Labour markets

Michel Serafinelli, 17 October 2017

The productivity benefits of similar firms locating near one another are well accepted, but there is little agreement on how knowledge spillovers have local effects. This column presents evidence from Italy of how firm-to-firm labour mobility enhances the productivity of firms located near other, highly productive firms. The main finding is that the recruitment of workers with experience at good firms significantly increases the productivity of the firms hiring them.

Matias Busso, Julian Cristia, Diana Hincapié, Julián Messina, Laura Ripani, 16 October 2017

Skills-development policies are needed in Latin America and the Caribbean to close the region’s productivity gap with the rest of the world, and at the same time help close the gap between those who began life with and without advantages or opportunities. This column presents the new IADB flagship report, which aims to help governments address these issues by providing detailed, evidence-based analysis of what works and what doesn’t.

Jörg Mayer, 11 October 2017

Most of the current debate on the threat of robots focuses on developed countries, but robotisation clearly also concerns developing countries. This column examines whether robots will reduce the familiar benefits of industrialisation as a development strategy. It argues that robots are not yet suitable for a range of labour-intensive industries, leaving the door open for developing countries to enter industrialisation processes along traditional lines. At the same time, it suggests ways that developing countries should embrace the digital revolution.

Clemens Fuest, Andreas Peichl, Sebastian Siegloch, 10 October 2017

Economists tend to think that the corporate tax burden is shared between labour and capital, but even among researchers in the field there is substantial disagreement over how much of the burden is shifted to workers. This column exploits variations in local business tax rates in Germany to identify the corporate tax incidence on wages. On average, more than half of the corporate tax burden is passed onto workers, implying a reduced overall progressivity of the German tax system.

David Neumark, 09 October 2017

Studies of the employment effects of minimum wages have been wide-ranging, but a consensus proves elusive. This column summarises the existing literature and proposes some key questions to better inform policy in the context of minimum wages across different states in the US. Future areas for research should include understanding why different approaches yield different answers, as well as a recognition that there is not one minimum wage effect, but several across different contexts.

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