Labour market discrimination and the macroeconomy

We measure the discriminatory ethnic and gender wage gaps in Georgia. Gender wage discrimination is larger than the ethnic wage discrimination. We use the estimated gaps in a general‐to‐specific vector autoregression framework to test for Granger causality between discrimination and growth, and estimate the long‐run effects of each variable on the other. Granger causality is found to be bidirectional, but it is only the net long‐run effect of discrimination on growth that is a large and highly significant negative effect. In the long‐run, a 10% increase in ethnic (gender) discrimination reduces economic growth by 3%–4% (8%–10%). Additionally, ethnic and gender wage differentials are found to be counter‐cyclical.     

New Labour at work: long-term unemployment and the geography of opportunity

New Labour has placed great faith in active labour market policiesto address problems of long-term unemployment and poverty. Thispaper considers the effectiveness of welfare-to-work programmesin light of persistent regional employment disparities withinthe UK. It is argued that the government has proceeded froma flawed analysis of the causes and magnitude of long-term unemployment,framing the issue in terms of ‘worklessness’ andneglecting demand-side concerns of job availability and jobquality.     

What keeps pensioners at work in Russia? Evidence from Household Panel Data

The proportion of working pensioners in Russia is high relative to what is usually observed in several Eastern and Western European countries. In this paper, we present an analysis of the determinants of pensioner employment, using panel data from the on-going Russian Longitudinal Monitoring Survey for the period 1994-99. Given the sharp deterioration in the safety net in recent years, a particular attempt is made to assess the role of inadequate pension benefits, along with other individual, household, and local labour market characteristics, in driving up the employment rate of older people during transition. Both the probability of holding a job and the number of hours worked are modeled. The microeconometric analysis confirms the role that family income and access to alternative coping mechanisms such as subsistence farming play in pensioner employment for women, but also stresses for both men and women the importance of age, education, and health status. Finally, the results show a low sensitivity of pensioner employment to pension arrears and pension benefits, indicating that even the full payment of benefits may be too low to significantly affect the decision to remain in employment.
JEL classification: C33, H55, J14, J21, P36.     

Flexible recession: the temporary staffing industry and mediated work in the United States

The evolution of the temporary staffing industry (TSI) in theUS is examined, with particular reference to the structuralfunctions of temporary work during the boom of the 1990s, the‘flexible’ recession of 2001, and the subsequent‘jobless’ recovery. It is argued that the TSI isincreasingly playing a systemic, macroregulatory role in theUS labour market, where it now accounts for a disproportionateshare of the costs of labour-market adjustment. The developmentpath of the TSI is closely intertwined with the wider restructuringof the US economy, where it has assumed a significant presenceas a purveyor of low-cost, flexibly mediated labour.     

Opportunistic discrimination

Are minorities more vulnerable to opportunism? We find that individuals from a minority group face greater danger of being cheated because trade with them is less frequent and the value of a reputation for fairness toward them is correspondingly smaller. When the majority is sufficiently large it can only lose from a solidarity strategy of punishing opportunism against the minority, so a firm that cheats the minority can still continue business as usual with the majority. If there is a small chance that a firm might have an implicit or preference bias against either group, then the interaction with reputational incentives gives unbiased firms an incentive to cheat the minority but not the majority. The prediction that smaller groups are more susceptible to discrimination distinguishes the model from most other discrimination models.     

Wage discrimination and population composition in the long run

We derive the conditions that sign the effects of changing population composition on wage levels and ratios, when labor supply and discrimination preferences vary. The overall effect depends on an aggregate market, a relative market, and a preference distribution effect.     

Religion,discrimination and trust across three cultures

We propose that religion impacts trust and trustworthiness in ways that depend on how individuals are socially identified and connected. Religiosity and religious affiliation may serve as markers for statistical discrimination. Further, affiliation to the same religion may enhance group identity, or affiliation irrespective of creed may lend social identity, and in turn induce taste-based discrimination. Religiosity may also relate to general prejudice. We test these hypotheses across three culturally diverse countries. Participants׳ willingness to discriminate, beliefs of how trustworthy or trusting others are, as well as actual trust and trustworthiness are measured incentive compatibly. We find that interpersonal similarity in religiosity and affiliation promote trust through beliefs of reciprocity. Religious participants also believe that those belonging to some faith are trustworthier, but invest more trust only in those of the same religion—religiosity amplifies this effect. Across non-religious categories, whereas more religious participants are more willing to discriminate, less religious participants are as likely to display group biases.     

An industry test for ethnic discrimination in major league soccer

This paper tests for salary discrimination based on player ethnicity in Major League Soccer (MLS) by making innovative use of player movements in a unique setting. The discriminating team investigated is Club Deportivo Chivas USA, which had a preference for employing Hispanic players. Evidence of discrimination is found by analyzing how other teams valued the former players of Chivas USA differently across ethnicity after the team was disbanded by the league. The nature of MLS player contracts and drafting rules allow for a simple and unique test for salary discrimination that has not previously been possible to implement.     

Coordination versus flexibility in wage formation: a focus on the nominal wage impact of productivity in Germany,Greece, Ireland,Portugal, Spain and the United States

Wage coordination between countries of the European Monetary Union (EMU) aims at aligning nominal wage growth with labour productivity growth at the national level. We analyse the developments in Germany, the EMU’s periphery countries Greece, Ireland, Portugal and Spain along with the United States over the period 1980 to 2010. Apart from the contribution of productivity to nominal wages, we take into account the contributions of prices, unemployment, replacement rates and taxes by means of an econometrically estimated nonlinear equation resulting from a wage bargaining model. We further study the downward rigidities of nominal wages. The findings show that in past times of low productivity, price inflation and reductions in unemployment still put significant upward pressure on nominal wage growth. The periphery countries are far from aligning nominal wage growth with productivity growth. German productivity is a major wage determinant, but surely not the only one. Within the context of a free bargaining process between employers and labour unions, policy-makers can effectively use the replacement rate to steer the nominal wages outcome.     

Obesity and happiness

This article provides insight on the relationship between individual obesity and happiness levels. Using the latest available panel data from Germany German Socio-Economic Panel (GSOEP), UK British Household Panel Survey (BHPS), and Australia Household, Income and Labour Dynamics in Australia (HILDA), we examine whether there is statistical evidence on the impact of overweight on subjective well-being. Instrumental Variable (IV) analysis is utilized under the presence of endogeneity, stemming from several explanatory variables. Results indicate that in all three countries obesity has a negative effect on the subjective well-being of individuals. The results also have important implications for the effect of other socio-demographic, economic and individual characteristics on well-being.     

Unemployment and labour force participation in Spain

This article examines the relationship between the unemployment rate and the labour force participation rate in Spain. Cointegration analysis is performed for aggregate, male and female time-series. Results suggest that there is no a long-run relationship between the two variables for the aggregate and male cases. However, the findings support a long-run relationship between the two variables for the female time-series. Thus, the unemployment invariance hypothesis is supported in the two former cases but not in the latter.     

Evolutionary stability of discrimination under observability

We study the evolution of preferences under perfect and almost perfect observability in symmetric 2-player games. We demonstrate that if nature can choose from a sufficiently general preference space, which includes preferences over outcomes that may depend on the opponent's preference-type, then, in most games, only discriminating preferences (treating different types of opponents differently in the same situation) can be evolutionary stable and some discriminating types are stable in a very strong sense in all games. We use these discriminating types to show that any symmetric outcome which gives players more than their minmax value in material payoffs (fitness) can be seen as equilibrium play of a player population with such strongly stable preferences.     

The Rise of Finance and the Decline of Organised Labour in the Advanced Capitalist Countries

The goal of this article is to provide a comprehensive evaluation of the impacts of finance and corporate governance reforms on organised labour since 1980. The argument is made that contemporary institutional and ‘Varieties of Capitalism’ as well as ‘Varieties of Unionism’ perspectives on labour market reform have overstated the power of states, institutions and organised interests in deflecting global economic pressures. Drawing on a range of recent Organisation for Economic Cooperation and Development (OECD) statistics and qualitative studies, it is claimed that current developments in finance and corporate governance mark a fundamental break with post-war developments. Capital has reasserted its power over organised labour and labour markets not only in the US and UK, but throughout Western Europe as well. In assessing how far this reversal has gone, the article focuses on three key political economic changes: i) the rise in finance and adoption of corporate ‘shareholder’ systems; ii) the expansion of mergers and acquisitions and their negative effects on unionisation and manufacturing jobs; and iii) the effects of financial pressures and corporate reform on collective bargaining and wages. This is the first study to report on comparative changes and qualitative reforms to both finance and labour in 13 OECD countries between 1980 and 2005.     

Price and quantity adjustments in the Austrian labour market

Austria is among the very few countries in the European Union which have managed to maintain comparatively low unemployment rates and high employment rates. This study looks at the price and quantity adjustment mechanisms in the Austrian labour market which may have contributed to this favourable outcome. After reviewing briefly the basic theoretical reasoning an empirical investigation is began into gross flow dynamics in the labour market and the cyclical volatility of employment and unemployment in Austria. In international comparison Austrian unemployment is very stable over the business cycle. This is due mainly to the high sensitivity of the labour force on cyclical conditions and, partly, also on the relatively weak responsiveness of employment to cyclical fluctuations in output, the latter being possibly attributable to the high degree of real wage flexibility in Austria. The study proceeds to show that the long-run elasticity of wages with respect to unemployment is indeed quite high in Austria. However, evidence was also found for outsider effects in the Austrian wage setting process. Relative wage structures, on the other hand, appear to be rather rigid.     

Displacement Effects of Active Labour Market Policy: The Youth Labour Market in Finland

In 1994 the number of workers participating in active labour market programmes in Finland was 299,000. On average there where 125,000 workers in these programmes at any one time, the average length of participation in a programme being about 5 months. In relation to the 2.5 million-strong Finnish labour force, these figures are proportionally large. In 1994 the total expenditure on unemployment amounted to 6.7 per cent of GNP of which the share spent on active labour market programmes was about 25 per cent. The study investigates the displacement effects of active labour market programmes in the youth labour market in Finland. The two age groups analysed are 15-19-year-olds and 20-24-year-olds. The results, based on a VAR analysis of quarterly data from the period 1981.1-1995.2, suggest that the displacement effects of job-creation programmes may be substantial. The study cannot, however, provide any robust estimates of the likely size of such displacement effects on youth employment in Finland. This revised version was published online in July 2006 with corrections to the Cover Date.     

基于劳动力市场分割的劳动力流动模型的构建

国内外学者对于劳动力流动进行了大量深入的研究,成果颇丰.然而,由于历史的原因,我国在劳动力流动方面呈现出与其他国家不同的特性,目前,我国的劳动力市场尚未发展成熟,劳动力流动存在很严重的不合理现象.因此,结合我国的现实情况对其进行研究意义更加重大.本文试图结合以往学者的研究成果,构建基于劳动力市场分割的劳动力流动模型,对其进行深入的探讨,为实现劳动力的合理流动提供帮助.     

Cooperation and discrimination within and across language borders: Evidence from children in a bilingual city

We present experimental evidence from a bilingual city in Northern Italy on whether the affiliation to a specific language group affects behavior in a prisoner׳s dilemma game and leads to discrimination. Running a framed field experiment with 828 six- to eleven-year old primary school children in the city of Meran, we find that cooperation generally increases with age, but that the gap between cooperation among in-group members and cooperation towards children speaking another language is considerable and develops with age. This gap is due to both in-group favoritism and language group discrimination. While the former is persistent across all age groups and both language groups and accounts for most of the discrimination observed, the latter only emerges in later years of primary school among children belonging to the German language group.     

试论按劳分配与按生产要素分配

长期以来,对于分配制度原则的选择,我国经历了从单纯的按劳分配,到按劳分配为主、其他分配形式为辅,再到按劳分配与按生产要素分配相结合这样一个较长的过程。按劳分配是以马克思主义理论为依据的。社会主义初级阶段的基本经济制度决定了我们必须把按劳分配和按要素分配两种不同的分配方式结合起来。按劳分配与按生产要素分配两种分配方式的结合是我国建立社会主义市场经济体制的客观要求。     

Real and perceived losses from unemployment: a cross-country study

This article compares the Unemployment Rate (UR) as a measure of inefficiency with several other potential measures across 18 Organization for Economic Co-operation and Development (OECD) countries. Results show that the UR is not a very good measure of relative inefficiency between countries, it overestimates the number of individuals who would get jobs if the market is clear, the Dead Weight Losses (DWLs) of UR are remarkably low even in high unemployment countries and the aggregate perceived monetary losses by the unemployed as a proportion of Gross Domestic Product (GDP) are also uniformly low, although inframarginal individuals in some countries may perceive their losses to be high.     

Parity reversion persistence in real exchange rates: middle income country case

This article investigates purchasing power parity (PPP) in the specific context of middle income countries. To circumvent the low power of traditional stationarity tests (Augmented Dickey-Fuller and Phillips-Perron tests), it performs variance ratio and fractional integration tests in addition to Perron's test that accounts for potential structural changes in real exchange rate processes. Beyond estimating half-life shocks to PPP, this article attempts to explain these estimates using a set of country specific variables as suggested by economic theory. The evidence suggests that reversion to parity tends to be faster in high inflation countries and that productivity improvement leads to a higher level of persistence. Openness to trade tends to reduce the extent of deviations from parity but this result does not appear to be statistically robust. Evidence shows also that deviations are less persistent under a fixed exchange rate regime and under unrestricted capital mobility.