Labour markets

Oya Celasun, Bertrand Gruss, 25 May 2018

The manufacturing sector is believed to play a unique role as a catalyst for productivity growth and income convergence, and as a provider of well-paid jobs for less-skilled workers. This column argues, however, that the declining share of manufacturing employment over the past decades need not hurt the income convergence prospects of developing economies and that the loss of manufacturing jobs can only explain a small fraction of the rise in inequality in advanced economies. That said, getting the policies right is key to help countries make the most out of structural transformation. 

Arindrajit Dube, Jeff Jacobs, Suresh Naidu, Siddharth Suri, 21 May 2018

Monopsony refers to the market power that employers wield in labour markets. This column explores monopsony power in online labour markets, using observational and experimental data from Amazon’s Mechanical Turk platform. Both datasets suggest an employer labour supply elasticity of close to 0.1, suggesting that a 10% reduction in wages would only see a 1% drop in willing labour. This points to substantial employer market power in a supposedly frictionless setting. 

Joan Monras, Javier Vázquez-Grenno, Ferran Elias, 15 May 2018

Studies have shown that granting work permits helps immigrants settle and integrate into host economies, but we know relatively little about how host economies are affected by the mass legalisation of immigrant workers. This column uses one of the largest and most unexpected legalisations in the world – by the Zapatero government in Spain – to show how legalisation can increase public revenues, but can also have distributive consequences for other workers in the economy.

Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena, 13 May 2018

Changing the terms and rules governing welfare can have substantial effects on employment. This column explores how the imposition of time limits for welfare receipt affected the employment, marriage, and divorce rates of women in the US. As intended by the reform, time limits decreased welfare use and the divorce rate, while increasing employment. Despite this, those women who were worst off prior to the reform are found to be even worse off after it.

Stefan Pichler, Nicolas Robert Ziebarth, 12 May 2018

In the past decade, dozens of US cities and seven US states have mandated employers to offer paid sick leave. This column investigates the relationship between sick pay and influenza-like illness rates. The results suggest that the mandates reduced the spread of infectious diseases, while having no significant effect on employment or wages.

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