Firing and training costs and labour market segmentation

This dissertation consists of three essays on the labour market impact of firing and training costs. The modelling framework resorts to the search and matching literature. The first chapter introduces firing costs, both liner and non-linear, in a new Keynesian model, analysing business cycle effects for different wage rigidity degrees. The second chapter adds training costs in a model of a segmented labour market, accessing the interaction between these two features and the skill composition of the labour force. Finally, the third chapter analyses empirically some of the issues raised in the second chapter.

Single period Markowitz portfolio selection, performance gauging and duality: a variation on Luenberger's shortage function

Markowitz portfolio theory (1952) has induced research into the efficiency of portfolio management. This paper studies existing nonparametric efficiency measurement approaches for single period portfolio selection from a theoretical perspective and generalises currently used efficiency measures into the full mean-variance space. Therefore, we introduce the efficiency improvement possibility function (a variation on the shortage function), study its axiomatic properties in the context of Markowitz efficient frontier, and establish a link to the indirect mean-variance utility function. This framework allows distinguishing between portfolio efficiency and allocative efficiency. Furthermore, it permits retrieving information about the revealed risk aversion of investors. The efficiency improvement possibility function thus provides a more general framework for gauging the efficiency of portfolio management using nonparametric frontier envelopment methods based on quadratic optimisation.

Parametric and semiparametric estimation of sample selection models: an empirical application to the female labour force in Portugal

This comment corrects the errors in the estimation process that appear in Martins (2001). The first error is in the parametric probit estimation, as the previously presented results do not maximize the log-likelihood function. In the global maximum more variables become significant. As for the semiparametric estimation method, the kernel function used in Martins (2001) can take on both positive and negative values, which implies that the participation probability estimates may be outside the interval [0,1]. We have solved the problem by applying local smoothing in the kernel estimation, as suggested by Klein and Spady (1993).

Labour market frictions, social policies, and barriers to technology adoption

Barriers to technological changes have recently been shown to be a key element in explaining differences in output per worker across countries. This study examines the role that labour market features and institutions have in explaining barriers to technology adoption. I build a model that includes labour market frictions, capital market imperfections and heterogeneity in workers' skills. I found that the unemployment rate together with the welfare losses that workers experiment after displacement are key factors in explaining the existence of barriers to technology adoption. Moreover, I found that none of these factors alone is sufficient to build these barriers. The theory also suggests that welfare policies like the unemployment insurance system may enhance these kinds of barriers while policies like a severance payment system financed by an income tax seem to be more effective in eliminating them.

Implementing a double dividend: recycling ecotaxes towards lower labour taxes

In this paper we follow the tradition of applied general equilibrium modelling of the Walrasian static variety to study the empirical viability of a double dividend (green, welfare, and employment) in the Spanish economy. We consider a counterfactual scenario in which an ecotax is levied on the intermediate and final use of energy goods. Under a revenue neutral assumption, we evaluate the real income and employment impact of lowering payroll taxes. To appraise to what extent the model structure and behavioural assumptions may influence the results, we perform simulations under a range of alternative model and policy scenarios. We conclude that a double dividend –better environmental quality, as measured by reduced CO2 emissions, and improved levels of employment– may be an achievable goal of economic policy.

Interactions between product and labour market reforms

Labour market reforms face very often opposition from the employed workers, because it normally reduces their wages. Also product market regulations are regularly biased towards too much benefitting the firms. As a result there remain many frictions in both the labour and product markets that hinder an optimal functioning of the economy. These issues have recently received a lot of attention in the economics literature and scholars have been looking for politically viable reforms in both markets. However, despite its potential importance, there has been done virtually no research on the interaction between reforms in product and labour markets. We find that when combining reforms, the opposition for reforms decreases considerably. This is because there exist complementarities and the gains in total welfare can be more evenly distributed over the interest groups. Moreover, the interaction of reforms offers a way out for the so-called 'sclerosis' effect.

Technical innovations at the service of cheaper labour in pre-industrial Europe. The Enlightened agenda to transform the gender division of labour in silk manufacturing

In 1749, Jacques de Vaucanson patented his or tour pour tirer la soie or spindle for silk reeling. In that same year he presented his invention to the Academy of the Sciences in Paris, of which he was a member1. Jacques de Vaucanson was born in Grenoble, France, in 1709, and died in Paris in 1782. In 1741 he had been appointed inspector of silk manufactures by Louis XV. He set about reorganizing the silk industry in France, in considerable difficulty at the time due to foreign competition. Given Vaucanson’s position, his invention was intended to replace the traditional Piémontes method, and had an immediate impact upon the silk industry in France and all over Europe.

Treballadores, conflictivitat laboral i moviment obrer durant el franquisme a l'àrea de Barcelona

Dins del desenvolupament de la tesi “Treballadores, conflictivitat laboral i moviment obrer durant el franquisme a l’àrea de Barcelona”, aquesta recerca ha tractat d'omplir un buit a les investigacions sobre l'actuació de les dones contra el franquisme, interrelacionant la seva participació en protestes laborals i al moviment obrer, especialment a Comissions Obreres (CCOO). Per portar a terme la investigació, s'ha consultat documentació procedent de les organitzacions antifranquistes, de la policia i del Sindicat Vertical franquista, a part d'entrevistes a dones que van participar a la conflictivitat laboral i al moviment obrer durant el franquisme. S'ha iniciat la redacció de la tesi doctoral, que es presentarà el 2008. A partir de les fonts estudiades s'ha pogut constatar la importància de la participació de les dones a les protestes laborals entre 1946 i 1956, amb un escàs paper de les organitzacions antifranquistes. Posteriorment, la presència de dones a les protestes laborals va disminuir. A més, inicialment van estar poc presents a les CCOO. A partir de 1969 el nombre de dones militants a CCOO va augmentar, al igual que la proporció de dones implicades a la conflictivitat laboral. No obstant això, van ser escasses les dones a les estructures organitzatives de CCOO i les reivindicacions pròpies de les treballadores rarament van estar presents a les plataformes reivindicatives durant el franquisme.

Labour Market Imperfections, International Integration and Selection

Although a large body of literature has focused on the effects of intra-firm differences on export performance, relatively little attention has been devoted to the interaction between firms' selection and international performance and labour market institutions - in contrast with the centrality of the latter to current policy and public debates on the implications of economic globalisation for national policies and institutions. In this paper, we study the effects of labour market unionisation on the process of competitive selection between heterogeneous firms and analyse how the interaction between the two is affected by trade liberalisation between countries with different unionisation patterns.

Recruitment and retention incentives in health labour markets: an analysis of participation in NHS Scotland following Dental Vocational

This paper uses a unique individual level administrative data set to analyse the participation of health professionals in the NHS after training. The data set contains information on over 1,000 dentists who received Dental Vocational Training in Scotland between 1995 and 2006. Using a dynamic nonlinear panel data model, we estimate the determinants of post-training participation. We nd there is signi cant persistence in these data and are able to show that the persistence arises from state dependence and individual heterogeneity. This finding has implications for the structure of policies designed to increase participation rates. We apply this empirical framework to assess the accuracy of predictions for workforce forecasting, and to provide a preliminary estimate of the impact of one of the recruitment and retention policies available to dentists in Scotland.

China´s new labour contract law: no harm to employment?

In January 2008, China imposed a new labour contract law. This new law is the most significant reform to the law of employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in it´s own right will have only small impacts upon employment in the fast-growing Chinese economy. On the contrary, induced increasing unit labour costs represent the real issue and may reduce employment.

How do improvements in labour productivity in the Scottish economy affect the UK position on the Environmental Kuznets Curve?

The research reported here is an output of Karen Turner’s ESRC Climate Change Leadership Fellow project (Grant reference RES-066-27-0029). However, this research builds on previous work funded by the ESRC on modelling the economic and environmental impacts of technological improvement (Grant reference: RES-061-25-0010) and by the EPSRC through the SuperGen Marine Energy Research Consortium on accounting for and modeling environmental indicators (Grant reference: EP/E040136/1).

Both Sides of the Story: Skill-biased Technological Change, Labour Market Frictions, and Endogenous Two-Sided Heterogeneity

This paper presents a stylised framework to examine how skill-biased technological change and labour market frictions affect the relationship between economic expansion and unskilled unemployment. The first part of the analysis focuses on the investment decisions in skill-acquisition and technology adoption activities faced by workers and firms in response to the introduction of an innovative technology. The second part examines how endogenous two-sided heterogeneity in the labour market affects the macroeconomic outcomes in terms of unemployment, technological diffusion, and economic expansion. To conclude, the framework is used to discuss the effects of alternative forms of policy intervention on agents' investment decisions and on the macroeconomic outcomes.

Who Ultimately Bears the Burden of Greater Non-Wage Labour costs?

We investigate the effect of a rise in non-wage labour costs (NWLC) on real anufacturing labour costs in OECD countries, taking into account the degree of coordination in the wage bargaining process. We find that, in countries in which wage bargaining is not highly coordinated, 55% of an increase in NWLC appears to be shifted to workers in the long run, whereas in countries operating under a highly coordinated bargaining regime, full shifting occurs. Overall, our results suggest that high NWLC can be associated with a high equilibrium unemployment rate, but only in those OECD countries that do not have highly coordinated wage bargaining.

Cohort effects within firms, and their implications for labour market outcomes and the business cycle

The project aims to achieve two objectives. First, we are analysing the labour market implications of the assumption that firms cannot pay similarly qualified employees differently according to when they joined the firm. For example, if the general situation for workers improves, a firm that seeks to hire new workers may feel it has to pay more to new hires. However, if the firm must pay the same wage to new hires and incumbents due to equal treatment, it would either have to raise the wage of the incumbents, or offer new workers a lower wage than the firm would do otherwise. This is very different from the standard assumption in economic analysis that firms are free to treat newly hired workers independently of existing hires. Second, we will use detailed data on individual wages to try to gauge whether (and to what extent) equity is a feature of actual labour markets. To investigate this, we are using two matched employer-employee panel datasets, one from Portugal and the other from Brazil. These unique datasets provide objective records on millions of workers and their firms over a long period of time, so that we can identify which firms employ which workers at each time. The datasets also include a large number of firm and worker variables.