Minimum wages and poverty with income-sharing

Textbook analysis tells us that in a competitive labor market, the introduction of a minimum wage above the competitive equilibrium wage will cause unemployment. This paper makes three contributions to the basic theory of the minimum wage. First, we analyze the effects of a higher minimum wage in terms of poverty rather than in terms of unemployment. Second, we extend the standard textbook model to allow for income-sharing between employed and unemployed persons in society. Third, we extend the basic model to deal with income sharing within families. We find that there are situations in which a higher minimum wage raises poverty, others where it reduces poverty, and yet others in which poverty is unchanged. We characterize precisely how the poverty effect depends on four parameters: the degree of poverty aversion, the elasticity of labor demand, the ratio of the minimum wage to the poverty line, and the extent of income-sharing. Thus, shifting the perspective from unemployment to poverty leads to a considerable enrichment of the theory of the minimum wage.      

The effect of the extent of unionism on union and nonunion wages

This paper provides estimates, derived from micro wage equations, of the effects of unionism on the wages for both union and nonunion labor. These equations control not only for union status, but also include measures of the extent of unionism in product and labor markets. The results suggest,inter alia, that an increase in the extent of unionization in an industry has substantial positive effects on the wages of nonunion as well as union workers. Increases in the extent of union coverage within an occupation, however, have little or no effect on nonunion wages.     

The relative effect of unionization and interjurisdictional competition on municipal wages

This study analyzes the effect on municipal employee wages of interjurisdictional competition in municipal service markets. The impact of market conditions are analyzed utilizing a bureaucracy model of local governmental decision making. The study develops hypotheses concerning the degree of competition in this market, constructs empirical measures of competition, and investigates the relationship between competition and wage levels for three categories of municipal workers. The empirical results suggest that local market conditions may be as important a determinant of local wages as local labor market conditions, including union membership. Also, the wage effect of unionization appears to be greater in less competitive local government environments. Financial support from the Earhart Foundation is gratefully acknowledged. We would also like to thank Werner Hirsch, Roger Folsom, and Geoffrey Nunn for helpful comments.     

Voluntary contributions and wages in nonprofit organizations

Voluntary work provides a major source of labor for many nonprofit organizations. Consequences of volunteers and paid staff working alongside each other in nonprofits are well documented. This article contributes to this strand of literature and investigates whether the presence of volunteer work influences paid employees' wages in nonprofit organizations. We estimated a multilevel wage equation accounting for personal characteristics of workers and characteristics of nonprofits. The analysis revealed that nonprofit organizations engaging volunteers pay lower wages to their employees. Our findings contribute to the understanding of wage‐setting behavior of nonprofits and improve the methodological approach of empirical research in this field.     

The occupational status and wages of women in the USSR

In the USSR, the state statistics for the 1930s through the 1970s seem to reflect the development and completion of a process of active and almost universal transition of women from individual housework to socialized production. The statistics also provide a graphic picture of the most important tendencies in the qualitative aspects of women's labor. Determining the special characteristics of women's job activities within the general structure of employment in the USSR that have offers some idea of the progressiveness of the changes that have occurred in women's occupational position and the contradictions and unresolved problems remaing. Notable is the substantial change in the predominant types of work, particularly a marked decrease in the number of women employed in agriculture. The urbanization of the USSR, the development of an urban economy, and the high rates of industrialization all contributed to the expansion of labor, involvement in industry, construction, and the system of sociocultural, trade, and labor services. This process directly influenced the nature of women's labor force activity. During the 1930-70s period, the proportion of women employed in industrial work, as well as in work relating to information, increased from 13% to 52%. The proportion of women performing industrial labor which requires training increased from 5% to 13-14% during this period. The relative proportion of women doing different types of service-type work increased from 11% to 25%. Women participated most actively in creating and developing the system of medical and cultural services, children's nurseries and kindergartens, trade enterprises and restaurants. The proportion of women in charge of work collectives and organizing the activity of people was negligible at the end of the 1930s and had increased to 4-5% by the 1970s. Yet, about 40% of women working in the economy are employed in unskilled or low-skilled labor, which requires no vocational training. This index is about 30% for the entire employed population. Some specific differences in areas of work and in working conditions, and hence perhaps in pay, most likely exist owing to the psychosocial characteristics of females and to prohibitions against women working in various types of harmful jobs. Yet, these differences testify to elements of inequality continuing to persist in women's occupational status.     

The effect of breastfeeding on young adult wages: new evidence from the add health

A growing literature in economics has examined the effect of early childhood health investments on adult human capital formation and labor market outcomes. This study is the first to examine the effect of having been breastfed as an infant on young adult earnings. Using data from the National Longitudinal Study of Adolescent Health (Add Health), ordinary least squares estimates suggest that breastfeeding is associated with a 10–12 % increase in hourly earnings. However, after ensuring common support on observables via propensity score matching and controlling for unmeasured family level heterogeneity common to siblings via family fixed effects, the estimated associations become much smaller and are statistically indistinguishable from zero. We conclude that the benefits of having been breastfed do not appear to extend to the labor market.     

Tasks,occupations and wages in OECD countries

This article investigates the links between earnings, human capital and job tasks, using internationally comparable information from the OECD Survey of Adult Skills. The authors use the theoretical framework developed by Autor and Handel (2013) and extend their empirical results to 21 OECD countries. The data allow for a richer characterization of workers' human capital by including both educational attainment and a measure of cognitive skills. Their findings confirm the predictive power of job tasks in explaining wage differences, both between and within occupations, and provide empirical support for the model's prediction in the vast majority of countries.     

Cooperation,job security,and wages in a dual labor market equilibrium

By introducing cooperation among individuals working within a firm, this paper constructs a model generating a dualistic competitive equilibrium with differentials in wages and job security in an industry with product demand uncertainty. Primary firms offer high job security to promote cooperation and achieve high productivity. Secondary firms merely take advantage of ability to adjust employment. Wage differentials arise because cooperation is more productive among members of the same social group and thus different groups of workers face different labor demand. In contrast to the Arrow-Debreu economy, firms making long-term decisions and those making short-term decisions coexist in the equilibrium.     

Unionism and the dispersion of wages among blue-collar women

Data from the 1973–1975 Current Population Surveys is used to examine the impact of unionism on wage dispersion among blue-collar women. The methodology employed in Freeman (1980) is used as a point of departure for this investigation, which disaggregates the results by sex. The study presents evidence that indicates the impact of unionism on the dispersion of earnings differs across sex. The study also examines whether the differential results occur because of differences in the types of jobs held by nonunion men relative to nonunion women and finds support for this hypothesis. The paper has benefited from discussions with and comments from Eric Bond, Barry Hirsch, Karen Pasborg, and an anonymous referee.     

Job security, unionisation, wages and privatisation: a case study in the Turkish cement industry

In the recent years, many studies have dealt with the economic aspects of privatisation both in developing and developed countries. There is, however, a lack of systematic enquiries into employees’ opinions about privatisation, albeit a number of claims have been advanced about the impact of privatisation upon the political attitudes of employees, and about its effects on employment relations. This article aims to contribute to filling this gap by analysing employees’ attitudes towards the effects of privatisation on their job security, unionisation and wages. The study is based upon field-work conducted in the Turkish cement industry in 1996, and the research covers 150 employees. The findings of the research hardly support the idea put forward by the new right that privatisation would undermine the class contradictions between bourgeoisie and proletariat (Heller, 1984; Vickers and Yarrow, 1988).     

Relating labor productivity to wages in service sectors: a long-run approach

This article introduces a systematic approach to the study of unbalanced productivity growth that can be readily applied across any sectors with unbalanced productivity growth. This approach is based on a cointegrating relationship between sectoral productivity and real sectoral compensation. Strong support for this relationship is found in U.S. service sectors from 1947 to 1993. The results show that Baumol's theory of'cost disease'due to unbalanced productivity growth has been a widespread phenomenon and that the relationship between labor productivity and real compensation is well represented with general forms of the production function.     

The employment and wages of legalized immigrants

"This article analyzes the employment and wages of recently legalized immigrants [in the United States] using the Legalization Application Processing System (LAPS) file, an administrative file based on the individual records of amnesty applicants, and draws comparisons with a sample of the foreign-born population from the Current Population Surveys of 1983, 1986 and 1988. Compared to the total foreign-born population, the legalized immigrant population differs in four important respects that bear on labor market position: 1) a younger age structure; 2) a less balanced gender composition; 3) a greater representation of Latin Americans; and 4) few years of U.S. residence. LAPS data reveal high rates of labor force participation among legalized immigrants, which exceeded the rates of the foreign-born population by approximately 5 and 17 percent for men and women, respectively."     

Competition of politicians for wages and office

We examine a model in which two politicians compete for office and for wages. Their remunerations are either set by the public or are offered competitively by the candidates during campaigns. Our main finding shows that competitive wage offers by candidates lead to lower social welfare than remunerations predetermined by the public, since wage competition may lead to higher wage costs or to the election of less competent candidates. I would like to thank Alexandrina Braack, Peter Bernholz, Robert Dur, Amihai Glazer, Volker Hahn, Stephan Imhof, Verena Liessem, Christian Schultz, Otto H. Swank, conference participants at the annual meeting of the Public Choice Society 2000, the annual conference of the Royal Economic Society in Durham 2001, the annual congress of the European Economic Association 2001 in Lausanne, seminar participants in Heidelberg and at the University of California, Irvine, and two referees for their valuable suggestions and comments.     

Competition of politicians for wages and office

We examine a model in which two politicians compete for office and for wages. Their remunerations are either set by the public or are offered competitively by the candidates during campaigns. Our main finding shows that competitive wage offers by candidates lead to lower social welfare than remunerations predetermined by the public, since wage competition may lead to higher wage costs or to the election of less competent candidates. I would like to thank Alexandrina Braack, Peter Bernholz, Robert Dur, Amihai Glazer, Volker Hahn, Stephan Imhof, Verena Liessem, Christian Schultz, Otto H. Swank, conference participants at the annual meeting of the Public Choice Society 2000, the annual conference of the Royal Economic Society in Durham 2001, the annual congress of the European Economic Association 2001 in Lausanne, seminar participants in Heidelberg and at the University of California, Irvine, and two referees for their valuable suggestions and comments. A previous version of this article can be found under doi:.     

On the Average Minimum Size of a Manipulating Coalition

We study the asymptotic average minimum manipulating coalition size as a characteristic of quality of a voting rule and show its serious drawback. We suggest using the asymptotic average threshold coalition size instead. We prove that, in large electorates, the asymptotic average threshold coalition size is maximised among all scoring rules by the Borda rule when the number m of alternatives is 3 or 4, and by -approval voting when m ≥ 5.     

Work discipline and lay-offs: Is there a trade-off between wages and job security?

It is usually argued that workers can trade off wages and job security, an argument with limited empirical support. This article develops a worker discipline model where work effort involves a moral hazard problem, such that firms set wages and monitoring levels to reduce potential shirking. It is shown that the efficacy of such incentives might be reduced by an increased probability of lay-offs, in which case job security and high wages will be positively and not inversely related. The author thanks the following individuals for helpful comments (not always accepted) on various drafts of this paper: Roy Boyd, Satya Das, Gerry Duguay, Herbert Gintis, Donald Katzner, Tong Hun Lee, Richard Perlman, James Rebitzer, G. Richard Meadows, Mark Meitzen, W. Stanley Seibert, and Geoffrey K. Turnbull. He also thanks Donna Bennett of the Social Science Research Facility at UWM for technical assistance.     

Home production and wages: evidence from the American Time Use Survey

Using data from the American Time Use Survey for the years 2003–2006, this paper finds that housework has a negative relation with wages for both women and men. The negative relation between housework time and wages is not likely to arise from omitted working conditions that are correlated with housework, nor from omitted effort. For women, the negative relation between housework and wages appears in most occupations, including professional and managerial occupations. The connection of housework time to the ‘lack of interest’ argument proposed by defendants in class action sex discrimination cases is examined and is not supported by the evidence.