Acknowledging that individuals dislike having low relative income renders trade less attractive when seen as a technology that integrates two economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are less than losses in relative income, with the result that global social welfare is reduced. We show that a “trembling trade” can arise even when trade is more gainful in four ways: through trade the absolute income of everyone increases, the income gap in both economies is reduced, as is the income gap between the trading economies. However, trade brings populations, economies, or markets that were not previously connected closer together in social space. As a consequence, separate social spheres merge, and people’s social space and their comparators are altered. Assuming that people like high (absolute) income and dislike low relative income, the aggregate increase in unhappiness caused by the trade-induced escalation in relative deprivation can result in a negative overall impact of trade on (utilitarian-measured) social welfare, if the absolute income gains are not large enough to mitigate the relative income losses.
{"title":"An Adverse Social Welfare Effect of Guadruply Gainful Trade","authors":"O. Stark, Grzegorz Kosiorowski","doi":"10.2139/ssrn.3727630","DOIUrl":"https://doi.org/10.2139/ssrn.3727630","url":null,"abstract":"Acknowledging that individuals dislike having low relative income renders trade less attractive when seen as a technology that integrates two economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are less than losses in relative income, with the result that global social welfare is reduced. We show that a “trembling trade” can arise even when trade is more gainful in four ways: through trade the absolute income of everyone increases, the income gap in both economies is reduced, as is the income gap between the trading economies. However, trade brings populations, economies, or markets that were not previously connected closer together in social space. As a consequence, separate social spheres merge, and people’s social space and their comparators are altered. Assuming that people like high (absolute) income and dislike low relative income, the aggregate increase in unhappiness caused by the trade-induced escalation in relative deprivation can result in a negative overall impact of trade on (utilitarian-measured) social welfare, if the absolute income gains are not large enough to mitigate the relative income losses.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131057960","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Provides a more robust understanding of retirement decisions by examining joint work-to-retirement trajectories.
通过检查从工作到退休的共同轨迹，对退休决策提供更有力的理解。
{"title":"Alternative Pathways to Retirement in a Household Context","authors":"Kristine M. Brown, K. Carman, K. Edwards","doi":"10.2139/ssrn.3690990","DOIUrl":"https://doi.org/10.2139/ssrn.3690990","url":null,"abstract":"Provides a more robust understanding of retirement decisions by examining joint work-to-retirement trajectories.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"85 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126115022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-09-11DOI: 10.24815/JPED.V6I2.16804
Muhamad Fathul Muin
Solving the unemployment issue is one of the best ways to reduce poverty. Through the provision of job opportunities, the poverty rate can be reduced. Therefore, this research explores the factors that influence the unemployment rate across 34 provinces over the 2015-2018 period using the panel regression technique. The variable used consisting of economic growth, the percentage of people with IT competence, and the average school duration. This study indicates that the unemployment rate can be reduced by increasing the average school duration. Meanwhile, the level of economic growth and the proportion of people with IT competence have an insignificant influence on Indonesia's unemployment rate. Based on these findings, the government needs to ensure that every resident in its territory can receive an adequate education.
{"title":"Analysis of Determinants of Unemployment Rate in Indonesia","authors":"Muhamad Fathul Muin","doi":"10.24815/JPED.V6I2.16804","DOIUrl":"https://doi.org/10.24815/JPED.V6I2.16804","url":null,"abstract":"Solving the unemployment issue is one of the best ways to reduce poverty. Through the provision of job opportunities, the poverty rate can be reduced. Therefore, this research explores the factors that influence the unemployment rate across 34 provinces over the 2015-2018 period using the panel regression technique. The variable used consisting of economic growth, the percentage of people with IT competence, and the average school duration. This study indicates that the unemployment rate can be reduced by increasing the average school duration. Meanwhile, the level of economic growth and the proportion of people with IT competence have an insignificant influence on Indonesia's unemployment rate. Based on these findings, the government needs to ensure that every resident in its territory can receive an adequate education.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"129 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132156057","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pillar 2 of the Australian retirement system was introduced in 1993 with contributions made by employers as a percentage of wages to be accumulated for employees until retirement. As originally introduced, the effect of this Pillar 2 system would have been to perpetuate wealth and income inequality in the pre-retirement phase into the post retirement phase. But the effect of restrictions subsequently introduced on maximum contributions and accumulated assets has been to significantly reduce the inequality between the highest and lowest income groups. The higher income groups however remain the major beneficiaries of the effective tax benefits of the Pillar 2 system. This paper quantifies the effects on wealth and income inequality from the introduction of the Pillar 2 system.
{"title":"The Effect on Wealth & Income Inequality of the Pillar 2 Component of the Australian Retirement System","authors":"John R. Evans, A. Razeed","doi":"10.2139/ssrn.3665753","DOIUrl":"https://doi.org/10.2139/ssrn.3665753","url":null,"abstract":"Pillar 2 of the Australian retirement system was introduced in 1993 with contributions made by employers as a percentage of wages to be accumulated for employees until retirement. As originally introduced, the effect of this Pillar 2 system would have been to perpetuate wealth and income inequality in the pre-retirement phase into the post retirement phase. But the effect of restrictions subsequently introduced on maximum contributions and accumulated assets has been to significantly reduce the inequality between the highest and lowest income groups. The higher income groups however remain the major beneficiaries of the effective tax benefits of the Pillar 2 system. This paper quantifies the effects on wealth and income inequality from the introduction of the Pillar 2 system.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"127 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130851948","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
S. Bandyopadhyay, A. Basu, Nancy H. Chau, Devashish Mitra
We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring, but not necessarily formal-to-informal outsourcing, and, in response, the developed nation wage can fall. Productivity improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the minimum wage is reduced, the developed nation wage falls when most of the efficiency gains accrue to the informal sector.
{"title":"Offshoring to a Developing Nation with a Dual Labor Market","authors":"S. Bandyopadhyay, A. Basu, Nancy H. Chau, Devashish Mitra","doi":"10.20955/r.102.237-53","DOIUrl":"https://doi.org/10.20955/r.102.237-53","url":null,"abstract":"We present a model of offshoring of tasks to a developing nation, which is characterized by a minimum wage formal sector and a flexible wage informal sector. Some offshored tasks are outsourced by the formal sector to the lower wage informal sector. An improvement in the productivity in performing offshored tasks in the developing country raises offshoring, but not necessarily formal-to-informal outsourcing, and, in response, the developed nation wage can fall. Productivity improvements in the informal sector expand both offshoring and outsourcing, and the developed nation wage must rise. When the minimum wage is reduced, the developed nation wage falls when most of the efficiency gains accrue to the informal sector.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"791 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123286257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article is two sections from a much longer article entitled Chinese COVID Lockdowns, Black Economic Dysphoria, Global Crony Capitalism. and the Killing of George Floyd. We argue that the Republican Party trade deals had a disproportionate negative economic effect on Black people. By the time the COVID lockdowns were implemented, Black workers had already been herded into the most unstable jobs in the gig economy. The six service sectors bore the brunt of the economic damage of the lockdowns. We argue that modern racism began around 1985, with the political organization of the Business Roundtable, that sought legislation to offshore production.
{"title":"The Origins of Modern Racism in the United States and Black Economic Dysphoria Under Global Corporate Crony Capitalism and the COVID Economic Lockdown Shock","authors":"Laurie Thomas Vass","doi":"10.2139/ssrn.3625160","DOIUrl":"https://doi.org/10.2139/ssrn.3625160","url":null,"abstract":"This article is two sections from a much longer article entitled Chinese COVID Lockdowns, Black Economic Dysphoria, Global Crony Capitalism. and the Killing of George Floyd. \u0000 \u0000We argue that the Republican Party trade deals had a disproportionate negative economic effect on Black people. \u0000 \u0000By the time the COVID lockdowns were implemented, Black workers had already been herded into the most unstable jobs in the gig economy. \u0000 \u0000The six service sectors bore the brunt of the economic damage of the lockdowns. \u0000 \u0000We argue that modern racism began around 1985, with the political organization of the Business Roundtable, that sought legislation to offshore production.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127370928","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Spousal insurance raises a worker's outside option, allowing workers to bargain a higher wage. To study this mechanism I propose a random search model with ex-ante heterogeneity in ability, endogenous marriage, endogenous labor supply of spouses and wages determined by Nash Bargaining. Using the model, I derive an empirical specification to test the mechanism and the sources of endogeneity to be addressed. I use a combination of an instrument derived from theory and one instrument based on policy variation to confirm the predictions of the model. A 1 percentage point increase in the share of married women working increases the wage of married individuals by 2.51-3.51%.
{"title":"Spousal Insurance, Outside Options and Wage Bargaining","authors":"João Galindo da Fonseca","doi":"10.2139/ssrn.3623323","DOIUrl":"https://doi.org/10.2139/ssrn.3623323","url":null,"abstract":"Spousal insurance raises a worker's outside option, allowing workers to bargain a higher wage. To study this mechanism I propose a random search model with ex-ante heterogeneity in ability, endogenous marriage, endogenous labor supply of spouses and wages determined by Nash Bargaining. Using the model, I derive an empirical specification to test the mechanism and the sources of endogeneity to be addressed. I use a combination of an instrument derived from theory and one instrument based on policy variation to confirm the predictions of the model. A 1 percentage point increase in the share of married women working increases the wage of married individuals by 2.51-3.51%.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130926450","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-01DOI: 10.5709/ce.1897-9254.403
A. Bokhari
The global economy has witnessed many economic fluctuations and waves of inflation and recession. With the consideration of achieving price stability as a primary goal of the economic policies, any attempt to eliminate inflation means accepting higher rates of unemployment, and vice versa. This conflict relationship was explained by the Economist “Phillips”, who developed the inflation/unemployment curve. After the emergence of the stagflation phenomenon, this relationship became an object of argument and skepticism. Therefore, the key point of this study is to investigate the tradeoff relationship between inflation and unemployment in the Kingdom of Saudi Arabia for the period 1988-2017. The co-integration and error correction approaches have been utilized, to determine the equilibrium relations in the long-run and short-run, and the causality direction between the two phenomena. Johansen test indicated that a long-run co-integration relationship was existed. Based on Vector Error Correction Model (VECM), results provide evidence in favor of the long-runs negative causation running from unemployment to inflation. Contrary to expectation, there was no significant evidence of short-run tradeoff between unemployment and inflation in the Saudi economy.
{"title":"The Twinning of Inflation and Unemployment Phenomena in Saudi Arabia: Phillips Curve Perspective","authors":"A. Bokhari","doi":"10.5709/ce.1897-9254.403","DOIUrl":"https://doi.org/10.5709/ce.1897-9254.403","url":null,"abstract":"The global economy has witnessed many economic fluctuations and waves of inflation and recession. With the consideration of achieving price stability as a primary goal of the economic policies, any attempt to eliminate inflation means accepting higher rates of unemployment, and vice versa. This conflict relationship was explained by the Economist “Phillips”, who developed the inflation/unemployment curve. After the emergence of the stagflation phenomenon, this relationship became an object of argument and skepticism. Therefore, the key point of this study is to investigate the tradeoff relationship between inflation and unemployment in the Kingdom of Saudi Arabia for the period 1988-2017. The co-integration and error correction approaches have been utilized, to determine the equilibrium relations in the long-run and short-run, and the causality direction between the two phenomena. Johansen test indicated that a long-run co-integration relationship was existed. Based on Vector Error Correction Model (VECM), results provide evidence in favor of the long-runs negative causation running from unemployment to inflation. Contrary to expectation, there was no significant evidence of short-run tradeoff between unemployment and inflation in the Saudi economy.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"464 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122500176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using threshold regression analysis, this paper studies how the relationship between unemployment and output, known as Okun's law, varies across business cycles measures. At the U.S. aggregate level, the results indicate the presence of strong asymmetries in the relationship characterized by three different regimes, where the sensitivity of unemployment to output decreases with economic activity for all measures of business cycles considered. For the preferred threshold variable, Okun's law is strong when the unemployment gap grows faster than 1.07 percentage points above the natural rate of unemployment, coinciding with periods of deep recessions. The sensitivity is smaller in absolute value when it grows between -0.70 and 1.07 percentage points during mild recessions, and weakens even further when the unemployment gap falls below -0.70 percentage points during periods of expansion, revealing a flattening, but also a shift, of Okun's law. The results are robust to the measure of business cycle, the specification of Okun's law, the speed of output growth, the frequency of the data and the identification of the gaps. The analysis also finds support for the nonlinear nature of Okun's law at the state and international levels.
{"title":"On the Behavior of Okun's Law across Business Cycles","authors":"Luiggi Donayre","doi":"10.2139/ssrn.3604542","DOIUrl":"https://doi.org/10.2139/ssrn.3604542","url":null,"abstract":"Using threshold regression analysis, this paper studies how the relationship between unemployment and output, known as Okun's law, varies across business cycles measures. At the U.S. aggregate level, the results indicate the presence of strong asymmetries in the relationship characterized by three different regimes, where the sensitivity of unemployment to output decreases with economic activity for all measures of business cycles considered. For the preferred threshold variable, Okun's law is strong when the unemployment gap grows faster than 1.07 percentage points above the natural rate of unemployment, coinciding with periods of deep recessions. The sensitivity is smaller in absolute value when it grows between -0.70 and 1.07 percentage points during mild recessions, and weakens even further when the unemployment gap falls below -0.70 percentage points during periods of expansion, revealing a flattening, but also a shift, of Okun's law. The results are robust to the measure of business cycle, the specification of Okun's law, the speed of output growth, the frequency of the data and the identification of the gaps. The analysis also finds support for the nonlinear nature of Okun's law at the state and international levels.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"90 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114201991","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This research explores the relation between labor mobility in pre-retirement and retirement ages and further employment in old age in Russia. Older workers often face the challenge of keeping their job due to impaired health, age discrimination, and other factors. Job change can be a potential strategy to maintain employment in old age. Our study uses panel data of the Russian Longitudinal Monitoring Survey of Higher School of Economics (RLMS-HSE) for 2010–2017. Logistic regression models show that labor mobility can be an effective strategy to maintain employment in old age but only for men. Older workers are more likely to change their job if they do not have stable employment relationships and are not satisfied with their current job.
{"title":"Does Job Change after becoming a Pensioner Contribute to Maintaining Employment In Old Age?","authors":"O. Sinyavskaya, A. Cherviakova, E. Gorvat","doi":"10.2139/ssrn.3531661","DOIUrl":"https://doi.org/10.2139/ssrn.3531661","url":null,"abstract":"This research explores the relation between labor mobility in pre-retirement and retirement ages and further employment in old age in Russia. Older workers often face the challenge of keeping their job due to impaired health, age discrimination, and other factors. Job change can be a potential strategy to maintain employment in old age. Our study uses panel data of the Russian Longitudinal Monitoring Survey of Higher School of Economics (RLMS-HSE) for 2010–2017. Logistic regression models show that labor mobility can be an effective strategy to maintain employment in old age but only for men. Older workers are more likely to change their job if they do not have stable employment relationships and are not satisfied with their current job.","PeriodicalId":125977,"journal":{"name":"ERN: Other Macroeconomics: Employment","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125032277","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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