A new GLO Discussion Paperreveals a significant dependence of current financial institutions in Africa on the legal origin and the colonization type.
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.
Author Abstract: This paper links banking systems development to the colonial and legal history of African countries. Specifically, we investigate the impact of differing legal traditions on the development of existing investor and creditor protection, and on African banking systems. Based on a sample of 40 African countries from 2000 to 2016, our empirical findings show a significant dependence of current financial institutions on the legal origin and the colonization type. Findings also reveal that current legal financial institutions are not the major determinants of banking system development, whereas institutional and regulatory quality significantly matter for banking system development in both common and civil law countries. Strong creditor rights reduce the cost of banking in African countries.
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A new GLO Discussion Paperpresentsevidence that reshoring in the age of automationis positively associated with wages and employment for high-skilled labor but not for low-skilled labor.
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.
Author Abstract: We propose a theoretical framework to analyze the offshoring and reshoring decisions of firms in the age of automation. Our theory suggests that increasing productivity in automation leads to a relocation of previously offshored production back to the home economy but without improving low-skilled wages and without creating jobs for low-skilled workers. Since it leads also to increasing wages for high-skilled workers, automation-induced reshoring is associated with an increasing skill premium and increasing inequality. We develop a measure for reshoring activity at the macro-level and, using data from the world input output table, we provide evidence for automation-driven reshoring. On average, within manufacturing sectors, an increase by one robot per 1000 workers is associated with a 3.5% increase of reshoring activity. Using robots in countries with similar sectoral structure as an instrument, we find that an increase by one robot per 1000 workers causes a 2.5% increase of reshoring activity. We also provide the first cross-country evidence that reshoring is positively associated with wages and employment for high-skilled labor but not for low-skilled labor and that tariffs increase the degree of reshoring.
A new GLO Discussion Paper finds that the demand-pull effect on firms’ growth is heterogeneous across different types of demand sources and that success depends on firms’ specific knowledge profiles.
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.
Author Abstract: The present paper explores the demand-pull effect of distinct demand sources (i.e. households and retailers, other firms and public sector) on Italian companies’ growth patterns. Data relies on the PEC (Indagine sulle Professioni e le Competenze) survey carried out by the Institute for Public Policy Analysis (INAPP), which provides a rich set of information on a representative sample of Italian companies (~32.000) observed during the years 2012, 2014 and 2017. In particular, we investigate if and to what extent firm-level growth profiles are linked to the prevalent source of the demand flows that such firms face. The analysis contextually accounts for the role played by technological and knowledge-related heterogeneities in shaping the growth pattern-demand type relationship. The empirical analysis shows that the demand-pull effect on firms’ growth is heterogeneous across different types of demand sources and that the ability to seize the growth-related chances provided by distinct demand conditions is contingent on firms’ specific knowledge profiles.
A new GLO Discussion Paperinvestigates the evolution of livelihood diversification in Egypt with a particular focus on wealth and urban-rural divides.
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.
Author Abstract: Livelihood diversification is attracting considerable interest as a tool to cope with economic shocks and resist vulnerability. This paper investigates the evolution of livelihood diversification in Egypt with a particular focus on wealth and urban-rural divides. Using Egypt Labor Market Panel data from 2006 to 2018, I find that rural households have a more diversified livelihood portfolio, yet they diversified away from farming over time. Poor rural households remained dependent on informal livelihood strategies due to the high entry barriers to formal employment. Urban households had significantly less livelihood diversification than rural households. Wealthy households in urban areas tended to depend on relatively more specialized livelihood clusters which were stable over time. These findings imply that distress is a potential reason for diversification in urban areas.
A new GLO Discussion Paperfinds that benefits do not necessarily reach the poor and vulnerable households at the regional level.
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.
Author Abstract: Tunisian social programs provide direct transfers and free or reduced rate access to public health care for families selected by local and regional commissions. In some areas, poor and vulnerable families are excluded from these programs whose places are occupied by other households. The center is often ill-informed about the performance of different regions in reaching the poor and about the exclusion and inclusion errors sources. This lack of information can severely limit the options for designing reforms that will improve targeting performance. In a nutshell : Two components of social safety nets in Tunisia: one covers more, and the other is more generous. The regional commissions often select households headed by women widowed and elderly as beneficiaries. At the regional level, some beneficiaries are not eligible, and the eligible are not beneficiaries. The inclusion of the non-poor and the exclusion of the poor at the regional level are due to disagreement between eligibility criteria and a person’s poverty status.
A new GLO Discussion Paperpresents cross-country evidence that agricultural credits have a positive impact on agricultural 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.
Author Abstract: We present cross-country evidence suggesting that agricultural credits have a positive impact on agricultural productivity. In particular, we find that doubling agricultural credits generates around 4-5 percent increase in agricultural productivity. We use two different agricultural production measures: (i) the agricultural component of GDP and (ii) agricultural labor productivity. Employing a combination of panel-data and instrumental- variable methods, we show that agricultural credits operate mostly on the agricultural component of GDP in developing countries and agricultural labor productivity in developed countries. This suggests that the nature of the relationship between agricultural finance and agricultural output changes along the development path. We conjecture that development of the agricultural finance system generates entry into the agricultural labor market, which pushes up the agricultural component of GDP and keeps down agricultural labor productivity in developing countries; while, in developed countries, it leads to labor-augmenting increase in agricultural production. We argue that replacement of the informal credit channel with formal and advanced agricultural credit markets along the development path is the main force driving the labor market response.
A new GLO Discussion Paperfinds that smartphone use reduces student success.
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.
Author Abstract: To study the causal impact of smartphone use on academic performance, we collected—for the first time worldwide—longitudinal data on students’ smartphone use and educational performance. For three consecutive years we surveyed all students attending classes in eleven different study programs at two Belgian universities on general smartphone use and other drivers of academic achievement. These survey data were merged with the exam scores of these students. We analyzed the resulting data by means of panel data random effects estimation controlling for unobserved individual characteristics. A one standard deviation increase in overall smartphone use results in a decrease of 0.349 points (out of 20) and a decrease of 2.616 percentage points in the fraction of exams passed.
A new GLO Discussion Paperfinds that employees with a temporary contract experience more loneliness at work as opposed to employees with a permanent contract. It also reveals that loneliness at work mediates the association between working temporarily and job satisfaction.
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.
Author Abstract: This research contributes to the limited literature concerning the determinants of loneliness at work, as well as to the literature on psychological outcomes associated with temporary work. More specifically, we are adding to the literature by exploring whether there is an association between working temporarily and loneliness at work and whether loneliness at work partly explains the association between working temporarily and job satisfaction. To this end, we analyze—by means of a mediation model—a unique sample of Flemish employees in the private sector. We find that employees with a temporary contract experience more loneliness at work as opposed to employees with a permanent contract. In addition, we discover that loneliness at work mediates the association between working temporarily and job satisfaction.
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A new GLO Discussion Paperfinds that the return rate to the labor market is between 50% and two thirds; survivors face lower work abilities and discrimination.
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.
Author Abstract: Objectives: To synthesise the existing reviews conducted on the labour market outcomes of cancer survivors by focusing on (i) the convergences and divergences on the overall work-related outcomes, (ii) the moderating factors studied to date, and (iii) an identification of areas where more research is needed in the future. Methods: A systematic review of the existing reviews on labour market outcomes for cancer survivors was performed. Bibliographic search for eligible studies published before January 2019 involved the following three core concepts: (i) cancer survivors, (ii) work, and (iii) review. The quality of the included reviews was assessed based on the Johns Hopkins Hospital Evidence Level and Quality Guide. Following this, a narrative synthesis of the findings was completed. Results: In total, 35 articles met the inclusion criteria. The average return to work (RTW) rate varied between 54% and 66%. The self-reported work ability was consistently lower following cancer. This review also found strong converging evidence of self-reported discrimination after cancer. The effects on work performance showed several inconsistencies, possibly due to the use of different definitions of work performance. Most moderating factors for successful work outcomes showed converging evidence, except for age, marital status, cancer type, and country. We provide several possible explanations and linkages for these divergencies. Conclusions: Further investigation of causal relationships by (i) using matched control groups and by (ii) gathering longitudinal data, and the use of more standardised definitions of the outcome variables are the two main future research recommendations. Furthermore, no studies have succeeded in measuring the work outcomes objectively. We provide specific recommendations from an interdisciplinary context to solve this.
In 2019, Dejan Kovač, GLO fellow and a former postdoc at Princeton University, left his position in the US and joined the presidential race in Croatia as a candidate. He did not become the president of Croatia, but in his campaign he highlighted the need for structural reforms, promoted civic and economic freedoms, and most importantly attacked corruption relying on his previous research experience.
Besides his research on corruption, Dejan Kovač is taking another promising research endeavor – rethinking the design of Croatia’s labor market to increase its global competitiveness.
In 2017, the Global Labor Organization (GLO) had supported a large international conferenceDejan Kovač had organized in Umag to debate the challenges of the global world for labor markets. The event was hosting some of the best labor economists of our time, including the former chief economist to president Obama, the late Alan Krueger, a legendary figure and GLO Fellow (see picture below).
Interview
GLO: The scientist and politics: How has the presidential campaign changed you?
Dejan Kovač: Before the campaign I was an economist, during the campaign I remained an economist, and after the campaign I am still an economist.
GLO: Was knowledge of economics and of scientific evidence helpful for you during the race?
Dejan Kovač: Not really. Presidential races in Croatia historically have a problem. This is not a competition about the better program, but rather about to what part of the political spectrum one belongs. I was not able to push any economics topic, because we are still trapped by tales from our history and historical revisionism. It is very unfortunate that there is so little voters’ awareness about the importance of particular topics. Especially because Croatia “lost” close to 10% of its population through emigration due to several main issues: high corruption, bad economic conditions and lack of structural reforms.
GLO: Is emigration the main motivation for your newly started project “Designing Croatia’s labor market for global competitiveness” or are there other important issues at play?
Dejan Kovač: The 10% loss of population is a great shock to our economy. One does not have to have a PhD in economics to realize that this will have a detrimental effect on GDP. A larger problem than size is the issue of “brain drain” not only in Croatia, but in the entire region. High-skilled workers are leaving and they would otherwise contribute the most to economic growth. Another problem of our labor market is that the entire education system is not adequate to satisfy domestic labor market needs and especially global trends.
GLO: What is wrong with Croatia’s education system?
Dejan Kovač: Quotas are such that we are “over-producing” some occupations, which we realistically do not need, while we lack for instance STEM workers, who are “under-supplied”. This is still a residue from our past, when both skills and quantities were defined through central planning. Today not only domestic, but also global market forces are at play. Nevertheless, we have a rigid set of quotas for higher education which has not changed in a reasonable manner in decades. That is the first step to take. It is not an easy task, because redesigning the entire education system implies evaluating labor demand and supply in the future. For this we need the entire Croatia, not just a government which represents one part of the political spectrum only. Either policy makers will realize that and do the urgent structural reforms, or with the next wave of emigrations, our problems will intensify significantly.
GLO: What are decisive elements of the needed university reform and how does this relate to the vitalization of the labor market?
Dejan Kovač: Beyond quotas, we need to raise the skill levels of our workers in such a way that knowledge learned at our universities is up to date with the frontier of innovations at the labor market. We lack “intermediaries” such as incubators who can “translate” knowledge from pure theory to applied science which can be used at the labor market. Also we need to revise the entire curriculum at most universities.
*** With Dejan Kovač spoke Klaus F. Zimmermann, GLO President.
From the left: GLO Fellows Joshua Angrist (MIT), Hank Farber (Princeton University) and Alan Krueger (Princeton University and former Chief Economist of President Obama); 2017 in Umea/Croatia.
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