Productivity and long-term growth potential in the UK economy 1924–1968

This paper examines the long-term structural determinants of labour productivity for the UK economy using a panel data set from 1924 to 1968. Trade union, product market competition and human capital explanations are embedded within the model and compared. Labour quality, or human capital, is found to be the most important of the explanations considered.     

Gender gap,capital accumulation and the demographic transition

This paper focuses on explaining the demographic transition and some of the broad patterns that are associated with it. We present an endogenous growth model that incorporates altruism and son preference within the family as well as gender wage gap and gender wage discrimination in the labour market. We show that with the accumulation of physical capital and human capital, the output share of mental labour increases and the gender wage gap narrows. In the early stages of economic development, gender discrimination is becoming prevalent and the substitution effect of capital accumulation, which raises the cost of child rearing, is dominated by the income effect, so the growth rate of population increases with income. When the degree of gender wage discrimination starts to decline, the increased cost of child rearing induces families to invest more in the human capital of children and the growth rate of the population falls. The quantitative analysis shows that gender wage discrimination is indeed an important contributor to the demographic transition.     

The gender gap in early-career wage growth

In the UK the gender pay gap on entry to the labour market is approximately zero but ten years after labour market entry, there is a gender wage gap of almost 25 log points. This article explores the reason for this gender gap in early-career wage growth, considering three main hypotheses – human capital, job-shopping and 'psychological' theories. Human capital factors can explain about 11 log points, job-shopping about 1.5 log points and the psychological theories up to 4.5 log points depending on the specification. But a substantial unexplained gap remains: women who have continuous full-time employment, have had no children and express no desire to have them earn about 8 log points less than equivalent men after 10 years in the labour market.     

Determinants of labour productivity: Comparison between developing and developed countries of Asia‐Pacific

The current study investigates the trends in labour productivity of the major developing and developed economies of the Asia‐Pacific region and examines its determinants over the period 1980–2014. The study analyses capital deepening, human capital, technology, share of agriculture in GDP, financial development, institutional quality, inflation as well as macroeconomic variables as potential determinants of productivity, and identifies the differences in the impact of these factors on the productivity of developing and developed countries. Using panel cointegration and group‐mean fully modified ordinary least squares estimation, the study finds that capital deepening, human capital, technology, institutional quality and macroeconomic variables (i.e. government size and openness) are significant determinants of labour productivity of both developing and developed economies of the Asia‐Pacific region. The study further finds that while both trade openness and foreign direct investment affect productivity of developing economies positively, only trade openness has a positive and significant impact on the productivity of developed economies. The share of agriculture in GDP affects the labour productivity of developing Asia‐Pacific economies significantly but not that of developed economies. Furthermore, capital deepening has a much higher impact on the productivity of developing Asia‐Pacific economies than that of developed economies.     

An empirical test of the segmented labour market theory for the Netherlands

In this paper an orthodox segmented labour market theory (SLM theory)is tested by means of the data provided by the research project, Quality of Labour 1977 (Zanders et al., 1977). The segmented labour market theory is restricted to the dual labour market approach, although a major extension is taken into account (a primary segment consisting of two tiers). The segments are created by making use of an objectivemethod. Nine quality characteristics of jobs are taken into account. A number of logit estimations are carried out to test the competing theories of human capital and the segmented labour market. The conclusion is that although discrimination in the labour market appears to exist, the SLM theory has to be rejected.     

Labour market characteristics and profitability: An econometric analysis of Hugarian exporting firms, 1986-951

This paper follows through an aspect of microeconomic restructuring in Hungary during the transition period. This restructuring brought about substantial changes in the behaviour of all economic agents. Our study combines labour market and corporate financial information to explore the effect of the quality of labour employed on the profitability of the firm. The quality of labour is measured as that portion of wage differentials that cannot be explained by a standard human capital model. The profitability of Hungarian exporting firms can be explained by economic factors during transition. In addition the quality of labour, export share, wage and bank costs, payables, receivables, foreign ownership, inventories, amortization and equity are all significant explanatory variables.     

Economic Progress in Australia: An Analysis of Occupational Mobility*

Educational attainment and gender are firmly established in the labour economics literature as key determinants of an individual's economic standing at a given point in time. The concern of the present paper is to determine the impact of these characteristics on economic progress over time. A multinomial logit approach to estimating occupational attainment at various career points is employed. The use of this method of analysis in conjunction with the intertemporal linking of occupations enables us to provide a number of important insights into economic progress in the Australian labour market. Additional years of education are shown to increase the probability of employment in better jobs at the time of labour market entry and also to enhance career mobility. Analysis of male-female differences highlights the sizeable gap between the occupational distributions of these groups. Part of this difference may reflect inequality of opportunity between males and females in the Australian labour market.     

Labour market institutions,crisis and gender earnings gap in Eastern Europe

We study gender pay inequality in ten Central and Eastern EU countries before (2007) and during the economic crisis (2009) using quantile regression methods. The analysis reveals remarkable cross‐country diversity in levels and patterns of the gender gap along the earnings distribution; for the majority of the countries the crisis is associated with declining male/female disparities. We address the role played by labour market institutions in shaping the observed gender pay gap levels and patterns. Labour market deregulation increases gender inequality at the middle and at the top of the pay distribution, but reduces disparities at the bottom. Higher union density and wage coordination reduce the pay gap, with stronger equalizing effects on better‐paid jobs. The crisis seems to weaken the already poor role of institutions in the low‐pay sector.     

Investment in human capital and gender wage differences: evidence from the NLSY

This paper uses data from the National Longitudinal Survey of Youth (NLSY) to investigate gender differences in returns to various forms of human capital. Since the NLSY includes relatively detailed information regarding on- and off-the-job training, we place special emphasis on measuring gender differences in the incidence of and returns to formal post-school training. Also considered is the role of nonhuman capital factors such as industry and occupation in explaining the wage gap. It is found that about 60% of the gender wage gap in the sample is explained by mean differences in individual characteristics and market circumstances. This suggests a smaller role for discrimination in explaining the wage gap than previous research has found. The research indicates that training does not affect the gender wage gap. Also it is found that there is no statistically significant difference in the rate of return to other measures of human capital for women versus men. Our research suggests that the largest factors contributing to the wage gap are differences in the stocks of human capital for men and women, and differences in the distributions of men and women across industries and occupations.     

The effects of structural change and economic liberalisation on gender wage differentials in South Korea and Taiwan

This paper investigates the sources of divergent trends in genderwage differentials in two important newly industrialised economies(NIEs), South Korean and Taiwan. As these economies have enteredthe 'post-industrial' phase of development, gender wage differentialsin Taiwan's manufacturing sector have widened, while in Koreathey have narrowed. Decomposition analysis is used to broadlyidentify sources of change in gender wage differentials. Multivariateregression analysis is relied on to differentiate the impacton the gender wage gap of (1) macro-levels policies, (2) institutionalfactors, and (3) shifts in labour demand and supply. In additionto the predictable effects of several standard supply-side variables,in Taiwan physical capital mobility is found to have contributedto a wider gender earnings gap. Women's greater concentrationin industries where capital is mobile may explain this result.The effects of capital mobility in Korea appears to differ,which may be due to the dissimilar characters of outward FDIfrom that country.     

Macroeconomic determinants of remittances: evidence from Romania

Given the globalization of the labour market and the promotion of free movement for work, young people are looking for employment opportunities from at least two perspectives – professional careers and socio-economic benefits from employment. In developing countries, such as Romania, the labour market is less attractive, which has led to profound, numerical and structural imbalances, due to external mobility for work. Both new generations of graduates and young people aged up to 40 years, decide to work abroad as a more beneficial individual solution, i.e. remittances. The purpose of this paper is to examine the macroeconomic determinants of remittances to Romania, in order to substantiate public policies on diaspora, to adjust employment policy on the national labour market by promoting incentives to create decent, youth-friendly jobs. Using panel data model we selected several variables with potential influence on remittances level. The results demonstrate that traditional influence’s factors as distance, migration routes diaspora concentration or unemployment rate are, at present, less important than wage gap or tax rate at least for developing origin countries.     

Increasing urban wage inequality in China

Two strictly comparable cross‐section household datasets, relating to 1988 and 1995, are used to analyse the increase in wage inequality from an initially low level in urban China over this period of labour market reform. The institutional background and the evolution of policy are described. The rapid growth of wage inequality and the sharp widening of wage structure are quantified. Earnings functions are compared, and the increase in both the level and the inequality of wages are decomposed into their constituent elements. Quantile regression analysis is conducted to throw light on the relationships between the observed and the unobserved determinants of wages. Distinctions are made between the variables likely to represent human capital, discrimination, and segmentation. The evidence suggests that productive characteristics were increasingly rewarded as marketization occurred, but that discrimination and segmentation also grew. The move towards a fully‐fledged labour market was by no means complete.     

Gender wage gap across the wage distribution in different segments of the Indian labour market, 1983–2012: exploring the glass ceiling or sticky floor phenomenon

Women’s participation in the Indian labour market is not only low but they are also engaged in low-productivity and low-paying jobs. Further, the labour market is segmented by gender, type of employment, sector and location of residence. This study makes an important contribution by examining gender wage gap in India across different segments of the labour market over the wage distribution using national-level representative data spanning the period 1983 to 2012. The empirical results suggest that (i) the male–female raw wage gap has declined over time across the wage distribution, (ii) the gender wage gap attributable to differing returns to characteristics has increased over time and there is evidence of convergence of productive characteristics of men and women, (iii) sticky floor rather than glass ceiling phenomenon is observed in all segments of the labour market and (iv) the adjusted wage gap suggests that women at the bottom of the distribution face higher discrimination than those at the top and this has increased over the years.     

Labour mobility during transitionEvidence from Georgia1

This article deals with labour mobility in Georgia during economic transition. We use quarterly 1998–99 panel data to examine mobility across six labour market statuses (inactivity, unemployment, formal wage employment, informal wage employment, self‐employment and farming). Our findings are consistent with the hypothesis of labour market segmentation. Formal employment is preferred to informal employment. Unemployment is largely a queuing device for individuals with higher education waiting for formal jobs. Some self‐employment is subsistence activities and consistent with a segmented labour market, while other is high risk and potentially high return activities. Age, gender and education are significant determinants of labour mobility. Finally, informal employment serves as a buffer in times of recession – with farming and informal wage employment absorbing labour shed by other statuses during the Russian financial crisis.     

Wage differences between Austrian men and women: <Emphasis Type="Italic">semper idem?</Emphasis>

In most OECD countries, the wage gap between men and women has narrowed during the past two decades. Developments of the last 20 years, e.g., increased labour market attachment of women or the introduction of equal pay laws, may have reduced the gender wage gap. We investigate the extent, persistence, and socio-economic determinants of the gender wage gap in Austria, for the years 1983 and 1997. Using wage decomposition techniques, we find that the average gender wage gap was almost as high in 1997 as it was in 1983. Not accounting for differences, the gender wage gap dropped from 25.5 to 23.3% of men’s wages. Taking observable differences between men and women into account, we estimate that the mean gender wage gap that cannot be explained, i.e., discrimination against women, dropped from 17 to 14% of men’s wages. A decomposition of the gender wage gap over time indicates that both returns to human capital and less discrimination were responsible for the narrowing of the gender wage gap.

CHILD LABOUR IN VIETNAM

Abstract.  The paper tests the explanatory power of a theoretical model of household decisions about child labour and school enrolment and analyses the determinants of child labour in Vietnam, a country that is experiencing a rapid transition toward a market economy. The theoretical framework, used as a benchmark, is in the spirit of the 'new household' economics and links household decisions about schooling and child labour to intergenerational altruism and to human capital investment. On this basis, we analyse the evolution and determinants of child labour using two household surveys (1993 and 1998) for Vietnam.     

Determinants of foreign direct investment in Spain

This study utilizes panel data as a means of examining the determinants of foreign direct investment (FDI) in Spain. Data that are taken in the period 1993–2002 are used in order to estimate the determinants of FDI, at the sectoral level, by differentiating the manufacturing sectors, and at the regional level. The analysis investigates the sectoral, regional and macroeconomic variables that have successfully attracted FDI inflows from those that have not. Empirical results suggest that the differential between labour productivity and the cost of labour has been an important determinant of FDI in Spain during the period 1993–2002. Factors related to demand, the evolution of human capital, the export potential of the sectors and certain macroeconomic determinants that measure the differential between Spain and the European Union average, also play a very important role in attracting flows of FDI. Certain policy issues that are relevant to the results are also discussed.     

Schooling, Literacy, Numeracy and Labour Market Success

The present paper uses data from the 1996 Australian Aspects of Literacy survey to examine the effects on labour market outcomes of literacy, numeracy and schooling. The survey includes a range of literacy and numeracy variables that are highly intercorrelated. A 'general to specific' approach identifies the most relevant literacy and numeracy variables. Including the others adds little explanatory power. Among males and females separately, approximately half of the total effect of schooling on labour force participation and on unemployment can be attributed to literacy and numeracy (the indirect effect) and approximately half to the direct effect of schooling. There is apparently no indirect effect of labour market experience through literacy and numeracy on participation or unemployment. The direct and total effects of experience are the same. Similarly, the direct and total effects of literacy and numeracy are reasonably similar to each other.     

An empirical analysis of occupational expectations

Empirical research on the subject area of occupational choice has generally focused upon outcomes; that is, in terms of occupational attainment, gender and racial segmentation, and male–female earnings differentials. But individual preferences, in terms of which occupation to pursue, are likely to be of equal importance in considering many of these issues. Therefore, this paper is concerned with an empirical analysis of the occupational expectations of minimum-aged school-leavers. A logit analysis is performed to establish what independent variables are more important in determining which labour queue school-leavers join. This is followed by the implications of the analysis for policy makers and practitioners concerned with the youth labour market. The evidence shows that there are clear differences in the occupational expectations of males and females. For instance, female school-leavers are more likely to seek entry to clerical and other non-manual occupations, such as retailing and catering. Males, on the other hand, have a higher probability of seeking entry to craft occupations like engineering and construction. However, account must also be taken of other personal characteristics when considering occupational choice in this context. Indeed, both human capital and other ‘personality’ variables are shown to have a statistically significant influence upon the occupational expectations of minimumaged school-leavers.     

The Gender Wage Gap in Paid- and Self-Employment in Australia

This paper presents an analysis of the gender wage gap in the highly regulated Australian labour market. It compares wage outcomes in the wage and salary sector with those for the self-employed. Comparisons with the United States are provided. The large gender pay gap in self-employment suggests that the aggregate gender wage differential will not be eliminated solely through wage determination for wage and salary earners. The greater gender wage gap in the self-employed sector may reflect liquidity constraints that are more difficult for self-employed women to overcome relative to self-employed men. The comparisons with the United States suggest that women will experience deterioration in relative earnings as the Australian labour market is deregulated.