Modelling low income transitions

We examine the determinants of low income transitions using first‐order Markov models that control for initial conditions effects (those found to be poor in the base year may be a non‐random sample) and for attrition (panel retention may also be non‐random). The model estimates, derived from British panel data for the 1990s, indicate that there is substantial state dependence in poverty, separate from persistence induced by heterogeneity. We also provide estimates of low income transition rates and lengths of poverty and non‐poverty spells for persons of different types. Copyright © 2004 John Wiley & Sons, Ltd.     

Sweatshops,Opportunity Costs,and Non‐Monetary Compensation: Evidence from El Salvador1

Using evidence from field interviews, this article examines the alternative employment opportunities of thirty‐one sweatshop factory workers in El Salvador and their perceptions about what types of non‐monetary benefits they receive in their current employment. Interview subjects provide insights into the benefits of their own and peers' employments, their next‐best alternative employment, and other aspects of total compensation. We find that workers perceive factory employment to provide more desirable compensation along several margins.     

Labour market institutions and employment in France

The purpose of this paper is to use individual data to study how the minimum wage and the welfare system combine to affect employment in France. Using the 1997 Labour Force Survey, we decompose non‐employment of married women into three components: voluntary, classical (due to the minimum wage) and ‘other’ (a residual category). We find that the minimum wage explains close to 15% of non‐employment for these women and that the disincentive effects of some welfare policy measures may be large. Our approach also allows us to evaluate various labour and welfare policy experiments in their effects on participation and employment. Copyright © 2002 John Wiley & Sons, Ltd.     

Decomposing the Ins and Outs of Cyclical Unemployment

This paper analyses the contribution of the composition of the pool of employed and unemployed individuals to labour market dynamics in different phases of the business cycle. Using individual‐level data from the Current Population Survey (CPS), we decompose differences in employment status transition rates between upswings and downturns into explained and unexplained parts. We find that the duration of unemployment contributes to explaining unemployment outflows to employment and observe that its initially positive contribution turns negative in deep recessions. Composition effects play an important role for unemployment outflows to non‐participation but dampen the cyclicality of unemployment inflows from employment.     

What Do Wages Add to the Health‐Employment Nexus? Evidence from Older European Workers

The role of wages in the health‐employment nexus can be important for designing employment policies aimed at older workers with health limitations. We, therefore, estimate the direct effect of health on employment and hours worked and its indirect effect that is mediated through wages using individual‐level panel data from SHARE. The endogeneity of self‐reported health is controlled for by instrumenting it with severe health conditions in a correlated random effects model. For men, we find that the direct effects of health deterioration, as measured by a reduction in health from the 75th to the 50th percentile of the health distribution, are about a 20% point lower employment probability and about 171 fewer hours worked per year. The indirect health effects through wages work in the opposite directions as health positively affects wages and wages negatively affect employment and hours worked. The total effects of this health deterioration amount to a 12% point lower employment probability and 95 fewer hours worked per year. In particular our finding of a large direct health effect on employment suggests an instrumental role for policy aimed at accommodating workers with health limitations to keep them employed at older ages.     

Employment,Inequality and the UK National Minimum Wage over the Medium‐Term*

We assess the impact of the national minimum wage (NMW) on employment and inequality in the UK over the decade since its introduction. We evaluate its effects in each year, using an incremental differences‐in‐differences (IDiD) estimator. Identification is based on variation in the bite of the NMW across local labour markets and the different sized year on year up‐ratings. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. While the average employment effect over the entire period is broadly neutral, there are small but significant positive NMW effects from 2003 onwards.     

The subordination of the gender equality objective: the National Reform Programmes and ‘making work pay’ oplicies

The streamlining of the Lisbon strategy has introduced new integrated guidelines for economic policy and employment strategy and a new report format––the National Reform Programme. In the first year of this new reporting mechanism, Member States have paid less attention to gender mainstreaming and gender equality objectives, not least because the gender equality guideline has been removed. Streamlining has further exposed the narrow and instrumental focus on gender equality measures in the Lisbon process as a means of raising the employment rate rather than a broader concern for equal opportunity. This narrow gender equality approach also dilutes the efficacy of the economic and employment policies that are advanced. Some positive steps to advance gender equality continue to be taken, but the reforms are partial, uneven and coexist with negative developments. We illustrate this with an evaluation of the policy trajectory in relation to the ‘making work pay’ agenda for low‐waged workers (tax/benefit reform, minimum wages, childcare and parental leave). We conclude that this latest reform to the Lisbon process has exposed the enormous amount of political work and capacity building that is needed to mainstream gender issues across the whole field of economic, employment and social policies.     

BIG‐BOX RETAILERS,RETAIL EMPLOYMENT,AND WAGES IN THE US

This paper examines the dynamic interrelationship between the presence of big‐box retailers and retail employment and wages in the United States at county level for 1986–2005 using panel vector autoregressions (Panel VAR). The Panel VAR approach addresses endogenous interactions among the variables in the system. In other words, this approach takes into account the fact that the presence of big‐box retailers can have an impact on retail employment and wages and at the same time, retail employment and wages can influence the presence of big‐box retailers. Results indicate that the presence of big‐box retailers has a positive effect on employment but a negative effect on wages. The effect on wages is relatively greater and is more prolonged than the effect on employment. Both employment and wages have an instant (first year) positive effect on the presence of big‐box retailers, which implies that big‐box stores are located in areas where the economy is growing.     

Field Perspectives on the Causes of Low Employment Among Less Skilled Black Men

This article presents findings from a unique survey that assessed explanations for low black male employment by questioning participants in a low skill labor market. Black men identified barriers to hiring—including felony convictions, drug testing, low skill levels, and bias—as major reasons for their non‐employment. Employers believed black male applicants were less likely to have the desired interpersonal skills and work ethic, and that they were less likely to pass pre‐employment drug tests.     

EVIDENCE ON THE IMPACT OF TARIFF REDUCTIONS ON EMPLOYMENT IN DEVELOPING COUNTRIES: A SYSTEMATIC REVIEW

This paper analyses the evidence on the impact of tariff reductions on employment in developing countries. We carry out a systematic review of the existing empirical literature, and include both, ex post econometric evidence and ex ante Computable General Equilibrium (CGE) simulation studies. The synthesis of results suggests that the effects of tariff reductions on employment are country and trade policy specific. When looking across higher quality econometric studies that control for the endogeneity of tariffs, only a couple of studies have statistically significant results, and these suggest that employment is likely to decrease slightly in the short run following trade liberalization. This is consistent with the notion that there are winners and losers from trade policy reform. These results are in contrast with the CGE findings, which by design incorporate projections of the medium‐run economy‐wide knock‐on effects suggested by economic theory. The synthesis of CGE studies suggests non‐negative effects of trade liberalization on aggregate employment and moderate inter‐sectoral labour reallocation effects.     

The influence of calculative (“hard”) and collaborative (“soft”) HRM on the layoff‐performance relationship in high performance workplaces

We investigate the effect of employment systems on the layoff‐performance relationship. We construct a typology of two types of HPWS (Calculative or “hard” HRM and Collaborative or “soft” HRM) and two non‐high performance systems (Traditional HRM and Low HRM). We use attribution theory as a framework from which to draw hypotheses. We examine survey responses from two waves of panel data. We employ cluster analysis to identify distinctive configurations of employment practices used in UK workplaces. We use the cluster outcomes as explanatory variables in moderator regression analysis. Following layoffs, we find that Calculative workplaces experience lower subsequent performance than Collaborative workplaces. Over the next five years, Calculative and Collaborative workplaces experience equivalent amounts of performance change but Calculative workplaces fail to make a full recovery.     

The impact of the National Minimum Wage in low‐wage sectors: does the Earnings Top‐up Evaluation study add to our understanding?

Recent work investigating the possible impact of the introduction of the UK National Minimum Wage (NMW) in April 1999 has focused on the analysis of care homes, a sector particularly associated with low‐wage employment. In this article we attempt to add to these findings by utilising the Earnings Top‐up Evaluation (ETUE) survey which was carried out in 1996, 1997 and 1999, and aimed to over‐sample establishments operating in low‐wage sectors. Initially, we utilise the panel element of the ETUE to carry out a similar analysis to that adopted for the care homes data. However, in addition to this ‘establishment‐level’ analysis, we also utilise information on wages and employment in three non‐managerial skill groups, within this panel of establishments, to carry out an analysis at the level of the skill group. In this second set of analyses we are able to reject the null hypotheses of parameter insignificance, identifying a negative employment effect of the 1999 NMW, although this is only true of one of our indicators of NMW impact and its magnitude is small. In the conclusion to the article, we discuss our results in light of the findings from other similar studies.     

Non‐competes,business dynamism,and concentration: Evidence from a Florida case study

Most research on non‐competes has focused on employees; here we study how non‐competes affect firm location choice, growth, and consequent regional concentration, using Florida's 1996 legislative change that eased restrictions on their enforcement. Difference‐in‐differences models show that following the change, establishments of large firms were more likely to enter Florida; they also created a greater proportion of jobs and increased their share of employment in the state. Entrepreneurs or establishments of small firms, in contrast, were less likely to enter Florida following the law change; they also created a smaller proportion of new jobs and decreased their share of employment. Consistent with these location and job creation dynamics, regional business concentration increased following the law change in Florida. Nationwide cross‐sections demonstrate consistent correlations between state‐level non‐compete enforcement and the location, employment, and concentration dynamics illustrated in Florida.     

Tied Migration and Subsequent Employment: Evidence from Couples in Britain*

We use unique information on migration behaviour and reasons for migration to study the impact of tied migration on labour market outcomes among husbands and wives. Fewer than 2% of couples migrate for job‐related reasons and the majority of these move for reasons associated with the husband's job. Estimates from dynamic random‐effects models indicate that husbands and wives in couples that migrated for job‐related reasons suffer lower job retention rates than non‐migrants. Tied migration reduces the probability of subsequent employment for both husbands and wives and in particular has a large negative impact on job retention rates among wives.     

An anatomy of zero‐hour contracts in the UK

We present the first attempt to locate zero‐hour contract (ZHC) jobs—jobs that lack a guaranteed minimum number of hours—within theoretical frameworks of the employment relationship and occupational class and empirically explore their characteristics using successive UK Labour Force Survey. In line with these theories, we find this contentious form of employment to be strongly differentiated by the nature of occupational tasks and to overlap with nonstandard employment features (e.g. part‐time and temporary). They are also highly concentrated in a small number of occupations and sectors, with over half of ZHC jobs found in just 10 occupations. We further show that ZHCs are associated with indicators of inferior job quality such as low pay and underemployment. Although we find no evidence that ZHCs are a particularly pervasive feature of the UK labour market, further growth cannot be ruled out in certain occupations.     

Promotional message strategies for disability charities' employment services

One hundred and eight managers responsible for employee recruitment completed mail questionnaires designed to assess their affective, cognitive and conative reactions to two promotional messages for a disability charity's employment (job‐finding) service. The first message contained a mainly altruistic appeal; the second emphasised the financial and other practical benefits of employing a disabled person. Overall the sample reacted more favourably to the latter communication. Heads of department and general managers found the altruistic message to be significantly less appealing than did personnel or human resources managers. Responses were significantly influenced by a recruiting manager's personal experiences of disabled individuals; by the state of the labour market; and by perceptions (possibly unfounded) that non‐disabled employees within a firm would feel uncomfortable if they were made to work alongside a disabled person. Copyright © 2001 Henry Stewart Publications     

Institutional antecedents and performance consequences of employment security and career advancement practices: Evidence from the people's republic of China

In this study, we examine the provision of employment security and career advancement opportunities in firms of diverse institutional ownership and the impact of such practices on employee and firm outcomes. The sample included 478 state‐owned and non‐state‐owned firms (i.e., domestic private firms, Sino‐foreign joint ventures, and wholly‐foreign‐owned firms) in the People's Republic of China. We found that the provision of employment security was greater in state‐owned than in non‐state‐owned firms. The provision of career advancement opportunities in domestic private firms and Sino‐foreign joint ventures was similar to that in wholly foreign‐owned firms, but greater than that in state‐owned firms. The provision of career advancement opportunities was positively related to employee organizational commitment, citizenship behaviors, and firm performance. The provision of employment security was positively related to employee organizational commitment, but not to citizenship behaviors or firm performance. © 2008 Wiley Periodicals, Inc.     

Narrating the Power of Non‐Standard Employment: The Case of the Israeli Public Sector*

abstract Applying a critical discourse analysis approach, this study shows how the argument equating non‐standard employment (NSE) with organizational efficiency gains dominance over the contesting argument that views NSE as reducing organizational efficiency. We interviewed 24 senior‐level HR managers in the Israeli public sector, where NSE is used extensively, in order to shed light on the discursive order and the power struggle between these contesting arguments. Findings point to two story‐lines that helped discredit the argument in which NSE reduces organizational efficiency: (1) a statement of loyalty to organizational efficiency, accompanied by a gesture of concern for employees in non‐standard arrangements; and (2) subordinating an implied preference for eliminating NSE to organizational constraints.     

Poverty Dynamics of Households in Rural China

The objective of our study is to identify patterns and causes of households' transitions into and out of poverty using the long household panel data on rural China in 1989–2009. We propose a discrete‐time multi‐spell duration model that not only corrects for unobserved heterogeneity, but also addresses the endogeneity due to dynamic selection associated with household's livelihood strategies. The household choosing farming or out‐migration as a main livelihood strategy was more likely to escape from persistent poverty than those taking local non‐agricultural employment. The present study emphasizes the central role of agriculture in helping the chronically poor escape from poverty.     

Productivity and Trade Orientation in UK Manufacturing*

We show that improvements in aggregate productivity in UK manufacturing during the first years after the implementation of the Euro, by the UK's main trading partners in Europe, are determined by both market share reallocation and within‐company productivity growth. Furthermore, we outline a structural methodology for estimating parameters of a production function linking the unobservable productivity to endogenous company‐level trade orientation, investment and exit decisions. This allows us to back out consistent and unbiased estimates of productivity dynamics by trade orientation of companies within four‐digit UK manufacturing industries using FAME data over the period 1994–2001. Our estimates of productivity dynamics indicate that improvements in aggregate productivity were mainly driven by market share reallocations away from inefficient and towards efficient exporting companies alongside productivity improvements within non‐exporting companies.