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1 – 10 of over 24000There is strong empirical evidence that unemployment rates decrease as the educational level rises. The present article attempts to take explicit account of this when estimating…
Abstract
There is strong empirical evidence that unemployment rates decrease as the educational level rises. The present article attempts to take explicit account of this when estimating educational rates of return. Three models that differ with respect to their degree of simplicity and data requirements are developed herein and applied to the empirical data. The estimates for 14 European countries suggest that standard estimates that do not account for unemployment are substantially downward biased. Differences in unemployment probabilities at different educational levels, and youth unemployment, both appear to be important for a better understanding of the incentive structure behind educational decisions.
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Stephen M. Hills and Teresa Schoellner
Decreased regulation of part-time work is one way a country responds to high rates of unemployment. Proponents of deregulation argue that a more flexible labor market is required…
Abstract
Decreased regulation of part-time work is one way a country responds to high rates of unemployment. Proponents of deregulation argue that a more flexible labor market is required to allow labor markets to clear. A more traditional response to high unemployment is change in monetary policy, where interest rates are lowered to stimulate the economy and increase rates of employment. Both policies have been tried in Europe, a good place to study the effects of the two policy responses, both because European unemployment has been high and because the trade off between monetary policy and the deregulation of part time work has varied from country to country. The establishment of the European monetary union (EMU) in 1999 created a natural experiment in which any one country’s ability to adjust its monetary policy was curtailed, creating pressure for deregulatory policies to come into play (Aaronovitch & Grahl, 1997; Pisani-Ferry, 1998).
The new economic-policy regime in Sweden in the 1990s included deregulation, central-bank independence, inflation targets and fiscal rules but also active labour market policy and…
Abstract
The new economic-policy regime in Sweden in the 1990s included deregulation, central-bank independence, inflation targets and fiscal rules but also active labour market policy and voluntary incomes policy. This chapter describes the content, determinants and performance of the new economic policy in Sweden in a comparative, mainly Nordic, perspective. The new economic-policy regime is explained by the deep recession and budget crisis in the early 1990s, new economic ideas and the power of economic experts. In the 1998–2007 period, Sweden displayed relatively low inflation and high productivity growth, but unemployment was high, especially by national standards. The restrictive monetary policy was responsible for the low inflation, and the dynamic (ICT) sector was decisive for the productivity miracle. Furthermore, productivity increases in the ICT sector largely explains why the Central Bank undershot its inflation target in the late 1990s and early 2000s. The new economic-policy regime in Sweden performed well during the global financial crisis. However, as in other OECD countries, the moderate increase in unemployment was largely attributed to labour hoarding. And the rapid recovery of the Baltic countries made it possible for Sweden to avoid a bank crisis.
The last few decades have seen increasing attention to problems of open and disguised unemployment (and underemployment) in developing countries. Open unemployment appears to have…
Abstract
The last few decades have seen increasing attention to problems of open and disguised unemployment (and underemployment) in developing countries. Open unemployment appears to have increased in the sixties. Disguised unemployment of persons in the labour force (as defined by marginal product of labour below the wage) is a key element in the labour surplus interpretations of underdeveloped economies. In developed countries, hidden or disguised unemployment is thought of primarily in terms of nonparticipation related to the difficulty of obtaining a job; the usual proxy for such difficulty is the unemployment rate. As open unemployment has risen in the urban areas of many L.D.C's, while participation rates have at the same time been falling, it is natural to ask whether this particular form of hidden unemployment is becoming increasingly important in those countries. More generally, a country's participation rate is a valuable indicator of the degree of utilization of the labour force; the hints it may provide as to the nautre of the labour market and the demand for labour are one of several contributions it makes to the understanding of an economic system.
Robert W. Fairlie and Frank M. Fossen
A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” …
Abstract
A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.
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The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African…
Abstract
Purpose
The purpose of this paper is to establish the concept of unemployment defined by the International Labour Organisation appears to be too narrow within the context of many African countries including Ghana. This phenomenon tends to put many jobless adults into the discouraged worker category thereby giving a misleading picture about the unemployment situation in these countries. In addition, the structure of the labour market in many African countries is such that informality takes the face of unemployment.
Design/methodology/approach
The paper uses a scatter plot and simple correlation analysis to show a trade-off between informality or vulnerability of employment and unemployment rates in Africa. The paper also adopts descriptive approach based on simple diagrams to show the extent of discouraged worker effect on the phenomenon of unemployment.
Findings
The paper finds a significantly negative correlation between unemployment and informality in Africa. Beside the high level of informality that hides the face of unemployment, the exclusion of many discouraged workers in estimating unemployment underrates the seriousness of the phenomenon. The paper therefore recommends the adoption of a broader definition of unemployment that accounts for discourage workers and underemployment to show the true picture of labour market challenge in Africa. Additionally, targeted programmes to support and transform the informal sector is required to make it a more attractive means of employment rather than being seen as a refuge point for the unemployed in Africa.
Originality/value
The observation that unemployment should be looked at from a broader perspective that accounts for discourage workers to inform policy design forms a base of the paper’s contribution to the body of literature. In addition, the high level of informality that hides the problem of unemployment shows that labour market challenges should not be restricted to unemployment but low quality of employment that characterises informality as well.
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Karikari Amoa-Gyarteng and Shepherd Dhliwayo
This study clarifies the intricate nature of globalization's impact on unemployment rates in South Africa. Given the heterogeneous views on globalization's effect on economic…
Abstract
Purpose
This study clarifies the intricate nature of globalization's impact on unemployment rates in South Africa. Given the heterogeneous views on globalization's effect on economic development, this study aims to offer a nuanced perspective. Furthermore, it aims to explore the mediating role of entrepreneurial development in shaping the complex relationship between globalization and unemployment.
Design/methodology/approach
The study employs four key indicators to measure entrepreneurial development, globalization and unemployment rates in South Africa. Hierarchical regression is used to evaluate the relationship between globalization and unemployment rates, and how entrepreneurial development mediates this relationship. Additionally, both the Sobel test and bootstrapping analyses were employed to verify and validate the mediating relationship.
Findings
The study demonstrates that globalization constitutes a crucial determinant of (un)employment rates in South Africa. The study shows that entrepreneurial development, specifically in the context of established business ownership, but not total early-stage entrepreneurial activity, exhibits an inverse relationship with unemployment rates. Moreover, it was observed that the positive impact of globalization on entrepreneurial development in South Africa becomes evident as SMEs advance to the established stage.
Research limitations/implications
The study's concentration on South Africa constrains the applicability of the results to other nations.
Practical implications
Based on the findings of this study, it is essential for emerging economies, such as South Africa, to take measures to foster a robust entrepreneurial ecosystem that can aid in the growth and international competitiveness of young SMEs.
Originality/value
To the best of the authors' knowledge, this study represents the first endeavor to analyze the potential impact of entrepreneurial development, as measured by both nascent and mature SMEs, on the correlation between globalization and unemployment.
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Kenneth A. Couch, Robert Fairlie and Huanan Xu
Labor force transitions are empirically examined using Current Population Survey (CPS) data matched across months from 1996 to 2012 for Hispanics, African-Americans, and whites…
Abstract
Labor force transitions are empirically examined using Current Population Survey (CPS) data matched across months from 1996 to 2012 for Hispanics, African-Americans, and whites. Transition probabilities are contrasted prior to the Great Recession and afterward. Estimates indicate that minorities are more likely to be fired as business cycle conditions worsen. Estimates also show that minorities are usually more likely to be hired when business cycle conditions are weak. During the Great Recession, the odds of losing a job increased for minorities although cyclical sensitivity of the transition declined. Odds of becoming re-employed declined dramatically for blacks, by 2–4%, while the probability was unchanged for Hispanics.
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Lorenzo Cappellari and Stephen P. Jenkins
We analyse the dynamics of social assistance benefit (SA) receipt among working-age adults in Britain between 1991 and 2005. The decline in the annual SA receipt rate was driven…
Abstract
We analyse the dynamics of social assistance benefit (SA) receipt among working-age adults in Britain between 1991 and 2005. The decline in the annual SA receipt rate was driven by a decline in the SA entry rate rather than by the SA exit rate (which also declined). We examine the determinants of these trends using a multivariate dynamic random effects probit model of SA receipt probabilities applied to British Household Panel Survey data. We show how the model may be used to derive year-by-year predictions of aggregate SA entry, exit and receipt rates. The analysis highlights the importance of the decline in the unemployment rate over the period and other changes in the socio-economic environment including two reforms to the income maintenance system in the 1990s and also illustrates the effects of self-selection (‘creaming’) on observed and unobserved characteristics.
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Although the news media have speculated that the current recession has increased rates of intimate partner violence, there is no reliable evidence supporting that claim. Moreover…
Abstract
Although the news media have speculated that the current recession has increased rates of intimate partner violence, there is no reliable evidence supporting that claim. Moreover, no well-designed studies have examined the impact of prior recessions. This chapter considers whether rising employment during a period of economic growth reduces intimate partner violence. The findings on the effect of economic growth are used to assess the likely impact of economic decline on rates of intimate partner violence. Using data from the National Crime Victim Surveys, the analyses examine both macro-level trends and individual-level effects. At the macro-level, men's and women's unemployment rates were only weakly related to rates of intimate partner violence. The individual-level results show that rising rates of employment during a period of economic growth were not responsible for producing declines in intimate partner violence. Taken together, these findings suggest that the current recession will not increase rates of intimate partner violence against women.