TWENTY YEARS OF THE INTERNATIONAL LABOUR ORGANISATION (1919–1939)

The Report presented by the Director of the I.L.O. to the International Labour Conference (May-June 1939) concludes by an important chapter on the work accomplished during the first twenty years. We take pleasure in reproducing below this exceedingly interesting statement.     

ELDERLY AND NON-ELDERLY IN THE EUROPEAN UNION: A COMPARISON OF LIVING STANDARDS

The paper compares the living standards of the elderly vis-a-vis the rest of the population in EU countries in the late 1980s using the data of Household Budget Surveys. Elderly and non-elderly are compared in terms of consumption expenditure, income and non-monetary indicators of welfare. The results show that in all EU countries the non-elderly are better-off than the elderly. In some countries the differences in the living standards of the two groups are marginal, whereas in others they are substantial. These differences tend to be larger in the Southern European EU countries (with the exception of Spain) and smaller in the Northern European EU countries (with the exception of the U.K.).     

A COMPARISON OF LIVING STANDARDS ACROSS THE UNITED STATES OF AMERICA

We use an expected utility model to examine how living standards, or welfare, vary across the United States and how each state's welfare has evolved over time, accounting for cross-state variations in mortality, consumption, education, leisure, and inequality. We find considerable cross-state heterogeneity in welfare levels. This is robust to allowing for endogenous interstate migration and to computing welfare conditional on education, gender, and race. Although states experienced heterogeneous welfare growth rates between 1999 and 2015 (1.68–3.73% per year), there is no evidence of convergence in welfare levels, including during the subperiods preceding and following the Great Recession.     

THE INTERNATIONAL DEMONSTRATION EFFECT AND THE DOMESTIC DIVISION OF LABOUR: A SIMPLE MODEL

Abstract.  The implications of the international demonstration effect (IDE) for the development of underdeveloped economies have long been studied and debated. Yet few formal analyses exist in the literature, especially regarding its implications for the growth of domestic markets and the division of labour in developing economies. We offer an analysis of endogenous specialization under the IDE, the first of its kind, showing that, far more complicated than the scenario held by conventional wisdom, the IDE makes more difficult the emergence of the market underpinning the domestic division of labour, but facilitates the expansion of the market once it has been developed.     

HOW TO MEASURE LIVING STANDARDS AND PRODUCTIVITY

I set out a general algorithm for calculating true cost‐of‐living indices when demand is not homothetic and when the number of products may be large. The non‐homothetic case is the important one empirically (Engel's Law). The algorithm can be applied in both time series and cross section. It can also be used to estimate true producer price indices and Total Factor Productivity in the presence of input‐biased economies of scale and technical change. The basic idea is to calculate a chain index of prices but with actual budget (cost) shares replaced by compensated shares, i.e. what the shares would have been if consumers (firms) faced actual prices but their utility (output) were held constant at some reference level. The compensated shares can be derived econometrically from the same data as are required for the construction of conventional index numbers. The algorithm is illustrated by applying it to estimating true PPPs for 141 countries and 100 products within household consumption, using data from the World Bank's latest International Comparison Program.     

THE IMPACT OF INTERNATIONAL OUTSOURCING ON LABOUR MARKET DYNAMICS IN GERMANY

Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium‐skilled and older workers.