Low-Wage Workers and the Enforceability of Noncompete Agreements

We exploit the 2008 Oregon ban on noncompete agreements (NCAs) for hourly-paid workers to provide the first evidence on the impact of NCAs on low-wage workers. We find that banning NCAs for hourly workers increased hourly wages by 2%–3% on average. Since only a subset of workers sign NCAs, scaling this estimate by the prevalence of NCA use in the hourly-paid population suggests that the effect on employees actually bound by NCAs may be as great as 14%–21%, though the true effect is likely lower due to labor market spillovers onto those not bound by NCAs. Whereas the positive wage effects are found across the age, education, and wage distributions, they are stronger for female workers and in occupations where NCAs are more common. The Oregon low-wage NCA ban also improved average occupational status in Oregon, raised job-to-job mobility, and increased the proportion of salaried workers without affecting hours worked. This paper was accepted by Lamar Pierce, organizations.

Gender pay gaps in domestic and foreign-owned firms

We investigate differences in gender wage gaps between foreign-owned and domestically owned firms in Poland, a country that has experienced large FDI inflows over the past three decades. We show that the adjusted gender wage gaps are larger among employees working in the foreign-owned sector than in the domestic sector. The gender pay gaps are found to be larger in the foreign-owned companies than in the domestically owned firms at every decile of the wage distribution, with the largest disparities being observed at the bottom and at the top. Our findings also show that in the foreign-owned sector, the returns to individual, job, and firm characteristics earned by women are much lower than the returns earned by men, but that the foreign-owned firms appear to pay higher firm-specific wage premia to women than to men, thereby narrowing within-firm gender wage inequality. These patterns differ from those observed in the domestic sector, in which firm wage premia tend to widen within-firm wage distributions, and contribute to the overall level of gender wage inequality.

The Optimal Earned Income Tax Credit (EITC) Schedule: A Trapezoid or a Triangle?

In this paper we ask the following question: Is the optimal Earned Income Tax Credit (EITC) schedule a trapezoid, as widely used by policy-makers, or is it a triangle? We show that a trapezoid is optimal only when the wage distribution among the working poor is even with a discrete jump for higher wage groups. Since this pattern is not in line with the observed wage distributions of countries, we conclude that the optimal schedule is a triangle. Our simulations show that the use of a trapezoid implies a substantial loss in terms of Social Welfare.

The evolution of the gender wage gap in Colombia: 1994 and 2010

This paper studies the evolution of the gender wage gap in Colombia at different points of wage distributions. Using DiNardo, Fortin, and Lemieux’s (1996) decomposition, we find that the enormous increase in female workers’ educational achievement has helped to reduce the gender gap, mainly at the top of the wage distribution. However, this effect has been countered by the reduction in the proportion of female workers in the public sector and those with indefinite contracts. Moreover, using the Arellano et al. (2017) methodology, we estimate the adjusted gender wage gap whilst controlling for sample selection. In both analysed years, our main finding was a clear glass-ceiling pattern that was slightly reduced in 2010.

The Distributional Impact of Recessions

Using the U.S. Current Population Survey data, this paper compares the distributional impacts of the Pandemic Crisis and those of the Global Financial Crisis in terms of (i) worker characteristics, (ii) job characteristics–“social” (where individuals interact to consume goods), “teleworkable” (where individuals have the option of working at home), and “essential” jobs (which were not subject to government mandated shut-downs during the recent recession), and (iii) wage distributions. We find that young and less educated workers have always been affected more in recessions, while women and Hispanics were more severely affected during the Pandemic Recession. Surprisingly, teleworkable, social and essential jobs have been historically less cyclical. This historical acyclicality of teleworkable occupations is attributable to its higher share of skilled workers. Unlike during the Global Financial Crisis, however, employment in social industries fell more whereas employment in teleworkable and essential jobs fell less during the Pandemic Crisis. Lastly, during both recessions, workers at low-income earnings have suffered more than top-income earners, suggesting a significant distributional impact of the two recessions.

Approximation of distribution of Poland’s population’s income according to Dagum and Zenga models

The aim of this paper is to analyse the income of the population of Poland using the Dagum and the Zenga distributions. The Zenga distribution, introduced in 2010, is a new distribution which has not been yet applied to analysing wages and income in Poland. The paper presents both the Dagum and Zenga distributions, as well as the results of the approximations of wage distributions drawn from the 2014 household budget survey. The calculated degree of compliance of the theoretical distribution with the empirical one demonstrates that the Zenga distribution describes the distribution of the income of the Polish population more reliably than the Dagum distribution, which so far has been regarded as one of the best.

FRICTIONS AND MISMATCHES IN THE LABOR MARKET

We develop an infinite-horizon dynamic search model to understand education–job mismatches in the labor markets where job seekers face three different types of labor markets based on their minimum educational requirements. Using a new dataset, we find that our model matches the US data well when we introduce heterogeneity through wage distributions. We use counterfactual experiments to show that even when the general unemployment level is kept constant, if the conditions within different job market types change, overeducation levels may increase or decrease dramatically. We find that regardless of the general unemployment level, frictions in the job market is the main reason for overeducation. However when unemployment is high, highly educated job seekers may settle for jobs below their education level at a higher level leading to a high degree of overeducation in the labor market and crowding out job seekers who have lower level of education.