On the frequency of wage indexation

This paper analyzes the optimal frequency of wage indexation. It demonstrates that a change in the expected value of money does not affect the optimal frequency, but that an increase in the riskiness of the value of money leads to an increase in the optimal frequency. An increase in the worker's risk aversion also leads to an increase in the optimal frequency, while an increase in the cost of indexation leads to a decrease in the optimal frequency.     

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 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.     

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 (-∞;∞).     

Mixed wage and rent contracts as reinterpretations of share contracts

This note extends the result of Stiglitz (1974) and Newbery (1977) concerning the equivalence of mixed wage and rent contracts to share contracts to the case where the only assumption is that there are no enforcement or transaction costs. This is so because an equivalent mixed wage/rent agreement can always be obtained by simply reinterpreting a share agreement.     

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 wage effects of subsidized career breaks

This article studies how subsidized career breaks affect future labor market performance. The analysis uses a Swedish career break program where applications were accepted until local funds were exhausted. The rejected applicants serve as counterfactuals to derive estimates that are unaffected by selection or omitted variables. The estimated wage effect of a 10-month-long break is negative and in the order of 3 % 1–2 years after the interruption. The average applicant is estimated to have substantially lower returns to experience than the average worker. The results thus show that career breaks are costly, even for groups with low expected returns to experience, and in an environment with very compressed wages. The career breaks also induced an increase in job and task mobility whereas post-leave labor supply remained unaffected except for workers close to retirement.     

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.     

The wage effects of ethnicity in Estonia

Using the retrospective (1989-94) Estonian Labour Force Survey (ELFS), we attempt to examine potential wage discrimination based on ethnicity (Estonian and Russian). Using standard wage decomposition methodology, we look at male full-time workers in the years 1989 and 1994. There is no evidence of discrimination against either ethnic group in 1989. However, the available data provide substantial evidence of discrimination against ethnic Russians in 1994. The evidence also suggests that Estonian language ability does not significantly affect wages. Surprisingly, Estonian-born ethnic Russians appear to fare worse than immigrant ethnic Russians in terms of wages.
JEL classification: J71, P23.     

边际工资补贴对区域经济的影响

The main research of this paper is the regional effects of marginal wage subsidies. Some regional economic issues are discussed such as production scales, operating profits, industry distribution, and expenditure distribution across the rich and poor regions. It is proven that, marginal wage subsidies improve the employment and raise the industrial share of the poor region, but meanwhile the expenditure share in the rich region increases for marginal wage subsidies. It is also showed that, the relationship between the effectiveness of marginal wage subsidies and the level of openness to trade is ambiguous when the wage level is very high, however, if the wage level is low enough thus marginal wage subsidies can cause relatively large employment increase, marginal wage subsidies cooperating with freer trade policy would be more effective.      

Optimal contracts and the role of the government in wage bargaining

This paper introduces a contract between the government and trade unions in a model of strategic wage bargaining à la Lippi (2003). It shows that an optimal contract can be implemented through an appropriately defined inflation target.     

Nominal wage contracts, labor adjustment costs and the business cycle

Previous work of monetary dynamic stochastic general equilibrium models with nominal rigidity a la Taylor, particularly the Cho–Cooley model, was abandoned in favor of the New-Keynesian analysis due to the model's failure to deliver business cycle statistics that match the U.S. economy along some key dimensions. In this paper, we take a step in revitalizing the Cho–Cooley avenue of research. We add empirically plausible labor adjustment costs into a model with nominal wage rigidity and find that with labor adjustment costs our model is able to overcome some of the shortcomings otherwise present in the Cho–Cooley framework, specifically high standard deviations of real variables and a countercyclical productivity.     

The wage effects of investments in enterprise-related training

Empirical Economics - In this paper we calculate the rate of return to enterprise-related training (ERT) using a simultaneous equations self-selection model of investment in ERT and wages. For...     

Union effects on wages and wage growth

This paper employs a pooled cross-section time-series error-variance-components model applied to panel data to present new estimates of the impact of unions on earnings profiles. It avoids union-status measurement errors alluded to by Freeman (1984) contained in current panel estimates by limiting analysis to a set of one-time union status switches for which union status data could be sufficiently cross-checked. It avoids heterogeneity biases by comparing entire earnings profiles for given workers before and after their union status change. Finally, potential selectivity biases in using a non-random sample of only union switchers, is found not to plague the reported results.     

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.     

Substitutes and stability for matching with contracts

We consider the matching with contracts framework of Hatfield and Milgrom [20], and we introduce new concepts of bilateral and unilateral substitutes. We show that the bilateral substitutes condition is a sufficient condition for the existence of a stable allocation in this framework. However, the set of stable allocations does not form a lattice under this condition, and there does not necessarily exist a doctor-optimal stable allocation. Under a slightly stronger condition, unilateral substitutes, the set of stable allocations still does not necessarily form a lattice with respect to doctors' preferences, but there does exist a doctor-optimal stable allocation, and other key results such as incentive compatibility and the rural hospitals theorem are recovered.