Labour-Market Developments at a Time of Heightened Uncertainty

These are testing times for labour-market policies in Indonesia. The country faces two major challenges in an unpredictable international and domestic environment: providing people with better, more secure jobs and raising productivity to help raise living standards and reduce poverty. Over the past several months, new global and domestic threats to economic growth have emerged and may hinder progress in jobs and productivity. In the longer term, the government is searching for new strategies to increase productivity, with a focus on supply-side investments in skills and training. In relation to events abroad, uncertainty has increased over the early initiatives taken by the new US president and his nationalist administration, such as the scuttling of the Trans-Pacific Partnership trade deal. At home, likely to be of some significance for economic policy are mass actions that were levelled against Jakarta’s governor but de facto also directed against the government. In the medium term, our assessment of the record of the Joko Widodo (Jokowi) government on the labour market is mixed. Over the past two years, growth has been slower than under the previous administration and hence job creation has also been muted. The experience of a handful of countries in Asia suggests that the government might have done more to stimulate economic growth and create jobs. The disappointing performance of manufacturing stands out. Yet inflation has fallen and the slide in the value of international trade—both exports and imports—has reversed in recent months. Improved fiscal management and a generally successful tax amnesty are other pluses. There was also an unexpected but considerable fall in unemployment in 2015–16, according to labour-force statistics. Some policies, such as the new approach to minimum wages, seem to have had beneficial effects for both business and the economy, and Indonesia has done well in some international rankings, such as the World Bank’s Ease of Doing Business index. However, the picture for the medium to longer term seems less bright for the labour market. There has been much talk about raising productivity by improving skills through government support for investment in training and apprenticeships, as well as by expanding vocational training along the lines of the German model. Expanding tourism is seen as one solution to the lack of employment for young secondary- and tertiary-educated jobseekers. But we have an impression of policy-making on the run; often, the argument for government intervention has not been made clearly enough. We argue that Indonesia still lacks a coherent, well-thought-out plan to increase jobs and productivity.     

Data Aggregation Issues for Crop Yield Risk Analysis

With increased emphasis on risk management in agriculture and a lack of disaggregated or farm‐level yield time series, decision makers are often faced with having to make adjustments to temporal yield risk measures obtained from readily available but aggregated yield data. This paper provides some empirical evidence on what type of aggregation bias to expect when measuring temporal yield risk using yield observations averaged across a region relative to yield risk estimated from quarter‐section yield time series in wheat. This study highlights some of the challenges faced when estimating aggregation distortions in measuring yield risk defined by temporal variance, especially given the nature of the empirical data set used. Cluster analysis, visual examination of relative frequency distributions and mapping of yield risk clusters suggest that using a readily available, aggregate temporal yield risk measure has the tendency to underestimate yield risk observed at the quarter‐section level and that clear, geographic yield risk boundaries do not exist in municipalities or across larger areas in this study. Further research on crops more risky than wheat appears promising. Avec un plus grand intéret sur la gestion du risk dans l'agriculture et un manque de données détaillees ou bien de collections de séries temporelles sur les rendements, les décideurs sont souvent tenus d'apporter des correctifs aux measures du risk obtenues a partir des données de rendements qui sont disponibles. Cet artcle apporte une preuve empirique du type de biais lie a l'agrégation qui peut être présent dans le calcul du risk de rendement temporel obtenu a partir de rendements moyens de blé observés au niveau régional en comparaison du risk de rendement qui est estimé a partir de données basées sur des quart‐de‐sections. Cette étude met en exergue quelques uns des obstacles qui se présentent dans l'estimation de distosions liées a l'aggrégation dans le calcul du risk de rendement défini par la variance temporelle, speciallement étant donne la charactère empirique des données utilisées. L'analyse de groupe, l'examen visual de la distribution des fréquences relatives, et la cartographie de classes de risk de rendement suggèrent que l'utilisation de la measure du risk de rendement basée sur des données disponibles de risk aggrège temporel a tendence a sousestimer le risk de rendement observe au niveau des quart‐de‐sections et qu'il n'y a pas de frontières de risk de rendement certaines, géographiques qui existent entre les municipalités ou bien a travers les zones plus larges examinées dans cette etude.     

Explaining intercity home price differences

This paper develops and tests an equilibrium model seeking to explain intercity variation in owner-occupied housing prices. Empirical tests with a reduced form equation using aggregated 1980 data on 94 SMSAs suggest explanation for 84% of this intercity home price variation. Intercity housing demand, based upon homeowner quality of life equilibrium, is successfully represented by the non-monetary income determinant of climate mildness in addition to several monetary income determinants that reflect household residual after-tax real income. Intercity housing supply was found to be influenced by intercity variation in construction costs and limitations upon the available supply of undeveloped urban land.     

The relationship between risk experience and risk response: a study of farmers and climate change

Within the existing literature, the role of experience of risk on attitudinal and behavioural risk response has been relatively neglected. Recent research that draws on the psychological distance of climate change as a concept notes the importance of local, significant experience as a driver for encouraging appropriate response. The experience of flooding was used as the stimulus in this paper, and emphasis placed on whether direct and/or indirect experience of flood risk is associated with different responses to climate change risk. In order to explore the relationship between climate change risk experience and response in the form of on-farm mitigation and adaptation, this paper draws on a case study of farmers in England, many of whom have experienced flooding. Results from a quantitative survey undertaken with 200 farmers in Gloucestershire, England are discussed. Statistical analysis found experience of flooding to be significantly associated with a heightened concern for climate change. Although also finding an association between experience and behavioural response, the sample were most likely to be taking adaptive behaviour as part of normal practice, with factors such as lack of overall concern for climate change risk and absence of information and advice likely to be the main barriers to action. Risk communication needs to further emphasise the connection between climate change and extreme weather events to allow for farmers to perceive climate change as a relevant and locally salient phenomenon, and subsequent tailored information and advice should be offered to clearly illustrate the best means of on-farm response. Where possible, emphasis must be placed on actions that also enable adaptation to other, more immediate risks which farmers in this study more readily exhibited concern for, such as market volatility.