Plant Turnover and the Evolution of Regional Inequalities

Understanding the evolution of earnings inequality is a major research topic with obvious policy implications. While there is widespread belief that institutions are largely responsible for the limited rise in inequality in some European countries, it is also recognised that little or no growth in inequality could be the outcome of market forces alone. However, the role of these market forces in different institutional environments is still not entirely understood. Is the small growth in inequality at the country level reflecting small increases in inequality within and between groups or is it the result of large offsetting changes in different components? Using a large longitudinal matched employer-employee dataset we produce several measures of within and between groups inequality in Portugal for the 1986-1998 period. We focus our attention on changes in the returns to observable characteristics (gender, age and education) of workers and test the hypothesis that these changes reflect developments in the labour market. However, we depart from previous research by shifting focus from the supply side to the demand side of the labour market. Drawing on the results of the by-now large literature on plant turnover we investigate the link between plant entry and exit and changing returns to observable worker characteristics. We argue that Portugal is an interesting case study because, despite very tight regulation and a centralised wage setting system, the level and changes of earnings inequality in recent years make the Portuguese case akin to the US and UK cases rather than to other European cases that share with Portugal similar labour market institutions. Furthermore, high firing costs have previously been identified as the cause for a larger share of employment adjustment occurring in Portugal through plant openings and closings as an alternative to the expansion and contraction of continuing plants. Our analysis is done at the regional level - 28 regions in mainland Portugal (NUTS III) are considered. The advantages of working at the regional level are twofold. First, data for all regions come from the same source - the Personnel Records - which eliminates all issues of comparability that plague many studies dealing with international comparisons. Second, regional comparisons within the same country guarantees a common institutional background which is appropriate given our focus on the role market forces play in shaping patterns of changing earnings inequality. Personnel Records are an administrative survey administered by the Ministry of Employment which is mandatory to all plants with at least one wage earner. Data reported by respondents include characteristics of the plant (location, industry and size), the firm they belong to (location, industry, total employment, annual sales and legal status) and each worker in the plant. Reported worker characteristics include gender, age, education, skill, tenure, earnings and weekly hours of work). Because each plant is assigned a unique invariant identifier, plants can be followed across waves and entries and exits can be identified. On average, the data contains information on 200 thousand plants and 2 million workers per year.

How a Reduction of Standard Working Hours Affects Employment Dynamics

On December 1, 1996, a new law was implemented in Portugal to gradually reduce the stan- dard working week from 44 to 40 hours. We study how this mandatory reduction affected employment through job creation and job destruction. We find evidence that the working hours reduction had a positive effect on employment through a fall in job destruction.Workweek reduction;policy reform;employment dynamics

How Working Time Reduction Affects Employment and Earnings

December 1, 1996 Portugal introduced a new law on working hours which gradually reduced the standard workweek from 44 hours to 40 hours. We study how this mandatory working hours reduction affected employment and earnings of workers involved. We find for workers who were affected by the new law that working hours decreased, while hourly wages increased, keeping monthly earnings approximately constant. We also find that the working hours reduction did not lead to an increased job loss of workers directly affected. Finally, we find that workers who themselves were not directly affected were influenced by the working hours reduction indirectly. If they worked in a firm with many workers working more than 40 hours before the change in law was introduced.Workweek reduction;policy reform;employment dynamics;earnings

Lumpy Labor Adjustment as a Propagation Mechanism of Business Cycles

This paper aims to study the quantitative significance of lumpy labor adjustment as a propagation mechanism for business cycles. In the baseline model, I introduce lumpy job turnover in the spirit of Taylor (1980) and Calvo (1983) in a DSGE framework and find that it performs as same as the quadratic-adjustment-cost model at the aggregate level, but different at firm’s level. In particular, It can capture lumpy labor adjustment at plant’s level through the ’front-loading effect’. Then I implement the Weibull distribution in the same framework to incorporate the increasing hazards of the labor adjustment process, which is supported by the evidence from micro data. This extension represents a substantial improvement over benchmark models. It can replicate high volatility of employment, low volatile labor productivity and persistent dynamics in output. Based on these results, I conclude that intratemporal substitution between the two production factors and the aggregation mechanism play an important role in the propagation mechanism.Business cycles, Lumpy labor adjustment, Weibull distribution, Increasing hazard function

Matching Workers to Jobs in the Fast Lane: the Operation of Fixed-term Contracts

In this paper we look at fixed-term contracts and examine the main features of temporary as opposed to regular employment, keeping the focus on employment careers and wage dynamics of workers employed under fixed-term contracts. Previous work found that fixed-term contracts serve as screening devices for employers. Here it is found that fixed-term contracts serve as search devices for workers, as well. Hence, they can be considered steppingstones to permanent forms of employment. However, if due to a job loss episode, a worker receives at some evolved stage of his or her career a fixed-term contract, there is an indication that both his wage and subsequent employment prospects are severely harmed.

Why Do Firms Use Fixed-Term Contracts?

Temporary forms of employment account for a variable but never trivial share of total employment in both the U.S. and in Europe. In this article we look at how one specific form of temporary employment − employment with fixed-term contracts − fits into employers' hiring policies. We find that human capital variables (schooling, skills and employer-provided training) as measured at the levels of the worker and the workplace are important determinants of the employersâ decisions to hire with fixed-term contracts and to promote temporary workers to permanent positions. Those employers that hire more with fixed-term contracts are also those that are more likely to offer a permanent position to their newly-hired temporary employees. Our results indicate that fixed-term contracts are used as mechanisms for screening workers for permanent positions.fixed-term contracts, adjustment costs, labor demand

Lumpy Labor Adjustment as a Propagation Mechanism of Business Cycles

I explore the aggregate effects of micro lumpy labor adjustment in a prototypical RBC model, which embeds a stochastic labor duration mechanism in the spirit of Calvo(1983), and it extends this approach by introducing a Weibull-distributed labor adjustment process to capture the increasing hazard function corroborated by the micro data. My principal findings are: The aggregate labor demand equation derived from the baseline Calvostyle model corresponds to the same reduced form as the quadratic-adjustment-cost model and deep parameters have a one-to-one mapping. However, this result does not hold in general. When introducing the Weibull labor adjustment, the aggregate dynamics vary with the extent of increasing hazard function, e.g., the volatility of aggregate labor is increasing, but the persistence is decreasing in degree of the increasing hazard of the labor adjustment.business cycles; heterogeneous labor rigidity; increasing hazard function; Weibull distribution

Sumoylation of Smc5 Promotes Error-free Bypass at Damaged Replication Forks

Replication of a damaged DNA template can threaten the integrity of the genome, requiring the use of various mechanisms to tolerate DNA lesions. The Smc5/6 complex, together with the Nse2/Mms21 SUMO ligase, plays essential roles in genome stability through undefined tasks at damaged replication forks. Various subunits within the Smc5/6 complex are substrates of Nse2, but we currently do not know the role of these modifications. Here we show that sumoylation of Smc5 is targeted to its coiled-coil domain, is upregulated by replication fork damage, and participates in bypass of DNA lesions. smc5-KR mutant cells display defects in formation of sister chromatid junctions and higher translesion synthesis. Also, we provide evidence indicating that Smc5 sumoylation modulates Mph1-dependent fork regression, acting synergistically with other pathways to promote chromosome disjunction. We propose that sumoylation of Smc5 enhances physical remodeling of damaged forks, avoiding the use of a more mutagenic tolerance pathway.Ministerio de Ciencia, Innovacion y Universidades (BFU2015-71308-P, PGC2018-097796-B-I00)AGAUR-Generalitat de Catalunya (2017-SGR-569

Why Do Firms Use Fixed-Term Contracts?

This paper investigates the reasons why firms use fixed-term contracts.Two distinctive features of these contracts - reduced firing costs and the prohibition of contract rollover - are highlighted. Firms' decision related to temporary contracts - the choice of the contract on offer and contract conversion - are modeled within standard adjustment costs and matching settings. Regression analysis is performed on the stock of fixed-term contracts and the flows of temporary workers to permanent positions. Results from a beta-binomial regression model indicate that screening workers for permanent positions is the single most important reason why firms use this type of contract.Fixed-Term Contracts, Adjustment Costs, Temporary Employment

Evolução setorial do emprego nas mesorregiões paranaenses: reflexos da crise de 2008.

Trabalho de conclusão de curso apresentado ao Instituto Latino-Americano de Economia, Sociedade e Política da Universidade Federal da Integração Latino-Americana (UNILA), como requisito parcial à obtenção do título de Bacharel em Ciências Econômicas – Economia, Integração e Desenvolvimento. Orientador: Prof. Dr. Gilson Batista de Oliveira.Este trabalho tem como objetivo analisar o comportamento do emprego formal das mesorregiões do estado do Paraná, no período de 2007 a 2013, buscando observar o desempenho de todas as mesorregiões e os setores econômicos que mais se destacaram. Evidencia-se a escolha dos anos visto que, em períodos de crise, o emprego é uma das variáveis macroeconômicas afetadas, já que, o período analisado neste trabalho, abarca a maior crise econômica após 1929. A metodologia utilizada é o método de análise regional shift-share, um método utilizado para evidenciar setores e regiões que se diferenciam levando em consideração vantagens diferenciais (locacionais) e estruturais (produtivas) quando comparadas a uma região universo. O método está fundamentado com o referencial teórico das teorias do desenvolvimento regional, em especial da análise locacional, tendo como destaque a polarização da atividade econômica nas regiões. Os resultados apontam que as regiões Sudoeste e Centro Sul foram as regiões que apresentaram maiores crescimentos relativos do emprego formal. No outro extremo estão as regiões Centro Oriental e Norte Pioneiro. Os resultados setoriais para o estado indicaram que a indústria de calçados e a construção civil foram os setores mais dinâmicos da economia. Os resultados mostraram que as mesorregiões Metropolitana de Curitiba, Norte Central, Centro Sul, Sudoeste e Oeste foram as regiões mais dinâmicas do estado. Apontou ainda que a mesorregião Metropolitana de Curitiba foi a única com vantagem estrutural regional. As mesorregiões Norte Pioneiro, Centro Oriental, Sudeste e Centro Ocidental foram as regiões menos dinâmicas de acordo com os cálculos da metodologia apresentando, simultaneamente, desvantagens estruturais e diferenciais. Majoritariamente, grande parte das mesorregiões apresentaram maiores vantagens estruturais no setor da construção civil (oito de dez regiões). Houve bastante diversificação quanto à componente diferencial, o que indica que as regiões, quando se refere a questões locacionais, são muito heterogêneas entre si. De modo geral, levando em consideração fatores estruturais e diferenciais, os setores de comércio varejista e serviços imobiliários foram os que mais se destacaram. Completam a lista a construção civil e a indústria de comidas e bebidas. Com respeito aos setores que apresentaram piores resultados por mesorregião, os resultados indicaram uma variação grande de rubricas, entre elas administração pública, agropecuária e indústria da madeira e mobiliário. Por fim, destaca-se a importância da análise proposta neste trabalho, visto que conhecer o perfil de uma região e sua evolução é de extrema importância para construir uma agenda de políticas públicas, com o objetivo de melhorar a vida da população. No caso deste trabalho, esta análise se daria através estudo do emprego regional.This work aims to analyze the formal employment performance of the Paraná's mesoregions, from 2007 to 2013, seeking to observe the performance of all mesoregions and economic sectors and that stood out. The years have been chosen because, in times of crisis, employment is one of the affected macroeconomic variables, since that, in this case, the period includes the biggest economic crisis after 1929. The methodology used is the shift-share analysis, one method used to show sectors and regions that differ considering differential advantages (locational) and structural (productive) when compared to a national region. The method is based on the theoretical framework of the theories of regional development, particularly the locational analysis, especially the polarization of economic activity in the regions. The results show that the Southwest and South Central regions were the regions with highest growth for formal employment. At the other extreme are the regions East Central and Northern Pioneer. Setor results to the state indicated that the shoe industry and construction were the most dynamic sectors of the economy. The shift-share analysis observed that the Metropolitan Region of Curitiba was the most dynamic mesoregion of the state. Also showed that this region is the one with regional structural advantage. The mesoregions Pioneer North, East Central, Southeast, and West Center were the least dynamic regions according to the methodology. Simultaneously showed structural an differential disadvantages. Mainly, most mesoregions had higher structural advantages in the construction sector (eight out of ten regions). There was significant diversification in the differential component, which indicates that the regions, when referring to locational issues are very heterogeneous with each other. In general, taking into account structural and differential factors, the retail trade sectors and estate services were the most outstanding. Rounded out the construction and the food and beverage industry. With respect to sectors that fared worse for mesoregion, the results indicated a wide range of items, including public administration, agriculture and wood and furniture industry. Finally, we highlight the importance of the analysis proposed in this work, as to know the profile of a region and its development is extremely important to build an agenda of public policies, with the aim of improving people's lives. In the case of this study, this analysis would take place through study of regional employmenEste trabajo tiene como objetivo analizar el comportamiento del empleo formal de las mesorregiones del estado de Paraná, en el periodo de 2007 a 2013, buscando observar el desempeño de todas las mesorregiones y los sectores económicos y que más se destacaron. Se evidencia la elección de los años en razón que, en periodos de crisis, el empleo es una de las variables macroeconómicas afectadas, ya que el periodo abarca la mayor crisis económica después de 1929. La metodología utilizada es el método de análisis regional shift-share, un método utilizado para poner en evidencia los sectores y regiones que se diferencian llevando en consideración ventajas diferenciales (de ubicación) y estructurales (productivas) cuando se comparan con una región universo. El método está fundamentado con el referencial teórico de las teorías de desarrollo regional, en especial de análisis de localización, teniendo como destacada la polarización de la actividad económica en las regiones. Los resultados apuntan que las regiones Sudoeste y Centrosur fueron las regiones que presentaron mayores crecimientos relativos del empleo formal. En el otro extremo están las regiones Centro Oriental y Norte Pionero. Los resultados sectoriales para el estado indicaron que la industria de calzados y la construcción civil fueron los sectores más dinámicos de la economía. El método shift- share constató que la Región Metropolitana de Curitiba fue la mesorregión más dinámica del estado. Se indicó a esta región como la única con ventaja estructural regional. Las mesorregiones Norte Pionero, Centro Oriental, Sudeste y Centro Occidental fueron las regiones menos dinámicas de acuerdo con la metodología. Se presentaron simultáneamente desventajas estructurales y diferenciales. En su mayoría, gran parte de las mesorregiones presentaron mayores ventajas estructurales en el sector de la construcción civil (ocho de diez regiones). Hubo bastante diversificación en cuanto al componente diferencial, lo que indica que las regiones, cuando se refieren a cuestiones de localización, son muy heterogéneas entre sí. De manera general, llevando en consideración factores estructurales y diferenciales, los sectores de comercio al por menor y de servicios inmobiliarios fueron los que más se destacaron. Completan la lista la construcción civil y la industria de comidas y bebidas. Con respecto a los sectores que presentaron peores resultados por mesorregión, los que indicaron una variación grande de los rubros, entre ellos la administración pública, agricultura e industria de la madera y mobiliario. Para finalizar, se destaca la importancia del análisis propuesto en este trabajo, puesto que conocer el perfil de una región y su evolución es de extrema importancia para construir una agenda de políticas públicas, con el objetivo de mejorar la vida de la población. En el caso de este trabajo, el análisis se llevará a cabo a través del estudio del empleo regiona