Preliminary Evidence on Wage Setting in Greek Manufacturing

Abstract. The negotiating power of the unions and their role in wage determination depends on the level of centralization of the wage bargaining system as well as on other institutional arrangements. In this study, we estimate a set of wage equations in order to study the employment effects of different unions’ stances in wage determination as well as to investigate other characteristics of employment in Greek manufacturing. We discriminate between workers and employees (blue‐ and white‐collar workers) and between sectors in order to capture differences in the relative supply as well as differences in the negotiating power among the staff of the same industry. Empirical findings reveal that the persistence of unemployment arises as a result of the great bargaining power of the unions in negotiations at a sectoral level. White‐collar workers exhibit a stronger negotiating power compared with blue‐collar workers because of differences in the institutional framework.     

Employer Wage Differentials in Germany: A Comparative Note

The paper contributes to the growing empirical literature on employer wage differentials, presenting first estimates for West Germany and comparing them with recent findings from other studies for the USA, France and Denmark. The empirical results show that the variation of global employer wage differentials is comparatively low in West Germany and has remained stable during the first half of the 1990s. This low dispersion results from wage setting for blue‐collar workers, while cross‐country differences are negligible for white‐collar workers. Employer wage differentials have, however, become more important for the remuneration of West German blue‐collar workers during the period investigated.     

Managing White‐Collar Work: An Operations‐Oriented Survey

Although white‐collar work is of vast importance to the economy, the operations management (OM) literature has focused largely on traditional blue‐collar work. In an effort to stimulate more OM research into the design, control, and management of white‐collar work systems, this paper provides a systematic review of disparate streams of research relevant to understanding white‐collar work from an operations perspective. Our review classifies research according to its relevance to white‐collar work at individual, team, and organizational levels. By examining the literature in the context of this framework, we identify gaps in our understanding of white‐collar work that suggest promising research directions.     

Residential Location,Work Location,and Labor Market Outcomes of Immigrants in Israel

We develop and estimate a comprehensive dynamic programming (DP) model for the joint decisions of residential location, employment location, occupational choices, and labor market outcomes. We use data on immigrants from the former Soviet Union (FSU). We provide an extensive empirical evaluation of policies that have been designed to affect the residential and employment location decisions of the migrant population. The results shed new, and important, light on several issues regarding this group of immigrants. We find large regional differences in wages for the white‐collar workers, but only little differences for the blue‐collar workers. A careful examination of a number of policy measures indicate that a direct subsidy, in the form of a lump‐sum transfer, is most effective in achieving the government stated goal of inducing people to reside in the northern region of the Galilee and southern region of the Negev. Other policies, such as rental and wage subsidies, can also be quite effective, but these are more difficult to administer.     

Will the Dismantlement of Early Retirement Schemes Increase Older Unemployment? A Competing‐risk Analysis for Belgium

On the basis of administrative data for Belgium, we estimate a competing‐risk model on transitions from employees aged 50 and older into unemployment, early and old‐age retirement while accounting for forward‐looking work disincentives. Our estimates are used to simulate a cut in early retirement benefits. Although this would enhance the financial sustainability of the social security system, our simulations predict a strong increase in unemployment among older blue‐collar workers in traditional industries. Members of private saving plans or occupational pension schemes and highly educated workers are predicted to move into the old‐age pension system.     

THE EFFECT OF EMPLOYMENT PROTECTION ON WORKER EFFORT: ABSENTEEISM DURING AND AFTER PROBATION

Employment protection systems are widely believed to generate distortions in firms' hiring and firing decisions. However, much less is known about the impact of these regulations on workers' behavior. In this paper we provide evidence on the latter question using data from a large Italian bank. Our analysis is based on weekly observations for 545 men and 313 females hired as white‐collar workers between January 1993 and February 1995. These workers begin to be protected against firing only after the 12th week of tenure, and we observe them for one year. We show that—particularly for men—the number of days of absence per week increases significantly once employment protection is granted at the end of probation. This suggests that the provision of employment protection causes the increase in absenteeism. Alternative explanations based on career concerns or on learning about social norms would predict a smooth relationship between absenteeism and tenure instead of the observed discrete jump. This consequence of employment protection seems to have been neglected in European policy debates so far. (JEL: J2, D2, D8, M5)     

Workers’ Perception of Chemical Risks: A Focus Group Study

Workers’ perceptions with respect to health and safety at work are rarely taken into account when considering the development of prevention programs. The aim of this study was to explore workers’ perceptions of chemical risks at the workplace, in order to investigate the prerequisites for a workplace health program. A qualitative study was conducted involving seven focus groups of 5–10 participants (blue‐collar workers) each. All groups were homogeneous in terms of sex, work status, language, and company membership. Results showed that several factors have an important influence on workers’ perception of chemical risks. Workers assess risks by means of both sensory and empirical diagnosis and are concerned about the long‐term health consequences. They perceive the threat of chemical risks as high. Despite this, they are resigned to accepting the risks. Existing formal sources of information are rarely consulted because they are judged to be difficult to understand and not user friendly. Instead, workers tend to obtain information from informal sources. Communication problems with and lack of trust in prevention advisers and hierarchy are frequently mentioned. Workers feel that their specific knowledge of their working conditions and their proposals for practical, cost‐effective solutions to improve health and safety at the workplace are insufficiently taken into account. The use of focus groups yielded a useful insight into workers’ perceptions of chemical risks. Our findings suggest that training programs for prevention advisers should include topics such as understanding of workers’ perceptions, usefulness of a participatory approach, and communication and education skills.     

Up in the Skies? The Relationship between Body Height and Earnings in Germany

Abstract. This paper analyses whether taller workers earn more than their shorter counterparts. Using GSOEP data from 1991 to 2002, earnings functions are estimated for male and female workers for both West and East Germany. The Hausman–Taylor IV estimator is applied to account for unobservable heterogeneity including also time‐invariant indicators. The results do not imply wage differentials based on height for female workers and male East German workers. For the height range up to 195 cm there is, however, a wage premium associated with stature for male workers from West Germany of about 4 per cent for each additional standard deviation increment in height.     

Is There a Double‐Negative Effect? Gender and Ethnic Wage Differentials in Italy

This paper investigates the gender and ethnic wage differentials for female migrants in Italy by applying the Oaxaca–Blinder decomposition, with and without Heckman correction, to account for self‐selection into the labour market. The gender wage gap is nearly 15 per cent, more than 60 per cent of which is unexplained by observable differences. The ethnic wage gap is much larger (39 per cent), but endowments explain 53 per cent of the gap. We also estimate the double‐negative effect of being both female and a migrant. A female migrant earns 42 per cent less than an Italian male; the unexplained component is estimated to be 53–65 per cent. Results are robust to different specifications.     

Job Tenure,Labour Mobility and Wage Profiles

Abstract. The features and the length of the attachment of workers to firms represent a central aspect of the labour relationship. The length of service is an important determinant of wages and of non-pecuniary benefits; it affects internal mobility in the firm, and insulates workers with long job tenure from unemployment. In this paper it is argued that the traditional “spot” labour market Characterization is difficult to reconcile with the existence of long term employment relationships. A number of alternative theories which predict the existence of an employer-worker attachment proposed, and their implications discussed. The relevance of long term employment relationships is then tested using micro-data for the Italian manufacturing industry. An appropriate methodology for the analysis of the duration of employment is developed. and separate “job tenure” equations for white and blue collar workers are estimated. A higher educational attainment - ceteris paribus- appears to increase the probability of a job separation; conversely, a higher working experience, previous to the current job, tends to reduce it. The effect of firm size is negative, as larger organizations seem to favour longer employment spells. Outside opportunities show a strong positive effect on the probability of separation. Finally, conditional on the current wage, the probability of leaving the job increases with the length of time worked. However, when the unconditional outcome is considered, separation decline with tenure; in this case. it is argued, the wage effect more than outweighs the conditional effect. This result is consistent with the predictions of both “specific” human capital and job matching theories.     

Public Sector Wage Premium in Canada: Evidence from Labour Force Survey

Although previous research has pointed to a public/private sector wage gap for men and women in Canada, the extent of this gap has not been measured in recent years. Using data from the Canadian Labour Force Survey for September 2008, and using an endogenous switching regression framework to control for self‐selection, I find that both men and women earn a wage premium in the public sector in Canada, although the premium is higher for women. The pure wage premium or economic rent that public sector workers receive relative to their counterparts in the private sector is $1.09, or 5.4 per cent for men and $3.15, or 20 per cent for women. An analysis of selection in the pubic/private sector reveals that public sectors workers are ‘positively selected’ on observables and consist of the ‘cream of the crop’.     

Perceptions of the effectiveness of training and development of ‘grey-collar’ workers in the People's Republic of China

An important human resource development (HRD) implication of the People's Republic of China's (PRC) rapidly expanding economy has been the emergence of a critical shortage of grey-collar workers (GCW). Although ‘grey-collar’ has been commonly used in the West to describe an aging population within the workforce, in China it refers to people who are neither white nor blue collar workers but technicians. The shortage of GCW constrains the PRC's economic and developmental sustainability, and has been recognized in central and provincial government initiatives to increase training and development of employees within these fields. While acknowledged as a policy and organizational problem, there has been no research investigating what organizations are doing to develop these employees. Drawing upon a survey of 310 semi-skilled and skilled employees in Beijing, our findings suggest that while the surveyed organizations are investing heavily in both on- and off-the-job training, employees' perceived value of such differs markedly according to age and position. The research has important implications for China's HRD strategy in suggesting links between training and other human resource management (HRM) functions are yet to be evidenced.     

Occupational Attainment and Earnings: The Case of the Disabled

Abstract. This paper offers, for the first time, an investigation of wage differentials between disabled and non‐disabled workers in Sweden. It extends the traditional wage decomposition by incorporating explained and unexplained differences in occupational attainment. Data from the Swedish Level of Living Survey for 1981 and for 1991 have been used. The results show that in both years the disabled worked in low‐level occupations to a greater extent relative to the non‐disabled. This is due to the fact that disabled workers have lower qualifications. The unexplained component due to differences in returns on wage determinants is insignificant in the 1981 case but is highly significant in 1991, constituting around 50–60 per cent of the average log wage differential.     

Quality circle failures in UK manufacturing companies—A study

This paper presents the results of a study of quality circle failures in UK manufacturing companies. A questionnaire survey formed the first part of the investigation, which reveals that the majority of companies which implement quality circles should expect to encounter some form of failure. The first three years of operating a quality circle programme represent the critical period for establishing long-term survival of the programme, whilst in the case of individual circles it is the first 18 months. The results indicate that white collar circles are more difficult to sustain over time than are circles in blue collar areas. The main reasons for circle failure include: rejection of the concept by top management and trade unions; the company restructuring, redundancies and labour turnover; circle leaders lacking time to organise meetings and a lack of co-operation from middle and first-line management. It is pointed out, that despite an average circle failure rate of 20%, there is a high level of satisfaction with quality circles amongst the respondents.     

Work value orientations and patterns: A comparison of future managers with manager and non-manager groups

This study uses the Values for Working questionnaire to classify the primary value systems and value patterns of 501 senior business school students (future managers). The students' scores on six value systems measured by the questionnaire are compared to national data on blue collar and clerical workers and on managerial and professional workers. The business students scored in the average range for four of the six value systems when compared to the manager group, but for only one of the value systems when compared to the non-manager group. Of the business students who had a primary value system, 82 percent wereexistential ormanipulative. There were significant differences in the value systems scores by sex but not by business major.     

The Burden of Labour Costs in Mexico

Abstract. We analysed labour costs in Mexico and evaluated their impact in terms of firm performance. Using a new survey, we studied how firms chose to conduct a firing procedure (i.e. mandatory payment, negotiation, or legal dispute) and the actual costs derived from that decision. We found that firms that negotiate have, on average, lower costs. This may mean that workers subvaluate the legal benefits. Moreover, legal disputes may increase firing costs by 50 per cent. We contributed to the analysis of the impact of such costs on employment and found that, when firms negotiate or pay higher costs, this decreases the level of employment. We also analysed the impact of Social Benefits on employment using an industrial survey. We found that a 10 per cent increment in these benefits may have a negative long‐term impact of 9 per cent on the level of employment.     

A New Look at the Public Wage Premium in Italy: The Role of Schooling Endogeneity

This paper uses a sample of male workers to estimate public and private wage structures and the public wage premium for Italy. Results from a model with endogenous sector and schooling suggest that public employees have on average lower unobserved wage potentials in both sectors than private employees, but work in the sector where they benefit from a comparative wage advantage. Schooling is positively correlated with wages in both sectors, and controlling for that is crucial to get more reliable estimates and predictions. The associated average unconditional public wage premium is 12 per cent. The net premium is 9 per cent, but not statistically significant.     

Does Rent‐sharing Profit Female and Male Workers? Evidence from Israeli Matched Employer–Employee Data

This paper analyses the impact of workplace characteristics on individual wages based on a unique cross‐section matched employer–employee data set for the Israeli private manufacturing sector in 1995. Specifically, we examine the effects of the interaction between profit‐sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively correlated with firms’ profits‐per‐employee, even when controlling for all of the following: group effects in the residuals, individual and firms’ characteristics, industry wage differentials and endogeneity of profits. Wage–profit elasticity is found to be 11 per cent and it does not significantly differ between genders. With respect to the overall gender wage gap (on average women earn 28 per cent less than men), the results show that within firms there is no gender discrimination and that 12 per cent of this gap can be explained by the wage–profits profile and by the fact that women are more likely to be employed in less profitable firms than men.     

An Assessment of the Italian 2007 Complementary Social Security Reform: A Simulation Approach

In this paper we aim at assessing the outcomes of the 2007 Italian reform of the complementary social security scheme and at identifying the determinants behind them. The reform provided workers with relevant incentives to switch the investment of about 7 per cent of their gross yearly wages from a firm‐managed scheme (which took the form of a termination indemnity payment, the Trattamento di Fine Rapporto scheme) to an external pension fund. We provide a theoretical framework to model the workers' problem of choosing between these two different forms of complementary social security schemes and we then perform an agent‐based simulation taking into account all the details of the reform. Differently from previous contributions, we stress the impact that the investment decision has on the financial health of firms and, consequently, on workers' employment stability. Our simulations are able to replicate the Italian data in terms of adhesion rates to complementary social security and also to identify some of the key determinants of that outcome, such as fiscal incentives, individual preferences, the working of both the Italian labour and the financial markets and the productive structure of the Italian economy.     

Do Lower Top Marginal Tax Rates Slow the Income Growth of Workers?

Top marginal tax rates are positively correlated with the pretax income growth of the bottom 90 per cent — those who are not subject to the top rates. To explain this correlation, this paper presents and tests a model in which executives can increase firm profitability by (i) increasing the firm's level of technology and (ii) decreasing labor costs. In the model, higher marginal tax rates may reduce pretax inequality by increasing the average income growth of workers. This hypothesis is tested by examining the effect of top marginal tax rates on (unobserved) relative bargaining power between labor and firms and, therefore, on the income growth of workers in the USA. Bargaining power, in both the theoretical and the empirical models, is proxied by private‐sector unionization and use of offshore labor resulting in higher imports.