Top PDF Technology and the Demand for Unskilled Labor After the Economic Crisis

Technology and the Demand for Unskilled Labor After the Economic Crisis

Technology and the Demand for Unskilled Labor After the Economic Crisis

This study focuses on the possibility that skill-biased technological change is one of the factors for relatively poor employment conditions of the unskilled after the economic crisis. Increasing employment share of skilled workers accompanying with rising wage premium for education since implies that labor demand has shifted toward the skilled. The decomposition of changes in wage share of skilled workers into between-industry and within-industry changes suggests that the increase in the demand for skilled labor has been largely due to within-industry changes, which can be seen as reflecting the effect of the skill-biased technological change. Also the regression results indicate that the employment share of skilled workers has more rapidly increased in the industries with higher ICT (Information Communication Technology) investment intensity since the mid 1990s, hinting to the possibility that skill-biased technological changes may have come from ICT.
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International economic activities and the demand for skilled labor: evidence from Brazil and China

International economic activities and the demand for skilled labor: evidence from Brazil and China

and close to those in Table 6. The coefficients on the interaction with the comparative advantage dummy are negative in three cases but never significant. The total effect of imported inputs on the demand for skilled labor is positive suggesting that our earlier finding that imported inputs allow Brazilian plants access to skill-biased technology flows is not counteracted by the fact that plants importing inputs in comparative advantage industries may be engaging in production activities intensive in unskilled labor. For China, the effect of imported inputs shares per se on the demand for skilled labor is negative, except for education-based skills measures. Chinese plants that import higher shares of inputs in industries with comparative advantage have an even lower demand for skilled workers. This provides support to our interpretation of the negative 45 We use detailed trade flows for Brazil, China and the world taken from World Integrated Trade Solution (WITS) to compute the revealed comparative advantage indexes as detailed in Yeats (1998). Industries with values for those indexes larger than one have revealed comparative advantage.
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Technology, development and economic crisis: the Schumpeterian legacy

Technology, development and economic crisis: the Schumpeterian legacy

Technology and employment. This is a topic and a social issue placed at the center of theorizing since the beginning of the political economy discipline. Surprisingly enough, after the pioneering contributions of early neo-Schumpeterian scholars such as Freeman, Clark and Soete (Freeman et al., 1982; Freeman and Soete, 1994) this theme has been progressively marginalized in the following neo-Schumpeterian literature. 6 The main reason of this disinterest is an (implicit) belief that technology is potentially able to foster economic growth at a pace sufficient to warranty full employment. Of course the existence of labour displacing effects is not ruled out but for most of the existing literature (both mean-stream and neo-Schumpeterian) this phenomenon affects low skilled jobs while the overall impact is thought to be positive. However, there is no empirical evidence supporting this optimistic view given the difficulty of modelling and estimating the net long term aggregate effect of technological change on employment (Vivarelli 2013). The functioning and strength of the so-called compensation mechanisms (Vivarelli, 1995; Vivarelli and Pianta, 2000) crucially depends on rather axiomatic conditions such as the existence of perfect competitive markets, a perfect and continuous inputs‟ substitutability, the validity of the so-called Say‟s law which guarantees that changes in „supply conditions‟ (i.e. productivity growth and supply of new products) always generate corresponding (market clearing) changes in demand. The net aggregate employment impact of technological change becomes even more difficult to be assessed in the case of the diffusion of Information and Communication Technologies (ICT). This is because of the pervasiveness of these technologies and their widespread impact on almost any domain of our economic and social life (Evangelista et al., 2014). In the light of all this, the still dominant optimistic and supply-side view of the relationship between technological change and employment, as well as the little attention given to this crucial and socially relevant theme by neo-Schumpeterian Scholar is somehow surprising.
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The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?

The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?

For several decades now, the demand for unskilled labor in Germany as elsewhere has been declining. There is no shortage of explanations for this phenomenon: skill-biased technological change (Falk and Seim, 1999), increased international trade (Fitzenberger, 1999a) and, latterly, organizational change (Lindbeck and Snower, 2000; Fitzenberger, 1999b). (A related preoccupation is of course the extent to which declining demand for the unskilled has been exacerbated by a rigid wage structure.) In the present treatment, using information on 1,171 manufacturing plants employing on average 360,000 employees, and on 174 service sector establishments covering some 49,000 employees, we seek to address these various influences using a flexible cost function framework to derive the demand for heterogeneous labor It is precisely this latter complication that involves the use of linked employee-employer data because only the latter contain detailed wage information. We estimate inter al. the own-wage elasticity of unskilled and skilled (and highly skilled) labor as well as the elasticities of the various labor categories with respect to trade, technology, and organizational change measures. We disaggregate by manufacturing and services both because of sectoral differences in the role of trade and by reason of occupational composition.
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Regional labor demand and national labor market institutions in the EU15

Regional labor demand and national labor market institutions in the EU15

The labor market effects of the recent financial and economic crisis are rather heteroge- neous across countries and regions (see Eichhorst et al. 2010, Artha and de Haan 2011). Eichhorst et al. (2010) argue that the structure of the economy as well as labor market institutions likely influence the impact of the crisis. The pronounced disparities in labor market performance among industrialized countries and their potential causes are an is- sue of research for a long time. Differences in unemployment between European countries and the US are frequently attributed to more rigid labor market institutions in Europe (e.g. Nickell 1997). According to Decressin and Fat´as (1995) there is an insufficient response of wages to shocks in Europe compared with the US. Blanchard and Wolfers (2000) and Bertola et al. (2002) have highlighted the role of institutions as potential determinants of these differences. In contrast, Solow (2000) stresses low output growth and a corresponding weakness of labor demand as primary factors behind the persistently high unemployment of several European economies. Evidence provided by Eichhorst et al. (2010) suggests, however, that the effects of GDP reductions on labor demand and unemployment during the recent economic crisis are marked by a considerable variation across countries.
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Discussion Paper No Diffusion of Information Technology, Internet Use and the Demand for Heterogeneous Labor. Martin Falk

Discussion Paper No Diffusion of Information Technology, Internet Use and the Demand for Heterogeneous Labor. Martin Falk

In order to quantify the main factors behind the skill structure, the employment shares are regressed against the potential determinants discussed above. As noted earlier, the percentage share of zero values ranges between 7 percent for the employment share of workers with a certificate from the dual vocational system and 34 percent for the unskilled employment share. For ICT worker share the percentage of zero values is 31 percent. Table 5 reports the CLAD estimation results for the five skill classes as well as for the share of ICT workers. 9 Estimation results of ML Tobit model are reported in Table 6. Since estimates using sample weights, which correct for the stratification plan, are very close to those reported here, I do not correct for the stratification plan. Likelihood ratio test, which tests the assumption of multiplicative heteroscedastic errors versus the homoscedastic base model, can not be rejected at the 5 percent level. The CLAD and Tobit estimates, however, are qualitatively quite similar but quantitatively different in most of the cases. The difference in the coefficients is relatively moderate. For the employment share of different educational qualifications, standard ML Tobit tends to overestimate the coefficients on both the percentage of workers using a computer on the job and the percentage of workers with internet access between 15 and 30 percent in absolute terms depending on the different employment shares. In contrast, standard ML Tobit tends to underestimate the coefficient on the ratio of computers per worker.
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Impacts of Current Global Economic Crisis on Asia's Labor Market

Impacts of Current Global Economic Crisis on Asia's Labor Market

The employment impact of any stimulus package will depend significantly on how rapidly the local economy can respond to any increase in domestic demand. In this regard, policy coherence is essential. The impact of major public investment in infrastructure will depend on whether local construction materials are available and whether local suppliers and contractors, many of them small firms, have the resources and incentives necessary to participate. Similarly, social transfers to poor and low-income households will generate demand for food and other basic consumable goods, many of which are produced by farmers and local SMEs. By helping to ensure that SMEs can sustain their operations now and thereby benefit from the subsequent increase in consumer demand, policies should facilitate a rise in household incomes coordinated with supporting local economic development. Targeting small firm clusters can have particularly beneficial multiplier effects. It is crucial to strengthen administrative and institutional capacity as well as coordination among various agencies to ensure these programs are effective.
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When skilled and unskilled labor are mobile: a new economic geography approach

When skilled and unskilled labor are mobile: a new economic geography approach

Depending on the level of unskilled labor mobility, the geographical distribution of economic activity has different shapes. If unskilled labor is relatively immobile, the increase in domestic demand by a relocation of unskilled labor is relatively unimportant compared to the demand by workers remaining in the distant market. The corresponding bifurcation pattern then is a pitchfork as proposed by Pflüger (2004) and exhibits a smooth transition from dispersion to total agglomeration. If unskilled labor is relatively mobile, the number of unskilled migrants will be great even for small migration incentives. Consequently, the aggregate demand in the immigration region increases significantly and compensates the effects of fiercer competition. The corresponding bifurcation pattern then is a tomahawk as in the seminal core-periphery model developed by Krugman (1991) and agglomeration is catastrophic. If the degree of un- skilled labor mobility is very high so that the necessary no-black-hole condition is violated, complete agglomeration of skilled labor is the only stable equilibrium for any level of trade costs. This is in line with Helpman (1998) and Murata (2003), if these models are considered without the additional dispersion force.
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Transforming Africa's Structure and Composition of Trade after the Global Economic Crisis

Transforming Africa's Structure and Composition of Trade after the Global Economic Crisis

The global economic crisis resulted in public finance problems for African countries. Although economic growth and trade in Africa is expected to begin recovering in 2010, it is reliant on demand from others. Due to significant commodity price declines and low demand, African countries which generally depend on export revenues to finance their economies were faced with shortfalls in government revenues which impacted on government public sector projects and programmes. According to the 2010 Global Economic Prospects Report the world economy is projected to grow at 2.7 and 3.2 percent in 2010 and 2011, after shrinking by 2.2 percent in 2009. SSA economies are expected to grow at 3.8 percent in 2010 but this growth will be slower than that of other developing countries due to the reliance on commodities. In addition, SSA economies will grow by 4.6 percent in 2011 while other developing countries will on average grow by 5.2 percent in 2010 and 5.7 percent in 2011. However, Africa's growth is dependent on export demand from trade partners such as China, the European Union and the United States.
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Economic Development After 25 Years: Its Significance for the Current Crisis

Economic Development After 25 Years: Its Significance for the Current Crisis

The initiative and opportunity to bring about this process of change was very much due to the pressures of an economic crisis which was to a great extent the consequence of previous gove[r]

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World economy, economics and economic policy: what emerges after the crisis?

World economy, economics and economic policy: what emerges after the crisis?

comparative statics, then in equilibrium dynamics) of a developed market economy. Theorists have consistently built up models of the the behavior patterns of economic agents at the micro level (firms and households), using as analytical tools of optimization models. The question of how the famous "invisible hand of the market" of A. Smith balances supply and demand in all markets in the economy simultaneously was resolved in in the theory of general economic equilibrium, starting with the works of Lƒon Walras in the last third of the 19th century and ending with the works of K. Arrow and G. Debr„ in the middle of the twentieth century. This theory has demonstrated that the price mechanism under certain conditions leads to vectors of prices and quantities which balance supply and demand in all markets simultaneously. It was given the formal support of some remarkable properties of the equilibrium condition in the form of two welfare theorems, which established a link between the competitive equilibrium in the market economy and Pareto-optimality. It is this range of ideas first strictly formed in mid-20th century became what was called the mainstream economics and formed the basis of the scientific knowledge of the possibilities and limits of price mechanism in the market economy. However, speaking about the findings of economic science on the properties of the market system, most often do not mention that these conclusions are drawn not in general but under certain conditions.
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Recovery of Tourism Demand in Hong Kong from the Global Financial and Economic Crisis

Recovery of Tourism Demand in Hong Kong from the Global Financial and Economic Crisis

Despite the inevitable effects of financial and economic crises on tourism demand, some scholars such as Prideaux (1999) and Okumus and Karamustafa (2005) note that the relevance of these crises to tourism has been largely overlooked by both tourism and economics researchers. Greater attention to the economic issues of tourism has been called for. So far only a small number of publications have examined the impact of economic or financial crises on tourism. For example, Prideaux studies the effect of the 1997-1998 Asian financial crisis on tourism in this region and concludes that this crisis has little long-lasting effect and tourism may be more resilient to crises than previously expected. Okumus and Karamustafa (2005) investigate the impact of the economic crisis in Turkey in 2001 on the tourism industry in Northern Cyprus. Evidence of both negative and positive impacts on hospitality businesses has been identified. Very recently the Journal of Travel Research published three articles featuring on the impacts of the current financial and economic crisis on tourism in Asia and the Pacific (Song & Lin, 2010), Europe (Smeral, 2010) and North America (Ritchie, Amaya Molinar, & Frechtling, 2010), together with two overall discussion papers by Sheldon and Dwyer (2010) and Papatheodorou et al. (2010). The common recognition among the above scholars is that the crisis presents both threats and opportunities for global tourism industries. In particular, the opportunities lie in the enhanced competitive advantage of tourism businesses and tourist destinations over the longer term (Sheldon & Dwyer, 2010).
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DEPARTMENT OF ECONOMICS WORKING PAPER SERIES Analyzing Skilled and Unskilled Labor Efficiencies in US

DEPARTMENT OF ECONOMICS WORKING PAPER SERIES Analyzing Skilled and Unskilled Labor Efficiencies in US

The paper is motivated by two important facts. First, previous studies that investigate the sources of US economic growth decompose changes in output into changes in factors of production and change in overall efficiency (total factor productivity). These studies usually also assume that skilled and unskilled labor are perfect substitutes (see, e.g., Jones (2002) and Ha and Howitt (2007)). Considering a more general general production framework in which skilled and unskilled labor are imperfect substitutes and decomposing overall efficiency into skilled and unskilled efficiencies provide a better understanding of sources of the US growth. Second, there have been dramatic changes in the relative supply of skills and the skill premium, defined as the ratio of the skilled labor wage to the unskilled labor wage, in the US over the last 50 years. As shown in Figure 1, despite the rapid increase in the relative supply of skills 1 there has been a substantial increase in the skill premium over this
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Fiscal consolidation in Poland and it’s economic consequences after the crisis 2008

Fiscal consolidation in Poland and it’s economic consequences after the crisis 2008

The paper focuses on public finance and the aspect of fiscal consolidation in Poland as economic consequences after the financial crisis in 2008. The study assumes that there is a wide range of needs for fiscal consolidation implementation in European post-crisis countries. Budgets of the vast majority of European Union Members are unbalanced, their deficits have a great, negative impact on the public finance sector, as well as on countries’ GDP. The theoretical part presents a literature overview of the essence of consolidation and its role in fiscal policy. The empirical part of the paper focuses on trends, changes in the level of budget deficits in Poland and EU-27 and the influence of this on key macroeconomic indicators.
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Optimal Redistributive Taxation with Both Labor Supply and Labor Demand Responses

Optimal Redistributive Taxation with Both Labor Supply and Labor Demand Responses

Our model encompasses the standard case with only the extensive margin. A higher level of the employment tax reduces the return of participation, thereby inducing some individuals to stay out of the labor force. The optimal employment tax is inversely related to the elasticity of the labor supply, as in the “extensive response model” of Saez (2002). We introduce labor demand through skill-speci…c matching frictions à la Mortensen and Pissarides (1999). When a worker and a vacancy are randomly matched, a surplus is created. The total surplus is the di¤erence between the overall income the worker and the employer get from the match and what they would get if their search was unsuccessful. We make the simplifying assumption that the worker and the employer receive a …xed fraction of this surplus. An increase in the employment tax reduces the total surplus, thereby both the worker’s and the employer’s surplus. Therefore, a rise in the employment tax decreases the net (or after-tax) wage and increases the gross (or pre-tax) wage. Employers thus …nd less pro…table to create vacancies, which decreases the number of taxpayers. 2
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The Incidence of Local Labor Demand Shocks

The Incidence of Local Labor Demand Shocks

Next, Table 4 looks at three important non-labor outcomes: real estate rental prices, housing values, and aggregate expenditures on public assistance programs. The measures of average rental prices and housing values are purged of observable changes in the quality of the housing stock following a similar procedure to the one used to create the residualized wage measure (see Data Appendix for details). Column (1) in Table 4 reports results for rental prices, which respond strongly to local labor demand. The results for housing values in column (2) are similar in magnitude, though somewhat less precise. As with the wage results, there is no evidence of an asymmetric response in either column; the estimates of are statistically insigni…cant and at most modest in magnitude, and the nonparametric speci…cation tests fail to reject the parametric (linear) model in both columns. 28 Appendix Table A2 reports similar results using the unconditional average rental prices and average housing values, as well as results using the repeated-sales housing price index (HPI) published by the Federal Housing Finance Agency (FHFA), formerly the O¢ ce of Federal Housing Enterprise Oversight (OFHEO). Consistent with the results in Table 4, there is no evidence of an asymmetric response in any of these alternative speci…cations.
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Technology frontier, labor productivity and economic growth: Evidence from OECD countries

Technology frontier, labor productivity and economic growth: Evidence from OECD countries

A final remark concerns the use of school enrollment rate as a proxy of human capital. Apart the fact that, it is a consensus choice in the empirical literature, at a first sight, estimations based on this may seem quite restrictive since school enrollment rates don’t reflect the qualitative effect of education and the others aspects of human capital. However, even in school enrollment rates there are still many differences between respective countries; for example in 1996, the school enrollment rate in higher education was 52% in France against 18.2% in Turkey and 60.3% in Corea Republic. Also, according to Romer (2000), if R&D don’t encourage a greater number of researchers to develop new ideas, they might be inefficient. Indeed, if we have a fixed number of researchers, an increase in R&D expenditures generates simply a higher wage level for them, and will have no impact on growth rate. So, to obtain an effect on growth, the increases in the wages of researchers might encourage many agents to adopt the research career. Also, with a general purpose technology, we need high skills, consequently an increase of the number of persons with higher formation favors growth. In this case, our choice concerning school enrollment rate for the three levels of education might be relevant. Descriptive statistics are presented in Table 1.
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The Impact Of The Current Economic Crisis On The Demand For Higher Education:  An Analysis Of Spanish Distance Education Universities

The Impact Of The Current Economic Crisis On The Demand For Higher Education: An Analysis Of Spanish Distance Education Universities

360 http://www.cluteinstitute.com/ © 2012 The Clute Institute The latest measures taken by the Spanish government in 2012 1 include a 3 billion euro cutback in education, which may make sense as a savings measure for the national budget, but which clashes head on with the approach and studies mentioned above in terms of the relationship between employability and educational level, and, above all, with the situation that has been developing since the economic crisis began in terms of the growing number of students enrolled in Spanish universities. All this places the higher education sector in a scenario that highlights the need to continue working without losing quality and with the goal of improving education and competitiveness among a growing number of students who belong to a population with lower purchasing power. And it all has to be achieved with 3 billion euros less in resources. Therefore, the current situation in Spain in terms of the provision of public education is facing the twofold challenge of containing expenditure and warranting higher quality that will result in increased employability for the population.
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Determinants of Corporate Loans and Bonds before and After Economic Crisis in Korea

Determinants of Corporate Loans and Bonds before and After Economic Crisis in Korea

First, we divided the whole sample into the two groups, listed companies and unlisted companies, and ran the same regression separately to the two groups. <Table 2-1> reports the regression results for all samples, listed companies, and unlisted companies. The hypothesis here is that public companies might behave differently as compared to private companies since they have other sources of corporate financing. <Table 2-1> shows that the coefficient on list dummy variable is negative and significant: listed companies depend less on loans. Regarding firm size, profitability, collateral ability, and the effect of crisis period, the listed and unlisted companies do behave similarly.
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Ten Years After the Global Economic Crisis : A Retrospective Analysis

Ten Years After the Global Economic Crisis : A Retrospective Analysis

Accounting for the lessons learnt from the crisis ten years ago, it is worthwhile to yet again recall and consider the retrospective message of the historian referenced previously, Tooze, that he intended for the present. in the final passages of his book (tooze, 2018), he compared the current state of affairs to the sit- uation in 1914. The way he puts it: back then, the world sleepwalked into the conflict of the world war. tooze makes a cautious, but all the more convincing case that the interwar period is a dangerous parallel for understanding to- day’s situation, insofar as following the armi- stice of WWi, the tensions that had triggered the war were not resolved, only throttled, which resulted in them reigniting after two decades. At the time, like today, international tensions did not fundamentally manifest as economic conflicts of interest. These could be regarded as secondary. But slogans and politi- cal distortion intimate some dangerous simi- larities to the present. He elaborates by stating that in a reassuring conflict resolution follow- ing WWii, the changes effectively required a new economic world order. The order born in Bretton Woods stays with us to this day, hav- ing lent overall stability to the world economy, which – it is true – can be characterized by the dominance of developed industrialized states, the uSA and victorious Western powers. At the same time, it considered rules-based op-
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