Setting It Right: Employment Protection,Labour Reallocation and Productivity

This paper provides a critical review of the recent empirical evidence on the links between regulations affecting the hiring and firing of workers, labour reallocation and productivity growth. It also reviews how workers affected by labour mobility fare and discusses policy options to support them. The upshot is that stringent employment protection has a sizeable negative effect on labour market flows and, through this channel, hinders productivity growth. At the same time, the evidence also shows that while greater labour market reallocation benefits many workers through higher real wages and better careers, some displaced workers lose out via longer unemployment durations and/or lower real wages in post-displacement jobs. In this context, reforms of employment protection should be considered as part of a comprehensive package that also includes an adequate safety net for the unemployed and effective re-employment services.     

CONTRACTING CONVICTS: THE CONVICT LABOUR MARKET IN VAN DIEMEN's LAND 1840–1857

The place of penal transportation in Australia's economic history has always been controversial. Convict workers were frequently denigrated as worse than useless, yet without convicts the settlements would have lacked sufficient labour for development. In Van Diemen's Land in the 1840s, convicts constituted more than half the labour supply, and if emancipists are included it was more like three-quarters. After transportation to New South Wales was halted in 1840, amidst claims that the assignment of convict labour was akin to slavery, Van Diemen's Land continued to receive transportees but adopted a new form of labour management: the so-called 'probation system'. To distinguish the new probation system from the 'slavery' of assignment, wages were paid to convict workers. This study uses 17,997 convict employment contracts to explore the labour market for convict passholders at the probation period. Actions speak louder than words, and irrespective of what might have been said about convict quality, by the end of transportation in 1853 convict workers were eagerly engaged at rising wages by employers desperate for labour.     

International Labour Migration in East Asia: trends, patterns and policy issues

This paper examines emerging patterns of labour migration in East Asia and related policy issues from the perspective of labour-importing countries. Following a survey of the characteristics of labour flows stemming from, but more importantly occurring within, the region, it probes inter-country differences, both in the timing of the entry of migrant workers and the degree of dependency on migrant labour in the context of rapid economic growth and labour market change. There is clear evidence that labour migration is now a structural feature of the economic landscape in these countries. The policy challenge is to design market-based systems for making the new reliance on labour inflows consistent with changing domestic labour market conditions and the priorities of national development policy, while minimising social resentment and adverse implications for political relations with neighbouring labour-sending countries.     

Labour markets during apartheid in South Africa1

Anecdotal evidence shows that despite extensive restrictions on the hiring of African workers, these workers were increasingly employed in semi‐skilled occupations throughout the apartheid era. This article shows that White skill acquisition throughout the apartheid era reduced the supply of White semi‐skilled workers and led to the removal of job reservation, the process of reserving skilled and semi‐skilled jobs for Whites. Although job reservation declined, there is little evidence of a decline in racial segregation in the labour market. It is concluded that the transformation in the labour market was driven by White economic incentives rather than any evident change in White preferences regarding racial segregation.     

ADAPTING TO NORTH-SOUTH TRADE:A GENERAL EQUILIBRIUM APPROACH TO POLICY OPTIONS

This paper develops a general equilibrium model of North-Southtrade with different wage setting regimes and a non-tradeablessector. Simulations confirm that substantial gains from tradeopenness can be accompanied by a significant deterioration inthe position of unskilled Northern workers. Increasing labourmarket flexibility will not correct this problem and protectionistmeasures, such as enforcing labour standards on the South, willreduce global income. Less conventional labour market policies,such as employment subsidies for unskilled workers, offer amore effective response, and one, moreover, which benefits workersin both the North and South.     

Economic and Social Security: The Role of the EU

This lecture addresses the issue of growing inequality of labour incomes in the EU. In this lecture, it is observed that through higher unemployment at downward rigid wages, the market position of low-skilled workers has deteriorated over the past quarter-century in Western Europe and that European countries have failed to develop an efficient instrument of income insurance on behalf of low-skilled workers. Wage subsidies are such an instrument. Furthermore, it is argued that labour market integration in an economic union like the EU entails externalities, resulting in underprovision of insurance and that coordination or matching grants could overcome this second inefficiency. On these empirical and theoretical grounds, this article proposes the organisation at EU level of a scheme of matching grants for low-skilled labour, whereby a share of national wage subsidies to low-skilled labour would be financed by the EU under suitable funding.     

Women's work and wages in the sixteenth century and Sweden's position in the ‘little divergence’

We use a unique source from the Swedish royal demesnes to examine the work and relative wages of women in sixteenth-century Sweden, an economic laggard in the early modern period. The source pertains to workers hired on yearly contracts, a type more representative of historical labour markets than day labour on large construction sites, and this allows us to observe directly the food consumed by workers. We speak to the debate on the ‘little divergence’ within Europe, as women's work and gender differentials in pay is a key indicator of women's relative autonomy and seen as a cause for the economic ascendency of the North Sea region during the period. We find small gender differentials among both unskilled and skilled workers, indicating that Sweden was a part of the ‘golden age’ for women. We argue that despite superficial equality, women's economic outlooks were restrained in many other ways – including their access to higher-skilled work and jobs in the expanding parts of the economy – adding important nuance to the discussion about the relationship between women's social position and economic growth in the early modern period.     

FOREIGN BANTU WORKERS IN SOUTH AFRICA: THEIR PRESENT POSITION IN THE ECONOMY

It is not possible to compile accurate statistics about the size, origin, distribution, earnings, remittances and similar measurable aspects of the foreign Bantu labour force in South Africa. From the foregoing discussion it will be obvious that such data are most unlikely to become available in the foreseeable future. There is, however, a growing need for reasonably reliable information concerning economic interrelationships in Southern Africa. The only way to arrive at a workable basis for informed studies of labour matters in the regional context, appears to be the one followed here. By compiling, and fully documenting, as much of the accessible and relevant data as possible into comprehensive and intrinsically consistent tables, the present article can, it is hoped, serve as a convenient starting point for further, more detailed investigations. Briefly, the principal figures derived in the foregoing may be recapitulated. The total number of foreign workers in the Republic in 1964 can be put at roughly half a million men, almost 300,000 (59 per cent.) of them in mining, about 140,000 (29 per cent.) in agriculture, and about 60,000 (12 per cent.) in other employment. In these sectors, they constitute roughly 53, 14, and under 4 per cent. respectively of all Bantu employed there. Approximately 45 per cent. of all foreign workers come from the former High Commission Territories (Basotho accounting for about 60 per cent of this group), about 30 per cent. from Moçambique, 18 per cent. from Rhodesia, Zambia and Malawi together, and the remaining 7 per cent. from South West Africa, Angola, Tanzania and other territories. The total annual earnings of foreigners can be put at R133.4 million (R82.3 million cash and R51.1 million in kind), out of which cash and goods to a total value of R23.9 million (R17.7 million cash and R6.2 million worth of goods) are estimated to be remitted to the countries of origin. About 40 per cent. of the total population of Southern Africa, more than 80 per cent. of its White inhabitants, and approximately two-thirds of the region's wage-earning opportunities for Bantu are to be found in the Republic. Apart from the remittances of migrant workers, the labour supplying countries derive substantial benefits, though of course to a varying degree, from the movement of their nationals to the Republic. These are: 1. the absorption of surplus population into the Bantu groups of the Republic; 2. the fact that at any given moment, a large number of people are living off the resources of another country instead of pressing on inadequate resources at home; 3. the financial benefits from the administrative activities of the recruiting organizations; and 4. the instruction in various subjects imparted to employees on the mines and elsewhere, and generally the knowledge and skills brought back by migrants to their home countries. (The social and economic drawbacks of the migrant labour system cannot be ignored but an evaluation of this system falls outside the scope of this study. It must be recognized that intra-regional labour movements are inextricably bound up with the economic life of Southern Africa. It can, rightly, be pointed out that the abundant supply of foreigners to mining and agriculture in the Republic tends to depress the earnings of indigenous Bantu in these sectors. It is, however, prima facie, open to serious doubt whether drastic reductions in the number of foreign workers is the best way to promote the economic well-being of the local Bantu population. From the standpoint of the labour exporting countries, it is naturally regrettable that their nationals are mostly confined to the less well paying sectors of the South African economy. On the other hand, and in view of the undeveloped state of their economies, they have every reason to welcome such employment opportunities as there may be in the Republic. The newly independent states of the region are earnestly striving to develop their potentialities. By supplying (or releasing) scarce resources, labour migration to the Republic contributes materially, and in the case of Lesotho and Botswana even decisively, towards the attainment of higher levels of living throughout the region. The Republic's neighbours would suffer most if political passion or animosity towards South Africa were to disrupt the present network of the intra-regional flow of labour.     

The Determinants of Labour Supply and Demand in Irrigated Agriculture: A Case Study of the Gezira Scheme in Sudan*

Abstract: The objective of this study was to estimate the determinants of labour supply and demand in irrigated agriculture with reference to the Gezira scheme. Two samples, one comprising the farmers and the other the agricultural workers, were randomly selected through a field survey during the 2003/2004 season. A log‐linear model of multiple regressions was fitted to the data. The results indicated that labour demand and supply depend mostly on variables related to the household characteristics and economic and non‐economic conditions.     

ECONOMIC ANALYSIS ON THE URBAN–RURAL DISPARITY IN HUMAN CAPITAL IN CHINA

With China's economic development and capital accumulation in the industrial sectors, the human capital level of the labours moving from the rural areas could no longer meet the demand of the industrial sectors. Therefore, “structural shortage of technical labour” emerged in the labour market as a result of excess of demand for high‐skilled workers. Previous literature mostly focused on the relationship between rural human‐capital level and labour movement, income change and economic growth, but in this article, the authors focus on the study of the relative disparity of urban and rural human capital and labour movement, as well as the effect of the change of urban–rural human capital gap on industrial output, profit and social welfare. This article shows that bridging the urban–rural gap in respect of human capital level could not only improve the situation of the “structural shortage of technical labour,” but also have a positive effect on the general social welfare.     

Employment quality index for the South African labour market

ABSTRACT

While the South African government specifically set targets on job creation in its numerous economic strategies since the economic transition, various local studies examined the levels and trends in labour force, employment and unemployment to evaluate if these targets were met. However, the quality of employment has not been thoroughly examined. This is the first local study that fills the existing research gap by deriving a composite, multidimensional employment quality index by taking 18 indicators from seven dimensions into consideration: wage, work hours and flexibility, employment security, income security, social benefits, skills and participation. Using the 2010–16 Quarterly Labour Force Survey data, the empirical findings indicated that highly educated, white male workers aged at least 35 years, who lived in urban areas of the Western Cape and Gauteng provinces, and were involved in high skilled occupations in the formal, public sector enjoyed significantly better employment quality.     

Dual Labour Market Intermediaries in Italy: How to Lay off “Lemons”—Thereby Creating a Problem of Adverse Selection

Using longitudinal data from the Bank of Italy that cover the period from 2004 to 2014, this paper investigates the wage- and career implications of temporary jobs across the entire wage profile via unconditional quantile regression models and dynamic panel probit models. Building on Autor’s contributions, we consider temporary jobs to be a Labour Market Intermediary that deals with job-matching problems, such as information asymmetries, search cost reductions, worker-side adverse selection, and pay-productivity gaps. Assuming that wage is a proxy for workers’ productivity, we examine the chances that temporary workers who are located in different quantiles of wage distribution have of making the transition towards a stable employment position in the primary labour market. Results clearly indicate that temporarily employed individuals suffer significant wage- and career penalties. Not only are these individuals overly concentrated in the lowest decile of wage distribution, but the career penalty associated with temporary jobs also remains stable independently of the wage/productivity quantile to which the workers belong. If firms use FTC or TWA at all, they do so to remove less productive workers, whose work contract is not renewed once expired. In light of this evidence, it is clear that the hypothesis—proposed in the economic literature—that temporary employment contracts might serve as a screening tool to identify the most productive workers who would then be offered a stable position in the primary labour market does not hold in the highly dualised labour market of Southern Europe.     

EVALUATING THE GENERAL EQUILIBRIUM EFFECTS OF A WAGE SUBSIDY SCHEME FOR SOUTH AFRICA

Unemployment among semi‐ and unskilled labour has reached severe proportions (over 50%) and threatens the political and economic stability of the South African economy. In this paper a computable general equilibrium (CGE) model of the South African economy is used to assess the effectiveness of a wage subsidy in raising employment of semi‐ and unskilled workers. We find that employment of semi‐ and unskilled workers can be raised quite significantly. Further, the wage subsidy schemes compares favourably with alternative welfare grant schemes in terms of employment growth. However, the results are sensitive to the targeting of sectors and the substitutability between labour of different skill levels.     

Peasant labour for urban industry: Temporary contract labour,urban-rural balance and class relations in a Chinese county

Urban-rural relations in China have a dual character: while a higher level of urban-rural economic balance than most other countries has been achieved, a sharp structural cleavage between workers and peasants has been maintained, based mainly on strict household registrations. Peasants are prevented from migrating to towns and gaining employment there, except under specially approved contracts arranged to resolve local shortages of industrial labour. Contract labour has complex and important effects on rural and urban industrial development. It also embodies the duality of urban-rural relations in China: at the same time as it redistributes wage funds from urban to rural areas, it reinforces the class cleavage between workers and peasants (including contract workers). It also opens up a complex web of inequalities and cleavages among those peasants with contract work and those without. Contract workers have been placed in a contradictory class position which has been a flashpoint of political conflict. The relationships of contract labour to urban industrial and rural development, urbanization, urban-rural balance and structural cleavage, class structure and political conflict are examined through a study of Shulu County, an ordinary rural area with agrowing industrial centre in which over half of the industrial labour force is comprised of peasant contract workers.     

European Labour Mobility: Challenges and Potentials

European Union economies are pressed by (i) a demographic change that induces population ageing and a decline of the workforce, and (ii) a split labour market that is characterized by high levels of unemployment for low-skilled people and a simultaneous shortage of skilled workers. This lack of flexible high-skilled workers and the aging process has created the image of an immobile labour force and the eurosklerosis phenomenon. In such a situation, an economically motivated immigration policy at the European level can generate welfare improvements. A selective policy that discourages unskilled migrants and attracts skilled foreign workers will vitalize the labour market, foster growth and increase demand for unskilled native workers. The paper summarizes the available economic insights, and suggests (i) the need to harmonize the single-country migration policies across Europe and (ii) that the European Union needs to become an active player on the international labour markets by providing competitive institutional settings for European companies. The author is President of the German Institute for Economic Research (DIW Berlin), Director of the Institute for the Study of Labor (IZA) in Bonn, Professor of Economics at the University of Bonn, and Honorary Professor at the Free University of Berlin. Revised version of a paper presented at the high-level expert conference ‘Jobs for Europe’ on the Social Policy Agenda for the European Union on October 25–26, 2004 in Amsterdam. The author thanks Aart Jan Bette, Henk Don, Renske Gerstel, Klara Scheepers, Jan van der Velden and other members of the editorial committee of this conference as well as conference participants, two anonymous referees of this journal, and Amelie Constant, Don DeVoretz, Holger Hinte and Stephanie Wei Wang for many useful comments on earlier drafts.     

我国劳动力流动的动态和预期经济效应分析

劳动力流动是市场机制发挥配置资源作用的表现。从静态分析看,劳动力流动调剂了供需双方缺口,提高了整个社会福利水平。从动态角度看,我国的中心城市和经济先发展地区具有吸引资金、技术和知识资本的优越条件,决定着劳动力流动方向,而且因累积循环作用,引起回波效应大于扩散效     

Has China run out of surplus labour?

Many recent studies claim that China has reached a Lewisian ‘turning point’ in economic development, signalled by rising wages in urban areas and the exhaustion of rural surplus labour. In this paper we show that despite some evidence of rising nominal urban unskilled wages between 2000 and 2009, there is little in the data to suggest that this wage increase has been caused by unskilled labour shortages. China still has abundant under-employed workers with very low income in the rural sector. We argue that China's unique institutional and policy-induced barriers to migration have both prevented many rural workers from migrating to cities and also reduced the migrants' length of stay. We project that under alternative institutional settings, the migrant stock could easily be doubled from the current 150 million to 300 million by increasing either the average length of migrant stay, or the migrant inflow, or both.     

Pieces of eight,pieces of eight: seamen's earnings and the venture economy of early modern seafaring†

Historians have generally argued that between the medieval period and the eighteenth century seafarers transformed from collaborative adventurers with a share in their vessel to the first international wage‐earning proletariat. This interpretation has drawn upon relatively limited statistical analysis of mariners’ wages, and underestimates the variety of seafarers’ remuneration and economic activities besides wages themselves. This article undertakes a more sustained analysis of seventeenth‐century wage data drawn from the papers of the English High Court of Admiralty, and uses the same evidence to examine other forms of income, both customary payments as part of shipping, and small‐scale trade. Seafarers of all ranks carried their own commodities on all shipping routes, offering an opportunity to increase their income considerably. This evidence confirms that the maritime labour market was hierarchical, and that very often seafarers were poor labourers facing economic insecurity of many kinds. However, it refines the previous interpretation by emphasizing the presence of skilled workers even among the lower levels of this labour market, and by introducing a new dimension to mariners’ economic agency: they were not simply wage‐workers, but also independent participants in a venture economy.     

Globalization and labour-market adjustment: how fast and at what cost?

In this paper we argue that the flexibility of an economy'slabour market plays a role in determining the gains from tradeliberalization, the level of short-run adjustment costs, andthe relative value of these two measures. To do so, we describethe model introduced in Davidson and Matusz (2000) which allowsus to solve for adjustment costs when workers vary accordingto ability and jobs differ in terms of the skills that theyrequire. We then report results based on simulations of thismodel. We find that economies with sluggish labour markets havethe least to gain from liberalization. The reason is that whilethe removal of trade barriers creates large benefits, they arealmost completely offset by large short-run adjustment costs.In contrast, we find that with either very flexible or veryslothful labour market gains from liberalization are alwayssignificantly larger than the short-run adjustment costs.     

Employees who do not know their labour contract term and the implications for working conditions: Evidence from Japanese and Spanish microdata

In this paper, we analyse the relationship between employees who do not know the length of their labour contract (hereafter, DNK employees) and working conditions. In developed countries, labour standards regulations generally require employers to provide a labour contract with a clearly defined duration to protect the fundamental rights of workers. However, the data reveal that in the developed countries on which we focus, Japan and Spain, non-negligible proportions of employees, 8% and 11%, respectively, do not know the duration of their labour contracts. Utilizing 2012 data from the Employment Status Survey for Japan and the Economically Active Population Survey for Spain, we find that whether workers are ignorant of their contract term commonly depends on their human capital level. Women, single people, younger and older workers and less-educated workers are more likely not to know their labour contract duration. Compared with other employees, DNK employees are more dissatisfied with their current job, more likely to search for other jobs and less likely to seek more work in their current jobs. We find that DNK employees suffer from a wage penalty for non-standard status and have less access to job training, as occurs in Japan, and that specific attributes, such as immigrant status, tend to be closely related to DNK status, as occurs in Spain. Overall, DNK employment is related to poor working conditions, which indicates the importance of educating workers about labour laws to maintain the welfare of disadvantaged workers.