(Un)Gleichheit durch soziale Schlie?ung

The concept of social closure is frequently used in recent debates about wage inequality. The following article shows that social closure generates not only inequality but equality, as well. Economic, segmentational and closure theoretical arguments shed light on the different relations of an employee to his employer in different labour market structures. Properties of the employee like vocational training, seniority or gender lose their impact on wages the more closed a labour market is. These hypotheses are tested with the 2006 BIBB/BAuA-Employment-Survey. Results support a deep effect of social closure in the German labour market.     

Social Capital is Associated with Earnings among Foreign‐born Mexican Men but not Women in Los Angeles County

The mechanisms through which social capital is accumulated may influence its relationship with hourly earnings. Because Mexican men and women accumulate social capital differently, for instance, gender may be an important factor for understanding social capital’s association with Mexican migrant earnings. Unlike past research that often fails to differentiate between various social capital metrics (e.g., social network member reciprocity, participation in civic group organizations, neighbourhood trust), this article estimates two of these associations with wages while controlling for individual‐, household‐ and neighbourhood‐level characteristics. Results suggest that foreign‐born Mexican men receive a wage premium from civic participation (bridging social capital) and a wage penalty from reciprocal social network exchange (bonding social capital). We also find that unauthorized legal status (among Mexican men and all migrants) and having children (among women) were negatively associated with hourly wages. We conclude with a discussion of the relative association of human and social capital with Mexican migrant wages.     

Cognitive dissonance and the overtaking anomaly: Psychology in the principal–agent relationship

We propose that the concept of cognitive dissonance contributes to the explanation of the regularity that wages grow faster than productivity. Cognitive dissonance is the tendency of a person to engage in self-justification after a decision. We show that a consequence of this tendency is that agents prefer increasing sequences of surplus over their career. This is achieved by paying wages less than productivity early in the career and more than productivity later. We refer to this as the overtaking anomaly. We distinguish the cognitive dissonance explanation from other explanations of the overtaking anomaly by identifying their divergent implications.     

Immigration Policy and Employment Conditions of US Immigrants from Mexico, Nicaragua, and the Dominican Republic1

Prior studies suggest that the passage of the Immigration Reform and Control Act (IRCA) in 1986 signalled a deterioration in the labour market conditions of Mexican migrants. In this paper, we examine whether and how labour market conditions worsened for Dominicans and Nicaraguans after 1986, and the extent to which these shifts were comparable to those experienced by Mexicans. Our analysis relies on a new source of data that offers comparable data across the three national origins. We estimate multivariate models that capture the effects of demographic attributes, human and social capital, migration‐specific human and social capital, legal status, period of trip, national origin, and other controls on the hourly wages earned by household heads and whether they received cash wages on their last US trip. Models with interaction terms reveal significant pre‐ and post‐1986 wage effects, but few differences in these effects between Mexicans and Dominicans or Nicaraguans. In contrast, group differences appear in the risk of cash receipt of wages. Dominicans and Nicaraguans experienced a greater increase in this risk relative to Mexicans pre‐ and post‐1986. Together, these findings depict a broader, negative impact of IRCA on Latino migrant wages than has been documented elsewhere.     

Ambivalence in the Relationship of Adult Children to Aging Parents and In‐Laws

The concept of ambivalence emphasizes the complexity of family relations and the potential for individuals to evaluate relationships as both positive and negative. Using multilevel models, we investigate ambivalence in adult children's relationships with their aging parents and in‐laws (N= 1,599). We focus on factors predicting adult children's ambivalence toward parents and in‐laws within a gendered kinship structure that shapes these relations. We conclude that ambivalence is a useful concept for representing the complexity of parent‐child relationships and is produced within the context of social relations structured by gender and kinship. Results show greater ambivalence among dyads of women, toward in‐laws, among those in poor health, for daughters providing assistance, and for adult children with poor parental relations in early life.     

Wages Differences Between Temporary and Permanent Immigrants1

Temporary “guestworker” programs are often assumed to have less impact on native-born workers than permanent immigration. However, there are theoretical reasons to expect temporary immigrants to accept lower wages and thus for temporary migration to have a greater adverse impact on receiving country wages. This article develops these theoretical insights and tests for differences in wages paid to temporary and permanent undocumented Mexican immigrants. Survey data from Mexico shows that temporary immigrants earned wages about 12% lower than permanent immigrants. Controlling for human and social capital, a 7.4% difference in wages remains. Among married immigrants, temporary immigrants earn 9.6% lower wages with these same controls.     

EFFICIENCY WAGES AND SUBJECTIVE PERFORMANCE PAY

This paper studies optimal relational contracts in motivating workers in a market setting. We find that labor markets with higher turnover costs will use more subjective performance pay and less efficiency wages and that in those markets, the total wage payment is lower and the equilibrium employment level is higher. Surprisingly, under certain conditions, an increase in turnover costs leads to higher social welfare. Incorporating workers' search costs, we show that wages are procyclical in booms and are either rigid or countercyclical during recessions. The predictions of the model are consistent with some empirical evidence. ( JEL D82, J33, J41, J63)     

WAGE SECRECY AS A SOCIAL CONVENTION

Despite the general belie that a free flow of information enhances efficiency, social convention appears to call for secrecy regarding individuals' wages. This paper provides an explanation for this convention. We suggest that the role of wage secrecy is to reduce effective labor mobility, and thereby enhance the feasibility of risk-shifting contracts. Wage secrecy may yield a mix of mobility and risk shifting that is superior both to a spot market for labor and to a social convention that binds workers to their employers.     

The Mahatma Gandhi National Rural Employment Guarantee Scheme: A Policy Solution to Rural Poverty in India?

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was developed by the Indian government to reduce rural poverty through 100 days of guaranteed employment per year. Using focus group methods, we explore whether this scheme has provided rights' based social protection through guaranteed employment for Scheduled Castes, Scheduled Tribes and women in Kerala, Tamil Nadu and Odisha. We found that the experiences of participating in MGNREGA varied depending on how MGNREGA wages compared to market wages in the region, as well as local implementation of the program. Although MGNREGA offered some basic employment for marginalized groups, it did not provide substantial help to the most vulnerable. However, there was some evidence of small but significant shifts in labour relations. Higher wages, more opportunities for work, better implementation and a greater recognition of the caregiving responsibilities of women will be required for this policy to fully meet its goals.     

Fixing minimum wage levels in developing countries: Common failures and remedies

Some developing countries have set their minimum wages too high or too low to constitute a meaningful constraint on employers. The article compares minimum wages worldwide, proposes several ways of measuring them in developing countries and discusses whether they are effective thresholds in those countries. The second part of the article considers the institutional factors leading countries to set minimum wages at extreme levels. The author concludes that the minimum wage is used as a policy instrument to several ends – wage negotiation, deflation and social dialogue – which results in the absence of a wage floor, weak collective bargaining, or non‐compliance.     

From wage rigidity to labour market institution rigidity: A turning-point in explaining unemployment?

In this paper we offer a critical discussion about the concept of labour market rigidity in the light of recent theoretical approaches that have aimed to provide sound micro-foundations to the presence of unemployment in market economies. We point out that the concept of labour market rigidity usually referred to in such theories has changed over time, involving in succession the rigidity of wages, contracts and labour market institutions. We also appraise the factors that lead labour market institutions rigidity, stressed by the search literature, to challenge the more widespread explanation of unemployment grounded on wage rigidity. Moreover, we analyse some theoretical and empirical issues that cast doubt on the ability to deal with unemployment, disentangling the role of institutional rigidities from that of wage stickiness.     

Seeking Social Security: An Alternative Motivation for Mexico-US Migration

In this analysis we investigate the degree to which the absence of effective pension systems may generate motivations for international migration as a means of self-financing retirement. Using ethnosurvey data gathered in selected Mexican communities and US destination areas, we estimate models to predict the odds of US migration from indicators of relative wages and whether or not jobs in Mexico were covered by that country's social security system. We find that by holding constant the binational differential in expected wages, the odds of out-migration were much higher for male household heads working in jobs that were not covered by social security compared with those working in jobs that enjoyed such coverage. Subsequent analyses showed that the odds of receiving a pension in old age were systematically higher for former US migrants, and that the likelihood of pension receipt rose steadily as the number of US trips and amount of US experience accumulated.     

EFFICIENCY WAGES AND EQUILIBRIUM WAGES

We present a labor market model that allows as special cases a market paying equilibrium wages, one paying disequilibrium efficiency wages, and a market combining the two. Our analysis indicates that industrial wage differentials are not necessarily evidence of efficiency wages. Such differentials may be explained by differences across industries in labor performance standards or in the accuracy with which worker effort can be measured. We do find, however, that the relationship between wages and dismissals can be used to distinguish a market paying equilibrium wages from one paying efficiency wages.     

Gender segregation and the wage gap in Portugal: an analysis at the establishment level

Using a large linked employer-employee data set, this paper aims at quantifying the trend in worker segregation at the establishment level and its impact on wages in Portugal over a fifteen year period. We concentrate on the gender dimension, to answer the questions: What is the level of gender segregation across establishments in the Portuguese labor market and how has it evolved over time? What is the impact of segregation on wages? Is that impact different for men and women? Systematic and random components of segregation are computed. We use standard wage decomposition techniques to evaluate the impact of the composition of the labor force at the establishment level on wages. The results reveal a high degree of systematic gender segregation. A higher proportion of females in the establishment lowers females’ wages while, on the contrary, it raises males’ wages. The evidence gathered is consistent with the taste-based model of employer behavior and with the theory of sorting of workers across establishments based on their productivity.     

The Effects of Being Out of the Labor Market on Subsequent Wages: Evidence for Uruguay

Based on administrative data combining workers’ earnings histories and unemployment insurance benefits, we document short and long term wage losses for a large sample of Uruguayan formal workers with high tenure. The contribution of this paper is to provide original evidence about job separation costs in a developing country, based on a unique array of social security and unemployment insurance administrative micro-data. Our main findings indicate that workers lose around 38 % of their previous wages in the first quarter after separation, and 1 year after, losses are still more than 14 %. If we consider earnings plus unemployment insurance benefits, losses at the quarter of separation are considerable lower, amounting 22 % of previous wages. We also provide original evidence about how wage losses vary across age groups, gender, industry and size of the firm. Differences between switchers and non switchers, as well as the effects of the economic cycle are also analyzed.     

Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations

This paper examines the effect of accumulated human capital, and particularly occupational human capital, on the workers’ wages. Unlike previous studies that apply occupational tenure as a proxy for occupational human capital, this paper applies the concept of Shaw’s (1984) occupational human capital to capture the transferability of occupational skills and estimates a new measure of occupational human capital, so-called occupational investment. Using the National Longitudinal Survey of Youth (NLSY) from 1979 to 2000, the key findings of this paper suggest that occupational skills from the previous jobs can also affect the workers’ wages at the current job and that occupational investment is one of the important sources of wages supporting the Shaw’s original work on wage determination. Specifically, 5 years of (3-digit) occupational investment relative to current occupational tenure could lead to a wage increase of 7.7 to 18.4 %. I also find that the general labor market experience accounts for a large share of workers’ wages.     

Do Minimum Wages Fight Poverty?

We present evidence on the effects of minimum wages on family incomes. The results indicate that minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families fall into poverty. The estimated increase in the flow into poverty is larger, although this difference is not statistically significant. We also find that minimum wages tend to boost the incomes of poor families that remain below the poverty line. On net, the various trade-offs created by minimum wage increases more closely resemble income redistribution among low-income families than income redistribution from high- to low-income families.     

Women’s employment and the decline of home cooking: Evidence from France, 1985–2010

We here investigate the extent to which labour-market changes explain the decline in the time spent home cooking by married women in France between 1985 and 2010. Using time use data and Oaxaca-Blinder decompositions, we find that rising women’s employment and observed wages together account for about 60% of the fall in the time married women spent cooking. We then use a semi-parametric matching technique to construct an implicit wage rate, which better reflects the change in labour-market incentives that individuals face. The rise in women’s implicit wages explains no more than 20% of the decline in their cooking time, while the wage of their partner has no effect. Changing labour-market incentives are thus far from being the main driver of the decline in home-cooking. We also find evidence that home cooking continues to be structured by the gendered social norm of the “proper family meal”.     

Erosion of purchasing power and labor supply

This paper presents three studies on the labor market in Italy, carried out using questionnaires over the course of time (1990–2002). The main result is that, if real wages decline to a certain extent, employed workers increase their labor supply, in order to recoup their lost purchasing power and to redress, perhaps unconsciously, the decline in their economic and social hierarchical position.As long as real wages grew at a satisfactory rate, in the early 90s, workers were unwilling to change their work schedules in either direction—exchanging income for leisure time at the current hourly wage or vice versa—whatever were their work time and wages. During the last decade workers—who suffered a decrease in real wages—have been willing to work more hours. As a result, workers did not demand more leisure time despite the fact that it had become cheaper as predicted by traditional theory. Thus, employers may expect a not-insignificant increase in labor supply if real wages decrease.     

Determinants of executive compensation: The neoclassical model versus concept formation

Neoclassical economic theory describes employee compensation as being equal to the worker's marginal revenue product. Other explanations of the wage formation process exist. For example, concept formation may enable employees to manipulate organizations and thereby receive higher compensation without changing their physical productivity. This study tests the two wage models on a 1983 data set of the 100 highest paid American chief executive officers. During 1983, the data appears to support the neoclassical economic model; while, the psychological model is not fully rejected. By contrast in an earlier study, for 1981, the psychological model took precedence over the economic model. The study fully reconciles the contrasting findings by introducing `stickiness in wages to explain why concept formation impacts executive wages during stagnant economic periods, and why productivity assumes a greater role in setting executive compensation levels during robust economic periods.