Disentangling goods, labor, and credit market frictions in three European economies

an article by Thomas Brzustowski (London School of Economics, UK), Nicolas Petrosky-Nadeau (Federal Reserve Bank of San Francisco, USA) and Etienne Wasmer (Department of Economics and LIEPP, Sciences Po, Paris, France) published in Labour Economics Volume 50 (March 2018)

Highlights

• We build a flexible model with search frictions in three markets: credit, labor, and goods market. We then apply this model (called CLG) to three different economies: a flexible, finance-driven economy (the UK), an economy with wage moderation (Germany), and finally an economy with structural rigidities (Spain).
• Goods and credit market frictions play a dominant role in entry costs and account for up to 75% to 85% of total entry costs.
• The demand side amplification effects of adverse supply shocks (through income losses of consumers) remains limited to a range of 15% to 25% of the total impact of these supply shocks.
• Finally, the speed of matching in the goods market and in credit market accounts for a small fraction of unemployment: most of the variation in unemployment comes from the speed of matching in the labor market.

Abstract

We build a flexible model with search frictions in three markets: credit, labor, and goods markets.

We then apply this model (called CLG) to three different economies: a flexible, finance-driven economy (the UK), an economy with wage moderation (Germany), and an economy with structural rigidities (Spain).

In these three countries, goods and credit market frictions play a dominant role in entry costs and account for 75% to 85% of the total entry costs.

In the goods market, adverse supply shocks are amplified through their propagation to the demand side, as they also imply income losses for consumers.

This adds up to, at most, an additional 15% to 25% to the impact of the shocks.

Finally, the speed of matching in the goods market and the credit market accounts for a small fraction of unemployment: most variation in unemployment comes from the speed of matching in the labor market.

Full text (PDF 17pp)

I tried reading it but admit that I am too far from using my maths/statistical knowledge in earnest to be able to make a lot of sense of the equations.

---

Matching worker skills to job tasks in the Netherlands: sorting into cities for better careers

an article by Suzanne Kok (University of Groningen, Netherlands and CPB Netherlands Bureau for Economic Policy Analysis, The Hague) published in IZA Journal of European Labor Studies Volume 3 Number 2 (2014)

Abstract

Matches between workers and jobs are better in thick labour markets than in thin ones. This paper measures match quality by the gap between worker skills and their job tasks in the Netherlands. The smaller the gap, the better the match between skills and tasks. The measured gaps are 14 percent of a standard deviation smaller in cities than in the Dutch countryside. The location of work explains the observed higher quality of matches, while the location of residence does not. Robustness analyses show that these results are not explained by more efficient learning in cities or the spatial distribution of industrial and service occupations. Higher matching quality is associated with higher wages and explains part of the urban wage premia.

JEL Codes: J24; J23; R12; R23

Full text: http://www.izajoels.com/content/3/1/2

Nothing in common: The career aspirations of young Britons mapped against projected labour market demand (2010-2020)

Occasional Taskforce Research Paper: No. 2 by Dr Anthony Mann, David Massey, Peter Glover, Elnaz T. Kashefpadkel and James Dawkins published by UKCES, b-live, and Education and Employers (March 2013)

Introduction

This paper asks a simple question: is there any alignment between the career aspirations of young people, aged between 13 and 18, and the best estimates of actual demand within the current and future British labour market?

The question is relevant to young people, employers and the UK’s future prosperity. The question is pertinent to young people who make important decisions about their future at ages 14, 16 and 18. Such decisions, about subject options chosen or dropped and experience sought, gained or missed are essential to the ultimate prospects of young people in the jobs market. This paper asks, therefore, whether teenagers, as they make these decisions, do so with career aspirations in mind which reflect realistic opportunities in the world of work.

To employers, the importance of the question relates to flow of a new generation of workers with interests, skills and qualifications relevant to available jobs. The productivity of enterprises is closely linked to the quality of staff they are able to recruit and retain. This paper addresses the question, therefore, of whether young people are aware of the range of opportunities open to them. Is the youth labour market working effectively in signalling to young people the breadth of opportunities which are available and what they need to do – the decisions they needed to take at 14, 16 and 18 – to allow them to compete successfully in recruitment competitions.

Full text (PDF 25pp)

---

Gender earning gaps around the world: a study of 64 countries

an article by Hugo Ñopo and Nancy Daza (Economic Studies Unit, National Planning Department, Bogotá, Colombia) and Johanna Ramos (Office of Evaluation and Oversight, Inter-American Development Bank, USA) published in International Journal of Manpower Volume 33 Issue 5 (2012)

Abstract

Purpose
The purpose of this paper is to analyze gender disparities in labour earnings for a comprehensive set of 64 countries.
Design/methodology/approach
Using the methodological approach proposed by Ñopo, socio-demographic characteristics are used to match males and females such that gender earnings disparities are computed only among individuals with the same observable characteristics.
Findings
Disparities are partially attributed to gender differences in observable socio-demographic and job characteristics. After matching males and females with the same characteristics, the authors found that the earnings gap falls within a range between 8 per cent and 48 per cent of average females’ earnings, being more pronounced in South Asia and Sub-Saharan Africa. The unexplained earnings gaps are more pronounced among part-time workers and those with low education levels.
Originality/value
This paper presents a comprehensive view of gender earnings gaps in the world, simultaneously exploring many of the issues highlighted in the related literature. It adds value by exploring gender gaps in a comparative perspective, applying the same methods for several different countries.

---

Skills for Employment: The impact of skills programmes for adults on achieving sustained employment

This report [from OfSTED Ref 110178] assesses the efficiency of systems in matching unemployed adults to training provision and the effectiveness of this provision in developing the employability skills of participants and supporting progression into sustained employment.

It is based on visits between September 2011 and May 2012 to 45 providers including colleges, independent learning providers and local authority providers of adult and community learning.

Full text (PDF 32pp)

Summary (PDF 5pp)

---