scholarly journals Worker Flows and Wage Dynamics: Estimating Wage Growth Without Composition Effects

2020 ◽  
Author(s):  
Raquel Carrasco Perea ◽  
José Ignacio García Pérez ◽  
Juan F. Jimeno
Keyword(s):  
Wage Growth ◽  
Wage Dynamics ◽  
Composition Effects ◽  
Worker Flows

scholarly journals Reallocation and the Role of Firm Composition Effects on Aggregate Wage Dynamics

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Effrosyni Adamopoulou ◽  
Emmanuele Bobbio ◽  
Marta De Philippis ◽  
Federico Giorgi
Keyword(s):  
Social Security ◽  
Standard Model ◽  
Firm Heterogeneity ◽  
Wage Growth ◽  
Wage Dynamics ◽  
Composition Effects ◽  
Italian Case ◽  
Obvious Candidate ◽  
The Universe

AbstractAggregate wages display little cyclicality compared to what a standard model would predict. Wage rigidities are an obvious candidate, but the existing literature has emphasized the need to take into account the growing importance of worker composition effects, especially during downturns. This paper seeks to understand the role of firm heterogeneity for aggregate wage dynamics with reference to the Italian case. Using a newly available dataset based on social security records covering the universe of Italian employers between 1990 and 2015, we document that firm composition effects increasingly matter in explaining aggregate wage growth and largely reflect shifts of labor from low-paying to high-paying firms, especially in the most recent years. We find that changes in reallocation of workers across firms accounted for approximately one-fourth of aggregate wage growth during the crisis.

scholarly journals Changes in Occupational Tasks and Their Association with Individual Wages and Occupational Mobility

2019 ◽  
Vol 20 (4) ◽  
pp. e295-e328
Author(s):  
Alexandra Fedorets
Keyword(s):  
Large Scale ◽  
Occupational Mobility ◽  
Wage Growth ◽  
Panel Survey ◽  
Proximity Measure ◽  
Wage Dynamics ◽  
Cross Sectional ◽  
Individual Level ◽  
Occupational Tasks ◽  
Over Time

Abstract This study provides novel evidence on the relevance of task content changes between and within occupations to wage dynamics of occupational changers and stayers. I use individual-level, cross-sectional data featuring tasks performed on the job to compute a measure of proximity of job contents. Then, I merge this measure to a large-scale panel survey to show that occupational changers experience a wage growth that is declining when the accompanying alterations in task contents are big. For occupational stayers, alterations in task contents generate a positive wage component, beyond tenure effect. However, the results are not robust with respect to the choice of proximity measure and over time.

scholarly journals Tenure, Experience, Human Capital, and Wages: A Tractable Equilibrium Search Model of Wage Dynamics

2014 ◽  
Vol 104 (6) ◽  
pp. 1551-1596 ◽  
Author(s):  
Jesper Bagger ◽  
François Fontaine ◽  
Fabien Postel-Vinay ◽  
Jean-Marc Robin
Keyword(s):  
Human Capital ◽  
Job Search ◽  
Capital Accumulation ◽  
Wage Growth ◽  
Search Model ◽  
Human Capital Accumulation ◽  
Wage Dynamics ◽  
Equilibrium Search ◽  
Individual Level ◽  
Wage Increases

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity, and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within and between jobs, declines over the first ten years of a career—the “job-shopping” phase of a working life—after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers. (JEL J24, J31, J63, J64)

Wage policy models: what implications for vulnerable employees?

2015 ◽  
Vol 36 (6) ◽  
pp. 912-930 ◽  
Author(s):  
Francesca Sgobbi
Keyword(s):  
Cluster Analysis ◽  
Labour Market ◽  
Parental Leave ◽  
Wage Growth ◽  
Growth Path ◽  
Wage Dynamics ◽  
Wage Policy ◽  
Content Type ◽  
Policy Models ◽  
The Impact

Purpose – The purpose of this paper is to explore the impact of the employer’s wage policy on the wage dynamics of vulnerable groups of employees at large firms, including younger employees, employees on fixed-term contracts, and employees who take parental leave. Design/methodology/approach – The first step of the analysis identifies the wage policy models adopted by a sample of large Italian companies by means of a cluster analysis based on firm-level variables that describe the wage level, wage structure, and wage dynamics. The second step estimates the impact of the employer’s wage policy on the wage growth path of matched employees, paying particular attention to groups of vulnerable workers. Findings – The cluster analysis identifies four clusters whose characteristics reflect ideal types suggested by the literature. The 2SLS wage regressions that examine the impact of the employer’s wage policy model on a matched employee’s wage five years later confirm that the initial employer’s wage policy is a significant determinant of wage dynamics. However, the observed patterns significantly differ between the whole sample and the examined groups of vulnerable employees. Originality/value – Despite consistent evidence of negative labour market outcomes for vulnerable employees, the impact of firm characteristics on segregation into disadvantaged groups is still under-researched. This paper provides new evidence of how the employer’s wage policy impacts the wage growth path of disadvantaged employees and highlights critical dimensions to reduce the risk of segregation into less favourable segments of the labour market.

scholarly journals European Wage Dynamics and Spillovers

2019 ◽  
Vol 2019 (156) ◽  
Author(s):  
Yuanyan Sophia Zhang
Keyword(s):  
Error Correction ◽  
Labor Productivity ◽  
Euro Area ◽  
Real Wage ◽  
Wage Growth ◽  
Nominal Wage ◽  
Inflation Expectations ◽  
Wage Dynamics ◽  
Error Correction Models ◽  
Short Run

Wage rises have remained stubbornly low in advanced Europe in recent years, but, at the same time, newer EU members are experiencing rapid wage acceleration. This paper investigates the drivers of this wage divergence. Econometric analysis using error correction models suggests that wage growth responds more quickly to changes in unemployment in the newer EU members than in advanced Europe, where wages are more closely related to inflation and inflation expectations in the short run, implying greater inertia in nominal wage rises in advanced Europe. In the years after the global crisis, this inertia contributed to the build up of a real wage overhang relative to sharply slowing labor productivity, which subsequently dragged on nominal wage rises even as unemployment began to decline. Spillovers of subdued wage growth between euro area countries also weighed on wage rises in advanced Europe.

scholarly journals New imported inputs, wages and worker mobility

2019 ◽  
Author(s):  
Italo Colantone ◽  
Alessia Matano ◽  
Paolo Naticchioni
Keyword(s):  
Wage Growth ◽  
Blue Collar ◽  
Assortative Matching ◽  
Average Wage ◽  
Skilled Workers ◽  
Wage Dynamics ◽  
Firm Level ◽  
Worker Mobility ◽  
Individual Level ◽  
The Individual

Abstract We study how firms and industries adjust to increasing international trade in intermediate inputs. In particular, we provide a comprehensive assessment of the effects of new imported inputs on wage dynamics, on the skill-composition of the labor force, on worker mobility, and on assortative matching between firms and workers. We employ matched employer-employee data for Italy, over 1995–2007. We complement these data with information on the arrival of new imported inputs at the industry level. We find new imported inputs to have a positive effect on average wage growth at the firm level. This effect is driven by two factors: (1) an increase in the white-collar/blue-collar ratio; and (2) an increase in the average wage growth of blue-collar workers, while the wage growth of white collars is not significantly affected. The individual-level analysis reveals that the increase in the average wage of blue collars is driven by the displacement of the lowest paid workers, while continuously employed individuals are not affected. We estimate the unobserved skills of workers. We find evidence that new imported inputs lead to a positive selection of higher-skilled workers, and to an increase in the degree of positive assortative matching between firms and workers.

scholarly journals Immigration and Wage Dynamics in Germany

2019 ◽  
Vol 19 (301) ◽  
Author(s):  
Sabine Klinger ◽  
Anvar Musayev ◽  
Jean-Marc Natal ◽  
Enzo Weber
Keyword(s):  
Unemployment Rate ◽  
Productivity Growth ◽  
Employment Growth ◽  
Wage Growth ◽  
Inflation Expectations ◽  
Wage Dynamics ◽  
Competition Effects ◽  
Micro Level ◽  
Complementarity Effects ◽  
German Data

German wages have not increased very rapidly in the last decade despite strong employment growth and a 5 percentage point decline in the unemployment rate. Our analysis shows that a large part of the decline in unemployment was structural. Micro-founded Phillips curves fit the German data rather well and suggest that relatively low wage growth can be largely attributed to low inflation expectations and low productivity growth. There is no evidence – from either aggregate or micro-level administrative data – that large immigration flows since 2012 have had dampening effects on aggregate wage growth, as complementarity effects offset composition and competition effects.

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