Inequality in the Initial Wage of College Graduates at the College-Level Perspective

College graduates, as a labor force with high human capital accumulation, have the problem of initial wage inequality, which is worth paying attention to. Based on the collated micro-survey data form “Employment and Entrepreneurship Development Report of Chinese College Graduates”, which contains 339 samples from vocational colleges, 453 from common colleges, and 360 from key colleges, this study empirically analyzed the inequality of college graduates’ initial wages at the college level. We found that the initial wage income level of college graduates is significantly influenced by the college level. The higher the level is, the higher the initial wage. The initial wage of graduates from key colleges is the highest, and the income inequality between them and vocational college graduates is the most significant. Moreover, there are structural differences in the wage premium effect of the college level on college graduates with a change in wage level. In addition, the study found that there is an obvious gender wage difference among college graduates, and political status, academic ranking, and student cadre experience as well as the nature of the workplace all contributed to the formation of wage premiums to a certain extent.

Institutional variation in occupational licensing and its consequences for wages. A distributional analysis for the USA and Germany.

Licensing is a central institution in labor markets worldwide. Using the example of the USA and Germany, this study shows strong institutional differences between licensing systems that are of great importance for wage distribution but are not yet part of the debate about the economic consequences of licensing. The two countries differ significantly in terms of the rules of entry into occupational labor markets, the competencies of occupational boards, and the combination of licensing with price regulation. I claim that licensing systems change the bargaining power and bargaining scope for wages, which leads to different wage premiums across the distribution and different consequences for wage inequality. Using novel license data, I empirically show that licensing is associated with the largest relative wage premium for German low-wage and American middle-wage workers. In addition, the USA system leads to greater dispersion among licensed workers and to higher wage inequality overall. In contrast, the German system compresses wages for licensed workers, thereby reducing overall wage inequality.

Analysing the employment impact of Sunday wage premiums reductions: Implications for minimum wage research

This article tests the employment impact of recent reductions in Australian wage premiums, or penalty rates, using surveys of 1828 employees and 236 employers in Retail and Hospitality sectors. In applying wage premium reductions for Sunday work, the national regulator, the Fair Work Commission, anticipated improvements in trading hours, employment and hours worked as a consequence. However, the authors found no statistically significant evidence for these predictions. Nor did difference-in-differences methods indicate substitution of workers subject to cuts for those who were exempt. The authors present the first systematic purpose-designed empirical evidence on the employment impact of wage premiums. In the absence of empirical evidence, the regulator had referred substantially to minimum wage research. This study also has implications for minimum wage research, and contributes to it with a novel methodology examining both aggregate hours and employment, comparing those subject to cuts with those not, and surveying both employees and employers.

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

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.

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

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.

The wage premium and market structure: theory and empirical evidence from Chilean manufacturers

PurposeThis paper aims to examine how the “wage premium,” the percentage by which wages earned by skilled workers exceed those of unskilled workers, varies across industries characterized by different levels of competitiveness.Design/methodology/approachA theoretical model employing constant elasticity of substitution (CES) utility function and constant returns to scale production function is developed and analyzed to derive the effects of industry competitiveness on the wage premium. Econometric methods are applied to Chilean manufacturing data to test implications of theoretical model.FindingsOnce the relative factor endowment is being controlled, market competition significantly reduces the wage premium. More specifically, given with the same relative factor endowment, the wage premium is significantly higher under oligopolistic competition than under monopolistic competition. Empirical evidence from Chilean manufacturers supports our theoretical conclusions.Practical implicationsDuring economic development, the reallocation of production factors from unskilled labor-intensive to skilled labor-intensive industries raises the wage premiums received by skilled workers. Besides, skilled workers will earn higher wages by working in more highly concentrated industries instead of more competitive industries. This needs to be considered by government policymakers who must balance promotion of technical change with prevention of extreme the income inequality.Originality/valueThis paper examines how market structure affects wage premiums, providing new insights into a well-established literature that largely maintains that wage premiums are primarily a function of relative factor endowments or international trade.

SEXUAL ORIENTATION AND WAGES

We wrestle with the issue of whether or not discrimination, in favor of or against straight and gay people can account for wage divergences between these two groups of people. Section II is devoted to empirical evidence supporting the existence of a discrimination wage gap due to sexual orientation. The majority of studies provided have concluded that sexual orientation diminishes wages for homosexual and bisexual men, whereas it increases wage premiums for homosexual women. Discrimination due to sexual orientation, specifically homo/bisexual males, is present in foreign labor markets as well as in the United States. In these calculations, all other factors, such as age, education, race, marital status, etc., are identified and taken into consideration when calculating the effect of sexuality on wage differences. Section III strives to explain why the discrimination wage gap cannot exist through a theoretical approach. In equilibrium, sexual preference can play no role whatsoever in wage gaps. We are never in full equilibrium, but the “expected value” is that we are always exactly on point, in the absence of any reason to expect over or underestimating prices or wages. We expect that discrimination cannot account for gay people being paid less than straights, assuming equal productivity. At equilibrium, these economic boycotts are impotent due to profit opportunities. We conclude leaving the reader to decide which perspective is more true.

Sources of Displaced Workers’ Long-Term Earnings Losses

We estimate the magnitudes of reduced earnings, work hours, and wage rates of workers displaced during the Great Recession using linked employer-employee panel data from Washington state. Displaced workers’ earnings losses occurred mainly because hourly wage rates dropped at the time of displacement and recovered sluggishly. Lost employer-specific premiums explain only 17 percent of these losses. Fully 70 percent of displaced workers moved to employers paying the same or higher wage premiums than the displacing employers, but these workers nevertheless suffered substantial wage rate losses. Loss of valuable specific worker-employer matches explains more than one-half of the wage losses. (JEL E32, J22, J31, J63, R23)