Teen employment, poverty, and the minimum wage: Evidence from Canada

In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3%-5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4%-6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families.     

Training subsidies and the wage returns to continuing vocational training: Evidence from Italian regions

We use the regional and time variation of training grants in Italy to identify the causal effect of (formal continuing vocational) training on earnings. We estimate log-linear earnings regressions with constant marginal returns to training and find that one additional week of training increases monthly net earnings by 1.36%, substantially less than the 3% or more often found in the literature. Estimated returns vary significantly by firm size, and range from 0.40% in firms with more than 100 employees to 2.51% in smaller firms, the bulk of the Italian private sector. A simple back of the envelope comparison of the marginal costs and benefits of training policy suggests that the latter are higher than the former.     

The effect of minimum wage hikes on employment: Evidence from regional panel data from Romania

Minimum wage hikes aim to increase the income of low-wage workers and improve their labour market participation. However, there are concerns that large increases may reduce employment, especially in countries where minimum wages increased quickly and whose competitiveness depends, at least partly, on low production costs. This study examines the employment effect of large increases in the minimum wage in Romania between 2008 and 2016. It uses regional (NUTS III) data and dynamic panel methods. The results do not support the hypothesis that minimum wage hikes reduce employment. They are robust to the use of different econometric methods, plausible variations of the specification and definitions of the key variables. Moreover, the results suggest insignificant effects even for low wage, less developed or high unemployment regions.     

我国总产出的动态特征研究--基于最小拉格朗日乘数单位根检验的实证分析

本文采用最新的结构断点最小拉格朗日乘数单位根检验,对我国1952～2004年间总产出的动态特征进行了研究,结果发现所有总量都是围绕着一个或两个结构断点的分段趋势平稳的。总产出服从分段趋势平稳过程的结论,对宏观经济运行预测、政策主导下的长期经济发展战略和短期经济稳定措施是否有效,以及总产出与其他总量间因果关系的研究具有重要启示。     

Organisational form and quality,service, and cleanliness inspection scores in restaurant franchise chains: Evidence from Spain

This study investigates how the organisational form (company ownership vs. franchising) of individual restaurants of a large Spanish restaurant company influences their inspection scores in terms of quality, service, and cleanliness (QSC). The research uses a panel data set that includes bimonthly restaurant-level data on QSC inspection scores. The aggregate data initially reveal substantial differences between company-owned and franchised restaurants. Nevertheless, after controlling for other variables, we observe that such differences are in fact minor, or even nonexistent. In addition, when we endogenise the selection of the restaurants' organisational form, the differences become statistically insignificant.     

What is the most flexible component of wage bill adjustment? Evidence from Belgium

This paper decomposes wage bill changes at the firm level into components due to wage changes, and components due to flows of employment. It relies on an administrative matched employer–employee dataset of individual earnings merged with firms' annual accounts for Belgium over the period 1997–2001. The results are in line with what one would expect in a downward wage rigidity environment. On average, wage bill contractions result essentially from employment cuts in spite of wage increases. Wage growth of job stayers is moderated but positive; and wages of entrants compared with those of incumbents are no lower. The labour force cuts are achieved through both reduced entries and increased exits, due to more layoffs, especially in smaller firms, and wider use of early retirement, especially in manufacturing. In addition, the paper points out the role of overtime hours, temporary unemployment and interim workers in adapting hours worked to economic circumstances.     

The Minimum Wage Law and Teenage Crime: Evidence From the US

What is the effect of minimum wage regulation on youth crime? Masanori Hashimoto, of Ohio State University, argues that in the USA the evidence suggests that the minimum wage causes both unemployment and teenage crime.     

Verifiable wage offers and recontracting: effect on wage and consumption profiles

This paper analyzes the effect of recontracting and matching verifiable wage offers on the intertemporal structure of contract wage and consumption profile for a two-period economy. A contract firm provides specific training for a worker during the first period, which increases his productivity if he stays in the second period, but the worker may quit to accept an alternative wage offer after a successful search. Wage offers are private to the worker but can be presented to the contract firm for matching. This paper shows that when capital markets are imperfect and wage offers are verifiable, the contract firm recontracts and matches any wage offers the worker receives up to the second-period productivity. The ex ante contract wage profile will be flat. Inefficient quits will be eliminated and there will be complete ex ante consumption smoothing. It is significant to note that the result of rising wage profile derived in numerous contract models is fragile with respect to assumptions on mechanism of interfirm labor mobility.     

Wage incentives and wage rigidity: A representative view from within

A recent literature has used surveys of those who set wages to learn about the nature of wage incentives and the sources of wage rigidity. Methodologically, we overcome many of the objections that have been raised against this work. Substantively, we find that: (i) the reasons for real wage rigidity differ significantly between large and small firms, and between the high- and low-end of the labor market; (ii) efficiency wage mechanisms reinforce rigidities due to worker bargaining power; (iii) money illusion is a widespread phenomenon across all segments of the labor market; (iv) unions reinforce nominal wage rigidities due to external pay comparisons; (v) there appears to be gender differences in pay bargaining and work morale.     

Is training more frequent when the wage premium is smaller? Evidence from the European Community Household Panel

According to Becker [Becker, G., 1964, Human Capital, NBER, New York], when labour markets are perfectly competitive, general training is paid by the worker, who reaps all the benefits from the investment. Therefore, ceteris paribus, the greater the training wage premium, the greater the investment in general training. Using data from the European Community Household Panel, we compute a proxy of the training wage premium in clusters of homogeneous workers and find that smaller premia induce greater incidence of off-site training, which is likely to impart general skills. Our findings suggest that the Becker model provides insufficient guidance to understand empirical training patterns. Conversely, they are not inconsistent with theories of training in imperfectly competitive labour markets, in which firms may be willing to finance general training if the wage structure is compressed, that is, if the increase in productivity after training is greater than the increase in pay.     

Efficiency Wages and the Economic Effects of the Minimum Wage: Evidence from a Low‐Wage Labour Market*

This article exploits a natural experiment provided by the 1999 introduction of the UK National Minimum Wage (NMW) to test for efficiency wage considerations in a low‐wage sector, the UK residential care homes industry. The empirical results provide support to the wage‐supervision trade‐off prediction of the shirking model and suggest that the NMW may have operated as an efficiency wage in the care homes sector, leading to a reduction in supervision costs. These findings can explain earlier evidence suggesting that although the NMW introduction increased wages dramatically in the care homes sector, it generated only moderate negative employment effects.     

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.     

Price,wage and employment response to shocks: evidence from the WDN survey

We analyse the relative intensity and character of price vs. cost and wage vs. employment firm-level adjustment to cost-push shocks in the European System of Central Banks Wage Dynamics Network (WDN) survey data set. The results document several statistically significant and theoretically sensible relationships: price increases are less likely when product market competition is more intense, and more likely when collective wage agreements or employment protection legislation constrain firm-level reactions. We discuss how changes of such structural and institutional features of firms and of their environment may underlie the evolution of macroeconomic adjustment mechanisms in Europe.     

The problem of riches: from trade boards to a national minimum wage

This article explores why, despite repeated shifts in the attitude of friends and enemies alike, wages councils (formerly trade boards) have survived for over seventy years. It examines their value and limitations, and considers the need for more wide-ranging regulation to tackle the problem of poverty wages in the midst of affluence.     

Some deadweight losses from the minimum wage: the cases of full and partial compliance

This paper highlights the social costs from non-price rationing of the labour force due to the minimum wage. By short-circuiting the ability of low reservation-wage workers to underbid high-reservation wage workers, the minimum wage interferes with the market's basic function of grouping the lowest cost workers with the highest productivity firms. The present paper models the deadweight loss that society bears when high reservation-cost workers displace low reservation-cost workers. When firms can evade part or all of the minimum wage, an extra deadweight loss arises. Firms with high evasive ability but low productivity may displace firms with low evasive ability but high productivity.     

The role of organizational culture and HRM on training success: evidence from the Canarian restaurant industry

This research aims to analyse the influence of organizational culture and human resources management (HRM) practices on the success of training at restaurants. Effective training is especially important for modern restaurants that aim to gain competitive advantage by means of good quality service and performance of their employees. To achieve this objective, an empirical study was conducted on 137 restaurants in the Canary Islands. Results show that organizational culture does not influence the success of the training programmes unless HRM practices that support the training process are implemented. Specifically, the study reveals the full mediating role of HRM practices between a continuous learning culture and effective training.     

Minimum Wages and Youth Unemployment: Will Britain Learn from Canada?

Norman Tebbit is spending vast sums on palliatives for youth employment. Minimum wage legislation may be responsible for nearly 40 per cent of youth unemployment in Britain. Canada suggests that unemployment must result if the labour market is prevented from accommodating population change through state-imposed rigidities which prevent changes in the price of labour.     

The wage policy of firms: comparative evidence for the US and Germany from personnel data

The wage policy of a German firm and a US firm is subjected to a comparative analysis, focusing on the relation between wages and hierarchies. While previous studies have examined only one particular firm, this paper investigates two plants belonging to the same owners with similar production processes but in different institutional environments. Convex wage profiles over the hierarchy levels of both plants are found. The US plant shows considerably higher intensity of intra-firm competition in terms of higher intra-level wage inequality and annual promotion rate. In contrast, wages are more distinctly attached to hierarchy levels in the German firm, as shown by wage regressions. The results are discussed in relation to previous studies.     

Specialization and Success: Evidence from Venture Capital

This paper examines how organizational structure affects behavior and outcomes, studying the performance of different types of venture capital organizations. We find a strong positive relationship between the degree of specialization by individual venture capitalists at a firm and its success. When the individual investment professionals are highly specialized themselves, the marginal effect of increasing overall firm specialization is much weaker. The poorer performance by generalists appears to be due to both an inefficient allocation of funding across industries and poor selection of investments within industries. Venture capital organizations with more experience tend to outperform those with less experience.     

外包与劳动生产率提升——基于中国工业行业数据的再检验

本文利用投入产出表中的完全消耗系数和基本流量表,突破FH指数的相同比例假定,利用1997年、2002年和2007年投入产出表计算DJ指数衡量的中国33个工业行业材料外包、服务外包和狭义材料外包水平,并运用面板数据模型检验了外包对劳动生产率整体及行业的影响。主要结论表明,材料外包和服务外包总体上提升了中国工业行业的劳动生产率,其中服务外包的促进作用更强。