Segmentation or competition in China's urban labour market?

In China, urban residents have traditionally been protectedagainst labour market competition from rural–urban migrants.Over the period of urban economic reform, rural–urbanmigration was allowed to increase in order to fill the employmentgap as growth of labour demand outstripped that of the residentlabour force in urban areas. However, as reforms gained paceand controls were lifted, it is plausible that competition forwork between migrants and urban residents would have increased.The paper examines whether the relationship is one of segmentationor competition in the labour market. It uses attitudinal responsesfrom two urban surveys. The urban workers who perceive competitionfrom migrants are those who are most vulnerable. The findingsare consistent with the presence of continued labour marketsegmentation, but suggest also that competition between thetwo groups is increasing.     

Trade,labour market rigidity,and aggregate productivity in OECD countries

As the economy becomes more open to trade, aggregate productivity can increase by driving out the least productive firms (the selection effect). Since the selection effect reallocates resources toward the more productive firms, this process can be hindered by rigidity in domestic labour market institutions. Based on the selection effect by Melitz (2003), this article empirically examines how rigidity in labour market institutions affects the consequence of trade on aggregate productivity. Findings from panel dynamic ordinary least square (DOLS) estimators suggest that a high degree of labour market rigidity in an open economy reduces Total Factor Productivity (TFP). In particular, in the case of extremely high labour market rigidity but low foreign R&D capital stocks, openness to trade can cause a country to experience decreasing TFP.     

Sidgwick and Edgeworth on indeterminacy in the labour market

Commentators have underlined Sidgwick's influence on Edgeworth's thinking and more particularly on New and Old Methods of Ethics (1877). But have failed to notice that Sidgwick remained a major reference in Mathematical Psychics (1881). Therefore, the purpose of this paper is to show that, in this book, Edgeworth wanted to refine upon the problem of wages addressed by Sidgwick in 1879. The thesis of the paper is that Sidgwick and Edgeworth's disagreement as to the role of open competition in the resolution of indeterminacy in the labour market stems from two different notions of competition. This latter can be seen as a differentiation process, as in Sidgwick's, or as a replication mechanism, as in Edgeworth's.     

Labour market institutions and labour market performance

This paper studies the relationship between labour market institutions and policies and labour market performance using a new and unique dataset that covers the countries of Eastern Europe and Central Asia, which in the last two decades experienced radical economic and institutional transformations. We document a clear trend towards liberalization of labour markets, especially in the countries of the former Soviet Union, but also substantial differences across the countries studied. Our econometric analysis implies that institutions matter for labour market outcomes, and that deregulation of labour markets improves their performance. The analysis also suggests several significant interactions between different institutions, which are in line with the idea of beneficial effects of reform complementarity and broad reform packages.     

Tax decentralization,labour productivity,and employment in OECD countries

Tax decentralization should improve the efficiency of local governments and ultimately boost output growth. However, the empirical evidence is mixed. Decomposing output growth into labour productivity and employment growth, we show that the ultimate effect of fiscal decentralization on growth depends on which factor prevails, thus rendering the direct estimation of tax decentralization on growth ambiguous. Using an instrumental variable approach, with instruments based on institutional similarities and geographic distance, the empirical analysis on a sample of 20 OECD countries shows that the positive and significant effect of tax decentralization on the employment growth rate is offset by the reduction of labour productivity growth, resulting in the absence of any statistically significant effect on output growth.     

Monetary policy shocks and productivity measures in the G-7 countries

An implication of two-country international real business cycle models is that total factor productivity should be an exogenous stochastic process. Economic theories which feature labor hoarding, variable capacity utilization, and increasing returns predict that measured productivity shifts are not exogenous; instead, expansionary aggregate demand shocks should lead to an increase in measured productivity. For each of the G-7 countries, this paper measures quarterly aggregate total factor productivity for the domestic country and its rest-of-world (G-6) counterpart. In each case the domestic productivity measures are not strictly exogenous: expansionary U.S. monetary policy shocks, as well as other G-6 monetary policy shocks, lead to productivity expansions. The evidence indicates that international business cycle models are misspecified unless they feature endogenous productivity mechanisms.Received: June 2001, Accepted: December 2001, JEL Classification: E5, F4Correspondence to: Charles L. EvansFor their helpful comments, we thank Mario Crucini, Patricia Reynolds, and Steve Strongin. The views expressed in this paper do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System.     

Labour market institutions and wage setting: evidence for OECD countries

The main channel through which labour market institutions are supposed to work in affecting unemployment is through their effects on the key parameters of the wage curve. In particular, labour market institutions may have both a direct wage push (or level) effect, i.e. change the level of the real wage for any given level of the unemployment rate and productivity, and an indirect slope effect, i.e. change the responsiveness of the real wage to the unemployment rate. The question this article addresses is whether there is any evidence that these transmission mechanisms were at work in a group of 20 Organization for Economic Co-operation and Development (OECD) countries over the period 1960 to 1999. The analysis is accomplished in two steps. Pooled Mean Group (PMG) estimates of a wage equation including unemployment, productivity and a set of wage push institutions are first obtained, allowing only a subset of institutional coefficient to be homogeneous, while leaving the unemployment and other coefficients free to differ across countries. The country specific estimates of the unemployment coefficients are then used to investigate whether and to what extent cross-country heterogeneity in the estimated wage response to unemployment is related to institutional differences. The results support the existence of significant wage push effects of union density and benefit replacement rates, and of significant slope effects of benefit replacement rates, benefit duration and employment protection. A more generous unemployment benefit structure is found to lower the wage responsiveness to unemployment, while higher employment protection, contrary to what one expects, is found to enhance it. No significant level and slope effects are found for the tax wedge and bargaining coordination.     

Quality of institutions and productivity of State-Invested Enterprises: International evidence from major telecom companies

The quality of institutions is at the core of the differences in the growth of income and productivity of nations. A growing body of evidence shows how this is also true at the firm level. After taking stock of earlier theoretical and empirical literature on the efficiency of state-owned versus private enterprises, while we consider ownership as the core internal governance mechanism of firms, we add quality of government as a determinant of the external institutional environment. To disentangle the effect of internal and external institutions on firms' productivity, we use different sets of ownership and institutional environment indicators.After having identified the top 350 private, state-invested (i.e. partially state-owned) and state-owned enterprises in the telecommunications industry in EU28 and in more than 60 other countries between 2007 and 2015, we empirically investigate models of firms' productivity augmented with ownership and quality of government. Our findings suggest that, after controlling for the regulatory and competitive conditions at the country level, on average, public ownership has a negative impact on firm-level TFP. This effect is however mitigated by high external institutional quality and even reversed in some countries with a particularly favourable institutional environment.     

经济地理与地区间工资差异

地区间收入差距究竟可以在多大程度上由需求的空间分布差异来解释?本文基于新经济地理学模型,利用1997年中国区域间投入产出表的流量数据,通过引力模型计算了衡量各地级城市空间需求大小的市场准入,并以此解释地级城市间的职工工资差异。本文发现:(1)各地级城市的市场准入差异极大;(2)工资对市场准入的弹性系数为0.22—0.32之间。基于上述实证依据,本文认为,各地级城市的市场准入差异是其工资差距存在的重要原因,而市场准入差异是劳动力流动的不充分性所产生的。     

Commodity exports and labour productivity in the long run

Empirical analysis of dynamic panel data models shows that dependence on exports of ores and metals is associated with lower labour productivity. For other commodity groups, there is no statistically significant effect.     

市场潜力、经济集聚与地区间工资差异

基于劳动力、产业在地区间分布的不平衡性以及地区间工资差异的事实,本文构建了一个市场潜力与工资的新经济地理学(NEG)理论模型。理论分析表明:市场潜力对工资产生正面影响。市场潜力对工资产生正面影响来自两种渠道:一是市场潜力引发了经济集聚效应;二是市场潜力产生了逆经济集聚。相比之下,市场潜力引发了经济集聚效应更能提高和扩大地区工资水平与差异,因为经济集聚需要更低的贸易成本、较大的市场规模以及较高的经济发展水平。     

Vintage capital,market structure and productivity in an evolutionary model of industry growth

This paper examines the effects of inter-firm variation in vintage equipment replacement policies on industry productivity and structure using an evolutionary model based on Nelson-Winter. Traditional industry productivity measures assume a graduated replacement policy with low variation across firms in the average age of the capital stock. This approach allows for inter-firm policy variation. The first part reviews the neoclassical treatment of vintage capital investment; the second part outlines an evolutionary model of vintage replacement in the context of industry growth; and the third part presents results of simulation experiments focused on the relationship between vintage replacement patterns and industry productivity growth. Findings suggest that inter-firm differences in vintage capital investment policies may account for significant shifts in the rates of industry productivity growth and changes in market structure.     

Modelling the housing market in OECD countries

Recent episodes of housing bubbles, which occurred in several economies after the burst of the United States housing market, suggest studying the evolution of housing prices from a global perspective. We utilise a theoretical model for the purposes of this contribution, which identifies the main drivers of housing price appreciation, such as, for example, income, residential investment, financial elements, fiscal policy and demographics. In a second stage of our analysis, we test our theoretical hypothesis by means of a sample of 18 OECD countries from 1970 to 2011. We employ the vector error correction econometric technique in terms of our empirical analysis, which permits us to model the long-run equilibrium relationship and the short-run dynamics, which also helps to account for endogeneity and reverse causality problems.     

The role of social capital in the labour market in China1

Social capital is considered to play an economic role in labour markets. It may be particularly pertinent in one that is in transition from an administered to a market‐oriented system. One factor that may determine success in the underdeveloped Chinese labour market is thus guanxi, the Chinese variant of social capital. With individual‐level measures of social capital, we test for the role of guanxi using a dataset designed for this purpose, covering 7,500 urban workers and conducted in early 2000. The evidence is consistent with the basic hypothesis. Both measures of social capital – size of social network and Communist Party membership – have significant and substantial coefficients in the income functions. Social capital can have influence either in an administered system or in one subject to market forces. It appears to do so in both parts of the labour market.     

Evaluating innovation and labour market relationships: the case of Italy

In this paper the link between labour market flexibility andinnovation is analysed paying particular attention to the differenttechnological regimes of economic activities and the differentgeographical areas of the Italian economy. A dynamic panel dataspecification is used to assess the endogenous relationshipbetween patents, included as a proxy for innovation, and jobturnover and wages, which represent labour market indicators.Our results show that higher job turnover only has a significantand negative impact on patent activities in regional sectorsof Northern Italy, while blue and white collar wages have beengenerally found to have a positive and significant impact oninnovation.     

Offshoring, labour market institutions and the elasticity of labour demand

This paper analyses the evolution of the elasticity of labour demand and the possible role of offshoring therein using industry-level data for a large number of OECD countries. The first main finding is that the wage elasticity of labour demand has increased substantially since 1980, although some of this increase may reflect a trend increase in the speed of adjustment rather than an increase in the long-run wage elasticity. The evidence on the potential contribution of offshoring to raising labour demand elasticity is mixed. No association is found between increases in offshoring and demand elasticity during the second half of the 1990s, but there is a significant cross-sectional association between higher average offshoring intensity during this period and higher demand elasticity. We also find some evidence that strict employment protection legislation weakens the cross-sectional association between offshoring and higher labour demand elasticity, suggesting that the relationship between offshoring and the labour demand elasticity may depend on the national institutional environment.     

Feminization of labour and profit rates: evidence from OECD countries

The article examines the effect of the feminization of labour on profit rates and capacity utilization by employing an indirect and two-stage least squares models for 21 OECD countries during the 1970–2008 period. Findings show that higher women’s labour force participation rates and gender wage gap lead to higher profit rates.     

Human capital accumulation in an open labour market: Ireland in the 1990s

Large-scale investment in education in Ireland began in 1967 and has led to a dramatic increase in the relative supply of skilled labour over the past four decades. Furthermore the supply of labour in Ireland is traditionally highly elastic through migration, which in the 1990s was predominantly high-skilled. This combination of rising education levels and an open labour market meant that employment and incomes rose rapidly in the 1990s, while Ireland still maintained a strong competitive position in terms of relative labour costs.In this paper we develop a new macro-economic framework to formally analyse these mechanisms. We estimate a small structural model of the Irish labour market, separately identifying high-skilled and low-skilled labour. We find that this model captures key characteristics of the Irish labour market in the 1990s.