Competitive Labor Market Research Articles

Working Time - a Key Element of Health Workers, an Instrument of Labor Market Flexibility. The Situation of the Health System

Abstract With its devastating effects and decreasing profitability, the economic crisis pushes employers to ask more from workers, for the same salary. From this derives flexibility, exemptions, waivers and national options to elude the common rules established by the European legislative act. The Directive can be both a guardian for the workers, but also a tool to streamline business through crisis conditions. This paper aims to analyze the impact of the recession, on the actual time worked by employees in the EU, with the major repercussions on the employees’ health and on the other hand the labor market flexibility and competitiveness. Also, special attention is given to the working time analysis in the health sector, especially for doctors in training and those who perform excess guards. Romanian doctors havea “Soviet-style” working program mentioningthat some guards exceed 30 hours. This article proposes an analysis of various member states on the following aspects: pattern of work, tendency towards a non-stop society ; relativity quantification of working time, overtime rewarding; correlations between the conclusions of the European Commission and the economic crisis.

Do high stakes and competition undermine fair behaviour? Evidence from Russia

This paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours. In the high stake condition subjects earned between two and three times their monthly income during the experiment. In the normal stake condition the stake level was reduced by a factor of ten. We observe that both in the high and the normal stake condition fairness concerns are strong enough to outweigh competitive forces and give rise to non-competitive wages. There is also no evidence that effort behaviour becomes generally more selfish at higher stake levels. Therefore, our results suggest that fairness concerns may play an important role even at relatively high stake levels.

Labor Market Competition and Anti-Immigrant Sentiment: Occupations as Contexts

This paper explores the impact of labor market competition measured within occupations on attitudes toward immigrants in the U.S. including perceived group threat and policy preferences. Multilevel analyses of data from the Bureau of Labor Statistics, the Integrated Public Use Microdata Series, O*NET, and the General Social Survey demonstrate that labor market competition accounts for threat perceptions – threat is lower in occupations with greater expected employment growth. Individual-level characteristics also explain differences across occupations. Perceived group threat is higher in some occupations because job incumbents have less education. Occupational differences in threat perceptions account for all occupational differences in policy attitudes.

Public Sector Capital and the Transition from Dictatorship to Democracy

A model where a dictator decides on both the level of public-sector capital and whether to democratize is constructed. Under dictatorship the labour market is monopsonistic; democratization involves instituting a competitive labour market. Workers sometimes have a credible threat of revolution and this may affect the dictator's investment decision; it may also induce democratization. The possibility of a ‘political development trap’, where the dictator stifles development to stay in power, emerges. The model is used, inter alia, to explain the effects of the 1832 Reform Act in the UK and the worldwide positive correlation between income and democracy.

Explicit and Implicit Incentives: Longitudinal Evidence from NCAA Football Head Coaches Employment Contracts

We study the role of explicit and implicit incentives in a competitive labor market with no internal promotion opportunities. We find that explicit incentives explain only a small fraction of the total incentives, as the likelihood of new employment and renegotiation of current employment on better terms increases following good performance. We also find the likelihood of renegotiation relative to changing employment on better terms is dependent on the labor market forces. Our findings demonstrate the role of renegotiation and the relative strength of labor market forces compared to ex-ante pay-for-performance in the presence of strong external labor market incentives. Further, our results suggest that conclusions regarding the optimal use of explicit incentives in pay-for-performance may be substantially overstated when not considering implicit incentives from the labor market.

Problems of Formation of Competitiveness of the Worker for Innovative to the Focused Economy of Russia

In confirmation of actuality Mozgachev M. analyzes a social and economic situation in the field of formation and use of workers competitiveness the and considers the main problems of youths on a labor market competitiveness in the article Problems of Formation of Competitiveness of the Worker for Innovative to the Focused Economy of Russia. According to the author, the problem of formation of administrative staff has to be assigned in states' higher education institutions at direct interaction of business structures and bodies of municipal authority. But for this purpose higher education institutions need to be reoriented to requirements of the modern market and to prepare specialists innovators for the market economy. The author also offers to use the administrative potential of youth in the sphere of small business and youth business and gives mechanisms solving this problem.

Exploring the benefits of contact centre offshoring: a study of trends and practices for the Australian business sector

A globalised knowledge economy has seen organisations restructure their delivery of customer services to take advantage of an open and competitive labour market. Gains achieved in developed economies such as the USA and UK from offshoring of business processes to developing countries are pressuring Australian businesses to offshore. This paper explores the practices of Australian businesses with offshore contact centres and considers emerging trends in offshoring in terms of potential risks and benefits for Australian organisations with broad customer contact. Findings suggest that Australian organisations are not only cautiously adopting offshore contact centre solutions to a range of onshore challenges including recruitment and retention of local staff and comparatively high local costs, but also achieving gains beyond cost savings in quality of service and enhanced business flexibility.

Market-based Incentives

We study optimal incentives a principal-agent problem which the agent's outside option is determined endogenously a competitive labor market. In equilibrium, strong performance increases the agent's market value. When this value becomes sufficiently high, the threat of the agent's quitting forces the principal to give the agent a raise. The prospect of obtaining this raise gives the agent an incentive to exert effort, which reduces the need for standard incentives, like bonuses. In fact, whenever the agent's option to quit is close to being in the money, the market-induced incentive completely eliminates the need for standard incentives.

Bonus Culture: Competitive Pay, Screening, and Multitasking

This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under perfect competition, the resulting efficiency loss can be much larger than that imposed by a single firm or principal, who distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more aggressively, the monopsonistic underincentivization of low-skill agents first decreases, then gives way to a growing overincentivization of high-skill ones. Aggregate welfare is thus hill-shaped with respect to the competitiveness of the labor market, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and behavior, but may generate their own set of distortions.

Flexibility and security? ‘Flexicurity’ and its implications for lifelong guidance

This article sets out to trigger research and policy attention among the career guidance community to the increasingly important notion of ‘flexicurity’. It first explores the different meanings of the term, particularly as these have evolved in discussions across the European Union. It then goes on to consider why ‘flexicurity’ has attracted so much policy interest, particularly in its promise to both support labour market competitiveness and increase economic efficiency on the one hand, while protecting the interests of workers on the other. Next, the article documents some of the key debates around the notion of flexicurity, highlighting the fact that any consideration of ‘flexicure’ arrangements needs to be empirically grounded in time and space, and carefully contextualised. The article concludes by making a series of critical reflections on the need to ‘insert’ career guidance in the European discourse on ‘flexicurity’.

Industry Structure, Executive Pay, and Short-Termism

This study outlines a new theory linking industry structure to optimal employment contracts and executive short-termism. Firms hire their executives using optimal contracts derived within a competitive labour market. To motivate effort, firms must use some variable remuneration. Such remuneration introduces a myopia problem: an executive would wish to inflate early expected earnings at some risk to future profits. To manage this short-termism, some bonus pay is deferred. Convergence in size among firms makes the cost of managing the myopia problem grow faster than the cost of managing the effort problem. Eventually, the optimal contract jumps from one deterring myopia to one tolerating myopia. Under some conditions, the industry partitions: the largest firms hire executives on contracts tolerant of myopia; smaller firms ensure myopia is ruled out. This paper was accepted by Wei Xiong, finance.

Management Insights

Management Insights

Nonmonetary Benefits, Quality of Life, and Executive Compensation

AbstractWe examine the effects of nonmonetary benefits on overall executive compensation from the perspective of the living environment at the firm headquarters. Companies in polluted, high crime rate, or otherwise unpleasant locations pay higher compensation to their chief executive officers (CEOs) than companies located in more livable locations. This premium in pay for quality of life is stronger when firms face tougher competition in the managerial labor market, when the CEO is hired from outside, and when the CEO has short-term career concerns. Overall, the geographic desirability of the corporate headquarters is an effective substitute for CEO monetary pay.

Incentive Schemes, Private Information and the Double-Edged Role of Competition for Agents

This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard and risk-averse agents, who have private information on their productivity. Two vertically differentiated firms compete for agents by offering contracts with fixed and variable payments. The superior firm employs both agent types in equilibrium, but the competitive pressure exerted by the inferior firm has a strong impact on contract design: For high degrees of vertical differentiation, i.e. low competition, low-ability agents are under-incentivized and exert too little effort. For high degrees of competition, high-ability agents are over-incentivized and bear too much risk. For a range of intermediate degrees of competition, however, agents' private information has no impact and both contracts are second-best. Interim efficiency of the least-cost separating allocation in the inferior firm is a sufficient condition for equilibrium existence. If this is violated, there can only be equilibria where the inferior firm ''overbids'', i.e. where it would not break even when attracting both agent types. Adding horizontal differentiation allows for pure-strategy equilibria even when there would be no equilibrium without overbidding in the pure vertical model, but equilibria with overbidding fail to exist.

Structure of Nurse Labor Market and Determinants of Hospital Nurse Staffing Levels

To analyze the structure of Korean nurse labor market and examine its effect on hospital nurse staffing. Secondary data were obtained from Statistics Korea, Education Statistics, and Health Insurance Review & Assessment Service and Patient Survey. Intensity of monopsony in the nurse labor market was measured by Herfindahl Hirshman Index (HHI). Hospital nurse staffing level was divided into high and low. While controlling for confounding factors such as inpatient days and severity mix of patients, effects of characteristics of nurse labor markets on nurse staffing levels were examined using multi-level logistic regressions. For characteristics of nurse labor markets, metropolitan areas had high intensity of monopsony, while the capital area had competitive labor market and the unemployed nurse rate was higher than other areas. Among hospital characteristics, bed occupancy rate was significantly associated with nurse staffing levels. Among characteristics of nurse labor markets, the effect of HHI was indeterminable. The Korean nurse labor market has different structure between the capital and other metropolitan areas. But the effect of the structure of nurse labor market on nurse staffing levels is indeterminable. Characteristics such as occupancy rate and number of beds are significantly associated with nurse staffing levels. Further study in support of the effect of nurse labor market is needed.

More technology, better childhoods? The case of the Portuguese 'one laptop per child' programme

In 2008, the XVII Portuguese socialist government launched the initiative 'e.escolinha' as a programme within its 'Technological Plan for Education'. This initiative aims to ensure access for all primary school children to a personal computer named 'Magalhães' with educational content and generalize the use of computers and the Internet in early learning. This paper presents a documental analysis of policy documents, complemented by interviews of policy makers, examining the ways children and children media users are (re)presented. We started from the position that these sources draw on both of these conceptions in order to present the 'e.escolinha' initiative, and we are interested in a deconstruction of those notions. Based on questionnaires administered to children aged 8-10 years old, the paper also focuses on the ways children experienced this policy. We find that this policy is more centred on access to technology and the Internet than on children. The child is conceived in terms of his or her future, seen as an adult in the making. Technology is a kind of passport to the future, enabling success in a competitive labour market. In general, the sources reveal an idealised political vision of the benefits of technology for the teaching and learning process and for children's educational success, which contrasts with both the way the children experienced this policy and mainly with the way that the children use the 'Magalhães' computer. We conclude by discussing the importance of taking into account the socially and politically constructed nature of technology and emphasizing the social dimensions of use and access.

The Borders of Solidarity? Trade Unions, Social Entitlements and Regional Integration

This article explores the effects of borders on the making of trade union policies and on their capacity to act. It takes as an entry-point the reform of Luxembourg's system of family allowances and financial support for students in 2010, which redefined the group of beneficiaries and partly excluded cross-border workers from neighbouring countries. This led to heated debates in Luxembourg and in the Greater Region (comprising Luxembourg, Saarland, Rhineland-Palatinate, Lorraine and Wallonia) during which trade unions played an important part. The author explores the contradictory logics of both competition and cooperation within the Greater Region. These lead to a gap between integration as a discourse and what it means for local populations, in particular regarding labour market competition. The debates within trade unions on the issue of social entitlements for cross-border workers offer insights into the dynamics of this dichotomy and into the everyday fabric of cross-border social relations.

Frontline Agents of Globalisation The German Merchant Community in Glasgow, 1840s to 1914

During the second half of the nineteenth century, a German business community of about one hundred merchants and commercial clerks developed in Glasgow. Their trade networks extended not only to Germany but also to other world markets. The main arguments and findings of the microhistorical analysis include: numbers were significantly higher than previously assumed; endogenous recruitment based on ethnic and family ties was prevalent; migrants benefited from their migration-induced social capital (training, languages, intercultural competence) to fill a skills-gap in Britain; labour market competition at the junior career level was less pronounced than contemporaneous assessments suggested; naturalisation was taken out for purely pragmatic reasons; there was a sense of community at intra-ethnic level, but also with the local business elite. The case study is embedded into the larger context of Anglo-German economic relations and globalisation. A purely local perspective does not suffice to do justice to the wider significance of expatriate business communities in an age of economic globalisation.

Doctors with Borders: Occupational Licensing as an Implicit Barrier to High-Skill Migration

Research on the political economy of immigration overlooks the specificity of skills in high skill occupations and its implications for immigration preferences and policymaking. Assessments that skilled Americans are unconcerned about labor market competition from skilled migrants build on a simple dichotomy between high and low skill migrants. In this article we show that natives turn to occupational licensing regulations as occupation-specific, protectionist barriers to skilled migrant labor competition. In practice, high skill natives face labor market competition from only those high-skill migrants who share their occupation-specific skills. Licensure regulations ostensibly serve the public interest by certifying competence but they can simultaneously be formidable barriers to skilled migrants’ labor entry. From a collective action perspective, skilled natives can more easily secure subnational, occupation-specific policies than influence national immigration policy. We exploit the unique structure of the American medical profession that allows us to distinguish between public interest and protectionist motives for migrant physician licensure regulations. We show that over the period 1973-2010 states with greater physician control over licensure requirements imposed more stringent requirements for migrant physician licensure and, as a consequence, received fewer new migrant physicians. By our estimates half of all US states could resolve their physician shortages within five year just by equalizing migrant and native licensure requirements. This article advances research on the political economy of immigration and highlights an overlooked dimension of international economic integration: regulatory rent-seeking as a barrier to the cross-national mobility of human capital, and the public policy implications of such barriers.

Gender and Competition: Evidence from Academic Promotions in France

Differences in promotion across genders are still prevalent in many occupations. Recent work based on experimental evidence indicates that women participate less in or exert lower effort during contests. We exploit the unique features of the promotion system for French academics to look at women's attitudes towards competition in an actual labour market. Using data for academic economists over the period 1991-2008 we find that, conditional on entering the competition, there is no difference in promotions across the genders, which is di cult to reconcile with either discrimination or a poorer performance of women in contests. In contrast, women have a substantially lower probability than men to enter the promotion contest. Our data does not support that this gap is due to differences in costs or in preferences concerning department prestige, indicating that women are less willing than men to take part in contests.