Labor Market Disequilibrium Research Articles

Black Lives Matter and Granger Causal Testing: A Signal of Economic Deprivation

BlackLivesMatter (BLM) protests achieved historically high rates of participation in 2020, resultant of social and economic distress. This study observes the effect of strain through both a collective action framework and statistical methodology. Withstanding the departure of new social movement theories from the traditional paradigm, we apply an economic lens to understand the underlying strain on the BLM population. The Google Trends API and Granger Causal testing demonstrate that the outlying 2020 increase in social movement participation is predicated on the COVID-19 pandemic. There were significant short-run economic effects, namely, the misallocation of resources and labor market disequilibrium on the Black community. Our analysis additionally demonstrates the discrepancies between variable search rate increases and changes in their real counterparts. With all other contributing factors held constant, we find significant causal relationships towards BLM search rates, implying a directional propagation of pandemic-related socioeconomic forces and the resulting social movement participation, signaling economic deprivation.

Are Mexican Manufacturing Workers Underpaid? Some Quarterly Time Series Evidence

The quarterly empirical relationship between Mexican manufacturing labor productivity and salaries 1993-2015 is examined for causality and whether first order labor market equilibrium is evident. An equilibrium would mean salaries and labor productivity are cointegrated. Wages above productivity levels may lead to calls for government intervention in the labor market. Federal quarterly data cover the nine main divisions of the manufacturing sector (old classification) as well as manufacturing overall. We use two series: labor productivity and average salaries with adjustment for inflation using the US consumer price index (2010 = 100). The time series is from 1993.1 to 2015.3. Standard cointegration analysis with structural change is applied with structural breaks hypothesized in 2008 with the Great Recession and 1995 with the Peso crisis. Tests for stationarity are applied to potentially correct for problems using first differences. Results indicate a statistically significant and negative relationship between labor productivity and salaries early in the sample period that becomes positive after structural changes. Salaries are more sensitive to events and volatile while productivity exhibits stable growth during 1993-2015. Salaries were impacted by both the 1995 Peso crisis and the Great Recession (2008) but productivity was only impacted by the latter. Higher labor productivity has not been rewarded with higher salaries suggesting Mexican manufacturing workers are underpaid. The firms where they work therefore have excess profits that can be used for investment and/or pay raises. Only the Timber and Metals divisions are found to not have salaries and productivity cointegrated. Government intervention in the form of wage setting or wage protection to protect firms from higher labor costs is unnecessary as firms are underpaying their workers. The government should reduce its role in the manufacturing labor markets. Foreign firms can hire underpaid workers away from domestic industry and take advantage of the labor market disequilibrium. Unions can insist on higher salaries to match their highly productive members work.

Improving Estimation of Labor Market Disequilibrium Using Shortage Indicators, with an Application to the Market for Anesthesiologists

Improving Estimation of Labor Market Disequilibrium Using Shortage Indicators, with an Application to the Market for Anesthesiologists

Improving Estimation of Labor Market Disequilibrium through Inclusion of Shortage Indicators

While economic studies often assume that labor markets are in equilibrium, there may be specialized labor markets likely in disequilibrium. We develop a new methodology to improve the estimation of a disequilibrium model that incorporates a survey-based shortage indicator into the model and estimation strategy. We demonstrate the gains in information provided by the methodology. We apply the model to the labor market of anesthesiologists, the outcomes of which would be of independent interest. We find improved accuracy in the estimation as well as useful information revealed by the expanded model.

Wages in Labour Market Theories

Abstract Already classical economists took interest in the role of wages and wage formation mechanisms, as well as in their influence on other components of the labour market. This article aims to systematise contemporary approaches to wages as one of the labour market components that have been developed within major economic theories. The systemization will serve as a basis for identifying main interactions between wages and other labour market components, such as labour supply and demand and labour market disequilibrium. The article presents major concepts formulated within neo-classical and Keynesian theories, labour market segmentation theories, efficiency wage theory, rent-sharing and rent-extraction theories, theory of job search, and search-and-matching models. One of the conclusions arising from the discussion is that the evolution of contemporary labour markets is a challenge for researchers seeking wage formation models adequately describing the real-life circumstances.

DYNAMICS OF THE NURSING WORKFORCE MARKET IN BULGARIA

v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} b\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} BACKGROUND. Bulgaria, as many countries in the world is experiencing a critical period for the health workforce. The shortage of qualified nurses is one of the biggest obstacles for improving the health-system performance. Lack of strategic planning based on profound market research and elaboration of scientifically based prognosis further deteriorate the current nursing labor market disequilibrium. THE AIM of the study is to explore the main factors influencing the nursing market disequilibrium in Bulgaria and to make an evidence-based forecast of the future needs for nurses in order to suggest relevant workforce development strategies. MATERIAL AND METHODS. The study employs a combination of sociological and statistical methods . The analysis is based on the official statistical data on Bulgarian nursing personnel up to 2012. Primary information is collected through self-administered questionnaires distributed among 337 practicing nurses from April 2007 to December 2012. Data are processed with the packages MS Office Excel 2010 and SPSS v. 13. RESULTS. Results indicate that a decrease in the demand for nursing labour caused large staff layoffs during the first stage of the restructuring period (1990-2000) followed by a severe drop in the number of nurses due to emigration and exodus from the profession. There are also educational and qualification problems along with unattractiveness of the nursing practice due to high workload and low remuneration. With the mean age of 49 severe nursing workforce???s deficit is expected in 10-15 years due to retirement. According to our estimations the deficit of nurses will account for 3162 specialists by 2030. CONCLUSION. The Bulgarian nursing labor market disequilibrium is due to long-term structural imbalances . As the market mechanism is unable to attain equilibrium Bulgarian government should be urgently involved in workforce planning and initiate actions and strategies for producing and retaining the highly qualified nurse professionals in Bulgaria . Key words: nursing workforce market, Bulgaria, disequilibrium, factors. 285 1 7772400 10058400 359410 259 261 257 280 262 283 1 00_/BRK?6.T2;=J!!1=F$#P 5 1 1 286 False 0 0 -1 304800 243 True 128 77 255 3175 3175 70 True True True True True 282 134217728 1 16 -9999996.000000 -9999996.000000 8 Empty 13056 39321 13424332 13421772 13158 3368550 16777215 40 Rain Forest -87325200 -87325200 (`@````````` 267 263 5

Modelling Downward and Upward Wage Flexibility at the Macroeconomic Level

In this paper, we analyze wage sensitivity to labour market disequilibrium at a macroeconomic level in several OECD countries. We estimate the Phillips curve and a wage equation with an error correction term a la Sargan with a novel asymmetric approach that allows us to distinguish between downward and upward flexibility. We present evidence that downward wage flexibility is more important than upward flexibility in all the countries. We also show that flexible labor market institutions do not lead to higher downward wage flexibility and lower unemployment. However, higher employment protection.

Unemployment and Economic Growth Cycles

The purpose of this paper is to study the dynamic interaction between economic growth and unemployment in a general model of economic growth. Labour market disequilibrium is introduced through a non-market real wage clearing modeled by a non linear Phillips Curve. We show that unemployment rate and per capita income dynamics fluctuate along cycles of different periods, and they may even have aperiodic paths. Labour market characteristics are the endogenous source of instability. In particular, as the rigidity of the labour market increases, the possibility of irregular behaviour increases as well. Besides cyclical behaviour, the dynamic analysis points to a positive income growth trend sustained by knowledge accumulation; however, there are periods where per capita income decreases. Moreover, in the same line as wage bargaining models (Layard and Nickell, 1985, 1986), we get the result that the higher workers' bargaining power, the lower both employment rate and per capita production. The paper aims to complement the literature in understanding the origin and nature of fluctuations in economic growth models.

Keynesian dynamics and the wage–price spiral: A baseline disequilibrium model

We reformulate the traditional AS-AD growth model of the Neoclassical synthesis, stage I, as a disequilibrium approach to aggregate supply analysis, with sticky wages, sticky prices, myopic perfect foresight on current inflation rates, and adaptively formed medium-run expectations concerning the investment and the inflation climate. Both LM curve and an interest rate policy rule are considered. The resulting nonlinear 5D model of labor and goods market disequilibrium avoids striking anomalies of the traditional Neoclassical synthesis AS-AD model. It exhibits instead Keynesian feedback dynamics proper with asymptotic stability for low adjustment speeds and with cyclical loss of stability when some adjustment speeds are sufficiently large. In such cases, downward money wage rigidities serve to make the overall dynamics bounded and thus viable. We thus obtain a baseline D(is equilibrium)AS-AD model with Keynesian feedback channels with a rich set of stability/instability features as sources of the business cycle. The outcomes of the model stand in stark contrast to those of the currently fashionable (closely related) model of the New Keynesian alternative.

Keynesian Dynamics and the Wage-Price Spiral: A Baseline Disequilibrium Model

We reformulate and extend the standard AS-AD growth model of the Neoclassical Synthesis (stage I) with its traditional microfoundations. The model retains an LM curve in the place of a Taylor interest rate rule, exhibits sticky wages as well as sticky prices, myopic perfect foresight of current inflation rates and adaptively formed medium-run expectations concerning the investment and the inflation climate in which the economy is operating. The resulting nonlinear 5D model of labor and goods market disequilibrium dynamics avoids the striking anomalies of the standard AS-AD model of the Neoclassical synthesis (stage I). It exhibits instead Keynesian feedback dynamics proper with, in particular, asymptotic stability of its unique interior steady state for low adjustment speeds and with cyclical loss of stability - by way of Hopf bifurcations - when some adjustment speeds are made sufficiently large, eventually leading to purely explosive dynamics. In such cases, downward money wage rigidity serves to make the overall dynamics bounded and thus viable. We thus obtain and analyze a baseline D(isequilibrium)AS-AD model characterised by Keynesian feedback channels with a rich set of stability/instability features as the sources of the business cycle. The outcomes of the model stand in stark contrast to those of the currently fashionable baseline model of the New Keynesian alternative (the Neoclassical Synthesis, stage II) that we suggest is more limited in scope.

Explaining the pattern of regional unemployment: The case of the Midi Pyrénées region

Abstract. Unemployment rates vary widely at the sub‐regional level. We seek to explain why such variation occurs, using data for 174 districts in the Midi‐Pyrénées region of France for 1990–1991. A set of explanatory variables is derived from theory and the voluminous literature. The best model includes a correction for spatially autocorrelated errors. Unemployment rates are higher in urban areas and, where per capita income is higher, are consistent with the view that unemployment differences largely reflect variations in “amenities.” Along with a lack of evidence of housing market rigidities, these suggest that subregional variations in unemployment are not mainly the result of labor market disequilibrium.

'Stigmatization by Negative Selection': Explaining Less-Educated People's Decreasing Employment Opportunities

The displacement argument is the dominant explanation for the phenomenon of trained individuals out-qualifying the less educated in job competition. Decreasing employment opportunities are seen as a labour-market matching problem.The explanation given in this paper is stigmatization by negative selection'. It takes into account that educational expansion has not only changed the number of less-educated people, but also the quality' of the less-educated group - due to changes in its group composition caused by increasing selection in the educational system, employers' perceptions, and ultimately employers' human resource management of this group. Thus, shrinking employment opportunitities for less-educated people are not only derived from distributional but behavioural changes. Whereas the displacement argument is mainly based on labour-market disequilibrium in terms of quantity, the stigma by selection'argument considers qualitative changes in this relationship between individuals and their environment. The ranking process is expanded into a sorting-out' process for the less-educated group which begins in school. The main argument is that following educational expansion, employers increasingly trust the sorting function of schools and teachers' evaluation, resulting in an exclusion of the less well educated. The empirical findings based on West German data correspond to the theoretical reasoning of the stigma by selection'argument.

Can Human Capital Theory Explain why Nurses are so Poorly Paid?

This paper uses Australian Census data to examine the earnings of female professionals. Comparisons are made between Registered Nurses (RNs), Teachers, Social Professionals, Health Professionals and Business Professionals. Wage decompositions show that RNs earn significantly less than other female Professionals and that the observed differentials can not be explained by differences in human capital endowments. The evidence presented is strongly suggestive of monopsonist or oligopsonist power in the setting of nurse wages – with a manifestation being persistent labour market disequilibrium. Changing the relative reward structure for nurses may help address the on‐going nursing ‘shortage’ in Australia, although further research in this area is called for.

The German Welfare State: Principles, Performance and Prospects After Unification

This article presents an overview of the institutional architecture and the organizing principles of the German welfare state, which is widely and rightly considered to be the model case of North West European Continental welfare states. The author's ambition is to be both systematic and historical in his presentation, emphasizing the process in which different layers of the historically evolved structure serve certain functions, such as poor relief, the protection of workers at work, the protection of workers outside of work, the determination of wages, and the level of employment. In the second part of the essay, the question under discussion is of what happens to this structure under the impact of German unification, European integration, economic `globalization', and lasting labor market disequilibrium. The third and final part outlines a policy proposal that aims at the strengthening of social citizenship rights which replace the `worker' as the reference unit of social protection with the `citizen'.

Unemployment, long-term employment relations and the determination of unit labour cost growth in US manufacturing industries

This paper examines the effect that unemployment and long-term employment relations exert on the determination of unit labour costs. The paper proceeds in three sections. Section one analyses the relationship between labour market conditions and unit labour costs by developping a simple model of a firm that relies upon dismissal threats to elicit work effort. The comparative static properties of this model suggest that a tightening of labour markets may result in an increase in unit labour costs. In addition, it is argued that the labour market disequilibrium that occurs at full employment levels of unemployment will likely result in an increase in the growth rate of unit labour costs. The second section of the paper reviews diverse theories of long-term employment relations (LTERs), each of which suggest that the presence of LTERs ought to reduce the effect that labour market conditions exert on unit labour costs. The third section of the paper presents empirical estimates of the effect unemployment and LTERs exert on unit labour costs. The central empirical findings can be briefly summarized. First, movements towards full employment increase the growth rate of wages, reduce the growth rate of labour productivity and increase the growth rate of unit labour costs. Secondly, where long-term employment relations are prevalent, the effect of unemployment on wage, labour productivity, and unit labour cost growth is diminished. The paper concludes by discussing the implications these findings have for effort regulation models and the macroeconomic foundations of microeconomic labour market structures

Government Deficits, Private Investment and the Current Account: An Intertemporal Disequilibrium Analysis

This paper uses a model with full intertemporal optimization and Fischer-Gray type short run real wage rigidities to demonstrate effects of deficit spending in different employment regimes. This study attempts to bring the two strands of short run aggregate demand effects and certain intertemporal aspects together. It analyses fiscal policy in the context of a model with full intertemporal optimization underlying private behavior, which allows the paper to deal with the intertemporal aspects, but it also explicitly incorporates the possibility of (short run) labour and goods market disequilibrium caused by Fischer (1977)-Gray (1978) type contract based real wage rigidities and within period downward price inflexibility. Prices are however assumed to be flexible upward, in a departure of the standard disequilibrium literature. In section 2 the basic model is presented. The paper uses a two period-full optimization set up where wages and prices are set at the beginning of each period using all available information. Fiscal policy effects under Keynesian unemployment are analyzed in section 3, while section 4 looks at the case of classical unemployment. Section 5 concludes.

WAGE FLEXIBILITY AND EMPLOYMENT STABILITY

How is the variance of employment affected by the speed of response of money wages to labor market disequilibrium? This is considered in a model which, apart from partial adjustment of the wage, is neoclassical, including rational expectations. Output is determined by demand which, like supply, is subject to shocks which affect employment. A faster wage response increases the impact of shocks on employment. In some cases this outweighs the effect of speedier equilibration, supporting an assertion of Keynes's. Since the nominal wage that is given in the short-run monetary policy is important, several variants are considered. Copyright 1987 by Royal Economic Society.

A TIME SERIES STUDY OF HOUSEHOLD PARTICIPATION DECISIONS THROUGH BOOM AND SLUMP

IN recent years, an extensive literature has developed on the theoretical and empirical modelling of labour supply decisions, both in the UK, and the US. Interest in this area ranges from a desire to quantify the likely effects of government taxation measures, to the analysis and understanding of the social re-structuring of work, and the division between domestic and waged labour within the family. Empirical analyses include cross section studies both at the aggregate and micro levels (for example Greenhalgh (1977) (1979) (1980a), Layard, Barton and Zabalza (1980), Zabalza (1983), Ashenfelter and Heckman (1974)), longitudinal studies of the behaviour of individuals and households over a period of time (Heckman (1980), Elias and Main (1982)), and pure time-series studies of aggregate data (Corry and Roberts (1970)). A particular problem that has dogged such empirical studies lies in the proper identification of supply responses from demand side influences, and the adequate integration of both sides of the market within a unified structural model. Thus, within the context of the current economic recession, the observed patterns of employment, unemployment, and labour supply undoubtedly reflect complex interactions and adjustments in supply and demand. Traditionally such adjustments would, in theory, operate through movements in the real wage, serving to equilibrate the market. Clearly, however, the market for labour in the UK cannot, in practice, be assumed to be in a state of continuous equilibrium, whilst wages evidently respond to a number of influences, and only rather slowly to the downward pressure of excess labour supply. The modelling of such behavioural systems becomes necessarily rather complex (see for example Rosen and Quandt (1978)), and one important implication stemming from the possibility of constraints on labour supply lies in the possibility of adjustments in commodity demands in response to labour market disequilibrium (Ashenfelter (1980), Blundell and Walker (1982)). In this study a quarterly time-series model is developed, by constructing averages of certain variables relevant to supply decisions from the Family Expenditure Survey (FES), a continuous rotating sample of household behaviour. The sample is restricted to all households where both husband

Minimum Wages, Union Membership and Differentials: The Phillips Curve and the Chilean Labour Market Revisited

Several Phillips curve models are presented and estimated with Chilean annual data for 1963–1982. Because of unreliable unemployment statistics, the real wage level is used to represent labour market disequilibrium. The Cortázar‐Marshall inflation index, alternative to the official one, and four different earnings variables are used. Equilibrium levels of earnings and equilibrium differentials are obtained. Market forces, expected inflation, structural change after 1973, and exogenous elements represented by a trend are all statistically significant; government‐determined minimum wage rates and union membership are not. There is no evidence of partial adjustment, and all equilibrium differentials increased during the period.

Job Quality, Labor Market Disequilibrium, and Some Macroeconomic Implications

(1982). Job Quality, Labor Market Disequilibrium, and Some Macroeconomic Implications. Journal of Economic Issues: Vol. 16, No. 3, pp. 731-755.