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on Labour Economics |
| By: | Alfonso Rosolia (Banca d’Italia); Roberto Torrini (Banca d’Italia) |
| Abstract: | We describe the evolution of the relative earnings of young male workers and the evolution of the age-earnings profiles across cohorts in the last three decades. We draw on administrative records to document a significant deterioration of entry wages over the 1990s in the presence of basically stable experience profiles. We supplement the analysis with the Bank of Italy's Survey on Household Income and Wealth and show that the wage gap between younger and older workers widened in the 90s for all levels of educational attainment. These developments are not accounted for by changes in relative skill-age labor supplies or in other potential socio-demographic determinants of wages. We argue that they were probably the result of partial labor market reforms that generated a dual labor market along the age dimension, opening a gap between the earnings of old incumbent workers and those of new labor market entrants. |
| Keywords: | entry wages, relative wages, cohort effects, labor market reforms |
| JEL: | J31 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_639_07&r=lab |
| By: | Danijel Nestic (The Institute of Economics, Zagreb) |
| Abstract: | This paper aims at estimating the size of, changes in, and main factors contributing to gender-based wage differentials in Croatia. It utilises microdata from the Labour Force Survey in 1998 and 2005, and applies both OLS and quantile regression techniques to assess the gender wage gap across the wage distribution. The gender wage gap is found to be relatively mild at the lower part of the wage distribution and is getting larger as one moves towards the top of the distribution. The paper argues that employed women in Croatia possess higher-quality labour market characteristics, especially levels of education, but receive much lower rewards for these characteristics. Some evidence of a glass-ceiling effect and occupational segregation are found. The impact of having children on the wage prospects of women is also considered. The paper finds that at the top of the wage distribution in the private sector mothers earn lower wages than women without children. |
| Keywords: | gender wage gap, glass ceiling, maternity leave, quantile regression |
| JEL: | J16 J31 J71 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:0704&r=lab |
| By: | Siegfried K. Berninghaus (Institut fuer Wirtschaftstheorie und Operations Research, University of Karlsruhe); Sabrina Bleich (Institut fuer Wirtschaftstheorie und Operations Research, University of Karlsruhe); Werner Gueth (Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | Facing a stochastic market wage, which is independent of their own hiring policy, employers offer contracts specifying ï¬xed wage, revenue share and employment duration. In ongoing employment relations it depends on the treatment whether ï¬xed wages can be only increased or also decreased. Will the uncertainty of the future market wage and less wage flexibility lead to temporary employment? And, if not, will employers adjust wages to changing market wages and will workers in ongoing employment relations react to wage decreases via effort choices? Our results partly question empirical claims, e.g. of Bewley (1995), and conï¬rm the tendency to establish ongoing employment relations. Granting more wage flexibility to employers altogether questions rather than enhances effciency since it induces opportunistic wage cuts to which employees react with lower efforts. |
| Keywords: | noncooperative game, labor contracts, labor market flexibility, principal-agent theory, experimental economics |
| JEL: | C72 C90 F16 J21 J24 L10 |
| Date: | 2007–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-072&r=lab |
| By: | Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Cecilia González (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | This paper analyzes the existence of a wage curve in Uruguay. We run several models using data for the period 1986-2005. We use two different proxies of the wage and we estimate both microdata and cell-mean regressions. Besides, we run the model for the whole sample and for groups of individuals disaggregated by level of education, gender, age and occupation. The results are consistent with the range of values found in similar studies for other countries. We find a negative relation between unemployment and wages. Specifically, we obtain an elasticity of -0.09. We find a higher elasticity for the youth, women and less educated workers. We also obtain difference results when disaggregating by occupation and formality. The results suggest that an increase of unemployment pushes up informality and self-employment which lead to a depression of earnings in these sectors. Thus, informality and self-employment would act as a buffer for unemployed formal wage earners. |
| Keywords: | wage curve, unemployment |
| JEL: | J30 J31 J60 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1107&r=lab |
| By: | Reichling, Felix |
| Abstract: | I develop an equilibrium matching model in which workers have preferences over consumption and hours of work and are able to self-insure against unemployment risks by accumulating precautionary wealth. Wages and working hours are the outcomes of Nash bargaining between workers and firms. I focus on an unemployment insurance (UI) system with constant benefits of indefinite duration financed through a constant labor income tax. Low-wealth individuals work unusually long hours to quickly accumulate precautionary wealth. The Frisch elasticity of labor supply governs a worker’s utility cost of supplying labor and hence the cost of accumulating precautionary wealth. A lower elasticity implies a higher utility cost of adjusting hours. I take Frisch elasticities from recent research using household data and find that the optimal level of UI benefits is between 34 and 40 percent of average compensation. The potential welfare gains from moving from current 34 percent to the optimal policy are as large as 0.13 percent of lifetime consumption. The optimal replacement rate is decreasing in the Frisch elasticity of labor supply. |
| Keywords: | Unemployment insurance; Labor supply; Matching equilibrium; Self-insurance |
| JEL: | J22 H00 J65 E24 |
| Date: | 2006–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5362&r=lab |
| By: | Van Poeck A.; Veiner M. |
| Abstract: | In this paper we provide new evidence on aggregate labour market flexibility in the four largest new EU member states from Central Europe (CEEC4) and a benchmark of existing EU countries (EU9). This is done trough direct comparison of several labour market institutions from which we derive an institutional summary indicator. Another approach that we follow is the estimation of aggregate wage Phillips curves from which we obtain estimates for the wage responsiveness to unemployment in these countries. The results show that the CEEC4 cannot be regarded as an homogeneous group. The Czech Republic and Hungary are relatively flexible and comparable to the United Kingdom. Poland belongs to a subgroup with France, Germany and Italy, with reduced labour market flexibility. The results are especially problematic for the Slovak Republic where aggregate wages do not respond to unemployment, although labour market institutions are still more supportive to flexibility than in most incumbent EU countries. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2007016&r=lab |
| By: | Eduardo Zepeda (International Poverty Centre) |
| Abstract: | This Working Paper seeks to provide an overview of the link between employment and poverty in Kenya. Using descriptive statistics and regression techniques, it examines unemployment, underemployment, employment and labour earnings, and the link of all these with poverty. Data are from the unit records of the Labour Force Survey of 1999/99, the latest available data at the time that this paper was written. The paper finds that Kenya faces daunting employment challenges. Unemployment is high and heavily affects urban areas, particularly young workers (15-24 years old) and mature educated workers (55-64 years old). Many of the unemployed are women. In rural areas, the main problem is underemployment, which also disproportionately affects women. Employment is dominated by traditional farming and pastoralists activities in rural areas and by informal activities in urban areas. Productive jobs are limited basically to wage employment, mostly in the modern public and private sectors concentrated in urban areas. Labour earnings are highly differentiated, starting from the high wages of employees in the modern public and private sectors, followed by the earnings of informal-sector workers, and ending with the low incomes of rural traditional farmers. Returns to education are high, very high in the case of tertiary education?suggesting that skills are scarce and highly demanded. The single two most important factors decreasing the probability of being poor are having higher education and having access to a paid job in the modern sectors. The employment landscape corresponds to that of a stagnant economy in which poor workers are in need of short-term social protection and all workers are in need of an effective long-term employment-focused development strategy. Using micro data, the paper simulates two programmes designed to provide income support to poor households: a child-transfer and a job-creation programme. Results suggest that both programmes improve the incomes of the poor and result in significant reductions in the depth of poverty. Simulations indicate that while the child-transfer programme performs better in rural areas, where dependency ratios are higher, the job-creation programme markedly reduces poverty in urban areas, particularly among the extremely poor, and even, surprisingly, among poor female workers. |
| Keywords: | Employment, Poverty, Child grants, Public works |
| JEL: | C52 J21 J24 O55 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:40&r=lab |
| By: | David G. Blanchflower; Chris Shadforth |
| Abstract: | UK population growth over the past thirty-five years has been remarkably low in comparison with other countries; the population grew by just 7% between 1971 and 2004, less than all the other EU15 countries. The UK population has grown at a faster pace since the turn of the millennium. Both the inflow and outflow rates have risen, but the inflow rate has risen more rapidly recently, with an influx of workers from Eastern European. The propensity to come to the UK to work is higher the lower is a) GDP per capita b) life satisfaction in each of the East European countries. There is reason to believe that the majority of those who have arrived in the UK from Eastern Europe have not come permanently. When surveyed only 9% said they expected to stay for more than two years. Hence, in our view it is inappropriate to call them migrants, whereas in fact they should more appropriately be considered temporary or guest workers. There is evidence that, as a result of this increase in the flow of workers from Eastern Europe, the fear of unemployment has risen in the UK which appears to have contained wage pressures. We argue that the influx of workers from Eastern Europe has tended to increase supply by more than it has increased demand in the UK (in the short run). We argue that this has acted to reduce inflationary pressures and reduce the natural rate of unemployment. |
| JEL: | J31 J61 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13506&r=lab |
| By: | Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari); Marco Valentini (Tolomeo srl) |
| Abstract: | On-the-Job Search is one of the most common and efficient ways to look for a new job, most of the time workers move directly from one employment position to another (E-to-E) without an intervening spell of unemployment. E-to-E transitions are a relevant component of total labour flows and have a definite cyclical pattern. This paper computes E-to-E worker flows through the development of a vacancy chain model. An iterative procedure is used to compute the successive reallocation runs, beginning from an autonomous vacancy and then to reconstruct the complete E-to-E transition process. The procedure is implemented and applied to a large micro-panel based on a highly industrialized Italian region from 1982 to 1996. E-to-E transitions are an increasingly large portion of worker flows in the labour market. They are clearly cyclic and the number of transitions increases over time as the labour market becomes tighter. These are the flows that explain labour market dynamics in upswings and recessions. Search models that look only at flows between employment, unemployment and outside of the labour force underestimate labour mobility and its cyclical pattern. |
| Keywords: | Job Flows, Search and Matching, Job to Job Mobility, Worker Flows, Business Cycle, Propagation |
| JEL: | E24 E32 J63 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:15_07&r=lab |
| By: | YOGO, Urbain Thierry |
| Abstract: | How do Growth affects labor market’s work? This question is important, because, labor market plays a key role in determining the success of poverty reduction policies. Using the times series data, we have been able to confirm the prediction of theory which present a positive effect of growth on the labor market’s work. However, this effect is not strong, and calls to the reinforcement of growth and the set up of pro investment incentives as well as in the level of good and knowledge production. |
| Keywords: | Labor Market; Economic Growth; Human Capital; Employment; Wage; Social Protection; Employment Protection |
| JEL: | J81 J82 |
| Date: | 2007–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5305&r=lab |
| By: | Luojia Hu (Northwestern University); Christopher Taber (Northwestern University) |
| Abstract: | In a seminal paper, Gibbons and Katz (1991) develop and empirically test an asymmetric information model of the labor market. The model predicts that wage losses following displacement should be larger for layoffs than for plant closings, which was borne out by data from the Displaced Workers Survey (DWS). In this paper, we take advantage of many more years of DWS data to examine how the difference in wage losses across plant closings and layoffs varies with race and gender. We find that the differences between white males and the other groups are striking and complex. The “lemons effect” of layoffs holds for white males, as in the Gibbons-Katz model, but not for the other three demographic groups (white females, black females, and black males). These three all experience a greater decline in earnings at plant closings than at layoffs. This results from two reinforcing effects. First, plant closings have substantially more negative effects on minorities than on whites. Second, layoffs seem to have more negative consequences for white men than the other groups. These findings suggest that the Gibbons-Katz asymmetric information model is not sufficient to explain all of the data. We augment the model with heterogeneous human capital and show that this model can explain the findings. We also provide some additional evidence suggestive that both asymmetric information and heterogeneous human capital are important. In support of both explanations, we demonstrate that the racial and gender effects are surprisingly robust to region, industry, and occupation controls. To look at the asymmetric information, we make use of the Civil Rights Act of 1991, which induced employers to lay off “protected” workers in mass layoffs rather than fire them for cause. As a result, relative to whites, a layoff would be a more negative signal for blacks after 1991 than before. If information is important, this would in turn imply that blacks experience a relatively larger loss in earnings at layoffs after 1991 than prior; and that’s what we find in the data. In addition, as further evidence for heterogeneous human capital, we document for the first time in the literature that the two types of layoffs reported in the DWS data, namely layoffs due to “slack work” and “position abolished,” have very different features when compared to plant closings. Finally, we simulate our model and show that it can match the data. |
| Keywords: | human capital, plant closings, layoffs, sex, gender, race |
| JEL: | J6 J7 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:07-136&r=lab |
| By: | Gould, Eric D; Winter, Eyal |
| Abstract: | This paper examines how the effort choices of workers within the same firm interact with each other. In contrast to the existing literature, we show that workers can affect the productivity of their co-workers based on income maximization considerations, rather than relying on behavioural considerations such as peer pressure, social norms, and shame. Theoretically, we show that a worker's effort has a positive effect on the effort of co-workers if they are complements in production, and a negative effect if they are substitutes. The theory is tested using panel data on the performance of baseball players from 1970 to 2003. The empirical analysis shows that a player's batting average significantly increases with the batting performance of his peers, but decreases with the quality of the team's pitching. Furthermore, a pitcher's performance increases with the pitching quality of his team-mates, but is unaffected by the batting output of the team. These results are inconsistent with behavioural explanations which predict that shirking by any kind of worker will increase shirking by all fellow workers. The results are consistent with the idea that the effort choices of workers interact in ways that are dependent on the technology of production. These findings are robust to controlling for individual fixed-effects, and to using changes in the composition of one's co-workers in order to produce exogenous variation in the performance of one's peers. |
| Keywords: | Externalities; Peer Effects; Team Production |
| JEL: | J2 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6527&r=lab |
| By: | Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari); Marco Valentini (Tolomeo srl) |
| Abstract: | This research exploits a large employer-level panel dataset in order to analyse employment and worker flows. Excess reallocation, the difference between worker and job flows at the firm level, is substantial and has a definite cyclical pattern. Both accessions and separations are cyclical in contrast to the conventional wisdom that assumes separation to be countercyclical. Separations increase in upswing, following the accession increase, and decline in recession. Unemployment during recession is not, to a large extent, due to an increase in the rate at which workers separate from their employers, as traditionally assumed among macroeconomists, but to the decline in job creations. |
| Keywords: | Job Flows, Worker Flows, Reallocation, Cyclical behaviour |
| JEL: | E24 E32 J21 J44 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:16_07&r=lab |
| By: | Gianna Claudia Giannelli; Francesca Francavilla |
| Abstract: | The paper deals with child labour in developing countries. We address a problem that has recently drawn much attention at the international level, that is, how to invest in women’s rights to advance the rights of both women and children. We study the problem from a new perspective. In our theoretical model we assume that the child’s time is an extension of her/his mother’s time, and that she has to decide how to allocate it. We estimate two empirical specifications, both multinomial logit. The first one, in line with the standard approach in the literature, estimates a model of the probability of the different child’s states, conditional on her/his mother’s states. The second empirical specification, in line with our theoretical model, estimates the mother-child states jointly. Using a unique, rich and representative data survey for all Indian states and for urban and rural India (NFHS-2, 1998/9), we select our sample drawing information from the household data set and the women’s data set. Our results show that the presence of the mother in the family increases children welfare, in terms of educational opportunities and protection from work activities. All our results indicate that the mother tends to stay home and send her children to school the better is the father’s employment position and the wealthier is the family. However, we observe a perverse effect. If the mother works, since female job quality and wage levels are very low, also her children have a higher probability to work. |
| Keywords: | income distribution, inequality trends |
| JEL: | J13 J22 O15 O18 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp22_07&r=lab |
| By: | Anna Aizer |
| Abstract: | Three quarters of all violence against women is perpetrated by domestic partners. I study both the economic causes and consequences of domestic violence. I find that decreases in the male-female wage gap reduce violence against women, consistent with a household bargaining model. The relationship between the wage gap and violence suggests that reductions in violence may provide an alternative explanation for the well-established finding that child health improves when mothers control a greater share of the household resources. Using instrumental variable and propsensity score techniques to control for selection into violent relationships, I find that violence against pregnant women negatively affects the health of their children at birth. This work sheds new light on the health production process as well as observed income gradients in health and suggests that in addition to addressing concerns of equity, pay parity can also improve the health of American women and children via reductions in violence. |
| JEL: | I12 J12 J13 J16 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13494&r=lab |
| By: | Stefanie Behncke; Markus Frölich; Michael Lechner |
| Abstract: | We evaluate a randomized experiment of a statistical support system developed to assist caseworkers in Swiss employment offices in choosing appropriate active labour market programmes for their unemployed clients. This statistical support system predicted the labour market outcome for each programme and thereby suggested an 'optimal' labour market programme for each unemployed person. The support system was piloted in several employment offices. In those pilot offices, half of the caseworkers used the system and the other half acted as control group. The allocation of the caseworkers to treatment and control group was random. The experiment was designed such that caseworkers retained full discretion about the choice of active labour market programmes, and the evaluation results showed that caseworkers largely ignored the statistical support system. This indicates that stronger incentives are needed for caseworkers to comply with statistical profiling and targeting systems. |
| Keywords: | Profiling, active labour market programmes, ALMP, statistical treatment rules, unemployment, public employment services |
| JEL: | J68 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2007:2007-37&r=lab |
| By: | Lechner, Michael; Wiehler, Stephan |
| Abstract: | This paper extends the traditional focus of active labour market policy evaluation from a static comparison of participation in a programme versus nonparticipation (or participation in another programme) to the evaluation of the effects of programme sequences, i.e. multiple participation or timing of such programmes. We use a dynamic evaluation framework that explicitly allows for dynamic selection into different stages of such sequences based on past intermediate outcomes to analyze multiple programmes, the timing of programmes, and the order of programmes. The analysis is based on exceptionally comprehensive data on the Austrian labour force. Our findings suggest that (i) active job search programmes are more effective after a qualification programme compared to the reverse order, that (ii) multiple participations in qualification measures dominates single participation, and that (iii) the effectiveness of specific labour market programmes deteriorates the later they start during an unemployment spell. |
| Keywords: | Active Labour market policy; matching estimation; panel data; programme evaluation |
| JEL: | J68 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6521&r=lab |
| By: | Tanya Araújo; Gérard Weisbuch |
| Abstract: | Positions offered on a labour market and workers preferences are here described by bit-strings representing individual traits. We study the co-evolution of workers and firm preferences modeled by such traits. Individual ”size-like” properties are controlled by binary encounters which outcome depends upon a recognition process. Depending upon the parameter set-up, mutual selection of workers and positions results in different types of attractors, either an exclusive niches regime or a competition regime. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp242007&r=lab |
| By: | Michael Lechner; Stephan Wiehler |
| Abstract: | This paper extends the traditional focus of active labor market policy evaluation from a static comparison of participation in a program versus nonparticipation (or participation in another program) to the evaluation of the effects of program sequences, i.e. multiple participation or timing of such programs. We use a dynamic evaluation framework that explicitly allows for dynamic selection into different stages of such sequences based on past intermediate outcomes to analyze multiple programs, the timing of programs, and the order of programs. The analysis is based on exceptionally comprehensive data on the Austrian labor force. Our findings suggest that (i) active job search programs are more effective after a qualification program compared to the reverse order, that (ii) multiple participations in qualification measures dominates single participation, and that (iii) the effectiveness of specific labor market programs deteriorates the later they start during an unemployment spell. |
| Keywords: | Active Labor market policy, matching estimation, program evaluation, panel data |
| JEL: | J68 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2007:2007-38&r=lab |
| By: | H. BOULHOL; S. DOBBELAERE; S. MAIOLI |
| Abstract: | This paper tests the pro-competitive effect of trade in the product and labour markets of UK manufacturing sectors between 1988 and 2003 using a two-stage estimation procedure. In the first stage, we use data on 9820 firms from twenty manufacturing sectors to simultaneously estimate mark-up and workers’ bargaining power parameters according to sector, firm size and period. We find a significant drop in both the mark-up and the workers’ bargaining power in the mid-nineties. In the second stage, we relate our parameters of interest to trade variables. Our results show that imports from developed countries have significantly contributed to the decrease in both mark-ups and workers’ bargaining power. |
| Keywords: | Workers’ bargaining power, mark-ups, pro-competitive effect |
| JEL: | C23 F16 J51 L13 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:07/479&r=lab |
| By: | Lopez-Pablos, Rodrigo A. |
| Abstract: | Exploring current literature that assess relations between cognitive ability and height, obesity, and its productivity-employability effect on women's labor market; we appraised the Argentine case to and these social-physical relations which involve anthropometric and traditional economic variables. Adapting an anthropometric Mincer approach by using probabilistic and censured econometric models which were developed for it. Subtle evidence of discriminative behavior on obese women, and a good performance of height variable as unobserved cognitive ability approximate measure to explain feminine productivity has been found. |
| Keywords: | Height; Obesity; Anthropometric Mincer; Discrimination. |
| JEL: | J24 I12 C34 |
| Date: | 2007–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5326&r=lab |
| By: | Bokan, Nikola; Hughes Hallett, Andrew |
| Abstract: | Most people accept that structural and labour market reforms are needed in Europe. However few have been undertaken. The usual conjecture is that reforms are costly in economic performance and costly to finance. Blanchard and Giavazzi (2003) and Spector (2004) develop a general equilibrium model with imperfect competition to show the impact of labour or product market deregulation. We extend that model to combine both reforms, and include the costs of financing them, the conflict between long run gains and short run costs, and to allow for reforms of distortionary taxation. We also extend the model to explain the natural rate of unemployment and non-wage employment costs, to show the impact of reform on the short and long run Phillips curve parameters. We find that structural reforms imply short run costs but long run gains (unemployment rises and then falls, while wages move in the opposite way); that the long run gains outweigh the short run costs; and that the financing of such reforms is the main stumbling block. We also find that the implications for welfare improvements and employment generation are quite different: tax reforms are more effective for welfare, but market liberalisation for employment. |
| Keywords: | Structural reform, wage bargains, short vs. long run substitutability, endogenous entry of firms |
| JEL: | E24 H23 J58 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:6169&r=lab |
| By: | Markus Leibrecht (Institute for Public Sector Economics, Vienna University of Economics and Business Administration, Austria); Johann Scharler (Department of Economics, Johannes Kepler University Linz, Austria) |
| Abstract: | The purpose of this paper is to investigate empirically the importance of labor market conditions and in particular of employment protection legislation as a determinant of bilateral Foreign Direct Investment flows to seven Central and Eastern European countries. Although our results indicate that countries characterized by low unit labor costs tend to attract more Foreign Direct Investment, we find no evidence suggesting that employment protection legislation matters in this context. This result also holds if we control for the riskiness of the host countries. |
| Keywords: | Foreign Direct Investment; Central and Eastern Europe; Labor Market; Employment Protection |
| JEL: | F21 F23 J50 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2007_16&r=lab |
| By: | Chaudhuri, Sarbajit; Yabuuchi, Shigemi |
| Abstract: | Formation of SEZ using agricultural land to promote industrialization has recently been one of most controversial policy issues in many developing economies including India. This paper critically theoretically evaluates the consequences of this policy in terms of a three-sector Harris-Todaro type general equilibrium model reasonable for a developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends more than a critical amount on irrigation projects and other infrastructural development designed for improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve. |
| Keywords: | Special economic zone; fiscal concessions; agricultural productivity; rural wage; urban unemployment. |
| JEL: | R14 H54 R13 |
| Date: | 2007–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5324&r=lab |