nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒07‒02
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Firms and labor market inequality: Evidence and some theory By Card, David; Cardoso, Ana Rute; Heining, Jörg; Kline, Patrick
  2. The Welfare Effects of Involuntary Part-Time Work By Daniel Borowczyk-Martins; Etienne Lalé
  3. Relational Altruism and Giving in Social Groups By Scharf, Kimberley; Smith, Sarah

  1. By: Card, David; Cardoso, Ana Rute; Heining, Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Kline, Patrick
    Abstract: "We review the literature on firm-level drivers of labor market inequality. There is strong evidence from a variety of fields that standard measures of productivity - like output per worker or total factor productivity - vary substantially across firms, even within narrowly-defined industries. Several recent studies note that rising trends in the dispersion of productivity across firms mirror the trends in the wage inequality across workers. Two distinct literatures have searched for a more direct link between these two phenomena. The first examines how wages are affected by differences in employer productivity. Studies that focus on firm-specific productivity shocks and control for the non-random sorting of workers to more and less productive firms typically find that a 10% increase in value-added per worker leads to somewhere between a 0.5% and 1.5% increase in wages. A second literature focuses on firm-specific wage premiums, using the wage outcomes of job changers. This literature also concludes that firm pay setting is important for wage inequality, with many studies finding that firm wage effects contribute approximately 20% of the overall variance of wages. To interpret these findings, we develop a model where workplace environments are viewed as imperfect substitutes by workers, and firms set wages with some degree of market power. We show that simple versions of this model can readily match the stylized empirical findings in the literature regarding rent-sharing elasticities and the structure of firm-specific pay premiums." (Author's abstract, IAB-Doku) ((en))
    Keywords: Unternehmen, Produktivitätsunterschied, Lohnunterschied, Einkommenseffekte, abhängig Beschäftigte, Wertschöpfung, Arbeitsplatzwechsel, zwischenbetriebliche Mobilität, Lohnfindung, Betrieb, Lohntheorie, Gewinnbeteiligung, qualifikationsspezifische Faktoren
    JEL: D22 J31 J42
    Date: 2016–06–13
  2. By: Daniel Borowczyk-Martins (Département d'économie); Etienne Lalé (Department of Economics (University of Bristol))
    Abstract: Employed individuals in the U.S. are increasingly more likely to work part-time involuntarily than to be unemployed. Spells of involuntary part-time work are different from unemployment spells: a full-time worker who takes on a part-time job suffers an earnings loss while remaining employed, and is unlikely to receive income compensation from publicly-provided insurance programs.We analyze these differences through the lens of an incomplete-market, job-search model featuring unemployment risk alongside an additional risk of involuntary part-time employment.A calibration of the model consistent with U.S. institutions and labor-market dynamics shows that involuntary part-time work generates lower welfare losses relative to unemployment. This finding relies critically on the much higher probability to return to full-time employment from part-time work. We interpret it as a premium in access to full-time work faced by involuntary part-time workers, and use our model to tabulate its value in consumption-equivalent units.
    Keywords: Involuntary part-time work; Unemployment; Welfare
    Date: 2016–06
  3. By: Scharf, Kimberley; Smith, Sarah
    Abstract: Much fundraising is done by individuals within existing social groups. Exploiting a unique dataset, we demonstrate (i) a positive relationship between social group size and the number of donations; (ii) a negative relationship between group size and the size of individual donations; (iii) no clear relationship between group size and the total amount raised. Free riding with respect to the activity being funded cannot explain the relationship between group size and donation size, since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by "relational altruism" .
    Keywords: Online giving; Fundraising; Social groups; Donations; Charity; Altruism
    JEL: D64 H31 Z1
    Date: 2016–06

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