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Business and Economics > Public Finance

You are looking at 1 - 10 of 42 items for :

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Cover IMF Staff Country Reports
Kingdom of Eswatini: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues paper highlights climate change impacts in Eswatini. Eswatini is highly susceptible to climate shocks and is impacted by frequent droughts, erratic rainfall, variability in temperature, and water scarcity. Climate change is affecting Eswatini in several ways. With over 70 percent of the population dependent on agriculture, the increased frequency of extreme weather phenomena necessitates adaptation to create a climate-smart agricultural sector with a long-run objective of ensuring food security and generating exportable surpluses. Focusing on sustainable energy is also pertinent to reduce reliance on carbon-intensive energy production that exacerbates climate stress. Eswatini should be seeking access to green financing and insurance mechanisms to protect against the financial impacts of climate change. Insurance plays a crucial role in providing a safety net against the unpredictable impacts of disasters. By spreading the financial risk associated with natural disasters, insurance helps to stabilize economies and support recovery efforts.
Keywords:
labor market indicator; NOWCASTING SWZ; Unemployment insurance in ESWATINI; GDP forecasting model; core element; Unemployment benefits; Natural disasters; Climate finance; Climate change; Unemployment; Africa; Global; Southern Africa; Sub-Saharan Africa
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 IMF Working Papers
The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries
Miyoko Asai
,
Qiaoe Chen
,
Mr. Jiro Honda
,
Xingwei Hu
, and
Qianqian Zhang
This paper examines the role of structural fiscal policies to promote female labor force participation and reduce gender gaps in labor markets in 26 OECD countries from 2000 to 2019. As both female labor force participation and many explanatory/control variables clearly exhibit non-stationarity (potentially leading to spurious regression results), we employ a panel vector error-correction model, in contrast with most previous empirical studies on this matter. Our analyses confirm statistically significant positive impacts of government spending on (1) early childcare and education, (2) active labor market programs, and (3) unemployment benefits, all of which would help encourage women to enter the labor force, while (4) an increase in relative tax rate on second earner could have negative impact on female labor force participation.
Keywords:
Fiscal Policy; Gender; Labor Force; OECD; panel unit root; panel vector error-correction model; robustness test; panel VECM result; female LFPR; age group; regression analysis; positive correlation; standard deviation; Women; Active labor market policies; Gender diversity; Unemployment benefits; Global
Cover IMF Working Papers
What Drives Mortgage Default Risk in Europe and the U.S.?
Mr. Marco Gross
,
Mr. Thierry Tressel
,
Xiaodan Ding
, and
Eugen Tereanu
We present an analysis of the sensitivity of household mortgage probabilities of default (PDs) and loss given default (LGDs) on unemployment rates, house price growth, interest rates, and other drivers. A structural micro-macro simulation model is used to that end. It is anchored in the balance sheets and income-expense flow data from about 95,000 households and 230,000 household members from 21 EU countries and the U.S. We present country-specific nonlinear regressions based on the structural model simulation-implied relation between PDs and LGDs and their drivers. These can be used for macro scenario-conditional forecasting, without requiring the conduct of the micro simulation. We also present a policy counterfactual analysis of the responsiveness of mortgage PDs, LGDs, and bank capitalization conditional on adverse scenarios related to the COVID-19 pandemic across all countries. The economics of debt moratoria and guarantees are discussed against the background of the model-based analysis.
Keywords:
Credit risk; household sector; micro-macro simulation modeling; financial policies; probabilities of default; mortgage PD; mortgage LGDs; mortgage default risk; simulation model; Mortgages; Housing prices; Loans; Unemployment rate; Unemployment benefits; Europe; Global; Eastern Europe
Cover IMF Working Papers
COVID-19 Vaccines: A Shot in Arm for the Economy
Mr. Niels-Jakob H Hansen
and
Rui Mano
We quantify the effect of vaccinations on economic activity in the United States using weekly county level data covering the period end-2020 to mid-2021. Causal effects are identified through instrumenting vaccination rates with county-level pharmacy density interacted with state-level vaccine allocations, and by including county and state-time fixed effects to control for unobserved factors. We find that vaccinations are a significant and substantial shot in the arm of the economy. Specifically, an increase of initiated vaccination rates of 1 percentage point increases weekly consumer spending by 0.6 percent and reduces weekly initial unemployment claims by 0.004 percentage points of the 2019 labor force. Vaccinations also increase workrelated mobility. Importantly, we find that the effects vary with county characteristics. Specifically, urban counties and counties with initially worse socioeconomic conditions and lower education levels exhibit larger effects of vaccinations. This way, vaccinations are also a fair shot in the arm for the economy, which highlights that equitable distribution of vaccines is important to reduce inequality. Our results are specific to the United States, but hold important lessons for the expected economic impact of vaccinations in other countries.
Keywords:
COVID-19; pandemics; vaccinations.; initiated vaccination rate; IMF working papers; vaccine allocation; effect of vaccination; vaccination rate; Unemployment; Labor force; Unemployment benefits
Cover IMF Working Papers
Tracking the Economic Impact of COVID-19 and Mitigation Policies in Europe and the United States
Sophia Chen
,
Ms. Deniz O Igan
,
Mr. Nicola Pierri
, and
Mr. Andrea F Presbitero
We use high-frequency indicators to analyze the economic impact of COVID-19 in Europe and the United States during the early phase of the pandemic. We document that European countries and U.S. states that experienced larger outbreaks also suffered larger economic losses. We also find that the heterogeneous impact of COVID-19 is mostly captured by observed changes in people’s mobility, while, so far, there is no robust evidence supporting additional impact from the adoption of non-pharmaceutical interventions. The deterioration of economic conditions preceded the introduction of these policies and a gradual recovery also started before formal reopening, highlighting the importance of voluntary social distancing, communication, and trust-building measures.
Keywords:
WP; economic activity; Non-Pharmaceutical Interventions; weakening economy; COVID-19; Mitigation policies; Pandemic; Electricity; Labor market; mitigation policy; NPI adopter; state level; NPIs introduction; economic recovery; Google community mobility; policy response; hit country; NPI timing; Unemployment; Labor markets; Europe; energy consumption; anticipation effect; Unemployment benefits
Cover IMF Working Papers
Effectiveness and Equity in Social Spending - The Case of Spain
Svetlana Vtyurina
Spain is experiencing sustained economic and social disparities in several areas. Social spending policies have a heightened responsibility to respond but are challenged by high public debt and pressures from an aging society. This study takes stock of the level and effectiveness of public social expenditure from a cross-country and macroeconomic view, complementing recent targeted spending reviews. The results suggest that social protection spending should aim to improve redistribution through better targeting the most vulnerable while more effective education and active labor market policies should aim to create more equal opportunities and income prospects. In some areas more fiscal resources are needed. But social spending alone cannot reduce inequality, and efforts also should be directed toward making the labor market more inclusive.
Keywords:
WP; spending; Spain; government; healthcare spending; Social Protection Expenditure; Redistribution; Spending Efficiency; income scheme; disposable income; means testing; health barometer; spending trend; youth labor force; market income; state ministry; protection expenditure; pension expenditure; protection outlay; Income; Active labor market policies; Pension spending; Social protection spending; Global; Western Europe; Europe
Cover IMF Working Papers
Structural Unemployment in Luxembourg: Bad Luck or Rational Choice?
William Gbohoui
This paper combines both micro and macro approaches to identify the drivers of (un)employment and inactivity in Luxembourg. The young, low-skilled, and non-EU migrants are found to be the most vulnerable groups in the labor market. In addition to skills mismatches, work disincentives embedded in the tax-benefit system constitute a factor explaining structural unemployment. High unemployment of young and low-skilled workers reflects substantial unemployment traps, while disincentives for second earners (respectively the generosity of the pension system) contribute to lower labor market participation of women (respectively seniors). Further reduction of structural unemployment requires better integration of vulnerable groups into the labor market and improved targeting of benefits to make work more rewarding.
Keywords:
WP; activity rate; labor market attachment; Luxembourg labor market; labor market participation; Participation; (Un)Employment; Work Incentives; Tax-Benefit System; Work-Welfare Trade-off; co-habiting worker; job search assistance; worker group; employment probability; labor market performance; labor market outcome; labor market in Luxembourg; labor market intervention; labor market prospects; Labor markets; Unemployment; Unemployment rate; Employment; Unemployment benefits; Global
Cover IMF Working Papers
The Macroeconomic Effects of Labor and Product Market Reforms in Morocco
Mr. Babacar Sarr
,
Mokhtar Benlamine
, and
Zsuzsa Munkacsi
This paper studies the macroeconomic effects and sequencing of (LMRs) and product (PMRs) market reforms in Morocco. It finds that introducing LMRs and PMRs simultaneously would add about 2.5 percentage points (pp) of GDP growth and reduce unemployment by about 2.2 pp after five years. If sequencing is required, starting with PMRs would be more effective in boosting output, while starting with LMRs would reduce unemployment faster. Finally, increasing unemployment benefits would be more effective if this reform takes place after the implementation of LMRs and PMRs.
Keywords:
WP; cost; enterprise; labor market; Morocco; unemployment insurance; structural reforms; growth; unemployment; hiring costs; firms’ entry costs; informal economy; small-open economy; hiring cost; market entry; growth-unemployment nexus; employment effect; enterprise survey; reducing unemployment; firms' hiring cost; hiring probability; employment survey; adjustment cost; employment effects of reform packaging; barriers to entry; Unemployment benefits; Labor markets; Employment; Labor market reforms; Global
Cover IMF Working Papers
The Structural Determinants of the Labor Share in Europe
Dilyana Dimova
The labor share in Europe has been on a downward trend. This paper finds that the decline is concentrated in manufacture and among low- to mid-skilled workers. The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and unemployment benefits have been the main contributors. Technology and globalization hurt sectors where jobs are routinizable but helped others that require specialized skills. High-skilled professionals gained labor share driven by productivity aided by flexible work environments, while low- and mid-skilled workers lost labor share owing to globalization and the erosion of labor market safety nets.
Keywords:
WP; skilled worker; import penetration; employment share; further labor share erosion; labor market; labor share erosion; labor share shrinkage; labor share stagnation; share data; share decline; wage share; labor share; technology; employment policies; globalization; shift share analysis; labor share contraction; labor share growth; labor share shrink; labor share stem; self-employment share; labor share come; labor share tend; labor share fluctuation; Employment; Employment protection; Unemployment benefits; Global; Baltics; Europe