Conditional distributions of earnings,wages and hours for blacks and whites

This paper provides new evidence on the conditional distributions of earnings, wages and hours for white and black males in the University of Michigan's Panel Study of Income Dynamics. Conditional hours and ln wages are approximately normal for both races. Conditional earnings are approximately normal for blacks while earnings are well approximated for whites by the product of normal hours and log-normal wages. The distribution of this product is derived here for the first time. Treating the marginal earnings distribution as the average of the conditional distributions, we use these results to predict poverty and affluence rates in our sample.     

The Geometry of Comparative Industrial Relations: Efficiency,Equity and Voice

This article focuses on John Budd’s efficiency, equity and voice concepts. The discussion considers the concepts’ utility as a framework for analyzing different national patterns of industrial relations in a comparative perspective. The article considers eight forms of employment relationships: social partnerships, sectoral bargaining, centralized awards, enterprise unionism, exclusive representation, codetermination, the US new deal system and voluntarism. The author concludes that this is a useful framework for such purposes, and that it is following the industrial relations tradition of pluralism.     

Efficiency,Equity, and Voice as Moral Imperatives

The thesis of this book is that efficiency, equity and voice are all human rights and should be treated as such by individuals, corporations and governments. The author reviews a wide range of philosophical and religious material that affirms the human rights nature of these aspects of employment relations. He also assesses a broad spectrum of approaches to employment relations against the standards of efficiency, equity and voice. Of particular note is the author’s critique of contemporary mainstream economics for subordinating voice to efficiency.     

Maternal full-time employment and overweight children: Parametric, semi-parametric, and non-parametric assessment

We use the matched mother-child data from the 2000 wave of the US National Longitudinal Survey of Youth 79 (NLSY79) to assess the impact of full-time working mothers on children’s body mass index (BMI) and the likelihood of becoming overweight. Parametric, semi-parametric and non-parametric methods are employed to correct the bias of selection on observables and unobservables. Pros and cons of various methods are discussed and specification tests are conducted. In general, we find that a mother’s full-time employment does have some impact on her children’s BMI and likelihood of becoming overweight across models and inference procedures.     

Neighbors’ income distribution: economic segregation and mixing in US urban neighborhoods

The paper describes within-neighborhood economic segregation in US metropolitan areas in 1985 and 1993. It uses the neighborhood clusters of the American housing survey, standardized by metropolitan area income and household size, to explore income distribution within neighborhoods at a scale much smaller than the census tract (a representative sample of households or ‘kernels’ and their 10 closest neighbors). Joint and conditional distributions portray neighbors’ characteristics conditional on the kernel’s housing tenure, race, and income. The paper documents both significant income mixing in the majority of US urban micro neighborhoods and the extent of income mixing within neighborhoods of concentrated poverty.     

Earnings volatility in America: Evidence from matched CPS

We offer new evidence on earnings volatility of men and women in the United States over the past four decades by using matched data from the March Current Population Survey. We construct a measure of total volatility that encompasses both permanent and transitory instability, and that admits employment transitions and losses from self employment. We also present a detailed decomposition of earnings volatility to account for changing shares in employment probabilities, conditional variances of continuous workers, and conditional mean variances from employment entry and exit. Our results show that earnings volatility among men increased by 15% from the early 1970s to mid 1980s, while women's volatility fell, and each stabilized thereafter. However, this pooled series masks important heterogeneity in volatility levels and trends across education groups and marital status. We find that men's earnings volatility is increasingly accounted for by employment transitions, especially exits, while the share of women's volatility accounted for by continuous workers rose, each of which highlights the importance of allowing for periods of non-work in volatility studies.     

The 'Impact' of Equal Employment Legislation on Women's Earnings: Limitations of Legislative Solutions to Discrimination in the Economy

A bstract . Although a strong legal basis now exists for equal opportunity in employment for women , women's earnings have actually dropped relative to men's. This holds true even when experience on the job , life-time work experience , and education are similar. Females are also still twice as likely as males to be below the poverty line. The impact of low female earnings may be of even greater significance today because of the increase in female-headed families. Equal opportunity legislation has not been sufficient to end economic sexism.     

Job losses and child outcomes

Based on matched employer–employee data from Norway, we analyze the effects of worker displacement in 1986–1987 on their children's earnings in 1999–2001. Using displacement of fathers to indicate an exogenous earnings shock we seek to identify whether family resources have a direct effect on children's economic outcome. Job losses appear to have a negative effect on earnings and employment of those affected, while we find no significant effects on earnings of the next generation.     

Mexico’s balance of payments and exchange rates: a cointegration analysis

Mexico’s recurrent economic crises have cast serious doubts on the existence of a long-run relationship between the country’s balance-of-payments and exchange rates. In this paper, cointegration and vector autoregression techniques are applied to Mexico’s data covering the period 1971 through 1988. Despite the presence of nonstationarity, the statistical analysis supports a long-run relationship between changes in international reserves and the exchange rate and changes in domestic credit. Further multivariate Granger causality tests, together with innovation accounting, indicate that Mexico’s monetary authorities adjust domestic assets to sterilize balance-of-payments deficits in a futile attempt to control its monetary policy.     

Stability and efficiency from a Neo-Keynesian viewpoint

This paper raises once more the Keynesian challenge of the classical doctrine that an unguided market economy has a natural tendency towards optimal employment of resources. By means of a simple macromodel, we show that if quantity expectations are incorporated into the Walrasian model, then it is no longer generally true that the ‘invisible hand’ leads the economy to Walrasian equilibrium. Instead, it may lead the economy to a kind of Keynesian equilibrium in which the firms' sales expectations constitute a binding constraint on production. Moreover, while Pareto optimum is unstable and hence unattainable in our model, a ‘second-best’ optimum among stable equilibria exists and requires a public sector. Accordingly, a trade-off between efficiency and other policy aims occurs only at tax rates above the positive tax rate in optimum     

Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence

Abstract.  This paper studies the links between macroeconomic adjustment and poverty. The first part summarizes some of the recent evidence on poverty in the developing world. The second reviews the various channels through which macroeconomic policies affect the poor, whereas the third is devoted to the specific role of the labor market. It presents an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. The fourth part presents cross‐country regressions linking various macroeconomic and structural variables to poverty. Higher levels and growth rates of per capita income, higher rates of real exchange rate depreciation, better health conditions, and a greater degree of commercial openness lower poverty, whereas inflation, greater income inequality, and macroeconomic volatility tend to increase it. Moreover, the impact of growth on poverty appears to be asymmetric; it seems to result from a significant relationship between episodes of increasing poverty and negative growth rates.     

Market Structure and Racial and Gender Discrimination:

The Annual Equal Employment Opportunity Reports and Current Population Survey files are used to examine employment and earnings by race and gender in the telecommunications industry following changes in the industry's affirmative action guidelines and following the divestiture of the American Telephone and Telegraph Company. Nonblack minority men were the only underrepresented group to experience marked employment gains as managers and professional. The relative employment probability of other underrepresented workers remained similar to the levels experienced during the implementation of affirmative action guidelines. Earnings differentials did decline for minority men and white women in the telecommunications industry. However, this finding is only unique to black men as the earnings pattern for white women and nonblack minority men mirror that found for these groups nationally.     

George Bain and a ‘Mechanistic Formula’: the Purposes and Politics of £3.60

This response to George Bain’s most recent defence of the Low Pay Commission’s first report and recommendations argues the case for a higher minimum wage tied to average earnings which seriously tackles the poverty and discrimination suffered by many employees     

A note on bride kidnapping and labour supply behaviour of Kyrgyz women

Using data from the 2011 and 2016 Life in Kyrgyzstan surveys, we examine Kyrgyz women’s labour supply elasticities at the extensive margin. We use Heckman’s two-step approach to predict earnings for the non-participating women and then use these predictions to estimate the participation equation. We find that women’s labour supply decision is not influenced by their earnings. We also show that there exists a significant gap in employment propensities among ethnic Kyrgyz women in consensual or arranged marriages compared to women in kidnapped-based marriages. This finding suggests that the practice of bride abduction adversely affects women’s probability of employment and might have negative consequences on their economic well-being.     

Gender, self-employment and microcredit programs An Indonesian case study

Credit is often the missing link for low-income families that try to make a living by operating small microenterprises. At the same time, the presumption that lending to the poor is very risky, the costs of operation are high, and the low repayment rates for such loans limit bankers’ willingness to extend credit to the poor. This article, however reports on the results of a microcredit program in Indonesia which suggests that when agencies, government and non-government, in a developing country make credit available to low income women, they can reduce the costs of delivery, greatly increase repayment rates, and substantially improve the well-being of poor families. Other studies also suggest that such credit tends to increase women’s participation in decision making, reduces fertility, substantially improves household nutrition and raises aspirations for children’s education. Our case study cofirms these results.     

Mobility,poverty and well-being among the informally employed in Bosnia and Herzegovina

We analyse informal sector employment in Bosnia and Herzegovina (BH), using panel data from the living standards measurement studies. We derive four main conclusions. First, there is significant labour market mobility in BH. Second, those in informal jobs are much more likely to suffer from poverty than formally employed people are. Third, earnings inequality is more pronounced in the informal sector than elsewhere. Fourth, the informally employed report lower levels of life satisfaction compared to most other labour market states. We conclude that, while the informal sector helps people cope, the formal sector provides better prospects for prosperity and well-being.     

Evaluating the effectiveness of Washington state repeated job search services on the employment rate of prime-age female welfare recipients

This paper uses an unbalanced panel dataset to evaluate how repeated job search services (JSS) and personal characteristics affect the employment rate of the prime-age female welfare recipients in the State of Washington. We propose a transition probability model to take into account issues of sample attrition, sample refreshment and duration dependence. We also generalize Honoré and Kyriazidou’s [Honoré, B.E., Kyriazidou, E., 2000. Panel data discrete choice models with lagged dependent variables. Econometrica 68 (4), 839–874] conditional maximum likelihood estimator to allow for the presence of individual-specific effects. A limited information test is suggested to test for selection issues in non-experimental data. The specification tests indicate that the (conditional on the set of the confounding variables considered) assumptions of no selection due to unobservables and/or no unobserved individual-specific effects are not violated. Our findings indicate that the first job search service does have positive and significant impacts on the employment rate. However, providing repeated JSS to the same client has no significant impact. Further, we find that there are significant experience-enhancing effects. These findings suggest that providing one job search services training to individuals may have a lasting impact on raising their employment rates.     

Can indeterminacy resolve the cross-country correlation puzzle?

Are productivity shocks the only driving force of international business fluctuations? In this paper I argue that another source of uncertainty—changes in market expectations or ‘sunspots’ – is also important. One major shortcoming of existing IRBC models is the ‘cross-country correlation puzzle’: models tend to generate cross-country consumption correlations that are too high and output, investment and employment correlations that are too low when compared to the data. I show that with empirically supported level of increasing returns, an otherwise standard model possesses multiple, indeterminate convergent paths to the steady state, which allow for sunspots to influence the economy. The model displays time series properties that in many ways match the data better than the conventional model. It is especially successful in generating realistic consumption and output correlations.     

In-work policies in Europe: Killing two birds with one stone?

Generous social assistance has been held responsible for inactivity traps and social exclusion in several European countries, hence the recent trend of promoting employment through in-work transfers. Yet, the relative consensus on the need for ‘making work pay’ policies is muddied by a number of concerns relative to the design of the reforms and the treatment of the family dimension. Relying on EUROMOD, a EU-15 integrated tax-benefit microsimulation software, we simulate two types of in-work benefits. The first one is means-tested on family income, in the fashion of the British Working Family Tax Credit, while the second is a purely individualized policy. Both reforms are built on the same cost basis (after behavioral responses) and simulated in three European countries suspected to experience large poverty traps, namely Finland, France and Germany. The potential labor supply responses to the reforms and the subsequent redistributive impacts are assessed for each country using a structural discrete-choice model. We compare how both reforms achieve poverty reduction and social inclusion (measured as the number of transitions into activity). All three countries present different initial conditions, including existing tax-benefit systems and distribution of incomes and wages. These sources of heterogeneity are exploited together with different labor supply elasticities to explain the cross-country differences in the impact of the reforms.     

Informal employment and the earnings of home-based home care workers in the United States

Informal employment continues to exist in parallel with formal employment among the US home-based home care workers and undermines the workers' economic security. This study examines the extent to which the earnings of the US home-based home care workers are affected by informal employment arrangements and state labour policies designed to benefit low-wage home care workers. Using a sample of 1,318 home-based home care workers from the 2017 and 2018 Annual Social and Economic Supplement of the Current Population Survey, this study found that (i) informally employed home-based home care workers had a 9% reduction in annual earnings and that (ii) their earnings were not improved by generous state minimum wages and Domestic Workers' Bill of Rights while the earnings of agency employees were. The findings highlight the importance of strong enforcement of labour standards for informally employed home care workers in the United States.