Category: labor

Rachel’s Journal Round Up Q3 2023

Rachel’s Journal Round Up Q3 2023

The selected article summaries for this quarter focused on local economic development. A range of issues were covered, such as the aftermath of Covid-19, migration, the Great Resignation, commuting distances, and more. All of the articles are in peer reviewed academic journals. 

Rohlin, S. (2023). Challenges to Identifying Economic Development Impacts – Sage Journals. 

This article is a commentary on the causal impacts of economic development. The author argues that, going forward, researchers need to focus more on distributional changes, the effects of migration, and the impact of Covid-19. 

Pawns with stacks of coins. Concept of social and economic inequality by is licensed under CC BY 2.0.
Pawns with stacks of coins.” Concept of social and economic inequality by is licensed under CC BY 2.0.

Due to increasing income inequality, it has become a necessity to look at economic outcomes more broadly. Typically, economic studies focus on the median/mean effect of a program, or alternatively focus exclusively on low-income individuals. The author argues that looking at an entire economic distribution is crucial to understanding the true effect of any particular economic policy/trend. One specific issue cited was how studying an entire distribution allows one to see how many workers are moving up and down the economic ladder, which has important policy implications.

The author also wants more focus on how migration affects economic development in local regions. For example, the author cites a case where money was given to help individuals in a local area obtain jobs and gain qualifications, but an indirect consequence of this was outsiders migrating to take advantage of these benefits. Lastly, the author wants to discuss how Covid-19 will affect the economy in the future. One issue that is directly highlighted is remote work and how this could increase the spatial scope of labor markets. 

Liu, C. Y., Doussard, M., & Lowe, N. (2023). Fixing work, and Moving Beyond It. – Sage Journals. 

This article discusses how Covid-19 created a fundamental shift in the U.S. labor market. The author goes into how the Great Resignation has been an underlying issue for years caused by technological advancement, globalization, and the decline in unionization, rather than a sudden change in attitude, as it has been portrayed. In addition, there has been a widening gap between “well-paying jobs”, and lesser paying jobs. Meanwhile, moderate skill jobs that straddle this economic divide are increasing in scarcity.

The author concludes that the solution to this problem is a renewed focus on job quality (as opposed to job quantity) in both the workplace and public policy at large. The author cites examples of small scale universal basic income and a $22/hour minimum wage in the fast-food industry as positive and necessary steps to relieve economic struggle in the United States. 

Kures, M., & Deller, S. C. (2023). Growth in Commuting Patterns and Their Impacts on Rural Workforce and Economic Development. – Economic Development Quarterly, 37(1), 54–63.

This article discusses recent changes in commuting patterns, as well as the general benefits and costs of commuting on workers. The information presented was gathered from the United States Census Bureau. 

The article outlines several benefits and costs to commuting noted in the research. Some studies have indicated that commuting is good for workers because it is an activity devoid of family/work burdens. Furthermore, commuting has also been associated with improving urban-rural integration. Most studies, however, have indicated that commuting is a cost to workers, and commutes longer than 50-60 miles cease to be beneficial. 

The number of stretch (long distance) commuters has increased from 11.0% to 13.6% of the workforce. Workers earning $1,250/month or less were more likely to be stretch commuters. However, since 2002, the greatest growth among stretch commuters comes from those making $3,333/month or more. 

Overall, the paper concludes by stating that higher rates of commuting require increased economic and social collaboration between communities. Those who spend more time commuting spend less time in their communities, so integrating communities together would be beneficial from both an economic and social perspective. While research is limited, some studies have indicated that long distance commuting has naturally contributed to cross-community integration, resulting in positive externalities such as lower poverty rates. Local policymakers should work to promote this further.

Bartik, T. (2022). Seize the time: Needed research on local economic development in an Era of Increased Attention to Problems of Pace – Sage Journals. 

This article outlines five areas surrounding local economic development where more research is needed: better definitions of local labor markets, policy tools to help economically distressed neighborhoods, types of jobs that have growth prospects and also provide long-run job opportunities for workers who lack a bachelor‘s degree, estimates of how local worker skill-upgrading programs affect labor market outcomes, and more rigorous evaluation of both customized business services and comprehensive regional economic development strategies.

On a basic level, local labor markets are simply an area of space with enough internal employment activity that an economic shock would affect the entire region. The author emphasizes the importance of selecting a proportional labor market to achieve accurate and useful data – larger labor markets risk ignoring local communities, but narrow research affecting only a few communities risks ignoring broader economic outcomes. The author concludes by mentioning that the rise of remote work further complicates the issue of local labor markets.

In regard to “distressed neighborhoods”, defined as places with high unemployment and low income, the author states that more research is needed on how to create increased employment and upward mobility in these communities. The author also notes that “distressed neighborhoods” are disproportionately populated by Black Americans. 

Looking to the future, the author argues that more research is needed on what job types will be well paying and in demand in the future. Many high paying managerial and professional jobs have too many educational credentials to be accessible. Instead, the author promotes “mid wage” jobs, which require little education but provide living wages. The author concludes by advocating for more research on how to promote and create these types of jobs.

With reference to skill upgrading programs, the author explains the current lack of research on the topic. While some local studies have pointed out possible benefits, there is little research about the side effects of these policies. Do skill upgrading programs promote migration, thus causing an increase in housing prices? These are questions that remain largely untouched. 

Lastly, the author supports more research in economic development services for individual businesses and local economies. Services to businesses have the potential to affect other facets of a local economy in unpredictable ways. Similarly, larger federal programs, such as the recent CHIPS Act, need to be researched to determine whether local economic improvements were worth the cost of the program. Overall, the article above outlines five aspects of the economy that need to be further examined. 

Shang, B. (2021, June 25). The Poverty and Distributional Impacts of Carbon Pricing: Channels and policy implications. – IMF. 

This article discusses the impact of carbon pricing (otherwise known as a carbon tax) through the lens of consumption, income, health, and revenue recycling. 

In regards to consumption, the article says that research is still emerging, but studies have indicated around 70% of energy price-driven input changes are passed down to the consumer. However, this varies by fuel and there is not a uniform consensus. In theory, carbon pricing would incentivize firms to improve energy efficiency or transition to renewable energy. This behavioral response could lower the burden of a carbon tax on both businesses and consumers. In fact, the article states that, “A carbon price of US$30 per ton of CO2 would reduce carbon emissions by about 14 percent, mostly because of consumers substituting away from emissions-intensive goods rather than lowering consumption in response to across-the-board price increases” (Shang). Lastly, the paper warns policymakers about the rebound effect, where increased energy efficiency leads to cheaper energy in spite of the carbon tax resulting in more carbon emissions.

A carbon tax would negatively impact workers in “brown” jobs, such as the coal industry. Even a gradual carbon tax would cripple the industry, and on a global level a carbon tax would negatively impact countries that rely heavily on oil for economic growth and government revenue. On the other hand, a carbon tax would improve the viability of renewable energy, causing an increase in investment and employment in this sector. 

From a health perspective, 4.2 million people die each year of carbon pollution. Health benefits from carbon pricing vary wildly by study and by population type. Ultimately, The evidence on how carbon pricing affects health outcomes is still unfolding. 

Revenue recycling refers to how the revenue raised from a carbon tax is spent. These plans vary heavily, ranging from cash transfers to infrastructure projects. The article does not promote any specific proposal, only outlining a goal of reducing poverty and income inequality. 

The article then presents details of different revenue recycling plans and how different countries across the world have implemented a carbon tax. The article concludes by warning that most countries have been tepid in implementing carbon taxes, an unacceptable outcome given the time sensitive nature of climate change.