METROECONOMICA, Issue 4 2007
Peter Flaschel
ABSTRACT This paper demonstrates how the labour and product markets interact in determining as outcome a generalized reduced-form price Phillips curve. For the labour market we consider a wage Phillips curve and for the product market a price Phillips curve. We estimate separately the wage and price Phillips curves for the USA, using ordinary least squares, non-parametric estimation and three-stage least squares techniques. The finding is that wages are always more flexible than prices with respect to their respective demand pressure and that price inflation responds somewhat more to a medium-run cost pressure than does wage inflation. The implications for macroeconomic stability are demonstrated. We also show,as a link between product and labour markets,that employment is related to output as Okun's law states. In comparing linear and non-linear estimates of the wage and price Phillips curves we find furthermore that for some relationships non-linearities are important while not for others. Although overall the non-linear estimates tend to confirm our linear estimates, non-linearities in some relationships of the Phillips curve are important as well. [source]

OUTSOURCING TYPES, RELATIVE WAGES, AND THE DEMAND FOR SKILLED WORKERS: NEW EVIDENCE FROM U.S. MANUFACTURING

ECONOMIC INQUIRY, Issue 1 2009
AEKAPOL CHONGVILAIVAN
Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the six-digit NAICS U.S. manufacturing data. We show that downstream materials and service outsourcing are skill biased, whereas upstream materials outsourcing is not. We also produce other supplementary results pertaining to the impact of technology, different capital inputs on relative wages, and the demand for skilled workers. (JEL C33, F14, F15) [source]

ON THE RELATIONSHIP BETWEEN WAGES AND MONITORING: COMMENT

METROECONOMICA, Issue 1 2008
Article first published online: 15 NOV 200, Katarina Bujdakova
No abstract is available for this article. [source]

ON THE RELATIONSHIP BETWEEN WAGES AND MONITORING: A REPLY

METROECONOMICA, Issue 1 2008
Laszlo Goerke
No abstract is available for this article. [source]

RISING WAGES: HAS CHINA LOST ITS GLOBAL LABOR ADVANTAGE?

PACIFIC ECONOMIC REVIEW, Issue 4 2010
Dennis Tao Yang
We document dramatic rising wages in China for the period 1978,2007 based on multiple sources of aggregate statistics. Although real wages increased seven-fold during the period, growth was uneven across ownership types, industries and regions. Over the past decade, the wages of state-owned enterprises have increased rapidly and wage disparities between skill-intensive and labour-intensive industries have widened. Comparisons of international data show that China's manufacturing wage has already converged to that of Asian emerging markets, but China still enjoys enormous labour cost advantages over its neighbouring developed economies. Our analysis suggests that China's wage growth will stabilize to a moderate pace in the near future. [source]

NON-SCALE EFFECTS OF INTERNATIONAL TECHNOLOGICAL-KNOWLEDGE DIFFUSION ON SOUTHERN GROWTH AND WAGES

THE JAPANESE ECONOMIC REVIEW, Issue 3 2010
OSCAR AFONSO
We develop a dynamic, general equilibrium non-scale endogenous growth model of North,South technological-knowledge diffusion by imitation. Countries differ in levels of exogenous productivity, human-capital levels and R&D capacity. Growth is driven by Northern innovative R&D and the South converges towards the North. Growth is also driven by human-capital accumulation, scale effects are removed, imitation is only feasible once a threshold distance to the frontier has been attained and is dependent on the South's relative level of employed human capital and on domestic policies promoting R&D. Imitation promotes partial convergence of inter-country wages and governs the path of intra-South wage inequality. [source]

RAISING WAGES TO DETER ENTRY INTO UNIONIZED MARKETS,

THE JAPANESE ECONOMIC REVIEW, Issue 4 2009
SHINGO ISHIGURO
This paper investigates entry under a unionized oligopoly when entry and wage negotiations are sequential. We find the incumbent has incentives to raise the wage, which strengthens the bargaining position of the union relative to the entrant at subsequent negotiations and thus discourages entry. We show that entry is more likely to be deterred (accommodated) if the union is wage (employment) oriented and that raising unemployment compensation during recession not only reduces the burden of the unemployed but also induces new entry, creating more employment opportunities. However, during a business boom, reducing unemployment compensation is a better policy. [source]

WAGES, HOURS OF WORK AND JOB SATISFACTION OF RETIREMENT-AGE WORKERS,

THE JAPANESE ECONOMIC REVIEW, Issue 2 2005
ISAO OHASHI
I analyse, theoretically and empirically, the effects of pension benefits, family conditions and the personal characteristics of older individuals on their labour supply, wages, hours worked and job satisfaction, in the framework of the Nash bargaining condition whereby an older worker and a firm bargain over employment conditions such as wages, hours of work and job investment. It is stressed that as workers become older they tend to give greater priority to the number of hours worked, work environment and type of job than to wages, and try to improve these through job investment, even at the cost of lower wages. [source]

FOREIGN DIRECT INVESTMENT AND DOMESTIC WAGES IN THE USA*

THE MANCHESTER SCHOOL, Issue 1 2009
SAIF S. ALHAKIMI
High wages generally prevail in industries with substantial foreign direct investment (FDI) in developed countries. This study examines whether such wages are economically justified by revealing the effect of worker and industry characteristics on the FDI,domestic wage relationship. Findings show that while observed worker characteristics that command high wages help explain high FDI wages, the propensity for foreign owners to invest in capital-intensive industries contributes appreciably to the high wage paid to workers in industries with high levels of FDI. [source]

MANUFACTURING WAGES IN THE ENLARGED EU: THE ROLE OF NEIGHBOUR-COUNTRY EFFECTS*

THE MANCHESTER SCHOOL, Issue 1 2009
HELENA MARQUES
In this paper a New Economic Geography type wage equation is estimated for the EU-25. The determinants of manufacturing wages are shown to be sector-specific and the role of geography is limited. As a consequence, we show that the improvement of the EU's internal market and the evolution of European geography are likely to favour larger EU members and challenge smaller ones. [source]

STATE-LEVEL BASIC WAGES IN AUSTRALIA DURING THE DEPRESSION, 1929,35: INSTITUTIONS AND POLITICS OVER MARKETS

AUSTRALIAN ECONOMIC HISTORY REVIEW, Issue 3 2007
Peter Sheldon
Australia; basic wage; depression; institutions; state tribunal State wage-fixation tribunals developed quite particular patterns of basic wage fixation during the Depression. They declined to follow the Commonwealth Court's 10 per cent wage cut, thereby confining its effect to about half the workforce and creating distinctly different State and Commonwealth basic wage patterns in each capital city. Further, tribunals' uneven patterns of basic wage adjustment to deflation meant that in some states, the real State basic wage increased. Patterns of state institutional behaviour and state politics therefore help explain the stickiness of real average wage levels during the Depression. [source]

THE RELATIONSHIP BETWEEN CAPITAL STOCK, UNEMPLOYMENT AND WAGES IN NINE EMU COUNTRIES

BULLETIN OF ECONOMIC RESEARCH, Issue 2 2007
Philip Arestis
E00; E22; E24 ABSTRACT The focus of this paper is to investigate the importance of the capital stock in the determination of wages and unemployment in a range of EMU countries and to compare the results across countries. A time-series analysis is conducted in the case of nine euro area countries, which were selected solely on the basis of data availability and consistency: Austria, Belgium, Finland, France, Germany, Italy, Ireland, the Netherlands and Spain. The paper begins with a short review of the literature on capital stock and unemployment, before it deals with the theoretical model. This is followed by estimation and testing of the theoretical model put forward, using both time-series and panel data. The results are supportive of the main hypothesis of the paper: capital stock is an important determinant of unemployment and wages in the countries considered for the purposes of the paper. [source]

Pay determination in small firms in the UK: the case of the response to the National Minimum Wage

INDUSTRIAL RELATIONS JOURNAL, Issue 1 2002
Mark Gilman
Pay determination in small firms is widely expected to follow the dictates of the market. Research on 81 firms in three competitive sectors finds, instead, loosely defined and variable pay structures. This variability is explained in terms of the interplay between labour and product markets, firms' own choices, and ,shocks' such as the National Minimum Wage. This analysis thus contributes to developing institutional theories of labour markets and pay systems. [source]

Employer strategies in the face of a national minimum wage: an analysis of the hotel sector

INDUSTRIAL RELATIONS JOURNAL, Issue 3 2000
Donna Brown
The introduction of the National Minimum Wage provides an opportunity to examine whether hotel managers act strategically. Most of our sample are affected by this wage floor, and their managers have selected clear response strategies. The majority, 55 per cent, planned to adopt cost minimisation techniques and one third the quality enhancement route. [source]

Evaluating the Introduction of a National Minimum Wage: Evidence from a New Survey of Firms in Ireland

LABOUR, Issue 1 2006
Donal O'Neill
We use data from a specifically designed survey of firms to estimate the employment effects of this change. Employment growth among firms with low-wage workers prior to the legislation was no different from that of firms not affected by the legislation. A more refined measure of the minimum wage, however, suggests that the legislation may have had a negative effect on employment for the small number of firms most severely affected by the legislation. However, the size of these effects is relatively modest. [source]

Labour Flows as Determinants of the Wage,Price Spiral: An Empirical Analysis for The Netherlands

LABOUR, Issue 2 2001
Lourens Broersma
This study presents an empirical analysis of the influence of labour market flows on wage and price formation. A system of wage, price and employment equations after Nickell (Oxford Bulletin of Economics and Statistics 49: 103,128, 1987) is estimated, including labour flows as indicators of labour market tightness in the wage equation. An impulse response analysis using this system shows how changes in the flow of layoffs (flow from employment to unemployment) may be the basis of short-run Phillips curve effects in The Netherlands [source]

Smith and Living Wages: Arguments in Support of a Mandated Living Wage

AMERICAN JOURNAL OF ECONOMICS AND SOCIOLOGY, Issue 5 2009
Article first published online: 20 OCT 200, Betsy Jane Clary
Adam Smith was a proponent of living wages for labor for reasons of growth and for reasons of equity. There is ample evidence in the body of Smith's work to support the thesis that Smith would support public policies that might ensure the achievement of a living wage. The argument rests, in part, on the conclusion that Smith had reservations concerning the ability of the economy to experience sufficient growth and the ability of growth, if achieved, to secure living wages. This article argues that, given Smith's views about justice and given Smith's ideas, as part of the Scottish Enlightenment, of how the rules of justice evolve, a living wage law could be one of the general rules of which Smith could approve. [source]

The Persistence of the Female Wage Disadvantage

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2001
Anh T. Le
Studies of the Australian labour market during the 1980s reported that the gender wage differential narrowed. However, a different story emerged during the 1990s when the gender pay gap persisted. A large part of the pay gap is attributable to different ,treatments' of men and women in the labour market. This article examines whether the female wage-disadvantaged state is a temporary or permanent phenomenon. The results show that while there is some mobility in the female wage distribution, there also exists a high degree of stickiness. It is argued that the wage-disadvantaged state for females is generally not a temporary phenomenon. [source]

The Intriguing Relation Between Adult Minimum Wage and Child Labour

THE ECONOMIC JOURNAL, Issue 462 2000
Kaushik Basu
Because most parents send their children to work when compelled by poverty, one would expect a rise in adult wage to lower child labour. However, if the rise in wage is achieved by a minimum wage law, its impact can be intriguing. It can, for instance, cause some adults to be unemployed and send their children to work, which in turn displaces more adult labour and sends more children to work. The paper solves this process and predicts the incidence of child labour. It shows that, for appropriate parametric configurations, child labour may fall or rise as the adult minimum wage is raised. [source]

Opposition to the Living Wage: Discourse, Rhetoric, and American Exceptionalism

ANTHROPOLOGY OF WORK REVIEW, Issue 1 2010
David Karjanen
Abstract In this analysis my aim is to further a line of inquiry into the cultural logics surrounding the ways that people conceptualize work, worth, and the compensation of labor. By analyzing public attitudes towards wage floor policies such as the living wage, ethnographers can contribute to the broader effort at dismantling the naturalized cultural logic of neoliberalism regarding progressive economic policies, specifically living wages. I conclude that the discursive constitution of living wages by opponents reflects broader and more deeply held ideological assertions about American society and the marketplace, and reinforcing a notion of American exceptionalism. [source]

The Process of Fixing the British National Minimum Wage, 1997,2007

BRITISH JOURNAL OF INDUSTRIAL RELATIONS, Issue 2 2009
William Brown
The British National Minimum Wage was introduced in 1999 under the guidance of a Low Pay Commission constructed on a basis of ,social partnership'. The article analyses its conduct over its first 10 years from diary data. Key challenges were for it to be independent of government, to have its advice accepted by government and to maintain internal unanimity. The changing internal dynamics of the Commission, and its major negotiations over the level of the minimum wage, are described and analysed. Conclusions are drawn for the social partnership process. [source]

The Impact of the National Minimum Wage in Small Firms

BRITISH JOURNAL OF INDUSTRIAL RELATIONS, Issue 3 2003
James Arrowsmith
The introduction of the National Minimum Wage (NMW) had potentially significant implications for small firms. Orthodox economic theory predicts adverse consequences, though institutional analysis points to potential efficiency as well as fairness effects. Using longitudinal data on 55 firms, this paper examines the impact of the NMW in small firms in clothing manufacture and hotel and catering. Different patterns of adjustment were observed, explained by both size and sector characteristics. Overall, the impact of the NMW was mediated by the informality of employment relations in the small firm. [source]

Flood Disasters and Agricultural Wages in Bangladesh

DEVELOPMENT AND CHANGE, Issue 4 2007
Lopamudra Banerjee
ABSTRACT This article examines the effects of abnormal floods on agricultural wages in Bangladesh. Drawing upon the district-wise monthly real wage data for the period 1979,2000, it shows that wages decline sharply in the regions that are severely inundated for a long period of time. Wages may remain depressed in these regions even in the post-flood months. However, wages increase in the flood months in the regions that remain submerged for short durations. The article examines the district-wise crop yield data to explain these results in terms of the impact of flood on agricultural productivity, and therefore the demand for labour. [source]

An Equilibrium Theory of Learning, Search, and Wages

ECONOMETRICA, Issue 2 2010
Francisco M. Gonzalez
We examine the labor market effects of incomplete information about the workers' own job-finding process. Search outcomes convey valuable information, and learning from search generates endogenous heterogeneity in workers' beliefs about their job-finding probability. We characterize this process and analyze its interactions with job creation and wage determination. Our theory sheds new light on how unemployment can affect workers' labor market outcomes and wage determination, providing a rational explanation for discouragement as the consequence of negative search outcomes. In particular, longer unemployment durations are likely to be followed by lower reemployment wages because a worker's beliefs about his job-finding process deteriorate with unemployment duration. Moreover, our analysis provides a set of useful results on dynamic programming with optimal learning. [source]

The Interaction between the Central Bank and a Single Monopoly Union Revisited: Does Greater Monetary Policy Uncertainty Reduce Nominal Wages?

ECONOMIC NOTES, Issue 3 2007
Luigi Bonatti
Previous papers modelling the interaction between the central bank and a single monopoly union demonstrated that greater monetary policy uncertainty reduces the union's nominal wage. This paper shows that this result does not hold in general, since it depends on peculiar specifications of the union's objective function. In particular, I show that greater monetary policy uncertainty raises the nominal wage whenever union members tend to be more sensitive to the risk of getting low real wages than to the risk of remaining unemployed. This conclusion appears consistent with the evidence showing that greater monetary authority's transparency reduces average inflation. [source]

Welfare to Work, Wages and Wage Growth,

FISCAL STUDIES, Issue 3 2005
Reamonn Lydon
Abstract This paper attempts to uncover the effects of a UK welfare-to-work programme on individual wage growth by exploiting an expansion to this welfare programme. The conventional wisdom is that such programmes trap recipients into low-wage, low-quality work , this comes from the simple argument that the ,poverty trap', which a wage subsidy for low-income workers induces, reduces the benefits to investments, such as on-the-job training, and so reduces wage growth. In fact, a wage subsidy will also reduce the costs of, at least, general training because we would normally expect workers to pay for their own general training in the form of lower gross wages. So a wage subsidy is a way of sharing these costs with the taxpayer. Thus, the net effect on wage progression depends on whether it reduces costs by more or less than it reduces the benefits. [source]

The Hidden Politics of Administrative Reform: Cutting French Civil Service Wages with a Low-Profile Instrument

GOVERNANCE, Issue 1 2007
PHILIPPE BEZES
The article addresses internal and hidden politics of changes in bureaucracies by focusing on the introduction and use of policy instruments as institutional change without radical or explicit shifts in administrative systems. Beneath public administrative reforms, it examines the use of "low-profile instruments" characterized by their technical and goal-oriented dimension but also by their low visibility to external actors due to the high complexity of their commensurating purpose and the automaticity of their use. The core case study of the paper offers a historical sociology of a technique for calculating the growth of the French civil service wage bill from the mid-1960s to the 2000s. The origins, uses, and institutionalisation of this method in the French context are explored to emphasize the important way of governing the bureaucracy at times of crisis through automatic, unobtrusive, incremental, and low-profile mechanisms. While insisting on the salience of techniques for calculating, measuring, classifying, and indexing in the contemporary art of government, it also suggests the need for observing and explaining "everyday forms of retrenchment" in bureaucracies. [source]

A Note on the Changes in the Relative Wages of LEP Hispanic Men between 1980 and 2000

INDUSTRIAL RELATIONS, Issue 2 2006
MARIE T. MORA
Using the Juhn-Murphy-Pierce (1993) wage decomposition technique, we analyzed changes in the earnings differential between Hispanic and non-Hispanic white men in the United States between 1980 and 2000. The empirical findings, based on decennial census data, indicate that limited-English-proficient (LEP) Hispanic men gained in their relative earnings position compared to English-fluent Hispanics during the 1990s. Our interpretation is that the relative demand for LEP Hispanic workers has risen in recent years. [source]

Fighting for Other Folks' Wages: The Logic and Illogic of Living Wage Campaigns

INDUSTRIAL RELATIONS, Issue 1 2005
RICHARD FREEMAN
Living wage campaigns have enacted ordinances/policies to raise low wages in over 100 localities. The campaigns galvanize citizens more than national economic issues and allow for pay increases fine-tuned to local realities, but cover relatively few workers. To help the low-paid broadly, the coalitions in living wage campaigns have to scale up to the state or national level while unions and national groups work to devolve labor issues from the gridlock at the federal level to states and localities. [source]