Labour markets

George Wehby, Dhaval Dave, Robert Kaestner, 26 September 2016

Despite ample research on the effects of minimum wage increases on employment, there has been little consensus on the effects of such increases on workers’ broader welfare, and in particular on their health and that of their families. This column analyses comprehensive data from the US on the effects of minimum wage increases on the health of children born to low-income workers. It finds that the increases have a significant positive impact on birth weights. This has important policy implications, with infant health acting as a reliable indicator of future health.

Enrique Fernández-Macías, Martina Bisello, 25 September 2016

A tasks approach to labour market analysis can contribute to a better understanding of structural change and employment trends. However, its narrow focus on a few specific types of task content and its neglect of the social aspects of production can limit the usefulness of this approach. This column presents a new framework for conceptualising and measuring tasks, and discusses an application to Europe.

James Bessen, 22 September 2016

A popular notion is that computer automation leads to major job losses. However, this ignores the dynamic economic responses that involve both changing demand and inter-occupation substitution. Using US data, this column explores the effect of automation on employment growth for detailed occupational categories. Computer-using occupations have had greater job growth to date, while those using few computers suffer greater computer-related losses. The real challenge posed by automation is developing a workforce with the skills to use new technologies.

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.

Rasmus Landersø, James Heckman, 12 September 2016

The Scandinavian model of social welfare is often contrasted favourably with the US model in terms of promoting social mobility across generations. This column investigates the accuracy of these claims, focusing on the case of Denmark. Denmark invests heavily in child development, but then undoes the beneficial effects by providing weak labour market incentives for its children to attend school compared to the US. This helps explain why the influence of family background on educational attainment is similar in the two countries.

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