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The Creation and Analysis of Employer-Employee Matched Data
Type: Book
ISBN: 978-0-44450-256-8

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Book part
Publication date: 21 May 2007

Rucker C. Johnson

I use data from employers and longitudinal data from former/current recipients covering the period 1997 to early 2004 to analyze the relationship between job skills, job…

Abstract

I use data from employers and longitudinal data from former/current recipients covering the period 1997 to early 2004 to analyze the relationship between job skills, job changes, and the evolution of wages. I analyze the effects of job skill requirements on starting wages, on-the-job training opportunities, wage growth prospects, and job turnover. The results show that jobs of different skill requirements differ in their prospects for earnings growth, independent of the workers who fill these jobs. Furthermore, these differences in wage growth opportunities across jobs are important determinants of workers’ quit propensities (explicitly controlling for unobserved worker heterogeneity). The determinants and consequences of job dynamics are investigated. The results using a multiplicity of methods, including the estimation of a multinomial endogenous switching model of wage growth, show that job changes, continuity of work involvement, and the use of cognitive skills are all critical components of the content of work experience that leads to upward mobility. The results underscore the sensitivity of recipients’ job transition patterns to changes in labor market demand conditions.

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Aspects of Worker Well-Being
Type: Book
ISBN: 978-1-84950-473-7

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Article
Publication date: 1 June 2002

Håkan Regnér

On‐the‐job training has a large positive effect on wages for employees in Sweden, and employees in jobs that require long on‐the‐job training earn significantly more than…

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Abstract

On‐the‐job training has a large positive effect on wages for employees in Sweden, and employees in jobs that require long on‐the‐job training earn significantly more than workers in jobs with short training requirements. The effects of training are large for recently hired and low for senior employees. There are significant wage effects of general and specific on‐the‐job training, and the effect is significantly larger for general training. Separate estimates for the public and private sectors show significant effects of specific training only for public‐sector employees and large effects of general training for private‐sector employees. The results suggest that the distinction between general and specific training matters, that firms are willing to pay for general training and that there is heterogeneity in the returns to these forms of training.

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International Journal of Manpower, vol. 23 no. 4
Type: Research Article
ISSN: 0143-7720

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Quantitative and Empirical Analysis of Nonlinear Dynamic Macromodels
Type: Book
ISBN: 978-0-44452-122-4

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Book part
Publication date: 21 May 2007

Sara Lemos

This paper presents new evidence on the effects of the minimum wage using Brazilian monthly household and firm panel data between 1982 and 2000. By examining the effects

Abstract

This paper presents new evidence on the effects of the minimum wage using Brazilian monthly household and firm panel data between 1982 and 2000. By examining the effects on wages, employment and prices together we are able to provide an explanation for the small employment effects prevalent in the literature. Our principal finding is that increasing the minimum wage raises wages and prices with small adverse employment effects. This suggests a general wage-price inflationary spiral, where persistent inflation offsets some of the wage gains. The main policy implication deriving from these results is that the potential of the minimum wage for the policy maker as a tool to help the poor is bigger under low inflation. Under high inflation, the resulting wage-price spiral makes the minimum wage increase – as well as its antipoverty policy potential – short lived. In this case, the wage effects are volatile and the permanent scars are lower employment and higher inflation in Brazil.

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Aspects of Worker Well-Being
Type: Book
ISBN: 978-1-84950-473-7

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Book part
Publication date: 14 July 2004

Anders Forslund and Ann-Sofie Kolm

A number of earlier studies have examined whether extensive labour market programmes (ALMPs) contribute to upward wage pressure in the Swedish economy. Most studies on…

Abstract

A number of earlier studies have examined whether extensive labour market programmes (ALMPs) contribute to upward wage pressure in the Swedish economy. Most studies on aggregate data have concluded that they actually do. In this paper we look at this issue using more recent data to check whether the extreme conditions in the Swedish labour market in the 1990s and the concomitant high levels of ALMP participation have brought about a change in the previously observed patterns. We also look at the issue using three different estimation methods to check the robustness of the results. Our main finding is that, according to most estimates, ALMPs do not seem to contribute significantly to an increased wage pressure.

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Accounting for Worker Well-Being
Type: Book
ISBN: 978-1-84950-273-3

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Book part
Publication date: 28 March 2006

Örn B. Bodvarsson and Hendrik Van den Berg

Numerous studies have concluded that immigration has very small effects on wages or unemployment, even when the immigration flow is very large. Three reasons suggested for…

Abstract

Numerous studies have concluded that immigration has very small effects on wages or unemployment, even when the immigration flow is very large. Three reasons suggested for this are that immigration: (1) is not supply-push, but may instead be driven by demand-pull factors; (2) is likely to cause some out-migration; and (3) may induce flows of other factors across the economy. Surprisingly, few studies consider another obvious explanation: immigrant workers also consume locally, which means immigration stimulates the local demand for labor. Previous researchers have generally ignored the measurement of immigration's effects on labor demand, perhaps because when immigration, out-migration, and immigrant consumption occur simultaneously in the same labor market, it is very difficult to isolate immigration's effect on labor demand. This paper measures the labor demand-augmenting effects of immigration using a two-sector model of a very special case in which the receiving economy consists of: (a) an export industry employing both immigrants and natives; and (b) a retail industry employing native labor that is driven by local demand. The model can incorporate both supply-push and demand-pull immigration as well as out-migration. The model's important implication is that since immigration is exogenous to the retail sector, an unbiased estimate of the demand effect of immigration can be obtained without having to use instrumental variables estimation or other statistical procedures that may introduce new sources of bias. Fortunately, the economy in our model matches a very convenient test case: Dawson County, Nebraska. Dawson County recently experienced a surge in demand-pull immigration due to the location of a large export-driven meatpacking plant. This exogenous capital shock pulled in many Hispanic immigrant workers, who did not immediately seek work in the retail sector because of social and language barriers. This immigration led to higher retail wages and housing prices, confirming that immigration is capable of exerting significant effects on local labor demand.

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The Economics of Immigration and Social Diversity
Type: Book
ISBN: 978-1-84950-390-7

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Book part
Publication date: 20 June 2003

Daron Acemoglu and Jörn-Steffen Pischke

Much of the recent debate on the minimum wage has focused on its employment implications. The theory of human capital suggests that minimum wages should also have…

Abstract

Much of the recent debate on the minimum wage has focused on its employment implications. The theory of human capital suggests that minimum wages should also have important adverse effects on human capital accumulation. In the standard human capital theory, as developed by Becker (1964), Ben-Porath (1967), and Mincer (1974), a large part of human capital is accumulated on the job, and workers often finance these investments through lower wages. A binding minimum wage will therefore reduce workplace training, as it prevents low wage workers from accepting the necessary wage cuts (Rosen, 1972). The early empirical literature has confirmed this prediction. The negative impact on human capital formation has been an important argument against minimum wages in the minds of many economists and policy-makers, and an important piece of evidence in support of the standard theory of human capital.

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Worker Well-Being and Public Policy
Type: Book
ISBN: 978-1-84950-213-9

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Article
Publication date: 29 October 2020

Lixin Cai

The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions…

Abstract

Purpose

The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects.

Design/methodology/approach

The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias.

Findings

The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession.

Originality/value

This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages.

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International Journal of Manpower, vol. 42 no. 5
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 4 June 2018

Jing Wang and Morley Gunderson

The purpose of this paper is to estimate the causal effect of minimum wages on the employment of low-skilled workers in less developed regions of China.

Abstract

Purpose

The purpose of this paper is to estimate the causal effect of minimum wages on the employment of low-skilled workers in less developed regions of China.

Design/methodology/approach

Based on data from the China Health and Nutrition Survey, a double-difference (DD) methodology is used to compare the employment of low-skilled individuals before and after a minimum wage increase in their provinces with a comparison group of individuals in provinces that did not have a minimum wage increase. Also, a triple-difference methodology (DDD) is used that also includes an additional control group of highly educated workers as a within-province internal comparison group that should not be affected by a minimum wage increase.

Findings

No evidence of an adverse employment effect is found in any of the 36 different estimates, consistent with recent US evidence that uses a similar DD methodology.

Research limitations/implications

The data are not national representative; rather heavily weighted towards the less developed Central, Western and parts of the Eastern Regions of China. This may partially explain the absence of the theoretically expected adverse employment effect. Other related reasons are discussed, including: lack of enforcement in those less developed regions; a large presence of state-owned enterprises in the regions where employment security clause remains intact; the relatively less developed labour markets in the regions including where employers may behave in a monopsony fashion in their labour markets; shock effects; and cost offsets from reduced fringe benefits and increases in the pace of work. This paper was unable to disentangle the separate effect of these possible factors.

Originality/value

This is one of the few studies on minimum wages in China to focus on low-skilled workers in less developed regions, to use individuals as the unit of observation rather than aggregates, and to provide causal estimates based on DD and DDD methodologies.

Details

International Journal of Manpower, vol. 39 no. 3
Type: Research Article
ISSN: 0143-7720

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