MARKET TRANSACTION COSTS IN INDUSTRIALIZATION AND DEMOGRAPHIC TRANSITION*

Abstract. This paper presents a unified theory of growth involving human capital accumulation, labour specialization, market expansion and falling fertility rates. The model suggests that these processes, often analysed separately, are intimately linked. The accumulation of specialized human capital increases the gains to labour specialization, leading agents to increase their participation in markets and reduce time spent at home. This raises the opportunity cost of child raising, lowering fertility rates. The model suggests a central role for market transaction costs in determining the timing and rate of fertility declines linked to rising income.     

Low level equilibrium trap,unemployment, efficiency of education system,child labour and human capital formation

This paper builds an overlapping generations household economy model to examine the impact of adult unemployment on the human capital formation of a child and on child labour, as viewed through the lens of the adult’s expectations of future employability. The model indicates that the higher the adult unemployment rate in the skilled sector, the lesser is the time allocated by an unskilled adult towards schooling of her child. We also find that an increase in the unskilled adult’s wage may or may not decrease child labour in the presence of unemployment. The model predicts that an increase in child wage increases schooling and human capital growth rate only if the adults in the unskilled sector earn less than subsistence consumption expenditure. As the responsiveness of skilled wage to human capital increases, schooling and human capital growth rates increase. The model dynamics bring out the importance of education efficiency and parental human capital in human capital formation of the child. In the case of an inefficient education system, generations will be trapped into low level equilibrium. Only in the presence of an efficient education system, steady growth of human capital is possible. Suitable policies that may be framed to escape the child labour trap are discussed as well.     

Social classes,demographic transition and economic growth

This paper analyzes the role of the demographic transition in the emergence of sustained economic growth, and shows that these two processes are related. Unlike previous contributions which have focused on the importance of human capital, this paper suggests that capital accumulation, and the existence of different social classes may provide an alternative explanation for the observed pattern of output, fertility rates and wages during the 19th century. The framework presented shows that during the first phase of industrialization, a decline in capital–labor ratio reduces the wage rate and increases the dependency of the family unit on child labor, increasing fertility rates. However, in later phases the increase in the capital–labor ratio, due to the saving of the business elite, reduces the necessity of child labor bringing about the demographic transition.     

Having It All? Employment,Earnings, and Children*

We study the effect of family policies on female employment, fertility, and the gender wage gap. We develop a life‐cycle model of heterogeneous households featuring endogenous labor supply, human capital accumulation, fertility, and home production. Our results suggest that human capital accumulation is important in accounting for the widening of the gender wage gap following children. We find that, in aggregate, childcare subsidies promote maternal employment and fertility, although the effects are heterogeneous across couples. A subsidy on home goods increases female employment, but primarily later in life. Thus, it does not dampen the widening of the gender gap.     

The gender gap in early-career wage growth

In the UK the gender pay gap on entry to the labour market is approximately zero but ten years after labour market entry, there is a gender wage gap of almost 25 log points. This article explores the reason for this gender gap in early-career wage growth, considering three main hypotheses – human capital, job-shopping and 'psychological' theories. Human capital factors can explain about 11 log points, job-shopping about 1.5 log points and the psychological theories up to 4.5 log points depending on the specification. But a substantial unexplained gap remains: women who have continuous full-time employment, have had no children and express no desire to have them earn about 8 log points less than equivalent men after 10 years in the labour market.     

Effects of North–South trade on wage inequality and on human-capital accumulation

This paper develops an endogenous growth model with technological knowledge directed towards high- versus low-skilled labour, augmented with North–South international trade of intermediate goods and with human-capital accumulation, to analyse how trade affects wage inequality and the inter-country human-capital gap. Trade is a vehicle for inter-country technological-knowledge diffusion and human-capital accumulation interacts with the intra-country direction of technological knowledge arising from trade. In contrast with the market-size effect, stressed in the skill-biased technological change literature, the operation of the price channel following openness to trade predicts, in line with the recent trends in developed and developing countries, an increasing technological-knowledge bias towards high-skilled human capital. This, in turn, decreases inter-country gaps of technological knowledge and human capital and increases intra-country wage inequality. Also in line with recent empirical evidence, inter-country wage convergence is induced by the trade-opening level effect.     

Investment in human capital and gender wage differences: evidence from the NLSY

This paper uses data from the National Longitudinal Survey of Youth (NLSY) to investigate gender differences in returns to various forms of human capital. Since the NLSY includes relatively detailed information regarding on- and off-the-job training, we place special emphasis on measuring gender differences in the incidence of and returns to formal post-school training. Also considered is the role of nonhuman capital factors such as industry and occupation in explaining the wage gap. It is found that about 60% of the gender wage gap in the sample is explained by mean differences in individual characteristics and market circumstances. This suggests a smaller role for discrimination in explaining the wage gap than previous research has found. The research indicates that training does not affect the gender wage gap. Also it is found that there is no statistically significant difference in the rate of return to other measures of human capital for women versus men. Our research suggests that the largest factors contributing to the wage gap are differences in the stocks of human capital for men and women, and differences in the distributions of men and women across industries and occupations.     

Economic development, growth of human capital, and the dynamics of the wage structure

In this paper I elucidate the sources of growth of human capital in the course of economic development. On the supply side (Section 1) I include the growth of family income, urbanization, the demographic transition, and the rising cost of time.The supply side alone cannot explain the continuous growth of human capital as it implies a self limiting decline in rates of return below those in alternative investments. Such declines are offset by growing demands for human capital in the labor market. Growth of demand for labor skills is a function of capital accumulation and of technological changes. Evidence on this hypothesis is summarized in Section 2 and on supply responses to growing demand for human capital in Section 3. Changes in the skill and wage structures in the labor market are an important part of the evidence.The reciprocal relation between economic growth and the growth of human capital is likely to be an important key to sustained economic growth. A caveat applies to indirect effects of economic growth on family instability, which may lead to a deterioration of childhood human capital in some sectors of society.     

Wage Determination in Rural Russia: A Stochastic Frontier Model

This article examines wages in rural Russia after the first decade of economic transition using data from a nationally representative household survey. The stochastic frontier analysis reveals that Russia's rural labour markets place high value on human capital. The overall level of rural wages, however, is very low, with the median wage 10% below the official subsistence level. The gender pay gap severely depresses women's wages. A woman with the same skills as a man is paid only 47% of the man's wage. Rural workers who receive income from their personal plots accept significantly lower wages. Private firms pay considerably higher wages than state or collectively owned firms, but account only for one fifth of rural workers.     

Wage differences between Austrian men and women: <Emphasis Type="Italic">semper idem?</Emphasis>

In most OECD countries, the wage gap between men and women has narrowed during the past two decades. Developments of the last 20 years, e.g., increased labour market attachment of women or the introduction of equal pay laws, may have reduced the gender wage gap. We investigate the extent, persistence, and socio-economic determinants of the gender wage gap in Austria, for the years 1983 and 1997. Using wage decomposition techniques, we find that the average gender wage gap was almost as high in 1997 as it was in 1983. Not accounting for differences, the gender wage gap dropped from 25.5 to 23.3% of men’s wages. Taking observable differences between men and women into account, we estimate that the mean gender wage gap that cannot be explained, i.e., discrimination against women, dropped from 17 to 14% of men’s wages. A decomposition of the gender wage gap over time indicates that both returns to human capital and less discrimination were responsible for the narrowing of the gender wage gap.

Wage formation during economic transformation: macroeconomic facts and firm survey evidence from Slovenia

This article provides macroeconomic stylised facts on wage comparisons and microeconomic evidence on how institutional changes, competitive pressures in firms' output markets, human capital and efficiency wage payment affect wage formation during the early stages of transformation. Wages in Slovenia are higher than in other transition Central and Eastern European countries and higher than labour productivity. We use a firm survey panel dataset of Slovenian enterprises to investigate labour cost adjustment and its policy relevance. The results reveal that transformation was not a uniform process as it has induced different labour cost adjustments and wage responses to transformation shocks over time. The hypothesis that labour productivity and competitive pressures in firms' output markets were important for wage formation was not supported. We confirm that rent seeking increased wages in insider, management and employee-owned enterprises in anticipation of privatisation. The effect of human capital was modest and efficiency wage payment was found not to be significant. The hypothesis of unionisation in Slovenian enterprises was not supported.     

Decomposing Gender Wage Differentials Using Quantile Regression: Evidence from the Lebanese Banking Sector

This paper investigates gender pay inequality in the labor market of a developing country. Our empirical investigation uses data derived from a sample of employees in the Lebanese banking sector for the years 2008 and 2014. Using Blinder-Oaxaca decomposition, the results reveal that the unexplained component of the gender wage gap, attributed to discrimination, represents a substantial share of the total gap. A surprising result is that the contribution of human capital to the gender wage gap is negative, suggesting that wage discrimination is the main explanation for the gap. Utilizing the Machado-Mata methodology to decompose the wage gap across the entire wage distribution, our findings indicate that the unexplained component of the raw gender wage gap is more pronounced at the low and middle ranges of the distribution. However, the explained component dominates at the top of the distribution, suggesting that earnings gaps are fully explained by observed characteristics.     

A quantitative theory of the gender gap in wages

This paper measures how much of the gender wage gap over the life cycle is due to the fact that working hours are lower for women than for men. We build a quantitative theory of fertility, labor supply, and human capital accumulation decisions to measure gender differences in human capital investments over the life cycle. We assume that there are no gender differences in the human capital technology and calibrate this technology using wage–age profiles of men. The calibration of females assumes that children involves a forced reduction in hours of work that falls on females rather than on males and that there is an exogenous gender gap in hours of work. We find that our theory accounts for all of the increase in the gender wage gap over the life cycle in the NLSY79 data. The impact of children on the labor supply of females accounts for 56% and 45% of the increase in the gender wage gap over the life cycle among non-college and college females, while the rest is due to the exogenous gender differences in hours of work.     

Gender Inequality and Economic Growth in Korea

Calibrating an endogenous‐growth model to Korean data, we analyse the impact of gender inequality in Korea on long‐term economic growth. We find that gender equality policies that lower discrimination in the labour market or that increase the time spent by a father on childrearing can contribute positively to female labour market participation and per capita income growth. The simulation results show that when the disparities between men and women at home and in the labour market are completely removed, the female labour force participation rate increases from 54.4 to 67.5%, and the growth rate in per capita income rises from 3.6 to 4.1% on average over a generation.     

Gender Discrimination in Central Europe during the Systemic Transition

In this paper we measure the extent of gender discrimination on Central European labour markets (Czech, Hungarian, Polish and Slovak) during the first years of transition. Using Oaxaca's method and Social Stratification Survey data for 1993, we estimate that discrimination explains about half of the wage gap. Gender discrimination is significantly weaker in Hungary and stronger in Slovakia and Poland, where a large part of discrimination is tied to segregation. More fundamentally, we try to determine the nature of this discrimination; we conclude that discrimination is mainly statistical (both group and individual), but also deliberate, and the labour market is partly inefficient.     

Gender Wage Gap: Some Recent Evidences from India

Gender wage inequality is a chronic socioeconomic malice in developed as well as in developing countries. This paper describes the outcomes of our study on the estimation of gender wage gap in the Indian labour market, using the 68th Round NSSO employment–unemployment data. The study uses Blinder–Oaxaca decomposition technique and Heckman two-step methodology, for removal of selectivity bias in the sample data, to measure the components of total gender wage gap, viz. (1) occupational segregation (explained by economic rationale) and (2) direct discrimination (not explained by economic rationale). The analysis indicates that the maximum direct discrimination is for job-related factors, such as industry type which are controlled by employers. The majority of the Indian employers today are men, which may be the reason for the insensitivity to the chronic direct discrimination against women in workplaces. The study also indicates that most of the explained gender wage gap is due to lower skill and experience amongst women. The findings suggest that besides labour law reforms for ensuring gender neutrality in workplaces, focused government policies for promoting women entrepreneurship and skill development of women are urgently required for reducing the gender wage gap in India.

     

Gender wage gap across the wage distribution in different segments of the Indian labour market, 1983–2012: exploring the glass ceiling or sticky floor phenomenon

Women’s participation in the Indian labour market is not only low but they are also engaged in low-productivity and low-paying jobs. Further, the labour market is segmented by gender, type of employment, sector and location of residence. This study makes an important contribution by examining gender wage gap in India across different segments of the labour market over the wage distribution using national-level representative data spanning the period 1983 to 2012. The empirical results suggest that (i) the male–female raw wage gap has declined over time across the wage distribution, (ii) the gender wage gap attributable to differing returns to characteristics has increased over time and there is evidence of convergence of productive characteristics of men and women, (iii) sticky floor rather than glass ceiling phenomenon is observed in all segments of the labour market and (iv) the adjusted wage gap suggests that women at the bottom of the distribution face higher discrimination than those at the top and this has increased over the years.     

城乡收入差距对中国经济增长的影响机制研究——基于我国省际动态面板数据的系统GMM分析

从理论上分析了城乡收入差距影响经济增长的传导机制;基于2000—2008年我国30个省、市、自治区(除西藏)的面板数据,采用系统广义矩分析方法对我国城乡收入差距通过物质资本积累和人力资本积累两个途径对经济增长的影响机制进行了实证分析。结果表明,现阶段我国城乡收入差距的扩大通过抑制人力资本积累进而阻碍经济增长的作用,要大于通过增加物质资本积累进而促进经济增长的作用。因此,现阶段我国城乡收入差距的扩大对经济增长总体上具有阻碍作用。最后,提出了具体的政策建议以缩小城乡收入差距、促进经济增长。     

DOES PRO‐POPULATION POLICY RAISE PER CAPITA CONSUMPTION?

We theoretically analyze the effects of a child allowance, an improvement in the efficiency of child rearing and a labour income tax on the fertility rate and per capita consumption. The effects on per capita consumption are opposite in the absence, and the presence, of unemployment. For example, a child allowance urges people to have more children and allocate more labour to child rearing, decreasing labour supply for the purpose of commodity production. Therefore, under full employment it decreases per capita consumption. In the presence of unemployment, however, it reduces the deflationary gap and hence stimulates per capita consumption.     

性别偏好与人口转型

人口转型是工业化发展过程中普遍发生的重要经济和社会现象。本文从性别偏好对生育决策的影响这个角度解释了为什么当经济发展到一定程度后,人口生育率会显著下降。本文通过动态一般均衡模型说明了资本积累和技术进步会缩小男女劳动力在生产效率上的差异,从而使男女工资的不平等减少。而性别偏好程度又取决于男女劳动回报的差异,因此经济发展会降低性别偏好的程度,提高女孩对于家庭效用的贡献,这将影响到家庭的生育决策。数值模拟的结果表明,性别偏好程度的下降对人口转型具有重要的影响,当性别偏好程度显著降低时,人口生育率会下降。