Labour market policies in the western industrialised countries

The longer the high levels of unemployment continue in western countries the greater is the discussion about a policy aimed at reducing unemployment which is independent of general counter-cyclical and growth policies. What type of labour market policy measures have been adopted up to now in these countries?     

SEARCH UNEMPLOYMENT AND THE EFFECT OF AGGREGATE DEMAND POLICY: A DUAL LABOR MARKETS ANALYSIS

This paper examines the role of aggregate demand policy affecting unemployment under a model of dual labor markets. Recently, some papers have considered the sources of unemployment in OECD countries and have stressed the role of aggregate demand policy in reducing it. However, there exists the argument that aggregate demand policy may have an adverse effect on unemployment. Therefore, in this paper, we will consider in what situations aggregate demand policy has such an effect on unemployment, and propose an analysis of its microfoundation.     

Is the unemployment–inflation trade-off still alive in the Euro Area and its member countries? It seems so

The unemployment–inflation trade-off can be interpreted as a proposition concerning the response of these two variables to aggregate demand shocks. In this paper, we study the possible presence of the trade-off in the Euro Area and in a wide group of Euro-area countries in the last 20 years, that is, since the start of EMU. We use the structural VAR methodology that allows the separation between supply and demand shocks. Our main finding is that the existence of a trade-off is largely confirmed both at the Euro Area and at the national level. Nevertheless, the size of the trade-off, measured at different horizons, shows some heterogeneity among countries. No less important, when we augment the VAR model by introducing monetary policy in the context of an open economy, we find that monetary policy shocks push inflation and unemployment in opposite directions in the currency area. Another interesting result concerns the evidence of a relatively flat relation between unemployment and inflation, conditionally to monetary policy shocks. The bulk of these conclusions seem to be confirmed by a number of robustness checks.     

Sustaining imperfectly credible trade liberalization: Do the rate of tariff reduction and the degree of labour mobility matter?

Abstract

Imperfectly credible trade liberalization can lead to balance of payment deterioration and a subsequent reversal of the reform. Therefore, this paper examines whether the likelihood of policy reversal depends on the rate of tariff reduction or the degree of labour mobility. The analysis shows that transitory unemployment increases the likelihood of policy reversal. Furthermore, a gradual reduction in the tariff rate is found to extend the life of the liberalization episode, but does not necessarily increase the likelihood of sustained liberalization.     

Reducing working hours in the context of growing real capital mobility

Can the reduction of working hours be a suitable policy instrument to reduce unemployment? The following article presents a model of the effects of such a reduction—without offsetting adjustments to wage rates—on unemployment in the context of growing real capital mobility between countries and discusses the consequences for economic policy.     

Employment and Labor Laws

Abstract

This article reviews and compares the employment and labor laws of three countries-US, South Africa, and Ghana. The methodology employed is a qualitative review of each countries employment and labor laws that are centered on collective bargaining, employment discrimination and other workplace standards, unemployment compensation, pensions, workplace safety, and workers compensation. Even though, the three countries have laws covering various areas of employer/employee relationships, perusal of the various countries' laws reveals there are considerable differences between the three countries with respect to the importance of labor market institutions and the role they play in determining the terms of employment.     

The end of full employment? On economic development in industrialized countries

In view of high and rising jobless rates in the industrialized countries the solution of the unemployment problem becomes a cardinal question for politicians and economists. What factors have determined the unemployment trend since the 1960s and what conclusions can be drawn for employment policy?     

International trade and unemployment: Theory and cross-national evidence

We present a model of trade and search-induced unemployment, where trade results from Heckscher-Ohlin (H-O) and/or Ricardian comparative advantage. Using cross-country data on trade policy, unemployment, and various controls, and controlling for endogeneity and measurement-error problems, we find fairly strong and robust evidence for the Ricardian prediction that unemployment and trade openness are negatively related. This effect dominates the positive H-O effect of trade openness on unemployment for capital-abundant countries, which turns negative for labor-abundant countries. Using panel data, we find an unemployment-increasing short-run impact of trade liberalization, followed by an unemployment-reducing effect leading to the new steady state.     

Wages and indirect labour costs in Western industrialized countries

All Western industrialized countries have been passing through the same economic sequence since 1970: a boom followed by a recession which in turn gave way to a slow recovery. Economic and social policy focuses everywhere on the fight against inflation and unemployment. The success or failure of these efforts is reflected by the wage levels which are one of the most important economic efficiency indicators. The following article provides an international survey¹.     

奥肯定律在中国的实证分析——我国经济高增长率与高失业率并存

近些年,中国经济出现了高增长、高失业的态势,由此使得为多数国家所证实的西方的奥肯定律在中国发生了明显的背离。通过运用Eviews软件进行线性回归分析方法,可以看出：中国经济高增长、高失业的态势之所以不符合奥肯定律所揭示的发展规律,其原因主要在于在于中国自身的特殊国情。政府应从国情出发,切实解决好高增长与高失业的矛盾,要发挥好政府的主导作用,采取适当的财政政策和货币政策;将促进就业作为宏观调控的首要目标,加强就业服务和人才培训发展多种就业形式;并在深化企业改革的同时,建立一套完整的失业保障体系。     

Worldwide Evolution of Channels Policy

Abstract

This article outlines the evolution of marketing channel systems and policies in selected regions around the world, less developed as well as developed countries are covered. It then delineates sectors worth researching, given the influence of globalization and the speed of technological advance. The societal impact of these problem areas cannot be ignored, as they are significant. From the viewpoints of the consumer and society, the decrease in small shops and the concentration of retailing might have negative effects; such as increased unemployment coupled with lower personal service offerings. This article further suggests that policy makers should pay attention to the ‘Digital Divide.’ The technological skills required to work effectively in the ‘Digital Age’ are separating skilled workers from others. It may not be possible to retrain significant numbers of other workers for many of the ‘new economy’ professions. However, society and employment may benefit if many of these non-skilled workers remain in or enter small channel service occupations.     

Explaining National Differences in the Size and Industry Distribution Employment

What forces determine national differences in the size and industry distribution of employment? We stress the role of the economic policy environment as determined by business taxes, employment security laws, credit market regulations, the national pension system, wage-setting institutions and the size of the public sector. We characterize these aspects of the economic environment in Sweden prior to 1990–91 and compare them to the situation in other European countries and the United States. Our characterization and international comparisons show that Swedish policies and institutions strongly disfavored less capital-intensive firms, smaller firms, entry by new firms, and individual and family ownership of business.

We also compile evidence that these forces affect outcomes. Taking the U.S. industry distribution as a benchmark that reflects a comparatively neutral set of policies and institutions, Sweden's employment distribution in the mid-1980s is sharply tilted away from low-wage industries and industries with greater employment shares for smaller firms and establishments. Compared to other European countries, Sweden has an unusually high share of employment in large firms. Furthermore, the Swedish rate of self- employment in the 1970s and 1980s is the lowest among all OECD countries.

The institutional and policy factors emphasized by our study differ greatly across countries. This fact suggests that our approach can be fruitfully applied to other studies of national differences in industry and size structures and their evolution over time. As an example, the tax reform wave of the 1980s – which largely evened out cross-country differences in corporate taxation among OECD countries – offers some basis for projecting a movement towards greater similarity among wealthy countries in the size and industry distribution of employment.

     

Managing policy lapse risk in Sweden’s life insurance market between 1915 and 1947

Abstract

We examine the challenges that Swedish life insurers faced in managing the lapse risk of policies written on the lives of the industrial urban working class between 1915 and 1947. We observe that with the threat of State socialisation of insurance in the 1930s, industrial life insurers modified their business practices to better control policy lapses. Using firm-level data, we also analyse the effect of socio-economic changes, such as rising real wages, interest rate fluctuations and unemployment on life insurance policy lapses. Our results support contemporary tests of the emergency fund and interest rate explanations for the voluntary premature termination of life insurance policies.     

Regional Policy in the Americas: The EU Experience as a Guide for North-South Integration?

After ten years the negotiations on the largest free trade agreement to date, the Free Trade Area of the Americas, which is to include 34 countries, have still not resulted in an agreement. What can the countries involved learn, both positive and negative, from the experiences of the EU with regional policy?

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The author would like to thank Herman Hoen and J?rg Noll for their comments on an earlier version of this article.     

Market Integration Without Policy Integration: A Comparison of the Shortcomings of Mercosur and the Eurozone

ABSTRACT

The major problem of Mercosur has been the lack of any policy coordination, which has resulted in periodic crises among member countries. It was thought that the Eurozone parts of the European Union represented a more mature institution, because member countries were willing to waive sovereignty over a major policy instrument (monetary policy), while maintaining independence over fiscal policy. The result of this, however, has led to even greater distortions than had there been no macroeconomic coordination at all.     

Why do developing countries resist global trade agreements?

Abstract

Although the Doha Development Round was launched with much promise for developing countries in 2001, the global trade negotiations have collapsed. One of the reasons for the lack of progress in the negotiation is the developed countries' unwillingness to reduce their enormous farm domestic subsidies and massive agricultural trade distortions. The developing countries' economies are characterized by heavy dependence on farm sector, labor-intensive agriculture, and persistent unemployment. Consequently, rich nations' unfair agricultural policies are detrimental to the well-being of poor exporting countries. This study develops a model incorporating developed countries' domestic and trade policies and developing countries' economic characteristics to illustrate the adverse effects of rich countries' policies on poor countries. We show that elimination of developed countries' policies will increase the world prices of agricultural commodities, which will benefit the farm-dependent developing countries.     

Aid for trade and trade policy in recipient countries

ABSTRACT

This article explores the impact of Aid for Trade (AfT) flows on trade policy in 123 recipient countries over the period of 2002 to 2015. It shows empirical evidence that AfT interventions are conducive to trade policy liberalization. These results apply to both the entire sample and to the sub-sample of least developed countries (LDCs). Additionally, the analysis shows that the lower the development level, the higher the positive impact of AfT inflows on recipient countries’ trade policy liberalization, although above the US$ 4,885.40 threshold of real per capita income, AfT inflows exert no significant impact on trade policy.     

Employment trends in the USA,Japan and the EC

Since 1973, the underlying tendency in most industrial countries has been for unemployment to increase strongly; the rate of unemployment rose noticeably in almost all instances. Nevertheless, trends in employment were much more varled, with significant differences visible between individual countries. The following article is a summary of the findings of a report concerning the reasons underlying differences between employment trends in the USA, Japan and the EC since 1973.¹     

Reasons for Japan's low unemployment rate

Since the beginning of the seventies, most OECD member countries have suffered from a substantial increase in measured unemployment rates. A notable exception is Japan, whose official unemployment rate is far below observed figures in other countries. This article examines the reasons why Japan's unemployment record has been better than those of the USA and West Germany.     

The Effect of Government Spending on the Debt‐to‐GDP Ratio: Some Keynesian Arithmetic

According to the standard approach to the issue of public debt sustainability, fiscal austerity is the route that many countries must currently follow to reduce their debt‐to‐GDP ratios back to sustainable paths. We challenge this conventional wisdom and argue that, below full employment, an increase in government spending may paradoxically reduce the debt‐to‐GDP ratio. This claim is particularly relevant today because with Central Bank interest rates near zero there is no alternative to fiscal policy, and the only argument against increasing government expenditure as a way to fight unemployment is its supposed negative effect on the state of public finances.