Christian Merkl, Enzo Weber, 07 April 2020

The spread of COVID-19 and the ensuing drastic lockdowns are placing economies and labour markets worldwide in a state of emergency. Governments are struggling to safeguard jobs and firms. Short-time work and comprehensive liquidity support for businesses and the self-employed are some measures being used. This column illustrates the consequences of a substantial hiring stall on unemployment and proposes hiring subsidies – directly reduce firms’ costs and thereby stimulate hiring – as a cost-effective stimulus measure for European countries to reduce the risk of unemployment hysteresis effects.

Shigeru Fujita, Giuseppe Moscarini, Fabien Postel-Vinay, 30 March 2020

The COVID-19 pandemic represents an unprecedented shock to labour markets. This column argues that the policy response should balance two objectives: (1) facilitating prompt reallocation of employment to essential activities during the emergency, and (2) maintaining workers’ attachment to their previous employers, preserving the aggregate stock of firm-specific human capital, and avoiding persistent mismatch, which would propagate the temporary shock into a prolonged stagnation. The authors make concrete labour market policy proposals and compare them with measures currently being implemented on both sides of the Atlantic.

Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis, 30 May 2017

Real hourly wage growth has behaved quite differently across countries over the past ten years. This column describes how the majority view of the latest Centre for Macroeconomics and CEPR expert survey is that low growth of real wages has had a positive impact on European employment rates during the recovery phase of the Great Recession. A strong majority of respondents also agrees that the dire performance of UK real wage growth relative to the big Eurozone economies is in large part due to the UK’s labour market policies, which provide workers with comparatively weak protection.

Aida Caldera, Alain de Serres, Filippo Gori, Oliver Röhn, 28 March 2017

Severe recessions have been frequent among OECD countries over the past four decades. This column explores the implications of various broad types of policy to minimise the risk and frequency of such episodes for the trade-off for the growth-fragility nexus. Product and labour market policies improve growth but are essentially neutral with regards to economic risks, while better quality institutions increase both growth and economic stability. Macroprudential and financial market policies, on the other hand, entail a trade-off between growth and risk.

Nitsa Kasir, Eran Yashiv, 24 February 2015

The labour market outcomes of Israeli Arabs, who are mostly Muslim, are negative in terms of participation, employment, and wages. There is a significant gap between their outcomes and those of the majority in Israeli society. CEPR Policy Insight 78 shows that government policy may make a big difference through investment in education, active labour market policies, physical infrastructure, tax and benefits reform, and anti-discrimination legislation and enforcement. The estimated rate of return on these policies is relatively high. And the lessons to be learned could be applied to other Muslim minorities. 

Nitsa Kasir, Eran Yashiv, 25 February 2015

The labour market outcomes of Israeli Arabs, who are mostly Muslim, are negative in terms of participation, employment, and wages. There is a significant gap between their outcomes and those of the majority in Israeli society. This column introduces CEPR Policy Insight 78, which shows that government policy may make a big difference through investment in education, active labour market policies, physical infrastructure, tax and benefits reform, and anti-discrimination legislation and enforcement. The estimated rate of return on these policies is relatively high. And the lessons to be learned could be applied to other Muslim minorities. 

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