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on Labour Economics |
| By: | Lei Fang; Jun Nie; Zoe Xie |
| Abstract: | The CARES Act implemented in response to the COVID-19 crisis dramatically increases the generosity of unemployment insurance (UI) benefits, triggering concerns about its substantial impact on unemployment. This paper combines a labor market search-matching model with the SIR-type infection dynamics to study the effects of CARES UI on both unemployment and infection. More generous UI policies create work disincentives and lead to higher unemployment, but they also reduce infection and save lives. Economic shutdown policies further amplify these effects of UI policies. Quantitatively, the CARES UI policies raise unemployment by an average of 3.7 percentage points over April to December 2020 but also reduce cumulative death by 4.7 percent. Eligibility expansion and the extra $600 increase in benefit level account for more than 90 percent of the total effects, while the 13-week benefit duration extension plays a much smaller role. Overall, UI policies improve the welfare of workers and reduce the welfare of nonworkers, both young and old. |
| Keywords: | COVID-19; CARES Act; unemployment insurance; search and matching |
| JEL: | J64 J65 E24 |
| Date: | 2020–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:88479&r=all |
| By: | Chiswick, Barry R. (George Washington University); Halenda Robinson, RaeAnn (George Washington University) |
| Abstract: | Rates of labor force participation in the US in the second half of the nineteenth century among free women were exceedingly (and implausibly) low, about 11 percent. This is due, in part, to social perceptions of working women, cultural and societal expectations of female's role, and lack of accurate or thorough enumeration by Census officials. This paper develops an augmented free female labor force participation rate for 1860. It is calculated by identifying free women (age 16 and older) who were likely providing informal and unenumerated labor for market production in support of a family business, that is, unreported family workers. These individuals are identified as not having a reported occupation, but are likely to be working on the basis of the self-employment occupation of other relatives in their households. Family workers are classified into three categories: farm, merchant, and craft. The inclusion of this category of workers more than triples the free female labor force participation rate in the 1860 Census, from 16 percent to 56 percent, which is comparable to today's rate (57 percent in 2018). |
| Keywords: | women, labor force participation, occupational attainment, unpaid workers, unreported family workers, 1860 Census |
| JEL: | N31 J16 J21 J82 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13424&r=all |
| By: | Kandoussi, Malak (University of Evry); Langot, François (University of Le Mans) |
| Abstract: | Recent events suggest that uncertainty changes play a major role in U.S. labor market fluctuations. This study analyzes the impact of uncertainty shocks on unemployment dynamics. Using a vector autoregression approach, we show that uncertainty shocks measured by stock market volatility have a significant impact on the U.S. unemployment rate. We then develop a quantitative version of the Diamond-Mortensen-Pissarides (DMP) model, in which uncertainty shocks hit the economy. Given the significant nonlinearities of the DMP model, we show that the introduction of uncertainty shocks not only allows this textbook model to account for observed characteristics of the U.S. labor market dynamics, with reasonable values for calibrated parameters, but also for the impact of rare episodes such as economic crises. |
| Keywords: | uncertainty shocks, unemployment dynamics, search and matching, non-linearities |
| JEL: | E24 E32 J64 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13438&r=all |
| By: | Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)) |
| Abstract: | This paper investigates the incidence, trend and determinants of remote work in Greece. A crisis-stricken country in the years preceding the Covid-19 crisis, Greece entered the first wave of the public health shock as a laggard in digitalisation and remote work arrangements among European countries. While Covid-19 induced a spike in the use of remote work arrangements in many countries, this paper presents evidence that working from home (WfH) in Greece was subdued in the past decade. By analysing the profile of the job tasks and skill needs of Greek homeworkers, the paper also shows marked deviations in homeworking patterns and determinants in Greece, relative to other EU countries. This includes a higher prevalence of WfH among Greek females and non-nationals, limited use by young workers and families with children and a stronger relation with atypical work hours. While remote workers in Greece receive a 7% monthly wage premium, their jobs are found to involve standardised and moderate ICT tasks and to rely more on social serving tasks. The paper highlights that there is significant scope to enhance remote work in Greece, which can amount to up to 37% of all salaried jobs, subject to changing work organisation, norms and policies. In the coronavirus era, overcoming barriers to remote work will be key for the Greek labour market to adapt to social distances practices and digitalisation. |
| Keywords: | work at home, remote work, teleworking, tasks, skills, COVID-19, Greece |
| JEL: | C25 J01 J23 J24 J31 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13408&r=all |
| By: | Alfonsi, Livia; Bandiera, Oriana; Bassi, Vittorio; Burgess, Robin; Rasul, Imran; Sulaiman, Munshi; Vitali, Anna |
| Abstract: | We design a labor market experiment to compare demand- and supply-side policies to tackle youth unemployment, a key issue in low-income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm-provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers we find that averaged over three post-intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector-specific skills, (ii) significantly improve their employment rates, and, (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are long-lasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre-labor market entry, therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants. |
| JEL: | R14 J01 N0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105154&r=all |
| By: | Deshpande, Ashwini |
| Abstract: | Based on national-level panel data from Centre for Monitoring Indian Economy (CMIE)’s Consumer Pyramids Household Survey (CPHS) database, this paper investigates the first effects of Covid-19 induced lockdown on employment and the gendered pattern of time allocation inside the home. Examining the employment status during the last 12 months of over 40,000 individuals surveyed in April 2020 (i.e. during the strict nationwide lockdown), the paper finds that overall employment, which was relatively stable during the pre-pandemic time period, dropped sharply post-lockdown. This drop in employment was not gender neutral. Given the large pre-existing gender gaps in employment, in absolute terms, more men lost employment than women. However, conditional on being employed pre-lockdown, women were roughly 20 percentage points less likely to be employed than men who were employed pre-lockdown. India has amongst the most unequal gender division of household work globally. Comparing hours spent on domestic work pre- and post-lockdown, I find that men increased hours spent on domestic work during lockdown. The male distribution continues to be right-skewed, but the proportions of men doing between 0.5 to 4 hours of housework per day increased post-lockdown. This seems to be driven by increased male unemployment. The time spent with friends decreased for both men and women, but relatively more for women. |
| Keywords: | Covid-19,Lockdown,Employment,Gender,Time Use,India |
| JEL: | J1 J6 O53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:607&r=all |
| By: | Farré, Lídia (University of Barcelona); Fawaz, Yarine (CEMFI, Madrid); Gonzalez, Libertad (Universitat Pompeu Fabra); Graves, Jennifer (Universidad Autónoma de Madrid) |
| Abstract: | The covid-19 pandemic led many countries to close schools and declare lockdowns during the Spring of 2020, with important impacts on the labor market. We document the effects of the covid-19 lockdown in Spain, which was hit early and hard by the pandemic and suffered one of the strictest lockdowns in Europe. We collected rich household survey data in early May of 2020. We document large employment losses during the lockdown, especially in "quarantined" sectors and non-essential sectors that do not allow for remote work. Employment losses were mostly temporary, and hit lower-educated workers particularly hard. Women were slightly more likely to lose their job than men, and those who remained employed were more likely to work from home. The lockdown led to a large increase in childcare and housework, given the closing of schools and the inability to outsource. We find that men increased their participation in housework and childcare slightly, but most of the burden fell on women, who were already doing most of the housework before the lockdown. Overall, we find that the covid-19 crisis appears to have increased gender inequalities in both paid and unpaid work in the short-term. |
| Keywords: | COVID-19, gender roles, labor market, household work, childcare |
| JEL: | D13 J13 J16 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13434&r=all |
| By: | Michael Elsby; Ryan Michaels; David Ratner |
| Abstract: | Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—plays a central role in establishment dynamics. We document this phenomenon using rich microdata on U.S. establishments, which frequently report no net change in their employment, often for years at a time, despite facing substantial gross turnover in the form of quits. We propose a model in which replacement hiring is driven by the presence of a putty-clay friction in the production structure of establishments. Replacement hiring induces a novel positive feedback channel through which an initial rise in vacancy posting induces still more vacancy posting to replace employees who are poached. This vacancy chain in turn induces volatile responses of vacancies, and thereby unemployment, to cyclical shocks. |
| Keywords: | Quits; replacement hiring; unemployment; vacancies; business cycles. |
| JEL: | E32 J63 J64 |
| Date: | 2020–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:88450&r=all |
| By: | Buscha, Franz (University of Westminster); Gorman, Emma (University of Westminster); Sturgis, Patrick (London School of Economics) |
| Abstract: | Social mobility—the extent to which social and economic position in adulthood is facilitated or constrained by family origins—has taken an increasingly prominent role in public and policy discourse. Recent studies have documented that not only who your parents are, but also where you grow up, influences subsequent life chances. We bring these two concepts together to study trends in social mobility in England and Wales, in three post-war generations, using linked Decennial Census data. We estimate rates of occupational social class mobility by sex and region of origin. Our findings show considerable spatial variation in rates of absolute and relative mobility as well as how these have changed over time. While rates of upward mobility increased in every region between the mid-1950s and the early 1980s, this upward shift varied across different parts of the country, and tailed off for more recent cohorts. We also explore the role of domestic migration in understanding these temporal and spatial patterns, finding that those who stayed in their region of origin had lower rates of upward mobility compared to those who moved out, although this difference also narrowed over time. While policy discussion has focused almost entirely on national-level trends in social mobility, our results emphasise the need to also consider persistent spatial inequalities. |
| Keywords: | intergenerational mobility, social mobility, regional economics, spatial mobility |
| JEL: | J62 J61 J21 I24 I26 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13437&r=all |
| By: | Beissinger, Thomas; Hellier, Joël; Marczak, Martyna |
| Abstract: | We develop a model which shows that wages, prices and real income should grow faster in countries with low increase in their labour force. If not, other countries experience growing unemployment and/or trade deficit. This result is applied to the case of Germany, which has displayed a significantly lower increase in its labour force than its trade partners, except in the moment of the reunification. By assuming that goods are differentiated according to their country of origin (Armington’s hypothesis), a low growth of the working population constrains the production of German goods, which entails an increase in their prices and in German wages. This mechanism is magnified by the low price elasticity of the demand for German goods. Hence, the German policy of wage moderation could severely constrain other countries’ policy options. The simulations of an extended model which encompasses offshoring to emerging countries and labour market imperfections suggest that (i) the impact of differences in labour force growth upon unemployment in Eurozone countries has been significant and (ii) the German demographic shock following unification could explain a large part of the 1995-2005 German economic turmoil. |
| Keywords: | Population growth,Labour force,Inflation,Wages,Germany |
| JEL: | E24 F16 J11 O57 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:620&r=all |
| By: | Seema Jayachandran |
| Abstract: | This article discusses cultural barriers to women's participation and success in the labor market in developing countries. I begin by describing how gender norms influence the relationship between economic development and female employment, as well as how gender norms vary substantially across societies at the same level of economic development. I then examine several specific gender-related social norms and how they constrain women's employment. I present examples of policies aimed at dismantling these cultural barriers to female employment and the impacts they have. |
| JEL: | J16 J20 O10 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27449&r=all |
| By: | Giorgio Barba Navaretti (Universita degli Studi di Milano and LdA); Lionel Fontagné (Paris School of Economics, Université Paris I & CEPII); Gianluca Orefice (University of Paris-Dauphine, CEPII and CESifo); Giovanni Pica (Universita della Svizzera Italiana, LdA and CSEF); Anna Rosso (Universita degli Studi di Milano, LdA and CEP) |
| Abstract: | This paper investigates the effects on firms' occupational structure of shocks induced by the intro- duction of Technical Barriers to Trade (TBTs) in importing countries. We rely on the Specific Trade Concern (STC) data released by the WTO to identify trade-restrictive TBT measures, combined with matched employer-employee data for the population of French exporters over the period 1995- 2010, and with information on the list of product-destinations served by each French exporter. Con- trolling for time-invariant firm/occupation effects and for time-varying sector/occupation shocks, IV estimates show that exporters respond to increased complexity associated with restrictive TBTs at destination by raising the share of managers at the expense of blue collars, white collars and professionals. This evidence is consistent with the growing literature exploring how firms organize their workforce composition in presence of exogenous (foreign) shocks; and it is also related to the well-beaten literature on the labour market effects of trade. |
| Keywords: | skill composition, labor demand, trade barriers, non-tariff measures |
| JEL: | F13 F14 J53 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt202007&r=all |
| By: | Betcherman, Gordon; Giannakopoulos, Nicholas; Laliotis, Ioannis; Pantelaiou, Ioanna; Testaverde, Mauro; Tzimas, Giannis |
| Abstract: | We use administrative, survey, and online vacancy data to analyze the short-term labor market impacts of the COVID-19 lockdown in Greece. We find that flows into unemployment have not increased; in fact, separations were lower than would have been expected given trends in recent years. At the same time, employment was about 12 percent lower at the end of June than it would have been without the pandemic. Our interrupted time series and difference-in-differences estimates indicate that this was due to a dramatic slowdown in hiring during months when job creation typically peaks in normal years, mostly in tourism. While we do not formally test the reasons for these patterns, our analysis suggests that the measures introduced to mitigate the effects of the crisis in Greece have played an important role. These measures prohibited layoffs in industries affected by the crisis and tied the major form of income support to the maintenance of employment relationships. |
| Keywords: | Greece,COVID-19 pandemic,labor market impacts |
| JEL: | J21 J60 J68 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:613&r=all |
| By: | Collischon, Matthias; Kühnle, Daniel; Oberfichtner, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "How parents respond to changes in the price of childcare is an important, though not fully understood, public policy question. Our paper provides newcomprehensive evidence on howa home care subsidy jointly affects maternal labour market outcomes, childcare choices, and children's development. We examine a German reform from 2013 which introduced a home care subsidy of initially 100 Euros per month for families who do not use subsidised childcare. Exploiting a date-of-birth cut-off in eligibility and using administrative data on employment and child development alongside survey data on childcare usage, we show that the reform reduced mothers' likelihood to return to work within three years by only 1.4 percentage points, but decreased childcare enrolment for one- and two-year olds by 5 percentage points. We find no effect on children's skill development at age six. Our findings imply that the subsidy accrued almost completely as windfall gains to families whowould not have used formal childcare anyway." (Author's abstract, IAB-Doku) ((en)) Additional Information Online Appendix |
| JEL: | J13 J18 J22 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202025&r=all |
| By: | Kandoussi, Malak (University of Evry); Langot, François (University of Le Mans) |
| Abstract: | We develop a multi-sectoral matching model to predict the impact of the lockdown on the US unemployment, considering the heterogeneity of workers to account for the contrasted impacts across various types of jobs. We show that separations and business closures that hit the workers with the first level of education explains the abruptness of the unemployment rise. The existence of significant congestion externalities in the hiring process suggests that a comeback to the pre-crisis unemployment level could be reached in 2024 in a scenario with a double wave. In the same scenario, a calibration on French data leads to more pessimistic forecasts with a comeback to the pre-crisis unemployment level expected until 2027. |
| Keywords: | COVID-19, unemployment dynamics, search and matching, worker heterogeneity |
| JEL: | E24 E32 J64 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13439&r=all |
| By: | Tora K. Knutsen; Jørgen Modalsli; Marte Rønning (Statistics Norway) |
| Abstract: | How can geographical proximity to college explain field of study choices? We empirically address this question using the major expansion of university colleges in Norway in the second half of the twentieth century, when 33 new education institutions were established in areas that did not previously have any institutions for higher education. Our findings indicate that take-up of the relevant educations (nursing, engineering and business administration) increased substantially with the establishment of new colleges. However, we do not find evidence of an increase in education on earnings capacity overall, suggesting that the new colleges shifted individuals on the intensive rather than extensive margin, between education tracks of similar length. We discuss challenges related to the estimation of education choices in a population that often started higher education late, well into their twenties, and also document substantial gender differences in the take-up of different higher education opportunities. |
| Keywords: | University access; Gender differences; Field of study; Geospatial variation |
| JEL: | D31 I23 J62 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:932&r=all |
| By: | Claus-Jochen Haake; Thorsten Upmann; Papatya Duman |
| Abstract: | We analyse the two-dimensional Nash bargaining solution (NBS) deploying a standard labour market negotiations model (McDonald and Solow, 1981). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems such that the two solutions together replicate the solution of the two-dimensional problem, if the NBS is applied. The axiom of Independence of Irrelevant Alternatives turns out to be crucial for decomposability. Our result has significant implications for actual negotiations, as it allows for the decomposition of a multi-dimensional bargaining problem into simpler problems—and thus helps to facilitate real-world negotiations. |
| Keywords: | labour market negotiations, efficient bargains, Nash bargaining solution, sequential bargaining, restricted bargaining games |
| JEL: | J52 J41 C78 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8422&r=all |
| By: | Joshua Bernstein; Alexander W. Richter; Nathaniel A. Throckmorton |
| Abstract: | This paper builds a nonlinear business cycle model with endogenous firm entry and exit and equilibrium unemployment. The entry and exit mechanism generates asymmetry and amplifies the transmission of productivity shocks, exposing the economy to significant tail risk. When calibrating the rates of entry and exit to match their shares of job creation and destruction, our quantitative model generates higher-order moments consistent with U.S. data. Firm exit particularly amplifies the severity and persistence of deep recessions such as the COVID-19 crisis. In the absence of entry and exit, the model generates almost no asymmetry or tail risk. |
| Keywords: | Unemployment; Firm Dynamics; Skewness; Labor Search; Nonlinear; COVID-19 |
| JEL: | E24 E32 E37 J63 L11 |
| Date: | 2020–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:88256&r=all |
| By: | Pastore, Francesco; Webster, Allan; Hope, Kevin |
| Abstract: | This study contributes to the rapidly growing literature on women in tourism. It focuses on a group of 13 Caribbean countries. The study analyses the impact of women in apical positions within firms (top manager or owner) on firm performance – productivity, profitability and female employment. For this both a decomposition model and the Inverse Probability Weighted Regression Adjustment (IPWRA) estimator are used. The analysis finds that opportunities for women in these positions in the Caribbean are constrained to less productive and profitable firms, as elsewhere. However, those firms with females at the top employ more women, particularly in management roles. |
| Keywords: | gender differences,tourism,Propensity score matching,IPWRA,Caribbean |
| JEL: | D22 J16 L26 L83 Z32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:599&r=all |
| By: | Jerome De Henau; Susan Himmelweit |
| Abstract: | This paper discusses new methods of combined macro-micro analysis of labor demand and supply to investigate the gender impacts of public policy. In particular it examines how studies have used input-output analysis together with more or less sophisticated methods of allocating people to jobs to model the impact of public investment in care on the gender employment gap and other inequality measures. It presents some results of a cross-country comparison of investment in the care and construction industries, suggesting methodological refinements to take account of the labor supply effects of such investment policies in order to enable a more detailed analysis of who gets the jobs generated and under what conditions of employment to achieve a more accurate assessment of a policy's full impact on employment inequalities. We argue that such a microsimulation of who is likely to get any newly created jobs should be able to take account of the (child)care "tax" paid by those with caring responsibilities on time spent in employment (as well as the formal tax and benefit system). |
| Keywords: | Care; Microsimulation; Public Investment; Labor Demand; Gender |
| JEL: | E17 J16 J21 R15 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_966&r=all |
| By: | Bandyopadhyay, Subhayu (Federal Reserve Bank of St. Louis); Basu, Arnab K. (Cornell University); Chau, Nancy H. (Cornell University); Mitra, Devashish (Syracuse University) |
| Abstract: | We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring, but not necessarily formal-to-informal outsourcing, and, in response, the developed nation wage can fall. Productivity improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the minimum wage is reduced, the developed nation wage falls when most of the efficiency gains accrue to the informal sector. |
| Keywords: | offshoring, outsourcing, informal sector, dual labor markets |
| JEL: | F1 F2 J4 J8 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13420&r=all |
| By: | Nordman, Christophe Jalil (IRD, DIAL, Paris-Dauphine); Sharma, Smriti (Newcastle University); Sunder, Naveen (Bentley University) |
| Abstract: | In predominantly agrarian economies with limited irrigation, rainfall plays a critical role in shaping households' incomes and subsequently their spending decisions. This study uses household-level panel data from a nationally representative survey in India to estimate the effect of agricultural productivity shocks – as proxied by exogenous annual rainfall deviations from long-term average – on education expenditures and children's work status in rural Indian households. Our results show that a transitory increase in rainfall significantly reduces education expenditures and increases the likelihood of child labor across a range of work activities. Additionally, we show that productivity-enhancing inputs such as land ownership and credit access do not mitigate these countercyclical effects of rainfall variations, indicating the importance of market imperfections (in labor and land markets). We also find that the effects of productivity shocks are reinforced for historically marginalized castes, and moderated for more educated households. These highlight that the average effects mask considerable heterogeneity based on household and regional characteristics. |
| Keywords: | rainfall shocks, education expenditures, child work, market imperfections, India |
| JEL: | D13 I21 J16 O12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13405&r=all |
| By: | Anderson, Dylan; Hesketh, Rachel; Kleinman, Mark; Portes, Jonathan |
| Abstract: | Over the last 50 years, London has successfully adapted to technological change and globalization, making it the major driver of the UK economy. But its strengths have also made the city particularly vulnerable to the health impacts of COVID-19, and potentially also to wider negative economic implications of the crisis. Many of London’s key sectors rely on proximity, agglomeration economies and externalities. We evaluate the available data on the impact of the pandemic on London to date, with a particular focus on the differential effects between sectors. We also identify seven key trends, affecting both the demand and supply side of the economy, that are likely to have significant medium- to long-term economic impacts, and assess the potential impacts on London’s major industrial sectors. Our findings suggest that COVID-19 may further accentuate the existing divide between globally competitive advanced producer services and more locally focused sectors providing lower-value personal and household services, posing a number of significant policy challenges. |
| Keywords: | COVID-19,London,agglomeration economies,migration,services |
| JEL: | J11 J24 J61 R11 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:608&r=all |
| By: | Hertog, Steffen |
| Abstract: | Like other Gulf Cooperation Council countries, Kuwait shares its wealth generously with its population. Yet the way in which it does so is inefficient, inequitable and economically distortive. This is true both for the country’s conventional social safety mechanisms and for two large-scale ‘quasi-welfare’ policies: the provision of cheap or free energy and large-scale public sector employment for citizens. Current wealth sharing policies are fiscally unsustainable given current demographic trends, disproportionately benefit richer households and deeply distort markets for energy and labour. Against this background, this paper analyses a number of alternative mechanisms of social safety and wealth sharing that could be less distortionary and more conducive to private job generation for nationals. It focuses in particular on the idea of a ‘resource dividend’: an unconditional cash grant for adult nationals that could be provided in lieu of other, more unequal, discretionary and distortive forms of subsidies and rent sharing. While the case for a resource dividend has been made in previous research, this paper goes beyond conceptual discussion and illustrates in detail how such a dividend could be financed, what its distributional consequences would be and how it should be combined with other welfare policies to minimise distortions and maximise political feasibility. The paper develops concrete scenarios illustrating how different types of households and businesses would be impacted and discusses the administrative arrangements likely to be required by resource dividend and social safety reform. |
| JEL: | E6 R14 J01 J1 |
| Date: | 2020–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105564&r=all |
| By: | Diemer, Andreas |
| Abstract: | There is little evidence on the relevance of social networks in the aggregate spatial diffusion of localised economic shocks. This paper uses novel data on the universe of online friendships in the US to uncover how plausibly exogenous surges in the local demand for jobs in the oil and gas industry can affect the economy of spatially distant but socially proximate places. Although most of the diffusion is limited to geographically proximate areas, social networks matter too. According to 2SLS estimates, a million dollar per capita increase in oil and gas extraction raises per capita wages by over 5,000 dollars for workers reporting their incomes in counties located as far as 1,200 km away from the drilling site, but strongly socially connected to it. This effect is likely explained by the relocation of transient workers within the industry, providing new aggregate evidence in support of the literature on job information networks. |
| Keywords: | social networks; fracking; spatial diffusion; job search |
| JEL: | J61 J64 L71 Q33 R12 R23 Z13 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105868&r=all |
| By: | Haroon Bhorat (Development Policy Research Unit, School of Economics, University of Cape Town); Morné Oosthuizen (Development Policy Research Unit, School of Economics, University of Cape Town) |
| Abstract: | The rapid growth of its population presents both opportunities and challenges to the African continent. In order for the demographic dividend to be harnessed, African countries' youthful populations need to find productive work. Unfortunately, labour market outcomes on the continent tend to be relatively poor, and while there has been a shift towards the services sector as a potential engine for future economic growth, development and— critically—jobs, it is debatable as to whether the services sector can generate jobs of the quantity or quality required to raise incomes. In this paper, we argue that the economic complexity framework, with its associated mapping of products within the product space, provides a useful lens through which to view industrial policymaking. By focusing more narrowly on specific products identified through the economic complexity methodology, it is argued that policymakers can be presented with a more targeted menu of policy recommendations aimed at resolving very specific problems within economies. By successfully addressing capability constraints, policy can have a potentially greater impact on the accumulation of capabilities and economic diversification, unlocking the potential of manufacturing as a source of economic dynamism and job creation. |
| Keywords: | Jobs, Economic Growth, Capacity Development, Youth, Africa JEL classification: F43, J13, J62, N37 |
| Date: | 2020–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2462&r=all |
| By: | Nogueira, Mara; Shin, Hyun Bang |
| Abstract: | The paper aims to investigate the relations between work and urban space, focusing on the struggles of street vendors for the “right to the city centre” in Belo Horizonte, Brazil. We join critical debates on Brazil’s internationally praised urban reform by focusing on informal workers. Beyond lacking the protection of labour laws, the “right to the city” (RttC) of such workers has been consistently denied through restrictive legislations and policies. In the context of the “crisis” of waged labour, we explore the increasing centrality of urban space for working-class political struggles. Looking at Belo Horizonte, the paper traces the relation between urban participatory democracy and the development of legal-institutional frameworks that restricted street vendors’ access to urban space in the city. In the context of an urban revitalisation policy implemented in 2017, we then explore the use of legal frameworks to remove street vendors from public areas of the city and the resulting political resistance movement. The discussion focuses on the emergence of the Vicentão Occupation, a building squatted by homeless families and street vendors in conflict with the local state. Though this case, we explore the radical potential of contemporary articulations of Henri Lefebvre’s framework emerging from the confluence of diverse local urban struggles for “the right to the city centre”. Ultimately we argue for an understanding of the RttC as a process and a site of continual struggle whose terrain is shaped, but cannot be replaced by, legal frameworks that need to be constantly contested and evolving to reflect the shifting socio-spatial relations. |
| Keywords: | the right to the city; popular economics; urban politics; crisis of labour |
| JEL: | R14 J01 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105867&r=all |