Working papers

2017

  1. The composition effects of tax-based consolidations on income inequality

    20 June 2017

    Many advanced economies have recently embarked on fiscal austerity. As this has come at a time of high and rising income disparities, policy-makers have fretted worrying about the inequality effects of fiscal consolidations. We shed new light on this issue by empirically investigating the (composition) effects of tax-based consolidations on income inequality, output and labour market conditions for a sample of 16 OECD countries over the period 1978-2012. We find that tax-based consolidations reduce income inequality, but at the cost of weaker economic activity. However, tax composition does matter. Indirect taxes reduce income inequality by more than direct taxes, possibly due to the operation of a positive labour supply channel. Higher indirect taxes increase the price of the consumption basket and create incentives for agents to increase their labour supply. We find this effect to be stronger for middle aged women. Looking at specific instruments, general consumption taxes and personal taxes are the most suited to reduce inequality while at the same time minimizing the equity-efficiency trade-off.

  2. Migrant and cities: Research report on recruitment, employment, and working conditions of domestic workers in China

    20 June 2017

  3. The International Labour Organization and the Living Wage: A Historical Perspective

    09 June 2017

  4. Long-term unemployment in Central Europe: A review of its nature and determinants in five countries

    01 June 2017

    EMPLOYMENT Working Paper No. 218

  5. Exporters, importers and employment: Firm-level evidence from Africa

    01 June 2017

    This paper studies the relation between firms’ export and import status, and the quantity and types of employment they offer, using firm-level data from 47 African countries in 2006-14. The paper also analyses how the quality of policies at the country-level relates to the difference between exporters and non-exporters, and between importers and non-importers. This paper shows that both exporters and importers employ on average more full-time permanent workers than their respective non-trading counterparts, even after controlling for a wide range of firm-level characteristics. This employment premium is larger in countries with a better quality of infrastructure. In addition, importers employ higher shares of non-production workers compared with non-importers. In addition, both exporters and importers are characterized by higher shares of female employment than their non-trading counterparts. Successful gender policies are positively associated with the female employment premium of trading firms. This paper also finds that there is a larger proportion of temporary workers in the workforce of exporters compared with non-exporters, but a better developed rural sector reduces this difference in the use of temporary manpower. The results presented in this paper suggest that the quality of policies has an impact on the extent to which trading firms are able to generate decent job opportunities in Africa.

  6. Labour Unions and the promotion of inclusive finance for workers

    23 May 2017

    Social Finance Working Paper. 73

  7. The role of investment incentives for structural transformation: A comparative analysis of investment incentives legislation in developing countries in sub-Saharan Africa, South Asia and South-East Asia

    18 May 2017

    EMPLOYMENT Working Paper No. 211

  8. Pro-employment budgeting in the United Republic of Tanzania: A country study

    17 May 2017

    EMPLOYMENT Working Paper No. 213

  9. Sectoral collective bargaining, productivity and competitiveness in South Africa’s clothing value chain: manufacturers between a rock and a hard place

    16 May 2017

    This working paper focusses on the role of sectoral collective bargaining in wage setting and the different factors that might account for the link between wage and productivity growth. It examines various initiatives to improve productivity in the South African clothing sector. These include sectoral framework agreements on the adoption of productivity schemes at the enterprise level, the introduction of ‘world class manufacturing techniques’, consultant-led productivity schemes, and management-designed incentive schemes introduced in consultation with workers. The study finds that sectoral-level bargaining is effective in establishing a common wage floor for the industry that also rewards more productive firms (and workers). Moreover, during a period of liberalization and industry restructuring, wage have been rising alongside increases in labour productivity. However, this link between wages and productivity was not achieved through “organized decentralization” (i.e. enterprise-level productivity bargaining within a sectoral framework agreement). Rather, it was the outcome of a “complex package of competitive strategies pursued by firms”. These included, notably, management capability and capacity and relations between retailers (‘buyers’) and manufacturers. The paper also examines the challenges experience by some manufacturers in respect of compliance with wages and the manner in which the gains are distributed in the value chain. It concludes with some ideas about the need for a new approach to collective bargaining in light of the restructuring of the clothing value chain in South Africa.

  10. Top income share and economic growth: Linear and non-linear effects

    09 May 2017

    This paper estimates the impact of inequality on growth, focusing on non-linearity and using top income share data that provides us with yearly observations over a long time period. A first result is that the relationship between inequality and growth is non-linear in contrast with most existing studies which focus on a linear relationship. Using panel threshold regression and panel smooth threshold regression methods, we show that the impact of inequality on growth is negative but the effect is larger when inequality is low. This result differs from existing work that stresses either a positive effect using linear estimation or a concave relationship using simple non-linearity. Lastly, heterogeneity across countries is related to the magnitude and the timing of the change in the elasticity.