MINIMUM WAGE EFFECTS ON PERMANENT VERSUS TEMPORARY MINIMUM WAGE EMPLOYMENT

We estimate the effect of minimum wages on employment using the Master Files of the Canadian Labour Force Survey over the recent period 1997–2008. Particular attention is paid to the differences between permanent and temporary minimum wage workers—an important distinction not made in the existing literature. Our estimates for permanent and temporary minimum wage workers combined are at the lower end of estimates based on Canadian studies estimated over earlier time periods, suggesting that the adverse employment effects are declining over time for reasons discussed. Importantly, the adverse employment effects are substantially larger for permanent compared to temporary minimum wage workers; in fact they fall almost exclusively on permanent minimum wage workers. (JEL J30)     

The labour market effects of financial crises

This paper examines how the 2008–2009 financial crisis affected labour markets in Europe, and how this impact depended on employment protection laws. Using a difference‐in‐differences approach, our estimates isolate the effect of the lack of credit on the labour market from that of the general decline in aggregate economic activity. We find large and negative impacts of the credit shock on total employment, particularly on temporary, unskilled and young workers. These impacts were significantly larger in countries with stronger legal protection of permanent workers from dismissal. This suggests that the differential impact of the crisis across countries was not entirely driven by the heterogeneity of the credit shock, but also by labour regulations. Given regulatory inflexibility in adjusting the permanent workforce, firms responded to tightening financial constraints by disproportionately laying off temporary workers (who tend to be younger and less skilled than permanent workers).     

Employment protection and productivity: evidence from firm-level panel data in Japan

Recent developments in the literature on Employment Protection Legislation (EPL) have revealed that changing the stringency of employment protection can lead to extensive consequences outside the labour market, by affecting firms’ production decisions or workers’ commitment levels. This article provides the first empirical evaluation of the comprehensive effect of restrictions on firing employees in Japan, by exploiting the variations in court decisions. We find that judgements lenient to workers significantly reduce firms’ total-factor productivity growth rate. The effect on capital is mixed and inconclusive, although we obtain modest evidence that an increase in firing costs induces a negative scale effect on capital inputs.     

The effects of employment protection: Learning from variable enforcement

Employment protection legislation (EPL) is not enforced uniformly across the board. There are a number of exemptions to the coverage of these provisions: firms below a given threshold scale and workers with temporary contracts are not subject to the most restrictive provisions. This within-country variation in enforcement allows us to make inferences on the impact of EPL which go beyond the usual cross-country approach. In this paper we develop a simple model which explains why these exemptions are in place to start with. Then we empirically assess the effects of EPL on dismissal probabilities and on the equilibrium size distribution of firms. Our results are in line with the predictions of the theoretical model. Workers under permanent contracts in firms with less restrictive EPL are more likely to be dismissed. However, there is no effect of the exemption threshold on the growth of firms.     

TURNING PINK SLIPS INTO RED TAPE: THE UNINTENDED EFFECTS OF EMPLOYMENT PROTECTION LEGISLATION

This article presents evidence on the link between employment protection legislation (EPL) and the rate of unemployment in a cross‐country panel dataset of Organisation for Economic Co‐operation and Development countries from 1985 to 2013. We use both a traditional panel specification with lags of the policy variable, and also a unique structural panel vector autoregression (PVAR) method to determine the long‐run dynamic interaction between EPL and unemployment. We confirm that more restrictive EPL for permanently employed workers causes a significant and persistent increase in unemployment, but the effect is only apparent at long‐lag lengths, some 2–5 years after the law has been implemented. (JEL J68, J65, J63)     

Weaker jobs,weaker innovation. Exploring the effects of temporary employment on new products

This work explores the relationship between temporary employment and product innovation focusing on five major European economies (France, Germany, Italy, Spain and the Netherlands) observed between 1998 and 2012. The analysis distinguishes sectors according to their technological characteristics and regimes finding that industries using temporary employment tend to have a weaker product innovation propensity. The negative correlation between temporary employment and innovation turns out to be stronger in those sectors where tacit firm’s specific knowledge is crucial to the development of innovations. These sectors are identified using both the ‘Cumulativeness’ proxy stemming from Peneder’s classification as well as distinguishing between different Schumpeterian regimes – Schumpeter Mark I vs. II – of knowledge accumulation.     

Temporary work and neoliberal government policy: evidence from British Columbia,Canada

We examine the impact of government policy on the incidence of temporary work by analysing the case of British Columbia (BC), Canada. The analysis is based upon the Canadian Labour Force Survey 1997–2004; temporary work is defined as work that is not expected to last for more than 6 months and includes seasonal, fixed‐term, casual, and temporary help agency work. A case study of BC provides a valuable opportunity to assess the impacts of neoliberal government policy, designed to increase labour market flexibility, on the extent of temporary work because we are able to compare labour market trends in BC both before and after the reforms introduced in 2001 and to compare BC with other provinces in Canada that were not subject to such large changes in their policy environments. We find that the shift to neoliberal policies in BC led to significant increases in the likelihood of workers finding themselves in temporary employment. We also find that the likelihood of being a temporary worker in BC in the post‐policy change period increases relative to all other provinces over the same period. Taken together, these results indicate that government policy is a key determinant of the level of temporary work. As such, the level of temporary work should be seen as a policy‐sensitive variable, rather than as a phenomenon determined solely by the exogenous forces of globalization and technological change.     

Scale effects in endogenous growth theory: an error of aggregation not specification

Modern Schumpeterian growth theory focuses on the product line as the main locus of innovation and exploits endogenous product proliferation to sterilize the scale effect. The empirical core of this theory consists of two claims: (i) growth depends on average employment (i.e., employment per product line); (ii) average employment is scale invariant. We show that data on employment, R&D personnel, and the number of establishments in the US for the period 1964–2001 provide strong support for these claims. While employment and the total number of R&D workers increase with no apparent matching change in the long-run trend of productivity growth, employment and R&D employment per establishment exhibit no long-run trend. We also document that the number of establishments, employment and population exhibit a positive trend, while the ratio employment/establishment does not. Finally, we provide results of time series tests consistent with the predictions of these models.     

Are costs really sticky? Evidence from publicly listed companies in the UAE

This article measures the degree of adjustment between operating revenues and costs for publicly listed companies in the United Arab Emirates (UAE). Traditional cost models assume that variable costs change proportionally in response to an upward or downward fluctuation in demand. However, in recent years, such an assumption has been questioned by a variety of papers from the economics and accounting fields. Typically, cost stickiness is defined as costs decreasing by less than 1% when sales decrease by 1%, while reacting closer to the proportion of change when sales increase. This study, unlike the vast majority of the literature, did not find cost stickiness in the UAE after using panel data regression analysis. The main explanation is that UAE has mostly expatriate labour force that does not have the typical benefits of employment protection legislation (EPL) available in other national jurisdictions. EPL is a main reason that costs adjustments during decreasing sales is curbed due to the associated costs of firing employees.     

中国农民工就业状态的调研

为了解国际金融危机发生近一年后对中国农民工就业的影响,笔者的课题组组织学生在全国19个省(直辖市、自治区)从流出地和流入地对农民工就业状态进行了调研。在对农民工就业状态的描述性统计、交互分类分析、对应分析的基础上得出以下结论:农民工转移就业、稳定就业的任务依然艰巨,供求的结构性矛盾突出与农民工就业不足将继续并存;农民工权益缺失,距离体面就业、生活和权益平等尚远;化解农民工就业问题的难点来自政策和社会管理体制上的问题,解决农民工就业问题需要实现经济发展方式的转变,需要作为中长期完善发展政策、机制和推进制度创新的一个核心问题。     

Technological innovation and the demand for labor by firms in expansion and recession

ABSTRACT

With firm data from the Spanish Community Innovation Survey (CIS) for the period 2003–2014, we find a positive and significant effect of innovation in the demand for labor when firms introduce product and process innovations in the same time period. The effect of innovation on the demand for labor is countercyclical, higher in the recession, after 2008, than in the expansion, before 2008, but the probability that firms innovate in product and process is counter-cyclical, i.e. lower in the recession. Altogether, the elasticity of the demand for labor to the probability that firms introduce product and process innovations remains stable throughout the sample period, at around 0.035. Innovation contributes to stabilize average employment during the cycle, more so when the innovation is in product, alone or together with process, than when it is only in process. These results are broadly consistent with product and process innovations shifting firms’ demand and production functions upwards, but differentially in expansions (less product market competition) than in contractions (more competition).     

Earnings Instability and Tenure

We study the effect of tenure on earnings instability in Italy using the reforms of temporary employment contracts, which affected the average tenure of workers differentially across cohorts. We develop a model of earnings dynamics, and we exploit the variation of tenure and instability over time and across birth cohorts to estimate policy‐relevant parameters. Our results indicate that each year of tenure on the job reduces earnings instability by 11 percent; the drop is faster in the first three years of the match. Workers on a temporary contract have an earnings instability up to 100 percent higher than workers on a permanent contract.     

The effect of temporary help jobs on employment volatility

This study investigates the impact of temporary agency employment on employment volatility outside the sector. Making use of econometric volatility models, we find that enhancing numerical flexibility by temporary agency employment decreases employment volatility of incumbent workers. However, not all subgroups are benefitting equally. While prime‐age permanent workers gain considerably from higher flexibility, young workers, migrants and low‐skilled workers not only are overrepresented among the temps but also do not gain when employed outside the sector.     

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.     

Reexamining the permanent income hypothesis with uncertainty in permanent and transitory innovation states

In this paper, we reexamine the permanent income–consumption relationship analytically and empirically, based on the innovation regime-switching (IRS) model developed in [Kuan, C.M., Huang, Y.L., Tsay, R.S., 2005. An unobserved component model with switching permanent and transitory innovations. Journal of Business and Economic Statistics, 23, 443–454]. A novel feature of the IRS model is that it explicitly allows for uncertainty in innovation states. When the labor income follows an IRS process, it is shown that the agent’s perception on the likelihoods of income innovations being permanent and transitory plays a crucial role in determining the optimal forecasts on the change of consumption. The effect of a current labor income innovation on consumption is a weighted average of two distinct effects resulting from permanent and transitory innovations with the weights equal to the perceived likelihoods of the respective states. Also, past innovations may affect consumption when there are revisions in the perceived likelihoods of previous states. Our empirical study on US data shows that consumption indeed reacts significantly to the perceived likelihoods of innovation states. However, even after controlling for the effect of state uncertainty, we find consumption vastly underreacts to permanent innovations in labor income but reacts about the right magnitude to transitory ones when compared with the prediction of the permanent income hypothesis. This evidence is similar to [Elwood, S.K., 1998. Testing for excess sensitivity in consumption: A state-space unobserved components approach. Journal of Money, Credit, and Banking, 30, 64–82] but in sharp contrast with that found in [Hall, R.E., Mishkin, F.S., 1982. The sensitivity of consumption to transitory income: Estimates from panel data on households. Econometrica, 50, 461–480].     

Impact of organizational innovation on product and process innovation

The purpose of this paper was to test the effect of organizational innovation on product and process innovation (while controlling for endogeneity). Our hypothesis was that organizational innovation should have a significant and positive impact on technical (product or process) innovation. We control for endogeneity by using a Poisson estimator that accommodates a binary endogenous regressor. We test 10 potential instruments using a battery of test criteria and settle on five. All results are presented using the five instruments to avoid expectation bias. In general we find that organizational innovation does impact technical innovation positively. With the 2009 data we find that the mean of the average treatment effect for product innovation is roughly 1.7 times that of process innovation. For the 2009–2012 data we find that the impact on product innovation is roughly 1.5 times that of process innovation. For the 2012 data, we had anomalous results for process innovation, such that organizational innovation reduced the number of process innovations by 2.3 per year. In terms of Canadian government policy, the results lend support to the view that technical innovation is not the only innovation that matters. The right policy mix may encourage firms to experiment with and adopt more organizational innovations to enhance technical innovation.     

Temporary and Permanent Immigration under Unionization

This paper investigates permanent and temporary immigration and remittance under the coexistence of unionized and non‐unionized manufacturing firms in a two‐sector economy. The impacts of immigration and remittance on respectively wages, employment, the union–non‐union wage gap and national welfare are analyzed. It is found that both permanent immigration (economy‐wide) and temporary immigration in agriculture bring positive effects on most variables (except the competitive wage), but widens the wage gap and causes income redistribution in the host country. However, if temporary immigrants work in manufacturing only, then all wages and the union–non‐union wage gap fall. That is, workers become more equally paid but poorer. In addition, remittance and globalization cause negative effects on union workers and employers. It is perhaps such consequences and the income redistribution effect of immigration that cause the media to paint a negative image of immigration.     

Temporary employment,work quality,and job satisfaction

Using European Working Conditions Survey, this paper shows that being employed on a temporary, rather than an open-ended, contract has a negative bearing for job satisfaction. While this effect has been established previously, the novelty of this paper is to show that the effect propagates both directly and indirectly, through working conditions and work quality. Accounting for this indirect effect allows to obtain the effect of the contractual status on job satisfaction that is substantially larger in magnitude as compared to simple direct effects, confirming the importance of accounting for unobservable individual, company-specific, and job-specific heterogeneity when addressing this relationship. Moreover, the extent of co-determination of poorer working conditions and temporary contractual status, as well as the resulting bias in estimating only a direct effect of temporary employment on job satisfaction without accounting for such co-determination, vary depending on a country setting. It is shown that in transition economies, this co-determination is larger than in non-transition economies, possibly because of the workers’ weaker bargaining power, strategic use of temporary employment to circumvent labor regulations, the absence of regulations prescribing equal treatment of workers with different contractual arrangements, or lack of compliance with such regulations.     

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.     

工艺创新会抑制就业吗？

以中国制造行业159家上市公司2001-2012年的面板数据为样本,从专利数据中分离出工艺专利,实证研究中国制造企业工艺创新对就业的影响。结果显示,工艺创新在整体上具有积极的就业效应,对技术人员数量的促进作用高于对生产人员的促进作用,从而证实了工艺创新有助于扩大企业需求,促进就业。