Effects of the Minimum Wage on Small Firms in China: Spillover Effects from Large Firms

This study investigates how minimum wage affects small firms through spillover effects from large firms. Using firm-level panel data from Anhui Province in China, we find that after a minimum wage increase, small firms will reduce workers’ wages and create jobs due to the inflow of displaced workers from large firms. This spillover effect is larger for micro firms and private firms, where minimum wage compliance tends to be lower. We also find that high-tech small firms are more affected than low-tech ones because of their greater demand for skilled labor. Our findings not only highlight the unintended consequences of minimum wage on small firms in China, but also help to explain the ambiguous employment effects of minimum wage on the covered sector in developing countries.

Työeläkekuntoutuksen vaikuttavuuden kehittäminen ja työkykyajattelu

Artikkelissa tarkastellaan työeläkelaitosten rahoittaman ammatillisen kuntoutuksen eli työeläkekuntoutuksen toimivuutta ja kehittämistä työeläkelaitosten asiantuntijoiden haastatteluiden perusteella. Viimeaikaiset tutkimustulokset työeläkekuntoutuksen vaikuttavuudesta ovat herättäneet keskustelua erityisesti työpaikalla tapahtuvien lyhytaikaisten toimien kustannustehokkuudesta. Tätä taustaa vasten artikkelin painopiste on asiantuntijoiden esiin nostamissa kehittämisajatuksissa. Aineisto muodostuu työeläkelaitosten kuntoutusasiantuntijoiden ja vakuutuslääkärien haastatteluista. Aineisto sisältää kuusi laajaa haastattelua, joissa oli yhteensä 15 haastateltavaa. Menetelmänä käytetään temaattista sisällönanalyysia. Tutkimuksen teoreettinen viitekehys muodostuu erilaisista työkyvyn edistämisen malleista. Keskeisenä kehittämisen kohteena haastatteluissa pidettiin ensinnäkin panostamista työn muokkaamiseen työkokeilujen aikana ja erilaisiin jatkotoimenpiteisiin niiden jälkeen. Toiseksi työkokeiluja pidempiaikaisemmat kuntoutustoimenpiteet,kuten työhönvalmennus ja koulutus, nähtiin usein järkeviksi vaihtoehdoiksi kestävien työllisyysvaikutusten näkökulmasta. Kolmanneksi kuntoutuksen työllisyysvaikutuksia saattaisi haastattelujen perusteella parantaa erityisesti työeläkejärjestelmän, Kelan ja työvoimapalvelujen yhteistyön tiivistäminen. Artikkeli osoittaa, minkälaisiin työkyvyn edistämisen malleihin haastateltavien esittämät kehittämisideat kytkeytyvät. Abstract Improving the effectiveness of vocational rehabilitation under the earnings-related pension scheme and the concept of work ability. Study based on interviews with experts from earnings-related pension providersIn this interview-based article we examine the effectiveness of vocational rehabilitation financed by earnings-related pension providers and its development. Recent studies on the efficiency of vocational rehabilitation have raised discussions particularly on the cost-efficiency of short-term rehabilitation at the workplace. The focal area of this article is thus on the development ideas presented by the experts. The data is based on interviews with rehabilitation experts at earnings-related pension providers and insurance physicians. The dataset consists of six extensive interviews with a total of 15 interviewees. The data is analysed using thematic content analysis. The theoretical framework of the study consists of various models of work ability. As key areas that require improvement the interviewees pointed out adjusting work tasks during work try-outs and taking various further actions after completing work try-outs. Second, longer-lasting rehabilitation measures, such as job coaching and training, were increasingly seen as viable options to achieve sustainable employment effects. Thirdly, based on the interviews, the employment effects of vocational rehabilitation may be improved through, in particular, closer co-operation between the earnings-related pension system, Kela and employment services. The article shows which types of models of work ability the development ideas of the experts are connected to. Key words: vocational rehabilitation, work ability, effectiveness, co-operation, experts, interview study

Infrastructure investment and employment: Evidence for Portugal

We estimated how investment in 12 infrastructure types affects employment in Portugal. Using a vector-autoregressive specification at the industry level, we found a double dividend associated with ports and airports: investing in either delivers the greatest bang per euro, both on impact and in the long run. One million euros invested in ports and airports creates 717.1 and 290.5 jobs in the long run, respectively, and 535 and 253.3 jobs in the short run, respectively. Regarding long-term employment effects, these are followed by municipal roads, telecommunications, national roads, health structures, education facilities, refineries, railroads, and highways. Water infrastructures and electricity and gas infrastructures have negligible effects. With the long-term effects decomposed, sizable supply-side employment effects for health and education facilities exist, while demand-side effects dominate for airports, ports, municipal roads, and telecommunications. Employment following the investment in national roads is balanced across demand and supply channels. We found no significant employment-related location effects of infrastructure investments. Also, investing in either health facilities or in education buildings entails non-negligible job losses in the short run. These results suggest that the magnitude and the timing of job creation crucially depend on the type of infrastructure investment. Policymakers in Portugal need to be aware of this in choosing between countercyclical or structural targets.

Monopsony power and the demand for low-skilled workers

This study analyses firms’ labour demand when employers have at least some monopsony power. It is argued that without taking into account (quasi-)monopsonistic structures of the labour market, wrong predictions are made about the effects of minimum wages. Using switching fractional panel probit regressions with German establishment data, I find that slightly more than 80% of establishments exercise some degree of monopsony power in their demand for low-skilled workers. The outcome suggests that a 1% increase in payments for low-skilled workers would, in these firms, increase employment for this group by 1.12%, while firms without monopsony power reduce the number of low-skilled, by about 1.63% for the same increase in remuneration. The study can probably also be used to explain the limited employment effects of the introduction of a statutory minimum wage in Germany and thus leads to a better understanding of the labour market for low-skilled workers. JEL Codes: J23, J42, C23, D24

Derailed by the COVID-19 Economy? Older Adults' Paid Work by Intersections of Age, Gender, Race-Ethnicity, and Class

This paper addresses the uneven employment effects on older Americans (Boomers and Genxers, ages 50-75) of the COVID-19 pandemic. Drawing on monthly CPS data from January through December 2020 (IPUMS) with an intersectional approach, we first chart shifts in employment and non-employment for population subgroups defined by age, gender and race/ethnicity, including explanations for not working (unemployment, retired, disabled, not in the workforce for other reasons – NILF-other). We then examine uneven transitions --monthly individual-level shifts out of and into paid work for population subgroups, considering also disparities by educational level. We find increases in proportions unemployed, especially for women in their 50s, as well as increases in the proportions reporting they are NILF-Other, especially for Asian and Hispanic women, with small increases for Asian and Hispanic men as well. There is little change in age-graded reports of being retired, regardless of gender or race/ethnicity, though there are education-level effects.

Racing with or Against the Machine? Evidence on the Role of Trade in Europe

Digital technologies displace labor from routine tasks, raising concerns that labor is racing against the machine. We develop an empirically tractable task-based framework to estimate the aggregate employment effects of routine-replacing technological change (RRTC), along with the labor and product demand channels through which this aggregate effect comes about, focusing on the role of inter-regional trade. While RRTC has indeed had strong displacement effects in Europe between 1999 and 2010, it has simultaneously created new jobs through increased product demand, resulting in net employment growth. However, the distribution of gains from technological progress matters for its job-creating potential.