Labor Market Structure Research Articles

Hysteresis, financial frictions and monetary policy

This paper develops a medium-sized monetary DSGE model of unemployment which assumes asymmetric information between entrepreneurs and financial intermediaries resulting in costly state verification financial frictions. The labor sector of the model consists of an insiders-outsiders labor market structure where a monopoly labor union unilaterally sets the nominal wage according to a hysteresis equation. Labor market hysteresis generates an asymmetry between insiders and outsiders. The main purpose of the paper is, firstly, to explore how labor market hysteresis affects the persistence of macroeconomic aggregates after temporary aggregate shocks that simulate a financial crisis; secondly, to investigate the implications of hysteresis for monetary policy. Overall, it is highlighted that a DSGE model that incorporates both financial frictions and employment hysteresis can generate substantial endogenous persistence that resemble a severe financial crisis. Furthermore, welfare analysis indicates a Taylor policy that stabilizes the growth rate of output leads to heavy welfare losses relative to output gap targeting. These losses increase with the degree of hysteresis. In this case, a central bank can benefit from choosing to stabilize wage inflation.

Digital skills as an impetus for the acceleration of economic digitalization: EU perspective

Digitalization, which gained momentum peculiarly after the invention of the Internet, has had a profound impact on the shape of the economy. It has changed the way of doing business and the labor market structure (Peetz, 2019). This change has brought the rise of automatized business processes and public services which aim to eliminate human manual work but at the same time cannot be realized without humans as a main component of information and communication technology (ICT). In order to fully leverage the positive effects of human capital in digitization, individuals must possess essential digital skills. This paper highlights the importance of citizens’ ICT skills for the acceleration of the digital economy, therefore the empirical analysis conducted examines the impact of different levels of digital skills on the digitalization of the economy. Additionally, the paper investigates whether the way individuals acquire digital skills differs between highly digitalized European Union (EU) economies and other parts of the Union. In this paper, secondary data sourced from Eurostat was used. To address the research questions, the pooled ordinary least squares (OLS) and least-square dummy variable (LSDV) models were utilized as well as the t-test. The findings of the study reveal a positive impact of digital skills on the digitalization of the economy. Furthermore, significant differences in the ways citizens acquire digital skills in most digitalized economies of the EU are uncovered.

ТРАНСФОРМАЦІЯ СУЧАСНОГО РИНКУ ПРАЦІ В УМОВАХ ЦИФРОВИХ ТРАНСФОРМАЦІЙ ЕКОНОМІКИ

The article is devoted to the study of transformational changes in the labor market under the influence of the spread of the processes of digital transformation of the economy. Scientific approaches to the content of the "digital transformation" category have been analyzed. It was concluded that digital transformation reflects the process of digitization, which is one of the defining trends in the development of human civilization. The main indicators of digitalization of the economy have been determined. Attention is focused on the continuous impact of digital transformations on the sphere of population employment. The effects of digitalization of the economy on the employment of the population at different levels of the economy: at the level of individual companies, at the sectoral level, and at the macro level have been studied. Five new characteristics of the employment system due to the digitalization of the economy are highlighted: the emergence of new forms of competition in the labor market (between high-value employees; between employers for labor); formation of almost unlimited virtual space for labor mobility of employees; high level of innovativeness and dynamism of the labor market; specific demographic structure of the digital labor market; digital employment can be a tool to ensure balance in the labor market. A number of risks in the field of employment of the population as a result of the digital transformation of the economy have been studied, in particular, a possible increase in the level of unemployment, automation of jobs, updating of work skills, difficulty in employment of the population of various age groups, in particular, the elderly. It was concluded that under the influence of digital transformations of the economy, the labor market expands the employment opportunities of the population, transforms the nature and conditions of work, increases the requirements for the qualifications and competencies of employees, and determines the formation of modern regulatory mechanisms of social and labor relations. The expediency of conducting further scientific research on the transformation of the labor market in the conditions of deepening the processes of digital transformation of the economy is substantiated. Keywords: labor market, employment, digital transformation, digital economy, digitalization, digital technologies.

Racismo, sexismo e resquícios do escravismo em anúncios de empregos

Abstract Job advertisements may present elements of racial oppression, albeit in subtle ways, as in the expressions “good looks” and “good hygiene.” This acknowledgment makes us reflect that the job market, and society in general, is racially structured, not only in the permanence and professional advancement of black women but even in recruitment, including online job advertisements. This research aims to understand how the publication of job advertisements with phenotypic characteristics such as “good looks” contribute to the perpetuation of racism and sexism. Specifically, we aim to understand how resistance to racist labor market practices and structure occurs. We invoke references of decoloniality and intersectionality and use thematic analysis in a corpus of 285 job advertisements on four classified sites and four black employability initiatives present on LinkedIn. In the results and discussion, we indicate that an ideal of a white worker is perpetuated in the domestic work market and that good image and good hygiene are euphemistic expressions that mask racism in the labor market, which is a remnant of slavery. Current black employability initiatives highlight the need to think about affirmative action for black men and women, historically excluded from more prestigious and remunerative jobs and decision-making spaces. This movement, between oppression, resistance, and black existence, operates a decolonial project of intervention in reality, the main contribution of this research.

The effects of major earthquakes on the labor market: evidence from Turkey

PurposeThe purpose of this paper is to explore the impact of earthquakes on the labor market. The authors try to estimate the impact of two major earthquakes (Izmir and Elazig) in Turkey.Design/methodology/approachIn order to analyze the effects of devastating earthquakes in the nearby regions of the province where the earthquake took place, on the labor market, monthly and annual data from the TUIK and ISKUR database will be used. For this purpose, the authors consider the earthquake a natural experiment and employ a Synthetic Control Method (SCM). In addition, the analysis will be carried out using seasonally adjusted data, taking into account the seasonal effects of the monthly data to be used in the study.FindingsThe results show that the impact varies based on the labor market structure of the regions. While the earthquake positively affects the labor market of agriculture-oriented regions, it harms the labor market of nonagricultural-oriented regions.Research limitations/implicationsA major limitation of the study is that we cannot fully separate the impact of Covid-19 from our estimate. The authors believe that Covid-19 overestimates the negative impact of earthquakes on the labor market.Social implicationsEarthquakes have adverse effects on the labor market. The estimation of the earthquake-related costs may provide a useful guide on policy planning and government incentives.Originality/valueThe originality of the study lies in the fact that this is the first study to evaluate how the dynamics of the labor market has changed as a result of the earthquakes that have taken place in Turkey, within the framework of causality.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0568

Public investment and human capital with segmented labour markets

Abstract We develop a dynamic general equilibrium macroeconomic model with segmented labour markets and efficiency wages to examine how labour market structures influence the impact of human capital investment in low-income countries. For plausible calibration values, public investment in education is much more effective than infrastructure investment in promoting long-run economic development, but because investment in education affects labour productivity with a lag, policymakers face an intertemporal trade-off which depends on their social discount rate and the weight of distributional objectives in the social welfare function. We show the distortionary structure of labour markets matters in leveraging welfare gains from public investment and in shifting the optimal public investment programme further in favour of human capital, relative to the case of flex-wage full-employment labour markets.

Worker intra‐urban residential migration and spatial labour market change in Melbourne's functional economic regions

AbstractThis paper investigates the intra‐urban residential migration of workers in Melbourne and assesses the spatial effects of this dynamic on urban internal structure and spatial labour markets. Intra‐urban migration is an important category of internal migration that relocates human and social capital in urban areas, contributing to changes in urban residential and labour market structure. This paper fills the gap in internal migration literature by determining spatial residential movement dynamics through a spatial analysis of census‐based intra‐urban migration flow data. In addition to detailed migration flow analysis undertaken at a local scale, the paper contributes an improved economic data geography based on functional economic regions (FERs) that permits analysis of the intersection of worker migration flows with sub‐metropolitan labour markets. Our results show that intra‐urban migration results in a strong outward flow of workers in Melbourne, which primarily appears to be shaped by spatial housing markets. This process, in turn, contributes to the dispersion of labour markets in Melbourne, complicating policy aims concerning urban agglomeration and limiting urban spatial expansion.

Regional/Rural Workforce Transitions for Post-COVID-19 Resilience

The pandemic has intensified the way we think about global challenges. Humanity now faces a ‘triple conjuncture’ of global crises: climate change and ecological breakdown; a systemic crisis of global capitalism; and the current global Coronavirus pandemic (Gills, 2020). The impacts of the pandemic are not experienced uniformly. They are amplified by social and economic vulnerabilities, labour market structures, precarious employment in some industries, and pre-existing inequities (Babacan et al., 2021, Spash, 2020). Regional/rural economies in Australia have undergone significant structural change and adjustment in the last three decades. Economies also have distinct characteristics and diverse strengths and needs and have been experiencing economic change at different magnitudes, speeds and intensities. Climate change is one of the greatest ecological events of our time. Scientists continue to give dire warnings about climate change amidst major global debate about the nature and extent of climate change. How well a place or region can adapt is complex. A study into the adaptive capacity of regions showed a strong correlation between low levels of adaptive capacity and remoteness (Productivity Commission 2017). Factors that contribute to adaptive capacity are linked to education, skills, levels of income, employment, health, access to infrastructure and services, and natural resources. Alarmingly, most of rural and regional Queensland falls below average adaptive capacity. Addressing future policy and regulatory challenges for the future of work requires a more in-depth understanding of the fragmentation impacts of work, changing employer arrangements and workplaces, and workers’ conditions across different regional/rural locales.

Gujarat's industrial status and characteristics: With special reference to defeminization in the labor market

In general, the state has become richer, the people returning to work has increased, and more women have joined the labor force. However, even though Gujarat has achieved great economic development during a typical industrial structural transformation, a very small percentage of women participate in economic activities. This study aims to characterize Gujarat's low engagement of female labor force in the process of Gujarat's industrial development. First, this study has captured that Gujarat's labor market structure and industrial structure has grown asymmetrically. It has failed to bring surplus female labor out of agriculture and into manufacturing or services. Second, capital intensity is rising in Gujarat's industries, amplifying male-biased employment. Finally, low formal employment in rural areas possibly discourages participation in economic activities by surplus female labor whose education level has consistently increased.

What do we know about rural and informal non-farming labour? Evidence from a mixed methods study of artisanal and small-scale mining in Northwest Tanzania

Despite its relevance for millions living in rural areas in the Global South, scholarly knowledge on the dynamics and structure of informal non-farming rural labour and its impact on poverty is limited. However, such knowledge is paramount for programming effective poverty-reduction and formalisation policies. This article investigates such dynamics through the lens of artisanal and small-scale gold mining (ASGM) by analysing two case study sites in Northwest Tanzania. It presents and analyses qualitative and quantitative primary data collected during five months of fieldwork, drawing on political economy analysis. The article empirically challenges both scholarship championing self-employment as the main and only informal labour relation in the Global South as well as literature portraying ASGM as potentially poverty-reducing. Its main argument is that waged labour is common in ASGM and that the type of ASGM job linked to a specific labour relation translates into heterogeneous labour market outcomes. The article shows that a number of ASGM jobs such as waged processing activities feature heterogeneous and much lower incomes than the high average incomes for diggers reported by previous contributions. Moreover, it finds that workers alternate between waged and self-employment. Both dimensions are important, because two-thirds of the sampled ASGM labour force engage in waged labour and one-third in processing tasks. The article empirically grounds the debate on informal non-farming rural labour markets. In so doing, it highlights that understanding internal differentiation and labour market structures is paramount for formalisation processes given the different needs of distinct groups. Lastly, this study emphasises the necessity to combine qualitative and quantitative data for work on the nexus of labour markets and poverty.

Parenthood and Life Satisfaction in Stratified Labor Market: Evidence From Korea.

This study analyzes the effect of parenthood on life satisfaction with a stratified labor market using the Korean Labor and Income Study. For regular female workers at large companies, the decrease in life satisfaction due to parenthood is higher compared to that for men in a similar position due to the high opportunity cost of a career break following childbirth. For men who are non-regular employees at Small and medium-sized enterprises (SMEs), the effect of parenthood on life satisfaction is negative because they are the income earners of the family but earn a relatively low income at SMEs. Based on the results, the job characteristics of a stratified labor market have a significant influence on life satisfaction regarding parenthood. To enhance parental life satisfaction and raise the fertility rate, the structure of the stratified labor market needs to be changed so that the labor market becomes more flexible and includes a solid social safety net.

COVID-19-Induced Digitalization in the Labour Market: A Systematic Review

The recent COVID-19 pandemic crisis has led to the rapid digitalization which significantly causes changes the labour market structures. Although digitalization is often associated with higher productivity, however, the implications of automation may have some critical challenges to the labour market and future employment. This paper aims to explore the implications that pandemic-induced digitalization may have on the labour market. By employing the systematic literature review approach, this paper will gather the relevant past literature evidences to determine the consequences and economic benefits of the digital transformation that has been triggered by the COVID-19 crisis. The main findings from this review indicated that the pandemic crisis has likely resulted the acceleration of digitalization and changes the nature of work in many occupations. Next, the results of the review further pointed out the implications of digitalization in employment by causing job displacement, resulting youth unemployment, causes diminishing demand for low-skill workers, and increasing inequality. However, there are suggestion that there could be positive benefits from the digital transformation experienced. Hence, a future research is encourage to explore the public policy solutions that can be implemented to support an inclusive and efficient digital transformation.

Did Timing Matter? Life Cycle Differences in Effects of Exposure to the Great Recession

Exposure to a recession can have persistent, negative consequences, but does the severity of those consequences depend on when in the life cycle a person is exposed? I estimate the effects of exposure to the Great Recession on employment and earnings outcomes for groups defined by year of birth over the ten years following the beginning of the recession. With the exception of the oldest workers, all groups experience reductions in earnings and employment due to local unemployment rate shocks during the recession. Younger workers experience the largest earnings losses in percent terms (up to 13 percent), in part because recession exposure makes them persistently less likely to work for high-paying employers even as their overall employment recovers more quickly than older workers’. Younger workers also experience reductions in earnings and employment due to changes in local labor market structure associated with the recession. These effects are substantially smaller in magnitude but more persistent than the effects of unemployment rate increases.

The gender aspect of migrants’ assimilation in Europe

The labor market performance of migrants relative to natives has been widely studied but its gender dimension has been relatively neglected. Our paper aims at revisiting labor market convergence between migrants and natives and examining this dimension in a comprehensive study of the EU-15 countries and Switzerland over the period 1999-2018. We measure convergence of labor market outcomes, such as employment probability, for male and female migrants to similar natives before and after the Great Recession and across countries of destination. Our results show that in most countries female migrants start with a larger employment gap but converge more rapidly than male migrants do. We also provide an overview of the correlation between potential factors such as economic conditions, labor market structures, institutions and attitudes towards migrants and women and employment convergence of male and female migrants. While we do not identify very significant correlations at the national level, we find a strong correlation between attitudes towards migrants and their employment convergence across sub-national regions.

Trade liberalization and wages: Evidence from the closer economic partnership arrangement between mainland China and Hong Kong

This paper studies the impact of tariff cuts on workers’ wages in a single labor market by examining the Closer Economic Partnership Arrangement (CEPA) trade liberalization, in which China unilaterally eliminated hundreds of tariffs on Hong Kong’s goods in 2004. Utilizing five Hong Kong censuses from 1996 to 2016, we find consistent result that a one-sided tariff concession leads to an increase in the monthly wage of affected workers, averaging between 5.75% and 6.84%. Moreover, we explore the possibility that the effects of exposure to CEPA may be heterogeneous along several dimensions. The workers who benefited the most were more educated, in higher-skilled occupations, Mandarin-speaking, near retirement, or just starting their careers. Surprisingly, we found no increase in employment in the treated industries. We conclude that tariff cuts’ wage impact and, hence, their impact on wage inequality, depend on the local labor market composition and structure.

‘Missing girls’ in interwar Poland: child sex ratios and their correlates across multiple borderlands

ABSTRACT Our testing of the relationship between child sex ratios (CSRs) and demographic, socioeconomic, and cultural diversity across nearly 300 districts of interwar Poland around 1931 yields a picture more complicated than common explanations of high masculinization of offspring. In line with existing literature, we found district-level CSRs to be positively associated with the extent of agriculture but negatively related to the relative spread of female employment outside farming and less hierarchical gender and generational household arrangements. At the same time, several of the classical modernization variables (e.g. industrialization, urbanization, female literacy or fertility) either did not result in lower sex ratios or turned out irrelevant. In this article, we attempt to reconcile these diverging results by putting them in the context of the country’s relative backwardness, the specific labor demands created by modernization, and the structure of the agricultural labor market. Altogether, our results add a new stimulus to study gender discrimination in infancy and childhood in East-Central European context and to contemplate universal explanations thereof.

Human capital disclosure and the contingency view

PurposeBuilding on an integration of strategic human resource capital management and human capital disclosure literature streams, this paper explores the associations between human resource performance and human resource disclosure in the financial services sector.Design/methodology/approachUsing content analysis and panel regression methods, the paper examines the extent, nature, and information content of human capital disclosures in the financial services sectors in North America during the global financial crisis period.FindingsLabor costs and marginal labor productivity are significantly associated with human resource disclosure and the latter is significantly related to both financial (explicit) and non-financial (implicit or relational) components of the employment relationship. Results show inverted effects between the US and Canadian samples. The findings support a contingency view or “best-fit” approach to human resource capital management.Practical implicationsDifferences in labor market structures and human capital attributes could have significant impacts on human capital disclosure strategies. More transparent and detailed disclosures regarding human resource capital management may provide useful and relevant information for investors and stakeholders in general.Originality/valueThe study provides insights into how labor market structures and human capital attributes jointly affect the extent and nature of corporate disclosures with regards to rents distribution and relational governance between employers and employees.

Contagious inequality: economic disparities and excess mortality during the COVID-19 pandemic

Abstract The COVID-19 pandemic has emphasized the need to consider multiple and often novel perspectives on contemporary policymaking in the context of technically complex, ambiguous, and large-scale crises. In this article, we focus on exploring a territory that remains relatively unchartered on a large scale, namely the relationship between economic inequalities and excess mortality during the COVID-19 pandemic, using a dataset of 25 European countries spanning 300 regions. Our findings reveal two pathways by which economic asymmetries and inequalities can observably influence excess mortality: labor market structures (capturing concentrations of industrial jobs) and income inequalities (capturing concentrations and asymmetries in income distribution). We leverage our findings to offer recommendations for policymakers toward a more deliberate consideration of the multidimensionality of technically complex, large-scale crises with a high degree of societal embeddedness. These findings also urge future scholarship to utilize a range of parameters and indicators for better understanding the relationship between cues and outcomes in such complex settings.

What if? Using counterfactuals to evaluate the effects of structural labour market reforms: evidence from the Italian Jobs Act

ABSTRACT The article assesses the impact of the Jobs Act, the labour market reform passed in Italy under Matteo Renzi’s cabinet in 2014–2015. In doing so, the study has a twofold aim. First, it contributes to the scholarly debate on labour market flexibilization, offering fresh empirical evidence about the debated effects of deregulatory reforms on employment performance. Second, our empirical investigation relies on an innovative approach, the synthetic control method, which allows us to estimate what would have happened if the Jobs Act had not been introduced. After the downturns of the Great Recession, the major goal of this flagship initiative was to boost overall employment performance while reducing labour market segmentation and enhancing more stable job opportunities for labour market outsiders, especially among younger cohorts and women. Comparing real-world observations for a number of key employment indicators with their estimated synthetic counterfactuals, we find that the Jobs Act did not fulfil its expectations. In line with part of the most recent literature addressing the impact of deregulatory reforms on employment performance, our results show that over the past five years no significant effects were driven by the reform, which may even have led to an increase in labour market segmentation.

Estimating the costs for implementing a maternity leave cash transfer program for women employed in the informal sector in Brazil and Ghana

BackgroundMaternity leave policies are designed to protect gender equality and the health of mothers in the workforce and their children. However, maternity leave schemes are often linked to jobs in the formal sector economy. In low- and middle-income countries a large share of women work in the informal sector, and are not eligible to such benefit. This is worrisome from a social justice and a policy perspective and suggests the need for intervening. Costing the implementation of potential interventions is needed for facilitating informed decisions by policy makers.MethodsWe developed and applied a costing methodology to assess the cost of a maternity leave cash transfer to be operated in the informal sector of the economy in Brazil and Ghana, two countries with very different employment structures and socioeconomic contexts. We conducted sensitivity analysis by modeling different numbers of weeks covered.ResultsIn Brazil, the cost of the maternity cash transfer would be between 0.004% and 0.02% of the GDP, while in Ghana it would range between 0.076% and 0.28% of the GDP. The relative cost of rolling out a maternity intervention in Brazil is between 2.2 to 3.2 times the cost in Ghana depending on the benchmark used to assess the welfare measure. The differences in costs between countries was related to differences in labor market structure as well as demographic characteristics.ConclusionsFindings show how a standard methodology that relies on routinely available information is feasible and could assist policymakers in estimating the costs of supporting a maternity cash transfer for women employed in the informal sector, such intervention is expected to contribute to social justice, gender equity, and health trajectories.