Wage Changes Research Articles

Two birds, one stone: minimum wage and child labor

PurposeThis paper investigates the impact of quasi-exogenous and substantial increases in the minimum wage on child labor outcomes in Türkiye. The study aims to provide empirical evidence on how minimum wage policies affect child labor outcomes in a developing country context, with a focus on gender and age differences. It seeks to understand whether minimum wage increases lead to a reduction in child labor and whether the impact is different for various demographic groups.Design/methodology/approachThe research employs a difference-in-differences methodology using data from the 2012 and 2019 Child Labor Force Survey in Türkiye. The treatment group consists of children from households with minimum wage earners, while the control group comprises children from other households. Various labor market outcomes are analyzed, and robustness checks are performed.FindingsOur findings indicate that while the overall effect of minimum wage increases on child labor is statistically insignificant, there are notable heterogeneous impacts across different demographic groups and employment sectors. Specifically, we observe a significant reduction in the employment probability of girls under the age of 15 and unpaid family workers. Additionally, the likelihood of younger children being wage earners decreases, and the minimum wage increase reduces employment in the agriculture and services sectors for certain subgroups. The impact is also more limited for children in single-adult-worker households.Social implicationsThese results underscore the varying effects of minimum wage policies on child labor and highlight the importance of considering demographic and sectoral differences in policy formulation. Policymakers should complement such policies with income-generating programs and targeted education initiatives to address child labor issues more comprehensively and sustainably.Originality/valueThis study fills a critical gap in the limited international literature on the causal effects of minimum wage policies on child labor incidence. One notable exception, Menon and van der Meulen Rodgers (2018) have explored the impact of minimum wage on child labor in India using regional variation, our study uniquely analyzes the effects at the household level in Türkiye. This approach provides valuable insights into how minimum wage changes affect child labor outcomes in a developing economy context with a high prevalence of minimum wage earners. It also contributes to the broader economic understanding of child labor and household income dynamics.

Optimizing Road Pavement Projects Through Earned Value Concepts

Every construction project faces constraints of cost, schedule, and quality that must be managed to achieve the desired objectives. This research aims to control the aspects of time and cost in construction projects by applying the Earned Value Concept and Crash Program methods. The subject of the study is the Preservation of Roads and Bridges project in Bireuen City - BTS, Lhokseumawe/Aceh Utara, Krueng Mane Buket Rata, SP. Krueng Geukeueh - PEL. Krueng Geukeueh (PEL. Lhokseumawe). The data analyzed includes the Budget Plan (RAB), project schedule, and reports on planned and actual work. This data is processed into three main indicators: BCWS, BCWP, and ACWP, which are then analyzed through Schedule Variance (SV), Cost Variance (CV), Schedule Performance Index (SPI), and Cost Performance Index (CPI). The analysis results show that during weeks 22 to 23, the project had a positive Schedule Variance (SV) (0), which then turned negative during weeks 24 to 28, with an average Schedule Performance Index (SPI) of 1.0096, indicating that project execution was ahead of schedule. Meanwhile, the Cost Variance (CV) was positive throughout the project, and the average Cost Performance Index (CPI) was 1.2118, indicating that actual costs did not exceed the budget. The application of the Crash Program method resulted in changes in heavy equipment rental costs and worker wages, from IDR 1,440,469,946.99 over 50 days to IDR 1,853,072,988.06 over 25 days, with a cost increase of IDR 412,603,041.07 and an acceleration ratio of 1.29. This research demonstrates that the Earned Value Concept and Crash Program methods are effective in controlling time and cost in construction projects, thereby helping to achieve better efficiency in project management.

Increasing expenditures on home- and community-based services: Do home care workers benefit?

To examine the association of Medicaid home- and community-based services (HCBS) expenditures on the home care workforce. We use two national, secondary data sources from 2008 to 2019: state-level Medicaid HCBS expenditures and the American Community Survey, in which we identify direct care workers in the home (i.e., home care workers), defined as nursing, psychiatric, and home health aides or personal care aides working in home health care services, individual and family services, and private households. Our key explanatory variable is HCBS expenditures per state per year. To estimate the association between changes in Medicaid HCBS expenditures and the workforce size, hourly wages and hours worked, we use negative binomial, linear, and generalized ordered logit regression, respectively. All models include demographic and socioeconomic characteristics, the number of potential HCBS beneficiaries (individuals with a disability and income under the federal maximum income eligibility limits), indicators for minimum wage and/or overtime protections for direct care workers, wage pass-through policies, and state and year fixed effects. We exclude states with incomplete reporting of expenditures. States' HCBS expenditures increased between 2008 and 2019 after adjusting for inflation and the number of potential HCBS beneficiaries. Yet, home care workers' wages remained stagnant at $11-12/h. We find no association between changes in Medicaid HCBS expenditures and wages. For every additional $1 million in Medicaid HCBS expenditures, the expected number of workers increases by 1.2 and the probability of working overtime increased (0.0015% points; p < 0.05). Results are largely robust under multiple sensitivity analyses. We find no evidence of a statistically significant relationship between changes in state-level changes in Medicaid HCBS expenditures and worker wages but do find a significant, but small, association with hours worked and workforce size.

Unintended workplace safety consequences of minimum wages

We investigate the unintended impact of minimum wage increases on workplace safety. Using establishment-level data from the United States and a cohort-based stacked difference-in-differences design, we find that large increases in minimum wages have significant adverse effects on workplace safety. Our findings indicate that, on average, a large minimum wage increase results in a 4.6 percent increase in the total case rate. Event study estimates show that this adverse effect persists in the medium run. Furthermore, we find a more salient effect for firms more likely to be financially constrained or subject to a higher labor market rigidity in firing workers. We provide suggestive evidence that small minimum wage increases might reduce injury rates, highlighting the potential heterogeneity in the impact of minimum wage changes. We do not find evidence that capital-labor substitution could be behind the findings.

Minimum or Living Wage? Framing Effects on Preferences and Expectations

ABSTRACTLiving wage campaigns are widely studied, yet less is known about how the frame differs from the minimum wage regarding public opinion and preferences. Such framing effects hold policy implications, as in 2016, UK Government changed the name of the regulatory wage floor to a living wage, concurrent with calls for welfare benefits cuts. This study explores how using the frame of ‘living’ rather than ‘minimum’ wage changes public socioeconomic expectations and preferences, and examines how a proposed wage increase, ranging from 50p to £6, comparatively influences public support for welfare spending. Methodologically, a sample from the United Kingdom's general population was recruited to participate in a series of online survey experiments. Treatment frames were randomly administered, followed by questions regarding the regulatory wage floor, and socioeconomic and redistributive preferences. Findings suggest introducing the term ‘living wage’ results in (1) higher expected real wages and unemployment effects; (2) raises the preferred wage floor for the United Kingdom and London; (3) greater desire for separate regional wage floors and (4) modest evidence suggesting that a living wage frame increases support for welfare spending. Interestingly, a proposed monetary wage floor increase had a null effect on welfare preferences when calling for a low or modest increase. However, a substantial proposed increase of over 50% led to a sharp reduction in support for benefits spending.

Chinese Minimum Wages and Health

Variation in the timing of changes in the minimum wage across provinces in China is exploited using individual/household longitudinal survey data from 2010 to 2018 to examine potential health effects on working age individuals in households that are likely affected by minimum wages. Minimum wage increases are estimated to improve self-reported health particularly by reducing the incidence of self-reported overall poor health. There is also reasonably strong evidence that they reduce unhappiness and lower dissatisfaction with less robust evidence that they improve mental health and lower recent discomfort. Importantly, there is a type of “dose-response” effect: the estimates indicate no health effects of minimum wage increases on those in households likely not affected financially by the minimum wage with health effects increasing the more likely the household is financially affected. The results are driven by the findings for males.

Crossers in a Segmented Labour Market: Occupational Advancement and Wage Changes from Semi-Skilled and Unskilled Jobs

How the upward mobility chances of workers in unskilled or semi-skilled jobs are shaped by influences at the organisational and sectoral level remains an open question. This article aims to close this research gap by examining the role of internal labour market characteristics in the promotion prospects and wage increases of workers in semi-skilled and unskilled positions. The hypotheses are derived from dual and segmented labour market theory. Regression analyses based on linked-employer-employee-data (LIAB), covering 44,024 workers in semi-skilled and unskilled positions from 2005 to 2010, underline the importance of the internal labour market. A considerable share of workers moved to skilled positions through company change. For the workers who stayed with the company, career advancements were associated with regular training investments and formalised regulations at the company level. Collective agreements, in contrast, were associated with lower chances of upward mobility, but higher wages.

Inflation’s Reduction of the Real Minimum Wage and Unemployment in the USA: 1987 to 2021

&lt;p class="MsoNormal" style="margin-top: 12pt; text-align: justify;"&gt;&lt;span lang="EN-US" style="font-family: 'times new roman', times, serif; font-size: 14pt;"&gt;Hundreds of articles have been written that include empirical estimates of the dis-employment effects of minimum wages; however, many of these articles find statistically insignificant effects, some find significant negative effects, and a few find significant positive effects. Most of these studies use multivariate analyses which can be criticized for omitting key variables. The omitted variables problem ruins all statistics and estimates. This paper uses reiterative truncated projected least squares (RTPLS), a solution to the omitted variables problem, to estimate the percentage increase in unemployment due to a one percent increase in the real minimum wage using monthly data for the 50 states of the USA from 1987 to 2021. RTPLS produces a separate elasticity for every observation where differences in these estimates are due to omitted variables. We argue that RTPLS solves most of the econometric problems that David Neumark identified in his keynote address at a minimum wage conference in Berlin in 2018. We find that the percentage change in the unemployment rate due to a one percent change in the minimum wage ranges between 1.156 and 3.389, that the elasticities for different states tend to move together over time, and that all these elasticities are statistically significant at a 95 percent confidence level.&lt;/span&gt;&lt;/p&gt;

Firm gender labour supply elasticities and sources of separation: evidence from Chile

ABSTRACT We exploit a national administrative dataset to estimate labour supply elasticities at the firm level in Chile, distinguishing for the first time the source of separation (quits versus layoffs), which is crucial as only the former is consistent with employees’ responses to changes in wages. Our results suggest that labour supply elasticities increase by around 18% when all separations (i.e. without identifying its source) are used instead of voluntary separations (i.e. quits). Hence, it transpires that previous literature, which due to data constraints, did not identify the source of separations, presented results which were upward biased, thus overestimating labour market competitiveness. We also find that between firm differences in the gender-specific elasticities are more relevant than within firm differences when voluntary separations are used, a result that should be considered by governments in the design of their gender gap policy agenda.

Forgotten Family: The Influence of Women and Children on the Nexus of Wage Earning and Demographic Change in England, 1260–1860

E. A. Wrigley identified the responsiveness of nuptiality and marital fertility to changes in male wages. Others have theorized the importance of women's decision-making in the timing of marriage, but without much empirical evidence. Combining new long-run series of annual wages for men, for married and single women, and for children with existing demographic data, the influence of women and children's remuneration on household formation is investigated. Women played a key role in the functioning of early modern preventive checks. High wages encouraged single women to delay marriage, reducing marital fertility. This counterbalanced the encouragement of nuptiality stimulated by high male earnings, which helped balance population and economic growth. Juvenile earnings had little influence on family formation, challenging links suggested in accounts of protoindustrialization or proletarianization. Demographic evidence suggests that economic circumstances contributed to the timing of medieval marriage, but poverty more often than prosperity prompted celibacy.

Effects of Automation on Mexican Automotive Employment: 2013–2022

AbstractThis article analyses the empirical relationship between the introduction of automation technology—industrial robots—and the employment and wages of workers in the Mexican automotive industry from 2013 to 2022. Drawing on contemporary debates surrounding automation and technological unemployment, we describe the Mexican labour market’s conditions in the context of trade openness, the technological capabilities of the Mexican automotive industry, and the implementation of industrial robots. We examine this relationship using a random effects panel data model across 14 Mexican states, constructed with values from the Monthly Survey of the Manufacturing Industry (EMIM), the Mexican Ministry of Economy (SE), and the International Federation of Robotics. Our results suggest that adopting industrial robots correlates positively with the employment and salaries of automobile sector workers in the study period. We discuss the implications of changes in jobs and wages in the Mexican automotive industry, highlighting the consequences of technological change.

The financial accelerator, wages, and optimal monetary policy

I study the effects of labor market outcomes on firms' loan demand and credit intermediation. I first show in partial equilibrium that the presence of frictions in the banking sector lowers the capital factor demand elasticity to changes in real wages. This finding helps to connect the substitutability of labor and capital with credit conditions. Second, I use a new Keynesian banking model with an endogenous financial accelerator mechanism to study the role of lower capital factor demand elasticity in the transmission mechanism of monetary policy. Stabilizing nominal wages is close to the optimal monetary policy because it coincides with stabilizing the credit spread, the net worth gap, and the output gap. Inflation stabilization, in turn, imposes a policy trade-off with high welfare costs.

The Potential of Minimum Wage Increases to Reduce Youth Homicide Disparities: Diminishing Returns for Black Youth.

We examine and compare the relationship between minimum wage increases and youth homicide rates in three groups: all youth, White youth only, and Black youth only. Using 2001-2019 mortality data from the National Vital Statistics System (NVSS) for all 50 states and Washington DC, we apply a difference in differences (DD) design to compare the change in youth homicides across states with varying changes in the state-specific minimum wage. With the inclusion of state-specific linear time trends, we find that a $1 increase in minimum wage leads to a significant 4% reduction (RR = 0.96, 95%CI [0.92, 0.99]) in homicides among White youth, but no significant reduction among Black youth (RR = 0.98, 95%CI [0.91, 1.04]). Findings are consistent with research on marginalization-related diminished returns for Black youth. While minimum wage increases are a promising step to reduce youth homicides overall, reducing homicide disparities experienced by Black youth requires additional components. Future research should examine policies with the specific intention to dismantle structural racism.

Gendered wage returns to changes in non-routine job tasks: Evidence from Germany

The labor market exhibits persistent occupational segregation by gender, with women and men performing distinct job tasks within their occupations. Prior research suggests that non-routine job tasks generally lead to higher wages, especially in digitally advancing contexts. However, these findings are largely based on cross-sectional data and neglect gender as a relevant dimension of inequality. We analyze three-wave panel data over nine years from the German National Educational Panel Study to explore the relationship between changes in non-routine job tasks and wages by gender. Given the constrained wage-setting opportunities within German firms, we further examine whether the association between task changes and wages differs for employees with and without job changes, both within and across occupational segments. Our fixed-effect regression analyses reveal gender-specific associations between changes in non-routine job tasks and wage increases. Men benefit from performing more complex and autonomous tasks, with additional gains when an inter-segmental job change accompanies the increase in complex job tasks. Conversely, women do not see wage benefits from enhancements in either complex or autonomous job tasks. These findings underscore the gendered patterns of wage increases associated with advancements in non-routine job tasks, with men profiting intra-individually from shifts towards more non-routine job tasks.

Decomposition of food price inflation in Sri Lanka

The recent upsurge in food prices in Sri Lanka has raised significant concerns, posing a threat to the food and nutritional security of the population. However, the causal factors driving this inflation still need to be better understood. Our study, utilizing Cointegration and Vector Error Correction Models (VECM), investigates the role of supply and demand-side determinants of food inflation. The study identified changes in exchange rate, agricultural wages, fuel prices, money supply, and fertilizer prices as key drivers of food inflation in Sri Lanka. Expansion of the money supply exerted the most substantial influence on food inflation in the long run. At the same time, changes in world market prices were found to be the most influential determinants of food inflation in the short run. Findings underscore the need for a comprehensive strategy that combines supply-side enhancements and demand-side management to control food inflation in Sri Lanka.

Analysis Of The Internal Control System Over Payroll And Wages At Pt.Roda Teknindo Purajayah

The payroll and wage accounting system needs to be carried out control activities to ensure that the implementation of the payroll and wage system runs according to established standards, including at PT. Roda Teknindo Purajaya. This company has implemented internal control over the payroll and wage system. The research objective is to determine the internal control system over the payroll and wage system at PT. Roda Teknindo Purajaya. This research includes comparative descriptive research, which describes the actual characteristics and conditions of a research object by comparing the internal control system over payroll and wages carried out at PT. Roda Teknindo Purajaya with Mulyadi's theory. Data is collected by documentation and interview methods, while data analysis uses comparative analysis. The results showed that the internal control system over payroll and wages at PT. Roda Teknindo Purajaya was in accordance with Mulyadi's theory. First organization, there has been a strict separation of functional responsibilities between the payroll maker function and the finance function. Second, the authorization system, the employee appointment letter is signed by the main director, in order to avoid paying salaries to fictitious employees, as well as changes in employee salaries, both due to changes in rank, changes in salary and wage rates, and additional families are always based on the director's decision letter. In addition to the separation of responsibilities, it is known that all documents used are always authorized by the authorized person. Third, the recording procedure has included salary and wage rates in the attendance card and is checked for accuracy by the bookkeeping department. Fourth, healthy practices, that supervision has been carried out, compared and verified against attendance cards and employee income tax calculations. Thus it can be conveyed that the internal control system over the payroll and wage system at PT. Roda Teknindo Purajaya is in accordance with the theory by Mulyadi.

Wages and Employment in the Netherlands, 2017–2023

This research documents changes in employment and wages in the Netherlands for different types of workers. We compare 2017 to 2023 using regression-adjusted wages to make sure changes in composition of the workforce do not influence our estimates. The research period has been characterised by high labour demand, negative supply shocks, high levels of inflation and economic lockdowns, all of which have contributed to substantial labour-market dynamics. Our findings suggest that employment has been growing by 2 percent in the period 2017–2023, of which 1.8 percent has been due to additional workers finding employment. Women have experienced the largest increase in employment, while the employment of men on temporary contracts has slightly fallen. Wages have been rising for workers at the bottom of the wage distribution. From the median of the wage distribution onwards real gross hourly wages have been fallen. The most likely explanation for rising wages at the bottom is the stepwise increase in minimum wages enforced by new labour-market legislation.

Evidence on quality spillovers from speed enhancing policies in the workplace

AbstractEmpirical researchers often consider a single determinant of labor productivity: speed. This paper asks whether they are neglecting spillovers on output quality. Using high‐frequency data on the speed and quality of strawberry harvesters' work, we offer novel evidence that two distinct workplace policies associated with increases in worker speed lead to similar decreases in the quality of their work. We find that both peer speed and wage changes boost worker speed and lower output quality; 10 percent increases in speed are associated with reductions in quality on the order of 1.5–1.7 percent.

THE IMPACT OF HUMAN RESOURCE MANAGEMENT STRATEGIES ON THE COMPANY PROFITABILITY

The aim of the study is to evaluate the impact of the human resource management (HRM) strategy on the company's profitability. The research employed economic, mathematical, and statistical methods (correlation and regression analysis, Granger causality test, Dickey-Fuller test, Beaver ratio, and ZEW Economic Sentiment Index). The profitability analysis found that the profit increased by approximately 1% (USD 13 billion) in the USA. It was determined that US companies are characterised by a developed HRM strategy and the profitability of companies is increasing. The analysis of the impact of HRM strategy on profit was carried out only for the 20 largest US companies. It was studied that profitability, rates of change in wages and average wages have a positive effect on increasing profits, and the most significant is the effect of labour productivity, which confirms previous conclusions about the positive impact of HRM strategy on the company profitability. The main conclusion is the need for significant investment in employee training, development of specialised training programmes and professional development of employees; material encouragement of personnel; improvement of working conditions and organisation; creating a favourable moral and psychological environment, and providing opportunities for career and scientific development. Further research can be aimed at avoiding the existing limitations of this study and moving to the empirical analysis of individual organisations or their aggregates in developing countries, which also has practical value. The selected evaluation method made it possible to determine the type of HRM strategy and adjust its impact on profitability, which is also an academic novelty.

Winner-takes-all or inclusive growth? The impact of digitalization on inter-firm wage inequality: evidence from China

ABSTRACT While previous research explores the impact of digitalization on individual firms’ performance, its potential to generate wage changes among firms with different characteristics, and subsequent inter-firm wage inequality, is often overlooked. Therefore, using China’s city panel data from 2003 to 2019, we assess the impact of digitalization on inter-firm wage inequality. Our findings reveal that digitalization increases inter-firm wage inequality in China, which is further validated using robustness tests. Mechanism tests reveal that digitalization tends to enhance high-wage firms’ productivity, widening the inter-firm productivity gap and exacerbating wage inequality. Further analysis indicates that digitalization boosts productivity more strongly in state-owned firms and those with higher research and development expenditure or more skilled talent, which typically pay higher wages, further widening the wage gap between firms. Our study supports the winner-takes-all perspective in the digital era, suggesting that the government should actively implement measures to protect vulnerable firms and maintain social equity.