scholarly journals Job Creation in a Multi-Sector Labor Market Model for Developing Economies

2016 ◽  
Author(s):  
Arnab K. Basu ◽  
Nancy H. Chau ◽  
Ravi Kanbur
Keyword(s):  
Labor Market ◽  
Developing Economies ◽  
Job Creation ◽  
Market Model

scholarly journals Job Creation in a Multi-Sector Labor Market Model for Developing Economies

2016 ◽  
Author(s):  
Arnab K. Basu ◽  
Nancy H. Chau ◽  
Gary S. Fields ◽  
Ravi Kanbur
Keyword(s):  
Labor Market ◽  
Developing Economies ◽  
Job Creation ◽  
Market Model

scholarly journals Employment targeting in a frictional labor market

2019 ◽  
Vol 12 (2) ◽  
pp. 242-262 ◽  
Author(s):  
Chetan Ghate ◽  
Debojyoti Mazumder
Keyword(s):  
Labor Market ◽  
Public Sector ◽  
Private Sector ◽  
Informal Sector ◽  
Developing Economies ◽  
Job Creation ◽  
Friction Model ◽  
Search And Matching ◽  
Content Type ◽  
The Public

Purpose Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through public workfare programs. The authors refer to this as employment targeting. The purpose of the paper is to consider different labor market effects of employment targeting in a stylized model of a developing economy. In the context of a simple search and matching friction model, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Design/methodology/approach The model is an application of a search and matching model of labor market frictions, where agents have heterogeneous abilities. The authors introduce a public sector alongside the private sector in the economy. Wage in the private sector is determined through Nash bargaining, whereas the public sector wage is exogenously fixed. In this setup, the public sector hiring rate influences private sector job creation and hence the overall employment rate of the economy. As an extension, the authors model the informal sector coupled with the other two sectors. This resembles developing economies. Then, the authors check the overall labor market effects of employment targeting through public sector intervention. Findings In the context of a simple search and matching friction model with heterogeneous agents, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Employment targeting can, therefore, have perverse effects on labor market outcomes. The authors also find that it is possible that the private sector wage falls as a result of an increase in the public sector hiring rate, which leads to more job creation in the private sector. Originality/value What is less understood in the literature is the impact of employment targeting on the size of the informal sector in developing economies. The authors fill this gap and show that public sector intervention can have perverse effects on overall job creation and the size of the informal sector. Moreover, a decrease in the private sector wage due to a rise in public sector hiring reverses the consensus findings in the search and matching literature which show that an increase in public sector employment disincentivizes private sector vacancy postings.

Job creation in a multi-sector labour market model for developing economies

2018 ◽  
Vol 71 (1) ◽  
pp. 119-144 ◽  
Author(s):  
Arnab K Basu ◽  
Nancy H Chau ◽  
Gary S Fields ◽  
Ravi Kanbur
Keyword(s):  
Labour Market ◽  
Developing Economies ◽  
Job Creation ◽  
Market Model

scholarly journals A Welfare Economic Analysis of Labor Market Policies in the Harris-Todaro Model

2018 ◽  
pp. 343-366 ◽  
Author(s):  
Gary S. Fields
Keyword(s):  
Labor Market ◽  
Economic Analysis ◽  
Job Creation ◽  
Welfare Economic ◽  
Market Model ◽  
Modern Sector ◽  
Labor Earnings ◽  
Labor Market Policies ◽  
Total Labor ◽  
Economic Analyses

This chapter presents a welfare economic analysis of the benefits of various labor market policies in the Harris-Todaro labor market model. The policies considered are a policy of modern sector job creation, called modern sector enlargement (MSENL); a policy of rural development, called traditional sector enrichment (TSENR); and a policy of wage limitation in the urban economy, called modern sector wage restraint (MSWR). First, the inequality effects of these policies are analyzed. Then two welfare economic analyses are performed, the first based on summary measures of labor market conditions (total labor earnings, unemployment, inequality of labor incomes, and poverty rates) and the second based on dominance analysis in the labor market, in both cases assuming that the costs are borne elsewhere. The results of the welfare analyses are compared, and it is shown that TSENR unambiguously increases welfare in the labor market using both approaches, the other policies yield ambiguous results, and no policy is unambiguously welfare-decreasing.

ENDOGENOUS MATCHING FUNCTIONS: AN AGENT-BASED COMPUTATIONAL APPROACH

2004 ◽  
Vol 07 (02) ◽  
pp. 187-201 ◽  
Author(s):  
MICHAEL NEUGART
Keyword(s):  
Labor Market ◽  
Job Search ◽  
Returns To Scale ◽  
Job Creation ◽  
Market Model ◽  
Small Range ◽  
Matching Function ◽  
Agent Based ◽  
Flow Models ◽  
Endogenous Matching

The matching function has become a popular tool in labor economics. It relates job creation (a flow variable) to two stock variables: vacancies and job searchers. In most studies the matching function is considered to be exogenous and assumed to have certain properties. The present study, instead, looks at the properties of an endogenous matching function. For this purpose we have programmed an agent-based computational labor market model with endogenous job creation and endogenous job search behavior. Our~simulations suggest that the endogenous matching technology is subject to decreasing returns to scale. The Beveridge curve reveals substitutability of job searchers and vacancies for a small range of inputs, but is flat for relatively high numbers of job searchers and vertical for relatively high numbers of vacancies. Moreover, the matching technology changes with labor market policies. This raises concerns about the validity of labor market policy evaluations conducted with flow models of the labor market that employ exogenous matching functions.

scholarly journals LABOR MARKET DYNAMICS UNDER TECHNOLOGY SHOCKS: THE ROLE OF SUBSISTENCE CONSUMPTION

2021 ◽  
pp. 1-29
Author(s):  
Sangyup Choi ◽  
Myungkyu Shim
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Developing Economies ◽  
Structural Var ◽  
Market Dynamics ◽  
Technology Shocks ◽  
Structural Factors ◽  
Long Run ◽  
Labor Market Dynamics ◽  
Short Run

This paper establishes new stylized facts about labor market dynamics in developing economies, which are distinct from those in advanced economies, and then proposes a simple model to explain them. We first show that the response of hours worked and employment to a technology shock—identified by a structural VAR model with either short-run or long-run restrictions—is substantially smaller in developing economies. We then present compelling empirical evidence that several structural factors related to the relevance of subsistence consumption across countries can jointly account for the relative volatility of employment to output and that of consumption to output. We argue that a standard real business cycle (RBC) model augmented with subsistence consumption can explain the several salient features of business cycle fluctuations in developing economies, especially their distinct labor market dynamics under technology shocks.

Information Technology Skills and Labor Market Outcomes for Workers

2021 ◽  
Author(s):  
Hilal Atasoy ◽  
Rajiv D. Banker ◽  
Paul A. Pavlou
Keyword(s):  
Information Technology ◽  
Labor Market ◽  
Developing Economies ◽  
Labor Market Outcomes ◽  
The Elderly ◽  
It Use ◽  
Market Outcomes ◽  
Disadvantaged Groups ◽  
It Training ◽  
It Skills

Job erosion is a major concern globally, especially given the COVID-19 pandemic. Unemployment and low wages remain pressing societal challenges in the wake of increased automation, more so for traditionally disadvantaged groups in the labor market, such as women, minorities, and the elderly. However, workers who possess relevant information technology (IT) skills may have an edge in an increasingly digital economy. In this study, we examine the role of IT skills in labor market outcomes for workers, using a household IT use survey from an emerging economy that captures detailed, individual-level data on IT skills, which are also integrated with data on workers’ wages, occupations, and industries between 2007 and 2015. The results indicate that basic IT skills increase individuals’ employment probability, which is driven by both higher labor force participation and a higher probability of transitioning from unemployment to employment, after accounting for the decision to participate in the workforce. Advanced IT skills do not provide a significant incremental effect on employment probability on top of basic IT skills. However, having advanced IT skills helps workers to earn higher wages while incrementally increasing the probability that they are employed in higher-paid jobs. Interestingly, the effect of basic IT skills on employment is significantly larger for the female and older workforce that typically has a higher preference for flexible work options. These results emphasize the importance of providing necessary IT access and offering basic IT training to traditionally disadvantaged groups to close the IT skills gap and the digital divide. We offer implications for the future of work, education, and public policy for designing IT training policies for workers, students, and organizations to stimulate employment with higher wages, particularly in developing economies and for traditionally disadvantaged segments of the workforce, such as women and the elderly, particularly after the COVID-19 pandemic.

scholarly journals Another Look at the Macroeconomic Information Content of Aggregate Earnings: Evidence from the Labor Market

2020 ◽  
Author(s):  
Rebecca N. Hann ◽  
Congcong Li ◽  
Maria Ogneva
Keyword(s):  
Labor Market ◽  
Information Content ◽  
Job Creation ◽  
Job Destruction ◽  
Special Items ◽  
Macroeconomic Information ◽  
Earnings Components ◽  
Aggregate Earnings ◽  
Core Earnings ◽  
Near Term

We examine the macroeconomic information content of aggregate earnings from the labor market's perspective. We use insights from the labor economics literature to characterize the information contained in aggregate GAAP earnings and its components that is relevant for predicting aggregate job creation and destruction. Our results suggest that not only does aggregate earnings news convey information about future labor market aggregates, but its information content is incremental to other macroeconomic variables at near-term horizons. Further, the source of this information stems primarily from two earnings components: aggregate core earnings and special items. Shocks to core earnings signal persistent changes in economy-wide profitability that predict aggregate job creation up to four quarters ahead, while shocks to special items predict job destruction up to one quarter. Taken together, our results suggest that aggregate earnings contain useful information about future labor market conditions, with the nature of such information varying across earnings components.

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