Labor emigration and economic development

"This article is concerned with the extent to which labor migration is advantageous to the labor exporting country. It focuses on development consequences of labor emigration with a view toward the formulation of policies which can shape those consequences into a positive force for development, discussing a wide variety of potential costs and benefits generated by labor emigration. The issue of private versus public choice relative to emigration is examined, as [are] the major economic benefits and costs of labor emigration and the influence of development objectives on the valuation of these costs and benefits. Policies by which emigration countries may increase the benefits from labor emigration and reduce the costs are outlined."     

EVIDENCE ON PRICE ADJUSTMENT COSTS IN U.S. MANUFACTURING INDUSTRY

This paper investigates the degree of rigidity in prices of manufactured products in the U.S., conditional on labor costs. I extend Rotemberg's model of quadratic price-adjustment costs and find that prices are costly to adjust: after a year, about 40 percent of adjustment remains to be completed for aggregate manufacturing, while for some industries the adjustment is twice as slow. But manufacturing prices are less sluggish than prices in the U.S. economy as a whole. Thus, nominal rigidity in other markets, such as those for services or labor, may be important.     

Seasonality and Flexible Labor in Resorts: Organizations,Employees, and Local Labor Markets

Seasonality, a chronic problem in the resort industry, is addressed in this seven-year participant observation and in-depth interview study of five Hawaiian resorts contiguously arrayed along a sandy beachfront strip. In order to operate profitably, these organizations must keep their labor costs trimmed as they move through annual cyclical fluctuations that place different labor demands on each department. We examine their use of various kinds of "flexible" employees, including both seasonally contingent and adaptable full-time workers. We examine the way these organizations expand and constrict their labor force annually. Studies of contingency labor have shown the benefits of this solution for organizations but have ignored the effects of labor flexibility on employees and local labor markets. In this article we take this broader view, looking at the integration of organizations, employees, and local labor markets and the way their interplay is forged in symbiotic and exploitive ways to maintain a system of human resources that reinforces a stratified social relations of production.     

Déjà vu for airline industrial relations

Fifteen years after deregulation, labor relations in the airline industry returned to thestatus quo ante, as union power, particularly ALPA’s, still dominates. Without a long-term shift in bargaining power between the parties, costs and productivity have not changed much. Labor accounts for 60 percent of the cost difference between strong and low-cost carriers. American, Delta, United, Northwest, and USAir would require some combination of labor cost concessions or productivity increases of $1.6 billion to match the productivity-adjusted labor costs for low-cost carriers’ flight crews. To remain competitive, strong carriers and unions must develop strategies to deal with anachronistic work rules, provisions to contract out work, and premium pay for airline employees.     

Does the early bird always get the worm? market institutions and the timing of employment decisions

Unravelling of appointment dates can be observed in some entry-level labor markets but not in others. A comparison of different markets shows how the costs of breaking contracts and being rematched can affect the timing of appointments and market behavior. If contracts can be terminated at any time by workers and if rematching costs are relatively small compared to the benefits from changing matches, early appointments in an entry-level labor market confers no benefit on firms. Firms then have no incentives to make early offers. However, if the costs offset the benefits from changing employment, firms that cannot compete with their principal competitors may prefer to make offers before some critical information becomes available rather than wait for the time when employment can actually start. Such a labor market may experience early appointments. But if the most desirable firms do not issue early offers, other firms may be rejected in any early period. Therefore, the most desirable firms can work together to halt unravelling. I am indebted to Esquire Donna Gerson and Koh Song Hui who extended help in writing this paper. My special thanks should be given to Alvin Roth for his suggestions and comments.     

Aesthetic Labor for the Sociologies of Work,Gender, and Beauty

Amid the growing literature on the costs and rewards of physical appearance for labor market outcomes, an economistic emphasis on looks as an investment strategy has gained prominence. The concept of aesthetic labor is a useful sociological intervention for understanding how the value of certain looks is constructed, and how looks matter for social stratification. Aesthetic labor is the practice of screening, managing, and controlling workers on the basis of their physical appearance. The concept advances research on the service economy by moving beyond a focus on emotions to emphasize worker corporeality. This article first untangles aesthetic labor from related concepts, including body work, emotional labor, and embodied cultural capital. Next is a review of three contexts in which scholars have applied aesthetic labor to the workplace: the organization, freelance labor, and the market. Because it situates the value of beauty in context, aesthetic labor foregrounds those power relations that define aesthetics, such as class, race, and gender. The concept incorporates insights from field theories of bodily capital, such that aesthetic labor denaturalizes beauty and seeks to explain the processes through which looks translate into economic and symbolic rewards.     

The Hidden Costs of Informal Elder Care

Demographic, socio-economic, and political trends throughout the developed world have contrived to make elder care an issue of utmost policy importance. They also have led to sharp reductions in health and social program expenditures. Policymakers are looking to communities to help meet growing care needs because community care is believed to be better and cheaper than institutional care. However, these beliefs become untenable when costs beyond public sector costs are considered. In fact, informal care carries a number of hidden costs that seldom are considered in health and social policy discussions. This article introduces a taxonomy of the costs of informal elder care, which can be categorized as out-of-pocket expenditures, foregone employment opportunities, unpaid labor, and emotional, physical and social well-being costs. Then, an illustration is provided regarding how the taxonomy can be applied to understanding the incidence, magnitude, and distribution of these costs among stakeholder groups. This taxonomy can help inform ongoing debate about health and social policy reform.     

Migration and development: myths and reality

Recent research on the impact of labor migration on the socioeconomic development of developing countries has provided opportunity to try and resolve some of the long-standing polemics that have pervaded the literature on migration and development. This article focuses on findings concerning the labor, remittance, and social impacts of emigration on countries that have participated in labor emigration. While a great deal more research needs to be done, recent findings confirm that in some situations the sort-term impacts of labor migration on sending countries have been considerable.     

The Medical Assessment of Migrants: Current Limitations and Future Potential

Attempts to control the importation of infectious diseases through the medical screening and evaluation of immigrants and refugees represent the modern application of some of the earliest recorded public health interventions.
States with long-standing immigration programmes continue to require the medical examination and screening of migrants for certain diseases. In some instances, the public health effectiveness of these immigration medical assessments is of questionable value when considered from a population health basis.
This article reviews current practices and describes recent studies where more modern and epidemiologically based immigration medical interventions have been undertaken. A more effective immigration medical assessment process is proposed through the use of results of this more empirical approach to immigration medical screening.     

EFFICIENCY WAGES AND SUBJECTIVE PERFORMANCE PAY

This paper studies optimal relational contracts in motivating workers in a market setting. We find that labor markets with higher turnover costs will use more subjective performance pay and less efficiency wages and that in those markets, the total wage payment is lower and the equilibrium employment level is higher. Surprisingly, under certain conditions, an increase in turnover costs leads to higher social welfare. Incorporating workers' search costs, we show that wages are procyclical in booms and are either rigid or countercyclical during recessions. The predictions of the model are consistent with some empirical evidence. ( JEL D82, J33, J41, J63)     

The role and significance of endogenous firing costs in a matching model with endogenous job destruction

Traditional models of the labor market assume fixed firing costs. This paper explores the implications of variable firing costs, building this new assumption into a matching model with endogenous job destruction. The available evidence on the outcomes of cases brought to labor courts suggests that firing costs are negatively related with labor market tightness. In such a case, we may no longer invoke “rigidities” on labor markets as the cause of their poor performance. Our model yields three interesting results. First, labor markets may have multiple equilibria that cannot be Pareto-ordered; each with its own configuration in terms of average duration of unemployment and filled jobs, as well as employment protection. Second, the variability of firing costs produces a positive externality affecting the stability properties of these equilibria. Finally, the two externalities affect the efficiency of the social optimum, modifying the Hosios [Hosios, A.J., 1990. On the efficiency of matching and related models of search and unemployment. Review of Economic Studies 57, 279–298] condition. We use these results to interpret the recent history of European unemployment.     

Critical analysis of contractual regulation mechanisms: An organizational approach

Starting from the contract as a coordination mechanism, this article questions the effectiveness of contractual regulatory mechanisms, i.e. the ability of regulation to attain its goal, not only in efficiency terms through the analysis of the production function, but also in organizational terms. Theories of agency and transaction costs are well-suited to investigation of coordination problems in regulation. The relationship between the regulator and the regulated firm has to be regarded as a principal-agent relationship included in a more general framework taking into consideration the differentiated effects of internal incentives schemes and of the labor, goods and capital markets as additional external incentive mechanisms to correct the behaviour of the regulated firm. Improvement of regulation rests on the regulated firm's capacity to minimize transaction costs associated with the whole coordination problem. The distinction between regulated private enterprise and public enterprise allows one to identify the property rights costs.     

Entry charges on immigrants

The author analyzes "the various arguments that can be advanced for imposing fees on immigrants to optimize...resident gains.... This article discusses cost recovery and emphasizes the costs of multiculturalism as a possible basis for fees. It then analyzes the effects of inelastic immigrant supplies in providing an optimal tariff motivation for monopsonistically restricting labor flows and deals with the second-best problem of devising an optimal fee policy to accompany a possibly suboptimal immigration quota. Next, attention turns to the role of priceable externalities. Externalities which are expensive to price because of transactions costs are analyzed. Finally, along with summarization of major conclusions, the author considers if, even in the economic interests of existing residents, entry rights should be sold."     

Recent developments in the employment and retirement of older workers in Germany

Against a background of an aging population, rising social security costs, and foreseeable labor and skill shortages, there have been public policy changes affecting older workers in Germany. Labor-market related initiatives aim at an increase of labor force participation among this group. Enterprise-related, active age-management strategies aim at improving occupational conditions of aging workers. In this context, prolonging the working life must be seen as one option of "active aging." Another view of the current retirement discussion is the question of how the unused potential of Germany's younger, early-retired seniors can be exploited. Active aging has become a social duty nowadays, with the intention that older persons contribute to society to avoid generational conflicts. In the future, active aging will preserve the competitiveness of enterprises and of the entire economy, despite an aging labor force. But gerontological research points out that different options to carry out individual life plans of active aging are also required. This article reviews the changes in public policies towards older workers and includes the findings of a project that illustrates good practice to combat age barriers in the labor world.     

The role of relationships in labor markets for the popular arts and its impact on product quality

While utilizing social networks is common in labor markets and may benefit both firms and laborers, social networks are argued to be unusually important in the popular arts. Prior work in economics on the role of relationships in labor markets has generally focused on the benefits and not the costs. This paper takes a different approach by focusing on both costs and benefits, by examining a specific market where relationships are particularly important. This paper argues that in addition to reducing diversity and creating inherent inequalities, excessive reliance on networks can lead to higher agency costs and lower product quality.     

Marginal Welfare Costs of Taxation with Human and Physical Capital

We develop a perfect foresight, overlapping generations model with intragenerational inequality and endogenous human and physical capital investment, and we calculate welfare costs for marginal reforms of taxation and public spending. Welfare costs are uniformly lower than in the equivalent static model where human and physical capital are fixed. Most of the upward bias in static estimates arises from fixed human capital because welfare cost is predominantly tax leakage from lower effective labor supply, but reallocating time between education and labor can leave effective labor supply unchanged. Hence, adjustments in human capital have an important mitigating influence on marginal welfare costs. (JEL D91, H20, H31, H41, J22, J24 )     

WORKER POWER, FIRM POWER, AND THE STRUCTURE OF LABOR MARKETS

The purpose of this article is to advance the conceptual development of structurally-oriented approaches to stratification by elaborating a behavioral model of the structure of labor markets that is based on power relations among both individual and collective actors. After reviewing the various approaches to the study of stratification and enumerating some of its shortcomings, a theory of the operation of labor markets that synthesizes a number of the elements in extant theories is presented. A labor market typology is developed based on the relative power of firms and workers and four distinct types of markets are delineated, i.e., worker-controlled, firm-internal, worker-firm negotiated, and competitive. In addition, the dynamics by which these labor markets are transformed is discussed. It is argued that this conceptual framework solves a number of problems inherent in extant theories of the operation of labor markets and the article concludes by suggesting areas for future research based on the theory.     

A Split Labor Market: Mexican Farm Workers in the Southwest*

Edna Bonacich's split-labor-market theory is used to explore the dynamics of agriculture in the southwest. This theory helps to explain the following developments: (1) importation of foreign contract workers; (2) passage of farm labor legislation; (3) development and implementation of mechanized equipment; (4) expansion of the “runaway shop”; and (5) a decrease in the number of independent farmers concurrent with an increase in large-scale corporate farms. One additional factor having a major impact on the industry is (6) the farm worker movement, the United Farm Workers (UFW) and the Arizona Farm Workers (AFW) being two of the most familiar examples.     

FIRMS AND FLEXIBILITY

The United States and France have very similar labor productivity levels while there are considerable differences between the firm‐size distributions and firm dynamics in the two countries. To reconcile these observations we introduce a joint model of endogenous entrepreneurship and firm‐size dynamics with firing costs, unemployment benefits, entry costs, and a tax wedge between wages and labor costs. We use our model to analyze the role of these rigitidies in explaining firm dynamics and productivity patterns in the United States and France. We find that our model with all rigidities goes a long way in accounting for firm‐size differentials between the United States and France while generating similar labor productivity outcomes. (JEL C78, D21, E24, J6)     

Household job search: A theoretical and empirical model

This article links the literature on family decision making and the economics of job search by examining job search by an unemployed individual within a household context. A theoretical model was developed which demonstrates the interdependence of the utility of household members when one is searching for work. The costs of search are borne by all household members while the benefits are captured in the searcher's expected future wage. A reservation wage was shown to be determined by household financing options, and the perception of relevant labor market parameters. An empirical model of the reservation wage for a sample of unemployment insurance recipients was estimated using two-stage least squares. Results, reported for male and female subgroups, support the hypotheses derived from the household job search model. In particular, the reservation wage was shown to depend on unemployment duration, labor market conditions, increased labor force participation of other household members, use of household assets to finance search, existence of dependents, and unemployment insurance benefits.