Stimulate Job Creation Research Articles

South African Tax Incentives To Alleviate Unemployment: Lessons From United States Of America Approaches

A quarter of the labour force in South Africa is currently unemployed with the majority of the unemployed being unskilled youth. One of the major causes seems to be the commanding power of trades union resulting in a high minimum wage for unskilled workers, which results in a reduction in the demand for unskilled labour. To reduce the current unemployment rate in South Africa, policy decisions should be focused on youth employment with emphasis on skills development. Policy should also stimulate growth of small, medium and micro enterprises in order to stimulate job creation. A literature review indicates that current tax incentives in South Africa do not incentivise employers to hire unskilled youth labour, and are not applied on a wide enough scale to significantly impact the overall unemployment statistics. The proposed youth wage subsidy will increase the demand for unskilled labour by reducing the cost of labour. However, to have the desired impact, the participation rate must be high. The proposed subsidy was analysed against the successes and failures of subsidies implemented in the USA. It was found that many of the flaws identified in the USA have been avoided.Based on the above, the recommendation is that the proposed youth wage subsidy is plausible in a South African context and should be implemented. The main concern is that newly employed youth would replace workers who do not meet the qualifications of the subsidy. This would have to be taken into account by policy makers.

The Big Question: Manufacturing Jobs: What Is the Best Way to Create Jobs?

The Big Question: Manufacturing Jobs: What Is the Best Way to Create Jobs?

Fiscal stimulus and labor market policies in Europe

Several contributions have recently assessed the size of fiscal multipliers both in RBC models and in New Keynesian models. This paper computes fiscal multipliers within a labor selection model with turnover costs and Nash bargained wages. We find that demand stimuli yield small multipliers, as they have little impact on hiring and firing decisions. By contrast, hiring subsidies, and short-time work (German “Kurzarbeit”) deliver large multipliers, as they stimulate job creation and employment.

Investing in nature: Restoring coastal habitat blue infrastructure and green job creation

This study examines the economic impact of the expenditures from the American Recovery and Reinvestment Act (ARRA) of 2009 that the National Oceanic and Atmospheric Administration (NOAA) administered for coastal habitat restoration projects around the United States. Estimates of the total jobs created as well as the average number of jobs created per million dollars spent are provided. The study shows that the 50 ARRA projects administered by NOAA in the first year and half generated a total of 1409 jobs. These habitat restoration projects created, on average, 17 jobs per million dollars spent which is similar to other conservation industries such as parks and land conservation, and much higher than other traditional industries including coal, gas, and nuclear energy generation. This suggests that habitat restoration is indeed an effective way to stimulate job creation. In addition, habitat restoration has longer-term economic benefits, including future job creation in rebuilt fisheries and coastal tourism, and benefits to coastal economies including higher property values and better water quality. Therefore, investing in blue infrastructure habitat restoration is a green opportunity benefiting coastal economies and societies in both the short and the long term. ► Habitat restoration projects generate on average 17 jobs per million dollars spent. ► This is similar to other conservation industry job impacts, higher than coal/gas. ► These habitat restoration jobs fall under the official definition of “green” jobs. ► Habitat restoration generates long-term economic impacts like future job creation. ► Investing in restoring “blue infrastructure” provides lasting benefits to society.

Does Labour Taxation Affect Unemployment? Croatian Worker in International Perspective

The paper examines the issue of labour taxation of Croatian worker in comparison to workers in OECD and EU Member States. By using hierarchical cluster analysis it studies the relations between tax wedge and labour market outcomes, whereas with panel regression analysis, performed on data for 39 countries during 2000–2008 period, estimates the impact of tax wedge on unemployment rate. The empirical estimates show that Croatia classifies among countries with higher unemployment and lower employment rate, characterized with higher tax wedge. Furthermore, the estimates of the regression analysis showed that the tax wedge at all three wage levels (i.e. 67 %, 100 % and 167 % of average wage) has a significant positive impact on unemployment rate. This signifies that Croatia, as other studied countries, should continue with reduction of tax wedge, as this would alleviate unemployment problems and stimulate job creation.

Subsidizing Job Creation in the Great Recession

We analyze the effects of various labor market policies on job creation, job destruction, and employment. The framework of Mortensen and Pissarides (2003) is used to model the dynamic interaction between firms and workers and to simulate their responses to alternative policies. The equilibrium model is calibrated to capture labor market conditions at the end of 2009, including the unemployment, inflow, and outflow rates by workers of different educational attainment. We consider the equilibrium effects of a hiring subsidy, a payroll tax reduction, and an employment subsidy. While calibrating parameters that characterize these policies, we try to mimic the policies in the Hiring Incentives to Restore Employment (HIRE) Act of 2010. We find that a hiring subsidy and a payroll tax deduction, as in the HIRE Act, can stimulate job creation in the short term, but can cause a higher equilibrium unemployment rate in the long term. Employment subsidies succeed in lowering the unemployment rate permanently, but the policy entails high fiscal costs.

Comment on Edlin and Phelps: A Better Employer Wage Subsidy

According to Tim Bartik of the Upjohn Institute, a revival of the New Jobs Tax Credit would be a more cost-effective and politically feasible method of stimulating job creation, compared to the broader employer tax credits advocated by Edlin and Phelps.

The European system of small- and medium-sized enterprises

As the European Commission has indicated, SMEs have a key role to play in stimulating job creation and in improving European competitiveness. This article provides an overview of the position of SMEs in the economic system of the European Union and highlights the weaknesses that constrain SMEs in fulfilling that key role. The article also explores the factors that promote profitability in SMEs at the expense of productivity, including low pay, poor working conditions and long working hours. It proposes that there is a contradiction between the representation of SMEs as a strategic lever in pursuit of the Lisbon goals, and the reality that European SMEs are generally incapable of generating either technological innovation or continuing education and training, leaving them ill-equipped to compete in global markets.

What Are the Different Strategies for EMU Countries?

The answer to competition from emerging countries with low wage costs must be very different according to the affected sector. We need to draw a distinction between manufacturing industry and services that can be relocated and other sectors: consumer services, retail, construction, most business services and financial services. For the former, no obstacle to restructuring or the modernisation of companies can be efficient, even though this implies further relocations and job losses. For the latter, there is a crucial need to analyse and assess the various experiments that seek to stimulate job creation in said sectors, as this is indispensable if industry is to continue losing jobs. We complete the analysis of the strategy of the various countries in manufacturing by a research of the determinants of exports performance. The answer to competition from emerging countries with low wage costs must be very different according to the affected sector. We need to draw a distinction between manufacturing industry and services that can be relocated and other sectors: consumer services, retail, construction, most business services and financial services. For the former, no obstacle to restructuring or the modernisation of companies can be efficient, even though this implies further relocations and job losses. For the latter, there is a crucial need to analyse and assess the various experiments that seek to stimulate job creation in said sectors, as this is indispensable if industry is to continue losing jobs. We complete the analysis of the strategy of the various countries in manufacturing by a research of the determinants of exports performance.

Emerging Issues in Economic Development Policy and Technology Incubators: The Vermont Center for Emerging Technologies Experience

This article explores the recent efforts of the University of Vermont to promote technology transfer activities and a technology incubator as a way to stimulate job creation and increase the flow of new, targeted technologies from the University to the marketplace. Specifically, the article examines the Vermont Center for Emerging Technologies (VCET) at the University of Vermont and its role in trying to play a crucial role in facilitating economic growth. Special attention is given to how technology enterprise development and economic development strategies should be custom designed to be congruent with the unique strengths (and weaknesses) of the regional economy. In addition to a literature review pertinent to these issues, a survey and interview data were collected from the key actors associated with VCET. A discussion of broader policy lessons that can be drawn from this case study is explored.

Choosing a System of Unemployment Income Support: Guidelines for Developing and Transition Countries

Mounting evidence suggests that excessive job protection reduces employment and labor market flows, hinders technological innovations, pushes workers into the informal sector, and hurts vulnerable groups by depriving them of job opportunities. Flexible labor markets stimulate job creation, investment, and growth, but they create job insecurity and displace some workers. How can the costs of such insecurity and displacements be minimized while ensuring that the labor market remains flexible? Each of the main unemployment income support systems (unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works) has strengths and weaknesses. Country-specific conditions—chief among them labor market and other institutions, the capacity to administer each type of system, and the size of the informal sector—determine which system is best suited to developing and transition countries.

Worker reallocation during Estonia’s transition to market

Based on consecutive labor force surveys, this study examines labor market dynamics during the first decade of the Estonian transition to market. The results show that, similar to other transition economies: Estonia’s employment and labor force was reduced; patterns of mobility profoundly changed – labor market flows intensified and previously nonexistent transitions emerged; and some groups of workers were disproportionally affected, chief among them the less educated and ethnic minorities. But Estonian fundamental free market reforms also produced labor market outcomes that differ significantly from those in other transition economies – above all, the intensity of worker and job flows in Estonia’s transition have surpassed those in most other transition economies. This was achieved by deliberate policies aimed at stimulating job creation and employment, above all by low employment protection and other policies geared toward increasing employability and strengthening the incentives of workers. Moreover, under the dynamic Estonian labor market adjustment, marginal groups have fared better than those in more protective labor markets of other transition economies.

The Skills Economy and its Development: Examples and Lessons from a Rural Region

ABSTRACT This paper is a study of the skills economy of the rural region of Mid Wales, and the subsequent policy responses that could be activated to stimulate job creation and upgrading through skills development and training. A skills economy approach incorporates the means by which the expectations of employers, employees and those outside the workforce influence the existing and potential skills base of a region. Such an approach differs from traditional labour market studies, being focused more on longterm aspects and based on skill deficiencies and gaps, rather than merely shortages. The paper addresses the underlying culture of learning and attitudes towards training, from the perspective of the training supply and the demand expressed by employers, employees, the unemployed and the inactive. It highlights that the socio-economic climate of a rural economy dominated by transport difficulties, depopulation and agricultural crises needs to be addressed by the training provision made available. However, the unwillingness or inability to invest in learning and training is shown to be highly apparent from both the employer and employee perspective. It is shown that the development of new awareness and skill raising activities, to encourage both businesses and individuals to capitalize upon their latent skills capacity, are crucial to enhancing the Mid Wales skills economy. These activities should be developed at a number of differing levels, ranging from the direct promotion of increased productivity, to facilitating excluded individuals in the development of basic employability and 'job-getting' skills.

Job Creation and the I999 Reform of National Insurance

A radical reform of National Insurance was implemented in April 1999. One objective of the reform was to stimulate job creation. This note analyses the effect of the changes in employers' contributions on employment. We find that the reform could stimulate the creation of about 200,000 jobs in manufacturing industries.

U.S. and Russia Join Forces in High-Stakes Job Hunt

RUSSIAAs jobs dwindle in the wake of Russia's sharp economic downturn since last August, nuclear weapons experts in Russia's once-secret nuclear cities might be lured away by would-be nuclear powers. So this year, the U.S.-Russian Nuclear Cities Initiative is spending $15 million on a new program to persuade U.S. companies and others to invest in new ventures in Russia's nuclear weapons centers in order to stimulate job creation. The program complements the Department of Energy's Initiatives for Proliferation Prevention, which will also spend $15 million in the nuclear cities this year.

The Asymmetric Effects of Monetary Policy on Job Creation and Destruction

This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.

The Asymmetric Effects of Monetary Policyon Job Creation and Destruction

This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.

The Asymmetric Effects of Monetary Policy on Job Creation and Destruction

This paper presents theory and evidence on the asymmetric effects of monetary policy on job creation and job destruction. First, it solves a dynamic matching model and it shows how interest rate changes result in an asymmetric response of job creation and destruction. Second, it looks at how changes in the federal fund rate affect gross job flows in the U.S. manufacturing industry, and it finds evidence of asymmetry. Tight policy increases job destruction and reduces net employment changes. Conversely, easy policy appears ineffective in stimulating job creation.

Job creation initiatives in the UK: the large company role

In recent years many large companies – mainly those making large scale redundancies – have made efforts to stimulate job creation in the localities in which they are based. Although this has succeeded in helping to create jobs, it has been criticised, prompting major sponsors of such initiatives to consider how job creation strategies can be made more effective.