This report analyzes the paths by which developing country labor markets adjust to permanent trade-related shocks. Trade shocks can bring about reallocation of labor between industries, but the presence of labor mobility costs implies economy-wide losses because they extend the period of economic adjustment.
... See More + This report focuses primarily on the adjustment costs faced by workers after a trade shock, because of magnitude and welfare implications and policy relevance. From a policy viewpoint, understanding the relative magnitudes of labor mobility and adjustment costs can help policymakers design trade policies that are consistent with employment objectives, can be complemented by labor policies, or support programs to facilitate labor transitions, or both. To complement and validate the analysis based on structural choice models, the study designed a distinct empirical approach using reduced-form econometric estimation strategies. This approach examines the impact of structural reforms and worker displacement on labor market outcomes. This makes it possible to estimate the time required to adjust to a trade-related shock, but does not assume the rigid underlying relationship inherent in structural models. This report is organized as follows: chapter one gives introduction. Chapter two presents evidence from the literature on the relative magnitude of labor adjustment costs borne by workers and by firms. Chapter three presents a new database of country-level labor mobility cost estimates for both developing and developed economies. Chapter four showcases country case studies in which labor mobility costs vary by industry, firm size, and worker type (for example, informal versus. formal). Chapter five analyzes the impact of structural reforms on aggregate labor market outcomes across countries and the effect of worker displacement due to plant closings on the employment outcomes of individual workers in Mexico. Chapter six concludes with a summary of the main findings about the labor adjustment costs associated with trade-related shocks and a discussion of policy responses internationally.
See Less -
Publication 88890 JUN 17, 2014
Hollweg, Claire H.; Lederman, Daniel; Rojas, Diego; Bulmer, Elizabeth Ruppert
Seasonal worker programs are increasingly seen as offering the potential to be part of international development policy. New Zealand's Recognised Seasonal Employer program is one of the first and most prominent of programs designed with this perspective.
... See More + This paper provides a detailed examination of this policy through the first six seasons. This includes the important role of policy facilitation measures taken by governments and aid agencies. The evolution of the program in terms of worker numbers is discussed, along with new data on the (high) degree of circularity in worker movements, and new data on (very low) worker overstay rates. There appears to have been little displacement of New Zealand workers, and new data show Recognised Seasonal Employer workers to be more productive than local labor and that workers appear to gain productivity as they return for subsequent seasons. The program has also benefitted the migrants participating in the program, with increases in per capita incomes, expenditure, savings, and subjective well-being. Taken together, this evidence suggests that the program is largely living up to its promise of a "triple win" for migrants, their sending countries in the Pacific, and New Zealand.
See Less -
Policy Research Working Paper WPS6762 JAN 01, 2014
Informal employment is ubiquitous in developing countries, but few studies have estimated workers' switching costs between informal and formal employment.
... See More + This paper builds on the empirical literature grounded in discrete choice models to estimate these costs. The results suggest that inter-industry labor mobility costs are large, but entry costs into informal employment are significantly lower than the costs of entry in formal employment. Simulations of labor-market adjustments caused by a trade-related fall in manufacturing goods prices indicate that the share of informally employed workers rises after liberalization, but this is due to entry into the labor market by previously idle labor.
See Less -
Policy Research Working Paper WPS6614 SEP 01, 2013
Arias, Javier; Artuc, Erhan; Lederman, Daniel; Rojas, Diego
Estimates of labor mobility costs are needed to assess the responses of employment and wages to trade shocks when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries.
... See More + The authors propose a method to estimate mobility costs using readily obtainable data worldwide. The estimator matches the changes in observed sectoral employment allocations with the predicted allocations from a model of costly labor adjustment. This paper estimates a world map of labor mobility costs and uses those estimates to explore the response of labor markets to trade policy.
See Less -
Policy Research Working Paper WPS6556 AUG 01, 2013
This paper presents empirical evidence from household and firm survey data collected during 2009-2010 on the implementation of the 2008 Labor Contract Law and its effects on China's workers.
... See More + The government and local labor bureaus have made substantial efforts to enforce the provisions of the new law, which has likely contributed to reversing a trend toward increasing informalization of the urban labor market. Enforcement of the law, however, varies substantially across cities. The paper analyzes the determinants of worker satisfaction with the enforcement of the law, the propensity of workers to have a labor contract, workers' awareness of the content of the law, and their likelihood of initiating disputes. The paper finds that all of these factors are highly correlated with the level of education, especially for migrants. Although higher labor costs may have had a negative impact on manufacturing employment growth, this has not led to an overall increase in aggregate unemployment or prevented the rapid growth of real wages. Less progress has been made in increasing social insurance coverage, although signing a labor contract is more likely to be associated with participation in social insurance programs than in the past, particularly for migrant workers.
See Less -
Policy Research Working Paper WPS6542 JUL 01, 2013
Giles, John; Park, Albert; Wang, Meiyan; Gallagher, Mary
The objective of the Sava Waterway Rehabilitation Project for Bosnia and Herzegovina is to improve the operational performance and safety of commercial and leisure vessels on the Sava River, thereby contributing to improved utilization of the river ports.
... See More + Negative impacts include: air pollution, dust, flora and fauna, noise pollution, soil erosion, and waste management. Mitigation measures include: a) prohibit tourist recreational traffic and traffic of high-speed boats in the vicinity of known spawning places; b) provide safe disposal of sanitary waste water from ships in ports. The ships should undertake ballast water management measures in accordance with requirements of the International Convention for the Control and Management of Ships Ballast Water and Sediments; c) provide appropriate procedures for managing chemical and fuel storage areas. Fuelling, loading and unloading activities on ships should be conducted by properly trained personnel according to pre-established formal procedures; d) prohibit tourist recreational traffic and traffic of high-speed boats in the vicinity of known spawning places; and e) allow passage of vessels that transport hazardous cargo and substances (chemical, oil, etc.) only with police entourage.
See Less -
The Turkish economy was hit hard by the global economic crisis, but recovered fast and strong. The economy had already started to slow down in 2007, but the global financial events of late 2008 led to a sharp contraction starting in the last quarter of 2008 until growth resumed in the last quarter of 2009.
... See More + The recovery was rapid, with growth reaching 9 percent in 2010 and 8.5 percent in 2011. This study looks at how the labor market fared during the recent downturn and recovery and informs policies to manage labor markets through the economic cycle and address the jobs challenge in Turkey. The study investigates: (i) pre-crisis labor market trends and the structural jobs challenge in Turkey; (ii) aggregate and distributional impacts of the recent crisis, and subsequent recovery, on the labor market; and (iii) recent policy measures and existing labor market institutions in the context of observed labor market outcomes. Based on this analysis and a comparison with selected countries from around the world, the study suggests options to improve the responsiveness of policies to future crises and to adjust the policy mix through the economic cycle. Finally, the study links policies to manage labor markets through the cycle with measures to address the longer term, structural jobs challenge in Turkey.
See Less -
The Turkish economy was hit hard by the global economic crisis, but recovered fast and strong. The economy had already started to slow down in 2007, but the global financial events of late 2008 led to a sharp contraction starting in the last quarter of 2008 until growth resumed in the last quarter of 2009.
... See More + The recovery was rapid, with growth reaching 9 percent in 2010 and 8.5 percent in 2011. This study looks at how the labor market fared during the recent downturn and recovery and informs policies to manage labor markets through the economic cycle and address the jobs challenge in Turkey. The study investigates: 1) pre-crisis labor market trends and the structural jobs challenge in Turkey; 2) aggregate and distributional impacts of the recent crisis, and subsequent recovery, on the labor market; and 3) recent policy measures and existing labor market institutions in the context of observed labor market outcomes. Finally, the study links policies to manage labor markets through the cycle with measures to address the longer term, structural jobs challenge in Turkey. Ongoing structural transformations and the large 'stock' of low-skilled workers are behind the jobs challenge in Turkey. Continued urbanization and labor shedding in agriculture, along with the increase in the Working Age Population (WAP), will continue to increase the number of (mostly) young and low-skilled workers looking for non-agricultural jobs. The Turkish Employment Agency (ISKUR) plays a key role in activating low-skilled workers into productive employment. ISKUR has come a long way since 2008, increasing the coverage and quality of vocational training, introducing job and vocational counselors and linking social assistance receipts to registration in ISKUR.
See Less -
The Turkish economy was hit hard by the global economic crisis, but recovered fast and strong. The economy had already started to slow down in 2007, but the global financial events of late 2008 led to a sharp contraction starting in the last quarter of 2008 until growth resumed in the last quarter of 2009.
... See More + The recovery was rapid, with growth reaching 9 percent in 2010 and 8.5 percent in 2011. This study looks at how the labor market fared during the recent downturn and recovery and informs policies to manage labor markets through the economic cycle and address the jobs challenge in Turkey. The study investigates: 1) pre-crisis labor market trends and the structural jobs challenge in Turkey; 2) aggregate and distributional impacts of the recent crisis, and subsequent recovery, on the labor market; and 3) recent policy measures and existing labor market institutions in the context of observed labor market outcomes. Finally, the study links policies to manage labor markets through the cycle with measures to address the longer term, structural jobs challenge in Turkey. Ongoing structural transformations and the large 'stock' of low-skilled workers are behind the jobs challenge in Turkey. Continued urbanization and labor shedding in agriculture, along with the increase in the Working Age Population (WAP), will continue to increase the number of (mostly) young and low-skilled workers looking for non-agricultural jobs. The Turkish Employment Agency (ISKUR) plays a key role in activating low-skilled workers into productive employment. ISKUR has come a long way since 2008, increasing the coverage and quality of vocational training, introducing job and vocational counselors and linking social assistance receipts to registration in ISKUR.
See Less -
The objective of the Road Rehabilitation and Safety Project for Serbia is to support the Government of Serbia in enhancing the efficiency, effectiveness and safety of its main and regional road network, through the improvement of a proportion of these road networks, scaling up of the use of efficient road asset management practices, the institutionalization of safe road design principles and road safety audits, and the strengthening of the institutional capacity of Public Enterprise Roads of Serbia (PERS).
... See More + Negative impacts include: noise disturbance to human and animal population and workers, dust pollution, traffic disruption during construction activity, water and soil pollution from improper material storage, worker safety, air pollution, and erosion. Mitigation measures include: 1) equipment operating with noise mufflers and licenced; 2) noisy equipment will be located as far as possible from residential or other sensitive receptors; 3) wetting down/spraying of construction areas, accesses, materials stockpiles and during loading/unloading activities, covering of vehicles carrying dusty materials, wheel washing/spraying of vehicles, and management of spoil, etc.; 4) traffic management plan with measures to redirect traffic that are easily seen or easy to follow; 5) dispose waste material at location protected from washing out; 6) provide workers with safety instructions and protective equipment; and 7) install traffic signs for speed limit.
See Less -
The objective of the Road Rehabilitation and Safety Project for Serbia is to support the Government of Serbia in enhancing the efficiency, effectiveness and safety of its main and regional road network, through the improvement of a proportion of these road networks, scaling up of the use of efficient road asset management practices, the institutionalization of safe road design principles and road safety audits, and the strengthening of the institutional capacity of Public Enterprise Roads of Serbia (PERS).
... See More + Negative impacts include: noise disturbance to human and animal population and workers, dust pollution, traffic disruption during construction activity, water and soil pollution from improper material storage, worker safety, air pollution, and erosion. Mitigation measures include: 1) equipment operating with noise mufflers and licenced; 2) noisy equipment will be located as far as possible from residential or other sensitive receptors; 3) wetting down/spraying of construction areas, accesses, materials stockpiles and during loading/unloading activities, covering of vehicles carrying dusty materials, wheel washing/spraying of vehicles, and management of spoil, etc.; 4) traffic management plan with measures to redirect traffic that are easily seen or easy to follow; 5) dispose waste material at location protected from washing out; 6) provide workers with safety instructions and protective equipment; and 7) install traffic signs for speed limit.
See Less -
The objective of the Road Rehabilitation and Safety Project for Serbia is to support the Government of Serbia in enhancing the efficiency, effectiveness and safety of its main and regional road network, through the improvement of a proportion of these road networks, scaling up of the use of efficient road asset management practices, the institutionalization of safe road design principles and road safety audits, and the strengthening of the institutional capacity of Public Enterprise Roads of Serbia (PERS).
... See More + Negative impacts include: noise disturbance to human and animal population and workers, dust pollution, traffic disruption during construction activity, water and soil pollution from improper material storage, worker safety, air pollution, and erosion. Mitigation measures include: 1) equipment operating with noise mufflers and licenced; 2) noisy equipment will be located as far as possible from residential or other sensitive receptors; 3) wetting down/spraying of construction areas, accesses, materials stockpiles and during loading/unloading activities, covering of vehicles carrying dusty materials, wheel washing/spraying of vehicles, and management of spoil, etc.; 4) traffic management plan with measures to redirect traffic that are easily seen or easy to follow; 5) dispose waste material at location protected from washing out; 6) provide workers with safety instructions and protective equipment; and 7) install traffic signs for speed limit.
See Less -
Using an extraordinarily rich panel dataset from Ghana, this paper explores the nature of self-employment and informality in developing countries through the analysis of self-reported happiness with work and life.
... See More + Subjective job satisfaction measures allow assessment of the relative desirability of different jobs in ways that, conditional wage comparisons cannot. By exploiting recent advances in mixed (random parameter) ordered probit models, the distribution of subjective well-being across sectors of employment is quantified. There is little evidence for the overall inferiority of the small firm informal sector: there is not a robust average satisfaction premium for formal work vs. self-employment or informal salaried work, and owners of informal firms that employ others are on average significantly happier than workers in the formal private sector. Moreover, the estimated distribution of parameters predicting satisfaction reveal substantial heterogeneity in subjective well-being within sectors that conventional fixed parameter models, such as standard ordered probit models, cannot detect: Whatever the average satisfaction premium in a sector, all job categories contain both relatively happy and disgruntled workers. Specifically, roughly 67, 50, 40 and 59 percent prefer being a small-firm employer, sole proprietor, informal salaried, civic worker respectively, than formal work. Hence, there is a high degree of overlap in the distribution of satisfaction across sectors. The results are robust to the inclusion of fixed effects and alternate measures of satisfaction. Job characteristics, self-perceived autonomy and experimentally elicited measures of attitudes toward risk do not appear to explain these distributional patterns.
See Less -
Policy Research Working Paper WPS6244 OCT 01, 2012
Sarrias, Mauricio; Falco, Paolo; Maloney, William F.; Rijkers, Bob
Sri Lanka's demographic transition has significantly shaped the age distribution of the labor force and created a large working age population (World Bank 2008).
... See More + Changing cohort sizes of young and old workers not only affect their own labor market outcomes (job quality, earnings), but also potentially affect growth prospects in the economy. Recovering from a 30-year conflict in the North and the East, Sri Lanka aims to accelerate growth in the medium term by substantially increasing investments. What will be the role of the labor market in delivering this growth? The service sector is expanding and accounts for nearly 60 percent of the Growth Domestic Product (GDP) and almost 40 percent of employment. However, only 56 percent of the working age population is employed, a result of low participation and high unemployment rates among women and youth. Any growth strategy will have to bring in more working age people, particularly women, into economic activity. The paper is organized as follows. The two sections that follow present an overview of the supply and demand side of the labor market. The next section discusses the ways in which the demographic transition could shape the labor market, particularly in terms of unemployment and earnings. This discussion is followed by three sections examining labor force participation and unemployment, job type, and earnings respectively. The last section concludes with some policy recommendations.
See Less -
Working Paper (Numbered Series) 74171 OCT 01, 2012
A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade.
... See More + This paper investigates the role of occupational mobility on the effects of trade shocks on wage inequality in a dynamic, structural econometric model of worker adjustment. Each worker in the model can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. The authors find that the costs of switching industry and occupation are both high, and of similar magnitude, but in simulations they find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether he or she is harmed by a trade shock.
See Less -
Policy Research Working Paper WPS6194 SEP 01, 2012
ThE-Junction newsletter includes the following headings: a letter from Julie Oyegun; Junior Professionals Program for Afro-Descendants (JPPAD): diversity in the ranks; and measuring LGBT inclusion in corporate America.
... See More +See Less -
Was economic growth in East Asia jobless? This paper addresses this question using data from eight East Asian countries during the period between 1997 and 2011 to estimate the Okun's Law Coefficient, which captures the relationship between growth and employment.
... See More + The analysis suggests that growth was not jobless. However, there is considerable variation across countries. Generally, the effect of growth on employment tends to magnify under more flexible hiring and firing rules. Yet even where labor markets are more tightly regulated, economic growth affects employment, not necessarily in the aggregate but in its composition. There is evidence that agricultural employment moves counter-cyclically, as opposed to non-agricultural employment. The effect is particularly pronounced in periods of economic crisis, suggesting that agriculture may serve as a shock-absorber for workers laid off in the industrial sector. Isolating non-agricultural employment reveals a stronger relationship between growth and job creation.
See Less -
Policy Research Working Paper WPS6156 AUG 01, 2012
Because of China's socialist legacy, until recently little attention has been paid to the rise of informal employment. Under planning urban workers enjoyed guaranteed employment, housing, pensions, and health care.
... See More + The prevalence of informal employment has important implications for public policies, because informality is often associated with poverty and social vulnerability, and it affects tax collection, the enforcement of labor regulations, and the provision of adequate social protection to workers and their families. Informality thus can be characterized by dualism, including both those who engage in informal work of their own volition and those who do so involuntarily because they are systematically excluded from formal employment opportunities. The goal of this paper is to provide for the first time an accurate measurement of informal employment in China by analyzing data from recent household surveys collected in six large Chinese cities in 2010. The surveys were designed by the authors with questions included to enable measurement of informality using accepted international standards set by the International Labour Organization (ILO) as well as by considering factors relevant in the Chinese context. The authors provide a number of insights into the extent and nature of informal employment and labor market development in China. The large payroll charges for social insurance programs create a disincentive for both employers and employees to participate.
See Less -
The authors present empirical evidence from household and firm survey data collected during 2009-2010 on how well the 2008 labor contract law has been implemented and what its impact has been on Chinese workers.
... See More + The authors find evidence of substantial effort to enforce the provisions of the new law, and that this has helped to reverse a prior trend toward increasing informalization of the urban labor market. Enforcement of the law varies substantially across cities. Satisfaction with the law's enforcement, propensity to have a labor contract, awareness of the laws content, and likelihood of initiating disputes are highly correlated with education, especially for migrants. Although analysis of employment by manufacturing firms suggests that higher labor costs have had negative impacts on employment growth, this has not led to aggregate unemployment or prevented rapid growth in real wages. Less progress has been made in increasing social insurance coverage rates, although labor contracts are increasingly likely to be associated with participation by migrant workers in social insurance programs.
See Less -
This paper provides an overview of the recent performance of the labor market in Vietnam during the Great Recession. The analysis uses data from the Labor Force Survey and the Vietnam Household Living Standard Survey.
... See More + The author finds that, notwithstanding the global crisis and domestic volatility, job creation has been sustained in Vietnam, especially in the formal sector, but that the overall quality of employment has suffered. Gender differentials are found to affect older women especially, while educated women benefit from a skills wage premium. Reassuringly given the large youth share of the total workforce, the youth labor market is dynamic and outcomes for youths have improved. Meanwhile, participation in poverty alleviation programs and labor market programs has not changed, and few workers use the newly created employment services and unemployment benefits.
See Less -
Policy Research Working Paper WPS6056 MAY 01, 2012