scholarly journals Workplace Heterogeneity and the Rise of West German Wage Inequality*

2013 ◽  
Vol 128 (3) ◽  
pp. 967-1015 ◽  
Author(s):  
David Card ◽  
Jörg Heining ◽  
Patrick Kline
Keyword(s):  
Wage Inequality ◽  
Fixed Effects ◽  
Wage Structure ◽  
Three Dimensions ◽  
Job Match ◽  
Wage Premiums ◽  
Dramatic Rise ◽  
Plant Level ◽  
Wage Variation ◽  
Education Groups

Abstract We study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit into four subintervals spanning the period from 1985 to 2009. We show that these models provide a good approximation to the wage structure and can explain nearly all of the dramatic rise in West German wage inequality. Our estimates suggest that the increasing dispersion of West German wages has arisen from a combination of rising heterogeneity between workers, rising dispersion in the wage premiums at different establishments, and increasing assortativeness in the assignment of workers to plants. In contrast, the idiosyncratic job-match component of wage variation is small and stable over time. Decomposing changes in mean wages between different education groups, occupations, and industries, we find that increasing plant-level heterogeneity and rising assortativeness in the assignment of workers to establishments explain a large share of the rise in inequality along all three dimensions.

Computers meet politics at wage structure: an analysis of the computer wage premium across rich countries

2019 ◽  
Author(s):  
Tali Kristal ◽  
Susanne Edler
Keyword(s):  
Wage Inequality ◽  
Industrial Relations ◽  
Wage Structure ◽  
Wage Premium ◽  
Wage Bargaining ◽  
Publicly Funded ◽  
Wage Premiums ◽  
Rapid Spread ◽  
International Data ◽  
Rich Countries

Abstract This article addresses an important question in the age of rapid spread of new computer technologies: how do institutions influence the computer wage premium? To identify institutional factors that account for differences in computers’ impact on wages, the authors estimate computer wage premiums for 20 countries classified into three national ‘varieties’ of capitalism and distinct forms of industrial relations and education systems. The analyses are based on unique international data from the Survey of Adult Skills, recently conducted by the Organisation for Economic Co-operation and Development. Results reveal that computer use at work is rewarded considerably higher in Liberal countries than in other countries—Nordic Coordinated countries above all. These results signify the centrality of coordinated markets, grounded in strong unions, centralized wage bargaining and publicly funded education and training, for lower computer wage gaps, hence for lower levels of wage inequality.

scholarly journals Estimation of a Roy/Search/Compensating Differential Model of the Labor Market

Econometrica ◽  
2020 ◽  
Vol 88 (3) ◽  
pp. 1031-1069 ◽  
Author(s):  
Christopher Taber ◽  
Rune Vejlin
Keyword(s):  
Wage Inequality ◽  
Capital Accumulation ◽  
Compensating Differentials ◽  
Search Frictions ◽  
Differential Model ◽  
Job Match ◽  
Relative Contribution ◽  
Compensating Differential ◽  
Roy Model ◽  
Wage Variation

In this paper, we develop a model that captures key components of the Roy model, a search model, compensating differentials, and human capital accumulation on‐the‐job. We establish which components of the model can be non‐parametrically identified and which ones cannot. We estimate the model and use it to assess the relative contribution of the different factors for overall wage inequality. We find that variation in premarket skills (the key feature of the Roy model) is the most important component to account for the majority of wage variation. We also demonstrate that there is substantial interaction between the other components, most notably, that the importance of the job match obtained by search frictions varies from around 4% to around 29%, depending on how we account for other components. Inequality due to preferences for non‐pecuniary aspects of the job (which leads to compensating differentials) and search are both very important for explaining other features of the data. Search is important for turnover, but so are preferences for non‐pecuniary aspects of jobs as one‐third of all choices between two jobs would have resulted in a different outcome if the worker only cared about wages.

Econometric Analysis of Returns to Education of Rural and Urban Labour Markets Workers in Tamil Nadu

2020 ◽  
pp. 336-344
Keyword(s):  
Wage Inequality ◽  
Tamil Nadu ◽  
Returns To Education ◽  
Labour Markets ◽  
Wage Distribution ◽  
Rural Market ◽  
Rural And Urban ◽  
Rate Of Returns ◽  
Education Groups ◽  
Quantile Regression Method

The objective of this study was to empirically evaluate the returns to education of rural and urban labour markets workers in Tamil Nadu using the IHDS data with appropriate Econometric models. First, the present study estimated the earning functions of the rural and urban market's workers by OLS technique and standard Mincerian earning functions. Secondly, the quantile regression method was also used to examine the evolution of wage inequality. The findings of the study showed that the effects of education and experience on the log of hourly wages were positive, and these coefficients were statistically significant. The returns to education increased with the level of education and differed among the workers of rural and urban labour markets. The results showed that the rates of returns to primary, middle and higher secondary were higher in the urban market, whereas those of secondary and graduation were higher in the rural market. The study revealed that the effect of education was not the same across the rural and urban wage distribution. The rate of returns differed considerably within education groups across different quantiles of the wage distribution.

Linked in Life and Death: A Note on the Effect of Parental Death on Sibling Relations in Young and Middle Adulthood

2021 ◽  
pp. 0192513X2098556
Author(s):  
Karsten Hank
Keyword(s):  
Family Relationships ◽  
Fixed Effects ◽  
Family System ◽  
Parental Death ◽  
Spillover Effects ◽  
Three Dimensions ◽  
Life And Death ◽  
Sibling Relations ◽  
Fixed Effects Regression ◽  
Parent Child

Despite the important role of adult parent–child and sibling relations in the family system, only few studies have investigated yet, how the common adult experience of parental death impacts sibling relations. Estimating fixed-effects regression models using four waves of data from the German Family Panel (pairfam; n = 4,123 respondents), the present note focused on changes in three dimensions of adult siblings’ relationship qualities following the first parent’s death. Our analysis revealed a short-term positive effect of parental death on sibling contacts as well as longer-lasting increases in emotional closeness and conflicts. Next to an intensification of sibling relations following the first parent’s death, we also detected significant spillover effects from respondents’ relationship with the surviving parent to their sibling relations. Our analysis thus provided evidence for adult parent–child and sibling relations to be “linked in life and death,” underlining the benefits of jointly analyzing intra- and intergenerational family relationships.

scholarly journals Expanding higher education and wage inequality in Chile

2020 ◽  
Vol 47 (4) ◽  
pp. 877-889
Author(s):  
Yoshimichi Murakami ◽  
Tomokazu Nomura
Keyword(s):  
Higher Education ◽  
Wage Inequality ◽  
Household Survey ◽  
Wage Structure ◽  
Wage Distribution ◽  
Structure Effect ◽  
Composition Effect ◽  
Content Type ◽  
Subsequent Decrease ◽  
Using Data

PurposeThis study aims to analyse the contribution of the expansion and diversification of higher education to Chile's increase in wage inequality from 1992 to 2000 and its subsequent decrease from 2000 to 2013.Design/methodology/approachThe wage equation for each year is estimated using data from the national household survey, Encuesta de Caracterización Socioeconómica Nacional (CASEN). Using the method proposed by Firpo et al. (2009), the evolution of wage changes is decomposed into composition and wage structure effects of each explanatory variable at different points of the wage distribution.FindingsThe results show that the positive composition effect of higher education, derived from the increasing share of both workers with university degrees and those with vocational degrees, is substantially larger at the upper quantiles and exceeds the negative wage structure effect, thereby contributing to increasing wage inequality from 1992 to 2000. By contrast, the negative wage structure effect of higher education, primarily derived from the decreasing return to university degrees, is substantially larger at the upper quantiles and exceeds the positive composition effect, thereby contributing to decreasing wage inequality from 2000 to 2013.Originality/valueThis study contributes to the literature by showing that the expansion of higher education increased inequality in the 1990s and decreased it in the 2000s while the increasing supply of workers with vocational degrees decreased wage premiums for university degrees in the latter period.

Globalization and health: An empirical investigation

2019 ◽  
Vol 19 (3) ◽  
pp. 207-224 ◽  
Author(s):  
Vishalkumar J Jani ◽  
Nisarg A Joshi ◽  
Dhyani J Mehta
Keyword(s):  
Health Status ◽  
Panel Data ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Health Indicators ◽  
Developed Countries ◽  
Social Dimension ◽  
Three Dimensions ◽  
Infant Mortality Rate ◽  
The Impact

This article empirically examines the impact of globalization on the health status of countries by using panel data. Unlike previous studies, it has attempted to use three different dimensions of globalization and estimate their impact on health status measured by infant mortality rate and life expectancy. It also introduces an initial level of development status as an explanatory variable and found that it has an important role. The fixed effects panel data analysis shows that globalization has a positive impact on the health indicators. Out of the three dimensions of globalization, namely, economic, social and political, the first one has the highest influence on health for the less developed countries. However, as one moves up the ladder of development, social dimension becomes more important. Moreover, the pace of improvement in health indicators is faster in developed countries, indicating a divergence between the developed and the underdeveloped world.

Inter-industry wage inequality: persistent differences and turbulent equalisation

2020 ◽  
Vol 44 (4) ◽  
pp. 919-942
Author(s):  
Patrick Mokre ◽  
Miriam Rehm
Keyword(s):  
Economic Theory ◽  
Bayesian Inference ◽  
Wage Inequality ◽  
Fixed Effects ◽  
Wage Differentials ◽  
Wage Determination ◽  
Inference Model ◽  
Hierarchical Bayesian Inference ◽  
Industrial Wage ◽  
Profit Rates

Abstract The empirical stylised fact of persistent inter-industry wage differentials is an enduring challenge to economic theory. This paper applies the classical theory of ‘real competition’ to the turbulent dynamics of these inter-industrial wage differentials. Theoretically, we argue that competitive wage determination can be decomposed into equalising, dispersing and turbulently equalising factors. Empirically, we show graphically and econometrically for 31 US industries in 1987–2016 that wage differentials, like regulating profit rates, are governed by turbulent equalisation. Furthermore, we apply a fixed-effects OLS as well as a hierarchical Bayesian inference model and find that the link between regulating profit rates and wage differentials is positive, significant and robust.

scholarly journals Leave‐Out Estimation of Variance Components

Econometrica ◽  
2020 ◽  
Vol 88 (5) ◽  
pp. 1859-1898 ◽  
Author(s):  
Patrick Kline ◽  
Raffaele Saggio ◽  
Mikkel Sølvsten
Keyword(s):  
Wage Inequality ◽  
Quadratic Forms ◽  
Fixed Effects ◽  
Linear Models ◽  
Large Data ◽  
Wage Determination ◽  
Fixed Effects Model ◽  
Relative Contribution ◽  
Estimation Of Variance ◽  
Linear Restrictions

We propose leave‐out estimators of quadratic forms designed for the study of linear models with unrestricted heteroscedasticity. Applications include analysis of variance and tests of linear restrictions in models with many regressors. An approximation algorithm is provided that enables accurate computation of the estimator in very large data sets. We study the large sample properties of our estimator allowing the number of regressors to grow in proportion to the number of observations. Consistency is established in a variety of settings where plug‐in methods and estimators predicated on homoscedasticity exhibit first‐order biases. For quadratic forms of increasing rank, the limiting distribution can be represented by a linear combination of normal and non‐central χ 2 random variables, with normality ensuing under strong identification. Standard error estimators are proposed that enable tests of linear restrictions and the construction of uniformly valid confidence intervals for quadratic forms of interest. We find in Italian social security records that leave‐out estimates of a variance decomposition in a two‐way fixed effects model of wage determination yield substantially different conclusions regarding the relative contribution of workers, firms, and worker‐firm sorting to wage inequality than conventional methods. Monte Carlo exercises corroborate the accuracy of our asymptotic approximations, with clear evidence of non‐normality emerging when worker mobility between blocks of firms is limited.

Changes in the Turkish Wage Structure in the EU Accession Process

2016 ◽  
pp. 187-208
Author(s):  
Nursel Aydiner-Avsar ◽  
M. Burak Onemli
Keyword(s):  
Wage Inequality ◽  
College Education ◽  
Wage Structure ◽  
Wage Distribution ◽  
Eu Accession ◽  
Job Status ◽  
Related Factors ◽  
Accession Process ◽  
Major Factors ◽  
The Eu

This chapter aims to analyze the evolution of Turkish wage structure following the introduction of new labor law in 2003 in the EU accession process. The authors first present a descriptive picture of the changes in wage inequality between 2003 and 2013. They then conduct an econometric analysis of the relative importance of individual, job- and workplace-related factors on wages across the wage distribution to understand what drives this outcome. It is found that wage inequality decreased from 2003 to 2007, and increased during the global economic crisis. Increased returns to college education, skilled white collar jobs as well as returns to construction sector stand out as the major factors increasing wage inequality. Though to a lesser extent, increased returns to blue-collar jobs, formal job status and reduced returns to employment in large firms are factors reducing wage inequality in Turkey in the post-2003 era.

Explaining Wage Losses after Job Displacement: Employer Size and Lost Firm Wage Premiums

2021 ◽  
Author(s):  
Daniel Fackler ◽  
Steffen Mueller ◽  
Jens Stegmaier
Keyword(s):  
Administrative Data ◽  
Fixed Effects ◽  
Job Displacement ◽  
Worker Productivity ◽  
Wage Premiums

Abstract This paper investigates whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We estimate losses in wages and firm wage premiums, the latter being measured as firm effects from a two-way fixed-effects wage decomposition. Using new German administrative data on displacements from small and large employers, we find that wage losses are to a large extent explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses strongly increase with pre-displacement employer size. This provides an explanation for large and persistent wage losses reported in previous displacement studies typically focusing on large employers, only.

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