One more argument against banning child labor

Everybody agrees that child labor is a problem, including the working child's parents. Some years ago, various groups, including the International Labour Organization, called for a ban on child labor. Yet it appears resistance to a ban is mounting, none the least due to pressure from economists who have argued that child labor is not a choice. Indeed, poverty often forces parents to send their

Explaining high unemployment and low mobility in Europe

There is an endless stream of papers trying to understand why, on average, unemployment rates are higher in Europe than in North America. I have reported here about several of the recent ones, and there seems no shortage of new explanations. In fact, if one were to build a model with all those explanations, one would probably be left to explain why after all the unemployment rate is not even

The impact of wage subsidies

Several European countries, including Germany, have wage subsidies to encourage employer to hire unemployed workers. While there is no doubt that, at the margin, this can reduce unemployment, the real question is whether those hired with a subsidy also stay employed after the subsidy expires, and have longer employment spells than those hired without a subsidy.Gesine Stephan looks at the German

Credit markets and the persistence of unemployment

Some literature has established that the presence of credit constraints can have an impact on the unemployment rate. It can reduce by making it impossible to find credit when unemployed and thus urging unemployed workers to find a job as fast as possible. But it can also increase it, either because structural change in the economy needs investment (and credit) or because search frictions on the

Unemployment insurance and work ethic

Why is the average unemployment rate so high in Europe? This question has kept economists busy for some time and various explanations has been proposed: the type of shocks Europe faces combined with the type of education, the generosity of unemployment insurance, tax rates, "culture", measurement. All these explanations have some merit, but I like to see the bigger picture, especially as these