Local Labor Market Research Articles

Local Employment Development and Sustainable Labour Market in Northern Hungary Since the Regime Change

Abstract The peripheral regions of Hungary, such as the Northern Hungarian region and its settlements, are facing a variety of problems and challenges, and in addition to economic difficulties, demographic and labour market challenges also demand increased attention and solutions. Since the change of regime, the region has been facing economic and labour market difficulties. The current labour market faces a combination of labour shortages, automation and robotisation, rapidly changing conditions and high unemployment. In most peripheral regions, the availability of labour resources to meet the needs of the primary labour market is very limited and local labour markets are completely depleted. The unemployed lack skills and experience. The aim of the study is to provide an overview of labour market developments in the Northern Hungarian region since the change of regime and to describe successful local developments. Addressing the situation requires local, municipal-level solutions, which is a real challenge, as there is no single recipe. Local development can and should be built on a toolbox of local development, as solutions based on local resources, local ‘heroes’, local control and local ideas can be successful. The paper describes such successful local development.

Employers expectations and requirements. Case study: Employers of Schools of Economics and Business Graduates in Romania

Abstract Nowadays, employers are reconsidering the definitions of professionalism and professionals. In addition to job related knowledge and skills, a professional need some general behavioral skills too, which are especially required when working with others. These inter-relational skills are not “hard skills”, but “soft skills” Being challenge to face an economic reality that is changing permanently, universities have to adapt themselves and to respond to the needs of the socio-economic environment by developing and adapting their educational services to the contemporary requirements. Among the multiple dimensions of the changes universities are facing nowadays important ones are the changes at the curriculum level: goals consisting in competences according to the labor market requirements, new educational plans and programs, new content and teaching and learning strategies, new learning settings and environments. The paper presents the experts’ perspective in respect with the ways in which universities are developing and innovating their curricula and analyses Romanian employers’ opinions regarding the curriculum development and innovation in schools of economics and business. The analysis is based on a survey conducted among the most important employers in Bucharest, the capital city of Romania and, in the same time, the largest local labor market in the country with national and multinational companies. Recommendations regarding the curriculum development and innovation are included too. These are meant to enhance the capacities of universities to provide high quality education and develop competences required on the labor market.

Regional borders, local unemployment, and life satisfaction

AbstractIn this paper, we provide novel evidence on the effect of local unemployment rate on life satisfaction. With this, we contribute to the expanding literature that aims to understand the role of the local labor market's conditions for individual well‐being. This information can be used to only analyze the impact of regional economic policies, as well as to understand individuals' behavior and reactions to policy changes. In concrete, we investigate how changes in local unemployment rate affect subjective well‐being in Germany, allowing for the presence of spatial spillovers and considering the role played by regional borders. The results indicate that higher unemployment in the own local area of residence has a negative effect on satisfaction. Similarly, individuals' happiness negatively correlates with the unemployment rate in contiguous local areas, but only if these areas are located in the same Federal State as the one where the individual lives. Heterogeneity analysis reveals that these negative effects of local unemployment rate are larger for individuals with stronger ties to the job market and less secure jobs.

Firms’ Employment Dynamics and the State of the Labor Market

According to search and matching theory, a greater availability of unemployed workers should make it easier for a firm to fill a vacancy, but more vacancies at other firms should make recruitment more difficult. Simulating a theoretical model of a firm facing perfect competition in the product market and no convex adjustment costs (standard assumptions in the search and matching literature), I find that shocks to vacancies and unemployment lead to economically significant employment responses. Simulating a more realistic model with imperfect competition in the product market and convex adjustment costs, I find small employment effects of shocks to vacancies and unemployment. In particular, shocks to the number of unemployed seem to be unimportant. Estimating an employment equation on a panel of Swedish firms, I find that neither the number of unemployed workers nor the number of vacancies in the local labor market is important for firms’ employment decisions.

The effects of a trade shock on gender-specific labor market outcomes in Brazil

As countries around the world increasingly engage in international trade, labor markets respond, creating both winners and losers. In this paper, I analyze the impact of a trade shock on gender-specific local labor market outcomes in Brazil. I use an instrumental variable approach and population census data for Brazil to estimate the effect of both increased imports from China and increased exports to China on male and female local labor market outcomes from 2000 to 2010. Regions more exposed to imports from China experience slower wage growth in the traded and formal sectors, but the declines are significantly larger for men, particularly in sectors with low shares of female employment. Exports have a positive association with wage growth, but no relationship with employment growth. Import-induced wage declines are coupled with significant employment growth in the formal sector. The gains for women are nearly double those for men, increasing the share of female employment in the formal sector. Regions more exposed to Chinese imports also experience an increase in the female employment to population ratio and a decrease in male and female unemployment rates. Thus, trade with China induces new workers into the labor market, reduces unemployment, and reallocates labor to the formal sector. These employment gains are strongest for women, signaling reduced employment barriers for females. Further, as employment reallocates to the formal sector, occupation segregation declines, highlighting an additional avenue through which trade can have gendered labor market effects.

How Internal Hiring Affects Occupational Stratification

AbstractWhen employers conduct more internal hiring, does this facilitate upward mobility for low-paid workers or does it protect the already advantaged? To assess the effect of within-employer job mobility on occupational stratification, we develop a framework that accounts for inequality in both rates and payoffs of job changing. Internal hiring facilitates advancement for workers without strong credentials, but it excludes workers at employers with few good jobs to advance into. Analyzing Current Population Survey data, we find that when internal hiring increases in a local labor market, it facilitates upward mobility less than when external hiring increases. When workers in low-paid occupations switch jobs, they benefit more from switching employers than from moving jobs within the same employer. One-third of this difference is due to low-paid workers isolated in industries with few high-paying jobs to transfer into. An occupationally segregated labor market therefore limits the benefits that internal hiring can bring to the workers who most need upward mobility.

After a Global Platform Leaves: Understanding the Heterogeneity of Gig Workers through Capital Mobility

We know a great deal about global capital mobility in traditional industries, such as manufacturing, but very little about emerging capital mobility in the gig economy. Using the case of Canadian Foodora, a multinational platform that left Canada in 2020, I situate global capital mobility in the local labour market. Drawing upon interview data with former Foodora couriers and ethnographic data collected from a gig workers’ union, I investigate the social, economic and political subjectivities of gig workers activated by a global platform’s capital mobility. My findings reveal unexpected parallel effects caused by capital mobility in the gig economy and traditional industries. My research highlights how heterogeneity is salient for understanding divergent worker subjectivities. The economic and social impacts upon financially dependent gig workers and the emotional connections of devoted and organized gig workers challenge the dominant discourse that gig workers are simply part-timers and hence free from work commitments.

Decomposing the employment effects of investment subsidies

Most governments tackle the economic issues of underdeveloped areas by offering subsidies aimed at fostering economic activities and local employment. Localized policies put constraints on where businesses may locate to receive subsidies, but they generally place few restrictions on whom subsidized businesses must hire. Using administrative data on firms and workers in Italy, we adopt a multi-cutoff regression discontinuity design to empirically assess and decompose the employment effect of substantial incentives for the replacement or establishment of new capital. Our empirical strategy allows identifying the geographical origin and labor market status of new hires. The results show how the majority of recruits come from new entrants to the labor market, in particular, young people and students, while displacement effects are limited. It appears that subsidized companies tend to keep their most valuable staff and hire more qualified young people. Overall, we find only a modest spatial dispersion of the effects or a possible crowding-out of the local labor market.

How do occupational relatedness and complexity condition employment dynamics in periods of growth and recession?

ABSTRACT Related diversification has generated interest in policy (Smart Specialisation) and academic (regional branching) circles, linking path creation to regional capabilities and performance. We develop measures of occupational relatedness and complexity for local labour market areas in Sweden over the period 2002–12 to examine whether these constructs are helpful in explaining spatial and temporal variations in employment growth. The results indicate that increases in occupational relatedness are positively related to employment growth, while changes in occupational complexity have no significant impact. Separating the results either side of the global financial crisis shows that the influence of relatedness on employment is stronger pre-2008, while after the crisis building specialization in more complex occupations was positively associated with employment growth.

Extractivism and Labour Control: Reflections of Turkey’s ‘Coal Rush’ in Local Labour Regimes

This study analyses labour processes and local labour control strategies in the extractive industries and regions as the reflections of state-capital-labour-nature relations. I argue that, for the analysis of labour control in extractive industries, there is a need to pay attention to (i) the significance of the natural resource for global capital accumulation processes and for the development policies of the state; (ii) the formation of the local labour market through proletarianization of rural population and other means of labour supply; (iii) the organization of work considering both natural limits (such as geological structure of the basin) and workforce composition; and (iv) the use of local political, institutional and community dynamics. Drawing upon the fieldwork carried out in Soma Coal Basin, this paper shows how Turkey’s coal rush shapes local labour control strategies.

First Palestinian intifada and intergenerational transmission of human capital

This paper attempts to estimate the intergenerational transmission of human capital in Palestine. The main question is whether formal parental education improves their offspring’s cognitive skills and school achievements. I use the instrumental variable method in the estimations to overcome the potential endogeneity of parental education. The main source of variation in parental educational attainment is parents’ exposure to the First Palestinian Intifada (1988–1993) during their middle and high school ages. During the First Palestinian Intifada, many school days were lost due to frequent school closures and other restrictions. Furthermore, many young people preferred to search for low-skill employment in Israel, since it provided them with better wages than the local labour market and hardly required any level of educational attainment. This study employs two outcomes, namely the standardised cognitive test scores and school achievements during the academic year 2012/2013 for students between grade 5 and grade 9 in West Bank schools. Overall, the results support the hypothesis of a human capital spill-over but more so for girls than for boys, where the instrumental variables results are often insignificant because of their large standard errors.

Minimum wage and local employment: A spatial panel approach

AbstractThis study analyzes spatial dependencies in the relationship between employment and minimum wage. Local employment may be affected not only by changes relative minimum wage in a region but also by those in neighboring regions. We use the spatial Durbin model and data for 380 local Polish labor markets during 2006–2018. The results reveal significant heterogeneities in the model, showing a significant spatial relationship between local employment and the minimum‐to‐average‐wage ratio in neighboring regions. Local minimum wage effects, insignificant at the beginning of the analyzed period, become significant and negative. These results may not be observed without a spatial model framework and are important for minimum‐wage policymakers. Our results suggest that, in countries with strong differences in average wage level between regions, the minimum wage can be differentiated at the local labor market level to avoid large differences in the minimum‐to‐average‐wage ratio.

The Effect of Immigration on Local Labor Markets: Lessons from the 1920s Border Closure

In the 1920s, the United States substantially reduced immigration by imposing country-specific entry quotas. We compare local labor markets differentially exposed to the quotas due to variation in the national origin mix of their immigrant populations. U.S.-born workers in areas losing immigrants did not gain in income score relative to workers in less exposed areas. Instead, in urban areas, European immigrants were replaced with internal migrants and immigrants from Mexico and Canada. By contrast, farmers shifted toward capital-intensive agriculture, and the immigrant-intensive mining industry contracted. These differences highlight the uneven effects of the quota system at the local level.

Internal migration and technical efficiency: the case of Italy

ABSTRACT The aim of the paper is to contribute to the study of the determinants of the internal mobility of people. To study the determinants of internal migration, we introduce a new explanatory variable, i.e. technical efficiency of Local Labour Market Areas. This variable is particularly relevant, as it allows us to summarize the entrepreneurial capacity connected to the cultural and social context of an area. Our results, for the case of Italy, suggest that technical efficiency contributes greatly to explaining internal migratory flows and the various patterns of migration among different groups of individuals. By looking more specifically at different groups of individuals, we also uncover important differences between natives and foreigners and among different age-groups.

Unsettled settlement? Translocal social anchoring and patterns of (im)mobility among Polish families in rural Norway

Whilst the transnational family life of post-accession intra-European migrants has been extensively explored, past studies have rarely addressed its local dimension. The relatively recent international migration patterns to rural areas in Europe provide opportunities to explore this particular aspect. Drawing on ethnographic data from Polish migrant families and young couples in rural Norway, we investigate the relationship between the settlement of the migrants in a specific rural locality and the dynamic of their cross-border and cross-local patterns of mobility. Using notions of translocalism and social anchoring, the article offers insights into how migrants' lives as couples and families become gradually reoriented as they settle in the rural host context and how the conditions for maintaining family relationships in Poland change at the same time. We illustrate how migrants' search for stability in their lives in the host location is associated with the question of family reunion, their position on the local labour market, purchase of houses and development of place attachment. At the same time, the settlement process breeds ambivalence as it requires migrants to adjust to the new life setting and continually navigate and negotiate the family life across home and host context. The ability of migrants to organise their translocal life satisfactorily depends on and reflects their overall level of integration locally and nationally.

Who takes the hit? Gender differences in employment outcomes after disasters

AbstractWe estimate the individual labor market outcomes in Indonesia using historical data to isolate the plausibly exogenous variation in local labor market conditions due to unexpected natural hazards. We find that men substitute labor away when there are more unanticipated disasters while women work more. These gender differences in employment elasticities are heterogeneous by land ownership and education. Results imply that policies targeting women, including more flexible workplace arrangements and incentives to finishing secondary school, may be necessary to allow women to substitute away from work when the gains from participation are low.

Typical school-to-work transitions of young adults with disabilities in Germany – a cohort study of recipients of vocational rehabilitation services after leaving school in 2008

Purpose In Germany, vocational rehabilitation (VR) for young people with disabilities (YPWD) aims to counteract disadvantages on the training and labour markets. However, the school-to-work transitions (STWT) among YPWD are underexplored. This study investigates to what extent and for whom VR provides an institutional bridge into employment. Materials and methods Based on representative administrative data of the German Federal Employment Agency, young people in VR are observed for 6.5 years after completing lower or intermediate secondary education in 2008. Using optimal matching and cluster analysis, six typical STWT trajectories are identified. Results Most of the YPWD completed company-external vocational training, some undertook regular in-firm training. These forms of training often lead to regular employment, albeit with a delay for some. Other young people are guided from training in sheltered workshops into sheltered employment. Another group exhibits problematic STWTs in which recurring unemployment and (non-training) programmes fail to lead to training or employment. Conclusions VR combined with in-firm or company-external vocational training can facilitate the STWTs of people with disabilities. However, individuals from poor families are less likely to benefit from VR. Similarly, restricted capabilities and problematic STWTs are observed when young people drop out of VR due to poor cooperation. Implications for rehabilitation Vocational training often is a prerequisite for labour market entry; however, if the structural conditions on the local labour market are unfavourable, young people with disabilities do not take up employment. Training within sheltered workshops often leads to highly institutionalised trajectories that should be reconsidered to permit greater permeability into the regular labour market. As young people with problematic STWT more often come from poor households, they should be targeted to a greater extent in the context of VR counselling.

Marketplace Trade in Large Cities in Poland

Traditional marketplace trade brings many socio-economic benefits: it affects the local labour market, entrepreneurship, and tourism. In many countries, activities are undertaken to support the operation of marketplaces. In recent years, new threats to the development of marketplaces have emerged, such as cheap discount shops, supermarkets, and online shops. The inhabitants of many cities still enjoy shopping at traditional marketplaces. The aim of the research is to assess the development of marketplace trade in large cities in Poland. Eurostat does not provide detailed data on marketplaces in Poland. We decided to fill this gap. Additionally, we assessed the attractiveness of large cities in Poland in terms of the development of marketplace trade in the years 2008–2019 by means of linear ordering of objects (Hellwig’s composite measure of development). In the years 1995–2019, the number of marketplaces in Poland remained at a constant level, but since 2003 their area has decreased. However, the total number of marketplaces has increased compared to 1995. In the whole research period, Kraków and Katowice were the most attractive cities with respect to the development of the marketplace trade, while Gdańsk and Sosnowiec were the least attractive. The high position of Kraków results from the nature of the city and its tourist attractions, while the low position of Sosnowiec is caused by the existence of a large bazaar in nearby city of Będzin.

Exploring Local Dynamics of COVID-19 in Italy: Local Labour Markets and the Cases of Bergamo and Brescia

In containing and mitigating the diffusion of COVID-19, countries are not fully able to pursue local test, trace and isolate strategies due to difficulties in detecting place-based infections and positive asymptomatic cases. This paper explores whether and to what extent local labour markets, functional areas defined by employment self-containment indexes and labour mobility data, can grasp the spatial dynamics of COVID-19 diffusion. Local labour markets capture most of the socio-economic interactions of working and residential populations and identify areas in which people are more likely to engage in frequent, face-to-face contacts with neighbours, colleagues, friends and relatives. Through an exploratory spatial data analysis and the estimation of a spatial autoregressive model, this paper examined a sample of 441 municipalities and 20 local labour markets. These territorial units belong to the Lombard provinces of Bergamo and Brescia (Italy), among the worst affected areas of the country in respect to both reported deaths and confirmed infections in the early stages of the pandemic. The findings suggest that municipal variations in mortality rates in 2020 correlate with a range of statistics for local labour markets, namely self-containment indexes, labour market dynamics and commuting behaviours. Overall, this paper shows that local labour markets are a useful scale of analysis in detecting the geography of COVID-19 diffusion in the target sample, and verifies the possibility of capturing the spatial dynamics of the epidemic on a smaller territorial scale than NUTS-3 regions do. Copyright © 2021 The Authors.

Do High School Industry Certifications Reflect Local Labor Market Demand? An Examination of Florida

Industry-recognized credentials, or certifications, provide one path to match people with jobs effectively. Certifications are nationally recognized, standardized credentials created by businesses and industry groups to demonstrate proficiency in skills related to specific jobs. State education systems increasingly provide students the opportunity to earn certifications in secondary school. In this study, we examine whether local labor market demand for certifications is associated with the likelihood of earning a certification in high school. Using comprehensive administrative data on a cohort of first-time ninth graders from the state of Florida, which has legislation encouraging certification attainment in high school, we find limited evidence for a relationship between certification demand and certification earning. However, high school students are more likely to earn certifications in some fields, such as health science, when local labor market demand for those certifications is high.