Labour Market Performance Research Articles

The German labor market during the Great Recession: Shocks and institutions

This paper analyzes Germany's unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for post-unification Germany. This allows us to disentangle the role of institutions (short-time work, government spending rules) and shocks (aggregate, labor market, and policy shocks) and to perform counterfactual exercises. We identify positive labor market performance shocks (likely caused by labor market reforms) as the key driver for the “German labor market miracle” during the Great Recession.

Motivation Application: The Key to Stimulating Work Productivity in Jordanian Private Universities

Motivation program was found to be the most commonly applied mechanism among firms, providing employees with multiple financial or non-financial rewards. It aims at raising the employees’ interest, attracting and retaining talented employees, rewarding employees based on the value they create and encourages them to work hard to achieve the goals set by organizations. The study has assessed the way motivational practices are applied as a mechanism for improving work productivity, and to establish the difference caused by gender in the application of motivation practices in Jordanian private universities. Such motivation tools have been exaimened, training, work conditions, rewards, promotion, and employee benefits. Quantitative approach has been applied in this study and data was obtained through a questionnaire survey. A total of 320 respondents were selected as a study sample including; professors, associate professors, assistant professors, senior lecturers, lecturer, and assistant lecturer. Additionally, 253 completed questionnaires were analyzed as a final sample using descriptive analysis and independent t-sample test performed by SPSS. Two hypotheses were developed based on literature review. The results indicate that respondents were not motivated by motivational practices applied by private universities. There was a positive relationship between motivation tools (training, financial rewards, promotion, working conditions, and employee benefits) and work productivity, and there was no significant difference caused by gender in the way motivation practices were applied.This study contributs to support the literature that’s not much available on the level of application of motivation practices to the academic staff in arab private universities particuallarly in Jordanian private universities. It recommends universities management to set academic staff salary based on the cost of living, labor market conditions and performance to retain talented staff and to avoid high labor turnover. Also, management should take into account the promotion practice as a motivator that may attract and retain talented academic staff. Future studies may investigate more motivation practices in the same industry or comparing Jordanian private universities with other private universities in the Middle East area based on these variables.

Relative Labour Market Performance of Former International Students: Evidence from the National Graduates Survey

Canada is increasingly looking to international students as a source of post-secondary tuition revenues and new immigrants. We compare the labour market performance of former international students (FISs) through the first decade of the 2000s with that of their Canadian-born and -educated (CBE) and foreign-born and -educated (FBE) counterparts. We find that FISs outperform FBE immigrants by a substantial margin but underperform CBE graduates from similar post-secondary programs. We also find evidence of a deterioration in FIS outcomes relative to both comparison groups. We argue that this deterioration is most consistent with a quality trade-off because the supply of international students has not kept pace with the growth in demand.

Family typology and gender empowerment: the labour market performance of married immigrants

This paper examines the impact of gender empowerment on labor market performance of U.S. married immigrants across different family types. Three types of families are defined based on the nationality of immigrants’ spouses; ‘Home-country Marriage’ where both spouses come from the same home-country, ‘Native Marriage’ where one spouse is an immigrant and the other is a Native, and ‘Foreign Marriage’ where both spouses are immigrants, but each comes from a different country of origin from the other. Recognizing the role of gender ideology across different family structures, this study provides empirical evidence of the impact culturally based gender status has on immigrants across family types. Labor market performance is measured by wages and the labor force participation decision of immigrants, using the Ordinary Least Squares and Logit models. The gender empowerment measure is utilized to reflect different cultural and institutional conditions, which shape gender status in the immigrants’ home countries. Results indicate the positive effect of gender equality on women’s earnings and labor force participation, as well as that home-country gender status strongly influence women’s labor force participation and earnings when they share the same cultural norms as their husbands. Interestingly, women are more influenced by their spouses’ gender norms than men when immigrants come from a different cultural gender norm than their spouse.

Collectivism in the labor market: Evidence from second generation immigrants in the United States

This study investigates the role of collectivism on labor market outcomes in an individualist country. We explore collectivism as an intergenerationally transmitted cultural value and analyze its explanatory power for the economic outcome of 21,000 male homogamous second generation immigrants in the US. Our collectivism proxy is derived from the country of ancestry’s historical disease environment because collectivistic values have been particularly advantageous in countries with a greater prevalence of disease-causing pathogens. Employing this new collectivism proxy that identifies collectivism more precisely than previously used cultural proxies, we find that higher scores of collectivism are associated with higher labor force participation and income earned in the US. The results on income are channeled through the number of hours worked and self-selection into jobs that require collectivistic traits. By analyzing the labor market performance of second generation immigrants, we are the first to show an occupational selection along cultural skills implying that second generation immigrants sort into occupations that demand skills on which they have a “cultural comparative advantage”.

The Impact of Language Skills on Immigrants’ Labor Market Integration: A Brief Revision With a New Approach

Abstract I examine the impact of language skills on immigrants’ labor market performance by applying a new approach, which allows to estimate wage benefits attributed to initial language skills at arrival. By exploiting unique data, I isolate the endogenous part of current German skills and instrument current command by German proficiency measured retrospectively at the point in time of migration. This approach tackles the problem that labor market effects from current language skills are at risk to reflect merely the sum of a successful residence in Germany and only display growth effects. I find that a good command of German increases labor market income by 47.0% for males, while no significant language effects are detected for females. Further analyses illustrate that differences in language effects by gender can be attributed to selection into different occupations and part-time employments and that language operates complementary and enables cross-border transferability of human capital.

Effects of Cash Subsidies Embedded in Student Loans

Every year, governments allocate considerable amounts of resources to support students’ access and performance in higher education. Grants and loans are directed to those students for whom college would seem unaffordable otherwise. These programs are justified on the grounds of how they help students access, persist and graduate from higher education. However, considering the time it takes to observe academic or labor market performance, the literature evaluating student loans and its additional embedded programs is scarce. This article wants to contribute filling this gap. Using a Regression Discontinuity Design (RDD), I evaluate a cash subsidy program embedded into the main governmental student loan program in Colombia. I exploit the allocation rule of these additional cash subsidies, to evaluate the effect of these transfers over dropout and graduation rates, and also over early default rates. My initial results indicate that the cash subsidies have substantial and significant effects on dropout rates at the cutoff point. Over graduation rates the effects are substantial, but barely significant. With respect to the default rates, cash subsidy beneficiaries tend to have lower rates at the cutoff, but this result is not statistically significant. However, the measure of the subsidy effect on the latter two outcomes is affected by the statistical power loss at the proximity of the cutoff scores, a limitation of the RDD.

Underground activities and labour market performance

We build a general equilibrium search and matching model with an informal sector. We consider the impact of traditional policy instruments discussed in the tax evasion literature, such as changes in the tax and punishment system and the employment protection legislation, as well as the impact of concealment costs, on labour market outcomes. The model is calibrated to and simulated on the northern and southern European countries, where countries in the south have significantly higher informal sectors than countries in the north. We conclude that differences in tax and punishment systems cannot explain the observed difference. Instead, we find that stricter employment protection legislation in southern Europe, as well as the higher tax morale and more extensive use of third-party reporting in northern Europe, are potential candidates for explaining the difference.

Credit contractions and unemployment

This paper investigates the impact of private credit contractions on labor market performance. Impulse responses for total, youth, and long-term unemployment are estimated using local projections for a panel of 20 OECD countries over the period 1980–2013. The empirical findings suggest that a decline in private credit can generate sizable and statistically significant increases in all three unemployment measures. On average, credit contractions in the sample increase total unemployment rates by nearly 1 percentage point at the peak. This effect is even stronger for youth unemployment. The persistent impact on long-term unemployment emphasizes the sluggish recovery of labor markets following a credit downturn. The results also reveal that increases in joblessness depend heavily on the scale of the build-up in financial leverage prior to the onset of a contraction. Specifically, excessive credit booms tend to be followed by a significantly larger rise in unemployment in the subsequent bust phase. Moreover, credit contractions associated with rigid labor market institutions lead to disproportionately greater increases in unemployment. These findings underline the important relationship between disruptions in the credit market and unemployment fluctuations.

Economic miracle, political disaster? Political consequences of Hartz IV

The German Hartz IV reform has been a far-reaching labour market reform which reduced unemployment benefit generosity. The encompassing economic evaluation tends to confirm that the reform was an initial spark for the improvement of German labour market performance. At the same time, welfare state scholars have recently expressed concerns that such reforms may have far-reaching and detrimental political effects. In this article, I contribute to this discussion and analyse the political effects of Hartz IV including decreasing satisfaction with democracy, decreasing political participation and an increase of protest voting and political polarization. To identify the effect of the reform, I rely on bi-weekly representative survey data and exploit the announcement of the Hartz reforms as natural experiment. Comparing political attitudes of persons interviewed immediately before and after the announcement in regression analyses confirms that there was a sharp drop in satisfaction with democracy and the intention to participate in the next election, as well as increasing affinity to non-established and left-wing parties. Supplementary analyses show that the effect is stronger for unemployed workers who are more directly affected by the reform. These results are robust to different model specifications and estimation techniques. Moreover, placebo tests for past and previous years refute the concern that the effect is driven by other factors such as calendar time effects. These findings indicate that the political consequences of welfare state retrenchment go far beyond electoral punishment. This is possibly more relevant today than ever before as the current increase of populist parties substantially impedes the functioning of political systems in modern democracies.

Labour market and social integration of Eastern European migrants in Scotland and Portugal

This article investigates the factors influencing the labour market performance and social integration of Eastern European migrants in two regions within Scotland and Portugal. Given the potential links between these outcomes, measures of labour market success and integration into the host community are examined from a multi-dimensional perspective, including by modelling these jointly within a statistical framework. The main findings indicate the importance of a range of factors for labour market and social integration, which change with time and cannot be limited to any definable set of goals. In particular, proficiency in the host country’s language plays a key role in obtaining a highly paid job and social integration, but not for the probability of employment. Further, maintaining family links and cultural identity often outweigh the importance of being integrated into host communities. Other human capital factors, especially whether the job matches skills and qualifications, strongly influence some labour market outcomes, whilst migrant network variables are important for integration more widely. Focus on the immediate earnings and having a job tends to be prioritised over career progression, which can lead to better integration. Drawing on the insights from economics and human geography, this paper stresses that these findings hold both in the separate and joint modelling approaches. The effect of the influences is also found to be generally similar in Scotland and Portugal. However, some significant differences are detected between the host communities with regards to the impact of previous migration and friendship on social integration and age on employment.

Analysis of School Life and Labor Market Performance by Career Types of Secondary Vocational Education Graduates

Analysis of School Life and Labor Market Performance by Career Types of Secondary Vocational Education Graduates

The Post‐Reform Effectiveness of the New German Start‐Up Subsidy for the Unemployed

AbstractThe current German start‐up subsidy for unemployed individuals underwent a major reform in 2011 that altered key parameters of the program, leading to ambiguous ex ante predictions on the post‐reform effectiveness of the program, making a new evaluation necessary. In our descriptive analysis, we find that participants after the reform differ significantly from pre‐reform participants in terms of important characteristics and subsequent labor market performance. Our causal analysis reveals positive and sizable treatment effects on the treated regarding employment and income that are larger effects than what was estimated for the pre‐reform program. Potential reasons for this are discussed.

Inserción laboral, desarrollo profesional y desempeño institucional de las (os) egresadas (os) del Plan único de especialización en enfermería de la eneo-unam: una experiencia de doce años.

Objetivo: Analizar las características que adopta la Inserción y desempeño laboral así como el Desarrollo profesional de las egresadas(os) del Plan Único de Especialización en Enfermería (PUEE) de la ENEO-UNAM. Marco Teórico. Inserción Laboral es un término usado para referirse al proceso de incorporación de los individuos a la actividad económica. El desarrollo profesional, es el fruto de la carrera, comprende los aspectos que enriquecen a la persona con vistas hacia el logro de metas dentro de la organización. El desempeño institucional incluye acciones o comportamientos de los empleados, relevantes para con los objetivos de la organización medidos en términos de competencias y niveles de contribución. Metodología. Estudio descriptivo y transversal, las variables de la inserción laboral fueron: Centro/institución de trabajo, categoría, antigüedad, salario y funciones principales. Las dimensiones del desarrollo profesional fueron: responsabilidad, autonomía, trabajo en equipo y posicionamiento. Las del desempeño Institucional: características de la Institución empleadora, satisfacción con el desarrollo profesional del egresado, y vinculación con la ENEO. La muestra fue de 417 egresados y trece instituciones encuestadas. Para el Desempeño Institucional se aplicaron 86 cuestionarios, a personal directivo de enfermería tanto de instituciones públicas como privadas. Resultados. La Inserción laboral mostró que la actividad principal desarrollada por los egresados es la atención directa, en Desarrollo Profesional los egresados perciben que la especialidad les habilitó para actuar con responsabilidad, autonomía, y trabajar en equipo, pero en el ámbito laboral el reconocimiento es limitado. El perfil del egresado coincide con lo requerido por las instituciones empleadoras y el desempeño es percibido como bueno.

Skills and their impact on labor market performance using European cross-country evidence

The impact of skills on labor market performance is a topic which has attracted a growing attention during the last years and has become a major concern among policy makers. In this paper, I discuss on the skill needs in Europe and skill shortages and surpluses as well. Moreover, I examine five important dimensions of skills: information skills, communication skills, problem solving skills, software skills and digital skills. For all of them I have found negative correlation with unemployment rates, findings which suggest that these skills can improve the employment prospects and reduce the skill mismatch in the workplace. Finally, I estimate the effect of three levels of education on unemployment rates across a sample of 28 European countries for the 1999-2016 time period. Both tertiary and elementary education seem to reduce unemployment for European countries, while secondary education is connected with increased unemployment rates.

Job flows, returns to skill, and rent-sharing at the dawn of the new millennium: A firm-level inquiry from the BRICS

We present a firm-level inquiry on labour-demand characteristics in the BRICS economies, using standardized data from the World Bank Enterprise Surveys for the pre-crisis period of 2002-2003. The BRICS countries are the growth champions of that period, with numerous discussions on the effect of growth on inequality and the role of skills on labour-market performance. We examine employment, employment growth and its constituents, as well the returns to skill and the incidence of rent-sharing. We find that SMEs in the BRICS exhibit lower gross employment growth, compared to large firms. Large firms in Brazil, Russia and South Africa are responsible for most of the net job creation. In contrast, small and medium firms in China and India exhibit higher net job creation rates compared to large firms. Younger firms in Brazil, Russia and India generate higher net job creation figures, in contrast to China and South Africa, in which it is the large firms that generate more net new jobs. Foreign firms in China exhibit the highest net job creation, while in Brazil and India domestic firms create most of the new net employment. Private firms are responsible for most of the net job creation and job reallocation in all BRICS counties. The returns to skill are lower in SMEs and young firms, and we find evidence in favour of rent sharing, particularly in Brazil and India, by foreign and exporting firms, and by SMEs in China.

Compulsory military service, civilian wages, and retirement decision

PurposeThe purpose of this paper is to evaluate the effect of veteran status on civilian wages and on retirement age through employing individual-level data.Design/methodology/approachInstrumental variable (IV) estimation specifications show that, contrary to public perception, veteran status has a statistically significant positive impact on an individual’s civilian wage and thus helps him retire earlier than his non-veteran counterpart.FindingsMoreover, the wage premium effect largely holds for less-educated men; however, for highly educated men, military service has adverse effects on their subsequent wages, and thus, on their retirement age. In line with this result, the effects of veteran status on retirement age largely hold for the relatively less-educated group.Originality/valueThis is the first finding to shed light on the link between veteran status and the decision to retire. This work is also first attempt to explore relationship between compulsory military service and subsequent civilian labor market performance, using the Korean individual-level data via relevant IV estimation methodology.

The Effects of Micro-entrepreneurship Programs on Labor Market Performance: Experimental Evidence from Chile

We investigate the impact of a program providing asset transfers and business training to low income individuals in Chile, and asked whether a larger asset transfer would magnify the program's impact. We randomly assigned participation in a large scale, publicly run micro-entrepreneurship program and evaluated its effects over 45 months. The program improved business practices, employment, and labor income. In the short run, self-employment increased by 14.8/25.2 percentage points for a small/large asset transfer. In the long run, individuals assigned to a smaller transfer were 9 percentage points more likely to become wage workers, whereas those assigned to larger transfers tended to remain self-employed. (JEL J16, J23, L25, L26, L53, O14, R23)

Youth minimum wages and youth employment

This paper performs a cross-country level analysis on the impact of the level of specific youth minimum wages on the labor market performance of young individuals. We use information on the use and level of youth minimum wages, as compared to the level of adult minimum wages as well as to the median wage (i.e., the Kaitz index). We complement these data with variables on the employment, labor force participation, and unemployment rates of 5-year age interval categories—all derived from the official OECD database. We distinguish between countries without minimum wages, countries with uniform minimum wages for all age groups, and countries with separate youth and adult minimum wages. Our results indicate that the relative employment rates of young individuals below the age of 25—as compared to the older workers—in countries with youth minimum wages are close to those in countries without minimum wages at all. Turning to the smaller sample of countries with minimum wages, increases in the level of (youth) minimum wages exert a substantial negative impact on the employment rate for young individuals.JEL Classification: J21, J23, J31

Reason for immigration and immigrants' health

ObjectivesThe existing literature on the health trajectories of the UK immigrants has mainly focussed on the relationship between ethnicity and health. There is little information on the role of immigration status and no previous information on the role of reason for immigration to the country. This study fills this gap in the literature by analysing the heterogeneity of immigrant-native differences in health by reason for immigration. Study designAnalysis of cross-sectional quarterly data from the UK Labour Force Survey covering the period of 2010 (quarter 1) to 2017 (quarter 2). The sample includes 345,086 observations. The dependent variables of interest include suffering from a long-lasting condition, the link between long-lasting conditions and labour market performance and the prevalence of 12 specific health conditions. MethodsData were analysed using linear probability models to adjust for differences in age, education, gender, ethnicity, local authority of residence and year of survey. The analysis also explores the role of length of stay in the UK and the percentage of current lifetime spent in the UK (duration in the UK/age). ResultsResults indicate that, in general, immigrants are less likely than natives to report suffering from a long-lasting (1 year or more) health problem. This pattern generally remains the same when we consider the specificity of the long-lasting health problem. However, there are key differences across the immigrant groups by reason for immigration. Those who migrated for employment, family and study reasons report better health outcomes than natives, while those who migrated to seek asylum report worse health outcomes than natives. There is convergence to natives' health outcomes over time for those who migrated for non-asylum reasons, but not for those who migrated to seek asylum. ConclusionsThe findings show that the prevalence of health problems differs not only between natives and immigrants but also across groups of immigrants who moved to the UK for different reasons.