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secondary (predominantly female) earners that can potentially generate large efficiency gains and improve aggregate labor market outcomes; and (v) using tax credits or benefits for low-wage earners to reduce the net tax liability thereby increasing the net income gain from accepting a job. These policies can be particularly effective in advanced economies and some developing countries. With growing recognition that gender equality promotes economic stability and growth, the IMF has scaled up its work in this area and is committed to continue these efforts . Work by
international dimensions of labor market outcomes. According to their study, appreciation of the dollar, while negatively affecting aggregate labor market outcomes, may improve employment conditions in some sectors, particularly those with a high import share. Amiti and Pissarides (2004) consider the nexus between trade liberalization and interregional labor and firm allocation and demonstrate that trade liberalization, through reduced trade costs, may lead to increased industrial agglomeration, more interregional trade, and more efficient labor matching. Trade
Contributions to Aggregate Labor Market Outcomes A. Sectoral Analysis of Okun’s Law and Its Drivers B. Is the COVID-19 Crisis Different? 6. The Role of JRS during the Pandemic 7. Labor Market Recovery Prospects A. Near-Term Unemployment Prospects: What Does a Macro Okun’s Law Approach Suggest? B. Using a Sectoral Approach to Illustrate Potential Reallocation Needs over a Longer Horizon 8. Designing Labor Market Policies amid High Uncertainty A. Adjusting Job Retention Schemes B. Facilitating Reallocation C. Minimizing Workforce Scars and
-country variations in aggregate labor market outcomes at the macro level. An early classical example is Blanchard and Wolfers (2000) , which argues that labor market institutions and their interactions with shocks explain most of the heterogeneity in the unemployment rate cross European countries. For this line of literature, Bassanini and Duval (2006) provides a comprehensive survey of the impact of policies and institutions. Empirical results have been largely mixed in this area. Among the key variables identified by the literature, higher unemployment benefits and labor
the relevant index falling slightly below the OECD average – although still exceeding some other transition economies and some countries of comparable income levels (chart). On the other hand, regulations concerning temporary contracts were tightened, and remain somewhat more restrictive than the OECD average. More importantly, the regulatory regime regarding collective dismissals was not changed by the reform, and remains relatively restrictive. EPL Index - Individual Dismissals, 2013 Source: OECD 15. Post-reform aggregate labor market outcomes improved
(predominantly female) secondary earners by replacing family taxation with individual taxation can potentially generate large efficiency gains and improve aggregate labor market outcomes. Many advanced economies, in particular, European countries, have the potential to reduce the secondary earner tax wedge significantly ( Elborgh-Woytek and others, 2013 ). Using tax credits or benefits for low-wage earners . These “in-work” tax credits reduce the net tax liability thereby increasing the net income gain from accepting a job. Typically, they are phased out as income rises
substantial and their use in a specific country context requires a careful assessment of their potential benefits and costs. Moreover, the effectiveness of ALMPs can be substantially undermined in an environment with weak labor demand and slow growth. There is plenty of evidence on the effectiveness of ALMPs. For instance, relatively long time series data available for many OECD countries allows estimating the effect of ALMPs on aggregate labor market outcomes. In particular, Estevão (2007) show that ALMPs have been effective in raising employment rates in the business