Labor Market Constraints Research Articles

The New Face of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, and Global Inequality

The institutional structure of global commodity chains and cross-border production networks will have a profound impact on how the benefits of globalized production are distributed. This paper develops a model that combines the insights of earlier unequal exchange theorists and new work on global commodity chains in order to clarify the distributive dynamics of the expansion of low-wage manufacturing in the developing world. In this framework, the ability of productivity-led development to raise employment incomes in low-wage manufacturing is constrained and depends on how the benefits of productivity improvements are captured - as lower prices for consumers or higher rents for brand-name multinationals. In contrast, consumption-led growth in relatively affluent consumer markets will contribute to income convergence when demand for manufactured consumer imports is sufficiently income elastic. However, in the long-run, labor market, macroeconomic, and environmental constraints will likely compromise this form of export-led employment growth.

The Socioeconomic Status of Women and Children in Japan: Comparisons with The USA

The context surrounding the poor economic situation of divorced Japanese women, who are the primary recipients of welfare support for single mothers in Japan, is not well understood. An analysis of the Japanese General Social Survey and the Panel Study of Income Dynamics reveal that divorced Japanese women experience a number of labour market and non-market constraints, including (i) earnings level similar to that of married women despite their higher likelihood of being a full-time worker, (ii) a lower likelihood of living with parents than never married and married women, and (iii) the less active remarriage market in Japan than the market in the USA. Children structure additional constraints for divorced Japanese women, such as even lower remarriage likelihoods than divorced Japanese women without children. Policy implications are discussed.

Living apart together over long distances – time-space patterns and consequences of a late-modern living arrangement

In this paper people living apart together at a greater distance with his/her partner (long distance LATs) are investigated, using empirical evidence from Germany. Previous research did not apply a distinction between couples which live apart over long distance or in close proximity. In official statistics and surveys across Europe and North America the spatialities of LAT unions is not captured either. The present results, which are based on a random sample survey of people who recently moved to selected metropolises, reveal that distance matters in this respect: long distance LAT unions are not only associated with specific formation and motivation contexts but also with distinctive socio-structural characteristics compared to couples in separate households close-by. Long distance LATs are young, spatially mobile, and highly skilled, and most frequently the living arrangement is due to labour market constraints. LATs are altogether a small population segment in late-modern societies, however, they are concentrated in metropolitan regions and cities, which points to the need of contemporary population, housing and urban studies to pay attention beyond the household to the level of living arrangements in order to understand how societal change shape urban landscapes and which role it play in transforming urban space. To be more precise, considering long distance LATs contributes, for instance, to our understanding of the relocation/residential behaviour of highly qualified couples, tenure choice behaviour, and preferences for specific dwelling features.

Private Savings Behaviour in Nepal: Longterm Determinants and Short-run Dynamics

With a view to explain the long-run and cyclical behaviour of private savings in Nepal during the period 1974-2005, the study employs an error-correctionframework. The study estimated 0.309 as marginal propensity to save with the corresponding value of 0.365 in the long-run. The estimation results reveal thatreal income, real government savings, real foreign savings, real interest rates, and labour market constraints play important roles in determining private savings in the short and long-run. The findings of the study suggest that there is a need to focus on development policy which increases productive base of the economy in order to increase income growth and reduce unemployment. It is also important to note that the real interest rates have a positive influence on the private savings and can be taken as an important policy variable in Nepal.

Schooling, wages and profits: Negative pecuniary externalities from schooling and their consequences for schooling investments

This paper tests the hypothesis that the schooling of the poor reduces profits for landowners, and that such negative pecuniary externalities in turn adversely affect schooling investments made by local governments. A theoretical model of occupational choice in the presence of credit and labor market constraints, combined with existing political economy models of the delivery of local public goods delivers such a result. This hypothesis is tested using household data from India. The empirical analysis shows that profits are reduced by the schooling of the poor and that this is primarily because of the effect of schooling on wages. It also shows that the negative effect of wages on profits reduces government provided schooling inputs.

Lean and reflective production: the dynamic nature of production models

Toyota and Volvo have traditionally been viewed as anchoring two extremes of production models that companies in the automotive and other manufacturing sectors draw upon. The “Toyota (Lean) Production System” drove superior organizational learning, innovation, and control with positive implications for customer-oriented outcomes. Volvo's “reflective production” model aimed to leverage and develop workers’ unique abilities, leading to adaptability, motivation, satisfaction, and innovation at the individual and group levels, with positive benefits for employees. Through a longitudinal case study, we show that environmental pressures, in the form of increased international product market competition and labour market constraints, drove convergence across the two production systems as enacted at Volvo and Toyota, in organizational structure, work design, and to a lesser extent, technology. The result is an integration of the adaptability, motivation, and development of workers at the individual and group levels, with enhanced organizational capacity for responsiveness, variability reduction, and innovation at the organizational level. Understanding how production models evolve provides insight into their operation, their limitations, and the challenges that are associated with their study, imitation, implementation, and use.

Does poverty constrain deforestation? Econometric evidence from Peru

This paper examines the relationship between income and land clearing for households living in tropical forest regions. A simple model of the agricultural household that clears land for agriculture is developed to investigate the relationship between lagged income and cleared land holdings. Analysis of panel data from Peru suggests that lagged income is positively correlated with clearing, though at a decreasing rate, and, because of labor market constraints, clearing is positively correlated with household labor availability. This work suggests that small increases in the incomes of the poorest are unlikely to reduce deforestation in this context.

Policy, technology, and management strategies for achieving sustainable agricultural intensification

AbstractConsiderable agreement exists among researchers, development practitioners, and policymakers regarding the goals of sustainable agricultural intensification (SAI). They include: achieving agricultural productivity growth, household food security, and improved rural livelihoods and employment, while simultaneously mitigating environmental degradation. However, the multiplicity of these objectives, as well as the choice of approaches to achieving them and the site‐ and context‐specificity of specific technological and institutional interventions, assures that the research and policy challenges to achieving SAI will remain considerable. This article summarizes the contributions of the articles in this Special Issue in four areas of the literature. First, labor market constraints, the labor intensity of specific agricultural technologies and practices, and labor's substitutability, or complementarity, with other inputs are shown to widely influence their viability and related input efficiencies. Second, the articles identify specific tradeoffs and synergistic relationships that arise in the attainment of these multiple goals stemming from technologies, management practices, and policies introduced under specific agroclimatic, market, and institutional conditions. Third, these papers contribute to the literature on agricultural technology adoption by furnishing additional empirical evidence on the determinants and effects of investment behavior and adoption of specific technologies and management practices. Finally, the articles in this Special Issue emphasize that there is no single policy nor technological, management, or institutional innovation that unambiguously promotes SAI. Preferred policies must be contextualized and sensitive to initial biophysical, market, and institutional conditions.

Land rental markets in transition: Theory and evidence from Hungary

This paper analyzes the determinants of household farms’ participation in land rental markets in transition countries. We derive several hypotheses on the impact of households’ human capital, land endowment, land quality and prices, transaction costs, rural credit, and labor market constraints. Our empirical analysis uses data from a representative survey of more than 1 400 Hungarian household farms and Hungarian official statistics. Land rental markets reallocate land to households with better farm management capacities. Households combine buying and renting of land to extend their farms. Land ownership is fragmented and land consolidation occurs through renting. The domination of corporate farms in some regions restricts households’ access to land.

Good IPOs drive in bad: Inelastic banking capacity and persistently large underpricing in hot IPO markets

AbstractIn this paper, we consider the effect of labor market constraints on the InitialPublic Offering (IPO) activity of investment banks. We posit that identifying IPOquality requires specialized screening labor that takes time to train. Positive shocksto economy’s production frontier stimulate IPO demand. At this higher level ofdemand, screening labor costs must rise to clear the labor market. This resultsin underwriters optimally reducing screening quality, in the process encouragingfirms with sub-marginal projects to also apply, further straining the screening labormarket. In equilibrium, underpricing can be quite significant both because of lowerquality screening and because of its role in lowering the quality of the applicantpool. Our model’s predictions are consistent with empirical results such as positivecorrelation between IPO volume and underpricing, reduced information search perproject during hot markets, and the persistence of high IPO volume in the face ofincreased underpricing.

Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach

Knowing whether a household behaves according to separability or non-separability is needed for the correct modeling of production decisions. We propose a superior test to those found in the literature on separability by using a mixture distribution approach to estimate the probability that a farm household behaves according to non-separability, and test that the determinants of consumption affect production decisions for households categorized as non-separable. With non-separability attributed to labor market constraints, the switcher equation shows that Peruvian farm households that are indigenous and young, with low levels of education, and lack of local employment opportunities are more likely to be constrained on the labor market.

Organizational capability and work re-structuring in a transitional economy

This paper examines the difficulties associated with the introduction of western management techniques in a newly privatized firm in Hungary. The interplay between firm strategy and organizational processes, focusing on worker outcomes, and changes in the organization of production, is analyzed with particular attention given to how work is (re-)structured as well as the effects of changes on workplace governance. This study shows how many of these changes have been rendered ineffectual because of employee resistance as well as broad labor market constraints.

Allocation du temps et propriétés cycliques du modèle d'appariement sur le marché du travail

Cet article étudie les propriétés cycliques du modèle d’appariement avec une destruction exogène des emplois. Son mécanisme de propagation interne des chocs a été critiqué en raison des trop fortes contraintes sur le marché du travail qu’il requiert. Pour évaluer la portée de cette critique, les prédictions de ce modèle sont comparées selon plusieurs hypothèses régissant la définition du taux d’emploi ainsi que les allocations du temps au travail et à la recherche d’emploi. Les résultats indiquent qu’il suffit de prendre en compte la variabilité de ces allocations pour que le modèle puisse reproduire conjointement les faits stylisés du marché du travail et la persistance du produit.

Can the workplace explain Canadian gender pay differentials?

s for paid vacation leave during the summer CANADIAN PUBLIC POLICY ANALYSE DE POLITIQUES, VOL. XXVIII, SUPPLEMENT/NUMERO SPECIAL 1 2002 This content downloaded from 207.46.13.111 on Tue, 13 Dec 2016 04:36:47 UTC All use subject to http://about.jstor.org/terms Can the Workplace Explain Canadian Gender Pay Differentials? S57 months. For example, it is unclear if total employment captures the number of persons at work during the summer months OR if total employment is the number of workers employed by the firm whether these workers are on paid vacation or not. '0Related to the coincidence of needs hypothesis, Reilly and Wirjanto (1999b) suggest that establishments with stable product/service may be better able to plan for the of labour and to accommodate women's employment patterns. If this is the case, then women workers may crowd into these workplaces with attractive (stable employment) but costly (lower wages) job characteristics. Reilly and Wirjanto create a variable for stable product based on the following question: On a scale of 1 to 9, would you say that this establishment faces a that is 1 = highly stable to 9 highly unstable? The WES does not contain information directly on the of product but does include performance measures (i.e., increased/decreased/same) for productivity, sales growth and profitability over the previous 12 months. These measures are based on a short period of time (12 months) and a trend of the stability in product demand is impossible to determine with the given data. For this reason, in product is not included in this analysis. The measure used by Reilly and Wirjanto (1999b) can be criticized since it is unclear whether all establishments used the same reference period and measures to characterize stability. is considerable debate over the inclusion of industry and occupation as explanatory variables since occupational segregation is a mechanism whereby wage discrimination may occur and their inclusion may undervalue the importance of labour market constraints on wages or alternatively, may over-justify gender-pay differentials. However, excluding occupation and industry may neglect the importance of background or individual decisions with respect to wage outcomes. 12The regression results on worker characteristics are included in Appendix Table Al. '3The F test (adjusted Wald test) suggests that the workplace characteristics are jointly and significantly different from zero. When industry is included among the workplace characteristics hypothesized to be zero, the F statistics are F(28,4508) = 24.98 for men and F(28,4062) = 19.46 for women. When industry is excluded from the set of workplace characteristics hypothesized to be zero, the F statistics are F(15,4521) = 25.39 for men and F(15,4075) = 11.92 for women. 14These elasticities are the product of the proportion of part-time workers in the workplace and the coefficient on the percent working part-time from Specification 4. For example, the elasticity for women is calculated as -0.055 = -0.163*0.3371. 15The exception is for women. 16The F test (adjusted Wald test) reveals that the variables on the degree of participation in self-directed workgroups are jointly and significantly different from zero with the exception of Specification 4 for women. '7The gender difference in the returns to the foreignheld workplaces is statistically significant at the 5 percent level. 18Table A2 in the Appendix documents the differences in the characteristics that men and women bring to the labour market. Roughly 19.5 percent (13.7 percent) of men and 11.7 percent (18.6 percent) of women are employed in managerial (professional) occupations. The receipt rates of additional compensation for men in women are 41.7 percent and 38.5 percent in managerial occupations and 29 percent and 23.2 percent for professional occupations. There is no significant gender difference in the receipt of additional compensation for managers or professionals. 20Roughly 25.4 percent of married women, 29.2 percent of single, never married women, 25.3 percent of women with dependent children and 28.9 percent of women with no dependent children earn any form of additional compensation. 21The WES asks respondents if they received any classroom or on-the-job the training in the previous 12 months. About 28.8 percent of men and 31.4 percent of women participated in on-the-job training while 36.9 percent of men and 37.4 percent of women participated in classroom training. The incidence of training is not used in the regression analysis since the impact of training on wages may not be realized immediately (i.e., within the previous 12 months). The impact of training on wages would be more accurately reflected in a measure of training that incorporates all training taken throughout the worker's career. CANADIAN PUBLIC POLICY ANALYSE DE POLITIQUES, VOL. XXVIII, SUPPLEMENT/NUMERO SPECIAL 1 2002 This content downloaded from 207.46.13.111 on Tue, 13 Dec 2016 04:36:47 UTC All use subject to http://about.jstor.org/terms

Women's Employment and Non-Marital Childbearing: A Comparison between East and West Germany in the 1990s

In contrast to West Germany, where marriage and childbirth have been strongly coupled, the German Democratic Republic (GDR) displayed high rates of non-marital childbearing. Researchers attributed this pattern to “misguided” GDR family policies that encouraged women to remain unmarried after childbirth. With German unification, East Germany’s legal and political institutions — including family policies — were replaced by those of West Germany. Against this background, it was widely expected that east German non-marital birth rates would soon fall to west German levels. After unification, however, they increased even further.This article argues that the enormous east-west differences in non-marital childbearing in the 1990s can be attributed to differences in women’s work orientation. Despite unfavourable labour market constraints and social policies that encourage women’s withdrawal from the labour force after childbirth, east German women, compared with their west German counterparts, are still more likely to be in full-time employment, and to re-enter the labour force sooner after childbirth. Our empirical investigation, drawing on data from the German 1997 micro-census, reveals a strong effect of women’s education and employment on marriage in west Germany, whereas in east Germany the probability of living in a marital union is hardly correlated at all with women’s employment characteristics. We conclude that a generally strong female work orientation and the wide availability of public day care facilities are the most important factors weakening the economic incentives for east German women to get married at childbirth.

Women's Employment and Non-Marital Childbearing: A Comparison between East and West Germany in the 1990s

In contrast to West Germany, where marriage and childbirth have been strongly coupled, the German Democratic Republic (GDR) displayed high rates of non-marital childbearing. Researchers attributed this pattern to “misguided” GDR family policies that encouraged women to remain unmarried after childbirth. With German unification, East Germany’s legal and political institutions — including family policies — were replaced by those of West Germany. Against this background, it was widely expected that east German non-marital birth rates would soon fall to west German levels. After unification, however, they increased even further.This article argues that the enormous east-west differences in non-marital childbearing in the 1990s can be attributed to differences in women’s work orientation. Despite unfavourable labour market constraints and social policies that encourage women’s withdrawal from the labour force after childbirth, east German women, compared with their west German counterparts, are still more likely to be in full-time employment, and to re-enter the labour force sooner after childbirth. Our empirical investigation, drawing on data from the German 1997 micro-census, reveals a strong effect of women’s education and employment on marriage in west Germany, whereas in east Germany the probability of living in a marital union is hardly correlated at all with women’s employment characteristics. We conclude that a generally strong female work orientation and the wide availability of public day care facilities are the most important factors weakening the economic incentives for east German women to get married at childbirth.

The Geography of an EthniCity: Residential Segregation of Birthplace and Language Groups in Sydney, 1996

Many contemporary cities have a diverse ethnic-cultural mix as a result of different international migration streams, with implications for the residential distribution of various ethnic groups within those cities. Boal recently suggested a series of scenarios against which the pattern in any one place could be evaluated. These are applied to Sydney in 1996, when over 34 per cent of the residents reported a birthplace outside Australia and 30 per cent reported using a language other than English at home. Lacking data on ethnic status, the birthplace and language data are used to explore Sydney's residential geography at two spatial scales, and to identify the degree of residential segregation of each birthplace and language group. Regression analysis, used to assess the relevance of human capital to observed levels of segregation, suggests that Boal's assimilation scenario accounts for most of the observed geographies, with some additional pluralism but little evidence of polarisation. These results suggest that the dynamics of Sydney's housing market facilitate movement into most areas of demand, subject only to labour market constraints; differential access to sections of the labour market, and hence to housing market sections, is a major factor in the residential segregation of birthplace and language groups in Sydney.

The Economics of American Sports Leagues

Player mobility in North American sports leagues is limited by labour market constraints designed ostensibly to allow teams to recoup player development costs and to maintain competitive balance within leagues. Theory holds that the distribution of talent will be invariant under any institutional configuration, and that while rules to constrain movement will serve to enhance monopsonistic exploitation of talent, they will have no effect on competitive balance. This paper reprises a general theory through which the effects of the labour market constraints can be comparatively analysed for American sports leagues. The economics of sports has been relegated to the realm of labour theory by the unnecessarily limiting assumption that owners of sports clubs are single‐minded profit maximisers. This paper also presents a theory that seeks to unify capital market decisions of financial leverage and ownership syndication with operational labour market decisions for athletic talent and an owner’s desire to win.

Regionalism, Competition Policy and Abuse of Dominant Position

Co-ordination of competition policies within regional trade agreements (RTAs) seems desirable, especially within deeper forms of regional integration. This contributes to a healthy and stable regional trading system. We argue, however, that regional competition policies should be carefully elaborated not to neglect efficiency considerations linked to economies of scale/scope within a regional liberalisation program, in particular, in the case of dominant positions. We also suggest that, in the short term, a less stringent approach to competition policy should be adopted in RTAs among developing countries where market failures may be due not only to imperfect competition but also to credit and labour market constraints.

The moonlighting decision of unmarried men and women: Family and labor market influences

This paper investigates the moonlighting behavior of unmarried adults. Moonlighting theory hypothesizes that individuals who face labor supply constraints may possess an enhanced incentive to work for more than one employer at a time, but previous research in moonlighting literature has not investigated the influence of labor market constraints empirically. Unmarried men and women, an increasingly prevalent demographic group, face somewhat unique familial and economic circumstances. Unlike married individuals, they do not have access to intra-household income sources and, yet, they may have children present in their household. Empirical results suggest a relationship between labor market constraints and moonlighting likelihood that is consistent with theory and suggest that a larger immediate and extended family may be associated with a lesser probability of moonlighting.