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In this paper, the author investigates the view that the US will soon face a labour shortage as a result of the impending retirement of ‘baby boomers’ and the slow growth of the workforce, and that labour market and education policies should be adapted to mitigate this impending shortage. The results suggest that this view is inaccurate because it makes ‘growth of gross domestic product (GDP) the target of economic policy’ and does not adequately allow for the ‘huge supply of qualified low wage workers in the global economy’. The author also demonstrates that the projections of future demands for skills are not reliable enough to inform skill development policies, and that demographic changes have not been consistently associated with changes in labour market conditions in the past. He argues that if there is to be a shortage, the competitive market should be allowed to ‘raise labour compensation rather than to adopt policies that keep labour costs low’. Show less

The paper documents the large cross-country differences in labor institutions that make them a candidate explanatory factor for the divergent economic performance of countries and reviews what economists have learned about the effects of these institutions on economic outcomes. It identifies three ways in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining, and by increasing information, communication, and trust. The evidence shows that labor institutions reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses in the cross-country data on which most studies focus, the paper argues for increased use of micro-data, simulations, and experiments to illuminate how labor institutions operate and affect outcomes.

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This paper examines the reasons for the current condition of the youth labour market in Organisation for Economic Co-operation and Development (OECD) countries in light of the deterioration of career employment and earning opportunities for youth over the last two decades. The author investigates the response of young people to these conditions through increased enrolment in higher education, a shift in choice of fields of study and occupation from science and liberal arts to business related areas, and a delay in the formation of families and longer residence in parental homes. Possible strategies to improve the conditions of the youth labour market are fielded. Statistical tables are included to support the text.

The volume of collected papers is indexed at TD/IRD 88.133. Show less

The distribution of earnings and the distribution of skills vary widely among advanced countries, with the major English-speaking countries, the US, the UK, and Canada, having much greater inequality in both earnings and skills than continental European Union countries. This raises the possibility that cross-country differences in the distribution of skills determine cross-country differences in earnings inequality. Using the International Adult Literacy Survey, we find that skill inequality explains only about 7% of the cross-country difference in inequality. Most striking, the dispersion of earnings in the US is larger in narrowly defined skill groups than is dispersion of earnings for European workers overall. The bulk of cross-country differences in earnings inequality occur within skill groups, not between them.

Published abstract reprinted by permission of the copyright owner. Show less