The Great Recession was marked by disruptions to the supply of credit to firms and households. But little is known about how much supply shocks to household credit actually contributed to employment losses. This column uses data on US counties to examine the causal relationship running from the supply of household credit to employment during the recession. The author concludes that contractions in household credit supply caused substantial employment losses.
John Mondragon, Sunday, January 11, 2015
Theodore H. Moran, Lindsay Oldenski, Saturday, August 9, 2014
There is indisputable evidence that manufacturing employment as a share of total employment in the US has been declining. This column argues that focusing on employment masks important signs of growth of the manufacturing sector. Using most up-to-date data, the authors reason that the US manufacturing base is growing larger, more productive and competitive. The expansion of operations abroad by US manufacturing multinationals leads to particularly strong increases in economic activity – including creation of greater numbers of high-paying manufacturing jobs – by those same firms in the US domestic economy.
Alex Edmans, Friday, July 25, 2014
Happy workers might well be more productive than unhappy ones, but high worker satisfaction could also be a sign that workers are overpaid or underworked. This column examines the link between worker satisfaction and future stock returns in 14 countries. In most but not all countries, employee satisfaction is associated with higher future stock returns. Abnormal returns to companies with high worker satisfaction are significantly increasing in the flexibility of their countries’ labour markets.
Maria Bas, Vanessa Strauss-Kahn, Monday, July 14, 2014
The rise of trade in intermediate inputs is well documented, but its role in shaping domestic economies is not yet completely understood. This column presents evidence from French firms on the effects of importing intermediate inputs. Firms importing more varieties of intermediate inputs increased their productivity and exported more varieties. Foreign inputs from the most advanced economies have the strongest effect on firm productivity, but imported inputs from all countries help raise the number of export varieties.
Chiara Criscuolo, Peter N. Gal, Carlo Menon, Monday, May 26, 2014
Young firms are known to play a central role in job creation. This column presents the results of a new OECD project on the dynamics of employment (DynEmp) based on an innovative methodology using firm-level data. It confirms that young firms play a central role in creating jobs, and in enhancing growth and innovation. Public policies can help by enabling firms to experiment, and by fostering the reallocation of resources towards the most productive firms. Structural reforms to product, labour, and capital markets, as well as bankruptcy laws that do not overly penalise failure, are particularly relevant.
Manuel Adelino, Song Ma, David Robinson, Wednesday, February 12, 2014
There is a strong link between entrepreneurship and growth – young firms were responsible for almost all net job creation in the US economy over the last 30 years. This column presents new research into the responsiveness of firms of different ages to investment opportunities. Firms aged 0–23 months create about twice the total number of new jobs in response to local income shocks than firms that are more than six years old.
Pierre Brochu, David A Green, Wednesday, January 22, 2014
Economic research finds little evidence in support of the hypothesis that an increase in minimum wages significantly affects employment – either positively or negatively. This column discusses a study of the impact of minimum-wage changes on turnover rates. Minimum-wage increases are associated with a lower probability that a job will end, and with a lower probability that an unemployed person will find work. The former effect is established only for newly hired workers. Increases in the minimum wages are also associated with more stable jobs for all low educated workers. Thus, the trade-off between fewer jobs with higher wages and more job stability versus easier access to jobs should be taken into account in the minimum-wage policy debates.
David Fine, Susan Lund, Tuesday, December 4, 2012
Africa's recent growth is impressive, yet its rate of stable job creation is anything but. This column argues that Africa needs rapid growth in stable, wage-paying jobs in order to ensure future stable growth and prosperity. African governments must develop and implement targeted jobs strategies – which focus on labour-intensive, competitive industries – to get the most out Africa’s rapid economic emergence.
Benedict Clements, Ruud de Mooij, Gerd Schwartz, Sunday, September 9, 2012
Many advanced country governments face the dual challenge of promoting job growth while pushing ahead with spending cuts. This column discusses how well-designed fiscal policy reforms can help boost employment without busting the government budget.
Eric Hanushek, Ludger Woessmann, Lei Zhang, Monday, November 21, 2011
Does vocational education have advantages over general education? This column presents new evidence suggesting that when economies change rapidly and the full life-cycle is taken into perspective, this advantage comes at the disadvantage of reduced employment opportunities in old age.
Pierre Cahuc, Stéphane Carcillo, Monday, January 24, 2011
In many OECD countries, the Great Recession has spawned new social programmes allowing employers to temporarily reduce hours works while reimbursing employees for lost income. The authors of CEPR DP8214 investigate how effectively these programmes prevent a surge in unemployment. They find, with a few caveats, significant benefits.
Paolo Manasse, Tuesday, January 18, 2011
Workers at a Fiat plant in Turin recently voted to approve a new, innovative labour contract that promises higher wages and new investments in exchange for tighter discipline and oversight. This column says that if such a model of industrial negotiations were adopted across Italy, employment would rise in both the short and medium term.
Pieter Bevelander, Ravi Pendakur, Monday, January 10, 2011
The Great Recession worsened the already-intractable unemployment problem of many immigrant communities in western countries. Can acquiring citizenship improve employment prospects for immigrants? CEPR Discussion Paper 8182 argues that recent liberalization of citizenship regulations in Sweden and Canada has increased employment probabilities for immigrant groups in both countries.
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C Wright, Tuesday, October 26, 2010
Do immigrants take American jobs? Or does increased efficiency in firms that hire immigrants or practice offshoring generate new jobs for US natives? The authors of CEPR Discussion Paper 8078 develop and test a model which measures both the direct impact of offshoring and hiring immigrants on the employment share of US natives and the indirect gains to US natives from the "cost-savings" effect.
John S. Earle, Saturday, March 7, 2009
A controversial article recently published in the Lancet argues that mass privatisation is responsible for the increased mortality in post-communist societies during the 1990s. It suggests privatised firms cut employment, which hurt health and mortality. This column uses firm-level data to show that there is no evidence that privatisation systematically lowered firm-level employment.
Peter Debaere, Joon H. Lee , Hongshik Lee , Wednesday, December 24, 2008
Do firms reduce their domestic employment when they establish operations abroad? Evidence from South Korean firms suggests that the impact varies by destination and operation. This column shows that concerns about investment in developing countries slowing employment growth at home may have empirical support.
Gianmarco I.P. Ottaviano, Giovanni Peri, Francesco D'Amuri, Monday, March 10, 2008
Germany has the largest number of foreign individuals in Europe, and foreign workers represent around 10% of the total labour force. The authors of CEPR DP6736 measure the effects of the substantial immigration of the 1990s on the Western German labour market and find that it had no adverse effects on native wages and employment levels, but instead led to adverse effects on previous immigrants.
Mitsuyo Ando, Fukunari Kimura, Tuesday, December 4, 2007
Offshoring is not new. Kudoka (hollowing-out due to offshoring) has worried Japan since the 1980s. Evidence from Japan presented in a new CEPR Policy Insight suggests that offshoring may help create domestic jobs, especially for SMEs.
Winfried Koeniger, Julien Prat, Wednesday, August 29, 2007
Recent empirical research shows that EPL has quite different effects across worker and firm types. Low-skilled workers bear most of the adverse consequences of EPL, and it drives small or less efficient firms out of the market. Reformers of EPL should take account of these differences, especially the interactions with product and financial market structure.
Dennis J Snower, Christian Merkl, Alessio J G Brown, Monday, June 11, 2007
Employment subsidies are often used to reduce both unemployment and earnings inequality together, a prime objective throughout the OECD. In CEPR DP6334, the authors compare the effectiveness of various employment subsidies in Germany and find that while hiring vouchers can be both effective and efficient if targeted appropriately, wage subsidies are too expensive and ineffective.