Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa

What happens when a previously uncovered labor market is regulated? We exploit the introduction of a minimum wage in South Africa and variation in the intensity of this law to identify increases in wages for domestic workers and no statistically significant effects on employment on the intensive or extensive margins. These large, partial responses to the law are somewhat surprising, given the lack of monitoring and enforcement in this informal sector. We interpret these changes as evidence that strong external sanctions are not necessary for new labor legislation to have a significant impact on informal sectors of developing countries, at least in the short-run.     

Informal employment relationships and the labor market: Is there segmentation in Ukraine?

One of the most important factors that determine individuals’ quality of life and wellbeing is their position in the labor market and the type of jobs that they hold. When workers are rationed out of the formal segment of the labor market against their will, i.e., the labor market is segmented, their quality of life is limited, and their wellbeing is reduced. When they can freely choose between a formal or informal employment relationship, i.e., the labor market is integrated, their wellbeing can reach high levels even in the presence of informal employment. We, therefore, test whether the Ukrainian labor market is segmented along the formal-informal divide, slicing the data by gender and age. The analysis that we perform consist in the analysis of short-term and medium-term transitions between five employment states, unemployment and inactivity. We also analyze wage gaps of mean hourly earnings and across the entire hourly earnings distribution, controlling for time-invariant unobserved heterogeneity. According to our results segmentation is present for dependent employees: for a large part of informal employees informal employment is used as a waiting stage to enter formal salaried employment and is not voluntarily chosen. As far as self-employment is concerned the evidence is mixed regarding segmentation in the Ukrainian labor market. This heterogeneity in outcomes implies that not all informal work is associated with a low quality of life and reduced wellbeing in post-transition economies.     

Search efficiency,wage dynamics and welfare

Advances in information technology have improved the job-search process in the labor market. We analyze the effects of this improvement by constructing a search-and-matching model with two sectors: a risky sector with firm-specific productivity shocks and a risk-free sector. The risky sector is characterized by a low level of commitment between employers and workers – either party can end the employment relationship. We show that a better job-search process generates more job matches in the risky sector, and this benefits workers by improving their outside options. The effect on employers is subtle: while it is easier to fill vacancies, workers become more expensive. At the same time, the ease of finding new workers makes it harder for employers to keep their wage promises to workers and increases wage volatility. Our paper contributes to the literature by offering a novel explanation for the observed rise in wage volatility.     

The labor market and corporate structure

We analyze the impact of labor demand and labor market regulations on the corporate structure of firms. Higher wages are associated with lower monitoring, irrespective of whether these high wages are caused by labor market regulations, unions or higher labor demand. We also find that the organization of firms has important macroeconomic implications. In particular, monitoring is a type of “rent-seeking” activity and the decentralized equilibrium spends excessive resources on monitoring. Labor market regulations that reduce monitoring by pushing wages up may increase net output or reduce it only by a small amount even though they reduce employment.     

The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel

This paper studies the short and medium run impact of highly skilled immigrants from the Former Soviet Union to Israel on natives' wages and employment. If immigrants are relatively good substitutes for native workers, the impact of immigration will be largest immediately upon the immigrants' arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives, the initial effect of immigration is small, and increases over time as immigrants acquire local labor market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel between 1989 and 1999.We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a labor market segment. A 10 percent increase in the share of immigrants lowers natives' wages in the short run by 1–3 percent, but this effect dissolves after 4–7 years. This result is robust to a variety of different segmentations of the labor market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the medium run.     

The labor market effects of introducing unemployment benefits in an economy with high informality

Unemployment benefit systems are nonexistent in many developing economies. Introducing such systems poses many challenges which are partly due to the high level of informality in the labor markets of these economies. This paper studies the consequences on the labor market of implementing an unemployment benefit system in economies with large informal sectors and high flows of workers between formality and informality. We build a search and matching model with endogenous destruction, on-the-job search, and intersectoral flows, where agents in the economy decide optimally whether or not to formalize jobs. We calibrate the model for Mexico, and show that the introduction of an unemployment benefit system, where workers contribute when employed in the formal market and collect benefits when they lose their jobs, even if they obtain informal jobs, can lead to an increase in formality in the economy, while also producing small increases in unemployment. The exact impact of incorporating such benefits depends on the relative strength of two opposing effects: the generosity of the benefits and the level of the contributions that finance those benefits. We also show important policy complementarities with other interventions in the labor market. In particular, combining the unemployment benefit program with policies that reduce the cost of formality, such as lower employment taxes and firing costs, can produce greater decreases in informality and lower impacts on unemployment than when the program is applied in isolation.     

Pareto-improving firing costs?

We examine self-enforcing contracts between risk-averse workers and risk-neutral firms (the ‘invisible handshake’) in a labor market with search frictions. Employers promise as much wage-smoothing as they can, consistent with incentive conditions that ensure they will not renege during low-profitability times. Equilibrium is inefficient if these incentive constraints bind, with risky wages for workers and a risk premium that employers must pay. Mandatory firing costs can help, by making it easier for employers to promise credibly not to cut wages in low-profitability periods. We show that firing costs are more likely to be Pareto-improving if they are not severance payments.     

The effects of immigration in frictional labor markets: Theory and empirical evidence from EU countries

Immigrants are newcomers in a labor market. As a consequence, they lack host-country-specific labor market knowledge and other country-specific and not directly productive valuable assets affecting their relative bargaining position with employers. We introduce this simple observation into a search and matching model of the labor market and show that immigrants increase the employment prospects of competing natives. To test the predictions of our model, we exploit yearly variations between 1998 and 2004 in the share of immigrants within occupations in 13 European countries. We identify the impact of immigrants on natives׳ employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin country. We find that natives׳ employment rate increases in occupations and sectors receiving more immigrants. Moreover, we show that this effect varies depending on immigrants׳ characteristics and on host country labor market institutions which affect relative reservation wages.     

Direct and Cross Effects of Employment Protection: The Case of Parental Childcare

I examine whether employment protection affects the willingness of working parents to provide childcare. Using a reform that made it easier for employers to dismiss workers in small firms, I find that softer employment protection reduces the use of temporary parental leave among directly treated fathers. In addition, I find that households respond to an increase in the dismissal risk by reducing temporary parental leave for the indirectly treated spouse. Spousal labor supply can thus serve as informal insurance against adverse income shocks.     

DO STATE EMPLOYMENT ELIGIBILITY VERIFICATION LAWS AFFECT JOB TURNOVER?

State laws requiring employers to verify workers' employment eligibility may reduce employment and earnings among unauthorized workers and make it difficult for them to switch jobs. Using data from the 2005–2014 Quarterly Workforce Indicators, we find evidence of a reduction in employment and job turnover among Hispanics as a whole in states that require all employers to verify employment eligibility. These adverse effects become larger as the share of likely unauthorized Hispanic workers falls. The drop in job turnover may be due to the laws trapping some Hispanic workers in their jobs. There is little effect on employment or job turnover among non‐Hispanic whites or blacks. There is no effect on average pay for all groups of workers. (JEL J15, J61, J68)     

劳动争议中的证人证言问题研究

劳动者与用人单位之间的特殊关系,对劳动争议中证人证言的内容、占有、支配、采集和证人态度、证人举证能力以及证据价值、证据效力等有着重要影响;合理地解决劳动争议中有关利害关系证人证言、证人出庭、书证物证的选择适用、用人单位举证责任及证人证言适用排除等问题,对于劳动争议当事人及司法裁判机关依法辨别、采信、运用和认定证人证言是至关重要的。     

外来劳动力挤占了本地居民的就业机会吗??

城市就业包容性的提升是实现城镇化发展的重要内容,而异质外来移民对原有居民的就业机会将产生不同影响.文章运用动态监测数据,按劳动力的技能水平、所属行业和流入时期分析城市劳动力市场的就业包容性,衡量人力资本等因素在异质外来劳动力就业过程中的作用机制.研究发现：(1)总体而言,人力资本的差异性取代传统的行业壁垒已成为获取就业机会的主要因素.(2)进一步使用工具变量,对劳动力组群的就业决定模型进行估计发现,外来劳动力占比每上升10％,城市原有劳动力的就业率将下降0．04－1．99个百分点,表现为外来劳动力对城市原有低技能劳动力就业率的影响并不明显,但对高技能劳动力的就业率产生显著冲击,且此现象在部分高进入门槛行业尤为明显.(3)城市劳动力市场对不同时期流入的高技能组劳动力的包容性显著低于低技能组,高技能组劳动力之间存在更高的替代性.(4)与本地劳动力的就业率相比,新进入的外来劳动力对前期进入的外来劳动力的就业率的影响会更大,且这种影响同样会随着受教育程度的提高而递增.因此,在完善就业市场的同时,应在就业的前置和后置环节制定更有针对性的人才培养机制和引入措施.     

On Footloose Industries and Labor Disputes with Endogenous Information Asymmetry

If capital becomes internationally mobile but labor does not, are outcomes of labor disputes tilted in favor of workers or employers? In this paper, we show that the answer depends critically on how the information structure of the dispute changes endogenously with capital mobility, and in addition, whether international investment incentives selectively favor the outflow of capital from the most or the least productive firms. In doing so, this paper brings together three strands of literature that are not often seen together—incentive compatible contracting, wage and unemployment outcomes of labor disputes, and international capital mobility with heterogeneous firms.     

Increasing dispersion of skills and rising earnings inequality

In recent decades many countries have simultaneously liberalized their trading regimes and expanded their education systems. The theoretical effect of these regime shifts on the wage differential between skilled and unskilled workers is ambiguous. On the one hand, openness to trade causes demand shifts in the labor market which may widen or narrow the differential. This result depends on whether the unskilled wage is depressed, as in the case of importing countries, or raised, as in the case of exporting countries. On the other hand, an increased supply of more educated workers reduces their wages and narrows the skill wage gap. In this study of the labor market of Hong Kong, we document that recent changes in response to the trade liberalization of Mainland China and expanded access to education have increased the earnings differential between skilled and unskilled workers. Using detailed census data, we argue that the main reason for this outcome is the widened dispersion of skills across the earnings distribution, resulting from demand and supply shifts in the labor market caused by trade openness and expanded access to higher education.     

Has the Affordable Care Act increased part-time employment?

We examine the impact of the Affordable Care Act (ACA) on part-time employment. Because the ACA’s employer health insurance mandate applies to individuals who work 30 or more hours per week, employers may try to avoid the mandate by cutting workers’ hours below the 30-hour threshold in order to avoid having to provide them with health insurance. Although the employer mandate only went into effect in 2015, many observers have argued that forward-looking employers began to shift towards a part-time workforce well in advance of the mandate. To test this hypothesis, we examine relative shifts across two categories of part-time workers (25–29 hours and 31–35 hours). We find some evidence of a shift from the 31–35-hour category into the 25–29-hour category after the passage of ACA in March 2010. However, that shift is not more pronounced among low-wage workers or among workers in industries and occupations most likely to be affected by the mandate. Thus, there is little evidence that the ACA has caused the shift across hours categories, or led to an increase in part-time employment. However, the ACA could cause a shift towards part-time work in the future as the mandate takes effect.     

劳动力流动对城市劳动力市场的影响

本文使用2005年1%人口抽样调查数据,考察了在我国大中城市中,劳动力流动对本地劳动者就业率和工资的影响。我们发现,外来劳动力对城市本地劳动力的就业率和工资均具有统计上显著的负向作用,但是影响的规模非常小。对于全部教育组平均而言,外来劳动力每增加10%,城市本地劳动力的就业率下降0.3%,工资下降0.65%;对于中低教育水平(高中及以下)的城市本地劳动力而言,外来劳动力的影响程度相对高一些,但是仍然不算大。另外,我们发现,外来劳动力对本地职工工资的影响,要大于对就业率的影响,说明城市本地劳动力对于外来劳动力存在有限的反应,主要体现在降低保留工资,而非放弃工作机会。     

Job creation and job destruction in the presence of informal markets

In developing economies, the fraction of informal workers can be as high as 70% of total employment. For economies with significant informal sectors, business cycle fluctuations and labor market policy interventions can have important effects not only on the unemployment rate, but also on the allocation of workers across regulated and unregulated jobs. In this paper, using worker flows data from Brazil, we build, calibrate, and simulate a two-sector search and matching labor market model, in which firms have the choice of hiring workers formally or informally. We show that our model can explain well the main cyclical patterns that lead to those cyclical reallocations. We also show how the effect of government interventions in the labor market depend on the magnitude of the reallocation of labor across regulated and unregulated sectors. For our calibration, policies that decrease the cost of formal jobs, or increase the cost of informality, raise the share of formal employment while reducing unemployment.     

整合技术概念及对新古典就业理论的反思

笔者提出整合技术概念，即所有的工人整合在一起操作生产系统；如果任何一名工人缺失，则生产系统不能运行。如果一种技术严格具有整合技术的性质，那么在到达能使生产系统运行之前，工人的边际产品为零。如果增加一名工人生产系统就可运行，则这名工人的边际产品等于总产品。如果再增加一名工人的边际产品为零，则边际产品曲线退化为一条垂直线。新古典边际劳动生产率理论认为，厂商雇闸工人的工资等于劳动的边际产品，但这一理论显然不适合整合技术。因此，要研究在更一般条件下厂商雇用决策的机制。采用整合技术的概念可以对很多经济学的理论问题进行重新思考。     

Does affirmative action reduce gender discrimination and enhance efficiency? New experimental evidence

We investigate experimentally the impact of quota policies on gender discrimination in hiring decisions by testing whether affirmative action increases female employment. We also ask whether firm performance is affected by such policies. Our experiment consists of three treatments. In the baseline (no quota) treatment, groups of two employers and six potential job candidates are formed. Employers have to hire two workers based on information on candidate characteristics including gender and years and subject of study. The second, low penalty, treatment is identical to the baseline except there is a quota such that at least half of the employees hired must be women. If this quota is not respected, the firm has to pay a penalty. The last, high penalty, treatment is the same as the low penalty treatment except that the penalty is significantly higher. We find that women are ranked unfavorably in the absence of a quota, and the introduction of a quota significantly reduces gender discrimination. Firm performance is not affected by the introduction of quotas.     

Do foreigners replace native immigrants? A panel cointegration analysis of internal migration in Italy

This paper examines the impact of the immigration of foreigners on domestic labor mobility. Since David Card's seminal study on the regional labor market impact of the Mariel Boatlift it is controversial whether domestic labor mobility equilibrates economic conditions across regions. However, there is little or no evidence that natives leave destinations where migrants tend to cluster. In this paper we reconcile the existing evidence by taking another route: we analyze whether the immigration of foreigners replaces domestic mobility from poor to rich regions. We focus on Italy, which is characterized by large North-South wage and unemployment differentials, and apply panel cointegration methods. The main finding is that, conditional on unemployment and wage differentials, the presence of foreign workers in the labor force of the destination regions discourages internal labor mobility significantly. As a consequence, spatial correlation studies which use the variance of the foreigner share across regions for identifying the wage and employment effects of immigration, tend to understate the actual impact of foreign immigration.