Expected income and labor market choices of US married couples: A locally weighted regression approach

This paper applies a locally weighted scatterplot smoothing (loess) method to estimate the spatially heterogeneous wages of demographic groups of workers across precisely defined US labor markets. We estimate a location choice model using data from the National Longitudinal Survey of Youth (NLSY79) using these estimates of labor market specific wages for men and women as determinants of their place of residence. We compare estimates of this model to a model using more aggregated measures of wages and locations from CPS. We show that potential wages based on these more refined definitions of labor markets and demographic groups provide more explanatory power in a simple migration model than do those based upon less detailed definitions of labor markets and demographic groups.     

Relative wage and unemployment changes in Poland: microeconometric evidence

We estimate changes in the Polish wage and unemployment structures between the years 1994 and 1998 in order to identify labour market characteristics associated with increasing and decreasing relative demand, as well as relative wage rigidities. The evidence shows that relative demand for workers with a low level of education decreased. Whereas relative wages for workers with basic vocational education also fell in this situation, relative wages of workers with only primary education did not, pointing to a relative wage rigidity for this group which faced an above-average unemployment risk throughout the observation period.     

A model of non-central production in a monocentric city

This paper develops a model of production outside the CBD in a monocentric city. The production process is a retail process, and consumers make costless circumferential shopping trips to retail producers. These producers use labor and building space to produce their output, and retail workers commute circumferentially to work at zero cost. The model is tested using detailed commercial data from several cities, and the tests do not fully support the model.     

Minimum wages,wages and employment in various sectors in Honduras

This paper contributes to our understanding of the impact of minimum wages on labor markets of developing countries, where there are often multiple minimum wages and compliance is weak. We examine how changes in more than 22 minimum wages over 1990–2004 affect employment, unemployment and average wages of workers in different sectors, defined by coverage under the legislation. The evidence suggests that minimum wages are effectively enforced only in medium and large-scale firms, where a 1% increase in the minimum wage leads to an increase of 0.29% in the average wage and a relatively large reduction in employment of ? 0.46%. We find that public sector wages emulate minimum wage trends but the higher cost of labor does not reduce employment there. There are no discernable effects of minimum wages on the wages of workers in small-firms or the self-employed; yet, higher minimum wages may create more unemployment. We conclude that (even under our upper bound estimate of the effect on the wages of workers) the total earnings of workers in the large-firm covered sector fall with higher minimum wages in Honduras, which warrants a policy dialogue on the structure and level of minimum wages.     

Wage premia and skill upgrading in Italy: why didn't the hound bark?

This paper presents firm-level evidence on the change of the employment share and the wage premium of non-manual workers in Italian manufacturing during the nineties. We find that the relative stability of the aggregate wage premium and employment share hides offsetting disaggregate forces: technical progress raises the relative demand for skilled labor within firms, whereas demand changes associated with trade reduce the relative demand for skills. Moreover, it is within the class of non-manual workers that most of the action takes place: the wage premium and employment share of executives rise substantially, while those of clerks fall in a similar proportion. Finally, we find that the export status of firms plays a key role in explaining labor market dynamics: exporters account for most of both demand-related and technology-related shifts. Overall, our results for Italy question the conventional view that the labor market is “rigid” due to labor market institutions.     

Seniority,experience, and wages in the UK

This paper uses BHPS data to investigate the relative importance of seniority and experience in determining male wages in the UK labor market. Using both the Altonji and Shakotko instrumental variable and the Topel two-step estimation approaches, I find that for all male workers, tenure plays a modest role, increasing wages by about 1% each year over the first 10 years on the job. General labor market experience has a larger role, so that after 30 years wages have increased by about 60%. Individual and job match heterogeneity are important, and should be carefully modeled when estimating wage equations for the British labor market. These results are remarkably similar to the most recent evidence about these relationships in the US labor market. After extending the standard model to include industry and occupation experience, the estimated impact of job seniority becomes negligible for nonunion workers. Instead, the wages of nonunion workers rise because of the accumulation of general and sector-specific experience. The wages of union workers are still found to increase with job seniority over the first ten years with their employer, suggesting that if seniority matters for wages it is only for union workers.     

An econometric model of a retail firm

Existing models of retail resource allocation generally specify response functions in a somewhat ad hoc manner. These are not usually derived from an explicit model of consumer maximization, and they generally do not explicitly consider the supply side of the market. This paper shows how the model of Ehrlich and Fisher (1982) can be used to provide insights into the proper specification of these functions. We illustrate the application of this model on data from a retail chain; our application extends work in Ratchford and Stoops (1988) to the demand side of the market. Potential areas of application of the model are to understanding the demand for labor and advertising services by consumers, and to the measurement of retail productivity.     

The impact of minimum wages on wages,work and poverty in Nicaragua

In this paper we use an individual- and household-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes including: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum. For example, increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. We find no evidence that these workers become unemployed.Our analysis of the relationship between the minimum wage and household income finds: a) increases in legal minimum wages increase the probability that a poor worker's family will move out of poverty, and b) increases in legal minimum wages are more likely to reduce the incidence of poverty and improve the transition from poor to non-poor if they impact the head of the household rather than the non-head; this is because the head of the household is less likely than a non-head to lose his/her covered sector employment due to a minimum wage increase and because those heads that do lose covered sector employment are more likely to go to another paying job than are non-heads (who are more likely to go into unpaid family work or leave the labor force).     

Urban Wages and Labor Market Agglomeration

Using the 5% public use micro sample of the 1990 U.S. census, we find that observationally equivalent workers in the manufacturing sector earn higher wages when they are in urban labor markets that have a larger share of national or metropolitan employment in their same occupation and industry groups. Quantitatively, the effect is large, with an elasticity (measured at the means) of between 1.2 and 3.6 for these effects. We interpret the willingness of firms to pay more for equivalent workers in dense markets as evidence of an agglomeration economy in urban labor.     

The effects of labor supply shocks on labor market outcomes: Evidence from the Israeli–Palestinian conflict

Since September 2000, as a result of mobility restrictions, the supply of Palestinian workers competing for local jobs in the West Bank has increased by about fifty percent. This paper takes advantage of this unique natural experiment to study the effects of labor supply shocks on labor market outcomes. Using quarterly information on wages and employment in each city in the West Bank, the paper analyzes the short-run adjustment of labor markets to a large inflow of workers separately from the effects of political instability. The results suggest that low-skilled wages are adversely affected by an increase in the supply of low- and high-skilled workers, while high-skilled wages are only weakly negatively related to an increase in their own supply. This is consistent with a scenario in which high-skilled workers compete for low-skilled jobs, pushing the low-skilled into unemployment. This latter hypothesis is confirmed by analyzing the effects of changes in labor supply on unemployment.     

Job hopping, earnings dynamics, and industrial agglomeration in the software publishing industry

This paper investigates the implications of industrial clustering for labor mobility and earnings dynamics in one large and increasingly important high-technology sector. Taking advantage of longitudinal employee-employer matched data, I exploit establishment-level variation in agglomeration to explore how clustering in the software publishing industry affects labor market outcomes. The results show that clustering makes it easier for workers to job hop within the sector. Higher earnings levels in more agglomerated areas are partly attributable to sorting across locations among workers and firms in the industry on the basis of observable and unobservable characteristics. Controlling for this heterogeneity, workers in clusters have relatively steep earnings-tenure profiles, accepting lower wages early in their careers in exchange for stronger earnings growth and higher wages later. These findings are consistent with theoretical models in which agglomeration improves labor market coordination and facilitates greater learning and human capital formation.     

Job hopping,earnings dynamics,and industrial agglomeration in the software publishing industry

This paper investigates the implications of industrial clustering for labor mobility and earnings dynamics in one large and increasingly important high-technology sector. Taking advantage of longitudinal employee-employer matched data, I exploit establishment-level variation in agglomeration to explore how clustering in the software publishing industry affects labor market outcomes. The results show that clustering makes it easier for workers to job hop within the sector. Higher earnings levels in more agglomerated areas are partly attributable to sorting across locations among workers and firms in the industry on the basis of observable and unobservable characteristics. Controlling for this heterogeneity, workers in clusters have relatively steep earnings-tenure profiles, accepting lower wages early in their careers in exchange for stronger earnings growth and higher wages later. These findings are consistent with theoretical models in which agglomeration improves labor market coordination and facilitates greater learning and human capital formation.     

农民工工资市场决定失灵的原因及解决途径

我国农民工的工资市场决定存在失灵,主要是农民工劳动力供求的变动对其工资水平的影响微弱,农民工劳动力短缺与其工资水平偏低并存。这种失灵直接源于农民工劳动力的供需矛盾性、需求垄断性和信息非对称性所决定的农民工劳动力市场的发育缺陷,根源于农民工劳动力市场所面临的包括以户籍制度为主的制度壁垒、重城轻乡的制度安排和信息传导的制度缺失在内的制度困境。而培育农民工劳动力市场、完善相关制度是解决其工资市场决定失灵的现实出路,其中转变政府职能是关键。     

Wages and the City. Evidence from Italy

We analyze empirically the impact of urban agglomeration on Italian wages. Using micro-data from the Bank of Italy's Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets, we test whether the structure of wages varies with urban scale. We find that every additional 100,000 inhabitants in the local labor market raises earnings by 0.1 percent. The use of a geographical approach enables us to state that this effect decays very rapidly with distance, losing significance beyond approximately 12 kilometers. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to worker supervisors.     

Work Recognition and Labor Productivity: Evidence from French Data

We empirically investigate whether labor productivity is related to work recognition. Using survey data about a large sample of French firms (N = 5309), we find that firms in which employees think their work is recognized are likely to report higher labor productivity, compared with firms where employees do not feel recognized. Our estimation results also suggest that labor productivity is strongly related to wages. Copyright © 2014 John Wiley & Sons, Ltd.     

Worker poaching in a supply chain: Enemy from within?

Worker poaching represents the primary mode by which workers change employers. We examine worker poaching between firms linked in a value chain. We find that, in a value chain, the less productive firm may offer its workers higher wages and poach workers from the more productive firm. We also find that worker flows accomplished via poaching impact supply chain management: (a) the identity of the bottleneck firm may depend on whether poaching is available; (b) poaching between linked firms may benefit both, and (c) the value chain cannot be fully coordinated without controlling wages in the labor market.     

Chinese Migrant Farmers in the Russian Far East: Impact on Rural Labor Markets

The close proximity of China and Russia, the activities of Chinese farmers, and the reduction in Russian labor resources have created job opportunities for Chinese workers in the Russian Far East (RFE). Chinese workers fill a labor shortage in agriculture, but little research has been done on them. We developed an econometric model to test the effects of Chinese intermittent migration on labor markets in the RFE. We found the proximity of Chinese to Russian farms reduces wages for both Russian and Chinese workers and increases their part-time employment on Russian farms. The greater availability of Chinese workers in the region results in lower number of family members working on Russian farms. Thus, the influx of Chinese workers may contribute to demographic shifts in the Russian population.     

Erratum to ‘Inventory record inaccuracy: Causes and labor effects’

Inventory record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different operational errors in a continuous (Q, R) inventory system through a full-factorial experimental design. While backroom and shelf shrinkage are found to be predominant drivers of IRI, the other three errors related to recording and shelving have negligible impacts on IRI. Next, we empirically assess the relationships between labor availability and IRI using longitudinal data from five stores in a global retail chain. After deriving a robust measure of IRI through Bayesian computation and estimating panel data models, we find strong evidence that full-time labor reduces IRI whereas part-time labor fails to alleviate it. Further, we articulate the reinforcing relationships between labor and IRI by formally assessing the gain of the feedback loop based on our empirical findings and analyzing immediate, intermediate, and long-term impacts of IRI on labor availability. The feedback modeling effort not only integrates findings from simulation and econometric analysis but also structurally explores the impacts of current practices. We conclude by discussing implications of our findings for practitioners and researchers.     

Estimating a tournament model of intra-firm wage differentials

We consider the estimation of a tournament model with moral hazard (based on Rosen (1986), AER)) when only aggregate data on intra-firm employment levels and salaries are available. Equilibrium restrictions of the model allow us to recover parameters of interest, including equilibrium effort levels in each hierarchical stage of the firm. We illustrate our estimation procedures using data from major retail chains in the US. We find that only a fraction of the wage differential directly compensates workers for higher effort levels, implying that a large portion of the differentials arises to maintain incentives at lower rungs of the retailers.     

Inventory record inaccuracy: Causes and labor effects

Inventory record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different operational errors in a continuous (Q, R) inventory system through a full-factorial experimental design. While backroom and shelf shrinkage are found to be predominant drivers of IRI, the other three errors related to recording and shelving have negligible impacts on IRI. Next, we empirically assess the relationships between labor availability and IRI using longitudinal data from five stores in a global retail chain. After deriving a robust measure of IRI through Bayesian computation and estimating panel data models, we find strong evidence that full-time labor reduces IRI whereas part-time labor fails to alleviate it. Further, we articulate the reinforcing relationships between labor and IRI by formally assessing the gain of the feedback loop based on our empirical findings and analyzing immediate, intermediate, and long-term impacts of IRI on labor availability. The feedback modeling effort not only integrates findings from simulation and econometric analysis but also structurally explores the impacts of current practices. We conclude by discussing implications of our findings for practitioners and researchers.