Toward a theory of labor market institutions

Standard economic analysis holds that labor market rigidities are harmfulfor job creation and typically increase unemployment. But many orthodoxreforms of the labor market have proved difficult to implement because ofpolitical opposition. For these reasons it is important to explain why weobserve such regulations. In this paper I outline a theory of how they may arise and why they fit together. This theory is fully developed in aforthcoming book (Saint-Paul (2000)), to which the reader is referred forfurther details.

On the distribution of income and worker assignment under intra-firm spillovers, with an application to ideas and networks

We study the earnings structure and the equilibrium assignment of workers when workers exert intra-firm spillovers on each other.We allow for arbitrary spillovers provided output depends on some aggregate index of workers' skill. Despite the possibility of increasing returns to skills, equilibrium typically exists. We show that equilibrium will typically be segregated; that the skill space can be partitioned into a set of segments and any firm hires from only one segment. Next, we apply the model to analyze the effect of information technology on segmentation and the distribution of income. There are two types of human capital, productivity and creativity, i.e. the ability to produce ideas that may be duplicated over a network. Under plausible assumptions, inequality rises and then falls when network size increases, and the poorest workers cannot lose. We also analyze the impact of an improvement in worker quality and of an increased international mobility of ideas.

The effect of unemployment spells on subsequent wages in Spain

In our analysis we try and recover the wage loss from unemploymentin Spain and see how it is affected by previous unemploymentexperience, unemployment duration, eligibility for unemploymentbenefits, and previous wages. We also study its variations acrossgroups. Our main conclusion is that while there is some evidencethat labour market rigidities tend to lower it, the wage loss ofdisplaced workers is remarkably high: more than 30%, that is,twice the equivalent figure for the US and France. Wages in Spainsuffer from a serious mismeasurement problems that we do our best tocontrol, so that our results are less robust than the ones thatwould be obtained with better data sets. However, they indicate a large level of wage flexibility in Spain.

The 'new political economy': Two recent books

This paper reviews two recent books on Political Economy by Allan Drazen and Torsten Persson and Guido Tabellini. It discusses some problems of the recent Political Economy literature.

Hiring and firing costs, adverse selection and long-term unemployment

In this paper, we present a matching model with adverse selection that explains why flows into and out of unemployment are much lower in Europe compared to North America, while employment-to-employment flows are similar in the two continents. In the model,firms use discretion in terms of whom to fire and, thus, low quality workers are more likely to be dismissed than high quality workers. Moreover, as hiring and firing costs increase, firms find it more costly to hire a bad worker and, thus, they prefer to hire out of the pool of employed job seekers rather than out of the pool of the unemployed, who are more likely to turn out to be 'lemons'. We use microdata for Spain and the U.S. and find that the ratio of the job finding probability of the unemployed to the job finding probability of employed job seekers was smaller in Spain than in the U.S. Furthermore, using U.S. data, we find that the discrimination of the unemployed increased over the 1980's in those states that raised firing costs by introducing exceptions to the employment-at-will doctrine.

Assesing the political viability of labour market reform: The case of employment protection

We analyze the political support for employment protection legislation.Unlike my previous work on the same topic, this paper pays a lot ofattention to the role of obsolescence in the growth process.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer jobduration. The support for employment protection will then depend onthe value of the latter relative to the cost of the former. Wehighlight two key deeterminants of this trade-off: first, the workers'bargaining power, second, the economy's growth rate-more preciselyits rate of creative destruction.

Explaining movements in the labor share

In this paper we study the evolution of the labor share in the OECD since 1970. We show it is essentially related to the capital-output ratio; that this relationship is shifted by factors like the price of imported materials or the skill mix; and that discrepancies between the marginal product of labor and the real wage (due to, e.g., product market power, union bargaining, and labor adjustment costs) cause departures from it. We provide estimates of the model with panel data on 14 industries and 14 countries for 1973-93 and use them to compute the evolution of the wage gap in Germany and the US.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.

The political consequences of unemployment

We analyze the channels by which an ill-functioning labor market changes the preferences of the people for public policy and therefore the decisions that are made. We not only discuss labour market reform but other important aspects of policy making such as the size and structure of government spending. Theclass of mechanisms that we highlight can be summarized as the very existence of unemployment generating political support for "sclerosis". This may help to explain the timid pace of reform, in particular the fact that any recovery sends them at the backfront of the political agenda, and the sometimes violent opposition generated by some measures, as we have seen mostly in France.

Employment protection, international specialization and innovation

We develop a model to analyse the implications of firing costs on incentivesfor R&D and international specialization. The Key idea is paying the firingcost, the country with a rigid labor market will tend to produce relativelysecure goods, at a late stage of their product life cycle.Under international trade, an international product cycle emerges where,roughly, new goods are first produced in the low firing cost country willspecialize in 'secondary innovations', that is, improvements in existinggoods, while the low firing cost country will more specialize in 'primaryinnovation', that is, invention of new goods.

Flexibility vs. rigidity: Does Spain have the worst of both worlds?

In this paper we study the structure of labor market flows in Spain and compare them with France and the US. We characterize a number of empirical regularities and stylized facts. One striking result is that the job finding rate is slightly higher than in France, while the jon loss rate is much higher, putting Spain half-way between France and the US. This suggests that while Spain has borne the full cost of its labor market reforms in terms of job precarity, the benefits in terms of job creation have been quite modest. We hypothesize that this has been due to the reform s credibility being imperfect, which leads toexpectation of reversal.

Geographical effects on the accuracy of textile trade data:an international approach for 1913

Foreign trade statistics are the main data source to the study of international trade.However its accuracy has been under suspicion since Morgernstern published hisfamous work in 1963. Federico and Tena (1991) have resumed the question arguing thatthey can be useful in an adequate level of aggregation. But the geographical assignmentproblem remains unsolved. This article focuses on the spatial variable through theanalysis of the reliability of textile international data for 1913. A geographical biasarises between export and import series, but because of its quantitative importance it canbe negligible in an international scale.

Labour market in the Catalan cotton textile sector: Employment and fertility (1850-1913)

This paper deals whit the dynamics of the Catalan textile labour market (theSpanish region that concentrated most of the industrial and factory activity duringthe 19 Century) and offers hypotheses and results on the impact it had on livingstandards and fertility levels. We observe the formation of an uneven labourmarket in which male supply for labour (excluding women and children) grewmuch faster than the demand. We stress the fact that labour supply is verydependant on institutional factors liked to the transmition of household propertybetween generations. Instead the slow path of growth of adult males demand forlabour is witnessing the limits of this industry to expand and to compete ininternational markets. The strategy of working class families to adapt to scarceopportunities of employment we document here is the diminution of legitimatefertility levels. Fertility control is the direct instrument we think workers have tocontrol their number in a situation that was likely to create labour surpluses in theshort and mid run.

Los repositorios como componentes esenciales de las bibliotecas. 3ª Jornada sobre la Biblioteca Digital Universitaria, Córdoba (Argentina), 27-28 de octubre del 2005

Los consorcios han sido una de las novedades más influyentes en la realidad bibliotecaria mundial de los últimos cinco años. Su expansión territorial y en actividades los ha convertido en un fenómeno que ha cambiado profundamente las formas tradicionales de definir los servicios bibliotecarios. El examen atento de las actividades que ha desarrollado el Consorcio de Bibliotecas Universitarias de Cataluña (CBUC) en el ámbito de las bibliotecas digitales es una muestra de las posibilidades de cooperación existentes en estos inicios del Siglo XXI. El CBUC inició sus actividades de contratación de contenidos digitales en el 1998. Los productos y servicios licenciados se agruparon bajo el nombre de Biblioteca Digital de Catalunya (BDC). La BDC contiene actualmente unas 6.800 revistas-e, 58 BBDD y 4.100 libros-e. De forma bastante paralela en el tiempo nacieron un servidor de sumarios electrónicos de revistas y un servidor de tesis doctorales a texto completo. La evolución de las necesidades de las bibliotecas ha comportado que hoy en el CBUC se tenga la visión de la BDC como un servicio formado de dos grandes partes: a) los productos exteriores sujetos a contratación y accesibles remotamente a través de servicios comerciales, y, b) servidores de aquellos objetos digitales generados en el ámbito del CBUC y que solo pueden ser puestos en la red por nosotros mismos. Para gestionar esta segunda parte de la BDC debemos constituir almacenes o repositorios digitales. Entre las diferentes posibilidades, el CBUC ha optado por crear repositorios institucionales colectivos de diferente tipo según los materiales que contienen. Hasta el momento se han creado tres repositorios: uno para tesis, uno para revistas y uno para literatura gris de investigación. Está previsto crear un cuarto repositorio para imágenes. La ponencia finaliza con los aprendizajes del CBUC en materia de repositorios. El principal es que la mayor dificultad para crearlos no son los elementos tecnológicos sino establecer mecanismos de relación con el profesorado y la universidad para que los diferentes documentos creados de forma electrónica pasen a formar parte de los repositorios institucionales correspondientes.