Labour Market Policies Research Articles

The Draghi Government put to the Test by the National Recovery and Resilience Plan

ABSTRACT The political and institutional trajectory of Italy was clearly punctuated by the economic upheavals of the pandemic. The articles in the special issue aim to assess the character of the institutional change prompted by the economic response to the pandemic, and in particular by the National Recovery and Resilience Plan (NRRP), in different policy areas. Three contributions analyse the reform dynamics related to the strategic axis of the Italian NRRP, namely digitalization and innovation (Ottone and Barbieri), the ecological transition (Cotta and Domorenok), and social inclusion as concerns labour-market policies (Tassinari). Two contributions focus on two overarching priorities of the NRRP: gender equality (Donà) and development of southern Italy (Cerruto, Cersosimo and Raniolo). Finally, one contribution focuses on reform of the public administration, which has been identified as a key area, affecting horizontally all missions in the NRRP (Di Mascio, Natalini and Profeti). Overall, the articles in the special issue highlight that the pandemic has been followed by a process of institutional change that occurred both incrementally and unevenly, often disguising substantial continuity.

Explaining public support for demanding activation of the unemployed: The role of subjective risk perceptions and stereotypes about the unemployed

In recent decades, European welfare states have adopted demanding active labour market policies (ALMPs), aimed at increasing labour market participation through imposing stricter work-related obligations and benefit cuts in case of job offer rejection. This article investigates whether support for such demanding ALMPs is driven by risk perceptions of future unemployment and negative stereotypes about unemployed persons. Insights into the role of risk perceptions and stereotypes offer opportunities to gain a better understanding of the impact of structural variables. Drawing on data from the European Social Survey 2016 in 21 European countries, the analysis reveals that higher subjective risk of unemployment decreases support for these ALMPs substantially, whereas negative perceptions of the unemployed increase support. However, these factors play at the individual level only and do not explain country-level differences in support of demanding ALMPs. The notable cross-national variation in support of activation policies is found to be unrelated to economic factors and to the strictness of activation requirements for unemployment benefits.

If You Don’t Like Your Job, Can You Always Quit? Pervasive Monopsony Power and Freedom in the Labor Market

One common metric of monopsony power is the quit elasticity, measuring how much more likely a worker is to quit a job in response to a wage change. Experimental and quasi-experimental variation in wages across workers within a given job results in quit elasticities in the 2-3 range, implying that a 10% reduction in wages increases the probability of quitting by 20-30%. In a model with monopsonistic employers, a quit elasticity of 2-3 also implies that workers are paid about 80-85% of the value they produce. These results indicate that employer power is pervasive. We present observational evidence that historically disadvantaged groups have systematically lower quit elasticities, indicating they face even greater employer power. Because monopsony power comes from an inability of workers to voluntarily switch jobs, the quit rate and especially the quit elasticity can be a useful metric for judging the health of the labor market. Pervasive employer power alters the analysis of labor market policy in a number of important ways.

Evaluating the effectiveness of labor market interventions on reducing the impacts of the COVID-19 pandemic.

This paper evaluates whether different labor market policy interventions taken in response to the COVID‐19 pandemic have been effective in reducing its adverse impacts. We construct a database covering 165 countries and 39 labor market interventions grouped into four pillars: stimulating the economy and jobs (pillar 1); supporting enterprises, employment, and incomes (pillar 2); protecting workers (pillar 3); and social dialogue (pillar 4). The results revealed that measures taken under pillars 1, 2, and 3 have reduced the impacts of the pandemic on economic growth; measures under pillar 4 were significantly associated with reducing its impacts on employment and those under pillar 2 with reducing its impacts on working hours.

Human Resource Strategies in the New Zealand Clothing Manufacturing Industry

The clothing industry has been, and remains, an important employer in New Zealand. Women make up the majority of employees in the industry, and factories are often located in rural communities (Young, 1988). The size of companies varies greatly, from the few "heavyweights" like Lane Walker Rudkin (LWR), admittedly made up of 15 subsidiary firms, who employ over 1,000 people around the country , down to tiny operations with less than 10 employees. These smaller companies make up the bulk of the 700-800 firms that Murray Rae estimates make up the industry. In February 1989, 91 percent of factories in the apparel industry employed less than 50 workers, with 48 percent of factories employing less than 10 (Tripartite Working Party on an Active Labour Market Policy for the Apparel Industry, 1989). Many of the smaller firms are known as CMTs (Cut Make and Trim), and act purely as contractors to designers and other manufacturers.

Active Labor Market Policies in a Context of High Informality: The Effect of PAE in Bolivia

Information asymmetries and limited skills are two main factors affecting job seekers’ chances to access quality jobs in developing countries. This paper evaluates the effectiveness of a program combining job intermediation and wage subsidy in Bolivia, a country with one of the highest levels of informality in Latin-America. Using administrative and survey data, we find that the program substantially increases employment and formality. These effects are heterogeneous across different subsamples of interest. Our results suggest that Active Labor Market Policies might be an effective solution for improving access to quality jobs in the context of high informality.

Subsidised Start-Ups for the Unemployed in Less Developed Region: Effects Behind Efficiency

One of the tools that governments use to support entrepreneurship is to support entrepreneurship through subsidised start-ups for the unemployed. This tool attempts to solve two problems at once. It acts as an active labour market policy tool to reduce unemployment. On the other hand, as an economic policy measure, it seeks to promote the development of entrepreneurship. Most existing studies focus mainly on measuring the sustainability or effectiveness of this tool.
 The aim of this article is to identify the pros and cons of this tool from the perspective of the beneficiaries of this support themselves. The research was conducted through interviews with the beneficiaries of the support as well as those institutions that are in some way involved in the process of this support. The interviews took place in the years 2019 -2020 in the Banská Bystrica Region in the Slovak Republic, which is one of the most underdeveloped regions in the European Union.
 The results of the research show that the support itself also has a positive impact on other aspects of life than the business itself. A large proportion of respondents reported that they are happier in life than before and that their business is much more fulfilling than their previous job. At the same time, however, they point to a distinct form of inefficiency of the support as a tool for entrepreneurship support, with many beneficiaries not using this tool with the primary goal of starting a business. Some of the supported start-ups started their business only as a cover for black and dependent work or as a form of part-time work.

Young Australians' labour market engagement and job aspiration in the wake of the COVID‐19 pandemic

AbstractYoung people tend to bear the brunt of adverse employment consequences of a crisis due mainly to the precarious nature of their job and their over‐representation among jobseekers who are having to find employment when jobs are scarce. Using quarterly welfare payment data for the period 2019–2021 from the Department of Social Services, we noted a marked increase in the percentage of 16‐ to 21‐year‐olds who received youth allowance (other) payments. While a greater proportion of Indigenous youth than non‐Indigenous youth received the payments from 2019 to 2021, the gap widened following the outbreak of the pandemic. Further, applying regression analysis to data from the 2019 and 2020 waves of the 2015 Cohort of the Longitudinal Study of Australian Youth (LSAY), we find no statistically significant change in individual‐level labour force status between 2019 and 2020. However, pandemic‐induced labour market crises appear to have been associated with reduced work hours, heightened career concerns and sustained nonemployment, where potential impacts are larger among traditionally vulnerable youth groups such as female, Indigenous and overseas‐born young persons. The study highlights the need for recognising the intersectionality of youth and other forms of identity (such as gender, Indigenous status and nativity) while designing labour market policies.

Implementation of the European Youth Guarantee and the Right to Work: A Comparative Analysis of Traineeship Programmes Under the EU Active Labour Market Policy

This article analyses the consistency between the implementation of the EU Youth Guarantee and the fundamental right to work. Focusing on the use of traineeships as an implementation instrument, it explores various types of national Active Labour Market Policies (ALMP) for young unemployed people in Italy, Spain, the Netherlands and Poland. The case studies show that it remains to be seen whether the traineeships considered in this research comply with the right to work. The authors argue for the need to strengthen the Youth Guarantee to accord with the right to work, so that in addition to the right to a first job, it ensures that work-related instruments include the provision of effective training, as well as the right to equal pay for work of equal value, and decent working conditions. This is particularly important in view of the Coronavirus disease 2019 (COVID-19) pandemic, that has had an unprecedented economic impact in the EU and is likely to result in another dramatic upsurge in the number of young unemployed. Youth Guarantee, Right to Work, NEETs, Traineeships, Decent Work, Equal Pay, Active Labour Market Policies

Government Welfare Policy Under a Skilled-Biased Technological Change

In a world where machines replace unskilled work, an active labor market policy—represented by the combination of an optimal Earned Income Tax Credit (EITC) and income maintenance for the unemployed—provides incentives to increase participation in the labor market and depresses wages for unskilled employees. In this paper, this policy is tested against the alternative of allowing unskilled workers to receive a means-tested basic income (MTBI), as recently adopted by Spain. For a liberal social planner (i.e., includes consumption and leisure in individual utility), the MTBI dominates the active labor market policy. For a conservative social planner (i.e., evaluates social welfare based on individual utility from consumption), the active labor market policy dominates the MTBI. The potential dynamic effects of active labor policy on labor supply were considered in a simulation using updated empirical estimates; it shows that this policy becomes preferable for both types of the social planner.

“What innovations would enable the tourism and hospitality industry in the European Union to re-build?”

PurposeThe aim of this paper is to discuss innovations in response to the COVID-19 pandemic, major investments and reforms required to realize transformation in the tourism and hospitality industry of the European Union.Design/methodology/approachA remedial literature study approach is used to analyze innovations put in place by governments and industry and to determine best practices including new innovations that could help to strengthen hospitality and tourism operations.FindingsThe COVID-19 outbreak and border closures had a significant impact on the tourism and travel sectors. During the pandemic, innovations were needed to address challenges brought on by the border closures, vaccine passports and stricter health and safety requirements. While these innovations helped organizations survive and reinvent themselves, they are not enough for long term sustainability. The need for resilience, effective and well-designed active labor market policies and social protection systems including investment in education and skills training will become basic foundations for sustainability. In order to address these issues, collaboration between government, academia and industry is essential.Originality/valueThe outbreak of COVID-19 and border closures in 2020 created turmoil in the travel and tourism sector. Small- and medium-sized enterprises were damaged and many did not survive. That said, the crisis has given the tourism and hospitality industry an opportunity to rethink the future.

The COVID-crisis as an opportunity for welfare recalibration? Panel-data evidence on the effect of the COVID-crisis on welfare preferences in Spain, Germany, and Sweden

ABSTRACT The reform capacity of welfare states to adapt to the needs of post-industrial labour markets has been a key question of the welfare literature for the last two decades. In a context of austerity, such adaptations (retrenchment or recalibration) are notoriously difficult because of extremely high levels of support for existing policies, particularly old age pensions. We investigate how the recent economic shock caused by the COVID-pandemic has changed social policy preferences in three West European countries (Germany, Sweden, Spain). Relying on original panel data observing the relative support for social policies before and during the crisis, we show that support for old age pensions has dropped substantially relative to other social policies. This drop can be observed in all three countries and among all ideological and age groups. The drop is strongest among current and soon-to-be pensioners who in turn increased support for benefits to the working-age population. At the expense of pensions, the economic shock has especially boosted support for active labour market policies and (in Germany) childcare services. This shift of support from pensions to social investment policies might have opened up a window of opportunity for recalibrating welfare reforms.

Do International Business Students Who Are Studying in Australia Have Similar Academic Outcomes? A Comparison of Undergraduate and Postgraduate Students

The paper explores the characteristics of business students studying in Australia. A total of 1907 students (1033 undergraduate and 874 postgraduate students) are included in the study between 2012 and 2016. These students are either from a higher education (tertiary) private provider of undergraduate business courses or from one of the Australian universities studying at the postgraduate level. The paper attempts to examine if there are similarities in undergraduate and postgraduate business student outcomes that could be attributed to country of origin and gender. The paper argues that the human capital pursuit among international business students studying in Australia is similar due to the linkages between immigration, labor market and education policies. These linkages might have facilitated the perceived risk-return relationship of studying in Australia and as a result led to attracting similar (international) students studying at the undergraduate and postgraduate levels. Ordinary least squares (OLS) models’ results suggest that gender and country of origin are important in predicting success. In particular, being female is positively related to academic success and certain student groups dominate the international students’ landscape in Australia.

Analysis of Input (Supply) Multipliers for the Maltese Economy on the Basis of the SIOTs for 2010 and 2015

The goal of this study is to present and assess estimates of input (supply) multipliers within the context of the Maltese economy to identify in which economic sectors it is the most beneficial to allocate primary resources with the aim to support economic growth. Via the application of the Ghoshian Supply-Driven Model, this study presents the first highly disaggregated input (supply) multiplier estimates for the Maltese economy based on the 2010 and 2015 Symmetric Input-Output Tables. This study also includes a comparative analysis between the years 2010 and 2015 to assess changes in the input (supply) multipliers ranking across economic sectors. Based on the 2015 Symmetric Input-Output Table, potential output is mostly increased following the additional allocation of primary inputs to the Manufacturing of other non-metallic mineral products sector following the highest input (supply) multiplier estimate, keeping all else constant. Furthermore, based on the 2010 Symmetric Input-Output Table, the Advertising and market research sector registered the highest input (supply) multiplier. The input (supply) multipliers are subject to the traditional input-output framework and the supply-side modelling assumptions. However, they do provide estimates on the potential change in economy-wide output following exogenous primary input shocks in every sector. In other words, the input (supply) multipliers provide policy makers a guide in which economic sector it is most beneficial to allocate primary inputs, such as labour supply, with the aim of supporting economic growth. The derived input (supply) multipliers may be utilised to aid in the formation of industry specific labour market policies with the aim of supporting overall economic expansion.

Review of Literature Related to Labour Migration: Types, Causes, and Impacts

Purpose: Economies of migration have always been an important topic of research. Migration of labour has, undoubtedly, some impact on employment, labour market, rural development, social welfare, labour management, migrant networks etc. A good understanding of the labour force is imperative for framing appropriate labour market policies and inclusive economic growth policies. Analysing the extent, and trend of labour migration policies as they influence upon labour market and economic development of a country. Design/Methodology/Approach: Descriptive Research was used in this study, which is focused on secondary data sources. Secondary data is gathered through books, newspapers, journals, articles, and government websites. Findings: Migration has always been an important factor in population expansion and economic development, according to a thorough examination of the literature. People have moved across national and international borders in search of better lifestyles. Originality/Value: This paper considers the issues and impacts of labour migration on national development. It presents the trends, patterns and causes and impact of labour migration at the international, national and state levels of Kerala as discussed in the literature. Paper type: Review of Literature.

Linking of the 'Integration von Menschen mit Behinderungen in die Arbeitswelt' (IMBA) to the 'International Classification of Functioning, Disability and Health' (ICF).

The assessment of work capacity, workable work and the need for a common language is challenging in labour market policy. Being a specific instrument to facilitate Return To Work (RTW), the Integration von Menschen mit Behinderungen in die Arbeitswelt (IMBA) might facilitate the documentation of the individual's work capacity, the job-related workload and the match between these two elements. Since the International Classification of Functioning, Disability and Health (ICF) is worldwide recognized as frame of reference in RTW, this paper presents the linking of IMBA to the ICF, since this is assumed to be beneficial to support RTW. The establishment of the IMBA-ICF linking in order to study 1) the relationship between IMBA and ICF; 2) the content comparison of IMBA with work-related ICF core sets; and 3) the extent to which the linking addresses the challenges in RTW policy. A content comparison of IMBA and ICF was conducted, using a 7- step linking methodology in which the Delphi and Nominal Group Technique are integrated in the implementation of the ICF linking rules. An explorative conversion of the scoring systems of IMBA and ICF was established based on expert opinions. In the main 70 IMBA items, 107 concepts have been identified of which 94 were linked to 87 different ICF categories. Body functions and activities and participation are the most presented ICF components in contrast to the environmental factors. IMBA items regarding occupational safety and work organization are respectively 'not covered' and 'not defined' in ICF. An integration of IMBA and ICF addresses the challenges in RTW policy in the assessment of work capacity, workable work and the need for a common language. In order to do so, extension of ICF terminology regarding 'occupational safety' and 'work organization' is priority. In depth quantitative research is necessary to support the conversion of both scoring systems.

Does the European left have to choose between the nation-state and internationalism? Some considerations following Richard Rorty

By applying the concept of democracy and the state proposed by Richard Rorty, the article aims to make a theoretical contribution to understanding frames of political mobilization and solidarity. While Rorty’s conceptual instruments stem from the field of epistemology and moral philosophy and have, so far, not been widely applied to theorizing statehood in general and labour market policy in particular, his ideas can help to understand leftist politics between inter- and re-nationalization. By drawing on empirical findings on debates and negotiations between European trade union organizations, the text proposes an idea on how to overcome a dualistic framework beyond a footloose cosmopolitanism and national protectionism.

Employment Generation Challenges and Strategies for Pakistan: A Diagnostic Analysis

The employment challenges are getting more complex and worse because youth under the age of 30 constitute 64 percent of the total population. The gradual increase in labor force participation is adding more pressure to the labor market to generate employment opportunities. Hence, the growth in employment generation is essential to match the unprecedented number of young people entering working age in Pakistan. Moreover, the structural transition process involving labor movement from low-to-high productive activities has been much slower in Pakistan than in other Asian countries like China. This study identifies all major concerns regarding employment challenges in Pakistan and identifies various strategies and policies while adopting a diagnostic approach to employment policy. The reason for adopting the diagnostic approach/framework is to develop an understanding of the factors which are responsible for the slow growth of employment in formal sectors and significant constraints for generating more employment. It attempts to assess various elements that may find a place in developing strategies and policies. While designing effective policies for employment, policymakers must consider all aspects like population, demographics, types of unemployment, economic condition, social structure, and development stage of a country. Meanwhile, the role of entrepreneurial activities and the private sector, technological changes, development of labor-intensive industries and SMEs, improving skills and knowledge, youth employment programs, active labor market policies (ALMPs), and macroeconomic policies are core elements that should be considered to design effectual policies for employment generation.

Productivity growth, industry location patterns and labor market frictions

This paper constructs a two-country model of international trade to study how labor market frictions affect industry location patterns, unemployment rates, and fully endogenous productivity growth. We show that when the larger country offers subsidies to labor search costs or reduces unemployment benefits, the domestic unemployment rate falls, causing greater industry concentration and faster productivity growth, but higher unemployment for the smaller country. When similar labor market policies are implemented in the smaller country, however, the resulting fall in domestic unemployment leads to lower industry concentration and slower productivity growth, while lowering unemployment in the larger country.

What Role Does EPL Play in Wage Determination under Segmented Labour Markets? A State-level Analysis from India’s Formal Manufacturing Sector

This study explores the role of employment protection legislation (EPL) in wage determination using a state-level panel dataset for India’s formal manufacturing sector. Unlike previous studies, we create a quantitative indicator of EPL using state-wise court judgements (on labour disputes), citing various sections of Chapters 5A and 5B of the Industrial Disputes Act, 1947, particularly those dealing with employment and wage-related legislations. Our findings suggest that pro-worker court judgements specifically on wage-related issues lead to an increase in the share of wages in industrial output. The findings are robust to alternative model specifications. However, we find that the share of wages responds negatively to an increase in pro-worker strictness in the overall EPL. We also analyse the consequences of labour market dualism, which is increasingly becoming a norm even in formal sectors. Using insights from labour market segmentation theory, we argue that a divergence in the regulation between regular and contract labour has a potential to undermine the success of active labour market policies in curbing the ill-effects of market segmentation. JEL Codes: J21, K31