A MORE FLEXIBLE LABOUR MARKET?

The firm downward trend in unemployment has been one of the most surprising aspects of the UK recovery to date. Unemployment has fallen at a much earlier stage of recovery than it did in the 1980s, despite the fact that measured growth has been fairly modest to date. More favourable demographic trends have contributed to this decline, as has early retirement and an expansion of higher education. It is also possible that growth is being understated. However, the decline in unemployment has also led to the suggestion that the UK labour market has become more flexible. In this Forecast Release, we examine this claim. We identify a number of ways in which both the demand for and the supply of labour have become more flexible. But in one crucial respect - real wage flexibility - the evidence is less persuasive. That should not prevent unemployment falling in the short term. But it could limit the extent to which a substantial further fall in unemployment could he sustained without inflation re-emerging.     

MARKET MANIPULATION: A SURVEY

Abstract Despite the significant attention that market manipulation has received in recent years many aspects of it are poorly understood. This article identifies from the theoretical and empirical literature what we do and do not know about market manipulation, and suggests directions for future research. We know that manipulation is possible and that it occurs in a wide variety of markets and circumstances. In contrast, we know little about how often manipulation occurs, its effects and how it responds to regulation. Suggested approaches for future research on these issues include: (1) collecting more comprehensive data sets of manipulation cases; (2) using detection controlled estimation methods to overcome sample selection and partial observability problems and (3) conducting controlled experiments. This article also constructs a novel and broad taxonomy of the different types of market manipulation and discusses approaches to defining manipulation.     

AFRICAN LABOUR MARKET MATTERS

There have been calls for restrictions on the employment of skilled professionals in the UK who are trained in poor countries. Such policies would not be good economics. However, it is also immoral to restrain the freedom of movement of people on such grounds.     

LABOUR MARKET REGULATION: SOME COMPARATIVE LESSONS

Labour market regulation that undermines freedom of contract leads to fewer, higher productivity jobs with employment being across a narrower range of ages. More people are excluded from the labour market, in highly regulated countries and they remain unemployed for longer. This seems to be damaging to welfare. It is possible that the extent of regulation is explained by the relative ability of those who gain from regulation (those in work) to influence the outcome of political processes to a greater extent than those who lose (the unemployed). However, the legal framework and legal traditions may also play a part.     

HOW TO MEASURE LABOUR MARKET EFFECTS OF IMMIGRATION: A REVIEW

Abstract.  This paper surveys available empirical evidence on labour market effects of immigration. Many different approaches have been used already to try to find out whether immigration hurts the labour market opportunities of natives. No doubt new approaches will follow in the future as globalization will keep the migration issue on the agenda. This literature review discusses the different approaches concentrating on both the methodology and the results. At the end, it tries to summarize available evidence.     

OFFSHORING, MULTINATIONALS AND LABOUR MARKET: A REVIEW OF THE EMPIRICAL LITERATURE

Abstract.  This paper reviews the empirical literature on the effects of offshoring and foreign activities of multinational enterprises on developed countries' labour markets. Results suggest that material offshoring worsens wage inequality between skilled and unskilled workers; it also seems to make employment more volatile, by raising the elasticity of labour demand and the risk of job losses. Service offshoring exerts at most small negative effects on total employment, and changes the composition of the workforce in favour of high-skilled white-collar employees. Multinationals tend to substitute domestic and foreign labour in response to changes in relative wages across countries; substitutability is weak, however, and mainly driven by horizontal, market-seeking foreign direct investments.     

WHY GERMAN LABOUR MARKET REFORM HAS BEGUN

The current German government, against the odds, has managed to introduce a number of labour market reforms previously seen as impossible. The reforms are briefly outlined, and the author, drawing on a number of theoretical approaches, suggests a number of reasons why these reforms have happened when they did.     

ECONOMIC TRANSITION AND LABOUR MARKET DYNAMICS IN CHINA: AN INTERPRETATIVE SURVEY OF THE ‘TURNING POINT’ DEBATE

Has the Chinese economy approached the ‘Lewisian turning point’ that marks the ending of the initial phase of industrial transformation fuelled by surplus labour? In this paper we undertake an interpretative survey of the literature on this issue, in the context of China's labour market conditions prior to the reforms and structural change of the past three decades. The available evidence is mixed, and our assessment makes a strong case for probing institutional constraints to labour mobility from an economy‐wide perspective, going beyond the confines of the rural economy.     

THE LABOUR MARKET UNDER 'NEW LABOUR': THE FIRST TWO TERMS

Since 1997, UK labour market regulation has increased significantly, and this trend seems likely to continue. Yet the UK's performance in terms of employment and unemployment has been broadly satisfactory. The author argues that there may have been offsetting factors in both government policy and the macroeconomic climate that have enabled the labour market to function adequately. However, he suggests that this favourable conjunction may not continue.     

THE ECONOMICS OF COMMUTING AND THE URBAN LABOUR MARKET

ABSTRACT. The spatial distribution of households and firms, or urban spatial structure, is a core element of the study of urban economics and the crucial determinant of commuting patterns. This paper examines developments in the analysis of urban spatial structure and commuting are related to the urban labour market—that is the analysis of labour supply and labour demand in a spatial context. These developments have been overlooked in the traditional approach to urban structure and commuting where most attention has been devoted to the markets for land and housing rather than the market for labour. Yet a little reflection suggests that the labour market might have a great deal to do with the location decisions of households and firms, and hence with commuting patterns. We argue that much criticism of the economic analysis of urban structure and commuting can be addressed by explicit incorporation of the labour market into the conventional model of urban location. This criticism includes findings that the theory cannot explain the tendency for richer households to live farther from the central business district and commute farther to work (Wheaton, 1977) and findings of substantial unexplained or 'wasteful' commuting according to conventional theory (Hamilton, 1982). The paper begins by outlining the basic model of residential location and commuting (Section 2). We then consider extensions that involve the introduction of labour supply decisions and which determine the value of commuting time (Section 3). More recent extensions involve the introduction of decentralized workplaces (Section 4) and, logically, the issues of job search and migration (Section 5). We conclude with a summary of the progress in incorporating labour market behaviour into the analysis of urban structure and commuting and our suggestions for further research in this area.     

AN EXAMINATION OF THE UK LABOUR MARKET FOR DOCTORS

One area of health services in the UK which has been neglected by commentators is the supply of skilled medical staff within a nationalised health service. This is a surprising omission because in the UK we have a labour market for doctors which exhibits the worst aspects of monopoly. Furthermore, the combination of monopoly control by the medical profession on the supply side and the nationalised National Health Service on the demand side has resulted in a lower number of doctors per head than in other Western European countries. Overseas doctors are recruited to make up some of the shortfall but the deficiency in numbers is such that government plans to deliver more healthcare more quickly cannot be met in the short term without importing overseas firms with their staff, and in the long term require an expansion in medical education.     

THE EVOLUTION OF STOCK MARKET EFFICIENCY OVER TIME: A SURVEY OF THE EMPIRICAL LITERATURE

Abstract This paper provides a systematic review of the weak‐form market efficiency literature that examines return predictability from past price changes, with an exclusive focus on the stock markets. Our survey shows that the bulk of the empirical studies examine whether the stock market under study is or is not weak‐form efficient in the absolute sense, assuming that the level of market efficiency remains unchanged throughout the estimation period. However, the possibility of time‐varying weak‐form market efficiency has received increasing attention in recent years. We categorize these emerging studies based on the research framework adopted, namely non‐overlapping sub‐period analysis, time‐varying parameter model and rolling estimation window. An encouraging development is that the documented empirical evidence of evolving stock return predictability can be rationalized within the framework of the adaptive markets hypothesis.