Impact of sequence of international entries on country exits

A classic model of international entries—the Uppsala model—postulated that firms enter foreign countries in increasing order of psychic distance between the home and the host country to minimize the risk of failure. A question that was left unanswered was whether this sequence of entry results in any performance benefits. Literature on the impact of psychic distance, or its components like culture distance, on the performance of foreign operations abounds but the order of entry that is critical to the Uppsala model remains conspicuously absent. This paper presents an analysis of foreign country entries and exits by the U.S. multinationals in the manufacturing and service sectors since 1965. Companies that enter foreign countries in increasing order of culture distance do gain a significant performance advantage over those who do not. Changes over time and across industry sectors are discussed.     

The distributive and welfare effects of product and labour market deregulation

This paper studies the effects of product and labour market deregulation on wage inequality and welfare. By constructing an analytically tractable model in which the level of product market competition and the wages are endogenously distributed among sectors, I show that deregulation in goods market has mixed effects on inequality: the wage variance and the Gini index are lower, but the ratio of the highest over the lowest wage paid in the economy increases. Moreover, deregulation in labour markets raises the aggregate level of employment and the average real wage but reduces the welfare of trade unions in sectors with a low level of competition.     

Differential effects of active labour market programs for the unemployed

The differential performance of six Swedish active labour market programs for the unemployed is investigated in terms of short- and long-term employment probability and un-employment-benefit dependency. Both relative to one another and compared to more intense job search, the central finding is that the more similar to a regular job, the more effective a program is for its participants. Employment subsidies perform best by far, followed by trainee replacement and, by a long stretch, labour market training. Relief work and two types of work practice schemes appear by contrast to be mainly used to re-qualify for unemployment benefits.     

Sectoral labour market effects of the 2006 FIFA World Cup

Using the case of the 2006 FIFA World Cup, this study is the first to test the employment effects of a mega-sporting event on the basis of data that combines both regional and sectoral data. It is also the first study of sporting events to use a semi-parametric test method. Earlier studies on the World Cup could hardly identify any employment effects. In contrast, we find a small but significant positive employment effect on the hospitality sector.     

Internal labour market processes

This article focuses upon internal labour market processes and reviews current theoretical and empirical material. In reporting two recent studies which indicate the variety of internal processes the authors offer some explanations for such developments, in particular their relevance to issues of managerial control.     

Competition and accessibility on a regional labour market

This paper presents an empirical study of competition among applicants for job openings in the Stockholm region and a multinomial logit model of allotment of job openings among applicants. The model is applied to the empirical data in a micro-oriented evaluation of accessibility to employment oppurtunities in the Stockholm region. The results suggest that competition has a strong and uneven effect on job searchers' prospects. Extensions and variations of the model are discussed.     

Replacement rates and labour market behaviour

This paper studies how the replacement rate, defined as the ratio of disposable income when unemployed to expected disposable income if beginning to work, affects individuals’ transition rate from unemployment. Linked register data, representing a local Finnish labour market in 1996, are analysed with piece-wise constant exponential hazard models. Results suggest that the effect of the replacement rate and, thus, of “unemployment traps”, is fairly modest. It does not seem to change with time spent unemployed. The impact on the transition rate into employment is lower than on the transition rate out of the labour force. Unemployment insurance recipients are found to be less sensitive to changes in the replacement rate than are unemployment assistance recipients.     

Breeding one's own sub-prime crisis: The labour market effects on financial system stability

Crisis may spread through economy via the propagating mechanisms of the labour market - households becoming delinquent due to an initial unemployment shock may be unable to continue servicing obligations versus the financial system. With large debts - e.g. mortgages - such defaults pose a threat to financial system stability. In this paper we use the Polish household budget surveys to simulate the impact of changes in the labour market status of household members on the ability of the household to service its mortgage payments. The simulation results are subsequently aggregated to facilitate a macro-level interpretation of the findings. We simulate various scenarios of labour market deterioration. Finally, we also introduce a policy instrument into the simulations providing, in a fiscally neutral manner, additional stability to the financial system. Based on robustness checks, the findings seem to be reliable. The results suggest that even with shares of debtors among consumers as low as in Poland, the propagation mechanism may indeed result in a considerable threat, while the fiscally neutral instrument is effective and well-suited to be addressed in providing additional stability to the financial system.     

Hierarchies in organisations and labour market competition

This paper studies the endogenous determination of hierarchies in firms. Firms can design a hierarchy with a continuum of ranks, one for each ability level. Nevertheless, in the market equilibrium, they choose to have only a finite number of ranks, so that in each rank there are workers of different abilities, who produce different output, and receive the same wage. It is also shown that an increase in the extent of labour market competition reduces the number of ranks in the hierarchy.     

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.     

A labour market perspective on management training and development in Europe

This paper uses recent survey data to undertake a comparative analysis of management development across six Western European countries. Unlike most studies that compare management development practices, we rely on an institutional labour market perspective to compare managerial skills development and training. We suggest that, while there are few differences in terms of the priority firms from different countries give to developing managers, the methods that are used and skill profiles can differ considerably. Furthermore, institutional change may also challenge some conventional views of how managers are being developed. We conclude by distinguishing four country systems that reflect a series of common characteristic strengths and weaknesses of national managerial training systems.     

Sexual orientation discrimination in the labour market

This research examines the possible discrimination faced by gay men compared to heterosexuals when applying for jobs in the Greek private sector. This issue was addressed through the observation of employer hiring decisions. Mailing pairs of curriculum vitae, distinguished only by the sexual orientation of the applicants, led to the observation that gay men faced a significantly lower chance of receiving an invitation for an interview. However, in cases where employers called applicants back, the wages offered did not differ significantly between gay and heterosexual applicants. Nevertheless, there is substantial evidence to suggest that discrimination based on sexual orientation does exist in the Greek labour market, and at alarmingly high levels.     

Testing for redlining in the labour market

When an employer refuses to recruit a job applicant due to the applicant's place of residence, we speak of redlining in the labour market. There are two explanations for this practice by the employer. The first is the excessive distance between the applicant's place of residence and the workplace, justified by a logic of spatial mismatch. The second is based on the characteristics of the neighbourhood in line with a signal logic. We propose to measure the effects of these two mechanisms using a correspondence test conducted in the Paris region of France for two occupations: waiters and cooks. It appears that distance plays a significant role and reinforces the effect of a disreputable neighbourhood. The most deprived neighbourhoods combine these two types of drawbacks.     

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.     

The impact of equity markets and corporate governance on labour market flexibility

Drawing from various literatures, this article explores links between equity markets and labour market flexibility. Various data sources are used to test relationships for a set of OECD countries, controlling for other likely influences on flexibility such as government and industrial relations institutions. The results are generally supportive as regards employment flexibility: equity market trading activity is associated with shorter job tenure, higher activity rates, and greater employment change over the cycle. However, the relationship between equity markets and pay flexibility is less statistically robust to the addition of controls.     

Employment relations and labour market indicators in ten industrialized market economies: Comparative statistics

The acceleration of the internationalisation of business and the division of labour has been led by improvements in technologies and communications, decreased barriers to trade, increased competition and the growth of multinational enterprises (MNEs). Employers, government organizations and unions, practitioners and academics are increasingly concerned with locating comparable statistics. This article reviews employment relations and labour market data for ten major industrialized market economies (IMEs) and discusses some of the challenges in the measurement and interpretation of such data. For a fuller discussion of such data, and of the ten IME, see Greg J. Bamber and Russell D. Lansbury (eds) International and Comparative Employment Relations 3rd edn, to be published by Sage, London, and Allen & Unwin, Sydney, in mid-1998.     

Equilibrium unemployment with outsourcing under labour market imperfections

We study the effects of international outsourcing on equilibrium unemployment in a high-wage economy with labour market imperfections. We demonstrate, consistent with empirical results, that the wage elasticity of labour demand is increasing as a function of outsourcing. Furthermore, we show that a production mode with more outsourcing reduces the negotiated wage in a high-wage country with labour market imperfections if the relative bargaining power of the labour union is sufficiently high. Under such circumstances outsourcing reduces equilibrium unemployment. Finally, we characterize the optimal production mode showing that stronger labour market imperfections induce a production mode with more outsourcing.     

Marshallian labour market pooling: Evidence from Italy

This paper employs a unique Italian data source to take a comprehensive approach to labour market pooling. It jointly considers many different aspects of the agglomeration — labour market relationship, including turnover, learning, matching, and hold up. It also considers labour market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labour market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labour pooling, labour poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labour market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms.