Labour markets

Ross Levine, Chen Lin, 02 July 2015

Labour market regulations have important implications for both the incidence of cross-border acquisitions, and the outcomes for acquiring firms. This column explores how variations in labour regulations between countries affect cross-border acquisitions and subsequent firm performance. For a sample of 50 countries, firms are found to enjoy larger returns when they acquire a target in a country with weaker labour regulations than the acquirer’s home country.

Tito Boeri, Pietro Garibaldi, Espen R. Moen, 12 June 2015

A new labour law in Italy aims to protect dismissed employees and offer firms greater incentives for human capital investment. This column explains the significance of the change, what it means for firms in Italy and its potentially positive effect on post-crisis job-creation. 

Ejaz Ghani, William Kerr, Alex Segura, 09 June 2015

The vast informal sector in India affects everything from poverty to growth. This column presents new facts on how Indian job growth in manufacturing is concentrated in informal tradable industries, especially one-person establishments. These features are most closely linked to the urbanisation of informal Indian manufacturing, but subcontracting and rising female participation also appear to play noteworthy roles.

Mathias Czaika, Christopher Parsons, 07 June 2015

Immigration policies can potentially attract and select high-skilled workers. This column provides a new assessment of the effectiveness of migration policies. Points-based (or supply-based) systems increase both the absolute numbers of high-skill migrants and the skill composition of international labour flows. Conversely, demand-driven systems – usually based on the principle of job contingency – are shown to have a rather small, even negative effect.

Ravi Kanbur, Michael Keen, 05 June 2015

The ‘informal’ economy presents a key challenge for developing-nation policymakers due to its labour-market and tax-revenue implications. Informality is usually defined as the complement to formality, i.e. any activity that isn’t covered by a clear set of laws. This column argues that such a definition risks obscuring more than it reveals, by failing to understand and address the varieties of informality that exist. Sensible policy should focus on tailored interventions across different categories of taxpayer, not on reducing aggregate informality.

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