The Australian Labour Market and the Early Impact of COVID-19: An Assessment

From March to June 2020 was the most dramatic four months in the history of the Australian labour market. Never before has a such a substantial decrease in labour demand (and partial reversal) occurred so quickly. In this article, we present an overview of the early impact of COVID-19: the main drivers it brought into play and the consequent labour market developments. Aggregate effects and how impacts differed by type of job and worker are described. We conclude with a brief review of the main government response to COVID-19, the JobKeeper program.     

Ex-ante evaluation of a targeted job program: Hypothetical integration in a social accounting matrix of South Africa

To analyze policy impacts of a targeted employment program calls for a new approach of estimation. This study proposes a simple modification to a Social Accounting Matrix (SAM) in order to analyze the multiplier effects of a new sector. A different input composition, or technology, of the sector with targeted job provision makes a conventional analysis of final-demand injections on existing sectors invalid. Instead of a costly full-scale rebalancing, we apply the modification—so-called hypothetical integration—into a SAM to assess a proposed expansion of social care sector within the Expanded Public Works Program in South Africa.     

Do earnings subsidies affect job choice? The impact of SSP subsidies on job turnover and wage growth

Abstract .  This paper explores the impact of earnings subsidies on job duration and wage growth. We develop an analytical framework that predicts that convex subsidies increase job turnover and affect within-job and between-job wage growth. This framework is used to analyze the effects of the Canadian Self-sufficiency Project earnings subsidy. We find that the treatment group had shorter job duration and experienced faster wage growth than controls, which is consistent with the analytical model. Results for between-job wage growth hold after we correct for compositional bias, but we cannot rule out that within-job wage growth was not affected by the program.     

Optimal Welfare-to-Work Programs

A Welfare-to-Work (WTW) program is a mix of government expenditures on various labour market policies targeted to the unemployed ( e.g. unemployment insurance (UI), job search monitoring (JM), social assistance (SA), wage subsidies). This paper provides a dynamic principal–agent framework suitable for analysing chief features of an optimal WTW program, such as the sequence and duration of the different policies, the dynamic pattern of payments along the unemployment spell, and the emergence of taxes/subsidies upon re-employment. The optimal program endogenously generates an absorbing policy of last resort ("social assistance") characterized by a constant lifetime payment and no active participation by the agent. Human capital depreciation is a necessary condition for policy transitions to be part of an optimal WTW program. The typical sequence of policies is quite simple: the program starts with standard UI, then switches into monitored search and, finally, into SA. The optimal benefits are decreasing during unemployment insurance and constant during both JM and SA. Whereas taxes (subsidies) can be either increasing or decreasing with duration during UI, they must decrease (increase) during a phase of JM. In a calibration exercise, we use our model to analyse quantitatively the features of the optimal program for the U.S. economy. With respect to the existing U.S. system, the optimal WTW scheme delivers sizeable welfare gains to unskilled workers because the incentives to search for a job can be retained even while delivering more insurance and using costly monitoring less intensively.     

Micro-credit programs and off-farm migration in China

Abstract. This paper seeks to evaluate effects of micro‐credit projects on the poor. We utilize data that we collected in Sichuan Province in 1999 to investigate whether micro‐credit projects have targeted the poor and whether participation in the micro‐credit project increases the likelihood of migration and switching to off‐farm jobs. We find that, although the micro‐credit programs did not help increase assets of the participants, it did help to move one or more of their members into an off‐farm job. Our findings indicate that there is a great deal of benefit in supporting micro‐credit programs.     

Multinational firms,acquisitions and job tasks

We revisit the question how inward FDI and multinational ownership affect relative labor demand. Motivated by the recent literature that distinguish between skills and tasks, we argue that the impact of multinational and foreign ownership on the demand for labor is better captured by focusing on job tasks rather than education. We use Swedish matched employer–employee data and find that changes of local firms to both foreign and Swedish multinationals increase the relative demand for non-routine and interactive job tasks in the targeted local firms. Hence, in a high-income country, both inward and outward FDI have a task upgrading impact on local firms. The effect is primarily driven by wage effects leading to increased wage dispersion for workers with different non-routine and interactive task intensity. We also show that the effect is not the same as skill upgrading since dividing employees by educational attainment does not capture changes in the relative labor demand. Hence, our results suggest a new aspect of the labor market consequences of FDI.     

A better job thanks to personal networks? An evaluation for migrants who arrived in France before age 18

It is more difficult for migrants than natives to find a job in their host country, so many of them have to accept, at least temporarily, a job that is below their level of qualification. This represents a waste of human capital for society and can undermine social cohesion. Relying on social relationships might help them to bypass some of the obstacles that prevent them from finding a job that matches their skillset. We focus on migrants who arrived in France before the age of 18 years, who were educated entirely or partially in France. We use the rich French Trajectories and Origins dataset for 2009 to study the impact of personal contacts on the quality of the current employment. We measure the job quality using an indicator based on the educational requirement for a given occupation. To address the endogeneity between our dependent variable (holding a suitable job or not) and the variable of interest (employment found through a personal contact or not), we use the variable ‘sibling(s) in France’ as an instrument: this variable influences an individual’s probability of finding a job through contacts but does not influence directly the quality of the employment. Our results indicate that for these migrants, finding a job through personal contacts strongly and positively impacts the occupational status attained: it raises both women’s and men’s probability of holding a suitable job by more than 0.40 points.     

Australian Government COVID-19 Business Supports

This article documents the considerable economic support provided to businesses by the Australian Government in response to the COVID-19 pandemic. We find that measures were associated with higher levels of business profitability and savings, a strong recovery in payroll jobs and wages, and mixed effects with respect to business dynamism. We formally evaluate the SME Cashflow Boost, finding costs per job-year saved in the vicinity of $72–83,000 ($US51–59,000) over its first year, implying between 400 and 500,000 job-years saved over this period. Combined with results from previous studies, this suggests between 1.1 and 1.3 million job-years were saved by the SME Cashflow Boost and JobKeeper Payment over their respective first years post-announcement.     

The impact of job security on job satisfaction in economic contractions versus expansions

Job security, often measured using the perceived risk of job loss in the near future, is a significant determinant of job satisfaction. We posit that the impact job security has on job satisfaction is not only a function of how likely it is that a worker loses a job but also how likely it is that a worker could find another. The effect this has on worker job satisfaction then is different depending on whether perceived job loss occurs (or not) when job openings are scarce or when job openings are plentiful. We use difference-in-differences analysis of the 1997 and 2008 waves from the National Study of the Changing Workforce to show that three measures of job security increase private sector worker job satisfaction, and reduce worker incentives to quit, more when job openings are relatively scarce (during contractions) than when job openings are relatively plentiful (during expansions). We find that our results are strongest among less-educated workers.     

Assessing the impact of a wage subsidy for single parents on social assistance

Abstract This paper studies the impact of a wage subsidy program aimed at long‐term social assistance recipients in Quebec. The program closely mimics the Self‐Sufficiency Project and was implemented for a trial period of one year in 2002.We focus on the labour market transitions of the targeted population starting one year before the implementation of the program and until the end of 2005. Our results show that the duration of spells off social assistance increased, while the duration of social assistance spells decreased slightly. The response to the program varies considerably with both observed and unobserved characteristics.     

Corporate Governance in Russia

This paper discusses a local, privately-run and federally-funded program for all individuals able to demonstrate their income is at, or below the poverty line. This free Certified Nursing Assistant training program enables successful participants to obtain appropriate employment in local hospitals. The program is complementary to job guarantee proposals promoted by a number of economists, and provides an example of how local job creation programs can incorporate job training to improve prospects for upward mobility.     

Assessing the Impact of District Primary Education Program in India

We examine the impact of India's District Primary Education Program (DPEP) introduced in the mid‐1990s. We exploit the fact that the DPEP was targeted towards primary school age children and was introduced in phases to different districts in India, and many of the districts never got the program to implement a difference‐in‐difference strategy to find the causal impact of the program on probability of attended primary school, probability of completed primary education and years of schooling. We find that the DPEP program increased the probability of attended primary school and completed primary school by about 2 percentage points. Similarly, the program increased the years of schooling by 0.16 years.     

Coaching,Counseling, Case‐Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Intensified counseling, job search assistance and related policies have been found to be effective for labor market integration of the unemployed by a large number of studies, but the evidence for older and hard‐to‐place unemployed is more mixed. In this paper, we present key results for a large‐scale active labor market program directed at the older unemployed in Germany. To identify the treatment effects, we exploit regional variation in program participation. We use a combination of different evaluation estimators to check the sensitivity of the results to selection, substitution and local labor market effects. We find positive effects of the program in the range of 5–10 percentage points on integration into unsubsidized employment. However, there are also substantial lock‐in effects, such that program participants have a higher probability of remaining on public welfare benefit receipt for up to 1 year after commencing the program.     

Preceptors for non-clinical employees: extending the value

Although preceptors have been utilized for many years to orient nurses, non-clinical employees have not had the benefit of having consistent, competent, standardized guidance during their orientation period. A preceptorship program was implemented in Ambulatory Care Services for non-clinical employees to improve the orientation experience and to make new employees feel valued. The preceptor program was designed to standardize the information given and skills taught, to increase competence in all job tasks, to assure completion of orientation documents, to reduce staff turnover and increase job satisfaction, and to reduce orientation costs to the organization. Many improvements have been realized related to these goals, including improved staff satisfaction and reduced turnover.     

Work satisfaction among California registered nurses: a longitudinal comparative analysis

California's minimum nurse-to-patient staffing ratio law, the nation's first, was implemented in 2004. This study had two aims: (a) to evaluate the effect of the nurse-to-patient ratios law on nurse job satisfaction in order to advance the debate over the merits of nurse staffing law, and (b) to compare California nurses who were satisfied against those who were not, in order to facilitate the development targeted retention interventions based on empirical evidence. The sample's overall job satisfaction increased significantly as the years passed, suggesting the nurse-to-patient ratios law was associated with improvements in nurse satisfaction. Satisfied RNs were more likely to have a balanced and financially secure life that included a partner, children living at home, higher hourly wages, and higher income from sources other than a nursing job. Nurses working in direct patient care positions remained dissatisfied in larger proportions than those working in other types of positions, even after the nurse-to-patient ratios were implemented. More nurses are satisfied today than before the ratios; nevertheless, far too many nurses (18.5%) have job satisfaction scores that are neutral or worse.     

ASSET‐BASED UNEMPLOYMENT INSURANCE*

This article studies a model of consumption, savings, and job search in which a borrowing constraint limits self‐insurance. The government administers the unemployment insurance program that may condition on an individual’s asset position, but not on her efforts of finding a job. To compensate for the impediments to self‐insurance, benefit payments should optimally be set higher at lower wealth levels and peak for borrowing‐constrained individuals with zero liquid funds. A quantitative exercise reveals that the U.S. unemployment insurance program is surprisingly close to optimal for the asset poor, but far too generous for wealthier individuals.     

The impact of health insurance on job location choice: Evidence from rural China

Many health insurance programs contain certain portability constraints. It is common that enrollees are eligible for greater reimbursement when they received services at selected local facilities. We investigate the impact of this portability constraint on residents' choice of job location. Using a unique, nationwide survey data set in China, we find that provision of health insurance decreases the probability of working in non-local regions for the rural residents by 2.4%. The results are mainly driven by the residence lock-in effect. That is, the insurance program discourages rural residents from working outside their registered areas of residence and, especially, in other provinces. The pullback effect, that is, the effect of the health insurance program attracting migrant workers who had worked outside back to regions close to their hometowns, is not found to be significant.     

The California Nurse Mentor Project: every nurse deserves a mentor

In the rush to fill positions, newly hired and transitioning RNs are increasingly put into demanding roles without adequate clinical or organizational preparation. One approach that has shown promising preliminary success in enhancing nursing job satisfaction and increasing long-term retention is the use of trained nurse mentors who are paired with newly hired or new graduate nurses to provide ongoing support, guidance, and assistance. The California Nurse Mentor Project was a 3-year pilot project whose goal was to create a replicable program designed to improve the quality, sensitivity, and effectiveness of patient care through enhanced retention of nurses, including multicultural, multilingual, and male nurses. The pilot implementation of the California Nurse Mentor project has been extremely successful. Attrition rates are lower for nurses who are enrolled in the program than those who did not. Both mentors and mentees report that the program has impacted several areas, including their job satisfaction and professional confidence. Preceptor training, according to participant feedback, shows lasting effects on their pedagogy even a year after attending the training.     

Do Long‐Term Unemployed Workers Benefit from Targeted Wage Subsidies?

We evaluate a wage subsidy program that is targeted at long‐term unemployed workers in Germany. We use an alternative identification procedure compared to empirical studies conducted so far. Exploiting the particular program regulations and large administrative data we estimate the impact of program availability using a regression discontinuity framework. Our results suggest no significant impact of the availability of the subsidy on labor market outcomes of the target group. Even though our analysis lacks some statistical power, our findings do not support the substantial positive effects obtained from matching studies. As our approach does not require observability of all drivers of selection, previous empirical studies justifying government expenditures on wage subsidies based on matching methods should be reconsidered.     

Cash Transfers to the Poor and the Labor Market: An Equilibrium Analysis

This paper studies the effects of cash transfers to the poor on the labor market. This is investigated in a matching model with endogenous labor market participation and job destruction. Depending on their productivity, workers might want to stay in the job, become unemployed, or leave the labor market; in addition, workers out of the labor force might decide to search for a job. Cash transfers are introduced to all agents with income below a given level. Two qualitative results are found: (i) The size of cash transfers has a negative effect on the employment rate, but an ambiguous effect on the unemployment rate; and (ii) the coverage of this welfare program has a positive effect on the employment rate, and an ambiguous effect on the unemployment rate. The numerical simulations also show that: (i) if the government target is to reduce inequality and poverty, the more efficient policy is to increase the level of benefits instead of increasing the eligibility of the program; (ii) compared with a welfare program that condition eligibility to labor market participation, the “unconditional” cash transfer program has a stronger impact on inequality and poverty, but with a reduction in labor market participation and output.