In Vino Pecunia? The Association Between Beverage-Specific Drinking Behavior and Wages

The positive association between moderate alcohol consumption and wages is well documented in the economic literature. Positive health effects as well as networking mechanisms serve as explanations for the “alcohol–income puzzle.” Using individual-based microdata from the SOEP for 2006, we confirm that this relationship exists for Germany as well. More importantly, we shed light on the alcohol–income puzzle by analyzing, for the first time, the association between beverage-specific drinking behavior and wages. In our analysis, we disentangle the general wage effect of drinking into diverse effects for different types of drinkers. Mincerian estimates reveal significant and positive relationships between wine drinkers and wages as well as between multiple beverage drinkers and wages. When splitting the sample into age groups, the “drinking gain” disappears for employees under the age of 35 and increases in size and significance for higher age groups. We also find a “beer gain” for the oldest age group and male residents of rural areas as well as a “cocktail gain” for residents of urban areas. Several explanations for our empirical results are discussed in view of the likelihood that the alcohol–income puzzle is a multicausal phenomenon.

Wages or welfare? Compensating caregiving in two conservative social welfare states

While nearly all developed nations have some form of attendance allowance for the elderly and disabled, the United Kingdom and several of the American states have provisions to pay caregivers directly if they are family members. This paper compares and contrasts provisions in the U.K. Invalid Care Allowance with provisions of a program in one American state-Michigan. Such payments potentially benefit disabled people, caregivers, and cost-conscious states. However, two particular goals shape the programs' impacts on caregiver functioning and adequacy. One is the extent to which programs operate as welfare provisions and benefits directed at the social or household economy. The other is the extent to which they function as a substitute for wage labor in the market economy. Each of these can be assessed in relation to the real, personal choices and economic gains it provides caregivers. Presumably, both are important in sustaining adequate and satisfying long-term care. Only by truly expanding choice as well as capacity can governments expect to effectively sustain an optimal mix of care provision in the community.     

Career Sidestep,Wage Setback? The Impact of Different Types of Employment Interruptions on Wages

We examined the wage implications of different types of wage employment interruptions in a sample of 44,384 Belgian employees. The employment interruption types included are family leave, unemployment, self‐employment, educational leave and a category other interruptions (for example, travel, voluntary work). We conduct separate analyses for men and women. Results indicate that unemployment spells and family breaks are penalized by lower subsequent wages, while the wage impact of self‐employment spells and educational leave is insignificant. Family breaks and unemployment spells were found to be more harmful for men than for women. Implications of the results and directions for future research are discussed.     

What Do Unions in China Do? Provincial-Level Evidence on Wages,Employment, Productivity,and Economic Output

Utilizing provincial-level data from the period of 1994–2008, this article studies the relationship between union density and wages, employment, productivity, and economic output in China. The findings indicate that union density does not affect average wage levels, but is positively associated with aggregate productivity and output. We discuss if and to what extent these findings are consistent with the familiar two faces of unions model and alternative explanations relevant in the context of Chinese labor and union institutions.     

Efficiency Wages,Unemployment Benefits and Union—Firm Wage Bargaining: The Issue of the Choice of the Outside Option

This paper points out that there may be a logical consistency issue in choosing the reference wage in efficiency wage models. We have shown that defining the outside option in the efficiency wage logic as the market-clearing wage solves this difficulty, and is justifiable in terms of the assumed behaviour of workers and employers. The model that we examine confirms earlier findings of reinforcing effects between union-firm bargaining and efficiency wages. However, if union preferences vary between wages and employment, Summers’ reinforcing effect is no longer present for each value of the parameter describing these preferences. Above a certain threshold value of union preferences for employment, the two mechanisms do not reinforce each other anymore.