The importance of education for the reallocation of labor: Evidence from Swedish linked employer–employee data 1986–2002

Using Swedish employer–employee data we study job and worker flows for different educational groups, as well as the cyclicality of such flows. Due to the long period studied, from 1986 to 2002, and the widely fluctuating business cycle during this period, we have a unique opportunity to analyze the cyclical pattern of job and worker flows. We especially look at the big downturn in the Swedish economy in the beginning of the 1990s. When workers are treated as homogenous, we find job reallocation to be countercyclical. However, when we estimate correlations for different educational groups, we find job reallocation to be countercyclical for the lowest educated, and acyclical for higher educated workers. Contrary to job flows, we find worker flows to be acyclical, with a strong procyclical pattern in hiring rates, and an acyclical pattern in separation rates. When decomposing worker flows into educational groups, the acyclical pattern is prevalent for all groups, except for the highest educated. For the highest educated, worker reallocation is strongly pro-cyclical due to both more hirings and separations during up-turns.     

The effects of financial liberalization on productivity: Evidence from India’s manufacturing sector

Using a panel of India’s registered manufacturing firms and both economy-wide and firm-level financial data, we investigate the effects of India’s financial liberalization on the productivity of its manufacturing sector in the 1990s and 2000s. Our dynamic panel analysis shows that the series of financial liberalization policies/measures, at both the macro and micro levels, significantly enhanced the productivity of the manufacturing sector. Total factor productivity increased for all firms, including those owned by the state government, with greater gains for the firms in the private and foreign sectors. Our results suggest that policies favoring financial liberalization should be pursued further in order for India to foster higher economic growth.     

The effects of labor supply shocks on labor market outcomes: Evidence from the Israeli–Palestinian conflict

Since September 2000, as a result of mobility restrictions, the supply of Palestinian workers competing for local jobs in the West Bank has increased by about fifty percent. This paper takes advantage of this unique natural experiment to study the effects of labor supply shocks on labor market outcomes. Using quarterly information on wages and employment in each city in the West Bank, the paper analyzes the short-run adjustment of labor markets to a large inflow of workers separately from the effects of political instability. The results suggest that low-skilled wages are adversely affected by an increase in the supply of low- and high-skilled workers, while high-skilled wages are only weakly negatively related to an increase in their own supply. This is consistent with a scenario in which high-skilled workers compete for low-skilled jobs, pushing the low-skilled into unemployment. This latter hypothesis is confirmed by analyzing the effects of changes in labor supply on unemployment.     

Financial crisis and relative productivity dynamics in Korea: evidence from firm-level data (1992–2003)

We have estimated the relative TFP growth at firm level and analyzed the firm dynamics in view of entry and exit of firms in Korea during 1992–2003, which includes the turbulent financial crisis of 1997–1998. Following Pyo and Ha, Hitotsubashi J Econ 48(1): 67–81, (2007), we have adopted a gross output model rather than a value added model of relative TFP analysis. We have found that the cyclical variation of productivity growth plays a dominant role in the decomposition effects before and after the 1997 financial crisis in Korea. Productivity growth is modest before the crisis and strong after the crisis owing to the recovering market efficiency. There is the likelihood that the productivity growth of stayers during the post-crisis period was significantly higher than new entrants. The net entry effect is found to be more sensitive in small business and export-based firms than in large business and domestic market-based firms. Our findings suggest that Korean firms have recovered a modest level of technical change after its severe financial crisis owing to the improvement of management transparency and the build-up of market efficiency during the IMF-mandated restructuring process. But since the entry effect is estimated to be still negative in Manufacturing and the exit effect is negative in Service sector after the crisis, the Korean economy has not fully recovered its metabolism in the post-crisis period and still lacks a creative destructive process to resume another round of sustainable growth path.     

Minimum wage is efficient wage in Turkish labor market: TAR–cointegration analysis

This study has two main purposes. First one is the necessity of taking minimum wages into account, if there is a purpose to analyze the relationship between wages and productivity in an economy which has high unemployment rates and informal employment. Second one is about the analyzing method of this relationship. We choose TAR cointegration analysis for this relation. First step of this analysis is testing for stationarity of the variables. However the low power of traditional unit root tests is examined and proved in many studies but not taken into account in TAR cointegration studies in literature. This study shows that traditional unit root tests are unfavorable for the variables which have TAR structures. Because of this shortcoming of traditional unit root tests, these results must be supported with TAR unit root tests.     

Accounting for wage and employment changes in the US from 1968–2000: A dynamic model of labor market equilibrium

In this article, we present a unified treatment of and explanation for the evolution of wages and employment in the US over the last 30 years. Specifically, we account for the pattern of changes in wage inequality, for the increased relative wage and employment of women, for the emergence of the college wage premium and for the shift in employment from the goods to the service-producing sector. The underlying theory we adopt is neoclassical, a two-sector competitive labor market economy in which the supply of and demand for labor of heterogeneous skill determines spot market skill rental prices. The empirical approach is structural. The model embeds many of the features that have been posited in the literature to have contributed to the changing US wage and employment structure including skill-biased technical change, capital-skill complementarity, changes in relative product-market prices, changes in the productivity of labor in home production and demographics such as changing cohort size and fertility.     

Does recession drive convergence in firms’ productivity? Evidence from Spanish manufacturing firms

This paper provides evidence on the effect of recessions and expansions on the productivity growth rate of productivity leaders and followers. We use data of a representative sample of the Spanish manufacturing sector for the period 1991 and 2005. These data allow us to estimate firm level productivity for a relatively long period of time and provide us with firm level perception of the business cycle. We find that productivity tends to converge in recessions because, in these periods, the productivity growth of followers is higher than the productivity growth of leaders. This fact is consistent with theoretical models of managerial incentives and competition. A recession can be seen as an exogenous increase in competition that reduces demand and poses a threat of liquidation. This threat is higher for followers and is high enough to create asymmetric incentives to become more productive. We test the robustness of our results to sample selection and different productivity measure.     

Volatile multinationals? Evidence from the labor demand of German firms

Does more FDI make the world a riskier place for workers? We analyze whether an increase in multinational firms' activities is associated with an increase in firm-level employment volatility. We use a firm-level dataset for Germany which allows us to distinguish between purely domestic firms, exporters, domestic multinationals and foreign multinationals. Employment in multinationals could be more volatile than employment in domestic firms if multinationals were facing more volatile demand or if they react more to aggregate developments. We therefore decompose the labor demand of firms into their reaction and their exposure to aggregate developments. We find no above-average wage and output elasticities for multinational firms.     

The effect of oil price uncertainty on corporate investment in the presence of growth options: Evidence from listed companies in China (1998–2019)

We empirically investigate the effect of oil price uncertainty on corporate investment in the presence of growth options using the financial data of listed firms in China from 1998 to 2019. We reveal three key findings in this paper. First, we find that oil price uncertainty has a U-shaped nonlinear effect on corporate investment. In periods of low uncertainty, oil price uncertainty negatively influences corporate investment. However, in periods of high uncertainty, oil price uncertainty positively influences corporate investment. Second, research has found that the U-shaped nonlinear effect is moderated by the irreversibility and growth opportunities of investment decisions. Third, further analyses reveal that this U-shaped nonlinear effect can be changed by a firm’s characteristics. Specifically, this nonlinear effect can only be observed in non-state-owned enterprises and small firms. We test the robustness of our findings and propose several policy suggestions.     

Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey

In the last three decades, revolutionary Iran has experienced large shocks to its political and economic system with likely effects on poverty, inequality, and economic mobility. While poverty has declined, inequality has remained relatively high and stable over nearly four decades. In this paper, for the first time, we examine poverty and inequality in a dynamic context using a 4-year panel data, collected during 1992–1995. We show that short-term income mobility is relatively high, which helps mitigate persistent high inequality. We offer a range of estimates of transition probabilities, indicating that, for example, someone in the lowest (highest) quintile has between 25% and 50% chance of moving up (down) the income ladder. Focusing on the dynamics of poverty, we distinguish between short- and long-term poor and between chronic and transient poverty. Surprisingly, we find that chronic poverty is a more serious problem in urban than rural areas, while transient poverty is geographically more uniformly distributed. Finally, using Tobit and quantile regression, we examine the correlates of these two types of poverty. Both chronic and transient poverty are higher for households headed by women and by younger and less educated men. While minorities suffer more from transient poverty, they are less likely to be chronically poor. We discuss the implications of these findings for policy to alleviate chronic and transient poverty.     

The effect of subsidizing continuous training investments — Evidence from German establishment data

This paper evaluates the impact of a training voucher program on establishments' investments in further training. The voucher program that was implemented in the German federal state of North Rhine-Westphalia increased training incentives for employees in small and medium-sized establishments by reducing training costs by 50%. The estimation is based on a quasi-experimental research design exploiting variation across time, regions and establishment size. Using establishment data, I find that the share of establishments that invest in training increased by 4–6 percentage points. Training intensity and the educational structure of participants remained unaffected among those establishments investing in training.     

A spatial analysis of inward FDI and urban–rural wage inequality in China

This article investigates the spatial effect of inward foreign direct investment (FDI) on urban–rural wage inequality, both in the short and long run, by employing the Spatial Durbin Model. In particular, we carefully consider the heterogeneity of inward FDI with respect to its entry mode (ownership type) and sectoral distribution. Based on a panel dataset covering 30 provinces and cities in China from 2000 to 2016, our results show that inward FDI does not increase urban–rural wage inequality. In particular, we do not find a significant relationship between inward FDI in the secondary and tertiary sectors, while inward FDI in the primary sector has a slightly negative effect on inequality. When we consider inward FDI by entry mode, we find that wholly foreign-owned enterprises (WFE) have a negative spatial effect on urban–rural wage inequality in the short and long run, while equity joint ventures (EJV) reduce urban–rural inequality in the long run only.     

How does FinTech affect the development of the digital economy? Evidence from China

Financial Technology (FinTech) is key to the global ascendency of China's finance, and the digital economy is a new driving force in the sustainable development and high-quality growth of China's economy. So, what is the nature of the relationship between FinTech and the digital economy. Based on the CRITIC method, this study calculates the China's 31 provinces’ (excluding Hong Kong, Macao and Taiwan) FinTech indices from 2008 to 2018 and the digital economy development indices from 2012 to 2018, and analyzes the impact of FinTech on the digital economy and its underlying mechanism. The results show that FinTech stimulates the development of the digital economy in China by promoting technological innovation and weakening the financial decentralization of local governments. Further research indicates that local financial regulatory resources have a positive moderating effect on the impact of FinTech in promoting the development of the digital economy. Increased local financial regulatory resources will enable FinTech to promote the development of the digital economy, but this regulatory role is only significant in financially developed areas. The approach of the study is relatively novel.     

Does labor–management partnership deprive union members of activism toward their unions? Evidence from union members in Korea

This study aims to analyze whether partnership ideology really deprives union members of the willingness and passion to act for their union, resulting in union decline, and whether militant unionism, which includes adversarial ideology against employers is more effective for igniting members' activism for their unions rather than labor–management partnership. The survey data were obtained from union members working in Mechanical and Metal Manufacturers Complex, Changwon, Republic of Korea. Judging from the overall results of the data analysis, Kelly's (1996) claim that moderate unionism based on partnership ideology would undermine members' activism for their unions was not supported; on the contrary, partnership ideology had positive effects on both members' activism for their unions and decision-making practices. The difference between partnership and militancy is that militancy had an intensive effect on the narrow focus of union activities, but the impact of partnership achieved a better balance between participation in union activities and in management decision making.     

Understanding wage restraint in the German public sector: does the pattern bargaining hypothesis really hold water?

German public sector wage restraint has been explained through the presence of a specific type of inter-sectoral wage coordination in the industrial relations system—that is, export sector-led pattern bargaining. First, as a literature-assessing exercise, this paper reviews the literature in industrial relations and comparative political economy (CPE) and finds that (i) the origins and mechanics of inter-sectoral wage coordination through pattern bargaining have never been laid out clearly; (ii) that the mechanisms of the pattern bargaining thesis have never been tested empirically; and (iii) that the CPE literature reveals an export-sector bias. Second, as a theory-testing exercise, hoop tests are performed to verify the pattern bargaining hypothesis. The key finding is that Germany cannot be considered a case of export sector-driven pattern bargaining, opening a new research agenda for the study of public sector wage setting centred on public sector employment relations, public finance, public administrations and the politics of fiscal policy.     

Is the nonlinear hedge of options more effective?—Evidence from the SSE 50 ETF options in China

The linear hedging of the options ignores the characteristic of the nonlinear change of option prices with the underlying asset. This paper establishes the nonlinear hedging strategy followed the study by Hull and White (2017) to investigate the effectiveness on the Shanghai Stock Exchange (SSE) 50 ETF options. The results show that the nonlinear hedge of the Chinese option market is less effective than the U.S option market because of the short history and the lower activity of the Chinese option market. The effect of nonlinear hedging strategy is better than the linear hedging strategy for calls in China. But for puts, the effect of the nonlinear hedging strategy is not as significant as it for calls. The difference in the trading volume between calls and puts and the high short-selling cost in the Chinese market are the main factors leading to the difference in hedge effectiveness. This paper suggests that the stock exchange could reduce margin standard of 50 ETF securities lending, promote a more flexible shorting mechanism, and accelerate the process of index options listed, so as to achieve hedging the risk of options more directly and efficiently.     

Does the quality of public-sponsored training programs matter? Evidence from bidding processes data

This paper analyzes the link between training quality and labor-market outcomes. Multiple proxies for training quality are identified from bidding processes in which public and private training institutions compete for limited public funding in Peru. Information about exact dates of program enrollment is analyzed to show whether the first-come-first-served assignment rule randomized eligible individuals across courses of varying quality. Generalized propensity score (GPS) is implemented to estimate dose–response functions in the context of multiple treatments. We find that beneficiaries attending high-quality training courses show higher earnings and better job-quality characteristics than either beneficiaries attending low-quality courses or nonparticipants. The returns are particularly robust for women, making the provision of high-quality training services cost-effective. Furthermore, the most important training attribute is expenditures per trainee. Class size and infrastructure are weakly related to the expected impacts, while teacher experience, curricular activities, and market knowledge seem to bear no relationship with the expected impacts. External validity was assessed by using five cohorts of individuals over an eight-year period.     

Does economic globalization affect the level and volatility of labor demand by skill? New insights from the Tunisian manufacturing industries

The central aim of this paper is to assess the effects of economic globalization on the level and volatility of labor demand for different skill groups in Tunisia. Using a panel dataset covering six manufacturing industries between 1983 and 2009, three main findings are reported. First, exports and imports exert a positive impact only on the semi-skilled and skilled labor demand while foreign direct investment flows increase the demand for semi-skilled and unskilled workers. Second, the regional analysis suggests that exports to the European Union boost the demand for the semi-skilled and skilled labor. Imports from the rest of the world exert similar effects on the demand for these two categories of workers. It emerges also that imports from the European Union lead to a higher demand for skilled labor, which gives support to the validity of the skill-enhancing trade hypothesis in Tunisian industries. Finally, our findings suggest that both exports and imports rise the employment volatility associated with skilled workers. On the other hand, there is a weak evidence of increased employment volatility as a result of foreign direct investment flows.     

On the linearity of the wage–profit relation in a Sraffa’s model: a mathematical summing-up

This paper sums up in a common analytical structure the main results, scattered in economic literature, concerning the linearity between rate of profit and real wage in a simple Sraffa’s model. The paper is mainly based on previous results of one of the two authors and on results of Miyao (Int Econ Rev 18:151–162, 1977) and Schefold (Zeitschrift für angewandte Mathematik und Physik 27:873–875, 1976a; Zeitschrift für National?konomie 36:21–48, 1976b).     

Does government funding promote or inhibit the financialization of manufacturing enterprises? Evidence from listed Chinese enterprises

This study examines how government funding type affects the financialization of manufacturing enterprises in China and discusses the different impacts of environmental factors. Funding for production can induce managers to increase expenses and reduce main business income by assigning social objectives, promoting corporate financialization. However, state-owned enterprises (SOEs) may suffer from soft budget constraints and ignore short-term revenue; enterprises in competitive industries tend to hold cash for precautionary motivation. Therefore, their financialization is insensitive to government funding. In addition, funding for interest can inhibit corporate financialization by increasing debts for non-SOEs and those with financial background employees or facing strong financing constraints, because they are lacking in capital or sensitive to financial risks.