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1 – 10 of 272This paper seeks to study gender wage differentials in Italy using first‐order predictions of monopsony‐search models. It compares empirical predictions of these models against…
Abstract
Purpose
This paper seeks to study gender wage differentials in Italy using first‐order predictions of monopsony‐search models. It compares empirical predictions of these models against other competing ones of wage determination in non‐competitive settings.
Design/methodology/approach
The paper looks at the empirical relevance of the model in terms of third degree wage discrimination among men and women by estimating the labour supply elasticity to the individual firm. It also tests the monopsony model using a “natural” experiment. Italian administrative longitudinal data from INPS are used.
Findings
Women have lower elasticity of labour supply to the individual firm: employer size regressions indicate larger effects (and consequently lower elasticity) for women as predicted by the monopsony model. Using the theoretical dynamic monopsony‐search model of Burdett and Mortensen, wage elasticity of separations and recruits confirm this result. Using relative men/women employment effects resulting from institutional changes in wage indexation mechanism (Scala Mobile), it is found that relative male employment responded differently in the two periods to the exogenous relative increase in the wage differential, as predicted by the monopsony model. Search frictions explain about 50 per cent of the gender differential.
Research limitations/implications
No role for discrimination. Better controls for rents and union status would be needed. More rich firm data would be needed.
Originality/value
The paper is one of the few attempts of testing implications of monopsony models in unionised labour markets, such as Italy, after some important reforms in wage bargaining agreements. The change in institutional agreements is an interesting test for different theories of wage determination.
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Julia Lane, Javier Miranda, James Spletzer and Simon Burgess
John G. Sessions and Nikolaos Theodoropoulos
Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to…
Abstract
Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is to tilt the remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.
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Renee S. Reid and Richard I.D. Harris
This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the external…
Abstract
This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the external environment, size, and the impact of changes in ownership status as important determinants of training expenditure in SMEs. Particular attention is also paid to the importance of whether the enterprise is family owned and/or managed. Generally, our results show that HR functions do generally matter; however, workforce characteristics (other than shift working), ownership characteristics and external factors, and even to some extent size, were much less important than expected. What our results do show is that whether the firm is family‐owned/managed is a major factor in determining training budgets in SMEs in Northern Ireland.
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Pekka Ilmakunnas and Seija Ilmakunnas
– The purpose of this paper is to analyse the determinants of hiring and exit rates by age at the firm level and firm-level age segregation in hirings and separations in Finland.
Abstract
Purpose
The purpose of this paper is to analyse the determinants of hiring and exit rates by age at the firm level and firm-level age segregation in hirings and separations in Finland.
Design/methodology/approach
The use Finnish linked employer-employee data from 1990 to 2004. The authors present a decomposition of employment change by age group to disentangle the roles of hirings and exits from factors related to demographics effects. Firm-level analysis is conducted using regression models for the hiring rates and shares of different age groups and for the probability of hiring older employees. Similar models are estimated for the exits of older employees. Segregation is analysed using age segregation curves and Gini indices calculated from them.
Findings
The hirings of older (50+) employees have clearly been more segregated at the firm level than the exits or the stock of old employees. Larger firms are more likely to hire older employees, but their hiring rates are lower. However, the probability of having hires or exits of older workers are much higher in large firms. The results are relatively similar for men and women.
Research limitations/implications
The determinants of the probability of hiring older workers and the rate of hiring them, given that the rate is positive, are different and these two processes should be modelled separately. The Gini index of segregation may be misleading when the number of employees per firm is small. Therefore it is useful to compare segregation to a random reshuffle of employees to firms.
Practical implications
Older worker who have become unemployed or who want to change their job need to have more employment opportunities. Labour and pension policies need to be monitored and designed so that there are more incentives for the individual to search for a new job and for the firms to hire older employees.
Originality/value
The authors provide new empirical evidence of age segregation and hiring prospects of older employees. Age segregation has previously been examined in occupations, but the authors extend the analysis to firm-level segregation. The authors suggest a new decomposition of the rate of employment change to the hiring and exit rates and to a cohort effect.
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Antti Kauhanen and Sami Napari
We study career and wage dynamics within and between firms using a large linked employer-employee panel dataset spanning 26 years. We construct six-level hierarchies for more than…
Abstract
We study career and wage dynamics within and between firms using a large linked employer-employee panel dataset spanning 26 years. We construct six-level hierarchies for more than 5,000 firms. We replicate most of the analyses from Baker, Gibbs, and Holmström (1994) and make some extensions. Many of our results corroborate their findings. Careers within firms are important, but the strong version of the theory of internal labor markets does not fit the data. Recent theories of career and wage dynamics explain our findings well.
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Fathi Fakhfakh and Felix FitzRoy
The purpose of this paper is to look at the effect of profit sharing (PS) on the ability of the firm to take care of the environment.
Abstract
Purpose
The purpose of this paper is to look at the effect of profit sharing (PS) on the ability of the firm to take care of the environment.
Design/methodology/approach
In a large cross-section of French firms, the authors find strong associations between PS and various innovations with environmental benefits. With cross-sectional data from the Community Innovation Survey and FARE, the authors estimate simultaneous equations for these effects, with endogenous PS.
Findings
This relationship between PS and environmental innovation is plausible, since workers benefit more than outside owners from a better local environment. To the best of the authors’ knowledge, this paper provides the first empirical evidence, so the results suggest PS supports environmental policy, in addition to its other, better known incentive benefits.
Research limitations/implications
Further studies, using panel data, are needed.
Practical implications
Financial participation may be considered as an additional tool to protect the environment.
Originality/value
This is the first paper looking at the impact of PS on the ability of the firm to take care of the environment. In this critical period when policy makers are searching for ways to limit global warming and protect the environment, the authors have presented here the first evidence that financial participation helps to support these policies.
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