Klaus F. Zimmermann

A new GLO Discussion Paper studies the consequences of forsaken schooling resulting from opportunities abroad taken by emigrants from Tajikistan.

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. 641, 2020

Schooling Forsaken: Education and Migration – Download PDF
by Abdulloev, Ilhom & Epstein, Gil S. & Gang, Ira N.

GLO Fellows Gil S. Epstein & Ira Gang

Author Abstract: We examine the phenomenon of forsaken schooling resulting from opportunities abroad. The brain-drain/gain literature takes as its starting point the migration of educated/professional labor from poor origin countries to richer host countries. While high-skilled emigration is troubling, even more so is that many international migrants accept low-skilled positions in host countries. Their willingness to do so arises from very large host-home earnings differentials. At home this can lead to reduced educational investment as people forgo schooling because of opportunities to migrate to high paying low-skilled jobs. This suggests possible time-inconsistencies between short-run economic gains from migration and negative long-term effects from missing human-capital investment. We analyze data from Tajikistan, where approximately one-third of the labor force works outside of the country. Our empirical results establish circumstances under forsaken schooling occurs, leaving trade-offs that policymakers’ need consider.

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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A new GLO Discussion Paper provides an overview of the Happiness Economics approach and outlines the promises and pitfalls of subjective well-being measures.

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. 640, 2020

The Economics of Happiness – Download PDF
by Nikolova, Milena & Graham, Carol

GLO Fellows Carol Graham & Milena Nikolova

Author Abstract: Welfare and well-being have traditionally been gauged by using income and employment statistics, life expectancy, and other objective measures. The Economics of Happiness, which is based on people’s reports of how their lives are going, provides a complementary yet radically different approach to studying human well-being. Typically, subjective well-being measures include positive and negative feelings (e.g., momentary experiences of happiness or stress), life evaluations (e.g., life satisfaction), and feelings of having a life purpose. Both businesses and policymakers now increasingly make decisions and craft policies based on such measures. This chapter provides an overview of the Happiness Economics approach and outlines the promises and pitfalls of subjective well-being measures.

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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A new GLO Discussion Paper shows that increasing import competition has kept more females in the Chinese workforce.

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. 638, 2020

Trade Liberalization and the Gender Employment Gap in China – Download PDF
by Wang, Feicheng & Kis-Katos, Krisztina & Zhou, Minghai

GLO Fellows Krisztina Kis-Katos & Minghai Zhou

Author Abstract: This paper investigates the impact of import liberalization induced labor demand shocks on male and female employment in China. Combining data from population and firm censuses between 1990 and 2005, we relate prefecture-level employment by gender to the exposure to tariff reductions on locally imported products. Our empirical results show that increasing import competition has kept more females in the workforce, reducing an otherwise growing gender employment gap in the long run. These dynamics were present both in local economies as a whole and among formal private industrial firms. Examining channels through which tariff reductions differentially affect males and females, we find that trade-induced competitive pressures contributed to a general expansion of female-intensive industries, a shift in sectoral gender segregation, reductions in gender discrimination in the labor market, technological upgrading through computerization, and general income growth.

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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A new GLO Discussion Paper provides a theoretical analysis to study the firms’ strategic choice of adopting an abatement technology in an environment with pollution externalities when the government levies an emission tax to incentivize firms undertaking emission-reducing actions.

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. 636, 2020

To abate, or not to abate? A strategic approach on green production in Cournot and Bertrand duopolies – Download PDF
by Buccella, Domenico & Fanti, Luciano & Gori, Luca

GLO Fellow Luca Gori

Author Abstract: This research analyses the firms’ strategic choice of adopting an abatement technology in an environment with pollution externalities when the government levies an emission tax to incentivise firms undertaking emission-reducing actions. A set of different Nash equilibria – ranging from dirty to green production – arises in both quantity-setting (Cournot) and price-setting (Bertrand) duopolies depending on the societal awareness towards environmental quality and the relative importance of technological progress in abatement adopted by firms. A synthesis of the main results is the following: if the awareness of the society towards a clean environment is relatively low (resp. high) and the index measuring the relative cost of abatement is relatively high (resp. low), the strategic interaction between two independent, competing and selfish (profit maximizing) firms playing the abatement game leads to not to abate [NA] (resp. to abate [A]) as the Pareto efficient outcome: no conflict exists between self-interest and mutual benefit to do not undertake (resp. to undertake) emission-reducing actions. Multiple Nash equilibria or a “green” prisoner’s dilemma may also emerge in pure strategies. When the choice of adopting a green technology is a deadlock (anti-prisoner’s dilemma), the society is better off as social welfare under A is always larger than under NA because pollution and environmental damage are higher in the latter scenario. These findings suggest that living in a sustainable environment challenges the development of clean technologies through ad hoc R&D and the improvement of public education to achieve an eco-responsible attitude.

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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A new GLO Discussion Paper argues that big data can measure happiness and help making good policy decisions.

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. 634, 2020

Big Data and Happiness – Download PDF
by Rossouw, Stephanie & Greyling, Talita

GLO Fellows Stephanie Rossouw and Talita Greyling

Author Abstract: The pursuit of happiness. What does that mean? Perhaps a more prominent question to ask is, ‘how does one know whether people have succeeded in their pursuit’? Survey data, thus far, has served us well in determining where people see themselves on their journey. However, in an everchanging world, one needs high-frequency data instead of data released with significant time-lags. High-frequency data, which stems from Big Data, allows policymakers access to virtually real-time information that can assist in effective decision-making to increase the quality of life for all. Additionally, Big Data collected from, for example, social media platforms give researchers unprecedented insight into human behavior, allowing significant future predictive powers.

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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A new GLO Discussion Paper using randomizes data from Bangladesh suggests offering commitment and screening applicants on present bias to enhance agricultural technology adoption.

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. 633, 2020

Contract structure, time preference, and technology adoption – Download PDF
by Chowdhury, Shyamal & Smits, Joeri & Sun, Qigang

GLO Fellow Shyamal Chowdhury

Author Abstract: Do constraints to technology adoption vary by behavioral traits? We randomize 150 villages in Bangladesh into being offered standard microcredit, loans with a grace period, the choice between those two contracts, and control. No discernible average effects are detected on the adoption of mechanized irrigation, hybrid seeds, and chemical fertilizers. However, credit access enhances technology adoption among present-biased farmers, whose output and profits increase. These effects are driven by the standard contract and choice villages, as present-biased farmers select out of the grace period contract. This suggests offering commitment and screening applicants on present bias to enhance agricultural technology adoption.

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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A new GLO Discussion Paper studies the implications of Artificial Intelligence (AI) in an endogenous growth model. It can explain why advanced countries tend to experience, despite much AI hype, the simultaneous existence of rather high employment with stagnating wages, productivity, and GDP.

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. 632, 2020

Artificial Intelligence, Income Distribution and Economic Growth – Download PDF
by Gries, Thomas & Naudé, Wim

GLO Fellow Wim Naudé

Author Abstract: The economic impact of Artificial Intelligence (AI) is studied using a (semi) endogenous growth model with two novel features. First, the task approach from labor economics is reformulated and integrated into a growth model. Second, the standard representative household assumption is rejected, so that aggregate demand restrictions can be introduced. With these novel features it is shown that (i) AI automation can decrease the share of labor income no matter the size of the elasticity of substitution between AI and labor, and (ii) when this elasticity is high, AI will unambiguously reduce aggregate demand and slow down GDP growth, even in the face of the positive technology shock that AI entails. If the elasticity of substitution is low, then GDP, productivity and wage growth may however still slow down, because the economy will then fail to benefit from the supply-side driven capacity expansion potential that AI can deliver. The model can thus explain why advanced countries tend to experience, despite much AI hype, the simultaneous existence of rather high employment with stagnating wages, productivity, and GDP.

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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A new GLO Discussion Paper finds that the pandemic and the lockdown increased underemployment and job search efforts significantly. Immigrants and individuals with shorter job tenure or occupations unsuitable for remote work were hit the hardest in terms of unemployment.

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. 635, 2020

Short-term Labour Market Effects of COVID-19 and the Associated National Lockdown in Australia: Evidence from Longitudinal Labour Force Survey – Download PDF
by Guven, Cahit & Sotirakopoulos, Panagiotis & Ulker, Aydogan

GLO Fellow

Author Abstract: We examine the short-term labor market effects of COVID-19 and the associated national lockdown in Australia by estimating person-fixed-effects models using the Longitudinal Labour Force Survey. COVID-19 decreased labor force participation (LFP) by 2.1%, increased unemployment by 1.1% and reduced weekly working hours by 1.1. The national lockdown decreased LFP by 3.3%, increased unemployment by 1.7%, and decreased weekly working hours by 2.5. The probability of working on Fridays decreased by 10% while working fewer hours due to being on leave, work shifts, not having enough work and losing jobs all increased due to the lockdown. The pandemic and the lockdown increased underemployment and job search efforts significantly. In terms of heterogeneity of these effects, our analysis shows that those with up to high-school education experienced larger reductions in their LFP and working hours than others. However, immigrants and individuals with shorter job tenure or occupations unsuitable for remote work were hit the hardest in terms of unemployment.

More from the GLO Coronavirus Cluster

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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A new GLO Discussion Paper finds that public sector employment is affected significantly.

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. 637, 2020

The intensity of COVID-19 Non-Pharmaceutical Interventions and labor market outcomes in the public sector – Download PDF
by Marcén, Miriam & Morales, Marina

GLO Fellow Miriam Marcén

Author Abstract: This paper examines whether the intensity of Non-Pharmaceutical Interventions (NPIs) during the COVID-19 pandemic has differentially impacted the public sector labor market outcomes. This extends the analysis of the already documented negative economic consequences from COVID-19 and their dissimilarities with a typical economic crisis. To capture the intensity of the NPIs, we build a novel index (COVINDEX) using daily information on NPIs merged with state level data on out of home mobility (Google data) to show that among individuals living in a typical state, the NPIs enforcement during the COVID-19 reduces the likelihood of being employed (at work) by 5% with respect to the pre-COVID period and the hours worked by 1.3% using data on labor market outcomes from the monthly Current Population Survey and difference-in-difference models. This is a sizable amount representing the sector with the higher job security during the pandemic. Public sector workers in a typical state are 4 percentage points more likely to be at work than salaried workers in the private sector and 7 percentage points more likely than self-employed workers (the worst so far). Our results are robust to endogeneity of the NPIs measures and present empirical evidence of heterogeneity in the response to the NPIs with those in the local employment being the hardest hit.

More from the GLO Coronavirus Cluster

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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