nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒09‒09
two papers chosen by
Maximo Rossi
University of the Republic

  1. Wage determination and wage inequality inside a Russian firm in late transition: Evidence from personnel data - 1997 to 2002 By Thomas Dohmen; Hartmut Lehmann; Mark E. Schaffer
  2. Culture as Learning: The Evolution of Female Labor Force Participation over a Century By Raquel Fernandez

  1. By: Thomas Dohmen; Hartmut Lehmann; Mark E. Schaffer
    Abstract: We use personnel data from a Russian firm for the years 1997 to 2002 to study the determinants of wages during transition. Our findings indicate that remuneration is not predetermined by formal rules and a stable institutionalized structure of wages, but rather that local labor market conditions have a strong impact on wage setting at the firm level. In particular, we document that real wages fall substantially during a period of high inflation and worsening local labor market conditions. Relative wage decreases are most pronounced for employees who initially earned the highest rents. The process of rent extraction leads to a strong compression of real wages and real compensation at the firm.
    Keywords: personnel economics, wage determination, Russia, transition
    JEL: J31 P31
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:hwe:certdp:0704&r=ltv
  2. By: Raquel Fernandez
    Abstract: Married women's labor force participation has increased dramatically over the last century. Why this has occurred has been the subject of much debate. This paper investigates the role of culture as learning in this change. To do so, it develops a dynamic model of culture in which individuals hold heterogeneous beliefs regarding the relative long-run payoffs for women who work in the market versus the home. These beliefs evolve rationally via an intergenerational learning process. Women are assumed to learn about the long-term payoffs of working by observing (noisy) private and public signals. They then make a work decision. This process generically generates an S-shaped figure for female labor force participation, which is what is found in the data. The S shape results from the dynamics of learning. I calibrate the model to several key statistics and show that it does a good job in replicating the quantitative evolution of female LFP in the US over the last 120 years. The model highlights a new dynamic role for changes in wages via their effect on intergenerational learning. The calibration shows that this role was quantitatively important in several decades.
    JEL: E2 J21 Z1
    Date: 2007–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:13373&r=ltv

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