nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2012‒12‒10
six papers chosen by
Erik Jonasson
Lund University

  1. One Man's Blessing, Another Woman's Curse? Family Factors and the Gender-Earnings Gap of Doctors By Schurer, Stefanie; Kuehnle, Daniel; Scott, Anthony; Cheng, Terence Chai
  2. English Deficiency and the Native-Immigrant Wage Gap By Miranda, Alfonso; Zhu, Yu
  3. Minimum Wages and Wage Inequality: Some Theory and an Application to the UK By Richard Dickens; Alan Manning; Tim Butcher
  4. Immigration, jobs and employment protection: evidence from Europe before and during the Great Recession By Francesco D'Amuri; Giovanni Peri
  5. GINI DP 56: Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US By Ive Marx; Sarah Marchal; Brian Nolan
  6. Wages & income mobility in Indian labour market: the post-reform scenario By Ray, Jhilam; Majumder, Rajarshi

  1. By: Schurer, Stefanie (Victoria University of Wellington); Kuehnle, Daniel (University of Erlangen-Nuremberg); Scott, Anthony (Melbourne Institute of Applied Economic and Social Research); Cheng, Terence Chai (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Using data from a new longitudinal survey of doctors from Australia, the authors test whether observed large gender-pay gaps among general practitioners (GPs) are the result of women's larger willingness to interrupt their careers. On average, female GPs earn A$83,000 or 54% less than male GPs. The difference between men and women with children is A$105,000, and A$45,000 for men and women without children. Of this gap, 66-75% is explained by differences in observable characteristics such as hours worked. The family gap emerges also within the sexes. Female GPs with children experience an earnings penalty of A$15,000-A$25,000 in comparison to women without children; almost 100% of this difference is due to observable characteristics such as hours worked and career interruptions. Male GPs with children experience a family premium of A$35,000 in comparison to men without children, indicating the presence of a breadwinner effect that exacerbates the gender-earnings gap.
    Keywords: gender-earnings gap, family-earnings gap, labour force attachment, decomposition methods, family physicians, MABEL
    JEL: J24
    Date: 2012–11
  2. By: Miranda, Alfonso (CIDE, Mexico City); Zhu, Yu (University of Kent)
    Abstract: We focus on the effect of English deficiency on the native-immigrant wage gap for male employees in the UK using the first wave of the UK Household Longitudinal Survey. We show that the wage gap is robust to controls for age, region of residence, educational attainment and ethnicity. However, English as Additional Language (EAL) is capable of explaining virtually all the remaining wage gap between natives and immigrants. Using the interaction of language of country of birth and age-at-arrival as instrument, we find strong evidence of a causal effect of EAL on the native-immigrant wage gap.
    Keywords: English as Additional Language (EAL), native-immigrant wage gap, age-at-arrival
    JEL: J15 J61
    Date: 2012–11
  3. By: Richard Dickens (Department of Economics, University of Sussex, UK); Alan Manning (Centre for Economic Performance, London School of Economics, UK); Tim Butcher (Secretariat, Low Pay Commission, UK)
    Abstract: Research suggests that, at the levels set in countries like the US and the UK, minimum wages have little effect on employment but do have impacts on wage inequality. However we lack models that can explain these facts – this paper presents one based on imperfect labour markets. The paper also investigates the impact of the UK’s National Minimum Wage on wage inequality finding it can explain a sizeable part of the evolution of wage inequality in the bottom half of the distribution in the period 1998-2010. We also present evidence that the impact of the NMW reaches up to 40% above the NMW in 2010 which corresponds to the 25th percentile. These spillovers are larger in low-wage segments.
    Keywords: Minimum Wage, Wage Inequality
    JEL: J38
    Date: 2012–12
  4. By: Francesco D'Amuri (Bank of Italy); Giovanni Peri (UC Davis)
    Abstract: In this paper we analyse the impact of immigrants on the type and quantity of natives’ jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking up manual-routine type of occupations pushed natives towards more “complex” (abstract and communication) jobs. This job upgrade was associated with a 0.7% increase in native wages for a doubling of the immigrants’ share. These results are robust to the use of an IV strategy based on the past settlement of immigrants across European countries. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labour market flows behind it: the complexity of jobs offered to new native hires was greater than that of lost jobs. Finally, we find evidence that the reallocation was larger in countries with more flexible labour laws.
    Keywords: immigration, jobs, task specialization, employment protection laws, Europe
    JEL: J24 J31 J61
    Date: 2012–10
  5. By: Ive Marx (Centre for Social Policy, University of Antwerp); Sarah Marchal (CSB , University of Antwerp); Brian Nolan (School of Applied Social Science, University College Dublin)
    Abstract: This paper focuses on the role of minimum wages, in conjunction with tax and benefit policies, in protecting workers against financial poverty. It covers 20 European countries with a national minimum wage and three US States (New Jersey, Nebraska and Texas). It is shown that only for single persons and only in certain countries do net income packages at minimum wage level reach or exceed the EU’s at-risk-of poverty threshold, which is set at 60 per cent of median equivalent household income in each country. For lone parents and sole breadwinners with a partner and children to support, net income packages at minimum wage are below this threshold almost everywhere, usually by a wide margin. This remains the case despite shifts over the past decade towards tax relief and additional income support provisions for low-paid workers. We argue that there appear to be limits to what minimum wage policies alone can achieve in the fight against in-work poverty. The route of raising minimum wages to eliminate poverty among workers solely reliant on it seems to be inherently constrained, especially in countries where the distance between minimum and average wage levels is already comparatively small and where relative poverty thresholds are mostly a function of the dual-earner living standards. In order to fight in-work poverty new policy routes need to be explored. The paper offers a brief discussion of possible alternatives and cautions against ‘one size fits all’ policy solutions.
    Date: 2012–07
  6. By: Ray, Jhilam; Majumder, Rajarshi
    Abstract: Improvement in the living conditions of workers is an important objective of development planners and India is no exception. The crux of this lies in returns from work, or wage level. While non-wage aspects are important, wage level is the most pertinent indicator of condition of workers and increase in real wage level signals improvement in condition of labour market. Though most studies compare wages at different points of time from cross-sectional data, they provide an aggregative view without control for variables that are particular to the household/family. Contrary to this, intergenerational mobility in wage income following life cycle theory observes direction & quantum of movement of workers’ wage relative to their parents, therefore filtering out household characteristics, and providing better measure of workers’ conditions and its trends over time. Another important aspect that can be explored by looking at intergenerational wage mobility is related to the issue of equality. Stickiness of wage income with respect to parental income leads to persistence of income inequality across generations and questions the notional objective of equity in opportunity and openness of any society. Historically some groups are belonging to lower strata of society due to economic and or social discrimination leading to lower income and asset possession as well as capability formation which excluded them from the process of capability formation and income-earning. This exclusion and backwardness surpass the boundary of the current generation and spills over to successive generations as well. As a result Intergenerational Mobility is very low among backward classes. Also of importance is to enquire whether economic liberalization and structural reforms have had any impact on the intergenerational income mobility – has mobility today more than that in the 1990s? In this paper we explore these issues, throwing light on a hitherto neglected area of research in Indian labour market studies – intergenerational income mobility, desegregated across social classes and comparing pre-reform and post-reform results. We observe that wage income mobility between generations have been generally low in India. Though such stickiness over generations is declining over time, especially in the post-reform period, stickiness is still higher for excluded social classes. Improvement over the last decade has occurred mainly for the scheduled castes and not for the tribals who are much more spatially isolated and hence outside the orbit of economic dynamics.
    Keywords: Intergenerational Mobility; wage; social class; income persistence; India
    JEL: J62 J31
    Date: 2012–11

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