Convergence in West German Regional Unemployment Rates

Abstract. Differences in regional unemployment rates are often used to describe regional economic inequality. This paper asks whether changes in regional unemployment differences in West Germany are persistent over time. Understanding the persistency of regional unemployment differences helps us to assess how effective regional policy can be. While univariate tests suggest that changes in regional unemployment differences are persistent in West Germany, more powerful panel tests lend some support to the hypothesis that regional unemployment rates converge. However, these tests reveal a moderate speed of convergence at best. Because there is a structural break following the second oil crisis, we also use tests that allow for such a break. This provides evidence for both convergence and quick adjustment to an equilibrium distribution of regional unemployment rates that is, however, subject to a structural break.     

The Relationship between Output and Unemployment with Efficiency Wages

Abstract. We construct a stylised model of the supply side with goods and labour market imperfections to show that an economy can rationally operate at a low-effort state in which the relationship between output and unemployment is positive. We examine data from the G7 countries over 1960–2001 and find that only German data strongly favour a persistent negative relationship between the level of output and rate of unemployment. The consequence of this is that circumstances exist in which market imperfections could pose serious obstacles to the smooth working of expansionary and/or stabilisation policies and a positive demand shock might have adverse effects on employment.     

Inclusive wealth with a changing but aging population

We consider the effect of population age distribution in inclusive wealth accounting. Numerical results demonstrate that the wealth of nations with an aging demographic structure, as well as those with a rapidly increasing working-age generation, may have been overestimated.     

Short-time work—Some long-run implications

This paper outlines a simple model to examine some long-run implications of short-time work schemes (STWs) on labor market performance and welfare. It is not clear that STWs reduce unemployment as the induced wage push discourages job creation.     

Is Downward Wage Flexibility the Primary Factor of Japan's Prolonged Deflation?

By using both macro‐ and micro‐level data, this paper investigates how wages and prices evolved during Japan's lost two decades. We find that downward nominal wage rigidity was present in Japan until the late 1990s, but disappeared after 1998 as annual wages became downwardly flexible. Moreover, nominal wage flexibility may have contributed to Japan's relatively low unemployment rates. Although macro‐level movements in nominal wages and prices seemed to be synchronized, such synchronicity is not observed at the industry level. Therefore, wage deflation does not seem to be a primary factor of Japan's prolonged deflation.     

Remittances and the human capital of children: New evidence from Kyrgyzstan during revolution and financial crisis, 2005–2009

We analyze the effect of the receipt of remittances on the education and health of children in Kyrgyzstan during a volatile period of their recent history, 2005–2009. The country experienced revolution in 2005 and the global financial crisis beginning in 2008. Both events impact human capital investment, and the changes vary by region of the country. We use fixed effects estimation and fixed effects, instrumental variables estimation to isolate the effects of remittances and other events on human capital. We find that boys aged 14–18 in remittances’ receiving households are less likely to be enrolled in school than other children. We also find that girls in remittances’ receiving households are more likely to be malnourished (thin). Both effects are relatively small. Remittances do not improve the human capital of children left behind. However, we do find an overall positive improvement in school enrollment among young children between 2005 and 2009 but a negative trend in enrollment among older boys and girls. Nutrition improves over time. Regional differences are apparent in these trends in nutrition and education.     

Industry Wages Across Countries and Over Time: A New Database of Micro Survey Data

This paper presents a newly collected database on industry wages. The underlying data are micro datasets collected through nationally representative household surveys which are mostly conducted by national statistical agencies. In comparison with wage measures based on macroeconomic data sources, we find that industry wages based on micro survey data are more reliable. Furthermore, data from nationally representative micro surveys are becoming increasingly available, thus allowing for better coverage, especially of low‐income countries. The database provides a reliable source of data for research on inter‐industry wage structures and gender wage differentials, across countries and over time. It may also serve as a basis for further research on the determinants and implications of inter‐industry and gender wage variations.     

REVISITING GLOBALIZATION CHALLENGES AND OPPORTUNITIES IN THE DEVELOPMENT OF COOPERATIVES

Cooperatives have gained prominent attention in recent years as strategic elements to achieve sustainable economic development and greater social cohesion in the context of neoliberal globalization. This article explores, theoretically, the current challenges and opportunities for cooperatives to develop successfully in the globalizing economy. To this end, we provide an analytical, critical review of the key bibliography concerning some fundamental aspects that shape the relationship between economic globalization and cooperatives, an issue that has been generally neglected by previous literature. Three key fields are addressed: 1) the viability of cooperatives, based on their strengths and possible weaknesses, under current globalization; 2) the role of these organizations in promoting the local development and stability of local communities; and 3) the tensions and potentialities that internationalization entails for cooperatives. Based on the analytical review and the organization of the literature, we propose an agenda for further research. This includes some hypotheses and strategies for testing them that would be essential to assess the role of cooperatives in economic globalization, and sheds light on key areas for future research that could provide a better understanding of the complexity surrounding the relationship between globalization and cooperatives.     

EQUALITY OF OPPORTUNITY: EAST VS. WEST GERMANY

The case of German reunification has been subject to extensive research on earnings inequality and labour market integration. However, little is known about the development of equality of opportunity (EOp) in East and West Germany after 1990. Using German micro data, we empirically analyse how circumstances beyond the sphere of individual control relate to inequality in East and West Germany. Our results show that EOp is larger in East than in West Germany. However, despite increasing income inequality, EOp remained surprisingly constant.