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on Labour Economics |
| By: | Böckerman, Petri; Uusitalo, Roope |
| Abstract: | Following an agreement between the trade unions and the employer organisations, Finnish employers could pay less than the existing minimum wage for young workers between 1993 and 1995. We examine the effects of these minimum wage exceptions by comparing the changes in wages and employment of the groups whose minimum wages were reduced with simultaneous changes among slightly older workers for whom the minimum wage regulation was still binding. Our analysis is based on the payroll record data and minimum wage agreements from the retail trade sector over the period 1990-2005. We discover that average wages in the eligible group declined only modestly despite the fact that the excess supply of labour during high unemployment should make it relatively easy to attract workers even with low wages. The minimum wage exceptions had no positive effects on employment. |
| Keywords: | Labour demand; employment; minimum wages; trade unions |
| JEL: | J31 J51 |
| Date: | 2007–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6113&r=lab |
| By: | John S Heywood; Colin Green |
| Abstract: | If workers can choose between permanent and flexible contracts, compensating wage differentials should arise to equalize on-the-job utility in the two types of contracts. Estimating job satisfaction using the British Household Panel Survey shows that agency and casual contracts are associated with routinely lower satisfaction. This results because the low job satisfaction associated with less job security is not offset by higher compensation or other job characteristics. Job security is sufficiently important that holding constant this one facet of satisfaction eliminates the overall gap in job satisfaction between flexible and permanent contracts. |
| Keywords: | Flexible Contracts; Job Satisfaction; Job Security |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005276&r=lab |
| By: | Nathalie Havet (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Catherine Sofer (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | The aim of this paper is to explain the growing wage differentials between men and women<br />during their working careers. We provide a dynamic model of statistical discrimination, which<br />integrates specific human capital decisions: on-the-job training investment and wages are<br />endogenously determined. We reveal a small wage differential at the beginning of women’s<br />career, followed by a larger wage differential; this is partly due to a lower level of human capital<br />investment by women and partly because firms smooth training costs between different periods. |
| Keywords: | Statistical discrimination, careers, male/female differentials, gender wage gap, specific human capital. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00193372_v1&r=lab |
| By: | Kathryn Shaw; Edward P. Lazear |
| Abstract: | A key tenet of the theory of human capital is that investment in skills results in higher productivity. The previous literature has estimated the degree of investment in human capital for individuals by looking at individual wage growth as a proxy for productivity growth. In this paper, we have both wage and personal productivity data, and thus are able to measure of the increase in workers' output with tenure. The data is from an autoglass company. Most of production occurs at the individual level so measures of output are clear. We find a very steep learning curve in the year on the job: output is 53 percent higher after one year than it is initially when hired. These output gains with tenure are not reflected in equal percentage pay gains: pay profiles are much flatter than output profiles in the first year and a half on the job. For these data, using wage profiles significantly underestimates the amount of investment compared to the gains evident in output-tenure profiles. The pattern of productivity rising more rapidly than pay reverses after two years of tenure. Worker selection is also important. Workers who stay longer have higher output levels and faster early learning. |
| JEL: | J01 J24 J31 J33 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13652&r=lab |
| By: | Johansson, Edvard (Swedish School of Economics and Business Administration); Böckerman, Petri (Labour Institute for Economic Research); Kiiskinen, Urpo (National Public Health Institute); Heliövaara, Markku (National Public Health Institute) |
| Abstract: | In this paper, we re-examine the relationship between overweight and labour market success, using indicators of individual body composition along with BMI (Body Mass Index). We use the dataset from Finland in which weight, height, fat mass and waist circumference are not self-reported, but obtained as part of the overall health examination. We find that waist circumference, but not weight or fat mass, has a negative effect on wages for women, whereas all measures of obesity have negative effects on women’s employment probabilities. For men, the only obesity measure that is significant for men’s employment probabilities is fat mass. One interpretation of our findings is that the negative wage effects of overweight on wages run through the discrimination channel, but that the negative effects of overweight on employment have more to do with ill health. All in all, measures of body composition provide a more refined picture about the effects of obesity on wages and employment. |
| Keywords: | wages; employment; bmi; overweight; obesity; fatness; adiposity |
| Date: | 2007–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:hanken:0528&r=lab |
| By: | Edward P. Lazear; Kathryn L. Shaw |
| Abstract: | Personnel economics drills deeply into the firm to study human resource management practices like compensation, hiring practices, training, and teamwork. Many questions are asked. Why should pay vary across workers within firms--and how "compressed" should pay be within firms? Should firms pay workers for their performance on the job or for their skills or hours of work? How are pay and promotions structured across jobs to induce optimal effort from employees? Why do firms use teams and how are teams used most effectively? How should all these human resource management practices, from incentive pay to teamwork, be combined within firms? Personnel economics offers new tools and new answers to these questions. In this paper, we display the tools and principles of personnel economics through a series of models aimed at addressing the questions posed above. We focus on the building blocks that form the foundation of personnel economics: the assumptions that both the worker and the firm are rational maximizing agents; that labor markets and product markets must reach some price-quantity equilibrium; that markets are efficient or that market failures have introduced inefficiencies; and that the use of econometrics and experimental techniques has advanced our ability to identify underlying causal relationships. |
| JEL: | J01 J24 J3 J31 J32 J33 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13653&r=lab |
| By: | Edward P. Lazear; Kathryn L. Shaw |
| Abstract: | The returns to talent or performance have grown over time in developed countries. Is talent concentrated in a few firms or are firms virtual microcosms of the economy, each having close to identical distributions of talent? The data show that talent is not concentrated in a few companies, but is widely dispersed across companies. Wage dispersion within firms is nearly as high as the wage dispersion overall. The standard deviation of wages within the firm is about 80% of the standard deviation across all workers in the economy. Firms are more similar than they are dissimilar, but they are not identical: the firm mean wage displays considerable dispersion across the population of firms. There is evidence that talent is becoming more concentrated over time within some firms relative to others. In four countries that estimated wage regressions with firm fixed effects, the firm fixed effects are contributing more to the R-squared of the wage regression over time. Law firms have more lawyers than janitors. Janitorial firms have more janitors than lawyers and the differences between firms have become more pronounced. Still, the variance of wages within the average firms remains high. |
| JEL: | J01 J2 J24 J3 J31 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13654&r=lab |
| By: | João Pereira (Universidade de Évora – Departamento de Economia); Aurora Galego (Universidade de Évora – Departamento de Economia) |
| Abstract: | This work aims at studying regional wage differentials both in a static and in a dynamic perspective. Previous studies have typically studied this issue using the Blinder and Oaxaca static decomposition. This approach does not provide clear information about the sources explaining the change in regional wage differentials along the years. To overcome this problem this study also uses Junh, Murphy and Pierce (1991,1993) decomposition. We analyse the case of Portugal for 1995 and 2002. Our results show that, although there are small changes in the interregional wage inequality, particularly between the region of Lisboa and the other regions, there are important and counteracting factors shaping this outcome. In fact, Lisboa has reinforced its position as the region with more qualified workers, but the gap in unobserved characteristics has decreased. |
| Keywords: | Regions, Wage Differentials, Wage Gap Decompositions |
| JEL: | J31 J38 J49 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2007_07&r=lab |
| By: | Dr. Adya Prasad Pandey, Adya Prasad Pandey; Shivesh , Shivesh |
| Abstract: | In a predominantly agricultural country like India, women play distinctive role in rural economic activities in earning a livelihood for the family. Except in the case of rich landowners and the upper castes, women of other categories are engaged in both the production and marketing of products of agriculture and handicrafts, women of these categories also combine household work with these activities. Because of the complexities of the role of women in different types of work, it is very difficult to examine the women’s contribution to family income through available employment statistics. There are almost intractable problems of definition as to what constitutes ‘employment’ and ‘work’ and as to who is as out to be over-simplistic and does not reflect the complexities of the situation. Until employment statistics relating to women are made more refined and meaningful, we are left with no option but to do the best we can with the available ones. In order to examine gender dimensions within and income earnings in India, the context of gendered participation of female labour supplies in its entirety needs to the accounted for. The dimensions affecting pre-entry conditions that influence capabilities, human capital traits and labour supply characteristics; aspects of in-market discriminations and gender biases against women in terms of hiring, promotion, segregation, gender relations and remunerations; and factors influencing women’s work time distribution among paid and unpaid activities, own and hired labour, extended activi8ties of household maintenance, care-giving, socially derived, traditional roles and sexual division of labour that influences the different agents of the labour markets have to be explored to understand the nature of gender-based wage differentials in India. The present paper highlights the wage and income differentials on the basis of gender in the Indian agriculture. |
| Keywords: | wage; Income differential ;gender; india Agriculture income diffrentials |
| JEL: | Q1 |
| Date: | 2007–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6088&r=lab |
| By: | Joseph Deutsch; Jacques Silber |
| Abstract: | This paper extends the famous Blinder (1973) and Oaxaca (1973) discrimination in several directions. First, the wage difference breakdown is not limited to two groups. Second, a decomposition technique is proposed that allows analysis of the determinants of the overall wage dispersion. The authors’ approach combines two techniques. The first of these is popular in the field of income inequality measurement and concerns the breakdown of inequality by population subgroup. The second technique, very common in the literature of labor economics, uses Mincerian earnings functions to derive a decomposition of wage differences into components measuring group differences in the average values of the explanatory variables, in the coefficients of these variables in the earnings functions, and in the unobservable characteristics. This methodological novelty allows one to determine the exact impact of each of these three elements on the overall wage dispersion, on the dispersion within and between-groups, and on the degree of overlap between the wage distributions of the various groups. However, this paper goes beyond a static analysis insofar as it succeeds in breaking down the change over time in the overall wage dispersion and its components (both between and within group dispersion and group overlapping) into elements related to changes in the value of the explanatory variables and the coefficients of those variables in the earnings functions, in the unobservable characteristics, and in the relative size of the various groups. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_521&r=lab |
| By: | Mauro Costantini (ISAE - Institute for Studies and Economic Analyses); Sergio de Nardis (ISAE - Institute for Studies and Economic Analyses) |
| Abstract: | This paper focuses on the influence of labour market reforms on the wage equation for Italy over the period 1981-2006. Using Gregory and Hansen (1996) residuals based tests for cointegration in model with regime shifts, we try to detect endogenously a possible structural break in the long run relationship between real wage, unemployment rate and labour productivity. Evidence of a structural shift is found and parameter elasticities of the equation before and after the break are estimated. |
| Keywords: | wage equation, cointegration, structural break. |
| JEL: | C22 E24 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:isa:wpaper:86&r=lab |
| By: | Laura Juarez (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)) |
| Abstract: | This paper investigates the effect of a generous demogrant for the elderly that started in 2001 in Mexico City on the labor supply and time use of the elderly and of non-elderly family members who live with them. Using data for the period 2000-2004 and a triple differences approach, I find that prime-age women reduce both their housework and market work time significantly, but only if they live with an age-qualifying woman in a poor neighborhood after the program started. In contrast, the program seems to have no significant effect on the time use of prime-age men. My results suggest that some of the public resources devoted to the elderly could actually spill over to other age groups, especially in countries where extended families are common, and that the gender of the potential beneficiary matters for outcomes. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cie:wpaper:0706&r=lab |
| By: | Sheila Mammen (Department of Resource Economics, University of Massachusetts Amherst); Daniel Lass (Department of Resource Economics, University of Massachusetts Amherst); Sharon B. Seiling (Department of Consumer Sciences, Ohio State University) |
| Abstract: | Labor force participation is crucial to the economic well-being of low-income rural families. This study identified the factors that influence two decisions that low-income rural mothers make regarding their employment: labor force entry and number of hours supplied to employment. The sample consisted of 412 rural low-income mothers who participated in a multi-state study. The logistic regression model correctly predicted 80 percent of their work participation decisions. Employed rural mothers appeared to be older, better educated, and less likely to suffer from depression compared to those not working. Additionally, they were more likely to have an employed partner, a driver’s license, child care assistance, and Earned Income Tax Credit from the previous year. The estimated labor supply function explained 33 percent of the variation in hours worked by the 208 employed rural mothers. Higher wages, availability of health insurance, and overtime benefits predicted the number of hours that these employed mothers were willing to work. |
| Keywords: | Rural Low-income Mothers, Labor Force Participation, Women’s Labor Supply, Welfare Reform |
| JEL: | D13 I38 J24 R29 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2007-12&r=lab |
| By: | T. Schirle (Wilfrid Laurier University) |
| Abstract: | Using longitudinal data from the Canadian Survey of Labour and Income Dynamics, I use an option value framework to examine the effects of health and employer provided pensions on retirement decisions. This study fills existing gaps in the literature by jointly modeling the impact of financial incentives and health on the retirement decisions of Canadians. The results indicate that both factors have substantial and significant effects on retirement, as having poor health increases the likelihood of entering retirement by up to 25 percentage points. Given the longitudinal aspect of the data, I am also able to address several identification issues discussed in the literature. The results corroborate previous evidence regarding the relative importance of attenuation and justification bias in self-reported health measures. The results also confirm U.S. and European evidence that employer-provided pensions and health are significant determinants of retirement. |
| Keywords: | Retirement; Private Pensions; Health |
| JEL: | J26 I10 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:wpaper:eg0046&r=lab |
| By: | Derek Yu (Department of Economics, Stellenbosch University) |
| Abstract: | Statistics South Africa (Stats SA) has been collecting labour market data with household surveys and in a fairly comparable format since 1993. These datasets have been studied and compared extensively in order to better understand the workings of the South African labour market. Many of these studies compare household surveys of different periods in order to identify trends, but the validity of such trends is conditional on the comparability of the different datasets. Besides, the naïve comparisons of the different datasets have been questioned. Other problems include inconsistencies in questionnaire design, coding errors, changes in the sampling frame, the oversampling of agricultural workers in OHS1995, the oversampling of subsistence agricultural workers in LFS2000a and LFS2000b, as well as the oversampling of informal workers in LFS2001a. Most of these issues have received attention in papers by Burger and Yu (2006), Casale, Muller and Posel (2005), and Wittenberg (2004). By drawing attention to a few of the lesser known problems, this paper aims to build on the existing literature by further stimulating debate around the strengths and weaknesses of the existing survey data, as well as considering the best ways in which to analyse the existing data. The inconsistencies that occur in the data independently of the way in which questions are asked by the interview, as well as the inconsistencies that result from the way in which the survey questions are formulated or placed in a given sequence are discussed. Where possible, adjustments that may contribute towards increased consistency in the responses are suggested. Ultimately, it is hoped that the lessons learnt from such discussions will serve to inform questionnaire design in future. |
| Keywords: | South Africa, Household Survey, Labour Market Trends, Earnings |
| JEL: | J00 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers48&r=lab |
| By: | Di Pane Fabrice (ETUC - ETUI-REHS) |
| Abstract: | European Economic and Employment Policy Briefs (EEEPBs) are edited by Senior Researcher Andrew Watt and issued electronically six to eight times a year. They are based on analytical work that is conducted both by the ETUI-REHS and cooperation partners. The aim of EEEPBs is to provide readers with short, critical, policy-oriented analyses of topical issues relating to European employment and the economy. Launched in 2005, the policy briefs have covered a number of important subjects including the European minimum wage policy, smart growth, accession to the euro area, and the role of demand-side policies in reducing unemployment. |
| JEL: | E00 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:tui:wpaper:1&r=lab |
| By: | T. Schirle (Wilfrid Laurier University) |
| Abstract: | This paper seeks to explain the substantial increases in older men’s labour force participation rates that have been observed since the mid-1990s. Using data from the U.S. March Current Population Survey, the Canadian Labour Force Survey, and the U.K. Labour Force Survey, I investigate the hypothesis that husbands treat the leisure time of their wives as complementary to their own leisure at older ages. I exploit the cohort effects driving recent increases in older women’s participation rates to identify the effect of a wife’s participation decision on her husband’s participation decision. Given this complementarity in leisure time, a large portion of the increase in older men’s participation rates may be explained as a response to the recent increases in older women’s participation in the labour force. The methodology of Dinardo, Fortin, and Lemieux (1996) is used to decompose the changes in older married men’s participation rates, demonstrating that increases in wives’ participation in the labour force can explain roughly one quarter of the recent increase in participation in the U.S., almost one half of the recent increase in participation in Canada, and roughly one third of the recent increase in the U.K. Older men’s educational attainment is also an important factor explaining recent increases in participation, yet cannot be expected to drive further increases in participation rates. In contrast, expected increases in older wives’ participation over the next decade are expected to drive further increases in older men’s participation rates. |
| Keywords: | Labour force participation; leisure complementarity |
| JEL: | J21 J22 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:wpaper:eg0045&r=lab |
| By: | Dr. Adya Prasad Pandey , Dr |
| Abstract: | In the rapid programme of industrial development of India, trade unions have come to occupy a critical position in the success of industrial relations in the country. Trade Unionism in India has been undergoing rapid changes due to socio-economic transformation. The term industrial relation or labour – management relation, refers to industry and relations, ‘industry’ means ‘any productive activity in which an individual is engaged’ and ‘relations’ means ‘the relations that exist in the industry between the employer and his workmen’. The concept of industrial relation is a developing and dynamic concept and does not limit itself merely to the complex of relations between the unions and management but also refers to the general web of relationship normally obtaining between employees. A web is much more complex than the simple concept of labour capital conflict. According to the International Labour Organisation (ILO) “Industrial relations deals with either the relationship between the state, employers' and workers organization or the relation between the occupational organization themselves.” Modern industrialism has not been an unmixed but has created a yawning gulf between management and labour because of the absence of workers ownership of the means of production. Power is concentrated in the hands of a few entrepreneurs, while the majority has been relegated to the insignificant position of merge wage-earners. The workers have now come to realize that most of their demands can be satisfied if they resort to concerted and collective action; while the employers are aware of the fact that they can resist these demands. This denial or refusal to meet their genuine demands has often led to dissatisfaction on the part of the workers, to their distress, and even to violent activities on their part, which have hindered production and harmed both the workers and the employees. In order to analyse the cause of labour – management relations we have to go into the various aspects related with industrial production and productivity. Hence in the present paper the researcher adopted the random sampling technique for the purpose and interviewed with the help of questionnaire. The whole universe has been classified into three groups, - viz. workers, executives and trade union leaders/office bearers of Bokaro Steel Plant. The research proposed to select nearly 160 workers, 70 executives and 70 trade union office bearers/leaders of Bokaro Steel Plant. Thus a total of 300 respondents in all were selected for study. The present study has been divided in IV parts Ist part is introductory whereas the IInd part deals with various segments of labourmanagement relations. The IIIrd part analyses the various aspects of the industrial relations concerning to trade unions on the basis of primary datas of Bokaro Steel Plant. The last partconcludes the study. |
| Keywords: | Labour Management; Industrial Peace; Radical Deal ; Adya Prasad Pandey |
| JEL: | A10 |
| Date: | 2007–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6085&r=lab |
| By: | Popovic, Milenko |
| Abstract: | One of the most interesting facts about the growth of developed nations, especially of the US growth, in the last three decades is significant growth of the ratio of the wage of skilled labor to that of unskilled labor. At the same time, existing evidence seems to suggest that the ratio of the rate of return on investment in skilled labor to that of unskilled labor has stayed pretty stable. This contradicting trend in movement of two ratios is formally easy to explain. Being aware of the fact that all possible measures of the rate of return in education confront, in one way or another, differences in wages of different educational levels with the cost of reaching the concerned level of education, we can with certainty conclude that, in order to keep the rate of return ratio unchanged, the increase of wage ratio should be accompanied with adequate increase in the ratio of the cost of reaching a skilled level of education to the cost of reaching an unskilled level. This is something that follows from identity and as such cannot be questioned. The real question here refers to a possible source of relative increase in the cost of reaching skilled level of education. Possibilities are here enormous and every developed country presents a different story. The purpose of this article is to shed a light on one of the sources of education cost growth which is common to all developed countries and which can explain the greatest part of education cost ratio increase in all developed countries. In what follows we will show that the increase in the cost of education ratio is mostly due, first, to the fact that technological progress in industry of education is negligible, second, to the fact that “products” of industry of education are nontradeables, and third, to the increase of wage ratio itself. |
| Keywords: | Inequality; Growth; Capital of Education; Costs of Education |
| JEL: | O47 O15 J01 |
| Date: | 2007–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6049&r=lab |