The Brazilian wage curve: new evidence from the National Household Survey

This paper reconsiders the Brazilian wage curve using individual data from the National Household Survey at 27 Federative Units over the period 2002–2009. We find evidence in favor of the Brazilian wage curve with an unemployment elasticity of ?0.08. We also find that males in Brazil are significantly more responsive to local unemployment rates (?0.13) than their female counterparts. In fact, we find that the unemployment elasticity for women is statistically insignificant. Applying gender-specific unemployment rates, the elasticity for men decreases to ?0.09, while the elasticity for women remains statistically insignificant. This paper also finds that the estimates for Brazilian wage curve are completely different for the case of formal and informal workers.     

Re-examination of the long-run purchasing power parity: further evidence from Turkey

In this article, we re-examine the empirical validity of the Purchasing Power Parity (PPP) theory for the Turkish economy. For this purpose, an empirical model is constructed using some contemporaneous estimation techniques such as multivariate co-integration and vector error correction methodology. Our estimation results reveal that the PPP can strongly be supported as a long-run stationary steady-state relationship for the Turkish economy.     

The nonlinear time series properties of unemployment rates: some further evidence

The time series properties of unemployment rates for Germany, Japan, the UK and the US are re-examined. Evidence of nonlinear structure in the residuals of the most parsimonious linear ARMA models is reported for all countries except Japan. Modelling this nonlinearity using SETAR models suggests strong asymmetry in unemployment dynamics and the presence of a possible limit cycle for the UK. However, residual diagnostics for these models indicate remaining structure. Alternative TAR models conditioned on past growth rates of industrial production yield substantial reductions in residual variance over both linear and SETAR counterparts, iid residuals in all cases other than the US, and threshold values at or very near zero, clearly identifying the asymmetric behaviour of unemployment during expansionary and contractionary phases of the business cycle.     

Firm profitability,regional unemployment and human capital in wage determination

This paper presents an analysis of wage formation in the Norwegian private sector using data for individual workers matched with firm level information and regional unemployment. A key issue is to test whether or not firm specific variables affect individual wages after controlling for individual specific factors and working conditions. The results imply positive effects of firm specific profitability and firm size. The elasticity of wages with respect to value added per worker and firm size is 5% and 3.3%, respectively. Empirical evidence of a downward sloping regional wage curve is also reported, while there is no support of the hypothesis of compensating wage differentials. Since data for three levels of aggregation are used, the OLS estimates of the standard errors are downward biased. Therefore, results using a random effects model are also reported, taking the multi-level structure of the data into account.     

Subjective well‐being and aggregate unemployment: further evidence

According to the literature, individual well‐being is negatively related to aggregate unemployment. This study examines whether the distribution of aggregate unemployment by duration affects well‐being, in addition to the level of unemployment. Different explanations are provided to indicate how the shares of short‐term (up to 3 months) and long‐term (more than 1 year) unemployed people could affect the well‐being of the employed and unemployed. Using data from almost 300,000 individuals from 11 EU countries, we find significant effects of both shares on life satisfaction. Among the unemployed, for example, we find a U‐shaped effect of the distribution of aggregate unemployment by duration on subjective well‐being, which compensates to some extent for the negative effect of the unemployment rate.     

The Turkish wage curve: Evidence from the Household Labor Force Survey

This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey including 26 NUTS-2 regions over the period 2005-2008. We find an unemployment elasticity of −0.099, with a higher elasticity for younger, less educated, less experienced and female workers.     

The yield curve and the macroeconomy: Evidence from Turkey

This paper contributes to the literature on the relationship between the yield curve and macroeconomic variables by focusing on an emerging market case: Turkey. The most important result of the paper is that the relationship between the yield curve and macroeconomic variables is significantly affected by the change in monetary policy which is associated with the implementation of inflation targeting (IT) regime. While before the IT regime the yield curve is affected to some extent by macroeconomic variables, after the IT regime, it is mainly driven by macroeconomic variables. We also find that central bank has gained ability to affect the entire yield curve with the IT regime. The other important result is that in addition to inflation and real activities, the exchange rates also play an important role in the yield curve dynamics in Turkey.     

The establishment-size wage premium: evidence from European countries

This study examines the magnitude and determinants of the establishment-size wage premium in five European countries using a unique harmonised matched employer–employee data set (the 1995 European Structure of Earnings Survey). This data set enables to test the validity of various traditional explanations of the size wage gap (i.e. the labour quality hypothesis, the theory of compensating wage differentials, the role of monitoring and institutions) and of more recent hypotheses (i.e. size differences in job stability and in the concentration of skilled workers). We find some support for traditional explanations, but there remains a significant wage premium for workers employed in large establishments. Further results indicate that the magnitude of this premium fluctuates substantially across countries and appears to be negatively correlated with the degree of corporatism.     

Threshold nonlinearities in unemployment rates: further evidence for the UK and G3 economies

The paper appraises the in-sample and out-of-sample adequacy of linear AR and nonlinear SETAR models of unemployment rates for Germany, Japan, the UK and the US. Tests are reported for the presence and specification of threshold nonlinearities, SETAR model estimates, limiting dynamic properties and residual diagnostics, and out-of-sample forecasting performance. In-sample, threshold non-linearities are confirmed to be strongly present for the UK, US and Germany, and more marginally so for Japan. Out-of-sample, excepting Japan, SETAR models provide superior onestep-ahead forecast on RMSE grounds, most notably for the US. Final tests indicate that these models exhibit predictive accuracy in the sense of parameter and residual variance stability, implying the potential for exploitation of such nonlinearity in official forecasting.     

Impact of terrorism on tourism in Turkey: empirical evidence from Turkey

This article aims at investigating the causal impact of terrorist attacks on the tourism industry in Turkey based on the Autoregressive Distributed Lag (ARDL) bounds testing procedure for the period between 1986 and 2006. The ARDL bounds test reveals that tourism is in a long-run equilibrium level relationship with terrorism. The evidence obtained from the long-run and short-run parameter estimates indicates the existence of a negative causal effect of terrorism on tourism.     

Spatial heterogeneity in the wage curve

Blanchflower and Oswald argue that the wage curve is a predictable empirical relationship with the “unemployment elasticity of pay” of about −0.1. Using GWR I find evidence of significant spatial heterogeneity in the unemployment elasticity of pay for US counties.     

Testing the role of urban development in the conventional Environmental Kuznets Curve: evidence from Turkey

We tested the role of urbanization in the conventional Environmental Kuznets Curve (EKC) of Turkey’s developing economy and rapid urbanization. The effects of an increase in carbon dioxide emissions were due to the usage of fuel oil and other traditional energy consumption patterns related to urban development. Based on our findings, we suggest that the EKC of Turkey is not an inverted U-shape. Thus, adapting of alternative and clean energy systems is necessary and unavoidable in Turkey, and Turkish authorities should consider renewable and alternative uses of energy to sustain a stable EKC.     

The Beveridge curve and unemployment fluctuations in Canada

We estimate the impact of cyclical, sectoral, and participation shocks and that of the trend on both the Canadian unemployment rate and the job vacancy rate over the 1969 to 1998 period. We conclude that a rise in the Canadian unemployment rate of almost 5 percentage units occurred between 1972 and 1982 because of participation rate shocks and a trend movement. Because the trend also explains the leftward shift of the Beveridge curve observed in the 1990s, this shift cannot be interpreted as a decline in the natural unemployment rate.
La courbe de Beveridge et les fluctuations du chômage au Canada. Les auteurs évaluent la contribution des chocs sectoriels, des changements dans le taux d'activité, des fluctuations cycliques et de la tendance sur les mouvements du taux de chômage et du taux de postes vacants pendant la période 1969–98. Ils concluent que le taux de chômage non conjoncturel s'est accru de près de 5 points de pourcentage entre 1972 et 1982 en raison de chocs dans le taux d'activité et d'un mouvement tendanciel. Le déplacement vers la gauche de la courbe de Beveridge observé dans les années 1990 est pour sa part le résultat d'une baisse tendancielle des postes vacants et n'indique nullement que le taux de chômage naturel ait diminué pendant cette période.     

Forecasting the yield curve and the role of macroeconomic information in Turkey

In this study we investigate the yield curve forecasting performance of Dynamic Nelson–Siegel Model (DNS), affine term structure VAR model (ATSM VAR) and principal component model (PC) in Turkey. We also investigate the role of macroeconomic variables in forecasting the yield curve. We have reached numbers of important results: 1—Macroeconomic variables are very useful in forecasting the yield curve. 2—The forecasting performances of the models depend on the period under review. 3—Considering the structural break which associates with change in monetary policy leads models to produce better forecasts than the random walk. 4—The role of exchange rate should not be ruled out in forecasting the yield curve in an emerging market like Turkey.     

Nonlinearity and structural stability in the Phillips curve: Evidence from Turkey

In this paper, we investigate possible nonlinearities in the inflation–output relationship in Turkey for the 1980–2008 period. We first estimate a linear bivariate model for the inflation rate and output gap, and test for linearity of the estimated model against nonlinear alternatives. Linearity test results suggest that the relationship between the inflation rate and output gap is highly nonlinear. We estimate a bivariate time-varying smooth transition regression model, and compute dynamic effects of one variable on the other by generalized impulse response functions. Computed impulse response functions indicate that inflation–output relationship in Turkey during the analyzed period was regime dependent and varied considerably across time.     

The wage curve before and during the Greek economic crisis

Using cross-sectional data from the Labour Force Survey, we investigate whether a wage curve, i.e. a negative relationship between real wages and regional unemployment, could be estimated in the Greek labour market and in the period 1999–2014. Adopting individual static and regional dynamic specifications, our results do not support the existence of such a relationship despite the extensive macroeconomic adjustment of real wages after 2009. However, allowing for period-specific heterogeneous slopes, we find that a negative relationship between wages and regional unemployment emerged in the period 2010Q2–2011Q4 which however was short-lived. This relationship appears to be exclusively due to the restructuring of the collective bargaining regime and the reduction in the national minimum wages, both of which were implemented in the private sector.     

Temporary layoff unemployment in Austria: empirical evidence from administrative data

Temporary layoffs (rehires, recalls) have been widely recognized as an important feature of North America's labour markets. For Europe, however, several observers have suggested that tighter regulatory impediments to the recruitment and dismissal of employees are responsible for temporary layoff unemployment being virtually non-existent. Against this background this paper uses administrative data to evaluate the quantitative importance of temporary separations among the unemployed in Austria and to track its composition by industries. The main finding of our empirical analysis is that about one-third of all unemployment spells in Austria in 1985 ended with the individual returning to the former employer. Since temporary layoff unemployment was found to be on average of shoter duration, it comprised a somewhat lower fraction of total weeks of unemployment. However, temporary layoff unemployment thus accounts for the same proportion of unemployment in Austria as in the US or Canada.     

Local flexibility in wage setting: evidence from the Norwegian local public sector

The public sectors in the Scandinavian countries have been prominent examples of centralized wage-setting systems. In Norway, more room for local flexibility was implemented by a wage frame system introduced in 1990 in which the national wage scale system merely works like a minimum wage system. We analyze the effect of this reform using a unique database where we can track employees and their local government over time and explore the consequences of controlling for fixed individual effects and fixed employer effects. We find that the wage dispersion increased across local governments after 1990, and that wages to some extent became more responsive to local government income, monopsony power and other local government characteristics after the reform. However, the numerical effects of the reform are estimated to be quite small.     

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.