Elena Cettolin, Sigrid Suetens, 13 September 2017

Studies have shown that ethnic discrimination occurs in many countries across Europe and the rest of the world, but distinguishing between discrimination based on ‘stereotypes’ and on ‘tastes’ is difficult. This column presents results from an experiment in the Netherlands that isolated taste-based discrimination. The results suggest that native Dutch participants reciprocate trust placed in them by immigrants of non-Western less than they reciprocate the trust of fellow Dutch natives. Since trustworthiness involves no behavioural risk, this implies that discrimination is the consequence of not only stereotyping, but also of tastes.

Jonas Hjort, 18 August 2017

Georg Graetz, Guy Michaels, 13 May 2017

Recoveries from recessions in the US used to involve rapid job generation, but job growth has failed to match GDP recovery after recent US recessions. This column examines the role of technology in this and asks whether jobless recoveries are a wider problem outside of the US. In the US, industries that are more prone to technological change experienced slower job growth during recent recoveries, but it appears unlikely that modern technologies are causing jobless recoveries outside of the US. This poses a puzzle as to the nature of recent jobless US recoveries. 

Michael Clemens, Ethan Lewis, Hannah Postel, 19 April 2017

Many claim that immigrants negatively affect the labour market prospects of native workers in advanced countries. This column studies a large change in immigration restrictions in the US – the 1965 exclusion of almost half a million Mexican seasonal farm workers (braceros) from the US labour market. The bracero exclusion did not increase the employment or wages of native workers, and technology adoption was one of the adjustment channels. 

Daron Acemoğlu, 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. 

Marco Di Cataldo, Andrés Rodríguez-Pose, 06 April 2017

EU development strategies are aimed at producing growth with “a strong emphasis on job creation and poverty reduction”. But it is unclear whether the economic conditions in EU regions are ideal for the generation of employment and labour market inclusion. This column argues that the quality of public institutions and the endowment of human capital – two key factors behind EU growth strategies – are essential for the reduction of labour market exclusion and the promotion of inclusive employment across Europe.

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.

Wolfgang Dauth, Sebastian Findeisen, Jens Südekum, 26 January 2017

The decline of manufacturing jobs in the US has been the focus of much attention recently, with rising trade with China cited as one explanation. This column describes how the German economy has experienced a similar secular decline in manufacturing and rising service employment, but that growing trade with China and Eastern Europe did not speed up this trend. In fact, rising exports to the new markets have stabilised industry jobs.

Pierre Cahuc, Olivier Charlot, Franck Malherbet, Hélène Benghalem, Emeline Limon, 05 January 2017

Temporary job contracts account for a substantial proportion of the workforce in countries such as France and Spain, but they can result in high job turnover and instability. This column assesses the impact of government policies that impose taxes on temporary contracts to induce employers to lengthen job durations. Such policies a negative impact on the labour market, reducing the mean duration of jobs and decreasing job creation. The introduction of open-ended contracts with no termination cost for separations occurring at short tenure may be more effective.

Christopher Blattman, Stefan Dercon, 20 December 2016

African countries are scrambling to bring industrial firms into the continent, and workers face a choice between industrial jobs and self-employment. This column reports the results of a randomised controlled trial of 1,000 job applicants in Ethiopia, which suggests that industrial workers earned no more in a year than those given training as entrepreneurs, and had higher disability rates. Two-thirds of industrial workers chose to quit, suggesting that low wages and poor working conditions are a concern for policymakers who promote industrialisation.

Girum Abebe, Stefano Caria, Marcel Fafchamps, Paolo Falco, Simon Franklin, Simon Quinn, 09 December 2016

Youth unemployment is a growing problem around the world, particularly in urban areas. This column assesses the impact of labour market interventions in Addis Ababa targeting two issues commonly faced by unemployed youth: job search costs and a poor ability to signal their skills. A transport subsidy and a job application workshop were both found to have significant positive effects on youth labour market outcomes, pointing to the important role policymakers can play in helping young people find satisfying employment.

Yoshio Higuchi, Kozo Kiyota, Toshiyuki Matsuura, 04 December 2016

There is a belief among the general public that employment volatility tends to be greater for firms with higher foreign exposure, but the relationship between the two is ambiguous in theory. This column uses firm-level data for Japan to compare the impact of foreign exposure on employment volatility for multinational, trading, and non-trading firms; for manufacturing and wholesale and retail trade; and for intra-firm and inter-firm trade. In manufacturing, the effect of exports on the volatility of employment varies, depending on the share of intrafirm exports to total sales. In wholesale retail, the effect of exports is generally insignificant. 

Elisa Gamberoni, Katerina Gradeva, Sebastian Weber, 03 December 2016

Employment subsidies have been widely used in OECD countries to counteract the recent job crisis, but their effectiveness is difficult to assess. This column summarises the findings of a recent study analysing a 2012 Spanish employment subsidy given to firms with fewer than 50 employees that make use of a new type of permanent contract. Consistent with other country studies, it fails to find robust evidence for increased employment growth due to the subsidy scheme.

Sandra Black, Jason Furman, Laura Giuliano, Wilson Powell, 02 December 2016

Over the past three years, 18 states plus the District of Columbia have implemented minimum wage increases, joining ten other states that have raised their minimum wages at least once since the last Federal increase in 2009. This column examines the impact of the more recent state increases on wages, weekly earnings, and employment among workers in the low-wage leisure and hospitality Industry. A comparison with states with no minimum wage increase since 2009 suggests that the recent legislation contributed to substantial wage increases with no discernible impact on employment levels or hours worked.

Dale Jorgenson, Mun S. Ho, Jon Samuels, 01 November 2016

There has been speculation that the low employment rates for younger and less-educated workers in the US reflect a ‘new normal’. This column uses detailed new US data to project output, productivity, and employment rates over the next decade. The results indicate that US economic growth will continue to recover from the Great Recession through the resumption of growth in productivity and labour input. The recovery of employment rates for less-educated and younger workers will make an important contribution to future economic growth.

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.

Wolfgang Frimmel, Martin Halla, Rudolf Winter-Ebmer, 18 August 2016

It has been widely demonstrated that parental divorce is associated with negative outcomes for affected children. However, the degree of causality in this relationship is not as clear. This column tackles this problem by using the level of gender integration in fathers’ workplaces as an instrument for divorce. The results suggest a causal link between divorce and worse economic outcomes that persists into early adulthood. 

Sari Pekkala Kerr, William Kerr, 10 August 2016

Increased hostility to immigration has been a key driver of the rise of right-wing populist movements across the world. At the same time, local governments – notably in the US – have designed work programmes to attract immigrant entrepreneurs to their areas. This column explores the types of businesses founded by immigrants and their growth patterns, and examines how these outcomes relate to immigrants’ age at arrival to the US. Immigrant entrepreneurs experience greater volatility – they fail more frequently, but those that persist experience greater employment growth than their native counterparts.