Are government wages interlinked with private sector wages?

The ongoing fiscal and financial crisis with significant macroeconomic imbalances in the euro area raises the question in how far public–private wage interaction and even wage spirals contribute to fiscal and competitiveness problems. In this vain we analyse empirically whether the evolution of public sector wages is decoupled from that of the private sector. Using data for number of OECD countries, we find: (i) a strong and extremely robust positive annual contemporaneous correlation of public and private sector wages over the business cycle; (ii) evidence of co-movement of these variables over the medium and long run. From a policy perspective, the findings of this study suggest public wage restraint and private wage flexibility coupled—where needed—with institutional reform to prevent or break public–private wage spirals.     

Revisiting the residential electricity demand in the United States: A dynamic partial adjustment modelling approach

In recent years, price policies and price changes derived from environmental regulations have played a more important role to promote residential energy conservation. Using recent annual state-level panel data for 48 states, we estimate a dynamic partial adjustment model for electricity demand elasticities on price and income in the residential sector. Our analysis reveals that in the short run, one unit price increase will lead to 0.142 unit of reduction in electricity use after controlling for the endogeneity of electricity price. Thus, raising energy price in the short run will not give consumers much incentive to adjust their appliances to reduce electricity use. However, in the long run, one unit price increase will lead to almost one unit consumption reduction, ceteris paribus. In addition, we find new evidence that for states of higher per capita GDP, raising the electricity price may be more effective to ensure a cut in consumption.     

Reducing unemployment? Examining the interplay between active labour market policies

Active labour market policies (ALMP) are important tools that welfare states utilize to influence the labour market. This study analyses the macroeconomic effects of different types of ALMP spending on aggregate unemployment rates, and especially if there is evidence of interdependencies between policies. The types of policies scrutinized are public employment services (PES), training programs, public job creation and subsidized employment, where the PES is singled out as a crucial factor that moderates the effects of other types of labour market programs. The study examines 19 welfare states between 1985 and 2013, using error correction modelling to separate between short‐ and long‐term effects. The results indicate that PES, training and subsidized employment reduce unemployment in the short‐run, whereas PES and wage subsidies are associated with reduced unemployment when considering long‐term effects. However, PES is found to have indirect effects on other policy types and increased spending on PES is shown to reinforce long‐term effects of training programs.     

Do broad money, output, and prices stand for a stable relationship in India?

This study investigates the stability of the relationship among M3 money, output, and prices. The empirical results derived from conventional stability tests, cointegration and error correction models and a test for structural break in a cointegrating vector provide evidence for the existence of a fairly stable relationship among these variables during 1951–1952 to 2000–2001. The evidence suggests that the growth of M3 money can be used as one of the potential indicators of future movement in prices within the multiple indicators framework of the Reserve Bank of India (RBI). However, evidence regarding the short run dynamic adjustment among these variables indicates that active monetary policy to stabilize short run fluctuation in prices must be handled with caution, as it would amplify rather than moderate price fluctuations in the long run.     

Public Sector & Private Sector Employment Programs as Competing Solutions to Unemployment

The object of this paper is to examine private sector wage subsidies and public sector job creation as competing solutions to unemployment. This has been undertaken firstly, by critically evaluating the general arguments adduced for the respective programs. Secondly, consideration is given to the outcomes from examples of such programs. In this case the Special Youth Employment Training Program (SYETP) and the Regional Employment Development Scheme (REDS) were selected as relevant examples of private and public sector employment programs conducted in Australia. It was found that SYETP had difficulty fulfilling its twin objectives of providing training for those disadvantaged in the labour market and fulfilling their transition to unsubsidised employment. Wage subsidies have a major administrative flaw in that it is extremely difficult to determine whether a subsidy results in either net job creation, i.e., creating a position which would not exist in absence of the subsidy, or the substitution of subsidised for non-subsidised labour. The operation of wage subsidies results in a degradation of the labour market, or substitution of permanent for casual, high turn-over positions. Public sector job creation is subject to certain benefits that do not accrue to private sector schemes. It is argued that RED type schemes have a greater capacity to incorporate more intensive formal skills training, and can more readily manipulate tax and employment multipliers. An attempt has been made to compare the cost efficiency of SYETP and REDS in creating employment. One important, though tentative result of this exercise is that the effectiveness of wage subsidies as a job creation mechanism is dependent upon economic growth. Consequently there is a paradox in the use of wage subsidies whereby they are most effective when they are least needed and most needed when they are least effective.     

Parenting stress and behavior among single mothers of preschoolers: The mediating role of self‐efficacy

Abstract

This study examines the role of perceived self‐efficacy in mediating relations between mothers’ parenting behavior and variables such as maternal employment status, depressive symptoms, parenting stress, and child behavior problems. Subjects were 93 employed and 95 nonemployed, single, black mothers of a 3–5‐year‐old child who were current and former welfare recipients. Using linear structural relations modeling (LISREL), the findings support a model whereby (a) the more behavior problems the child is perceived to have, the more depressive symptoms the mother feels; (b) the more depressive symptoms the mother feels, the more likely she is to rate herself high in parenting stress; (c) the more depressive symptoms and parenting stress the mother experiences, the lower is the mother's estimate of her self‐efficacy; and (d) the lower the mother's self‐efficacy, the less competent is her parenting. The findings for employment status are similar; i.e., maternal employment predicted a trajectory leading to somewhat better parenting. In addition, child behavior problems were associated with less competent parenting both directly and indirectly through their effect on parenting stress and self‐efficacy. These results suggest that self‐efficacy has import as a mediator of the relations between maternal parenting and other psychosocial variables. There is no evidence, based on these findings, that employment in the low‐wage market is harmful either for single black mothers or their preschool children. However, job availability and an increase in the minimum wage are important policy considerations.     

The impact of the Soviet Union upon the U.S. feed/livestock sector— An assessment

In this article, the impact of volatile Soviet Union corn imports on the U.S. feed/livestock sector is analyzed using an econometric model. The model's attention to supply response when feed price changes enables it to determine the nature of the effect of exogenous shocks across feed and livestock sectors. The model is used in historical simulation to demonstrate the effects of actual and alternative paths of variable Soviet import demand and to explore the difficulties of deriving a stabilizatior policy for these linked sectors.     

Determinants of Women's Entry into Self–Employment

Objective . Building on recent studies that have shown how employment– and family–related characteristics are uniquely intertwined in facilitating women's decisions to work for themselves, I examine the process of transitions into self–employment among white, African–American, and Hispanic women. Methods . This study analyzes data from the National Longitudinal Survey of Youth, a national probability sample of those born between 1957 and 1964, which allows me to apply a dynamic model for studying women's employment transitions. Results . Regardless of race or ethnicity, factors such as work experience and the presence of a spouse encourage women to become self–employed. At the same time, the distributions of these characteristics for African–American women, and to a lesser extent Latinas as well, significantly account for their slower entry into self–employment. The effect of children on women's entry into self–employment, which earlier studies often found to be positive, especially among whites, is mixed. Conclusions . These findings reveal significant racial/ethnic differences in the process of female self–employment and also call into question the view that self–employment allows working mothers to better combine their careers with family responsibilities than does wage/salary sector employment.     

最低工资管制的就业效应分析

非线性规划分析表明,最低工资管制的就业后果不仅取决于最低工资管制本身, 还取决于外部监管环境,当监管环境强化到一定程度时,最低工资管制的就业冲击会扩大。基于粤闽两省439家企业调查数据的实证分析表明,2008年提高最低工资标准对农民工的就业冲击明显强于2007年,但对城镇劳动力没有造成明显强化的冲击。进一步分析证明,农民工就业冲击的扩大主要源于《劳动合同法》引起的监管环境的强化,而城镇劳动力就业冲击没有扩大主要源于二元就业制度对城镇劳动力利益的优先保护。这提醒我们,《劳动合同法》对就业的影响很可能会通过强化最低工资管制等其他管制措施的效果来间接实现。     

Moderate wage increases and flexible labour contracts to protect employment in Colombian manufacturing

Based on conditional and unconditional demands for labour, we exploit the variations of real minimum wage across manufacturing subsectors to present evidence that this variable affects formal employment. The long-term elasticity of labour demand to the minimum wage is around –0.7. Accordingly, increases in the minimum wage lead to job losses for unskilled labour, mainly in plants with fewer than 100; thus, small increases in the minimum wage are desirable to protect employment. Labour demand is highly cyclical: the output elasticity is about 1.7. Thus, some flexibility in labour contracts is desirable to reduce the link between employment and variation of plants’ sales. Open-ended labour contracts might allow reductions of the nominal wage rather than inducing job losses during periods of severe slumps, as has happened during the COVID-19 pandemic.     

Japanese import behavior and cointegration: A comment

In a recent paper, Mah (1994) investigated the behavior of Japanese aggregate import and argued that there was no empirical evidence in favor of the existence of a traditional imperfect-substitutes long-run import demand model using cointegration analysis. In this paper we reinvestigate the problem in a coherent multivariate framework and point out that the results of Mah (1994) are very much dependent on the approach he followed.     

Trade liberalization in textiles: Policy effects in an import-competing industry

I trace the dynamic impact of removal of textile quotas in the US on output, employment and plant closure in that industry. A dynamic theoretical model of firm-level decision-making is estimated with US Census manufacturing data and with industry-level demand-side data. Simulations performed with the estimated model provide a decomposition of the historical record into parts attributable to import competition, to technological progress, and to a secular real-wage increase. Plant closure and a fall in domestic prices are largely associated with technological progress, while downsizing, layoffs and reduction in domestic market share are associated with trade liberalization. The market-clearing domestic price of textiles is identified as a crucial channel in transmitting technology or import price shocks to layoffs and plant closure.     

The Impact of Immigration on Skills,Innovation and Wages: Education Matters more than where People Come from

With the ensuing immigration reform in the US, the paper shows that targeted skilled immigration into the R&D sector that helps low-skilled labor is conducive for controlling inequality and raising wage. Skilled talent-led innovation could have spillover benefits for the unskilled sector while immigration into the production sector will always reduce wage, aggravating wage inequality. In essence, we infer: (i) if R&D inputs contributes only to skilled sector, wage inequality increases in general; (ii) for wage gap to decrease, R&D sector must produce inputs that goes into unskilled manufacturing sector; (iii) even with two types of specific R&D inputs entering into the skilled and unskilled sectors separately, unskilled labor is not always benefited by high skilled migrants into R&D-sector. Rather, it depends on the importance of migrants’ skill in R&D activities and intensity of inputs. Empirical verification using a VAR model in the context of the USA confirms the conjectures, and the empirical results substantiate our policy-guided hypothesis that skilled immigration facilitates innovation with favorable impact on reducing wage-gap. Inclusive immigration policy requires inter-sectoral diffusion of ideas embedded in talented immigrants targeted for innovation.     

Free trade,food-processing,and migration: An analysis of Mexican immigration in the U.S. Great Plains Region

This paper empirically identifies the factors driving Mexican immigration into the U.S. Great Plains region, focusing especially on the role of work in the Mexican and U.S. food-processing sectors, which in the context of NAFTA-induced foreign direct investments, opens up paths for migration along occupational lines into the U.S. from Mexico. Using a unique dataset on Mexican migration, the study addresses three related questions in a series of multivariate logistic regression analyses. First, is employment in the U.S. food-processing sector associated with Mexican migration into the Great Plains region? Second, does employment in the Mexican food-processing sector predict employment in the Great Plains food-processing sector? Finally, is the political–economic context linking Mexico and the U.S. related to the formation of occupational channels linking the food-processing sectors in Mexico and the U.S.? The findings demonstrate that the U.S. food-processing sector is a strong predictor of Mexican migration to the Great Plains region; Mexican migration is strongly channeled along occupational lines from Mexico to the U.S.; and the implementation of NAFTA, a period of intensive political–economic integration, strengthens the occupational channel between the food-processing sectors.     

Inhospitable workplaces? International students and paid work in food services

Most international students in Australia take up paid work during their studies, generally as part‐time employees in low‐wage, low‐skill labour markets. Though little is known about the detail of their work experiences, scattered reports suggest that wages and working conditions are often poor and pose significant issues of social justice. This article examines the characteristics of jobs held by one group of international students, drawing on in‐depth qualitative interviews that form part of a case study of Melbourne's café, restaurant and takeaway food services sector. The evidence indicates that precariousness in employment is widespread in this sector and that it centres on underpayment and non‐payment of wages, in breach of labour regulation. The article suggests that such illegal employer practices are facilitated by use of undeclared casual work. Underpayments are most severe in what are typically regarded as ethnic cafes and restaurants, which concentrate on employment of international students, but they are also widespread in mainstream cafes and restaurants, where international students share precarious work conditions with other workers. The findings underline the case for more concerted research and new policy initiatives.     

FROM HARVESTER TO DE-REGULATION: WAGE EARNERS IN THE AUSTRALIAN WELFARE STATE

The significance of the Harvester Judgment in 1907 was not only in the establishment of a ‘fair and reasonable’ wage, which became known as the basic wage , but also in the principle that wages had to meet at least the basic social needs of the worker's family. Income earned through employment was thus regarded as primary welfare . These principles in wage determination were discarded in the 1960s and the de-regulation policies of the 1980s further increased the division between employment and social needs. Exacerbated by the endemic high levels of unemployment, the progressive de-regulation of the labour marked since the 1980s has been one of the most significant causative factors in the growing inequality in Australia.     

FINLAND

The durability of all institutions during this last decade of the twentieth century has been tested by the economic recession. Repercussions have hit the Finnish pension system from two directions - problems in financing, and the need to cut costs in the public sector. However, in the long run, the question of securing pensions is a matter of will. In recent years, some major amendments to laws have been made successfully, including a higher age limit for early retirement, lower levels of disability and early retirement pensions and diminished index adjustments of old-age pensions. These amendments give even more reason to believe that the main contributors to the pension system have the capacity and the will to secure the Finnish employment pension system.     

Exchange rate and wage policies in Central and Eastern Europe

After the eastern enlargement of the European Union (EU) and due to increasing labor market integration, wage determination in Central and Eastern Europe (CEE) has become a key issue in European economic policy making. In addition, a controversial discussion concerning the monetary integration of CEE countries into the EMU has emerged. Both issues have earned particular academic and political interest because Eastern and Western Europe are at different stages of economic development and volatile international capital flows seem to require either a higher degree of wage or exchange rate flexibility. Based on the Scandinavian model of wage adjustment by Lindbeck (1979), we analyze the role of exchange rates in the wage determination process of the Central and Eastern European countries to identify which exchange rate strategy contributes to faster wage convergence in Europe. Panel estimations suggest that workers in countries with fixed exchange rates are likely to benefit in the long run from higher wage increases.     

The trinity of wage setting in EMU: A policy proposal

Diverging labor cost developments are often considered to be one of the most important factors that led to large current account imbalances in the euro area (EA) in the run-up to the global financial crisis. It has also been shown that wage growth differentials have significantly lowered the co-movement of EA countries’ business cycles – the most widely used meta-criterion for optimum currency areas. Against this background, this paper develops a wage-setting benchmark that aims to keep the economy in internal equilibrium and to maintain price stability, while it also exhibits the capacity to correct for external imbalances. The proposed wage benchmark is very simple and may serve as an anchor for the macroeconomic dialogue in Economic and Monetary Union. In order to demonstrate the potentially beneficial effects of such a wage benchmark we present some simulations showing how current account balances and labor costs would have developed across EA countries if the rule had served as a benchmark already in the run up to the crisis.