Labor adjustment,productivity and output volatility: An evaluation of Japan’s Employment Adjustment Subsidy

This paper provides a quantitative examination of the impact of Japan’s Employment Adjustment Subsidy, a major employment insurance policy since 1975, on labor adjustment, productivity and output fluctuation in the iron and steel sector. A partial equilibrium industry model with heterogeneous establishments and aggregate uncertainty shows that the EAS reduces steady-state labor productivity by encouraging labor hoarding, and in some cases, preventing the exit of least efficient establishments. The EAS also reduces job flows and increases average establishment-level employment. Although the impact on productivity is roughly proportional to the size of subsidized workers in most cases, the effects of the subsidy on output and employment volatility are more than proportional. First, the subsidy can lead to a sizable increase in output fluctuations over business cycles by symmetrically increasing the output response to shocks. This result is achieved through lower output via a subsidy during unfavorable times and higher output via less time and money spent on hiring during favorable times. Second, the subsidy meets its primary objective of reduced employment volatility. The reduction can be considerable when firing costs are high.     

Transatlantic trade and investment partnership: sectoral and macroeconomic perspectives for Germany,the EU and the US

The EU and the US have started negotiations on a Transatlantic Trade and Investment Partnership Agreement (TTIP) which could bring a considerable increase of exports and output as well as changes in the composition of output and employment. Thus export simulation studies in combination with input output analysis and employment analysis is useful. In the analysis presented the focus is mainly on sectoral output and employment effects where the key sectors are the automotive sector, chemical industry, information and communication technology production, pharmaceuticals and machinery and equipment. Backward sector links are analysed and found to be quite important in the automotive sector, the chemical industry, the machinery and equipment sector in both Germany and the US; in Germany also in ICT production. However, most of the observed sectors have weak forward linkage. Input output analysis is also used to identify employment effects in various sectors: the pure employment effect of a 20 % export expansion in Germany amounts to about 800 000 new jobs. Looking only at the US and German perspective turns out to be misleading—the high imports of intermediate inputs of German firms from EU partner countries suggests that a comparison EU-US is analytically required for some key issues and that considering the effects on EU partners is also useful. There is a host of key policy issues, including the issue of extended sustainability reporting.     

Fiscal Shocks and The Sectoral Composition of Output

We study the impact of shocks to different types of government spending on the sectoral composition of output for a panel of EMU member countries. We find that fiscal shocks lead to an increase in the relative size of the nontraded sector, with the impact varying across the different spending categories. There is typically no significant impact on the level of production in the tradables sector but the level of imports increases and the level of exports declines in most cases. Overall, the results show that fiscal shocks matter not only for aggregate variables but also for the sectoral composition of output. The sectoral output results are consistent with previous work concerning the impact of fiscal shocks on the real exchange rate and the relative price of nontradables.     

What effect does the size of the state-owned sector have on regional growth in China?

This paper examines the effects state-owned enterprises (SOEs) have on China's economic growth. We present a simple and intuitive model of the political process, which predicts a larger state-owned sector will lead to lower growth rates. We then estimate regressions with various measures of and proxies for real output growth using a variety of other factors, including measures of the size of the state-owned sector, as regressors.We find a robust negative relation between the size of state-owned enterprises and the provincial growth rate. The estimates indicate that a decrease in the SOE share of industrial production by 10 percentage points increases real GDP growth the following year by between 0.7% and 1.2%. The average impact of a reduction in the SOE share in employment by 10 percentage points is between 1.6% and 2.3%.     

杠杆率的持续性与溢出效应:基于四部门的实证研究

文章采用TVP-VAR模型系统考察了我国非金融企业部门、金融部门、居民部门、政府部门四部门杠杆分别对总产出和资产价格波动的时变影响，从产出效应和潜在风险两方面实证检验了各部门杠杆率的可持续性。研究发现：杠杆率过快增长会加重资产价格波动，使金融不稳定性上升，削弱杠杆率对产出增长的促进作用。当前，非金融企业部门、政府部门、居民部门杠杆对产出仍有较显著的正向影响，而金融部门杠杆上升对产出的正向影响最小，对资产价格波动的正向影响最大。进一步，文章实证研究了杠杆率变动在部门间的信息溢出，发现政府部门加杠杆将显著推升全社会杠杆率，金融部门杠杆率上升对非金融企业部门杠杆有挤出作用，居民部门杠杆则可以分担部分非金融企业和政府部门的过剩杠杆。因此，当前应优先调控金融部门杠杆，减少资金在金融体系内空转套利，其他三个部门则应保持杠杆率总量的平稳。研究结论对于宏观金融稳定和结构性去杠杆政策的实施有重要的实践意义。     

Unemployment: The role of the public sector in increasing the labour absorption capacity of the South African economy

The critical proportions of unemployment and the mainly structural nature of the problem necessitate a re‐evaluation of policy measures in order to foster a pro‐poor growth and development process in South Africa. The propblem could be addressed by implementing an integrated and comprehensive policy package. The public sector expenditure programme is a potent policy measure for stimulating employment growth in the economy. It is argued that a restructuring rather than an expansion of the public sector expenditure programme can result in short‐term, enduring employment effects. The restructured public sector expenditure programme should include characteristics of special employment programmes, focusing on the procurement and provision of more labour‐intensive goods and services and a reorientation of expenditure programmes in favour of the unemployed and the poor.     

SECTORAL ELASTICITY OF SUBSTITUTION AND RETURNS TO SCALE IN SOUTH AFRICA

Elasticity of substitution and returns to scale are estimated on a sectoral basis for South Africa using panel-based generalised least square procedure. Apart from sectoral differences in terms of elasticity of substitution, the study found that elasticity of substitution is below unity in all of the sectors. Most of the sectors studied are found to have increasing returns to scale in production. The study further explores the implications of elasticity of factor substitution and returns to scale on growth and employment creation. It is argued that a greater number of jobs can be created from growth of sectors with constant or decreasing returns to scale than from the same level of output growth generated by sectors with increasing returns to scale. This is the case when the employment-creating potential of the same amount of additional output is compared in all the sectors examined. By virtue of scale economies, a sector like finance, insurance, real estate and business services generates more output with less proportional increase in inputs, which means growth in this sector may not have the desired impact on job creation. However, given the sector's large share (20%) of the country's total output and employment, it may generate more jobs, even if sectors like utilities and construction experience the same level of output growth. Given its importance for growth and employment, the study recommends further investigation into the reasons why elasticity of substitution is lower in sectors like utilities, mining and trade, catering and accommodation services.     

DEVELOPING EMPLOYMENT EFFECTS OF INNOVATIONS: MICROECONOMETRIC EVIDENCE FROM TAIWAN

This paper aims to identify the effects of innovation on employment and labor composition in Taiwan. Using a new and detailed firm‐level data set, the empirical results determine that innovations, measured by R&D investments or patent counts, have a positive impact on employment. Both of the estimated employment effects of product and process innovations are overall significantly positive. Although the effects of process innovations differ between high and low R&D‐intensive industries, the process innovation tends to expand the firms’ output and then increase employment for high R&D‐intensive industries. However, it frequently results in laborsavings in terms of production work and reduces jobs in low R&D‐intensive industries. Moreover, technological innovations are found to be non‐neutral, leading to a shift in labor composition in favor of skilled and more educated workers.     

An Input–Output Analysis of the Philippine BPO Industry

This paper provides a profile of the Philippine business process outsourcing (BPO) sector, makes comparisons with India and other BPO providers, and summarises the results of an input−output analysis of the Philippine BPO industry's inter-sectoral linkages and its potential impact on compensation and employment. The input−output analysis shows that the BPO industry is not a key sector in terms of stimulating production in other sectors of the Philippine economy. Growth in the sector's revenues, however, can have a significant impact on compensation and employment. If appropriate policies are enacted and human capital improved, it is estimated that the Philippine BPO sector may become an important employment-generating sector.     

Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific

We take a sectoral level approach to analyzing the effects of foreign direct investment (FDI) inflows. We disaggregate FDI first by manufacturing versus services, then within services by financial services, trade services, and business services. We consider the effects of FDI inflows on growth of GDP per capita, then distinguish between growth in manufacturing and services value added per capita. Our data sample comprises 14 Asia Pacific economies for the period 1985–2012 to which we apply a dynamic panel generalized method of moments estimation technique. Services FDI as a whole is found to have a significantly positive impact on GDP growth while manufacturing FDI is found to have no effect. The impetus for growth from services FDI traces to financial services in particular, acting not only directly on service sector output but through manufacturing sector output as well. By contrast, trade services FDI is found to have a significantly negative effect on manufacturing output with no significant effect on services output. Foreign participation in trade services may act to expose domestic manufacturers to international competition and may also lead to domestic consolidation to take advantage of economies of scale.     

The impact of foreign direct investment on export structure and employment generation

The literature on foreign direct investment often treats its determinants and consequences independently. This is particularly so for empirical studies. The purpose of this paper is to consider both aspects simultaneously and to provide some empirical evidence on the nature of foreign investment and its impact on export structure and employment generation. The method consists of a model which includes both industry-specific and location-specific determinants of foreign direct investment in the export sector and their effects on the employment generating capacity of individual manufacturing industries. It is estimated for three-digit S.I.C. industries in Puerto Rico in 1979. The results suggest that Puerto Rico's export sector consists of US based firms producing on a large scale. These firms are primarily attracted to the island by relatively higher profits than on the mainland. Low wage labor is not considered an important inducement to foreign investment in Puerto Rico. The labor intensity of the island's export sector lags behind that of comparable countries due to the capital-intensive nature of its principal exports. The island's manufacturing employment can be more effectively increased by altering the composition of exports than by inducing present firms to hire more workers.     

IMPACTS OF TRADE LIBERALIZATION ON EMPLOYMENT IN VIETNAM: A SYSTEM GENERALIZED METHOD OF MOMENTS ESTIMATION

Using a system generalized method of moments model, the present paper investigates the impacts of trade liberalization on employment in Vietnam from 1999 to 2004. The results show that the increase in industrial output increased labor demand, whereas the increasing wage rate led to a decline in the employment level. The impact of export expansion on derived labor demand was positive and statistically significant, indicating that the higher level of exports than previously presented employment opportunities for the country's large labor surplus. As far as imports are concerned, empirical observations indicate that imports did not necessarily negatively impact Vietnam's employment level.     

非农就业提高农村居民幸福感了吗？

农村劳动力非农转移已经成为常态,对农村居民的福利水平产生了深远影响。文章基于体验效用假设,构建了工农要素流动下农村居民的幸福函数,并基于2018年中国家庭追踪调查(CFPS)农村调研数据,实证分析了非农就业影响农村居民幸福感的效应、机制与情境。结果表明:非农就业在总体上促进了农村居民幸福感提升,但却存在一定的"伊斯特林悖论"关系,即短期非农就业能够显著促进幸福增长,但长期非农就业对幸福增长的促进作用是有限的,甚至出现停滞或反向抑制状态;其内在机制主要在于非农就业过程中农村居民的需求层次逐渐由生存需要转向尊重和自我实现需要,但长期非农就业并不能显著提升外出务工农村居民的社会地位感知;非农就业对农村居民幸福感的促进效应,在本地非农就业和跨省流动的就业情境下更为显著,在女性群体、高中层次受教育程度群体中相对更高,且伴随农村居民的年龄增长呈现边际递减规律。基于此,文章提出创造本地就业市场、关注非农劳动力的就业需求变化、加强非农就业劳动力职业技能培训等针对性政策启示。     

汇率变动对工资和就业结构影响的实证分析

本文由Frenkel两部门理论模型,采用IMF提供的人民币对美元实际汇率数据,通过实证分析发现,实际汇率升值会显著减少贸易部门就业,即人民币升值使贸易部门就业人数显著减少,非贸易部门第二产业工人就业人数会增加,对第三产业工人就业影响不大,但就业工人实际工资水平都会有所提高。所以本文的结论是,人民币升值能提升中低阶层福利水平,支持人民币升值。     

Growth,employment and income distribution in Egyptian agriculture, 1964–1979

This paper is a study of the aggregate behavior of crop production in Egypt. We find that the output growth rate declined in the 1970s but there were some signs of recovery towards the end of the decade. This trend cannot be explained by the observed-cyclical movements in profitability and in the real price of aggregate output. On the other hand, investment in infrastructure goes a long way towards explaining the trends both in aggregate output and in land profitability. Increased investment in agriculture infrastructure tends to raise the growth rate of the sector and, at the same time, to increase labor's share in production at the cost of property share. Our observations also suggest that the demand for agricultural labor is rather inelastic with respect to the wage rate. Therefore, using the agricultural sector as an absorbent of employment shocks in the rest of the economy may lead to significant variability in income distribution.     

Affiliates and parent employment through foreign direct investment: a study case of substitutability or complementarity

How does outward foreign direct investment (FDI) affect employment of multinationals in the home country? Does the impact of outward investment differ among manufacturing and service sectors? Using data on Italian MNEs, this paper examines the impact of Italian outward FDI on local employment between 1998 and 2006. In particular, we investigate the relationship existing between employment in the parent company and employment in foreign affiliates by distinguishing according to host-country location and sector of activity. The results suggest that the effects of Italian outward FDI on domestic employment differ according to the sector and the country of destination. In the manufacturing sector, a weak but significant relationship of labour substitutability is found for Italian MNEs producing low-technology products in foreign affiliates localized in high-wage countries. On the other hand, a significant North–south complementarity relationship in labour demands appears in the High and Medium-high- technology sectors. In the service sector, we find strong complementarity between employment in the parent firm and employment in foreign affiliates: in particular, this regards Italian MNEs producing knowledge-intensive services both in Western affiliates and CEEC locations. These results are robust when we control for endogeneity of output and parent wages.     

Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence

Studies routinely document that immigrant employment concentrates in non‐traded goods sectors and that many immigrants have low inter‐sectoral mobility. We consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation's pattern of production and trade. We model an economy producing three goods; one is non‐traded. Domestic labor and capital are domestically mobile but internationally immobile. Allowing that some new immigrants will become specific to the non‐traded goods sector, the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants. Empirical investigation in a panel data set of OECD countries supports the model's prediction that immigration raises the output of non‐traded goods. Consistent with the model, we also find that immigration and trade are complements. Given its empirical support, the model's implications for immigration policy are then discussed.     

Minimum wage,trade and unemployment in general equilibrium

The path‐breaking work of Card and Krueger, showing that a higher minimum wage can increase employment, turned the age‐old conventional wisdom on its head. This paper demonstrates that this apparently paradoxical result is perfectly plausible in a competitive general equilibrium production structure of a small open economy with a non‐traded good, without recourse to monopsony, spatial heterogeneity, heterogeneity of consumers and so on, the usual theoretical drivers behind the result. Following Jones and Marjit, we build a simple general equilibrium model with production complementarity and we show that a higher minimum wage can raise aggregate employment. Expansion in the non‐traded sector following a wage hike may be consistent with the overall expansion of the export sector in a multi‐good framework, an unlikely outcome in a conventional two‐good model which cannot accommodate with production complementarity.     

Domestic value added and employment generated by Chinese exports: A quantitative estimation

We develop an input–output methodology to estimate how Chinese exports affected the country's total domestic value added (DVA) and employment in the years 2002 and 2007. For every US$1000 dollar of Chinese exports in 2007 (2002), DVA and employment are estimated to be US$591 (US$466) and 0.096 (0.242) person-year, respectively. To implement these estimations, we use hitherto unpublished Chinese government data to construct several completely new datasets, including an input–output table with separate input–output and employment-output coefficients for processing exports, non-processing exports, and output for domestic use. We hypothesize that, in comparison with the export sector, China's domestic sector would be relatively autarkic due to China's history of central planning. We expect that exports would generate less DVA and employment than output for domestic use. Processing exports, which are highly dependent on imported inputs, would similarly generate less DVA and employment than non-processing exports. Our findings support these expectations. For both 2002 and 2007, the DVA and employment effects of domestic final demand were higher than those of non-processing exports, which were in turn higher than those of processing exports. However, with the progress of economic reforms, we found that the total DVAs of exports and domestic final demand have converged from 2002 to 2007.     

Coordinating unions,wages and employment

Summary In this paper we consider a two-sector economy in which individual unions are affiliated into a federation of unions. We analyze the consequences of two different types of wage setting. Firstly, individual unions set wages in their own sector without taking into account the effect of their wages on the employment level in the other sector. There may be positive as well as negative externalities. A positive (negative) externality may exist if a higher (lower) wage in one sector implies a higher level of employment in the other sector. Both cases may occur in our model. Secondly, wages in the two sectors are set by the federation of unions. We show that in this case higher (lower) wages result than in the first case if a positive (negative) externality exists.Preliminary versions of this paper were presented at seminars at the University of Oldenburg and the University of Groningen and the Fourth Annual Congress of the European Economic Association, Augsburg, September 2–4, 1989. The authors would like to thank W.H. Buiter, H. van Ees, J. Hartog, Th. v.d. Klundert, S.K. Kuipers, Chr. Mulder and T. van Veen for their comments on an earlier version of this paper.