Permanent Disadvantage or Gradual Integration: Explaining the Immigrant–Native Earnings Gap in Sweden

Theoretical explanations suggest that wage differentials between immigrant and native workers are generated either by differences in the acquisition of human capital or by various forms of exclusion of immigrants from fair labour market rewards. We evaluate the labour quality and labour market discrimination hypotheses by using a large sample of Swedish employees in 1995. Our findings show that labour market integration is relatively unproblematic for immigrants from Western countries, whereas immigrants from other countries, especially from Africa, Asia and Latin America, face substantial obstacles to earnings progress when entering the Swedish labour market. For the latter group of countries, extensive controls for general and country‐specific human capital reduce the earnings differentials. However, the remaining gap is of a non‐trivial magnitude. Thus, the labour quality hypothesis accounts for a part of the observed native–immigrant wage gap, but the remaining differentials can be interpreted in terms of labour market discrimination.     

Long‐term Effects of Cash for Childcare on Mothers' Labour Supply

Abstract. In 1998–99 a cash benefit for 1‐ to 2‐year‐olds who do not use subsidized childcare on full‐time basis was introduced in Norway. A large‐scale appraisal shortly after introduction concluded that the effects on mothers' labour supply were surprisingly small. The more long‐term effects reported in this paper suggest that this conclusion may need modification. Almost 4 years after the reform the employment probability had declined significantly, and employed mothers were much more likely to be on leave. All in all the reduction in labour supply is estimated to be 3¾ hours per week or almost 20 per cent.     

Optimal Temporal Customer Purchasing Decisions Under Trade‐In Programs with Up‐Front Fees

To entice customers to purchase both current and new generation products over time, many firms offer different trade‐in programs including programs that require customers to pay an up‐front fee. To examine the effectiveness of the trade‐in programs, we develop a two‐period model in which a firm sells the first generation product in the first period and the second generation product in the second period; however, the firm offers a trade‐in program that customers can participate in when purchasing the first generation product in the first period. To participate, each customer has to pay a nonrefundable fee in the first period so that she has the option to trade‐in her first generation product and receive a prespecified trade‐in value to be used for the purchase of the second generation product in the second period. To capture market heterogeneity and market uncertainty, we examine the case when the valuation of the first generation product varies among customers and the valuation of the second generation product is uncertain a priori. By analyzing a two‐period game, we determine the optimal purchasing behavior of each rational customer, and we show that the firm is always better off by offering its own trade‐in programs. Also, our numerical analysis reveals that trade‐in programs can benefit the firm significantly especially when (i) the residual value of the first generation product is high; (ii) the expected incremental value of the second generation product is high; or (iii) the valuation of the second generation product is highly uncertain.     

Wage Differentials between Ethnic Groups in Switzerland

This paper analyses the average wage differentials between various groups of immigrants and the Swiss workers. Classical Oaxaca‐Blinder decompositions are applied to a sample of 7,494 males (whose 1,070 immigrants) interviewed for the 1995 Swiss Labour Force Survey. Education and experience before and after migration are separately considered in two different ways. We control for sample selection in the wage and salary sector. We also investigate earnings differentials between natives and immigrants who arrived in the country before the age of 6. Our main results are that the part of differentials due to difference in coefficient varies strongly with different ethnic groups considered, that education is a strong determinant of the difference in observed characteristics and that second generation immigrants are fairly well assimilated in the Swiss labour market.     

Firm‐level Evidence on Gender Wage Discrimination in the Belgian Private Economy

In this paper we explore a matched employer–employee data set to investigate the presence of gender wage discrimination in the Belgian private economy labour market. Contrary to many existing papers, we analyse gender wage discrimination using an independent productivity measure. Using firm‐level data, we are able to compare direct estimates of a gender productivity differential with those of a gender wage differential. We take advantage of the panel structure to identify gender‐related differences from within‐firm variation. Moreover, inspired by recent developments in the production function estimation literature, we address the problem of endogeneity of the gender mix using a structural production function estimator alongside instrumental variable‐general method of moments (IV‐GMM) methods where lagged value of labour inputs are used as instruments. Our results suggest that there is no gender wage discrimination inside private firms located in Belgium, on the contrary.     

Discrimination and Resistance to Low‐skilled Immigration

Abstract. This paper shows that the immigration of some low‐skilled workers can be of advantage for low‐skilled natives when the host economy suffers from unemployment due to the presence of trade unions and an unemployment insurance scheme. This benefit arises if trade unions have appropriate bargaining power and preferences for members’ income, labor market discrimination against immigrants is strong enough and the unemployment tax rate is low.     

Immigrants' Relative Earnings in Sweden — A Cohort Analysis

Abstract. This paper examines the earnings assimilation of immigrants in Sweden by applying a quantile regression approach on pooled data during the period 1990–99. Immigrants from Nordic and Western European countries have a smaller entry earnings disadvantage and slower rate of assimilation than other groups of immigrants. For some cohorts of immigrants from European countries the initial earnings disadvantage disappears after 15–20 years in Sweden, but as non‐European immigrants suffered from very large entry earnings disadvantages, their earnings will not catch up with the earnings of natives during their first 20 years in Sweden. More recent non‐European immigrant cohorts had a larger entry earnings disadvantage than previous ones. The immigration policy, discrimination, and the economic conditions may have contributed to the decline in the earnings assimilation of non‐European immigrants.     

Application of the Hyper‐Poisson Generalized Linear Model for Analyzing Motor Vehicle Crashes

The hyper‐Poisson distribution can handle both over‐ and underdispersion, and its generalized linear model formulation allows the dispersion of the distribution to be observation‐specific and dependent on model covariates. This study's objective is to examine the potential applicability of a newly proposed generalized linear model framework for the hyper‐Poisson distribution in analyzing motor vehicle crash count data. The hyper‐Poisson generalized linear model was first fitted to intersection crash data from Toronto, characterized by overdispersion, and then to crash data from railway‐highway crossings in Korea, characterized by underdispersion. The results of this study are promising. When fitted to the Toronto data set, the goodness‐of‐fit measures indicated that the hyper‐Poisson model with a variable dispersion parameter provided a statistical fit as good as the traditional negative binomial model. The hyper‐Poisson model was also successful in handling the underdispersed data from Korea; the model performed as well as the gamma probability model and the Conway‐Maxwell‐Poisson model previously developed for the same data set. The advantages of the hyper‐Poisson model studied in this article are noteworthy. Unlike the negative binomial model, which has difficulties in handling underdispersed data, the hyper‐Poisson model can handle both over‐ and underdispersed crash data. Although not a major issue for the Conway‐Maxwell‐Poisson model, the effect of each variable on the expected mean of crashes is easily interpretable in the case of this new model.     

Extension of the Application of Conway‐Maxwell‐Poisson Models: Analyzing Traffic Crash Data Exhibiting Underdispersion

The objective of this article is to evaluate the performance of the COM‐Poisson GLM for analyzing crash data exhibiting underdispersion (when conditional on the mean). The COM‐Poisson distribution, originally developed in 1962, has recently been reintroduced by statisticians for analyzing count data subjected to either over‐ or underdispersion. Over the last year, the COM‐Poisson GLM has been evaluated in the context of crash data analysis and it has been shown that the model performs as well as the Poisson‐gamma model for crash data exhibiting overdispersion. To accomplish the objective of this study, several COM‐Poisson models were estimated using crash data collected at 162 railway‐highway crossings in South Korea between 1998 and 2002. This data set has been shown to exhibit underdispersion when models linking crash data to various explanatory variables are estimated. The modeling results were compared to those produced from the Poisson and gamma probability models documented in a previous published study. The results of this research show that the COM‐Poisson GLM can handle crash data when the modeling output shows signs of underdispersion. Finally, they also show that the model proposed in this study provides better statistical performance than the gamma probability and the traditional Poisson models, at least for this data set.     

Wage Discrimination Against Immigrants in Austria?

This paper analyses wage discrimination against immigrants in Austria using combined information from the labour force surveys and administrative social security data. We find that immigrants experience a wage penalty of 15 percentage points compared with natives. However, a substantial part of this gap can be explained by differences in human capital endowment and job position. Decomposition methods using quantile regressions indicate larger discrimination in the upper part of the wage distribution.     

Looks‐Based Hiring and Wrongful Discrimination

Popular clothing retailer Abercrombie and Fitch (A&F) is well‐known for hiring attractive store sales clerks. While the economic benefits of this hiring practice for the company are undeniable, many commentators contend that it constitutes wrongful discrimination against unattractive job seekers. In this article, I explore the ethics of A&F‐style lookism and challenge two common perspectives on this issue. I argue that on one hand, looks‐based hiring cannot be defended based on its economic benefits alone, as race‐based hiring also can be profitable in some circumstances. At the same time, I reject arguments that looks‐based hiring is not “job relevant” given its economic impact in many contexts. Through a comparison between race‐ and looks‐based hiring, I conclude that at least for businesses that are relevantly similar to A&F—firms for which lookism produces clear economic benefits—looks‐based hiring is permissible.     

A Practical Two‐Step Method for Testing Moment Inequalities

This paper considers the problem of testing a finite number of moment inequalities. We propose a two‐step approach. In the first step, a confidence region for the moments is constructed. In the second step, this set is used to provide information about which moments are “negative.” A Bonferonni‐type correction is used to account for the fact that, with some probability, the moments may not lie in the confidence region. It is shown that the test controls size uniformly over a large class of distributions for the observed data. An important feature of the proposal is that it remains computationally feasible, even when the number of moments is large. The finite‐sample properties of the procedure are examined via a simulation study, which demonstrates, among other things, that the proposal remains competitive with existing procedures while being computationally more attractive.     

The Incidence of Household Characteristics on Labour Decisions: The Case of Spain

Abstract. This work presents an approach to the analysis of the incidence of family relationships on individuals' labour decisions as well as on their position in the labour market. We follow two different analyses. Firstly, we attempt to identify the type of households which are the most characteristic in our society to select the main categories of those where most people live, in order to study the decisions about participation in labour markets as well as the incidence of unemployment upon them. The second analysis tries to implement a model to allow us to study the implications of living in a partnership and the probability of both members of a couple having the same labour market status. There are at least two relevant results: the first shows the important concentration of unemployment in households of a couple with adult children and is clearly related to youth and female unemployment and the necessity of political intervention to correct them. The second points out the dependence between the labour status of the couple, mainly when they have a low level of education. Nevertheless, the woman is usually inactive, although this situation tends to change the younger she is, in which case the highest probability is that both members of the couple are employed.     

A Resource‐Process Framework of New Service Development

Motivated by the increasing attention given to the operational importance of developing new services, this paper offers a theoretical framework that integrates both process‐ and resource‐oriented perspectives of new service development (NSD) by defining and organizing 45 practice constructs for NSD‐related practices and activities that occur in contemporary service firms. We employ a rigorous procedure whereby both quantitative and qualitative data were gathered through multiple rounds of interviews and card‐sorting exercises with senior service managers. This iterative refinement process helps ensure that the construct domains and definitions are consistent and that they are applicable across multiple service sectors. A primary contribution of this research is to provide precise operational definitions of theoretically important NSD practice constructs. Importantly, this study expands on the NSD literature by including both resource‐ and process‐centric perspectives within a single framework. A second contribution is to illustrate a general methodology for developing clear, concise, and consistent construct definitions that may be generally useful for production and operations management scholars interested in new construct development for emerging areas. Empirical results suggest that the resource‐process framework can help guide and organize future research on, and provide insight into, a more comprehensive view of new service development.     

Why Near‐Miss Events Can Decrease an Individual's Protective Response to Hurricanes

Prior research shows that when people perceive the risk of some hazardous event to be low, they are unlikely to engage in mitigation activities for the potential hazard. We believe one factor that can lower inappropriately (from a normative perspective) people's perception of the risk of a hazard is information about prior near‐miss events. A near‐miss occurs when an event (such as a hurricane), which had some nontrivial probability of ending in disaster (loss of life, property damage), does not because good fortune intervenes. People appear to mistake such good fortune as an indicator of resiliency. In our first study, people with near‐miss information were less likely to purchase flood insurance, and this was shown for both participants from the general population and individuals with specific interests in risk and natural disasters. In our second study, we consider a different mitigation decision, that is, to evacuate from a hurricane, and vary the level of statistical probability of hurricane damage. We still found a strong effect for near‐miss information. Our research thus shows how people who have experienced a similar situation but escape damage because of chance will make decisions consistent with a perception that the situation is less risky than those without the past experience. We end by discussing the implications for risk communication.     

Comparisons in Gender Wage Differentials and Discrimination between Germany and the United Kingdom

Due to the lack of consistent data, direct and robust comparisons of cross‐country labour markets have been virtually impossible. This study uses a new panel data series that controls for inconsistencies, thus overcoming this problem. This study estimates gender wage differentials and gender discrimination in the German and UK labour markets. Panel estimates are used to identify general wage differences between the two countries, with cross‐sectional comparisons undertaken to identify changes that have occurred between 1991 and 1993, that are consistent with known labour market policies. It is found that gender wage differentials are greater in the UK than Germany with employer discrimination against females attributed with the majority of the difference in both countries.     

Drivers and Enablers That Foster Environmental Management Capabilities in Small‐ and Medium‐Sized Suppliers in Supply Chains

The limited capabilities and resources available within many small‐ and medium‐sized enterprises frequently hamper an effective response to environmental pressures, which in turn hurts large buying firms (i.e., customers). Using a case study method with multiple suppliers of two large buying firms, we mapped factors that initiated and improved environmental capabilities in small‐ and medium‐sized enterprises over time. Through several specific mechanisms, buyers' green supply chain management initiated and then enabled the improvement of suppliers' environmental capabilities. Independent of buyers, internal championing of environmental concerns also provided an impetus for small‐ and medium‐sized enterprise suppliers to acquire resources outside the supply chain. Thus, synergistic linkages emerged in supportive buyer‐supplier relationships, resource acquisition, and capability development. When these findings are combined with earlier research on larger suppliers, an integrative framework emerges that provides direction for suppliers, buyers, and public agencies seeking to improve environmental performance.     

The Role of Profit Sharing in Dual Labour Markets with Flexible Outsourcing

We combine profit sharing for high‐skilled workers and outsourcing of low‐skilled tasks in a partly imperfect dual domestic labour market, which means that only low‐skilled labour is represented by a labour union. In that framework we analyse how the implementation of profit sharing for high‐skilled workers influences the amount of outsourcing and the labour market outcome for low‐skilled worker. By doing this, we use some specific assumptions, e.g. exponentially increasing outsourcing costs or the wage for low‐skilled workers will be determined by a union whereas the wage for high‐skilled workers is given. Assuming that low‐skilled labour and outsourcing are interchangeable we show that profit sharing has a positive effect on the wage for low‐skilled workers and helps to decrease wage dispersion. However, under these circumstances, profit sharing enhances outsourcing. Concerning the employment effects for high‐ and low‐skilled workers, we show that there is an employment reducing effect due to higher wages for low‐skilled work, which can be offset by higher productivity of highly skilled workers, as the domestic labour inputs complement each other.     

Assessing the ‘Choosiness’ of Job‐seekers. An Exploratory Approach and Evidence for Italy

Abstract. We use information about job search and work preferences, typically collected in a labour force survey, in order to construct an indicator of ‘choosiness’ of the labour supply of job‐seekers. The method for obtaining the indicator, first at individual level and then at aggregate levels, is based on results from multiple correspondence analysis. We investigate the informational value of the indicator by examining its stability over time and its predictive power on labour force transitions. Empirical analyses of cross‐section and panel samples of job‐seekers from the Italian quarterly Labour Force Survey clarify the potentials (and limitations) of the approach.