Post on 28-Dec-2015
transcript
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4Labor market policies:historical and comparative
perspectives
Philippe Askenazy (Paris School of Economics)
www.jourdan.ens.fr/~askenazy/laborpolicy.htm
Updated slides!
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Outline of the courses
03/15, 9.15-12.15: 2000’s. Old tools or new tools? Minimum wages versus in-depth liberalization
A comparative perspective: current policies
03/22, 9.15-12.15: Comparative methodology
03/29, 9.15-12.15: Scandinavian countries, Germany, UK, US. 3 presentations (Sweden, Germany, US)
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Outline of the courses
04/05, 9.15-12.15: Labor policies in developing countries. 2 presentations (India, South-American)
04/26, 9.15-12.15: The coordination of European labor policies; the labor policies in the current crises. 2 presentations (OECD and EU strategies)
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“Euro zone”: 1987-1990 a new Phillips curve?
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1988-1990
NO e.g. the proportion in Europe of long term unemployed remained high
Decline of short and long-term unemployment in Europe End of stagflation: low persistent inflation rate
End of hysteresis?
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1991 the end of a short-cycle
Short recession in the US but Deeper recession in Europe Rise of unemployment, especially in Scandinavian countries (why ?)
German reunification: a positive demand shock and a negative monetary shock
End of the Cold War but the first Gulf war
new tensions on oil/gaz market
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Harmonized unemployment rate 1988-1994
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But US “new economy”: an idea from entrepreneurs (not economists)
Clinton 1993:
- massive public support to ICT infrastructures
- from military R&D to mixed R&D
+ Generalization of innovative work practices
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US “new economy”: a productivity resurgence
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US growth decomposition (Jorgenson-Stiroh)
Productivity growth + digitalized economy = rapid growth without inflationist tensions + unemployment drop
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US “new economy”
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US were not an exception
Ex: Finland, also, followed the “entrepreneurs”
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Who followed the economists? France!
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Ideas from economists in 1991
The “revenge” of the histeresis but no view of the “new economy”!
Necessity to build a new labor policy from the consensus of economists ~ Washington consensus for developing countries
In France: the Commissariat Général au Plan (Charpin/Brunhes)
International: The OECD Job Study
transatlantic consensus: same structural changes i.e. globalization and biased technological progress. Why ? But different institutions
higher wage inequality in the US versus low-skilled unemployment in Europe
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Economic ideas born in 1991-1994
Assumption: unemployment is a sharper inequality that wage inequality
Reduce labor market rigidities: simplified firing for increasing the propensity to hire; simplified hiring
Activate passive labor policies: lower unemployment benefits associated with “accompaniment” + sanctions
Reduce the social-fiscal corner and/or minimum wages
Evaluate labor market policy tools with new econometric methods: matching, propensity score… (Heckman)
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Ex: French new labor policy 1991-1997
1991-1993: “enrich the labor content of growth” through niche job markets
Income tax cuts for households that employ personal workers Immediately increased by 100.000 the number of personal workers: formerly undeclared jobs?
Social tax cuts for part-time jobs
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Ex: French new labor policy 1991-1997
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Ex: French new labor policy 1991-1997
1993-1997: “enrich the labor content” of growth through social tax cuts for low-wage workers
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Ex: French new labor policy 1991-1997
Controversial evaluations: why?
Juppé social tax cuts: 100,000 to 600,000 job creations. “consensus” of administrations: about 300,000 jobs
The share of low-skilled jobs re-increased!
But costly: about 7-8 billions current euros…
And alsoFinancial support for apprenticeship rapid development… for tertiary education: substitution? Robien 1996: massive social tax cuts for shorter working time => favor the socialist idea of the 35-hour workweek
Aborted “SMIC jeune”
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France: 1997-2000
The surprising dissolution of the Parliament and the return of a socialist government (green-communist-socialist)
=> Enrich the job content of growth through sharing labor and public jobs
Analysis: 1. slow growth recovery… (while US, Nordic countries massively invested in the knowledge economy)2.bargained reduction of working time in most continental European countries except in France
Youth employment: stock of about 200,000 workers on 5-year contracts paid at the minimum wage, mainly as assistants in schools
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The Aubry laws
Impacts?
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Exceptional job creations for France
300,000 Juppé + 300,000 Aubry
1998,1999 and 2000 = the first, second, and fourth best years for job creations during the century in France
But still high unemployment in 20008.6% 16.6% for the 15-24 10% for women about 40% of long-term unemployed
… in France but also in Europe!
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2000 Euro zone”: still high unemployment