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Author: Robert Shimer Publisher: Princeton University Press ISBN: 1400835232 Category : Business & Economics Languages : en Pages : 189
Book Description
Labor Markets and Business Cycles integrates search and matching theory with the neoclassical growth model to better understand labor market outcomes. Robert Shimer shows analytically and quantitatively that rigid wages are important for explaining the volatile behavior of the unemployment rate in business cycles. The book focuses on the labor wedge that arises when the marginal rate of substitution between consumption and leisure does not equal the marginal product of labor. According to competitive models of the labor market, the labor wedge should be constant and equal to the labor income tax rate. But in U.S. data, the wedge is strongly countercyclical, making it seem as if recessions are periods when workers are dissuaded from working and firms are dissuaded from hiring because of an increase in the labor income tax rate. When job searches are time consuming and wages are flexible, search frictions--the cost of a job search--act like labor adjustment costs, further exacerbating inconsistencies between the competitive model and data. The book shows that wage rigidities can reconcile the search model with the data, providing a quantitatively more accurate depiction of labor markets, consumption, and investment dynamics. Developing detailed search and matching models, Labor Markets and Business Cycles will be the main reference for those interested in the intersection of labor market dynamics and business cycle research.
Author: Robert Shimer Publisher: Princeton University Press ISBN: 1400835232 Category : Business & Economics Languages : en Pages : 189
Book Description
Labor Markets and Business Cycles integrates search and matching theory with the neoclassical growth model to better understand labor market outcomes. Robert Shimer shows analytically and quantitatively that rigid wages are important for explaining the volatile behavior of the unemployment rate in business cycles. The book focuses on the labor wedge that arises when the marginal rate of substitution between consumption and leisure does not equal the marginal product of labor. According to competitive models of the labor market, the labor wedge should be constant and equal to the labor income tax rate. But in U.S. data, the wedge is strongly countercyclical, making it seem as if recessions are periods when workers are dissuaded from working and firms are dissuaded from hiring because of an increase in the labor income tax rate. When job searches are time consuming and wages are flexible, search frictions--the cost of a job search--act like labor adjustment costs, further exacerbating inconsistencies between the competitive model and data. The book shows that wage rigidities can reconcile the search model with the data, providing a quantitatively more accurate depiction of labor markets, consumption, and investment dynamics. Developing detailed search and matching models, Labor Markets and Business Cycles will be the main reference for those interested in the intersection of labor market dynamics and business cycle research.
Author: Andreas Pollak Publisher: Mohr Siebeck ISBN: 9783161493041 Category : Business & Economics Languages : en Pages : 204
Book Description
Designing a good unemployment insurance scheme is a delicate matter. In a system with no or little insurance, households may be subject to a high income risk, whereas excessively generous unemployment insurance systems are known to lead to high unemployment rates and are costly both from a fiscal perspective and for society as a whole. Andreas Pollak investigates what an optimal unemployment insurance system would look like, i.e. a system that constitutes the best possible compromise between income security and incentives to work. Using theoretical economic models and complex numerical simulations, he studies the effects of benefit levels and payment durations on unemployment and welfare. As the models allow for considerable heterogeneity of households, including a history-dependent labor productivity, it is possible to analyze how certain policies affect individuals in a specific age, wealth or skill group. The most important aspect of an unemployment insurance system turns out to be the benefits paid to the long-term unemployed. If this parameter is chosen too high, a large number of households may get caught in a long spell of unemployment with little chance of finding work again. Based on the predictions in these models, the so-called "Hartz IV" labor market reform recently adopted in Germany should have highly favorable effects on the unemployment rates and welfare in the long run.
Author: Jonathan Michie Publisher: Bloomsbury Publishing ISBN: 147250819X Category : Business & Economics Languages : en Pages : 209
Book Description
During prolonged economic recessions when the normal cyclical expansion of output fails to materialize, the topic of the 'cyclical behaviour of wages' has emerged as an area of debate. In 1985, the British Treasury claimed that academic studies into the cyclical behaviour of wages demonstrated that a cut in wages would increase employment. Wages in the Business Cycle contests this argument by presenting the results of original, empirical work which illustrates the absence of any systematic empirical regularity to wage movements over the business cycle. Jonathan Michie argues that the re-emergence of this debate must be seen within the context of the theory of the 'labour demand function', representing an attempt to challenge the Keynesian theoretical assumptions implicit in the bulk of applied macro economic work up to the late 1970s.
Author: Alexander Hijzen Publisher: International Monetary Fund ISBN: 1475533918 Category : Business & Economics Languages : en Pages : 39
Book Description
In many countries, notably across Europe, collective bargaining coverage is enhanced by government-issued extensions that widen the reach of collective agreements beyond their signatory parties to all firms and workers in the same sector. This paper analyses the causal impact of such extensions on employment using a natural experiment in Portugal: the immediate suspension by the government that took office in 21 June 2011 of the (until then) nearly automatic extensions. The combination of this suspension and the time needed for processing the extension applications resulted in a sharp and unanticipated decline in the extension probability of agreements signed several month earlier around 1 March 2011. Our results, based on a regression discontinuity design and matched employer-employee-agreement panel data, suggest that extensions had a negative impact on employment growth. Moreover, the effects tend to be concentrated among non-affiliated firms. The lack of representativeness of employer associations is a potentially important factor behind the adverse effect of extensions. Another is the role of retro-activity in combination with the administrative delay in processing extensions. This is particularly relevant in the context of a recession.
Author: Romain Bouis Publisher: International Monetary Fund ISBN: 1484385020 Category : Business & Economics Languages : en Pages : 26
Book Description
The paper investigates the economic effects of major product market reforms in some of the historically most protected non-manufacturing industries. It relies on a unique mapping between new annual data on reform shocks and sector-level outcomes for five network industries (electricity and gas, land transport, air transport, postal services, and telecommunications) in twenty-six countries spanning over three decades. The use of a threedimensional panel and careful instrumentation of reform shocks using external instruments enables us to control for economy-wide macroeconomic shocks and address possible sources of omitted variable bias more broadly. Using a local projection method, we find that major reductions in barriers to entry yield large increases in output and labor productivity over a five-year horizon, concomitant with a relative price decline. By contrast, there is only a weak positive effect on sectoral employment, and investment is essentially unaffected, suggesting that output gains from reform primarily reflect higher total factor productivity. It takes some time for these gains to materialize: effects become statistically significant two to three years after the reform, as prices start dropping, and productivity and output increase significantly. However, there is no evidence of any negative short-term cost from reform, including under weak macroeconomic conditions. These findings provide a clear case for intensifying product market reform efforts in advanced economies at the current juncture of weak growth.
Author: Gilbert Faccarello Publisher: Edward Elgar Publishing ISBN: 1785367366 Category : Business & Economics Languages : en Pages : 498
Book Description
This unique troika of Handbooks provides indispensable coverage of the history of economic analysis. Edited by two of the foremost academics in the field, the volumes gather together insightful and original contributions from scholars across the world. The encyclopaedic breadth and scope of the original entries will make these Handbooks an invaluable source of knowledge for all serious students and scholars of the history of economic thought.
Author: United States. Congress. House. Committee on Education and Labor. General Subcommittee on Labor Publisher: ISBN: Category : Minimum wage Languages : en Pages : 900
Author: Philip E. Mirowski Publisher: Routledge ISBN: 1317512227 Category : Business & Economics Languages : en Pages : 193
Book Description
Discussing economic theory and English economic history from the eighteenth century until the late 1970s this volume discusses among other things fixed capital and problems with the definition of the premodern economy as well as providing a chronology of 18th century business cycles.
Author: Randall E. Eberts Publisher: Routledge ISBN: 1315488558 Category : Business & Economics Languages : en Pages : 153
Book Description
During much of the 1980s, US wage growth has been unexpectedly slow in the face of relatively low unemployment rates and high capacity utilization rates. This collection of papers resulting from the Wage Structure Conference held by the Federal Research Bank of Cleveland, November 1989, helps explain labour market behaviour in that period. The contributors - academic and research economists in labour economics - provide a comprehensive assessment of the current state of the wage-setting process in the US labour market.
Author: Robert Shimer
Author: Robert Shimer
Author: Andreas Pollak
Author: Jonathan Michie
Author: Alexander Hijzen
Author: Romain Bouis
Author: Gilbert Faccarello
Author: United States. Congress. House. Committee on Education and Labor. General Subcommittee on Labor
Author: Philip E. Mirowski
Author: OECD
Author: Randall E. Eberts