unemployment and the coverage extension of collective wage agreements abstract this paper examines how the extension of collective wage bargaining agreements to non unionized firms affects unemployment testing a large number of econometric specifications on data from 15 oecd countries observed between 1965 and 2007 we find a positive significant and robust interaction between the tax wedge and the degree of coverage extension of collective wage bargaining agreements more specifically our results suggest that the tax wedge has a larger positive effect on unemployment than any other labour market policy in countries with wide extension of collective wage agreements coverage such as france or spain conversely in countries where coverage extension is close to zero as in nordic countries unemployment is essentially insensitive to changes in the tax wedge

challenges for wholesale electricity markets with intermittent renewable generation at scale the us experience the supply of intermittent wind and solar generation with zero marginal operating cost is increasingly rapidly in the us these changes are creating challenges for wholesale markets in two dimensions short term energy and ancillary services markets built upon mid twentieth century models of optimal pricing and investment which now work reasonably well must accommodate the supply variability and energy market price impacts associated with intermittent generation at scale these developments raise more profound questions about whether the current market designs can be adapted to provide good long term price signals to support investment in an efficient portfolio of generating capacity and storage consistent with public policy goals the recent experience of the california iso caiso is used to illustrate the impact of intermittent generation on supply patterns supply variability and market based energy prices reforms in capacity markets and scarcity pricing mechanisms are needed if policy makers seek to adapt the traditional wholesale market designs to accommodate intermittent generation at scale however if the rapid growth of integrated resource planning subsidies for some technologies but not others mandated long term contracts and other expansions of state regulation continue more fundamental changes are likely to be required in the institutions that determine generator and storage entry and exit decisions

should renewable energy policy be renewable political flexibility brings about trade offs for policy makers aiming to support the deployment of renewable energy sources res on the one hand it allows incorporating new information on ex ante uncertain benefits and costs of res policy on the other hand it may deter res investments this paper scrutinizes how these trade offs play out economically and politically when res policy makers choose the degree of flexibility as well as the instruments to implement flexibility the analysis builds on a theoretical framework distinguishing between flexibility by design and by adjustment it is complemented by a discussion of three case studies res support schemes in germany and the united kingdom and the eu emissions trading scheme theoretical as well as empirical results suggest that the politically chosen degree of flexibility by policy design may be sub optimally low in contrast flexibility by policy adjustment is often excessively high

on the importance of the participation margin for labor market fluctuations abstract conventional analyses of labor market fluctuations ascribe a minor role to labor force participation we show by contrast that flows based analyses imply that the participation margin accounts for around one third of unemployment fluctuations a novel stock flow apparatus establishes these facts delivering three further contributions first the role of the participation margin appears robust to adjustments for spurious transitions induced by reporting error second conventional stocks based analyses are subject to a stock flow fallacy neglecting offsetting forces of worker flows on the participation rate third increases in labor force attachment among the unemployed during recessions are a leading explanation for the role of the participation margin

job search and unemployment insurance new evidence from time use data article i nfo this paper provides new evidence on job search intensity of the unemployed in the u s modeling job search intensity as time allocated to job search activities the major findings are 1 the average u s unemployed worker devotes about 41 min to job search on weekdays which is substantially more than their european counterparts 2 workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker 3 across the 50 states and d c job search is inversely related to the generosity of unemployment benefits with an elasticity between 1 6 and 2 2 4 job search intensity for those eligible for unemployment insurance ui increases prior to benefit exhaustion and 5 time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for ui

the cyclicality of separation and job finding rates this paper uses cps gross flow data to analyze the business cycle dynamics of separation and job finding rates and to quantify their contributions to overall unemployment variability cyclical changes in the separation rate are negatively correlated with changes in productivity and move contemporaneously with them while the job finding rate is positively correlated with and tends to lag productivity contemporaneous fluctuations in the separation rate explain between 40 and 50 percent of fluctuations in unemployment depending on how the data are detrended this figure becomes larger when dynamic interactions between the separation and job finding rates are considered

green electricity market development lessons from europe and the us this study compares the development and implementation of green electricity policies in germany the netherlands sweden and the united states a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources a general tendency is identified that policies shift emphasis from r d stimulation towards dissemination and market application of renewable energy technologies we argue that in light of the long term nature of policy goals on energy security mitigation of climate change and environmental protection the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies clarifying policy objectives would allow careful selection of policy instruments including support for r d improved capacity building for policy implementation is also important

the role of shocks and institutions in the rise of european unemployment the aggregate evidence two key facts about european unemployment must be explained the rise in unemployment since the 1960s and the heterogeneity of individual country experiences while adverse shocks can potentially explain much of the rise in unemployment there is insufficient heterogeneity in these shocks to explain cross country differences alternatively while explanations focusing on labour market institutions explain current heterogeneity well many of these institutions pre date the rise in unemployment based on a panel of institutions and shocks for 20 oecd nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts

the cumulative carbon budget and its implications the cumulative impact of carbon dioxide co2 emissions on climate has potentially profound economic and policy implications it implies that the long term climate change mitigation challenge should be reframed as a stock problem while the overwhelming majority of climate policies continue to focus on the flow of co2 into the atmosphere in 2030 or 2050 an obstacle however to the use of a cumulative carbon budget in policy is uncertainty in the size of this budget consistent with any specific temperature based goal such as limiting warming to 2 c this arises from uncertainty in the climate response to co2 emissions which is relatively tractable and uncertainty in future warming due to non co2 drivers which is less so we argue these uncertainties are best addressed through policies that recognize the need to reduce net global co2 emissions to zero to stabilize global temperatures but adapt automatically to evolving climate change adaptive policies would fit well within the paris agreement under the un framework convention on climate change

unemployment a survey this paper presents a survey of the economics of unemployment it covers competitive and imperfect competition models the role of different methods of wage determination and explanation of postwar unemployment patterns in the oecd countries copyright 1990 by royal economic society

is renewable energy a cost effective mitigation resource an application to the spanish electricity market abstract this paper evaluates the net effect of renewable energy policy in spain from 2002 to 2017 and calculates its cost effectiveness in terms of co2 emission reductions in the production of electricity our conclusions indicate that although the phasing out of feed in tariffs reduced the regulatory costs it also limited renewable participation in the electricity market leading to an increased electricity price and higher emissions according to our results the joint effect of i the value of avoided emissions due to renewable energy participation and ii the merit order effect was able to compensate for the regulatory costs subsidies up until 2010 while the sign of the net effect was reversed from 2011 to 2017 finally we find that the economic implications of emission reductions are highly dependent on how the social cost of carbon is measured

trade climate change and the political game theory of border carbon adjustments the lack of real progress at the durban climate change conference in 2011 postponing effective action until at least 2020 has many causes one of which is the failure to address trade issues and in particular carbon leakage this paper advances two arguments first it argues that the conventional view of border carbon adjustments bcas as a dirty trade barrier should be turned on its head rather the absence of a carbon price comprises an implicit subsidy to dirtier production in non regulated markets second bcas could act as a game changer when climate policy negotiations move at a glacial pace if at all materially stronger progress could be achieved indirectly from the threat of unilateral trade policies the paper shows how this could come about using a simple political game theory model the appropriate game form is one in which parties move unilaterally and sequentially given the failure to agree on a common course of action and are fully aware of the impacts of their actions the paper shows that properly crafted bcas could help reduce trade distortions limit the competiveness effects and help build a broader coalition of interests for more global actions

the age of electricity the age of electricity is coming driven by rapid technological change on the demand side the digitalization of many processes is leading to technologies that require electricity rather than liquid or solid fuels on the supply side renewable energy technologies provide electricity directly at falling cost electrification directly and indirectly e g using electricity to produce hydrogen fuel can aid the decarbonization of the economy strong climate policy would accelerate electrification the big question is when not if and the transition is not occurring anywhere near fast enough to meet the paris climate goals the immediate impact of the coming age of electricity is the transformation of electricity markets which need to adapt to near zero marginal costs and intermittency in the longer term the impact on fossil fuels will be radical fossil fuel prices will fall with demand and the oil and gas majors will either completely transform themselves or will harvest profits and exit

the effect of benefit sanctions on the duration of unemployment this paper investigates the effectiveness of unemployment benefit sanctions in reducing unemployment duration swiss data on benefit sanctions allow us to separate the effect of a warning that a person is not complying with eligibility requirements from the effect of the actual enforcement of a benefit sanction moreover public employment services are given substantial leeway in setting the monitoring intensity results indicate that both warning and enforcement have a positive effect on the exit rate out of unemployment and that increasing the monitoring intensity reduces the duration of unemployment of the nonsanctioned jel j64 j65 j68

credible carbon policy the paper sets out the credibility problem in carbon policy provides a number of examples of non credibility in recent energy policy and identifies the costs of failing to address it the time inconsistency of carbon policy arising because of multiple objectives the irreversibility of energy investments and the scope for ex post reneging on ex ante commitments to set policy instruments such as carbon taxes or emission permits at appropriate levels is set in a conceptual framework analogies with monetary policy are drawn and a solution to the time inconsistency problem is proposed through the establishment of an energy carbon agency

design of an economically efficient feed in tariff structure for renewable energy development abstract evidence suggests albeit tentatively that feed in tariffs fits are more effective than alternative support schemes in promoting renewable energy technologies rets fits provide long term financial stability for investors in rets which at the prevailing market price of electricity are not currently cost efficient enough to compete with traditional fossil fuel technologies on the other hand if not properly designed fits can be economically inefficient as is widely regarded to have been the case under the public utility regulatory policies act of 1978 purpa under purpa too high a guaranteed price led to the creation of so called purpa machines poorly performing generating units that could survive financially only because of heavy subsidies that came at the expense of retail customers similarly because of their adverse impacts on retail electricity rates german fits have been subject to increasing political pressure from utilities and customers in this paper we propose an innovative two part fit consisting of both a capacity payment and a market based energy payment which can be used to meet the renewables policy goals of regulators our two part tariff design draws on the strengths of traditional fits relies on market mechanisms is easy to implement and avoids the problems caused by distorting wholesale energy markets through above market energy payments the approach is modeled on forward capacity market designs that have been recently implemented by several regional transmission organizations in the usa to address needs for new generating capacity to ensure system reliability

unemployment questions and some answers in more or less every country in the oecd unemployment was lower in the decades following the second world war than in any other period of comparable length either before or since for example in britain unemployment has exceeded 5 in every peacetime decade from 1850 onwards except for the 1950s and 1960s alternatively as we can see in table 1 p 779 average unemployment in the 1980s and 90s is higher generally much higher than in the 1960s in every country considered why this is so is one of the questions which underlies this paper a second question which is also illustrated in the unemployment numbers presented in table 1 p 779 concerns the causes of the enormous variation in unemployment rates across the oecd countries as we shall see these are difficult questions the first in particular is one for which we do not have a complete answer by this i do not mean that we do not have theories which are broadly consistent with these numbers in fact we have theories consistent with more or less any numbers what we lack is a satisfactory empirical explanation of the time series pattern of oecd unemployment in what follows we remain focused on these two questions first considering the theoretical background and then looking at some possible answers we finish with some speculative conjectures on the first question

unemployment at risk the policy determinants of labour market exposure to economic shocks this paper examines the vulnerability of labour markets to adverse economic shocks we define labour market exposure as the cumulated amount of excess unemployment generated by a shock before unemployment returns to steady state we use a panel of 19 countries covering the period 1985 2010 to assess the influence of labour market policies on labour market exposure which is also calculated country by country we find that less generous unemployment insurance more active labour market policies or a lower minimum wage imply a trade off between average unemployment and labour market exposure as they help low skilled workers to get out of unemployment at the cost of increased vulnerability to adverse shocks on the other hand reducing the tax wedge is conducive to both lower steady state unemployment and labour market exposure alain de serres and fabrice murtin

the unemployment volatility puzzle is wage stickiness the answer i discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate i show that job creation in the model is influenced by wages in new matches i summarize microeconometric evidence and find that wages in new matches are volatile and consistent with the model s key predictions therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages i discuss a modification of the model based on fixed matching costs that can increase cyclical unemployment volatility and is consistent with wage flexibility in new matches

product market reforms labour market institutions and unemployment we analyze the impact of product market competition on unemployment and wages and how this depends on labour market institutions we use differential changes in regulations across oecd countries over the 1980s and 1990s to identify the effects of competition we find that increased product market competition reduces unemployment and that it does so more in countries with labour market institutions that increase worker bargaining power the theoretical intuition is that both firms with market power and unions with bargaining power are constrained in their behaviour by the elasticity of demand in the product market we also find that the effect of increased competition on real wages is beneficial to workers but less so when they have high bargaining power intuitively real wages increase through a drop in the general price level but workers with bargaining power lose out somewhat from a reduction in the rents that they had previously captured

counting on the neighbours challenges and practical approaches for cross border participation in capacity mechanisms capacity mechanisms have been implemented in an uncoordinated way by many countries in europe in recent years to ensure security of supply the european commission has defined via the state aid guidelines principles to minimize their impact on trade and competition in european electricity markets the paper identifies the different drivers of these national reforms maps the key issues associated with the coordination of capacity mechanisms across countries and explores alternative approaches to allow for explicit cross border participation in capacity mechanisms

two questions about european unemployment a general equilibrium search model makes layoff costs affect the aggregate unemployment rate in ways that depend on equilibrium proportions of frictional and structural unemployment that in turn depend on the generosity of government unemployment benefits and skill losses among newly displaced workers the model explains how before the 1970s lower flows into unemployment gave europe lower unemployment rates than the united states and also how after 1980 higher durations have kept unemployment rates in europe persistently higher than in the united states these outcomes arise from the way europe s higher firing costs and more generous unemployment compensation make its unemployment rate respond to bigger skill losses among newly displaced workers those bigger skill losses also explain why u s workers have experienced more earnings volatility since 1980 and why especially among older workers hazard rates of gaining employment in europe now fall sharply with increases in the duration of unemployment

the cost of energy review and its implementation the cost of energy review recommended that in the face of radical technical change government should move towards an equivalent firm power capacity auction integrating the renewables establish independent public system operators at the national and regional levels and move towards an economy wide carbon price these have met resistance from vested interests in defence of the economic rents that have accumulated from the dense web of interventions that have accumulated the paper shows that the first two of these reforms are nevertheless inevitable with active demand storage and decentralized generation technologies inverting the old assumptions of passive demand no storage and ever larger scale generation that have underpinned the electricity industry for the past century delay in implementation means continued excess costs of energy and delays innovation

direct and indirect electrification of industry and beyond achieving net zero greenhouse gas emissions is very challenging given the limitations in the direct use of renewable energy for heat and mobility electrification of the broad economy seems a must provided electricity supply is co2 free the recent cost reductions of solar and wind technologies their immense potential and the improvement in electric technologies for industry and transport open new avenues for achieving humankind s climate mitigation goals however a large fraction of the best solar and wind resources are situated far away from large consumption centres moreover the variability of solar and wind and the shortcomings of electricity storage limit the scope for direct electrification indirect electrification through electrolysis of water and the use of hydrogen and hydrogen rich feedstock and fuels may in all end use sectors complement electrification where it appears excessively challenging serve the power sector itself and also help harness remote resources and ship them to consumers or industries

renewable financial support systems and cost effectiveness abstract this paper analyses the performance of market based and feed in tariff systems of renewable energy procurement and comments on the impact of different procurement systems on investment in renewable energy the market based british renewables obligation ro is not more cost effective compared to the german feed in tariff although the nominal rates of payment per kwh of renewable energy are higher in germany this is more than offset by lower wind speeds in germany producing a lower return on investment compared to the uk a harmonised eu wide market based system would not improve cost effectiveness and may serve to reduce rather than increase local investment in renewable energy on the other hand nationally based green electricity certificate systems like the ro are not intrinsically biased against locally owned or co operative ventures systems are needed which encourage a diversity of investment in renewable energy from local as well as institutional sources

optimal second stage outsourcing manufacturers have recently begun outsourcing product assembly and completion tasks to their suppliers such outsourcing solves several contracting problems but generates new incentive frictions between manufacturers and their suppliers in this paper we analyze a manufacturer s decision to outsource an assembly second stage task to a preestablished supplier we find that outsourcing second stage tasks becomes more attractive as the cost of either the first or second stage activity rises outsourcing becomes less attractive when the supplier is unable to accept large levels of liability the manufacturer is shown to prefer more testing when she outsources assembly to her supplier as opposed to when she assembles products in house last we find that the contracting frictions identified persist when the supplier s work can be tested individually albeit imperfectly

the benefits of purely financial participants for wholesale and retail market performance lessons for long term resource adequacy mechanism design in april 2015 singapore introduced an anonymous futures market for wholesale electricity using data on prices and other observable characteristics of all competitive retail contracts signed from october 2014 to march 2016 a larger average quantity of open futures contracts that clear during the term of the retail contract a month before the retail contract starts delivery predicts a lower price for the retail contract this outcome is consistent with increased futures market purchases by independent retailers causing lower retail prices consistent with the logic in wolak 2000 that a larger volume of fixed price forward contract obligations leads to offer prices closer to the supplier s marginal cost of production a larger volume of futures contracts clearing against short term wholesale prices predicts lower half hourly wholesale prices both empirical results support introducing purely financial players to improve both retail and wholesale market performance the paper then outlines how a regulator mandated standardized futures market can be used as a long term resource adequacy mechanism for the wholesale market regime