Does Public or Not-for-Profit Status Affect the Earnings of Hospital Workers?

This paper examines the earnings differentials among hospital workers in the public, private nonprofit, and private for-profit sectors. Utilizing data from the 1995 through 2007 Current Population Surveys, unadjusted earnings are highest in the private nonprofit sector and lowest in private for-profit firms. Once measurable characteristics are accounted for, health practitioners in for-profit and nonprofit hospitals earn similar wages while public sector workers earn small but significant wage penalties. Nonprofit hospitals tend to attract workers with higher levels of skill as measured by schooling and potential experience. This could be explained in part by worker sorting and lower cost containment incentives in nonprofit hospitals. Wage change analysis using pooled 2-year panels constructed from the CPS indicate no significant differences in earnings between the three sectors of employment. Whatever the role of the sector of employment on the overall earnings of hospital workers, there is sufficient worker mobility within the industry to largely eliminate systematic wage differences across type of hospital.

Union Worker Wage Effect in the Public Sector

This study examines union wage premiums in the public sector for the 1998–2004 period. Unlike previous studies, our approach estimates union wage premiums considering differences in the rewards to education, experience, and other personal characteristics for union and non-union workers. The approach provides a larger estimated wage gap than the traditional approach, and allows for simulations of union–nonunion wage gaps for different types of workers. Moreover, we use an Oaxaca decomposition to explain the larger union–nonunion wage gap in the private sector in comparison to that in the public sector. We find that between 50% and 60% of the difference in union wage premiums between the private and public sectors is due to differences in the way unionized workers are rewarded in the private and public sectors, while the remaining portion is due to differences in personal characteristics of private and public sector workers.

Sexual Orientation and Wage Discrimination in France: The Hidden Side of the Rainbow

This article is the first study to present an econometric evaluation of wage discrimination based on sexual orientation in the French labor market. Having identified same-sex couples using the French Employment Survey, we estimate the wage gap related to sexual orientation in the private and public sectors, in order to analyze whether or not lesbians and gays suffer a wage penalty. The results obtained show the existence of a wage penalty for homosexual male workers, as compared with their heterosexual counterparts, in both the private and public sectors; the magnitude of this discrimination varies from about ?6.5?% in the private sector, to ?5.5?% in the public sector. In the private sector, the wage penalty suffered by gay employees is higher for skilled workers than for the unskilled, and??in both sectors??the wage penalty is higher for older workers than for younger ones. As with many other countries, we do not find any evidence of the existence of a wage discrimination against lesbians.     

Reconsidering union wage effects: Surveying new evidence on an old topic

I examine evidence on private sector union wage gaps in the United States. The consensus opinion among labor economists of an average union premium of roughly 15 percent is called into question. Two forms of measurement error bias downward standard wage gap estimates. Match bias results from Census earnings imputation procedures that do not include union status as a match criterion. Downward bias is roughly equal to the proportion of workers with imputed earnings, currently about 30 percent. Misclassification of union status causes additional attenuation in union gap measures. This bias has worsened as private sector density has declined, since an increasing proportion of workers designated as union are instead nonunion workers. Corrections for misclassification and match bias lead to estimated union gaps substantially higher than standard estimates, but with less of a downward trend since the mid 1980s. Private sector union gaps corrected for these biases are estimated from the CPS for 1973–2001. The uncorrected estimate for 2001 is .13 log points. Correction for match bias increases the gap to .18 log points; further correction for misclassification bias, based on an assumed 2 percent error rate, increases the gap to .24. Reexamination of the skill-upgrading hypothesis leads to the conclusion that higher union gap estimates are plausible. The conventional wisdom of a 15 percent union wage premium warrants reexamination.     

Do Truly Comparable Public and Private Sector Workers Show Any Compensation Differential?

Using data from the Health and Retirement Study, we apply propensity score matching methods to examine evidence on the rent paid to public sector workers in the United States. Traditionally, wage differentials are computed assuming that workers from both public and private sectors are comparable, without actually controlling for the comparability of the units. Using this method, we are able to control for selection bias and, at the same time, select a subsample of comparable workers in terms of their conditional probability of choosing to work in the public sector on which to estimate separate wage equations.     

Women’s Tertiary Education Masks the Gender Wage Gap in Turkey

This paper investigates the gender wage gap for full-time formal sector employees, disaggregated by education level. The gap between the labor force participation rate of women with tertiary education and those with lower levels of education is substantial. There is no such gap for men. Hence, existing gender wage gap studies for Turkey, where we observe lopsided labor force participation rates by education levels, compare two very different populations. We disaggregate the whole sample by education level to create more homogenous sub-groups. For Turkey, without disaggregation, the gender wage gap was 13% in 2011, and women are significantly over-qualified relative to men on observed characteristics. Once we disaggregate the sample by education level, we show that the gender wage gap is 24% for less educated women and 9% for women with tertiary education in full-time formal employment. Observed characteristics only explain 1 % of this gap in absolute terms. We further disaggregate the data by public and private employment. The gender gap is higher in the private sector. However, women with tertiary education in the public sector are significantly better qualified compared to men, and consequently the adjusted gender wage gap is higher for women with tertiary education in the public sector. Our estimates also indicate a rise in the gender wage gap between 2004 and 2011.     

Public–private wage differential and gender gap in Latin America: Spoiled bureaucrats and exploited women?

This paper uses a rich collection of household surveys to investigate the wage differential between the public and private sectors in 13 Latin American countries. It also studies how the sector of employment affects the gender wage gap. Contrary to what is commonly thought, it is found that, in the majority of Latin American countries, there is a premium associated with working in the public sector. It is also found that the premium is often higher for women than for men but that this difference does not compensate for the wide gender gap.     

Public transit wage rates: Pre-Reagan and Reagan-Bush eras

This paper examines the earnings of public transit bus drivers for both the pre-Reagan and Reagan-Bush eras using Current Population Survey data. The findings show that union drivers were consistently paid a significant wage premium over nonunion drivers, a premium which also exceeded that for unionized private nontransport operatives — suggesting that special institutional features of the public transit industry have collectively conferred market power on unionized public transit workers. During the Reagan years, the earnings of public transit drivers, union and nonunion alike, rose relative to those of private and public nontransport operatives in spite of federally-spearheaded cost containment policies. In 1990, these earnings fell relative to those of private and public nontransport operatives, suggesting that the effects of these policies may be beginning to be felt. Helpful comments were provided by Don Bellante and an anonymous referee     

Anti-Discrimination vs. Anti-Poverty? A Comparison of Pay Equity and Living Wage Reforms

SUMMARY

Welfare reform focuses attention on the potential of pay equity and living wage strategies to move women out of the ranks of the working poor. In this study, we use data from a large municipality in the Northeast to simulate implementation of the two policies and compare their relative effectiveness in raising the earnings of female- and minority-dominated jobs, narrowing gender- and race-based earnings differentials, and lifting workers out of poverty. Results show that pay equity raises salaries across-the-board, but especially among low-skilled and minority-dominated jobs, and closes the wage gap. Both pay equity and living wage dramatically reduce the incidence of poverty; living wage, however, leaves virtually untouched the type of discrimination targeted by pay equity and has little impact on the wage gap. The implications of these results for addressing the needs of women transitioning off public assistance and wage justice are discussed. We conclude that both policies should be an integral part of welfare reform efforts, as well as key planks in an overall wage justice strategy.     

The ‘New Minimalist Approach’ to Private‐Sector Development: A Critical Assessment

Recent literature on private‐sector development emphasises the need to establish a ‘level playing field’ and tends to disregard selective supportive interventions. The most commonly highlighted elements are administrative simplification and effective property rights policies, with business services largely left to private providers ‐ what we call the ‘new minimalist approach’ (NMA). However, the NMA is based on certain unrealistic assumptions and is barely backed by empirical evidence. A range of complementary public policies is needed to create competitive sectors and overcome internal constraints, especially in small‐scale economies.     

The (unexpected) structure of “rents” on the French and British labour markets

This paper considers the allocation of labour on the French and British markets, using objective wage and subjective satisfaction data. We show that, in some sectors, workers enjoy both higher wages and higher job satisfaction. We argue that this reflects labour market wage rents. Perhaps surprisingly, wage rents are typical of the British public sector and permanent contracts, but not of their French counterparts. In France, such rents are found in full-time, rather than part-time jobs. Hence, the data provide little support for the usual a priori that the French labour market is structured along insider–outsider model lines, whereby wage rents are captured by the insiders of the public sector to the detriment of the private sector. However, they do suggest that part-time employment is involuntary to a far greater extent in France than in Great Britain.     

Privatization of Refuse Removal and Labor Costs*

We examine the labor-cost savings associated with privatization by comparing earnings and employment trends of public and private sector refuse workers. Findings suggest that high union earnings for workers in the public sector are a source of labor-cost savings in the refuse industry. Evidence on job changers does not indicate that earnings for this group of workers are a compensating differential. Metropolitan area employment findings suggest that municipalities are less likely to use union refuse workers in the public sector when a relatively small percentage of area residents belong to a union.     

Privatization of refuse removal and labor costs

We examine the labor-cost savings associated with privatization by comparing earnings and employment trends of public and private sector refuse workers. Findings suggest that high union earnings for workers in the public sector are a source of labor-cost savings in the refuse industry. Evidence on job changers does not indicate that earnings for this group of workers are a compensating differential. Metropolitan area employment findings suggest that municipalities are less likely to use union refuse workers in the public sector when a relatively small percentage of area residents belong to a union. The authors thank Jacqueline Agesa, Keith Bender, Maria Crawford, and Richard Perlman for valuable suggestions. Research assistance from Eric Blackburn is greatly appreciated.     

Immigration,labor force integration and the pursuit of self-employment

A correspondence analysis was used to examine the entire working life cycle of Canadian-born male age-education cohorts and immigrant male age-education cohorts who arrived during 1945-61. Data were drawn from the 1961 and 1971 census databases as well as the 1981 and 1991 public individual files. Findings support the existence of a split labor market based on immigrant status, particularly at the low end of the schooling spectrum. In 1961, immigrants with low levels of schooling were closely associated with the wage construction sector, whereas Canadian-born males below the high school level would most likely gravitate towards consumer services. Meanwhile, immigrants with a high school education were likely to be in consumer services; whereas, Canadian-born males with a high school education were closely aligned with public administration and distributive services. Moreover, immigrants with higher levels of schooling were less likely to work in ethnically dominated markets, while immigrants with low schooling moved into the self-employed construction sector. The existence of a split in the labor market was evident among workers with lower levels of schooling compared with university-educated workers.     

Self-employment and earnings among immigrants in Australia

This article contributes to the small Australian literature on the earnings of immigrants in the self-employment sector. Earnings functions for both the foreign-born and Australian-born are estimated, and the results show that compared with native-born workers, foreign-born workers have higher earnings in the wage/salary sector but lower earnings in the self-employment sector.
Among the foreign-born, the results suggest that self-employed immigrants are less skilled compared with those who are wage/salary employed. Thus, low-skilled immigrants may be forced into self-employment.
There is no evidence of immigrant "catch-up" in the self-employment sector. Among wage/salary workers, however, immigrant wages are characterized by a "catch-up" effect.     

Education,Skills, and Wage Gaps in Canada and the United States

We analyse data from the Programme for the International Assessment of Adult Competencies to reveal that immigrants in Canada and the United States make over $200 less per month than native‐born workers. In the United States, immigrants disproportionately work in low‐wage occupations, leading to large mean national differences between immigrants and native workers. The wage differential disappears after accounting for education and cognitive skills, indicating policies must focus on reducing education and skill gaps in the United States. In Canada, an immigrant wage gap persists in nearly all occupational fields, suggesting that the better skilled and educated immigrants in Canada are not receiving the same wage premium as native workers. We close with implications for policy and future research.     

DOES THE PUBLIC SECTOR IMPLODE FROM BAUMOL'S COST DISEASE?

The root of the Baumol cost disease is higher productivity increases for manufactured goods than for services. The implied increase in relative costs of service production is widely claimed to have devastating implications for the public sector as a provider of tax‐financed services such as health, education, and care. To match the increasing costs it appears inevitable that tax rates would be ever increasing. It is shown that this inference does not follow under standard assumptions when accounting explicitly for service provision from both the private and public sectors. Strikingly under assumptions often made in the literature, the welfare maximizing tax rate for a utilitarian policy maker would remain constant despite the Baumol cost disease, and by implication the share of public employment in total employment will remain constant. (JEL H5, H11, O41)     

Wage Mobility in Israel: The Effect of Sectoral Concentration

Using a unique eight-year data set, merging population census and national insurance data, the paper examines and compares patterns of wage mobility in Israel. First, the public and the private sectors are compared. Second, within each of these sectors, a distinction is made between sub-sector groupings that exhibit a high level of concentration and those that are more diffuse and unregulated. Based on alternative measures of wage mobility, the central finding of the paper is that the extent of wage mobility in a given economic sector is negatively related to the degree of concentration in that sector.     

USING THE PARETO DISTRIBUTION TO IMPROVE ESTIMATES OF TOPCODED EARNINGS

Inconsistent censoring in the public‐use March Current Population Survey (CPS) limits its usefulness in measuring labor earnings trends, as previous approaches for imputing topcoded earnings systematically understate top earnings. Using Pareto estimation methods with less‐censored internal data, we create an enhanced cell‐mean series to capture top earnings in the public‐use data. Annual earnings inequality trends since 1963 using our series largely mirror those found by Kopczuk, Saez, and Song using social security administration data for commerce and industry workers. When we extend our analysis to 2013 and consider all workers, earnings inequality levels are higher but its growth is more modest. (JEL C81, D31, J01)     

Enclaves and Entrepreneurs: Assessing the Payoff for Immigrants and Minorities1

Self‐employment and work in sectors with high concentrations of owners and workers of the same ethnicity have been identified as potential routes of economic success for immigrants. This study uses 1990 census data to assess the effects of self‐employment, ethnic employment, and their interaction on the odds of being at work, on number of hours worked, and on earnings of individual members of several representative groups. These groups include Cubans in Miami; African Americans, Puerto Ricans, Koreans, Chinese and Dominicans in New York; and African Americans, Koreans, Chinese, Mexicans and Salvadorans in Los Angeles. Work in ethnic sectors of the economy has no consistent effects, although work in their niche in the public sector offers greater rewards than any other type of employment for African Americans and Puerto Ricans. Findings are mixed for self‐employment, and its estimated effect on earnings depends on model specification. We conclude that the self‐employed work longer hours but in many cases at lower hourly rates. The effects of self‐employment are the same in ethnic sectors as in the mainstream economy.