We study a model in which management and a union bargain sequentially, first choosing a rule that will later determine the level of employment, and then choosing a wage. The government then chooses an output or an employment subsidy. An exogenous natural turnover rate in the unionized sector creates unemployment whenever the union wage exceeds the competitive wage. Government intervention can i...

A growing body of programme evaluation literature recognises immigrants as a disadvantaged group on European labour markets and investigates the employment effects of Active Labour Market Programmes (ALMPs) on this subgroup. Using a meta-analysis, we condense 93 estimates from 33 empirical studies of the effectiveness of four types of ALMPs employed across Europe to combat immigrant unemploymen...

This paper uses a unique panel dataset from China's initial reform of fiscal decentralization to analyze the relationships between fiscal decentralization, local economic development, and rural-rural undocumented inter-provincial labor mobility. Using a modified gravity model with Heckman Maximum Likelihood Estimation method, this paper shows that fiscal decentralization has two contending effe...

Active Labour Market Policy in East Germany: Waiting for the Economy to Take Off We investigate the effects of the most important East German active labour market programmes on the labour market outcomes of their participants. The analysis is based on a large and informative individual database coming from administrative data sources. Using matching methods, we find that over a horizon of 2.5 y...

This paper studies effects of unemployment and labour market programmes on real wages in the Czech and Slovak Republics using district panel data for the period 1992-1998. Clear evidence of a “wage curve” exists in both countries. The estimated unemployment elasticity of pay is, however, higher in the Slovak Republic, than in the Czech Republic. The wage subsidy and the public works programme e...

This paper examines the impact of the Working Families Tax Credit (WFTC) on employment retention and advancement. The WFTC, which replaced Family Credit in October 1999, supplemented earnings of low paid workers living in low income families. It was designed to increase the financial incentive for low skilled workers to find and remain in work and in the process boost their family income. It fi...

This paper combines a search model and signaling game to analyze the interrelationship between labor market outcome and educational choices as well as relevant policy implications, featuring endogenous educational requirement for job application. It explains more than 60% of the unemployment rate difference between college and high school graduates. It predicts that higher unemployment benefit ...

From Micro Data to Causality: Forty Years of Empirical Labor Economics This overview describes the development of methods for empirical research in the field of labor economics during the past four decades. This period is characterized by the use of micro data to answer policy relevant research question. Prominent in the literature is the search for exogenous variation in treatment assignment w...

This paper provides a review of the recent literature on how incentives in unemployment insurance (UI) can be improved. We are particularly concerned with three instruments, viz. the duration of benefit payments (or more generally the time sequencing of benefits), monitoring in conjunction with sanctions, and workfare. Our reading of the theoretical literature is that the case for imposing a pe...

Wage Rigidity or Fiscal Redistribution? The Unemployment Bias of Time Consistent Redistributive Policies Because of Time Inconsistency considerations, policymakers underestimate the drawbacks of wage rigidity as a redistributive tool. Consequently, they redistribute inefficiently income from high to low skilled workers. They typically implement too much wage rigidity whereas other means (in par...