Local flexibility in wage setting: evidence from the Norwegian local public sector

The public sectors in the Scandinavian countries have been prominent examples of centralized wage-setting systems. In Norway, more room for local flexibility was implemented by a wage frame system introduced in 1990 in which the national wage scale system merely works like a minimum wage system. We analyze the effect of this reform using a unique database where we can track employees and their local government over time and explore the consequences of controlling for fixed individual effects and fixed employer effects. We find that the wage dispersion increased across local governments after 1990, and that wages to some extent became more responsive to local government income, monopsony power and other local government characteristics after the reform. However, the numerical effects of the reform are estimated to be quite small.     

个人特征还是行业特征——吉林省行业工资差异的成因研究

基于统计年鉴宏观数据和吉林省劳动力市场状况调查微观数据,采用两步骤回归模型分析吉林省行业间工资差异的成因。结果发现,个人特征对吉林省行业工资回报具有正向作用;行政垄断等行业特征变量对吉林省行业工资差距同样产生正向影响。可见,个人特征和行业特征都是行业间工资差异形成的原因,相比之下,行业特征因素更为显著。因此,政府在调控现阶段行业间工资回报差异方面,更应该倾向于关注行政垄断带来的工资差异。     

Technical change and market structure

This paper investigates the ceteris-paribus effects of labor reducing technical progress on industry-wide employment under different market regimes. We distinguish between a contestable market, a monopoly, and a market with bounded supplier power. Under a constant wage rate, employment will not decrease only if the elasticity of demand on a contestable market exceeds one. The same thing holds for markets with bounded supplier power. Under a monopoly, price elasticity must even be more than three. Ceteris paribus we thus have to expect a higher probability of employment reduction under a monopoly than under other market regimes. Raising wages proportional to productivity leads to an employment reduction on stagnating markets with supplier power. Here a raise in wages without layoffs is only possible if the growth in demand is at least as high as the growth in productivity.The author is indebted to Alfred E. Ott, Sabine Böckem, Rolf Wiegert and Ulf Schiller for valuable comments. Of course, I take responsibility for all remaining errors.     

市场潜能、原材料接近度与日本食品产业在华投资的区位选择

运用《中国进出企业一览》(2003—2004年版)中的数据实证研究了市场潜能和原材料接近度在日本食品产业在华投资区位选择中的作用效果。基于Reddingand Venables[1]和Harris[2]测算了我国各省市自治区的市场潜能和原材料接近度,通过区位选择模型分析发现,国内市场潜能对日资食品产业投资的进入具有正的效果,但是不如用GDP衡量的"本地市场"变量大。国外市场潜能则具有最大的效果。日本食品产业倾向于投资在原材料接近度高的省份,但效果也不及用农业总产出衡量的"本地原材料"变量。     

Transitions across labor market states including formal/informal division in Egypt

This study examines the worker transitions across labor market states including formal/informal division using panel data of 2006 to 2012 from Egypt. We generate a broad set of facts about labor market dynamics in Egypt. We first develop transition probabilities by gender across different labor market states including formal/informal sectors utilizing Markov transition processes. Government employment is the most persistent labor market state for both men and women and the out of labor force is the second most persistent labor market state for women. Unemployment is the most mobile labor market state. Informal private wage work and self‐employed–agriculture are also relatively mobile labor market states. We next identify the effects of individual, household and job characteristics on different mobility patterns by estimating multinomial logit models. We find that gender, age, education, experience, and several sectors of economic activity are associated with the transition probabilities between the labor market states considered such as formal wage, informal wage, self‐employment, unemployment, government employment, and out of labor market. Education, in particular, university degree or above is noted to play a vital role in the probability of transitions across several labor market states.     

Individual wages and regional market potential

In this article, we study wage determinants in Poland by employing the augmented NEG wage equation that controls for individual worker characteristics. Our analysis is based on the Labor Force Survey (LFS) conducted by the Polish Central Statistical Office (CSO) for the period 1999–2009. Using annual data on about 10,000 Polish workers in 16 regions, we find that a significant fraction of inter‐individual wage differences can be explained by the geography of access to markets.     

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.     

Wage indexation and the monetary policy regime

We estimate a New Keynesian wage Phillips curve for a panel of 24 OECD countries and allow the degree of wage indexation to past inflation to vary according to structural characteristics. We find that the degree of wage indexation is significantly lower for countries with an inflation target. However, this effect vanishes when we control for the degree of goods market competition. By contrast, more goods market competition is consistently associated with lower wage indexation. This robust finding puts into question whether embedding a constant degree of wage indexation in standard DSGE models is truly structural.     

New economic geography meets Comecon

We analyse the internal spatial wage and employment structures of the Czech Republic, Hungary, Poland, Slovakia and Slovenia, using regional data for 1996–2000. A new economic geography model predicts wage gradients and specialization patterns that are smoothly related to the regions’ relative market access. As an alternative, we formulate a ‘Comecon hypothesis’, according to which wages and sectoral location are not systematically related to market access except for discrete concentrations in capital regions. Estimations support both the NEG (new economic geography) prediction and the Comecon hypothesis. However, when we compare internal wage and employment gradients of the five new member states with those of Western European countries, we find that the former are marked by significantly stronger discrete concentrations of wages and service employment in their capital regions, confirming the ongoing relevance of the Comecon hypothesis.     

Tariff reforms with rigid wages

This paper analyses the effects of tariff reforms on welfare and market access in a competitive small open economy, which is characterised by involuntary unemployment due to non-market clearing wages that are fixed either in terms of the numeraire or in real terms. We show that recent tariff-reform results can be extended to integrated reforms of tariffs and the wage rate, and that the inherent tension between reforms that increase welfare and market access carries over. We also derive welfare increasing tariff-reform strategies that keep the wage rate constant and show that this tension may be attenuated. We thank Peter Neary, an anonymous referee, as well as participants at the GEP Conference on New Directions in Trade Theory and at the ETSG Annual Conference in Athens for helpful comments. We acknowledge gratefully financial support from the Leverhulme Trust under Programme Grant F114/BF.     

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

In this paper we use Turkish household labor force data to address a number of conceptual issues pertaining to the wage curve, an empirically derived negative relationship between the real wage level and the local unemployment rate. First, we show that in developing economies where labor markets are prone to high degree of segmentation by skill level, local unemployment rates disaggregated by education provide more accurate measures of the degree of group-specific wage competition and hence yield more robust results of the wage curve analyses. Second, we estimate the wage curve using various definitions of the unemployment rate, including discouraged and marginally attached workers, and the long-term unemployment rate to explore the most relevant measure of local labor market tension in the wage setting process. We find that broader definitions of unemployment serve as a more effective reference point in measuring wage flexibility for women, whose attachment to the labor market is substantially weak in the Turkish context; while for men the official and long-term unemployment rates perform well. Finally, using quantile regression we show that wage responsiveness to unemployment cannot be assumed to be constant along the wage distribution. In the Turkish case, we find a higher unemployment elasticity of wages around the median segment of wage distribution. This effect is more pronounced for women.     

Heterogeneous Matching with Transferable Utility: Two Labor Market Applications*

A labor market model under search frictions is developed, where participants are heterogeneous in productivity and the decision of which type of agents to match with is endogenized. Two applications are studied. It is observed that countries with high (low) unemployment tend to exhibit low (high) wage dispersion. And there is evidence showing that individual and firm characteristics have more explanatory power for the French than for the American wage data. Matching patterns can account for these two observations. In the absence of a minimum wage, I thus provide a theory of endogenous wage compression.     

Skilled and unskilled wage dynamics in Italy in the 1990s: changes in individual characteristics,institutions, trade and technology

In this paper, we use individual micro data on workers combined with industry and regional data to study the wage dynamics of skilled and unskilled workers in Italy in the 1991–1998 period. In contrast to previous empirical studies, our data make it possible to analyse, within a single framework, the role of many of the factors indicated in the literature as possible determinants of skilled and unskilled wage dynamics: changes in the individual characteristics of workers, changes in labour market institutions, increasing international integration, and skill‐biased technological progress. Our results show that international integration, both in terms of trade in goods and in terms of international labour mobility, plays a role in determining the wage dynamics of skilled (white‐collar) and unskilled (blue‐collar) workers. Moreover, in line with labour economics research, our findings show that the individual characteristics of workers and the institutional variables are more relevant in explaining skilled and unskilled wage dynamics than wage differentials.     

国有企业支付了更高的职工工资吗?

对职工个人层面的研究表明,股权性质显著影响职工平均工资,但已有文献对于企业层面上股权性质如何影响职工平均工资尚缺乏深入探讨。以1999—2009年间我国A股上市企业为样本,本文深入考察了国有股权性质对职工平均工资的影响。研究结果表明,从整体上看,样本期间国有企业支付了更高的职工工资,而且这一结论在控制了行政垄断、企业规模和职工教育背景等因素之后依然成立。进一步区分国有企业控制级别和职工工资类别后发现,与非国有企业相比,国有企业普通职工工资显著更高。其中,中央政府控制的国有企业普通职工工资显著高于地方政府控制的国有企业,而地方政府控制的国有企业又显著高于非国有企业;国有企业高管薪酬与非国有企业并无显著差异,但中央政府控制的国有企业高管薪酬显著高于地方政府控制的国有企业和非国有企业。上述研究结论有助于理解转轨经济背景下国有股权性质对职工工资的影响,丰富了职工工资的相关研究,并对推进我国国有企业工资体制改革具有借鉴意义。     

Downward wage rigidity and job mobility

Using data from the German Socio-Economic Panel (GSOEP) we study whether being individually affected by downward wage rigidity has an effect on layoffs, quits and intra-firm mobility. Within a structural empirical model we estimate the individual extent of wage rigidity. This is expressed by the wage sweep-up, which measures by how much individual wage growth increases through the effect of downward wage rigidity when compared to a counterfactual labour market with flexible wage setting. We find robust negative effects of wage sweep-up on quits and layoffs and some evidence for a positive association of wage sweep-up and promotion opportunities. This is consistent with a core-periphery view of the labour force, where a core work force is protected from layoffs and wage cuts and at the same time enjoys good promotion opportunities. On the other side a peripheral work force provides a buffer for adjustment and suffers from both flexible wages, more insecure jobs and less internal promotion opportunities.      

Social Preferences, Skill Segregation, and Wage Dynamics

We study the earning structure and the equilibrium assignment of workers to firms in a model in which workers have social preferences, and skills are perfectly substitutable in production. Firms offer long-term contracts, and we allow for frictions in the labour market in the form of mobility costs. The model delivers specific predictions about the nature of worker flows, about the characteristics of workplace skill segregation, and about wage dispersion both within and across firms. We show that long-term contracts in the presence of social preferences associate within-firm wage dispersion with novel "internal labour market" features such as gradual promotions, productivity-unrelated wage increases, and downward wage flexibility. These three dynamic features lead to productivity-unrelated wage volatility within firms.     

MNEs and wages: The role of productivity spillovers and imperfect labor markets

Disentangling the labor market implications of increased foreign capital flows remains important. This paper provides a unifying framework allowing to study the wage implications of multinational enterprise (MNE) activities, pointing to the importance of controlling for both labor market imperfections and productivity spillovers from foreign to local firms. Results show that increased MNE activities increase average wages in the local economy while contributing to a larger wage dispersion between the MNE and local firms. While the results pertaining to average wages depends heavily on the frictions in the labor market, how much the wage dispersion alters also depends on the extent of productivity spillovers from the MNEs to the local firms and the complementarity between domestic and foreign capital.     

Oligopsony and the distribution of wages

We propose a simple model of wage dispersion arising from oligopsonistic competition in the labor market. Our model has workers who are equally able but who have heterogeneous preferences for non-wage characteristics, while employers have heterogeneous productivity characteristics. We completely and explicitly solve for the equilibrium wage distribution and show that “inside” and “outside” forces interact in wage determination. This interaction generates spillover effects of minimum wages in a manner which is consistent with the empirical evidence.     

Wage Inequality and Wage Mobility in Europe

Using data from the European Union Statistics on Income and Living Conditions, this paper investigates wage inequality and wage mobility in Europe. Decomposing inequality into within‐ and between‐group inequality, we analyze to what extent wage inequality and mobility can be explained by observable characteristics. Furthermore, we investigate which individual and household characteristics determine transitions within the wage distribution. We find that overall, mobility reduces wage inequality. While a large part of wage inequality is due to unobservable characteristics, the equalizing effect of mobility mainly occurs within groups. Furthermore, both personal and household characteristics play an important role for wage transitions. Finally, our findings reveal large cross‐country differences across Europe.     

中国大城市的工资高吗?——来自农村外出劳动力的收入证据

运用2008年农村外出劳动力的收入数据(RUMiCI),本文分析我国不同规模城市的工资升水是否存在,并探讨其产生的内在机制。研究发现控制住劳动者的可观测能力特征,城市规模的工资升水并不大,而进一步考虑劳动者的不可观测能力特征和选择偏差问题,大城市劳动者的收入优势不再存在,甚至可能出现收入劣势。大城市的互动效应和学习效应只部分地得到证明。论文为城市聚集的劳动力市场影响、劳动力在不同规模城市间的合理配置以及城市间劳动者收入差距的缩小等问题提供了启示。