Larissa Nocko (p), João Renato Leripio Gomes

Labour force participation plays a key role both in macroeconomic and social policies. In macroeconomic grounds, overlooking labour supply may lead to erroneous conclusions on the labour market idleness and, thus, on the output gap. On the other hand, composition effects may hide striking differences across groups. When these differences stem from constraints faced by individuals within those groups, there is room for government to design policies so as to loosen the constraints. The literature points out that labour force participation can be decomposed into two opposite effects, namely, the discouragement and the added worker effect. The discouragement effect takes place when either the expectation of good wages or the likelihood of getting a job are reduced. The added worker effect, in turn, makes people otherwise out of the labor force to seek for employment as household income decreases. Both movements tend to scale up during economic slowdowns, making it hard to draw conclusions and to adopt offsetting measures based solely on the aggregate indicator. This is specially so at the regional level, in this case Brazil's capital city, where sociodemographic characteristics have the potential to overstate those effects. In order to address this shortcoming, the article focuses on the relationship between economic activity and household income on the labour force participation for several groups based on age, gender and income level. We use disaggregated data from the Employment and Unemployment Survey, a monthly monitor of unemployment at metropolitan areas, here with a focus to Distrito Federal, Brazil. Our results show that individual response either to the business cycle position or to the household income varies across groups. Along with demographic and business cycles predictions, our models are useful to predict labour force participation trends, which are of utmost interest for policymakers.

Cristina Serbanica (p)

While following the place-based approach to economic development, the smart specialization concept is meant to provide opportunities for all regions, irrespective of their current R&D strengths and profiles. Consequently, less-developed territories, which are currently lagging–behind in terms of economic performance and are far from the technology frontier, have developed regional innovation strategies for smart specialization (RIS3) and defined their paths to innovation and smart growth; at minimum, such a strategy is expected to transform less advantaged regions into good followers. In this context, the dedicated literature dealing with smart specialization in various territorial contexts is burgeoning and different authors devote a special attention to the less-developed territories. The purpose of our paper is to review the literature on regional innovation, planning and development, with a view to gaining a better understanding of the nature of necessary policy interventions in the less-developed regions. We use WoS and Scopus databases as primary sources for searching documents on ”regional innovation systems” and ”smart specialization” and bring insights from reports, policy briefs, working papers, etc. issued at the EU level (i.e. the S3 Platform, CITEK’s Smart Specialization Observatory). Our study highlights the need to take differentiated approaches when (1) establishing the rationale of policy interventions, (2) allocating funds for research and innovation (including the Cohesion funds), 3) adopting sectoral approaches and 4) devising support measures. The most recurrent policy recommendations residing from our literature review are to create critical mass of localized resources for innovation through external interactions, to change routines and address institutional bottlenecks and to adopt the broader view of innovation.

Jitendra Parajuli , Kingsley E. Haynes (p)

This paper examines the relationship between asymmetric digital subscriber line (broadband) and dial-up (narrowband) Internet subscribers in Nepal. While the number of broadband subscribers is increasing, the number of narrowband subscribers has been decreasing over the last couple of years. As expected, broadband subscribers “Granger cause” narrowband subscribers to decline. This suggests that digital subscriber lines are a superior good that is a substitute and replace dial-up services. This relationship should be stable in the short-run. The public sector incumbent Nepal Telecom provides both digital subscriber lines and dial-up access while commercial Internet Service Providers supply dial-up services. Hence a large proportion of the revenue of the commercial providers is likely to be eroded compared to the incumbent. Given this context and in order to ensure that there is free and fair competition to support rapid growth in the Internet sector, the Government of Nepal needs to address important regulatory and policy issues related to this narrowband-broadband transition.