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Europe > Ireland

You are looking at 1 - 5 of 5 items for :

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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
Cover IMF Working Papers
Job Protection Deregulation in Good and Bad Times
Mr. Romain A Duval
,
Davide Furceri
, and
João Tovar Jalles
This paper explores the short-term employment effect of deregulating job protection for regular workers and how it varies with prevailing business cycle conditions. We apply a local projection method to a newly constructed “narrative” dataset of major regular job protection reforms covering 26 advanced economies over the past four decades. The analysis relies on country-sector-level data, using as an identifying assumption the fact that stringent dismissal regulations are more binding in sectors that are characterized by a higher “natural” propensity to regularly adjust their workforce. We find that the responses of sectoral employment to large job protection deregulation shocks depend crucially on the state of the economy at the time of reform——they are positive in an expansion, but become negative in a recession. These findings are consistent with theory, and are robust to a broad range of robustness checks including an Instrumental Variable approach using political economy drivers of reforms as instruments. Our results provide a case for undertaking job protection reform in good times, or for designing it in ways that enhance its short-term impact.
Keywords:
WP; business cycle; EPL reform; differential employment effect; labour market; layoff rate; Structural Reforms; Labor Market; Deregulation; Employment Protection; Growth; Employment; severance pay; Business cycles; Labor market frictions; Southern Europe
Cover IMF Working Papers
Determinants of Inflation in the Euro Area: The Role of Labor and Product Market Institutions
Mrs. Hanan Morsy
and
Ms. Florence Jaumotte
While inflation differentials in a monetary union can be benign, reflecting a catch-up process, or an adjustment mechanism to asymmetric shocks or different business cycles, they may also indicate distortions related to inefficiencies in domestic product and labor markets that amplify or make more persistent the impact of shocks on inflation. The paper examines the determinants of inflation differentials in the euro area, with emphasis on the role of country specific labor and product market institutions. The analysis uses a traditional backward-looking Phillips curve equation and augments it to explore the role of collective bargaining systems, union density, employment protection, and product market regulation. The model is estimated over a panel dataset of 10 euro area countries over the period 1983-2007. Results show that high employment protection, intermediate coordination of collective bargaining, and high union density increase the persistence of inflation. Oil and raw materials price shocks are also more likely to be accommodated by wage increases when the degree of coordination in collective bargaining is intermediate. These results are robust to different estimation methods, model specifications, and outliers. The paper suggests that reforming labor market institutions may improve the functioning of the euro area by reducing the risk of persistent inflation differentials.
Keywords:
WP; inflation differential; lag inflation; inflation expectation; product market institution; Inflation; inflation differentials; inflation persistence; euro area; labor and product market institutions; regulations; high-inflation country; Output gap; Employment protection; Labor market institutions; Europe
Cover IMF Working Papers
The Spanish Labor Market in a Cross-Country Perspective
Ms. Florence Jaumotte
The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the structure of its collective bargaining, which occurs mostly at an intermediate level, and by very high severance payments for permanent workers. Based on a quantitative analysis, the paper shows that moving away from the intermediate level of bargaining would go a long way toward bringing the unemployment rate closer to the EU15 average. The key reform needed to reduce the share of temporary workers is reducing employment protection of permanent workers. Substantially reforming the collective bargaining system and reducing the protection of permanent workers are likely to be highly complementary to secure a substantial reduction in the unemployment rate. The recent 2010 labor market reform attempts to address these issues, although its effects are still to materialize.
Keywords:
WP; labor market; share of temporary workers; equilibrium unemployment; wage agreement
Cover IMF Working Papers
Cyclical Behavior of Inventories and Growth Projections Recent Evidence From Europe and the United States
Mr. Willy A Hoffmaister
and
Mr. Jens R Clausen
In the United States and a few European countries, inventory behavior is mainly the outcome of demand shocks: a standard buffer-stock model best characterizes these economies. But most European countries are described by a modified buffer-stock model where supply shocks dominate. In contrast to the United States, inventories boost growth with a one-year lag in Europe. Moreover, inventories provide limited information to improve growth forecasts particularly when a modified buffer-stock model characterizes inventory behavior.
Keywords:
WP; stock; inventory behavior; buffer-stock model; Inventories; business cycle; forecasting; inventory investment; foresight inventory model; stylized fact; inventory change; inventories stem; Production growth; Business cycles; Employment protection; Vector autoregression; Supply shocks; Europe