Will They Ever Converge? Earnings of Immigrant and Canadian-born Workers over the Last Two Decades1

Using Census data covering the 1980–2000 period, this article examines what outcomes would be necessary for today's recent immigrant cohorts to achieve earnings parity with Canadian‐born workers. Our results show that today's recent immigrants would have to experience a drastic steepening of their relative age‐earnings profile in the near future for their earnings to converge with their Canadian‐born counterparts. The reason is simple: the greater relative earnings growth experienced by recent immigrant cohorts has only partially offset the drastic deterioration in their relative earnings at entry.     

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.

Reinserting the professional into the study of globalizing professional service firms: the case of law

Abstract In discussions of the globalization of professional service firms there is an increasing recognition that understanding the ‘social construction’ of organizational architectures is essential. In this article we argue, using the management of transnational law firms as an example, that to understand effectively these social constructions we must reincorporate an understanding of the principles of professionalism into discussions. We highlight the importance of occupational autonomy to professionals and how this is likely to influence the strategies that global professional service firms use. We also point to what we term the ‘varieties of professionalism’ and the spatially variable professional projects that underlie the values and identities of lawyers. This reveals the way rational and efficient forms of organizing have to be adapted as a result of professional values and the diverse ideals and beliefs of lawyers in different international jurisdictions.     

The relationship between work/family benefits and earnings: A test of competing predictions

Using data from a random statewide telephone survey, this study examines the relationship between four specific types of work/family benefits (child care, flextime, and two types of flexible leaves) and employee earnings. The research is guided by two competing theoretical perspectives. One—compensating wage differential theory—is based on the presumed cost of the benefits, and the other is based on their potential productivity enhancing effects. Despite the prevalence of the former perspective for guiding work on the impact of job characteristics on earnings, we found limited supporting evidence. Instead, earnings more closely related to work/family benefits were likely to have a positive impact on productivity, but only among those groups that stood the most to gain. Building on the findings of this study, suggestions are made to examine further how and in what ways this important new class of benefits might affect employee earnings.     

THE IMPACT OF DEREGULATION ON THE PRODUCTION STRUCTURE OF THE MOTOR CARRIER INDUSTRY

Empirical analysis of the motor carrier industry pre- and post-regulatory reform reveals that deregulation resulted in significant changes in firm production structure and lower real average costs. Translog cost functions for firms operating in 1977 and 1983 were estimated and compared for "other specialized commodity" carriers. Fitted average costs were computed from these functions. The results indicate significant differences in the cost functions and real costs that cannot be attributed to technological changes but rather suggest efficiency gains. The results also suggest that it is inappropriate to predict outcomes of deregulation using empirical analyses of firms in the regulated environment.     

The private sector and urban housing production process in Nigeria: A study of small-scale landlords in Abuja

The private production system continues to supply the majority of housing to the population of Third World cities. In Nigeria, statistics show that the bulk of urban housing units is supplied for rent by small-scale private landlords. This paper examines the process of housing production among this category of producers using, as a case study, the peripheral settlements of Abuja, Nigeria's new capital city. A predominance of small-size sole proprietorships is established among the small-scale house building firms, mostly for reasons of maintaining operational flexibility and cost saving. It is also found that the greatest attraction of investing in rental housing by small entrepreneurs is the hedge it provides against inflation and the stability and permanence it introduces into the capital base of economic pursuits. A strong influence of traditional chiefs in land supply is revealed, together with the emergence of a commercialised land market, resulting in speculation and contributing to rising land prices. It is shown that building materials are the most problematic of the key building components to the housing production process. It is argued that small building firms would make more profit if they had access to formal sector working capital and that the practice of using casual workers in project execution has the advantage of enabling firms to survive periods of job drought, but does not encourage growth of the firms, apprenticeship training and skills development in the house construction industry. It is concluded that what is needed to enhance the operation of this category of producers is for government to accept an enabling role that will seek to minimise the financial burden and risks to which they are currently exposed.     

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.     

The relationship between work/family benefits and earnings: A test of competing predictions

Using data from a random statewide telephone survey, this study examines the relationship between four specific types of work/family benefits (child care, flextime, and two types of flexible leaves) and employee earnings. The research is guided by two competing theoretical perspectives. One—compensating wage differential theory—is based on the presumed cost of the benefits, and the other is based on their potential productivity enhancing effects. Despite the prevalence of the former perspective for guiding work on the impact of job characteristics on earnings, we found limited supporting evidence. Instead, earnings more closely related to work/family benefits were likely to have a positive impact on productivity, but only among those groups that stood the most to gain. Building on the findings of this study, suggestions are made to examine further how and in what ways this important new class of benefits might affect employee earnings.     

The difference between wages and wage potentials: Earnings disadvantages of immigrants in Germany

Immigrants in Germany have poor earnings performance relative to natives. Claiming that human-capital endowments determine earnings potentials rather than actual earnings, a stochastic earnings frontier is estimated and used to seek systematic differences between natives and migrants for GSOEP data for the year 2000. While empirical results clearly support the frontier assumption, natives and immigrants are surprisingly about the same with respect to the frontier. Assuming a half-normal distribution of the wage gap, on average, both groups transform a modest 84% share of their potential income into market earnings. This implies wage inequality can be attributed to human-capital differentials alone. The human-capital endowments of immigrants are largely determined by the very low percentage who have college degrees, their slow assimilation and zero-return on imported experience. The paper also tries to explain individual wage gaps, which are significantly decreased in married subjects raising families, but increased in employees in small- or medium-sized relative to larger firms. However, these variables only make minor contributions to the variance.     

HEDONIC PRICE FUNCTIONS

Three feasible interpretations of cross-sectional hedonic price regression equations are derived from consumer choice, profit maximization by competitive firms, and market clearing, each conceptual experiment deploying a Lancastrian "new approach" to micro theory. Lancaster's theory is compared with those consumer theories of Houthakker heritage, and some limitations of each are indicated. The assertion that Adelman and Griliches' quality-adjusted hedonic price index is a constant satisfaction index is shown to necessitate interpersonal comparisons of utility, and the possibility of identifying demand and supply functions for commodities by exclusion restrictions on characteristics is rejected.     

AN EMPIRICAL INVESTIGATION OF ASYMMETRIC BEHAVIOR IN CORPORATE DIVIDEND POLICY

Employing three alternative measures of ability to pay, we find support for the Lintner hypothesis that firms pursue a long-run target payout ratio and also that current earnings better explain long-run dividends than cash flows or stock prices. The evidence further indicates that corporations adjust dividends with a ratchet effect, raising them more readily than they lower them. More specifically, when dividends are below target levels, firms move toward equilibrium by increasing them, but when dividends are above target levels, firms approach equilibrium by restricting dividend increases as earnings rise.     

International labor migration through multinational enterprises

"This research studies international migration of company transferees. The main purposes are to address how their individual characteristics have influences on their overseas assignment and what kinds of migration patterns are created by the multinational business enterprises. U.S. firms in Taiwan are the primary study focus. By using both quantitative and qualitative data, the results show that although an overseas appointment is mainly based on individual competence, nationality, ethnicity and gender also play crucial roles. And multinationals are important channels for sustainable, return and circular migration."     

INNOVATION: ITS PUBLIC AND PRIVATE ASPECTS AND SOME OF THEIR EMPIRICAL IMPLICATIONS FOR MERGERS

Innovators may have incentives to incur the expense of the search for new knowledge even if others can use the results without contributing to the costs of the search for them. Why? Assume firms choose their actions independently. Assume new knowledge is a free public good: a firm can make the product at lower cost even if it spends nothing on research, if another does the research. The most plausible noncooperative equilibrium in this situation is stochastic: firms will decide what to do on the basis of a random device. The theory determines the probability that the firm spends nothing, or something, on research. In consequence, no firm can be certain that a rival will do the research; no firm can be certain of becoming a free rider. In consequence, there will be no relation on average between returns on research-outlays and size of outlays; but the yield on research always will be positive. Innovation can lead to differences among firms, but these differences should not persist, as firms can gain by eliminating them. In a non-cooperative equilibrium, where firms have different cost conditions, the allocation of output among them is inefficient. Such inefficiency can be eliminated if information about methods of production is sold, say by way of licensing. But royalty receipts are a very small fraction of total revenues, even in research and development intensive industries such as chemicals and scientific instruments. Merger is another avenue of cooperation. The theory which assumes research results are private predicts a positive relation between merger activity and technical change. Empirical evidence for the 1879–1930 inverval supports this prediction.     

The Causes and Consequences of Albanian Emigration during Transition: Evidence from Micro Data1

This note reports the results of a field survey of individuals and firms in Albania, carried out during 1998. The surveys were designed to analyze the size, causes and consequences of emigration from Albania during the 1990s. Our results show that emigrants are motivated mainly by the ease of access of neighboring countries and by the prospect of high financial returns. Although most emigrants worked illegally and had part‐time, low‐skilled jobs, the majority found the overall experience positive, and the skills and earnings abroad have contributed to setting up businesses on return. These results have important policy implications for both EU countries and other transition countries in the region.     

Regulation, market power, and labor earnings: Evidence from the cable television industry

Labor economists have suggested that employee earnings may be relatively higher in firms possessing market power, such as that which may stem from government regula-tion of prices or entry of firms. We test this hypothesis, which previously has been inves-tigated in the context of industries such as trucking and air transportation, using earnings data for the cable television industry. Our empirical findings suggest that cable TV employees capture some of the benefits producers receive from regulations restricting competition.     

Unions,firms, and the return to seniority

Wages generally rise more slowly with experience in union than in nonunion settings. It has been argued that the lower slope of the earnings profiles reflects the preferences of the median worker. It is shown in this paper that the median worker model (assuming a median worker exists) does not lead to a uniformly less steeply sloped earnings profile. Instead, the lower return to seniority reflects the firm’s rational response to the union’s monopoly power. Thus, the lower slope in unionized firms reflects the objectives of firms, not unions, in the bargaining process. I would like to thank Bill Dickens, Bernie Grofman, Shu Kahn, and Donald Martin for useful comments and suggestions.     

Minimum wages and the wessels effect in a monopsony model

The Wessels model suggests that firms respond to increases in the minimum wage rate by decreasing the level of fringe benefits — an action which produces an inefficiency effect that lowers workers’ utility and the supply of labor. Standard models of monopsony, however, argue that wage floors prevent the exercise of market power and increase employment. I show that wage floors, even with fringe benefit curtailment, may increase employment by lowering the marginal expense of labor. Employee utility and employment will rise somewhat but not as much had the firm acted competitively in setting both wages and fringes.     

Jacob Mincer,Experience and the Distribution of Earnings

This paper reviews Jacob Mincer's contributions to the analyses of earnings and the distribution of earnings through his pioneering focus on labor market experience or on-the-job training. It begins with a brief discussion of the theoretical literature on the distribution of earnings in the pre-Mincer period, and then discusses his analysis of human capital and earnings developed in his 1957 doctoral dissertation and 1958 Journal of Political Economy (JPE) article. Further analyses of on-the-job training, and in particular estimates of the rate of return from on-the-job training, are presented in his 1962 JPE paper. The synergy between Mincer and Becker during the 1960s is discussed, as is the development of the schooling-earnings function by Gary S. Becker and Barry R. Chiswick (1966). Jacob Mincer extended this relationship by incorporating experience to form the human capital earnings function in his Schooling, Experience and Earnings (1974). Subsequent modifications, extensions, tests of robustness and the wide applicability of the human capital earnings function are presented.     

THE DECOMPOSITION OF INEQUALITY BY CLASS AND BY OCCUPATION:

Sociological research on earnings and income has focused on predicting individual income. Analyses most often use occupational status or class, along with other economically relevant variables, to explain earnings or income variations among individuals (income determination). Aggregate inequality (income distribution) has received considerably less attention, except in cross-national research. This especially holds for applying central concepts of stratification to the analysis of inequality. That is, class and occupation differences in economic rewards are rarely used to investigate aggregate earnings or income inequality. This study, using 1976 and 1977 Panel Study of Income Dynamics survey data, estimates the proportion of total earnings/income inequality accounted for by class and by occupation. Theil's index is used to measure earnings and income inequality and thus decompose total inequality into between-and within-group components. Wright's five-category schema is replicated for decomposition of inequality by class and a traditional four-category ordinal typology for decomposition by occupation. The two schemas show similar results: both class and occupation respectively account for between one-fifth and one-fourth of total earnings and income inequality. The results show the relevance of these central stratification typologies for the analysis of aggregate inequality.