nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒01‒25
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Multidimensional Well-being at the Top: Evidence for Germany By Andreas Peichl; Nico Pestel
  2. Wage Mobility in East and West Germany By Riphahn, Regina T.; Schnitzlein, Daniel D.
  3. Another Economic Miracle? The German Labor Market and the Great Recession By Rinne, Ulf; Zimmermann, Klaus F.
  4. Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better? By Douglas L. Kruse; Joseph R. Blasi; Richard B. Freeman
  5. Analysis of Gender Wage Differential in China's Urban Labor Market By Su, Biwei; Heshmati, Almas
  6. On the measurement of social progress and well being: some further thoughts By Jean Paul Fitoussi; Joseph Stiglitz
  7. Racial and Ethnic Inequality in Employer Provided Fringe Benefits By Mok, Wallace; Siddique, Zahra

  1. By: Andreas Peichl; Nico Pestel
    Abstract: This paper employs a multidimensional approach for the measurement of well-being at the top of the distribution using German SOEP micro data. Besides income as traditional indicator for material well-being, we include health as a proxy for nonmaterial quality of life as well as self-reported satisfaction with life as dimensions. We find that one third of the German population is well-off in at least one dimension but only one percent in all three dimensions simultaneously. While the distribution of income has become more concentrated at the top, the concentration at the top of the multidimensional well-being distribution has decreased over time. Moreover, health as well as life satisfaction contribute quite substantially to multidimensional wellbeing at the top which has important policy implications.
    Keywords: Multidimensional measurement, well-being, Germany
    JEL: D31 D63 I31
    Date: 2011
  2. By: Riphahn, Regina T. (University of Erlangen-Nuremberg); Schnitzlein, Daniel D. (DIW Berlin)
    Abstract: This article studies the long run patterns and explanations of wage mobility as a characteristic of regional labor markets. Using German administrative data we describe wage mobility since 1975 in West and since 1992 in East Germany. Wage mobility declined substantially in East Germany in the 1990s and moderately in East and West Germany since the late 1990s. Therefore, wage mobility does not balance recent increases in cross-sectional wage inequality. We apply RIF (recentered influence function) regression based decompositions to measure the role of potential explanatory factors behind these mobility changes. Increasing job stability is an important factor associated with the East German mobility decline.
    Keywords: wage mobility, earnings mobility, income mobility, Germany, East Germany, inequality, transition matrix, Shorrocks index, administrative data
    JEL: J30 J31 J60 D63
    Date: 2011–12
  3. By: Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The mild response of the German labor market to the worst global recession in post-war history appears as an economic miracle. In response to the crisis, Germany has shown to be a strong case of internal flexibility. We argue that important factors that have contributed to this development include the strong position of the German economy due to recent labor market reforms, the nature of the crisis affecting mainly export-oriented companies in Germany, the extension of short-time work, the behavior of social partners, and automatic stabilizers. Among these factors, we emphasize the key role of the interaction between short-time work and long-term shortages of skilled workers in sectors and regions that were particularly affected by the crisis. Although the German experience is in stark contrast to that in the United States, we identify and discuss three challenges that will be at the center of debate on both sides of the Atlantic in the future.
    Keywords: economic crisis, Germany, short-time work, unemployment, labor market institutions, internal flexibility
    JEL: J68 J21 P52 O57
    Date: 2011–12
  4. By: Douglas L. Kruse; Joseph R. Blasi; Richard B. Freeman
    Abstract: This paper analyzes the linkages among group incentive methods of compensation, labor practices, worker assessments of workplace culture, turnover, and firm performance in a non-representative sample of companies: firms that applied to the “100 Best Companies to Work For in America” competition from 2005 to 2007. Although employers with good labor practices self- select into the 100 Best Companies firms sample, which should bias the analysis against finding strong associations among modes of compensation, labor policies, and outcomes, we find that in the firms that make more extensive use of group incentive pay employees participate more in decisions, have greater information sharing, trust supervisors more, and report a more positive workplace culture than in other companies. The combination of group incentive pay with policies that empower employees and create a positive workplace culture reduces voluntary turnover and increases employee intent to stay and raises return on equity. Finding these effects in the non-representative “100 Best Companies” sample strengthens the likelihood that the policies have a causal impact on employee well-being and firm performance.
    JEL: J33 J53 J54 J63 M50 M52 M54 P12 P13 P17
    Date: 2012–01
  5. By: Su, Biwei (Korea University); Heshmati, Almas (Korea University)
    Abstract: This paper estimates the gender wage gap and its composition in China's urban labor market using the 2009 survey data from the Chinese Family Panel Studies. Several estimation and decomposition methods have been used and compared. First, we examine the gender wage gap using ordinary least square regression method with a gender dummy variable. Then, we apply Oaxaca (1973) decomposition method with different weighting systems to analyze the logarithmic wage differential. To be more specific, we prove the existence of sample selection bias caused by the female's labor force participation. We eliminate it by using the Heckman's two-step procedure. Empirical results reveal that male workers generally receive a higher wage than female workers, and a great deal of this difference is unexplained. Meanwhile, this unexplained part, which is usually referred to as discrimination turns out to be higher when the adjustment is made for the selection bias. A further breakdown of the wage gap shows that among all the individual characteristics, occupations explain the largest share of the wage gap, followed by their working experience. On the other hand, education acts as a contributor for discrimination in the labor market.
    Keywords: discrimination, wage gap, decomposition, gender, Chinese labor market
    JEL: J70 J31 J16 J78
    Date: 2011–12
  6. By: Jean Paul Fitoussi (Observatoire Français des Conjonctures Économiques); Joseph Stiglitz (Columbia University)
    Abstract: Two years after the delivery of the report on The Measurement of Economic Performances and Social Progress (Stiglitz-Sen-Fitoussi),this paper provides some further reflections on the subject. Since 2008, when the work of the Commission began, the world has experienced several dramatic events which all call into question our measurement systems and the policies which were grounded on them: the financial crisis of 2007-2008, the grave events in Japan, the Sovereign debt crisis, and the revolutions in the Arabic world. In particular, the Japanese earthquake and its aftermath underlines three central shortcomings of our metrics: the measurement of the economic product,the measurement of well being, and the measurement of sustainability. For economists, these concerns are especially important, because we often rely on statistical (econometric analyses) to make inferences about what are good policies. Those inferences are only as reliable as the metrics that they are based on. Our statistical systems should tell us whether or not what we are doing is sustainable, economically, environmentally, politically, or socially and whether proposed policies will in fact enhance well-being . There would be little sense in pursuing policies aimed at increasing some widely used metric like GDP ifsuch policies lead to a decrease in well being.
    Keywords: 1- Economic indicators 2- Gross Domestic Products 3-Social indicators 4- Well being 5- Sustainability
    JEL: E01 E30 G10 I32 Q50 Q54
    Date: 2011–10
  7. By: Mok, Wallace (Chinese University of Hong Kong); Siddique, Zahra (IZA)
    Abstract: We examine racial and ethnic inequality in offers of employer provided fringe benefits (health insurance, life insurance and pension). Restricting to full-time workers in the private sector, we find that African Americans are significantly less likely to get fringe benefit offers than non-Hispanic whites after we control for individual differences in age and youth characteristics that matter for labor market success using the 1979 cohort of the National Longitudinal Survey of Youth. We do not find ethnic differences in the 1979 cohort or racial/ethnic differences in the 1997 cohort to be significantly large after controlling for individual differences in age and youth characteristics. Irrespective of race, ethnicity, gender or cohort, we always find that older workers are more likely to get fringe benefit offers as are workers with higher cognitive ability and years of education at age 22. We find that the cross-sections from the 1979 cohort of the National Longitudinal Survey of Youth have more fringe benefit offers than cross-sections from the 1997 cohort. A large part of the difference across cohorts can be explained by the older age profile of cross-sections from the 1979 cohort. Some part of the difference across cohorts can also be explained by differences in family background characteristics, particularly changing family structures which are important for non-Hispanic whites and for African American men. Improvements in cognitive ability and years of education at age 22 for the 1997 cohort increase the unexplained difference in fringe benefit offers across the two cohorts for women (irrespective of race or ethnicity), but not for men.
    Keywords: economics of minorities and races, non-wage labor costs and benefits
    JEL: I11 J15 J32
    Date: 2011–12

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