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Business and Economics > Public Finance

You are looking at 1 - 10 of 404 items for :

  • Type: Journal Issue x
  • Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity x
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Cover Selected Issues Papers
Using Digitalization to Enhance Public Finance in Kosovo: Republic of Kosovo
Carolina Bloch
,
Mariano Moszoro
,
Mona Wang
,
Frank van Brunschot
, and
Yasemin Hurcan
Kosovo has embarked on a journey of digital transformation, developing digital infrastructure to provide access to households, companies, and educational institutions and modernizing its public finance system through GovTech. Digitalization and GovTech can facilitate Kosovo leapfrogging into advanced infrastructure and public service delivery. While Kosovo has achieved significant milestones—including nearly universal internet coverage and the comprehensive front-end e-Kosova portal—unconnected systems, relatively high consumer prices for digital inclusion, limited digital skills, and cybersecurity risks hinder the full realization of digital benefits.
Keywords:
Digital Transformation; GovTech Solutions; Public Finance Management; E-Government; Cybersecurity; maturity index; using digitalization; cybersecurity risk; potential of GovTech adoption; Digitalization; Public employment; Cyber risk; Europe
Cover IMF Working Papers
The Role of Corporate Cash Holdings in the Transmission of Monetary Policy Tightening
JaeBin Ahn
,
Euihyun Bae
, and
Jing Zhou
The U.S. economy has been exceeding expectations amid one of the most aggressive monetary policy tightening cycles. This paper provides firm-level evidence showing that abundant cash holdings enable firms to benefit from higher interest rates, thereby reducing net interest payments and mitigate the adverse impact from interest rate hikes to firms' investment and employment.
Keywords:
Corporate cash; Monetary policy transmission; Interest income; Interest expense; Net interest payment; cash holding; tightening JaeBin Ahn; Monetary tightening; Interest payments; Income; Employment; Capital spending; North America; Global
Cover IMF Working Papers
Divergence in Post-Pandemic Earnings Growth: Evidence from Micro Data
Sophia Chen
and
Do Lee
We use a comprehensive employer-employee dataset to examine post-pandemic worker earnings in the US. Our findings reveal that earnings grew faster in counties that were less severely impacted at the onset of the pandemic. This divergence in growth was both substantial and persistent, particularly for lower-paid and nonmanagerial workers, as well as for those in smaller firms. Both wage increases and additional hours contributed to this earnings growth. This evidence aligns with a job-ladder framework, where labor market competition leads to a dispersion of earnings across counties but compresses earnings among workers in counties with strong labor markets. Our findings provide a microfoundation for the wage Phillips curve and have direct implications for stabilization policies.
Keywords:
Earnings; Wage; Labor Market Conditions; Pandemic; Earnings growth; micro data; labor market competition; IMF working paper No. 2024/222; employer-employee dataset; Wages; Labor markets; Labor force; Unemployment; North America; Global
Cover Technical Assistance Reports
Republic of Palau: Technical Assistance Report-Managing Government Employment and Compensation-Update
International Monetary Fund. Fiscal Affairs Dept.
Upon the authorities’ request, the IMF’s Fiscal Affairs Department provided technical assistance to Palau on implementing the recommendations of the technical report produced by the November 2023 mission on government compensation and employment. The creation of the Employment and Compensation Committee (ECC) demonstrated the authorities’ commitment to reform and the mission supports the authorities’ proposal to reorganize the ECC into a Steering Committee and a Working Group. Before awarding pay increases to address issues of recruitment and retention, the government needs to assess its fiscal space and determine its expenditure priorities. The importance of systematically and prominently advertising vacancies online cannot be overstated. Human resource laws and regulations are generally fit for purpose, but current practices governing new position creation and recruitment merit review by the ECC with support from FAD.
Keywords:
IMF's Fiscal Affairs Department; IMF executive directors; government position; government workforce; government worker; Human capital; Public employment; Employment; Wage scale; Wage adjustments
Cover Selected Issues Papers
Upskilling the UK Workforce: United Kingdom
Pragyan Deb
and
Gloria Li
The UK workforce has larger and more chronic skills gaps than in most peer countries, with surveys reporting widespread recruitment difficulties, with implications for output, in high-skill sectors like digital and software, manufacturing, medicine and life sciences, teaching, and construction. This partly reflects declines in primary and post-secondary education outcomes (particularly science scores, over the past two decades) and in workplace training and apprenticeships, particularly for the young. Moreover, the recent increase in non-EU migrants has not fully offset the adverse impact from Brexit on the availability of needed skills, including because smaller firms face more recruitment hurdles with regard to non-EU hires. Against this backdrop, there is an urgent need to upskill the UK workforce, both by building on ongoing efforts, as well as additional concrete measures to: (i) encourage students and young workers to join and excel in STEM; (ii) ensure adequate vocational and on the job training, particularly for the young; (iii) retain the talent produced by UKs world leading universities; (iv) upskill the existing labor force; and (v) facilitate attraction and retention of in-demand skills through adjustments to the visa regime.
Keywords:
Potential Growth; Supply of Labour; Skills; UK workforce; recruitment difficulty; demand skill; post-secondary education outcome; skills gap; Labor force; Education spending
Cover IMF Staff Country Reports
Spain: 2024 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. European Dept.
The Article IV Consultation discusses that with a growth rate of 2.5 percent in 2023 and continued solid activity momentum, the Spanish economy has demonstrated remarkable resilience to elevated global uncertainty and tighter financial conditions. Robust services export performance and public consumption have been the main drivers of recent growth. Spain’s banking system has shown resilience. Strong economic and labor market performance and deleveraging have helped the private sector cushion the impact from rising interest rates, although pockets of vulnerability remain. Growth is projected to reach 2.4 percent in 2024 and 2.1 percent in 2025, driven primarily by stronger domestic demand growth. Private consumption is expected to strengthen as the household saving rate normalizes gradually and real wage income continues to increase steadily. Uncertainty surrounding the outlook has become more balanced, but risks remain tilted to the downside for growth and to the upside for inflation.
Keywords:
article IV consultation discussion; Banco de Espana; labor market performance; C. labor market policy; IMF staff estimate; Labor markets; Inflation; Employment; Global; Europe
Cover IMF Working Papers
Exploring the Role of Public Expenditure in Advancing Female Economic Empowerment and Gender Equality
Charla Britt
and
Danielle Egerer
This paper discusses connections between female economic empowerment and government spending. It is an abbreviated overview for non-gender-experts on how fiscal expenditure may support female economic empowerment as an interim step toward advancing gender equality. From this perspective, it offers a preliminary exploration of key factors and indicators associated with gender-differentiated impacts in each of five main categories of public spending (education, health, capital expenditure, government employment and compensation, and social protection and labor market programs). It examines and proposes indices within each category that can be used to identify and measure related gender gaps and suggests associations and connections between those indices, public spending, and other available proxy measurements with some benchmarking potential which is summarized at the end of each category in a Gender Lens Matrix for ease of reference. The paper draws on an extensive literature review and examination of publicly available datasets. It also highlights and discusses gaps in data which limit gender analysis. The purpose of the paper is to advance dialogue on the adoption of a gendered approach to government spending, by providing a gender lens that may assist country level assessments and discussions among IMF staff and member country authorites.
Keywords:
Women’s economic empowerment; gender equality; gender analysis; gender gaps; fiscal expenditure; government spending; youth literacy Gender Parity Index; labor market program; IMF working paper No. 24/108; IMF's expenditure assessment tool; maternity leave; Women; Gender inequality; Sub-Saharan Africa; Global; Caribbean; South Asia; Asia and Pacific
Cover IMF Staff Country Reports
Iraq: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper offers a roadmap for tax policy measures and structural reforms that could be used to raise non-oil revenues. In order to raise revenues in the near-term, the authorities should review the tariff structure to eliminate exemptions and raise tariffs on luxuries. There is scope to make the personal income taxes more progressive and broaden tax bases. Raising non-oil revenues is a key priority because of the expected decline in oil prices, as well as the need to ensure long-term fiscal sustainability and meet sizeable spending needs. Over the medium-term, the authorities should move towards adopting the value added tax and tackle structural obstacles to revenue mobilization—informality, lack of economic diversification, low levels of financial inclusion and high reliance on cash. In parallel, the authorities should significantly accelerate institutional reforms of revenue and customs administration with support of IMF and other donor capacity development efforts.
Keywords:
labor market challenge; labor market structure; labor market indicator; C. assessing Drivers; informality distance; Labor markets; Women; Employment; Global; Middle East and Central Asia
Cover IMF Working Papers
Strengthening Social Protection to Pave the Way for Technological Innovation: Evidence from the U.S.
Fernanda Brollo
This paper investigates the impact of automation on the U.S. labor market from 2000 to 2007, specifically examining whether more generous social protection programs can mitigate negative effects. Following Acemoglu and Restrepo (2020), the study finds that areas with higher robot adoption reduced employment and wages, in particular for workers without collegue degree. Notably, the paper exploits differences in social protection generosity across states and finds that areas with more generous unemployment insurance (UI) alleviated the negative effects on wages, especially for less-skilled workers. The results suggest that UI allowed displaced workers to find better matches The findings emphasize the importance of robust social protection policies in addressing the challenges posed by automation, contributing valuable insights for policymakers.
Keywords:
Automation; Innovation; Gen-AI; Social Protection; Social Assistance; Social Safety Nets; Labor Market; Unemployment Insurance; labor market program; IMF working paper 24/95; protection policy; wage measure; job searching; employment polarization; Robotics; Labor markets; Employment; Wages; Unemployment benefits; Europe
Cover Technical Assistance Reports
Indonesia: Technical Assistance Report-Subnational Government Endowment Funds
International Monetary Fund. Fiscal Affairs Dept.
The Indonesian authorities are exploring options for the establishment of subnational government endowment funds and the Ministry of Finance (MoF) has drafted regulations in that context. However, the motivations and objective for establishing an endowment fund at the subnational level diverge across various stakeholders. Clarity of the objectives and purpose of the endowment fund will be critical for informing features of its architecture, and the endowment fund should be aligned with the national fiscal policy objectives. Establishing such funds at a time of fiscal deficit entails a “borrowing-to-save” approach which is not optimal from a fiscal policy perspective. Currently, there is a misalignment between the design of inflow and outflow rules, the endowment fund’s objectives, and the fiscal/economic context. In addition, the current draft MoF regulations restrict the investment policy to conform with the law on decentralization enacted in 2022. This report emphasizes that regardless of the structure of the endowment fund, it needs to be fully integrated within the budget. The report also provides recommendations on assessing the full cost of the subnational government endowment fund, its design and implementation, and provides suggestions to improve the draft MoF regulations.
Keywords:
Indonesia; Subnational government; Local government; Endowment Fund; Sovereign wealth fund; Intergovernmental fiscal relations; Decentralization; Intergenerational wealth; Inflows; outflow rules.; CD recipient; IMF Resident representative; government endowment funds; IMF Fiscal Affairs Department; draft government; FAD expert; Budget planning and preparation; Investment policy; Budget execution and treasury management; Natural resources; Public employment