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Open Access
Article
Publication date: 15 February 2022

Varuna Dreepaul-Dabee and Verena Tandrayen-Ragoobur

This paper aims to examine the employment effect of the minimum wage in Mauritius, a country that has recently introduced an economy-wide national minimum wage. As women have low…

3418

Abstract

Purpose

This paper aims to examine the employment effect of the minimum wage in Mauritius, a country that has recently introduced an economy-wide national minimum wage. As women have low labor force participation rate and higher unemployment rate compared to men, this study sheds light on the impact of the national minimum wage on male and female employment.

Design/methodology/approach

A conceptual framework based on the labor–leisure model of Blundell et al. (2007) incorporating the minimum wage as an important variable influencing the employment decision of the individual serves as the methodological backdrop of this paper. It applies the difference-in-difference estimation technique and uses micro data from the Continuous Multi-Purpose Household Survey for the period 2017–2019.

Findings

The results show that minimum wage has a significant negative impact on overall employment. With the imposition of the national minimum wage, the probability that an individual, currently earning less than the minimum wage, remains employed is 0.525 lower than that of a worker earning above the minimum wage level. Moreover, using sex-disaggregated data, the analysis demonstrates the negative employment effects of the minimum wage adversely impact women more than men.

Originality/value

This is a first attempt to estimate the effect of the newly introduced national minimum wage on employment in Mauritius. While the effects of a minimum wage vary across different segments of the economy, this study adopts a gender perspective by comparing the impact of the minimum wage on male and female employment.

Details

Journal of Business and Socio-economic Development, vol. 3 no. 1
Type: Research Article
ISSN: 2635-1374

Keywords

Open Access
Article
Publication date: 12 January 2021

Evans Korang Adjei, Lars-Fredrik Andersson, Rikard H. Eriksson and Sandro Scocco

The purpose of this paper is to examine the effects of immigration on the labour market outcomes of low-educated natives (i.e. residents without a university diploma). Using the…

4893

Abstract

Purpose

The purpose of this paper is to examine the effects of immigration on the labour market outcomes of low-educated natives (i.e. residents without a university diploma). Using the labour market competition theory, which argues that the labour market effects of natives depend on the skill set of immigrants, the paper addresses whether immigrants are complementary to or substitutes for native workers.

Design/methodology/approach

Longitudinal matched employer–employee data on Sweden are used to estimate how low-educated natives, in regions experiencing the greatest influx of refugees from the Balkan wars, responded to this supply shock with regard to real wages, employment and job mobility between 1990 and 2003.

Findings

First, the analysis shows that low-educated native workers respond to the arrival of immigrants with an increase in real wages. Second, although employment prospects in general worsened for low-skilled workers in most regions, this is not attributable to the regions experiencing the largest supply shock. Third, there are indications that low-skilled natives in immigration-rich regions are more likely to change workplace, particularly in combination with moving upwards in the wage distribution.

Originality/value

Rather than seeing an emergence of the commonly perceived displacement mechanism when an economy is subject to a supply shock, the regional findings suggest that high inflows of immigrants tend to induce a mechanism that pulls native workers upwards in the wage distribution. This is important, as the proportion of immigrants is seldom evenly distributed within a nation.

Details

International Journal of Social Economics, vol. 48 no. 3
Type: Research Article
ISSN: 0306-8293

Keywords

Open Access
Article
Publication date: 2 October 2017

Mathew Johnson

The purpose of this paper is to understand the impact of living wages on organisational pay systems.

3679

Abstract

Purpose

The purpose of this paper is to understand the impact of living wages on organisational pay systems.

Design/methodology/approach

The research draws on 23 semi-structured interviews with HR managers, trade union representatives, and politicians at four UK local government case study sites.

Findings

The findings suggest that living wages can have a positive impact on directly employed workers in cleaning, catering and care services, but the research also finds that the localised adoption of living wages can lead to significant wage compression, resulting in a broad band of “low skill-low wage jobs”.

Originality/value

The theoretical contribution is twofold. In-line with earlier research the “first-order” effects of living wages are clear: hourly wages for a large number of women in part-time roles increased sharply. However, this is only part of the story as “second-order” effects such as ripples and spill-overs are less extensive than suggested by other studies. This is due to the limited scope for trade unions to restore wage differentials through collective bargaining, the slow progress in extending the living wage to contracted staff, and parallel processes of downsizing and outsourcing.

Details

Employee Relations, vol. 39 no. 6
Type: Research Article
ISSN: 0142-5455

Keywords

Open Access
Article
Publication date: 4 June 2018

Pawel Strawinski, Aleksandra Majchrowska and Paulina Broniatowska

The purpose of this paper is to analyse the relation between occupational segregation and the gender wage differences using data on three-digit occupational level of…

3874

Abstract

Purpose

The purpose of this paper is to analyse the relation between occupational segregation and the gender wage differences using data on three-digit occupational level of classification. The authors examine whether a statistically significant relation between the share of men in employment and the size of the unexplained part of the gender wage gap exists.

Design/methodology/approach

Traditional Oaxaca (1973) – Blinder (1973) decomposition is performed to examine the differences in the gender wage gaps among minor occupational groups. Two types of reweighted decomposition – based on the parametric estimate of the propensity score and non-parametric proposition presented by Barsky et al. (2002) – are used as the robustness check. The analysis is based on individual data available from Poland.

Findings

The results indicate no strong relation between occupational segregation and the size of unexplained differences in wages. The unexplained wage differences are the smallest in strongly female-dominated and mixed occupations; the highest are observed in male-dominated occupations. However, they are probably to a large extent the result of other, difficult to include in the econometric model, factors rather than the effects of wage discrimination: differences in the psychophysical conditions of men and women, cultural background, tradition or habits. The failure to take them into account may result in over-interpreting the unexplained parts as gender discrimination.

Research limitations/implications

The highest accuracy of the estimated gender wage gap is obtained for the occupational groups with a similar proportion of men and women in employment. In other male- or female-dominated groups, the size of the estimated gender wage gaps depends on the estimation method used.

Practical implications

The results suggest that decreasing the degree of segregation of men and women in different occupations could reduce the wage differences between them, as the wage discrimination in gender balanced occupations is the smallest.

Originality/value

To the best of the authors’ knowledge, this study is one of the few conducted at such a disaggregated level of occupations, and one of few studies focused on Central and Eastern European countries and the first one for Poland.

Details

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

Keywords

Open Access
Article
Publication date: 18 June 2021

Thang Ngoc Bach, Hung Ly Dai, Viet Hung Nguyen and Thanh Le

This paper examines the effects of sub-national union coverage on the youth's labor market outcomes.

1165

Abstract

Purpose

This paper examines the effects of sub-national union coverage on the youth's labor market outcomes.

Design/methodology/approach

In the context of the private business sector in Vietnam, this study link individual labor market data with union coverage at provincial level in the period 2013–2016 to investigate the effects of sub-national union coverage on the youth's labor market outcomes. Contingent on the outcome variable, we use the OLS and probit model that control for diverse individual characteristics, year- and industry-fixed effects, and particularly control for selection bias in the labor market.

Findings

The empirical results show that the union coverage is positively associated with a wide range of the youth's labor market outcomes, including employment status, wage rate, work hour, and job formality. Also, the coverage is complementary to individual labor contract in determining the youth's wage rate.

Practical implication

Our empirical results indicate positive associations between union coverage and the youth's multi-dimensional labor market outcomes, which contribute to this young age cohort's smooth school-to-work transition, provided that the role of trade union is challenged both in developing and developed countries.

Originality/value

This study provides an in-depth study on the interplay between trade union and the youth's labor market outcomes that contributes to the literature of labor market institutions and youth employment policies in a dynamic transitional economy of Vietnam.

Details

Journal of Economics and Development, vol. 24 no. 2
Type: Research Article
ISSN: 1859-0020

Keywords

Open Access
Article
Publication date: 1 November 2023

Elena Lasso-Dela-Vega, José Luis Sánchez-Ollero and Alejandro García-Pozo

This study conducts a comparative analysis of the impact of educational mismatch on Spanish wages. This paper aims to focus on the industrial, construction and service sectors at…

Abstract

Purpose

This study conducts a comparative analysis of the impact of educational mismatch on Spanish wages. This paper aims to focus on the industrial, construction and service sectors at three levels of disaggregation: sector, occupation and gender.

Design/methodology/approach

The over-education, required education and under-education (ORU model), was applied to data from the 2018 Spanish Wages Structure Survey conducted by the Spanish National Statistics Institute.

Findings

The industrial sector is the one that best manages over-education by offering the highest returns to each year of over-education. It is also the sector that most values the education of women, particularly those in highly qualified positions.

Originality/value

This study compares the wage effects of educational mismatch in the service, industry and construction sectors. Previous literature has ignored the latter sectors in this field of study, but the results of the present study show that the industrial sectors significantly value and remunerates worker education. Therefore, it may be worthy to focus certain economic and social policies on this sector, to contribute to reducing gender wage gaps and gender employment discrimination in the economy.

Details

International Journal of Manpower, vol. 44 no. 9
Type: Research Article
ISSN: 0143-7720

Keywords

Open Access
Article
Publication date: 28 February 2023

Daniela Rohrbach-Schmidt, Caroline Wehner, Sabine Krueger and Christian Ebner

This article aims to examine whether specific job tasks measured at the individual level or personality traits are associated with wages and whether the relationship between…

Abstract

Purpose

This article aims to examine whether specific job tasks measured at the individual level or personality traits are associated with wages and whether the relationship between personality traits and wages differs depending on the job tasks that individuals perform.

Design/methodology/approach

This study analyzes the association between job tasks and personality traits, and their interaction, with regard to wages using German employee data from 2017/2018.

Findings

Results suggest that nonroutine manual, interactive or analytic tasks are associated with significantly higher wages compared to routine manual tasks, and while extraversion and emotional stability are related to higher wages, agreeableness and openness tend to be associated with lower wages also within occupations. Moreover, the association between personality traits and wages varies depending on the job task requirements at the workplace. A high degree of extraversion in particular is associated with higher wages when the employee performs nonroutine manual, interactive or analytic tasks.

Originality/value

To date, especially the interaction between individual job tasks and personality traits on wages has not been extensively studied because data on both job tasks and personality at the employee level are scarce. This study contributes to the understanding of wage differences among employees.

Open Access
Article
Publication date: 22 August 2023

Kausar Yasmeen

The objective of this study is to construct a theoretical framework concerning wage determination, grounded in principles and supplemented by conventional theories. It discusses…

1899

Abstract

Purpose

The objective of this study is to construct a theoretical framework concerning wage determination, grounded in principles and supplemented by conventional theories. It discusses the Islamic perspectives on minimum wage and examines contemporary challenges and intricacies in its application.

Design/methodology/approach

This study uses thematic analysis to create the conceptual framework, drawing upon a review of pertinent literature such as academic papers, books and articles published up to 2023.

Findings

The framework encompasses various categories, namely, employee characteristics, job characteristics, market factors, compensation practices and Islamic principles. Each category consists of multiple variables. The resulting framework offers a holistic and ethically grounded methodology for wage determination, aligning with both Islamic and conventional perspectives. This study notes the absence of a universally agreed-upon minimum wage. Islamic economics faces challenges due to the unclear application of principles, limited awareness, legal constraints and a lack of empirical evidence on wage systems, along with complexities in their implementation.

Research limitations/implications

The paper’s limited scope focuses solely on the Islamic perspective on wage determination, without comparing it to the conventional viewpoint. This may have implications for future research.

Practical implications

The insights on Islamic principles and wage determination guide scholars and policymakers interested in promoting just and equitable wages.

Originality/value

This study is distinct in its integration of various factors to propose an all-encompassing framework for wage determination, rooted in the Quran and principles, while also reinforcing the framework with conventional theories. Additionally, it adds to the growing body of literature by investigating the Quran’s stance and principles on minimum wage, as well as discusses the challenges involved in implementing an Islamic approach to wage determination, which has received limited attention in Islamic literature.

Details

Islamic Economic Studies, vol. 31 no. 1/2
Type: Research Article
ISSN: 1319-1616

Keywords

Open Access
Article
Publication date: 17 October 2023

Van H. Pham

This paper is a dedication to Professor Ngo Van Long who introduced the idea of Kant–Nash equilibrium. The author extends this analysis to the study of adult and child labor…

Abstract

Purpose

This paper is a dedication to Professor Ngo Van Long who introduced the idea of Kant–Nash equilibrium. The author extends this analysis to the study of adult and child labor markets.

Design/methodology/approach

This is a game theoretic analysis of the market for adult and child workers when some firms behave in the neoclassical Nashian way and some firms follow a Kantian social norm.

Findings

The presence of Kantian firms in the output market in addition to Nashian lowers industry output and labor demand. This raises the possibility that Kantian behavior in the output market could lower wages sufficiently and increase the incidence of child labor. If firms engage in Kantian behavior in the labor market by not hiring child workers, adult wage rises but could lower child wage as children if they work can only work for Nashian firms. When labor demand is sufficiently high, more Kantians could raise adult wage above subsistence and eliminate child labor supply.

Originality/value

This is the first paper to apply Kant–Nash equilibrium to the labor market. The result that Kantian behavior could have an unintended negative spillover effect in other markets is new. The paper keeps alive the ideas of Professor Long, which hopefully will stimulate further work and build on his ideas.

Details

Fulbright Review of Economics and Policy, vol. 3 no. 2
Type: Research Article
ISSN: 2635-0173

Keywords

Open Access
Article
Publication date: 6 July 2021

Cuong Le-Van and Nguyen To-The

Total factor productivity (TFP), for a country and for a firm as well, is a crucial element for economic growth by inducing high output. Actually, workers' effort is among the…

1059

Abstract

Purpose

Total factor productivity (TFP), for a country and for a firm as well, is a crucial element for economic growth by inducing high output. Actually, workers' effort is among the important factors that positively influence the TFP.

Design/methodology/approach

In this paper, the authors assume that the wage bonus enhances the worker's effort. Wage bonus is an incentive mechanism and plays a role in the TFP as is shown in a recent paper by Le Van and Pham (2021). The firm will maximize its profits. The supplies of capital and workers are exogenous. At equilibrium, the authors obtain that wage bonus has positive effects on output, labor productivity and price of the output.

Findings

The wage bonus system can make the optimal sequence of outputs grow without bounds. And if the optimal sequence converges to a steady state, this one can be characterized by higher output per capita than that in the steady state without the bonus.

Originality/value

In particular, the result show if, thanks to the wage bonus externality effect, the production may become of increasing returns and if the incentive mechanism is very strong, any optimal path of physical capitals will converge to infinity.

Details

Fulbright Review of Economics and Policy, vol. 1 no. 1
Type: Research Article
ISSN: 2635-0173

Keywords

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