The economics of wage-led recovery: analysis and policy recommendations

The financial crisis and Great Recession have been followed by a jobs shortage crisis that most forecasts predict will persist for years given current policies. This paper argues for a wage-led recovery and growth program which is the only way to remedy the deep causes of the crisis and escape the jobs crisis. Such a program is the polar opposite of the current policy orthodoxy, showing how much is at stake. Winning the argument for wage-led recovery will require winning the war of ideas about economics that has its roots going back to Keynes’ challenge of classical macroeconomics in the 1920s and 1930s. That will involve showing how the financial crisis and Great Recession were the ultimate result of three decades of neoliberal policy, which produced wage stagnation by severing the wage productivity growth link and made asset price inflation and debt the engine of demand growth in place of wages; showing how wage-led policy resolves the current problem of global demand shortage without pricing out labor; and developing a detailed set of policy proposals that flow from these understandings. The essence of a wage-led policy approach is to rebuild the link between wages and productivity growth, combined with expansionary macroeconomic policy that fills the current demand shortfall so as to push the economy on to a recovery path. Both sets of measures are necessary. Expansionary macro policy (i.e. fiscal stimulus and easy monetary policy) without rebuilding the wage mechanism will not produce sustainable recovery and may end in fiscal crisis. Rebuilding the wage mechanism without expansionary macro policy is likely to leave the economy stuck in the orbit of stagnation.

On the distributive impact of unconventional monetary policy

Logo após à crise financeira de 2007-08 o Federal Reserve interveio para tentar controlar a recessão. No entanto, ele não apenas baixou os juros, como também adotou políticas não-convencionais, incluindo o empréstimo direto para empresas em mercados de crédito de alto nível. Estas novas medidas foram controversas e alguns opositores protestaram porque elas estariam ajudando disproporcionalmente aquelas pessoas ligadas ao sistema financeiro que já eram ricas. Nós utilizamos um modelo DSGE para a análise de políticas monetária não convencional e introduzimos dois tipos distintos de agentes, capitalistas e trabalhadores, para investigar o seu impacto distributivo. Nós encontramos que a política de crédito to Fed foi bem sucedida no mercado de trabalho, o que ajuda mais os trabalhadores, e introduziu um novo competidor no mercado bancário, o governo, o que prejudica mais os capitalistas. Logo, nós encontramos que a política de crédito diminuiu a desigualdade nos EUA.

E-commerce environment and trade promotion for Latin America: policy implications from East Asian and advanced economies' experiences

Includes bibliography

Job creation in Latin America in the 1990s: the foundation for social policy

Includes bibliography

Active labor market programs for the integration of youths and immigrants into the labor market: the Nordic experience

Incluye Bibliografía

SOCIAL POLICY AS REGIONAL POLICY: MARKET AND NONMARKET FACTORS DETERMINING REGIONAL INEQUALITY

We decompose the recent changes in regional inequality in Brazil into its components, highlighting the role of spatially blind social programs. We aggregate personal income micro data to the state level, differentiating nine income sources, and assess the role of these components in the observed changes in regional inequality indicators. The main results indicate that the largest part of the recent reduction in regional inequality is related to the dynamics of the market-related labor income, with manufacturing and services favoring deconcentration. Labor income in agriculture, retirement and pensions, and property rents and other sources favored concentration. The social programs Bolsa Familia and Beneficios de Prestacao Continuada are responsible for more than 24 percent of the reduction in inequality, although they account for less than 1.7 percent of the disposable household income. Such positive impact on regional concentration is impressive, since the goals of the programs are clearly nonspatial.

Understanding Recent Developments in the Turkish Labor Market: Empirical Essays with a Gender Focus

This dissertation comprises three essays on the Turkish labor market. The first essay characterizes the distinctive characteristics of the Turkish labor market with the aim of understanding the factors lying behind its long-standing poor performance relative to its European counterparts. The analysis is based on a cross-country comparison among selected European Union countries. Among all the indicators of labor market flexibility, non-wage cost rigidities are regarded as one of the most important factors in slowing down employment creation in Turkey. The second essay focuses on an employment subsidy policy which introduces a reduction in non-wage costs through social security premium incentives granted to women and young men. Exploiting a difference-in-difference-in differences strategy, I evaluate the effectiveness of this policy in creating employment for the target group. The results, net of the recent crisis effect, suggest that the policy accounts for a 1.4% to 1.6% increase in the probability of being hired for women aged 30 to 34 above men of the same age group in the periods shortly after the announcement of the policy. In the third essay of the dissertation, I analyze the labor supply response of married women to their husbands' job losses (AWE). I empirically test the hypothesis of added worker effect for the global economic crisis of 2008 by relying on the Turkey context. Identification is achieved by exploiting the exogenous variation in the output of male-dominated sectors hard-hit by the crisis and the gender-segmentation that characterizes the Turkish labor market. Findings based on the instrumental variable approach suggest that the added worker effect explains up to 64% of the observed increase in female labor force participation in Turkey. The size of the effect depends on how long it takes for wives to adjust their labor supply to their husbands' job losses.

HIV/AIDS policy for employers in religious communities

Surveys of national religious denominational offices and of churches in Texas were conducted to evaluate the prevalence of HIV/AIDS policies for members and employees, and to get feedback on a proposed HIV/AIDS policy. Most religious organizations in Texas do not have a HIV/AIDS policy for their employees. Analysis of the data from 77 church questionnaire surveys revealed only 17 (22.1%) policies in existence. From the current data, policies for employees were most prevalent among Catholic churches with 8 (47.1%) and Baptist churches with 7 (41.2%). Nine of the churches (52.9%) who had HIV/AIDS policies for their employees were categorized as having 2501-5000 members. In 1994 and 1995 the largest number of policies developed by churches totaled 8 (47.1%). The findings of this exploratory study in Texas were consistent with the survey of 7 national denominational offices which demonstrated that only the Lutheran church had a policy (14.3%). The literature is consistent with the finding that some churches have decided no separate HIV/AIDS policy is needed for employees. More than half of the employers reporting a HIV/AIDS related experience still feel they do not need a specific policy (CDC, 1992). The range of number of employees in churches varied widely from a high of 54.5% of churches with 15-50 employees to a low of 7.8% of churches with more than 100 employees. Seventy-one of the churches (92.2%) reported that they had no employees infected with HIV/AIDS, while 1 church (1.3%) reported having more than 1 employee infected with HIV/AIDS. This indicates that churches are reacting to incidence of the HIV/AIDS infection rather than preparing ahead. The results of this study clearly indicate the need to develop a comprehensive HIV/AIDS policy for employees in religious communities. Church employees must carefully consider all the issues in the workplace when adopting and implementing a HIV/AIDS policy. A comprehensive policy was developed and guidelines are suggested. ^

Do Labor Market Imperfections Increase Trade Protection? A Theoretical Investigation

Labor market imperfections are commonly believed to be a major reason for imposing trade impediments. In this paper, I introduce labor market rigidities that are prevalent in continental European countries into the well-known protection for sale model proposed by Grossman and Helpman (1994). I show that contrary to commonly held views, imperfections in the labor market do not necessarily increase equilibrium trade protection. A testable equilibrium trade protection equation is also derived. The findings in this paper are hence particularly relevant for empirical tests of trade policy determinants in economies with more regulated labor markets.

Monetary and Exchange Rate Policy in Multisectorial Economies

We develop a two-sector economy where each sector is classified as classical/Keynesian (contract/noncontract) in the labor market and traded/nontraded in the product market. We consider the effects of changes in monetary and exchange rate policy on sectoral and aggregate prices and outputs for different sectoral characterizations. Duca (1987) shows that nominal wage rigidity facilitates the effectiveness of monetary policy even in the classical sector. We demonstrate that trade price rigidity provides a similar path for the effectiveness of monetary policy, in this case, even when both sectors are classical.

A comparison of labor and delivery management activities in two settings

Similarities and differences in management activities and patient health outcomes between a traditional physician staffed labor and delivery setting and a certified nurse-midwife staffed Birth Center within the same hospital were described. The 950 study subjects, low income, minority women, were classified as low obstetrical risk by a POPRAS score of 25 points or less at time of admission for labor and delivery. The study subjects were similar in demographic, antepartum and intrapartum characteristics; the labor course was problem free for the majority in both settings. There were no remarkable differences in health outcomes between the groups. Management activities varied between settings; these variations were policy related rather than health related. The POPRAS rating system was an accurate predictor for 93% of BC subjects and 85% of LDU subjects. Charge for service was approximately $600 less for BC women; length of stay did not contribute to the difference in charge. Overall, BC respondents to the attitude survey were more satisfied with their labor and delivery experience than L\&DU women. ^

Assessing the impact of electronic health record technology adoption on hospital labor efficiency

Information technology (IT) in the hospital organization is fast becoming a key asset, particularly in light of recent reform legislation in the United States calling for expanding the role of IT in our health care system. Future payment reductions to hospitals included in current health reform are based on expected improvements in hospital operating efficiency. Since over half of hospital expenses are for labor, improved efficiency in use of labor resources can be critical in meeting this challenge. Policy makers have touted the value of IT investments to improve efficiency in response to payment reductions. ^ This study was the first to directly examine the relationship between electronic health record (EHR) technology and staffing efficiency in hospitals. As the hospital has a myriad of outputs for inpatient and outpatient care, efficiency was measured using an industry standard performance metric – full time equivalent employees per adjusted occupied bed (FTE/AOB). Three hypotheses were tested in this study.^ To operationalize EHR technology adoption, we developed three constructs to model adoption, each of which was tested by separate hypotheses. The first hypothesis that a larger number of EHR applications used by a hospital would be associated with greater staffing efficiency (or lower values of FTE/AOB) was not accepted. Association between staffing efficiency and specific EHR applications was the second hypothesis tested and accepted with some applications showing significant impacts on observed values for FTE/AOB. Finally, the hypothesis that the longer an EHR application was used in a hospital would be associated with greater labor efficiency was not accepted as the model showed few statistically significant relationships to FTE/AOB performance. Generally, there does not appear a strong relationship between EHR usage and improved labor efficiency in hospitals.^ While returns on investment from EHR usage may not come from labor efficiencies, they may be better sought using measures of quality, contribution to an efficient and effective local health care system, and improved customer satisfaction through greater patient throughput.^

The Regional Development Policy of Thailand and Its Economic Cooperation with Neighboring Countries

Thailand has recently strengthened its economic policy toward its neighboring countries in coordination with domestic regional development. It is widely recognized that economic cooperation with neighboring countries is essential in preventing the inflow of illegal labor and effectively utilizing labor and resources through the relocation of production bases. This direction is strengthened by elaborating the GMS-EC and the ECS (Economic Cooperation Strategy). In addition, economic dependency of the neighboring countries on Thailand is generally high. In this report, firstly, Thai regional development policy will be made clear in relation to its economic policy toward neighboring countries as well as the status quo of the industrial estates. Secondly, Thai policy toward the neighboring countries is examined referring to the concept of wide-ranging economic zones, regional economic cooperation and special border economic zones. Thirdly, the paper will discuss how closely the economies between Thailand and the neighboring countries are related through trade and investment. Lastly, some implications on Japan's economic cooperation will also be explored.

On Labor Complementarity, Cultural Frictions and Strategic Immigration Policies

In this paper we consider a model with two industrialized countries that face a flow of immigration from the "rest of the world." The countries differ in three characteristics: the labor complementarity between the "native" population and immigrants, the population size, and the magnitude of the cultural friction between the natives and immigrants. We consider a non-cooperative game between two countries' when their strategic instrument is the choice of an immigration quota and the world immigrant wages introduce the spill-over effect between two countries. We first show that the quota game admits unique pure strategies Nash equilibrium. We then compare the equilibrium choices of two countries and show that even though the larger country attracts more immigrants, it chooses lower quota than its smaller counterpart. It also turns out that higher degree of labor complementarity between natives and immigrants and a lower degree of cultural friction between two groups yield higher immigration quota. We also examine the welfare implications of countries choices' and argue that coordinated and harmonized immigration policies may improve the welfare of both countries.