Labour economics

Labour economics, or labor economics, seeks to understand the functioning and dynamics of the markets for wage labour. Labour is a commodity that is supplied by labourers, usually in exchange for a wage paid by demanding firms. Because these labourers exist as parts of a social, institutional, or political system, labour economics must also account for social, cultural and political variables. Labour markets or job markets function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services (workers) and the demanders of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and income. These patterns exist because each individual in the market is presumed to make rational choices based on the information that they know regarding wage, desire to provide labour, and desire for leisure. Labour markets are normally geographically bounded, but the rise of the internet has brought about a 'plan

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"Immigration, Innovation, and Knowledge Diffusion"

Gabriele Cristelli

This dissertation studies the relationship between immigration and innovation. It adopts an empirical perspective and focuses on Switzerland, combining the use of patent data and immigration administrative records. The first essay is based on a novel database on immigrant inventors and explores their role in Swiss R&D activities, their productivity, and inventive career before and after immigration. It shows that highly productive inventors are over-represented among immigrants and that foreign inventors tend to enter Switzerland early in their careers and with little prior inventive experience. The second essay studies the innovation effects of the Agreement on the Free Movement of Persons (AFMP), which lifted immigration restrictions for EU citizens to Switzerland after its introduction in 2002. It exploits a natural experiment generated by regional differences in the exposure to the AFMP and influx of foreign workers. It finds that the AFMP introduction increased regional patenting in Switzerland and did not depress the inventive output of its neighbouring countries. In addition, Swiss inventors did not reduce their inventive activity due to newly arrived foreigners. Further results show that the AFMP had a positive effect on incumbent inventors' productivity, increasing the number of foreign collaborators and the variety of technical knowledge available.The third essay also focuses on the AFMP and studies the effects of the Swiss and the German labor markets' integration on technical knowledge diffusion. Using patent citation data and textual similarity measures, it demonstrates that the abolition of immigration restrictions for commuters residing in the German state of Baden-Wuerttemberg and working in Switzerland increased the diffusion of German inventions patented in commuters' residential locations into Switzerland.

EPFL2021

On the radar: Predicting near-future surges in skills’ hiring demand to provide early warning to educators

Richard Lee Davis, Pierre Dillenbourg, Ramtin Yazdanian

The AI-driven Fourth Industrial Revolution and the COVID-19 pandemic have one important thing in common: they both have caused significant and rapid changes to the skill set landscape of various industries. These disruptive forces mean that the early identification of the newly rising skills in a labour market — which we call its “emerging skills” — is crucial to its workforce. It is also crucial to the educators who, in order to provide lifelong training to the workforce, need to quickly adapt their curricula to the new skills. We propose a classification methodology that uses the past job ad trends of skills to predict the emerging skills of a future period, defined as the skills that have experienced a surge in hiring demand in said period. This general definition allows for freedom in specifying the criteria for a skill being emerging (through thresholds on hiring demand and its growth), which could be important to educators. Applying our methodology to the Information and Communication Technologies (ICT) labour market in Singapore, we show that we are able to predict future emerging skills with good precision and recall and beat two baseline classifiers for multiple threshold sets. Our methodology also allows us to see where job ads fail to provide sufficient predictive signals, pointing to auxiliary data sources (such as Stack Overflow for ICT) and skill ontologies as potential remedies. The success of our method shows how AI can be used to empower learners and educators in the ICT domain (and potentially other domains) with useful and well-curated insights at a moment’s notice, thus helping speed up the process of curricular change.

2021

Monopsony with nominal rigidities: An inverted Phillips Curve

Charles Cosme Henri Dennery

With nominal wage rigidities, it is crucial to distinguish whether wages are set by workers or firms — whether we have monopoly or monopsony power. This paper provides a model of monopsony power in the labour market and a monopsonistic Phillips Curve. If wages are set by firms who face nominal rigidities, and there is inflation, firms cannot adjust their wages fully. The real wage falls, and labour supply hence output decreases. This provides a Phillips Curve where the output gap is negatively correlated with wage inflation. In such a world monetary policy affects the intertemporal labour supply, while the Phillips Curve is a labour demand curve. Interest rate cuts reduce the labour supply instead of boosting demand: they are contractionary.

2020

Economics

Economics (ˌɛkəˈnɒmᵻks,_ˌiːkə-) is a social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of econom

Capitalism

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competiti

Employment

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit

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