Workforce Composition, Productivity, and Labor Regulations in a Compensating Differentials Theory of Informality

Author(s):  
Daniel Haanwinckel ◽  
Rodrigo R Soares

Abstract We develop a search model of informal labor markets with realistic labor regulations, including minimum wage, and heterogeneous workers and firms. Smaller firms and lower wages in the informal sector emerge endogenously as firms and workers decide whether to comply with regulations. Because skilled and unskilled workers are imperfect substitutes in production, the model uniquely captures the informality consequences of shocks that affect returns to skill, such as rising educational levels. The model also reproduces empirical patterns incompatible with other frameworks: the presence of skilled and unskilled workers in the formal and informal sectors, the rising share of skilled workers by firm size, and formal and firm-size wage premiums that vary by skill level. We estimate the model using 2003 data from Brazil and show that it successfully predicts labor market changes observed between 2003 and 2012. Under a range of different assumptions, changes in workforce composition appear as the main drivers of the reduction in informality over this period. Policy simulations using the estimated model suggest that progressive payroll taxes are a cost-effective way to reduce informality.

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
Youngho Kang ◽  
Hyejoon Im

Abstract: Using longitudinal survey data from Korean workers, we examine whether the effects of import competition on post-displacement wages are heterogeneous between skilled and unskilled workers for trading partners with different endowments of (un)skilled labor. Reemployment wages of displaced workers show a decrease for skilled workers but an increase for unskilled ones when imports from an advanced country rise, whereas they decrease for unskilled workers but increase for skilled ones when imports from a developing country rise. The results provide support for the Stolper–Samuelson theorem.


Author(s):  
Clara Tridiana ◽  
Diah Widyawati

The effectiveness of minimum wages is still debated, even though minimum wage regulation increases worker’s wages, yet it causes “disemployment effect”. This study aims to identify differences in minimum wages impact on probabilities out of formal sector for unskilled and skilled workers. The type of skill used is based on job classification. Using Sakernas data in August 2010 and 2015, probit regression was conducted to estimate minimum wages impact on probabilities out of formal sector on skilled and unskilled workers. Based on analysis, minimum wage on probability of exit from formal sector is higher for unskilled workers than skilled workers. ============================= Efektivitas penerapan upah minimum masih diperdebatkan, karena meskipun upah minimum meningkatkan upah pekerja, namun di sisi lain dapat menyebabkan “disemployment effect”. Penelitian ini bertujuan mengidentifikasi perbedaan dampak upah minimum terhadap probabilitas keluar dari sektor formal pada tenaga kerja tidak terampil dan terampil. Tipe keterampilan yang digunakan dalam penelitian ini berdasarkan klasifikasi jenis pekerjaan. Dengan menggunakan data Sakernas Agustus 2010 dan 2015, penelitian ini menggunakan regresi probit untuk mengestimasi dampak upah minimum terhadap probabilitas keluar dari sektor formal pada tenaga kerja terampil dan tidak terampil. Hasil yang diperoleh adalah dampak upah minimum terhadap probabilitas keluar dari sektor formal lebih tinggi pada tenaga kerja tidak terampil dibandingkan tenaga kerja terampil.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Brian Tavonga Mazorodze

PurposeThe purpose is to establish the impact of trade on manufacturing employment in South Africa.Design/methodology/approachTwo techniques, the Pooled Mean Group (PMG) and the Dynamic Common Correlated Effects (DCCE), are applied on a panel dataset comprising 26 three-digit manufacturing industries with data observed between 1970 and 2016.FindingsThe impact of trade on employment is miniscule at best and insignificant at worst once the study controls for cross-sectional dependency. This is true for both skilled and unskilled workers. Employment of skilled workers is explained by remuneration while employment of unskilled workers is explained by output dynamics.Practical implicationsTrade is widely attacked for causing labour market disruption through job losses. This hypothesis is not supported by data for South Africa as no link is confirmed between trade and employment of skilled and unskilled workers.Originality/valueEstimating the trade and employment link for skilled and unskilled workers while controlling for both endogeneity and cross-sectional dependency.


Author(s):  
Sam Mitrani

This chapter examines how the Chicago Police Department dealt with the first May Day Strike of 1867 demanding employers to adopt the eight-hour day. In the period after the Civil War, a new working class emerged in the United States. By the 1860s, this working class was coalescing both because an increasing number of people worked for wages and because those wage workers were increasingly coming together in a variety of collective ways to address their common problems. Chicago was a key center of both aspects of working-class formation; workers both formed unions and pushed for legislative reform. The division between skilled and unskilled workers was the central dividing line in the Chicago labor movement throughout this period, and it largely correlated with ethnicity. This chapter first considers labor's reaction to the growth of a wage labor economy that stripped even skilled workers of their independence before providing an overview of the May Day March that saw the Chicago Police Department confront large crowds of angry workers calling for the implementation of the eight-hour law.


Author(s):  
Filbert Uriel Sulaiman ◽  
Suwardana Winata

Bungur subdistrict, located in Senen district, Central Jakarta, is famous as a printing area. Bungur has various types of printing services starting from digital printing, offset printing, and finishing services (emboss, binding, cutting, etc). There are many skilled workers are hired to work in the printing services. Skilled or unskilled workers in printing services are people who rely on physical labour and tend to work longer than educated workers. The lack of interaction and tension in the workplace after a long period can cause stress which leads to other diseases. However, the stress can be solved by having an informal interaction apart from their workplace and home. In the other hand, long working hours have reduced opportunities for these workers to have an informal social interaction. As a respond to the problem, this training facility design as a place for skilled and unskilled workers to have social interaction apart from their workplace and home. This project also aims to be a place for residents of Bungur Subdistrict to develop their skills in graphic design. To reach the goals, the design has a wide-open space for anyone on the basement floor which is open and becomes into one virtually with the ground floor. Above the open space there are training facility and gallery which have separated circulation. The separation between the training facilities, gallery, and the open space under it aims to fulfil the needs of each program. AbstrakKecamatan Bungur, yang terletak di distrik Senen, Jakarta Pusat, terkenal sebagai daerah percetakan. Bungur memiliki berbagai jenis layanan pencetakan, mulai dari pencetakan digital, cetak offset, dan layanan finishing (emboss, binding, cutting, dll). Oleh karena itu banyak pekerja terampil dipekerjakan untuk bekerja di bidang percetakan. Pekerja yang terampil atau tidak terampil dalam layanan pencetakan adalah orang-orang yang mengandalkan tenaga fisik dan cenderung bekerja lebih lama daripada pekerja yang berpendidikan. Kurangnya interaksi dan ketegangan di tempat kerja setelah waktu yang lama dapat menyebabkan stres yang mengarah pada penyakit lain. Namun, masalah ini dapat diselesaikan dengan interaksi informal yang terpisah dari tempat kerja mereka dan rumah dapat mengurangi stres tersebut. Tetapi, jam kerja yang panjang menghasilkan kesempatan minimal bagi para pekerja ini untuk melakukan interaksi sosial di luar tempat kerja atau rumah mereka. Akibatnya, fasilitas pelatihan ini dirancang untuk menjadi tempat bagi pekerja terampil dan tidak terampil untuk berinteraksi sosial antara tempat kerja dan rumah mereka. Bukan hanya tempat untuk melakukan interaksi sosial, tetapi proyek ini juga bertujuan untuk menjadi tempat bagi warga Kecamatan Bungur untuk mengembangkan keterampilan mereka dalam desain grafis. Sebagai tempat interaksi, bangunan dirancang memiliki ruang terbuka lebar bagi siapa saja di lantai dasar yang terbuka dan menjadi satu dengan lantai dasar. Kemudian fasilitas pelatihan dan galeri melayang di atasnya dengan dukungan kolom. Pemisahan antara fasilitas pelatihan, galeri, dan ruang terbuka di bawahnya bertujuan untuk memenuhi kebutuhan masing-masing program.


Economies ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 76
Author(s):  
Lourenço S. Paz ◽  
Kul Prasad Kapri

This study examines the impacts of imports from China and from the Rest of the World (ROW) on the wages of Brazilian manufacturing workers during 2000–2012. In this period, import penetration in Brazil grew by 25 percent, and the Chinese share of it increased from 3 to 20 percent. Using household survey data that encompass both formal and informal workers, we find that imports from China and from the ROW had different effects on manufacturing skilled and unskilled workers’ wages. Both the skilled and unskilled workers were negatively affected by an increase in the Chinese import penetration of intermediate inputs. For skilled workers, the ROW import penetration effect was negative for labor-intensive industries and positive for the other industries, while the Chinese import penetration had a positive effect on skilled workers’ wages. For the unskilled workers, we find that those in unskilled-labor intensive industries experienced positive impacts from both China and ROW import penetrations, whereas larger import penetrations reduced the wages for unskilled workers in the other industries.


2016 ◽  
Vol 23 (5) ◽  
pp. 1069-1075 ◽  
Author(s):  
Sylvain Petit

This study investigates the impact of the international openness in tourism services trade on wage inequality between highly skilled, semi-skilled, and unskilled workers in the tourism industry. The sample covers 10 developed countries and expands over 15 years. A cointegrated panel data model and an error correction model were used to distinguish between the short- and long-run effects. The results are compared to those of openness of business services and manufactured goods. The findings point out that tourism increases wage inequality at the expense of the least skilled workers in the long run and the short run.


Circulation ◽  
2012 ◽  
Vol 125 (suppl_10) ◽  
Author(s):  
Lena M Bjorck ◽  
Christina Stahl-Heden ◽  
Masuma Novak ◽  
Wai Giang Kok ◽  
Annika Rosengren

Background and aim: The link between low socioeconomic status (SES) and CHD is well established but whether low SES is also an independent predictor for development of diabetes type 2 is not clear. The aim of this study was to investigate whether SES, measured as occupational class, predicted subsequent development of diabetes type 2 over an extended follow-up. Methods: A total of 6941 men 47-55 years old, without prior diabetes, from a population sample of 9998 men, were investigated during 1970-73. Of the men, 23.7% were unskilled workers, 27.2% were skilled workers, 19.7% occupied either a supervisory manual position or were lower officials, 17.9% were officials at an intermediate position, and 11.6% were professionals, executives or senior officials. Follow-up was achieved through the national Swedish patient registry. Results: A total of 900 men (13%) were registered at any time with a diagnosis of diabetes over a 35-year follow-up. Compared with men in the highest occupational class, men with intermediate non-manual occupations had a multiple-adjusted hazard ratio (HR) of 1.10, 95% confidence interval (CI) 0.84-1.44, lower officials and foremen had an HR of 1.37 (1.06-1.78), semiskilled and skilled workers 1.39 (1.08-1.78), and unskilled workers 1.66 (1.30-2.13) after adjustment for smoking at baseline, BMI, blood pressure, serum cholesterol, treatment for hypertension and leisure time physical activity. Conclusions: Low SES is an independent risk factor for long-term risk of diabetes in men, with a 66% independent higher risk in unskilled workers, compared to professionals/senior officials.


2020 ◽  
Author(s):  
Boško Mijatović ◽  
Branko Milanovic

The paper presents the first estimate of the welfare ratio for Serbia using the 19th and early 20th century data on wages of skilled and unskilled workers (including the part paid in kind) and prices of goods that enter into “subsistence” and “respectability” consumption baskets. It finds a stagnation of unskilled wage close to the welfare ratio of 1, and a modest increase in skilled wage. The paper introduces several adjustments to conventional methodology in order to make it more relevant for predominantly agricultural societies. (Stone Center on Socio-Economic Inequality Working Paper)


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