the assignment of workers to tasks with endogenous supply of skills this paper presents a general equilibrium assignment model of workers to tasks with endogenous supply of skills in the model skills are endogenous and multidimensional and two types of assignment occur workers self select the type of skills to supply and firms assign workers to tasks the model shows that the impact of any skill biased technical change on wage inequality is tightly related to the distribution of skills in the population when the supply of skills is endogenous productivity effects can be overestimated or underestimated by wage data and johnson s 1997 distinction between intensive and extensive technical change is impossible

counterfactual decomposition of changes in wage distributions using quantile regression we propose a method to decompose the changes in the wage distribution over a period of time in several factors contributing to those changes the method is based on the estimation of marginal wage distributions consistent with a conditional distribution estimated by quantile regression as well as with any hypothesized distribution for the covariates comparing the marginal distributions implied by different distributions for the covariates one is then able to perform counterfactual exercises the proposed methodology enables the identification of the sources of the increased wage inequality observed in most countries specifically it decomposes the changes in the wage distribution over a period of time into several factors contributing to those changes namely by discriminating between changes in the characteristics of the working population and changes in the returns to these characteristics we apply this methodology to portuguese data for the period 1986 1995 and find that the observed increase in educational levels contributed decisively towards greater wage inequality copyright 2005 john wiley sons ltd

the effect of cohort size on earnings growth a reexamination of the evidence this study reexamines the effect of cohort size on earnings growth finis welch finds that individuals in larger cohorts experience depressed earnings conditions on entry into the labor market but that their earnings grow at faster rates than in smaller cohorts thus a large portion of the cohort size effect on earnings dissipates after a few years however using data almost identical to those of welch but estimating less restrictive models it is found here that cohort size not only depresses earnings at entry but also seems to slow down early career earnings growth the evidence suggests that earnings ini larger cohorts do not approach normal levels after at brief period in the labor force rather the negative cohort size effect on earnings appears to worsen with experience

the grocery stores wage distribution a semi parametric analysis of the role of retailing and labor market institutions abstract how and why has the wage distribution in u s grocery stores changed between 1984 and 1994 unlike other industries in this time period the important change in the wage distribution is not risinginequality but that real wages fell across the entire wage distribution changes in labor market institutionsexplain more than half of the change in the wage distribution in grocery stores specifically the decline inthe real value of the minimum wage explains little of the decline in the mean real wage but much of thechange in the shape of the distribution between 1984 and 1994 and 95 percent of the decline at the lowest10th percentile the decline in union coverage in grocery stores and the narrowing of the union nonunionwage gap explain much of the decline above the 25th percentile a third institutional change the use ofpart time employees is not associated with changes in grocery industry wage outcomes one might think that the major changes in operations and technologies that occurred during thisperiod are at least contributing factors but we find quite the contrary if average store size weeklyoperating hours and the use of scanning technology had remained at their lower 1984 levels the real wagedecline would have been even greater than that actually seen and for the entire wage distribution changesin grocery retailing prevented an even greater decline in real wages again unlike many other industries skill biased technological change does not appear important for grocery industry wage outcomes the basis of our analysis is a statistical technique which combines nonparametric kernel densityestimation with a parametric re weighting applied to current population survey data supplemented withsecondary data sources on the grocery industry

education training and employability two hypotheses are tested 1 education and training increase the employability of workers at other tasks within the firm and reduce the need for help from supervisors when workers encounter small problems and 2 greater employability and problem solving capability increase wages the empirical results show that greater employability and problem solving capability are independent from each other formal work related training increases employability workers in jobs requiring no induction training are less employable at other jobs or departments both general and specific human capital increase the ability of workers to solve problems on their own greater employability does not increase wages male workers who solve problems on their own earn more than men who need help from others the effects of human capital variables on employability and problem solving capability do not differ between and men and women however it is found that the ability to solve problems on one s own has a pay off for men but

communication externalities in cities to identify communication externalities in french cities we exploit a unique survey recording workplace communication of individual workers our hypothesis is that in larger and or more educated cities workers should communicate more in turn more communication should have a positive effect on wages by estimating both an earnings and a communication equation we find evidence of communication externalities in larger and more educated cities workers communicate more and in turn this has a positive effect on their wages depending on the estimates we find that 13 to 22 of the effects of a more educated and larger city on wages percolate through this channel

policy choice theory and evidence from commitment via international trade agreements abstract why do governments employ inefficient policies when more efficient ones are available for the same purpose we address this puzzle in the context of redistribution toward special interest groups sigs by focusing on a set of important policies tariffs and non tariff barriers ntbs in our policy choice model a government can gain by committing to constrain tariffs through international agreements even if this leads to the use of less efficient ntbs commitment has political value because it improves the bargaining position of a government that is weak relative to domestic sigs using detailed data we find support for several of the model s predictions including i tariff commitments in trade agreements increase the likelihood and restrictiveness of ntbs but not enough to offset the original tariff reductions ii tariff commitments are more likely to be adopted and more stringent when the government is weaker relative to a sig thus the results can explain the use of inefficient policies for redistribution and suggest that the bargaining motive is an important source of the political value of commitment in international agreements

health and schooling investments in africa this paper first outlines an organizing framework for considering how health and schooling affect labor productivity and growth and how household and community factors can in turn affect the demand for these human capital investments both cross country growth models and various aspects of microeconomic studies of individual productivity as related to education and health are discussed the conclusion offers some tentative leads for policy in this area based on existing research and an agenda for future research

the impact of the 1962 repatriates from algeria on the french labor market this paper uses census data to examine the impact on the french labor market of the 900 000 people repatriated from algeria in 1962 repatriates settled in regions culturally and climatically simil

distributive shares in the us economy 1964 2001 specifying the labour theory of value in a way that distinguishes both productive from unproductive labour and production workers from supervisory workers this paper considers distributive shares in the us economy between 1964 and 2001 trends in productive and unproductive labour are explored in full time equivalents hours and money after 1979 there was a large shift of money value not matched by a shift in either hours or employment from the wages paid to productive labour to those paid to supervisory labour since the wage share in money value added of non supervisory labour in unproductive sectors was approximately constant the 1980s and 1990s also saw the profits share squeezed by the rising wage share of supervisory workers some implications of this are explored in the construction of a class rather than a factor approach to distributive shares

educational opportunity and income inequality affordable higher education is and has been a key element of social policy in the united states with broad bipartisan support financial aid has substantially increased the number of people who complete university generally thought to be a good thing we show however that making education more affordable can increase income inequality the mechanism that drives our results is a combination of credit constraints and the signaling role of education first explored by spence 1973 when borrowing for education is difficult lack of a college education could mean that one is either of low ability or of high ability but with low financial resources when government programs make borrowing easier or tuition more affordable high ability persons become educated and leave the uneducated pool driving down the wage for unskilled workers and raising the skill premium

religion and female educational attainment the paper reviews the literature on the education gender and religion nexuses and identifies plausible hypotheses that religion adversely affects female education the link between major religions and female educational attainment is examined using the barro lee data set for a sample of 97 countries the estimates include control variables for colonial heritage urbanization labor force participation and young adult mortality the estimates show powerful negative links between female educational attainment and the proportion of ethnoreligions hindu and muslim adherents in a country with similar results for the gender gap the paper offers some interpretative thoughts and research agendas

regional labor markets and the determinants of wage inequality from 1972 to 1990 the united states experienced the largest increase in wage inequality of any developed country the spread in log wages between the 90th and 10th percentiles of the male wage distribution increased by about 60 points and inequality increased within virtually every demographic or skill category of the labor force see chinhui juhn et al 1993 various explanations have been offered including changes in the relative demand for skill intensive goods international trade immigration of less skilled workers and increased labor force participation of women yet attempts to quantify the relative importance of these factors have not met with much success this leaves skill biased technical change as the residual claimant that rationalizes the data this paper uses regional differences in the evolution of wage inequality to provide new evidence on the determinants of relative wages using a model of factor demand in geographic markets i isolate contributions of i changing skill ratios in the labor force ii increased participation of women iii technical change and iv changes in the industrial composition of labor demand the data indicate that changing skill ratios and women s labor supply have affected the wages of low skilled men in the west the data indicate that increased immigration of less skilled hispanic and asian workers has adversely affected the wages of natives causing a greater increase in inequality there than in any other region of the country i modeling wage inequality in regional markets

promotions and wage growth this article presents evidence that internal mobility defined as a promotion or other position change is an important source of wage growth it accounts for approximately 15 of wage growth over the life cycle for white and black men but less for women the incidence of promotions and other position changes appears tied to the wage level better paid workers are more likely to be promoted the life cycle incidence of internal mobility looks similar to that for conventionally defined job mobility most moves are made early in the career mobility declines both with time in position and with experience

promotion speed and its effect on attrition of navy enlisted personnel addressing heterogeneity in high school credentials this article investigates the relationship between recruit quality and promotion speed of the us navy s first term enlisted personnel which in turn is expected to affect retention it also investigates whether there are quality differences between the various types of high school credentials presented at the time of recruitment including test based and attendance based equivalencies and nontraditional high school diplomas the results of this article suggest that the navy s recent targeting of individuals with alternative high school credentials and nonhigh school graduates who score in the top half of the armed forces qualification tests afqts as substitutes for diploma holders have desirable results for promotion speed but undesirable results for retention

immigrants minorities and labor market competition this paper investigates the extent of labor market competition among immigrants minorities and the native population an analysis of 1980 u s census data reveals that immigrants tend to be substitutes for some labor market groups and complements for others the effects of shifts in immigrant supply on the earnings of native born men are however very small on the other hand increases in the supply of immigrants do have a sizable impact on the earnings of immigrants themselves an increase of 10 percent in the supply of immigrants for example reduces the immigrant wage by about 10 percent

on the distributional aspects of urban growth abstract although many theories of urban growth have broad implications regarding the dynamics of wage inequality little empirical work has explored the issue this paper studies the relationship between the growth of three measures of economic activity population employment and per capita income and a variety of wage dispersion measures across a sample of us metropolitan areas between 1970 and 1990 overall the results indicate a negative association between the two cities experiencing more rapid growth also tend to witness smaller increases or larger decreases in their inequality such findings offer some support to theories stressing growth mechanisms which equalize productivity across workers

opening a can of worms the pitfalls of time series regression analyses of income inequality this paper argues that time series regression analysis is of only very limited use for understanding the determinants of income inequality the argument is based on a combination of results from the time series econometrics literature and several characteristics of inequality itself principally nonstationarity of the data in most inequality regression models and the weak theoretical foundations underlying the models a sample of postwar us data is used to illustrate the problems involved

wage inequality and returns to skill in taiwan 1978 96 since 1980 income inequality has risen faster in taiwan than in the united states inequality rose despite a rapid increase in the share of educated workers in the labour market that might have been expected to depress returns to education returns to a college education rose in taiwan for all but the least experienced college graduates who were the most substitutable by the large new cohorts of college graduates this pattern of changes in relative employment and relative wages is consistent with persistent shifts in relative demand toward skilled labour the shifts are not sector specific as might have been the case if shifts in trade flows were responsible for the shifts in relative wages growth of relative employment of more educated workers occurred in all sectors of the economy consistent with the hypothesis of skill biased technical change these results are similar to findings reported for oecd countries suggesting that taiwan has been exposed to the same types of skill biased shifts in relati

assessing the employment effects of vocational training using a one factor model matching estimators use observed variables to adjust for differences between groups to eliminate sample selection bias when minimum relevant information is not available matching estimates are biased if access to data on usually unobserved factors that determine the selection process is unavailable other estimators should be used this study advocates the one factor control function estimator that allows for unobserved heterogeneity with factor loading technique treatment effects of vocational training in sweden are estimated with mean and distributional parameters and then compared with matching estimates the results indicate that unobservables slightly increase the treatment effect for those treated

does the labour supply of wives respond to husbands wages canadian evidence from micro data and grouped data using micro data and grouped data we assess the extent to which canadian wives adjusted their labour supply in response to changes in husbands wages during the period 1980 2000 grouped data parameters based on weighted least squares and the unbiased error in variables estimator developed by devereux 2004 2007a b yield cross wage elasticities that are substantially higher in absolute value than those derived from ols regressions run on micro data both grouping estimators indicate that the labour supply of canadian wives responded strongly to changes in husbands wages during the 1980s for the 1990s our estimates of wives cross wage elasticity display greater dispersion a l aide de micro donnees et de donnees groupees on etablit jusqu a quel point les epouses canadiennes ont ajuste leur offre de travail en reponse aux changements dans les salaires de leurs epoux au cours de la periode 1980 2000 les parametres pour les donnees groupees derives par la methode des moindres carres ponderes et de l estimateur developpe par devereux 2004 2007a b engendrent des elasticites croisees qui sont substantiellement plus grandes en termes absolus que ceux derives par la methode des moindres carres ordinaires en utilisant des micro donnees les deux estimations montrent que l offre de travail des epouses canadiennes a repondu fortement aux changements dans les salaires des epoux au cours des annees 80 pour les annees 90 les evaluations des elasticites croisees des salaires montrent une plus grande dispersion

what is behind increasing wage inequality in mexico abstract we evaluate the impact of the educational expansion and changes in labor market institutions on wage inequality among mexican workers using a simulation technique proposed by knight and sabot the american economic review 73 5 1983 1132 1136 we conclude that while increases in the relative rate of return of higher education would have induced an increase in wage inequality changes in the composition of the educational distribution would have led to a stronger decline in wage inequality instead increased wage inequality is largely explained by changes in mexican labor market institutions namely unionization rate and minimum wages

earnings mobility in times of growth and decline argentina from 1996 to 2003 summary in recent years argentina s economy has experienced both rapid growth and severe decline in this paper we use a series of one year long panels to study who gained the most in pesos when the economy grew and who lost the most in pesos when the economy contracted various considerations led us to expect that mobility would be divergent that is that the individuals who started with the highest initial earnings would enjoy the largest earnings gains in pesos contrary to expectations and for a wide range of specifications mobility is found to be mostly convergent sometimes neutral and never divergent

banking structure and employment growth recent studies have documented an association between financial structure and per capita income growth the relationship between financial structure and job growth by contrast is an unexplored issue of independent interest here we find that us nonmetropolitan employment grew faster in 1973 1996 where there were fewer locally owned bank offices and a more concentrated initial banking market structure these linkages were less stable in metropolitan areas in addition controlling for employment growth does not undermine the empirical linkage between initial bank structure and subsequent per capita income growth

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

factor proportions and relative wages the supply side determinants of wage inequality supply side factors may contribute to rising wage inequality first certain changes in the supply of skills allegedly exacerbate wage inequality women s increased labor force participation and increased immigration are the leading candidates both allegedly reduce the wages of less skilled men however immigration s impact on wage inequality has been minor and the effects of women s participation is inconclusive second in evaluating the likelihood that human capital investment will mitigate future inequality evidence suggests that rising returns to education have increased the proportion of young people attending college limiting the growth of inequality among high wage workers

employability miles and worker employability awareness this article studies the use and impact of a employability miles voucher scheme these vouchers could be used for participation in a restricted number of training courses which all aim to stimulate employees to develop a more active attitude towards their own employability using data from two surveys of one firm s workforce we find that voucher use is related to various personality traits and personal characteristics in particular a worker s ambition goal setting and education level are positively related to voucher use in addition workers with longer tenure spend their vouchers more often conversely workers with a more positive self image as well as those who are negatively reciprocal spend their vouchers less often the negative relation between voucher use and negative reciprocity suggests that workers who are more negatively reciprocal perceive the voucher as an hr tool for outplacement further we find that voucher use positively affects worker employability awareness and willingness t

the role of off the job vs on the job training for the mobility of women workers the transition from school to work is typically a period in which many young workers experience a wide range of different jobs and experience some of their most rapid wage growth over their working life robert hall 1982 has estimated that the first 10 years of an individual s working career will include approximately two thirds of all lifetime job changes robert topel and michael ward 1988 found that over half of young male new entrants held six or more jobs over the first 10 years of their work experience only one young male worker in twenty held a single job for 10 years in their sample all of this suggests that young workers early years in the labor market involve several employment transitions the purpose of this paper is to examine for young workers in their first years of work the determinants of leaving an employer in particular this paper focuses on the role of different types of training on the probability of leaving an employer in previous work 1990 i have examined the impact of private sector training on the determination of wages and wage growth of young workers and reached the following conclusions first formal company provided onthe job training on jt appears to be highly firm specific in the united states and therefore is not portable from employer to employer company provided training raises wages in the current job but has no effect on the wages earned in subsequent employment second formal off the job training off jt received from for profit proprietary institutions has little effect on the wages earned on the current job but it does raise the expected wage in subsequent employment finally there are important differences by race gender and education level in the probability of receiving different types of formal training and in the impact this training has on wages and wage growth these findings have several implications for the impact of training on mobility one implication is that if company provided training is primarily firm specific then the probability of leaving an employer should decline if a young worker has experienced some on jt an additional implication is that if a worker participates in an off jt program it appears that the worker should be more likely to leave the current employer in this case off jt allows a young worker to change career paths and find a better match using data from the national longitudinal survey youth nlsy cohort this paper examines in detail the factors that influence the probability of new entrants leaving their first job including the differential effects of company provided training apprenticeships and training from for profit proprietary institutions

the price of experience we identify a key role of factor supply driven by demographic changes in shaping several empirical regularities that are a focus of active research in macro and labor economics in particular demographic changes alone can account for the large movements of the return to experience over the last four decades for the differential dynamics of the age premium across education groups emphasized by katz and murphy 1992 for the differential dynamics of the college premium across age groups emphasized by card and lemieux 2001 and for the changes in cross sectional and cohort based life cycle profiles emphasized by kambourov and manovskii 2005 jel d91 e24 i23 j11 j24 j31