Internal Migration in Sweden: The Effects of Mobility Grants and Regional Labour Market Conditions

The main purpose of this study is to investigate whether variations in mobility grants have affected internal migration in Sweden. The paper also contains an exploration of how changing labour market conditions influence the migratory behaviour of the unemployed in comparison with other individuals. The results indicate that total migration flows respond to changes in labour market conditions in accordance with predictions from economic theory. This finding seems mainly to stem from the migratory behaviour of the unemployed. Furthermore, non-matching migration subsidies at the levels employed are not found to be migration enhancing.     

Emigration and Immigration in Italy: Recent Trends

ABSTRACT: During the eighties Italy has evolved into being a receiver of immigration. However, the existence of large Italian communities abroad, and the persistence of exit migratory flows (although amply compensated by re-entry flows) show that the connotation of Italy as a country of emigration still persists. This paper points out the differing composition of present immigration flows to Italy compared to those of Italian migratory flows towards the more industrially advanced European countries over the past decades. The labour forces that constitute these present day immigration flows often possess medium to high educational qualifications, and are more frequently absorbed into the tertiary and agricultural markets, rather than the industrial sector. These immigrants rarely have regular, unionized occupations, and satisfy a demand for precarious, unstable labour which is in expansion in Italy, as in other countries. Furthermore, these immigration flows are directed not only towards those regions with high employment rates, but also to those with high unemployment rates. Thus, the implications are that the character of present day emigration can only be clearly understood by taking into account the highly segmented aspect of the labour market.     

European Integration and the Integration of European Labour Markets1

Abstract. Will European economic and monetary union bring about a unification of European labour markets, and is there likely to be a convergence of patterns of labour market organisation among Community countries? The evidence discussed suggests that a major increase in unskilled mobility across the EC is unlikely, at least concerning EC citizens. Among skilled labour, a major increase in international mobility is also unlikely on account of differences in skill organisation among countries. In contrast, the integration of European capital is causing some integration of enterprise internal labour markets across national borders as firms seek to integrate their managerial and technical workforces. In the “high-tech” area, skills are in a state of flux, and the possibility that European labour markets will emerge is much stronger than for other categories.     

Permanent Disadvantage or Gradual Integration: Explaining the Immigrant–Native Earnings Gap in Sweden

Theoretical explanations suggest that wage differentials between immigrant and native workers are generated either by differences in the acquisition of human capital or by various forms of exclusion of immigrants from fair labour market rewards. We evaluate the labour quality and labour market discrimination hypotheses by using a large sample of Swedish employees in 1995. Our findings show that labour market integration is relatively unproblematic for immigrants from Western countries, whereas immigrants from other countries, especially from Africa, Asia and Latin America, face substantial obstacles to earnings progress when entering the Swedish labour market. For the latter group of countries, extensive controls for general and country‐specific human capital reduce the earnings differentials. However, the remaining gap is of a non‐trivial magnitude. Thus, the labour quality hypothesis accounts for a part of the observed native–immigrant wage gap, but the remaining differentials can be interpreted in terms of labour market discrimination.     

Labour Market Policies in Times of Crisis: A Reaction Function Approach for the Period 1985–2010

This article examines the reaction function of labour market expenditure to unemployment in 24 OECD countries, over the period 1985–2010, using the OECD panel data. The level of public debt is also introduced as a factor that is likely to influence these expenditures. Using a fixed‐effect model with interaction terms, this research focuses on two periods of crisis (1992–93 and 2007–09). The results confirm the counter‐cyclical variation of labour market policy expenditures. Nevertheless, the sensitivity of labour market expenditure to the economic cycle has in general decreased and the policy mix has changed. This could result from the important labour market reforms undertaken in the last 20 years.     

Public-Private Wage Differentials in French-Speaking Africa: A Comparative Analysis

Abstract. In the framework of structural adjustment programs implemented in Africa, the idea that wages in the public sector are too high compared to those of the private sector is partly based on wage policies with regard to the public sector. But the existence of public-wage differentials, inducing a labour market segmentation within the modern sector, has rarely been the object of attentive examination. With the help of earnings functions, based on homogeneous cross-section and logitudinal data of seven capitals of French-speaking Africa, the author plans to verify this hypothesis. The main conclusion of this research is that distortions on the modern labour market of many African countries are less important than one may think. In most of the countries considered, public-private wage gaps are essentially attributable to characteristics of individuals. This suggests that policies aiming to reduce wages of the public sector are no longer justifiable, economically and socially.     

Labour Surplus,Worker Rights and Productivity Growth: A Comparative Analysis of Asia and Latin America

How do labour market conditions, trade union rights and job security regulations affect labour productivity? This paper is the first attempt at an empirical analysis of this important question for a large sample of Asian and Latin American countries. We provide new estimates of the rates of surplus labour in 20 countries, as well as detailed tables summarizing their key regulations governing certain aspects of union activity and layoffs. Then we exploit these and other data in an econometric analysis of intercountry differentials in the growth rate of labour productivity in manufacturing during the 1980s. Among the principal results, we find that, while all else remains the same, productivity growth rates are significantly higher in countries with relatively larger labour surpluses, the effects of excess of labour on productivity growth are affected by the strength or weakness of union rights. We also find that the impacts of union rights and job security protections on productivity trends may be either positive or negative, depending on the labour market situation.     

Women's Labour Force Participation and Part Time Work in Spain

Spain is one of the southern countries where the percentage of women working part-time is relatively low in comparison to other European countries, together with a low female activity rate. Some important obstacles to increasing female activity rates have already been removed, as younger cohorts of women show a more permanent attachment to the labour force than older women, meeting even high unemployment, which is especially acute for women and young people. Under the recent labour market reform, it is hoped that part-time contracts, which were first regulated in 1984, would be a way of facilitating flexibility and an incentive for employers to create jobs, as the experience of other countries has shown. The relative novelty of part-time work in Spain is the reason why this typically female employment regime has not been much explored in Spain yet, in spite of its important role in the reorganisation of the employment system.     

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.     

Uncertainty,Flexibility Gap and Labour Demand in the Italian Economy

In this paper we analyse the effects of changes in the degree of uncertainty of the economic system and in the “flexibility gap”, deriving from the combined evolution of the degrees of uncertainty and flexibility of the economic system (in particular, labour market flexibility), on regular and irregular labour demand. On the basis of a simple qualitative model, we give a partial interpretation of some stylized facts of the Italian economy during the last decades. We argue that the low uncertainty and flexibility gap in the 1950s and 1960s, their remarkable increases in the 1970s, their inadequate reduction in the 1980s and the new increase of uncertainty and flexibility gap in the first half of the 1990s, have had a considerable influence on the quantity and quality of the “investment in employment” of Italian economy. The higher degree of uncertainty and the inadequate degree of flexibility of the Italian economic system are likely to have contributed towards the lower regular employment rate, compared to the main industrialized countries, and to high irregular employment. An adequate economic policy for reducing the uncertainty of the economic system together with a structural economic policy for increasing the flexibility of the economic system (in particular, an active labour policy for increasing the flexibility of the labour market), would be likely to produce positive effects on the quantity and quality of labour demand, contributing towards reducing unemployment.     

DOES THE ILO DEFINITION CAPTURE ALL UNEMPLOYMENT?

The labour market status of many nonworking persons is at the boundary between unemployment and inactivity. Like the unemployed, they seek and are available for work; unlike them, their last search action was not recent enough to meet the International Labour Office definition of unemployment. In this paper we examine by nonparametric tests how the transition probabilities of these out‐of‐the‐labour‐force job seekers differ from those of the unemployed as well as the other nonparticipants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information available only in the Italian Labour Force Survey to derive a measure of search intensity that we use to break down the out‐of‐the‐labour‐force job seekers. On the basis of their transition probabilities, the most active are indistinguishable from the unemployed. (JEL: J64, J22, R23)     

The Determinants of Child Labour: The Role of Primary Product Specialization

Abstract. The paper tests predictions of a traditional intra‐household bargaining model which, under reasonable assumptions, shows that lack of bargaining power in the value chain significantly reduces the capacity for obtaining benefits from increased product demand arising from trade liberalization and therefore is positively associated with child labour. Cross‐sectional and panel negative binomial estimates in a sample of emerging countries support this hypothesis. They show that proxies of domestic workers’ bargaining power in the international division of labour (such as the share of primary product exports) are significantly related to child labour, net of the effect of traditional controls such as parental income, quality of education, international aid, and trade liberalization. The positive impact of the share of primary product exports on child labour outlines a potential paradox. The paradox suggests that trade liberalization does not always have straightforward positive effects on social indicators and that its short‐run effects on income distribution and distribution of skills and market power across countries need to be carefully evaluated.     

Facts and Theories of the Italian Labour Market (1970-1985): A Time Series Analysis of Wages,Employment and Prices

ABSTRACT: ln this paper an attempt is made to determine whether observed patterns of intertemporal variability in a number of Italian labour market characteristics are consistent with the predictions forthcoming from three prominent models of aggregate labour market behaviour. The behavioral models included in the analysis are: a) intertemporal substitution labour supply, b) staggered wage contracts, and c) intertemporal labour demand with adjustment costs. The empirical results provide relatively more support for the validity of the adjustment cost model.     

How Do Policies Affect the Exit Rate out of Unemployment? Disentangling Job Creation from Labour Market Frictions

This paper assesses the effects of labour market policies on the unemployment outflow rate while disentangling two channels, namely labour market tightness and employer–employee matching efficiency. Using a sample of 11 OECD countries over the period 1985–2007, we treat the endogeneity of market tightness with business cycle shocks and the tax wedge as instruments. We find that the replacement rate of unemployment benefits, Active Labour Market Policies as well as the tax wedge in countries with poorly representative unions, have a significant, robust, and large impact on market tightness. Employment protection has a negative but small impact on matching efficiency. Overall, policy effects appear to be mostly channeled through market tightness and job creation.     

Part-Time Work in the Nordic Countries: A Trap for Women?

Abstract. The aim of the study is to examine the consequences of part-time employment at the individual level, especially for women. Are part-time jobs precarious as compared to full-time jobs, and are they traps, or perhaps rather bridges, in the labour market? The results indicate that the situation of part-timers varies in the Nordic countries. On one hand, the gap between part-time and full-time work has narrowed in Sweden and Norway, which may reflect a normalization of part-time work in these countries. On the other, part-timers' situation in the Finnish labour market still seems more precarious than that of full-timers. However, in most cases part-time work is a bridge rather than a trap in the Nordic labour market.     

The Principal Statistical Sources for the Labour Market in Italy

ABSTRACT: The state of disequilibrium which the labour market in Italy (as in all the major industrialised countries) presents, has been the centre of debate in political and economic circles for many years now. How should this disequilibrium be interpreted, considering the complexity of the phenomena found in the labour area? Can they be modeled into global explanatory schemas of general economic theory? The authors believe the complexity of these phenomena can neither be ignored nor simplified, but accepted as a distinguishing feature of the labour market, and thus have to be interpreted on the basis of numerous and often contradictory control variables. This paper hence outlines the principle sources of Italian labour market data available, in order to provide a rational and critical guide to interpreting the available indicators. The sources examined are both institutional (the ISTAT and Ministry of Labour surveys) and private (the employers associations of Confindustria, Assolombarda and Federmec-canica). The paper outlines the areas covered, the methodology, and the qualities and drawbacks that these surveys present.     

Trade and Labour Markets: Vertical and Regional Differentiation in Italy

The labour market misfortunes of the less skilled and rapid growth of international trade in manufactured goods with less advanced countries are linked by the paradoxical observation that trade theorists are in the forefront of those denying the importance of trade in income distribution. This paper analyses this conclusion by stressing the importance of vertical differentiation of trade flows and regional differentiation of skills in order to identify labour market effects of trade integration. Vertical and regional differentiation in trade and labour markets are analysed for a country, Italy, where these two elements seem to play a crucial role. The results show a likely displacement effect on unskilled labour due to trade flows with less advanced countries. Given the characteristics of Italian trade and labour markets, a stronger trade‐induced displacement effect on demand for unskilled labour takes place in the North of the country. Thus the vertical differentiation in Italian intra‐industry trade is a warning against understating the effect of trade on labour markets if product heterogeneity is not adequately considered. The regional differentiation of skill intensity is another warning against understating the effect of trade on labour markets whenever cross‐sectoral effects and the change in relative specialization are not adequately considered.     

Comparisons in Gender Wage Differentials and Discrimination between Germany and the United Kingdom

Due to the lack of consistent data, direct and robust comparisons of cross‐country labour markets have been virtually impossible. This study uses a new panel data series that controls for inconsistencies, thus overcoming this problem. This study estimates gender wage differentials and gender discrimination in the German and UK labour markets. Panel estimates are used to identify general wage differences between the two countries, with cross‐sectional comparisons undertaken to identify changes that have occurred between 1991 and 1993, that are consistent with known labour market policies. It is found that gender wage differentials are greater in the UK than Germany with employer discrimination against females attributed with the majority of the difference in both countries.     

British Employment Measures: Policy and Evidence

ABSTRACT: This paper examines how British labour market policy has developed over the decade up to mid-1986 and summarises the evidence available on the effects of the so-called 'special employment measures'. Given the wide range of schemes and the variations in rules governing them as they evolved, no attempt is made to give details of the different schemes. The aims are to identify the main shifts in policy and to address the principal methodological and empirical issues which arise in attempting to evaluate policy. The main focus of the paper is on those measures which have been designed to increase employment without threatening the attempts by successive governments first to restrain the growth of public expenditure and then to reduce the level in real terms. The mainstream macroeconomic and labour market strategy continues to stress the need for fiscal and monetary restraint combined with much greater labour market flexibility. Whilst the paper is concerned with employment measures, the Youth Training Scheme is also included. It represents the biggest of all the programmes initiated during the last decade or so of policy intervention and is concerned with providing employment as well as training opportunities.     

Unemployment,Vacancies and Unfair Dismissals

In most West European economies the annual number of grievance procedures settling individual complaints against unfair dismissals has been increasing since the 1960s. This development has very often been attributed to the enactment of legal regulations restricting the dismissal behaviour of firms. Econometric analyses using data from Germany and Great Britain show that labour market developments, namely the flow into unemployment and the vacancy rate, have a much stronger influence on the cyclical demand for grievance procedures than changes in the “legal infrastructure” of the labour market. Without denying the importance of institutional differences it appears that the individual costs of unemployment (which, ceteris paribus, rise as the flow into unemployment increases and the vacancy rate decreases) are superior predictors of the demand for grievance procedures than institutional changes strengthening or weakening employees' rights.