Labour markets

Marc Piopiunik, Guido Schwerdt, Lisa Simon, Ludger Woessmann, 23 February 2018

Applicants use CVs to signal cognitive and non-cognitive skills to potential employers, but we know little about how effective those signals are. Based on an experiment in which HR managers chose between CVs, this column argues that signals of cognitive skills, social skills, and maturity matter for successful entry into the labour market. The relevant signals depend on gender and entry stage.

Benjamin Villena-Roldán, Stefano Banfi, 17 February 2018

Researchers often pick a random or a directed search model based on convenience and theoretical implications, but distinguishing between the two is important as many labour market regulations may be welfare-improving under random search, but not under directed search. This column uses data from Chile to show that job-seekers respond to information posted by employers, suggesting that policy design should consider the prescriptions of directed search models.  However, the evidence also shows that relevant features of these markets are not well captured by existing models.

Cristina Fernández, David Martínez Turégano, 07 February 2018

European labour force participation has increased over recent decades, fuelled in large part by increased female labour participation, improvements in education levels, and socioeconomic factors. This column explores whether this trend will continue, or whether we will see a decline similar to that in the US. Results indicate that while Europe’s labour participation is not on the verge of a reversal, targeted policies will need to take over from socio-educational developments in driving further growth.

Camille Landais, Arash Nekoei, J Peter Nilsson, David Seim, Johannes Spinnewijn, 03 February 2018

Unemployment insurance is compulsory in almost all countries, with no choice for workers over the level of coverage. But why restrict choice if it can improve the targeting of individuals who value the insurance the most? This column uses evidence from Sweden to examine whether the issue of adverse selection justifies a universal mandate for unemployment insurance. Workers who purchased more generous unemployment insurance were more than twice as likely to be unemployed in the following year. A universal mandate combats such adverse selection, but forces workers to buy insurance even when insurance costs are higher than the value they assign to it.

Axel Börsch-Supan, Irene Ferrari, Nicolas Goll, Johannes Rausch, 26 January 2018

Retirement ages in industrialised countries have been rising over the last three decades as more people work later into their lives. This column focuses on Germany, examining this trend and the contributing factors. Despite comparable trends in health, educational attainment, and spouse’s labour force participation, these three factors do not appear to explain the rise in retirement age. Instead, changes to public pension rules seem to be the key driver.

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