the wage impact of trade unions in the uk public and private sectors there is a growing gap in the union membership wage premium between public and private sector workers in the united kingdom using the labour force surveys of 1993 2006 the gap between the membership premium in the public and private sectors closes with the addition of three digit occupational controls although significant wage premia remain in both sectors however using the workplace employment relations survey of 2004 the public sector union membership wage premium remains roughly twice the size of the private sector membership premium having accounted for workplace fixed effects and workers occupations job characteristics qualifications and demographics

collective bargaining arrangements closed shops and relative pay this paper uses establishment level data to examine the impact on union nonunion pay differentials of the industrial relations setting in which bargaining takes place the pre entry closed shop is found to be of prime importance for the pay of both skilled and semiskilled manual workers for skilled workers and for semiskilled workers in larger establishments the differentials are found to be insignificantly different from zero in the absence of a pre entry closed shop copyright 1987 by royal economic society

women and the union wage gap this paper uses the social change and economic life initiative 1986 data set to provide new estimates for the female union wage gap for britain the joint endogeneity of trade union and full time part time employment status is addressed within the econometric framework of a bivariate sample selection model the mean unconditional union mark up estimate for female full time workers is estimated at 14 6 percent with the comparable estimate for part time female workers estimated at 15 3 percent copyright 1992 by royal economic society

the role of international fragmentation in the development process much of what has been written about the process of economic development has concentrated on macroeconomic factors that affect the growth process such as the community s savings rate its ability to attract foreign investment and the composition and quality of its factor endowment base less formally dealt with but nonetheless often cited as important in the development process is the nature of government regulations and the type of institutions that are reflective of the community s own cultural inheritance

minimum wage effects under endogenous compliance evidence from peru latin american labor markets feature large informal sectors in practice however the simple duality formal informal has many different shades firms tend to comply more with certain legislation than with other recent evidence has suggested that minimum wages have significant effects on the informal sector bell 1997 for mexico gindling and terrell 2004 for costa rica lemos 2004 and fajnzylver 2001 for brazil and maloney and nunez 2004 for colombia further some of this evidence suggests effects throughout a large part of the wage distribution this has been interpreted as evidence of lighthouse or numeraire effects we test this hypothesis using panel data from peru to identify effects throughout the wage distribution although there are some effects on informal sector workers overall results provide little support for numeraire or lighthouse effects labor monthly earnings are affected only at the bottom of the distribution 0 25 0 60 of the minimum wage made up mostly of informal workers and for formal workers earning between the old the new minima negative effects on the probability of retaining employed status after a minimum wage shock are either weak or non significant for wage earners below the minimum wage but significant for formal workers trapped between minima and for both formal and informal earning between 1 2 and 2 times the minimum wage independent workers earning below minimum suffer negative effects on both earnings and employment

law and employment lessons from latin america and the caribbean analyzing the effects of regulation and deregulation on latin american labor markets law and employment joins the ongoing debate about the virtues and costs of legislating mandatory benefits for workers of the numerous labor regulations that were altered or created in latin america during the last thirty years many have had unintended and far reaching results nobel prize winning economist james j heckman and carmen pages document the behavior of firms attempting to stay in business and be competitive while facing the high costs of complying with these labor laws they challenge the prevailing view that labor market regulations affect only the distribution of labor incomes and have little or no impact on efficiency or the performance of labor markets this volume shows that mandated benefits reduce employment have a disruptive impact on turnover rates and labor market flexibility promote inequality and discriminate against marginal workers along with in depth studies of colombia peru brazil argentina chile and uruguay law and employment provides comparative analysis from a range of european countries and the united states while also covering important changes in reg

manual wage differentials collective bargaining and multi locational firms an analysis using northern ireland nes data harris r 1994 manual wage differentials collective bargaining and multilocational firms an analysis using northern ireland nes data reg studies 28 483 493 a number of studies have appeared in the literature which consider the impact on the wage distribution of for example gender and ethnic differences of union membership or coverage by collective agreements of firm size of belonging to the private vis a vis public sector of being self employed as opposed to an employee another potentially important determinant of wages is whether the firm employing an individual is locally owned or whether it is part of a multiregional or multinational organization which operates branches in various locations this paper sets out to investigate the size of this locational wage differential across all sectors for a region of the uk using a bivariate sample selectivity model where the choice of firm type i e locally owned or externally owned and union coverage are endogenous the results confirm that

minimum wages and compliance the case of trinidad and tobago explores compliance to the national minimum wage in trinidad and tobago potential costs associated with the national minimum wage actual incidence of compliance in terms of employment and wage distribution nature of labor market this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from an this abstract was borrowed from another version of this item

leveraging reputational risk sustainable sourcing campaigns for improving labour standards in production networks ethical or socially sustainable sourcing mechanisms mandating labour standards among the suppliers and subcontractors that organisations source goods and services from are becoming more common the issue of how labour activist groups such as trade unions can encourage organisations to adopt and strengthen these mechanisms within domestic production networks is largely unexplored using three cases of domestic sustainable sourcing campaigns developed by unions in britain the strategies used by labour activists the characteristics of the organisations targeted and the motivations of lead firms for improving sourcing practices are analysed the article makes a significant contribution by demonstrating that organisational susceptibility to reputational risk is a key factor influencing the capacity of activist groups to convince and compel their targets to improve sourcing practices it argues that different types of organisations are susceptible to reputational damage in different ways that risk events provide opportunities for unions to strengthen their leverage against target organisations and that the multidimensional nature of corporate reputation needs to be better considered for understanding how campaigns are framed and executed

job search and mobility in developing countries theory and policy implications abstract a labor market model is developed in which the formal sector is characterized by search frictions whereas the informal sector is competitive we show that there exists a unique steady state equilibrium in this dual economy we then consider different policies financed by a tax on firms profits we find that reducing the unemployment benefit or the firms entry cost in the formal sector induces higher job creation and formal employment reduces the size of the informal sector but has an ambiguous effect on wages we also find that an employment wage subsidy policy and a hiring subsidy policy have different implications in particular the former increases the size of the informal sector while the latter decreases it

nonunion wage rates and the threat of unionization i investigate how the threat of union organization affects the wage paid to nonunion workers i start by outlining the standard model of wage determination by a nonunion employer when faced with the threat of union organization the model suggests that the nonunion wage will be directly related and the union wage gap will be inversely related to the threat i use repeated cross section data from the cps from 1977 2002 to develop a measure of the threat as the predicted probability of union membership i use this measure to estimate earnings functions that use several sources of variation in the likelihood of union membership to identify the threat effect in a manner that reduces the likelihood of omitted variable bias finally i investigate two cases where there has arguably been a change in the likelihood of union organization that is not correlated with changes in the demand for labor these include the wage changes surrounding the introduction of rightto work rtw laws in two states during the period studied and wage changes surrounding deregulation of key industries in the late 1970s and early 1980s the results are mixed the preferred estimates from the analysis using predicted probability of unionization as the threat measure imply very little relationship between either nonunion wages or the union wage gap and the threat the estimates that rely on the introduction of rtw laws show a significant relationship between nonunion wages and the introduction of rtw laws in one of the two states stronger evidence of threat effects is found in the experience of deregulated industries where regulation was a central factor in union strength

job queues and the union status of workers this paper develops a model of the determination of the union status of workers that allows for the possibility of queuing for union jobs the empirical results derived using a sample from the university of michigan panel study of income dynamics are supportive of the queuing hypothesis the no queue model can be rejected using a likelihood ratio test this suggests that a simple probit or logit model for union status is misspecified because it is not based on any consistent behavioral theory an important implication of the model is that because most new entrants to the labor market prefer union jobs but cannot get them and because accrual of nonunion seniority makes workers progressively less likely to desire union jobs the union status of workers is largely determined by their success in being selected from the queue early in their working life

the determinants of workers union status evidence from the national longitudinal surveys using data from the 1980 wave of the young men nls sample this paper provides estimates of the queue model developed by farber to explain the process of union status determination the use of nls data largely avoids the censoring problem encountered by farber in estimating his model and permits direct estimation of crucial probabilities associated with the model despite important differences between econometric methodologies and the data sets analyzed the nls results support farber s conclusion that queueing for vacancies in existing union jobs is an important labor market phenomenon in particular supply constraints on the availability of union jobs are found to dominate worker preferences in explaining differences in extent of unionization by occupation and region but not race

interstate migration in mexico variations on the todaro theme abstract this study of migration in mexico is based upon a modified todaro approach and utilizes census data in a simultaneous equations model of 13 variables it is unique in several ways a it introduces proxy variables for employment probability and cost of migration that have not heretofore been found in the literature but for which data are often available b it illustrates that in some important cases census data have advantages not available through surveys and c it finds that in some sense land reform in mexico may have operated perversely finally the study opens a new avenue for the study of informal sector growth

unions wages and productivity some evidence from uk engineering firms estimates of union wage and productivity effects are derived using primary micro level panel data for a sample of firms in the uk engineering industry union wage differentials of the order of 10 are suggested from the results whereas union productivity impacts appear to be non linear with respect to union density

the three faces of factor intensities abstract in this paper we suggest that factor intensities have more than one face and care must be taken in the comparisons chosen among other things we illustrate that in the multi country multi commodity case a capital abundant country s export can easily be more labor intensive than its import competing sector

the impact of minimum wages in mexico and colombia there are diverging views about how minimum wages affect labor markets in developing countries advocates of minimum wages hold that they redistribute resources in a welfare enhancing way and can thus reduce poverty improve productivity and foster growth opponents on the other hand contend that minimum wage interventions result in a misallocation of labor and lead to depressed wages in the very sectors the rural and informal urban sectors where most of the poor are found with the effect of wasting resources and reducing the growth rate data from colombia and mexico for the 1980s provide an opportunity to evaluate the impact of minimum wages in mexico in the 1980s the minimum wage fell in real terms roughly 45 percent by 1990 mexico s minimum wage was about 13 percent of the average unskilled manufacturing wage during the same period the minimum wage in colombia increased at nearly the same rate reaching roughly 53 percent of the average unskilled wage the author charts how the mandated minimum wage affected the demand for skilled and unskilled labor in both countries during that decade findings are as follows in mexico minimum wages have had virtually no effect on wages or employment in the formal sector the main reason the minimum wage is not an effective wage for most firms or workers in the informal sector in turn there is considerable noncompliance with the mandated minimum wage especially among part time and female workers as a result significant numbers of workers are paid at or below minimum wages in colombia minimum wages have a much stronger impact on wages judging from their proximity to the average wage and both cross section and time series estimates the estimates imply that the elasticity of low paid unskilled employment with respect to minimum wages is in the range of 2 to 12 percent

oligopsonistic landlords segmented labor markets and the persistence of tied labor contracts this article examines contractual labor arrangements in agrarian economies that persist as a consequence of market power on the part of landlords faced with output uncertainty we show that a segmented labor market characterized by tied labor contracts and involuntary unemployment in the lean season are optimal as compared to a labor hiring arrangement that guarantees full employment of labor in both seasons government intervention in the form of a specific subsidy targeted toward the hiring of permanent laborers may raise the welfare of all laborers while a specific subsidy directed toward the hiring of casual laborers or the institution of relief programs that absorb the rural unemployed in the lean season leads to the casual laborers in the economy being worse off copyright 2002 oxford university press

union wage differentials in the face of changes in the economic and legal environment this paper examines changes in union wage differentials in britain between 1980 and 1984 on the basis of two comparable establishment level data sets this period saw considerable economic and legislative change with potential effects on the outcomes of collective bargaining despite these changes the mean differential has little change between these two years and what there is is attributable to compositional changes such as the shift away from the manufacturing sector and the downward shift in the establishment size distribution the impact of the changes in unemployment and union coverage that took place is found to be minimal copyright 1991 by the london school of economics and political science

enforcement and compliance with labor regulations in argentina the author analyzes the effect of government enforcement on compliance with labor regulations in argentina a country where only half of the workforce receives all the benefits to which they are legally entitled constructing panel data for the period 1995 2002 across provinces and using the number of labor inspectors per capita as a proxy for enforcement he estimates the effect of enforcement on compliance with six employment and social security regulations minimum wage maximum hours paid vacation time annual extra monthly wage workers compensation insurance and health insurance because of potential simultaneity between enforcement and compliance the author explores instrumenting enforcement by electoral years two stage least squares estimates suggest enforcement increases compliance

brain drain informality and inequality a search and matching model for sub saharan africa abstract this paper revisits the effect of brain drain on development and inequality using a two sector model with formal and informal labor markets contrary to existing studies we use a search and matching setting that allows to endogenize the employment structure and the wage differentials between different skill groups in the same sector and between workers with identical skills employed in different sectors theoretically the brain drain induces ambiguous welfare effects for those left behind as the potential loss gain depends on the parameters of the model we thus parameterize our model on 33 sub saharan african countries and produce comparative results for each of them we find that skilled emigration induces heterogeneous welfare losses for the low skilled population the size of these losses varies between 0 2 and 8 and is influenced by the parameters of the production and education technologies the results are fairly robust to identifying assumptions to the inclusion of technological externalities and to the endogenization of training decisions

turning a blind eye costly enforcement credible commitment and minimum wage laws in many countries non compliance with minimum wage legislation is widespread and authorities may be seen as having turned a blind eye to a legislation that they have themselves passed but if enforcement is imperfect how effective can a minimum wage be and if non compliance is widespread why not revise the minimum wage this paper examines a minimum wage policy in a model with imperfect competition imperfect enforcement and imperfect commitment and argues that it is the combination of all three that produces results which are consistent with a wide range of stylized facts that would otherwise be difficult to explain within a single framework we demonstrate that turning a blind eye can indeed be an equilibrium phenomenon with rational expectations subject to an ex post credibility constraint since credible enforcement requires in effect a credible promise to execute ex post a costly transfer of income from employers to workers a government with an objective function giving full weight to efficiency but none to distribution is shown paradoxically to be unable to credibly elicit efficiency improvements via a minimum wage reform

an analysis of rural urban migration and protection in this paper a harris todaro migration model is developed with the urban manufacturing sector supplying a crucial input for the rural sector capital is region specific but flows freely between two urban sectors final goods are traded and have exogenously fixed prices if this economy imposes a tariff on the import competing manufacturing sector employment might go down even if the protected sector is labour intensive the paper describes how intersectoral linkages can play a significant role in determining the employment effects of a tariff summary in fre excerpt

new estimates of union wage effects in the u s abstract we present new estimates for union wage effects using a unique dataset with information on job skill requirements we find the union wage premium to be smaller at higher skill levels consistent with the view that unions work to decrease skill differentials

unemployment insurance job queues and systematic job search an equilibrium approach the labor market effects of unemployment insurance ui have been viewed in several contexts by economists on the one hand the ui system of jobless benefits and experiencerated taxation of firms is seen as influencing firms decisions to lay off workers 9 10 24 2 key in such analyses is the degree to which firms layoffs are subsidized by an imperfect experience rating a tax system in which employers ui taxes increase by less than their workers benefits increase on the other hand many other studies of ui place primary focus on the worker although employer concern for worker well being plays a role even in the work on the impact of ui on firm layoff decisions each of these worker based studies is concerned with one of two issues 1 ui and compensating wage differentials 14 24 or 2 u i and the job search process first hutchens assumes that workers face a choice in the labor market between high wage high layoff probability firms and low wage low layoff probability firms 14 by reducing the cost of being laid off ui increases one s likelihood of choosing the former kind of job along these lines topel finds evidence that ui generosity substitutes for wages and therefore lowers the compensating differential associated with a high layoff job 23 second several authors have studied the effect of ui on job search this work recognizes that ui lowers the cost of searching and therefore raises the reservation wage expected unemployment duration and expected post unemployment wages 2 previous work on the impact of ui on firm layoff decisions has assumed either a layoff subsidy 9 or demand uncertainty 2 in order to generate layoffs and therefore a u i impact on layoffs in contrast to such work this paper views layoffs in an equilibrium context they occur in our model even with no layoff subsidy and or with no demand uncertainty layoffs are of value to the firm in our model since they correspond to workers rejected from a queue of potential trainees from the firm s point of view a queue of applicants may be desirable in order to lower

internet start ups access to the bank loan market evidence from italy the analysis of the bank sector s ability to efficiently fuel the birth of new italian business ventures in internet related services is studied in particular through the specification and the estimate of a series of econometric models this paper aims at investigating which characteristics of a large sample of internet start ups and their relative founders facilitate access to the loan market more precisely the role played by founders human capital as a possible significant signal used by banks to evaluate investment projects is addressed estimation results suggest that highly qualified human resources possessed by internet founders do not represent an important driver for gaining access to bank credit and they do not affect the amount of the incurred debt

the employer size wage gap evidence for britain university of edinburgh and university of sussexfinal version received 5 may 1992 this paper presents estimates for the employer plant size wage gap for britain using anordered probit model selectivity corrected wage equations are estimated for three plant sizecategories in a comparison between plants with more than 500 workers and those with lessthan 100 a wage gap estimate of over 17 per cent is detected the wage effects of unionizationin plants with more than 500 workers is reported as insignificant in contrast to evidenceprovided by idson and feaster 1990 for the united states no evidence of non randomsorting of workers across plant size is detected

the demand for labor market structure an economic approach this paper formulates and estimates a model for the determination of employer and union demand for multiemployer vs single employer bargaining units utility maximizing risk averse firms and unions are both assumed to weigh the impact of each type of bargaining unit on the expected level and variability of profits and wages respectively the model is tested on a 1975 sample of 3 486 individual collective bargaining agreements because either party can generally leave a multiemployer unit without the other party s consent a partially observed bivariate probit model is used to estimate demand for structure it is found that the forgone profits due to a multiemployer unit relative to a single firm unit lower firm demands for this type of unit while forgone wages in a multiemployer unit relative to a single firm unit lower union demand for this type of unit

the relationship between union wage and profitability effects abstract this paper presents empirical evidence on the relationship between union effects on wages and on profitability as expected unions are found to increase wages albeit significantly in smaller firms only and to reduce profitability in a sample of british engineering firms over the period 1979 1982 the key question asked is whether the observed union effect on profitability is no more than a further manifestation of the observed wage effect estimates of profit equations normalised to take account of the union wage effect do not reject the hypothesis that it is

trade and protection with multistage production this paper analyses trade in manuf acutured goods that are produced via a vertical production structure with many stages where some value is added at each to an intermediate product to yield a good in process ready for the next stage we consider the stage at which a good is traded to be an economically endogenous variable with comparative advantage determining the pattern of production specialization by stages across countries we study how endowment changes and policy shifts move the margin of comparative advantage which thus provides a channel for resource allocation adjustment that is additional to the usual ones of factor substitution and changes in the quantity of output

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

trade unions and employment change an analysis of british establishment data few explanations of the changing employment structures of industrialised countries have omitted some reference to the role of trade unions for some commentators it is the unions ability to raise wages above their natural market level that constitutes a brake on employment growth by increasing the employer s costs and making product prices uncompetitive for others it is the unions power to impose uneconomic working practices upon management that leads to decline or lack of growth of the organisation for a discussion see freeman and medoff 1984 mayhew 1983 empirical testing of these and other lines of explanation has been hampered in britain by lack of suitable datasets while employment data are detailed and widely available systematic and reliable information on the extent of trade union influence has been restricted to reported membership levels for broad industry groups see for example bain and price 1983 pencavel 1974 the coverage of collective bargaining derived from earnings surveys see for example mulvey 1976 layard metcalf and nickel1 1978 and the extent and frequency of strike action see for example smith et al 1978 j the availability of a new series of nationally representative surveys at the establishment level has enabled us to obtain new insights into the relationship between changes in employment and trade union organisation at the point where such relationships arguably occur the place of work the

the union membership wage premium puzzle is there a free rider problem economists have long suggested that labor unions suffer a free rider problem the argument is that since union set wages are available to all workers covered by unions irrespective of their union status and union membership entails costs workers will only join if they are coerced or are offered non wage goods that they value above membership costs yet u s and british empirical research has found a substantial union membership wage premium among private sector union covered workers implying that there is no free rider problem the authors of this study hypothesize that these findings arise due to selectivity problems associated with identifying the union membership effect their analysis which uses rich data from a new linked employer employee survey for britain and exploits the within establishment variation in wages as a function of individual union membership status demonstrates that the apparent wage premium for members is illusory hence a potential free rider problem remains author s abstract free full text download available at http digitalcommons ilr cornell edu ilrreview

working part time by choice or by constraint the selection of workers into part time jobs and the wages they earn are analysed using the 1989 labour market activity survey we focus on the distinction between voluntary and involuntary part time workers since involuntary part time workers earn substantially lower wages than other workers we find that the selection of individuals into involuntary part time work is more closely tied to job characteristics than personal or human capital characteristics the lower wage earned by involuntary part time workers is largely due to differences in returns and selection effects rather than differences in endowments

the impact of trade union membership on training in britain in order to measure the union non union training differential in britain a recursive model of training participation and union membership is estimated using data taken from the 1989 labour force survey the results show a positive and significant effect of union membership on training participation in small establishments this is consistent with the hypothesis that any negative impact on employer provided training that might have arisen from the union wage mark up is outweighed by a positive influence exerted by unions through the exercise of collective voice and or reductions in labour turnover by contrast in establishments with 25 or more workers unions have no significant impact on training

minimum wages and labor market prospects of women in recent years the field of labor economics has witnessed growth of interest in causes and consequences of female labor force participation principal areas of research include determinants of female wages and labor supply many empirical issues remain unresolved and research continues to focus on the likely ranges of such parameters as the own wage elasticity of hours supplied the cross elasticity with respect to spouse s income the rate of return to female schooling and the issue of self selection in observed earnings of working women one area which remains relatively unexplored is the impact of minimum wage legislation on employment prospects of females the issue of minimum wages is of special interest in the case of women first the proportion of labor force nonparticipation by females exceeds that of males consequently institution of an effective minimum wage plays to a larger audience of nonparticipating females than males it is likely that a significant portion of the positive labor supply response to minimum wages is in the form of previously nonparticipating females second as is well known female wages tend to be lower than those of males owing in part to 1 lower levels of female schooling and experience 2 intermittent life cycle patterns of labor supply and human capital accumulation 3 sorting of females into occupations that are conducive to intermittent behavior and 4 as several researchers suggest gender discrimination consequently women are more likely than men to experience wages that fall short of the legal minimum this study examines the consequences of minimum wages on female employment prospects of special interest is the likelihood of successful job search for women whose wages in the absence of legislation would be below the minimum it is commonly argued that minimum wages in competitive labor markets have the effect of hindering employment prospects of low wage workers this study based on a sample of microdata from the public use sample of the 1980 census proposes a simple framework in which this issue can be addressed in the context of a conventional model of labor supply

contractual dualism market power and informality we develop a search theoretic model of contractual dualism in formal and informal labour markets the model i provides the micro underpinnings for endogenous determination of employer market power in the formal and informal sectors ii offers a unified and coherent set up whereby a host of salient features of developing country labour markets can be explained together and iii places for the first time the stiglerian prescription of the optimal unemployment minimising minimum wage in the broader context of labour markets where formal job creation is costly where employer market power is endogenous and where formal employment informal employment and unemployment coexist

modelling the informal sector formally abstract the theoretical characterization of formal informal sector dualism by labor market dualism is integrated with its empirical characterization by size dualism by supposing that the minimum formal sector wage is only enforced for firms greater than a certain size a firm s size varies directly with the talent of its enterpreneur manager and the choice between formal and informal sector entrepreneurship is determined endogenously it is then shown that the size gap between the smallest formal sector firm and largest informal sector firm varies directly with the formal informal sector wage differential which in turn is shown as expected to increase the further is the minimum wage above the market clearing wage the comparative statics of changes in the size of the firm above which the minimum wage is enforced are also examined

disentangling the minimum wage puzzle an analysis of worker accessions and separations changes in the legislation in the mid 1980s in portugal provide remarkably good conditions for analysis of the employment effects of mandatory minimum wages as the minimum wage increased sharply for a very specific group of workers relying on a matched employer employee panel data set we model gross worker flows accessions and separations in continuing firms as well as in new firms and those going out of business using a count regression model applied to proportions employment trends for teenagers the affected group are contrasted to those of older workers before and after the raise in the youth minimum wage the major effect on teenagers of a rising minimum wage has been the reduction of separations from the employer which during the period under analysis has compensated for the reduction of accessions to new and continuing firms in this sense our results can reconcile some of the previous evidence in the empirical literature when analyzing the aggregate impact of the minimum wage on youth employment without decomposing it by type of worker flow jel d21 j23 j38

impact of the worker s employment probability on wage rates the employment probability is a significant determinant of the worker s wage rate expecially in the presence of employers hiring discrimination several tests suggest that the omission of this variable in the wage regression may lead to misspecification

whose wages do unions raise a dynamic model of unionism and wage rate determination for young men we estimate the union premium for young men over a period of declining unionization 1980 87 through a procedure which identifies the alternative sources of the endogeneity of union status while we estimate the average increase in wages resulting from union employment to be in excess of 20 we find that the return to unobserved heterogeneity operating through union status is substantial and that the union premium is highly variable we also find that the premium is sensitive to the form of sorting allowed in estimation moreover the data are consistent with comparative advantage sorting our results suggest that the unobserved heterogeneity which positively contributes to the likelihood of union membership is associated with higher wages we are unable however to determine whether this is due to the ability of these workers to extract monopoly rents or whether it reflects the more demanding hiring standards of employers faced by union wages 1998 john wiley sons ltd

mobility in the urban labor market a panel data analysis for mexico abstract we analyze mobility in urban mexico between three labor market states working in the formal sector working in the informal sector and not working a dynamic multinomial logit panel data model with random effects is used explaining the labor market state of each individual during each time period the data are drawn from mexico s urban employment survey a quarterly household survey for urban mexico while some of the descriptive statistics suggest that informal sector jobs are inferior to formal sector jobs formal tests cannot reject the null hypothesis of equal transition rates between formal and informal sector jobs for homogeneous groups of workers looking at entry and exit into and out of nonemployment we find that transitions from formal sector jobs to nonemployment were less likely than transitions from informal sector jobs to nonemployment in 1992 but not in 1999 suggesting that employment protection in the formal sector has been reduced

union competition and strikes the need for analysis at the sector level international comparative research has found that strike incidence is higher where two or more unions bargain with an employer multi unionism as is common in most european countries than where only one union does all else equal two proposed explanations for this relationship both invoking inter union rivalry as the main dynamic are that under multi unionism unions a make propagandistic use of strikes to attract members or b compete with each other by bidding up bargaining demands to date the evidence bearing on these hypotheses has been equivocal because the author argues researchers have focused on activity at the national level rather than at the lower levels that are more commonly the nexus for strike formation the author performs empirical tests using industry sector level data for seven european countries for the years 1990 2006 and finds evidence clearly favoring the competitive bargaining hypothesis over the propaganda hypothesis

firms rents workers bargaining power and the union wage premium this article identifies the wage premium associated with firm level union recognition in france an average premium of 2 is found despite the fact that most workers are already covered by industry level agreements to explore the origin of the premium i construct a simple bargaining model from which i derive three predictions which are tested empirically using matched employer employee data the main prediction is that if intra firm bargaining is behind the union wage premium the latter increases with the amount of quasi rents available in the firms that unions organise this prediction is validated empirically when firms market shares are used as a proxy for their rents

rural labor and credit markets this paper studies changes over time in the incidence of labor tying the existing literature is successful in explaining the emergence of this institution but contains the counterfactual implication that there should be an increasing trend in labor tying however previous contributions have so far implicitly assumed that there are no consumption credit markets available to workers i show that taking account of borrowing opportunities leads to new predictions about the evolution of permanent labor in particular declines in borrowing costs associated to efficiency gains in the financial sector lead to a fall in the fraction of rural workers who are tied in addition if consumption credit markets are operating a fall in the size of the rural population will cause under certain conditions a decline in the percentage of permanent workers these predictions are consistent with the observed trends in developing countries hence this paper complements previous theoretical work on labor tying with its addition the theory now explains the emergence persistence and final demise of this institution 1997 elsevier science b v

unions wages and skills studies uniformly conclude that union wage effects are largest for workers with low measured skills longitudinal analysis using 1989 90 1994 95 cps matched panels produces union premium estimates equivalent across skill groups following appropriate sample restrictions and control for worker specific skills nlsy evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization union organizing where skills are homogeneous and unionized employers reluctance to hire the most as well as least able workers

the union wage effect and ability bias evidence from ireland we use longitudinal data from an irish household survey to measure the union wage premium a subsample in which the worker s payslip was seen by the interviewer is unlikely to have measurement error for the union variable the results support the finding that measurement error leads to a large downward bias in fixed effects estimates of the union effect but indicate that ability bias has a small effect on the average union wage premium

risk aversion and trade union membership if trade unions provide only their members with insurance against income variations as a private good this insurance will provide a stronger incentive for more risk averse employees to become union members using data from the german socio economic panel soep and various direct measures of individual risk attitudes we find robust evidence of a positive relationship between risk aversion and the likelihood of union membership for full time employees this association is particularly strong for males and in west germany

the effect of unions on the employment of blacks hispanics and women to investigate whether unions have helped or hindered the employment prospects of minorities and women the author analyzes data on 1 273 california manufacturing plants for the period 1974 80 the

sluggish institutions in a dynamic world can unions and industrial competition coexist during the 1930s and 1940s collective bargaining emerged as the workplace governance norm in much of the u s industrial sector following its peak in the 1950s union density in the u s private sector fell steadily to only 7 4 percent in 2006 governance shifted from a formalized union norm to one of constrained managerial discretion in competitive and dynamic economic environments a union tax on company earnings and slow response to economic shocks combine to produce poor performance by union companies two industries automotives and airlines are used to illustrate these points if worker based institutions are to flourish they must add value and permit companies to perform at levels similar to those obtained under evolving nonunion governance norms

skilled unskilled wage inequality and urban unemployment i introduction an extensive body of literature has looked at possible effects of trade liberalization on the labor market in the north the effects on the labor market in the south have not drawn as much attention conventional wisdom associated with the stolper samuelson theorem predicts a gradual reduction of skilled unskilled wage inequality in the south however recent studies on latin american countries exhibit conflicting patterns wood 1997 summarizes the empirical findings citing a series of articles by robbins 1995a 1995b 1996a 1996b that convincingly demonstrate that latin america has experienced an increasing wage gap between the skilled and the unskilled following a more open trade and investment regime while globalization induced changes in production patterns and the consequent increase in the demand for skilled labor relative to unskilled labor has often been cited as the root cause of wage inequality there has been no general agreement over the possible source of such increased demand for skilled labor the debate among economists on this has followed two broad paths one relying on technological changes and the other on trade and investment while technological change may have played a key role in the widening wage gap in the industrialized countries there is strong evidence robbins 1994a 1994b 1995a 1995b 1996a 1996b robbins and zveglich 1995 wood 1997 indicating the dominant influence of trade and investment on wage inequality in the developing economies the implications of a more open trade and investment regime need to be analyzed in terms of frameworks that explicitly take into account the structural features of labor markets in the south one of the key structural differences between the north and the south is that the south experiences a pronounced rural urban migration in the presence of urban unemployment basu 1997 ray 1998 the goal of our paper was to capture this feature within the structure of a simple general equilibrium model in an effort to understand the effect of fragmentation on the skilled unskilled wage differential and employment in the south the rest of the paper is organized as follows the next section places this paper in the context of the relevant literature section iii describes the general equilibrium model with the possibility of fragmentation and unemployment section iv compares and contrasts the impact of trade and endowment on the skilled unskilled wage gap and employment with and without fragmentation section v concludes ii context the motivation of this paper stems from our view that the southern experience does not necessarily contradict conventional wisdom as has been claimed in wood 1997 but points to the need for parsimonious yet meaningful modifications of the structure of general equilibrium models from which the wisdom is derived to properly reflect the salient structural features of the south on the one hand production fragmentation has become an important facet of globalization in modern times 1 sharp declines in transportation and communication costs have encouraged this process of slicing the value chain that is evident in international trade data this has been sustained by various regional integration agreements that have reduced the barriers to international trade and investment as well as important technical innovations in telecommunications and information technology that have facilitated the coordination of international production networks this advanced stage in the international division of the chain of production has brought a fundamental change in the nature of international trade as goods increasingly cross multiple national borders while they are in process several authors such as jones kierzkowski and lurong 2005 wan 2005 long 2005 jones and kierzkowski 1998 jones and marjit 2001 arndt 1998 feenstra 1998 harris 1998 hummels rapoport and yi 1998 feenstra and hanson 1996b and dixit and grossman 1982 have analyzed the role of fragmentation in world trade

economic reform and informal wage a general equilibrium analysis abstract we attempt to trace the consequences of liberal economic policies on informal wage in a general equilibrium model with formal informal labor markets wage differential vertical linkage and restricted capital movement in particular we show that the informal wage representing income for a vast segment of unskilled labor may actually increase even if more people are employed in the informal segment this also confirms that a contraction in the formal sector employment and the consequent expansion in the informal segment do not necessarily imply impoverishment of the existing set of informal workers

union density and varieties of coverage the anatomy of union wage effects in germany collective bargaining in germany takes place at either industry or firm level and bargaining coverage is much higher than union density the share of a firm s employees covered can vary between 0 and 100 suggesting that researchers should distinguish union density coverage at the firm level and coverage at the individual level using linked employer employee data the authors estimate ols and quantile regressions of wages on these dimensions of union influence they find that a higher share of employees in a firm covered by industrywide or firm specific contracts is associated with higher wages but find no clear cut effect on wage dispersion yet holding coverage at the firm level constant individual coverage is associated with lower wages and less wage dispersion higher union density reinforces the effects of coverage but for employees in firms without coverage density s effect is negative and thus compresses the wage distribution in firms without coverage

unions and the incidence of performance linked pay schemes in britain abstract this paper examines the relationship between trade unions and the incidence of share ownership profit sharing and value added schemes in britain the first two schemes are more common in the union sector whilst the third occurs more in non union establishments a distinction is made between weak and strong unions and it is found that performance linked pay schemes are in general less likely to be present if an establishment has a strong union rather than a weak one

longitudinal analyses of the effects of trade unions but union members are different from nonmembers in unobserved ways biasing your estimates y ou should make a selectivity bias correction simultaneously determine union status and economic outcomes develop an unobservables model use longitudinal data archetypical comment on virtually any study of the economic effects of umomsm or suitably modified on any other empirical subject

social comparison and performance experimental evidence on the fair wage effort hypothesis we investigate the impact of wage comparisons for worker productivity we present three studies which all use three person gift exchange experiments consistent with akerlof and yellen s 1990 fair wage effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advantageous wage discrimination does not increase efforts on average two studies allow us to measure wage comparison effects at the individual level we observe strongly heterogeneous wage comparison effects we also find that reactions to wage discrimination can be attributed to the underlying intentions of discrimination rather than to payoff consequences

the effects of labour market policies in an economy with an informal sector in this article we build an equilibrium search and matching model of an economy with an informal sector our model extends mortensen and pissarides 1994 by allowing for ex ante worker heterogeneity with respect to formal sector productivity we use the model to analyse the effects of labour market policy on informal sector and formal sector output on the division of the workforce into unemployment informal sector employment and formal sector employment and on wages finally we examine the distributional implications of labour market policy specifically we analyse how labour market policy affects the distributions of wages and productivities across formal sector matches in this article we construct a search and matching model that we use to analyse the effects of labour market policies in an economy with a significant informal sector what we mean by an informal sector is a sector that is unregulated and hence not directly affected by labour market policies such as severance or payroll taxes we find that labour market policies that apply only to the formal sector nonetheless affect the size and the composition of employment in the informal sector this is important since there is substantial economic activity in the informal sector in many economies particularly in developing countries estimates for some latin american countries put the informal sector at more than 50 of the urban work force 1 the informal sector is also important in many transition countries as well as in some developed economies 2 although much of the literature treats the informal sector as a disadvantaged sector in a segmented labour market framework this interpretation is not consistent with recent empirical evidence from latin america under a segmented or dual labour market interpretation one would expect jobs to be rationed in the primary sector and workers to be in the secondary or informal sector involuntarily and to be queuing for formal sector jobs maloney 2004 presents evidence for several latin american countries that challenges this view and instead interprets the informal sector as an unregulated micro entrepreneurial sector similarly using data from the argentinian household survey pratap and quintin 2006 reject the notion that labour markets are segmented in the greater buenos aires area concluding that there is no evidence of a formal sector wage premium after controlling for individual and establishment we thank mauricio santamaria for stimulating conversations that inspired our interest in this topic we also thank bob hussey and fabien postel vinay as well as our editor steve pischke and two anonymous

globalization outsourcing and wage inequality there is considerable debate over whether international trade has contributed to the declining economic fortunes of less skilled workers one issue that has become lost in the current discussion is how firms respond to import competition and how these responses in turn are transmitted to the labor market in previous work we have argued that outsourcing by which we mean the import of intermediate inputs by domestic firms has contributed to an increase in the relative demand for skilled labor in the united states if firms respond to import competition from low wage countries by moving non skill intensive activities abroad then trade will shift employment towards skilled workers within industries in this paper we extend our previous work by combining new import data from the revised nber trade database with disaggregated data on input purchases from the census of manufactures we construct industry by industry estimates of outsourcing for the period 1972 1990 and reexamine whether outsourcing has contributed to an increase in relative demand for skilled labor our main finding is that outsourcing can account for 31 51 of the increase in the relative demand for skilled labor that occurred in u s manufacturing industries during the 1980s compared to our previous estimate of 15 33 this abstract was borrowed from another version of this item

union membership collective bargaining coverage and the trade union mark up for britain abstract this paper estimates the union mark up using british general household survey data the wage gap is decomposed both for the mean and the variance of the earnings distribution the results indicate that the union mark up is larger than previously estimated and that structural effects account for a major part of the differences that are found in the earnings distributions of covered union members covered non unionists and uncovered non unionists

trade unions and training practices in british workplaces the authors use british establishment level data from the 1991 employers manpower and skills practices survey emsps and individual level data from the autumn 1993 quarterly labour force survey qlfs to investigate the links between training provision and workplace unionization both the probability of receiving training and the amount of training received are found to have been substantially higher in unionized than in nonunion workplaces the authors view these results as showing that trade unions can play an important role in developing and boosting skill formation in britain

institutions and short run macroeconomic performance abstract this paper reviews the growing interest in institutions it argues that the explanation for this interest is a fresh awareness of how institutions affect economic performance this connection arises because many economic interaction take the form of one or other of three classic games prisoners dilemma coordination and chicken and the outcome in these games and hence performance of the economy is influenced by the institutional context of these interactions the paper provides a detailed illustration of this argument with a survey of the literature which relates unemployment performances to the institutions of wage setting in oecd countries

wage effects of unionization and occupational licensing coverage in the united states recent estimates in standard models of wage determination for both unionization and occupational licensing have shown wage effects that are similar across the two institutions these cross sectional estimates use specialized data sets with small sample sizes for the period 2006 to 2008 the authors analysis examines the impact of unions and licensing coverage on wage determination using new data collected on licensing statutes that are then linked to longitudinal data from the national longitudinal survey of youth nlsy79 from 1979 to 2010 they develop several approaches using both cross sectional and longitudinal analyses to measure the impact of these two labor market institutions on wage determination the estimates of the economic returns to union coverage are greater than those for licensing statutes

optimum taxation and public production in a dynamic harris todaro world abstract this paper examines the steady state dynamics and develops policy rules in a two sector optimum growth model with urban unemployment people migrate from the rural sector to the urban sector in response to a difference between the minimum expected urban wage and the actual rural wage labor in the urban sector is heterogeneous and the skilled labor force owns the capital stock in both sectors as well as the land in the rural sector the government taxes urban wages capital income from both sectors and the income from land and invests in the two sectors

does corporate social responsibility make over educated workers more productive this article provides first evidence on whether corporate social responsibility csr influences the productivity effects of over education by relying on detailed belgian linked employer employee panel data covering the period 1999 2010 our empirical results exhibit a positive and significant impact of over education on firm productivity moreover they suggest that the effect of over education is positively enhanced when the firm implements a csr process especially when it aims to have i a good match between job requirements and workers educational level ii a diverse workforce in terms of gender and age and iii a long term relationship with its workers when focussing on required education and over education the results suggest that csr besides representing an innovative and proactive approach for the firms stakeholders may also be beneficial for the firm itself through a bigger increase in productivity for each additional year of required education or over education

sector specific minimum wages economic growth and some policy implications abstract economic growth is introduced in the urban unemployment model of harris and todaro it is shown that in the steady state the optimal savings ratio is greater than the golden rule savings ratio under full employment also the optimal proportion of total investment allocated to the urban sector is not necessarily higher than the optimal proportion under full employment

informality in developing economies regulation and fiscal policies abstract this paper proposes a unified theoretical framework where formal and informal firms coexist and face the same type of product and labor market imperfections they have monopoly power in the goods market they are subject to matching frictions in the labor market and wages are determined by bargaining between large firms and their workers through either individual or collective bargaining our model matches the main stylized facts on informality for developing countries and appears to be a good candidate for policy analysis in this framework we study the impact on informality wages and unemployment of policies that may be used to reduce informality we consider changes in product market regulation pmr and in two types of fiscal policies labor taxes and formality enforcement we find that lessening pmr decreases informality and unemployment simultaneously indicating that there is not necessarily a tradeoff between informality and unemployment the tradeoff appears when fiscal policies are used though moreover the impacts of pmr on unemployment and on wages are larger under collective than individual bargaining with respect to wage inequality lessening pmr reduces it while lower taxes tend to increase the formal sector wage premium

on the economic effects of multiple unionism in a recent paper stephen machin mark b stewart and john van reenan 1993 using establishment level data for the united kingdom find that ceteris paribus plants with multiunionism and separate bargaining arrangements pay higher wages than either those in which different unions bargain jointly or those in which there is a single union in this paper the author offers a theoretical interpretation of this result within the framework of the henrik horn and asher wolinsky 1988 analysis of worker substitutability and patterns of unionization copyright 1995 by the editors of the scandinavian journal of economics

unions and the financial performance of british private sector establishments summary this paper considers the relationship between unions and financial performance using data from the 1980 and 1984 workplace industrial relations surveys a qualitative indicator of financial performance is utilized and ordered probit estimates presented these indicate that unionized establishments are characterized by lower performance levels than are non union concerns the interface between union effects and relative market power is also explored and the ability of unions to extract a share of the available rents is found to be greater if the plants in which they are located possess a higher market share

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

possibility or impossibility of paradoxes in the small country harris todaro framework a unifying analysis abstract in this paper we argue that the harris todaro ht framework sometimes satisfies an envelope property which makes it work like a full employment heckscher ohlin samuelson hos model then the ht structure produces very similar results as one gets in the standard hos framework differences arise because the envelope condition may break down we show how several celebrated results in the ht structure can have this reinterpretation