Do salaries improve worker performance?

We establish the effects of salaries on worker performance by exploiting a natural experiment in which some workers in a particular occupation (football referees) switch from short-term contracts to salaried contracts. Worker performance improves among those who move onto salaried contracts relative to those who do not. The finding is robust to the introduction of worker fixed effects indicating that it is not driven by better workers being awarded salary contracts. Nor is it sensitive to workers sorting into or out of the profession. Improved performance could arise from the additional effort workers exert due to career concerns, the higher income associated with career contracts (an efficiency wage effect) or improvements in worker quality arising from off-the-job training which accompanies the salaried contracts.     

Wage inequality, technology and trade: 21st century evidence

This paper describes and explains some of the principal trends in the wage and skill distribution in recent decades. Increases in wage inequality started in the US and UK at the end of the 1970s, but are now widespread. A good fraction of this inequality trend is due to technology-related increases in the demand for skilled workers outstripping the growth of their supply. Since the early 1990s, labor markets have become more polarized with jobs in the middle third of the wage distribution shrinking and those in the bottom and top third rising. I argue that this is because computerization complements the most skilled tasks, but substitutes for routine tasks performed by middle wage occupations such as clerks, leaving the demand for the lowest skilled service tasks largely unaffected. Finally, I argue that technology is partly endogenous, for example it has been spurred by trade with China. Thus, trade does matter for changes in the labor market, but through a different mechanism than conventionally thought.     

Substitution and complementarity between managers and subordinates: Evidence from British football

We use data on British football managers and teams over the 1994-2007 period to study substitution and complementarity between leaders and subordinates. We find for the Premier League (the highest level of competition) that, other things being equal, managers who themselves played at a higher level raise the productivity of less-skilled teams by more than that of highly skilled teams. This is consistent with the hypothesis that one function of a top manager is to communicate to subordinates the skills needed to succeed, since less skilled players have more to learn. However, we also find that managers with more accumulated professional managing experience raise the productivity of talented players by more than that of less-talented players. This is consistent with the hypothesis that a further function of successful managers in high-performance workplaces is to manage the egos of elite workers. Such a function is potentially more important the more accomplished the workers are-as indicated, in our data, by teams with greater payrolls.     

Two perspectives on multiskilling and product-market volatility

We study the effect of product-market volatility on a firm's choice between multiskilling and specialization. We construct a theoretical model that captures the tradeoff between multiskilling (which gives greater flexibility to reassign workers in production) and specialization (which provides workers with the expertise to respond to product market signals in their area of specialty). Using data from a nationally-representative cross section of British establishments, we find that greater volatility is associated with greater specialization. This result holds both inside and outside of manufacturing, but consistent with our model, it holds only in multi-product establishments and not in single-product ones.     

Adverse workplace conditions, high-involvement work practices and labor turnover: Evidence from Danish linked employer-employee data

Using Danish linked employer-employee data, we find that: (i) exposing the worker to physical hazards leads to a 3 percentage point increase in the probability of voluntary turnover from the average rate of 18%; (ii) working in night shift results in an 11-percentage point hike; and (iii) having an unsupportive boss leads to a 6-percentage point jump. High involvement work practices are found to play a significant role in mitigating the adverse effects of workplace hazards. Finally, the worker under adverse workplace conditions is found to improve the 5-year odds of rectifying such workplace adversities by quitting the firm.     

Firms' relative sensitivity to aggregate shocks and the dynamics of gross job flows

We propose the coefficient of variation as a measure of the cyclical volatility of gross job flows that is immune to trends in net job creation. In addition, we show that this measure is intrinsically related to the importance of aggregate shocks for fluctuations in job flows at the firm level. Using data for the Portuguese economy, we conclude that the coefficient of variation is a more robust measure for the underlying volatility of gross job flows. We also find that large and old firms exhibit higher relative sensitivity to aggregate shocks than small and young firms, and have a disproportional influence over the dynamics of aggregate job reallocation. In particular, since large and old firms tend to reallocate jobs less procyclically than small and young firms, job reallocation is less procyclical than if all firm classes were equally sensitive to aggregate shocks.     

Noncognitive skills, occupational attainment, and relative wages

This paper examines whether men's and women's noncognitive skills influence their occupational attainment and, if so, whether this contributes to the disparity in their relative wages. We find that noncognitive skills have a substantial effect on the probability of employment in many, though not all, occupations in ways that differ by gender. Consequently, men and women with similar noncognitive skills enter occupations at very different rates. Women, however, have lower wages on average not because they work in different occupations than men do, but rather because they earn less than their male colleagues employed in the same occupation. On balance, women's noncognitive skills give them a slight wage advantage. Finally, we find that accounting for the endogeneity of occupational attainment more than halves the proportion of the overall gender wage gap that is unexplained.     

Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model

This paper introduces collective bargaining at the firm and at the sector level into the heterogeneous firm model of Melitz and Ottaviano (Melitz, M. J., Ottaviano, G. I. P., 2008. Market size, trade, and productivity. Review of Economic Studies 75 (1), 295-316). It then analyses how the two bargaining regimes change aggregate industry productivity and firm performance relative to a competitive labour market. While sector-level bargaining forces the least productive firms to exit and thus increases average productivity relative to the competitive benchmark, firm-level bargaining allows less productive firms to stay in the market and thus reduces average productivity. Sector-level bargaining also results in higher average output and profit levels than either firm-level bargaining or a competitive labour market. The paper also shows that the choice between sector- and firm-level bargaining can involve a trade-off between product variety and product prices: Not only the average price level but also product variety tends to be lower under sector-level bargaining than under firm-level bargaining.     

Job satisfaction and gender: Why are women so happy at work?

By most objective standards, women's jobs are worse than men's, yet women report higher levels of job satisfaction than do men. This paper uses a recent large-scale British survey to document the extent of this gender differential for eight measures of job satisfaction and to evaluate the proposition that identical men and women in identical jobs should be equally satisfied. Neither the different jobs that men and women do, their different work values, nor sample selection account for the gender satisfaction differential. The paper's proposed explanation appeals to the notion of relative well-being, especially relative to workers' expectations. An identical man and woman with the same jobs and expectations would indeed report identical job satisfaction, but women's expectations are argued to be lower than men's. This hypothesis is supported by the finding that the gender satisfaction differential disappears for the young, the higher-educated, professionals and those in male-dominated workplaces, for all of whom there is less likely to be a gender difference in job expectations.     

Effects of job stress on self-esteem,job satisfaction,and turnover intention

ABSTRACT

This study is focused on female inbound call center counselors who are easily exposed to emotional labor when customers express anger and hostility and use swear words toward invisible targets on the phone. Our study is based on 244 responses from female inbound call center counselors. Job stress has a significantly negative effect on job satisfaction and self-esteem. It was shown that self-esteem has a partially mediating effect, and turnover experience had a moderating effect. It is important to shed new light on the roles of self-esteem among determinants of job satisfaction.     

Socio-demographics,political attitudes and informal sector employment: A cross-country analysis

In this paper, we empirically investigate the relationship between informal sector employment and micro-level socio-demographic characteristics, political acts and attitudes, and individual norms. Using self-reported individual micro-level data from the World Values Survey for seven developing countries (China, Ecuador, Egypt, Mexico, Peru, South Africa and Yemen), our cross-country regressions and principal component analysis reveal that socio-demographic characteristics of individuals are strong predictors of their informal sector employment. Our estimations further document that individual preferences for an economically strong, interventionist and egalitarian state and confidence in state and political institutions are positively and significantly correlated with informal sector employment, whereas variables associated with confidence in free market institutions and support for competition are negatively and significantly correlated with informal sector employment. We also show that individuals who participate either actively or inactively in peaceful and lawful political processes are significantly less likely to work in the informal sector. Finally, we document that individual norms, such as religiosity and tax morale, are negatively correlated with informal sector employment. Throughout our analysis, instead of having to rely on ad-hoc informality categorizations of third parties, we base our measurement of informal sector employment directly on the self-evaluation of individuals, who have the best information on the degree of their informality.     

Birth-spacing,fertility and neonatal mortality in India: Dynamics,frailty, and fecundity

Using microdata on 30,000 childbirths in India and dynamic panel data models, we analyse causal effects of birth-spacing on subsequent neonatal mortality and of mortality on subsequent birth intervals, controlling for unobserved heterogeneity. Right censoring is accounted for by jointly estimating a fertility equation, identified by using data on sterilization. We find evidence of frailty, fecundity, and causal effects in both directions. Birth intervals explain only a limited share of the correlation between neonatal mortality of successive children in a family. We predict that for every neonatal death, 0.37 additional children are born, of whom 0.30 survive.     

Culture,participative decision making and job satisfaction

This study explores the impact of culture on participatory decision making (PDM) and job satisfaction (JS) using data obtained from the European Values Study (EVS). We parameterise two different cultural variables using principal components analysis: first a continuum based on survival versus self-expression values and second a continuum based on traditional versus secular-rational values. Application of ordered logistic regression to Likert scales of PDM and JS suggests that greater self-expression in the survival versus self-expression variable enhances both PDM and JS; and more traditional values in the traditional versus secular-rational continuum have the same effect.     

VARs,common factors and the empirical validation of equilibrium business cycle models

Equilibrium business cycle models have typically less shocks than variables. As pointed out by Altug (1989) International Economic Review 30 (4) 889–920 and Sargent (1989) The Journal of Political Economy 97 (2) 251–287, if variables are measured with error, this characteristic implies that the model solution for measured variables has a factor structure. This paper compares estimation performance for the impulse response coefficients based on a VAR approximation to this class of models and an estimation method that explicitly takes into account the restrictions implied by the factor structure. Bias and mean-squared error for both factor- and VAR-based estimates of impulse response functions are quantified using, as data-generating process, a calibrated standard equilibrium business cycle model. We show that, at short horizons, VAR estimates of impulse response functions are less accurate than factor estimates while the two methods perform similarly at medium and long run horizons.     

Market imperfections and firm-sponsored training

Using worker and firm data from Dutch manufacturing, our paper investigates how product market competition and labor market imperfections affect firm-sponsored training. We find that product market competition does not affect the firms' training expenditures. Increasing competition, for instance due to increased international integration and globalization, is not a threat to investments in on-the-job training. Instead, labor market imperfections influence firm-sponsored training. An increase in labor market flexibility significantly reduces the incentives of firms to invest in training. The magnitude of this effect is nevertheless small.     

Testing for unobserved heterogeneity in exponential and Weibull duration models

We examine the use of the likelihood ratio (LR) statistic to test for unobserved heterogeneity in duration models, based on mixtures of exponential or Weibull distributions. We consider both the uncensored and censored duration cases. The asymptotic null distribution of the LR test statistic is not the standard chi-square, as the standard regularity conditions do not hold. Instead, there is a nuisance parameter identified only under the alternative, and a null parameter value on the boundary of the parameter space, as in Cho and White (2007a). We accommodate these and provide methods delivering consistent asymptotic critical values. We conduct a number of Monte Carlo simulations, comparing the level and power of the LR test statistic to an information matrix (IM) test due to Chesher (1984) and Lagrange multiplier (LM) tests of Kiefer (1985) and Sharma (1987). Our simulations show that the LR test statistic generally outperforms the IM and LM tests. We also revisit the work of van den Berg and Ridder (1998) on unemployment durations and of Ghysels et al. (2004) on interarrival times between stock trades, and, as it turns out, affirm their original informal inferences.     

The phantom of the opera: Cultural amenities, human capital, and regional economic growth

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a part of rulers' competition for prestigious cultural sights. Robustness tests confirm our strategy and strengthen the finding that proximity to a baroque opera house significantly affects the spatial equilibrium share of high-human-capital employees. A cross-region growth regression shows that these employees induce local knowledge spillovers and shift a location to a higher growth path.     

Relative deprivation, relative satisfaction, and attitudes towards immigrants: Evidence from Ukraine

This paper applies the concept of relative deprivation/satisfaction to studying the formation of attitudes towards immigrants. It finds that the feeling of group relative deprivation, as opposed to individual relative deprivation or satisfaction, adversely affects the attitudes of native-born, even when its potential endogeneity is taken into account. Furthermore, relative deprivation matters only for native-born who subjectively underestimate their well-being, but not for those who overestimate it. When considering other forms of native-born individuals’ perceived disadvantage, such as in terms of employment, access to education or medical facilities, there is weak evidence that only a perceived disadvantage in obtaining medical aid negatively affects attitudes.