Labor Market Skills Research Articles

Artificial intelligence: a destructive and yet creative force in the skilled labour market

ABSTRACT Artificial intelligence (AI) is not just a simple tool to replace skilled labour but one that is equally capable of creating many other jobs in line with its development. It is even expected that there will be a surge in skilled jobs to provide support services for the new technologies. Occupations that are inimitable to AI are characterized by the development of more ‘abstract’ managerial skills – critical and system thinking skills – that intelligent algorithms are not yet able to understand. The growing involvement of AI in the skilled professions had led to the development of new relationships between humans and smart machines. This research sheds new light on the evolution of skilled jobs in a context where the use of artificial intelligence is fast increasing. As we will soon enter 2021, it’s the combination of AI and human intelligence that will transform work and workers as we know it.

Public-private partnerships for skill development in the United States, Russia, and China

ABSTRACT We compare three countries where public policy has explicitly sought to align incentives of employers and educational institutions around closing the gap between skill formation and labor market demand. In large, heterogeneous countries such as the United States, Russia and China, collaborative arrangements such apprenticeships and other forms of public-private partnerships can be constructed at the subnational level by building on direct, face-to-face ties across educational, business, government, and civic sectors. Drawing on existing literature as well as fieldwork studying a number of specific cases in the three countries, the paper develops a typology of such arrangements and proposes an explanation for the observed variation. It emphasizes the importance of two sets of factors: those that induce cooperation on the part of firms and schools, and those that influence the character of such partnerships.

Labour Market Outcomes and Skill Endowment of Nepali Migrant Workers in India: Case of Uttar Pradesh and Delhi

Migration to India of Nepali workers is a historical phenomenon. Due to 'open border' and multidimensional inter-linkages, migration for work persists to this day. The importance and challenges of the labour market for Nepali migrants in India are yet to be recognized and studied. This study examines the existing skill endowments of Nepali migrant workers and strategies to enhance their labour market outcomes in India. The Indian labour market is fragile. Recruitment neither follows a strict rule or process nor are any specific skills required. From this standpoint, the situation of Nepali migrant workers is not much different than India’s internal migrants. However, Nepali migrants are neither well documented nor properly recruited in the labour markets of India. Because of their low level of education and lack of skill, they are deprived of good job opportunities and their income is also low. Most of the Nepali migrants are not netted in by the social security scheme of India. This study suggests that education; training for skills and social security benefits can go a long way in improving the labour market outcomes of the Nepali migrants.

The Labor-Market Skills of Foreign-born Workers in the United States, 2007–2017

Various measures of the labor-market skills of foreign-born workers have improved during the past decade. The largest gains are concentrated among immigrants from Mexico, who traditionally have shown the lowest skill levels among foreign-born workers. The data suggest that the apparent increase in skills is the result of a shift in the distribution of immigrants coming to the United States, with increased immigration of workers from Asia and a precipitous decline in immigration of workers from Mexico.

Analysing the effect of commuting time on earnings among young adults

ABSTRACT A few recent studies find a positive relationship between workplace income and commuting distance among the general population. However, young adults, with less advanced labour market skills, might be more likely to accept longer commutes even if they are not compensated with higher earnings in the short-run. We examine the relationship between commuting time and earnings in a sample of young adults from the National Longitudinal Study of Adolescent to Adult Health. We employ various statistical approaches to disentangle the effects of commuting time on earnings while controlling for numerous socio-demographic factors, occupation, irregular work schedules or part-time work, transportation mode, and other explanatory variables. Our results indicate that 10 additional minutes of one-way commuting time is associated with a 2.9% (2.8%) increase in annual income for young adult men (women). These findings have implications for employers, young employees, workplace advocates, and policymakers as commuting is a prominent component of work–life balance for most individuals.

Vision 2030 and reducing the stigma of vocational and technical training among Saudi Arabian students

Technical and vocational education and training (TVET) plays a critical role in developing essential labor market skills. In Saudi Arabia, participation in TVET has traditionally been stigmatized in favor of white-collar jobs. However, the importance of skilled labor has increased in Saudi Arabia’s private sector as the country’s Vision 2030 focuses on moving the economy from oil to investment. This quantitative study investigates the role of recent socio-economic transformations in changing attitudes toward TVET. Statistical analysis of a questionnaire distributed to 1007 TVET students identified a significant relationship between perceptions of TVET and gender, family income, and parental educational level.

The Relation of Contemporary Labour Market Skills and the Future Engineers’ Visions

The study describes a segment of an international research which was aimed to find answers what the future generations‘ (Gen Z) vision is concerning their career and the correlation between these visions and the expectations of labour market nowadays. The preferred competencies of the labour market are constantly altering: a prognosis from 2018 says that the five most important skills will be analytical thinking, innovation, active learning, creativity, and critical thinking in 2022.
 Keywords: career, competences, engineering education, future priorities, generation Z, labour market, STEM, top skills

The effect of university graduates’ international mobility on labour outcomes in Spain

ABSTRACT The Erasmus programme represents one of the most popular policy measures of the European Union among its citizens. The aim of this paper is to explore the causal effect of this mobility action on labour market outcomes and skills’ development in Spain. In order to do so, this research exploits the Spanish University Students Employability Survey 2014 an employs and instrumental variables strategy, based on the supply of Erasmus scholarships by area of studies and region of residence, to address the potential endogeneity of the participation in the programme. On the one hand, the empirical results suggest that studying abroad has a positive effect on the probability of becoming an entrepreneur, working in a foreign country and the formation of Information Communication and Communication skills. On the other hand, they do not reveal any significant impact of participating in this programme on the likelihood of employment and several working conditions.

Concept for distributed robotics learning environment - Increasing the access to the robotics via modularisation of systems and mobility

The ongoing digital transition affects manufacturing industry at all levels, from workers at a shop floor to machine systems, and from business models to future markets. Emerging technologies such as robotics, Internet of Things (IoT), Artificial intelligence (AI), and cyber-physical production systems (CPPS) capable of facilitating real-time processes, visibility and transparency of factory operations will speed up the change of manufacturing paradigms. The mass customization and personification is expected to increase further.The capability to address the requirements and needs of each individual customer will be a key differentiation and competitive factor. At the same time the workforce in Europe is diminishing, causing a miss-match between skills and needs from the industry. In manufacturing industry any skills are developed by experience, reflecting time on the labour market and age and skills taught in qualifications change. Qualifications which are prone to technological change are likely to reflect quite different embodied skills according to age cohort. In order to answer these challenges we have established a robotics fablab concept to support both formal and non-formal education offered to the younger students and industrial workforce alike. The concept utilises digital learning contents, a fablab operating philosophy and mobile factory concept, meaning that parts (e.g. robot cells) of the laboratory can be shipped to another location for a while to be used by learners. This paper will described the concept and preliminary findings from the applicability of the concept.

Self-organised learning: Empowering the most marginalised schools of rural Greece?

Despite increasing demands in the labour market for higher-order thinking skills, along with OECD reports highlighting an urgent need for a curriculum reform in the crisis-ridden country that will aim to adopt a more holistic approach to the education and development of its young people, Greece is still ranking among the lowest across 30 OECD countries in terms of performance on 21st century competencies, such as creativity, while also performing well below average on foundational literacies such as scientific and cultural and civic literacy. It should be hardly surprising that the structural constraints imposed by a debt-ridden economy seem to weigh heavily on the administrators, who, recognising the need for the nation to play catch-up, are currently amidst a curricular reform for a number of secondary school subjects, yet inevitably pushing over 500 of the most marginalised primary schools operating in rural and socioeconomically challenged parts of the country down the list of priorities. It is against this very backdrop, then, that questions such as “How can we do more with less?” have greater currency than ever. This ongoing scholarship investigates the design of a targeted intervention aiming to provide support for the more disadvantaged state schools where there is currently no provision for the teaching of English as a Foreign Language (EFL) due to geographical and budgetary constraints. ‘Self-organised learning’ as an alternative, cost-effective model for the enactment of the primary English curriculum to current approaches has been put to the test. Pupils from eight such schools participated in a quasi-experiment consisting of weekly sessions where they were encouraged to self-organise, take responsibility for the direction of their own learning, demonstrate initiative, and collaborate effectively. Preliminary findings are discussed in terms of behavioural changes regarding the above-mentioned skills, including the participants’ preparedness to self-direct.

Natives’ skills and attitudes towards immigrants: evidence from 20 OECD countries

PurposeThe purpose of this paper is to examine whether natives’ attitudes toward immigration is associated with an influx of high- and low-skilled immigrants. The current research focuses on selected 20 OECD countries as destination countries.Design/methodology/approachA pseudo-panel based on age cohort is constructed to control for the potential unobservable individual characteristics. The random effects and within estimators (where applicable) are applied in the panel-data setting.FindingsRegression results indicate that natives’ attitudes depend on their labor market exposure and skill type. Low-skill immigrant inflows are negatively associated with natives’ attitudes, but the magnitude is reduced proportionally to their share of the high skilled. The association between immigrant flows and attitudes is particularly strong for the prime-age cohorts, which can be explained by the labor market competition mechanism.Research limitations/implicationsGiven the data limitations, not all destination countries could be analyzed but only selected OECD countries. However, this situation has resulted in the sample destination countries sharing similar characteristics with advanced economies.Originality/valueAlthough the majority of previous studies are based on survey questions on attitudes toward immigrants with respective skill type, the current study focuses on the effects of the actual immigration flows. Natives’ attitudes respond sensitively to the actual changes in the number of migrants. The selection of OECD countries makes the characteristics of the destination countries substantially homogeneous.

Employment and Human Capital Investment Intentions Among Recent Refugees in Germany

Motivations to participate in the labour market as well as to invest in labour market skills are crucial for the successful integration of refugees. In this paper we use a unique dataset – the IAB-BAMF-SOEP Refugee Survey, which is a representative longitudinal study of all refugees reported on administrative records in Germany – and analyse which determinants and characteristics are correlated with high motivation and intention to participate in the labour market. We find that overall men have a strong intention to work and to invest in human capital. The result for women is different: among women, having children, lack of German language skills, and having no previous work experience significantly and consistently correlate with lower expectations and intentions of future economic integration. Furthermore, we find a significant relationship between the degree of traditional or patriarchal views of women’s societal roles, and our corresponding outcomes of interest.

Training and Skills Development Policy Options for the Changing World of Work

This article offers a critical assessment of empirical knowledge regarding labour market training and skills development in an era of technological disruption. Although exactly which skills and jobs will become obsolete is not known, technological change may cause unemployment to spike and increase the need for retraining. To move toward understanding what policy interventions will be needed in response, in this article we assess the current state of knowledge about Canada’s active labour market policies. We argue that before creating new programs, policy-makers need to learn from existing policy attempts to address labour market disruptions. By analyzing the most recent Employment and Social Development Canada evaluations, we find that quality data and analyses regarding the effectiveness of these programs are lacking. We conclude that research in this area is needed before policy-makers will be able to develop responses to technological disruption.

Labor market regulation, the diversity of knowledge and skill, and national innovation performance

The diversity of knowledge and skill is an important element of a national system of innovation. We propose a theory of how certain labor market institutions affect diversity, and through that route affect levels of innovation. Specifically, unemployment protection (UP) encourages diversity by reducing the risk burden of a broad range of learning, or human capital investment; for that reason, UP fosters innovation. Employment protection (EP) reduces the risk burden of a much narrower range of learning; for this reason, it will not enhance diversity to the extent UP does, and it may actually depress overall diversity and innovation. Our approach differs from previous research on labor market insurance and skill formation, much of which has dealt with a distinction between general and specific skills, and which has treated the effects of UP and EP as similar. Estimating the effects of UP and EP on patenting for 25 OECD countries over 24 years, we find a positive effect from UP, a negative effect from EP, and evidence that the UP effect is mediated by diversity of skill.

What Works for Working Women? Unpacking the Constraints on Female Labour Force Participation in Bangladesh

During the last five years, urban poverty reduction in Bangladesh has stagnated and, perhaps without coincidence, this has also been a period in which urban female labour force participation (FLFP) rates have also fallen. Understanding factors that constrain FLFP in urban areas is increasingly important to understanding how to ensure urban income growth and poverty reduction, as Bangladesh continues to urbanise. This paper explores factors that constrain women in slums and low-income neighbourhoods in Dhaka from engaging in the labour market and supplying their labour to wage or self-employment. It uses unique individual level data on labour market participation, time-use, norms and skills, both cognitive and non-cognitive. The data reconfirm well-known patterns about female labour force participation: that it is higher among low-income neighbourhoods and women with low education, and it is higher among younger unmarried women. The paper also highlights the correlation between soft-skills and type of work. In addition, the paper quantifies the important correlation between the need for childcare, safety in public spaces and at work.

Domestic demand-based economic globalization and inclusive growth

Purpose The purpose of this paper is to propose policy recommendations that resort to the domestic market to achieve inclusive growth from an open perspective. Design/methodology/approach How will economic globalization based on domestic demand affect economic growth and income distribution in an open and large country? With the aim of discussing the mechanism of the impact of expanding domestic demand on the inclusive growth from an open perspective, this paper incorporates the Global Value Chains vs National Value Chains (GVC-NVC) competition, which is triggered by foreign investments attracted by the domestic demand scale into an endogenous growth model with “Schumpeterian Innovation.” Findings Theoretical analysis indicates the following findings: although domestic demand-based economic globalization can promote transnational inclusive growth across countries, it is not conducive to national (domestic) inclusive growth; the impacting effect of domestic demand scale on inclusive growth across countries is subject to the moderating effect of the development maturity of the labor market; and the impacting effect of domestic demand scale on national inclusive growth is subject to the joint moderating effect of the development maturity of the labor market and labor skill structure. Originality/value First, this paper examines the impact of domestic demand-based economic globalization on the inclusiveness of economic growth from an open perspective, which deepens the existing theory of intra-product specialization and inclusive growth. Second, the paper puts the sequential production process into Schumpeterian growth model and reveals the mechanism that domestic demand affects inclusive growth. Third, the study finds that the enhancement of labor market efficiency, transfer payments to low-skilled labor and the creation of a fair competitive market environment will contribute to the globalization of a domestic demand-oriented economy, which provides a policy-making basis for government sectors.

Decomposing the growth of the high-skilled wage premium in an advanced economy open to trade

We use a double-calibrated general equilibrium model to decompose the growth of the high-skilled wage premium in the UK from 1979 to 2000 into a range of potential contributory factors. This structural approach ensures that the model used is consistent with both price and quantity data simultaneously, and allows us to investigate a wide range of plausible parameter values. We find that the small observed rise in the skill premium is the net outcome of a set of opposing effects, some of which are large. In particular, the negative effect on the skill premium from the rising supply of skilled labour is mostly offset by the factor bias of technical change in favour of skilled labour. To this extent our work supports previous labour-market based studies, but is novel in showing that these are consistent with trade price and volume changes in a general equilibrium framework. If we assume a production technology dominated by capital-skill complementarity, the fall in capital prices (positive effect on the skill premium) and the sector bias of technical change in favour of unskilled-labour-intensive sectors (negative effect) also become quantitatively important. The impact of international trade and consumer preferences on the skill premium is mostly positive, and while not large compared to the role of factor bias, it is still significant as a proportion of to the net change in the wage premium. We conclude that a structural model such as ours provides robust insights into the processes that drive the skill premium. At the same time, while we treat the rise in the supply of skilled labour as exogenous, future research might usefully aim to endogenize skill acquisition decisions and labour market policies with a more fully dynamic modelling technique.

Impact of contract farming on land productivity and income of maize and potato growers in Pakistan

While the positive income effect of contract farming is well established in the literature, the heterogeneity of effects for different crops has not been widely investigated. This study compares the income and productivity effects of large-scale contract farming under contract schemes for potatoes and maize in Pakistan. In the area of the study, maize is a common staple crop, widely available in the market, while the potatoes produced by contract farmers are a special variety not sold in the market. We find that potato contracting is associated with significantly higher income for participating farmers, while maize contracting has no association with either income or productivity. We found no negative association between contract participation and income from other sources. Taken together, these results show a higher total household income for potato contract farmers. We also show unique evidence that potato contract farmers tend to employ more skilled workers under a salary system for the management of farms, which implies that contract farming may have positive spillover effects in the skilled labor market. Neither scheme, however, is associated with larger employment of agricultural labor for simple tasks.

Country-specific preferences and employment rates in Europe

European countries exhibit significant differences in employment rates of adult males. Differences in average labor-leisure preferences, determined by cultural values that vary across countries, can be responsible for part of these differences. However, differences in labor market institutions, productivity, and skills of the labor force are also crucial factors and likely correlated with preferences. In this paper we use variation among first- and second-generation European migrants to isolate the effect of culturally determined labor-leisure preferences on individual employment rates. If migrants maintain some of their country of origin labor-leisure preferences as they move to different labor market conditions, we can separate the impact of these culturally determined preferences from the effect of other factors. We find that country-specific labor-leisure preferences explain about 24% of the top-bottom variation in employment rates across European countries.

More necessary and less sufficient: an age-period-cohort approach to overeducation from a comparative perspective

In many countries, the skilled labor market has lagged educational expansion. As a result of increased competition, younger cohorts of the highly educated face decreasing returns to education or overeducation. Surprisingly, decreasing occupational outcomes do not coincide empirically with the economic returns among those with tertiary education. Regarding the process of changes in economic returns to education based on cohort transformations, we expect that the expansion of tertiary education affects specific cohorts, which find themselves facing more labor market competition. As a result, the economic returns to education should decrease among younger cohorts even when the overall returns to education remain stable over time. To study this process, we model economic returns with a new age-period-cohort-trended lag (APCTLAG) method, which allows us to compare the gap in economic returns between tertiary and less than tertiary education over cohorts. Using the Luxembourg Income Study (LIS), we analyze trends over three decades in 12 countries. Our results confirm that educational returns for tertiary education have declined over time, even though the gap between the educated and the less educated has remained similar in most of the countries. For younger cohorts, tertiary education has become more necessary to survive in the competitive labor market, but the actual economic returns have decreased—making tertiary education less sufficient than before.