Mobility,poverty and well-being among the informally employed in Bosnia and Herzegovina

We analyse informal sector employment in Bosnia and Herzegovina (BH), using panel data from the living standards measurement studies. We derive four main conclusions. First, there is significant labour market mobility in BH. Second, those in informal jobs are much more likely to suffer from poverty than formally employed people are. Third, earnings inequality is more pronounced in the informal sector than elsewhere. Fourth, the informally employed report lower levels of life satisfaction compared to most other labour market states. We conclude that, while the informal sector helps people cope, the formal sector provides better prospects for prosperity and well-being.     

Risky Businesses? Young People in Informal Self‐Employment in Sofia

This article studies how perceptions of the risks associated with informal self‐employment depend on the interplay between the institutional, structural (network) and cultural embeddedness of economic action. Informal self‐employment should create at least three types of risk. The first concerns the possible legal and social sanctions that stem from the illegal character of the entrepreneurial action. The second is related to the complete lack of social security protection among those for whom informal self‐employment is their sole employment. The third is connected with the lack of guarantees concerning contract enforcement, which may increase the probability of opportunistic behaviour by business partners and clients. On the basis of a qualitative study of young, highly educated, informally self‐employed workers in Bulgaria's capital Sofia, I argue that these risks are compensated by the specific network and cultural embeddedness of the economic action. This compensation takes the form of various types of insurance against risks. Its core is the replacement of the vacuum of institutional‐system trust with interpersonal trust. Thus, the specific constellation of institutional, network and cultural embeddedness is able to solve the problem of opportunism, as well as to create the perception that the informally self‐employed are faced with not much greater risks than registered self‐employed workers.     

Earnings inequality,returns to education and immigration into Ireland

We examine what has happened to earnings inequality and the returns to education in Ireland between 1987 and 1997. We find that while both increased between 1987 and 1994, the increases slowed dramatically between 1994 and 1997. We look to immigration as being a contributing factor to this pattern because a large group of skilled workers flowed into the Irish labour market between 1994 and 1997. We develop a model of the Irish labour market and use it to simulate the impact of an increase in skilled labour. The simulation suggests that immigration did indeed reduce earnings inequality. This result is an interesting corollary to work from the US that shows the immigration of unskilled workers' increasing earnings inequality.     

最低工资对正规部门、非正规部门工资和就业的影响

本文根据是否遵守最低工资标准,将劳动部门分为正规部门和非正规部门。利用中国健康与营养调查（CHNS）微观数据,运用固定效应模型和Multinomial Logit模型,本文实证研究了2004年以来,最低工资对正规部门和非正规部门工资和就业的影响。研究发现：最低工资每提高1%,正规部门工资会增加0.5%,非正规部门平均工资下降统计不显著,而处于最低工资线附近的非正规部门劳动者工资下降0.77%;最低工资提高使得失业者向非正规部门流动,而非正规部门劳动者向正规部门流动,最终将有利于劳动者在正规部门就业。因此,政府在制定最低工资制度时应全面考虑最低工资标准作用效果的部门差异。     

The operation and management of agency workers in conditions of vulnerability

This article focuses on the operation and management of agency labour by employers and observes that there are strong contradictions between the employers' stated reasons for using agency labour and the employment agencies' perceptions of why such labour is utilised. While discussing agency labour generally, the article also takes account of the position of migrant workers within the agency sector, since agencies have represented a significant route into employment for migrant labour. It draws primarily on 22 in‐depth interviews with employers and employment agencies mainly in the food processing, cleaning and care sectors. The research revealed that while some employers were using agency staff to cover for specific peaks in production, others had used it as an alternative method of dealing with vacancies that otherwise might have resulted in permanent employment.     

The Labour Market Effects of Increases in Social Insurance Premium: Evidence from Japan

Exploiting heterogeneous variations in labour cost increases due to Japan's 2003 social insurance premium reform as a natural experiment, we estimate the impacts of the increased social insurance premiums on employment, working hours and payroll costs. Using the difference‐in‐differences method with establishment fixed effects, we find that firms reduce the number of employees and increase average annual earnings from longer working hours in response to an exogenous increase in labour costs without productivity gains. Firms manage to pay for this increase in the average wage paid to the remaining workers by reducing the number of employees to keep total payroll costs unchanged. In contrast, since social insurance premiums are shared equally between employees and employers, firms pay the remaining half premiums that they are imposed with. Sub‐sample analyses show that firms adhering to a labour hoarding policy did fire many workers taking advantage of the 2003 reform. This may indicate that the reform provided a good excuse to cut employment in firms that had been forced to comply with a labour hoarding policy even in an over‐employment situation, which is more likely in sectors and countries where dismissals are rigorously regulated.     

Why Does Growing up in an Intact Family during Childhood Lead to Higher Earnings during Adulthood in the United States?*

With a view to finding an explanation of the observed differences in adult annual earnings between workers raised in intact (INTACT) and non‐intact families in the US labor market, this study tests two hypotheses. First, workers growing up in intact families during childhood earn more during their adulthood because they acquire more years of schooling, which in turn affect their wages positively. Second, intact family background acts as an instrument for numerous factors that contribute to workers' happiness during adulthood. Since happier workers, with other characteristics held constant, are known to have higher earnings, workers raised in intact families during childhood by leading a relatively happier life during their adulthood earn more than their otherwise identical non‐intact counterparts. Both these hypotheses find strong support from the US data. The evidence of simultaneous relationships between wage and happiness and between happiness and schooling confirms that the true effect of INTACT on wage may be much larger than what is envisaged by a simple one‐step process. Regardless of whether this relationship is due to causation or correlation, the study simply demonstrates that the US evidence of higher earnings associated with workers raised in intact families may be attributed partly to their higher levels of schooling and happier lives. By demonstrating a significant positive relationship between the stability of parental family structure during childhood and earnings during adulthood, the current study highlights the importance of responsible parenthood as a means of improving the child's future economic performance.     

The reporting of gross and net earnings in a postal survey

In a controlled experiment involving a sample comprising 8300 school leavers who entered the labour market in 1983/84, half of the sample were asked to report on gross weekly earnings (if employed) or expected gross earnings (if not employed). The other half were asked equivalent questions in terms of net earnings. Comparisons between the responses indicate that those in employment were able to provide consistent responses concerning gross and net earnings. Among the non-employed, however, there is reason to believe that those reporting expected net earnings may have underestimated the impact of the deductions due to tax and National Insurance contributions. The size of this understatement is such as to create a discrepancy of some 9 per cent (in terms of gross earnings) between the two sources of expected earnings.     

Costs and benefits of Danish active labour market programmes

Since 1994, unemployed workers in the Danish labour market have participated in active labour market programmes on a large scale. This paper contributes with an assessment of costs and benefits of these programmes. Long-term treatment effects are estimated on a very detailed administrative dataset by propensity score matching. For the years 1995 – 2005 it is found that private job training programmes have substantial positive employment and earnings effects, but also public job training ends up with positive earnings effects. Classroom training does not significantly improve employment or earnings prospects in the long run. When the cost side is taken into account, private and public job training still come out with surplusses, while classroom training leads to a deficit.     

Labour standards application among Chinese and Indian firms in Ghana: typical or atypical?

Despite the current interest in the growing amount of Chinese and Indian investments in African countries, little is known on the impact of such investments on the employment conditions of African workers. This study investigates the employment practices of a Chinese-owned and an Indian-owned manufacturing company in Ghana in relation to the national labour laws and international labour standards. This article argues that given the weaknesses in the institutional and financial capabilities of the state and the resultant large scope of autonomy assumed by multinational corporations (MNCs), it is highly unlikely that MNCs will voluntarily adopt a high level of labour standards without tangible benefits to the business. This is particularly the case for smaller MNCs from emerging economies such as China and India, as they often slip through the net of international pressure groups and are most unlikely to receive pressure in their home country to observe labour standards in their overseas operations. This study has policy implications for Ghana and other less developed countries that are seeking foreign direct investment to help national development.     

A Note on US Worker Turnover

The length of new employment relationships is of first‐order importance for a number of questions in recent macro‐labour research. We investigate it using data from the Survey of Income and Program Participation for the US from 1996 onwards, and document that above two‐fifths of newly employed workers fall into non‐employment within a year. We also find that the transition rate from employment to non‐employment within the first year varies significantly for different groups of the population, increases with the duration of the previous non‐employment spell, exhibits an acyclical or weakly procyclical pattern and a much higher volatility than the unemployment rate.     

Earnings volatility in America: Evidence from matched CPS

We offer new evidence on earnings volatility of men and women in the United States over the past four decades by using matched data from the March Current Population Survey. We construct a measure of total volatility that encompasses both permanent and transitory instability, and that admits employment transitions and losses from self employment. We also present a detailed decomposition of earnings volatility to account for changing shares in employment probabilities, conditional variances of continuous workers, and conditional mean variances from employment entry and exit. Our results show that earnings volatility among men increased by 15% from the early 1970s to mid 1980s, while women's volatility fell, and each stabilized thereafter. However, this pooled series masks important heterogeneity in volatility levels and trends across education groups and marital status. We find that men's earnings volatility is increasingly accounted for by employment transitions, especially exits, while the share of women's volatility accounted for by continuous workers rose, each of which highlights the importance of allowing for periods of non-work in volatility studies.     

Spatial changes in labour market inequality

We study spatial changes in labour market inequality for US states and MSAs using Census and American Community Survey data between 1980 and 2010. We report evidence of significant spatial variations in education employment shares and in the college wage premium for US states and MSAs, and show that the pattern of shifts through time has resulted in increased spatial inequality. Because relative supply of college versus high school educated workers has risen faster at the spatial level in places with higher initial supply levels, we also report a strong persistence and increased inequality of spatial relative demand. Bigger relative demand increases are observed in more technologically advanced states that have experienced faster increases in R&D and computer usage, and in states where union decline has been fastest. Finally, we show the increased concentration of more educated workers into particular spatial locations and rising spatial wage inequality are important features of labour market polarization, as they have resulted in faster employment growth in high skill occupations, but also in a higher demand for low wage workers in low skill occupations. Overall, our spatial analysis complements research findings from labour economics on wage inequality trends and from urban economics on agglomeration effects connected to education and technology.     

Nothing ventured,nothing gained! How and under which conditions employers provide employability-enhancing practices to their older workers

Employability-enhancing practices usually refer to training or courses, but also practices directed towards older workers to sustain their work capability can be embraced by this term. In the context of an ageing population and workforce, older workers' labour market participation gains an increasingly important role. Therefore, the importance of employability-enhancing practices is noted as a solution to sustain their employment. In this study, we focus on employer-provided employability practices for older workers. We answer the following research question: which practices do employers use to enhance their older workers' employability and under which conditions are these practices adopted. Analyses on Dutch corporate data (N = 860) show that employers mainly provide employability-enhancing practices that are easily implemented and not expensive. This finding replicates prior research and clarifies that job redesign should be considered as a possibility to keep older workers in the labour market. Furthermore, our study shows that both organizational and labour market characteristics affect employers' decisions whether to provide employability-enhancing practices for their older workers. This suggests that policy measures might be necessary to assimilate investments in employability-enhancing practices across organizations.     

Evaluating cross‐national variations in the extent and nature of informal employment in the European Union

This article evaluates critically the contrasting explanations for the cross‐national variations in the prevalence and nature of informal employment, which variously view such work as more prevalent in poorer, under‐developed economies; driven by high taxes, corruption and state interference that lead workers to exit formal employment; or driven by inadequate state intervention leading to the exclusion of workers from formal employment and state welfare provision. By analysing cross‐national variations across the European Union in the size of informal employment using indirect measurement methods and in its varying character using evidence from a 2007 Eurobarometer survey, it was found that wealthier, less corrupt and more equal economies with higher levels of labour market intervention, social protection and redistribution via social transfers have lower levels of informal employment, much of which is conducted to exit formal employment. The paper concludes by exploring the theoretical and policy implications.     

The impact of Greek labour market regulation on temporary employment – evidence from a survey in Thessaly,Greece

This paper uses an original data-set for 186 workplaces in Thessaly (central Greece), to study consequences of Greece's strict employment protection law (EPL) and national minimum wage for temporary employment. We find higher temporary work contract rates among workplaces that pay low wages close to the minimum. We also find that EPL ‘matters’, in particular, managers who prefer temporary contracts because temporary workers are less protected definitely employ more. Our findings thus support the view that a firm's HRM decisions regarding internal versus external allocation of tasks are influenced by labour regulation.     

Empirical Studies of Self‐Employment

This paper presents a review of empirical studies of self‐employment for the Australian, Canadian, Dutch, UK and US labour markets. Both cross‐sectional and longitudinal studies are analysed. Analyses using cross‐sectional data examine the propensity to be self‐employed at any one point in time, whereas longitudinal studies focus on the transition into self‐employment from wage/salary employment and the survival rate in this state over time. Various hypotheses advanced in the economics and sociology literatures on self‐employment are tested. These include the relationship between managerial ability and the propensity to be self‐employed and the impact of financial constraints on entry into self‐employment stressed in economic models of entrepreneurship, and the relationships between self‐employment choice and the nature of the work and group characteristics (e.g., ethnic enclaves) stressed in sociological models of entrepreneurship. The evidence shows that self‐employment outcomes are significantly affected by factors such as individual abilities, family background, occupational status, liquidity constraints and ethnic enclaves.     

Assessing the impact of liberalisation policies on the Greek labour market: an insider–experts' view from the perspective of the varieties of liberalisation

During the recent Great Recession (2008–2018), Greece has become the prototype example of the implementation of austerity policies in Europe. Contrary to public discourse, these austerity policies were complemented by substantial labour market reforms that promoted employment and wage flexibility. This article aims to present a theory-driven understanding of the implementation and the effects of these reforms. For this purpose, we employ a qualitative study consisting of semi-structured interviews with 50 labour market experts—government officials and labour lawyers, academics, labour union representatives and employer association representatives. Using Thelen's framework on the Varieties of Liberalization, we conclude that, contrary to the initial aims of the reforms, Greece followed a trajectory of direct deregulation, reducing considerably the level of both coordination between employers and workers, and coverage of employment protection. The interviews show that the dismantling of collective bargaining system was the most decisive move in this path.     

Youth minimum wage reform and the labour market in New Zealand

This paper analyses the effects of a large reform in the minimum wages affecting youth workers in New Zealand since 2001. Prior to this reform, a youth minimum wage, applying to 16–19 year-olds, was set at 60% of the adult minimum. The reform had two components. First, it lowered the eligible age for the adult minimum wage from 20 to 18 years, and resulted in a 69% increase in the minimum wage for 18 and 19 year-olds. Second, the reform raised the youth minimum wage in two annual steps from 60% to 80% of the adult minimum, and resulted in a 41% increase in the minimum wage for 16 and 17 year-olds over a two-year period. We estimate the impact of this reform by comparing average outcomes for these two groups of teenagers, before and after the change, to those for 20–25 year-olds, who were unaffected by the reform. We find no evidence of adverse effects on youth employment immediately following the reform, but some weak evidence of employment loss by 2003. We also find evidence of a 10–20% increase in hours worked following the reform for employed 16–17 year-olds, and up to a 10% increase for employed 18–19 year-olds, depending on the specification adopted. Combined, wage, hours, and employment changes lead to significant increases in labour earnings and total income of teenagers relative to young adults. However, we also find evidence of a decline in educational enrolment, and an increase in unemployment, inactivity, and benefit receipt rates, suggesting that while the minimum wage reform increased the labour supply of teenagers, this increase was not matched by as large an increase in employment.     

What is the most flexible component of wage bill adjustment? Evidence from Belgium

This paper decomposes wage bill changes at the firm level into components due to wage changes, and components due to flows of employment. It relies on an administrative matched employer–employee dataset of individual earnings merged with firms' annual accounts for Belgium over the period 1997–2001. The results are in line with what one would expect in a downward wage rigidity environment. On average, wage bill contractions result essentially from employment cuts in spite of wage increases. Wage growth of job stayers is moderated but positive; and wages of entrants compared with those of incumbents are no lower. The labour force cuts are achieved through both reduced entries and increased exits, due to more layoffs, especially in smaller firms, and wider use of early retirement, especially in manufacturing. In addition, the paper points out the role of overtime hours, temporary unemployment and interim workers in adapting hours worked to economic circumstances.