Labour markets

Matthias Heinz, Sabrina Jeworrek, Vanessa Mertins, Heiner Schumacher, Matthias Sutter, 15 December 2017

Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers.

Yann Algan, Sergei Guriev, Elias Papaioannou, Evgenia Passari, 12 December 2017

A wave of populism has been gaining ground in the West since 2012. This column uses regional data for 26 European countries to explore how the impact of the Great Recession on labour markets has affected populist voting, political attitudes, and trust. The results indicate a strong link between unemployment and voting for non-mainstream (especially populist) parties. Unemployment is also correlated with increasing distrust of national and European parliaments.

Joshua Aizenman, Yothin Jinjarak, Nam Ngo, Ilan Noy, 11 December 2017

The Global Crisis and its aftermath has focused attention on increasing inequality, and specifically on declining real incomes of the working poor. Comparing the US to Germany, this column argues that pushing more students to degree-granting colleges may no longer be the most efficient way to deal with the challenges caused by the decline in manufacturing employment affecting, in particular, lower-income households. Well-resourced, well-targeted vocational training can prove to be a better long-term investment in skill acquisition to help ameliorate the difficulties faced by workers whose prospects look to be quite bleak.

Cheti Nicoletti, Kjell G. Salvanes, Emma Tominey, 10 December 2017

Developed countries have seen substantial increases in the number of women who return to work after having a child. This is due to a host of well-researched factors, including tax credit incentives and increased availability of child care. This column analyses another factor determining mothers’ labour supply – the peer effects of women in their family. It finds that for each hour worked by a family member, women work up 30 minutes a week purely due to the peer effect. This finding is important for determining the direct and indirect effectiveness of policies encouraging women to work after having children.

Josh Angrist, Sydnee Caldwell, Jonathan Hall, 08 December 2017

Ridesharing services like Uber and Lyft have disrupted taxi markets in many countries around the world. This column examines the differences between rideshare services and taxis from the driver’s point of view. It argues that the crucial difference comes down to the need to lease a medallion to drive a taxi versus the pro rata fee that rideshare services charge. Many high-volume drivers display ‘lease aversion’, opting for the pro rata rideshare service despite the lease model for taxis offering a better return.

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