21 Jul 2015
by Jim Rose
in economic history, economics of regulation, global financial crisis (GFC), job search and matching, labour economics, labour supply, law and economics, minimum wage, politics - USA, unions
Tags: British economy, employment law, employment regulation, Eurosclerosis, France, Germany, Index of Economic Freedom
The writers of the Index of Economic Freedom at the Heritage foundation really loves the USA and didn’t think much of the Conservative Party – Liberal Democratic Party coalition government because labour market freedom actually fell in the UK during their administration. Bring back Tony Blair, all is forgiven. The information on their website throws no insight into why this reduction in labour market freedom in Britain happened.
Figure 1: Index of Economic Freedom, Argentina, Brazil, Chile and Venezuela, 95 – 2015 
Source: Index of Economic Freedom 2015.
Fortunately for Germany, labour market freedom increased over the course of the global financial crisis and its aftermath. This helps explains low unemployment in Germany during that period. Nothing much happened in France in regard to labour market freedom.
18 Jul 2015
by Jim Rose
in business cycles, job search and matching, labour economics, labour supply, macroeconomics, unemployment
Tags: British economy, Canada, equilibrium unemployment rate, natural unemployment rate
Figure 1 suggests a lot more structural change in the Canadian and British labour market in the 1970s and 1980s.
Figure 1: equilibrium unemployment rates, Canada, USA and UK, 1962 – 2016
Source: OECD Economic Outlook June 2015 via OECD StatExtract.
Nothing much at all seems to have happened to the equilibrium unemployment rate in the USA since the OECD first started calculating it. I doubt that so that will be subject of a future blog. Namely, the large changes in natural unemployment rates in the post-war period, largely to demographic changes such as the baby boom.
17 Jul 2015
by Jim Rose
in economic growth, economic history, human capital, income redistribution, labour economics, labour supply, politics - New Zealand, poverty and inequality, Public Choice, rentseeking
Tags: Leftover Left, neoliberalism, top 1%
On 12 August last, Closer Together New Zealand posted a chart showing average hourly wages had been stagnant for 20 years and then started growing again in 1993. Closer Together New Zealand then rounded up the usual suspects of the Left over Left.
Later that month in a comment on that post, a chart was posted showing that inequality had been increasing quite rapidly in the late 1980s and early 1990s in New Zealand. There were a range of economic reforms Closer Together New Zealand didn’t like in the late 1980s and early 1990s.
Closer Together New Zealand did not notice their second chart showed there had been a large increase in inequality, and their first chart showed that this was followed by the return of regular average hourly wages after 20 years of stagnation.
I am not so vulgar as to suggest correlation is causation, but it is amusing to watch that one day a chart is posted showing a resumption of wages growth after 20 years of wage stagnation and the next day a chart is posted showing that the major economic developments in the preceding years were a large increase in inequality and substantial economic liberalisation.
To add to my amusement, a companion site Inequality A New Zealand Conversation posted a chart showing the top 1% had not had much at all in income growth for the last 20 years while most everyone else had. This spike in the incomes of the top 1% prior to about 1994 was followed by the resumption in average wages growth after 1994.
16 Jul 2015
by Jim Rose
in discrimination, gender, human capital, labour economics, labour supply, occupational choice
Tags: asymmetric marriage premium, economics of families, gender wage gap, motherhood penalty
Source: Parenthood and the Gender Gap: Evidence from Denmark by Henrik Jacobsen Kleven, Camille Landais and Jakob Egholt Søgaard, University of Copenhagen January 2015 at http://eml.berkeley.edu/~webfac/auerbach/Landais2015.pdf
16 Jul 2015
by Jim Rose
in economic growth, labour economics, labour supply, minimum wage, politics - New Zealand, poverty and inequality, unemployment, welfare reform
Tags: child poverty, family poverty, family tax credits, in-work tax credits, social insurance, welfare reform, welfare state
Figure 1: child poverty (%) in New Zealand (before and after housing costs), 1982 – 2013
Source: Bryan Perry, Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2013. Ministry of Social Development (July 2014), Tables F.6 and F.7.
16 Jul 2015
by Jim Rose
in discrimination, economics of education, gender, labour economics, labour supply
Tags: cognitive psychology, educational psychology, lost boys, PISA, Psychology, reversing gender gap
Figure 1: % of students achieving a proficiency level below 2 in science by gender, USA, UK, New Zealand, Japan, Canada and Australia, 2012
Source: OECD StatExtract.
16 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, Austrian economics, comparative institutional analysis, constitutional political economy, development economics, economic history, economics of bureaucracy, economics of education, economics of regulation, economics of religion, energy economics, entrepreneurship, environmental economics, financial economics, growth disasters, growth miracles, income redistribution, industrial organisation, international economics, labour economics, labour supply, liberalism, poverty and inequality, Public Choice, rentseeking, survivor principle, transport economics, urban economics
Tags: Deirdre McCloskey, entrepreneurial alertness, The Great Enrichment, The Great Escape, The Great Fact, top 1%
15 Jul 2015
by Jim Rose
in Euro crisis, global financial crisis (GFC), great recession, job search and matching, labour economics, labour supply, macroeconomics, unemployment, welfare reform
Tags: equilibrium unemployment rate, Eurosclerosis, natural unemployment rate, unemployment duration
14 Jul 2015
by Jim Rose
in international economics, labour supply, minimum wage, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality, welfare reform
Tags: Australia, British economy, Canada, low pay, New Zealand, social insurance, welfare state, working poor
Figure 1: working poor – proportion of employed persons with income below the poverty line (50% of median disposable income) living in households with a working age head and at least one worker in USA, UK, Canada, Australia and New Zealand, 2013
Source: In It Together – Why Less Inequality Benefits All – © OECD 2015, OECD Income Distribution Database (IDD), www.oecd.org/social/income-distribution-database.htm, Table 1.A1.1. Key indicators on the distribution of household disposable income and poverty, 2007, 2011 and 2013 or most recent year.
12 Jul 2015
by Jim Rose
in discrimination, economics of love and marriage, gender, labour economics, labour supply, law and economics, occupational choice, politics - USA, poverty and inequality
Tags: asymmetric marriage premium, British economy, Canada, gender wage gap, marriage and divorce, motherhood penalty
Figure 1: Female/male earnings ratio by partner status and motherhood, 2004 
Source: LIS Cross-National Data Center in Luxembourg – Wave VI; individuals with positive earnings only. .
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