Top PDF Subsidizing low-skilled jobs in a dual labor market

Subsidizing low-skilled jobs in a dual labor market

Subsidizing low-skilled jobs in a dual labor market

the scal scheme may change the demand but also the size and composition of the labor force. In presence of frictional unemployment in a dual labor market, increasing the scal burden of high skilled workers and jobs may induce changes in low-skilled and high-skilled worker job structure and in turn may be detrimental for low-skilled people situation. By introducing heterogeneous skills and possible downgrading of the high-skilled workers, we show that the eectiveness of policies aiming at reducing classical unemployment are decreasing. At the equilibrium, any additional classical unemployed re- entering the job market is accompanied by an increasing number of downgraded high-skilled workers. In practice, jobs can be characterized by the scope they oer for utilizing the worker capacities. The technology is usually such that a low-skilled job can be done by either type of workers, but a high- skilled job can only be done by a high-skilled worker. As Albrecht and Vroman (2002) put it, a Ph.D. in nuclear engineering can do rocket science or she can ip hamburger. A high-school dropout can't do rocket science but she can ip hamburger. Facing unemployment risk, some high skilled workers can accept a job that does not correspond to their level of professional qualication. For instance, Battu et al. (2000) highlight that in Britain, eleven years after graduation only 70% of graduates have a job requiring a degree. Following Hartog et al. (1994), almost 21% of high skilled workers have accepted a low-skilled position on Dutch data. In an economy where matches between high-skilled workers and low-skilled vacancies are mutually benecial, high skilled workers take jobs away from low-skilled workers. In other words, they crowd out low-skilled workers. 1 In such a situation, some people earning
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Cash holdings and labor heterogeneity:the role of skilled labor

Cash holdings and labor heterogeneity:the role of skilled labor

higher in magnitude than those of unskilled workers, modest and comparable percentage reductions in the LACs of both types of workers should lead to a much greater decrease in absolute terms in the LACs faced by high-skill firms. Second, the increased thickness of Houston’s local labor market is likely to reduce the probability of not filling a vacancy more for jobs requiring advanced skills than for unskilled jobs and to improve the employee-firm match quality more for highly skilled specialized employees than for low-skilled manual laborers (Moretti 2011; Bleakley and Lin 2012). Thus, the Katrina-induced migration to Houston should exert a stronger impact on the LACs of highly skilled workers than those of low-skilled workers. Based on these arguments, we expect Houston-based firms, in particular those with a greater share of skilled workers, to have had a lower precautionary savings motive for holding cash than the control firms. Using treatment firms headquartered in the Houston metropolitan area and matched firms headquartered in neighboring metropolitan areas, we run a difference-in-differences regression as well as a triple-difference specification with continuous treatment, the latter regression enabling us to capture the impact of exogenous variation in LACs on cash holdings conditional on different levels of LSI. Consistent with our predictions, the coefficients on the double- and triple-difference terms are negative and significant. Overall, while it is difficult to completely rule out endogeneity concerns, taken together, our three tests all provide consistent evidence of a causal effect of LSI on cash holdings.
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Equilibrium search with heterogeneous firms, workers and endogenous human capital

Equilibrium search with heterogeneous firms, workers and endogenous human capital

In this paper, we construct and analyze an equilibrium search model in a labor market where firms post wage-human capital contracts and risk neutral workers search for better job opportunities whether employed or unemployed. There are heterogeneous firms (unskilled or skilled) and workers (low-educated or high-educated), and high-educated workers may accept unskilled jobs for which they are over-qualified. In addition, the structure proportion of the offered jobs affects the equilibrium, which shows there exists a threshold that can distinguish whether the equilibrium is separating or cross-skill. The cross- skill equilibrium solution implies the workers with higher human capital are more likely to earn higher pay rates and the high-educated workers are more likely to own higher pay rates than that the low-educated workers with the same tenure are likely to.
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The Ordeal of Shelter: Continuities and Discontinuities in the Public Response to Homelessness

The Ordeal of Shelter: Continuities and Discontinuities in the Public Response to Homelessness

The emerging polarized labor market of high tech, highly skilled, professional service jobs at one end, and low-paid, menial service work (maintenance, clerical, deliver[r]

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‘McJobs’, ‘good jobs’ and skills: job-seekers' attitudes to low-skilled service work

‘McJobs’, ‘good jobs’ and skills: job-seekers' attitudes to low-skilled service work

It should be noted that any attempt to discuss job-seekers’ attitudes towards a homogeneous ‘service sector’ risks imposing a degree of generalisation that denies the term any real meaning. Even within Singlemann’s (1978) generally accepted sub-sector classifications of distributive, personal, producer and social services, service work encompasses tasks ranging from administrative support to sales to more basic forms of ‘personal services’. Nevertheless, it is clear that the increasing importance of service- oriented work can be viewed as a source of problems as well as of opportunities. For Sassen (1996) the polarisation of workers’ pay and conditions and the casualisation of employment relations that increasingly characterise work in urban labour markets are an inevitable consequence of the rise of the service economy; the growing importance of service inputs partially explains the increasing inequalities between workers in different sectors, while these inequalities are reproduced and accentuated within service work itself. Low-skilled service jobs tend to offer limited opportunities for progression, while levels of pay and shift working can also preclude workers from taking up training or engaging in networking that might otherwise provide alternative opportunities to move up the jobs ladder (Talwar, 2002). Meanwhile, traditional escape routes from poverty (such as the apprenticeship system) have disappeared (Charlesworth, 2000).
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To what extent are federal states’ prerequisites accounted for in the initial national allocation mechanism of asylum seekers and refugees?

To what extent are federal states’ prerequisites accounted for in the initial national allocation mechanism of asylum seekers and refugees?

arrived, federal states’ governments expressed and take stock of the opportunity to make up for these shortcomings. As a response to recent arrivals, many Bundesländer have enabled mechanisms as such, i.e. in first reception facilities. Examples can be found in i.e. Rhineland- Palatine with the project ‘Kompetenzen erfassen, Chancen nutzen zur Integration von Flüchtlingen in Arbeit und Ausbildung’ (Aumüller 2016: 26). In this program key competencies and gathered on a voluntary basis before persons are allocated to municipalities within the Bundesland’s territory. The project has proven to be a good practice, since municipalities gain hence a profound picture of necessity of action, which can facilitate early integration in the labour market (cf. Rhineland-Palatine 2018: 2). Similar models were introduced in Bavaria, Baden-Württemberg, Lower Saxony, Saxony, Mecklenburg Western-Pomerania and Schleswig-Holstein, which installed integration offices in all first reception facilities (Aumüller 2016: 26; Integrationsministerium Baden- Württemberg 2015: 4; Bayerische Staatsministerium 2015: 5; Freistaat Sachsen n.d.: 3; Niedersachsen 2018; Schlewsig-Hollstein 2016). In these offices social workers jointly with representatives of the Federal Employment Office offered assessment of competencies and possible career and educational pathways (Aumüller 2016: 26). Other Bundesländer offer these services as first preparations, such as in Berlin through so-called ‘Willkommen in Arbeit Büros’ (Welcome-in-Work-offices), which provide information and direct newly arrived refugees and asylum seekers to existing services (OECD Forthcoming a). NRW does not have a mechanism as such in place, but encourage participation in above described mechanisms implemented by Jobcenter and Federal Employement Agency through several instruments in its comprehensive approach towards labour market integration (Land NRW 2015: 4).
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Skill Acquisition, Incentive Contracts and Jobs: Labor Market Adjustment to Trade

Skill Acquisition, Incentive Contracts and Jobs: Labor Market Adjustment to Trade

Firm heterogeneity in the model above reflects differences in the ability to capture worker performance, but no differences in the capacity of firms to harness worker skills. As a result all firms are equally competitive in attracting teams of labor, and recruiting occurs randomly across firms offering the same occupations. The model could easily include the possibility that firms can make investments that allow them to better address the agency problem; i.e. pay a fixed costs to obtain a higher value of Γ. As a result, firms that make investments in directing worker efforts would attract higher skilled teams, and exhibit greater labor performance relative to those that do not. This approach has been taken by others in various contexts. See Yeaple (2005) and Davidson et al. (2008) for investments in technologies with skill complementarities, and Helpman et al. (2010) for investments in worker screening with complementarities between workers’ abilities. While these authors have demonstrated that greater foreign market access can incentivize technological and recruiting investments at the firm level, I am concerned presently with adjustments within firms, and
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The School Going Child Worker: An Analysis of Poverty, Asset Inequality and Child Education in Rural India

The School Going Child Worker: An Analysis of Poverty, Asset Inequality and Child Education in Rural India

household work than the household with the less educated mother (less than seven years of education). At first glance, this result appears to contradict the contention that mothers who are more educated will lower hours of child work and increase hours of study. In fact, the empirical result seems to hint that higher education of mother is detrimental to child welfare. To resolve this apparent contradiction, recall from section 4.3 that the AAI is not a measure of family income. Hence, even the same AAI in two households does not imply that income is necessarily the same. If adult rural labor markets are such that unskilled or semi skilled workers are in demand but high skilled workers are unable to secure appropriate jobs, then there is a possibility that a household “ X ” where the mother is “over educated and over skilled” has lower income than another household “Y ”where the mother is “less but suitably educated” (father’s education is at average in both households). Assuming that in both households, total parental income alone would fall short of the poverty threshold, this implies from equation (3B):
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Prototype Specification for a Real Computable General Equilibrium Model

Prototype Specification for a Real Computable General Equilibrium Model

Production, like in most CGE models, relies on the substitution relations across factors of production and intermediate goods. The simplest production structure has a single constant-elasticity-of-substitution (CES) relation between capital and labor, with intermediate goods being used in fixed proportion to output. In the production structure described below, there are multiple types of capital, land and labor, and they are combined in a nested-CES structure intended to represent the various substitution possibilities across these different factors of production. Typically, intermediate goods will enter in fixed proportion to output, though at the aggregate level, the model allows for a degree of substitutability between aggregate intermediate demand and value added. 3 The decomposition of value added has several components (see figure 1 for a representation of the multiple nests). First, land is assumed to be a substitute for an aggregate capital labor bundle. 4 The latter is then decomposed into unskilled labor on the one hand, and skilled labor cum capital on the other hand. This conforms to recent observations suggesting that capital and skilled labor are complements, which can substitute for unskilled labor. The four aggregate factors— unskilled and skilled labor, land and capital, are decomposed by type in a final CES nest.
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Exploitation in a Disruptive and Unjust Gig Economy

Exploitation in a Disruptive and Unjust Gig Economy

The agreement of the employer and the independent contractor in a gig economy is a legal agreement. The classification of the employee into an independent contractor or an employee has recently fallen into precarious territory and many workers are misclassified. This misclassification has led to unfair labor standards and many a company in the gig economy have had to face lawsuits. Cherry’s (2016) study found that, “To date, the dominant economic narrative for the gig economy has been one in which platform owners extract a share of income generated from the workers who use their platforms. This is troubling as many forms of crowd-work are situated at the crossroads of precarious work, automatic engagement, deskilling and low wages” (p,1).
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Skilled Labor Mobility in the ASEAN Economic Community (AEC): Experience from Thailand Labor Market

Skilled Labor Mobility in the ASEAN Economic Community (AEC): Experience from Thailand Labor Market

Abstract. Skilled labor mobility in the ASEAN Economic Community (AEC) plays an important issue in labor market due to the impact of globalization, especially increasing demand for high technology and integration among region. This impact leads free movement of workers among employer in service sectors, foreign investment and need more demand for skilled labor. Moreover, AEC blueprint in 2015 outlined to moves forward to free flow of skilled labor achieve strategic goal of single market and production base. These included facilitate the issuance of visas and employment passes; mutual recognition arrangements (MRAs) for major professional service; core concordance of service skills and qualifications; and enhance cooperation among ASEAN universities to increase region mobility for student and staff. To achieve the free flow of skilled labor in AEC member countries many issue have been discussed such as the mutual recognition arrangement (MRAs) for major professional services and core competencies for job skills required in the priority integration services (PIS) sectors (ASEAN Economic Community Blueprint: 2012). The objective of the study is to determine the impact of AEC on Thai labor market by using the comparison of labor immigration in AEC member countries. The paper provides a description of (a) currently govern the cross-country labor movement within ASEAN for skilled workers: and b) the analytical framework that support the discussion in deriving the recommendations that there are already experiences on these types of worker movements. The finding of Thai labor market has found in two characteristics: shortage of professionals and technicians and unskilled and semi-skilled labor.
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Dual labor market and strategic efficiency wage

Dual labor market and strategic efficiency wage

Considering a Sta kelberg equilibrium in whi h the primary se tor a ts as a leader and the se ondary se tor as a follower, we show that the Solow ondition does not hold in general and an[r]

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The Rise of Offshoring: It s Not Wine for Cloth Anymore

The Rise of Offshoring: It s Not Wine for Cloth Anymore

As we have noted, part of the movement in terms of trade may have been because of improved possibilities for offshoring. Indeed, the Heckscher-Ohlin variant of our model of offshoring predicts that as the cost of offshoring L-tasks falls, the relative world output of labor- intensive goods should rise, thereby exerting downward pressure on the relative price of these goods. However, the improved opportunities for offshoring are hardly the only—or even the most important— factor that has moved the U.S. terms of trade. For one thing, petroleum prices have risen precipitously during the period under consideration. But as these prices play no explicit role in our model, we can avoid confounding the forces of globalization with those of oil price hikes by choosing a measure of the terms of trade that excludes these prices. Still, movements in the relative prices of goods and serv- ices traded between the United States and the labor-rich economies in Asia and Latin American have moved for reasons having little to do with offshoring. As is well-known, China and India have experienced dramatic growth in recent years as these countries have improved their regulatory environments, removed impediments to investment and entry, and more fully joined the world economy. Both trade liberaliza- tion and productivity growth in these economies could account for an expansion in the relative world supply of labor-intensive goods. Since we cannot separate the part of the terms-of-trade movements because of improved offshoring from that due to productivity growth and trade liberalization in the developing countries, we shall simply lump them together and estimate what combined effect they may have had on U.S. low-skill wages.
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Homeownership And Unemployment: Outcomes And Implications

Homeownership And Unemployment: Outcomes And Implications

homeownership on unemployment spells for different types of re-employment. In estimating this relationship, two important points must be noted. First, the choice of being a homeowner may be endogenous due to selection of a person into owning or renting. An unemployed person may examine her future job prospects and decide to rent rather than own a home. For example, Moriizumi and Naoi (2011) find unemployment risk delays the timing of homeownership. Second, a homeowner may just prefer stability and decide not to take distant jobs for reasons other than homeownership. Failure to account for these selection issues would result in parameter identification problems.
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Rising House Prices in an Open Labour Market  ESRI WP166, June 2005

Rising House Prices in an Open Labour Market ESRI WP166, June 2005

We simulate this model to illustrate the effects of a housing constraint on labour supply. Firstly we trace the channels through which a rise in house prices will affect the labour market. Secondly we compare the effects of a shock to world demand for Irish output under a “with housing constraint” and a “without housing constraint” assumption. The difference between these two simulations is a measure of the potential effect of house prices on Irish labour supply and its consequences for the wider economy. Our numerical results indicate that the housing constraint could knock almost one-quarter off the growth in GNP that might be expected to arise from world output growth. Furthermore it shifts the balance of labour market growth from employment to wages, with a consequent rise in the real exchange rate. While some gradual erosion in Irish competitiveness is inevitable now that the economy has reached full employment, the infrastructural deficit in housing accelerates this process beyond that which would be naturally dictated by a fully employed workforce.
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Offshoring Intensities and Skill Upgrading of Employment in the Slovak Republic

Offshoring Intensities and Skill Upgrading of Employment in the Slovak Republic

The participation in global value chains raises the question whether the employment and created jobs are sustainable. The declining importance of manufacturing in developed OECD countries is often associated with a transfer of low-skilled jobs to CEE countries. The data of employment share for individual industries in Table 4 confirm the dominant position of manufacturing for job creation in the Slovak Republic. However, the intertemporal comparison reveals the decreasing share in total industries employment, though this is not true for division of transport equipment (the key sector of FDI inflow in the Slovak Republic). The growth rates between 1995 and 2011 show that the most jobs are created in sectors: Renting of m&eq and other business activities (such as computer and relative activities, software publishing consultancy and supply, research and development and other business activities) and retail trade. This information is very positive because these sectors create considerable demand for high skilled labor.
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Optimal Monetary Policy in a Dual Labor Market Economy

Optimal Monetary Policy in a Dual Labor Market Economy

In order to answer these important questions we propose, in this paper, a Dynamic Stochastic General Equilibrium New Keynesian (DSGE-NK) model where …rms may belong to two di¤erent …nal-goods producing sectors: one where wages and employment are determined in a competitive labor market and the other where wages and employment are the result of a contractual process between unions and …rms. In order to evaluate movements of labor along the extensive margin, we assume, as in Hansen [22] and Rogerson and Wright [31], that labor supply is indivisible and that workers face a positive probability to remain unemployed; as in Ma¤ezzoli [25], we assume that unions set wages according to the popular monopoly-union model introduced by Dunlop [12] and Oswald [28]. By doing this we depart, in this paper, from the recent literature, that has recently tried to improve on the ”standard” DNK model by considering explicitly the role of labor market frictions for monetary policy. While these papers, among which we …nd Chéron and Langot [7], Walsh [35] [36], Trigari [33], [34], Moyen and Sahuc [27] and Andres et al. [2] and, more recentlyby Christo¤el and Linzert [9] and Blanchard and Galì [4] [5], analyze monetary policy in search and matching models of the labor market à la Mortensen-Pissarides ([26]), we chose to introduce unemployment in the simpler Rogerson and Wright [31] framework and to concentrate on the fact that collective bargaining between unions and …rms may give rise to real wage rigidity. 4
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Labor Markets in South Africa During Apartheid

Labor Markets in South Africa During Apartheid

5 white community (Lipton 1985, Thompson 1995, Feinstein 2005). When the Afrikaans worker- supported National Party came to power and implemented apartheid in 1948, it legalized the practice of reserving certain occupations in the manufacturing sector for whites (Horrell 1969, Horrell 1978, Omond 1986). The government did this by handing the right to determine the racial allocation of jobs to whites through the Industrial Conciliation (IC) Act of 1956. The IC Act established an industrial relations framework that enabled trade unions and employers’ organizations to negotiate industrial labor contracts that specified which jobs went to the different race groups. Furthermore, the Act required unions to be racially segregated and excluded Africans from formal trade union representation. The consequence of this trade union segregation was that white unions were able to negotiate the exclusion of Africans from occupations that attracted large numbers of whites, a process known as job reservation. Negotiators created a skill classification for every occupation in an industry, then ranked the occupations by skill level, and finally, allocated the lowest skilled jobs to non-whites and the higher skilled jobs to whites. Evidence from the negotiation process indicates that decisions on the skill requirement were fairly arbitrary and depended more on which whites found those jobs to be attractive than on skills per se.
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Optimal Monetary Policy in a Dual Labor Market Economy

Optimal Monetary Policy in a Dual Labor Market Economy

Optimal Monetary Policy in a Dual Labor Market Economy Rossi, Lorenza and Mattesini, Fabrizio Universita Cattolica del Sacro Cuore, Milano.. Online at https://mpra.ub.uni-muenchen.de/246[r]

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Health, Research, and Entrepreneurship:

Health, Research, and Entrepreneurship:

Topics : Today’s brain circulation is a very important driver of entrepreneurial growth. It to the flow of ideas, from clever young nationals who go abroad to study, then take a job abroad, and later bring back the fruits of that study and working experience to their home country. Some authors believe that this form of migration will increase in the future in some regions, especially if economic disparities between countries continue to diminish. When skilled labor emigrates from a country, it can be argued that it represents a loss of intellectual capital and resource to the nation. Certainly when professionals like engineers, doctors and nurses emigrate en masse , it can pose a real problem to a nation as these professionals help in delivering many critical services to the people of the country. Commentators have labeled this process of emigration of skilled labor as Brain Drain and the process of immigration of skilled labor to foreign countries as Brain Gain denoting the gain of intellectual capital of host nations receiving these skilled labor. But some have lately realized that Brain Drain is only one part of the story. The other part of the story relates to the social contacts and international experience the expatriates gain when working or studying in a foreign country. These experiences and social contacts are valuable resources for the country of origin of these expatriates, provided it is able to tap into them and such a process is called Brain Circulation . In some cases like Taiwan, Greater China and India, countries have profited enormously from Brain Circulation, while in others, Brain Circulation do not seem to happen in a significant way. Why Brain Circulation can be witnessed in certain contexts and not in others is a question that is at the forefront of research questions that academics are at present grappling with in this area of study.
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