The estimates will be biased if the above assumption does not hold. For example, suppose that non-cognitive skills have a positive effect on employment, and low-wage workers in the treatment groups have lower non-cognitive skills than high-wage workers in the first control group. If the gap in non-cognitive skills between the treatment and control groups tends to increase overtime, then our difference-in-differences will overestimate the effect of the minimum wage increase. It means that without the minimum wage increase, low-wage workers are still more likely to lose job than high- wage workers. Similarly, the treatment group and the second control group can differ in time-variant unobserved variables, which can cause our estimates biased. However, it is expected that most important unobserved variables such working motivation and non- cognitive skills are time-invariants during a not so long time period 2004-2006.
38 Read more
However, while large proportions of minimum wage workers appear to transition to higher paid employment quite quickly, a substantial minority are likely to remain in low paid jobs for a considerable period. Carrington and Fallick (2001) use the National Longitudinal Survey of Youth to study the transition patterns of young workers entering minimum wage jobs in the US, and find that approximately 8 per cent are still employed in minimum wage positions ten years into their careers. Carrington and Fallick (2001) also report that individuals remaining in long-term minimum wage positions are more likely to be from minorities, female and have lower levels of schooling. With respect to evidence from the UK and elsewhere, Dickens (2000), while not strictly focusing on minimum wage workers, finds that between 20 and 30 per cent of British males in the lowest income decile remained there after three years, with similar results for females. Stewart and Swaffield (1999), also for the UK, report high rates of persistent, low-wage employment. They also find that low wage workers tend to move more frequently between employment and unemployment. Finally, for Italy, Cappellari (2007) finds that accepting a low paid job raises the probability of future low wage episodes, with persistence levels higher for females and those with lower levels of education. Therefore, the international evidence suggests that minimum wage employment is likely to lead to higher earnings for most workers. However, a significant minority experience persistent low-wage employment.
37 Read more
There is a trade-off when selecting the comparison group. On the one hand, a fairly narrow definition is desirable to keep the comparison group as similar to the directly affected group (in terms of unobservables) as possible. Moving the comparison group further up the wage distribution makes the possibility of interactions more of a threat and increases the burden of adjustment through the real wage polynomial. On the other hand, widening the definition of the comparison group or moving it further away from the “treatment” group lessens the problem of misclassification due to measurement error and makes the underlying wage rates less similar, giving the test more leverage. Moving the comparison group further up the wage distribution reduces the impact of the “threats” to the identification strategy discussed in Section 2: both wage spillovers and substitution between the groups become less likely. An additional benefit of widening the definition is that it increases the size of the comparison group and (other things equal) the precision of estimation.
41 Read more
The interviews with the women wage workers started with personal information. This is not only useful as background to any type of analysis based on household survey data, but is also a natural starting point for discussion with a newly acquainted person. (The respondent usually reciprocated by asking questions about the personal and family background of the interviewer.) This part of the questionnaire obtained information on the demographic and economic characteristics of the worker and her family. These included her age, marital status, number of children bom, education (school attendance), age of the smallest child, family size etc. The major emphasis was on the worker's own income and employment. Data on her total employment over the last year and the earnings from that work were obtained. Data about other adult male and female members in the family and their incomes were also obtained. The economic standing of the family was important for this study. Information was thus collected on the possession of productive and other assets, including land.
277 Read more
The subjects of this study are female wage workers - women that declared to have a paid job or activity when they were surveyed, who are 15 to 65 years old. A preliminary analysis of the data showed that few women younger than 15 and older than 65 years declared to have a paid activity (less than 2.5% of the entire datasets for the two groups). The younger subjects were students while the older ones had retired from the labor force. Therefore, I eliminated all female subjects that declared they did not work - students, unemployed and retired women -, and those that were not in the targeted age range, as well as all male subjects from both datasets. I also eliminated from the datasets all women who worked but did not receive any income from it – unpaid workers. I reasoned that their inclusion in the analysis could lead to an over estimation of the impoverished group of workers. Being an unpaid worker does not necessarily mean being poor. Many unpaid workers are either children or spouses of the head of household and work in a family business 21 . The samples ended up with 12,154 cases for 1996 and 15,273 cases for 2005.
79 Read more
The table reports the effect of an increase in the minimum wage ratio on the share of high educated (secondary or post-secondary education) self-employed when only the first wave per each country is considered. The sample comes from merging the I2D2 dataset and the ILO Global Wage Database 2012. We keep household surveys of developing countries where the minimum wage exists; we further limit our sample to labor market groups (cohorts) formed by more than 100 observations and where the minimum wage is below the 70th percentile wage. The share of self-employed is the share of self-employed and non-paid employees (i.e. family worker) outside of agriculture. Only full-time self-employed are considered when they can be identified; both full- and part-time self-employed are considered when full-time self-employed cannot be identified. The minimum wage ratio is calculated as the minimum wage over the 70th percentile wage of (full-time if possible) wage workers outside of agriculture and the public sector; wages are weighted with survey weights. The Z dummies included are: a dummy signaling if the individual has a low level of education (primary education or no schooling), a dummy for individuals who are 18-29 years old, a dummy for individuals who are 30-50 years old and a dummy for being male. The controls included in the 6th Column are dummies for industry (agriculture, manufacturing, etc.), urban/rural, whether the individual is the head of the household/spouse/other and the household size. In the estimations equal weights are given to each labor market group. Standard errors are clustered at cohort level in parentheses: * p<0.1, ** p<0.05, *** p<0.01.
185 Read more
This methodology allows us to measure the impact of the 2016 minimum wage change on levels of wage inequality in Ireland. A priori, we may expect any policy that improves the position of low-waged workers to reduce the gap between high- and low-paid workers, thus reducing wage inequality. We assess the impact of the minimum wage change on wage dispersion by comparing the counterfactual P90/P10 and P75/P25 ratios to the actual 2016 statistics. A fall in these ratios, as a result of the minimum wage change, would be consistent with a fall in wage inequality. We also identify the precise wage range that was affected by the minimum wage change in a statistically significant way, thereby identifying the extent to which low-paid workers were affected. As well as capturing the effect on minimum wage workers, it highlights any wage spillovers that may have occurred for workers earning in excess of the minimum wage. The extent of spillover effects is captured by measuring the degree to which the average wages of workers have been affected in the areas of the wage distribution just above the new minimum wage level. In addition to applying this methodology to the full sample of employees, we restrict our analysis to three subsamples: males, females and young workers (aged 25 years and under). 13
38 Read more
The increasingly low official estimates of female LFPR in India may also be due to exclusion of a large number of women workers who are engaged in informal sector. Large proportions of women in informal sector works as a self-employed and operates from home and thus are likely to be excluded from the labour force enumeration. Women are over-represented in informal sector because of their need for flexibility to manage both productive, home-based income earning work, and many other unpaid activities within and outside the household and their reproductive functions. Women workers in informal sectors are generally unskilled, low educated and more vulnerable and are considered to be the cheap source of labour and are particularly the most marginalized section of workers. A large concentration of this small fraction of labour force in Informal sector highlights their marginalized condition under which they have to work. Against this backdrop, the present paper tries to explore gender inequality in Indian labour market. Towards that it focuses on the working conditions and wage situation of wage workers across formal and informal sectors and across gender. NSSO data base on Employment and Unemployment from 69th round survey for year 2011-12 has been used.
26 Read more
With the use of heterogeneous wages as a rationing device, the matching eﬃ- ciency is now attained in equilibrium. Note, however, that the distribution of the matches is shifted towards the firm oﬀering the higher wage. This gives an example where, while introduction of one or more heterogeneities causes ineﬃcient coordination in a matching market, a social planner may be able to design the market in such a way that the externality eﬀects of the het- erogeneities oﬀset each other, increasing the overall matching eﬃciency. The above example is where wages are used to perfectly oﬀset the externality ef- fect of the heterogeneous labor demand. More specifically, by oﬀering lower wages at the firms attracting suboptimally high number of applications, the externality associated with heterogeneous labor demands is fully internalized. Once again, given the diﬀerence between wages and the number of vacancies as factors directing search, as discussed in Section 3.1, this result relies crucially on the result established in Proposition 1 that the level of aggregate match is independent of the workers’ preferences ex-post of job oﬀers. 11
32 Read more
My model concentrates on the effect of experience over time. I have made the assumption that information regarding workers is transmitted from one firm to the next. However, I could also argue that workers benefit from long tenure because employers have a longer period in which to observe worker productivity and adjust wag es ac cord ingly. T his stu dy rep licates the re sear ch de sign o f earlie r stud ies. Therefore, I chose to limit my analyses to the experience variable rather than the tenu re varia ble be caus e this is the m easu re us ed b y the m ajority of theo rists inves tigating the b ache lor wa ge p ena lty with cro ss se ctiona l data.
150 Read more
productivity stood 38.7 percent higher than its 1992 average and real wages were up only 36.9 percent, one of the larger gaps shown. Following the economic slowdown and recession in 2000-01, real wages and productivity have accelerated, especially in 2001- 04. Since the end of 2000, business sector productivity has risen at a 3.1 percent average annual rate, a pace not seen from 1968 until 2002 for a comparable period and generally equaled or exceeded since then. Real wage growth has been somewhat slower, registering a 2.3 percent rate over the same 5.5 year period, still a pace that also was not seen from mid-1974 until 1999.
Many literatures have discussed the influence of positive emotions on wages, but few literatures have explored the effects of negative emotions on wages. The literature has shown that the negative psychological factors of young Americans have a passive effect on their later income  . However, few studies have been explored the effects of negative emotion on wage in developing countries. Therefore, this paper will provide more developing countries' experience and results about this field and then measure the depression degree of migrant workers by using the Center for Epidemiologic Studies Depression scale.
The variables Over and Under measure the fact that the real wage per hour could be more influenced by the type of job than by having a higher educational level. Although the database used controls for the type of job, there is a high correlation between educational level and occupation, and this creates high multicollinearity. Thus, following , occupation is taken into account indi- rectly by calculating a mean of the most frequent level of studies in each occupation. The mode is used as the sta- tistical measure. However, this procedure is expanded in cases where the mode represents a percentage lower than 40% of the total number of employees in each occupation, defined at the level of two digits according to the Na- tional Classification of Occupations –CNO94– . In these cases, the workers considered as appropriately edu- cated are those who have obtained an educational level corresponding to the mode as well as those who have reached an adjacent educational level (immediately lower or higher). Thus, for a given occupation, if the mean number of study years required are 15 (undergraduates) but the mode includes a reduced number of cases (less than 40%), workers with secondary education (12 study years) or postgraduates (17 study years) would be also considered appropriately educated. Choosing the level of studies immediately lower or higher than the mode was done by taking into account which level has a greater percentage of workers in each occupation.
11 Read more
It seems farfetched that this anxiety is simply the thinking of a small number of people. The general public’s perception of foreign workers can be examined in the “Analysis on Impact of Foreigners Inflow in Society Undergoing Low Fertility and Population Aging” by Lee and Jeon (2011). The above-mentioned study involved conducting “A Survey on the Public Perception of Foreign Immigrants”, and consisted of 1000 adult men and women over the age of 20 from all over the country. The results indicated that 6 out of 10 persons had considerable wariness regarding the influx of foreign immigrants. Moreover, 50.3% of the respondents said that it would be harder for Koreans to find a job if the number of foreigners and immigrants increased. The results also showed that 37.2% responded with a “Yes” to the question: “Would the wage of the Koreans decrease if the number of immigrants increases?”
23 Read more
In the present paper, we test the evaluability hypothesis in a gift exchange game. Instead of limiting the choices to only equal or only unequal payoff in separate evaluation mode as in Blout and Bazerman, agents in the worker- employer relation are free to make choices between relative or absolute fairness. This causes the interaction to be more complex as agents have to choose between own wage or market wage to form perception of fairness. Conducting the test in a true worker-employer exchange also allows us to learn the role of attribute ambiguity and evaluability hypothesis in explaining fairness perception. For example, the workers cannot tell the true reciprocal type of employer in the one shot treatment. If the hypothesis is true, workers should evaluate fairness based on market wage, and if workers can tell in the repeated interaction, workers will reciprocate based on own wage.
13 Read more
In this paper we have analyzed the issue of non-compliance with minimum wage legislation in the context of a model which allows for heterogeneity in inspection stemming from the heterogeneity of the activities under monitoring. This uncertainty leads us to our main result which holds that non-compliance persists in a number of sectors, a result which appears to be broadly consistent with available empirical evidence.
16 Read more
Figure 13 compares employment outcomes under the five scenarios. All five scenarios end the simulation period with employment deviations in the order of -0.4 per cent. This reflects the permanent loss of the immigrant workers who would otherwise have joined the workforce during the border closure year. Under Scenarios (3) and (5), employment is held on its basecase path, less the foregone immigrant labor. Here, we assume that workers are willing to absorb a real wage reduction for the duration of the crisis motivating border closure. The wage reduction is sufficient to keep employment of the incumbent workforce at its basecase 2008 level. The required real wage cut is highest for Scenario (3), since this scenario involves full import restriction (Figure 14). The reduction in real wages required to keep employment unchanged is substantially less when mining imports are allowed (Scenario 5). Under Scenarios (1), (2) and (4), real consumer wages are sticky. They fall slightly during the border closure year, in response to the negative employment deviations in that year. However, with real wages sticky, labor market pressure under Scenarios (1), (2) and (4) is expressed mainly as a change in employment (Figure 13). The employment loss is deepest under Scenario (2). This is our most restrictive case, in that all imports are restricted and strategic reserves are untapped. With the employment loss deepest under Scenario (2), so too is the real GDP loss (Figure 15). Like Scenario (2), all imports are also restricted under Scenario (1). However use is made of strategic reserves of the mining commodity. This attenuates the cost of restricting mining imports. This accounts for the lower employment and real GDP losses under Scenario (1) relative to Scenario (2). The economic damage caused by restricting mining imports, which represent only 10 per cent of all imports, can be seen by comparing the employment and real GDP deviations of Scenarios (4) and (2) (Figures 13 and 14). Scenario (4) is like Scenario (2) in all respects other than restriction of mining
37 Read more
industries increased from 358061 to 373548 over 1982-1997. The relative wage of high-skilled to low-skilled workers which is de…ned by the relative wage of non-production to production workers in U.S. manufacturing industries also increased from 1.58 to 1.88 over the same period. The size of a …rm which is de…ned by (total employment)/(the number of …rms) decreased from 53.37 to 48.40; the real wage of production workers in U.S. manufacturing industries which is de‡ated by the CPI slightly increased from 100 (1982=100) to 102.07 over the same period. The source of data is the U.S. Annual Survey of Manufactures (ASM). Note that the ASM uses census data for the number of establishments, and this census is conducted at 5-year intervals.
11 Read more
The solutions for factor prices in the model are obtained by solving the price equations of the model represented through equations (1) to (4) and equation (10) (see appendix). Using the simple solution method for general equilibrium model through use of zero profit condition and envelope theorem we first derive the solution for rate of change in return to physical capital (r) from equation (2). With given wage rate (𝑊) for unskilled labour and given price of informal commodity Y we find that there is no change in the rate of return to physical capital. Substituting the value of 𝑟̂ = 0 in equations (1) we have𝑊 = 0 as price of formal good (X) is considered to be given exogenously. Further substituting 𝑟̂ = 0 in equation (3) we have 𝑊 = 0with given price of commodity Z.Then using 𝑊 = 0 in equation (10) we obtain 𝑅 = 0 as 𝜇 is constant.
17 Read more
Labor market outcomes are determined from the interactions between firms and workers. From the perspective of firms, it is not clear why their knowledge of the price level would be inaccurate enough to cause large fluctuations in unemployment, since information on the price level is available on the internet from the Bureau of Labor Statistics on a monthly basis. Even if firms lack perfect information about the price level, there is no obvious mechanism through which imperfect information would translate into large changes in unemployment. For example, Mankiw and Reis consider firms’ pricing and output decisions but do not consider their wage and employment decisions, and there is no reason why firms in their model would not continually set wages at their market-clearing level.
39 Read more