THE IMPACT OF LABOR MARKET REGULATION ON EMPLOYMENT IN LOW‐INCOME COUNTRIES: A META‐ANALYSIS

Controversy over labor market policy often centers on achieving a balance between preventing worker exploitation, and avoiding loss of productivity or employment through excessive regulation. Although the literature documenting the impact of labor market regulation on employment is extensive, there is a dearth of evidence on the impact of such policies in low‐income countries (LICs). Since it is easier for workers, especially women, to slip into the informal sector in LICs, regulations are likely to have stronger impacts on formal employment in these countries (but lower impacts on unemployment). We systematically reviewed available research from countries that are, or were until recently, LICs. Most studies document that more stringent labor regulations are associated with lower formal sector employment and higher informal sector employment. We also conducted a metaregression analysis of the impact of minimum wages on formal and informal employment. After controlling for publication bias, higher minimum wages are associated with lower formal employment and a higher share of informal workers.     

TECHNOLOGICAL INNOVATION AND EMPLOYMENT IN DERIVED LABOUR DEMAND MODELS: A HIERARCHICAL META‐REGRESSION ANALYSIS

The effect of technological innovation on employment is of major concern for workers and their unions, policy makers and academic researchers. We meta‐analyse 570 estimates from 35 primary studies that estimate a derived labour demand model. We contribute to existing attempts at evidence synthesis by addressing the risks of selection bias and that of data dependence in observational studies. Our findings indicate that: (i) hierarchical meta‐regression models are sufficiently versatile for addressing both selection bias and data dependence in observational data; (ii) innovation's effect on employment is positive but small and highly heterogeneous; (iii) only a small part of residual heterogeneity is explained by moderating factors; (iv) selection bias tends to reflect preference for upholding prevalent hypotheses on the employment effects of process and product innovations; (v) country‐specific effect‐size estimates are related to labour market and product market regulation in six OECD countries in a U‐shaped fashion; and (vi) OLS estimates reflect upward bias whereas those based on time‐differenced or within estimators reflect a downward bias. Our findings point out to a range of data quality and modelling issues that should be addressed in future research.     

FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: A META‐ANALYSIS

We analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth. Taken together, the studies imply a positive and statistically significant effect, but the individual estimates vary widely. We find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results. Studies that do not address endogeneity tend to overstate the effect of finance on growth. While the effect seems to be weaker in less developed countries, the effect decreases worldwide after the 1980s. Our results also suggest that stock markets support faster economic growth than other financial intermediaries.     

INTERFUEL SUBSTITUTION: A META‐ANALYSIS

Abstract This paper provides the first meta‐analysis of the interfuel substitutability literature. The sample includes 47 studies of interfuel substitution in the industrial sector, in manufacturing industry or manufacturing sub‐industries, or in the macro‐economy of a variety of developed and developing countries. Meta‐regressions are estimated for the six shadow elasticities of substitution between coal, oil, gas and electricity. I find that at the level of the industrial sector as a whole the oil–coal, oil–gas, oil–electricity and gas–electricity shadow elasticities of substitution are significantly greater than unity. The remaining elasticities – between coal and gas and coal and electricity – are insignificantly different from unity or zero due to their large standard errors. Substitution possibilities seem more constrained at the macro level and less constrained at lower levels of aggregation. Estimates of the elasticities of substitution from cross‐section regressions are generally largest whereas fixed effects panel estimates are intermediate in magnitude, and time‐series estimates are mostly much smaller. In order to obtain more precise and less biased estimates of long‐run elasticities of substitution, there is a need for additional primary studies using large samples and/or the between estimator which econometric research suggests is likely to provide the best estimates of long‐run elasticities.     

THE FINANCIAL DEVELOPMENT AND GROWTH NEXUS: A META‐ANALYSIS

We conduct a meta‐analysis of the literature of financial development and economic growth. We cover a large number of empirical studies and estimations that have been published in journal articles. We measure the degree of heterogeneity and identify the causes of the observed differentiation. Among the most significant factors behind this heterogeneity is the choice of financial‐variable proxies, the kind of data used as well as whether a study takes into account the issue of endogeneity. Our results suggest that the empirical literature on the finance–growth nexus is not free from publication bias. Also, a genuine positive effect exists between financial development and economic growth.     

INFLATION AND CENTRAL BANK INDEPENDENCE: A META‐REGRESSION ANALYSIS

Abstract Using 59 studies, we perform a meta‐regression analysis of studies examining the relationship between inflation and central bank independence (CBI). The studies considered are very different with respect to the CBI indicator used, the sample of countries and time periods covered, model specification, estimators used and publication outlet. We conclude that there is a significant publication bias. However, we also find a significant genuine effect of CBI on inflation. Differences between studies are not caused by differences in CBI indicators used.     

THE EURO'S TRADE EFFECT: A META‐ANALYSIS

Many studies have estimated the trade effect of the euro, but their results vary greatly. This meta‐analysis collects 3323 estimates of the euro effect along with 28 characteristics of estimation design from almost 60 studies and quantitatively examines the literature. The results show evidence of publication bias, but they also suggest that the bias decreases over time. After correcting for the bias, the meta‐analysis shows that the literature is consistent with an effect ranging between 2% and 6%. The results from Bayesian model averaging, which takes into account model uncertainty, show that the differences among estimates are systematically driven by data sources, data structure, control variables, and estimation techniques. The mean reported estimate of the euro's trade effect conditional on best‐practice approach is 3%, but is not statistically different from zero.     

OWNERSHIP CONCENTRATION AND FIRM PERFORMANCE IN EMERGING MARKETS: A META‐ANALYSIS

The literature concerned with relations between ownership concentration and corporate performance in emerging markets presents conflicting theoretical predications and inconclusive empirical results. We use meta‐analytical techniques to integrate the diverse empirical findings and investigate factors contribute to the inconsistencies in the empirical evidence. Using 419 correlations collected from 42 primary studies of listed corporations in 18 emerging markets, heterogeneity tests show that only a small proportion of the variation in reported ownership concentration–performance relations can be attributed to sampling error. Our meta‐regressions reveal how population differences, researchers’ modeling choices, and inadequate treatment of endogeneity explain a large portion of the true heterogeneity. After adjusting for these effects, we find ownership concentration has negative relation with firm performance across countries. Our results emphasize the importance of model specification and methods of addressing endogeneity, and support further comparative study of the ownership concentration–corporate performance relation between countries with seemingly similar corporate governance environments.     

FDI AND TAXATION: A META‐STUDY

Abstract In this paper we extend former meta‐analyses on FDI and taxation in three ways. First, we add 16 recent publications. Second, we code additional meta‐regressor variables addressing important issues in research on FDI and taxation. Third, we refer to the sophisticated meta‐analytical methodology and present a coherent strategy to choose the meta‐regression estimator most suitable for the meta‐data at hand. As compared to prior surveys, the meta‐analysis is thus based on a much broader methodological basis and a considerably richer meta‐data set. The median tax semi‐elasticity of FDI based on 704 primary estimates is 2.49 in absolute terms. The precision weighted average of the full sample of semi‐elasticities is 2.55, again in absolute terms. Moreover, our meta‐analysis shows that there is a publication bias in the primary literature. Meta‐regressions show that studies based on aggregate data report systematically larger semi‐elasticities than firm‐level analyses, that integrating bilateral tax regulations into effective tax rates leads to more effective measurement of adverse tax incentives on foreign investment, and that tax effects are not compensated by public spending.     

INTEREST RATE PASS‐THROUGH: A META‐ANALYSIS OF THE LITERATURE

The interest rate pass‐through describes how changes in a reference rate (the monetary policy, money market or T‐bill rate) transmit to bank lending rates. We review the empirical literature on the interest rate pass‐through and systematize it by means of meta‐analysis and meta‐regressions. Using the pass‐through to corporate lending rates as the baseline, we find systematically lower estimated pass‐through coefficients in studies that focus on the pass‐through to consumer lending rates and rates on long‐term loans. Also studies estimating the pass‐through by averaging all lending rates into one category report a lower pass‐through. Importantly, the interest rate pass‐through is significantly influenced by the country's macro‐financial environment. In economies with deepening stock markets, the estimated pass‐through strengthens significantly. Interestingly, after the global financial crisis, the pass‐through weakened across the board, including because of growing trade openness and supply chain financing, rising volatility and stock market turnovers, as well as declining central bank independence. Inflation targeting frameworks, if in place, helped diminish this pass‐through weakening.     

CORRUPTION'S DIRECT EFFECTS ON PER‐CAPITA INCOME GROWTH: A META‐ANALYSIS

Corruption is a symptom of weak institutional quality and could have potentially adverse effects on economic growth. However, heterogeneity in reported findings makes it difficult to synthesize the evidence base with a view to test competing hypotheses and/or support evidence‐based policy and practice. To address this issue, we have extracted 327 estimates of corruption's direct effect on per‐capita GDP growth from 29 primary studies, following a peer‐reviewed and pre‐published systematic review protocol. Precision‐effect and funnel asymmetry tests indicate that corruption has a negative effect on per‐capita GDP growth after controlling for publication selection bias and within‐study dependence. However, multivariate meta‐regression analysis results indicate that the overall effect is not robust to inclusion of moderating variables through a general‐to‐specific procedure for model specification. We report that the marginal effect of corruption on per‐capita GDP growth is more adverse when the primary study estimates relate to long‐run growth, are based on low‐income‐country data only, and extracted from journal papers. The effect is less adverse in studies that use the International Country Risk Guide corruption perceptions index and in those reporting estimates from two‐stage least‐squares estimations.     

THE EFFECTIVENESS OF ACTIVE LABOR MARKET POLICIES: A META‐ANALYSIS

This paper provides a meta‐analysis of microeconometric evaluation studies on the effectiveness of active labor market policies. The analysis is built upon a systematically assembled data set of causal impact estimates from 57 experimental and quasi‐experimental studies, providing 654 estimates published between January 1990 and December 2017. We distinguish between the short and longer term impacts in our analysis; at 6, 12, 24, and 36 months after program start. After correcting for publication bias and country‐specific macroeconomic characteristics, subsidized labor and public employment programs have negative short‐term impacts, which gradually turn positive in the longer run. Schemes with enhanced services including job‐search assistance and training programs do not have these negative short‐term effects, and stay positive from 6 until 36 months after program start.     

ALCOHOL MARKETING,ADOLESCENT DRINKING AND PUBLICATION BIAS IN LONGITUDINAL STUDIES: A CRITICAL SURVEY USING META‐ANALYSIS

Abstract This paper presents a meta‐analysis of prospective cohort (longitudinal) studies of alcohol marketing and adolescent drinking, which accounts for publication bias. The paper provides a summary of 12 primary studies of the marketing–drinking relationship. Each primary study surveyed a sample of youth to determine baseline drinking status and marketing exposure, and re‐surveyed the youth to determine subsequent drinking outcomes. Logistic analyses provide estimates of the odds ratio for effects of baseline marketing variables on adolescent drinking at follow‐up. Using meta‐regression analysis, two samples are examined in this paper: 23 effect‐size estimates for drinking onset (initiation); and 40 estimates for other drinking behaviours (frequency, amount, bingeing). Marketing variables include ads in mass media, promotion portrayals, brand recognition and subjective evaluations by survey respondents. Publication bias is assessed using funnel plots that account for ‘missing’ studies, bivariate regressions and multivariate meta‐regressions that account for primary study heterogeneity, heteroskedasticity, data dependencies, publication bias and truncated samples. The empirical results are consistent with publication bias, omitted variable bias in some studies, and lack of a genuine effect, especially for mass media. The paper also discusses ‘dissemination bias’ in the use of research results by primary investigators and health policy interest groups.     

SUCCESSFUL IN THE LONG RUN: A META‐REGRESSION ANALYSIS OF PERSISTENT FIRM PROFITS

We study the profit persistence literature by applying meta‐regression analysis (MRA) to a set of 36 empirical papers, which analyze the persistence of abnormal firm profits over time. The analyzed literature provides evidence for a mediocre degree of persistence in abnormal profits. An initial analysis of the distribution of reported profit persistence estimates reveals some degree of excess variation. This points toward publication bias that favors significant results independent of their algebraic sign. The MRA, however, reveals that publication bias is particularly favoring results that indicate profit persistence and thus contradict the neoclassical model of perfect competition. Moreover, the MRA enables to control for heterogeneity driven by the study design. We find that the analyzed country (developing vs. developed), the applied econometric approach, as well as the analyzed period of time are significant drivers of heterogeneity in reported persistence estimates.     

MULTI‐CRITERIA OPTIMIZATION OF REGIONAL EMPLOYMENT POLICY: A SIMULATION ANALYSIS FOR GERMANY

The distribution of European and national aid among 271 German labor market regions is considered as an optimization problem with three targets: (i) interregional equalization of unemployment rates; (ii) minimization of total (national) unemployment; and (iii) maximization of GDP, subject to budget constraints and some administrative restrictions. The analysis of the German program in 2000–2002 shows that the results actually obtained for 6 billion euro required only 241 million euro under optimal planning (4% of the actual budget). Such an inappropriate implementation of active labor market policies can be the cause of low efficiency, often misinterpreted as uselessness. This paper suggests a decision aid for optimal planning and shows that tax returns from the additional GDP due to jobs subsidized can transform regional policy into a winning governmental strategy.     

CHILD LABOUR: A REVIEW OF RECENT THEORY AND EVIDENCE WITH POLICY IMPLICATIONS

In recent years, a growing number of authors have turned their attention to the question of why children work. The purpose of this paper is to review some of the more recent theoretical and empirical research into the topic of child labour, and to illustrate the fact that no one factor on its own can account for the phenomenon of child labour. Therefore, policies aimed at eradicating child labour will need to address the broad range of underlying factors that contribute to the incidence of child labour, such as poverty, market imperfections and access to education.     

THE INNOVATION‐EMPLOYMENT NEXUS: A CRITICAL SURVEY OF THEORY AND EMPIRICS

Understanding whether technical change is beneficial or detrimental for employment is at the center of the policy debate, especially in phases of economic recession. So far, the effects of innovation – in its manifold declinations and intrinsic complexity – on labor demand have proven to be not unequivocal. This essay critically reviews the role of technical change in shaping employment dynamics at different levels of aggregation. First, it disentangles theoretically the role of different compensation mechanisms through which employment adjusts after an innovation is introduced. Second, it critically presents the most recent empirical evidence on the topic, with a focus on methods and limitations. Finally, it provides an attempt to conceptualize a number of stylized facts and empirical regularities on the innovation‐employment nexus.     

Perceptions of High‐Involvement Work Practices,Person‐Organization Fit,and Burnout: A Time‐Lagged Study of Health Care Employees

Previous research demonstrates that high‐involvement work practices (HIWPs) may be associated with burnout (emotional exhaustion and depersonalization); however, to date, the process through which HIWPs influence burnout is not clear. This article examined the impact of HIWPs on long‐term burnout (emotional exhaustion and depersonalization) by considering the mediating role of person‐organization fit (P‐O fit) in this relationship. The study used a time‐lagged design and was conducted in a Canadian general hospital among health care personnel. Findings from structural equation modeling (N = 185) revealed that perceived HIWPs were positively associated with P‐O fit. There was no direct effect of HIWPs on burnout; rather, P‐O fit fully mediated the relationship between employee perceptions of HIWPs and burnout. This study fills a void in the HR and burnout literature by demonstrating the role that P‐O fit has in explaining how HIWPs alleviate emotional exhaustion and depersonalization. © 2016 Wiley Periodicals, Inc.     

EXPLAINING DIFFERENCES IN EFFICIENCY: A META‐STUDY ON LOCAL GOVERNMENT LITERATURE

This paper reviews the literature on local government efficiency by meta‐reviewing 360 observations retrieved from 54 papers published from 1993 to 2016. The meta‐regression is based on a random‐effects model estimated with the two‐step random‐effects maximum likelihood (REML) technique proposed by Gallet and Doucouliagos. Results indicate that the study design matters when estimating a frontier in local government. We find that studies focusing on technical efficiency provide higher efficiency scores than works evaluating cost efficiency. The same applies when using panel data instead of cross‐section data. Interestingly, studies that use the Free Disposal Hull (FDH) approach yield, on average, higher efficiency scores than papers employing the data envelopment analysis (DEA) method, thereby suggesting that in this literature the convexity hypothesis of the production set is a matter. Finally, the efficiency of local government increases with the level of development of the analysed countries and is positively related to the national integrity of the legal system. The opposite holds when considering the corruption.