{"title":"Downward Nominal Wage Rigidity in the United States: New Evidence From Worker-Firm Linked Data","authors":"André Kurmann, Erika McEntarfer","doi":"10.2139/ssrn.3334409","DOIUrl":"https://doi.org/10.2139/ssrn.3334409","url":null,"abstract":"This paper examines the extent and consequences of Downward Nominal Wage Rigidity (DNWR) using administrative worker-firm linked data from the Longitudinal Employer Household Dynamics (LEHD) program for a large representative U.S. state. Prior to the Great Recession, only 7-8% of job stayers are paid the same nominal hourly wage rate as one year earlier - substantially less than previously found in survey-based data - and about 20% of job stayers experience a wage cut. During the Great Recession, the incidence of wage cuts increases to 30%, followed by a large rise in the proportion of wage freezes to 16% as the economy recovers. Total earnings of job stayers exhibit even fewer zero changes and a larger incidence of reductions than hourly wage rates, due to systematic variations in hours worked. The results are consistent with concurrent findings in the literature that reductions in base pay are exceedingly rare but that firms use different forms of non-base pay and variations in hours worked to flexibilize labor cost. We then exploit the worker-firm link of the LEHD and find that during the Great Recession, firms with indicators of DNWR reduced employment by about 1.2% more per year. This negative effect is driven by significantly lower hiring rates and persists into the recovery. Our results suggest that despite the relatively large incidence of wage cuts in the aggregate, DNWR has sizable allocative consequences.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133883293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"최저임금이 고용구조에 미치는 영향(Minimum Wage and Employment Structure : Evidence from Korean Industry-Level Data)","authors":"Heonjae Song, Hyunjoon Lim, Woori Shin","doi":"10.2139/ssrn.3303711","DOIUrl":"https://doi.org/10.2139/ssrn.3303711","url":null,"abstract":"<b>Korean Abstract:</b> 본 연구에서는 최저임금이 고용구조에 미치는 영향을 분석하였다. 분석 결과, 최저임금 인상으로 산업내 최저임금 미만자 및 영향자의 비율이 상 승하는 경우 근로자들의 비정규직화 비율 및 정규직과 비정규직간 임금 격 차는 확대되나 그 영향은 크지 않은 것으로 나타났다. 산업내 최저임금 미 만자 및 영향자의 비율은 이들의 월평균 근로시간과 급여에 음(-)의 영향을 미치고 이들 그룹과 이들보다 높은 임금을 받는 근로자간의 월평균 급여 격차는 다소 확대되는 것으로 나타났다. 분석대상기간 중에는 최저임금이 고용구조에 미치는 효과가 크지 않은 것으로 추정되었으나 최근의 큰 폭 인상을 감안하면 그 영향이 이전과는 다른 양상을 나타낼 가능성을 배제할 수 없다 하겠다. 본 연구는 최저임금에 대한 관심이 고조되고 있는 상황에 서 기존 선행연구와 차별화된 자료와 연구방법을 통하여 최저임금의 영향 을 다각도에서 살펴 보았다는 점에서 연구의 의의를 찾을 수 있다.<br><br><br><b>English Abstract:</b> This study analyzes the linkage between minimum wage and employment structure. As a result, rising ratio of the workers below minimum wage and who are affected by it turns out to lead to increases in the ratio of irregular workers to regular ones and wage gap between the two groups, but with only limited magnitudes. Furthermore we find that minimum wage hike negatively affects working hours and monthly wage. Although the impacts have been minimal, it is likely that the impact for this time turns out to be different from the previous cases, given the recent drastic minimum wage hike. Our study is meaningful in that we investigate empiric relationship between minimum wage and employment structure by using the data and analysis methodology differentiated from the existing research in circumstances where there is mounting concern as to the impact of rapid icreases in the minimum wage.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"651 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123349210","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Implementation of the President’s May 2012 Decrees: Consequences for the Public Sector","authors":"M. Lopatina, V. Lyashok","doi":"10.2139/ssrn.3250666","DOIUrl":"https://doi.org/10.2139/ssrn.3250666","url":null,"abstract":"In early 2018, growth in wages and salaries in Russia was related to a substantial increase in the labor remuneration of employees in education and healthcare. Such an increase was feasible as a result of implementation of the President’s May 2012 Decrees which set targets as regards wages and salaries of the public sector’s employees. According to the data of January-June 2018, this objective has been achieved, except for individual regions.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125775373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Distinguishing Between Signal and Noise in the Measurement of the Firm Wage Premium","authors":"N. Chanut","doi":"10.2139/ssrn.3470571","DOIUrl":"https://doi.org/10.2139/ssrn.3470571","url":null,"abstract":"There is a growing interest about firm-side drivers of wage differentials, as different studies show that this component is driving the increase in inequality in many developed countries. In this paper, I contribute to this literature in three respects. First, I reconsider the widely used model from Abowd, Kramarz and Margolis (1999) used to decompose the respective contributions of firm and individual heterogeneity. I suggest an easily applicable split-sample procedure to uncover the extent of overfitting in this model. Using French administrative data, I find evidence of sizeable overfitting: conservative estimates suggest that the contribution of firm heterogeneity to wage inequality is overestimated by at least 25%. Second, I provide a simple procedure to recover the correct signal variance of firm effects and the covariance between individual and firm effects. Third, I show how to recover better prediction of the firm effects using shrinkage estimators. This matters quantitatively: due to shrinkage, half of the firm effects are shrunk by 38% or more, and 40% of firms end up in different deciles when ranked according to their firm effects.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"94 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121085437","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Human Capital Depreciation and Stigma Effects in Unemployed Workers’ Re-Employment Wages","authors":"Zafar Nazarov, N. Adilov, Heather L. R. Tierney","doi":"10.2139/ssrn.3223708","DOIUrl":"https://doi.org/10.2139/ssrn.3223708","url":null,"abstract":"Using the data from the Survey of Income and Program Participation (SIPP) between 1996 and 2013, the effects of unemployment duration on the re-employment wages for workers 40 years of age and older are empirically estimated using a quasi-structural model. The findings indicate that the re-employment wages for workers over age 40 decrease by 0.9% for each month that a worker remains unemployed. Hence, the longer the worker remains unemployed, the lower are his/her re-employment wages. The duration of unemployment effect is decomposed into the human capital depreciation and stigma effects with the stigma effect referring to potential employers’ perception, or possible misperception, of older workers as being lower productivity workers the longer they remain unemployed. The estimated coefficient of the human capital depreciation is statistically insignificant, which indicates that the observed reduction in re-employment wages for older workers is mainly explained by the stigma effect.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128834092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"설비자본재 기술진보가 근로유형별 임금 및 고용에 미치는 영향 (The Effect of Investment-Specific Technology Shocks on the Gap of Wage and Employment by Workers′ Skill or Tasks)","authors":"Namju Kim","doi":"10.2139/ssrn.3223192","DOIUrl":"https://doi.org/10.2139/ssrn.3223192","url":null,"abstract":"<b>Korean Abstract:</b> 일반적으로 임금과 고용의 변화는 경기변동, 노동시장 제도변화, 교육수준 향상 등 노동수요 및 공급에 영향을 미치는 여러 요인의 영향을 받는다. 이중 생산기술의 변화는 생산과정에서의 노동투입 결정에 변동을 가져와 임금과 고용에 영향을 미치게 되는데, 노동력이 다양한 유형으로 구성된 경우에는 이들 간 임금 및 고용 변화에 차이를 가져올 수 있다. 본 논문은 이러한 기술변화 중 설비자본재의 기술진보를 가져오는 양( )의 투자고유충격(investment- specific technology shocks; 이하 IST충격)이 근로자의 근로유형별 임금 및 고용의 격차(비율)에 어떤 영향을 미치는지 중점적으로 분석하였다. 학력별(대졸이상/고졸이하)로 근로유형을 구분(숙련/미숙련)하고, IST충격·숙련편향적 기술충격·숙련편향外 기술충격이 각각 발생할 때 이들 간의 임금격차(숙련프리미엄), 고용격차(상대고용)가 어떻게 변화하는지 알아보았다. 장기제약을 도입한 구조 베이지안 VAR모형으로 투자고유충격(IST충격) 등 각각의 기술충격을 식별하였다. 또한, 본 논문에서 처음 시도된 것으로써, 직업의 직무특성별(반복·정형업무/非정형업무)로도 근로유형을 구분(정형직/비정형직)하고, IST충격·정형직노동 생산성충격·그 외 기술충격이 이들 간 임금격차와 고용격차에 미치는 효과도 분석하였다. 분석결과, 설비자본재 기술진보를 의미하는 양( )의 IST충격은 숙련-미숙련 근로자 간 임금격차는 축소시키고 정형-비정형직 근로자 간 임금격차는 확대시켰다. 다만, 동 충격으로 숙련 및 정형직 근로자의 고용격차는 유의하게 변화하지 않아 고용구조 변화까지는 초래하지 않았다. 이러한 분석결과를 통해 우리나라의 설비자본은 생산과정에서 미숙련근로자에 비해 숙련근로자를, 정형직 근로자에 비해 비정형직 근로자를 더 많이 대체하는 특성을 보이고 있음을 알 수 있었다. <b>English Abstract:</b> This paper aims to assess the effect of investment-specific technology shocks(IST shocks) on the gap of wages and employment between different groups of workers in the Korean labor market. IST shocks can be identified by four long-run restrictions in a Structural Bayesian VAR framework. First, workers are categorized into skilled(college graduates and more) and unskilled(high-school graduates and less) ones by their educational attainment. After each shocks activates, including IST·skill-biased technology·other technology shocks, changes in the Skill-Unskill wage gap(skill premium) and employment differentials are examined. Second, workers are re-categorized into routine(tasked on repetitive and procedural jobs) and non-routine ones by their occupational tasks. By simulating IST·routine-labor productivity·other technology shocks respectively, it is originally checked how the Routine-Nonroutine wage gap and employment differentials will change. This paper shows that positive IST shocks can decrease the Skill-Unskill wage gap and increase the Routine-Nonroutine wage gap. It is also found, however, that positive IST shocks can not drive significant changes in employment differentials by any categorization.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131373310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intergenerational Mobility in the US: What We Have Learned from the PSID","authors":"B. Mazumder","doi":"10.2139/ssrn.3173259","DOIUrl":"https://doi.org/10.2139/ssrn.3173259","url":null,"abstract":"This article reviews the contributions of the Panel Study of Income Dynamics (PSID) to the study of intergenerational mobility. As the longest running longitudinal household survey in the world, the PSID is ideally suited for studying intergenerational issues. The ability to track individuals as they form new households along with the broad coverage of many dimensions of socioeconomic status over large portions of the lifecycle, make it especially ideal for studying intergenerational mobility. I highlight how the economics literature has utilized these key aspects of the data to substantially contribute to the modern view of the U.S. as among the least economically mobile countries among advanced economies. Even with the emergence of “big data” and administrative data sources, the PSID remains a vital source for studying intergenerational mobility because of the richness of the questions and its long panel length. I review a recent example where a highly influential study of intergenerational mobility by Chetty et al (2014) using IRS data overstates intergenerational mobility in the U.S. because of the short panel length of the tax data used in their study. The PSID has also been instrumental in contributing to our understanding of many other dimensions of intergenerational mobility including: occupation; wealth; education; consumption; health; and group differences in mobility by gender, race and region. Finally, studies using the PSID have cast light on the mechanisms behind intergenerational persistence and how persistence has changed over time.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"52 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132014974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Edoardo Della Torre, A. Giangreco, William Legeais, J. Vakkayil
{"title":"Do Italians Really Do it Better? Evidence of Migrant Pay Disparities in the Top Italian Football League","authors":"Edoardo Della Torre, A. Giangreco, William Legeais, J. Vakkayil","doi":"10.1111/emre.12136","DOIUrl":"https://doi.org/10.1111/emre.12136","url":null,"abstract":"This study contributes to research on migrant pay disparities by analysing the impact of players' domestic/foreign status on performance-based pay offered to professional footballers, to understand if foreign players benefit from a preferential labour market. We used information from publicly available data of 275 footballers who played for two consecutive seasons in the Italian league Serie A. We found that the relationship between previous and current performance was partially mediated by the current salary. This result reinforced earlier findings on the pay-performance relationship, where seasonal performance is particularly relevant. Moreover, our results show that pay discrimination does not indicate a straightforward (dis)advantage for one group, but presents a more complex picture. We have examined possible underlying reasons for these disparities and offered suggestions for further research. We conclude by discussing how clubs and managers could consider incentives to strengthen pay-performance relationships by being sensitive to the complex influence of players' origins.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120370111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Emanuele Colonnelli, Joacim Tåg, Michael Webb, S. Wolter
{"title":"A Cross-Country Comparison of Dynamics in the Large Firm Wage Premium","authors":"Emanuele Colonnelli, Joacim Tåg, Michael Webb, S. Wolter","doi":"10.2139/ssrn.3105385","DOIUrl":"https://doi.org/10.2139/ssrn.3105385","url":null,"abstract":"We provide stylized facts on the existence and dynamics over time of the large firm wage premium for four countries. We examine matched employer-employee micro-data from Brazil, Germany, Sweden, and the UK, and find that the large firm premium exists in all these countries. However, we uncover substantial differences among them in the evolution of the wage premium over the past several decades. Moreover, we find no clear evidence of common cross-country industry trends. We conclude by discussing potential explanations for this heterogeneity, and proposing some questions for future work in the area.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115264001","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Why Haven't Regional Wages Converged?","authors":"Jason L. Saving","doi":"10.24149/wp1711","DOIUrl":"https://doi.org/10.24149/wp1711","url":null,"abstract":"Regional wage convergence has long been predicted across the United States as barriers to factor mobility have fallen, yet there is little evidence (apart from a brief period in the 1970s and 1980s) that convergence has actually occurred. Why not? I reexamine this issue by developing a model in which fiscal policy differences across states endogenously impact labor supply across jurisdictions. I find that states whose safety nets are relatively generous will tend to drive out workers, raising wages for those who remain while also prompting net outmigration to less generous states. This suggests that regional wage convergence requires not only free factor mobility but also the coordination of fiscal policy across jurisdictions.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115424604","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}