Labour market reform

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Population Ageing, Labour Market Reform and Economic Growth in China: A Dynamic General Equilibrium Analysis

Population Ageing, Labour Market Reform and Economic Growth in China: A Dynamic General Equilibrium Analysis

We notice that when labour market reform increases the shift of labour from agricultural to non-agricultural sectors, agricultural output declines. One reason is that we did not consider the productivity improvement generated by the labour movement in the agricultural sector. In China land is very scarce. The per capita arable land is less than 0.1 hectares in 2005, which is very low comparing with the most of developing countries. Meanwhile there are about 2.5 agricultural labourers for every hectare of arable land (China Xinhua News Agency, 2004). The high density of agricultural labour has not only resulted in low labour productivity but also prevented the development of large-scale agricultural production. When more rural labourers move out of the agricultural sector, the possibility of developing large-scale modern agriculture arises. This implies large investment in the agricultural sector and fast technology progress. Meanwhile more rural surplus labourers moving out of agricultural sector will directly improve labour productivity. Thus ignoring the productivity improvement generated by increased labour movement from agricultural - to non-agricultural sectors implies the macroeconomic effects of removing labour market discrimination are underestimated. To illustrate this point, in policy simulation two, we assume that the 28 percent reduction in agricultural and non-agricultural wage gap leads to an increase in all-factor augmenting technical change in agricultural sector by 1.5 percent in 2012. 9
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Labour Market Reform and Incidence of Child Labour in a Developing Economy

Labour Market Reform and Incidence of Child Labour in a Developing Economy

In this section, we derive the supply function of child labour from the utility maximizing behaviour of the representative altruistic poor household. There are L numbers of homogeneous working families, which are classified into two groups with respect to the earnings of their adult members. The adult workers who work in the higher paid formal manufacturing sector comprise the richer section of the working population. On the contrary, labourers who are engaged in the informal sector constitute the poorer section. There is now considerable evidence and theoretical reason for believing that, in developing countries, parents send their children to work out of sheer poverty. 2 A distinctive paper in this regard is that of Basu and Van (1998). Following their ‘Luxury Axiom’ we assume that there exists a critical level of family (or adult labour) income, W , from non-child labour sources, such that the parents will send their children out to work if and only if the actual adult wage rate is less than this critical level. We assume that each worker in the formal manufacturing sector earns a wage income, W * , sufficiently greater than this critical level. So, the workers belonging to this group do not send their children to work. On the other hand, adult workers employed in the informal sector earn W amount of wage income, which is less than W and, therefore, send many of their children to the job market to supplement low family income.
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Labour Market Reform, Rural Migration and Income Inequality in China: A Dynamic General Equilibrium Analysis

Labour Market Reform, Rural Migration and Income Inequality in China: A Dynamic General Equilibrium Analysis

Since 1978, rural economic reforms in China have released large amounts of rural labour to move to other more productive sectors such as construction, manufacturing and services. According to the second Agricultural Census China had 130 million rural labour who worked for more than one month outside of their township of residence in 2006. The corresponding data is 74 million in 1997. This large rural migration has proven to be a source of improvement in allocation efficiency and labour productivity. Though migration from rural to urban areas has been increasing rapidly in recent years, underemployment or disguised unemployment remains widespread in rural areas. Labour movement is still restricted by the household registration system (hukou) and associated regulations and policies. Notwithstanding the partial modification of the hukou system since the early 1980s, it is still the largest institutional barrier to rural labour migration in China. These institutional obstacles inhibit permanent migration of the rural labour force to urban areas. As a result, migration in China is restricted largely to a “floating population”.
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Globalization, Agro-Based Industry and Unemployment: A Three-Sector General Equilibrium Model

Globalization, Agro-Based Industry and Unemployment: A Three-Sector General Equilibrium Model

reform on factor income, sectoral growth, income inequality and informalization of labour. Under restricted capital mobility across the formal and informal sector, we obtained that tariff liberalization causes informalization of unskilled labour and widens income inequality. Labour market reform and foreign capital inflow leads to an increase in the formal employment. However, their effect on income inequality is ambiguous but can be improved under a particular sufficient condition that distributive share of capital is relatively larger in the skilled intensive sector compared to the low skilled formal sector. Results are slightly reversed when allowing for capital mobility across formal and informal sector. Under the regime of perfect capital mobility, tariff liberalization has favorable effect on either type of worker in terms of increased wage rate, however, it causes informalization of the workforce. Foreign capital inflow and decline in trade union strength unambiguously expands the scope for formalization of the labour force, however, a labour market reform policy dampens the income of the workers. Apart from analyzing the model to bring out the above propositions, the paper also digs out the serious trade-off that policy makers have to face to improve labour welfare. The trade-off is explained in terms of increased labour income and informalization of the workforce to improve labour welfare. The paper is limited to its analysis of a particular stylized model, however, there exist future scopes for extension of the model by incorporating non-traded informal intermediate sector and indexing the formal wage to food price. The paper also intends to look into possibilities of exploring such hidden tradeoffs that are inherent in the structure of the labour market.
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Job Searching and Job Matching in a Two Sector General Equilibrium Model

Job Searching and Job Matching in a Two Sector General Equilibrium Model

framework by introducing a frictionless segment of the labour market. We also examine the effects of trade reforms and labour market reforms on equilibrium rate of unemployment and wage inequality in our stylitzed economy. We find that both these reforms reduce equilibrium rate of unemployment. However, trade reforms raise wage inequality but labour market reforms reduce it. These results provide a strong theoretical basis for labour market reform in a small open economy characterized by frictional labour market.
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Developments in employment policies in Europe. Series produced from the MISEP network. Employment Observatory 38, Summer 1992

Developments in employment policies in Europe. Series produced from the MISEP network. Employment Observatory 38, Summer 1992

CONTENTS OVERALL DEVELOPMENTS Spain Italy Measures promoting labour market reform New regulations apply to entry and residence of non-EC citizens 2 2 AID TO THE UNEMPLOYED Greece Special[r]

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Economic Reforms, Frictional Unemployment and Wage Inequality     A General Equilibrium Analysis

Economic Reforms, Frictional Unemployment and Wage Inequality A General Equilibrium Analysis

Abstract: In this paper we extend the benchmark model of Diamond-Mortensen- Pissarides in a two-sector general equilibrium framework by introducing a frictionless segment of the labour market. The two sectors are the frictionless informal sector and the frictional formal sector where match friction is the root cause of unemployment. Here, both wages are flexible. Informal wage is determined by the marginal productivity rule of the worker and the formal wage is determined by the Nash-bargaining solution. We also examine the effects of trade reforms and labour market reforms on equilibrium rate of unemployment and wage inequality in our stylitzed economy. We find that both these reforms reduce equilibrium rate of unemployment. However, trade reforms raise wage inequality but labour market reforms reduce it. These results provide a strong theoretical basis for labour market reform in a small open economy characterized by frictional labour market.
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Labour Market Institutions and Labour Market Performance in the European Union

Labour Market Institutions and Labour Market Performance in the European Union

Hence, the reform of labour market is a main aspect of discussion which concerns eurozone enlargement. Moreover, labour market reform is considered as the most important component of national economic policy for countries which make effort to fulfil Maastricht ´s criteria, though labour market criterion is not their component. Bentolila – Gilles (2000;3-4) ask the question if a change of monetary authority will foster or put back the labour market reform within EMU. They refuse often mentioned idea: “the more rigidity, the higher costs associated with EMU enlargement”. If labour market flexibility may be an instrument of adjustment process in case of hitting economy by the asymmetric shock the author matters to define labour market flexibility and its aspects. We can find out the most sophisticated definition of labour market flexibility in Eamets – Masso (2003;4): “We can say that labour market flexibility shows how quickly markets adjust to the external shocks and changing macroeconomic conditions.”
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Employment Observatory: SYSDEM Trends, No  28, Summer 1997

Employment Observatory: SYSDEM Trends, No. 28, Summer 1997

The latest response to these problems was a general labour market reform that came into force on 1 January L994.Its main characteristics in relation to activation measures are: - a chang[r]

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Editorial

Editorial

land” has been prompted by the global financial crisis that emerged in 2008 and the Hartz labour market reforms in Germany. Six contributions concerning labour market reform, production systems, vocational education and training, industrial relations, employment patterns, and social policy examine the pillars of the German Model. A central argument in all of the contributions is that the German Model is undergoing a process of recalibration accompanied by increased uncertainty, rather than institu- tional breakdown. The Model’s institutional preconditions and sources of legitimacy are becoming weaker and more questioned than in the past. These processes unfold less via major crises and political interventions than through “creeping” economic and social changes.
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Wage effects of non wage labour costs

Wage effects of non wage labour costs

Our paper contributes to the small but growing literature that uses large policy changes within a country over time or across groups to evaluate their labour market effects. Our analysis makes several advances over previous studies. Unlike many previous studies we present a taylor-made model that fits the salient features of the policy changes. On the empirical side, we provide new evidence on the wage effects of non-wage labour costs. The data we use is a unique longitudinal data set which contains information on individual job histories from social security records and basic individual information from the census. Thus, we can work with all relevant job spells instead of quarterly data, as provided for instance by the Labour Force Survey. We use information on previous unemployment spells to overcome the sample selection problem we face when estimating the causal effects on wages, which results from those getting new employment not being a random sample. The rest of the paper is structured as follows. Next we briefly describe the main changes brought about by the 1997 Spanish labour market reform, while Section 3 ac- commodates the salient features of the reform into a matching model with heterogenous workers. Section 4 explains our identification strategy and section 5 presents the data. Our main estimation results are reported in Section 6. Finally, section 7, summarises the main findings of the paper.
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"Where is the Wealth?" Echoing the King's 2014 speech in light of the delay in the implementation of the new Constitution  Arab Citizenship Review No  16, 19 February 2016

"Where is the Wealth?" Echoing the King's 2014 speech in light of the delay in the implementation of the new Constitution. Arab Citizenship Review No. 16, 19 February 2016

Given the premises and the little budget allocated to education, it is difficult to see how the new and ambitious project launched by the Higher Education Council (CSE, Conseil Supérieur de l’Education) – ‘Vision pour l’éducation au Maroc 2015-2030’ – could succeed in promoting a “new excellent and egalitarian school, accessible to the greatest number of Moroccan citizens”. The Report of the Higher Council of Education (CSE) identifies three major challenges for the school system in Morocco: making schools accessible to all pupils, including those living in rural areas or coming from families who cannot afford school-related expenditures; boosting the learning of languages, with an emphasis on Arabic, English and French; and providing schools with more qualified teachers. The reform does not envisage to allocate more resources, nor to provide incentives for qualified teachers to move to the countryside. In addition, the practices of the government are very different from the theories. Between 2008 and 2013, 91 primary and secondary public schools concentrated in the urban areas of Casablanca and Rabat have been closed to be replaced by private ones 34 : a trend that
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Working their way out of poverty? : Australian sole mothers, labour market participation and welfare reform

Working their way out of poverty? : Australian sole mothers, labour market participation and welfare reform

Introduction Rising Proportion of Sole Parents Demographic Characteristics Pathways to Sole Parenthood Ethnicity Age Groups Children Educational Levels Economic Position Changes to Level[r]

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Labour market performance of immigrants in the UK labour market

Labour market performance of immigrants in the UK labour market

We next examine differences in labour force participation and employment between UK- born white British and the foreign-born. We distinguish between non-British-born whites and non-UK-born non-whites. We exclude students to remove any effects of increased par- ticipation in tertiary education. We define the participation rate as the ratio of economically active individuals over the total population. Economically active individuals include individ- uals currently unemployed, but seeking a job. We define the employment rate as the ratio of individuals working over individuals participating. Accordingly, the unemployment rate equals one minus the employment rate. The inactivity rate is one minus the participation rate. Our results are reported in Figures 3.4 (employment rates) and 3.5 (participation rates). As Figure 3.4 shows, non-white immigrants have, on average, a dramatically lower em- ployment rate than UK-born white individuals. Foreign-born whites are very similar to the UK-born whites. Differences are similar for females and for males. For males, the employ- ment gap does not appear to be present in the late 1970s, when information on immigrants in the LFS was first collected.
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ETF Yearbook 2006: Skills development for poverty reduction

ETF Yearbook 2006: Skills development for poverty reduction

in other places. With some exceptions, these are uncertain (precarious) jobs, low paid and low skilled; they deprive the individual of social rights such as future access to age or invalidity pension, health insurance, and they certainly do not fulfil health and safety at work requirements. It seems that (poor) people who have suffered most from recent economic developments, and of whom the vast majority are low-educated/low-qualified individuals or people with outdated middle-level skills, have also entered a vicious circle of further deskilling that worsens their employability even more. The lack (or loss) of technical or occupation-specific skills is not the only problem. The lack (or loss) of soft skills, positive attitudes to work and job-search skills are equally (if not more) important, and are the most difficult to redevelop through short-term measures. People who are unemployed or involved in informal or subsistence agriculture activities tend to adopt a negative attitude to ‘normal’ work, lose hope that they will ever have a ‘normal’ job (although it is mainly jobs in the public sector that are considered ‘normal’) and in general develop a lifestyle in which operating at the margins of the economy/labour market/society is acceptable. According to the opinions of employers – gathered through surveys of EU-funded CARDS programmes in several countries in the region, as well as through an in-depth survey of employers gathered by the EU-funded CARDS project ‘Support for Human Resources Development Measures for Unemployed and Redundant Employees in Sumadija, Serbia
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Transformation of Labour Relations

Transformation of Labour Relations

wheeling capital will cost workers jobs or impairs their standards of living, and that some groups of workers or countries will be left out of expanding international markets altogether. Clearly within a decade the World Bank (2005) stresses that Governments must intervene in worker–firm relations on three main fronts such as in the wage-setting process, regulating working conditions, and controlling the ‘hire and fire’ system of workers. Then the efficiency arguments stress information problems and a need to improve the matching of labor demand with supply. There may also be equity arguments if there is unequal bargaining power between employers and workers, discrimination against vulnerable groups, or incomplete or imperfect insurance of workers against risks. The new work environment demands a high degree of adaptability and flexibility in the Labour market. In this situation only the government is competent and responsible enough to ensure that this flexibility is compatible with employment security, including protection against arbitrary loss of employment, arbitrary reductions in income and unhealthy work practices.
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Pre Budget 2011 Submission, November 2010

Pre Budget 2011 Submission, November 2010

The tax wedge on labour is the gap between what the employer pays and what the employee receives. A competitive tax wedge is vital to encourage employment growth across all income categories and is an important competitive advantage in attracting and retaining highly skilled and internationally mobile workers. In Ireland, the labour tax wedge has risen for all income categories assessed by the OECD (Table 1 and Figure 1) since 2008 while the tax wedge in most OECD countries is unchanged or falling.

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State Intervention and Labour Market in India: Issues and Options

State Intervention and Labour Market in India: Issues and Options

The labour policies have been applicable to the organised private sector as well, especially for the factories. However, as rational employers, they have faced the laws as restrictions imposed on their decision making process and have attempted to maximise their returns nevertheless. Firstly, rules regarding closure of enterprises entail substantial compensation for retrenchment. Secondly, temporary or casual labour is used cautiously as after a specified time of employment they would be deemed to be permanent and entitled to higher benefits. Thirdly, wage legislations have raised the cost of hiring workers – both current wages and present value of future benefits that are to be offered to the workers in cash and kind. Such wage legislations are also practically exogenous in nature – pay revisions for government employees take place at regular intervals; this leads to wage revisions in PSUs; there is a demand for wage revision in private sector as well and real wages are revised upwards. Thus the employers face a peculiar dilemma – once they hire someone they cannot fire her; the costs of retaining is substantial and ever increasing, having no link with productivity and profitability; the cost of retrenchment (if permitted) is exorbitantly high. All these push cost of labour far above the prevalent wage level and makes labour relatively dearer compared to capital, or at least the relative price of labour compared to capital goes on increasing.
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The labour market characteristics and labour market impacts of immigrants in Ireland

The labour market characteristics and labour market impacts of immigrants in Ireland

In an earlier paper, Barrett et al. (2002) looked at the labour market impacts of all immigration into Ireland in the mid-1990s (i.e., both non-Irish immigration and returning Irish migrants). They used the educational levels of immigrants in estimating impacts and so did not attempt to capture the possibility of immigrants being employed in occupations below that which their education levels might suggest. As immigration into Ireland at the time was made up primarily of returning Irish migrants and other English speakers who were less likely to suffer any occupational disadvantage, this approach was appropriate. But with an increase in non-Irish and non-English speaking immigration in this decade, it is now important to take account of the occupation issue.
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Active labour market policies: Challenge for the Macedonian labour market

Active labour market policies: Challenge for the Macedonian labour market

The age disaggregation suggests pronounced differences in the employment and unemployment rates. Only 17.3% of youth (15-24) have been employed in 2015, as compared to 59.5% of population at age of 25-49. Looking at the dynamics over the period 2007-2015, one can note the employment rate of youth improved only a little. Similarly, the unemployment rate remains very high. Every second young individual who is seeking for the job is unemployed in Macedonia. The rate of unemployment of this age category in 2015, was 47.3%, far away from the EU-28 average youth unemployment rate of 19.6%. Youth labour force participation is low and has been falling steadily, largely owing to the increased time spent in education. Since 2005/2006, dispersed studies have been introduced in Macedonia and the number of students jumped. Additional potential explanatory factors on the low activity rate of youth include: (perception of) few employment opportunities, difficult transition from school to work, skills mismatch between employers’ needs and the competencies acquired at school and the unwillingness of employers to bear the cost of training young workers (Ministry of Labour and Social Protection, 2015).
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