Differences in underemployment between the United States and the Netherlands

In this paper the method of cross nation comparison has been applied to analyze wage impacts of labor market institutions. The countries under comparison are the US and the Netherlands. By means of stochastic wage frontier models it has been shown that labor market institutions, in particular, higher unemployment benefits and collective bargaining lead to substantial less underemployment in the Netherlands than in the US. Information channels also play a role, especially in the US, although to a smaller extent.

Regional labour market dynamics in The Netherlands

This paper analyses the response of the Dutch labour market to a regional labour demand shock. European-wide studies and US labour market studies found that in Europe adjustment to such a shock runs primarily through changes in participation, while in the US this is through migration of workers. Another striking difference is that the admustment process in the US takes places a much higher speed than in regions in European countries The main explanation for this phenomenon is the rigid labour market in Europe, against the flexible labour market in the US, which is expressed by the fact that spatial mobility among US workers is much higher than among European workers. A similar approach to the Dutch labour market shows that adjustment to labour demand shocks is primarily through changes in participation. In that sense it fits the European picture. As far as the speed of adjustment to a shock is concerned, the Dutch labour market seems more in line with American than with European levels. A disaggregate analysis shows that particularly the response of the northern labour market stands out. Adjustment to a shock is absorbed faster than in other Dutch regions. Furthermore, unemployment and migration are more important as absorption channels in the North than in the other regions.

How do Dutch regional labour markets adjust to demand shocks?

This paper analyses the response of regional labour markets in The Netherlands to region specific labour demand shocks. Whereas previous studies analyse only average patterns of all regions in a country, this paper provides also a more in debt analysis of within country differences in labour market adjustment processes. Previous studies show remarkable differences in response between regions in European countries and regions in the United States. The analysis in the present paper shows that in Dutch regions the labour market adjusts to labour demand shocks primarily through changes in participation. In that sense it fits the European picture. As far as the speed of adjustment to a shock is concerned, the Dutch labour market seems more in line with American than with European levels. A spatial disaggregated analysis shows remarkable differences between regions within the Netherlands. In particular the response of the regions in the northern part of the country stands out. First, adjustment to a shock is absorbed much faster than in other Dutch regions. Second, the shock is absorbed more through changes in unemployment than changes in participation.

Regional differences in productivity growth in The Netherlands: an industry-level growth accounting

It is well known that the productivity growth in Europe is slowing down, against an increasing growth rate in the US. The Netherlands is one of countries in Europe with the lowest growth rates of productivity. This paper presents the results of a growth accounting exercise applied to regional industry data of The Netherlands between 1995-2002. We find that low productivity growth in The Netherlands is particularly situated in the economic core regions of the west and south and is caused by slow growth of MFP. Compared to the more peripheral regions, MFP-growth is lower in all industries, except social and non-market services. The high level of traffic congestion and relatively low labour effort in the core regions can explain part of this slow MFP-growth.

Regional Differences in Productivity Growth in the Netherlands - an Industry-level Growth Accounting

Main point in the current European policy debate is to find instruments that stimulate the growth rate of labour productivity. The reason for this is a persistent slowdown in labour productivity growth in European countries and an increasing gap in growth rates between the USA and Europe starting in the second half of the 1990’s. Labour productivity in the US is nowadays at a much steeper growth path than in Europe. What is the reason for this increasing gap between Europe and the USA? This is an important question in order to assess the measures proposed in the Lisbon Agreement by the European Union (EU) to become the world’s most competitive and dynamic knowledge-based economy in 2010. With increasing globalisation and deregulation of international markets, productivity growth is the tool to enhance competitiveness. Therefore instruments are sought that will get the productivity growth rate in European countries back on track. One of the main explanatory factors for productivity growth is the production, use and diffusion of information and communication technology (ICT). Inklaar et al. (2003) show, however, that the main source for the European slowdown in productivity growth is not so much lagging IT use, but a deceleration of non-ICT capital deepening (i.e. lagging increase of non-ICT capital per hour worked) and, in contrast to the US, a lack of acceleration of TFP growth. TFP growth is the part of productivity growth that cannot be attributed to an increase in the capital stock per hour worked, where capital is usually subdivided in ICT capital and non-ICT capital. Daveri (2004), who applies a more rigorous definition of ICT using and ICT producing industries, by and large corroborates these results. The deceleration of non-ICT capital deepening of the nineties in Europe has coincided with a sharp rise in employment. Non-ICT capital deepening, or the growth of non-IT capital per hour worked, is clearly related to the growth rates of the price of both inputs. Faster wage growth increases non-ICT capital deepening because capital will substitute labour. An increase in the ‘price’ of non-ICT-capital, on the other hand, makes capital more expensive and leads to deceleration of non-ICT capital deepening. Inklaar et al. (2003), however, show that the impact of growth rates of wage and rental prices on non-ICT capital deepening is much stronger for the US than Europe. The small effect of wage growth in European countries implies that wage moderation might be an important reason for the slowdown of non-ICT capital deepening. Labour productivity growth in The Netherlands is at a persistently lower growth path than the European average. Since The Netherlands has been champion in wage moderation in the past decades, a natural question is whether this has led to an even slower non-ICT capital deepening than Europe or that other mechanisms have instead caused the Dutch slowdown of productivity growth. This issue will be addressed at a low spatial level: what is the reason for the Dutch slowdown, are there regions that have contributed more to the lagging productivity growth rate than others and which industries are responsible. This question will be answered using the growth accounting approach, which is also used to explain the widening of the productivity growth gap between Europe and the USA. Distinction can be made at the provincial level of The Netherlands between growth rates of value added in constant prices, number of hours worked, ICT and non-ICT capital services for eight aggregate industries. There is therefore sufficient detail to determine which industry in which province contributes positively or negatively to the lagging Dutch growth performance of the late 1990’s. This issue is useful from both an academic and a policy perspective.

Regional transitions of low educated schoolleavers in the Netherlands

This paper deals with the question of regional variation in two transitions that low educated can make. The first transition is the choice between learning through versus not learning and entering the labour market. Second, if they enter the labour market, the question is whether there is a regional difference in outcomes in terms of earned wages. Several explanatory regional circumstances are considered like urbanization and regional economic growth. The questions are analyzed using data of a schoolleaverssurvey in the period of 1996-2008 in the Netherlands.