Earnings Of Workers Research Articles

Public Sector Pay in the UK: Quantifying the Impact of the Review Bodies

This paper examines the impact of the UK Public Sector Pay Review Bodies (PRBs) on the pay of their remit groups comparing the real weekly earnings of workers using ASHE and LFS data from 1993 to 2007 for 10 occupational subgroups. Using consecutive difference‐in‐differences we can identify whether the PRBs have had an impact by comparing the differences in pay for different occupations in successive time periods. Our examination of the annual changes in differentials suggest that the PRBs may have had relatively little systematic impact on earnings over and above that observed for comparable individuals working elsewhere in the public sector.

Determinants and Persistence of Benefits from the National Rural Employment Guarantee Scheme – Panel Data Analysis for Rajasthan, India

India’s National Rural Employment Guarantee Scheme (NREGS) has been hailed as one of the country’s most creative social initiatives. Since the program was begun only recently (in 2004–2005) there is a need to assess household access to this program and persistence of benefits to households not just in one year but over time. Using a unique panel data set for 2007–2008 and 2009–2010 for the Indian state of Rajasthan, this paper analyzes the transitions into and out of NREGS. It models the impact of such transitions on earnings of workers as well the determinants of such transitions. To the best of our knowledge this is the first study of this kind. Several policy conclusions are advanced.

Earnings of Immigrant Entrepreneurs and Paid Workers in Canadian Gateway and Non-gateway Metropolises

A growing number of immigrants are living in non-gateway metropolises. In this paper, drawing from the 2006 Canadian census, we explore and compare the earnings of immigrants in Canadian gateway and non-gateway metropolises. We differentiate entrepreneurs and paid workers in the analysis. In addition, we compare white and non-white immigrants in gateway and non-gateway metropolises. We employ an endogenous switching regression model to address the issue of the “selectivity” of immigrants settling in gateway and non-gateway metropolises. Findings show that the earnings of immigrants always are lower in gateway metropolises than in non-gateway metropolises. Separate analyses for entrepreneurs and paid workers show the same pattern. We also find that there is a significant difference in the earnings of white and non-white immigrants in gateway metropolises only, controlling for demographic and socioeconomic background. In addition, recency of arrival and language ability are not related to earnings for those working in non-gateway metropolises. The implications of the findings are discussed.

Buying Loyalty: Theory and Evidence from Physicians

Skilled-services firms often lack full control over their key assets -- the relationships between their workers and clients. This problem can lead to investment holdups that distort labor market equilibria. We study how non-compete agreements (NCAs), which prohibit a worker from leaving a firm and then competing against it, can overcome this control problem. We show theoretically that NCAs reduce investment holdups and increase productive efficiency. These direct effects lead to higher worker earnings, larger returns to tenure, and longer job spells. However, NCAs also reduce the ex post bargaining power of workers, which can alter the structure of contracts. Using new survey data from physicians, we find that physicians with NCAs have contracts with output incentives that are more than twice as strong, they are over 40% more productive, earn 14% higher wages, and have within-job earnings growth that is 21 percentage points higher, despite being of the same average quality as physicians without NCAs. Decomposing earnings growth, we find that NCAs increase returns to both tenure and experience, suggesting that they promote general as well as firm-specific human capital investment. All of the effects increase in magnitude with the enforceability of state NCA laws.

Agglomeration of Knowledge: A Regional Economic Analysis for the German Economy

We investigate the effects of job-specific knowledge for individual labor earnings of workers in the German economy. The results indicate a positive effect for earnings stemming in particular from high-knowledge in the areas of sales and marketing, computers and electronics, mathematics, biology and law and government. Investigating the geographical concentration of employment reveals, for example, that workers with high-knowledge in the field of communication and media are concentrated in just a few places whereas workers with high-knowledge in law and government and administration and management are far more dispersed over the regions. These patterns of geographical localization of employment give evidence for differences in the dissemination of knowledge across peers and customers.

Within-Establishment Wage Inequality and Satisfaction

Abstract The aim of this paper is to provide fresh empirical evidence on the mechanisms through which wage inequality affects worker satisfaction.Theoretically, the wages of others may affect workers’ utility for two main reasons: Workers may derive well-being from their social status (the comparison effect) and/or they may use others’ wages to help predict their own future wage (the information effect). The author tests both hypotheses. To do this, she models individual utility from pay as a function of a workers own wage and the earnings of all other workers within the same establishment, and she estimates the model using matched British employeremployee data. The author assumes incomplete information about others’ wages. She finds that the comparison effect matters. Interestingly, she also provides some evidence on a positive relation between well-being and inequality. Her results are robust to different specifications and different definitions of the reference group.

Transitory shocks and birth weights: Evidence from a blackout in Zanzibar

Do transitory economic shocks affect neonatal outcomes? I show that an unexpected, month-long blackout in Tanzania caused a sharp but temporary drop in work hours and earnings for workers in electricity-dependent jobs. Using records from a maternity ward, I document a reduction in birth weights for children exposed in utero to the blackout, and an increase in the probability of low birth weight. The reduction is correlated with measures of maternal exposure to the blackout. The blackout also increased fertility for teenage and first-time mothers, but selection into pregnancy cannot fully explain the drop in weights.

Personnel Economics Essay: Issues in Human Capital Theory, Training and Earnings of Workers

In this paper the issues from the personnel economics has been investigated. The issues such as training of workers from Becker’s human capital theory and their association with the workers’ productivity. In the second part of the paper the issue of grooming has been investigated in relation with earnings for which there exist and it is presented empirical evidence. In the equation as regressors are also present Mincerian variables: age, marital status and others. Also the four puzzles in the empirical literature about the determinants of earnings has been investigated. And how the empirical literature helps in resolving them.

How Does Accounting for Worker Productivity Affect the Measured Cost-Effectiveness of Lumbar Discectomy?

BackgroundBack pain attributable to lumbar disc herniation is a substantial cause of reduced workplace productivity. Disc herniation surgery is effective in reducing pain and improving function. However, few studies have examined the effects of surgery on worker productivity.Questions/purposesWe wished to determine the effect of disc herniation surgery on workers’ earnings and missed workdays and how accounting for this effect influences the cost-effectiveness of surgery?MethodsRegression models were estimated using data from the National Health Interview Survey to assess the effects of lower back pain caused by disc herniation on earnings and missed workdays. The results were incorporated into Markov models to compare societal costs associated with surgical and nonsurgical treatments for privately insured, working patients. Clinical outcomes and utilities were based on results from the Spine Patient Outcomes Research Trial and additional clinical literature.ResultsWe estimate average annual earnings of $47,619 with surgery and $45,694 with nonsurgical treatment. The increased earnings for patients receiving surgery as compared with nonsurgical treatment is equal to $1925 (95% CI, $1121–$2728). After surgery, we also estimate that workers receiving surgery miss, on average, 3 fewer days per year than if workers had received nonsurgical treatment (95% CI, 2.4–3.7 days). However, these fewer missed work days only partially offset the assumed 20 workdays missed to recover from surgery. More fully accounting for the effects of disc herniation surgery on productivity reduced the cost of surgery per quality-adjusted life year (QALY) from $52,416 to $35,146 using a 4-year time horizon and from $27,359 to $4186 using an 8-year time horizon. According to a sensitivity analysis, the 4-year cost per QALY varies between $27,921 and $49,787 depending on model assumptions.ConclusionsIncreased worker earnings resulting from disc herniation surgery may offset the increased direct medical costs associated with surgery. After accounting for the effects on productivity, disc herniation surgery was found to be a highly cost-effective surgery and may yield net societal savings if the benefits of outpatient and inpatient surgery persist beyond 6 and 12 years, respectively.Level of EvidenceLevel II, economic and decision analysis. See the Instructions for Authors for a complete description of levels of evidence.

Efficient markets, managerial power, and CEO compensation

The escalation in chief executive officer (CEO) pay over recent decades, both in absolute terms and in relation to the earnings of production workers, has generated considerable attention. The pay of top executives has grown noticeably in relation to overall firm profitability. The pay gap between CEOs in the US and those in other developed countries narrowed substantially during the 2000s, making top executive pay an international concern. Researchers have taken positions on both sides of the debate over whether the level of CEO pay is economically justified or is the result of managerial power.

Navigating work disability paradigms and reform in Canada

Objective: We investigate labour-market earnings of workers’ compensation claimants from three distinctly different workers’ compensation insurance support programs for claimants with permanent impairments. These three programs, which existed in Ontario, Canada in different periods over the last 25 years, are the Permanent Disability (PD) program, the Future Economic Loss (FEL) program, and the Loss of Earnings (LOE) program. The nature of benefit determination and the return to work supports provided by three programs are very different. The focus of the study is on evidence of programmatic impact on labour-market earnings recovery trajectories over nine years post injury.Methods: The study included claimants sampled from each of the three programs who sustained a permanent impairment from a work injury. Claimants were identified in a Revenue Canada tax file database known as the Longitudinal Administrative Databank (LAD), which is a longitudinal 20% simple random sample of all Canadian tax filers. Each claimant was matched with similar uninjured controls that were also in the LAD, based on sex, age, labour-market earnings amounts and trajectories in the four years prior to injury, and a propensity score. Statistical modeling analysis was undertaken to compare the labour-market earnings trajectories of claimants relative to their matched controls using data on earnings over the nine years post injury. Analyses focused on sub-strata defined by program, sex, age, permanent impairment level, and pre-injury earnings. A key issue of interest was to determine which program of supports resulted in the best labour-market earnings recovery.Results: Five distinct earnings recovery trajectories were identified. Claimants in various demographic and pre-injury earnings sub-strata from the LOE program cohort had a statistically significant lower probability of the lowest earnings recovery trajectory, and higher probability of the second highest trajectory compared to the PD cohort. Results for the LOE program were similar to the FEL program.Conclusions: Injured workers from the LOE program appear to fare better than claimants from the PD program and similarly to those from the FEL program in terms of labour-market earnings recovery over the nine years post injury. Across all programs, older claimants fare more poorly, and women fare worse than men in terms of labour-market earnings recovery.

Work disability trajectories under three workers’ compensation programs

Objective: We investigate labour-market earnings of workers’ compensation claimants from three distinctly different workers’ compensation insurance support programs for claimants with permanent impairments. These three programs, which existed in Ontario, Canada in different periods over the last 25 years, are the Permanent Disability (PD) program, the Future Economic Loss (FEL) program, and the Loss of Earnings (LOE) program. The nature of benefit determination and the return to work supports provided by three programs are very different. The focus of the study is on evidence of programmatic impact on labour-market earnings recovery trajectories over nine years post injury.Methods: The study included claimants sampled from each of the three programs who sustained a permanent impairment from a work injury. Claimants were identified in a Revenue Canada tax file database known as the Longitudinal Administrative Databank (LAD), which is a longitudinal 20% simple random sample of all Canadian tax filers. Each claimant was matched with similar uninjured controls that were also in the LAD, based on sex, age, labour-market earnings amounts and trajectories in the four years prior to injury, and a propensity score. Statistical modeling analysis was undertaken to compare the labour-market earnings trajectories of claimants relative to their matched controls using data on earnings over the nine years post injury. Analyses focused on sub-strata defined by program, sex, age, permanent impairment level, and pre-injury earnings. A key issue of interest was to determine which program of supports resulted in the best labour-market earnings recovery.Results: Five distinct earnings recovery trajectories were identified. Claimants in various demographic and pre-injury earnings sub-strata from the LOE program cohort had a statistically significant lower probability of the lowest earnings recovery trajectory, and higher probability of the second highest trajectory compared to the PD cohort. Results for the LOE program were similar to the FEL program.Conclusions: Injured workers from the LOE program appear to fare better than claimants from the PD program and similarly to those from the FEL program in terms of labour-market earnings recovery over the nine years post injury. Across all programs, older claimants fare more poorly, and women fare worse than men in terms of labour-market earnings recovery.

Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity

This paper examines how firm investments in technology-based employee monitoring impact both misconduct and productivity. We use unique and detailed theft and sales data from 392 restaurant locations from five chains that adopt a theft monitoring information technology (IT) product. We use difference-in- differences models with staggered adoption dates to estimate the treatment effect of IT monitoring on theft and productivity. We find significant treatment effects in reduced theft and improved productivity that are driven by changed worker behavior rather than worker turnover. These findings are consistent with employees under a pay-for-performance system increasing selling effort to compensate for lost theft income. We find substantial financial benefits to both firms and the legitimate tip- based earnings of workers. Our results suggest that employee misconduct is not solely a function of individual differences in ethics or morality, but can also be influenced by managerial policies that can benefit both firms and employees.

Technological Progress and the Earnings of Older Workers

Economists’ standard model assumes that improvements in total factor productivity (TFP) raise the marginal product of labor for all workers evenly. This paper uses an earnings dynamics regression model to study whether, in practice, older workers benefit less from TFP growth than younger workers. We utilize panel earnings data from the Social Security Administration’s Continuous Work History Sample. The data include workers of all ages, and we use annual figures for 1950-2004. Our first specification relies on BLS measurements of TFP. Our second model develops a new TFP measure using a principal components analysis. We find that although the earnings of younger workers track TFP growth 1-for-1, the earnings of older workers do not: we find, for example, that a 60-year-old male’s earnings grow only 85-90% as fast as TFP. Nevertheless, our analysis implies that in an economy with an aging labor force, gains from experience tend to outweigh older workers’ inability to benefit fully from TFP improvements.

The Caring Majority: Building a Coalition Around Domestic Workers' Rights

The Caring Majority: Building a Coalition Around Domestic Workers' Rights

Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity

This paper examines how firm investments in technology-based employee monitoring impact both misconduct and productivity. We use unique and detailed theft and sales data from 392 restaurant locations from five firms that adopt a theft monitoring information technology (IT) product. We use difference-in-differences models with staggered adoption dates to estimate the treatment effect of IT monitoring on theft and productivity. We find significant treatment effects in reduced theft and improved productivity that appear to be primarily driven by changed worker behavior rather than worker turnover. We examine four mechanisms that may drive this productivity result: economic and cognitive multitasking, fairness-based motivation, and perceived increases of general oversight. The observed productivity results represent substantial financial benefits to both firms and the legitimate tip-based earnings of workers. Our results suggest that employee misconduct is not solely a function of individual differences in ethics or morality, but can also be influenced by managerial policies that can benefit both firms and employees. This paper was accepted by Serguei Netessine, operations management.

The emergence of employer information networks in an experimental labor market

We use laboratory experiments to investigate whether employer networks emerge that facilitate information sharing about the trustworthiness of job candidates. The design allows us to distinguish between mechanisms underlying the relations among employers and those between employers and workers. One type of network we observe is an ‘anonymity network’ where information is anonymously and voluntarily provided as a collective good for all employers to use. The other type is a ‘reciprocity network’ where information sharing is driven by the rewarding of previously given information by the requestor. Recruitment through these networks leads to higher earnings for both employers and workers.

The Effects of U.S. Immigration on the Career Trajectories of Native Workers, 1979–2004

While earlier work primarily examines the point-in-time effects of immigration on the earnings of native workers, this article focuses more broadly on the effects of immigration on native workers’ career trajectories. Cross-classified multilevel growth-curve models are applied to 1979 National Longitudinal Survey of Youth and U.S. Census Bureau data to demonstrate how people adjust to changing local labor market conditions throughout their careers. The key findings indicate that substitution and complementary effects depend on the stage of the worker’s career. At entry into the labor market, high levels of immigration have a positive effect on the career paths of young native-born adults. However, negative contemporaneous effects to natives’ earnings tend to offset positive point-of-entry effects, a finding that suggests job competition among natives is greater in areas of high immigrant population concentration. These results raise questions about whether foreign-born workers need to be in direct competition with natives for there to be substitution effects.

Comparison of MCMC algorithms for the estimation of Tobit model with non-normal error: The case of asymmetric Laplace distribution

The analysis of Tobit model with non-normal error distribution is extended to the case of asymmetric Laplace distribution (ALD). Since the ALD probability density function is known to be continuous but not differentiable, the usual mode-finding algorithms such as maximum likelihood can be difficult and result in the inconsistent parameter estimates. Various Markov chain Monte Carlo algorithms including probability integral transformation, griddy Gibbs, random walk Metropolis–Hastings, and tailored randomized block Metropolis–Hastings (TaRB-MH) are applied and compared. Results from a simulation study suggest that TaRB-MH is the best performing algorithm. Using a survey dataset on the wage earnings of Thai male workers to compare the Tobit model with normal and ALD errors through the model marginal likelihood and deviance information criterion, the results reveal that the model with the ALD error is preferred.

Why Do Programmers Earn More in Houston than Hyderabad? Evidence from Randomized Processing of US Visas

Why do workers earn so much more in the United States than in India? This study compares the earnings of workers in the two countries in a unique setting. The product is perfectly tradable (software), technology differences are nil (they are members of the same work team), and the workers are identical in expectation (those who enter the United States are chosen by natural randomization). The results suggest that output tradability, technology, and human capital together explain much less than half of the earnings gap. Location itself may have large effects on individual workers' wages and productivity, for reasons poorly understood.