Anti-inflation taxation policy: An alternative to wage and price controls

One reason the postwar economy has become increasingly inflation prone is that oligopolistic firms tend to act as if demand is completely inelastic for price increases no greater than the expected rate of inflation. Hence, in the absence of mandatory price controls, there is no effective disincentive at the individual firm level to price increases of this magnitude. The policy proposed below provides such a disincentive by linking each firm's tax rate to the increase in its revenues attributable to price changes.     

The macroeconomic impact of the nixon wage and price controls: A general equilibrium approach

This paper empirically estimates the effects of the Nixon Wage and Price Controls using a general equilibrium macroeconomic model which allows for interaction of prices, wages, aggregate demand, real output, and interest rates. Results confirm earlier findings: the controls had only brief, downward effects on measured inflation which were reversed by the end of 1973. Even before the end of 1973, controls were having adverse effects on prices, output and interest rates. Furthermore, there is evidence that controls, coupled with expansive monetary policy, can lead to economic conditions that are more serious than those existing prior to the imposition of the controls.     

The minimum wage, employment, and the AS-IF methodology: A forecasting approach to evaluating the minimum wage

Out-of-sample employment forecasts for 33 U.S. industries which are likely to be sensitive to the federal minimum wage are, more often than not, more accurate when information about the minimum wage is not taken into account. This is true even in instances where this information improves wage forecasts. When employment forecasts conditional on the minimum wage are better, the improvement is typically small. These results are invariant to the number of workers previously making less than the new minimum wage, and to the value of the minimum wage relative to industry average wages. First version received: August 1999/Final version received: July 2000     

Spikes and spill-overs: The impact of the national minimum wage on the wage distribution in a low-wage sector

The UK National Minimum Wage (NMW) has had a minimal impact on UK wage inequality because it has been set at a modest level and because aggregate evidence suggests very small spill-over effects. But the small spill-over effects might be because of the small numbers of workers affected and widespread anticipation of the introduction of the NMW might make the impact effect appear very small. This paper investigates these issues using data collected from care homes where the NMW affected 40% of workers. But we still find no evidence of large spill-over effects and very small amounts of anticipation of the NMW.     

反补贴:中国出口贸易的潜在威胁

反补贴连同反倾销、保障措施一起,被视为世贸组织允许的对本国产业实行保护的合法贸易救济措施。目前,反补贴调查虽然远不及反倾销调查在世界范围内的影响大,但其依然能对被调查国的出口贸易造成较大伤害,严重影响涉案企业的竞争力。2004年以来,我国外贸出口一路高歌猛进的同时,与贸易伙伴的贸易摩擦也不断增加,国外纷纷加大了针对我国的贸易保护措施的力度。尤其值得注意的是,除了使用反倾销和保障措施外,有些国家开始针对我国产品进行反补贴调查措施,这种现象表明反补贴对中国出口产品的潜在威胁已经转变为现实危害。因此,寻求取代出口补…     

The Vietnam reforms,change in wage inequality and the role of the minimum wage

The Vietnam ‘renovation’ reforms were implemented during the 1990s, but their full effect was only felt several years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. Using a variety of approaches (traditional measures of inequality, comparison of density functions, decomposition of the change in real wage by sector as well as a detailed decomposition of the change in the Gini), we present a consistent picture: contrary to what one might have expected given the nature of the reforms, inequality declined sharply in the private sector (but not in the state sector). This study links these developments to the policy of aggressively increasing the minimum wage over the past several years, differences in implementation by sector as well as variation in the over‐time changes in minimum wage.     

The evolution of the returns to education and wage differentials in Brazil: a quantile approach

This paper uses quantile regression techniques to analyze the returns to education across the conditional distribution of wages from individuals separated both by gender and skin color, while accounting for the endogeneity of the education decisions. Using data from the Brazilian households survey (PNAD) for the years of 1988 and 1996, the results indicate that the returns to education are significantly heterogeneous across the distribution of earnings, as well as the wage gap between the groups, according to gender and skin color. Moreover, there has been a significant improvement in the wage differentials between the groups across the years.     

The role of unemployment in wage determination: further evidence on the wage curve from Turkey

This paper presents an empirical estimation of the correlation between wages and regional unemployment rates in Turkey, more specifically it explores the role of regional unemployment rates in wage determination. The analysis builds upon a series of recent empirical studies on the wage-unemployment relationship, now commonly known as ‘the wage curve’, a downward sloping curve in wage-unemployment space. The existing studies are for most part in advanced market economies, while this paper presents one of the few attempts at a wage curve analysis within the context of a developing market economy. A cross-sectional estimation of micro level individual wage data for the Turkish labour market in 1994, suggest a statistically significant negative correlation between wages and regional unemployment rates. Separate regressions for men and women, however, show a wage curve to exist only in the male labour market. The study also presents the results on other variables of wage determination such as returns to schooling, returns to age, job tenure, gender, industrial and occupational affiliation of the worker, economic sector and union status.     

Coordination versus flexibility in wage formation: a focus on the nominal wage impact of productivity in Germany,Greece, Ireland,Portugal, Spain and the United States

Wage coordination between countries of the European Monetary Union (EMU) aims at aligning nominal wage growth with labour productivity growth at the national level. We analyse the developments in Germany, the EMU’s periphery countries Greece, Ireland, Portugal and Spain along with the United States over the period 1980 to 2010. Apart from the contribution of productivity to nominal wages, we take into account the contributions of prices, unemployment, replacement rates and taxes by means of an econometrically estimated nonlinear equation resulting from a wage bargaining model. We further study the downward rigidities of nominal wages. The findings show that in past times of low productivity, price inflation and reductions in unemployment still put significant upward pressure on nominal wage growth. The periphery countries are far from aligning nominal wage growth with productivity growth. German productivity is a major wage determinant, but surely not the only one. Within the context of a free bargaining process between employers and labour unions, policy-makers can effectively use the replacement rate to steer the nominal wages outcome.     

Employment effects of introducing a minimum wage: The case of Germany

Income inequality has been a major concern of economic policy makers for several years. Can minimum wages help to mitigate inequality? In 2015, the German government introduced a nationwide statutory minimum wage to reduce income inequality by improving the labour income of low-wage employees. However, the employment effects of wage increases depend on time and region specific conditions and, hence, they cannot be known in advance. Because negative employment effects may offset the income gains for low-wage employees, it is important to evaluate minimum-wage policies empirically. We estimate the employment effects of the German minimum-wage introduction using panel regressions on the state-industry-level. We find a robust negative effect of the minimum wage on marginal and a robust positive effect on regular employment. In terms of the number of jobs, our results imply a negative overall effect. Hence, low-wage employees who are still employed are better off at the expense of those who have lost their jobs due to the minimum wage.     

The wage gap between Francophones and Anglophones: a Canadian perspective, 1970–2000

Abstract. The wage gap between Francophone and Anglophone men from 1970 and 2000 fell by 25 percentage points within Quebec, but only by 10 points Canada‐wide, largely because the wages of Quebec Anglophones fell by 15 points relative to other Canadian Anglophones. Accordingly, the Canadian measure of the Francophone gap better reflects the changing welfare of Francophones than the Quebec measure. Over half of the reduction in the Canadian Francophone wage gap is explained by rising Francophone education levels. In Quebec, the declining number and relative wages of Anglophone workers is best explained by a falling demand for English‐speaking labour.     

The effect of minimum wage on poverty

To the best of my knowledge, the minimum wage's influence on poverty in Russia has never been investigated. Russian data provide a unique opportunity for studying the effects of the minimum wage on poverty, given significant increases in the minimum wage in recent years, almost complete coverage, and a high representation of full-time workers in poor households. This article examines the effect of the minimum wage on the incidence of poverty and the transitions into and out of poverty in Russia using data from the Russia Longitudinal Monitoring Survey of Higher School of Economics (RLMS-HSE) from 2006 to 2011. The results indicate that the minimum wage in Russia had moderate poverty-reducing effects.     

Unions and wage inequality: The roles of gender,skill and public sector employment

We examine the changing relationship between unionization and wage inequality in Canada and the United States. Our study is motivated by profound recent changes in the composition of the unionized workforce. Historically, union jobs were concentrated among low-skilled men in private sector industries. With the steady decline in private sector unionization and rising influence in the public sector, half of unionized workers are now in the public sector. Accompanying these changes was a remarkable rise in the share of women among unionized workers. Currently, approximately half of unionized employees in North America are women. While early studies of unions and inequality focused on males, recent studies find that unions reduce wage inequality among men but not among women. In both countries, we find striking differences between the private and public sectors in the effects of unionization on wage inequality. At present, unions reduce economy-wide wage inequality by less than 10%. However, union impacts on wage inequality are much larger in the public sector. Once we disaggregate by sector, the effects of unions on male and female wage inequality no longer differ. The key differences in union impacts are between the public and private sectors—not between males and females.     

Downsizing, wage inequality and welfare in a developing economy

This paper focuses on the cost cutting effects of firm downsizing in a developing economy. Using a dualistic production structure to depict a developing economy, the impacts of downsizing on wage inequality and social welfare are examined. Downsizing is revealed to not only narrow the wage gap between skilled and unskilled labor but also to raise the level of manufactured output and reduce the unemployment ratio in the urban sector. These effects improve the social welfare of the economy.     

Foreign capital inflow,skilled–unskilled wage inequality and unemployment of unskilled labour in a fair wage model

This paper has developed a three-sector general equilibrium framework that explains unemployment of both skilled and unskilled labour. Unemployment of unskilled labour is of the Harris–Todaro (1970) type while unemployment of skilled labour is caused due to the validity of the FWH in the high-skill sector. There are two types of capital one of which is specific to the primary export sector while the other moves freely among the different sectors. Inflows of foreign capital of either type unambiguously improve the economic conditions of the unskilled working class. However, the effects on the skilled–unskilled wage inequality and the extent of unemployment of both types of labour crucially hinge on the properties implied by the efficiency function of the skilled workers.     

The returns to education and wage penalty from overeducation: New evidence from Vietnam

This study intends to estimate the rate of returns to education in Vietnam, the distributive effects of education on wages, and the wage penalty from the incidence of overeducation in the Vietnamese labor market during 2004–2016. This study employs a pseudo-panel approach to address omitted variables bias and the unconditional quantile regression to identify the heterogeneity of returns to education across the income distribution. Our main finding indicates that the estimated rate of returns to education in Vietnam is approximately 6.5%, showing a downward bias from previous estimates. The returns vary across wage distributions, where a lower rate of return is observed in lower quantiles and a higher rate among those individuals at the higher quantiles. The returns to education have declined since 2008, confirming the oversupply of highly educated workers in the Vietnamese labor market with an estimated wage penalty of 17%. Government assistance measures are needed to reduce the overeducation and the wage penalty issues in the Vietnamese labor market.     

The impact of education expansion on wage inequality

The findings on education expansion and income inequality have important implications for policymakers to implement effective policies to reduce income inequality. This study attempts to explain how education expansion affects income inequality by education distribution and the rate of return to education. We decompose the effect of education expansion on wage gaps into price effect and structure effect. We compare the income inequality from 2002 to 2013 using the Chinese Household Income Project (CHIP) 2002 and CHIP2013 survey data and employ FFL decomposition method. Our findings suggest that income inequality increased in 2013 and that income inequality among the high-income groups increased even more significantly. The structure effect of education expansion on income inequality is negative, when average education increases one year, the income gap between 80th and 20th will decrease 1.2%, in other words, education expansion decreases income inequality by allowing a wide range of individuals to attend college. However, this effect is offset by the price effect, which is positive and much more significant in magnitude. One extra year of average education will increase income gap by 29% which means that the demand for high-skilled labour is increasing faster than the supply and thus lead to the increasing premium for higher education return.     

Minimum wage,on-the-job search and employment: On the sectoral and aggregate equilibrium effect of the mandatory minimum wage

We study the impact of a minimum wage in a segmented labor market in which workers are at different stages of their careers. At the end of a learning-by-doing period, workers paid the minimum wage quit “bad jobs” for better-paying “good jobs”, following an on-the-job search process with endogenous search intensity. A rise in the minimum wage reduces “bad jobs” creation and prompts workers to keep their “bad jobs” by reducing on-the-job search intensity. The ambiguous impact on unqualified employment replicates and explains the findings of several empirical studies. However, a minimum wage rise reduces overall employment and output.