Black–white wage differentials: duration and probability unemployment effects in a multiple of sample selection bias model

The extent to which probability and duration of unemployment affect the black–white wage differentials is examined in this paper. The paper simultaneously incorporates in the wage equation the multiple sample selection bias that occurs as a result of individuals’ propensity to be in the labor force, and the firm’s hiring decisions. The results reveal a substantial contribution of the duration of unemployment variable to the black–white wage differential, but a small portion of the differential is explained by the probability of unemployment. The results also indicate a sizeable difference between the contribution of the duration of unemployment variable to the male’s wage differentials (26%) and to the female’s (35%). The study finds that an individual’s labor force decision as well as a firm’s hiring decision are important in the wage determination process and that failure to account for the sample selectivity bias due to these two decisions will result in either underestimating or overestimating the wage differentials between black and white workers. At the macro level, the results seem to suggest that promotion of racial wage equality should be associated with policies that will minimize blacks’ incidence of unemployment and duration of unemployment spells.     

The Impact of Children on Wages, Job Tenure, and the Division of Household Labour

In the absence of typical exclusion restrictions, covariance restrictions are used to obtain estimates of the effects of children on household behaviour. Using data from the PSID on two age samples, children are found to have a significant impact on many household decisions. However, while in the young sample exogenous fertility cannot be rejected, in the older sample this is not the case. Finally, if the average household had one less child, the male-female wage differential would decrease by 9.5 %.     

A Model of Asymmetric Employer Learning with Testable Implications

This paper helps close the gap between theory and empirical evidence in the literature on asymmetric employer learning. If an employer's private learning is reflected in a worker's wage and one employer's private information is transmitted to the next when the worker makes a job-to-job transition, then asymmetric employer learning will appear in wage regressions as learning over an employment spell. Extending previous work that assumes all learning takes place publicly, this paper develops wage regressions that test for both asymmetric employer learning and public learning. The empirical results, including tests of alternative explanations, are consistent with asymmetric employer learning's having at least as much of an effect on wages during an employment spell as does public learning. The model developed in this paper illustrates how the story suggested by the empirical work might unfold. It shows that outside firms can profitably compete with a better-informed employer through bidding wars, even when the worker is equally productive in all firms. Furthermore, this competition results in different wages for workers with the same publicly observable characteristics, a result that previous models of asymmetric learning have not produced.     

Market wages,reservation wages,and retirement decisions

The paper is an empirical cross-section study of the retirement decisions of American white men between the ages of 58 and 67, predicated on the theoretical notion that an individual retires when his reservation wage exceeds his market wage. Reservation wages are derived from an explicit utility function in which the most critical taste parameter is assumed to vary both systematically and randomly across individuals. Market wages are derived from a standard wage equation adjusted to the special circumstances of older workers. The two equations are estimated jointly by maximum likelihood, which takes into account the potential selectivity bias inherent in the model (low-wage individuals tend to retire and cease reporting their market wage). The model is reasonably successful in predicting retirement decisions, and casts serious doubt on previous claims that the social security system induces many workers to retire earlier than they otherwise would. The normal effects of aging (on both market and reservation wages) and the incentives set up by private pension plans are estimated to be major causes of retirement.     

Male-female wage differentials: Additional evidence

By applying a richer data set than others have used to a simultaneous equation regression model, the analysis sheds new light on the existence and magnitude of the male-female wage differential.     

农民工的城市归属感与定居决策

本文利用2008年珠三角九城市农民工调查数据,对农民工城市定居决策的影响因素进行了实证分析。结果发现,农民工的城市归属感是其定居决策的关键影响因素。农民工的归属感与工资收入、家庭教育、居住条件等显著正相关,与打工时间、年龄、收入缺口、是否存在劳动者权益侵犯等显著负相关。而农民工是否购买保险、是否加入工会、是否接受职业培训等不会显著影响农民工的城市归属感及定居决策。这说明我国的医疗养老保险制度、工会制度、职业培训政策等并未切实保护农民工的利益,需要进行相应的改革。     

Does Employee Body Weight Affect Employers' Behavior?

In this paper, we study the possible segregation of overweight individuals already established in the labor market when firms make decisions on hiring, firing, and promoting. Most existing studies use wage equations to document wage differences, but little is known about the reason for the differences and the sorting of workers. Using an equilibrium search model, search frictions are taken into account. Additionally, sorting is examined using a logit model. We find that wage differences between workers who have a normal weight and workers who are overweight or obese can be explained by differential firm behavior, with respect to both the job‐offer arrival rate and the probability of being promoted.     

Educational choice, wage determination, and rates of return to education in Taiwan

This paper estimates educational choice, wage determination, and the rate of return to education in Taiwan using Taiwan's Manpower Utilization Survey data of 1996. As education investment is a self-selection process, this paper adopts a two-stage estimation method. First, a polychotomous ordered probit model is used to estimate the education decision. Second, the wage equations of different educational attainments are estimated by incorporating the possible selection bias obtained in the probit model. Finally, rates of return on each education level are calculated from the estimation results.     

Relative Deprivation, Wage Differentials and Mexican Migration

This paper constructs and tests a model that incorporates relative deprivation into the migration decision. Relatively deprived individuals view their situations as less than a community standard. Another innovation of this paper is the utilization of a cluster approach to wage differentials. This cluster method takes account of individual characteristics while avoiding the severe multicollinearity problems inherent in the standard wage equation approach. Using data from the Mexican Migration Project, relative deprivation is found to be a significant motivating factor in domestic migration decisions. The results also suggest that Mexico‐US migration may be increasing relative deprivation in Mexican communities. For policymakers, the results indicate that policies attempting to slow domestic rural‐to‐urban migration must address both relative and absolute outcomes in communities. Investments in communities that raise aggregate incomes, but increase relative deprivation, could result in an increase in migration out of the community, not in a decrease as intended.     

Interindustry part-time and full-time wage differentials: regional and national analysis

This paper provides more evidence that the wage differential is far smaller than is suggested by simple comparison of gross wages of full-time and part-time workers. It is noted that to obtain a more reasonable measure of the full-time and part-time wage differential, it is necessary to adjust for differences in workers' characteristics, labour market conditions and sample selection. It is found that, in general, full-time and part-time workers exhibit different personal characteristics. In particular, full-time workers possess more human capital and experience than part-timers. Also, labour market conditions such as unions and pension plans favour full-timers. These differences may partly account for the wage disparity between full-time and part-time workers. It was noted that the nonrandomness of the workers into full-time and part-time jobs influences the wage determination of both full-time and part-time workers. The results indicate that the adjustment of the wage equations to reflect the above mentioned differences reduces the national wage differential between full-time and part-time workers by 10%. The reduction is even larger across regions and industries. Another finding was that the wage determination processes between full-time and part-time workers do differ.     

Definition of full-time and part-time employment,and distributional assumptions: the implications for the estimated full-time and part-time wage equations

This paper demonstrates that rejecting the standard definition of full-time and part-time workers, the estimated number of hours that an individual is likely to work as a full-time worker is a function of the type of distribution one assumes about the error term in the wage equation. Adopting a switching regression model with unknown sample selection, we have found that the normality assumption generates higher hours for full-timers in comparison with the non-normal distributions. We also noted that regardless of the distribution assumed, the hours differ from one industry to another. The implication is that the standard definition of full-time and part-time worker may not be appropriate for all firms irrespective of the distribution assumed. The paper also shows the sensitivity of parameter estimates to the distributional assumptions about the error term in the wage equation. The results indicate that the normal distribution wage equation estimates are relatively larger than the Weibull and exponential distributions. This finding is particularly important because such differences in estimated coefficients may have a direct wage influence on the wage gap between full-time and part-time workers across distributions.     

How is the worker’s weekly hour related to wage over the life cycle? The U.S. evidence

The current study estimates the relationship between weekly hours and weekly wage over the life cycle of a representative sample of workers. Recognizing the endogeneity of these two variables, the study estimates both equations in a simultaneous equations framework and demonstrates that the relationship between weekly hours and weekly wage is not uniform over the worker’s life cycle. These two variables are negatively related when the workers are young and have a positive relationship when they are matured adults. This conclusion remains valid for both men and women. Our robustness check further confirms that workers respond to wage increases differently at different stages of their working career. This has interesting policy implications. Any policy to influence the worker’s hours decision through wage incentive must consider the stage of his/her working career.     

The importance of the distinction between long- and short-term unemployment in UK macroeconometric models

This paper examines the degree of support for distinct duration effects on wages across a variety of wage equations, and investigates their importance in full simulations with three large-scale UK macroeconometric models. The paper begins by highlighting deficiencies both in the way that existing models determine the duration structure of unemployment and in the specification of long-term unemployment in the wage equation. By constructing a single preferred wage equation we test hypotheses relating to duration effects and, although tests are not conclusive, find some support for the use of short-term unemployment in the wage equation. However, it is also shown that the response of wages to changes in unemployment is similar regardless of whether aggregate or short-term unemployment is used in the wage equation, although this does not hold when the duration structure of unemployment changes radically. By substituting revised equations into the models we show that these results carry over to full model simulations. Thus although neglect of duration effects may not be crucial in assessing the effectiveness of standard macro policy instruments, this is not likely to be true when evaluating policies which are deliberately targeted at the long-term unemployed.     

Migration,self-selection and earnings in Philippine rural communities

"Estimated returns to schooling investments can be misleading if migration causes significant shifts in population distribution across time. Data gathered in rural Philippine communities show that the more educated and experienced individuals are more likely to outmigrate, causing a sample selection bias in the estimation of wage equations. The observed wages were then lower than the conditional population mean of an entire cohort residing originally in the area. Controlling for self-selection, the wage returns to schooling and experience were higher, Finally, the sample selectivity variable accounts substantially for the difference in the wages of men and women."     

Incidence and Duration of Unemployment Spells: Implications on the Wage Differentials of Part-Time and Full-Time Workers

This article analyzes the extent to which incidence of unemployment and duration of unemployment spells affect the wage differentials between full-time and part-time workers. The estimation results of a sample selectivity bias–adjusted wage equation reveal that high incidences of unemployment are associated with low wages for both full-time and part-time workers. However, the reduction in wages due to incidence of unemployment is larger for full-time workers in high-paid jobs than for their part-time counterparts. Duration of unemployment spells affects full-time and part-time workers differently. In general, longer unemployment spells tend to increase the wages of full-time workers but tend to depress the wages of part-time workers. Although the probability of unemployment is not a factor in explaining the wage differential, the duration of unemployment accounts for a substantial portion (about 66.6% in full sample) of the wage differential that exists between full-time and part-time workers.     

金融能力、金融决策与贫困

本文利用2013年中国家庭金融调查（CHFS）数据,通过因子分析法构建居民金融能力指数,运用Probit模型、工具变量法和中介效应模型实证分析了金融能力对贫困的影响以及金融能力、金融决策与贫困之间的作用机理。研究发现：（1）无论是绝对贫困还是相对贫困,金融能力能够显著抑制贫困的发生,且城镇地区相较农村地区更明显。（2）金融能力对贫困的影响既存在“抑制效应”,也存在“偏离效应”,两者之间呈现正“U”型关系。（3）经中介效应模型计算可知,在“抑制效应”下,金融能力可以通过改善金融决策来缓解居民贫困状况。具体而言,在三种不同的贫困状况衡量方式下,金融决策的中介效应占比分别为2542%,2296%和2160%。     

Wage,productivity and unemployment: microeconomics theory and macroeconomics data

We confront microeconomics theory with macroeconomics data. Unemployment results from two main micro-level decisions of workers and firms. Most of the efficiency wage and bargaining theories predict that over the business cycle, unemployment falls below its natural rate when the worker’s real wage exceeds the reservation wage. However, these theories have weak empirical support. Firm’s decision predicts that when the worker’s real wage exceeds the marginal product of labour (MPL), unemployment increases above its natural rate. Accounting for this microeconomic decision helps explain almost all the fluctuations of US unemployment.     

Tax Policies,Regional Trade Agreements and Foreign Direct Investment: A Welfare Analysis

In this paper, we develop a partial equilibrium three‐country model to examine the relationship between regional trade agreements (RTAs) and foreign direct investment (FDI) in an environment with double taxation. Our analysis shows that FDI is welfare‐improving for at least one or both of the two regional countries if wage asymmetry is significantly large. FDI and an RTA are also welfare‐improving for the high‐wage country and the region if the wage differential is not small. We also examine the role of repatriation taxes in affecting the determination of firm location under an RTA. Our results suggest that the signing of an RTA may induce relocation from the high‐wage country to the low‐wage country unless an increase in the repatriation tax rate also occurs.     

Returns to education and wage equations

The paper shows why considering a number of education-dependent covariates in a wage equation decreases the coefficient of education in that equation. This result is illustrated empirically with a meta-analysis for Portugal. The education coefficient decreases when covariates are used that can be considered post-education decisions; on the other hand, it is independent of sample size, tenure and whether hourly or monthly wages are used. These results support the use of a simple specification of the Mincer equation for the study of the total returns to education.     

Trends in the Australian Gender Wage Differential over the 1980s: Some Evidence on the Effectiveness of Legislative Reform

The article examines the legislative reforms incorporating the Sex Discrimination Act and the Affirmative Action Act introduced during the 1980s. We utilise the Australian Bureau of Statistics Income Distribution Surveys 1981–82 and 1989–90 to reflect pre- and post-legislative reform.
The article adopts the Brown, Moon and Zoloth (1980) methodology which treats both the wage and occupational status of the individual as endogenously determined. In the current context this is a particularly flexible framework allowing one to capture both the direct and indirect effects of the legislative reforms. The indirect effect refers to the narrowing of the gender wage gap associated with legislative manipulation of the male-female occupational distributions.
The results contrast the slow convergence in the gender wage gap during the 1980s with the much faster pace of the 1970s. The article concludes that despite the focus of the 1980s legislation on employment equity, changes in the male-female occupational distribution over the period are small and the associated impact on gender wage convergence is also small.