nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒08‒31
five papers chosen by
Maximo Rossi
University of the Republic

  1. How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being By Pencavel, John
  2. New Evidence on the Motherhood Wage Gap By Amuedo-Dorantes, Catalina; Kimmel, Jean
  3. Migration, Remittances and Children’s Schooling in Haiti By Amuedo-Dorantes, Catalina; Georges, Annie; Pozo, Susan
  4. When Workers Share in Profits: Effort and Responses to Shirking By Richard Freeman
  5. Complementarity of Shared Compensation and Decision-Making Systems: Evidence from the American Labor Market By Arindrajit Dube; Richard Freeman

  1. By: Pencavel, John (Stanford University)
    Abstract: Can conventional economic analysis help in defining and measuring the success of labor unions? In this paper, a general indicator of union welfare is proposed and particular expressions for the wage and employment objectives of unions are rearranged to derive measures of union success or welfare. These indicators combine two measures: union density and the relative union-nonunion wage gap. The indicators are applied to describe the movement of union welfare in the United States over the past eighty years, the differences in union success among groups of U.S. workers, and the variation in union well-being across countries.
    Keywords: trade unions, union density, relative wage effect of unionism, union objectives
    JEL: J51
    Date: 2008–08
  2. By: Amuedo-Dorantes, Catalina (San Diego State University, California); Kimmel, Jean (Western Michigan University)
    Abstract: Using data from the 1979 National Longitudinal Survey of Youth, we assess the role of employment-based health insurance offers in explaining the motherhood wage gap. Researchers have been aware of the existence of a motherhood gap for many years; yet, the literature has failed to address the role of non-wage compensation in explaining the motherhood wage gap despite the increasing importance of non-wage benefits in total compensation packages. As hedonic wage theory suggests, mothers might view health benefits as desirable and trade-off wages for health insurance. Thus, lower wages for mothers might reflect their relative preferences for jobs offering health insurance. We estimate an endogenous switching wage equation model to account for the self-selection and, thus, endogeneity of having an employment-based health insurance offer. We find that, once the endogeneity of having an employment-based health insurance offer is accounted for, the motherhood wage gap disappears.
    Keywords: motherhood wage gap, non-wage compensation, health insurance
    JEL: J01 J31 J33 J16
    Date: 2008–08
  3. By: Amuedo-Dorantes, Catalina (San Diego State University, California); Georges, Annie (National Center for Children and Families); Pozo, Susan (Western Michigan University)
    Abstract: In this paper, we focus on the use of remittances to school children remaining in migrant communities in Haiti. After addressing the endogeneity of remittance receipt, we find that remittances raise school attendance for all children in some communities regardless of whether they have household members abroad or not; however, in other communities, we only observe this effect among children living in households that do not experience any family out-migration. Our finding underscores the simultaneous and opposing impacts of household out-migration and remittance receipt on children’s schooling. While the receipt of remittances by the household lifts budget constraints and raises the children’s likelihood of being schooled, the disruptive effect of household out-migration imposes an economic burden on the remaining household members and reduces their likelihood of being schooled. As such, remittances ameliorate the negative disruptive effect of household out-migration on children’s schooling and, given the substantial costs of schooling in Haiti, contribute to the accumulation of human capital in the midst of extreme poverty.
    Keywords: migration, remittances, education, Haiti
    JEL: F22 O54
    Date: 2008–08
  4. By: Richard Freeman
    Abstract: This paper summarizes new evidence from the "Shared Capitalism" Project on the extent towhich workers' earnings depend on the performance of their firm or work group in the USand advanced European countries and on the impact of sharing arrangements on economicbehavior. The evidence shows that: 1) a large and growing proportion of workers are coveredby shared capitalism through worker profit-sharing, bonuses, or worker ownership of shares;2) outcomes for workers and firms are higher under shared capitalism than under other workand pay arrangements; and 3) that worker co-monitoring helps overcome the free riderproblem that arises when part of workers pay depends on the productivity and effort of allworkers.
    Keywords: Profit sharing, efficiency wages
    JEL: J41 J24 J33
    Date: 2008–07
  5. By: Arindrajit Dube; Richard Freeman
    Abstract: This paper examines the relationship between shared capitalist modes of pay and shared modes of decision-making via employee involvement and related committees and between them and measures of productivity and worker well-being in two data sets: the employee based Worker Participation and Representation Survey and the California Establishment Survey. It finds in both data sets that the forms of shared compensation are complementary in the sense that they are more likely to be found together than if firms chose them separately; that shared compensation systems are positively associated with shared decision-making; and that combining shared compensation systems and employee involvement has greater impacts on outcomes than each system by itself.
    JEL: J33 J54 L23 L25
    Date: 2008–08

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