Kaivan Munshi, 27 July 2017

Thomas Le Barbanchon, Roland Rathelot, Alexandra Roulet, 27 June 2017

The generosity of unemployment insurance can influence the time and energy job seekers dedicate to searching for a job, as well as the jobs they are willing to accept. Yet we know little about how unemployment insurance affects the reservation wages of the unemployed. Using new French data, this column shows that increasing unemployment generosity does not affect the reservation wages or the ‘pickiness’ of job seekers.

Claudia Olivetti, Barbara Petrongolo, 03 June 2017

Family-oriented policies – such as parental leave, childcare support, and flexible work arrangements – are in place in all high-income countries, as well as several developing countries. This column assesses the labour market impacts of these policies, based on a review of the literature and data on 30 OECD countries over 45 years. While there is no clear consensus, a general theme is that policies that make it easier to be a working mother, such as subsidised childcare, seem to have better labour market outcomes than extending parental leave.

Alexander Bick, Nicola Fuchs-Schündeln, David Lagakos, 04 June 2016

Ejaz Ghani, Arti Grover Goswami, Sari Pekkala Kerr, William Kerr, 06 May 2017

Developing countries around the world are implementing structural reforms and pro-competitive policies to promote growth, but the impact of this on gender equity is unclear. This column examines the case of India, one of the world’s fastest growing countries, and finds that gender equality has not improved. Policymakers must do more to eliminate gender discrimination. They have an opportunity to not only improve the allocative efficiency of factors and increase growth, but also create an environment of equal opportunity for all, by targeting domestic market competition. 

Daron Acemoglu, Pascual Restrepo, 10 April 2017

As robots and other computer-assisted technologies take over tasks previously performed by labour, there is increasing concern about the future of jobs and wages. This column discusses evidence that industrial robots reduced employment and wages between 1990 and 2007. Estimates suggest that an extra robot per 1,000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, the decline of routine jobs, offshoring, other types of IT capital, or the total capital stock. 

Cristina Mitaritonna, Gianluca Orefice, Giovanni Peri, 03 March 2017

Despite numerous studies exploring how immigration affects local labour markets, there is limited evidence on the impact of immigrants on firms’ productivity levels. Using detailed, firm-level data from France, this column explores how firms react to an increase in the supply of immigrant workers. Provinces with a large increase in immigrant supply experienced higher productivity growth, especially among firms that were initially less productive. This suggests immigration can promote convergence in firm size and productivity levels. 

Fabrizio Coricelli, Marco Frigerio, 23 February 2017

A main source of alternative financing during credit crunches is trade credit. This column argues that small and medium-sized enterprises in Europe suffered a liquidity squeeze during the Great Recession due to the increase of their net lending to large firms. This squeeze was induced by their weak bargaining power in trade credit relationships, and had significant adverse effects on their levels of investment and employment.

Fabio Berton, Sauro Mocetti, Andrea Presbitero, Matteo Richiardi, 09 February 2017

Understanding the real effects of financial shocks is essential for the design of effective growth-restoring policies. This column uses data on job contracts matched with the universe of firms and their banks from a region of Italy to analyse the employment effects of financial shocks. Financially constrained firms – especially the least productive ones – significantly reduced employment, mostly of less-educated and lower-skilled workers with temporary contracts. While these results suggest possible distributional effects across workers, they could also reflect a productivity-enhancing reallocation function of financial shocks.

Sari Pekkala Kerr, William Kerr, Çağlar Özden, Christopher Parsons, 31 January 2017

The distribution of talent and human capital is highly skewed across the world. As high-income countries engage in a global race for talent, the resulting migration of high-skilled workers across countries tilts the deck even further. This column draws upon newly available data to outline the patterns and implications of global talent mobility. Key results include recent dramatic increases in high-skilled migration flows, particularly in certain occupations, in certain countries, among those with higher skill levels, and from a wider range of origins. 

Florence Jaumotte, Ksenia Koloskova, Sweta C. Saxena, 12 January 2017

Rapidly ageing populations, the refugee crisis, and growing anti-immigration rhetoric have brought immigration issues to the forefront recently. Using a panel of 18 countries, this column explores the long-term effects of migration on receiving advanced economies’ GDP per capita and labour productivity. Both high- and low-skilled migrants are found to raise productivity and GDP, and these gains appear to be broadly shared across the population. 

Elisa Gamberoni, Claire Giordano, Paloma Lopez-Garcia, 13 December 2016

An efficient allocation of inputs across firms is a necessary condition to boost TFP growth. This column presents evidence that in large Eurozone economies, capital misallocation trended upwards in the period 2002-2012 while labour misallocation dynamics were flatter. Uncertainty and credit market frictions were strongly associated with the observed developments in capital misallocation, whereas the overall deregulation in the product and labour markets contributed to dampening input misallocation dynamics. 

Lionel Fontagné, Gianluca Santoni, 20 November 2016

A key driver of productivity is ease of resource allocation. This column uses firm-level data for France to show that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate. Denser commuting zones seem to offer a better match between employers and employees, leading to more productive firms.

Patrick Bennett, Amine Ouazad, 29 October 2016

A substantial body of literature finds significant effects of unemployment rates on crime rates. However, relatively little is known about the direct impact of individual unemployment on individual crime. This column examines the effect of job displacement on crime using 15 years of Danish administrative data. Being subject to a sudden and unexpected mass-layoff is found to increase the probability that an individual commits a crime. However, the findings stress the importance of policies targeting education and income inequality in mitigating crime.

Julián Messina, Oskar Nordström Skans, Mikael Carlsson, 23 October 2016

While standard microeconomic theory suggests that firms have no power over setting wages when markets are perfectly competitive, this view obviously clashes with the perceptions of the casual observer. This column uses data from Sweden to investigate the extent to which differences in firms’ pay are related to differences in physical productivity. It finds that firms that benefit from positive productivity shocks increase the wages of incumbent workers, and in particular firms among which there is substantial labour mobility. The evolution of productivity among such firms appears to be a crucial determinant of workers’ wages.

Sergei Guriev, Biagio Speciale, Michele Tuccio, 13 September 2016

A common explanation for the growth in unemployment in southern Europe after the Great Recession is lack of flexibility in over-regulated labour markets. This column examines wage adjustment in regulated and unregulated labour markets in Italy during the recent crisis. Using data on immigrant workers, it shows that before the crisis wages in the formal and informal sectors moved in parallel. During the crisis, however, formal wages did not adjust downwards, while informal labour wages did. Greater flexibility in wages in the formal market could slow the decline in employment.

Daron Acemoglu, Pascual Restrepo, 05 July 2016

Many economists throughout history have been proven wrong in predicting that technological progress will cause irreversible damage to the labour market. This column shows that so far, the labour market has always adapted to the replacement of jobs with capital, using evidence of new types of skilled jobs between 1970 and 2007. As long as the rate of automation of jobs by machines and the creation of new complex tasks for workers are balanced, there will be no major labour market decline. The nature of new technology, and its impact on future innovation potential, has important implications for labour stability.

Dalia Marin, 23 June 2016

Income inequality is less severe in Germany than in the US. Part of this is due to CEO pay in the US growing faster than in Germany. This column offers some novel explanations for these observations. From the mid-1990s, Germany began offshoring managerial tasks to Eastern Europe, reducing demand for German managers. In addition Germany offshored skill-intensive jobs to Eastern Europe, reducing the skill premium.

Alexander Bick, Nicola Fuchs-Schündeln, David Lagakos, 04 June 2016

The development accounting literature tries to account for cross-country output per worker differences by taking stock of inputs per worker. The data employed are often measured without great precision, however, making comparisons difficult. This column presents a new, internationally comparable dataset of average hours worked per adult across the world income distribution. Adults in poor countries are found to work a lot more and with lower productivity than those in rich countries. The findings suggest that those from poorer countries are not only ‘consumption poor’, but also ‘leisure poor’. 

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