Although unemployment rates are at historical lows, there is still a persistent gap between unemployment rates in black and white population. Some have proposed that part of the gap for men can be explained by the higher rate of criminal records in the black population.
This analysis aims to use negative binomial regressions and the detailed crime data available from the National Longitudinal Survey of Youth 1997 survey to determine if black men with criminal records appear to be the driving force behind the gap.
The author finds that there are significant deviations in labor market outcomes depending on race and ethnicity, even when controlling for a criminal record and premarket skills.
Lowering the disproportionate rate at which black men are incarcerated will not in itself eliminate the unemployment gap between white and black men.
Duncan McVicar, Andrew Park and Seamus McGuinness
This paper examines the impacts of the introduction of the UK National Minimum Wage (NMW) in 1999 and the introduction of the UK National Living Wage (NLW) in 2016 in Northern Ireland (NI) on employment and hours. NI is the only part of the UK with a land border where the NMW and NLW cover those working on one side of the border but not those working on the other side of the border (i.e., Republic of Ireland). This discontinuity in minimum wage coverage enables a research design that estimates the impacts of the NMW and NLW on employment and hours worked using difference-in-differences estimation. We find a small decrease in the employment rate of 22–59/64-year-olds in NI, of up to 2% points, in the year following the introduction of the NMW, but no impact on hours worked. We find no clear evidence that the introduction of the NLW impacted either employment or hours worked in NI.
Yigit Aydede and Atul Dar
A growing wage gap between immigrant and native-born workers is well documented and is a fundamental policy issue in Canada. It is quite possible that wage differences, commonly attributed to the lower quality of foreign credentials or the deficiency in the accreditation of these credentials, merely reflect lower wage offers that immigrant workers receive due to risk aversion among local firms facing an elevated degree of asymmetric information. Using the 2006 and 2011 population censuses, this paper empirically investigates the effects of wage bargaining in labor markets on the wage gap between foreign- and Canadian-educated workers. Our results imply that a significant part of the wage gap between foreign-educated and Canadian-educated immigrant (and native-born) workers is not driven by the employers’ risk aversion but by differences in human capital endowments and occupational matching quality.
We introduce a pro-cyclical endogenous utilization rate of physical capital stock into a real business cycle model augmented with a government sector in detail. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2016). We investigate the quantitative importance of the endogenous depreciation rate and the capital utilization mechanism working through the use of energy for cyclical fluctuations in Bulgaria. In particular, a positive shock to energy prices in the model works like a negative technological shock. Allowing for variations in factor utilization and the presence of energy as a factor of production improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework with constant depreciation and a fixed utilization rate of physical capital (e.g., Vasilev (2009)).
Robert Skikiewicz and Józef Garczarczyk
Section K of the services sector includes entities conducting financial and insurance activities and, among others, banks. Fluctuations in the whole economy and its individual sectors’ situation are interrelated; hence, one may also expect similarities of cyclical fluctuations in the banking sector and in the entire financial sector. The analyses in the article concern the connections between the cyclical fluctuations on the banking services market and in the entire K section of the services sector, grouping entities conducting financial and insurance activities in Poland. The analyses proved that changes in the economic situation appear earlier in the banking sector than in section K of the services sector. The time range of analyses covered the period from the first quarter of 2003 to the first quarter of 2018. Conclusions on relationships were formulated on the basis of cross-correlation analysis and the analysis of the turning points in the time series of variables describing the cyclical fluctuations in the banking market and in the K section of the services sector.
Budget transparency innovations bring new extent and forms of transparency. The aim of the article is to explore the diffusion of budget explorers, that is, a budget transparency innovation extremely popular in the Czech Republic, and to evaluate their impact on voluntary budget information disclosed.
Careful mapping of the diffusion using a survey of budget explores in 72 former Czech district towns and media analysis shows that the key success factor was its convenience for politicians, as it is attractive, easy to implement and up-to-date demonstration of their transparency. Budget explorers are nowadays a standard extension to accounting software, and their usage is evaluated in several government transparency competitions.
The major benefit of the budget explorers is that they made for the first time publicly available detailed public financial information, changed the standard of best practice and drew some public attention. At the same time, they, unfortunately, narrowed the scope of the budget transparency debate by omitting the importance of the draft budget and introduction of performance measurement.
Kathryn Anne Edwards and Jeffrey B. Wenger
The risk of labor market, health, and asset-value shocks comprise profound retirement savings challenges for older workers. Parents, however, may experience added risk if their children experience adverse labor market shocks. Prior research has shown that parents support their children financially through an unemployment spell. In this paper, we also provide evidence of financial support from parents and investigate if this financial support is accompanied by adjustments to parental consumption, income, or savings behavior. With longitudinal data on mothers and children from the Panel Study of Income Dynamics, we use within-mother variation in behavior to identify the effect of a child’s labor market shock on parent outcomes. We find evidence of a decline in consumption, an increase in labor supply, and a decrease retirement savings, though the results are heterogenous among mothers. Our results point to aggregate inefficiencies and inequities that may result from family risk sharing.
Marta Postuła and Jacek Tomkiewicz
This article focuses on the effects of corrections to the budgetary policy in eurozone economies. The goal of the text is to check if advancement in implementing modern tools of public management is helpful in the time of fiscal adjustment. We assume that the most important role of a performance approach in conducting fiscal policy is the ability of government to implement active policy meant as structural changes in the composition of public expenditures. In the case of the need to cut general levels of public spending, public sector managers who have knowledge of performance effects of public policies should be able to conduct fiscal adjustment in such a way as to minimise negative outcomes of spending correction on society. The structure of the text is as follows. First, we present some insights on the economic effects of fiscal adjustment. Then, we discuss the concept of performance management presented in the theory and policy agendas of international institutions such as the European Union or the OECD (Organization for Economic Cooperation and Development). Finally, we present the result of an empirical exercise that is designed to combine the level of advancement in implementing performance budgeting (PB) and the social cost of fiscal adjustment in eurozone economies. The most important finding of the research is that PB tools seem to have very limited usefulness in a time of fiscal adjustment. There is no statistical evidence that countries advanced in utilisation of PB tools conduct more active fiscal policy – approach of cutting all expenditures across the border by given percentage rather than looking at priorities and social outcomes of fiscal adjustment dominates in all cases.
Standard labor market models predict that the likelihood of employment increases, hours worked increase, and individuals transition from less-skilled and temporary jobs to more skilled and more stable employment as they age. I examine the association between age and transactional sex work using national household surveys from Zambia, one of the few settings with general population surveys asking women about transactional sex and a relatively high documented prevalence of employment in transactional sex. My results indicate that the likelihood of employment in transactional sex sharply falls with age. Increased employment opportunities outside of transactional sex do not appear to explain the transactional sex employment-age profile and marital status appears to explain only a portion of it. These findings are consistent with the hypothesis that clients prefer younger transactional sex workers and suggest that policymakers implement interventions designed to reduce client demand for younger females.