New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒12‒01
two papers chosen by

  1. Executive Compensation: The View from General Equilibrium By Jean-Pierre Danthine; John B. Donaldson
  2. Gender wage discrimination in the Turkish labor market By Elisabeth Cudeville; Leman Yonca Gurbuzer

  1. By: Jean-Pierre Danthine (University of Lausanne, CEPR and Swiss Finance Institute); John B. Donaldson (Columbia University)
    Abstract: We study the dynamic general equilibrium of an economy where risk averse shareholders delegate the management of the ¯rm to risk averse managers. The optimal contract has two main components: an incentive component corresponding to a non-tradable equity position and a variable 'salary' component indexed to the aggregate wage bill and to aggregate dividends. Tying a manager's compensation to the performance of her own ¯rm ensures that her interests are aligned with the goals of ¯rm owners and that maximizing the discounted sum of future dividends will be her objective. Linking managers' compensation to overall economic performance is also required to make sure that managers use the appropriate stochastic discount factor to value those future dividends.
    Keywords: incentives, optimal contracting, stochastic discount factor
    JEL: E32 E44
    Date: 2007–09
  2. By: Elisabeth Cudeville (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Leman Yonca Gurbuzer (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: While the topic of gender equality turns out to be an important element in the preparation of Turkey to join the European Union, very little empirical research on this issue has been done using Turkish data. This paper aims to contribute toward filling this gap. We propose an estimate of the wage discrimination in Turkey relying on different decompositions of the gender waga differential. The data set used is the 2003 Turkish Household Budget Survey. In Turkey, the observed average gender wage gap is about 25,2 % in favor of men for the salaried population and around 60 % of it may be attributed to discrimination. In terms of gender wage discrimination, with an observed wage gap close to those observed in France and Italy, and a discrimination component close to the ones obtained in Spain and Greece with comparable methods, Turkey happens to do not so bad. But, in the Turkish case, wage discrimination appears to be a bad indicator of gender inequalities in the labor market, as exclusion and segregation of women are the main concerns.
    Keywords: Discrimination, gender wage gap decompositions, Turkey.
    Date: 2007–05

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