August 21, 2019. Baby bonus as a successful pro-natalist policy? Now published in the Journal of Population Economics.

The study using Canadian experiences finds that properly structured pro-natal policies can successfully increase fertility among different segments of the population.

Read more in:

Natalie Malak, Md Mahbubur Rahman & Terry A. Yip:
Baby bonus, anyone? Examining heterogeneous responses to a pro-natalist policy
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1205-1246.

GLO Fellows Natalie Malak and Md Mahbubur Rahman

Journal Website, complete issue 4.

Author Abstract: We examine the impact of the Allowance for Newborn Children, a universal baby bonus offered by the Canadian province of Quebec, on birth order, sibship sex composition, income, and education. We find a large response for third- and higher-order births for which the bonus was more generous. Interestingly, though, we find stronger response if there were two previous sons or a previous son and daughter rather than two previous daughters. We also find, in addition to a transitory effect, a permanent effect, with the greatest increase in one daughter-two son families among three-child households. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Also, women with at least some post-secondary education respond more to the policy than those with less. These findings suggest that properly structured pro-natal policies can successfully increase fertility among different segments of the population while simultaneously diminishing the effect of gender preferences and fertility disparity related to women’s education.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

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August 21, 2019. Interest Rate Uncertainty Affects Investments

A new GLO Discussion Paper derives the exact shape of the “hysteretic” impact of changes in the interest rate on macroeconomic investment under scenarios of both certainty and uncertainty. Conclusions deal with the efficacy of central bank’s interest rate policy.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 377, 2019

Interest Rate Hysteresis in Macroeconomic Investment under Uncertainty – Download PDF
by Belke, Ansgar & Göcke, Matthias

GLO Fellow Ansgar Belke

Author Abstract: The interest rate is generally considered as an important driver of macroeconomic investment. As an innovation, this paper derives the exact shape of the “hysteretic” impact of changes in the interest rate on macroeconomic investment under the scenarios of both certainty and uncertainty. We capture the direct interest rate-hysteresis on the investments and the capital stock and, explicitly, of stochastic changes on the interest rate-investment hysteresis. Starting with hysteresis effects on a microeconomic level of a single firm, we apply an explicit aggregation procedure to derive the interest rate hysteresis effects on a macroeconomic level. Based on our simple model we are able to obtain some conclusions about the efficacy of a central bank’s interest rate policy, e.g. in times of low or even zero interest rates and high uncertainty, in terms of stimulating macroeconomic investment.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Journal of Population Economics: Annual Report 2019 & Issue 4, 2019 available. Planning Meeting at UNU-MERIT.

The Editor-in-Chief (Klaus F. Zimmermann) and the Managing Editor (Michaella Vanore) of the Journal of Population Economics met on August 13, 2019 at UNU-MERIT in Maastricht/The Netherlands to discuss the newly available 2019 Editor-in-Chief Report (EiC), celebrated the just published October Issue 4/2019, and made plans for the forthcoming issues 1 + 2, 2020. The EiC report (see also below) indicates that the Journal receives nearly 600 submissions per year, with Impact Factor of 1.26 and an acceptance
rate of 7%. It ranks 68 of 2,253 journals listed in RePEc (August 2019). The Journal has its Headquarter at UNU-MERIT and is supported by the GLO network.

The newest issue 4 of October 2019 exhibits an impressive collection of 10 articles in areas (i) Social Remittances, (ii) Demography & Policy and (iii) Development in Family Contexts. The Lead Article Ancestral ecological endowments and missing women by GLO Fellows Gautam Hazarika, Chandan Kumar & Sudipta Sarangi deserves broad attention. It is open access for free over the next few weeks.

Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

The article provides global evidence that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer.

Author Abstract: This paper examines the relationship between ecological endowments in antiquity and contemporary female to male sex ratios in the population. It is found that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer. This relationship is shown to be strong even after ancestral plough use, the timing of the Neolithic Transition, and many other potentially confounding factors are controlled for. Similar results are also obtained using district-level data from India.

EiC Report 2019: The 2019 Editor-in-Chief report is available here:

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August 20, 2019. Skill Gaps and Mismatches at the Workplace Damage Firm Productivity

A new GLO Discussion Paper disentangle the complex relationships between skill needs and the productivity of Italian companies. Those firms satisfying their skill needs through successful hiring show higher productivity.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 376, 2019

Skill Gap, Mismatch, and the Dynamics of Italian Companies’ Productivity  Download PDF
by Fanti, Lucrezia & Guarascio, Dario & Tubiana, Matteo

GLO Fellow Lucrezia Fanti

Author Abstract: Relying on a unique integrated database, this work explores the relationship between labour productivity, on one side; intensity and characteristics of companies’ skills need and degree of skill mismatch, on the other. The analysis focuses on a representative sample of Italian limited liability companies observed during the years 2012, 2014 and 2017. First, companies acknowledging the need to update their knowledge base display a higher productivity vis-à-vis other firms. Second, when it comes to the skill need distinguished by competence/knowledge domains (management, STEM, social and soft skills, technical operatives and humanities) it emerges that companies looking for technical operative and social skills show lower labour productivity as compared to other firms. On the contrary, companies characterized by a need in managerial, STEM or humanities-related skills show higher productivity. Third, the ability to match the skill need via new hiring is always positively correlated with firms’ productivity. This result is confirmed across all the adopted specifications.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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August 19, 2019. Globalization reduces public employment. GLO Discussion Paper now published in “Economics Letters”

Does globalization increases or decreases the size of government (“compensation” versus “efficiency” hypothesis)? The debate is re-visited with innovative bureaucracy and globalization indicators using panel data for the unexplored period 2000-2016. Robust evidence suggests that global competition reduces public employment.

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August 19, 2019. New GLO Discussion Paper compares political and cultural visions on migration.

A new GLO Discussion Paper suggests that structural shortages of labor in developed countries and effectively unlimited supply of labor in the least developed countries generate unavoidable and indispensable international migrations of increasing size.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 375, 2019

Migration. Comparing political and cultural visions – Download PDF
by Bruni, Michele & Catani, Mario

GLO Fellow Michele Bruni

Author Abstract: Different interpretations of migration confront themselves in the political arena. Considering two factors, necessity and acceptability, the paper identifies four stereotyped visions: the society of the walls, the society of mercy, the society of ghettos, and the society of reason. The first three share the ideological assumption that migration flows are supply determined, that they are pushed by poverty, lack of jobs, and desperation due to the lack of perspectives of a better future. The fourth vision states, based on robust empirical evidence, that migration is determined by a structural shortage of labor that, characterizes an increasing number of developed countries, in the presence of an unlimited supply of labor in the least developed countries. The implication of this idea is that international migrations flows of increasing size are unavoidable and indispensable to both groups of countries. They should reach a political agreement to jointly manage them with mutual advantage. An Annex summarizes previous work of one of the authors updated with recent data and estimates released by UN DESA. It provides a short, critical introduction to the concept of the demographic transition and presents the statistical implications of its most relevant consequence: the demographic polarization of the planet.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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August 18, 2019. Monetary policy is weakened by interest rate uncertainty.

A new GLO Discussion Paper investigates whether uncertainty over future interest rates in the Euro area hampers the monetary policy transmission. It finds hysteretic effects of interest rate changes on investment in most European countries.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 374, 2019

Interest Rate Bands of Inaction and Play-Hysteresis in Domestic Investment – Evidence for the Euro Area – Download PDF
by Belke, Ansgar & Frenzel Baudisch, Coletta & Göcke, Matthias

GLO Fellow Ansgar Belke

Author Abstract: The interest rate represents an important monetary policy tool to steer investment in order to reach price stability. Therefore, implications of the exact form and magnitude of the interest rate-investment nexus for the European Central Bank’s effectiveness in a low interest rate environment gain center stage. We first present a theoretical framework of the hysteretic impact of changes in the interest rate on macroeconomic investment under certainty and under uncertainty to investigate whether uncertainty over future interest rates in the Euro area hampers monetary policy transmission. In this non-linear model, strong reactions in investment activity occur as soon as changes of the interest rate exceed a zone of inaction, that we call ‘play’ area. Second, we apply an algorithm describing path-dependent play-hysteresis to estimate investment hysteresis using data on domestic investment and interest rates on corporate loans for 5 countries of the Euro area in the period ranging from 2001Q1 to 2018Q1. We find hysteretic effects of interest rate changes on investment in most countries. However, their shape and magnitude differ widely across countries which poses a challenge for a unified monetary policy. By introducing uncertainty into the regressions, the results do not change much which may be due to the interest rate implicitly incorporating uncertainty effects in investment decisions, e.g. by risk premia.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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August 17, 2019. How culture stimulates joint housework of couples. New research from the GLO network.

A new GLO Discussion Paper helps to understand how culture works in the family life of couples. A stronger culture of gender equality is associated with more joint home production of the partners.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 373, 2019

Gender division of household labor: How does culture operate?  Download PDF
by Marcén, Miriam & Morales, Marina

GLO Fellow Miriam Marcén

Author Abstract: In this paper, we examine whether culture plays a role in the gender division of household labor. To explore this issue, we use data on early-arrival first and second generation immigrants living in the United States. Since all these individuals have grown up under the same laws, institutions, and economic conditions, then the differences between them in the gender division of housework may be due to cultural differences. We find that the higher the culture of gender equality in the country of ancestry, the greater the equality in the division of housework. This is maintained when we consider both housework and childcare as household labor. Our work is extended by examining how culture operates and is transmitted. We study whether culture may influence by and with whom housework activities are performed and the timing of the day when this happens, which can help us to understand how culture operates in the family life of couples. Results indicate that the more culture of gender equality is associated with greater probability that individuals report performing housework when they are with their partner in the evening, which may improve family live by making housework a non-individual task. The cultural impact is also observed in the case of working days, but it is not so clear during public holidays, which can be explained by the fact that those individuals originating from less egalitarian countries work longer work hours than those from egalitarian countries.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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GLO Fellow Dejan Kovač for President in Croatia?

GLO Fellow Dejan Kovač (Princeton University) is running for President in Croatia.

Dejan Kovač (Princeton University and GLO) has announced his campaign for the upcoming presidential elections in Croatia.

See: Media report. YouTube. Facebook. Personal Website.

Dejan Kovač said:

  • “Croatia is in a very bad situation: politically, economically and morally. Basic human rights and democratic values are long gone. For the past several years through my public speeches I tried to highlight the main problems in our democracy but with no success. Politicians do not listen, so I decided to engage in a more active social role.”
  • “Once you see this level of injustice, anyone with any level of dignity cannot remain indifferent to people’s suffering. I have time, but Croatia does not. We are on a turning point. Either we are going to make strong changes in our set of values or we will perish.”
  • “In 10 years time, when my kids will ask me: “Dad, where were you when all of this was happening?” I want to be able to look them in their eyes and say that I gave my best.”
  • “During the course of my life I was always the underdog, this time it will be the same, but what is most importantly – I never ran from a fight. “

GLO President Klaus F. Zimmermann and Dejan Kovač were colleagues during Zimmermann’s appointment at Princeton University 2016/2017, and GLO supported the Croatia conference organized by him in 2017. See REPORT 1 and Report 2.

Klaus F. Zimmermann said: Dejan Kovač is man with vision, passion and energy. At this time, we badly need the political engagement of people with strong academic routes. I wish him all the best for his ambitions!”

Zimmermann has good memories of his visit to Umag/Croatia in 2017, from the conference and the wonderful holiday island: See Report 1 and Report 2.

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August 16, 2019. Recession in sight? How labor market policies may affect wellbeing in an economic crisis. Experiences to learn from the Great Recession.

A new GLO Discussion Paper suggests that labor market policies affected wellbeing during the Great Recession in Europe. While generous unemployment support mitigated the negative effects for most of the population, stricter employment protection legislation exacerbated the negative effects.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 372, 2019

Labor market policy and subjective well-being during the Great Recession  Download PDF
by Morgan, Robson & O’Connor, Kelsey J.

GLO Fellow Kelsey O’Connor

Author Abstract: Average subjective well-being decreased in Europe during the Great Recession, primarily among people with less than a college education and people younger than retirement age. However, some countries fared better than others depending on their labor market policies. More generous unemployment support, which provided income replacement or programs to assist unemployed workers find jobs, mitigated the negative effects for most of the population, although not youth. In contrast, stricter employment protection legislation exacerbated the negative effects. We present further evidence that suggests the exacerbating effects of employment protection legislation are due to greater rigidities in the labor market, which in turn affect perceived future job prospects. Our analysis is based on two-stage least squares regressions using individual subjective wellbeing data obtained from Eurobarometer surveys and variation in labor market policy across 23 European countries.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers)Complete list of all GLO DPs downloadable for free.

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