Do State Minimum Wages Affect the Incarceration Rate?

Because of historically unprecedented increases in the prison population since the late 1970s, the United States has the highest incarceration rate in the world. Using Becker's (1968) framework on crime, this study investigates the causal relationship between incarceration rates and state minimum wages. Our identification strategy consists of a state-level fixed effects model and Autor and Dorn's (2013) two-stage least-squares (2SLS) approach. Using the historical local industry structure, we predict the change in employment shares of manual task-intensive occupations and use those as an instrument for state minimum wages. The fixed effects and 2SLS estimates suggest that a one-dollar increase in state minimum wage leads to approximately 12–25 fewer incarcerations per 100,000 state residents. Estimates of the heterogeneous impacts by race and gender indicate that the aggregate impact of state minimum wages is entirely driven by men.     

Right-to-work legislation and the economic position of black workers

Recent empirical analysis of state right-to-work legislation indicates that a negative wage effect may result as a consequence of banning union shop contracts. It has been previously shown that industrial unionism tends to improve the relative wage position of black workers. Thus, it is hypothesized that if state right-to-work laws weaken the economic power of unions to raise wages, black workers will experience a disproportionate decline in their relative wage position. Black workers in right-to-work states would therefore experience a reduction in their relative economic position unless a strong positive relative employment effect occurs in response to the decline in wages. Using a cross-sectional regression model this article examines the relative employment effect due to right-to-work legislation. The results indicate that black workers experience a statistically significant decline in their relative employment rate within right-to-work states. When this finding is coupled with the hypothesized negative wage effect, it is concluded that right-to-work legislation results in a worsening of the net economic position of black workers.     

Is Informal Job Experience of Youth Undermining their Labor-Market Prospects in Transition Economies?

The objective of the paper is to investigate if previous informal employment experience of youth affects later labor-market outcomes in transition economies. We consider the effects on employment, decent job and wages. Some theories suggest that previous informal job experience may extend informality later and negatively impact decent employment and wages, while others argue that informal jobs may provide training, networks and working attitudes to young workers hence improving their formal employment and wage potential. We rely on the newly-produced School to Work Transition Surveys for seven transition economies of Southeast Europe and the Commonwealth of Independent States. Our results robustly suggest that early informality of youth is negative for the later labor-market outcomes. However, for the wage, there is limited evidence that the negative effect potentially turns positive for long informal job experiences. The negative effect of informal job on later outcomes is stronger for females, while any differences between the two regions of transition economies are neither systematic nor robust.     

Youth wage employment and parental education in Malawi

This paper looks at the relationship between the likelihood of being in regular wage employment and parental education for Malawian youth. It uses data from the third integrated household survey (IHS3). Only a mother's education is found to have a statistically significant effect on the likelihood of being in regular wage employment for young females and males. It is established that the effect of a mother's education on young males is significantly larger than that for young females. The paper also finds that, regardless of gender, a mother's education complements/reinforces the positive effect of a youth's own education on the probability of being in wage employment. The evidence from this paper points to the existence of an intergenerational poverty trap; with children of uneducated mothers or mothers with low education finding themselves outside regular wage jobs.     

The effect of foreign competition on UK employment and wages: Evidence from firm-level panel data

The Effect of Foreign Competition on UK Employment and Wages: Evidence from Firm-Level Panel Data. —This paper contributes to the sparse empirical literature on the effects of foreign competition on domestic employment and wages. The authors estimate a structural labour demand equation on UK firm-level panel data between 1982 and 1989 and several wage equations. When they restrict the sample to the manufacturing sector only, they find for the unionized firms that foreign competition has a negative effect on both wages and on employment. However, when UK manufacturing firms face only a few rivals, foreign competition has a positive effect on wages, but no effect on employment.     

The wages and employment of female day‐labourers in English agriculture, 1740–18501

Using a new sample of farm accounts from 84 farms throughout England, this article provides measures of regional variation and changes over time in female wages and employment in agriculture. Female wages were not fixed, but changed over time and responded to high demand for female labour. The female‐male wage ratio fell between 1750 and 1850, except in the industrial north west. In 1851 approximately 19 per cent of agricultural day‐labourers were female. In the industrial north west, opportunities for factory employment reduced the supply of females to agriculture, but elsewhere the relative demand for female labour in agriculture declined.     

Taxes and Benefits in a Non-linear Wage Equation

This paper estimates a structural non-linear wage bargaining model for the Netherlands. The estimation results show a significant positive long-term impact of the average tax rate on wages. The marginal tax rate exerts a small negative impact on wages. The impact of benefits rises with the unemployment rate.     

Institutional wage-setting,labour demand and labour supply: Causal estimates from a South African pseudo-panel

Unemployment in South Africa has multiple causes. This article uses a district pseudo-panel to estimate the elasticity of labour demand, labour supply and unemployment with respect to wages. We assess whether hiring decisions are more sensitive to increases in wages of low-paid workers than high-paid workers, and whether wage growth prompts entry into the labour market. These channels combine to result in the positive causal effect of wage growth on unemployment. The research investigates whether these effects are dominated by districts in which unionisation rates are high and employment is concentrated in large firms. Wage growth of middle-paid to highly paid workers – as opposed to low-paid workers – reduces local labour demand and raises local unemployment. Bargaining arrangements correspond closely to the spatial wage distribution; in turn, a large part of the impact that wage growth has on labour market outcomes is determined by these wage-setting institutions.     

The impact of foreign direct investment on wages and employment

This paper studies the impact of foreign direct investment (FDI)on wages and employment When labor-management bargaining isindustry-wide, two effects of FDI are identified; the collusioneffect and the threat-point effect. It is shown that: (i) FDIalways reduces the negotiated wage; (ii) FDI reduces union employmentand the competitive wage if die union cares more about employmentthan wages or is equally concerned about employment and wages.However, if labor-mingement bargaining is firm-specific andunionization is industry-wide, then the above effects of FDIare substantially reduced.     

Experience,Tenure, and the Perceptions of Employers

This paper examines how group-based assessments concerning employee ability impact employee compensation. The employer learns about worker ability through Bayesian updating, creating an additional channel for wage growth that is not available to those workers with only general labor market experience. Consistent with the model's predictions, results from National Longitudinal Survey of Youth (NLSY) indicate that black workers fare much better relative to white workers in returns to tenure than in returns to experience. Finally, parameter estimates in the structural model suggest that employers initially undervalue black males but that their wages rise with learning by employers over time.     

Union relevance in the Malaysian labour market

The study estimates the effect of union membership on workers' wages using individual‐level data from a survey conducted among employees in various sectors in Malaysia in 2012. Initial results show that union membership has a positive effect on wages. However, after controlling for endogeneity, union membership or the presence of a labour union within a firm is not statistically significant for individual wage levels. Because there is no trade union wage premium, the study suggests that the revival of labour union membership is not going to be an easy task.     

Trade liberalization and wage inequality: Evidence from Korea

This paper investigates the heterogeneous income distribution effects of trade liberalization using Korean survey data from years of 2000–2015. Following the Stolper-Samuelson theorem most of previous research studying the effects of trade liberalization on wage differences focus on workers’ characteristics (e.g., skilled or unskilled) while heterogeneity within the same worker group has not been yet substantially investigated. To fill this gap, this paper provides empirical evidence of wage inequality across firms within the same group of workers caused by trade liberalization, potentially implied in the new-new trade models with firm heterogeneity. Employing a difference-in-differences (DID) specification, we find that the wages of unskilled workers in Korea have increased since its FTAs with more advanced countries, such as members of EU and the US, came into effect, while the effects on the wages of skilled workers are negative but not statistically significant. We also show that wage effects are heterogeneous across firms within unskilled and skilled worker groups, while the positive effects are statistically significant and largest for unskilled workers in medium-large sized firms. These findings are in line with both traditional and new-new trade models.     

Health and Productivity: Panel Data Evidence from Ethiopia

Abstract: Neoclassical growth models and endogenous growth theories show the positive contribution of human capital to growth. Using household panel data (1994–2000) on individuals who reported their wages in urban Ethiopia, we estimated a relationship between health measures (i.e. proxied by height and BMI) and wages (which proxies productivity/growth). Our findings from the IV quantile regression estimates indicate that productivity is positively and significantly affected by education, height and BMI. The return to BMI is important both at the lower and upper end of the wage distribution. The return to height is significant only at the end of the wage distribution. The substantive content of the results (i.e. the high‐nutrition and high‐productivity equilibrium story) does not change even if we did not control for endogeneity of schooling. Non‐parametric evidence also supports the strong and positive relationship between productivity and our indicators of human capital.     

Legal Minimum Wages and Employment Duration

We estimate the effect of minimum wages on employment duration using event history data from the 1988-1994 rounds of the National Longitudinal Survey of Youth. Existing literature takes two alternative tracks: Some studies predict reduced turnover due to rents created by minimum wages, others focus on the expected increase in turnover due to reduced job amenities and imperfect information. We find that for men, the net effect of a minimum wage depends on its magnitude relative to the typical wage in the local labor market. We find some evidence that where the minimum wage is low, separation rates for men hired at the minimum wage are reduced. We also find that as the relative value of the minimum wage rises, separation hazards increase. We interpret these findings as evidence that rents may accrue to minimum wage workers, but that the job matching process is undermined when the minimum wage binds.     

Evaluating public sector sponsored training in East Germany

Support of training has been a very important instrument ofactive labor market policy in East Germany. This paper attemptsan evaluation of the employment and wage effects of trainingsupported by public income maintenance outside of a firm. Afterdescribing the labor market developments in East Germany, weillustrate the evaluation problem. Then, we estimate a simultaneousmodel for participation in training, employment, and wages.Taking account of selection effects before participation, ourfindings mostly suggest positive though only partially significantlong-run effects of training on employment or wages.     

Farm Household Responses to Government Policies: Evidence from West Java

Few micro level analyses have been undertaken in Indonesia of rural households' responses to government policies, and of household characteristics and endowments. Most studies of rural household behaviour in Indonesia have analysed the consumption, production and labour supply aspects separately, ignoring the complex interrelations among farm production, farm profit, household consumption and family labour supply. In this study, the complex nature of rural household production and consumption decisions is analysed by applying a farm household model to cross-sectional data from 241 households in six villages of West Java. The model incorporates multiple crops, different wage levels for males and females, and non-agricultural employment.     

Off‐farm wage returns to education: Evidence from Lesotho

This article presents estimates of off‐farm wage returns to education in rural areas of Lesotho. Results from a sample survey conducted in the northern Lowlands and Foothills of Lesotho indicate that returns to education are relatively higher for people wage‐employed in Lesotho than those wage‐employed as migrants in South Africa. For people working within Lesotho, education appears to have a significant and positive effect on off‐farm wages. Most people working within Lesotho are employed as teachers, nurses and civil servants and these job categories require an educated labour force. For people wage‐employed in South Africa, education appears not to have a significant effect on off‐farm wages. Most men working in South Africa are employed as labourers in mines while women working in South Africa are employed as domestic servants.     

最低工资制度对劳动力市场影响的实证分析

本文对最低工资理论模型进行了拓展分析,并以深圳为案例分析了最低工资制度对区域就业的影响。在跨区域劳动力流动的情况下,区域劳动力市场均衡工资趋近最低工资标准,并且不会导致区域就业量的下降。     

Coordinating unions,wages and employment

Summary In this paper we consider a two-sector economy in which individual unions are affiliated into a federation of unions. We analyze the consequences of two different types of wage setting. Firstly, individual unions set wages in their own sector without taking into account the effect of their wages on the employment level in the other sector. There may be positive as well as negative externalities. A positive (negative) externality may exist if a higher (lower) wage in one sector implies a higher level of employment in the other sector. Both cases may occur in our model. Secondly, wages in the two sectors are set by the federation of unions. We show that in this case higher (lower) wages result than in the first case if a positive (negative) externality exists.Preliminary versions of this paper were presented at seminars at the University of Oldenburg and the University of Groningen and the Fourth Annual Congress of the European Economic Association, Augsburg, September 2–4, 1989. The authors would like to thank W.H. Buiter, H. van Ees, J. Hartog, Th. v.d. Klundert, S.K. Kuipers, Chr. Mulder and T. van Veen for their comments on an earlier version of this paper.     

The Effect of Social Security Contributions on Coverage and Wages: A Gender Perspective Using a Natural Experiment from Colombia

This article investigates, from a gender and marital status perspective, the effects of pension and health care contributions on the employment and wages of workers covered by social security regulations. To do this, I use as a natural experiment a reform implemented in Colombia during the mid‐1990. In particular I employ a differences‐in‐differences estimation based on an endogenous switching‐regression model that accounts for self‐selection into coverage. My results indicate that, for females, a 10% increase in contributions reduces the relative wages of covered workers by 7.2%. On the other hand, for males, the reform increases the relative wages of covered workers by 7.1%. Among females, the effect is predominantly present in single women. Among men, divorced and widowed workers are the only group not to experience an effect on earnings. For most family groups, the social security reform has no significant effect on coverage.