<abstract><title style='display:none'>Abstract</title>The current wave of technological change based on advancements in artificial intelligence (AI) has created widespread fear of job loss and further rises in inequality. This paper discusses the rationale for these fears, highlighting the specific nature of AI and comparing previous waves of automation and robotization with the current advancements made possible by a widespread adoption of AI. It argues that large opportunities in terms of increases in productivity can ensue, including for developing countries, given the vastly reduced costs of capital that some applications have demonstrated and the potential for productivity increases, especially among the low skilled. At the same time, risks in the form of further increases in inequality need to be addressed if the benefits from AI-based technological progress are to be broadly shared. For this, skills policies are necessary but not sufficient. In addition, new forms of regulating the digital economy are called for that prevent further rises in market concentration, ensure proper data protection and privacy, and help share the benefits of productivity growth through the combination of profit sharing, (digital) capital taxation, and a reduction in working time. The paper calls for a moderately optimistic outlook on the opportunities and risks from AI, provided that policymakers and social partners take the particular characteristics of these new technologies into account.</abstract>

Economics of Artificial Intelligence: Implications for the Future of Work

<abstract><title style='display:none'>Abstract</title>This paper studies how an introduction of paid parental leave (PPL) affects maternal labor market outcomes in the short run. Using a reform in Australia, the PPL scheme, that gave the primary caregiver of a child born or adopted on or after January 1 2011, $672.70 a week for a maximum of 18 weeks, this paper develops theoretical predictions of the effect of PPL on maternal labor market outcomes, and tests these predictions using confidential data from the Australian Pregnancy and Employment Transitions Survey. The theoretical results imply that after the introduction of PPL, hours of work in the pre-birth period should decrease for mothers who will qualify for PPL, and increase for mothers who are attempting to qualify for PPL. Post birth, the theoretical results imply that more mothers are out of work and on leave than would have been in the absence of PPL. The empirical results suggest that the PPL scheme had no significant effect on labor market outcomes pre birth or post birth.</abstract>

Does an Introduction of a Paid Parental Leave Policy Affect Maternal Labor Market Outcomes in the Short Run? Evidence from Australia’s Paid Parental Leave Scheme

<abstract><title style='display:none'>Abstract</title>This study quantifies the economic effects of two major immigration policies aimed at legalizing undocumented individuals that entered the United States as children and completed high school: Deferred Action for Childhood Arrivals (DACA) and the DREAM Act. The former offers only temporary legal status to eligible individuals, whereas the latter provides a track to legal permanent residence. Our analysis is based on a general equilibrium model that allows for shifts in participation between work, college, and non-employment. The model is calibrated to account for productivity differences across workers of different skills and documentation status, and a rich pattern of complementarities across different types of workers. We estimate that DACA increased gross domestic product (GDP) by almost 0.02% (about $3.5 billion), or $7,454 per legalized worker. Passing the DREAM Act would increase GDP by around 0.08% (or $15.2 billion), which amounts to an average of $15,371 for each legalized worker. The larger effects of the DREAM Act stem from the expected larger take-up and the increased incentive to attend college among DREAMers with a high school degree. We also find substantial wage increases for individuals obtaining legal status, particularly those that increase their educational attainment. Because of the small size of the DREAMer population, and their skill distribution, legalization entails negligible effects on the wages of US-born workers.</abstract>

The Economic Effects of Providing Legal Status to DREAMers

<abstract><title style='display:none'>Abstract</title>Collective bargaining has come under renewed scrutiny, especially in Southern European countries, which rely predominantly on sectoral bargaining supported by administrative extensions of collective agreements. Following the global financial crisis, some of these countries have implemented substantial reforms in the context of adjustment programmes, seen by some as a ‘frontal assault’ on collective bargaining. This paper compares the recent top-down reforms in Portugal with the more gradual evolution of the system in the Netherlands. While the Dutch bargaining system shares many of the key features that characterise the Portuguese system, it has shown a much greater ability to adjust to new challenges through concerted social dialogue. This paper shows that the recent reforms in Portugal have brought the system more in line with Dutch practices, including in relation to the degree of flexibility in sectoral collective agreements at the worker and firm levels, the criteria for administrative extensions, and the application of retro- and ultra-activity. However, it remains to be seen to what extent the top-down approach taken in Portugal will change bargaining practices, and importantly, the quality of industrial relations.</abstract>

Frontal assault versus incremental change: A comparison of collective bargaining in Portugal and the Netherlands

<abstract><title style='display:none'>Abstract</title>Parental leave and child care are important instruments of family policies to improve work–family balance. This paper studies the impact of the substantial change in Germany’s parental leave system on maternal employment. The aim of the reform was to decrease birth-related maternal employment breaks by providing more generous parental benefits for a shorter period of time. Using the German Socio-Economic Panel data for 2002–2015, I exploited quasi-experimental variation in the benefits to estimate the impact of the reform. I incorporated the mother’s decision to substitute her care time with the public child care. To control for the availability of child care, I used spatial and temporal variation in the availability of childcare slots. Overall, I did not find significant changes in maternal employment during the first three years of motherhood after the reform implementation. Only for high-income mothers, the reform produced a significant decrease in the employment participation during the first year of leave and an increase in employment probability after the benefits expired. The empirical findings suggest that the restriction in the childcare availability became an important constraint for the employment effect of the reform.</abstract>

The Impact of Parental Leave Policy on Child-Rearing and Employment Behavior: The Case of Germany

<abstract><title style='display:none'>Abstract</title>This paper provides robust estimates of the impact of both product and labor market regulations on unemployment using data from 24 European countries over the period 1998–2013. Controlling for country fixed effects, endogeneity, and a large set of covariates, results show that product market deregulation overall reduces the unemployment rate. This finding is robust across all specifications and in line with theoretical predictions. However, not all types of reforms have the same effect: deregulation of state controls and in particular involvement in business operations tend to push up the unemployment rate. Labor market deregulation, proxied by the employment protection legislation index, is detrimental to unemployment in the short run, while a positive impact (i.e., a reduction in the unemployment rate) occurs only in the long run. Analysis by sub-indicators shows that reducing protection against collective dismissals helps in reducing the unemployment rate. The unemployment rate equation is also estimated for different categories of workers. Although men and women are equally affected by product and labor market deregulations, workers distinguished by age and educational attainment are affected differently. In terms of employment protection, young workers are almost twice as strongly affected as older workers. Regarding product market deregulation, highly educated individuals are less impacted than low- and middle-educated workers.</abstract>

Unemployment Impact of Product and Labor Market Regulation: Evidence from European Countries

<abstract>
<title style='display:none'>Abstract</title>
Most of the competitiveness gap in Latin America is due to its labor market, one of the areas with the highest rates of subjective indicators in the Global Competitiveness Index (GCI). This paper analyzes the subjective component of the GCI in the labor market area and discusses its accuracy for policy advice. We focus on the set of countries that highly rely on the GCI for policy advice and highlight that the perception of business executives of the labor market as rigid contrasts with the significant experience of flexibilization policies undertaken in the region over the past 3 decades. We show that the GCI has been largely constructed with opinion data from large firms, a business sector that accounts for &lt;5% of total firms in the countries of study. Furthermore, the questionnaire exhibits obvious flaws. Thus, we do not find that the GCI provides a solid base for policy advice.
</abstract>

Is the Global Competitiveness Index by the World Economic Forum a reliable tool for the design of labor market policies? Evidence from Latin American countries

<abstract>
<title style='display:none'>Abstract</title>
This paper develops a conceptual analysis to identify the jobs that can be done from home and those that cannot, and on this basis quantifies the fraction of employees that are in teleworkable occupations across EU countries. Using detailed data on occupational tasks, we construct two teleworkability indices. The first core technical teleworkability index, based on the prominence of physical tasks, implies that 36% of dependent employment in the EU is technically teleworkable. However, our second social interaction index shows that only one third of teleworkable employment is in occupations that require limited social interactions, thus ideally suited to telework. To validate our approach, we compare our measures of teleworkability with data on the actual prevalence of telework before and during the COVID-19 outbreak. We show that our measures correlate with the observed increase in telework across countries and occupations in the EU during the outbreak. However, the prevalence of telework among employees appears to have remained below its full potential in 2020, as measured by our technical teleworkability index. This is especially the case for lower-level white-collar occupations as well as for countries with limited previous experience with teleworking. These patterns suggests that, despite the rapid increase in teleworking, the same barriers that prevented the diffusion of telework before the outbreak – lack of ICT infrastructure, fears of losing managerial control, position in the occupational hierarchy, limited workforce's digital skills, awkwardness of remote social interaction – are likely to continue playing an important role in shaping the diffusion of telework after the outbreak.
</abstract>

Teleworkability and the COVID-19 crisis: potential and actual prevalence of remote work across Europe

<abstract>
<title style='display:none'>Abstract</title>
Despite established positive associations of paid care leave (PCL) policies on labor market outcomes such as wage replacement and job continuity, the United States is a notable outlier as the only advanced nation without a federal paid leave program. Assuming PCL programs are costly, my study examines employer perceptions and responses to PCL regulations in the US during the COVID-19 pandemic in 2020. Using a policy experiment around the 500-employee cutoff associated with the Families First Coronavirus Response Act (FFCRA), logistic regressions are used on a newly-created dataset constructed from a survey administered to 306 business managers in New York and Boston. The analysis ultimately seeks to evaluate if PCL cost concerns predict 19 different business outcomes such as changes in headcount or employee benefits. In general, while 54.6 percent of firms report cost concerns with PCL laws, the results find firms with such concerns are more likely to engage in non-employee focused operational changes such as increases in prices instead of employee-oriented outcomes such as layoffs or wage decreases. Furthermore, the policy experiment yields that large companies are more likely to increase internal paid leave, while small companies are more likely to increase the number of independent contractors at the company. My study confirms companies react to government PCL regulation in dynamic ways, dependent on the unique circumstances and culture of each company.
</abstract>

Families first: A comparative study of company responses to paid care leave programs in the COVID-19 pandemic

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<title style='display:none'>Abstract</title>
During the last quarter century, job tenure in Europe has shortened. Using data from Eurostat Labor Force Surveys of 29 countries from 1995 to 2020 and applying an age-period-cohort decomposition to analyze changes in tenure for specific birth cohorts, we show that tenure has shrunk for cohorts born in more recent years. To account for compositional changes within cohorts, we estimate the probability of holding jobs of different durations, conditional on individual and employment-related characteristics. The estimations demonstrate that, over time, the likelihood of having a medium- or long-term job decreased and holding a short-term job increased. We also find that stricter job protection legislation appears to decrease the probability of holding a short-term job, and higher trade openness and ICT-related technological change are correlated with an increase of that probability.
</abstract>

Explaining the Evolution of Job Tenure in Europe, 1995–2020

<abstract>
<title style='display:none'>Abstract</title>
Many European countries are facing the key challenge of integrating low-skilled jobless young people into the labor market. From 2018 to 2020, the Public Employment Service (PES) in Vienna tested a new model of intensified support (“case management”). The target group consisted of young unemployed persons with low formal qualifications who were drawing on social assistance. Based on the pilot project and a propensity matching approach, we show that the increase in staff significantly increased the intensity of the counseling. It led to an increase in job proposals and active labor market program participation, as well as sanctions in the form of benefit suspensions for failure to keep PES appointments. In line with the goal, more of the young people were encouraged to take part in training and further education instead of being quickly placed in an unskilled job. However, in the three-year follow-up period, the intensified counseling did not (yet) have a significant effect on the overall extent of integration into employment. Regarding post-unemployment job quality, we find no effects on wages at the start of a job.
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The effects of more intensive counseling for disadvantaged unemployed youth

<abstract>
<title style='display:none'>Abstract</title>
This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs, an increase in their wages, and stable separation rates because temporary workers shield permanent workers from adverse shocks. We find empirical support using a regional French policy experiment, the “Contrat de Transition Professionelle”, which increased separation taxes for recently hired permanent workers in firms with fewer than 1,000 workers.
</abstract>

Job Protection — It is Good to be an Insider

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IZA Journal of Labor Policy

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