Low-skilled Employment Research Articles

Does eco-innovation stimulate employment? The case of Spanish manufacturing firms

The demand for eco-products due to the exigency of friendly and environmental production could affect the employment of the firms. This paper tests whether product and process eco-innovations boost employment in Spain differentiating by the environmental goals (material and energy efficiency and environment responsiveness), by the level of qualification of the workers, and by the dirtiness of the industries. We apply a Green Harrison model, using the Technological Innovation Panel (PITEC) for Spain from 2008 to 2016. Results show a positive relationship between all types of product eco-innovations and employment, while the influence of process eco-innovations on employment depends on the environmental goals, the level of skills, and the industry. Specifically, distinguishing by industry there is a labour-saving effect in clean industries and a labour-friendly effect for low-skilled employment in dirty industries.

People-centric variables in the fourth industrial revolution: an application of SWARA methodology

PurposeThe accelerating business transformation through Industry 4.0 (I4.0) is expected to create significant value in the manufacturing industry by delivering considerably high productivity, superior quality, better efficiency and effectiveness. However, its evolutionary processes have far-reaching challenging for humanity. This has triggered a need to analyze the impact of I4.0 on various people-centric variables (PCVs).Design/methodology/approachThis paper attempts to analyze the interrelationship dynamics between the PCVs in the current digital-industry ecosystem using a focus-group approach and causal loop diagrams. Application of the SWARA (stepwise weight assessment ratio analysis) methodology has provided its prioritized ranking in terms of importance.FindingsThe study has highlighted that I4.0 has a significant influence on five of the 13 PCVs – human quality of life, digital dexterity, high-skilled talent, low-skilled employment and creativity which contribute to 80% of the total impact.Originality/valueThe prioritized weights of the human factors from the SWARA approach have facilitated the assessment of the Human Resource Development Index (HRDI). The study is also contributing in enriching the literature on the human impact of the growing I4.0 and triggered the researchers to study further its adverse impact on critical human factors.Key pointsThe paper pertains to debates on a very critical issue of impact of integration of the current intelligent digital technologies in manufacturing and services to transform businesses to be more flexible and agile.This paper features I4.0 as a technology that allows integration of new products in the existing production lines, one-off manufacturing runs and high mix manufacturing.The paper also highlights major adjustments in operational activities, processes, supply chain, and organizational redesign due to I4.0 adoption.The current research study has significantly enriched the literature on the I4.0 impact on people-centric variables (PCVs) using the SWARA method. The use of the Causal Loop Diagram has very aptly brought out the type of causality (polarity) between the different PCVs in the growth of I4.0.

Employment effects of minimum wages in a dual economy: Evidence from Thailand

This study employs both theoretical insights and empirical techniques to investigate the impact of a minimum wage increase on employment when minimum wage coverage is incomplete. Previous empirical studies on this topic have found conflicting results: while some find the share of the covered sector decreases, some find it increases. In the theoretical part, we extended the classic two-sector model and found both scenarios can occur depending on the parameters of the economy. Empirically, using as a natural experiment a novel minimum wage policy in Thailand whereby 40 percent of workers were not covered by the legislation, we found that one percent increase in the minimum wage reduced low-skilled employment in the covered sector by 0.1–1.1 percent and increased employment in the uncovered sector. The official unemployment rate also decreased because the rise in the minimum wage lowered the probability of covered employment to such a large extent that workers instead turned to the uncovered sector.

The value of formal host-country education for the labour market position of refugees: Evidence from Austria

Refugees hosted across the developed world often work in low-quality jobs, regardless of education previously attained in their country of origin. In this paper, I analyse the long-term value of formal host-country education for refugees using the example of forcefully displaced Bosnians who arrived in Austria during the 1992-1995 Bosnian war. Deploying 22 years of Austrian microcensus data, I exploit the age at the time of forced migration as an instrument for the probability of receiving host-country instead of origin country education to recover local average treatment effects of education attained in Austria vis-A -vis Bosnia on labour market outcomes for refugees aged around schooling thresholds. These estimates show that attaining a formal degree in the host-country significantly reduces the probability of work below educational attainment and low-skill employment over the entire observation period. Income differences between Austrian and Bosnian degree holders are visible after more than two decades of stay in Austria. The discount on Bosnian education declines over time for men but not for women, suggesting that host-country degrees are particularly important to groups that faced cultural barriers to quality employment in their country of origin.

Transit finance, growth, and equity: a dynamic panel analysis on the effect of transit revenues on low-skilled employment

Transit finance, growth, and equity: a dynamic panel analysis on the effect of transit revenues on low-skilled employment

R&D and Employment Relation: Differences in Low and High-Skilled Employment in Developing Economies

This paper attempts to investigate the effect of technology on employment based on skill groups in developing countries using data from 23 countries between 1990 and 2019. We use the macroeconomic framework to split employment in developing countries into high-skilled and low-skilled and examine how these two groups are affected by progress in technology. Pedroni’s (1999, 2004) and Kao’s (1999) cointegration methods reveal the statistically significant relationship among variables in the long run. Coefficients estimated in cointegration highlight that technology is among the factors that increase unemployment in developing countries. In addition, our baseline models document that inflation and real interest rates have a positive impact on unemployment. Finally, both high-skilled and lowskilled employment in developing countries are negatively affected by technology, and the negative impact is greater on low-skill employment.

The Labor Board Crew: Remaking Worker-Employer Relations from Pearl Harbor to the Reagan Era

The Labor Board Crew: Remaking Worker-Employer Relations from Pearl Harbor to the Reagan Era

Wishing for More: Technological Change, the Rise of Involuntary Part-Time Employment and the Role of Active Labour Market Policies

AbstractTechnological change has squeezed the demand for middle-skill jobs, which typically involve routine-intense tasks. This squeeze has coincided with an increase in the number of part-time working individuals who wish to work more hours. We argue that these two trends are linked. Due to the decline of middle-skill employment, medium-educated workers shift into low-skill employment, increasing the supply of labour for jobs in this segment of the labour market. This pushes those dependent on these jobs to accept part-time jobs, even if these involve fewer hours than they prefer. To empirically assess this claim, we analyse involuntary part-time employment across 16 European countries between 1999 and 2010. Our analysis confirms that a decline in middle-skill employment is associated with an increase in involuntary part-time employment at the bottom end of the labour market. This finding implies that the automation of routine-intense labour worsens employment possibilities in this segment of the labour market. However, we show that training and job creation schemes mitigate this effect. These programmes cushion competition either by providing medium-educated workers with the necessary skills to shift into high-skill jobs or by increasing employment possibilities. Thus, governments have the tools to support workers facing challenges in the knowledge economy.

Long-term dynamics of informal employment and its relationship with the poverty of the Russian population against the backdrop of the COVID-19 pandemic

The study aims at assessing the prevalence of informal employment in the Russian labour market and evaluating its relationship with the risks of monetary poverty. Empirically, the study bases on the data of the Russian Longitudinal Monitoring Survey (RLMS HSE) for 2000-2020. Calculations have shown that over the past 20 years, on average, about a quarter of Russian employees were included in the informal labour market for their main or secondary employment. The results of the study provide some evidence on the existence of several zones of informality in the Russian labour market, in which there are different motives for deformalization, in particular: low-skilled employment in the informal sector, employment only in the format of informal part-time / side jobs (“casual employment”) and partial departure to the informal sector while maintaining an official employment contract at the main place of work. Employment with part or all of the pay for the main job received informally — that is, without a formal contract or with declared wages below the actual wage received, in violation of current regulations — is more common among men, young people and people of early working age, and as well as citizens with education below vocational secondary. At the same time, women, people aged 30–49, and citizens with vocational secondary education predominate in the structure of informally employed, although with a slight preponderance. Regression analysis shows that there is a statistically significant relationship between involvement in the informal labour market and the risks of monetary poverty: fully informal employment in 2019 is associated with higher chances of the respondent’s household falling into poverty, and with lower chances in 2020.

What explains immigrant–native gaps in European labor markets: The role of institutions

AbstractThe understanding of how institutional and policy contexts affect immigrant integration is essential for any effort to foster a sustainable and effective migration and integration policy framework. Immigrant–native labor market gaps may arise not only due to differences in human capital or other socio-economic and demographic characteristics, but also due to differentiated impacts of institutions and policies on otherwise similar immigrants and natives. Different integration policy approaches are needed to close the gaps arising through these different mechanisms. This article exploits the variation across Europe to study the institutional and policy determinants of immigrant–native gaps in host labor markets. Using the EU Labor Force Survey as the primary source of data and a novel analytical approach, we study immigrant–native gaps in labor force participation, unemployment, low-skilled employment, and temporary employment and measure the contribution of institutional and policy contexts to the part of these gaps that cannot be explained by immigrant–native differences in characteristics. Our findings confirm that institutional and policy contexts play a significant role in immigrant integration and highlight the importance of tailoring policy approaches with regard to the causes of immigrant–native gaps.

Offshoring, Automation, Low-Skilled Immigration, and Labor Market Polarization

We show that the observed polarization of employment toward the high- and low-skill occupations disappears when only native workers are considered. Instead, low-skilled immigration explains employment growth at the low tail of the skill distribution. Moreover, while employment rose, wages remained subdued in low-skill occupations. A data-disciplined structural model accounts for this evidence: Offshoring and automation negatively affect middle-skill occupations but enhance employment and wages for the high-skilled. Low-skill employment is sheltered from offshoring and automation, as it consists of manual, non-tradable services. However, low-skilled immigration depresses low-skill wages and encourages native workers to move into skilled occupations through training. (JEL F16, J24, J31, J61, M53)

The long-term effect of resource booms on human capital

Resource booms may reduce human capital accumulation. They can increase the opportunity costs of education by favoring low-skilled jobs, thus making it optimal for individuals to interrupt their education. This study uses proprietary individual-level data to study the long-term effects of an oil boom on human capital in a developing country. Exploiting variation in the timing of the shock and geographic differences in the effect of exposure to the boom, I find that exposure to the boom decreased college completion, increased low-skill employment, and had limited long-term effects on wealth accumulation.

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.

DETERMINANTS OF SCHOOL ENROLMENT IN INDONESIA: THE ROLE OF MINIMUM WAGE

This paper investigates the role of minimum wages in determining school enrolment (educational investment) in Indonesia using the National Socioeconomic Survey (Susenas). It finds that minimum wage legislation has a negative and significant substitution effect on educational investment. Individuals are more likely to drop out of senior secondary school as a result of a minimum wage legislation. Even though the response among low-income households is positive, this result may be generated by a fall in the probability of obtaining low-skilled employment, which offset the substitution effect.

Downward Professional Mobility among Poles Working and Living in Norway

This article explores the diverse trajectories of downward professional mobility as experienced by skilled Polish migrants living in Norway. On the basis of 30 in-depth qualitative interviews with Poles who have worked below their level of competence after migrating to Norway, I outline (1) how they tend to channel themselves into low-skilled employment at the initial stages of migration as they commonly assume it is inevitable when migrating, and (2) how they interpret and respond to remaining in low-skilled jobs after settling in Norway, often explaining it as a result of racialising and discriminatory practices against them. By bridging concepts of habitus and field with hierarchies of desirability of national migrant groups, I propose a notion of a ‘transnational field of national hierarchies’. I argue that the downward professional mobility is both an individual and collective social practice guided by what I call ‘the national component of the habitus’ and embedded in the transnational field, where different national identities are hierarchically positioned.

The Value of Formal Host-Country Education for the Labour Market Position of Refugees: Evidence from Austria

Refugees hosted across the developed world often work in low-quality jobs, regardless of education previously attained in their country of origin. In this paper, I analyse the long-term value of formal host-country education for refugees using the example of forcefully displaced Bosnians who arrived in Austria during the 1992-1995 Bosnian war. Deploying 22 years of Austrian microcensus data, I exploit the age at the time of forced migration as an instrument for the probability of receiving host-country instead of origin country education to recover local average treatment effects of education attained in Austria vis-a-vis Bosnia on labour market outcomes for refugees aged around schooling thresholds. These estimates show that attaining a formal degree in the host-country significantly reduces the probability of work below educational attainment and low-skill employment over the entire observation period. Income differences between Austrian and Bosnian degree holders are visible after more than two decades of stay in Austria. The discount on Bosnian education declines over time for men but not for women, suggesting that host-country degrees are particularly important to groups that faced cultural barriers to quality employment in their country of origin.

Does low-skilled immigration increase profits? Evidence from Italian local labour markets

We study the effects of low-skilled immigration on firm profits, average wages, employment, capital and total factor productivity (TFP) by combining firm-level and local labour market data from Italy. We find that low-skilled immigration increases profits by reducing average wages and total labour costs. This effect is small on average, but about ten times larger for firms operating in local labour markets with a high share of low-skilled employment than for other firms. In these areas, the substitution effects triggered by immigration reduce average wages much more than elsewhere.

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 (IV) 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 (1988–93) 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 labor market and hardly required any level of educational attainment. This study employs two outcomes, namely the standardized cognitive test scores and school achievements during the academic year 2012/13 for students between grade 5 and grade 9 in West Bank schools. Overall, the results support the hypothesis of a human capital spillover but more so for girls than for boys, where the IV results are often insignificant because of their large standard errors.

Hard times for long-term care systems? Spillover effects on the Spanish economy

Since the end of the last century, demographic aging has led to an increased demand for new social protection services. Universalizing these to meet the needs of the most vulnerable requires the design of policies that ensure the sustainability of the system. Consequently, the economic structure of a country and its productive fabric are affected. Assessing the impact of this growing demand is not an easy task, although extended input-output models can help. With this aim, we determine the spillover effects of the demand shocks arising from the increase in public spending allocated for the implementation of the Spanish long-term care system. The results reveal that such spending proves efficient in sustaining 116,000 jobs, most of which are in social work activities, entailing a large amount of direct but low-skilled employment. In addition, 5,000 million euros are generated in value added, including a fiscal return of 1,400 million euros.

Is employment a panacea for poverty? A mixed-methods investigation of employment decisions in South Africa

Unemployment is a key determinant of poverty in South Africa and labour market inequalities reflect deep-rooted socio-economic inequalities. In a context of high rates of poverty and unemployment, we would expect a job loss to be associated with a decline in wellbeing. Using nationally representative panel data and original qualitative data collected in Cape Town, I find that, on average, this hypothesis holds. However, this aggregate effect conceals heterogeneities in the relationship between labour market transitions and wellbeing which are of special analytic interest. In particular, this study focusses on those cases which go against the grain of the overall labour market-wellbeing nexus – that is, cases in which black, urban youths turn down or quit wage work. An analysis of these examples helps illuminate how disadvantaged workers face non-negligible disincentives to certain forms of low-skill employment and reveals the circumstances under which these disincentives may outweigh the disincentives to unemployment. To aid this investigation, I develop a model which analyses the welfare effect of job losses as being jointly determined by the strength of outside options and disincentives to work. Using qualitative data, I provide evidence in support of this model and show that, under certain circumstances, transitioning out of employment will be the welfare optimising choice for workers: Younger workers with no dependants and with alternative sources of support can be said to have stronger outside options, and are especially likely to turn down or quit low-quality jobs. Older workers, with dependants and without alternative sources of support, are more likely to accept and persist in low-quality jobs. This study argues that understanding the complexity of the incentives that workers face and which inform labour market choices will be indispensable in effectively designing policies which aim to reduce inequalities in labour markets – in South Africa and beyond.