Iranian Youth in Times of Economic Crisis

Young people play an important role in shaping Iran's politics but have only a marginal role in its economy. Youth (ages 15–29) are more than one-third of the country's population and are better educated than the generation they are replacing, while accounting for more than two-thirds of the unemployed. Demographics have thrown the marriage market out of balance, with a “shortage of men” of about 25 percent, while economic pressures have reduced the ability of youth to get married and form families. The higher education system has expanded to absorb ever greater numbers of youth but because education quality is low this has not helped in reducing unemployment. The demographic pressures have amplified since 2008 when the economy entered a period of stagnation. The economic crisis has hit Iran's youth particularly hard, especially those from lower economic backgrounds because the country's rigid formal labor market preserves jobs for older workers. The record number of youth entering the labor market has to wait longer for a regular job or has to take up part-time and informal jobs. In either case, their difficulties in marriage and family formation are intensified.     

Spatial Effects of Labour Policies Promoted in Italy from 1996 to 2006: An Analysis in the EU Context

One of the most important economic and social facts concerning the European Union consists in the mismatch among its regions in terms of unemployment rates. The paper aims at examining and measuring the efficiency of Italian policies for labour market carried out in the last 10 years, in terms of reduction in the regional disparities in comparison with the whole European distribution of unemployment. We question whether these policies have been successful or the territorial dimension has still a relevant role on the unemployment in Italy. We try to answer to this question by calculating the Theil Index using data from 1996 to 2006 on unemployment and participation from Eurostat at NUTS 2 level, comparing Italian data with those of other EU countries. Our results show that Italy has still a prominent role in the geographical disparities among regions and that its contribution to the geographical concentration of unemployment is still high (especially if we consider female and youth unemployment).     

Wage Effects of Unemployment Duration and Frequency

This paper analyzes the wage effects of unemployment duration and frequency for different regional labor market situations in The Netherlands using a simultaneous equations approach. The main finding is that unemployment duration has a significant negative effect and the frequency of unemployment a significant positive effect on wages in the core regions with relatively low unemployment rates. In the periphery with relatively high unemployment rates no significant effects of unemployment duration and frequency are found. It is argued that in the core regions unemployment duration is primarily viewed as a personal indicator of low productivity whereas in the periphery it is attributed to the situation in the regional labor market.     

SPATIAL HETEROGENEITY AND THE WAGE CURVE REVISITED*

ABSTRACT Most “wage curve” studies ignore the geography of local labor markets. However, when a local labor market is in close proximity of other labor markets, a local shock that increases unemployment may not lead to lower pay rates if employers fear outward migration of their workers. Hence, the unemployment elasticity of pay will be greater, the more isolated the local labor market is. Wages are also expected to be higher in regions that interact strongly with other regions. These hypotheses are confirmed by means of an estimation of wage curves with data for 327 regions of western Germany over the period 1990–1997.     

Analysis of Interregional Labor Migration in Spain Using Gross Flows

In this paper we study the economic determinants of Spanish interregional labor force flows from an aggregate perspective. The study is based on a matching model of the labor market applied to migration, and uses gross rather than net flows as other studies do. Among the main results, we find that unemployment increases out-migration because unemployed people search more actively, but when the unemployment rate is above a certain level this effect is reduced. We also find that the rate of change of relative wages is a significant determinant of migration in Spain.     

Polarization and the growth of low‐skill service jobs in Spanish local labor markets

This paper analyzes the long‐term transformations of the occupational structure in 50 provinces of Spain with a view to ascertain the existence and assess the extent of employment polarization. The peculiar characteristics of this country, namely rigid labor markets and the relatively recent transition to democracy, make for an interesting addition to existing studies on this topic. In line with previous literature on other countries, we find a strong association between the decline of “routine” mid‐skill jobs and the expansion of low‐skill service employment as well as differential labor market outcomes by levels of formal education. Results are robust to various controls and instrumental variables that account for long‐term industry specialization. We also find a positive local multiplier effect of high‐skilled workers on the demand for nontradable service jobs.     

PERSISTENCE OF REGIONAL UNEMPLOYMENT: APPLICATION OF A SPATIAL FILTERING APPROACH TO LOCAL LABOR MARKETS IN GERMANY*

ABSTRACT The geographical distribution and persistence of regional/local unemployment rates in heterogeneous economies (such as Germany) have been, in recent years, the subject of various theoretical and empirical studies. Several researchers have shown an interest in analyzing the dynamic adjustment processes of unemployment and the average degree of dependence of the current unemployment rates or gross domestic product from the ones observed in the past. In this paper, we present a new econometric approach to the study of regional unemployment persistence, in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment. First, we propose an econometric procedure suggesting the use of spatial filtering techniques as a substitute for fixed effects in a panel estimation framework. The spatial filter computed here is a proxy for spatially distributed region‐specific information (e.g., the endowment of natural resources, or the size of the “home market”) that is usually incorporated in the fixed effects coefficients. The advantages of our proposed procedure are that the spatial filter, by incorporating region‐specific information that generates spatial autocorrelation, frees up degrees of freedom, simultaneously corrects for time‐stable spatial autocorrelation in the residuals, and provides insights about the spatial patterns in regional adjustment processes. We present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive coefficients estimated for unemployment data for German NUTS‐3 regions. We find widely heterogeneous but generally high persistence in regional unemployment rates.     

Firm-level productivity growth returns of social capital: Evidence from Western Europe

We analyze the firm-level labor productivity growth returns of social capital—defined as a synthetic measure of “generalized trust,” “active participation,” and “social norms”—using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms' labor productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.     

Young people’s disadvantages on the labour market in Italy: reframing the NEET category

Abstract

The worsening of young people’s condition on the labour market has been described as a long-term trend of contemporary advanced capitalist economies. In recent years, the NEET (not in employment, education or training) label has been increasingly used to assess the integration of young people into the labour market. Does the NEET category adequately grasp the complexity of the underlying processes? In this contribution we will try to answer this question considering the Italian case as an extreme example. Focusing on the features of the youth labour market in Italy, we show the heterogeneity that lies behind the NEET concept, as well as its relationships with the labour market, the education system and welfare institutions. We argue that the institutionalization of NEETs as an analytical category may prove to be problematic as it may fail to identify specific vulnerable subgroups clearly, thereby leading to ineffective one-size-fits-all policy responses.     

EUROPEAN UNION REGIONAL PRODUCTIVITY DYNAMICS: A “DISTRIBUTIONAL” APPROACH*

ABSTRACT Working within the “distributional approach,” this research offers evidence of past and future polarization in aggregate regional labor productivity in EU‐15. This finding is robust to alternative definitions of the spatial units used and does not appear to be the result of regional structural change. Spatial effects are found but are of rather localized nature. Turning to separate sectoral analyses suggests that past and future polarization in labor productivity across European regions may be associated with regional productivity differences in the services sectors.     

Are You in This Country? How “Local” Social Relations Can Limit the “Globalisation” of Customer Services Supply Chains

Abstract: The relocation of thousands of call centre and back office jobs from the UK to subcontractors in India in the early 2000s led to extensive speculation that the “globalisation” and “jobs flight” of service work was underway. Yet as this article illustrates some call centre customer services do not easily transfer to different local, social and cultural contexts. Call centre operations are embedded in local social relations and taken for granted skills that are difficult to reproduce outside of the locality which has produced them. Nevertheless the spatial dispersal of work can be as much a political process as it is an economic one. This article, which follows the journey of 1000 call centre jobs from the UK to India, illuminates how subcontracting service work “offshore” can facilitate a transformation of the employment relation and an escape from a difficult to discipline labour force.     

TheConvergence of the Italian Regions and Unemployment: Theory and Evidence

We explore the links between the halt of the convergence process of Italian regions at the beginning of the 1970s and the increase in regional unemployment dispersion. We consider a neoclassical exogenous growth model with an imperfect labor market and show that during the transitional dynamics the imperfections of the labor market negatively influence the output growth rate. In particular, the model implies that centralized bargaining is likely to set a national minimum wage that is too high with respect to the labor productivity of the less developed regions, resulting in a negative impact on their per capita output growth. We test the implications of the model on a regional panel data set using the GMM framework. Both our market distortion measure and the unemployment rate are found to significantly lower the growth rate of per capita output.     

JOB CHAINS AND WAGE CURVES: WORKER MOBILITY AND MARSHALLIAN SURPLUSES IN EVALUATING REGIONAL EMPLOYMENT GROWTH*

ABSTRACT In theory, new regional jobs yield two distinct sources of welfare gains to workers: (1) mobility gains achieved by workers as they move up job chains and (2) traditional Marshallian surpluses enjoyed by all workers as labor markets tighten. In the past, we have argued that the second channel is likely to be small relative to the first. This paper integrates a chain model (using PSID job change data) with a modified‐Marshallian model based on “wage curves” (estimated from CPS data) to formalize and test that argument. High wage jobs with modest wage–unemployment elasticities show Marshallian effects only 10 percent to 20 percent the size of mobility effects. Low wage jobs with somewhat higher elasticities show Marshallian effects from 40 percent to 70 percent the size of mobility effects.     

The Impact of a Customs Union with the European Union on Internal Migration in Turkey

Abstract The impact of the recent Customs Union (CU) agreement between Turkey and the European Union on internal migration is studied using an intra‐industry trade Computable General Equilibrium (CGE) model with intersectoral capital mobility under two alternative specifications for the labor market: the traditional Harris‐Todaro approach and the existence of a “wage curve” in the urban sector. Under both specifications, the numerical results show that the CU is welfare enhancing and causes a reduction of the urban‐rural wage gap as suggested by theoretical studies. At the same time, it leads to rural‐to‐urban migration and raises the capital rent, results that are counter intuitive with respect to the dual economy literature. Furthermore, the rise in formal labor demand and the migration response to the CU have not resulted in an increase in urban unemployment (i.e. the “Todaro paradox”), but rather to a fall in the unemployment pool. The study also shows that the Bhagwati‐Srinivasan proposal of maximizing welfare by uniformly subsidizing the entire labor market is impracticable, especially if the high wage union sector can negotiate employment conditions.     

Spillover Effects of Welfare Reforms in State Labor Markets

This paper estimates the effects of welfare reforms on a state's employment and wage rates. Welfare reforms include: pushing welfare recipients into the labor force, financial incentives to recipients for working, wage subsidies to employers of recipients, and community service jobs for recipients. The effects of these policies are analyzed using a newly estimated model of state labor markets. Simulations show that jobs found by welfare reform participants cause sizable displacement effects for nonparticipants. Displacement effects of labor supply policies are highest when a state's unemployment is high, whereas displacement effects of labor demand policies are highest when a state's unemployment is low.     

THE EFFECT OF URBANIZATION ON LABOR TURNOVER*

ABSTRACT The paper empirically examines labor market matching as a source of urban agglomeration economies. We work from the hypothesis that job turnover leads to tighter labor matches and estimate the relationship between urbanization and the job mobility of young men. Using a panel from the National Longitudinal Survey of Youth, we find evidence that young men change jobs more frequently in their early career if they live in larger or in more educated urban areas. The sensitivity of the results to whether the young men were “movers” or “stayers” suggests the possible endogeneity of location.     

Why do students leave school early in OECD countries? The role of regional labor markets and school policies

This paper examines the determinants of early school leaving (ESL) in a panel of 371 regions of OECD countries observed between 1998 and 2019. The empirical analysis includes both local factors previously emphasized by micro-economic studies and national-level factors such as education policies. We find that labor market opportunities for young people, as captured by the youth unemployment rate or the size of low-skill sectors, can pull students out of school. Conversely, late access to a large number of vocational education tracks, high preprimary enrollment and continuous training for teachers are strongly and negatively correlated with ESL rates.     

Net migration,unemployment, and the business cycle

"An empirical test of the effects of exogenous shocks upon a region's population size is conducted in the framework of an equilibrium locational model. The model emphasizes the separation of endogenous from exogenous factors, a point omitted in most empirical studies of aggregate migration. Exogenous changes are manifested in the local relative cost of living and the local relative unemployment rate. Hypotheses are tested using a national sample of youth, in addition to census, data [for the United States]. Surprisingly, a simple measure of the size of shock to a regional economy has the greatest explanatory power compared to more sophisticated measures based on prior business cycles."     

Refugees and racial capitalism: Meatpacking and the primitive accumulation of labor

When meatpacking plants in the United States lost a third of their undocumented Latinx workers to Federal immigration raids in the late 2000s, the industry began recruiting vulnerable, but “legal,” refugee workers to replace them. In the spring of 2020, as COVID-19 threatened to halt meatpacking, two separate executive orders designated meatpacking production as essential to the United States food system and introduced new restrictions on refugee resettlement in the United States. Bridging Marxian literature on race, labor, and capitalism and critical refugee studies, this paper examines the paradox of refugees’ positioning as both “essential” sources of vulnerable labor and “prohibited” threats to the American nation-state. We argue that the placement of refugees in meatpacking jobs is actually the primitive accumulation of unfree labor. In the case of “essential” meatpacking work in the United States, racial capitalism articulates with conditions of statelessness and unequal citizenship rights to anchor “prohibited” refugees to meatpacking work.     

Collaboration for Local Economic Development: Business Networks,Politics and Universities in Two Swedish Cities

In this article we want to show how conceptions about collaboration for local eocnomic development in Sweden are constructed on national and local levels. We also show how these conceptions have been realized in two different company networks; in the city of Östersund (“Odenskog företagsstaden”) and in the city of Karlskrona (“Telecom City”). In politics and research, local collaboration or cluster formation are viewed as important tools and levers for local economic development. However, we argue that the local labour markets and unemployment rates in our case studies do not differ significantly, despite very different strategies for collaboration. Therefore, we suspect that the political focus on collaboration is a way of legitimizing the change in regional policy rather than a delegation of real power to the local level. If this continues, we fear that the current regional policy is reduced to a discourse of popular concepts rather than a real instrument for local economic development.