scholarly journals Does China Still Have a Labor Cost Advantage?

2012 ◽  
Vol 12 (3) ◽  
pp. 1850270 ◽  
Author(s):  
Janet Ceglowski ◽  
Stephen S. Golub
Keyword(s):  
Labor Cost ◽  
Cost Advantage ◽  
Labor Costs ◽  
Relative Unit ◽  
Unit Labor Costs ◽  
Real Appreciation

In recent years wages in China have been rising and the yuan has appreciated, potentially eroding China’s cost advantage in manufactures. This paper explores the evolution of China’s relative unit labor costs in manufacturing over 1998-2009. Between 1998 and 2003 China’s unit labor costs fell, but since 2003 they have increased both absolutely and relative to US unit labor costs. Much of the rise in China’s relative unit labor costs can be traced to a real appreciation of the yuan against the dollar. Despite the recent rise, China’s unit labor costs remain low relative to those in most other countries.

scholarly journals Relation between work efficiency and labor cost in Poland

2018 ◽  
Vol 50 (1) ◽  
pp. 47-62
Author(s):  
Magdalena Kapela
Keyword(s):  
Labor Productivity ◽  
Technology Development ◽  
Work Productivity ◽  
Essential Element ◽  
Labor Cost ◽  
Work Efficiency ◽  
Labor Costs ◽  
Basic Goal ◽  
Unit Labor Costs ◽  
Research Period

The basic goal of this document is to research the changes in work efficiency level, as well as labor costs and evaluation of their relation in Poland in comparison to other EU countries. Research period embraced the years 2000–2016. Desired research objective was achieved with the use of review of the literature method, deduction, description and simple statistical and visualization technics (Eurostat, GUS). The analysis of changes and proportions between unit labor costs and labor productivity is essential element of labor market researches. Sustainable and monochromic growth of both factors is important if competitiveness’s improvement ought to be due to technology development not to low-wages politic. Polish production is based on low and middle technology, and until now low labor costs. This system can turn out negative and embed unfavorable economy structure. The level of unit labor costs in Poland in comparison to European Union is low, so as the level of work productivity is. On the other hand the pace of labor productivity is high. Until now the pace of wage growth was lower than labor efficiency, and the balance between two variables was kept.

scholarly journals Labor Costs and the Social Dumping Debate in the European Union

ILR Review ◽  
1994 ◽  
Vol 48 (1) ◽  
pp. 28-47 ◽  
Author(s):  
Christopher L. Ericksno ◽  
Sarosh Kuruvilla
Keyword(s):  
European Union ◽  
Capital Flows ◽  
Capital Mobility ◽  
Western Europe ◽  
Developed Countries ◽  
Labor Cost ◽  
The European Union ◽  
Labor Costs ◽  
The Social ◽  
Unit Labor Costs

This study examines the labor cost incentive for capital movement in manufacturing within the European Union, a key aspect of the “social dumping” debate in Western Europe. The authors find that the percentage differences in unit labor costs between the more developed and less developed countries in the Union not only were large in 1980 but actually grew between 1980 and 1986, and separate estimates of compensation and productivity growth rates do not indicate that significant convergence occurred over the remainder of the 1980s. Although these findings apparently confirm that a labor cost incentive for capital mobility does exist, analysis of foreign direct investment data indicates that during the period 1980–88 capital flows to the lower labor cost countries actually were not much larger than capital flows to the higher labor cost countries.

scholarly journals Increasing labor income and real unit labor costs in Brazilian agrobusiness

2022 ◽  
Vol 60 (2) ◽  
Author(s):  
Nicole Rennó Castro ◽  
Geraldo Sant’Ana de Camargo Barros
Keyword(s):  
Productivity Growth ◽  
Labor Cost ◽  
Labor Income ◽  
Unit Labor Cost ◽  
Labor Costs ◽  
Annual Increase ◽  
Unit Labor Costs ◽  
Annual Reduction ◽  
Productivity Gains ◽  
The Relationship

Abstract This study analyzes the interactions between per worker labor income (PWLI), labor productivity, real unit labor costs, and the relationship between relevant employee (IPCA) and employers (GDP deflators) prices, specifically focusing on Brazilian agrobusiness. For that purpose, labor productivities of the entire agrobusiness sector and its segments were calculated from 2004 through 2015. We found that the gap between agrobusiness sector deflators and the IPCA did not play a preponderant role to mitigate the effect of PWLI growth of 3.81% annually on real unit labor cost (CURT), which only increased 0.21% annually. In turn, CURT was contained by productivity gains, boosted mainly by agriculture. Without this productivity growth, CURT would have increased at 3.7% annually, thus making unviable the observed simultaneous gains for employers and employees in the Brazilian agrobusiness sector. The result for the primary agrobusiness segment should be highlighted. Even with an annual increase of 4.07% in PWLI, the 7.24% annual growth in productivity implied on an average annual reduction in CURT (-2.56%); without this significant productivity growth, the same increase in PWLI would have boosted CURT by 4.7% annually.

scholarly journals How Do Firms Respond to Reduced Labor Costs? Evidence from the 2007 Swedish Payroll Tax Reform

2021 ◽  
Author(s):  
Sven-Olov Daunfeldt ◽  
Anton Gidehag ◽  
Niklas Rudholm
Keyword(s):  
Tax Reform ◽  
Cost Savings ◽  
Labor Cost ◽  
Policy Instrument ◽  
Extensive Margin ◽  
Labor Costs ◽  
Payroll Tax ◽  
Payroll Taxes ◽  
Wage Effect ◽  
Marginalized Groups

AbstractOne way for policymakers to reduce labor costs and stimulate the recruitment of marginalized groups of labor in a highly unionized economy is to lower payroll taxes. However, the efficiency of this policy instrument has been questioned, and previous evaluations have mostly found small employment effects for such reforms. We investigate the effects of a payroll tax cut in Sweden that decreased firms’ labor costs in relation to the number of young employees that they had employed when the reform was implemented in 2007. We find that most firms received small labor cost savings as a result of the reform, but those that received larger cost savings increased their number of employees significantly more than firms that received no, or minor, labor cost savings. Our findings also suggest that the payroll tax cut increased the total wages paid to incumbent workers, but the wage effect was too small to offset the positive extensive-margin employment effect of the reform. In total, we find that the Swedish payroll tax reform created 18,100 jobs over the period 2006–2008; most of these jobs were within the targeted group of young employees.

scholarly journals Confidence as a Driver of Private Investment in Selected Countries of Central America

2020 ◽  
Vol 20 (270) ◽  
Author(s):  
Carlos Janada ◽  
Iulia Ruxandra Teodoru
Keyword(s):  
Interest Rates ◽  
Central America ◽  
Empirical Work ◽  
Private Investment ◽  
Business Climate ◽  
Labor Costs ◽  
Vector Error Correction ◽  
Unit Labor Costs ◽  
Global Shocks ◽  
Business Confidence

This paper argues that structural weaknesses may make private investment particularly sensitive to business confidence relative to other traditional investment drivers and global shocks. It gauges the importance of confidence over recent years in selected countries in Central America, including Costa Rica, the Dominican Republic, El Salvador, and Guatemala. Using a vector error correction model to carry out the empirical work, a system representing global activity and the domestic economy, including a set of investment drivers (interest rates, unit labor costs, and confidence) is analyzed. The findings suggest that confidence has been, on average, the most important driver of investment in these countries, exceeded only by global factors. Since confidence, arguably, can be influenced by policymakers’ decisions, structural reforms to improve the business climate and reduce uncertainty play an important role in promoting investment and economic growth.

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