Structural Changes in Employment Diversification in Pakistan: Assessing the Role of Sectoral Employment Elasticities in Employment Generation

Employment growth (part-time and full-time) in Sub-sectors of economic activity is not only determined by the output growth in this sector but the time lag is also involved, in addition to this the wage elasticity of employment is also critical in determining employment diversification and labor mobility between sectors, varied widely in different sectors of the economy. This paper endeavors to illustrate the role of part-time and full-time employment elasticity among sectors along with employment diversification. Furthermore, the empirical analysis is carried out on time series data for 1990 to 2019. By utilizing Seemingly Unrelated regression and by estimating wage elasticity of employment with modified two factor Cobb-Douglas function for full time and part-time employment, the results have been illustrated, by carefully considering the reliability, consistency, and accuracy of the findings, this study demonstrates an increased sectoral output tends to enhance employment in respective sectors. For the manufacturing sector and construction sector, both sectoral output and total output were found to have comparable responses that suggest employment for both sectors tends to increase in line with the output. Therefore, the conclusions of the study establish that an effective way to enhance employment is to create flexibility in the wages as an efficient approach to enhance sectoral employment.

Puerto Rico's minimum wage: Revisiting a price floor with bite

Revisiting research from the 1990s from Castillo-Freeman and Krueger, I use the synthetic control method of Abadie et al. to estimate the impact of the most recent increase in the federal minimum wage on employment in Puerto Rico. I estimate that the employment/population ratio of various groups in Puerto Rico was significantly lower than that of a data-constructed synthetic Puerto Rico which did not raise its minimum wage. Placebo tests on other donor units, time periods, and population groups suggest that a significant portion of this gap is a result of the minimum wage. Groups with greater exposure to the minimum wage, such as teens and restaurant workers, experienced proportionally greater declines in employment. My results suggest an own-wage elasticity of employment in Puerto Rico of −0.68, higher than estimates from the mainland, which suggests that the employment response to minimum wages may be more dramatic at higher relative minimum wages.

DOES LOCATION AFFECT EMPLOYMENT? EVIDENCE FROM THE HIGH NORTH OF RUSSIA

Local labour markets within one country can be characterized by different outcomes because of their geographical and economic peculiarities. The unique features of the labour markets of the High North regions of Russia include compensative differentials and specific labour protection legislation together with the specific geographical characteristics. The aim of the paper is to investigate what peculiarities arise in employment as a result of location in the areas of the High North of Russia. Using aggregate regional data for the northern regions of Russia from 2005 to 2014 we estimated the dynamic fixed effects models for the number of employees and net migration. It was discovered that geographical characteristics affect employment in the High North of Russia more than wages. Labour supply exceeds labour demand in the northern regions of Russia because of strong positive wage elasticity of net migration. We can surmise that regulation of wages and migration should be a part of common economic policy in the High North regions of Russia.

DETERMINATION OF THE URBAN WAGE PREMIUM IN ECUADOR

This paper aims to determine the urban wage premium in Ecuador. It estimates two wage equations with the nominal and real wage, using instrumental variables to control endogeneity. Four indicators are applied to measure up the urban premium: area, classification by size of a city, cantonal population, and number of firms per capita. The latter is used for the first time and proves to be a better measure to reflect the urban premium. The results show that workers located in metropolis and big cities earn wages 14% and 4% higher than those workers located in small towns, respectively. The wage elasticity is 0.03% with respect to cantonal population, and 0.06% with respect to the number of firms.

INFERENCE IN NONPARAMETRIC SERIES ESTIMATION WITH SPECIFICATION SEARCHES FOR THE NUMBER OF SERIES TERMS

Nonparametric series regression often involves specification search over the tuning parameter, that is, evaluating estimates and confidence intervals with a different number of series terms. This paper develops pointwise and uniform inferences for conditional mean functions in nonparametric series estimations that are uniform in the number of series terms. As a result, this paper constructs confidence intervals and confidence bands with possibly data-dependent series terms that have valid asymptotic coverage probabilities. This paper also considers a partially linear model setup and develops inference methods for the parametric part uniform in the number of series terms. The finite sample performance of the proposed methods is investigated in various simulation setups as well as in an illustrative example, that is, the nonparametric estimation of the wage elasticity of the expected labor supply from Blomquist and Newey (2002, Econometrica 70, 2455–2480).

Minimum Wages and the Distribution of Family Incomes

There is robust evidence that higher minimum wages increase family incomes at the bottom of the distribution. The long-run (3 or more years) minimum wage elasticity of the non-elderly poverty rate with respect to the minimum wage ranges between −0.220 and −0.459 across alternative specifications. The long-run minimum wage elasticities for the tenth and fifteenth unconditional quantiles of family income range between 0.152 and 0.430 depending on specification. A reduction in public assistance partly offsets these income gains, which are on average 66 percent as large when using an expanded income definition including tax credits and noncash transfers. (JEL D31, I32, I38, J31, J38)

Aggregation and Labor Supply Elasticities

We outline a formal procedure for deriving the aggregate wage-elasticity of labor supply for a large group of heterogeneous workers who operate under uncertainty. Heterogeneity relates to preferences, income, wealth, and the labor market status. If each worker faces a small, possibly nonuniform wage change, the implied aggregate wage-elasticity can be represented by a closed-form expression. This expression captures an extensive and an intensive margin. We empirically implement the procedure for a dynamic model of individual labor supply and a micro panel of men in Germany from 2000 to 2013. We find that the extensive margin is less time-varying than the intensive margin, and that its size varies with the measure of reservation wages. Self-reported reservation wages render a larger extensive margin than other proxies. The estimated aggregate Frisch wage-elasticity varies between 0.85 and 1.06, and the two margins matter equally strongly for the unbalanced sample.

Wage Flexibility in Russia: Empirical Evidence from Microdata Analysis

The paper discusses the real wage elasticity to unemployment and GDP in Russia. An approach based on panel microdata about earnings of individuals has been applied. This methodology helps to avoid a number of difficulties that are created when aggregated analytical data on the average wage dynamics are used. The study has indicated some conclusions. Firstly, a review of estimations from other countries based on the same methodology is provided. The results confirm the conclusion about higher wage elasticity to unemployment in Russia than in many developed countries. However, the real wage elasticity to GDP in Russia is comparable with the same elasticity in other countries. Secondly, the use of microdata facilitates the evaluation of real wage flexibility for particular groups of workers and for different types of jobs: in other words, the heterogeneity of wage flexibility. As shown by calculations, wage flexibility is higher for young men living in the city and working in the private or informal sector of the economy. Moreover, it was found that wage flexibility of workers who have changed jobs during the year is higher than that of those who have remained with the same employer. Thus, interfirm mobility contributes to high wage flexibility in Russia: during economic growth employees, on average, newly start better paid jobs, whereas during crises they switch to low-paid jobs.

ELASTISITAS PERMINTAAN TENAGA KERJA PADA USAHA KONVEKSI SKALA MIKRO DAN KECIL

Labor intensive in small and micro scales garment sector is very common in Soreang Village, Bandung Regency, West Java Province. The purpose of this study is to analyze the elasticity of labor demand of the labor-intensive micro-small scale garment enterprises. Sixty seven entrepreneurs were interviewed to collect primary data. Result from natural logarithm regression showed that labor demand was inelastic to the unit number of machines, wage, number of output, and firm age. These regression coefficients showed that unit of machines was complementary for labor; the wage elasticity of labor demand was negative; the increase in production output will lead to increase in labor demand; and, firm age was contributed positively to the increase in labor demand.Keywords: elasticity of labor demand; small-micro scale enterprises; garment