Long-term Unemployment in the Canadian Labor Market

A bstract . Examination of the distribution of long-term unemployment in the Canadian labor market employing longitudinal administrative unemployment insurance data for the 1975–79 period indicates that over relatively long time periods, unemployment tends to be concentrated among those who have multiple unemployment episodes over time. By implication, high unemployment spell frequencies indicate a high propensity for re-employment. A great deal of long-term unemployment is found in lower skilled occupations and in seasonal occupations and industries. Youth and adult women comprise a proportion of long-term unemployed roughly commensurate with their share of the labor force.     

Are specific skills an obstacle to labor market adjustment?

This paper shows that specialized education reduces workers’ mobility and hence their ability to cope with economic changes. We illustrate this point using labor force data from two countries having experienced important macroeconomic turbulence; a large economy with rigid labor markets, Poland, and a small open economy with increased flexibility, Estonia. We find that holding a vocational degree is associated with much longer unemployment duration spells and higher likelihood of leaving activity for older workers. We then build a theoretical framework in which young agents’ careers are heavily determined by the type of initial education, and analyze the transition to a new steady-state after a sectoral demand shift. Quantitative exercises suggest that the over-specialization of the labor force in Poland led to much higher and persistent unemployment compared to Estonia during the period of EU enlargement. Traditional labor market institutions (wage rigidity and employment protection) lead to an increase of the unemployment gap, but to a lesser extent.     

Does early intervention help the unemployed youth?

This paper evaluates a measure targeted at unemployed individuals aged 20–24. The main purpose of the measure is to prevent long-term unemployment by guaranteeing an assignment to some labor market program within 100 days of unemployment. Municipalities voluntarily agree to offer the guarantee. To identify the effect of the measure, we use three conditions: The guarantee covers individuals aged 24 but not 25, one fifth of the municipalities does not provide the guarantee, and the guarantee existed in 1998 but not in 1997. We find no evidence that the measure did significantly improve the future labor market situation of the youth, which suggests that early intervention in the unemployment spell is not important.     

How do the employment effects of job creation schemes differ with respect to the foregoing unemployment duration?

Based on new administrative data for Germany covering entrances into job creation schemes between July 2000 and May 2001, we evaluate the effects of this active labour market policy programme considering the timing of treatment in the individual unemployment spell. Applying propensity score matching in a dynamic setting where the time until treatment in the unemployment spell is stratified into quarters, regional (East and West Germany) as well as gender differences are considered in the estimation. The results in terms of employment present a heterogeneous, but disappointing picture. For West Germany, most of the estimates are insignificant at the end of the observation period, and only one positive exception could be established. In East Germany, none of the groups experiences an improvement of the labour market situation, but the employment chances tend to be reduced due to participation even 30 months after start of programmes.     

The Effects of UI Benefits on Unemployment and Subsequent Outcomes: Evidence from a Kinked Benefit Rule

This paper analyses the effects of unemployment insurance benefits on unemployment exits and subsequent labour market outcomes. We exploit a piecewise linear relationship between the previous wage and benefits in Finland to identify the causal effects of the benefit level by using a regression kink design. Although we only find weak evidence of an effect on the time to the next job, higher benefits decrease the time spent in part-time unemployment and thus result in more full-time unemployment. The re-employment probability and post-unemployment wage are also negatively affected. The results for the duration of the first post-unemployment job are not conclusive, but in total both employment and earnings in the two years following the beginning of the unemployment spell decrease with higher benefits.     

我国产业结构与就业吸纳能力的实证分析

基于就业弹性的视角对我国产业结构与就业吸纳能力进行实证分析发现,我国第一产业拉动就业不足,第三产业拉动就业能力较强。再通过比较我国结构偏离系数与国际标准结构偏离系数发现:第一产业存在大量的隐性失业,第二产业吸纳就业能力在减弱,劳动力在向第三产业转移;各行业直接或者间接吸纳就业能力不同,批零餐饮业和社会服务等行业拉动就业作用最强。最后,从消除第一产业隐性失业、发展劳动密集型产业等角度提出了一些解决我国结构性就业矛盾的政策建议。     

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.     

The (un)importance of unemployment fluctuations for the welfare cost of business cycles

This paper studies the cost of business cycles within a real business cycle model with search and matching frictions in the labor market. We endogenously link both the cyclical fluctuations and the mean level of unemployment to the aggregate business cycle risk. The key result of the paper is that business cycles are costly: fluctuations over the cycle induce a higher average unemployment rate since employment is nonlinear in the job-finding rate and the past unemployment rate. We show this analytically for a special case of the model. We then calibrate the model to U.S. data. For the calibrated model, too, business cycles cause higher average unemployment; the welfare cost of business cycles can easily be an order of magnitude larger than Lucas's (1987) estimate. The cost of business cycles is the higher the lower the value of nonemployment is, or, equivalently, the lower is the disutility of work. The ensuing cost of business cycles rises further when workers' skills depreciate during unemployment.     

Optimal unemployment policy in a matching equilibrium

This paper considers optimal unemployment policy in a matching equilibrium with risk averse workers and unobserved job search effort. The Planner chooses unemployment benefits, taxes and job creation subsidies to maximise a Utilitarian welfare function. Optimal policy involves a trade-off between higher employment taxes (which finance more generous unemployment benefits) and greater market tightness (which reduces the average unemployment spell). Optimal UI implies the initial UI payment equals the wage, thus ensuring consumption is smooth across the job destruction shock, and UI payments then fall with duration.     

Using a Structural‐Form Model to Analyze the Impact of Home Ownership on Unemployment Duration

It is often found that the impact of home ownership on the hazard rate for leaving unemployment is positive, indicating that home ownership helps workers to leave unemployment for a paid job. However, little emphasis has been given to how such a relationship can be explained. This paper estimates a structural‐form model that allows for self‐selection into home ownership and the risk of home owners losing their property during a spell of unemployment. We find a substantial amount of self‐selection using indirect inference based on a mixed proportional hazards‐rate model and find virtually no impact of home ownership on individual labor market performance. Copyright © 2016 John Wiley & Sons, Ltd.     

国内失业问题研究最新进展

从失业的性质和原因、农村劳动力的转移和经济增长、失业统计和失业现状、缓解失业的对策措施等四个方面介绍了当前国内理论界对我国失业问题研究的最新进展,并进行了简要评述.本文认为,当前我国对失业问题的理论研究取得了重大进展,为促进就业奠定了理论基础.但和我国日益严峻的就业形势相比,失业理论的研究总体滞后,创新不够.     

Does subsidised temporary employment get the unemployed back to work? Aneconometric analysis of two different schemes

Subsidised employment is an important tool of active labour market policies to improve the reemployment chances of the unemployed. Using unusually informative individual data from administrative records, we investigate the effects of two different schemes of subsidised temporary employment implemented in Switzerland: non-profit employment programmes (EP) and a subsidy for temporary jobs (TEMP) in private and public firms. Econometric matching methods show that TEMP is more successful than EP in getting the unemployed back to work. Compared to not participating in any programme, EP and TEMP are ineffective for unemployed who find jobs easily anyway or have a short unemployment spell. For potential and actual long-term unemployed, both programmes may have positive effects, but the effect of TEMP is larger.     

Labor market outcomes,savings accumulation,and return migration

In this paper, I examine the determinants of return migration from Germany for immigrants from four different source countries, and test the savings accumulation conjecture that is used to rationalize return migration decisions using both cross-country and time variation in purchasing power parity. The empirical results confirm the savings accumulation conjecture. Therefore, return migration can be seen as part of optimal life-cycle location choices in this context. I also examine how labor market outcomes influence return decisions. A key finding here is that unlike previous studies, which find a positive impact of unemployment on return migration, I find that the direction of the impact of unemployment changes by the spell length.     

Job search incentives and job match quality

We examine the impacts of time-limited unemployment insurance (UI) and active labor market programs (ALMP) on the duration and outcome of job search in Norway. We use a comprehensive simultaneous equations model accounting for i) the duration of unemployment spells; ii) their outcomes, iii) subsequent employment stability; and iv) the earnings level associated with the first job. We find that time invested in job search pays off in form of higher earnings once a job match is formed. ALMP raises the probability of eventually finding a job as well as expected earnings, but at the cost of lengthening job search.     

DURATION OF UNEMPLOYMENT IN SPAIN: RELATIVE EFFECTS OF UNEMPLOYMENT BENEFIT AND FAMILY CHARACTERISTICS

ABSTRACT We estimate the effects of unemployment benefit and family situation on the unemployment duration in Spain. Empirical results indicate that the distinctions between the exits into employment and the exits from the labour force and between men and women are important. Although unemployment benefit reduces significantly the job-finding probabilities, its effects are much larger on exits from the labour force. Many people who decide to go out of the labour force delay their exits until they exhaust their unemployment benefits. Family situation also has strong effects on the duration of unemployment in Spain. Household heads have about twice larger job-finding probability than non-heads, and having a working household head or other working household members improves employment probability. This suggests that family connections in the labour market are important determinants of unemployment duration in Spain.     

Gender differences in job separation rates and employment stability: New evidence from employer-employee data

I analyze the job separation process to learn about gender differences in job separation rates and employment stability. An essential finding is that employer-employee data are required to identify gender differences in job separation probabilities because of labor market segregation. Failure to recognize this may potentially lead to statistical discrimination. Three important empirical results are obtained from the analysis. First, women have higher unconditional job separation probabilities. Second, there are no gender differences in job separation probabilities for employees working in similar workplaces. Finally, women's employment stability is relatively low because they are more likely to move from a job and into unemployment or out of the labor force, and less likely to make job-to-job transitions.     

Market reforms in the time of imbalance

We study the consequences of product and labor market reforms in a two-country model with endogenous producer entry and labor market frictions. We focus on the role of business cycle conditions and external constraints at the time of reform implementation (or of a credible commitment to it) in shaping the dynamic effects of such policies. Product market reform is modeled as a reduction in entry costs and takes place in a non-traded sector that produces services used as input in manufacturing production. Labor market reform is modeled as a reduction in firing costs and/or unemployment benefits. We find that business cycle conditions at the time of deregulation significantly affect adjustment. A reduction of firing costs entails larger and more persistent adverse short-run effects on employment and output when implemented in a recession. By contrast, a reduction in unemployment benefits boosts employment and output by more in a recession compared to normal times. The impact of product market reforms is less sensitive to business cycle conditions. Credible announcements about future reforms induce sizable short-run dynamics, regardless of whether the announcement takes place in normal times or during an economic downturn. Whether the immediate effect is expansionary or contractionary varies across reforms. Finally, lack of access to international lending in the wake of reform can amplify the costs of adjustment.     

The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance reform

In January 2003, the unemployment benefits in Finland were increased for workers with long employment histories. The average benefit increase was 15% for the first 150 days of the unemployment spell. At the same time severance pay system was abolished. In this paper we evaluate the effect of the change in the benefit structure on the duration of unemployment by comparing the changes in the re-employment hazard profiles among the unemployed who were affected by the reform to the changes in a comparison group whose benefit structure remained unchanged. We find that the change in the benefit structure reduced the re-employment hazards by on average 17%. The effect is largest at the beginning of the unemployment spell and disappears after the eligibility period for the increased benefits expires.     

New methods for analyzing structural models of labor force dynamics

The economic theory of decision-making under uncertainty is used to produce three econometric models of dynamic discrete choice: (1) for a single spell of unemployment; (2) for an equilibrium two-state model of employment and non-employment; (3) for a general three-state model with a non-market sector. The paper provides a structural economic motivation for the continuous time Markov (or more generally ‘competing risks’) model widely used in longitudinal analysis in biostatistics and sociology, and it extends previous work on dynamic discrete choice to a continuous time setting. An important feature of identification analysis is separation of economic parameters that can only be identified by assuming arbitrary functional forms from economic parameters that can be identified by non-parametric procedures. The paper demonstrates that most econometric models for the analysis of truncated data are non-parametrically under-identified. It also demonstrates that structural estimators frequently violate standard regularity conditions. The standard asymptotic theory is modified to account for this essential feature of many structural models of labor force dynamics. Empirical estimates of an equilibrium two-state model of employment and non-employment are presented.     

Subsidizing low-skilled jobs in a dual labor market

We introduce a matching model that allows for classical and frictional unemployment. The labor market is dual featuring low-skilled and high-skilled workers and simple and complex jobs. Simple jobs pay a minimum wage, while wages in the complex jobs are determined by Nash bargaining. Opportunities for low-skilled workers are limited to simple jobs; while high-skilled unemployed can apply for both types of jobs, and thereby can accept to be downgraded. We analyze the outcomes of simple job subsidy policies assuming that government budget is balanced through taxes on occupied workers. We first give conditions for the existence and uniqueness of a steady-state equilibrium and we then analyze the effects of different fiscal instruments. We show that in this set-up, increasing simple job subsidies does not necessarily reduce low-skilled unemployment or unemployment spells. By introducing heterogeneous skills and possible downgrading of the high-skilled workers, we show that the effectiveness of such policies in reducing the classical unemployment is decreasing. In fact, any additional classical unemployed re-entering the job market is accompanied by an increasing number of high-skilled workers downgrading to low-skilled jobs. We calibrate the model on French labor market data. It is found that for five low-skilled workers leaving classical unemployment, two high-skilled workers are downgraded.