Labour markets. Carla Canelas

Transcription

1 Labour markets Carla Canelas / 37

2 Table of contents Introduction Basic definitions World labour force Labour markets in developing countries Formal and informal employment References 2 / 37

3 Introduction What is labour economics? 3 / 37

4 Introduction What is labour economics? Labour economics is the study of the market in which labour services are exchanged for wages. 3 / 37

5 Introduction What is labour economics? Labour economics is the study of the market in which labour services are exchanged for wages. In other words: Labour economics studies the market of one particular commodity Labour Services in the economy. 3 / 37

6 Introduction Agents in the labour market: Firms Individuals/workers Government 4 / 37

7 Introduction Agents in the labour market: Firms Individuals/workers Government Agents interact in order to determine: Labour market equilibrium: Price => wage Quantity 5 / 37

8 Equilibrium 6 / 37

9 Introduction Agents in the labour market: Firms: decide who to hire and fire (labour demand) hours of work Individuals/workers: when to enter the labour market (labour supply) number of hours to work whether to quit or retire occupation or industry Government (regulation) impose taxes laws to protect workers and firms: 1. safety regulations 2. minimum wages 3. employment benefits: workers compensation, pensions, unemployment insurance, etc. 7 / 37

10 Introduction Why is labour economics important? 8 / 37

11 Introduction Why is labour economics important? Income! 8 / 37

12 Introduction Why is labour economics important? Income! Fact: for the majority of households in the economy, labour income constitutes their major source of income. 8 / 37

13 Introduction Why is labour economics important? Income! Fact: for the majority of households in the economy, labour income constitutes their major source of income. Income is an important determinant of well-being. 8 / 37

14 Source of income 9 / 37

15 Introduction Labour economics studies: wages (Human capital theory) employment /unemployment labour market participation decisions impact of mandatory contributions minimum wages number of hours worked, time allocation decisions 10 / 37

16 Introduction Labour markets are related to other fields of social sciences: Demography: fertility decisions, women labour force participation ageing economies: social protection systems Optimal taxation: income tax, VAT => redistribution! what we tax? who we tax? Human capital: returns to education, investment? health outcomes Migration: brain drain 11 / 37

17 Manufacturing growth and the lives of Bangladeshi women by R. Heath and M.Mobarak (JDE) study the effects of explosive growth in the Bangladeshi ready-made garments industry on the lives on Bangladeshi women. they compared the marriage, childbearing, school enrolment and employment decisions of women who gain greater access to garment sector jobs to women living further away from factories. 12 / 37

18 Manufacturing growth and the lives of Bangladeshi women by R. Heath and M.Mobarak (JDE) study the effects of explosive growth in the Bangladeshi ready-made garments industry on the lives on Bangladeshi women. they compared the marriage, childbearing, school enrolment and employment decisions of women who gain greater access to garment sector jobs to women living further away from factories. Girls exposed to the garment sector delay marriage and childbirth. (a) young girls becoming more likely to be enrolled in school after garment jobs (which reward literacy and numeracy) arrive, and (b) older girls becoming more likely to be employed outside the home in garment-proximate villages. The demand for education generated through manufacturing growth appears to have a much larger effect on female educational attainment compared to a large-scale government conditional cash transfer program to encourage female schooling. 12 / 37

19 What about labour regulations? The 2013 Savar building (Rana Plaza) collapse. Due to unsafe working conditions in the factory building, from approximately 3000 workers, 1,129 died. 13 / 37

20 Facts 4 WORLD DEVELOPMENT REPORT 2013 billion people working for 1.6 a wage or a salary 1.5 labor force participation 77% by women in Vietnam 28% of the manufacturing jobs 39% are in microenterprises 97% 2x million people 90 22x 10 3% in Chile employment growth in a firm in Mexico over 35 years working abroad billion people working in farming and self-employment 10x million children working in hazardous conditions the productivity gap between manufacturing firms in the 90th and 10th percentiles in India 621 9x 21 million jobs needed over 15 years to keep current employment rates 30 60% million entrants to the labor force per year in Sub-Saharan Africa international migrants as a share of the world population labor force participation by women in Pakistan of the manufacturing jobs are in microenterprises in Ethiopia employment growth in a firm in the United States over 35 years million victims of forced labor million youth neither working nor studying the productivity gap between manufacturing firms in the 90th and 10th percentiles in the United States million postsecondary students in China foreign-born population in Kuwait, Qatar, and the United Arab Emirates 14 / 37

21 Introduction Basic definitions World labour force Labour markets in developing countries Formal and informal employment References 15 / 37

22 Basic definitions The labour force is composed of all persons employed or looking for a job To be considered unemployed, people must be: without job available for work seeking for a job The participation rate is the ratio of the labour force to the population in age of working (generally more than 15 years old) The employment rate is the ratio of the number of employed people to the working age-population The unemployment rate is the ratio of the number of unemployed people to the labour force. (subjective measure) 16 / 37

23 Facts about labor force - Participation rates males 17 / 37

24 Facts about labor force - Participation rates females 18 / 37

25 Introduction Basic definitions World labour force Labour markets in developing countries Formal and informal employment References 19 / 37

26 Definition of developing country All countries below the high-income level are, by convention, considered developing. At 1 July 2013, the World Bank income classifications by GNI per capita are as follows: Low income: $1,035 or less Lower middle income: $1,036 to $4,085 Upper middle income: $4,086 to $12,615 High income: $12,616 or more Developed countries: Europe, USA, Canada, Taiwan, Qatar, Seychelles, Argentina, Venezuela, Russian Federation, Saudi Arabia, Korea, Japan, Israel, among others Developing countries: The term is used for convenience; it is not intended to imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. (WB) 20 / 37

27 Labour market characteristics of developing countries Predominantly agrarian Low industrial development Abundant labour and scarce capital Persistence of informality Multiple job-holding Low unemployment rates Labour force participation of women is low 21 / 37

28 Statistics 22 / 37

29 Statistics 23 / 37

30 Statistics 24 / 37

31 Introduction Basic definitions World labour force Labour markets in developing countries Formal and informal employment References 25 / 37

32 Informal sector / informal employment The 15th ICLS (ILO 2000) defined employment in the informal sector as comprising all jobs in informal sector enterprises, or all persons who, during a given reference period, were employed in at least one informal sector enterprise, irrespective of their status in employment and whether it was their main or a secondary job. (ILO) The 17th ICLS defined informal employment as comprising the total number of informal jobs, whether carried out in formal sector enterprises, informal sector enterprises, or households, during a given reference period (ILO) 26 / 37

33 Informal sector enterprises Enterprises owned by individuals or households that are not constituted as separate legal entities independently of their owners, and for which no complete accounts are available that would permit a financial separation of the production activities of the enterprise from the other activities of its owner(s). All or at least some of the goods or services produced are meant for sale or barter, with the possible inclusion in the informal sector of households which produce domestic or personal services in employing paid domestic employees. Their size in terms of employment is below a certain threshold to be determined according to national circumstances, and/or they are not registered under specific forms of national legislation (such as tax or social security laws), and/or their employees (if any) are not registered. 27 / 37

34 Informal sector / informal employment Informal employment refers to the total number of persons whose main job was informal. A job is informal when it lacks basic social or legal protections or employment benefits and may be found in the formal sector, informal sector or households. 28 / 37

35 Informal sector / informal employment Persons in informal employment include the following types: (i) own-account workers employed in their own informal sector enterprises; (ii) employers employed in their own informal sector enterprises; (iii) contributing family workers, irrespective of whether they work in formal or informal sector enterprises; (iv) members of informal producers cooperatives; (v) employees holding informal jobs in formal sector enterprises, informal sector enterprises, or as paid domestic workers employed by households; (vi) own-account workers engaged in the production of goods exclusively for own final use by their household, if considered employed given that the production comprises an important contribution to total household consumption 29 / 37

36 Common measures of informality Social security coverage. Possession of employment contract. Size of enterprise, usually 5 or 10. (control is costly) 30 / 37

37 Facts about labor force Most of the world labour force is concentrated in developing countries The majority of workers in the world today are in the informal economy The majority of new entrants to the global labour market enter the informal economy 31 / 37

38 Informal economy Figure 1. Share of persons employed in the informal economy, latest year available Serbia FYR Macedonia Moldova Armenia South Africa Brazil Uruguay Panama Venezuela Costa Rica Dominican Republic Argentina Mexico West Bank and Gaza Liberia Ecuador Colombia Sri Lanka El Salvador Vietnam Nicaragua Lesotho Paraguay Peru Uganda Madagascar Honduras Bolivia Zambia Tanzania Mali Philippines India 3.5% 7.6% 7.3% 10.2% 3.1% 5.2% 8.7% 17.8% 24.3% 27.7% 21.3% 9.6% 33.9% 29.4% 36.3% 37.0% 32.1% 34.1% 37.3% 43.5% 37.9% 14.9% 49.7% 52.2% 50.5% 53.4% 54.4% 49.1% 50.2% 51.8% 58.3% 52.1% 51.7% 59.2% 18.0% 64.6% 16.3% 71.4% 72.5% 68.8% 9.8% 11.8% 19.4% 11.2% 17.9% 35.8% 20.2% 24.0% 10.8% 9.3% 11.6% 25.0% 32.8% 14.8% 15.0% 21.6% Share of persons employed in the informal sector (A+B) Share of persons in informal employment outside the informal sector (C) 21.1% 13.5% 21.9% 17.0% 23.5% 25.0% 11.7% 11.3% 11.5% 15.4% Note: The data refer to non-agricultural employment and the latest year available for each country. 32 / 37

39 Informal employment and poverty Figure 6: Informal Employment and Poverty, sub-sample of 36 countries Informal 90 employment (% of total 80 nonagricultural employment) 70 Low percentage of population under poverty and high informal employment VNM IND UGA PRY SLV PER NIC MLI High percentage of population under poverty and high BOL informal employment HND MDG ZMB 60 LKA ECU COL LBR EGY MEX ZWE THA CRI BRA URY PAN VEN NAM DOM LSO ZAF 30 TUR Low percentage of ARM 20 population under poverty and low informal MDA employment High percentage of MKD 10 population under poverty and low informal SRB employment Population living below the national poverty line (percentage of total population) Source: ILO, Department of Statistics, and IMF, World Economic Outlook This graph shows for each country the percentage of informal employment in total non-agricultural employment and the percentage of the population living below the national poverty line (World Bank). Country names have been abbreviated due to space constraints. The axis passes through the unweighted sample means. The size of the bubbles is proportional to the size of total informal employment (in logarithms). Only countries with data on persons in informal employment have been included. Poverty figures are computed using averages. 33 / 37

40 Introduction Basic definitions World labour force Labour markets in developing countries Formal and informal employment References 34 / 37

41 All definitions, figures, statistics, facts come from: World Development Report 2013 World Development Indicators Hussmanns, R. Defining and measuring informal employment. wp ILO Campbell, Duncan, and Ishraq Ahmed. The labour market in developing countries. Perspectives on Labour Economics for Development (2013). Introduction. Cahuc, Pierre, and André Zylberberg. Labor Economics (2004). MIT Press. Introduction and Ch 1 35 / 37