Category Archives: Article

October 10, 2019. Where are all the good jobs? Hélène Syed Zwick on the new book of David G. Blanchflower.

In his new book, GLO Research Director Danny Blanchflower has explained us why the job market is not as healthy as we think, in particular he promotes to look at underemployment instead of unemployment. glabor.org had announced the book earlier this year and published in the summer an interview with the author. In her book review for the LSE Review of Books website, GLO Fellow Hélène Syed Zwick provides more details and insights, but also formulates questions and challenges.

David G. Blanchflower: Not Working. Where Have All the Good Jobs Gone? Princeton University Press, 2019

GLO Research Director David G. Blanchflower. GLO bio. He is the Bruce V. Rauner Professor of Economics at Dartmouth College, Professor of Economics at the University of Stirling, and a Research Associate at the National Bureau of Economic Research.

GLO Fellow Hélène Syed Zwick. GLO bio. She is Executive Director of the ESLSCA Research Center and Associate Professor in Economics at ESLSCA University (Egypt).

Book review for the LSE Review of Books website:

“In Not Working: Where Have All the Good Jobs Gone?, David Blanchflower contributes to the already substantial stream of scholarship on job quality, happiness and economic downturns. The author, a prominent economist and former external member of the Bank of England’s Monetary Policy Committee (MPC) between 2006 and 2009, offers a praiseworthy, didactic and anticipated analysis ‘on well-paying [or good] jobs and the failure of policymakers to deliver them’ (11).

In the first part of the book, the author skillfully argues that most Western countries, especially the US and the UK, are far away from full employment, despite their respective low unemployment rates. Through a heavy reliance on data, he argues, and brilliantly demonstrates, that the unemployment rate is no longer an accurate signal of labour market slack. He repeats throughout his book that the main signal that confirms this hypothesis is the lack of sustained wage and price growths. Normally, Blanchflower explains, in a situation of full employment, there ‘would be so few people looking for jobs’ (25) that wages would grow rapidly and ‘workers would be able to climb the occupational ladder’ (140). Unfortunately, he writes, this is not happening either in the US or the UK. On the contrary, underemployment  – which relates to ‘unstable, precarious, low-paying, and temporary jobs’ (35) and which expanded after the Great Recession in most rich Western countries – appears as a significant new predictor of wage and inflation growth. Here we reach the central argument of the book: underemployment associated with weak bargaining power on the part of workers leads to contained wage pressure. Blanchflower advises that we therefore rely on underemployment rather than unemployment to analyse the labour market situation, especially within this post-recession period characterised by ‘an extended semi-slump, of subnormal prosperity’ (80).

If such a proposal is quite orthodox, three elements transversal to this first part capture the reader’s attention: the economics of walking about (EWA); the societal consequences; and house-ownership and mobility. Firstly, thanks to Blanchflower’s EWA approach which is ‘fundamental’ to the book (184), he is in contact with what has been happening to ordinary people. As he explains, Blanchflower believes in data from the real world. His thinking has been ‘driven mostly by observing how the world works and attempting to uncover fundamental truths and patterns in the data’ (9). Discussions with London cabbies or looking at jingle mails (the act of mailing the keys back to the mortgage lender) are common ways for Blanchflower to feel what is going on in societies. Secondly, he discusses the links between feelings of insecurity on the labour market, happiness and societal outcomes like obesity, mental disorders, depression and even suicide. Thirdly, he examines the negative impact of house ownership on mobility. He evokes the fall in the homeownership rate, especially in the US and the UK, and explains that an unconstrained housing market leads to more efficient labour markets and to a fall in the equilibrium unemployment rate thanks to higher mobility. These effects have too often been neglected by researchers, he argues.

The second part of Not Working is composed of five chapters and aims to study the response to the Great Recession. Blanchflower’s analysis led him to anticipate the crisis in 2007, while most of his colleagues did not. The author calls therefore for a ‘big rethink’ (11, 315), especially among policymakers, central bankers and economists. Scathingly, he denounces their obstinacy in relying on theoretical, mathematical-based models and prescriptions from the 1970s. As he argues, ‘the elites were stuck in the past’ (171) and ‘the experts were looking in the wrong places’ (162). Policymakers decided in 2009-10, under the recommendations of economists, to launch what Blanchflower names a ‘reckless and unnecessary austerity’ (173) ‘attacking the Keynesian school of thought from multiple directions’ (171). The author writes that this was a ‘unique opportunity [for them] to decrease the size of the state’ (173).

In this section of the book, Blanchflower’s efforts may appear overly detailed to the less specialised reader and not especially innovative for the specialists. Yet, he convincingly establishes the socio-economic, demographic and geographic profile of the ‘left-behinds’ in the US, the UK and Eurozone countries after 2010. Unsurprisingly, decreases in expenditure ‘hit the weak, the disabled and vulnerable’ (214). Such fractures between the have-nots and haves were already present before the Great Recession, which only ‘exacerbated them’ (37). He notes that the left-behinds from the US, the UK, France and Austria have been ‘strongly opposed to political and social developments they see as threatening sovereignty, identity and continuity’ (258). He therefore indicates that he was already expecting in 2010 a political ‘backlash’ (265) after all the pain and suffering. Why should politics not therefore suffer? Few can have ignored recent populist movements in the US with Donald Trump’s presidency, in the UK with the Brexit vote and in France with Marine Le Pen. The author establishes a direct relationship between the profile of the left-behinds and those who voted for populist parties.

This inquiry leads us to the third part dedicated to prescriptions and policy recommendations. Whilst the quality of analysis and richness of its scholarly references impresses across two-thirds of the book, here the author fails in making the reader optimistic or confident about the future. Why? First, because the recommendations he formulates are unoriginal and lack ambition, and second, because several dimensions elsewhere detailed in the book, like the decline in unionism and bargaining power, are not even discussed. Strictly speaking, the use of idioms and expressions in the titles and subtitles in this third part appear by far insufficient to convince me. Most of the Keynesian recommendations that he formulates are well-known and have been debated for decades. For instance, he recommends reaching full employment by decreasing the interest rate to boost wages and therefore living standards, investing more in infrastructure to create jobs, subsidising childcare services and providing incentives for low-skilled workers. From my point of view, such advice relies far too much on the intervention of public authorities, which seems quite inconsistent with Blanchflower’s lack of trust in policymakers and politicians that he claims throughout his book: ‘Why believe them?’ he asks several times. ‘Why should we trust any of them now? I don’t,’ he writes (211).

It could certainly be argued that this third part is disappointing as Blanchflower fails to provide sufficient depth in the formulation of his recommendations, which is essential once the analysis has been delivered. However, even with this limitation, this encyclopedic book is highly welcome and will be an unquestionably worthy addition to the bookshelves of a general readership as well as scholars in labour economics, macroeconomics, monetary economics and political science.”

Dr. Hélène Syed Zwick, Executive Director of ESLSCA Research Center, ESLSCA University, Egypt

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

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September 22, 2019. ‘Parental responses to children’s revealed human capital’: Forthcoming in the Journal of Population Economics.

The article finds that parents compensate disadvantaged children with greater cognitive resources using data from primary school-aged Ethiopian siblings.

Read more in:

Wei Fan & Catherine Porter
Reinforcement or compensation? Parental responses to children’s revealed human capital levels, forthcoming Journal of Population Economics, Vol. 33 (2020), online first. Open Access.

Author Abstract: A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-aged Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first 3 years of a child’s life to isolate exogenous variations in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate disadvantaged children through increased cognitive investment. The effect is significant, but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size and higher wealth compensate with greater cognitive resources for a lower-ability child.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

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September 6, 2019. ‘Decomposing the gender pay gap in the USA’: Now published online in the Journal of Population Economics.

Gender pay gaps are still of much concern, in particular in the United States. A new GLO Discussion Paper adds to our understanding how the gender gap is shaped by multiple different forces such as parenthood, gender segregation, part-time work and unionization.

Read more in:

Katie Meara, Francesco Pastore & Allan Webster
The gender pay gap in the USA: a matching study
Journal of Population Economics, now FREE PAPER PDF

GLO Fellows Francesco Pastore & Allan Webster
The paper is also GLO Discussion Paper No. 363, 2019.

Author Abstract: This study examines the gender wage gap in the USA using two separate cross-sections from the Current Population Survey (CPS). The extensive literature on this subject includes wage decompositions that divide the gender wage gap into “explained” and “unexplained” components. One of the problems with this approach is the heterogeneity of the sample data. In order to address the difficulties of comparing like with like, this study uses a number of different matching techniques to obtain estimates of the gap. By controlling for a wide range of other influences, in effect, we estimate the direct effect of simply being female on wages. However, a number of other factors, such as parenthood, gender segregation, part-time working, and unionization, contribute to the gender wage gap. This means that it is not just the core “like for like” comparison between male and female wages that matters but also how gender wage differences interact with other influences. The literature has noted the existence of these interactions, but precise or systematic estimates of such effects remain scarce. The most innovative contribution of this study is to do that. Our findings imply that the idea of a single uniform gender pay gap is perhaps less useful than an understanding of how gender wages are shaped by multiple different forces.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

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September 3, 2019. Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca on ‘Hate at first sight only. The presence of immigrants, electoral outcomes and policy insights.’ GLO Research for Policy Note No. 3.

GLO Research for Policy Note No. 3 – Theme 10. Migration

Hate at first sight only. The presence of immigrants, electoral outcomes and policy insights.

by Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca

Most of the studies on how electoral outcomes in Western Europe and in the US are influenced by the presence of immigrants in the neighborhood provide evidence that living in an area with a greater number of immigrants increases the probability of voting for anti-immigrant parties. The immediate policy implication would be that people want to restrict immigration tout court. But is this so?

In a recent GLO Discussion Paper and forthcoming in the Journal of Population Economics, we contribute to the debate on this topic by analyzing the dynamic aspects related to this effect. This is to investigate if policies should be concerned with the time and geographical concentration of new arrivals more than on their number and focus on integration as well as coping ability of local populations. In particular, we formulate the hypothesis that hostility toward immigration is temporary: there is “hate at first sight” only.

We focus on the 2004, 2009 and 2014 European elections in the United Kingdom, a country in which the immigration issue has been central to all of the latest electoral outcomes.  The UK Independent Party (Ukip), a party founded in 1993 by Conservatives who were cross with the EU, became a strongly anti-immigration party under the leadership of Nigel Farage. It boosted its votes from 15.6% in 2004 to 26.8% in 2014 in correspondence with an increase in the number of immigrants from 8% to 11% of the total population.
____________________

What we do.

  • We first test for a short-run effect of the presence of immigrants on votes for Ukip. In our statistical model we add to the share of immigrants the 2-year migration flows, as this is the time lag suggested by time series tests. After having verified that the appropriate statistical conditions for time consistency are satisfied, we proceed to our main analysis. Our models control for unemployment, demographic variables, and population and include specifications with fixed effects for each area and with an instrumental variable approach.
  • Previous studies on Denmark and Italy find that hostility is stronger in rural areas. Immigration to larger urban centers has generally started before immigration to more rural areas, which can explain why previous studies have found a different effect in these two different contexts. Therefore, we test if this difference is completely explained by the time path of immigration or if there is something more, maybe related to political and cultural factors.
  • We explore potential issues related to integration. Do changes in unemployment, welfare expenditures per capita or in the number of crimes explain the short-run effect of the presence of immigrants? These are very common explanations, as individuals may feel that immigrants are to be blamed for increased unemployment, for reduced access to welfare or for an increasing number of crimes.

What we find.

  • The effect of immigration on anti-immigrant votes is indeed a short-run effect. Areas where there has been an acceleration of new arrivals by 1 percentage point see an increase in votes for Ukip by 1.1-1.2 p.p.. In other words, immigration flows boost Ukip votes. In contrast, an increase of 1 p.p. in the share of immigrants corresponds to 1.7-1.9 p.p. fewer votes for Ukip.
  • There is something more to hostility in rural areas than just the time path of immigration. First, we replicate previous evidence that the long-run effect of immigration is declining by population density. Second, if we look at heterogeneity by socioeconomic characteristics, we find that the effect of immigration flows, although positive and significant in all UK, is different in magnitude across areas and reaches a peak of 2.1 p.p. in the “English and Welsh Countryside” (see Figure 1). Only in “London cosmopolitan, Suburban traits and Business and Education centres” and “Mining Heritage and Manufacturing” the share of immigrants has a negative significant effect. This further suggests that political and cultural factors may be more relevant in explaining the difference in votes across areas than the difference between urban and rural areas.
  • Looking more closely at integration issues, in areas that have diminishing welfare benefits per capita immigration flows have a stronger effect on votes for Ukip. Increase in unemployment and in crimes do not seem to matter in relation to hostility to immigration. It is to note that the coefficient of immigration flows always stays significant, suggesting that there is substantially more that is left unexplained.

Figure 1 – UKIP votes by supergroups of area: estimated coefficients and confidence intervals for immigrant share and flows.

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Our findings clearly substantiate that the “hate at first sight” effect , e.g the impact of immigration on the ascent of anti-immigrant parties as the result of the short-term material consequences and/or identity reactions induced by migration flows, is indeed a temporary phenomenon. Two main policy implications follow. First, there is a need to pay closer attention to how flows are distributed over time and space: it is probably better to allow immigrants to arrive in small waves and distribute recent arrivals in a homogeneous manner and based on local political and cultural factors, rather than in large ones and concentrated in certain areas. Second, policies should focus more on integration across its cultural, social and economic dimensions. Clearly, in the long run, social forces can drive toward integration; however, policies can expedite this process. In fact, we find that the electoral impact of immigration is weaker and shortly reverted when more welfare resources become available. Therefore, policies and  resources should aim both at facilitating the integration process of migrants as well as the local population’s ability to cope with the changes.

References

Barone G, D’Ignazio A, De Blasio G, Naticchioni P (2016). Mr. Rossi, Mr. Hu and politics. The role of immigration in shaping natives’ voting behavior. J Public Econ 136: 1–13.

Brunner B, Kuhn A (2018). Immigration, cultural distance and natives’ attitudes Towards immigrants: Evidence from Swiss voting results. Kyklos 71(1): 28-58.

Dustmann C, Vasiljeva K, Damm AP (2018). Refugee migration and electoral outcomes. Rev Econ Stud online.

Halla M, Wagner AF, Zweimüller J (2017). Immigration and voting for the far right. J Eur Econ Assoc 15(6): 1341-1385.

Harmon NA (2018). Immigration, ethnic diversity, and political outcomes: Evidence from Denmark. Scand J Econ 120(4): 1043-1074.

Levi, E, Mariani, RD, Patriarca, F (2019). Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip. GLO Discussion Paper No. 364. Journal of Population Economics online.

Otto AH, Steinhardt MF (2014). Immigration and election out-comes—evidence from city districts in Hamburg. Reg Sci Urban Econ 45: 67–79.

NOTE: Opinions expressed here are those of the authors and not of the GLO, which has no institutional position.

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12. August 2019. ‘Parenting style as an investment in human development’: Now published in the Journal of Population Economics.

The article explicitly considers the role of parenting style in child rearing relating it to socioeconomic disadvantage. It finds that effective parenting styles are negatively correlated with disadvantage.

Read more in:

Deborah A. Cobb-Clark, Nicolás Salamanca & Anna Zhu:
‘Parenting style as an investment in human development’.
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1315-1352.

Journal Website, complete issue 4. Paper.

Author Abstract: We propose a household production function approach to human development that explicitly considers the role of parenting style in child rearing. Specifically, parenting style is modeled as an investment that depends not only on inputs of time and market goods, but also on attention. Our model relates socioeconomic disadvantage to parenting style and human development through the constraints that disadvantage places on cognitive capacity. We find empirical support for key features of our model. Parenting style is a construct that is distinctive to standard parental investments and is important for young-adult outcomes. Effective parenting styles are negatively correlated with disadvantage.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

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12 August 2019. ‘Ancestral ecological endowments and missing women’: Now published in the Journal of Population Economics.

The article provides global evidence that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer.

Read more in:

Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123 .

Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.

GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

Author Abstract: This paper examines the relationship between ecological endowments in antiquity and contemporary female to male sex ratios in the population. It is found that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer. This relationship is shown to be strong even after ancestral plough use, the timing of the Neolithic Transition, and many other potentially confounding factors are controlled for. Similar results are also obtained using district-level data from India.

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Now ONLINE & OPEN ACCESS in the Journal of Population Economics: International migration as a driver of political & social change

Using data for Morocco, the paper provides further evidence that international migration fosters the transfer of political and social norms.

Read more in:


Michele Tuccio, Jackline Wahba and Bachir Hamdouch: “International migration as a driver of political and social change: evidence from Morocco”
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellows Michele Tuccio, Jackline Wahba and Bachir Hamdouch

Author Abstract: This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, this paper explores whether households with return and current migrants bear different political preferences and behaviors than non-migrant families. Once controlling for the double selection into emigration and return migration, the findings suggest that having a returnee in the household increases the demand for political and social change. This result is driven by returnees mostly from Western European countries, who were exposed to more democratic norms in the destination. However, we find a negative impact of having a current migrant on the willingness of the left-behind households to change. This result is driven by migrants to non-Western countries, where the quality of political and social institutions is lower. Our results are robust to also controlling for destination selectivity.

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Now Online in the Journal of Population Economics: Mortality inequality in France & the United States

Despite a measured strong cross-sectional relationship between income and health, the study finds no necessary connection between changes in income inequality and changes in health inequality.

Read more in:

Janet Currie, Hannes Schwandt & Josselin Thuilliez: “Pauvreté, Egalité, Mortalité: mortality (in)equality in France and the United States”
Journal of Population Economics, online, in print.

Journal Website. Paper Access.

GLO Fellow Hannes Schwandt

Author Abstract: We develop a method for comparing levels and trends in inequality in mortality in the United States and France between 1990 and 2010 in a similar framework. The comparison shows that while income inequality has increased in both the United States and France, inequality in mortality in France remained remarkably low and stable. In the United States, inequality in mortality increased for older groups (especially women) while it decreased for children and young adults. These patterns highlight the fact that despite the strong cross-sectional relationship between income and health, there is no necessary connection between changes in income inequality and changes in health inequality.

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Now ONLINE & OPEN ACCESS in the Journal of Population Economics: The nativity wealth gap – what is it & what drives it?

The paper studies the migrant-native differences in wealth among older households in Europe which is significant and to the advantage of the natives. The importance of origin country, age at migration, and citizenship status in reducing the gap is shown.

Read more in:

Irene Ferrari: “The nativity wealth gap in Europe: a matching approach “
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Irene Ferrari

Author Abstract: This study uses a matching method to provide an estimate of the nativity wealth gap among older households in Europe. This approach does not require imposing any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows estimation not only of the mean of the wealth gap but also of its distribution for the common-support sub-population. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. A heterogeneity analysis shows the importance of origin, age at migration, and citizenship status in reducing the gap. Indeed, households who migrated within Europe, those who moved at younger ages rather than as adults, and those who are citizens of the destination country display a wealth gap that is consistently smaller over the entire distribution.

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How dreams matter for migration: Now Published in the Journal of Population Economics

The article provides evidence that countries with stronger beliefs that hard work leads to a higher social status (the ‘American Dream’) attract a higher proportion of high-skilled immigrants.

Read more in:

Claudia Lumpe: “Public beliefs in social mobility and high-skilled migration”
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 981–1008.

Journal Website Issue. Paper Access.

GLO Fellow Claudia Lumpe

Author Abstract: This paper investigates how beliefs of the destination country’s population in social mobility may influence the location choice of high-skilled migrants. We pool macro data from the IAB brain-drain dataset with population survey data from the ISSP for the period 1987–2010 to identify the effect of public beliefs in social mobility on the share of high-skilled immigrants (stocks) in the main OECD immigration countries. The empirical results suggest that countries with higher “American Dream” beliefs, i.e., with stronger beliefs that climbing the social ladder can be realized by own hard work, attracted a higher proportion of high-skilled immigrants over time. This pattern even holds against the fact that existing social mobility in these countries is relatively lower.

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Now ONLINE & OPEN ACCESS in the Journal of Population Economics: Marriage, dowry, and women’s status in rural Punjab

Dowry is a common custom in South Asia with rising use and increasing amounts. The paper shows that a higher dowry amount, especially in terms of furniture, electronics, and kitchenware, is positively associated with women’s status in the marital household.

Read more in:
Momoe Makino: “Marriage, dowry, and women’s status in rural Punjab, Pakistan”
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 769-797.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Momoe Makino

Author Abstract: Dowry is a common custom observed in South Asian countries. Despite alleged negative consequences caused by dowry and the legal ban or restrictions on its practice, the custom has been extended, and recently, dowry amounts seem to be increasing. Compared with public interest in and theoretical studies on dowry, empirical studies are relatively scarce mainly due to data unavailability and inadequacy. We conducted a household survey specifically designed to empirically investigate how dowry is associated with women’s status in the marital household in rural Punjab, Pakistan. The dataset is unique because it gathers information on disaggregated marriage expenses, which enables us to examine the relation between each itemized component of dowry and women’s status. Results show that a higher dowry amount, especially in terms of furniture, electronics, and kitchenware, is positively associated with women’s status in the marital household. The positive association of these illiquid items adds suggestive evidence that in rural Punjab, Pakistan, dowry serves as a trousseau that the bride’s parents voluntarily offer to their daughter.

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Now OUT in the Journal of Population Economics: Internal migration affects the emotional health of elderly parents left-behind in China.

A new study examines how migration of an adult child affects the emotional health of elderly parents left-behind in China. It finds that migration reduces happiness and leads to more loneliness among the elderly.

Read more in:

Juliane Scheffel & Yiwei Zhang: How does internal migration affect the emotional health of elderly parents left-behind? Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 953-980.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Juliane Scheffel

Author Abstract: The ageing population resulting from the one-child policy and massive flows of internal migration in China pose major challenges to elderly care in rural areas where elderly support is based on a traditional inter-generational family support mechanism. We use data from the China Health and Retirement Longitudinal Study to examine how migration of an adult child affects the emotional health of elderly parents left-behind. We identify the effects using fixed effects and IV approaches which rely on different sources of variation. We find that migration reduces happiness by 6.6 percentage points and leads to a 3.3 percentage points higher probability of loneliness. CES-D scores of elderly parents are severely increased pushing average scores close to the cut-off indicating clinical levels of depressive symptoms. As emotional health is a key determinant of the overall health status, our findings have significant impacts on economic development in China.

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Now OUT in the Journal of Population Economics: Your spouse is fired! How much do you care?


Unemployment reduces the life satisfaction of the partner! However, while wives’ life satisfaction does not recover even two years after their partners becoming unemployed, husbands only react to their wives’ joblessness during the first year of unemployment.

Read more in:
Milena Nikolova & Sinem H. Ayhan: Your spouse is fired! How much do you care?
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 799-844.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellows Milena Nikolova and Sinem H. Ayhan

Author Abstract: This study is the first to provide a causal estimate of the cross-spouse subjective well-being consequences of unemployment. Using German panel data on married and cohabiting partners for 1991–2015 and information on exogenous unemployment entry due to workplace closure, we show that one spouse’s unemployment experience reduces the life satisfaction of the other partner. The estimated spillover is at least one quarter of the effect of own unemployment and is equally pronounced among female and male partners. In addition, while wives’ life satisfaction does not recover even two years after their partners becoming unemployed, husbands only react to their wives’ joblessness during the first year of unemployment. Our results are insensitive to income controls and the couple’s position in the income distribution, thus reflecting the non-pecuniary costs of unemployment. Although the income loss hardly explains the negative spillover effects of unemployment on spousal life satisfaction, we document large declines in spousal satisfaction with household income and living standards. This finding supports the argument that the costs of unemployment borne by indirectly affected spouses extend beyond the loss of consumption opportunities and might be rather related to social values attached to market work. Being robust to a battery of sensitivity checks, our findings imply that public policy programs aimed at mitigating unemployment’s negative consequences need to target not only those directly affected but also cohabiting spouses.

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Now Published in the Journal of Population Economics: Migrants Reduce the Work Health Risks of Natives

The value of immigrants for the UK has played an important role in the Brexit debate. A recent GLO Discussion Paper explores the effects of immigration on the allocation of occupational physical burden and work injury risk using data for England and Wales.
Migrants seem to reduce the risks for UK-born workers and they report report lower injury rates than natives. The paper is now published in the Journal of Population Economics and available online. See also below.

GLO Discussion Paper now published in the Journal of Population Economics, July 2019, Volume 32, Issue 3, pp 1009–1042; already 2.4k downloads on July 5, 2019! OPEN ACCESS….

See online on the Journal website.

Download PDF of the Journal of Population Economics article for free.

GLO Discussion Paper No. 215, 2018.

Immigration and the Reallocation of Work Health Risks – Download PDF
by Giuntella, Osea & Mazzonna, Fabrizio & Nicodemo, Catia & Vargas-Silva, Carlos

GLO Fellows Osea Giuntella, Fabrizio Mazzonna, Catia Nicodemo & Carlos Vargas-Silva

Author Abstract: This paper studies the effects of immigration on the allocation of occupational physical burden and work injury risks. Using data for England and Wales from the Labour Force Survey (2003–2013), we find that, on average, immigration leads to a reallocation of UK-born workers towards jobs characterized by lower physical burden and injury risk. The results also show important differences across skill groups. Immigration reduces the average physical burden of UK-born workers with medium levels of education, but has no significant effect on those with low levels. We also find that that immigration led to an improvement self-reported measures of native workers’ health. These findings, together with the evidence that immigrants report lower injury rates than natives, suggest that the reallocation of tasks could reduce overall health care costs and the human and financial costs typically associated with workplace injuries.

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Now online in the Journal of Population Economics: John Gardner on ‘Intergenerational altruism: Evidence from the African American Great Migration’

Intergenerational altruism explains between 24 and 42% of the Northward migration!

Read more in:

John Gardner: Intergenerational altruism in the migration decision calculus: evidence from the African American Great Migration, forthcoming in the Journal of Population Economics.

See Online First on the Journal website.

GLO Fellow John Gardner

Author Abstract: It is widely believed that many migrations are undertaken at least in part for the benefit of future generations. To provide evidence on the effect of intergenerational altruism on migration, I estimate a dynamic residential location choice model of the African American Great Migration in which individuals take the welfare of future generations into account when deciding to remain in the Southern USA or migrate to the North. I measure the influence of altruism on the migration decision as the implied difference between the migration probabilities of altruistic individuals and myopic ones who consider only current-generation utility when making their location decisions. My preferred estimates suggest that intergenerational altruism explains between 24 and 42% of the Northward migration that took place during the period that I study, depending on the generation.

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Now published in the Journal of Population Economics: Return migrants transfer social norms; evidence on female genital mutilation in Mali.

A recent GLO Discussion Paper found that girls living in localities with return migrants in Mali are less likely to be circumcised. This effect is driven mainly by the returnees from Côte d’Ivoire, suggesting that, in addition to punitive action against those who practice Female Genital Mutilation (FGM) or information campaigns, having lived in an African country where FGM practice is not customary is equally influential. This is evidence for the relevance of social remittances through return migration here by improving social norms. The paper is now accepted for publication in the Journal of Population Economics and already available online. See the detailed discussion (in French) in a newsletter.

See also below.

GLO Discussion Paper of the Month of March 2019 now forthcoming in the Journal of Population Economics!

See online on the Journal website.

GLO Discussion Paper No. 329, 2019.

Female genital mutilation and migration in Mali. Do return migrants transfer social norms? Download PDF
by Diabate, Idrissa & Mesplé-Somps, Sandrine

GLO Fellow Sandrine Mesplé-Somps.

Abstract:   In this paper, we investigate the power of migration as a mechanism in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in localities with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration and return decisions, we show that return migrants have a negative and significant influence on FGM practices. More precisely, we show that this result is primarily driven by the flow of returnees from Cote d’Ivoire. We also show that adults living in localities with return migrants are more informed about FGM and in favor of legislation. The impact of returnees may occur through several channels, including compositional effects, changes in return migrants’ attitudes toward FGM, and return migrants convincing stayers to change their FGM practices.

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June 26, 2019. Friederike Welter & André Pahnke on: The German Mittelstand: an antithesis to Silicon Valley entrepreneurship? GLO Research for Policy Note No. 2

Since 2013, GLO Fellow Friederike Welter is head of the Institut für Mittelstandsforschung (IfM) Bonn, a policy-oriented independent research institute on small business and entrepreneurship issues (www.ifm-bonn.org). She also holds a professorship at the University of Siegen. Friederike Welter has broad experiences in applied and policy-related research on entrepreneurship and small business, much of it in an international context. She is a member of several policy-related advisory boards for federal and state ministries and for international bodies. She was President of the European Council for Small Business and Entrepreneurship (2007-2009). For her work on small business and entrepreneurship, she has been honored as ECSB Fellow (2011), as Wilford L. White Fellow of the International Council of Small Business (ICSB, 2014) and she recently received the Greif Research Impact Award (2017). The Frankfurter Allgemeine Zeitung regularly lists her among the most influential economists in Germany.

André Pahnke has studied economics at the Leibnitz University Hannover. First, he worked as a research fellow at the Institut für Arbeitsmarkt- und Berufsforschung, Nuremberg. Since 2011, Dr. Pahnke is a researcher at the Institut für Mittelstandsforschung (IfM), Bonn. His main research fields are International Comparative SME Research, Finance and Apprenticeship Training.

GLO Research for Policy Note No. 2 – Theme 3. Future of work

The German Mittelstand: an antithesis to Silicon Valley entrepreneurship?

by Friederike Welter & André Pahnke

At the international level, many policy makers, academics and business observers are interested in understanding Germany’s “secret economic weapon”, its Mittelstand. It is therefore not at all surprising that foreign officials and business people are making pilgrimages to Germany to learn from the Mittelständler. At the same time, German politicians, journalists, and entrepreneurs travel to the Silicon Valley, to learn from what they perceive to be a vibrant start-up ecosystem, fostering the seemingly endless creation of highly innovative, technology-orientated, venture capital-backed gazelles and unicorns. In meetings with policy makers, one of us is regularly asked why Germany could not have its own Microsoft, Google, Amazon or Facebook. Such statements reflect a current debate in Germany: some perceive the German Mittelstand as a low growth, low-tech and non-innovative approach while in contrast the Silicon Valley entrepreneurship is regarded as the salvation for a doomed German economy. In our recent paper (Pahnke and Welter, 2019), we therefore set out to critically review the assumption of the Mittelstand as an antithesis to Silicon Valley entrepreneurship. We suggest that future research and policies should stand back from dichotomies such as “Mittelstand versus Silicon Valley entrepreneurship” and instead acknowledge the vibrant diversity and heterogeneity of entrepreneurship.
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What we should know

  • Mittelstand is not just about size. There is some confusion about the meaning of the term “Mittelstand”, not only in the media but also among academia. It is often used as a synonym to Small Medium Entreprises (SMEs). However, the small size of Mittelstand businesses is rather a by-product of other key characteristics. Mittelstand entrepreneurs should be first characterized by their independent ownership. They are typically owned by an individual or a family, who is actively involved in the strategic development and management decision-making of their companies and bears the entrepreneurial risks and liabilities of these decisions. The identity of ownership and management should therefore be seen as a key feature when studying Mittelstand ventures.
  • Mittelstand is a mindset. The ideal business model of the Mittelstand combines ownership, leadership and organizational characteristics with individual value systems and attitudes. Due to a number of positive connotations with the term “Mittelstand” in Germany, even large companies – in which the identity feature of the ownership and management is not present – still perceive themselves as Mittelstand. Therefore, emotions, passion and feelings of belonging, play an important role for understanding the Mittelstand.
  • Mittelstand is important for the economy and the society. The Mittelstand is generally considered to be the backbone of the German economy because of its economic contribution in terms of annual sales, export turnover, net value added, employment generation and apprenticeship training. Many studies illustrate, in addition, its substantial contribution to both the economy and the society. Beyond the provision of employment, goods and services, the specific ownership-management structure of the Mittelstand is associated with high levels of social, inter-generational, and regional responsibilities.
  • Mittelstand is as innovative but often in a different way. Regarding the perceived lack of “innovativeness” in Mittelstand firms in comparison to Silicon Valley entrepreneurship, we argue that this is related to a narrow view of innovation. As soon as we apply a wider understanding of what constitutes innovation, the Mittelstand is by no means less innovative. Mittelstand and Silicon Valley entrepreneurship differ with respect to innovations because of different industry structures and target groups. While Silicon Valley innovations are very consumer-oriented and visible to all of us, Germany’s digital and disruptive technologies are first and foremost “deep tech” hidden in products and processes of other companies.
  • Mittelstand has different patterns of employment growth. Silicon Valley entrepreneurship is generally seen as creating many jobs in a relatively short period of time. In contrast, employment growth in Mittelstand ventures has been slower and happening over a longer period of time; although there are also gazelles in Germany. Such comparisons between the Silicon Valley and the Mittelstand are however problematic: they compare apples (a single high-growth company) to oranges (a whole segment of the German economy).

We need more, not less attention to the Mittelstand!

For obvious reasons, the Mittelstand is often seen as an exclusively German phenomenon: it has deep roots in the German history; it stands for a specific German variety of capitalism; and it is strongly influenced by previous and current institutional arrangements in Germany. In our view, however, the Mittelstand is an excellent example of every day entrepreneurship, demonstrating how entrepreneurship that builds on a deep sense of responsibility and solidarity can shape an economy and society and contribute to its world standing. In this regard, the core characteristics of the Mittelstand stand in stark contrast to Silicon Valley entrepreneurship; although one should not overlook important similarities, too. Overall, the Mittelstand is a vibrant segment of the economy. It is competitive, innovative as well as growth oriented; sometimes by other means that are less visible than the well-known uni- or decacorns from the Silicon Valley.

References

Berghoff, H. (2006). The End of Family Business? The Mittelstand and German Capitalism in Transition, 1949-2000. The Business History Review, https://doi.org/10.2307
/25097190

Fear, J. (2014). The secret behind Germany’s thriving ‘Mittelstand’ businesses is all in the mindset. The Conversation. http://theconversation.com/the-secret-behind-germanys-thriving-mittelstand-businesses-is-all-in-the-mindset-25452.Accessed 28 November 2017.

Gantzel, K.-J. (1962). Wesen und Begriff der mittelständischen Unternehmung. Abhandlungen zur Mittelstandsforschung, 4. Wiesbaden: Springer.

Gärtner, C. (2016). Deep-tech in good old Germany: digitale hidden champions. XING Insider. https://www.xing.com/news/insiders/articles/deep-tech-in-good-old-germany-digitale-hidden-champions-532499. Accessed 28 Nov 2017.

Pahnke, A.; Welter, F. (2019): The German Mittelstand: antithesis to Silicon Valley entrepreneurship?, Small Business Economics,  52 (2), 345-358.

Ross Range, P. (2012). The German Model. Report. Handelsblatt. http://www.handelsblatt.com/politik/konjunktur/report-the-german-model
/6966662.html. Accessed 28 November 2017.

Logue, D. M., Jarvis, W. P., Clegg, S., & Hermens, A. (2015). Translating models of organization: Can the Mittelstand move from Bavaria to Geelong? Journal of Management & Organization, 21(01), 17-36.

The Economist (2014). German lessons: Many countries want a Mittelstand like Germany’s. It is not so easy to copy. http://www.economist.com/news/business/21606834-many-countries-want-mittelstand-germanys-it-not-so-easy-copy-german-lessons. Accessed 28 November 2017.

NOTE: Opinions expressed here are those of the authors and not of the GLO, which has no institutional position.

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May 13, 2019. Azita Berar on ‘ILO: Celebrating a century of international cooperation for social justice’. GLO Policy News No.1

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Azita Berar Awad is Director Policy of the Global Labor Organization (GLO), and Former ILO Director, Employment Policy

GLO Policy News No. 1 – Theme 3. Future of Work

ILO: Celebrating a century of international cooperation on the governance of labour

by Azita Berar Awad

This year is the Centenary of the International Labour Organization (ILO). Since its establishment in 1919,  by the Versailles Peace Treaty at the end of the first World War, the Organization has shown a remarkable resilience, unique amongst the multilateral institutions of global governance. Over 100 years, ILO has survived another major war. It also surfed over and navigated through  several global and regional economic and social crises and tectonic geopolitical shifts among its constituent members. Created in 1919, on the promise of sustaining peace by promoting social justice, the Centenary celebrations across the world, are a good opportunity to reflect not only on past achievements, but on the relevance of this  proposition for the future.

The Future of Work is the central theme of ILO’s Centenary deliberations. To this effect, an independent Commission composed of 27 members representing diverse interests was established in 2017 and issued its report in January 2019. The International Labour Conference, the main governance organ of the institution, bringing together governments, employers’ and workers organizations from 187 countries, will meet in June 2019 in Geneva  to draw its own conclusions in the form of a Centenary Declaration.

In this GLO Policy News, six issues drawn from a review of ILO’s rich history are highlighted. (See for a list of publications on ILO history.) They relate to the Organization’s foundational values and their evolution in a century of economic, social and technological transformations. On each issue,  we bring out key challenges, the resolution of which  will  shape ILO’s effectiveness in its second century.
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What we should know

  • The ILO was born at the intersection of the twin quests for International Peace and that for Social Justice. Its foundational act, the ILO Constitution, is  Part XIII of the Peace Treaty that put an end to World War I. It was adopted by the Versailles Peace Conference on 28 April 1919. The Constitution envisioned a new international order, against a backdrop of tremendous human sufferings during World War I, widespread poverty and appalling conditions of work in most of the 19th Century and early 20th Century. The  industrial revolution had brought about progress, but also misery and injustice. Protest,  social unrest and revolution had ensued. This vision in which “lasting peace can be established only if based on social justice”, resonates strongly  a century later, for all those concerned with the rising and widening economic and social inequalities, for the left-behind of globalization, and for all those who look to the future with apprehension. Will there will be work for all who seek to work and will it be decent, they wonder. While international wars have diminished in recurrence and intensity, millions of people are caught in numerous internal strife and protracted crises of various types in different regions of the world. Current conflicts that have dreadful internal and cross-border consequences,  such as the movements  of internally displaced persons (IDPs), economic migrants  and refugees seeking asylum.
  • ILO is the only of the three international institutions established by the Versailles Treaty still functioning a century later. The League of Nations and the Permanent Court of Justice, the other two institutions,  were paralyzed and later formally abolished to be replaced by the new global governance system of the United Nations. The ILO became the first Specialized Agency within the new frame of the United Nations System, soon joined by several other new international institutions with dedicated technical specialization.
  • The Philadelphia Declaration, adopted on the 10th May of 1944,  and embedded later into the ILO Constitution, while maintaining the ILO’s primary function of developing international legislation to promote humane conditions of work, broadened the original vision in several ways. (To date, there are 189 Conventions and 205 Recommendations and 4 Protocols covering a wide range of work related issues and adopted after elaborate international tripartite negotiations.) With emphasis laid on human rights, including the freedom of association (for workers and employers),  the Philadelphia Declaration is a precursor to the Universal Declaration for Human Rights adopted in 1948 and a source of inspiration for many rights included in  the two international Covenants of Civil and Political Rights and Social, Economic and Cultural rights adopted in 1966.
  • The Philadelphia Declaration also introduced the objective of full and freely chosen employment and the commitment to promote employment, acquisition of skills, and regulation of labour migration as contributing to full employment. Despite the Cold War and the confrontation between competing social ideals, ILO’s model of international cooperation adapted and evolved relatively well in the 1950’s and 1960’s, in a context of high growth, full employment and welfare state in industrial countries. During the same period, the decolonization process which saw the membership of the Organization grow rapidly from 40 countries in 1919 to 187 today, gave more sense to the universal relevance of the ILO while bringing out the different and diverse realities of the world of work in developing countries. The World Employment Programme launched in 1969, at mid-point in ILO’s history, responded to this developmental challenge by treading new field, uncharted before. Examples are its pioneering work on rural poverty, its coining of the concept of the informal sector and its innovative lens on the gendered division of labour.
  • The Philadelphia Declaration clearly  proclaimed the primacy of human and social progress “in conditions of freedom and dignity, of economic security and equal opportunity” over economic and financial considerations. It mandated the ILO to examine all international economic and financial policies in the light of this primacy. We know that the globalization story in the 1980’s and the 1990s, and the neo-liberal model that sustained it and expanded it to all regions, unfolded differently. The International Financial Institutions (IFI) set  policy frameworks  based on the primacy of financial solvency, despite its high social adjustment costs. The policy responses to the 1997 Asian financial crisis and to the 2007/2008 global financial crisis, have shown that policy coherence, between the IFIs and the United Nations system, when addressing the social and economic challenges of globalization or responding to major global economic and financial crises, remains a challenge. The ILO’s 1998 Declaration on Fundamental Principles and Rights at Work represents a rare consensus platform, a level playing field in globalizing economies in respect of the core labour rights  of elimination of child and forced labour, non-discrimination at work, and freedom of association.
  • It is good to recall that the ILO is the only United Nations agency that is not only inter-governmental but embodies an enlarged democratic system representing all three parties of the world of work. Since its foundation, the ILO functions on the premise of tripartite dialogue and cooperation at national and international levels. Governments, employers’ and workers’ organizations voice their views, negotiate and vote independently in all ILO’s organs and working processes. This pioneering and revolutionary model of tripartism is obviously  confronted with its own challenges. A major one is the representational challenge. The declining membership of trade unions reduces  their bargaining power and hence their voice in policy-making. The Employers’ organizations often do not include the two extremes of the business sector, that is the major multinationals and global supply chains that operate across borders and different national legislative frameworks, often setting their own ethical agenda and codes of conduct. They do not encompass either the myriad micro and small business operators , most of which are in the informal economy. The  growing movement of civil society organizations (other than employers and workers organizations) also claims a more active and systemic engagement with ILO.

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This brief could only touch on a few issues. It is merely an invitation to dig deeper into the ILO history, many aspects of which are yet to be researched and written. Looking into the second centenary, this is an invitation to reflect on the philosophical notions of human work and social justice and on the values of democratic dialogue and international cooperation in a context of fast technological disruptions such as the artificial intelligence and all embracing digitalization, environmental degradation and widening inequalities. Will the human agency prevail in innovative social engineering and in shaping the future in fairness in a more complex and uncertain world?

NOTE: Opinions expressed here are those of the author and not of the GLO, which has no institutional position.
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April 10, 2019. All GLO Discussion Papers of March 2019 & the Discussion Paper of the Month suggesting that return migration improves social norms in Mali.

The GLO Discussion Paper of the Month in March finds that girls living in localities with return migrants in Mali are less likely to be circumcised. This effect is driven mainly by the returnees from Côte d’Ivoire, suggesting that, in addition to punitive action against those who practice Female Genital Mutilation (FGM) or information campaigns, having lived in an African country where FGM practice is not customary is equally influential. This is evidence for the relevance of social remittances through return migration here by improving social norms.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers)Complete list of all GLO DPs downloadable for free.

GLO Discussion Paper of the Month: March

GLO Discussion Paper No. 329, 2019.

Female genital mutilation and migration in Mali. Do return migrants transfer social norms? – Download PDF
by Diabate, Idrissa & Mesplé-Somps, Sandrine  

GLO Fellow Sandrine Mesplé-Somps, Paris School of Economics.


Sandrine Mesplé-Somps

Abstract:   In this paper, we investigate the power of migration as a mechanism in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in localities with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration and return decisions, we show that return migrants have a negative and significant influence on FGM practices. More precisely, we show that this result is primarily driven by the flow of returnees from Cote d’Ivoire. We also show that adults living in localities with return migrants are more informed about FGM and in favor of legislation. The impact of returnees may occur through several channels, including compositional effects, changes in return migrants’ attitudes toward FGM, and return migrants convincing stayers to change their FGM practices.

GLO Discussion Papers of March 2019

339 Monopsony Power and Guest Worker Programs  Download PDF
by Gibbons, Eric M. & Greenman, Allie & Norlander, Peter & Sørensen, Todd

338 Personality Traits and Performance in Online Labour Markets – Download PDF
by Mourelatos, Evangelos & Giannakopoulos, Nicholas & Tzagarakis, Manolis

337 Out-of-Partnership Births in East and West Germany – Download PDF
by Jirjahn, Uwe & Struewing, Cornelia

336 What Is the Value Added by Using Causal Machine Learning Methods in a Welfare Experiment Evaluation? – Download PDF
by Strittmatter, Anthony

335 Returns to Investment in Education: The Case of Turkey – Download PDF
by Patrinos, Harry Anthony & Psacharopoulos, George & Tansel, Aysit

334 Conflict Exposure and Economic Welfare in Nigeria – Download PDF
by Odozi, John Chiwuzulum & Oyelere, Ruth Uwaifo

333 Assessing the impact of off- and on-the-job training on employment outcomes. A counterfactual evaluation of the PIPOL program – Download PDF
by Pastore, Francesco & Pompili, Marco

332 Maternal Health, Children Education and Women Empowerment: Quasi-Experimental Evidence from India – Download PDF
by Chatterjee, Somdeep & Poddar, Prashant

331 Exchange rate, remittances and expenditure of foreign-born households: evidence from Australia – Download PDF
by Hasan, Syed & Ratna, Nazmun & Shakur, Shamim

330 Walls and Fences: A Journey Through History and Economics – Download PDF
by Vernon, Victoria & Zimmermann, Klaus F.

329 Female genital mutilation and migration in Mali. Do return migrants transfer social norms? – Download PDF
by Diabate, Idrissa & Mesplé-Somps, Sandrine

GLO DP Team
Senior Editors: Matloob Piracha (University of Kent) & GLO; Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University).
Managing Editor: Magdalena Ulceluse, University of GroningenDP@glabor.org  

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“Why is Populism on the Rise and What Do the Populists Want?”. Experts debate this in the Winter Issue of “The International Economy” magazine.

“What problems are today’s populists seeking to address? Are followers of populist leaders driven by economic insecurity at a time of rising economic inequality and subpar growth, or by a reaction against progressive values, or both?” The International Economy magazine.

In its Winter 2019 issue of “The International Economy”, the Washington DC based magazine of international economic policy, has featured a prominent symposium of views on “Why is Populism on the Rise and What Do the Populists Want?”. Klaus F. Zimmermann, the President of the Global Labor Organization (GLO), Bonn University Professor and UNU-MERIT/Maastricht affiliated economist, who is currently the George Soros Chair Professor at the School of Public Policy of the Central European University (CEU) in Budapest, had been asked to contribute to this debate. The link to the full text of the symposium is here. Please find the contribution of Zimmermann also below.

Related to the interactions between media, populism and migration is a new Oxford University book also free access online, to which GLO President Klaus F. Zimmermann has contributed a chapter. See:

Martin Ruhs, Kristof Tamas, & Joakim Palme (Eds.):
Bridging the Gaps. Linking Research to Public Debates and Policy Making on Migration and Integration. Oxford University Press. Published online March 28, 2019.

Chapter 8: Klaus F. Zimmermann: Gaps and Challenges of Migration Policy Advice: The German Experience

LINK TO THE FULL MANUSCRIPT OPEN ACCESS.

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Paper submission to Brasov conference on 31 May to June 1, 2019 still possible until April 26.

International Conference„Inclusive and sustainable economic growth. Challenges, measures and solutions” (ISEG 2019).

Place: 31 May-June 1: Brasov, Romania, at the Transilvania University of Brasov.

Organizers: Transilvania University of Brasov; Romanian Academy, Institute of Economic Forecasting; Global Labor Organization (GLO)

Invited Speakers are Filomena Maggino and  Klaus F. Zimmermann.

To participate: Register until April 26 through the conference website and send an abstract asap. CONTACT.

GLO is interested in research papers for a special session related to the Labor Markets of Countries in South East Europe; GLO members who wish to contribute to this are invited to send an abstract by April 20 to Klaus F. Zimmermann. (klaus.f.zimmermann@gmail.com)

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April 1, 2019. Francesco Pastore & Marco Pompili on their research for Italy ‘What works for youth employment?’. GLO Research for Policy Note No. 1


Francesco Pastore is Associate Professor of Political Economy at the University of Campania Luigi Vanvitelli & Fellow and Country Lead for Italy of the Global Labor Organization (GLO).

Marco Pompili is Researcher at Ismeri Europa and GLO Fellow.

GLO Research for Policy Note No. 1 – Theme 4. Population dynamics: youth employment and participation

What works for youth employment? An evaluation of an Italian regional integrated program of active labour market policies

by Francesco Pastore & Marco Pompili

In a recent GLO Discussion Paper, we have studied the effect of PIPOL (Piano integrato di politiche per l’occupazione e il lavoro), an integrated programme of active labour market policies, launched by the Italian Region of Friuli Venezia Giulia in 2014, to facilitate the increasingly difficult school to work transitions for young people. The programme grouped different funding sources, including those originating from the European Social Fund (ESF) and the Youth Employment Initiative (YEI), (an initiative supporting young people in European Union countries, living in regions with high young unemployment rate). The Programme provided employment and training services to increase the employability of participants.
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What we should know

  • PIPOL is targeted at different groups of people with different needs: Group 1 includes young people aged 15-19 years at risk of dropping out of school; Group 2 includes young NEETs (Not-in-Education-Employment-or-Training) under the age of 30; Group 3 includes under-30 youngsters with a high-school diploma or a professional qualification attained within the last 12 months; Group 4 includes young people under-30 with a university degree obtained at least 12 months earlier; Group 5 includes unemployed people or at risk of unemployment.
  • The participation in PIPOL is structured in three phases. Phase one is registration: young participants who think to be eligible can register on-line or go to a Public Employment Service (PES) or other institutions for specific groups. In phase two, orientation services are provided  and  participants are profiled according to their needs band; this service has to be offered to people within 60 days from the registration to the PESs. An individual action plan is established, showing the type of active policies to be administered. Phase three is the implementation of active measures, such as on-the-job training, classroom traineeship, labour incentives, support to business creation.
  • Our evaluation focussed on the first stage of PIPOL, in particular on the interventions of off-the-job and on-the-job training completed by the end of 2016.
  • Our analysis focused on 4,962 off-the-job training courses and 3,361 internships, that were completed by the end of 2016. In terms of participants, the study covered 7,175 young people, of which 4,059 women. Overall, 3,911 attended off-the-job training; 2,945 attended on-the-job training; and 319 both types of intervention.
  • To assess the impact, we have resorted to a counterfactual approach: a control group is extracted by means of PSM or Mahalanobis matching among those who registered in the program over the years 2014-16, but have never benefited of the program. In other words, the econometric procedure is organized in two steps. In step one, we draw a random sample of individuals from the group of those who registered in the program but did not attend because of the lack of suitable financial resources. The selection is done in such a way that the target and control group have exactly the same characteristics.
  • The Mahanobis matching is more accurate since it implies that only individuals with exactly the same characteristics are selected. In step two, we compare the probability to find a job by the program participants and the control group to see whether the former has a higher probability of employment than the latter. This allowed us controlling for observed heterogeneity through a battery of control variables (age, gender, citizenship, education, province of residence and also pre-program work experience) and for unobserved heterogeneity, by extracting the control group using the same pool of individuals registered in the program.
  • We used data from two main sources: 1) different data banks from the administration of the program and 2) information on outcome variables obtained from compulsory communications  that employers have to make to employment services whenever any labour contract is signed or completed/ended.

What works? On-the-job training has the greatest impact!

  • We found that the net impact of PIPOL is equal to 5 percentage point (pp) on average, meaning that people who benefited from the Programme have an average  probability to be employed 5 percentage points higher than people who did not.
  • The greatest impact was found for on-the-job training, and no significant impact  was observed for in-room training. On-the Job training  also  increased the probability of finding permanent work (+3pp). This is consistent with the view of a youth labour market where young people have excellent theoretical competences, but very little work experience and work-related competences (Pastore, 2015; 2018).
  • The off-the-job training programs did not show statistically significant impact on employment, but did affect the probability to experience at least one labour contract after 2016.
  • These results are partly due to a lock-in effect, namely the tendency of those who attend training programs to put off their effort in job search.
  • Interestingly, we found that the program has a different impact for different typologies of recipients and different types of intervention. The scheme seems to have a greater net impact in the case of women, foreigners and young people with lower education.
  • Some forms of off-the-job training still have a positive net impact on employment chances (training to gain a qualification).
  • Internships in manufacturing and construction show a greater impact than in the service sector, although the service sector is experiencing a larger expansion overall.

____________________
This study represents an important addition to the Italian and global literature on programme evaluation regarding school to work transitions,  considering the small number of such studies, noted also in the recent review of the literature by Card et al. (2010). It is one of the first analysis of the effect of interventions  implemented within the YEI. To our knowledge, there is only a previous paper assessing the impact of YEI in Latvia (Bratti M. et al. 2018) and the evaluation of the Italian YEI (Isfol, 2016), the latter focusing on the very short-term effects. Our findings suggest that active labour market policies for youth are more effective in Italy when they are directly related to the production of work-related competences.

References
Angrist, D. & J. Pischke (2009). Mostly Harmless Econometrics. Princeton University Press, Princeton.
Bratti, M. & al. (2018). Vocational Training for Unemployed Youth in Latvia: Evidence from a Regression Discontinuity Design, IZA Discussion Paper No. 1187.
Card, D., J. Kluwe and A. Weber (2010). Active Labor Market Policy Evaluations: A Meta-Analysis. Economic Journal, 120 (548): F452-F477.
Card, D., & al. (2018). What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations. Journal of the European Economic Association, 16(3): 894-931.
Isfol. (2016). Primo Rapporto di valutazione del Piano italiano Garanzia Giovani. Roma: Ministero del Lavoro.
Pastore, F. (2018). Why So Slow? The School-to-Work Transition in Italy. Forthcoming in Studies in Higher Education.
Pastore, F. (2015). The Youth Experience Gap. Explaining National Differences in the School-to-Work Transition, Springer Briefs in Economics, Physica Verlag, Heidelberg.
Patore, F. & M. Pompili (2019). Assessing the Impact of Off- and On-the-job Training on Employment Outcomes. A Counterfactual Evaluation of the PIPOL Program, GLO Discussion Paper No. 333.

NOTE: Opinions expressed here are those of the authors and not of the GLO, which has no institutional position.

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March 1, 2019. Azita Berar on ‘Automation, jobs and inequality’. GLO Policy Brief No. 1

Azita Berar is Director Policy of the Global Labor Organization (GLO), and Senior Fellow, Graduate Institute of International and Development Studies, Geneva.

GLO Policy Brief No. 1 – Theme 3. Future of Work


Automation, jobs and inequality

by Azita Berar

There is growing apprehension about new waves of technological development in particular about the implications of increasing automation and use of robotics  displacing human labour. To date, research and policy debate have mostly focused on the estimation of potential job losses that such technologies will entail sometimes with alarmist conclusions. We argue for considering a broader frame of analysis for research and policy that takes account of wider economic and societal implications, including the distributional issues and the need for policy to re-engineer new and evolving social institutions.
____________________

What we should know

  • Recent empirical studies (see selected references below) have focused mostly on the job destruction and substitution impact in the US, other advanced countries and in a few emerging economies. Through different methodologies applied and assumptions made to project potential job losses, they reach very different conclusions about the number of jobs and/or the types of jobs that will be substituted. Their estimates vary greatly – by no less than 5 times amongst the most alarmist and the lowest band – even when focusing on the same economy and/ or sector.
  • The new job creation impact of automation within the same sector or the broader economy is usually underestimated. There are examples of  automation technology widely used today that clearly show the positive net job creation and economic expansion. The most cited example is the ATM innovation in the banking sector dispensing human tellers. There has been massive redeployment and upgrading of jobs of former tellers to offer different and higher quality banking products and services. Productivity gains have been invested in the expansion of the sector, in turn leading to new jobs and incomes within and outside the sector.
  • Another fast-evolving technological innovation is “co-bots”, where robots “co- work” along with (or assist) human workers. Used in the automotive and the health industry for example, these have contributed to reducing the drudgery and improving the quality of jobs for humans. And potentially leading to as many new jobs for humans as the use of this type of automation spreads.
  • It is also important to distinguish between the availability of technology that could  replace or displace a certain job/task – a starting premise of recent projections on automation induced job losses – and the probability that the technology will be adopted on a large scale replacing all such jobs/ tasks. There are gaps, sometimes very significant, between the two. This gap is larger in developing countries and amongst them, where as noted, there has been relatively little research. And where the diffusion and impact of automation can not be deducted from current estimates focusing on a limited set of countries and sectors.
  • An interplay of multiple factors pushing in different directions determines the pace and scale of adoption of automation innovation that goes beyond a simple comparison of relative cost among robots and human labour.
  • Understanding the decision-making process of managers and investors in the spread and large-scale adoption of automation is also key. Rarely, automation alone, in the absence of a broader firm strategy,  provides the competitive edge for increased profitability and productivity.
  • There are also wide sectoral variations in the nature of automation innovation and the dynamics of job, income and productivity gains and losses that could incur. A sector/industry focus would shed more light into specific dynamics.  Another under-researched area is the dissemination of technology within sectors and across borders including through global supply chains in highly globalized industries.
  • From a societal perspective, the key issue is how the productivity gains will be invested and/or distributed and through which mechanisms and institutions. This is highly important not from the angle of equity but for sustaining demand in the medium to long term.
  • Throughout previous waves of industrial revolutions and technological disruptions, starting with the mechanization of spinning and weaving in Britain’s textile industry the mid-18th century, there has been apprehension with regard to destruction of jobs and distribution of wealth and well-being. Then and now, there has been a sharp divide between optimists and pessimists! Looking back the reality has overtaken all projected scenarios in very different directions but it has also led to social engineering, policy innovations and the creation of new institutions to tackle wider societal implications.

Will it be different this time? Context and policy matter.

Automation in unequal and polarized environment

  • This new round of rapid automation innovations is taking place amidst a highly polarized environment.
  • Labour markets remain tight: globally 192 million people are unemployed of which over 70 million are young women and men. In many instances, the youth unemployment rate is three times higher than adult unemployment and female unemployment twice that of male unemployment. And these figures do not take into account the “discouraged workers”, those who have given up looking for a job. Quality of jobs is a concern. About 1.4 billion people are working in “vulnerable forms” of employment (own-account workers and contributing family workers) and this number is on the rise. Informality is widespread particularly in developing and emerging countries, where it reaches more than 60 per cent of total employment. There are large segments of population affected by “working poverty”, those who work but are trapped in poverty.
  • Rising inequality and polarization: in the last two decades, most regions have experienced an increase in income inequality. During the same period, there has been a decline in the share of income that goes to labour relative to capital. And this pattern has persisted while labour productivity has increased. Concerns with hollowing out of the middle class and income polarization along different groups of population galvanizes headlines regularly and feed into social unrest. These trends left unattended, automation is likely to exacerbate the inequalities and vulnerabilities and entail more apprehension, whether founded or not on evidence, and more resistance to change.

A broader policy and research agenda

  • For a more positive outlook into the future of automation and work in this environment, there is a need for a broader value-driven policy and research agenda that  engages multiple actors, spans to other geographies and provides a more integrated perspective. Beyond net job destruction and creation counts, induced by automation, distribution of jobs and skills, productivity and income gains should be the focus of research and policy.
  • Space for dialogues. There are examples of how more acceptable and equitable outcomes can be negotiated through social dialogue. The highly automated Hamburg Port is a case in point. Advanced automation has been accompanied by internal redeployment of employees to other jobs and tasks, their re-skilling and up-skilling packages, and redistribution of productivity gains through new working time arrangements and wage compensations.
  • Another innovative form of dialogue to explore, is dialogue among scientists and technology innovators with the research community in economic and social sciences.
  • Transition policies should become permanent features of public policy action and enterprise strategies, facilitating redeployment within firm, sector or economy. Use of  fiscal policies as well as private sector financing  can support active transitions in particular for those made vulnerable to automation, and who are in structural disadvantage in the labour markets.
  • Expansion and distribution of learning and re-skilling opportunities as automation and other technological innovations require different and continuously evolving  set of skills. Their accessibility to those who need them most can be powerful means to reduce inequalities.

The challenges of disruption in labour markets as a result of new waves of automation are real but more complex than a narrow focus on the potential job displacement and job creation impact. While this time too, the future may evolve in unpredictable ways, there is a need for a broader policy and research agenda and actions that accompany these transformations. In the polarized environment of today and the rapid pace of technological innovation, the time is now and the time span is limited to invest in new social engineering  and cooperative mechanisms that create more equitable and sustainable outcomes.

__________________


Arntz, Melanie; Gregory; Terry; Zierahn, Ulrich. 2016. “The risk of automation for jobs in OECD Countries: A comparative analysis”, OECD Social, Employment and Migration Working Paper No. 189. Paris, OECD Publishing.

Frey, Carl Benedikt; Osborne, Michael. 2013. “The future of employment: How susceptible are jobs to computerisation?”, Oxford, Oxford Martin Programme on Technology and Employment, a revised version of which was published in 2017 in Technological Forecasting and Social Change, Vol. 114.

ILO, Employment Policy Brief 2017. New automation technologies and job creation and destruction dynamics.

McKinsey Global Institute. 2017. A future that works: automation, employment, and productivity.

World Economic Forum. 2018. The Future of Jobs Report 2018.

World Bank. 2016. World development report 2016: Digital dividend. Washington DC, World Bank.

NOTE: The opinions expressed here are those of the author and not of the GLO, which has no institutional position.

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Journal of Population Economics: Issue 2/2019 Table of Content & Ten New Associate Editors

Journal of Population Economics. Volume 32 Number 2 is now available online.

Ten new articles in Population Economics are published, see listing and access below. Ten new Associate Editors have been appointed. Their names and pictures are below.

In this issue: TABLE OF CONTENT and article access
National identity under economic integration
Chun-Fang Chiang, Jin-Tan Liu & Tsai-Wei Wen
» Abstract   » Full text HTML   » Full text PDF
OPEN ACCESS TO THE PUBLIC for a limited time!
Concrete measures: the rise of public housing and changes in young single motherhood in the U.S.
Katharine L. Shester, Samuel K. Allen & Christopher Handy
» Abstract   » Full text HTML   » Full text PDF
Does public insurance coverage for pregnant women affect prenatal health behaviors?
Dhaval M. Dave, Robert Kaestner & George L. Wehby
» Abstract   » Full text HTML   » Full text PDF
Closing or reproducing the gender gap? Parental transmission, social norms and education choice
Maria Knoth Humlum, Anne Brink Nandrup & Nina Smith
» Abstract   » Full text HTML   » Full text PDF
Intergenerational income mobility: access to top jobs, the low-pay no-pay cycle and the role of
education in a common framework
Paul Gregg, Lindsey Macmillan & Claudia Vitto
» Abstract   » Full text HTML   » Full text PDF OPEN ACCESS TO THE PUBLIC
Family support or social support? The role of clan culture
Chuanchuan Zhang
» Abstract   » Full text HTML   » Full text PDF
Revisiting the relationship between longevity and lifetime education: global evidence from
919 surveys
Mohammad Mainul Hoque, Elizabeth M. King, Claudio E. Montenegro & Peter F. Orazem
» Abstract   » Full text HTML   » Full text PDF
Rising longevity, fertility dynamics, and R&D-based growth
Koichi Futagami & Kunihiko Konishi
» Abstract   » Full text HTML   » Full text PDF
Premature mortality and poverty measurement in an OLG economy
Mathieu Lefèbvre, Pierre Pestieau & Gregory Ponthiere
» Abstract   » Full text HTML   » Full text PDF
Unequal hopes and lives in the USA: optimism, race, place, and premature mortality
Carol Graham & Sergio Pinto
» Abstract   » Full text HTML   » Full text PDF

Newly appointed Associate Editors

  • Quamrul Ashraf, Williams College, USA
  • Andrew Clark, Paris School of Economics, France
  • Avraham Ebenstein, Hebrew University of Jerusalem, Israel
  • Shuaizhang Feng, Jinan University, Guangzhou, China
  • Moshe Hazan, Tel Aviv University, Israel
  • Eliana La Ferrara, Bocconi University, Milan, Italy
  • Terra McKinnish, University of Colorado, USA
  • Jessamyn Schaller, University of Arizon, USA
  • Kompal Sinha, Macquarie University, Sydney, Australia
  • Rainer Winkelmann, University of Zurich, Switzerland

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Immigration restrictions lead to cultural separation across generations!

Issue 2019/1 of the Journal of Population Economics is published: Please see for the Table of Content: Volume 32, Issue 1, January 2019

The article in the new issue

Immigration restrictions and second-generation cultural assimilation: theory and quasi-experimental evidence

By Fausto Galli, Giuseppe Russo; pp. 23-51

Abstract

“We study the effects of immigration restrictions on the cultural assimilation of second-generation migrants. In our theoretical model, when mobility is free, individuals with a stronger taste for their native culture migrate temporarily. When immigration is restricted, however, these individuals are incentivized to relocate permanently. Permanent emigrants procreate in the destination country and convey their cultural traits to the second generation, who will therefore find assimilation harder. We test this prediction by using the 1973 immigration ban in Germany (Anwerbestopp) as a quasi-experiment. Since the ban only concerned immigrants from countries outside the European Economic Community, they act as a treatment group. According to our estimates, the Anwerbestopp has reduced the cultural assimilation of the second generation. This result demonstrated robustness to several checks. We conclude that restrictive immigration policies may have the unintended consequence of delaying the intergenerational process of cultural assimilation. “

Read further open access for a short period:

Yoo-Mi Chin & Nicholas Wilson, Disease risk and fertility: evidence from the HIV/AIDS pandemic, Journal of Population Economics, 31 (2018), 429–451.

Kuznets Prize Winner 2019.
The paper is freely downloadable for a short period. The Award Study shows that a rise in the disease risk increases the total fertility rate and the number of surviving children, a finding which has important policy implications.

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Migration fosters economic adjustment after shocks. European flexibility has increased.

Issue 2019/1 of the Journal of Population Economics is published: Please see for the Table of Content: Volume 32, Issue 1, January 2019

The Lead Article is about:
Migration as an adjustment mechanism in the crisis? A comparison of Europe and the United States 2006–2016

Authors: Julia Jauer, Thomas Liebig, John P. Martin, Patrick A. Puhani

Abstract

” We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixed-effects regressions using regional panel data, we find that Europe’s migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes—i.e. an upper-bound estimate—up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals.”

Read also open access for a short period:

Yoo-Mi Chin & Nicholas Wilson, Disease risk and fertility: evidence from the HIV/AIDS pandemic, Journal of Population Economics, 31 (2018), 429–451.

Kuznets Prize Winner 2019.
The paper is freely downloadable for a short period. The Award Study shows that a rise in the disease risk increases the total fertility rate and the number of surviving children, a finding which has important policy implications.

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Kuznets Prize of the Journal of Population Economics given at the #ASSA2019 Reception of IESR in Atlanta.

The awarded study receiving the Kuznets Prize shows that a rise in the disease risk increases the total fertility rate and the number of surviving children. This has important policy implications.

The Kuznets Prize Paper of the Journal of Population Economics in a particular year is selected by the Editors of the Journal among the papers published in the previous year. Then the winners will be presented in a prize ceremony. This time, the winners remained confidential until January 4, 2019. The prize committee for the 2019 award consisted out of Alessandro Cigno, Erdal Tekin, Junsen Zhang and Klaus F. Zimmermann selecting from the 2018 published articles they were in charge of as acting Editors.

Dean Shuaizhang Feng, Head of the Institute for Economic and Social Research (IESR) of Jinan University, had invited the members of the Global Labor Organizations (GLO) and the Kuznets Prize Ceremony of the Journal of Population Economics as other ASSA 2019 participants to join the reception of the Institute. IESR and GLO are collaborating organizations, and Shuaizhang Feng is a GLO Fellow and Associate Editor of the Journal.

GLO President Zimmermann (UNU-MERIT & Maastricht University) and Editor-in-Chief of the Journal had visited Jinan University and IESR in March 2018 for a longer period and a GLO-IESR workshop. He had also presented the Journal in 2018 to various academic events in Beijing, Xiamen and Hongkong to strengthen the already strong contacts to the Chinese research community. A larger number of economists participated, including many Editorial Board Members of the Journal of Population Economics and Kuznets Prize winners of previous years.

Shuaizhang Feng reported about the activities of IESR and the hiring interviews at the ASSA job market and explained the attractive research climate at the Institute. He also warmly welcomed the affiliates of GLO and the Journal of Population Economics. Klaus F. Zimmermann congratulated Feng for the successful development of IESR and the strong research climate and the attractive working conditions he had observed while visiting the Institute in 2018 and met with the very many strong and ambitious researchers.

Zimmermann also welcomed the 2018 Kuznets Prize Winner, Le Wang (University of Oklahoma), who received the award together with Chunbei Wang (University of Oklahoma) for their article:

Knot yet: Minimum marriage age law, marriage delay, and earnings, Journal of Population Economics (2017), 30(3), pp. 771-804.

Both authors had studied and graduated at Jinan University before they came to the United States. Le Wang expressed his gratitude for receiving the Kuznets Prize and explained how it created visibility for his work.

Then the 2019 Kuznets Prize paper was announced. Studying the HIV/AIDS pandemic using national household survey data from 14 sub-Saharan African countries, it suggests that a rise in the disease risk increases the total fertility rate and the number of surviving children. This has important policy implications.

Yoo-Mi Chin & Nicholas Wilson, Disease risk and fertility: evidence from the HIV/AIDS pandemic, Journal of Population Economics, 31 (2018), 429–451.

Abstract: A fundamental question about human behavior is whether fertility responds to disease risk. The standard economic theory of household fertility decision-making generates ambiguous predictions, and the response has large implications for human welfare. We examine the fertility response to the HIV/AIDS pandemic using national household survey data from 14 sub-Saharan African countries. Instrumental variable (IV) estimates using distance to the origin of the pandemic suggest that HIV/AIDS has increased the total fertility rate (TFR) and the number of surviving children. These results rekindle the debate about the fertility response to disease risk, particularly the HIV/AIDS pandemic, and highlight the question of whether the HIV/AIDS pandemic has reduced GDP per capita.

Yoo-Mi Chin is an Assistant Professor of Economics at Baylor University with a Ph.D. from Brown University. She is also a Fellow of the Global Labor Organization (GLO). Most of her research focuses on the analysis of domestic violence. She has published her previous work in the Journal of Applied Statistics, the Journal of Health Economics, and World Development, among other outlets. Prior to joining Baylor University, she was an Assistant Professor at the Missouri University of Science & Technology.

Nicholas Wilson is a Fellow with the Office of Evaluation Sciences, an Associate Professor of Economics at Reed College and the Chair of the Department of Economics. He is also a Fellow of the Global Labor Organization (GLO). His research focuses on fundamental puzzles about human behavior in the context of health, development, and behavioral economics. Prior to joining Reed College, he was a Visiting Scholar at the University of California, Berkeley and an Assistant Professor of Economics at Williams College. He has published a larger number of papers in journals including the American Economic Review, Demography, Economics & Human Biology, Journal of Development Economics and Journal of Health Economics.

Yoo-Mi Chin was present at the ceremony and happily took the prize. The large crowd of participants congratulated the prize winners and networked intensively within the remaining reception time.

Yoo-Mi Chin & Nicholas Wilson

Yoo-Mi Chin & Klaus F. Zimmermann
Klaus F. Zimmermann & Shuaizhang Feng

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GLO Discussion Papers December 2018 & Discussion Paper of the Month

The discussion paper of the month examines the potentials multiple language skills have for employment and wages in a globalized world. The research finds in the context of an open and multilingual economy that language training improves employability, but the skills are not sufficiently rewarded by higher wages.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs downloadable for free.

GLO Discussion Paper of the Month: December

Discussion Paper No. 289 Evaluation of Language Training Programs in Luxembourg using Principal StratificationDownload PDF
by Bia, Michela & Flores-Lagunes, Alfonso & Mercatanti, Andrea

GLO Fellow Alfonso Flores-Lagunes

Abstract: In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using high quality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are “truncated” by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual’s hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation. It appears that, in the context of an open and multilingual economy, language training improve employability but the language skills acquired are not sufficiently rewarded to be reflected in higher wages.

GLO Discussion Papers of December 2018

Titles and free access/links to GLO Discussion Papers

289 Evaluation of Language Training Programs in Luxembourg using Principal StratificationDownload PDF
by Bia, Michela & Flores-Lagunes, Alfonso & Mercatanti, Andrea

288 Bounds on Average and Quantile Treatment Effects on Duration Outcomes under Censoring, Selection, and NoncomplianceDownload PDF
by Blanco, German & Chen, Xuan & Flores, Carlos A. & Flores-Lagunes, Alfonso

287 Anti-Migration as a Threat to Internationalization? A Review of the Migration-Internationalization LiteratureDownload PDF
by Hatzigeorgiou, Andreas & Lodefalk, Magnus

286 Some unpleasant consequences of testing at lengthDownload PDF
by Brunello, Giorgio & Crema, Angela & Rocco, Lorenzo

285 Does Money Relieve Depression? Evidence from Social Pension Expansions in ChinaDownload PDF
by Chen, Xi & Wang, Tianyu & Busch, Susan H.

284 Media Attention and Choice of Major: Evidence from Anti-Doctor Violence in ChinaDownload PDF
by Bo, Shiyu & Chen, Y. Joy & Song, Yan & Zhou, Sen

283 Elite School Designation and House Prices – Quasi-experimental Evidence from Beijing, ChinaDownload PDF
by Huang, Bin & He, Xiaoyan & Xu, Lei & Zhu, Yu

282 Commuting Patterns, the Spatial Distribution of Jobs and the Gender Pay Gap in the U.S.Download PDF
by Gutierrez, Federico H.

281 The Effect of Self-Employment on Income InequalityDownload PDF
by Schneck, Stefan

GLO DP Team
Senior Editors:
Matloob Piracha (University of Kent) & GLO; Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University).
Managing Editor: Magdalena Ulceluse, University of Groningen. DP@glabor.org

GLO Fellows Stijn Baert & Sunčica Vujić find that volunteering fosters employment

Caring seems to be at odds with the simple model of economic agents as understood by the wider societal audience. However, care taking is a more and more popular field in economic analysis. A recent study in the Journal of Population Economics, the leading academic outlet in the field of population economics, is now establishing a volunteering premium. This implies that not only people care, it also pays to care.

Both authors, Stijn Baert & Sunčica Vujić, are Fellows of the Global Labor Organization (GLO), an international organization that supports academic international exchange and the work of the Journal of Population Economics. The article was just published in the new issue of the Journal of Population Economics, , Volume 31, Issue 3, pp 819–836:

Does it pay to care? Volunteering and employment opportunities

Stijn Baert & Sunčica Vujić

» Abstract   » Full text HTML   » Full text PDF

https://doi.org/10.1007/s00148-017-0682-8

Abstract

The GLO Fellows have investigated whether volunteering has a causal effect on individual employment opportunities. A field experiment is conducted in which volunteering activities are randomly assigned to fictitious job applications sent to genuine vacancies in Belgium. They find that volunteers are 7.3 percentage points more likely to get a positive reaction to job applications. The volunteering premium is higher for females but invariant with respect to the number of engagements.

  • Baert: Ghent University, University of Antwerp, Université Catholique de Louvain, GLO and IZA, Ghent, Belgium

Stijn Baert

  • Vujić: University of Antwerp and University of Bath, Antwerp, Belgium, and GLO

Sunčica Vujić

Journal of Population Economics

Klaus F. Zimmermann; Editor-in-Chief, Journal of Population Economics; President, GLO. The Global Labor Organization (GLO) supports the Journal of Population Economics.

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New GLO Discussion Paper: Selective Labor Immigration Policies Matter in Canada

Europe is discussing how to improve the labor market performance of economic migrants and their integration chances. The Canadian immigration system is often seen as a model case. Is there an earnings benefit depending on the selection channel under the economic classe? In a new Discussion Paper of the Global Labor Organization (GLO), Casey Warman, Matthew D. Webb and Christopher Worswick provide strong empirical evidence that selection matters. Using Canadian data sources they find that relative to the Family Class, the Adult Arrivals in the Skilled Worker category have earnings that are 29% higher for men and 38% higher for women.  Child Arrival immigrants landing in the Skilled Worker Class have similar earnings advantages.

GLO Fellow Casey Warman is associated with the Department of Economics, Dalhousie University and NBER.

GLO Fellow Matthew D. Webb is associated with the Department of Economics, Carleton University

GLO Fellow Christopher Worswick is associated  with the Department of Economics, Carleton University and CReAM

Casey Warman, Matthew D. Webb & Christopher Worswick: Immigrant Category of Admission and the Earnings of Adults and Children: How far does the Apple Fall? GLO Discussion Paper No. 196.  FREE DOWNLOAD: Download PDF

ABSTRACT

Immigrants  in  many  Western  countries  have  experienced  poor  economic  outcomes. This has led to a lack of integration of child immigrants (the 1.5 generation) and the second generation in some countries.  However, in Canada, child immigrants and the second generation have on average integrated very well economically.  The study examines the importance of Canada’s admission classes to determine if there is an earnings benefit of the selection under the Economic Classes to:  (i) the Adult Arrival immigrants and (ii) the Child Arrival immigrants (1.5 generation) once old enough to enter the labor market.  The study employs unique administrative data on landing records matched with subsequent  income  tax  records  that  also  allows  for  the  linking  of  the  records  of  Adult Arrival parents and their Child Arrival children.  It is found that relative to the Family Class, the Adult Arrivals in the Skilled Worker category have earnings that are 29% higher for men and 38% higher for women.  These differences persist even after controlling for  detailed  personal  characteristics  such  as  education  and  language  fluency  at  21% for men and 27% for women. Child Arrival immigrants landing in the Skilled Worker Class have earnings advantages (as adults) over their Family Class counterparts of 17% for men and 21% for women.  These Child Arrival Skilled Worker advantages remain at 9% for men and 14% for women after controlling for child characteristics, the Principal Applicant parent’s characteristics and the parent’s subsequent income in Canada. (Abstract marginally adapted from the DP.)

The paper is forthcoming in the Journal of Population Economics. The responsible Editor has been Klaus F. Zimmermann.

The study is in line with earlier research on entry category effects of migrant’s labor market performance. For an analysis see a recent review paper:

Zimmermann, Klaus F., Refugee and Migrant Labor Market Integration: Europe in Need of a New Policy Agenda. Mimeo. Presented at the EUI Conference on the Integration of Migrants and Refugees, 29-30 September 2016 in Florence. Published in: Bauböck, R. and Tripkovic, M.,  The Integration of Migrants and Refugees.  An EUI Forum on Migration, Citizenship and Demography, European University Institute, Robert Schuman Centre for Advanced Studies, Florence 2017, pp. 88 – 100.

Titles and free access to all GLO Discussion Papers

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers).

Complete list of all GLO DPs downloadable for free.

Journal of Population Economics

Ends;

 

 

Does Foreign Aid Stop Refugee Flows? New Evidence for the Policy Debate From a New GLO Paper

In the recent heated public debates in Europe about how to control refugee flows to Europe, it is often argued that foreign aid should be helpful to moderate such migration. In a new Discussion Paper of the Global Labor Organization (GLO), Axel Dreher, Andreas Fuchs and Sarah Langlotz provide strong empirical evidence using global data sources to suggest that while exogenous aid encourages recipient governments to support the return of citizens, we find no evidence that aid reduces worldwide refugee outflows in the short term; however, the authors find effects in the very long run.

GLO Fellow Axel Dreher  is associated  with the Alfred-Weber-Institute for Economics, Heidelberg University; KOF Swiss Economic Institute; CEPR; Georg-August University Goettingen; and CESifo.

GLO Fellow Andreas Fuchs is associated with the Research Center for Distributional Conflict and Globalization & Alfred-Weber-Institute for Economics, Heidelberg University.

GLO Fellow Sarah Langlotz is associated  with the Alfred-Weber-Institute for Economics, Heidelberg University.

Axel Dreher, Andreas Fuchs & Sarah Langlotz: The Effects of Foreign Aid on Refugee Flows, GLO Discussion Paper No. 195.  FREE DOWNLOAD: Download PDF

ABSTRACT

This article is the first to systematically study whether foreign aid affects the net flows of refugees from recipient countries. Combining refugee data on 141 origin countries over the 1976-2013 period with bilateral Official Development Assistance data, we estimate the causal effects of a country’s aid receipts on both total refugee flows to the world and flows to donor countries. The interaction of donor-government fractionalization and a recipient country’s probability of receiving aid provides a powerful and excludable instrumental variable,when we control for country – and time-fixed effects that capture the levels of the interacted variables. Although our results suggest that exogenous aid induces recipient governments to encourage the return of their citizens, we find no evidence that aid reduces worldwide refugee outflows or flows to donor countries in the short term. However, we observe long-run effects after four three-year periods, which appear to be driven by lagged positive effects of aid on growth. (Abstract marginally adapted from the DP.)

The study is in line with earlier research on South-North refugee migration. As Rotte, Vogler and Zimmermann (1997) have shown in their econometric analysis using refugee migration data to Germany, the issue had been discussed before. Short-term measures would not work, a long-term perspective would be needed.

Ralph Rotte, Michael Vogler & Klaus F. Zimmermann (1997), South-North Refugee Migration: Lessons for Development Cooperation, Review of Development Economics, 1 (1), pp. 99-115. Access.

Abstract: Migration has become a major concern of European development policies. By improving socio-economic and political conditions through development cooperation, a reduction of South-North migration flows is envisaged. This new approach is examined by analyzing the causes of asylum migration from developing countries to Germany. The econometric findings suggest that support of democracy, economic development and trade will not reduce migration, at least not in the medium-run. However, restrictive legal measures work. Migration control by international development cooperation therefore seems to need a long-term perspective.

Titles and free access to all GLO Discussion Papers

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers).

Complete list of all GLO DPs downloadable for free.

Ends;

European Development Research Network publish special issue on Migration & Development: Research & Policy

A high-profile workshop organized by the European Development Research Network focused on how migration and migration policies can affect economic development and studied the policies that strengthen the benefits of migration for both sending and receiving countries. The event took place at Bonn University on December 5, 2016 under the leadership of Stephan Klasen (University of Goettingen), the President of the European Development Research Network.

The keynote speaker of the event had been Klaus F. Zimmermann (UNU-MERIT, Maastricht University and ZEF, Bonn University), who is also the President of the Global Labor Organization (GLO).

GLO Discussion Paper No. 70 Migration for Development: From Challenges to Opportunities – Download PDF

by Klaus F. Zimmermann

Background paper to the keynote presentations to the European Development Conference 2016 on “Migration and Development” at Bonn University, December 5, 2016, and to the 22. Eurasia Business and Economics Society (EBES) Conference, May 24-26, 2017 at Sapienza University of Rome.

The papers of this event have now been published in French and English in the Revue D’Économie Du Développement collecting also articles of GLO Fellows Hillel Rapoport (Paris School of Economics), Dean Yang (University of Michigan) and Tommaso Frattini (Milan University) and were discussed, among others, by GLO Fellows Toman Barsbai (Kiel Institute for the World Economy) and Melissa Siegel (Maastricht Graduate School of Governance and UNU-Merit). (See for more details below.)

 

 

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“Inter-generational cultural assimilation is hindered by immigration restrictions”

This is the conclusion of a new scientific study forthcoming in the Journal of Population Economics, the leading academic outlet in population economics. The Journal is supported by the Global Labor Organization (GLO).

Message: Inter-generational cultural assimilation is hindered by immigration restrictions.

Background

As migration research has shown, restricting free labor mobility leads to more migrants in the host country. People stay longer or forever and bring family. The 2014 article on Circular Migration by Klaus F. Zimmermann has reviewed this point providing evidence for Mexico and Germany. In the German context, the 1973 migration labor recruitment stop has lead to more migrants when the restrictions were binding.

In this tradition, a new scientific study forthcoming in the Journal of Population Economics investigates the impact of restrictions on cultural assimilation. If those migrants with a stronger affection to the culture of origin are more temporary, more of them stay even permanently, and restrictions may lead to a slower cultural assimilation into the host country, among them or even in the next generation. The new paper studies the impact on second-generation cultural assimilation in this context.

THE PAPER:

Immigration restrictions and second-generation cultural assimilation: theory and quasi-experimental evidence

by Fausto Galli & Giuseppe Russo

Fausto Galli is at the Dipartimento di Scienze Economiche e Statistiche, Universita’ di Salerno, Fisciano, Italy

GLO Fellow Giuseppe Russo is at the Dipartimento di Scienze Economiche e Statistiche, Universita’ di Salerno, Fisciano, Italy and at the Centre for Studies in Economics and Finance (CSEF), Napoli, Italy

Website Link. Accepted for publication, forthcoming in the Journal of Population Economics. Available online. https://doi.org/10.1007/s00148-018-0694-z

ABSTRACT

We study the effects of immigration restrictions on the cultural assimilation of second-generation migrants. In our theoretical model, when mobility is free, individuals with a stronger taste for their native culture migrate temporarily. When immigration is restricted, however, these individuals are incentivized to relocate permanently. Permanent emigrants procreate in the destination country and convey their cultural traits to the second generation, who will therefore find assimilation harder. We test this prediction by using the 1973 immigration ban in Germany (Anwerbestopp) as a quasi-experiment. Since the ban only concerned immigrants from countries outside the European Economic Community, they act as a treatment group. According to our estimates, the Anwerbestopp has reduced the cultural assimilation of the second generation. This result demonstrated robustness to several checks. We conclude that restrictive immigration policies may have the unintended consequence of delaying the intergenerational process of cultural assimilation.

The responsible editor has been Klaus F. Zimmermann.

Journal of Population Economics

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Eastern Orthodox believers are less happy and have less social capital, a new GLO study shows.

Relative to Catholics, Protestants and non-believers, those individuals of Eastern Orthodox religion seem to be less happy, have less social capital and prefer old ideas and safe jobs. In a new Discussion Paper of the Global Labor Organization (GLO), Simeon Djankov and Elena Nikolova provide strong empirical evidence using global data sources to suggest that this is support for the received Berdyaev hypothesis of communism as a successor of orthodoxy.

Simeon Djankov  is associated  with the London School of Economics and Political Science, UK and the Peter G. Peterson Institute for International Economics, USA.

GLO Fellow Elena Nikolova is associated with the Central European Labor Studies Institute, Slovakia, the Leibniz Institute for East and Southeast European Studies, Regensburg, Germany, and University College London.

Simeon Djankov & Elena Nikolova: Communism as the Unhappy Coming, GLO Discussion Paper No. 192FREE DOWNLOAD.

ABSTRACT

Eastern Orthodox believers are less happy compared to those of Catholic and Protestant faith using data covering more than 100 countries around the world. Consistent with the happiness results, the study also finds that relative to Catholics, Protestants and non-believers, those of Eastern Orthodox religion have less social capital and prefer old ideas and safe jobs. In addition, Orthodoxy is associated with left-leaning political preferences and stronger support for government involvement in the economy. Compared to non-believers and Orthodox adherents, Catholics and Protestants are less likely to agree that government ownership is a good, and Protestants are less likely to agree that getting rich can only happen at the expense of others. These differences in life satisfaction and other attitudes and values persisted despite the fact that communist elites sought to eradicate church-going in Eastern Europe, since communists maintained many aspects of Orthodox theology which were useful for the advancement of the communist doctrine. The findings are consistent with Berdyaev’s (1933, 1937) hypothesis of communism as a successor of Orthodoxy. (Abstract marginally adapted from the DP.)

Titles and free access to all GLO Discussion Papers

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers).

Complete list of all GLO DPs downloadable for free.

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A Full Employment Strategy for Europe: New GLO Discussion Paper of Ritzen & Zimmermann

Why not be more ambitious? Ritzen and Zimmermann suggest coordinated labor policies for a European full employment strategy.

Jo Ritzen is Professor of International Economics of Science, Technology and Higher Education, Maastricht University, UNU‐MERIT, Graduate School of Governance. Klaus F. Zimmermann is Professor, UNU‐MERIT, Maastricht University and Bonn University; President, Global Labor Organization (GLO) and Research Fellow, CEPR.

Since years, Ritzen and Zimmermann have discussed the development of the European labor markets as a core factor behind Euroscepticism, which has been seen as posing an existential threat to the European Union. Therefore, European labor policies need to become more ambitious to fight unemployment. In their new discussion paper, Ritzen and Zimmermann outline the challenges and perspectives of a full employment policy across Europe: “We need a full employment strategy for Europe!”

Jo Ritzen & Klaus F. Zimmermann: Towards a European Full Employment Policy, GLO Discussion Paper No. 191 FREE DOWNLOAD.

ABSTRACT

Full employment in the European Union member states is a challenge but feasible, also in downswings of the business cycle and during stages of increased robotization. It requires labor legislation that ensures flexibility and retraining, responsive labor sharing during the business cycle and to individual life cycle needs, government interventions to supply supplemental employment and revamping dual education. The future of work is better ensured with coordinated European full employment labor policies establishing fair work conditions based on long-run business strategies as well as a fair distribution of national income between labor and capital.

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Jo Ritzen (right) and Klaus F. Zimmermann at UNU-MERIT, Maastricht.

In 2017, Jo Ritzen has published a related book on: A Second Chance for Europe. Economic, Political and Legal Perspectives of the European Union, Springer Verlag Heidelberg.

Titles and free access to all GLO Discussion Papers

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers).

Complete list of all GLO DPs downloadable for free.

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GLO Discussion Paper of the month: How Adult Wellbeing is Affected by Family and Childhood & ALL MARCH GLO DP’s OPEN ACCESS

Titles and free access/links to GLO Discussion Papers

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs downloadable for free.

Discussion Paper of the Month: March

Flèche, Sarah & Lekfuangfu, Warn N. & Clark, Andrew E. , The Long-Lasting Effects of Family and Childhood on Adult Wellbeing: Evidence from British Cohort Data, GLO Discussion Paper, No. 184, March 2018. Free download.

Abstract: To what extent do childhood experiences continue to affect adult wellbeing over the life course? Previous work on this link has been carried out either at one particular adult age or for some average over adulthood. We here use two British birth-cohort datasets (the 1958 NCDS and the 1970 BCS) to map out the time profile of the effect of childhood experiences on adult outcomes, including life satisfaction. We find that the effects of many aspects of childhood do not fade away over time but are rather remarkably stable. In both birth-cohorts, child non-cognitive skills are the strongest predictors of adult life satisfaction at all ages. Of these, emotional health is the strongest. Childhood cognitive performance is more important than good conduct in explaining adult life satisfaction in the earlier NCDS cohort, whereas this ranking is inverted in the more recent BCS.

GLO Discussion Papers of March 2018

190 Residential Satisfaction for a Continuum of Households: Evidence from European Countries – Download PDF
by Borgoni, Riccardo & Michelangeli, Alessandra & Pirola, Federica

189 The economics of university dropouts and delayed graduation: a survey – Download PDF
by Aina, Carmen & Baici, Eliana & Casalone, Giorgia & Pastore, Francesco

188 The Optimal Graduated Minimum Wage and Social Welfare – Download PDF
by Danziger, Eliav & Danziger, Leif

187 Minority Groups and Success in Election Primaries – Download PDF
by Epstein, Gil S. & Heizler, Odelia

186 Two and a half million Syrian refugees, skill mix and capital intensity – Download PDF
by Akgündüz, Yusuf Emre & Torun, Huzeyfe

185 Voting in Hiring Committees: Which “Almost” Rule Is Optimal? – Download PDF
by Baharad, Eyal & Danziger, Leif

184 The Long-Lasting Effects of Family and Childhood on Adult Wellbeing: Evidence from British Cohort Data – Download PDF
by Flèche, Sarah & Lekfuangfu, Warn N.s & Clark, Andrew E.

 

Successful GLO team:

GLO Managing Director Matloob Piracha (University of Kent, right) and GLO President Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University, left).

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GLO President Klaus F. Zimmermann on: Why we need global scientific policy advice.

Evidence-free policy making is on the move. This is a particular challenge for the relationship between scientists and policymakers. A workshop with a high-ranked panel of scientists in Budapest engaged in policy advice and policy-making will debate this in the face of the ongoing debate about the future of the Central European University (CEU). The open event takes place on September 6, 2017 on the premises of CEU.

The issue is also debated during the  Academia Europaea 29th Annual Conference 2017 in the Hungarian Academy of Sciences, Budapest, on Tuesday September 4-6, 2017. Academia Europaea (AE) is the Academy of Europe.

Klaus F. Zimmermann (UNU-MERIT, Maastricht & Bonn University) is President of the Global Labor Organization (GLO) and Member of the AE. The AE Council of Academia Europaea has just confirmed his position as Chair of the AE Section “Economics, Business and Management Sciences”.

Zimmermann writes on “Why we need global scientific policy advice”:

“Scientific research does not have to follow socio-political concerns, but it is often inspired by practical challenges. While science cannot help policymakers in cases where hard evidence and convincing findings are lacking, both sides should nonetheless engage in evidence-based policy advice. National and international labor market policies provide a number of good examples how this concept can work.

The concept has, however, come more under pressure in recent years leading to an age of evidence-free policy making at a time when fake-news became fashionable.

The world has learned a lot from the evidence-based policy making of the successful German labor market reforms. This has been a great step forward. On the other hand, many in Europe still fear the economic and social consequences of open and mobile labor markets – despite the proven success of EU enlargement and the available evidence from numerous international migration studies. Unfortunately, the new refugee issue has led people to increasingly ignore such findings after 2015.

But even though the success and the potential of evidence-based policy advice have been widely shown, the concept is subject to criticism from various sides. The necessary independence cannot be guaranteed, a common arguments goes. From this point of view, any policy recommendations are ultimately driven by political and economic interests and dependencies. This allegation is an attack on the scientist’s professional ethos, which includes compliance with the principles of good scientific practice, the pursuit of robust findings, and the impartial communication of these findings. New ethics codes, which the profession has recently adopted, ensure that these principles are upheld.

While good science is always global, some claim that good policy advice must be primarily national in scope. To be sure, national contexts and institutional differences are relevant for a policy advisor. But the increasing global interdependence leaves no room for provincial strategies. For highly open economies like Germany, policy is no longer national. Since globally oriented science ensures the competitiveness of national policy advisors, the quality of German policy advice would be threatened if it were to concentrate on national peculiarities alone.

Evidence-based policy advice, moreover, requires a combination of research and advice: The researcher also acts as an advisor, while the advisor also conducts research. In Germany, the Science Council and other scientific organizations have always stressed the need for this dual role, and the Academies of Science have been practicing it worldwide. Opponents of this concept claim that the dirty business of policy making only keeps scientists from doing good research. Likewise, the demands of policymakers are better met, according to the argument, if they free themselves from the constraints of seeking science-based advice.

Of course, there will always be scientists who shy away from offering policy advice, just as well as policy advisors who do not want to do research. This is not to be condemned. But these two types cannot be considered actors of evidence-based policy advice. And in the long run, this is likely to result in policies of inferior quality. Only the best scientific findings should provide the foundation for important economic policy decisions. Only genuine scientists, i.e., those who contribute to the advancement of science through their own publications, can produce such output, inspired by the challenges of their advisory role, and communicate their results as evidence-based policy advice. This superiority is owed to global competition both in research and policy advice, which ensures the use of the best methodology and findings.”

Revised version of an op-ed of Zimmermann published in IZA Compact 4/2015, p. 16, and on the website of the Academia Europaea, The Academy of Europe.

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Zimmermann in front of the Hungarian Academy of Science, Budapest

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GLO Fellows Asadullah & Maliki on: Bottling Indonesia’s Gini

GLO Fellows M Niaz Asadullah and Maliki have just posted an article on the future of Indonesia with PROJECT SYNDICATE.

M Niaz Asadullah is Professor of Development Economics at the University of Malaya in Kuala Lumpur, and Head of the Southeast Asia cluster of the Global Labor Organization.

Maliki, a Global Labor Organization research fellow, is Director for Population Planning and Social Security at the Indonesian Ministry of National Development Planning (Bappenas).

JAKARTA – When Indonesia declared independence from Dutch rule in 1945, the country’s founder, Sukarno, called on his people to build a nation that would “stand in strength,” eternally united. That mantra – unity and strength – helped shape the country’s future, including its approach to economic development. During much of Indonesia’s early history, its egalitarian distribution of wealth and assets set it apart from its neighbors.

But seven decades later, the legacy of equality is fading. If Indonesia is to remain one of Asia’s most robust economies, it is essential that its current leadership recommit to narrowing the socioeconomic gap.

During much of the 1970s and 1980s, Indonesia’s low level of income inequality helped raise living standards and reduce poverty. In 1970, just 25 years after independence, the country managed an enviable distribution of wealth among a diverse population, with a Gini coefficient (a common measure of income inequality) of 0.35 (with zero representing maximum equality). By comparison, neighboring Malaysia had a Gini coefficient of 0.50.

Indonesia’s remained roughly the same for decades. But, since the Asian financial crisis in 1997, income gaps have widened throughout the region, and in Indonesia in particular, where social welfare programs have barely stemmed the rise in inequality. This year, Indonesia’s Gini coefficient is around 0.39, only slightly better than the 0.41 recorded in 2014.

To economists like us, this trend is deeply worrying. Because persistent high or rising inequality can contribute to political instability and undermine social cohesion, it is critical that Indonesia address it. Paradoxically, Malaysia’s experience is instructive.

In Malaysia, income inequality is no longer primarily a function of ethnicity, or the rural-urban divide, as it once was. Thanks to successful redistribution strategies adopted during the 1970s and 1980s, average per capita income increased, and poverty rates fell dramatically. Though wealth distribution remains a major concern, Malaysia’s Gini coefficient has been on a steady glide toward greater equality since the mid-1970s; in 2014, for example, it dropped to 0.40 for the first time ever, (though this figure remains higher than the average for OECD economies).

Indonesia is moving in the opposite direction. Not only does it have one of the highest levels of wealth inequality in the world; it also suffers deep regional disparities. The country’s poorer eastern provinces, which have a history of ethnic violence, lag behind the rest of the country on human development indicators, infrastructure quality, and access to education. Despite the country’s overall progress, food insecurity and child malnutrition remain serious issues in the east. In other words, it is not just Indonesia’s income distribution that concerns us, but how unequal access to health care, education, and social services has become.

Our concern is widely shared. Last month, scholars, practitioners, and policymakers from around the world gathered at the Indonesian Development Forum to explore solutions to the many forms of inequality that are affecting Indonesia today. The challenges are complex, and discussions focused on the need for multipronged solutions. As Columbia University’s Jeffrey D. Sachs noted, greater investment in education, and more effective wealth redistribution strategies, are the key areas that Indonesia’s government must focus on.

The classroom is the foundation of sustainable development everywhere. Access to education is one of the best ways for poor or disadvantaged youth to become economically productive and climb out of poverty. Unfortunately, Indonesia’s public schools, especially in the east, are struggling with teacher absenteeism. Children who want to learn simply cannot when their instructors do not show up. Broadening access to education is not only about boosting enrollment rates; it also requires ensuring accountability and improving service quality.

Still, reforming the education sector alone will not be enough to close Indonesia’s wealth gap. Strategies that the government should consider include expanding social protection; creating more vocational-training programs; and overhauling the tax system. In many OECD countries, redistributive policies, like tax breaks and expansion of welfare benefits, have helped reduce inequality. If Indonesia is to hit the targets set by the United Nations’ Sustainable Development Goals for reducing inequality by 2030, it must follow these countries’ example.

There are many reasons to be hopeful. Bambang Brodjonegoro, Indonesia’s Minister of National Development Planning, has helped make social inequality a key agenda item, following the direction of President Joko Widodo. This time next year, the Indonesia Development Forum will meet again to gauge progress in our efforts to tackle regional inequality.

Clearly, the political will exists to restore greater equality to Indonesia’s economy. If current leaders can remain as focused on their vision as the country’s founders were on theirs, Indonesia will again serve as a model of unity and strength for the region.

Article copyright: Project Syndicate (posted with permission)

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GLO Heads Brown & Zimmermann on the Hounds of Globalization

Companies need to actively and positively account for the hounds of globalization – migration and digitization, issues which are core to the research efforts of the Global Labor Organization (GLO)GLO Director Alessio J.G. Brown and GLO President Klaus F. Zimmermann have just published a joint article in Germany’s leading Human Resources Magazine Personalführung (in German). 

Brown and Zimmermann both serve also as Co-Directors of POP at UNU-MERIT in Maastricht and as Honorary Professors of Maastricht University.

Abstract

Die Planung und Entwicklung der Humankapitalressourcen in den Unternehmen steht vor gewaltigen Zukunftsaufgaben. Die Globalisierung, wenn auch zunehmend bekämpft, setzt weltweite Standards und erzwingt Wettbewerb. Der Beitrag analysiert die Themenfelder Demographie, Europa, Migration und Digitalisierung. Mitarbeiterrekrutierung wird für die Unternehmung zur Herausforderung. Arbeit wird flexibler und an die Bedürfnisse der Beschäftigten angepasst. Aber ihre sozialen und wirtschaftlichen Risiken nehmen zu. Mitarbeiterführung und Mitarbeitermotivation stehen vor neuen Fragen.

A copy of the article can be found here.

Zimmermann and Brown in front of UNU-MERIT in Maastricht.

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