Does Pension Wealth Peak at the Age of Early Retirement?

Once an employee has qualified for early retirement, continuing to work involves an implicit tax in the form of forgone pension payments. We explore this implicit pension tax in a Canadian setting and find that, contrary to Lazear (1983), but consistent with most U.S. studies, pension wealth generally does not peak at the date of first eligibility for early retirement. We highlight the importance of the earnings path posited for older workers, anticipated enrichments to flat benefit formulas, and the distinction between reduced and unreduced early retirement as determinants of this result.     

COMPARABLE WORTH: CANADA'S EXPERIENCE

This paper discusses the design, implementation and administration of comparable worth legislation in Canada, focusing particular attention on the potential of comparable worth to close the male-female earnings gap. The authors document the Canadian legislative initiatives, provide illustrative evidence on the impact of comparable worth, and identify the main policy lessons to be learned from the experience of Canada, where the comparable worth concept has evolved furthest.     

The Meta Taylor Rule

We characterize U.S. monetary policy within a generalized Taylor rule framework that accommodates uncertainties about the duration of policy regimes and the specification of the rule, in addition to the standard parameter and stochastic uncertainties inherent in traditional Taylor rule analysis. Our approach involves estimation and inference based on Taylor rules obtained through standard linear regression methods, but combined using Bayesian model averaging techniques. Employing data that were available in real time, the estimated version of the “meta” Taylor rule provides a flexible but compelling characterization of monetary policy in the United States over the last 40 years.     

GENDER EARNINGS DIFFERENCES IN CHINA: BASE PAY,PERFORMANCE PAY,AND TOTAL PAY

We utilize a data set that has not been used in literature—the Life Histories and Social Change in Contemporary China (LHSCCC)—to provide new evidence on male‐female pay differences in China. The data set not only enables us to control for a wide range of pay‐determining characteristics but also is the first to enable an analysis of the different components of pay (e.g., base pay and performance pay) as well as for total pay. We find: (1) Women receive about three‐quarters of male pay for each of the dimensions of base pay, performance pay, and total pay, before adjusting for the effect of different pay‐determining factors; (2) Approximately two‐thirds of the gap reflect the fact that females tend to be paid less than males for the same wage‐determining characteristics (often labeled as discrimination), while about one‐third reflects the fact that males have endowments or characteristics that tend to be associated with higher pay, especially supervisory responsibilities, general labor market experience, occupational skills, education, and membership in the Communist party; (3) Marriage has a large positive effect on the earnings of women in China (and none for men), but childcare responsibilities for children under the age of 6 have a large negative effect on the earnings of women although these are offset almost completely if an elder family member is present, highlighting that childcare responsibilities disproportionately fall on women unless an elder family member is present; (4) Pay premiums for higher level skills and higher supervisory ranks are remarkably small for both males and especially females; (5) With respect to the unexplained or “discriminatory” portion of the gap, females get a huge pay penalty for simply being female, but a substantial portion of this gets offset by the higher pay premium they receive for such factors as Han ethnicity, being married, and education. This suggests that discrimination tends to occur in the form of a pay penalty for simply being female and not from lower returns to the same endowments of pay‐determining characteristics. (JEL J3, J7, M5)     

Minimum Wage Impacts from a Prespecified Research Design: Canada 1981–1997

Neumark (2001 ) used the novel methodology of a prespecified research design to estimate the employment effect of minimum wage changes. We conducted our analysis in the “spirit” of this methodology based on Canadian data from 1981 to 1997. Our minimum wage elasticities are substantial, typically in the range of ?0.14 to ?0.44, with ?0.30 being a reasonable point estimate, and with the effects being larger after lagged adjustments.