Loek Groot

Technological change and skill formation in the bank sector

Abstract This paper focuses on the shifts in the educational structure in the banking sector caused by technological developments. A cross-section analysis of 100 local banks shows that the diffusion of office automation has significant positive effects on both the skill level and the share of vocationally skilled workers. The results also show that the automated banks use recruitment policies more intensively than less automated banks in adjusting the skill structure.

Basic Income on the Agenda

Persisting unemployment, poverty and social exclusion, labour market flexibility, job insecurity and higher wage inequality, changing patterns of work and family life are among the factors that exert pressure on welfare states in Europe. This book explores the potential of an unconditional basic income, without means test or work requirement, to meet the challenges posed by the new social question, compared to policies of subsidized insertion in work. It also assesses the political chances of basic income in various European countries. These themes are highly relevant to policy-makers in the field of labour markets and social security, economists, political philosophers, and a social science audience in general.

A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy: The Economic Sustainability of a Basic Income

This article identifies the circumstances under which the introduction of a basic income in an efficiency-wage economy leads to the desirable effects of lower unemployment, nondecreasing real incomes and profits, and an increase of secondary- versus primary-sector wages. The model analyses show that a moderate basic income can be compatible with lower unemployment, higher GDP,higher real incomes for workers, lower income inequality between workers, but a lower real income for the (voluntary) unemployed.

Gravity Models of Trade-based Money Laundering

Several attempts have been made in the economics literature to measure money laundering. However, the adequacy of these models is difficult to assess, as money laundering takes place secretly and, hence, goes unobserved. An exception is trade-based money laundering (TBML), a special form of trade abuse that has been discovered only recently. TBML refers to criminal proceeds that are transferred around the world using fake invoices that under- or overvalue imports and exports. This article is a first attempt to test well-known prototype models proposed by Walker and Unger to predict illicit money laundering flows and to apply traditional gravity models borrowed from international trade theory. To do so, we use a dataset of Zdanowicz of TBML flows from the US to 199 countries. Our test rejects the specifications of the Walker and Unger prototype models, at least for TBML. The traditional gravity model that we present here can indeed explain TBML flows worldwide in a plausible manner. An important determinant is licit trade, the mass in which TBML is hidden. Furthermore, our results suggest that criminals use TBML in order to escape the stricter anti moneylaundering regulations of financial markets.

Name Clustering on the Basis of Parental Preferences

Abstract Parents do not choose first names for their children at random. Using two large datasets, for the UK and the Netherlands, covering the names of children born in the same family over a period of two decades, this paper seeks to identify clusters of names entirely inferred from common parental naming preferences. These name groups can be considered as coherent sets of names that have a high probability to be found in the same family. Operational measures for the statistical association between names and clusters are developed, as well as a two-stage clustering technique. The name groups are subsequently merged into a limited set of grand clusters. The results show that clusters emerge with cultural, linguistic, or ethnic parental backgrounds, but also along characteristics inherent in names, such as clusters of names after flowers and gems for girls, abbreviated names for boys, or names ending in –y or -ie.

Basic Income and Unemployment

The debate on basic income (henceforth BI) seems to be contra-cyclical. The underlying reason for the coming and going of BI in and out of the picture, is the relationship between the welfare state and unemployment. In periods of recession, e.g. the 1930s, late 1970s and early 1980s, there are more discussions about BI than in periods of economic prosperity (e.g. during the so-called Golden Age of capitalism in the 1950s and 1960s). If unemployment is high and to a large extent involuntary, the policy to push the unemployed to accept (non-existent) jobs or to curtail social benefits becomes highly controversial, and as a corollary, forms of BI (or negative income tax) become more fashionable. Unemployment, in particularly large scale and long lasting unemployment, can safely be considered as one of the greatest problems for social policy makers. In the literature concerning the labour market and social policy, one not only finds theories that try to explain un-employment, but also many proposals to reduce or eliminate unemployment. These vary from piece-meal social-engineering approaches (e.g., cutting back social benefit and minimum wage levels, providing wage subsidies to low-waged labour), workfare-oriented approaches, to proposals which envisage an entirely different institutional framework of the labour market (e.g., Weitzman’s (1984) Share Economy).

Reasons for Launching a Basic Income Experiment

Even if policy makers or the public are not at all interested in a BI and prefer a move to more workfare-oriented social security, it would still be advisable to conduct a BI experiment that would provide the benchmark or baseline against which the results of all workfare-oriented experiments can be evaluated. Why? The net impact of special workfare-programs compared to existing schemes depends on the normal treatment (applying for jobs, following job counseling courses, etc.) of social security recipients.

The effect of interruptions and part-time work on women's wage rate: A test of the variable-intensity model

SummaryIn this article we investigated the effects of interruptions of labour market participation and part-time work on womens gross wage rates, using the variable-intensity model. Women who interrupt their labour market careers suffer not only from depreciation, which effects all workers. Every year they do not participate they also miss experience. Part-time work mitigates the depreciation of human capital compared to a situation of non-participation. The expectation that part-time work — as opposed to full-time work — leads in the long run to a lower wage rate is confirmed.

A Global View on Demographic Pressure and Labour Market Participation

Demographic change across the globe puts pressure on labour markets and public finances. Most studies on ageing focus on the projected development of the old age dependency ratio, being the ratio of persons 65 or older relative to the working age population. This ratio gives a very incomplete picture of the (fiscal) pressure from demographic changes. In this study, besides the share of the dependent population composed of the young and the old, we also include the share of the working age population that is not active on the labour market, labelled as the labour market space. By analysing 21 developing and 29 developed economies across the globe, we cover 75% of the 9.3 billion people that the United Nations projects for the whole world in 2050. A new indicator, relating demographic pressure from fiscal spending to the available space at the labour market, enables us to quantify and compare the pressure-to-space across countries over the time span 2010-2050. The indicator points out that Poland, Turkey and Greece are most under pressure. Developing countries, such as Uganda, the Democratic Republic of Congo and Tanzania will experience a very low pressure up to 2050 in case their fiscal spending per young and elderly person remains at the current levels. In most of the countries under high pressure there seems to be room for using the labour market space by, for instance, working more hours or increasing the retirement age, as this will alleviate the fiscal pressure. This suggests a policy trade-off between maintaining publicly financed services to the dependent population and maintaining labour market space.

Defining Occupational Groupings by Educational Structure

In this study a cluster analysis is performed in order to define clusters of occupational groups according to their educational structure. The underlying assumption is that such groups with similar schooling profiles belong to the same labour-market segment and therefore offer opportunities for good forecasts of occupational manpower. Attention is paid to the optimal choice of a (dis)similarity criterion, the clustering method, and the clustering algorithms used for the problem at hand. In the analysis fourteen branches of study and four education levels are distinguished. This results in the formation of forty clusters, each characterized by combinations of branches and levels of education. It appears that this functional classification differs from the administrative International Standard Classification of Occupations (ISCO) in several respects.