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1 – 10 of 170This paper examines the role of the bargaining regime in bringing about inter‐industry wage differentials in the Belgian private sector. Empirical findings, based on the 1995…
Abstract
This paper examines the role of the bargaining regime in bringing about inter‐industry wage differentials in the Belgian private sector. Empirical findings, based on the 1995 Structure of Earnings Survey, emphasise that sectors offering high/low wages are similar for workers covered by different bargaining regimes, even when controlling for individual characteristics, working conditions and firm size. Moreover, results show that, ceteris paribus, the dispersion of inter‐industry wage differentials is higher when wages are collectively renegotiated at the firm level, and workers covered by a company collective agreement (CA) earn 5.1 per cent more than their opposite numbers whose wages are solely covered by national and/or sectoral CAs.
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Kevin T. Reilly and Luisa Zanchi
In this paper, three implementation and interpretation issues are examined associated with Krueger and Summers' method for calculating inter‐industry wage differentials. The…
Abstract
In this paper, three implementation and interpretation issues are examined associated with Krueger and Summers' method for calculating inter‐industry wage differentials. The literature tends to report a less than complete set of industry wage differentials, use the wrong standard errors, and misinterpret the meaning of the industry wage differentials. The solution to the first two issues follows from making explicit the restriction that the employment‐weighted average of all industry wage effects is zero, the same restriction that Krueger and Summers are implicitly imposing on industry wage effects. All industries have thus a wage effect relative to an average worker net of any industry effect and correct standard errors are available via the Delta method. Finally, a method is proposed for analysing inter‐industry wage differentials as actual differences between the wage levels expressed in percentage points and not as log points, which is the current misleading standard. The procedure calculates actual average percentage wage differences by industry and avoids the distortion in differences across industries that log point comparisons engender. An application is provided, using the United States Outgoing Rotation Files of the Current Population Survey for 1989 and 1996, and so updates the work by Krueger and Summers.
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The purpose of this paper is to show that for some key topics on labour economics such as the effect of seniority and job mobility in wages, it is important to explicitly consider…
Abstract
Purpose
The purpose of this paper is to show that for some key topics on labour economics such as the effect of seniority and job mobility in wages, it is important to explicitly consider firm fixed effects. The author also wants to test whether the importance of firm in explaining wage dispersion is higher or lower in Spain than in other European countries.
Design/methodology/approach
The author estimates an individual wage equation where firm and workers effects are considered and the estimation process control for censored wages. This exercise is performed for the Spanish economy over the course of a whole business cycle, i.e., 2000-2015.
Findings
The author demonstrates that Spanish firms contribute to explain around 27 per cent of the individual wage heterogeneity but more importantly around 74 per cent of inter-industry wage differentials. In both cases, this contribution is mainly related to large dispersion in firm’s wage policies. The process of positive sorting of workers across firms or industries does not play an important role. Interestingly, the importance of firm’s wage policies in explaining individual wage dispersion has increased over the current Big Recession.
Practical implications
The results confirm that firms set wages and, henceforth, are partially responsible for individual wage heterogeneity but more importantly for inter-industrial wage dispersion.
Originality/value
The exercise is performed under optimal conditions because the author uses a longitudinal matched employer-employee data set, observed wages are at a monthly frequency, and implements an estimation method suitable for censored models with two high-dimensional fixed effects. This is the first study that looks deeply into the role of firms in explaining wage heterogeneity at the individual and industry level in Spain and along the current Big Recession.
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Stephen G. Bronars, Melissa Famulari, Paul Bingley and Niels Westergard-Nielsen
Danièle Meulders, Robert Plasman and François Rycx
This paper introduces the Special Issue on competitive versus non‐competitive wage differentials, a collection of papers originally presented at the 79th Conference of the Applied…
Abstract
This paper introduces the Special Issue on competitive versus non‐competitive wage differentials, a collection of papers originally presented at the 79th Conference of the Applied Econometrics Association held in Brussels in May 2002.
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Evangelia Papapetrou and Pinelopi Tsalaporta
During the crisis, the Greek labor market went through major changes in terms of employment, unemployment and wages. The economic activity registered a cumulative decline of…
Abstract
During the crisis, the Greek labor market went through major changes in terms of employment, unemployment and wages. The economic activity registered a cumulative decline of around 25%, weighting heavily on the labor market. The unemployment rate showed a substantial increase, with signs of persistence and the employment rate fell substantially. Utilizing a unique dataset, the European Union Structure of Earnings Survey (SES) the paper examines the evolution of wages over the period 2010–2014. During that period, the economic adjustment programs to deal with the chronic deficiencies of the Greek economy and restore sustainable public finances, to gain competitiveness and set the foundation for long-term growth, were implemented. Data refer to 2010, when the first elements of the program were beginning to be executed, and to 2014 when the crisis had already unfolded. Results point to a reduction of average wages across industries, even after controlling for personal and workplace characteristics. Amid a wage decrease at the mean, there is evidence of a divergent wage evolution between sectors of economic activity during the crisis. Furthermore, we find that wage premia that have persisted in the Greek economy during the same period are not disproportionately captured by employees at the upper end of the conditional wage distribution.
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This article is principally a case study establishingthe existence of an internal labour market inBritish Rail, and its significance for the long‐termwage structure. Drawing on…
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This article is principally a case study establishing the existence of an internal labour market in British Rail, and its significance for the long‐term wage structure. Drawing on the work of Doeringer and Piore it outlines the advantages that internal labour markets would be expected to offer both employers and employees, and the implications which these have for the process of wage determination. It briefly reviews previous case studies supporting the importance of the role of comparisons, both internal and external, in wage bargaining; and then turns to the study of British Rail. Finding the characteristics expected of an internal labour market, it then establishes that the wage structure of the industry has demonstrated a considerable degree of stability over the period 1950‐85, despite considerable changes in relative productivities. This degree of consistency is regarded as being difficult to reconcile with the dominance of market forces in wage determination.
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Since the efficiency‐wage theory has graduated from a hypothesis to a model, there is the need for an establishedempirical foundation as the basis for continued confidence in…
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Since the efficiency‐wage theory has graduated from a hypothesis to a model, there is the need for an established empirical foundation as the basis for continued confidence in the model′s practical validity. To augment the efforts already made in this regard for the industrially developed labour markets, contributes an in‐depth empirical analysis of the model by explicit use of Nigerian data as a prototype of the less developed countries. The results show a very strong case for the empirical validity of the model.
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