Export Activity,Firm Size and Wage Structure: Evidence from Taiwanese Manufacturing Firms*

This study adopts a semiparametric smooth coefficient model to evaluate the export–wage premiums, firm size–wage premiums, and the wage gap between skilled and unskilled labor. Particular focus is placed upon widespread evidence indicating that pay levels in ‘large’ and ‘export‐oriented’ firms are higher than in their ‘small’ and ‘domestic‐oriented’ counterparts. Applying the firm‐level data for Taiwanese manufacturing firms, we find a positive export–wage premium for skilled workers and a negative export–wage premium for unskilled workers. The hypothesis of a constant export premium across firm size is rejected. While most of the export–wage premiums for skilled labor can be attributed to the small and medium firms, the large exporting firms have a significant adverse effect on wages for unskilled labor. Moreover, our results suggest that the firm size–wage premiums for skilled workers are larger than those for unskilled workers. The wage gap between the two skill groups is also sensitive to size categories.     

Inducing political action by workers

A firm aiming to influence a governmental policy may benefit from political action by its stakeholders, such as workers. This article studies the behavior of such a firm, showing that workers will have a greater incentive to engage in costly political activity against the governmental policy the greater their number and the higher the wage. The firm may, therefore, profit from paying above‐market wages and from hiring what might appear to be an inefficiently large number of workers. And because unions may overcome free‐rider problems of uncoordinated political effort, a firm may favor unionization, or be less opposed to unionization than it would otherwise be. The results of this article can also explain why firms may little reduce wages in a recession, and why the higher wages paid by unionized firms do not reduce survival rates of these firms.     

Trends in worker displacement penalties in Japan: 1991–2005

We examine the period from 1991 to 2005 to document the effects of a changing Japanese labor market on the consequences of job change for workers, focusing on the change in the wages between initial and subsequent employment. During this period, job changes caused by separations from the initial job that were involuntary from the workers point of view increased and the wage losses from job change grew. As well, while age-earnings profiles for continuously employed career workers remained the same in 1993 and 2003, the age-earnings profiles of newly hired workers grew flatter during the period. Hence, an erosion in the earnings of newly hired workers relative to incumbent workers occurred and the effect was to increase the job change wage losses for older workers. Thus, while the losses from changing jobs grew in general, they also grew more age-related over the sample period.     

INSTITUTIONAL WAGE EFFECTS: REVISITING UNION AND BARGAINING COUNCIL WAGE PREMIA IN SOUTH AFRICA

The literature on the union wage gap in South Africa is extensive, spanning a range of data sets and methodologies. There is, however, little consensus on the appropriate method to correct for the endogeneity of union membership or the size of the union wage gap. Furthermore, there are very few studies on the bargaining council wage premium in South Africa because of lack of data on the coverage of employees under these agreements. Our study, using 2005 Labour Force Survey data, firstly reconsiders the union wage gap controlling for both firm‐level and job characteristics. When correcting for the endogeneity of union status through a two‐stage selection model and including firm size, type of employment, and non‐wage benefits, we find a much lower union wage premium for African workers in the formal sector than premiums reported in some previous studies. Secondly, our study estimates bargaining council wage premiums for the private and public sectors. We find that extension procedures are present in both private and public bargaining council systems but that unions negotiate for additional gains for their members at the plant level. Furthermore, there is some evidence that unions negotiate for awards for their members in the private sector irrespective of bargaining council coverage.     

WAGE BARGAINING, HOLDOUT, AND INFLATION

In many countries it is customary that production continuesunder the terms of the old contract during wage negotiations(holdout), unless a work stoppage is initiated This paper analysesa model where the workers deliberately work less efficientlyduring a holdout, while the firm reduces bonus payments If aholdout is more costly to the firm than to the workers, thewage bargaining will result in a nominal wage increase. Themodel implies a Phillips curve that consists of two verticalparts, one with high inflation and low unemployment and onewith low inflation and high unemployment.     

Labour market segmentation: Evidence from Cyprus

Labour market segmentation (LMS) is thought to generate poverty and inequality and its existence has been often documented by estimated earnings functions identified by such endogenous income-determining factors as occupation, firm size and sector. Past research is open to the criticism that it ignores the extent to which workers are able to gain access to the high wage segments of the labour market. The paper investigates various dimensions of LMS in Cyprus and shows that the market is segmented by sex, an exogenous factor, as well as by the endogenous factors of public/private sectors of employment and firm size. Evidence is presented to show how the Cyprus labour market operates to erect barriers which serve to restrict access of workers to the high wage segments.     

The minimum wage,exports, and firm performance: Evidence from Indonesia

This paper examines the interrelationship between changes in the provincial minimum wage, firms’ export behavior, and firms’ performance in Indonesia. In this regard, we apply a two-stage least squares regression analysis to detailed firm-level data of manufacturing enterprises during 2002–2014. We find that an increase in the minimum wage is associated with a decrease in a firm’s employment and productivity, but increase in its probability of exporting and markup. We also use the 2012 minimum wage reform in Indonesia to conduct a difference-in-difference analysis to further mitigate the potential endogeneity of minimum wage regulation. Our findings are generally robust to alternative estimation methods. Moreover, quantile regression results indicate that the average wage, firm size, and the education level of workers also affect the predictions. Above all, this study suggests that Indonesian exports and the country’s comparative advantage in international markets are not negligibly affected by higher labor costs caused by the growth in the minimum wage.     

The Effect of Immigration on Unskilled Native Workers: Evidence from a Natural Experiment

This study exploits the natural experiment, provided by the start of the second intifada, to measure the effect of immigration on the wage and employment of unskilled native workers. It finds that immigration has no effect on the wage or employment of unskilled Jewish workers. The wage and employment of the least‐skilled Israeli Arab workers (with zero to five years of schooling) are adversely affected by immigration. The slightly more skilled Arab workers (with six to 11 years of schooling), in contrast, are positively affected by immigration, suggesting a complementarity effect with this group. Different explanations are proposed.     

Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand

In recent years, Thailand has experienced the emergence of “overeducated” workers as the supply of university graduates in Thailand has outpaced growth in high‐skilled employment opportunities. Using the 2007 to 2009 Thai Labor Force Survey, this paper quantifies the incidence of overeducation and estimates overeducation wage penalties among male university graduates. The results show that the incidence of overeducation is greatest among younger cohorts. Quantile wage regression results suggest that overeducation wage penalties for older workers capture the impact of unobserved low ability on wages. In contrast, persistent wage penalties of 11–26% across the wage/ability distributions for younger workers are consistent with structural imbalances in the Thai labor market. These imbalances make it difficult for university graduates to find jobs commensurate with their level of formal education and to achieve their full earning power. The wage penalties are especially large for new entrants into the labor market.     

Eastern European trade and the Austrian labour market

Eastern European Trade and the Austrian Labour Market. — Recent years have seen a major break in trade relations between Western and Eastern European countries. Austria experienced a large bilateral trade creation with these countries. In this paper, the authors take a closer look at the impact this trade growth had on the Austrian labour market. To differentiate as far as possible between different segments of the labour market, they concentrate on unemployment experience and wage growth for a panel of individual workers in Austrian industry. The results show rather small employment effects, the impact on wage growth is more pronounced with interesting modifications for mobile and immobile workers.     

Interpreting Wage Gaps of Disabled Men: The Roles of Productivity and of Discrimination

Using the UK Labour Force Survey, we study wage gaps for disabled men after the introduction of the Disability Discrimination Act. We estimate wage gaps at the mean and at different quantiles of the wage distribution and decompose them into a part explained by differences in workers' and job characteristics, a part that can be ascribed to health‐related reduced productivity, and a residual part. The large original wage gaps reduce substantially when we control for differences in education and occupation, although significant residuals remain. However, when we isolate productivity differences between disabled and nondisabled workers, the residual wage gap becomes insignificant in most cases.     

EVALUATING THE GENERAL EQUILIBRIUM EFFECTS OF A WAGE SUBSIDY SCHEME FOR SOUTH AFRICA

Unemployment among semi‐ and unskilled labour has reached severe proportions (over 50%) and threatens the political and economic stability of the South African economy. In this paper a computable general equilibrium (CGE) model of the South African economy is used to assess the effectiveness of a wage subsidy in raising employment of semi‐ and unskilled workers. We find that employment of semi‐ and unskilled workers can be raised quite significantly. Further, the wage subsidy schemes compares favourably with alternative welfare grant schemes in terms of employment growth. However, the results are sensitive to the targeting of sectors and the substitutability between labour of different skill levels.     

Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training

While foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers, the causes of this remain unresolved. In a two-period bargaining framework we show that if training is more productive and specific in foreign firms, foreign firm workers will have a steeper wage profile and thus acquire a premium over time. Using a rich employer-employee matched data set we verify that the foreign wage premium is only acquired by workers over time spent in the firm and only by those that receive on-the-job training, thus providing empirical support for a firm-specific human capital acquisition explanation. JEL no. F23, J24     

The Effect of the Tipped Minimum Wage on Employees in the U.S. Restaurant Industry

According to federal law in 2013, employers can take a credit of up to $5.12 for tips received by workers in satisfying the minimum‐wage requirement of $7.25. This article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full‐service restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.     

外资所有权与工资升水——来自中国制造业的证据

很多研究发现外商投资企业比内资企业对同等情况下的工人所付工资要高,本文利用中国省际制造业分大类数据对此进行了实证研究,研究的结果表明,在控制了各种对工资影响因素(产业、地区、企业、工人素质)后,外资所有权工资升水显著存在,大约为10%。同时还对平均薪酬进行了研究,外资所有权薪酬升水大约为7%。此外,本文还得出了其他一些有意义的结论。     

Wage inequality and firm performance: Professional basketball's natural experiment

The purpose of this inquiry is to utilize a natural experiment from professional basketball to examine how wage inequality impacts the productivity of the firm. The literature suggests that wage inequality may promote firm productivity if higher wages are necessary to limit the damage potential of certain workers. In contrast, other writers have trumpeted the productivity gains from worker cooperation and thus, argued that wage disparity lowers firm output. During the 1990s, the National Basketball Association experienced dramatic increases in the level of wage inequality. The empirical evidence reported here supports a third possibility. Specifically, wage inequality and firm productivity are not related.     

Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market

An urban labour market is in the process of being formed in China. The objective of this paper is to analyse the stage that it has reached. A 1999 household survey is used to investigate whether the labour market has three tiers comprised of recently retrenched and re-employed urban workers, non-retrenched urban workers, and rural–urban migrants. It tests whether wage levels and structures differ across these categories of worker. Panel data are used to model the evolution of the wage structure and, specifically, the impact of retrenchment and re-employment. The results indicate that non-retrenched urban workers enjoy a wage premium, although migrants receive similar returns to education. Re-employed workers receive no return to education and appear to have lost out on the wage rises enjoyed by the non-retrenched. There is evidence to suggest that the urban labour market is segmented into these categories, which differ in their openness to market competition. The urban labour market has a long way to go before it is fully competitive.     

Firm specific human capital and unemployment in a growing economy

This study analyzes how the intensive use of firm specific human capital in firms affects the unemployment rate. For this purpose, I introduce into an equilibrium search model the possibility that workers quit their jobs. A worker changes his job when a firm that newly enters into the market offers a higher wage than his current wage. If firm specific human capital is important, it is difficult for a worker to quit his job, and, in consequence, the number of workers who quit their jobs is small. Thus, the unemployment rate is low. If the speed of technology obsolescence is high, the unemployment rate is high.     

How do firms respond to minimum wage regulation in China? Evidence from Chinese private firms

To study how firms respond to minimum wage regulation in China, this paper empirically explores a number of dimensions along which firms adjust in response to minimum wage differences, using three waves of a national survey of Chinese private firms. Consistent with the predictions of economic theory, we find that private firms in China respond to minimum wage increases by cutting various fringe benefits such as pension and insurance, and by laying off low-skilled workers and short-term workers. Despite these adjustments, firms cannot fully mitigate the detrimental effects on firm profitability when faced with adverse demand shocks because of the wage rigidity introduced by minimum wage regulation. These findings highlight the unintended consequences of minimum wage regulation on the private sector in China.     

Wage differentials between urban and rural-urban migrant workers in China

Since the end of the 1980s, the number of migrants working in the urban labor market has increased dramatically. However, migrant workers are treated differently from urban workers. In this paper we examine the labor market discrimination against rural migrants from the point of view of wage differentials using CHIP-2007 data. We apply Jann pooled method to deal with index number problem and use Heckman two step model to correct selection problem when decomposing the wage gap. The decomposition results show that a significant difference in wage gains persists between the two groups as late as 2007. In 2007 migrants only earned 49% of urban workers' income and 17% of the wage gap cannot be explained by observed factors. In detail, differences in educational attainment, work experience and distribution across industry, occupation, and ownership of enterprises account for most of the explained wage gap.