Informal Referrals,Employment, and Wages: Seeking Causal Relationships

Employers and job seekers rely extensively on informal referrals to fill vacancies or to find a job. The widespread use of job contacts has been largely associated with labor outcomes, such as finding a job or even affecting wages. This paper explores whether the use of informal referrals on the job search process affects labor market outcomes of Colombian urban workers. Results indicate that informal referrals are slightly more successful than other job search strategies in term of job seeker's placement. However, referred workers earn in average less than their non‐referred counterparts. Yet, this is only true in formal‐sector positions.     

The Macroeconomics of Employment and Wages in Mexico

The main objective of this article is to study some aspects of the labor market in Mexico, on the basis of an econometric model. Starting with an unrestricted VAR, the author finds two cointegration vectors, one with employment and output, and one with nominal wages, minimum wages, the price index, and labor productivity. A congruent model with the growth rates of the variables, and including the cointegration vectors, is finally estimated. On the basis of this model the author carries out an analysis of the effects of macroeconomic variables upon employment and nominal wages.     

The Effect of Trade on Employment and Wages in Italian Industry

The paper analyses the labour market impact of international trade on the Italian manufacturing sector. Using data for a panel of manufacturing industries the effects of trade‐induced changes in sales on employment and wages are investigated. The evidence suggests that the industry adjustment to demand shocks took place mainly through employment changes. However, increased exposure to foreign competition had a small effect on the Italian labour market, while technological change seems to have a major role in explaining the increase in unemployment.     

Unemployment May Be Lower if Unions Bargain over Wages and Employment

This paper addresses the question under which circumstances unemployment can be lower if unions bargain over wages and employment in a general equilibrium framework. Thereby, it turns out that the unemployment rate may negatively depend on the wage rate, if the unemployment compensation scheme contains a constant real term in addition to the replacement ratio component. This is, compared with a pure replacement ratio scheme, the more plausible formalization of the real world’s compensation systems, at least for European countries. Besides the theoretical analysis, the paper also derives political implications by identifying the relevant parameters for the decision on whether weakening unions will be a good strategy for an economy to overcome its unemployment problem.     

Technology Effects on Wages in Finnish Manufacturing

In this paper we study the effect of technology on establishment‐level wages using a classification of manufacturing industries based on four technology levels. The technology wage premiums are estimated separately for non‐manual and manual workers using wage equations with available control variables for plant and workforce characteristics (human capital) over the time period 1974–93. The results do not show a straightforward increasing relationship between a plant’s average wages and its technology at higher technology levels. However, establishments with the lowest technology level paid the lowest wages during the whole period. We also find that the relative non‐manual to manual wage ratio increased over the time period in the highest technology levels. These findings are consistent with technology wage premiums and skill‐biased technological change found in studies for other countries     

Labour Policy and Determinants of Employment and Wages in a Developing Economy with Labour Shortage

Using data from a sample of 1,099 workers, this paper investigates the determinants of employment and wages for workers in the United Arab Emirates. The paper further examines the wage distribution and the decomposition of the wage gap between the public and the private sectors. Results of the study are consistent with the dual labour market theory and indicate that the labour market in the United Arab Emirates is segmented based on sectors (public versus private) and types of workers (nationals versus non‐nationals). The study concludes with a discussion of the implication of these findings for the effectiveness of labour and economic policy.     

Human Capital,Wages and Family Interactions

The majority of studies of the returns to human capital investment have generally considered the relationship among wages and individuals’ investment in education. However, among factors which increase individuals’ stocks of human capital and affect their labour market performances there are variables linked to the relevant social environment, such as the family. This paper takes into consideration intra‐generational relations which form between spouses through marriage, as well as inter‐generational relationships between parents and their sons/daughters. The empirical work investigates the effects of some family background variables on individuals’ economic performances, using data drawn from the 1995 survey of household income and wealth conducted by the Bank of Italy. The results of the analysis show that individuals’ wages do not depend only on their own human capital endowment, but also on that of other family members (parents and partners).     

Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds

This paper examines changes in the distribution of wages using bounds to allow for the impact of nonrandom selection into work. We show that worst case bounds can be informative. However, because employment rates in the United Kingdom are often low, they are not informative about changes in educational or gender wage differentials. Thus we explore ways to tighten these bounds using restrictions motivated from economic theory. With these assumptions, we find convincing evidence of an increase in inequality within education groups, changes in educational differentials, and increases in the relative wages of women.     

Firing Costs,Efficiency Wages and Unemployment

This paper uses a Shapiro–Stiglitz efficiency wage model to analyse the effects of firing costs on wages, employment, expected utility and profits. It considers that the probability of a non–shirker being fired depends on an exogenous shock which follows a two–state Markov process. It finds that higher severance payments give rise to lower wages, a lower unemployment rate, an increase in firms’ profits and a decrease in the utility of both workers and the unemployed. These conclusions derive from the finding that a greater probability of keeping one’s job, because of higher firing costs, raises the value of the job and reduces the worker’s incentives to behave opportunistically; this enables firms to reduce wages. Hence, if firms pay efficiency wages, a higher degree of labour market flexibility increases unemployment.     

An Equilibrium Theory of Learning,Search, and Wages

We examine the labor market effects of incomplete information about the workers' own job‐finding process. Search outcomes convey valuable information, and learning from search generates endogenous heterogeneity in workers' beliefs about their job‐finding probability. We characterize this process and analyze its interactions with job creation and wage determination. Our theory sheds new light on how unemployment can affect workers' labor market outcomes and wage determination, providing a rational explanation for discouragement as the consequence of negative search outcomes. In particular, longer unemployment durations are likely to be followed by lower reemployment wages because a worker's beliefs about his job‐finding process deteriorate with unemployment duration. Moreover, our analysis provides a set of useful results on dynamic programming with optimal learning.     

Risk Aversion,Collective Bargaining,and Wages in Germany

We develop an open‐shop model of trade union membership in which workers differ in their risk attitudes, and derive conditions under which the bargained wage will fall and union membership will increase with a general rise in risk aversion. Using data from the German Socio‐Economic Panel we define broad bargaining units and show that wages decline as average risk aversion of union members in these units rises, controlling for individual effects of risk aversion. Given a negative relationship between wages and employment, this suggests that secular changes in risk attitudes, because of an aging workforce or greater female labour force participation, can help to explain variations in the employment performance of unionized economies.     

Facts and Theories of the Italian Labour Market (1970-1985): A Time Series Analysis of Wages,Employment and Prices

ABSTRACT: ln this paper an attempt is made to determine whether observed patterns of intertemporal variability in a number of Italian labour market characteristics are consistent with the predictions forthcoming from three prominent models of aggregate labour market behaviour. The behavioral models included in the analysis are: a) intertemporal substitution labour supply, b) staggered wage contracts, and c) intertemporal labour demand with adjustment costs. The empirical results provide relatively more support for the validity of the adjustment cost model.     

Firm Size and Wages

In this article the authors analyse the evidence found in several countries that large firms pay more than firms categorised as small. Firstly, this study discusses the factors which, according to previous theoretical research, explain the firm size-wage differential. Secondly, the different theoretical arguments are tested empirically. As a data base the authors use the individual and longitudinal data of the first four waves of the German Socio-Economic Panel. In the empirical investigation the instruments of variance, correlation and regression analysis, including the estimations of fixed-effects and random-effects odels are applied. The empirical analysis clearly demonstrates that positive effects of firm size on wages persist after controlling for

• — labour quality
• — differences in working conditions
• — employment tenure and rates of fluctuation
• — monetary fringe benefits of firms
• — heterogeneity of employese
• — monopoly power and ability to pay of firms.

The article concludes with some proposals for future research.     

Pension Rights and Wages

This paper highlights public and negotiated pension rights in a total wage concept. Individual annual pension rights are calculated in order to analyse what the inclusion of pension rights in total wage could mean for wage differentials and wage dispersion.     

员工效率工资与企业的管理效率分析

本文在文献回顾基础上分析了效率工资的solow模型和shapiro-stiglitz模型存在的局限性,认为由于工资合约具有非完备性特点,通过工资合约对员工进行完全激励是困难的;之后基于重复博弈理论构建了同时考虑内外部劳动力市场要求的效率工资模型,运用博弈理论分析了企业和员工在效率工资博弈过程中的行为和策略,揭示了该模型较之均衡效率工资模型具有的更为丰富的经济内涵,从八个方面阐述了效率工资对企业提高管理效率的价值,认为效率工资需要与其它激励机制相互补充.建立全面报酬体系才能实现其激励的目的.     

Residential Location,Job Location,and Wages: Theory and Empirics

I develop a stylized partial on‐the‐job equilibrium search model that incorporates a spatial dimension. Workers reside on a circle and can move at a cost. Each point on the circle has a wage distribution. Implications about wages and job mobility are drawn from the model and tested on Danish matched employer–employee data. The model predictions hold true. I find that workers working farther away from their residence earn higher wages. When a worker is making a job‐to‐job transition where he/she changes workplace location he/she experiences a higher wage change than a worker making a job‐to‐job transition without changing workplace location. However, workers making a job‐to‐job transition that makes the workplace location closer to the residence experience a wage drop. Furthermore, low‐wage workers and workers with high transportation costs are more likely to make job‐to‐job transitions, but also residential moves.     

Wages and Unemployment in Italy,a Long Term Perspective

ABSTRACT: This paper traces a long-term perspective of the relationship between wages and unemployment in the Italian economy from the end of the fifties to the mid-eighties. During this period, the rate of unemployment exhibited three distinct time profiles. After a cyclical episode from around 1958 to the mid-sixties, the unemployment rates changed very little for a decade, showing only mild fluctuations until 1975. Since then, unemployment has been increasing steadily, and in 1987 it exceeded 12|X% of the labour force. The aim of this paper is not to provide a new interpretation of facts, but rather to assess whether, and when, wage pressure has represented a significant factor in the evolution of unemployment. The main conclusion of the paper is that the considerable rise in unemployment observed since the mid-70s is part of a long term evolution, and that in the long-run wages are not exogenous. Though there have been periods of exogenous wage push temporarily affecting unemployment, the argument that the continuous rise in unemployment depends on inappropriate real wages has no empirical content.     

Minimum Wages and Trainers' Dilemma

This paper examines how a minimum wage, viewed as an incentive to trainers, would affect the informal help provided through on‐the‐job training. In the work environment, experienced employees play a significant role in training new employees. However, the more help they provide to trainees, the less likely that the trainers themselves will be promoted. This is the trainer's dilemma: help trainees or work for promotion. We show that a minimum wage alleviates the trainer's dilemma, as it increases the earnings of non‐promoted workers and reduces the net benefit of promotion for experienced employees. Hence, minimum wage regulation encourages informal help and enhances welfare, although it reduces the firm's profit.     

Productivity,Real Wages and Worker Rights: A Cross-National Comparison

ABSTRACT: High unemployment in Europe has led many economists to recommend labour market deregulation — the removal of obstacles to labour market flexibility. These “obstacles” include union power, employment protection legislation and income security arrangements. We argue that such worker rights promote productivity and real wage growse effects. Policy-makers should be aware of these positive effects on productivity and real wage growth when considering curtailing worker rights in order to reduce unemployment.     

Technology Import and Industrial Employment: Evidence from Developing Countries

Abstract. This paper based on panel data across countries examines the possible effect of the imported technology on labour absorption in the industrial sector, after controlling for real wage rate and GDP per capita. Findings tend to suggest a negative relationship between the two. Technical efficiency index derived on the basis of the stochastic frontier function framework is also negatively affected by the import of technology. Without enhancing the knowledge relating to the mechanisms of exploiting the new technology acquired from abroad, a mere increase in import of technology would mean rising unutilized capacity. And this could be due to the poor skill base of the available human capital. Investment in human capital in terms of skill formation, up‐gradation, and training on the one hand and technological advancement to suit the internal labour market conditions are the two important policy conclusions for reviving the role of industry as the engine of pro‐poor growth.