On optimal wage indexation when shocks are real

This note studies the optimal degree of wage indexation in the presence of real shocks. Contrary to what is indicated in the literature, it is demonstrated that the optimal degree of indexation is not limited to (0;1) but may take any value in (-∞;∞).     

Partial wage indexation with real shocks

This note analyzes wage indexation from a macroeconomic viewpoint. Its purpose is to examine when wage indexation should be partial in the presence of real shocks, and it shows how the conditions for this to be the case depend on the aggregate production function, the income velocity of money, and the labor supply.     

The effects of indexation of wage contracts on macro-economic stability

The paper develops a simple analytical framework in which the shortrun affects of wage indexation on the dynamic stability of inflation can be analyzed. It consists of a unlonized labor market faced by a competitive demand. Without indexation, the wage contract is based upon the union's prediction of the price level during the period of the contract. With indexation, the same objective is achieved by contracting only once at some initial period, subject to the stipulation that the nominal wage is linked to the price level. The main result is that when the demand for money is sensitive to changes in the expected rate of inflation, nominal variables like prices and wages are more likely to yield an unstable dynamic response with wage indexation, thus endangering the monetary system.     

The incidence and intensity of wage indexation: an empirical analysis

Variables suggested by theoretical studies of indexation are considered with a view to examining their utility in the context of the decision to index (incidence) and the desired degree of indexation when escalator clauses are put into effect (intensity). The Tobit model, which can address both of these issues, suggests that most of the effects of explanatory variables on the regressand occur by modifying the incidence of indexation, not its intensity. However, the Tobit model is itself rejected in favour of separate Probit and Truncated Regression investigations of incidence and intensity, respectively. The results obtained indicate that the standard list of explanatory variables, which one thinks of in the context of the theoretical literature as dealing primarily with intensity, perform well in explaining incidence but very poorly in accounting for the non-limit observations. The latter are influenced by bargaining power proxies such as the unemployment rate and union density; a very clear trade-off between indexed and non-contingent wage adjustment can also be discerned. These results call for more theoretical attention to the distinction between indexation incidence and its intensity.     

Wage indexation and the unemployment-inflation trade-off

A variety of wage indexation schemes are analyzed in the context of a simple dynamic disequilibrium macroeconomic model. These indexation schemes include rigid money wages (zero indexation), rigid real wages (full indexation), and intermediate cases (partial indexation). In a situation of unemployment, aggregate demand increases produce the most desirable results under rigid money wages. In a situation of excess demand for labor, aggregate demand increases produce the least desirable effects under rigid money wages. Mixed indexation schemes, in which money or real wages are rigid downward, are also examined as are the effects of stop-go policies.     

浅论美国的税收指数化制度

本文分析了通货膨胀对税收制度的影响,并解析了美国的税收指教化制度,从实施指数化背景,基本的指数化方法以及指数化的效应和来自各方对美国税收指数化的评价这几个方面做了简析.并以此为基础,探讨我国的税收制度指数化改革方法的研究.     

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.     

On the role of social wage comparisons in gift-exchange experiments

This study extends a bilateral gift-exchange experiment by Clark et al. (2010). We investigate how the provision of either quantitative or qualitative information on the average wage paid in all worker-employer relationships impacts the wage set by employers and worker performance. We find that information on the average wage reduces (increases) both wage offers and effort levels in one-shot (repeated) relationships.     

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.     

UK wage underpayment: implications for the minimum wage

Dynamic monopsony suggests that, due to labour market frictions, workers will be paid below their productivity. This paper uses the stochastic frontier technique to estimate the degree of this underpayment for UK employees. It finds evidence of significant underpayment. The estimates are used to examine whether the predictions of dynamic monopsony are empirically accurate. No conclusive evidence against this theoretical framework is found. The paper also investigates whether payment according to productivity is a sufficient condition for the elimination of the ‘working poor’ problem. Due to the existence of an unemployment barrier, it finds that the minimum wage is not an effective anti-poverty policy.     

Wage indexation,migration, and unemployment

This article sets up a two-goods model with wage indexation and migrants. A dual labor market is introduced where the domestic workers receive an indexed wage while migrants receive a market-determined wage. The traded sector may be assumed to be unionized while the non-traded goods sector is non-unionized giving rise to flexible wages. This provides an example of segmentation and wage indexation. The wage indexation creates unemployment in the traded sector and the segmentation allows this unemployment to persist. The main results obtained are: sector-specific migration of labor may raise domestic welfare, while with capital accumulation such migration necessarily raises the relative price of the non-traded goods, leading to structural adjustment.     

On the interpretation of diploma wage effects estimated by regression discontinuity designs

Several recent papers employ regression discontinuity (RD) designs to estimate the causal effect of a diploma or similar credentials on wages. I build a model of knowledge acquisition, test‐taking and labour market careers that mimics the settings studied in these papers. I show that a positive RD estimate is evidence for information frictions in the labour market, but caution that the relative importance of acquired knowledge and innate talent in the production function cannot be separately identified. While a positive RD estimate does not reveal whether students study too much or too little compared to the social optimum, the rate at which RD estimates decline with labour market experience indicates the speed of employer learning, a parameter that is critical for the extent of inefficiency in study choices.     

On preserving the reservation wage property in a continuous job search model

The purpose of this article is to examine a continuous model of job search. Job offers are received randomly over time according to a renewal process. The wage offers are assumed to be positive, independent, and identically distributed random variables. There is a search cost of c monetary units per unit time. The only decision the searcher must make is when to stop searching and accept an offer. It is shown that the optimal stopping strategy which maximizes the searcher's expected net return over the class of all stopping times possesses the reservation wage property, provided that the interarrival time between two successive job offers in NBUE (new better than used in expectation).     

The indexation of wages and bonds in Brazil

This paper analyses the dynamic relationship between the degrees of indexation of wages and public bonds in Brazil. A simple model is constructed to show that both degrees of indexation are determined simultaneously. We apply cointegration techniques and estimate error-correction representations to assess the temporal causality between them. Our results provide empirical support for the existence of simultaneity in the degrees of indexation in Brazil in the period 1980–93.     

Evidence on the effects of inflation on price dispersion under indexation

Distortionary effects of inflation on relative prices are the main argument for inflation stabilization in macro models with sticky prices. Under indexation of non-optimized prices, those models imply a nonlinear and dynamic impact of inflation on the cross-sectional price dispersion (relative price or inflation variability, RPV). Using US sectoral price data, we estimate such a relationship between inflation and RPV, also taking into account the endogeneity of inflation by using two- and three-stage least-squares and GMM techniques, which turns out to be relevant. We find an effect of (expected) inflation on RPV, and our results indicate that average (??trend??) inflation is important for the RPV?Cinflation relationship. Lagged inflation matters for indexation in the CPI data, but is not important empirically in the PPI data.     

论继续坚持经济适用房建设

越来越多的批评指向经济适用房政策,同时,房价的不断高涨,吞噬着购房者的可支配收入,很多人买不起房,居民幸福指数的提高受到了高房价的阻碍。经济适用房制度提供了一种解决问题的途径。然而一项制度的实施需要在执行过程中不断调整和完善,最终形成成熟的制度来实现制度制定者的目标。众多的批评不应成为取消经济适用房政策的借口,而应该是完善该政策的动力。     

On employment,wage and risk sharing in labor contracts

This note studies risk sharing in labor contracts when the price of the firm's product is uncertain. It demonstrates that if the firm adjusts employment at its own discretion, then the wage should not in general be constant, but should be constant only if the production function is of the Cobb-Douglas type.     

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.