Toward managed flexibility: The revival of labour inspection in the Latin world

Examining the role of labour inspection in the context of the revival of labour market regulation, the authors distinguish between the Latin model, where inspectors have authority to tailor enforcement to firms' exigencies, and the less flexible United States approach. The Latin model can reconcile regulation with economic flexibility and transform inspectors into the shock troops of a campaign for decent work. But its vulnerability to arbitrary behaviour on their part needs to be addressed through: management of organizational cultures; exposure and sys‐tematization of the tacit knowledge underpinning inspectors' judgements; and research into the relationship between labour standards and business practices.     

Six central features of the Chinese labour market: A literature survey

In this comprehensive analytical overview, the author pays particular attention to the changing structure of China's employment towards more private‐sector jobs in urban areas; its rising wages and widening earnings inequality; the persistence of its hukou system, causing labour market discrimination, an urban labour shortage and a rural labour surplus; its more market‐oriented wage structure, albeit with segmentation between firm ownership types; its relatively low unemployment; and the relatively weak role of its traditional labour market institutions, including minimum wages and trade unions. The aim is to contribute to the development of more suitable, China‐specific theoretical models and sound policy analysis.     

RENT CREATION AND RENT SHARING: NEW MEASURES AND IMPACTS ON TOTAL FACTOR PRODUCTIVITY

This analysis proposes new measures of rent creation and rent sharing and assesses their impact on productivity on cross‐country‐industry panel data. We find first that: (1) anticompetitive product market regulations positively affect rent creation and (2) employment protection legislation boosts hourly wages, particularly for low‐skill workers. However, we find no significant impact of this employment legislation on rent sharing, as the hourly wage increases are offset by a negative impact on hours worked. Second, using regulation indicators as instruments, we find that rent creation and rent sharing both have a substantial negative impact on total factor productivity. (JEL E22, E24, O30, L50, O43, O47, C23)     

Assessment of a hybrid reform path: Social and labour policies in Uruguay, 1985–2005

Since Uruguay's return to democracy in 1985, a shift in economic and social policy has radically changed the country. The outcomes have been shaped by adjustment to international circumstances “by default”, stop‐go market reforms and the inconsistent pace and content of reforms. Unlike other countries in the region, Uruguay has not followed a resolutely neo‐liberal course, but rather a hybrid one. The end result has been a liberal labour regime coupled with a three‐dimensional social policy balancing the market, the old corporatist welfare State and the new welfare state targeting specific beneficiaries.     

INTERNATIONAL NARCOTICS TRADE,FOREIGN AID,AND ENFORCEMENT

Using a general equilibrium model of a developing narcotics‐producing and ‐exporting economy, we analyze the economic effects of policies designed to restrict the production and trade of narcotics: foreign aid tied to anti‐narcotics law enforcement activities, demand reduction policies, and alternative development policies. We characterize the problem as one of serious factor market distortions introduced by illicit production and enforcement. While aid to enforcement generally reduces the production and export of narcotics, it is less effective for economies with market power, and under plausible conditions may raise narcotics output and have negative welfare implications for the recipient. (JEL F1)     

The Frisch Elasticity in the Mercosur Countries: A Pseudo‐Panel Approach

In estimating the Frisch elasticity – i.e., the elasticity of substitution between worked hours and real wages, holding constant the marginal utility of wealth – for the Mercosur countries, this article finds a strong heterogeneity. It argues that severe liquidity constraints are the main reason for the negative estimates and that the heterogeneity is the outcome of differences in many relevant economic dimensions – ranging from sectorial specialisation to welfare‐state provisions and labour‐market specificities. The diversity of Frisch elasticities calls for the development of a cross‐country (rather than a within‐country) policy approach, since they crucially affect the dynamics of the business cycle, the synchronisation of which is a step prior to the design of macro‐convergence policies in the Mercosur context.     

BEYOND EDUCATION AND FAIRNESS: A LABOR MARKET TAXATION MODEL FOR THE GREAT GATSBY CURVE

Applied researchers have been drawn to models that attribute the demonstrated cross‐country differences in intergenerational income transmission to government failures to invest in the human capital of poor children. To highlight another potential mechanism, the disincentive effects of labor market taxation and redistribution, we present a simple model that can explain cross‐country differences in intergenerational mobility and other previously observed empirical patterns. Empirical tests using data on income mobility, tax rates, and public expenditures largely support the model predictions. We conclude that the common presumption that intergenerational mobility largely measures fairness or opportunity, and the resultant policy recommendations, are premature. (JEL D31, J24, J62)     

Do labour market reforms reduce labour productivity growth? A panel data analysis of 20 OECD countries (1960–2004)

Based on comprehensive regression analysis, the authors find that weak wage growth and a smaller labour share of national income significantly reduce labour productivity growth. They conclude that supply‐side labour market reforms have contributed to reducing labour productivity growth: this cannot be explained by a deregulation‐induced inflow of low‐productivity labour as proposed by OECD researchers. They also discuss why deregulation, easier firing and higher labour turnover may damage learning and knowledge accumulation in companies, notably by weakening the functioning of the “routinized” innovation model (“Schumpeter II”). Finally, their findings raise doubts about the relevance of Baumol's law and Verdoorn's law.     

Labour market participation among young refugees in Sweden and the potential of education: a national cohort study

This register-based study examined the importance of education on labour market participation among young refugees in Sweden. The study population consisted of unaccompanied (n?=?1606) and accompanied refuges (n?=?4142), aged 23–26 years in 2006–2010, after 7 years of residence in Sweden. Native Swedish, aged 24 years (n?=?347,255) constituted the comparison population, with intercountry adoptees (n?=?6689) as an alternative reference group. Gender-stratified multinomial regression models indicated that unaccompanied and accompanied male and female young refugees had higher risks of being in insecure work force and NEET compared to native Swedes with comparable levels of education. However, young refugees and intercountry adoptees with primary education had similar risks of poor labour market outcomes. The educational differences within each group concerning the risk of being in insecure work force were comparable. With the exception of unaccompanied females, secondary education seemed to be less protective against being in NEET among young refugees compared to native Swedes and intercountry adoptees. We conclude that while young refugees face employment disadvantages, education has the potential of mitigating poor labour market outcomes in this group.     

Does Greater Labour Market Flexibility Induce Greater Levels of Inequality within Europe?

Economic and social inequality is often thought to be contingent on varying degrees of labour market flexibility. This paper investigates this causal nexus and tests the correlation between flexibility and inequality for the European labour market by using evidence from European labour market institutions and data from several sources of inequality measures. We find that, on a pan-European level, there is overwhelming evidence that inequality levels do not fluctuate with varying degrees of labour market flexibility. On a country-specific level, we find several labour market characteristics that promote flexibility and equality. They include decentralized labour market institutions, low utilization of temporary work, and redundancy systems that unite low employment protection with high economic and social protection. Taken together, these factors enable the European labour market to buck the stylized perception that high labour market flexibility is coupled with high inequality.     

THE EFFECTS OF EMPLOYMENT PROTECTION ON LABOR TURNOVER: EMPIRICAL EVIDENCE FROM TAIWAN

This paper investigates the effects of employment protection legislation on the rates of hiring, separation, worker flows, job reallocation, and churning flows for the case of Taiwan. Our empirical identification takes advantage of a reform created by Taiwan's enactment of Labor Standards Law, which has substantially increased the costs of firing, and the implementation of the law's enforcement measures. Moreover, our identification also exploits the fact that the stringency of the law's provisions and the intensity of the law's enforcement vary with establishment size. On the basis of the monthly data at the establishment level for the period 1983–1995, we find that Taiwan's Labor Standards Law and its enforcement measures have dampened labor turnover for medium‐sized and large establishments, while that of small establishments was not affected. (JEL J65, J63, J88)     

QUANTIFYING BIAS IN DRIVING‐UNDER‐THE‐INFLUENCE ENFORCEMENT

As the marginal suspect and propensity to commit crime are unobserved across racial categories, it is difficult to quantify racial bias with law enforcement outcomes data. We test for racial bias in driving‐under‐the‐influence of alcohol enforcement. The assessment outcome variable, blood alcohol content (BAC), provides information about motorist's choices and allows for a more refined test for racial bias compared with other law enforcement outcome data. We find no evidence of racial bias in the relevant range where our model applies. However, we do find differences in find rates at the lowest levels of BAC, where there should be no impairment. (JEL J7, K42)     

Migrants' regular army of labour: gender dimensions of the impact of the global economic crisis on migrant labor in Western Europe

The purpose of this article is to remedy the lack of explanatory endeavours concerning the positive performance of female migrant workers during the recent economic crisis in Western Europe. This phenomenon both interrogates the established association between economic downturns and their negative impact on migrant labour in low‐skilled jobs and enriches the theory of the reserve army of labour, which has been applied to understanding the fragile status of migrant workers in Western economies. Secondary analysis of Labor Force Survey (LFS) and OECD data concerning the impact of the crisis on migrant labour shows that women employed in the care‐domestic sector have been affected significantly less than men employed in manufacture and constructions. To explain this evidence, the article proposes a theoretical framework that draws on key concepts and debates in different strands of sociology: the increasing demand for paid care‐domestic work due to the ageing population and the growth of native‐born women's rates of activity; the commodification of care and the state management of migration; the affectivity and spatial fixity of care‐domestic labour. All these factors contribute to configure female migrant labour, mostly employed in the reproductive sector, as a ‘regular’ rather than a reserve army of labour.     

Labour incorporation of young Southern European graduates in Mexico: the impact of the economic crisis

ABSTRACT

The 2008 economic crisis has had particularly negative effects on the youth labour market outcomes in Southern Europe. Thus, it is hardly surprising that many Southern European youngsters see migration as the only way to escape from under-employment and precariousness. In this context, the article studies the reasons for emigration to Mexico of a group of young graduates from Italy and Spain. The paper is based on 42 in-depth semi-structured interviews with young graduates, aged 29 years old or less on their arrival in Mexico. The article first explores the relevance of the economic crisis as the main reason behind the migration of this group. It is revealed that the interviewed graduates had a precarious labour incorporation back in their countries of origin, and migration appeared as a means to further their careers. Second, the paper analyses the interviewees’ labour incorporation in Mexico; in many cases this coincides with an extended university-work transition, since many of them had not secured full-time permanent jobs before their arrival in Mexico. Finally, the paper explores the interviewees’ future plans. These depend not only on their work experiences in Mexico but also on their degree of social and cultural integration in the host country.     

Government inspectors and ‘ethical’ buyers: regulating labour in Moradabad's metalware industry

This paper is based on fieldwork for a doctoral thesis on the metalware cluster of Moradabad, Uttar Pradesh. I present two different ways by which labour standards are regulated in the city: first by the state labour administration and second, by the market of global buyers implementing codes of conduct. In the context of debate over state versus market-based and voluntary regulation, I discuss the text of each regulatory regime and how this is interpreted, used, subverted and applied in the city's export firms. I show how enforcement of laws and corporate ‘ethical’ codes is undermined not only by limited capacity to survey units deep inside the city, but also by the incentives of enforcement agents. The regulatory regime of the state is revealed to be morally ambivalent, where justice for workers depends on patronage inside the labour department, and on an opaque and complex legal code which keeps employers vulnerable to inspector harassment. By contrast, the regulatory regime of the market is shown to be morally incoherent, where code compliance officers are sidelined by their commercial colleagues and efforts to establish ‘ethical’ purchasing practices are routinely undermined by the imperative to fast-feed goods onto the shelves of retail giants.     

Asymmetric Information under the Kafala Sponsorship System: Impacts on Foreign Domestic Workers’ Income and Employment Status in the GCC Countries

This article examines the legal and policy implications of information asymmetry for foreign domestic workers employed under the Kafala sponsorship system in the Gulf Cooperation Council (GCC) countries. Drawing from ethnographic and field‐based observations in large GCC migrant destinations – including Kuwait, Qatar, and the United Arab Emirates (UAE) – we investigate the information flows and market uncertainties between five key stakeholders: labour‐receiving governments, labour‐sending governments, recruitment agencies (subagents), sponsors (employers), and social networks. Several factors contribute to asymmetric information: the lack of bilateral labour agreements and government policy coordination, programs between and among government entities, the absence of labour law for domestic workers, and the laissez faire approach of the labour‐receiving government. These sources of asymmetric information create serious market vulnerabilities for the domestic worker population, often resulting in loss of employment and early deportation. The concluding section further outlines policy implications and areas of methodological research on GCC migration.     

Culture,Intermarriage, and Immigrant Women's Labor Supply

We examine the impact of culture on the work behaviour of second‐generation immigrant women in Canada. We contribute to the literature by analysing the role of intermarriage in intergenerational transmission of culture and its effect on labour market outcomes. Using female labour force participation and total fertility rates in the country of ancestry as cultural proxies, we find that culture affects the female labour supply. Cultural proxies are significant in explaining number of hours worked by second‐generation women with immigrant parents. The impact of culture is significantly larger for women with immigrant parents who share the same ethnic background than for those with intermarried parents. The weaker effect of culture for women raised in intermarried families stresses the importance of intermarriage in assimilation process. Our findings imply that government policies targeting women's labour supply may have differential effects on the labour market behaviour of immigrant women of different ancestries.

Policy Implications

• The result that culture has statistically significant impact on second‐generation immigrant women's labour supply has policy implications in terms of the government programmes and benefits that target the labour supply of women and immigration policies in general.
• Our findings imply that government policies targeting women's labour supply may have differential influence on the labour market behaviour of second‐generation immigrant women of different ancestries.

     

The effect of labour market polarization on university students’ job market‐related outcomes in the Republic of Korea: Implications for youth unemployment

This article aims to assess the effect of the labour market environment on university students’ labour market‐related behaviour in the Republic of Korea. Using data from the country's Graduates Occupational Mobility Survey for 2005–13, the author estimates the effect of macroeconomic variables on university students’ job market‐related outcomes. Results indicate that labour market polarization, as measured by the labour market polarization index developed by Chung and Jung (2016), has a significant effect on both the nominal and masked (through extension of university enrolment and university transfers) unemployment of university students. These findings imply that the labour market structure is a key element in understanding youth unemployment.     

Education and occupational status in 14 countries: the role of educational institutions and labour market coordination

This article explores the role of national institutional factors – more specifically, the level of skill transparency of the education system and labour market coordination – in accounting for cross‐national differences in the relationship between education and occupational status. Consistent with previous research, our findings suggest that skill transparency is the primary moderator. Countries with a highly transparent educational system (i.e., extensive tracking, strong vocational orientation, limited tertiary enrolment) tend to be characterized by a strong relationship between education and occupational status. These findings hold even after controlling for the level of labour market coordination. Nevertheless, we also find that labour market coordination plays an independent role by dampening the effect of education on occupational status. Taken together, these results suggest two quite different policy implications: (1) strengthening the skill transparency of the education system by increasing secondary and tertiary‐level differentiation may strengthen the relationship between education and occupation, regardless of the level of coordination, and (2) increasing labour market coordination could lead to improved social inclusion and a reduction in inequalities related to educational attainment.     

More but not better jobs in Chile? The fundamental importance of open‐ended contracts

Chilean governments since 1990 have relied on economic growth to generate employment, higher wages and better conditions of employment. But the results of this policy have been mixed: quantitative improvements in employment and wages have not been matched by improvements in job quality. Contrasting Chile's seemingly rigid regulatory framework with its actual labour market flexibility, the authors stress the importance of employment conditions in assessing labour market performance. They empirically explore the effects of individual and job characteristics on employment and income‐generating capabilities, whose most powerful determinant, they find, is employment under an open‐ended contract. They conclude with a discussion of policy implications.