The Effects of Market Liberalization on the Relative Earnings of Chinese Women

In this paper, we explore the effects of differences in labor market institutions and the degree of market liberalization on the size and composition of gender wages gaps in China's urban labor markets. We use enterprise-ownership type, enterprise age, and workers' methods of finding employment as proxies for the extent of market liberalization. We find both the size of the wage gaps and the proportion of the gap left unexplained by differences in observed characteristics largest in the most liberalized joint-venture sector and smallest in the least liberalized state sector. We next investigate the effects of differences in the wage structure on the gender wage gaps. We find that differences in the wage structure, in general, and the degree of wage dispersion, in particular, are extremely important in accounting for the larger wage gaps in the joint-venture and collective sectors relative to the state-owned sector. J. Comp. Econ., June 2002 30(4), pp. 709–731. Department of Economics, Bates College, Lewiston, Maine 04240. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved.Journal of Economic Literature Classification Numbers: Numbers: J16, J31, J71, O15, O53, P23.     

Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages

A striking observation of the U.S. and other labor markets is the weak position of women in terms of job attachment, employment, and earnings relative to men. We develop a model of fertility and labor market decisions to study the impact of fertility on gender differences in labor turnover, employment, and wages. In our framework, individuals search for jobs and accumulate general (experience) and specific (tenure) human capital when they work. They can also increase their wage by moving to a job of higher quality. Labor market decisions (e.g., job acceptance and job mobility) may differ across genders: females that give birth may decide to interrupt their labor market attachment in order to enjoy the value of staying at home with their children. The model economy is successfully calibrated to match aggregate statistics in terms of fertility, employment, and wages. We find that fertility decisions generate important gender differences in turnover rates, with long lasting effects in employment and wages. These differences in labor turnover account for almost all the U.S. gender wage gap that is attributed to labor market experience by Blau and Kahn (2000, Journal of Labor Economics15(1), 1–42). The model also implies a very small role of tenure capital in accounting for wage differences between males and females (gender gap), and between females with and without children (family gap). Journal of Economic Literature Classification Numbers: E24, J13, J21, J31.     

The effects of stochastic wages and non-labor income on labor supply: update and extensions

The analysis of labor supply under risk has a long history dating back to Hicks (The theory of wages, St. Martin’s Press, New York, 2003) and Knight (Risk, uncertainty and profit, Kelly, New York, 1964). In the 1980s more technical papers investigated the impact of stochastic non-labor income and/or wage rate upon labor supply. In this paper, we show that the effect of a mean-preserving increase in risk in wage rate or non-labor income on labor supply is best understood as a special case of an Nth degree risk increase (as defined by Ekern (Econ Lett 6:329–333, 1980)) and the conditions for signing the effect of a higher-order risk increase in wage rate or non-labor income on labor supply are analogous to those for signing the effect of a simple non-stochastic decrease in wage rate or non-labor income. We thus extend, and provide new and more intuitive interpretations for, related earlier results.     

Human capital, market imperfections, and labor reallocation in transition

In this paper, we investigate the effects of human capital and factor market imperfections on household decisions regarding labor use and reallocation in transition countries. We develop a model that accounts explicitly for heterogeneity in the supply of labor and analyze its impact on the allocation of labor. Furthermore, the effects of imperfections in the capital and labor markets on the reallocation process are modeled. Using a dataset based on a countrywide representative survey of Hungarian rural households, we estimate the effects empirically and find them to be important. Journal of Comparative Economics 32 (4) (2004) 745–774.     

Reference Dependent Preference and Labor Supply: Evidence from China

This paper investigates the daily labor supply decisions of Hangzhou cabdrivers. We find that Hangzhou cabdrivers’ wage elasticity is significantly positive, their working decisions are largely affected by shift time, and crude proxy variables for income; hours targets can hardly explain their working behavior. Nevertheless, Hangzhou cabdrivers are still affected by reference dependent preference. Using new empirical strategies, we show that cabdrivers are more likely to continue working when wage rates are unexpectedly low and more likely to quit when wage rates are unexpectedly high.     

von Thünen: Capital,Production Functions,Marginal Productivity Wages,and the Natural Wage

This paper puts seminal contributions to theory of production functions and maximization of explicit quantitative objective functions by Johann Heinrich von Thünen into a systematic historical perspective. We show that his comprehensive ‘Tableau Economiques’ do imply two exact parametric production functions. Moreover, the renowned ‘geometric mean wage’ formula is restated as an exact CES marginal labor productivity wage for σ = 2. We review four alternative modes of normative (natural) wage calculations without an explicit production function, and conclude that von Thünen's natural wage differentiation formulas are bona fide alternatives for deriving the natural wage formula.     

SHOULD WE CARE ABOUT THE COMPOSITION OF TAX‐BASED STIMULUS PACKAGES?

We investigate the effects of tax policy shocks on the U.S. economy over the 1972:3–2008:4 period within a structural vector autoregressive (SVAR) framework. Disaggregating tax shocks suggests that the positive output multipliers documented for total taxes by the previous literature are present only for indirect tax innovations. We also show that both labor and corporate taxes have similar effects on output, with labor tax multipliers being slightly larger in magnitude. The positive and negative responses of inflation following respectively corporate and labor tax shocks imply that former shocks work through aggregate supply, whereas the latter work predominantly through aggregate demand. (JEL C32, E62, H20)     

Has Abe's Womanomics Worked?

The present paper estimates the effect of the Abe Cabinet's Womanomics policies that aimed to increase female labor supply and keep women on a career path. The policies are surveyed, and the effects are estimated using microdata from the Labor Force Survey combined with data at the prefectural level on day care provision. A difference‐in‐difference (DD) method is applied to uncover the impacts of the Abe Cabinet's policies. The rapid increase in the provision of infant care, especially in the urban area, has contributed to a strong increase in the labor participation of mothers with young children. In addition, DD method estimates show a strong increase in mothers with infants staying in permanent‐contract regular employment. A significant shortening of work hours of workers, especially of parents with infants, is observed, which enabled working mothers to maintain their employment status. A change in the gender wage gap in the Japanese labor market is observed, but much progress is still required to close the large wage gap.     

Sources of German unemployment: a structural vector error correction analysis

In this paper we analyze the sources of German unemployment within a structural vector error correction model (SVECM) framework. For this purpose we estimate a VECM model using data for unified Germany. The cointegration analysis reveals a long-run relationship between real wages, productivity and unemployment which is interpreted as a wage setting relation. Based on a reduced form subset VECM we identify structural shocks and assess their importance for unemployment by impulse response analysis, forecast error variance and historical decompositions. In contrast to previous studies for West Germany, we find that productivity, labor supply and labor demand shocks are important sources of unemployment in the long-run.

基于动态视角的中国劳动力供给决策实证分析--以杭州出租车司机为例

生命周期劳动供给理论预测工人的劳动供给对短期工资波动有正向的反应，然而不少研究发现国外出租车司机劳动供给弹性是负的。国内出租车司机的情况如何呢？文章用杭州出租车GPS 行程数据分析了司机的内延性和外延性劳动供给。为解决由测量误差和同事效应产生的内生性问题，我们用司机当天遇到的长途载客次数作为其每小时工资的工具变量，进而探讨每小时工资对司机劳动供给时间的影响。我们发现，杭州出租车司机的内延性和外延性劳动供给工资弹性均显著为正，这说明政府增加司机每公里燃油补贴等政策的确能激励司机增加劳动供给。另外，这也说明放松出租车市场的价格管制能使司机更好地根据市场需求优化自己的工作决策。     

THE SHORT‐RUN EMPLOYMENT EFFECTS OF RECENT MINIMUM WAGE CHANGES: EVIDENCE FROM THE AMERICAN COMMUNITY SURVEY

This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015. As of 2015, we estimate that relatively large minimum wage increases (defined as those exceeding $1) reduced employment among low‐skilled population groups by just over 1 percentage point. Smaller minimum wage increases, as well as increases linked to inflation indexation provisions, appear to have had much smaller (and possibly positive) effects on employment over our sample period. The estimates thus raise the potential importance of nonlinearities in the minimum wage's effects, which are consistent with standard models of the labor market. (JEL H11, J08, J23)     

Labor supply with stochastic wage rate and non-labor income uncertainty

This paper deals with the labor supply problem in the contemporaneous presence of wage rate and non-labor income uncertainties. We examine the effect of a stochastic wage rate(a non-labor income uncertainty) on labor supply in the presence of a non-labor income uncertainty(a stochastic wage rate) and provide some conditions of utility function for assuring larger labor supply. We study the joint effect of two types of uncertainty on labor supply when two risks are either small or positive quadrant dependent. Our work extends the previous model of labor supply to two-risk framework and shows some new explorations on the classical issue of labor supply under uncertainty.     

Economic returns to schooling in urban China, 1988 to 2001

This study provides estimates of the returns to schooling in urban China over an extended period of economic reforms. We find a dramatic increase in the returns to education, from only 4.0 percent per year of schooling in 1988 to 10.2 percent in 2001. Most of the rise in the returns to education occurred after 1992 and reflected an increase in the wage premium for higher education. The rise is observed within groups defined by sex, work experience, region, and ownership, and is robust to the inclusion of different control variables. The timing and pattern of changing schooling returns suggest that they were influenced strongly by institutional reforms in the labor market that increased the demand for skilled labor. Journal of Comparative Economics 33 (4) (2005) 730–752.     

Wage inequality and between-firm wage dispersion in the 1990s: A comparison of rural and urban enterprises in China

Using a worker–firm matched sample, this paper compares the changes of wage structures of urban and rural enterprises following public sector restructuring in China's manufacturing sector. While the wage responses of rural firms with respect to firm characteristics are found to have declined steadily, compensation of urban workers has become increasingly linked to their firms' ability to pay. Our analysis reveals that industrial restructuring has weakened the influence of institutional factors, such as market power, soft budget constraints, and insider influence, on the wage determination of rural firms but it has enhanced their impact on urban firms. Journal of Comparative Economics 33 (4) (2005) 664–687.     

FACTORS AFFECTING THE LABOR SUPPLY DECISIONS OF REGISTERED NURSES

We estimate the labor force participation and the full‐time and part‐time work decisions of female registered nurses (RNs) and find higher wages are not a significant factor to (a) increase the likelihood of working nor (b) to encourage full‐time work. Another key factor is age which, given the aging of the RN population, foreshadows dwindling labor supply. This, while demand for RNs is predicted to continue to rise, will exacerbate labor shortages in the market for RNs. The results also offer insight to explain the reduction in labor supply wage elasticities for female workers in general in the United States. (JEL I11, J22, J44)     

Why is the public sector more labor-intensive? A distortionary tax argument

Government-run entities are often more labor-intensive than private companies, even with identical production technologies. This need not imply slack in the public sector, but may reflect a wage tax advantage, stemming from the fact that government entities (partly) pay their taxes to themselves. A tax-induced cost advantage of public production precludes production efficiency and reduces welfare when labor supply is inelastic. With an elastic labor supply, a wage tax advantage of the public sector may improve welfare if it allows for a higher net wage.      

Asymmetric Labor Markets, Southern Wages and the Location of Firms

This paper studies the behavior of firms towards weak protection of labor standards in developing countries (South). A less than perfectly elastic labor supply in the South gives firms an oligopsony position in the labor market tempting them to strategically reduce output to cut wages. In an open economy, competitors operating where labor standards are recognized meanwhile enjoy less aggressive competitors and raise output. Delocation also increases Southern wages and triggers a competition effect, lowering ex post output and hence potential profits of a relocating firm. These effects reduce relative profitability of moving production to the South casting doubts on traditional beliefs that multinationals are attracted to regions with lower wages. Moreover, adopting a minimum wage policy in the South eliminates the oligopsony distortion and improves competitiveness of Southern firms in the world product market. It also enhances consumer and wage surplus in the South and hence unambiguously raises Southern welfare.     

TRAINING,TURNOVER, AND SEARCH*

This article explores a model of firm‐specific training in a job search environment with labor turnover. The main substantive finding is a positive association between training and wages (when dispersed). The article then precisely characterizes how both wage dispersion and firm profitability depend on the flow value b≥ 0 of workers' unmatched time. It is shown that: (i) for all high values b, no equilibrium exists; (ii) for intermediate values b, multiple equilibria arise, where firms earn zero profits, and choose from a general wage distribution; (iii) for all lower values b, there is a unique equilibrium, with firms earning positive profits, and choosing from an atomless set of wages.     

Labor Market Segmentation and the Implications for Public Sector Retrenchment Programs

Despite the importance placed on reducing public sector employment in sub-Saharan Africa, remarkably little is known about the labor market transition paths of departing public sector workers. This paper uses household survey data from Conakry, Guinea to establish evidence of labor market segmentation between the wage and nonwage sectors. An empirical model of the unemployment durations experienced by departing public sector workers finds that transition paths vary significantly according to personal characteristics that also affect the resulting earnings opportunities in segmented labor markets. Particularly, there is a marked tendency of females to enter quickly the nonwage sector, relative to males, and a negative influence of severance payments on wage sector employment acceptance.J. Comp. Econom.,December 1997,25(3), pp. 385–402. Department of Agricultural and Applied Economics, Virginia Tech University, 208 Hutcheson Hall, Blacksburg, Virginia 24060-0401 and Cornell University, 3M28 Martha Van Rensselaer Hall, Ithaca, New York 14853.     

Cyclical wage movements in emerging markets compared to developed economies: The role of interest rates

This paper documents that, at the aggregate level, (i) real wages are positively correlated with output and, on average, lag output by about one quarter in emerging markets, while there are no systematic patterns in developed economies, and (ii) real wage volatility (relative to output volatility) is about twice as high in emerging markets compared with developed economies. We then present a small open economy model with productivity shocks and countercyclical interest rates. The model incorporates a working capital requirement and the Jaimovich and Rebelo (2009) preference that allows for flexible parameterization of the strength of income effects on labor supply. The model can account for the high volatility of wage and consumption relative to output and countercyclical trade balances that characterize emerging-market economies. During economic downturns, rising interest rates in emerging markets induce relatively large income effects on labor supply, so households would not reduce their labor input as much even though wages drop significantly.