A new GLO Discussion Paper compares the performance of econometric and machine learning models in predicting poverty.
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: OLS models are the predominant choice for poverty predictions in a variety of contexts such as proxy-means tests, poverty mapping or cross-survey imputations. This paper compares the performance of econometric and machine learning models in predicting poverty using alternative objective functions and stochastic dominance analysis based on coverage curves. It finds that the choice of an optimal model largely depends on the distribution of incomes and the poverty line. Comparing the performance of different econometric and machine learning models is therefore an important step in the process of optimizing poverty predictions and targeting ratios.
Affirmative Action and Intersectionality in South Africa: A new GLO Discussion Paperfinds supporting evidence that affirmative action has induced sizable increases of women in top management positions in South Africa.
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: Gender-based board quotas do not always lead to higher share of women in top management positions. We study the consequences of an affirmative action policy that stipulates gender- and race-based targets in top management positions, beyond boards. We focus on the representation of intersectional group identities, such as race and gender, at the top. We find sizable increase in the likelihood of Black women employment in top positions in the post-policy period relative to Black men, White women and White men in South Africa. We extend our analysis and estimate policy spillovers for years of schooling, earnings gaps and self-employment.
A new GLO Discussion Paperstudies the effects of product, process, and organizational innovations on firm labor productivity in Pakistan.
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 examine the determinants of product, process, and organizational innovation, and their impact on firm labor productivity using data from a unique innovation survey of firms in Pakistan. We find significant heterogeneity in the impact of different innovations on labor productivity: Organizational innovation has the largest effect followed by process innovation. But unlike much of the literature, we found a negative impact of product innovation suggesting a disruption effect of new products; however, this is mitigated if new products are paired with process or organizational innovations. We find a strong impact of engaging in knowledge creation on product and process innovation. We found that external knowledge networks and innovation cooperation play no significant role in firms’ decision to perform R&D and its intensity, though vertical linkages with suppliers (clients) promote product (process) innovations. Foreign competition has a negative effect on product innovation and a positive effect on organizational innovation.
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A new GLO Discussion Paperfinds for Italian data that mismatched workers are at risk of long-term 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.
Author Abstract: In this article, we investigate the role of several types of educational mismatch in explaining labour market transitions of workers with secondary and higher education. We focus on transitions from employment to unemployment and on job changes, to assess whether mismatch is a temporary or a permanent phenomenon. In the first case, as suggested by matching models, mismatch will be eliminated through job-to-job transitions. In the second case, it might be permanent and caused by employment discontinuity and deskilling processes. By using information from the Italian Survey of Professions (ICP) and the Survey on Labour Participation and Unemployment (PLUS), we calculate three measures of vertical mismatch. This allows comparing the outcomes from self-reported and revealed match measures in order to assess the robustness of the results. In addition, we use a measure of horizontal mismatch and evaluated the effect of Routine Bias Technical change (RBTC) in terms of unemployment risk, through a Routine Task Index (RTI) calculated on Italian data. Results indicate that mismatched workers are at risk of long-term unemployment. More specifically, among workers with higher education, the risk is due to mismatches in the field of studies whereas for secondary educated workers, over-education is the main cause of unemployment risk. The effect of the RTI is often not significant. This adds evidence to the problem of skill gap in Italy, as educational choices are not aligned to market needs. In this respect, both demand side and supply side policies are needed to allow firms to better use this human capital.
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Professor Niaz Asadullah gave a talk at the Department of Economics of East West University in Dhaka, Bangladesh, on “Labor Economics for Southeast Asia“. He is the Lead of the GLO Southeast Asia Cluster. The session was moderated by Assistant Professor Dr. Iftekharul Huq. The session is part of GLO supported activities in the region to promote the study and practice of labor economics. Topics discussed included the low participation of women in Southeast Asian labor markets, the linkages between labor and marriage market, the dynamics of wage returns to education and the risk of job automation and technological unemployment. A large number of students attended the event and actively took part in the Q&A session.
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A new GLO Discussion Paperfinds that the child tax credit reform in Austria reduces inequality, lowers the poverty rate in general, but by definition only for households with children.
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 analyses the impact of the implementation of a child tax credit in Austria in 2019, not only on micro, but also on macro level by using a dynamic scoring methodology. First, we assess the fiscal and distributional impact of this reform using the microsimulation model EUROMOD. Second, we estimate labour supply impacts of the reform based on a structural discrete choice framework. Third, we evaluate the macroeconomic impacts of the reform, by calibrating and shocking QUEST, the DSGE model of the European Commission, with the micro-based results for the implicit tax rate, the non-participation and the labour supply elasticities. We show that the child tax credit reform in Austria reduces inequality, lowers the poverty rate in general, but by definition only for households with children. Overall the reform has a positive impact on labour supply, both on the extensive and on the intensive margin, especially for women. On the macro-level (and in the long-run), our model suggests a positive impact on employment. Additionally, we find that parts of the tax decrease can be potentially captured by the employer, meaning that gross wages would fall slightly. However, we find small but positive effects on GDP, investment and consumption, although the long-run macroeconomic effects depend crucially on how the government compensates the missing tax revenues after the reform. Accounting for these feedback effects at the micro level with a new methodology, we show that the second round effects are important to take into account, because they provide insights into the medium-term distributional impact of the reform.
The GLO Discussion Paper of the Month of January shows that promoting access to credit and improving the property rights framework are vital for removing barriers to productive female entrepreneurship at a larger scale in countries such as Eswatini, Lesotho, and Zimbabwe. The paper makes a significant contribution to policy debates, suggesting that policy interventions aimed at removing obstacles to female land tenure and ownership could greatly benefit Southern African countries.
Author Abstract:Limited access to finance is one of the major barriers for women entrepreneurs in Africa. This
paper presents a model of start-ups in which firms’ sales and profits depend on their productivity
and access to credit. However, due to the lack of collateral assets such as land, female
entrepreneurs have more constrained access to credit than do men. Testing the model on data
from the World Bank Enterprise Surveys in Eswatini, Lesotho, and Zimbabwe, we find land
ownership to be important for female entrepreneurial performance in terms of sales levels. This
finding suggests that the small Southern African economies would benefit from removing
obstacles to women’s land tenure and enabling financial institutions to lend against movable
collateral. While land ownership is linked with higher sales levels, it seems less critical for sales
growth and innovation where access to short term loans for working capital seems to be key.
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 Groningen. DP@glabor.org
A new GLO Discussion Paperfinds that retirement increases the probability of migration strongly.
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 examine whether and how retirement affects migration decisions in China. Using a regression discontinuity (RD) design approach combined with a nationally representative sample of 228,855 adults aged between 40 and 75, we find that retirement increases the probability of migration by 12.9 percentage points. Approximately 38% of the total migration effects can be attributed to inter-temporal substitution (delayed migration). Retirement-induced migrants are lower-educated and have restricted access to social security. Household-level migration decisions can reconcile different migration responses across gender. Retirees migrate for risk sharing and family protection mechnisms, reducing market production of their families in the receiving households.
A new GLO Discussion Paperstudies the long-run growth effects of rising longevity and an increasing retirement age.
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 assess the long-run growth effects of rising longevity and increasing the retirement age when growth is driven by purposeful research and development. In contrast to economies in which growth depends on learning-by-doing spillovers, raising the retirement age fosters economic growth. How economic growth changes in response to rising life expectancy depends on the retirement response. Employing numerical analysis we find that the requirement for experiencing a growth stimulus from rising longevity is fulfilled for the United States, nearly met for the average OECD economy, but missed by the EU and by Japan.
A new GLO Discussion Paperreveals that the impact of exports on economic growth has been small but positive in 1850-2017 Spain.
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 analyse in this paper the relationship between international trade and economic growth from the point of view of one of the most traditional hypotheses within this field, namely, the export-led growth hypothesis, for the case of Spain in a long-term perspective of almost 170 years. Exports seem to have played a positive, though modest, role in promoting economic growth in the Spanish economy over the whole period, mostly due to the higher productivity associated with the export sector. The contribution of exports to growth, however, seems to have been stronger in the final years of the 19th century, unlike the rest of the period, where it proved to be very small.
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