IMMIGRANT RELATIVE WAGES AT THE GREAT RECESSION: EVIDENCE WITH MATCHED EMPLOYER‐EMPLOYEE DATA FOR SPAIN

The article examines relative wages of immigrants in Spain, with a particular focus on the impact of the Great Recession. The empirical analysis is restricted to men and is based on matched employer‐employee microdata and the decomposition techniques of Juhn et al. (1991, 1993) and Fortin et al. (2011). Our results show that the significant native‐immigrant wage gap that exists both in terms of average wages and of differentials along the wage distribution is essentially explained by differences in the endowments of observed characteristics so that, in general, immigrants tend to receive a similar wage treatment than Spaniards with analogous observed attributes. On the other hand, the Great Recession has had a noticeable impact on the relative wages of immigrants, given that the significant increase of the native‐immigrant wage gap observed during the previous expansionary period was mitigated during the economic downturn due to composition effects arising from the severe employment destruction pattern.     

Why the earnings of the middle class declined: evidence from Japan

Using rich governmental micro data, we explore the reasons for the decline in earnings of the middle class in Japan. Many developed countries have seen the decrease in middle-class earnings, and Japan, long known for its solid middle class, is no exception. Our analyses revealed that the main reasons for the decline differ between males and females. The decrease in the earnings of middle-class male workers is due to the decrease in general human capital captured by returns to potential experience years. In contrast, the decrease in the earnings of middle-class female workers is mainly due to the increase in the supply of part-time workers. Furthermore, the firm-specific human capital captured by the return to tenure has increased only among high-wage male workers. This implies that Japanese firms invest in a selected few able workers, regardless of age, because they have been changing human resource strategy in response to economic globalization and changes in technology and the management environment.