nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2014‒11‒07
seven papers chosen by
Joseph Marchand
University of Alberta

  1. JOB-TO-JOB (J2J) FLOWS: NEW LABOR MARKET STATISTICS FROM LINKED EMPLOYER-EMPLOYEE DATA By Henry Hyatt; Erika McEntarfer; Kevin McKinney; Stephen Tibbets; Doug Walton
  2. The Glass Ceiling and the Paper Floor: Gender Differences among Top Earners, 1981–2012 By Guvenen, Fatih; Kaplan, Greg; Song, Jae
  3. The cleansing effect of minimum wages - Minimum wages, firm dynamics and aggregate productivity in China By Sandra PONCET; Florian MAYNERIS; Tao ZHANG
  4. Heterogeneity, Endogeneity, Measurement Error and Identification of the Union Wage Impact By Chrysanthou, Georgios Marios
  5. Flexible pay systems and labour productivity: Evidence from Emilia-Romagna manufacturing firms By Davide Antonioli; Paolo Pini; Roberto Antonietti
  6. Pay increase may not be a strong incentive for undertaking acquisitions By Swarnodeep Homroy
  7. The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy By Caliendo, Lorenzo; Parro, Fernando; Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel G.

  1. By: Henry Hyatt; Erika McEntarfer; Kevin McKinney; Stephen Tibbets; Doug Walton
    Abstract: Flows of workers across jobs are a principal mechanism by which labor markets allocate workers to optimize productivity. While these job flows are both large and economically important, they represent a significant gap in available economic statistics. A soon to be released data product from the U.S. Census Bureau will fill this gap. The Job-to-Job (J2J) flow statistics provide estimates of worker flows across jobs, across different geographic labor markets, by worker and firm characteristics, including direct job-to-job flows as well as job changes with intervening nonemployment. In this paper, we describe the creation of the public-use data product on job-to-job flows. The data underlying the statistics are the matched employer-employee data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics program. We describe definitional issues and the identification strategy for tracing worker movements between employers in administrative data. We then compare our data with related series and discuss similarities and differences. Lastly, we describe disclosure avoidance techniques for the public use file, and our methodology for estimating national statistics when there is partially missing geography.
    Date: 2014–09
  2. By: Guvenen, Fatih (Federal Reserve Bank of Minneapolis); Kaplan, Greg (Princeton University); Song, Jae (Social Security Administration)
    Abstract: We analyze changes in the gender structure at the top of the earnings distribution in the United States over the last 30 years using a 10% sample of individual earnings histories from the Social Security Administration. Despite making large inroads, females still constitute a small proportion of the top percentiles: the glass ceiling, albeit a thinner one, remains. We measure the contribution of changes in labor force participation, changes in the persistence of top earnings, and changes in industry and age composition to the change in the gender composition of top earners. A large proportion of the increased share of females among top earners is accounted for by the mending of, what we refer to as, the paper floor – the phenomenon whereby female top earners were much more likely than male top earners to drop out of the top percentiles. We also provide new evidence at the top of the earnings distribution for both genders: the rising share of top earnings accruing to workers in the Finance and Insurance industry, the relative transitory status of top earners, the emergence of top earnings gender gaps over the life cycle, and gender differences among lifetime top earners.
    Keywords: Top earners; Glass ceiling; Gender gap; Paper floor; Industry
    JEL: E24 G10 J31
    Date: 2014–10–22
  3. By: Sandra PONCET (Université de Paris I); Florian MAYNERIS (FERDI); Tao ZHANG (FERDI)
    Abstract: We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For the surviving firms, thanks to signicant productivity gains, wage costs rose without any negative employment effect. At the city-level, our results show that higher minimum wages affected aggregate productivity growth via both productivity growth in incumbent firms and the net entry of more productive firms. Hence, in a fast-growing economy like China, there is a cleansing effect of labor-market standards.
    JEL: F10 F14 O14
    Date: 2014–10
  4. By: Chrysanthou, Georgios Marios (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)
    Abstract: We study union wage effects when membership is non-coercive and employers reserve the right of union recognition. Using the BHPS during 1995-2009 we find evidence of membership differentials for the lower male and middle female observed skill groups. The coverage differential at the bottom of the observed male skill distribution suggests free riding. While union members are negatively selected, there is evidence of positive selection at the bottom of the observed skill distribution. Using the unified measurement error and endogeneity bias expression, we obtain a discernible pattern between uncorrected, endogeneity corrected and fixed effects estimates of the union wage effect.
    Keywords: Union wage differentials; measurement error; unobserved heterogeneity; endogeneity
    JEL: C33 C35 J31 J51
    Date: 2014–09–29
  5. By: Davide Antonioli; Paolo Pini; Roberto Antonietti
    Abstract: The aim of this paper is to analyse the link between flexible pay systems (FPS) and labour productivity, with a close look at wage premium determinants as elements disclosing specific managerial strategies. The analysis was conducted on a sample of more than 500 manufacturing firms located in the Emilia-Romagna region, Italy. Results show that the adoption of flexible pay schemes is linked to union involvement and organizational changes within the firm, supporting the idea that flexible wages do not constitute merely an economic premium, but a more complex strategy aimed at increasing employees’ flexibility and autonomy. Notwithstanding the positive effects on productivity, the relation with economic performance does not emerge as extremely innovative. On the one hand, it is driven by a traditional form of premiums (PRP) targeted to individual employees and linked to a simple “effort improvement and control†motivation and “ability to pay†of the firm. On the other, it is driven by premiums (PFP) provided ex-ante and aimed at developing employees’ participation and competencies
    Keywords: performance related pay; pay for participation; organizational innovation; industrial relations; labour productivity
    JEL: J24 J33 J51
    Date: 2014–10–08
  6. By: Swarnodeep Homroy
    Abstract: A large body of literature suggests that CEOs have misaligned incentives to undertake acquisitions in an attempt to increase their pay. This paper shows that the likelihood of post-acquisition CEO turnover can act as a constraint on such incentives. The acquisition premium in pay decreases by 50% if the likelihood of post-acquisition turnover is controlled for. This suggests a significant survivor bias in previous estimates of acquisition premium. Given a smaller pay premium for undertaking acquisitions and non-zero risk of dismissal, a risk-averse agent may not have strong incentives to undertake an acquisition for the marginal pay increase. The likelihood of dismissal seems to carry stronger incentive effects than post-acquisition pay increase.
    Keywords: Agency problem, mergers and acquisitions, CEO pay, Severance
    JEL: G34 J31 J33 M52
    Date: 2014
  7. By: Caliendo, Lorenzo (Yale University); Parro, Fernando (Board of Governors of the Federal Reserve System (U.S.)); Rossi-Hansberg, Esteban (Princeton University); Sarte, Pierre-Daniel G. (Federal Reserve Bank of Richmond)
    Abstract: We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We fi nd that such elasticities can vary signi cantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the US economy. We highlight the role of these elasticities by tracing out the effects of productivity gains in California in the Computers and Electronics industry between 2002 and 2007 on all other U.S. sectors and regions.
    Keywords: Interregional trade; intersectoral linkages; total factor productivity; gross domestic product; factor mobility
    JEL: F10 F11 O40 O47 R12 R13
    Date: 2014–08–06

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