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612. The Decline of Drudgery and the Paradox of Hard Work
- Author:
- Brendan Epstein and Miles S. Kimball
- Publication Date:
- 06-2014
- Content Type:
- Commentary and Analysis
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- We develop a theory that focuses on the general equilibrium and long-run macroeconomic consequences of trends in job utility. Given secular increases in job utility, work hours per capita can remain approximately constant over time even if the income effect of higher wages on labor supply exceeds the substitution effect. In addition, secular improvements in job utility can be substantial relative to welfare gains from ordinary technological progress. These two implications are connected by an equation flowing from optimal hours choices: improvements in job utility that have a significant effect on labor supply tend to have large welfare effects.
- Topic:
- Labor Issues, Economic Theory, Welfare, Social Services, and Wage Growth
- Political Geography:
- Global Focus
613. Offshoring, Mismatch, and Labor Market Outcomes
- Author:
- David M. Arseneau and Brendan Epstein
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- We study the role of labor market mismatch in the adjustment to a trade liberalization that results in the offshoring of high-tech production. Our model features two-sided heterogeneity in the labor market: high- and low-skilled workers are matched in a frictional labor market with high- and low-tech firms. Mismatch employment occurs when high-skilled workers choose to accept a less desirable job in the low-tech industry. The main result is that--perhaps counter-intuitively--this type of job displacement is actually beneficial for the labor market in the country doing the offshoring. Mismatch allows the economy to reallocate domestic high-skilled labor across both high- and low-tech industries. In doing so, mismatch dampens both the increase in the aggregate unemployment rate and the decline in aggregate wages that come as a consequence of shifting domestic production abroad.
- Topic:
- Globalization, Industrial Policy, International Trade and Finance, Labor Issues, Work Culture, and Labor Market
- Political Geography:
- Global Focus
614. Gains from Offshoring? Evidence from U.S. Microdata
- Author:
- Ryan Monarch, Jooyoun Park, and Jagadeesh Sivadasan
- Publication Date:
- 11-2014
- Content Type:
- Commentary and Analysis
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- We construct a new linked data set with over one thousand offshoring events by matching Trade Adjustment Assistance program petition data to confidential data on U.S. firm operations. We exploit these data to assess how offshoring affects domestic firm-level aggregate employment, output, wages and productivity. Consistent with heterogenous firm models where offshoring involves a fixed cost, we find that the average offshoring firm is larger and more productive than the average non-offshorer. After initiating offshoring, firms experience large declines in employment (46.2 per cent), output (38.5 per cent) and capital (28.8 per cent) relative to their industry peers. We find no significant change in average wages or in total factor productivity measures for offshoring firms. These results are consistent across two separate difference-in-differences (DID) approaches, an instrumental variables approach, and a number of robustness checks. Thus, we find offshoring to be a strong substitute for domestic activity in this large sample of offshoring events.
- Topic:
- Industrial Policy, Labor Issues, Manufacturing, Trade, Outsourcing, and Capital
- Political Geography:
- North America and United States of America
615. What Happens to Wage Elasticities When We Strip Playometrics? Revisiting Married Women Labour Supply Model
- Author:
- Duo Qin, Sophie van Huellen, and Qing-Chao Wang
- Publication Date:
- 12-2014
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- This paper sheds new light on the well-known phenomenon of dwindling wage elasticities for married women in the US over the recent decades. Results of a novel model experiment approach via sample data ordering unveil considerable heterogeneity across different wage groups. Yet surprisingly constant wage elasticity estimates are revealed within certain wage groups over time as well as across two widely used US data sources, the Current Population Survey (CPS) and the Panel Study of Income Dynamics (PSID). These findings refute the assumed presence of a single-valued aggregate wage elasticity for working wives. Although women’s responsiveness to wages remains largely unchanged over time, we find that the composition of working women into different wage groups has changed considerably, resulting in decreasing wage elasticity estimates at the aggregate level. All these findings were methodologically impossible to acquire had we not dismantled and discarded the stereotyped endogeneity-backed instrumental variable route, which hitherto blocked the way towards sample data ordering.
- Topic:
- Gender Issues, Labor Issues, Inequality, Discrimination, and Wage Growth
- Political Geography:
- Global Focus
616. Towards Freer Movement of Skilled Labour in AEC 2015 and Beyond
- Author:
- Christopher Findlay
- Publication Date:
- 05-2014
- Content Type:
- Policy Brief
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- Movements of skilled labour in ASEAN have been largely from the lower income labour surplus economies to the higher income labour deficit economies in response to employment and remuneration differentials. The AEC Blueprint includes the objective of free flow of skilled labour to facilitate flows in services and investment. However, free flow is obstructed by differences in qualifications, standards and language proficiency as well as by national legal provisions and policies despite MRAs on professional services and the Agreement on Movement of Natural Persons. To facilitate free flows, their net benefits have to be emphasised; MRAs and labour market access be implemented effectively; and regional differences among tertiary institutions in standards, capabilities and English language proficiency be narrowed through academic cooperation and exchanges, and joint establishment of regional centres of excellence.
- Topic:
- Labor Issues, Services, Industry, Labor Rights, and Skilled Labor
- Political Geography:
- Asia and Southeast Asia
617. Wage Differentials: Trade Openness and Wage Bargaining
- Author:
- Gustavo Gonzaga, Beatriz Muriel, and Cristina Terra
- Publication Date:
- 04-2014
- Content Type:
- Working Paper
- Institution:
- Institute for Advanced Development Studies (INESAD)
- Abstract:
- We build a theoretical model that incorporates unionization in the labor market into a Heckscher-Ohlin-Samuelson (HOS) framework to investigate the impact of unionization on the Stolper-Samuelson Theorem. To capture the American economy case, we assume that unskilled labor in the manufactured goods sector is unionized, and that sector is intensive in skilled labor, and that trade liberalization increases the relative price of manufactured goods. In the HOS model, trade liberalization induces a reallocation of production towards the sector that uses intensively the country’s most abundant factor. The resulting change in relative labor demand impacts wage bargaining in the unionized sector, which, in turn, has a dampening effect on the Stolper-Samuelson effect. Moreover, wages of unionized workers are even less responsive to trade liberalization. Through traditional mandated-wages regressions, we show that skilled-wage differentials changes were less pronounced among more unionized sectors in the U.S. economy for the 1979-1990 period.
- Topic:
- Labor Issues, Economy, Manufacturing, Trade, and Wages
- Political Geography:
- Global Focus
618. Priorities for the G20: The St. Petersburg Summit and Beyond
- Author:
- Gordon Smith, Domenico Lombardi, Barry Carin, Paul Jenkins, Pierre Siklos, Susan Schadler, and Thomas A. Bernes
- Publication Date:
- 08-2013
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation (CIGI)
- Abstract:
- Tail risks for the global economy have receded vis-à-vis last year, but this has not translated into higher growth in many advanced economies. Emerging economies, which have made considerable contributions to global economic growth since the height of the international financial crisis, are slowing down. In its latest round of forecasts in July, the International Monetary Fund (IMF) downgraded its growth projections, especially those for the emerging economies, and the Washington-based institution may provide G20 leaders with a new set of downward-revised projections in St. Petersburg in September.
- Topic:
- Debt, Development, Economics, International Cooperation, and Labor Issues
- Political Geography:
- Washington
619. When do adults learn? A cohort analysis of adult education in Europe
- Author:
- Anna-Elisabeth Thum, Miroslav Beblavý, and Galina Potjagailo
- Publication Date:
- 05-2013
- Content Type:
- Working Paper
- Institution:
- Centre for European Policy Studies (CEPS)
- Abstract:
- Adult learning is seen as a key factor for enhancing employment, innovation and growth, and it should concern all age cohorts. The aim of this paper is to understand the points in the life cycle at which adult learning takes place and whether it leads to reaching a medium or high level of educational attainment. To this end we perform a synthetic panel analysis of adult learning for cohorts aged 25 to 64 in 27 European countries using the European Labour Force Survey. We find, as previous results suggest, that a rise in educational attainment as well as participation in education and training happens mostly at the age range of 25-29. However, investment across the life cycle by cohorts older than 25 still occurs: in most countries in our sample, participation in education and training as well as educational attainment increases observably across all cohorts. We also find that the decline with age slows down or is even reversed for older cohorts, for both participation in education and educational attainment. Finally, we can identify a Nordic model in which adult learning is achieved through participation in education and training, a Central European model in which adult learning occurs in the form of increasing educational attainment and a liberal model in which both approaches to adult learning are observable.
- Topic:
- Economics, Education, Markets, and Labor Issues
- Political Geography:
- Europe
620. Common Strategies for Women in Transition Countries
- Author:
- Steven E. Steiner
- Publication Date:
- 09-2013
- Content Type:
- Policy Brief
- Institution:
- United States Institute of Peace
- Abstract:
- Ongoing dialogues and forums on nations in transition reinforce the commonality of challenges related to women's rights and roles in society, especially leadership in government. Women leaders in Afghanistan, Iraq and the Arab Spring countries face major challenges, including heightened insecurity and the risk of women's rights being rolled back significantly. Steps to address these challenges are to build coalitions across internal divides, engage male religious leaders and other men to support women's rights, reach out to youth, develop gender-based budgeting, and underscore the importance of women's economic empowerment. Keys to progress in these areas include obtaining grassroots support and taking a long-term strategic focus in international programs.
- Topic:
- Development, Economics, Gender Issues, Government, Labor Issues, and Governance
- Political Geography:
- Afghanistan and Arabia