Youth Unemployment and Opportunities in the Labour Market – The Myth of Lifelong Hysteresis

This paper examines whether the level of risk of unemployment for recently trained youths in the labour market has lasting effects upon their employment opportunities: will a cohort that enters the labour market during a period of high unemployment have a permanently higher rate of unemployment than one that joins the labour market during a period of low unemployment? The connection between occupational choice and employment status after graduation is also examined The analysis encompasses teachers, engineers and unskilled workers. The conclusion is that troughs and highs in the labour market have a significant but not necessarily permanent effect upon unemployment and placement in different industries.     

Impact of Multiple Labour Market Programmes on Multiple Outcomes: The Case of Norwegian Youth Programmes

Abstract. Unemployed youth in Europe have access to a variety of labour market programmes, the intention of which is to improve the chances of employment or education. A particular two‐stage modelling and estimation procedure designed to analyse the effects of multiple programmes on multiple outcomes is used to control for selection bias. The model is applied to non‐experimental longitudinal data on young unemployed individuals in Norway in the early 1990s, a period during which unemployment was rising. Separate analyses for subgroups indicate that employment programmes increase the full‐time employability of females but not of males, and for the younger age group, but not of those over 20 years of age. Training programmes have no positive effects, irrespective of subgroup. Vocational programmes are counterproductive for teenagers, which is the group at which it is targeted.     

Unemployment and the Composition of Labour Slack: An International Comparison

The present statistical apparatus allows us to construct a single indicator of the degree of non-utilisation of labour resources that mitigates the shortcomings of the traditional unemployment rate. This paper defines a method to measure aggregate labour slack, and applies it to post-1973 data for four countries: Canada, the Netherlands, Sweden and the U.S.A. The estimates take into account non-utilised labour resources due to unemployment, to changes in the number of hours actually worked and to changes in registered labour force participation. Since changes in and the manipulation of working time schedules on the one hand, and of labour supply on the other, have become more frequent over the last few decades, it is highly relevant to investigate international and intertemporal differences in the non-utilisation of labour resources by means of a ratio that accounts for these changes. Unemployment is ill-suited for this purpose, and therefore a labour slack estimate is constructed, which takes working time developments and changes in labour force participation into consideration. The estimate is cyclically more sensitive and more internationally comparable than the traditional unemployment rate.     

Unemployment Stigma and Multiple Labour Market Equilibria: A Social-Psychological Interpretation of Hysteresis

ABSTRACT: This paper supplements a simple one period non-shirking efficiency wage model with behavioural assumptions drawn from the social-psychological literature. A model of social interaction is developed in which the status associated with various labour market options yields implications for the shape of the non-shirking constraint and, thereby, for the number and type of labour market equilibria. The significance of such a finding for the existence of unemployment hysteresis is explored.     

中国失业问题与财政政策研究

失业是市场经济运行中各国以及我国社会经济发展面临的一大难题。促进就业、控制失业率是各国政府的宏观调控目标之一和不可推卸的责任。本报告从理论与实践的结合上,深入研究失业与宏观调控及财政政策的关系,揭示当前我国政府及财政促进就业政策的成效和问题,并在借鉴国际经验的基础上,进一步提出了近期我国缓解失业压力、建立促进就业长效机制的宏观对策思路和财政政策取向。     

Dynamic Updating of Labour Force Estimates: JARES

Abstract. In this paper a new algorithm is proposed in order to produce an automatic dynamic compound estimator of the labour force based on an interactive scheme. The proposed algorithm, JARES, is based on the probability estimator of Jaynes based on the notion of maximum entropy of a given probability distribution with a constraint on the average of an external information. The iterative scheme is based on the solution of a set of linear equations which represent the algebraic relationships between the weights and the estimates.     

The Labour Market in Macedonia: A Labour Demand Analysis

Abstract. This paper examines the labour market in Macedonia, a country with the highest unemployment rate in Europe. I describe labour market institutions and policies during the transition. I also examine job creation and job destruction using firm‐level data and I estimate short‐term and long‐term elasticities of the labour demand. The analysis shows that there are regulatory barriers to the labour market flexibility. I can also conclude that the privatization of socially owned enterprises has failed to promote job creation. Nevertheless, labour market problems seem to stem from factors other than substantial sluggishness of firms in adjusting employment to variations in wages.     

Labour Market and Labour Market Policy in the Eastern Part of Germany: New Approaches and New Links to Structural Policy

ABSTRACT: After unification, East German GNP dropped severely, total employment fell to about two thirds of the former level. Long-term labour market prospects remain poor. From the very beginning up to now, labour market policy (short-time work, early retirement schemes, work creation measures, further training and retraining) absorbed much of the surplus labour supply. Regulations were changed to allow for‘“mega-measures” (contrasting the traditional individual approach). A new co-financing model links work-creation measures more closely to regional structural policy. A labour market infrastructure was built up in a short time, including new elements such as‘“employment promotion companies” and‘“reconstruction agents“.     

Wage Flexibility for Skilled and Unskilled Workers: New Evidence on the Norwegian Wage Curve

Empirical evidence is provided in favour of a hypothesis that wages for unskilled workers are more responsive to unemployment than wages for skilled workers. The results imply vigorous wage responsiveness to low levels of unemployment for both groups, while the wage curves become almost entirely flat for unemployment rates above 1.7 percent. One interpretation of this result is that firms have strong incentives to increase wages in order to recruit and retain workers when unemployment is below some critical level. Since unemployed workers will certainly find work, the expected costs of a job loss are small, as are costs associated with an egalitarian wage policy.     

Taxes and Women in the Labour Force in a Southern European Country: The Case of Portugal

On looking at the female labour supply in Europe, it is immediately noticed that there is a large variation among countries. One possible explanation for this fact is that different countries have different tax policies, leading to variations in incentive and costs. This has been investigated in papers such as that of Gustafsson (1992a,b) for countries such as Germany and Sweden. The same exercise has been performed by the present authors for a low-income, southern European country, Portugal, which has one of the highest rates of female participation (out of line with neighbouring countries). Female labour supply does not seem to be very sensitive to fiscal policies, as those policies have only a small influence on the take-home wage. This result appears to be independent of the fact that the female labour supply shows a higher elasticity to wages than that which has been reported for other countries. The present authors also show that Portuguese women contribute a much larger proportion of family earnings than do their counterparts in Sweden and Germany, and that the Portuguese fiscal system is rather neutral. Further studies with data from other countries are needed in order to shed more light on the issue of tax harmonization.     

Labour Policy in the Federal Republic of Germany: Challenges and Concepts

ABSTRACT: This paper describes how German labour policy, both employment policy and active labour market policies, has developed between 1974 and 1987. Government intervention for full employment in a welfare state, a cooperative system of industrial relations, an active labour market policy, and a comparatively efficient system of vocational and adult education did not prevent the loss of full employment in 1974. But persistent labour market slack until today has not fundamentally changed the climate of relative political and social calm. The basic concepts, programmes and specific measures of labour policies pursued in the FRG are surveyed with special reference to their costs and effects on employment and the structure of unemployment. The challenges to labour policy stem from three complete business cycles around a slightly falling trend in employment and the bad prospectives of the German labour market until the year 2000. Four major measures of labour market policy now reduce registered unemployment by about 400,000 in the mid 1980s. Total costs of unemployment amounting to 57 billion DM per year offer financial alternatives to create jobs and to reduce working hours. Finally, actual proposals under discussion in Germany are examined in order to combat unemployment in a determined commitment to full employment immediately.     

New Mothers’ Labour Force Participation in Italy: The Role of Job Characteristics

Abstract. In this paper we use newly available individual‐level data from the Longitudinal Survey of Italian Households to investigate the factors associated with female labour force participation after the birth of the first child. We focus on the role of pre‐marital job characteristics and find that new mothers who worked without a contract are less likely to participate, while those who worked in the public sector or in a large private firm have a higher probability of being in the labour force after childbearing. We suggest that these effects could be at least partly attributed to differences in the level of job protection and employment stability enjoyed by workers. This implies that in Italy women with highly protected and stable jobs might find it easier to combine career and family, whereas those who are less sheltered by the legislation might be more likely to be inactive after becoming mothers.     

Unemployment and Search for Work: Exploratory Analyses of Labour Market Attachment and its Dynamics

This paper deals with measuring unemployment and labour market attachment in Italy, on the basis of Labour Force Survey data. Based on the answers to a set of questions on search for work, a cluster analysis is performed, which yields four groups, clearly characterized as regards their labour market conditions and attachment. Analyses are then carried out on the gross flows between these groups, estimated over a quarterly interval. Results of the dynamic analysis confirm the relevance of the classification established through exploratory techniques. The various groups exhibit a different dynamic behaviour, thus documenting that the exploratory classification has predictive power.     

Unemployment and Search for Work: Exploratory Analyses of Labour Market Attachment using CPS-Type Data

Abstract. This paper deals with measuring unemployment and labour market attachment in Italy, on the basis of CPS-type survey data. It is shown that the size and rate of unemployment are highly sensitive to modest variations in the definition of unemployment. This motivates a different approach. Based on the answers to a set of questions on search for work, a cluster analysis is performed, which yields four well established groups. Comparing them with the official labour force classifications, two “grey areas” appear at the borders between employment, unemployment and inactivity, which are of some interest in interpreting labour market attachment.     

The Effect of a Longer Eligibility to a Labour Market Programme for Dismissed Workers

Liste di Mobilità is an Italian programme targeted to dismissed workers. It combines a ‘passive’ and an ‘active’ component. Eligibility duration varies with the worker's age at dismissal. Using a new panel data set, we identify the impact of extending the duration of eligibility on re‐employment probabilities and wages, via Regression Discontinuity Design. We validate the design by a set of overidentification tests. For most subgroups we find no significant impact, with a peculiar pattern for women entitled to monetary benefits. A major negative impact emerges for workers aged 50 or more granted monetary benefits, likely due to the fact that they can use the programme as a bridge to retirement.     

The Influence of Unemployment Benefits on Unemployment Duration: Evidence from Spain

ABSTRACT: This paper analyses the duration of unemployment spells and the possible incidence of unemployment insurance on job search behaviour and voluntary duration of unemployment in Spain. To do so, a longitudinal data set containing information on unemployment recipients during the period 1987-93 is used. Hazard rates and survival profiles are constructed for the cohorts of unemployed workers entering the benefit system at different points in time, and a logit model of the probability of leaving the system before exhausting entitlement period is presented. The results do not support the view that the unemployed tend to intensify their job search when benefits are near exhaustion.     

The Economic Impact of Health Policy Interventions

The rapid aging of the U.S. population, increases in the absolute prevalence of chronic diseases, and the associated rise in the proportion of the GNP expended on medical care all indicate the need for methods to accurately forecast future health care expenditures for specific chronic diseases. Additionally, if these methods are biomedically realistic, they can be used to evaluate the economic implications of specific prevention strategies designed to reduce chronic disease incidence, prevalence, and mortality. Projection strategies that are not biomedically realistic, such as models that assume that risks for demographic subgroups do not change over time (e.g., "static component" models), though possibly accurate over the short run, are not suitable for assessing the long term effects of specific proposed health policy interventions which are designed to alter risks.
In this paper we present a strategy for forecasting health care costs which is based on a model that represents the natural history of a chronic disease in terms of a preclinical state, a clinical state, case fatality rates, cures, and the implications of exogenous medical factors. Using this model we project that the treatment costs associated with respiratory cancer in the white male population of the U.S. may undergo a two-thirds increase in real dollars over the period 1977 to 2000. About one-half of this increase is due to a demographic shift to an older population structure, with the remainder due to higher respiratory cancer incidence rates in younger cohorts. Alteration of certain parameters of the model to simulate various interventions suggests that about three-quarters of the cost of this disease could be eliminated, though realization of any significant part of this savings would require a lengthy phase-in period.     

Physicians’ Labour Supply: The Wage Impact on Hours and Practice Combinations

Abstract. It is a stated aim to improve physician services in underserved sectors and areas. Increased wages is one instrument for boosting the hours provided by the personnel to the prioritized sub‐markets. This study applies an econometric framework that allows for non‐convex budget sets, non‐linear labour supply curves and imperfect markets with institutional constraints. The labour supply decision is viewed as a choice from a set of discrete alternatives (job packages) in a structural labour supply model estimated on Norwegian micro data. An out‐of‐sample prediction is also presented and evaluated by means of a natural experiment.     

Solving the Labour Problem Among Professional Workers in the UK Public Sector: Organisation Change and Performance Management

This paper draws together evidence from across the UK public services to present an analysis of public sector organisational change that has been observed and experienced since the 1980s. The argument is that the pattern of persistent change, packaged as a myriad of reform measures, has been centrally concerned with solving the labour problem—low worker productivity and managers not being able to manage—in what are labour intensive services. The now familiar managerial discourse of empowerment and high commitment working practices is highlighted and express linkages are drawn between such themes and the day-to-day practices of performance and human resource management, seen here to be key levers in solving the same labour problem through a reduction in the quality of working lives of many public service workers.