Youth labour market performances in the Russian and Italian regions

The focus of this paper is on youth unemployment in Italy and Russia: in both countries, youth unemployment rates (YURs) are higher than adult (or total) ones. Despite these general trends, there are significant regional differences in YURs and above-average YUR regions tend to cluster close to each other. Moreover, a distinction between “North” and “South” regions seems appropriate for both countries. The purpose of this study is to identify key determinants of YURs in the Russian and Italian regions, for the period 2000–2009. We also search for the existence of distance spatial effects. In particular, we estimate a modified Arellano–Bond model for the regional YUR, including some explanatory and control variables (e.g. regional GDP in PPP, regional population density, regional total unemployment rate), together with year dummies and North/South dummies. The use of distance matrixes enables important analysis to be conducted on the role played by spatial effects, which turn out to be significant. Also the negative impact of the 2008–2009 crisis is statistically confirmed (at least in the case of Italy). The relevant policy implications are highlighted in the conclusions.     

The impact of welfare reform on labour supply behaviour in New Zealand

New Zealand recently implemented sweeping reforms to its social welfare programmes by cutting benefits and tightening eligibility criteria. Regression analysis is used in this paper to isolate the effects of these reforms on several dimensions of labour supply behaviour. Overseas research in this area has often been hindered by the difficulty of boiling complex work disincentives down to a manageable set of regressors, or the lack of true variation in programme parameters. The structure of the benefit system and the nature of the reforms in New Zealand provide a unique opportunity to identify these behavioural responses. Quarterly random samples of individuals between 1985:4 and 1995:4 are used to isolate the effects of these policies, while controlling for a wide variety of other influences. This study finds compelling evidence that these reforms increased aggregate labour supply in this country.     

Holdup in oligopsonistic labour markets - a new role for the minimum wage

We consider a labour market model of oligopsonistic wage competition and show that there is a holdup problem although workers do not have any bargaining power. When a firm invests more, it pays a higher wage in order to attract workers from competitors. Because workers participate in the returns on investment while only firms bear the costs, investment is inefficiently low. A binding minimum wage can achieve the first-best level of investment, both in the short run for a given number of firms and in the long run when the number of firms is endogenous.     

Structure of the labour market and wage inequality: evidence from European countries

The aim of this paper is to explore how the structural changes that have occurred in the labour market, in terms of employment composition by skill levels, affect wage inequality in three developed countries of Western Europe that are in close geographical proximity but have disparities in their labour market characteristics. More precisely, the analysis compares, from an international perspective, France, Germany—whose labour markets have been characterised in recent years by job polarization and the upgrading of occupations, respectively—and Italy, where neither of the two phenomena can be clearly identified. Using EU-SILC (European Union—Survey on Income and Living Conditions) data, in the first step, RIF-regression (Recentered Influence Function) enables an exploration on the primary factors that are likely to explain the differences in generating personal labour earnings and, in the second step, a decomposition of the change in wage inequality between 2005 and 2013 to evaluate how much of the overall gap is accounted for by the endowments in employees’ individual characteristics (composition effect) rather than the capability of labour markets to transform these characteristics into job opportunities and earnings (wage structure). Regarding France and Germany, the main results highlight how the endowment effect plays a key role in decreasing or, at least, not increasing wage inequality, whereas in Italy the rising inequality may be due to the lower efficiency of the country’s labour market in creating job opportunities, better job-related careers, and higher-salaries for employees.     

Setting the minimum wage

The process leading to the setting of the minimum wage so far has been overlooked by economists. There are two common ways of setting national minimum wages: they are either government legislated or the byproduct of collective bargaining agreements, which are extended erga omnes to all workers. We develop a simple model relating the level of the minimum wage to the setting regime. Next, we exploit a new data set on minimum wages in 68 countries having a statutory national minimum level of pay in the period 1981–2005. We find that a Government legislated minimum wage is lower than a wage floor set within collective agreements. This effect survives to several robustness checks and can be interpreted as a causal effect of the setting regime on the level of the minimum wage.     

The eurozone crisis,German hegemony and labour market reform in the GIPS countries

This article argues that the eurozone crisis has led to Germany hegemony, a feature of which has been complete resistance to a genuinely European solution to the crisis. German political leaders have sought to make the eurozone a more stable currency area by demanding far reaching labour market adjustment in the debtor countries of Greece, Ireland, Portugal and Spain, GIPS countries. This article assesses why Germany's leaders elected to act as a coercive hegemon and examines the labour market reform pathways being travelled by GIPS countries. It argues that the austerity regime enacted under German hegemony has obliged the GIPS countries to introduce important labour market reforms. However, these reforms have not threatened the integrity of established national systems of industrial relations. As a result a Euro war of attrition has opened up between the European core and periphery.     

Transnational labour markets and national wage setting systems in the EU

The article analyses the impact of European regulations of posting on different national wage systems. The article shows that the impact varied across the countries and has been filtered by the national institutions regulating the labour market. In the voluntarist wage setting systems of Germany and even Sweden, they have been a major factor bringing wages back into competition. The ability of national actors to act has been considerably curtailed by the European Court of Justice (EUJ), which has placed free competition above the basic rights of autonomous collective bargaining. Because of the divergent interests of Member States, this weakening of national actors cannot be compensated for by transnational agreements. This ‘negative integration’ brings with it a serious risk that the inclusiveness of European wage systems will be eroded by a series of cumulative effects.     

Labour market segmentation and wage dynamics

The article contains results of a quantitative empirical investigation into the effects of labour market segmentation on wage dynamics in total industry as well as in several industrial branches in West Germany. By testing correlations between several indicators of earnings and the labour market it is shown that wage dynamics, in so far as they are determined by shop floor bargaining, can be explained at least as well and partly even better by indicators of certain partial labour markets than by conditions of the general labor market (i.e. the traditional Philipps approach).     

The effect of the minimum wage on employment and hours

This study examines the effect of minimum wage increases on teen hours of work and employment using both state- and individual-level panel data in the US. The state-level results indicate that minimum wage increases may lower employment rates but do not adversely affect hours among either working teens or all teens. The individual-level results do not indicate that minimum wage increases have a significant negative effect on hours worked by low-wage teens who are likely to be affected by a minimum wage increase. The results suggest that low-wage teens are less likely to remain employed, relative to high-wage teens, when the minimum wage is raised. However, this adverse effect disappears when these low-wage teens are compared to other low-wage teens during periods when the minimum wage did not increase.     

Port reform without tears – the New Zealand experience

New Zealanďs port reforms in 1989 and 1990 were part of a wider programme of economic reform. The paper analyses their effects, concluding that there have been substantial benefits in terms of improved port performance which have helped New Zealand exporters and the economy generally.     

Negotiating fair pay and conditions: low paid women's experience and perceptions of labour market deregulation and individual wage bargaining

The OECD is strongly supportive of the industrial relations changes recently introduced in Australia. This article examines the experiences of low paid women in a deregulated labour market context. The research highlights the gendered effects of the recent reforms and cautions against the use of Australia as a model framework.     

Sexual orientation discrimination in the labour market

This research examines the possible discrimination faced by gay men compared to heterosexuals when applying for jobs in the Greek private sector. This issue was addressed through the observation of employer hiring decisions. Mailing pairs of curriculum vitae, distinguished only by the sexual orientation of the applicants, led to the observation that gay men faced a significantly lower chance of receiving an invitation for an interview. However, in cases where employers called applicants back, the wages offered did not differ significantly between gay and heterosexual applicants. Nevertheless, there is substantial evidence to suggest that discrimination based on sexual orientation does exist in the Greek labour market, and at alarmingly high levels.     

Testing for redlining in the labour market

When an employer refuses to recruit a job applicant due to the applicant's place of residence, we speak of redlining in the labour market. There are two explanations for this practice by the employer. The first is the excessive distance between the applicant's place of residence and the workplace, justified by a logic of spatial mismatch. The second is based on the characteristics of the neighbourhood in line with a signal logic. We propose to measure the effects of these two mechanisms using a correspondence test conducted in the Paris region of France for two occupations: waiters and cooks. It appears that distance plays a significant role and reinforces the effect of a disreputable neighbourhood. The most deprived neighbourhoods combine these two types of drawbacks.     

Endogenous monopsony and the perverse effect of the minimum wage in small firms

The minimum-wage rate has been introduced in many countries as a means of alleviating the poverty of the working poor. This paper shows, however, that an imperfectly enforced minimum-wage rate causes small firms to face an upward-sloping labor supply schedule. Since this turns these firms into endogenous monopsonists, the minimum-wage rate has the perverse effect of reducing employment in small firms as well as what these firms offer their workers. Thus, if there are only small firms, the minimum-wage rate makes all workers that would be employed in the absence of a minimum-wage rate worse off.     

End the minimum wage debate: Revise the concept itself

The debate over raising the minimum wage focuses on the wrong point. We should be trying to change the concept of minimum wage to one that reflects what it really is—an entry wage. The real issue in the minimum wage debate needs to be one of clarifying the underlying human/social purpose of the minimum wage concept.     

Hierarchies in organisations and labour market competition

This paper studies the endogenous determination of hierarchies in firms. Firms can design a hierarchy with a continuum of ranks, one for each ability level. Nevertheless, in the market equilibrium, they choose to have only a finite number of ranks, so that in each rank there are workers of different abilities, who produce different output, and receive the same wage. It is also shown that an increase in the extent of labour market competition reduces the number of ranks in the hierarchy.     

Reproducing low‐wage labour: capital accumulation,labour markets and young workers

Drawing on evidence from Greater Manchester, this article examines how structural changes in capital accumulation have created particular labour market outcomes, which have led to young people becoming a source of cheap labour for the growing low‐wage service economy. Greater Manchester has been selected as a case study because of the sectoral composition of its labour market and because levels of low pay for young workers are above the national low‐pay average of 40 per cent. The research reveals that it is necessary to move beyond sociological explanations that concentrate on the ‘essential youthfulness’ of young people and instead draw on analytical categories from political economy in order to understand the structural causes of young people's material circumstances.     

Job and wage mobility with minimum wages and imperfect compliance

We propose a job search model with minimum wage regulations and imperfect compliance to explain the doubling of the mean and variance of hourly earnings of white males during the first 18 years of labor market experience. The model encompasses job mobility and on‐the‐job wage growth as sources of wage dynamics, and is estimated by simulated generalized method of moments using data from the National Longitudinal Survey of Youths 1979. Our estimates provide a good fit for the observed levels and trends of the main job and wage mobility data, and for the increase in the mean and variance of wages over the life cycle, as well as for the fall in the fraction of workers paid below the minimum wage. Job mobility explains 40–50% of the observed wage growth. Increases in the minimum wage and/or compliance deliver small effects on the wage distribution and the nonemployment rate. Copyright © 2010 John Wiley & Sons, Ltd.