Spillover effects of a minimum wage increase – evidence from Slovenia

This article Analysis the effects of a large increase in Slovenia’s minimum wage in March 2010 on the wage distribution using an administrative matched employer–employee panel database. We find that the minimum wage hike increased the concentration of low-paid workers, creating a much more pronounced spike at the minimum, particularly in market services, and for the young, the least educated and those with the least work experience. Our analysis also shows that the March 2010 minimum wage increase also produced sizeable spillover effects. The spillover effects were higher among young and older workers, especially for wage levels near the new minimum wage. The results are based on a difference-in-differences approach comparing changes in wages during the control and treatment periods as experienced by workers in the wage group immediately above the level of the new minimum wage and workers in wage groups higher up in the wage distribution.     

Do Immigrants Affect Firm‐Specific Wages?*

We propose and test a novel effect of immigration on wages. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, immigrants might also affect wage formation at the most disaggregate level – the workplace. Using linked employer?employee data, we find that an increased use of low‐skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables.     

Registered nurses: the impact of wages on labour force participation and hours worked – are wages an effective mechanism for addressing RN shortages with evidence from 1960 to 2008?

Registered nurses (RNs) are critical producers and coordinators of patient care in acute and non-acute settings (Needleman et al. 2011). The Affordable Care Act coupled with an ageing population, are increasing demand for health care and, in turn, RNs. Numbering 3 million, RNs comprise the largest professional occupation in health care. Therefore, the labour force participation and hours worked are of keen interest to stakeholders and policymakers. Rising demand may exacerbate nursing shortages and have important effects on costs. We estimate the impact of wages on participation and hours worked as a possible policy tool to increase nursing supply. In 2008, the RN wage had a positive and significant effect on participation and a small positive but only marginally significant effect on hours worked given participation. The latter elasticity for married females (single females) was 0.11 (0.33). Therefore, the elasticity of hours worked with respect to the nurse wage is and unlikely to have an important effect on the participation rates or hours worked of currently trained female RNs. Consequently, wage increases are unlikely to be an effective policy to increase the labour supply among the currently licensed RNs and will not relieve any short-term nursing shortage.     

关于中国实行最低工资保障制度的思考

最低工资制度是否有效一直是学术界一个备受争议的问题。我国现阶段实行最低工资制度在微观层面缓解了劳资双方矛盾,保护了劳动者权益,对宏观经济层面也有正效应。针对当前的制度因素,应从立法、加强监管、加大财政支出等方面完善最低工资保障制度,以实现社会和谐发展。     

Lower Tax Progression, Longer Hours and Higher Wages

The impact of tax reforms that decrease income tax progression is analysed in an equilibrium search model with wage bargaining and endogenous individual working hours. Working hours are either bargained together with the hourly wage (case 1) or determined solely by workers after bargaining over the wage (case 2). In both cases reducing tax progression increases working hours of employed and, more interestingly, unambiguously increases wages and unemployment. Wages and unemployment rise more and working hours and production less in case 1 compared to case 2, probably making case 2 countries best suited for such tax reforms.
JEL Classification : H 24; J 22; J 41     

Book Reviews

Books reviewed:
Erik Berglöf and Romesh Vaitilingam, Stuck in Transit: Rethinking Russian Economic Reform
Mitko Dimitrov, Wladimir Andreff and László Csaba, Economies in transition and the variety of capitalisms: features, changes, convergence
Vincent Edwards, Gennady Polonsky & Avgust Polonsky, The Russian Province after Communism. Enterprise Continuity and Change
Christian von Hirschhausen and Jürgen Bitzer, The Globalization of Industry and Innovation in Eastern Europe
Mario I. Blejer & Marko Skreb, Financial Sector Transformation. Lessons from Economies in Transition     

Gender Discrimination in Central Europe during the Systemic Transition

In this paper we measure the extent of gender discrimination on Central European labour markets (Czech, Hungarian, Polish and Slovak) during the first years of transition. Using Oaxaca's method and Social Stratification Survey data for 1993, we estimate that discrimination explains about half of the wage gap. Gender discrimination is significantly weaker in Hungary and stronger in Slovakia and Poland, where a large part of discrimination is tied to segregation. More fundamentally, we try to determine the nature of this discrimination; we conclude that discrimination is mainly statistical (both group and individual), but also deliberate, and the labour market is partly inefficient.     

The effect of shocks to labour market flows on unemployment and participation rates

This article presents an analysis of labour market dynamics, in particular of flows in the labour market and how they interact and affect the evolution of unemployment rates and participation rates, the two main indicators of labour market performance. Our analysis has two special features. First, apart from the two labour market states – employment and unemployment – we consider a third state – out of the labour force. Second, we study net rather than gross flows, where net refers to the balance of flows between any two labour market states. Distinguishing a third state is important because the labour market flows to and from that state are quantitatively important. Focusing on net flows simplifies the complexity of interactions between the flows and allows us to perform a dynamic analysis in a structural vector-autoregression framework. We find that a shock to the net flow from unemployment to employment drives the unemployment rate and the participation rate in opposite directions while a shock to the net flow from not in the labour force to unemployment drives the rates in the same direction.     

Active labour market policies in Germany: do regional labour markets benefit?

This article examines on a regional level whether active labour market policies (ALMP) improve the matching process. To take the fact of heterogeneous search effectiveness during programme participation into account, we distinguish between current and former programme participants. Our findings based on a regional augmented matching function show that higher search effectiveness due to ALMP is not outweighed by indirect effects on nonparticipants. The total number of matches in a region increases with a higher share of former programme participants among the jobseekers. However, these effects largely differ between programme types.

Abbreviation OECD (Organisation for Economic Co-operation and Development)ALMP (active labour market policy)