October 10, 2019. All the good jobs are gone. The rise in underemployment and the societal consequences. Hélène Syed Zwick on the new book of David G. Blanchflower.

In his new book, GLO Research Director Danny Blanchflower has explained us why the job market is not as healthy as we think, in particular he promotes to look at underemployment instead of unemployment. glabor.org had announced the book earlier this year and published in the summer an interview with the author. In her book review for the LSE Review of Books website, GLO Fellow Hélène Syed Zwick provides more details and insights, but also formulates questions and challenges.

David G. Blanchflower: Not Working. Where Have All the Good Jobs Gone? Princeton University Press, 2019

GLO Research Director David G. Blanchflower. GLO bio. He is the Bruce V. Rauner Professor of Economics at Dartmouth College, Professor of Economics at the University of Stirling, and a Research Associate at the National Bureau of Economic Research.

GLO Fellow Hélène Syed Zwick. GLO bio. She is Executive Director of the ESLSCA Research Center and Associate Professor in Economics at ESLSCA University (Egypt).

Book review for the LSE Review of Books website:

“In Not Working: Where Have All the Good Jobs Gone?, David Blanchflower contributes to the already substantial stream of scholarship on job quality, happiness and economic downturns. The author, a prominent economist and former external member of the Bank of England’s Monetary Policy Committee (MPC) between 2006 and 2009, offers a praiseworthy, didactic and anticipated analysis ‘on well-paying [or good] jobs and the failure of policymakers to deliver them’ (11).

In the first part of the book, the author skillfully argues that most Western countries, especially the US and the UK, are far away from full employment, despite their respective low unemployment rates. Through a heavy reliance on data, he argues, and brilliantly demonstrates, that the unemployment rate is no longer an accurate signal of labour market slack. He repeats throughout his book that the main signal that confirms this hypothesis is the lack of sustained wage and price growths. Normally, Blanchflower explains, in a situation of full employment, there ‘would be so few people looking for jobs’ (25) that wages would grow rapidly and ‘workers would be able to climb the occupational ladder’ (140). Unfortunately, he writes, this is not happening either in the US or the UK. On the contrary, underemployment  – which relates to ‘unstable, precarious, low-paying, and temporary jobs’ (35) and which expanded after the Great Recession in most rich Western countries – appears as a significant new predictor of wage and inflation growth. Here we reach the central argument of the book: underemployment associated with weak bargaining power on the part of workers leads to contained wage pressure. Blanchflower advises that we therefore rely on underemployment rather than unemployment to analyse the labour market situation, especially within this post-recession period characterised by ‘an extended semi-slump, of subnormal prosperity’ (80).

If such a proposal is quite orthodox, three elements transversal to this first part capture the reader’s attention: the economics of walking about (EWA); the societal consequences; and house-ownership and mobility. Firstly, thanks to Blanchflower’s EWA approach which is ‘fundamental’ to the book (184), he is in contact with what has been happening to ordinary people. As he explains, Blanchflower believes in data from the real world. His thinking has been ‘driven mostly by observing how the world works and attempting to uncover fundamental truths and patterns in the data’ (9). Discussions with London cabbies or looking at jingle mails (the act of mailing the keys back to the mortgage lender) are common ways for Blanchflower to feel what is going on in societies. Secondly, he discusses the links between feelings of insecurity on the labour market, happiness and societal outcomes like obesity, mental disorders, depression and even suicide. Thirdly, he examines the negative impact of house ownership on mobility. He evokes the fall in the homeownership rate, especially in the US and the UK, and explains that an unconstrained housing market leads to more efficient labour markets and to a fall in the equilibrium unemployment rate thanks to higher mobility. These effects have too often been neglected by researchers, he argues.

The second part of Not Working is composed of five chapters and aims to study the response to the Great Recession. Blanchflower’s analysis led him to anticipate the crisis in 2007, while most of his colleagues did not. The author calls therefore for a ‘big rethink’ (11, 315), especially among policymakers, central bankers and economists. Scathingly, he denounces their obstinacy in relying on theoretical, mathematical-based models and prescriptions from the 1970s. As he argues, ‘the elites were stuck in the past’ (171) and ‘the experts were looking in the wrong places’ (162). Policymakers decided in 2009-10, under the recommendations of economists, to launch what Blanchflower names a ‘reckless and unnecessary austerity’ (173) ‘attacking the Keynesian school of thought from multiple directions’ (171). The author writes that this was a ‘unique opportunity [for them] to decrease the size of the state’ (173).

In this section of the book, Blanchflower’s efforts may appear overly detailed to the less specialised reader and not especially innovative for the specialists. Yet, he convincingly establishes the socio-economic, demographic and geographic profile of the ‘left-behinds’ in the US, the UK and Eurozone countries after 2010. Unsurprisingly, decreases in expenditure ‘hit the weak, the disabled and vulnerable’ (214). Such fractures between the have-nots and haves were already present before the Great Recession, which only ‘exacerbated them’ (37). He notes that the left-behinds from the US, the UK, France and Austria have been ‘strongly opposed to political and social developments they see as threatening sovereignty, identity and continuity’ (258). He therefore indicates that he was already expecting in 2010 a political ‘backlash’ (265) after all the pain and suffering. Why should politics not therefore suffer? Few can have ignored recent populist movements in the US with Donald Trump’s presidency, in the UK with the Brexit vote and in France with Marine Le Pen. The author establishes a direct relationship between the profile of the left-behinds and those who voted for populist parties.

This inquiry leads us to the third part dedicated to prescriptions and policy recommendations. Whilst the quality of analysis and richness of its scholarly references impresses across two-thirds of the book, here the author fails in making the reader optimistic or confident about the future. Why? First, because the recommendations he formulates are unoriginal and lack ambition, and second, because several dimensions elsewhere detailed in the book, like the decline in unionism and bargaining power, are not even discussed. Strictly speaking, the use of idioms and expressions in the titles and subtitles in this third part appear by far insufficient to convince me. Most of the Keynesian recommendations that he formulates are well-known and have been debated for decades. For instance, he recommends reaching full employment by decreasing the interest rate to boost wages and therefore living standards, investing more in infrastructure to create jobs, subsidising childcare services and providing incentives for low-skilled workers. From my point of view, such advice relies far too much on the intervention of public authorities, which seems quite inconsistent with Blanchflower’s lack of trust in policymakers and politicians that he claims throughout his book: ‘Why believe them?’ he asks several times. ‘Why should we trust any of them now? I don’t,’ he writes (211).

It could certainly be argued that this third part is disappointing as Blanchflower fails to provide sufficient depth in the formulation of his recommendations, which is essential once the analysis has been delivered. However, even with this limitation, this encyclopedic book is highly welcome and will be an unquestionably worthy addition to the bookshelves of a general readership as well as scholars in labour economics, macroeconomics, monetary economics and political science.”

Dr. Hélène Syed Zwick, Executive Director of ESLSCA Research Center, ESLSCA University, Egypt

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October 9, 2019. New GLO Discussion Paper on ‘Intergenerational Income Mobility and Income Taxation’

A new GLO Discussion Paper studies through counterfactual analysis how income taxation affects the correlation of income across generations. Introducing a flat tax regime reduces the correlation in comparison to no taxes, which is enforced through child benefits and a progressive scheme.

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. 409, 2019

Intergenerational Income Mobility and Income Taxation –  Download PDF
by
Kurnaz, Musab & Soytas, Mehmet A

GLO Fellow Mehmet A. Soytas

Author Abstract: We study the impact of income taxation on intergenerational income correlation. We estimate a life cycle dynastic model and conduct counterfactual analysis to observe the effects of various tax regimes. Compared to a no tax environment, a flat tax regime reduces the correlation only by one percentage points. If the flat tax regime provides child benefits, the correlation additionally declines by four percentage points. Finally, if the taxes are progressive, the reduction, which is due to the increase in the fertility rate (quantity) and the decrease in the educational outcome of children (quality), is highly significant (seven percentage points).

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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October 8, 2019. GLO and University of Kent/UK affiliate.

The Global Labor Organization (GLO) and the University of Kent (UoK) affiliate. The two organizations will support each other in their common missions on research and educational issues. UoK will provide a local platform of GLO in the UK.

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.

The University of Kent (UoK), the UK’s European university, is a public research university based in Kent, United Kingdom. It has a rural campus in Canterbury as well as campuses in Kent and European postgraduate centers in various European cities. The University is committed to rigorous research and excellent education; it is international, with over 20,000 students from about 160 nationalities and about 40% of international academic staff. It provides GLO with a local platform in the UK.

GLO Director Matloob Piracha is Senior Lecturer at the University of Kent and Country Lead of GLO for the entire UK; he will act as Head of the local initiatives at Kent. A first joint research workshop is planned for April 2020 at Kent; a Call for Papers will appear in due course.

GLO’s Virtual Young Scholars (VirtYS) program for emerging young scholars is also headed from Kent, namely by GLO Fellow Olena Nizalova, Senior Research Fellow at the University of Kent.

The University of Kent (UoK) has become a supporting organization of GLO.

Olena Nizalova (right) and Matloob Piracha (left) with GLO President Klaus F. Zimmermann.

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October 7, 2019. Evidence from Switzerland: Asylum seekers are more likely to work with more inclusive labor market access regulations. GLO Discussion Paper of the Month: September & all GLO Discussion Papers from this month.

The GLO Discussion Paper of the Month of September finds that inclusive labor market access regulations substantially increase the employment chances of asylum seekers, in particular if the language distance is short.

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.

GLO Discussion Paper of the Month: September

GLO Discussion Paper No. 396 , 2019

Are asylum seekers more likely to work with more inclusive labor market access regulations? 
by Slotwinski, Michaela & Stutzer, Alois & Uhlig, Roman 

GLO Fellows  Slotwinski, Michaela & Stutzer, Alois

Author Abstract: In the face of recent refugee migration, early integration of asylum seekers into the labor market has been proposed as an important mechanism for easing their economic and social lot in the short as well as in the long term. However, little is known about the policies that foster or hamper their participation in the labor market, in particular during the important initial period of their stay in the host country. In order to evaluate whether inclusive labor market policies increase the labor market participation of asylum seekers, we exploit the variation in asylum policies in Swiss cantons to which asylum seekers are as good as randomly allocated. During our study period from 2011 to 2014, the employment rate among asylum seekers varied between 0% and 30.2% across cantons. Our results indicate that labor market access regulations are responsible for a substantial proportion of these differences, in which an inclusive regime increases participation by 11 percentage points. The marginal effects are larger for asylum seekers who speak a language that is linguistically close to the one in their host canton.

GLO Discussion Papers of September 2019

408 The quasi-market of employment services in Italy –  Download PDF
by 
Pastore, Francesco

407 Depression in the House: The Effects of Household Air Pollution from Solid Fuel Use in China –  Download PDF
by 
Liu, Yan & Chen, Xi & Yan, Zhijun

406 Assessing the Legal Value Added of Collective Bargaining Agreements –  Download PDF
by 
Martins, Pedro S. & Saraiva, Joana

405 The Arab Inequality Puzzle: The Role of Income Sources in Egypt and Tunisia –  Download PDF
by 
Krafft, Caroline & Davis, Elizabeth E.

404 Transition, height and well-being –  Download PDF
by 
Adserà, Alicia & Dalla Pozza, Francesca & Guriev, Sergei & Kleine-Rueschkamp, Lukas & Nikolova, Elena 

403 Career or flexible work arrangements? Gender differences in self-employment in a young market economy –  Download PDF
by Buttler, Dominik & Sierminska, Eva

402 Can Women’s Self-Help Groups Contribute to Sustainable Development? Evidence of Capability Changes from Northern India –  Download PDF
by Anand, Paul & Saxena, Swati & Gonzalez, Rolando & Dang, Hai-Anh H.

401 Is the future of work childless? Self-employment and fertility –  Download PDF
by Gonçalves, Judite & Martins, Pedro S.

400 Do Workers Benefit from Resource Booms in Their Home State? Evidence from the Fracking Era –  Download PDF
by Winters, John V. & Cai, Zhengyu & Maguire, Karen & Sengupta, Shruti

399 Delayed graduation and university dropout: A review of theoretical approaches –  Download PDF
by Aina, Carmen & Baici, Eliana & Casalone, Giorgia & Pastore, Francesco

398 Education-occupation mismatch of migrants in the Italian labour market: the effect of social networks –  Download PDF
by Van Wolleghem, Pierre Georges & De Angelis, Marina & Scicchitano, Sergio

397 Testing the employment and skill impact of new technologies: A survey and some methodological issues – Download PDF
by Barbieri, Laura & Mussida, Chiara & Piva, Mariacristina & Vivarelli, Marco

396 Are asylum seekers more likely to work with more inclusive labor market access regulations?  Download PDF
by Slotwinski, Michaela & Stutzer, Alois & Uhlig, Roman

395 Parental Migration, Investment in Children, and Children’s Non-cognitive Development: Evidence from Rural China – Download PDF
by Jiang, Hanchen & Yang, Xi

394Impact of Early Childcare on Immigrant Children’s Educational Performance – Download PDF
by Corazzini, Luca & Meschi, Elena & Pavese, Caterina

393 The gender wage gap among PhD holders: an empirical examination based on Italian data  Download PDF
by Alfano, Vincenzo & Cicatiello, Lorenzo & Gaeta, Giuseppe Lucio & Pinto, Mauro

392 The Impact of Family Size and Sibling Structure on the Great Mexico-U.S. Migration – Download PDF
by Bratti, Massimiliano & Fiore, Simona & Mendola, Mariapia

GLO DP Team
Senior Editors: Matloob Piracha (University of Kent) & GLO; Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University).
Managing Editor: Magdalena Ulceluse, University of GroningenDP@glabor.org  

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October 6, 2019. Job creation on ‘The quasi-market of employment services in Italy’

A new GLO Discussion Paper studies the shortcomings and merits of the first experiment of establishing a quasi-market in the provision of employment services.

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. 408, 2019

The quasi-market of employment services in Italy –  Download PDF
by
Pastore, Francesco

GLO Fellow Francesco Pastore

Author Abstract: This paper aims to study the shortcomings and merits of the first experiment of quasi-market in the provision of employment services: the Lombardy DUL (Dote Unica Lavoro). This system, which has inspired the 2015 national reform within the Jobs Act, has reactivated and revitalized the sector by providing important job opportunities to jobless workers. The system has the typical problems of quasi-markets in the provision of public services (lion’s share of private organizations; cherry picking; gaming). However, different expedients are devised in the program to minimize these shortcomings. The empirical analysis suggest that such phenomena if existent are at a physiological level. Analysis of the determinants of completing successfully the program provides non-trivial results as to, among others, the role organizations of different ownership type and of services provided.

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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October 5, 2019. New GLO Discussion Paper on ‘Depression from Household Air Pollution by Solid Fuel Use in China’

A new GLO Discussion Paper documents evidence on the impact of household air pollution on mental health in China.

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. 407, 2019

Depression in the House: The Effects of Household Air Pollution from Solid Fuel Use in China –  Download PDF
by
Liu, Yan & Chen, Xi & Yan, Zhijun

GLO Fellow Xi Chen

Author Abstract: While adverse health effects of ambient air pollution have been well documented, there is scarce evidence on the impact of household air pollution (HAP) on mental health. We investigated the causal link between HAP exposure from the use of solid fuel on depressive symptoms using a nationally representative dataset of middle-aged and older population in China. Employing the propensity match score method (PSM), matching and adjusting for potential confounders, we found significantly higher Center for Epidemiological Studies Depression Scale (CES-D) score and risk of depressive symptoms among solid fuel users than clean fuel users. These associations were especially stronger for older females who were less educated, of lower income, of higher body mass index, or had chronic diseases.

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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October 4, 2019. Ineffective impact: Assessing the legal value added of collective bargaining agreements

A new GLO Discussion Paper finds that collective bargaining in Portugal has a relatively small role as a source of effective labor law.

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. 406, 2019

Assessing the Legal Value Added of Collective Bargaining Agreements –  Download PDF
by Martins, Pedro S. & Saraiva, Joana

GLO Fellows Pedro Martins

Author Abstract: How much value does collective bargaining add to the working conditions already established in general labour law? In this paper we propose a methodology to address this question: we compare the specific contents of collective agreements (except minimum wages) to their equivalent norms set by base law. We illustrate this approach by analysing in detail about 400 norms from six collective agreements in Portugal and then comparing them to the country’s Labour Code. We find that as many as 62% of those collective bargaining norms are exactly or virtually equal to the Labour Code; only 25% (an average of 16 norms per convention) are more favourable for the worker; and 12% (8) are more favourable for the employer. We conclude that collective bargaining in Portugal has a relatively small role as a source of effective labour law. We also present several potential explanations for our findings, including the wide range of base law, which may reduce the negotiating space of bargaining.

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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October 3, 2019. Decomposing inequality by income sources: ‘The Arab Inequality Puzzle’

A new GLO Discussion Paper reveals that based on standard measures, inequality in Egypt and Tunisia is not unusually high. This is qualified exploring a new dimension decomposing inequality by income sources.

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.

The Arab Inequality Puzzle: The Role of Income Sources in Egypt and Tunisia –  Download PDF
by Krafft, Caroline & Davis, Elizabeth E.

GLO Discussion Paper No. 405, 2019

GLO Fellow Caroline Krafft

Author Abstract: Egypt and Tunisia are perceived to have high levels of inequality, yet based on standard measures, inequality in these two countries is not unusually high. In this study we explore a new dimension of inequality in Egypt and Tunisia by using a more complete measure of income and decomposing inequality by income sources (factor components). We find that higher-income households have more income sources than lower-income ones. Informal wage work and earnings from household enterprises are more common in Egypt than Tunisia, while formal wage work, pensions, and social assistance are more common in Tunisia. Social assistance does little to offset income inequality in either country. Enterprise earnings (in Egypt) and agricultural earnings (in Tunisia) as well as rent and other capital income in both countries play a large role in inequality. High inequality in these non-wage income sources may help explain why inequality is perceived to be high.

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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October 2, 2019. New GLO Discussion Paper on how transition in Eastern Europe had affected height and well-being

A new GLO Discussion Paper finds that cohorts born around the start of transition are shorter than their older or younger peers. While the transition process has been a traumatic experience, its negative impact has largely been overcome.

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. 404, 2019

Transition, height and well-being –  Download PDF
by Adserà, Alicia & Dalla Pozza, Francesca & Guriev, Sergei & Kleine-Rueschkamp, Lukas & Nikolova, Elena 

GLO Fellows Sergei Guriev & Elena Nikolova

Author Abstract: Using newly available data, we re-evaluate the impact of transition from plan to market on objective and subjective well-being. We find clear evidence of the high social cost of early transition reforms: cohorts born around the start of transition are shorter than their older or younger peers. The difference in height suggests that the first years of reform were accompanied by major deprivation. We provide suggestive evidence on the importance of three mechanisms which partially explain these results: the decline of GDP per capita, the deterioration of healthcare systems, and food scarcity. On the bright side, we find that cohorts that experienced transition in their infancy are now better educated and more satisfied with their lives than their counterparts. Taken together, our results imply that the transition process has been a traumatic experience, but that its negative impact has largely been overcome.

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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#CEU – Central European University Expelled From Budapest. Now moved to Vienna.

Questions, we all should reflect!

Source: Facebook

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