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Over 25 million people are victims of forced labor globally; the vast majority are low-skilled migrant workers who migrated from a different country or region. Evidence so far indicates that much of labor exploitation has roots in the recruitment process. This motivates the question of whether there are characteristics common to low-skilled labor recruitment that can serve as reliable indicators of forced labor risk in the workplace. Leveraging unique data sets from the Myanmar Government and the Issara Institute on weekly demand for Burmese migrant workers in Thailand by Thai companies, and on worker voice hot-line data from 2018-2020, we find that unexpected labor shortages in the workplace significantly increase migrant worker abuse. Using an Instrumental Variable (IV) approach, we find that an increase of one standard deviation in low-skilled labor shortages in the workplace leads to a 34.5% or higher increase in worker-reported labor abuse in the two to four weeks that follow. Shocks of such magnitude occur about 10% of the time. We also find a visible correlation between provinces whose labor markets are more stressed on average and the frequency of unexpected labor shortages in a province, suggesting that stressed labor markets are also more prone to unexpected shortages and abuse. Overall, this research suggests that inefficiencies in matching supply and demand for low-skilled labor play an important role in determining labor abuse outcomes, and that reducing these inefficiencies in the labor recruitment process could help mitigate labor abuse.

We estimated the impact of the minimum wage on wages, unemployment, and formal-informal sector mobility for women in the domestic-work sector in Uruguay. Applying the density-discontinuity design developed by Jales (2017), we used cross-sectional data for the period 2006-2016 from the National Household Survey and found that the minimum wage had significant effects on labor outcomes, with almost 20% of women increasing their wages to reach the minimum. This effect was observed in both the formal and informal sectors, though the latter was not covered by the policy. We also showed a decline in employment in the domestic sector as well as a significant effect on formal-informal sector mobility with negative impacts on formal employment. We present suggestive evidence those effects were offset by other labor policies undertaken in the analysis period.

We estimated the impact of the minimum wage on wages, unemployment, and formal-informal sector mobility for women in the domestic-work sector in Uruguay. Applying the dual-economy, density-discontinuity design developed by Jales (2017), we used cross-sectional data for 2006-2016 from the National Household Survey and found that the minimum wage had significant effects on labor outcomes, with almost 20% of women increasing their wages to reach the minimum. This effect was observed in both the formal and informal sector, though the latter was not covered by the policy. Our results showed a drop in employment as well as a significant effect on sector mobility with negative impacts on formality. Nevertheless, these undesired effects were offset by other labour policies undertaken in the period, by sustained economic growth, and by improvement in labor- market conditions. A novel identification strategy that is particularly suited to developing countries provides empirical evidence regarding the effects of a minimum wage on women workers in the informal sector.

Matched employee-employer data from the UK are used to analyze the wage premium to working in an innovative firm. We find that firms that are more R&D intensive pay higher wages on average, and this is particularly true for workers in some low-skilled occupations. We propose a model in which a firm's innovativeness is reflected in the degree of complementarity between workers in low-skill and high-skilled occupations, and in which non-verifiable soft skills are an important determinant of the wages of workers in low-skilled occupations. The model yields additional predictions on training, tenure and outsourcing which we also find support for in data.

The paper investigates the effects of firms’ investment in Research and Development (R&D) on employment dynamics in the British local labour markets (Travel to Work Areas). We distinguish between local areas characterised by the initial level of routinised employment of the workforce. We implement a instrumenting strategy to address endogeneity issues in the relation between innovation and employment. Our results suggest that increases in R&D investments mainly affect routinised areas, where the employment created is low skilled, concentrated in non-tradable sectors (like transport, construction) and services. A significant share of the jobs created is self-employment, concentrated in the 25-34 age cohort. We qualify the effect of R&D on self-employment by looking at local firms’ dynamics, which suggest that the increase in self-employment is reflected in a higher number of micro-firms. Rather, in non-routinized areas, R&D results in the expected increase in the demand of high-skilled workers and a reduced demand of low-skill employment.

We investigate a market in which experts have a moral hazard problem because they need to invest in costly but unobservable effort to identify consumer problems. Experts have either high or low qualification and can invest either high or low effort in their diagnosis. High skilled experts are able to identify problems with some probability even with low effort while low skilled experts here always give false recommendations. Experts compete for consumers by setting prices for diagnosis and service. Consumers can visit multiple experts, which enables an endogenous verifiability of diagnosis. We show that with a sufficient number of high skilled experts, stable second-best and perfectly non-degenerate equilibria are possible even with flexible prices, although they depend on transactions costs being relatively low. By contrast, with a small share of high skilled experts in the market, setting fixed prices can be beneficial for society.

We use micro data on skills to analyze the human capital of entrepreneurial and incumbent plants in U.S. manufacturing over 2005-2013. We find a large drop in cognitive skills in entrepreneurial plants. This has long-term implications since initial cognitive skills at the plant level predict future skills and growth rates. The gap between entrant and incumbent skills increases with exposure to Chinese imports, with entrants' skills falling and those of incumbents increasing. Import competition explains between 17%-60% of the skill differential between entrants and incumbents. While high skilled incumbents grow faster than low skilled establishments in exposed industries, the evidence for entrants is weaker. Overall, we find that entrepreneurial firms and incumbents are acquiring different skill sets, leaving entrants more exposed to the risk of automation or offshoring.

This study explores if declining employment in routine middle-skilled jobs as a result of technological change is creating more over-educated workers in the low skilled non-routine manual jobs. Using data from European Labour Force Survey covering the period from 1999 to 2007, the paper analyses employment change and over-education in four countries of Europe – Germany, Spain, Sweden and UK. The results suggest higher incidence of over-education in polarized countries – Spain and UK as compared to countries with employment upgrading – Germany and Sweden. It also reveals that in Spain and UK, over-education is prominent and increasing over time in the low paid jobs which are mostly non-routine manual in nature, while Germany and Sweden have more over-educated workers in middle skilled routine and high skilled analytical jobs. I find similar results in both descriptive and job fixed effects regressions.

ILO instruments have long recognized the potential of bilateral cooperation in the good governance of labour migration flows, and in contributing to the protection of migrant workers. In the recent past, bilateral labour arrangements (BLAs) and Memoranda of Understanding (MOUs) on labour migration have gained significance as tools to facilitate the cross-border movement of workers across all regions. The study reviews the evolution of bilateral agreements since the 1950s and identifies changing patterns in such agreements. The focus is on bilateral arrangements for migration of low skilled workers. It is shown that MOUs are the main form of bilateral cooperation in Asia whereas Africa, Europe and the Americas have generally relied on BLAs.It evaluates BLAs and MOUs using international standards and norms as a benchmark, and highlights the major issues involved. For the comparative evaluation, the study draws upon regional mappings of BLAs and MOUs undertaken by the ILO/KNOMAD (Global Knowledge Partnership on Migration and Development) project.The study highlights the extent to which agreements contribute to ensuring good governance in facilitating labour migration processes, protecting human and labour rights of migrant workers, and reaping development benefits of migration. It makes a series of recommendations based on the analysis.

We document that immigration to U.S. states has increased the mass of workers at the lower range of the skill distribution. We use this change in skill distribution of workers to analyze the effect of immigration on wages. Our model allows firms to endogenously respond to the immigration-induced changes in skill distribution in terms of their decisions (i) to enter different industries which require the use of different technologies; (ii) to choose across technologies that differ in their skill-intensity; and (iii) to employ workers of different skill levels. Allowing these mechanisms to interact, we find that, in line with much of the related empirical literature, immigration has a small effect on average real wages of low skilled workers for U.S. states. We further show that immigration increases the wage inequality between workers of different skill levels in all states, and that the effect of immigration on wages and wage inequality varies systematically with the volume of immigration across states.

It is often assumed that international labor migration from Tajikistan, while having no noticeable effects on investment (usually defined as medium and long-term consumption, such as education, or investment into housing or business), on average leads to an increase in short-term consumption, mostly food. In this paper, a simple household-level model determining the migration decision is developed and tested empirically. In a second step, the effect of low-skilled labor migration on household expenditure shares is analyzed using 2SLS. While only weak effects of migration measured by a simple dummy are visible, repeating the analysis using the length of the migration spell instead, as well as its squared term, reveals that labor migration apparently takes a while to "kick in" and become profitable to those remaining at home. The observed long-term effects on household consumption patterns, albeit being rather small, actually speak in favour of investment of remittances, with the respective shares increasing over time, while the budget share spent on food slowly decreases.

We assess the impact of low-skilled immigration on capital intensity. We first present a model characterized by frictions in the labor market and firms' asymmetric information on workers' skills and show that firms can react to the immigration-induced reduction of their workforce's skill level by increasing the capital-labor ratio. We test the predictions of the model on a sample of Italian manufacturing firms over the period 1996-2007, finding that increased immigration of low-skilled workers from developing countries, measured at the provincial level and instrumented with pre-existing enclaves of immigrants and network effects, raises capital intensity. In line with the predictions of the theoretical model, the impact of immigration, which is quite robust across empirical specifications, is stronger for larger firms and in skill-intensive sectors.

We ask how two reforms of migration law (EEA accession in 1994 and the integration agreement regulation in 2003) impacted on the education structure of migrants to Austria. To identify the effects of these reforms, we use the fact that EEA accession affected only migrants from EEA countries, while third country citizens were unaffected and that the opposite is the case for the integration agreement regulation. We find robust evidence that the share of low educated permanent migrants from the EEA to Austria reduced relative to the share of low educated permanent migrants from other countries due to Austria's EEA accession. With respect to the reform of residence law in 2003 our results are less robust. Most of them, however, point to an increased share of low skilled permanent migrants.

While various studies have already shown that people prefer high- over low-skilled migrants we know surprisingly little why this is so. This paper tries to close this gap by investigating three explanatory models. (1) According to the labor market competition model, citizens oppose immigrants with the same skill levels who are perceived as competitors on the job market. (2) According to the welfare state model low-skilled immigrants’ use of public services is disproportionally higher than their contribution to tax revenues contrary to high-skilled immigrants. (3) According to the deservingness model high-skilled immigrants are preferred as low-skilled immigrants are considered as lazy people who would be as well off as natives if they only tried harder. As one of the first studies outside the US these arguments are tested by means of an experimental online survey in Switzerland. Respondents were randomly assigned to evaluate low- and high-skilled immigrants. We find that different groups prefer high- over low-skilled immigrants for different reasons: While the labor market competition model does nort play a role, the welfare state model only holds for natives who are well off in regions with low taxes. Finally, attitudes on deservingness explain preference of high-skilled immigrants only if the respondents have a high income.

Education is widely recognized as one of the most important determinants of earnings in the labour market. A main aspect of the relationship between education and earnings is the wage premium between workers with higher and lower education. The findings of previous studies show that changes in the relative supply of high skilled to low skilled workers are negatively related with the wage premiums. Increases in relative demand, on the other hand, are found to have a positive impact. In this study I analyze the evolution of wage premiums of attaining further education in the Republic of Cyprus. The results indicate a fall, on average, in the wage premiums of the first period (1991-1996) and a rise in the second (1996-2003). Several plausible explanations are given for these changes using the findings, the existing literature and important historical facts.

This paper deals with the recruitment strategies of employers in the low-skilled segment of the labour market. We focus on low-skilled workers because they are overrepresented among jobless people and constitute the bulk of the clientele included in various activation and labour market programmes. A better understanding of the constraints and opportunities of interventions in this labour market segment may help improve their quality and effectiveness. On the basis of qualitative interviews with 41 employers in six European countries, we find that the traditional signals known to be used as statistical discrimination devices (old age, immigrant status and unemployment) play a somewhat reduced role, since these profiles are overrepresented among applicants for low skill positions. On the other hand, we find that other signals, mostly considered to be indicators of motivation, have a bigger impact in the selection process. These tend to concern the channel through which the contact with a prospective candidate is made. Unsolicited applications and recommendations from already employed workersemit a positive signal, whereas the fact of being referred by the public employment office is associated with the likelihood of lower motivation.

Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sector, the transition into and out of informality, and wages. Our results indicate that rises in non-wage costs and the minimum wage, increase the probability of transition into informality as well as the size of the informal sector. The analysis of these effects along the income distribution points towards strong exclusion motives for low skilled informal workers, mainly driven by labor demand adjustments in response to increasing hiring costs; and argues somehow in favor of exit motives for workers at the top of the wage distribution. Furthermore, there is strong indexation of salaries to the minimum wage, except for low skilled informal workers. In addition, firms adjust salaries in response to increasing non-wage costs for all workers within the labor force.

In this paper I analyze the effects of information and communication technology (ICT) on compensation shares of high-, medium-, and low-skilled workers. Com- pared to other studies, I investigate this question using a considerably richer data set with respect to the length of time series, set of countries and industries, and information on ICT. Next to investigating the influence of ICT in 14 countries, I concentrate on the analysis in 23 separate industries. The results I find show that the skill-biased technological change hypothesis is rejected if single countries are analyzed with an industry panel, while I find that technological change is a cause of changes in the relative compensation shares in single industries. Here there is a positive influence of ICT on high-skilled workers' relative compensation for the time before 1995, while ICT investments drive the medium- and low-skilled com- pensation shares together for a substantial amount of industries, especially since 1995.

The paper addresses an important aspect of the current migration and development debate - the role of diasporas and transnational communities as contributors to the development of their origin countries. He shows that diaspora definitions, estimates of diaspora numbers and conceptualising their contributions are very much inter-related. In the first section, the author reviews different definitions of diasporas and transnational communities. He then provides some statistical information and estimates available on diaspora communities in different regions of the world with some discussion of their profiles. The diversity of the diaspora is examined in terms of age and skill profiles, length of stay in host societies, status of stay (documented and undocumented) and return patterns. In the next section, the author examines the nature and diversity of diaspora contributions to development. Globalization trends and advances in internet and communications technology and travel and transport have led to many options in transnational engagements. At the same, the increasing attention on promoting migration and development linkages has focussed on the role of the diaspora as a major area of intervention. The author argues that betting on the intellectual or the skilled diaspora alone as common in most discussions could be misleading, and may provide wrong signals for policy interventions. There is substantive evidence that all categories of the diaspora including low skilled diaspora make important contributions to home countries, and this diversity of contributions needs to be given due recognition in diaspora engagement policies.The author concludes by highlighting a number of directions for further research: better information on diaspora profiles and their transnational engagements; role of women in diaspora communities and their engagement with home countries; transnational practices that embrace both source and destination countries; extent of integration of the diasporas in host societies, and the impact of such integration and protection of rights on their contributions; role of migrant organisations, both formal and informal; and analysis of current policies followed by particularly countries of origin for engaging their diaspora communities.

Research generally focuses on how immigration affects native workers, while the impact of immigration on domestic firms is often overlooked. This paper addresses this important omission by examining whether firms respond to immigration by adjusting the location of their production activities. Consistent with the predictions of the model, the results indicate that low skilled immigration decreases and high skilled immigration increases the relocation of production activities at both the extensive and intensive margins. These results explain why the impact of immigration on the wages of native workers is often found to be quite small.

Low-skilled workers do not fare well in today's skill intensive economy and their opportunities continue to diminish. Given that individuals in this challenging skill segment of the workforce are more likely to have poor experiences in the labor market, and hence incur greater public expenses, it is particularly important to seek and evaluate their labor market options. Utilizing data from the Survey of Income and Program Participation, this paper provides a comprehensive analysis of the economic returns to business ownership among low-skilled workers and addresses the essential question of whether self-employment is a good option for low-skilled individuals that policymakers might consider encouraging. The analysis reveal substantial differences in the role of self-employment among low-skilled workers across gender and nativity – women and immigrants are shown to be of particular importance both from the perspectives of trends and policy relevance. We find that although the returns to low-skilled self-employment among men are relatively high we find that wage/salary employment is a substantially more financially rewarding option for most women. These findings raise the question of why low-skilled women enter self-employment. Our business start-up results are consistent, but not conclusive, with lack of affordable child care options and limited labor market opportunities in the wage/salary sector as motivating native born women to enter self-employment. We do not find empirical evidence of similar constraints among immigrant women.

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer-term employment. We utilize the unique structure of Detroit's welfare-to-work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period.

We show how small initial wealth differences between low skilled black and white workers can generate large differences in their labor-market outcomes. This even occurs in the absence of a taste for discrimination against blacks or exogenous differences in the distance to jobs. Because of the initial wealth difference, blacks cannot afford cars while whites can. Car ownership allows whites to reach more jobs per unit of time and this gives them a better bargaining position. As a result, in equilibrium, blacks end up with both higher unemployment rates and lower wages than whites. Furthermore, it takes more time for blacks to reach their jobs even though they travel less miles. Those predictions are consistent with the data. Better access to capital markets or better public transportation will reduce the differences in labor market outcomes.

This paper explores the effects of high skilled immigration to a host country with unionized low skilled labor and an unemployment insurance scheme. We show that such immigration can create a negative immigration surplus due to adverse effects on low skilled employment, provided that fiscal redistribution is not too intense and the elasticity between high and low skilled labor is high as empirical evidence suggests.

We analyse the immigration flows to Western Europe in the sixties. We develop a theoretical model tailored to account for some of the key features of this period, i.e., trade in manufacturing that essentially involved advanced countries, the growing administration of labour markets in Western Europe and the huge inflow of low skilled immigrants from the South (less advanced countries) into Western Europe. Two propositions are subsequently derived from this model. First, the immigration flow increases with the skill premium in the country of destination. Second, for a given skill premium, immigration is an increasing function of both the host country’s working population and its relative endowment in skilled labour. The first proposition reflects a demand side effect that diverges from the result of the traditional self-selecting approach to migration, i.e., that a higher skill premium in the country of destination tends to discourage potential low-skilled migrants. Estimations implemented for a panel of four European countries (Belgium, France, Sweden and West Germany) over the period 1960-1975 corroborate to a large extent our propositions. We also find that none of the supply determinants are individually significant at equilibrium. These results confirm the hypothesis that immigration to Western Europe in the sixties was primarily demand driven.

While an extensive literature examines the impact of low-skilled immigration on US native wages, there has been almost no research on the parallel question of how immigration affects the price of goods and services. A standard small open economy model suggests that low-skilled immigration should reduce the relative price of non-traded goods by decreasing the wages of low-skilled workers. Treating US cities as small open economies and using confidential price data on goods and services to estimate reduced-form price effects, I find that, at current immigration levels, a 10 percent increase in the share of low-skilled immigrants in the labor force decreases the price of immigrant-intensive services, such as housekeeping and gardening, by 1.3 percent and of other non-traded goods by 0.2 percent. Structural estimates suggest that lower wages are a likely channel through which these effects take place. However, wage effects are significantly larger for low-skilled immigrants than for low-skilled natives because the two are imperfect substitutes. Overall, the results imply that the low-skilled immigration wave of the 1990s increased the purchasing power of high-skilled natives living in the 25 largest cities by 0.65 percent but decreased the purchasing power of native high school dropouts by 2.66 percent.

We examine the key components that determine an individual's early career wage growth and how these factors have changed for less skilled workers over the last twenty years. In particular, we examine the relative importance of accumulating work experience as compared to the quality of job matches in influencing wage growth. Our main finding is that over this period, the vast majority of the variation in wage growth is due to variability in the return to experience.

We examine why employers use temporary agency and contract company workers and the implications of these practices for the wages, benefits, and working conditions of workers in low-skilled labor markets. Through intensive case studies in manufacturing (automotive supply), services (hospitals), and public sector (primary and secondary schools) industries, we define the circumstances under which these workers are likely to be adversely affected, minimally affected, or even benefitted by such outsourcing. Adverse effects on compensation are clearest when companies substitute agency temporaries or contract company workers for regular employees on a long-term basis because low-skilled workers within the organization receive relatively high compensation and employment and labor law or workers and their unions do not block companies from such substitution. Often, however, organizations only contract out management functions or utilize agency temporaries for brief periods of time, with little direct effect on in-house, low-skilled workers. Moreover, employers often use temporary agencies to screen workers for permanent positions. Because temporary agencies lower the cost to employers of using workers with poor work histories or other risky characteristics, agencies may benefit these workers by giving them opportunities to try out for positions they otherwise might not have had.

This paper analyzes the relationship between unemployment and growth, applying the seminal growth model of Aghion/Howitt (1992). We distinguish low skilled and high skilled labor and assume that a union bargains over the low skilled labor wage. This causes unemployment, but the growth effect is ambiguous. On the one hand, the higher wage will squeeze the expected profits of the researcher, which is bad for growth. On the other hand, the union affects the marginal product of high skilled labor, and, hence, the wage in the manufacturing sector declines. This causes a "migration" of high skilled labor from the manufacturing into the research sector. This effect is growth enhancing. We show that the overall effect crucially depends on the elasticity of substitution between high skilled and low skilled labor. Is this elasticity smaller than one the "good" growth effect dominates the bad and vice versa. In the Cobb Douglas case both effects cancel out.

This paper investigates the impact of "outsourcing" on the relative wages and employment of the low-skilled in the U.K. In contrast to previous studies which proxy outsourcing by imports from all countries, we examine whether the source of imports is important. We disaggregate U.K. imports according to individual supplier countries and construct import penetration terms for different groups of countries--i.e., distinguishing between imports from industrialized countries and imports from low-wage countries--for each 4-digit industry within the broader categories of textiles and non-electrical machinery. Our econometric results show that imports from low-wage countries have made a significant contribution to the decline in the relative wages and employment of the less-skilled in the U.K., with no discernible effect resulting from imports originating from industrialized countries. The estimates suggest that rising imports from low-wage countries may account for about 40 percent of the rise in the wage bill share of skilled workers, and approximately one-third of the increase in their employment share, in the U.K. textiles sector during the period 1970-1983. We also offer some limited evidence that the degree of outsourcing may differ across industries and that large currency appreciations may have a disproportionately large impact on the economic fortunes of the less-skilled, partly by creating an increased "threat" of outsourcing.