Labor market deregulation, intended to boost productivity and employment, is one plausible, yet little studied, driver of the decline in labor shares that took place across most advanced economies since the early 1990s. This paper assesses the impact of job protection deregulation in a sample of 26 advanced economies over the period 1970-2015, using a newly constructed dataset of major reforms to employment protection legislation for regular contracts. We apply the local projection method to estimate the dynamic response of the labor share to our reform events at both the country and the country-industry levels. For the latter, we employ a differences-in-differences identification strategy using two identifying assumptions grounded in theory—namely that job protection deregulation should have larger negative effects in industries characterized by (i) a higher “natural” propensity to adjust the workforce, and (ii) a lower elasticity of substitution between capital and labor. We find a statistically significant, economically large and robust negative effect of deregulation on the labor share. In particular, illustrative back-of-the-envelope calculations suggest that job protection deregulation may have contributed about 15 percent to the average labor share decline in advanced economies. Together with existing evidence regarding the macroeconomic gains from job protection and other labor market reforms, our results also point to the need for policymakers to address efficiency-equity trade-offs when designing such reforms.
The Hague, Netherlands
In January 2006, the Dutch government implemented a pension reform that substantially reduced the public pension wealth of workers born in 1950 or later. At the same time, a tax-facilitated savings plan was introduced that substantially reduced the saving costs of all workers, irrespective of birth year. This paper uses linked administrative and survey data to assess the effect of the reform on the savings and retirement expectations and realizations of two virtually identical male cohorts that differ only in treatment status, the treated having been born in 1950 and the controls having been born in 1949. We show that retirement expectations are in line with realizations and that the reform had the intended effect on the labor supply for the larger part of the workers, namely, those without sufficient means to substantially increase private savings to counter the effect of the reform. These workers, who are generally in worse health, have zero substitution rates between private and public wealth. On the other hand, there is a group of mostly high-wage workers who participate in the tax-facilitated Life Course Savings Scheme and who increase private savings to fully counter the impact of the drop in public wealth. A further, unintended side effect of the introduction of the tax-facilitated savings plan is that high wage earners who are not affected by the drop in pension wealth retire even sooner than initially planned.
The Hague, Netherlands
Sharon McGuinness, CEO of the Health and Safety Authority will launch a new ESRI report titled Job stress and working conditions: Ireland in comparative perspective. The study asks how the levels of job stress in Ireland changed between 2010 and 2015 and how levels compare to those in the UK and other countries in Western Europe.
Patricia Murray, psychologist from the Health and Safety Authority will also speak, and Dr Agnes Parent-Thirion from the European Foundation will talk about burnout.
Scientific and engineering research is increasingly global, and international collaboration can be essential to academic success. Yet even as administrators and policymakers extol the benefits of global science, few recognize the diversity of international research collaborations and their participants, or take gendered inequalities into account. Zippel considers systematically the challenges and opportunities that the globalization of scientific work brings to U.S. academics, especially for women faculty. While some have approached underrepresentation as a national concern with a national solution, Zippel highlights how gender relations are reconfigured in global academia. The case of STEM fields shows how gendered cultures and structures in academia persist and contribute to an underrepresentation of women also in global science. But for U.S. women in particular, international collaboration offers opportunities to step outside of exclusionary networks at home. International collaboration is not the panacea to gendered inequalities in academia, but, as Zippel argues, international considerations can be key to ending the steady attrition of women in STEM fields and developing a more inclusive academic world.
Many humanitarian migrants have a hard time finding their way to the labour market. Only ten percent of working-age humanitarian migrants who entered The Netherlands in 2014 had a job two and a half years later. While international evidence indicates that integration policies may improve labour market outcomes of refugees significantly, our knowledge about what makes such policies effective is still limited. Randomized controlled trials (RCTs) provide a reliable method to learn more about the effectiveness of particular policy instruments. Several countries have started to evaluate elements of their integration policies through this approach.
This workshop reviews our empirical knowledge about effective policies to promote the labour market integration of refugees, with a particular focus on the use of RCTs. Matti Sarvimäki (Aalto University) will kick off with an overview and he will present an ongoing RCT that evaluates the use of social impact bonds in Finland. Michele Battisti (University of Glasgow) will present preliminary results from an RCT that evaluates the effectiveness of job search assistance in Germany. Iris Berkhout (Ministry of Social Affairs and Employment) will discuss the role of her department in evaluating the effectiveness of Dutch initiatives to promote the labour market integration of refugees. A panel of several international researchers will then further discuss our knowledge about effective labour market integration policies for refugees and what is needed to learn more. The workshop is aimed at policy makers and researchers interested in the labour market integration of refugees. It will be in English.
The Hague, Netherlands
With the increase in national debts, the salary cost and productivity of civil servants are under scrutiny. However, public wage setting policies should account for relevant comparisons with the private sector. We suggest novel evidence for France by conducting a comprehensive assessment of the public sector wage gaps throughout the distribution and over the long period. We exploit a very large panel of French salary workers drawn from administrative data for 1988-2013. We estimate the public sector premia/penalties on the unconditional wage distribution while originally accounting for fixed effects and a jackknife correction for potential incidental parameter bias. The public wage gap is broadly negative in France, with larger penalties at the top, which contributes to a compression of the wage distribution by the public sector. This equalizing effect is revealed when the incidental parameter bias in standard fixed effect quantile estimations is corrected for. Time changes since 1988 are consistently explained by a mix of political and business cycles. The unobserved skill gap between sectors tends to decline in early years due to less less-selective recruitment schemes. It totally disappears in the recent period, suggesting the detrimental effect of nominal wage freeze and the absence of performance-based remuneration among public sector executives.
Why does inequality differ so much across countries?
While income inequality trends have been extensively researched, much less is known about the driving forces behind international differences in inequality. Yet, differences across countries remain more striking than the increases in inequality recently observed within any industrialized country.
LISER, the University of Luxembourg and the University of Antwerp convene an international workshop to bring new light to the underlying drivers of inequality and to unpack the reasons for wide variations in inequality across countries.
We seek to attract papers discussing the role of labour markets, taxation, social protection and redistributive policies, but we are especially interested in papers studying the role of deeper drivers such as political institutions, norms and attitudes and preferences for redistribution. Advancements to methodology and critiques on the cross-country comparability of inequality measures are also welcome.
While the main discussion may be about income inequality, we hope to attract contributions about wealth, consumption or other forms of inequalities.
Gabriel Lee (Regensburg and IHS)
David Andolfatto (FRB St. Louis and SFU)
Martin Gervais (Iowa)