Individual Wages Research Articles

MINIMUM WAGES AND WAGE DISTRIBUTION IN THAILAND

Minimum wage policies were designed to raise the wages of low-skilled workers. In this study, we use data from the Thai Labor Force Survey (2011-2020) to examine the impact of the minimum wage policy on the wage distribution using a quantile regression model corrected for sample selection with a copula. We find that the minimum wage has the strongest effect on the lowest quantile and the effect decreases toward the higher quantiles. This confirms the effectiveness of the minimum wage policy in raising the wages of low-income individuals. In addition, there is also a spill-over effect on individuals in higher wage quantiles. The effect of the minimum wage estimated by our model is smaller compared to the standard quantile regression. This suggests that without correcting for sampling bias, the estimated effect of the minimum wage leads to an upward bias.

Short-term effects of the COVID-19 pandemic on employment and income of the Russian population: which groups were affected the most?

The paper analyzes short-term factors of job loss, wage reduction and factors of household income reduction in Russia in the context of the coronavirus crisis. Panel data of the Russian Longitudinal Monitoring Survey - Higher School of Economics (RLMS-HSE) served as empirical basis of the study. According to the study results, the highest risks of job loss are registered among females, young employees, unskilled workers, workers without professional education, and workers with low wages. However, almost the only factor of wage reduction (in case of retained employment) is employment in the most affected industries. Household income prior to the pandemic is the key determinant of household income reduction – the higher the level of material wellbeing, the higher the risk of income reduction. Increased probability of income reduction is also reported for families with children. The study has confirmed the hypothesis about negative impact of vulnerable employment on employment and wages of individuals, as well as household income.

Labor market tightness and individual wage growth: evidence from Germany

It is often stated that certain occupations in Germany, because of “Demographic Change “, are dwindling, implying a labor shortage. We investigate the 10-year wage growth of young employees entering the labor market in different occupations. Our findings suggest that regional labor market tightness in occupational fields significantly explains wage growth. Individuals who start their careers in a tighter labor market enjoy higher wage growth than workers in more relaxed labor markets. We identify some occupational fields where the effect is especially strong, such as several engineering groups, IT occupations, technicians, and some commercial occupations. Interestingly, health-care occupations reveal a reverse relation.

Socio-Economic Status Differences in Changing Affordability of Tobacco Products from 2011-2012 to 2018-2019 in India.

We studied the change in affordability of tobacco products, an important determinant of tobacco use, across the different socio-economic status (SES) in India. We calculated affordability in the form of relative income price (RIP-cost of tobacco products relative to income) for the years 2011-2012 and 2018-2019 using three different denominators, that is per capita gross domestic product (GDP) and net state domestic product at national and state levels, respectively; monthly per capita consumer expenditure (MPCE); and individual wages. We investigated RIP for cigarettes, bidis, and smokeless tobacco (SLT) across different SES groups (caste groups, type of employment, and education). RIP increased marginally for cigarettes, bidis and remained almost constant for SLT across casual workers. However, when RIP was adjusted with SES variables, there was no significant change (p > .05) in the affordability of products for casual workers in the year 2018-2019 as compared to 2011-2012. For regular workers, cigarettes and bidis became marginally less affordable (β < 1), whereas affordability remained constant for SLT. All products became more affordable for backward caste groups within regular workers. When RIP was calculated using MPCE all tobacco products became less affordable in the year 2018-2019. However, after adjusting for SES variables SLT reported no change in affordability. There was a marginal increase in affordability for all products when RIP was calculated with GDP. Although implementation of GST has increased the price of tobacco products, it is still not sufficient to reduce the affordability of tobacco products, particularly SLT and especially for the lower SES group. Tobacco use and economic disadvantage conditions of the population are intricately linked. Affordability of tobacco products is influenced by socio-economic indicators like age, sex, income, education, etc. The literature measuring the affordability of tobacco products across different SES groups is scant in India. Additionally, existing literature measures affordability of tobacco products based on per capita GDP as a proxy for income. This is the first study in Indian context to report the change in affordability of tobacco products across different SES groups after adjusting for SES indicators, using individual-level income data. We have calculated the change in affordability of tobacco products between the year 2011-2012 and 2018-2019 using GDP, household income, and individual wages as a proxy for income.

The interindustry wage differentials by sector in China: What is the role of union density?

Although how union density affects interindustry wage differentials has long been discussed, there is a paucity of empirical research relevant to China. The trade-union system in China has been criticized for a long time because the Chinese Communist Party can influence union density and indirectly affect interindustry wage differentials through non-market mechanisms, such as administrative monopolies. This study explores the impact of union density on interindustry wage differentials in the context of administrative monopolies. The research takes a two-stage estimation approach after scrupulously integrating and conforming more than 40,000 individual data from the Urban Household Survey and various yearbooks from years 2004, 2008, and 2013. In the first stage, the individual wages are regressed with industry-sector dummies to obtain the wage-differential coefficients. Furthermore, union density is considered as a core variable to create regressions to the interindustry wage differential coefficients obtained in the first stage using administrative monopolies and labor safeguards as instrumental variables. It is found that although the union density was expected to increase wage differentials in industries, its influence diminished in 3 years under study. Administrative monopolies can indirectly affect wage differentials through union density. The support to grassroots unions in non-administrative monopolies industries and the opening up of industry to the private sector will help to overcome this dilemma.

How Are Patented AI, Software and Robot Technologies Related to Wage Changes in the United States?

We analyze the relationships of three different types of patented technologies, namely artificial intelligence, software and industrial robots, with individual-level wage changes in the United States from 2011 to 2021. The aim of the study is to investigate if the availability of AI technologies is associated with increases or decreases in individual workers' wages and how this association compares to previous innovations related to software and industrial robots. Our analysis is based on available indicators extracted from the text of patents to measure the exposure of occupations to these three types of technologies. We combine data on individual wages for the United States with the new technology measures and regress individual annual wage changes on these measures controlling for a variety of other factors. Our results indicate that innovations in software and industrial robots are associated with wage decreases, possibly indicating a large displacement effect of these technologies on human labor. On the contrary, for innovations in AI, we find wage increases, which may indicate that productivity effects and effects coming from the creation of new human tasks are larger than displacement effects of AI. AI exposure is associated with positive wage changes in services, whereas exposure to robots is associated with negative wage changes in manufacturing. The relationship of the AI exposure measure with wage increases has become stronger in 2016–2021 in comparison to the 5 years before.JEL Classification: J24, J31, O33.

Are deprivation-specific cancer survival patterns similar according to individual-based and area-based measures? A cohort study of patients diagnosed with five malignancies in England and Wales, 2008–2016

ObjectiveTo investigate if measured inequalities in cancer survival differ when using individual-based (‘person’) compared with area-based (‘place’) measures of deprivation for three socioeconomic dimensions: income, deprivation and occupation.DesignCohort study.SettingData from...

Rethinking regional wage determinants: regional market potential versus trade partners’ potential

ABSTRACT This paper reconsiders the relationship between individual wages and regional market access. We focus on Poland – a country that has experienced profound changes in market accessibility over the last two decades, first as a consequence of European Union accession in 2004, and second as a result of the unprecedented development of the major road transport network. Using data over the period 2000–15 we find that the positive relationship between wages and regional market access disappears after 2004. At the same time, individual wages begin to be positively correlated with the market potential of Poland’s main trading partners.

Wage Risk and the Skill Premium

Abstract The skill premium has increased significantly in the United States in the last five decades. During the same period, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation, which increases the skill premium due to capital-skill complementarity. Using a quantitative macroeconomic model, we find that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust across a variety of model specifications.

Import competition in the manufacturing sector in Peru: Its impact on informality and wages

This paper studies the impact of import competition from China on labor outcomes in the Peruvian manufacturing sector in 2001–2010. Using data from the Peruvian Household Survey, we use a two-step procedure to evaluate the impact of the surge in imports from China on the likelihood of having an informal job and on wages in both the formal and informal sectors. On the first step, the results suggest that greater import competition increased—albeit weakly—the likelihood of having an informal job for workers with elementary education. On the second step, we find that the surge in imports from China was detrimental to wages of the least educated individuals with informal jobs—with no education and elementary education—, although we also find that this result is mostly driven by the presence of self-employed among informal workers. We also observe a wage increase among workers with formal jobs and elementary and high school education. These results are robust to the inclusion of different exclusion restrictions and even after accounting for industry-level growth which was strong during the period studied.

Optimal redistributive policies by publicly provided inputs and income taxation

AbstractGovernments redistribute income through taxes, transfers, and public services. Using three key statistics, we characterize the conditions under which nonlinear income taxation is optimally combined with a publicly provided input in economies where individual wages are driven by households' exogenous abilities and unobservable input investments. A universal scheme in which all households opt for a large and uniform level of publicly provided input optimally compounds with nonlinear income taxation if input and ability are substitutes in households' earnings. Calibrating our model with US data, we find that this scheme represents the optimal policy regime for a wide spectrum of plausible parameter values.

Education level and disability type as causes for the discernible wage divergence for people with disabilities

In Cyprus, disabled people face many difficulties in accessing employment, as more than 10,000 people with appropriate qualifications remain unemployed. According to worldwide estimates, disabled people receive lower wages compared to individuals without disabilities due to being either unemployed or underemployed more frequently. Using other countries with similar cultural and legal environments, this study examined the correlation between disabled people's wage levels and their disability types and educational levels. In order to gather primary data used for this correlational and regression study, 117 online questionnaire responses were collected from 6,000 registered members with physical disabilities in related organizations in Cyprus. The study examined the effect of education and disability type, on wages for disabled individuals in Cyprus using a cross-sectional survey utilizing judgment sampling (purposive sampling), in order to identify possible relationships between them, and hence see if education and disability cause a lower wage. According to the results, the two variables are not significantly associated with disability wages in Cyprus. These coefficients differ, however, between the variables 'education' and 'type of disability,' showing that in Cyprus education predicts the wage levels for disabled workers, as it is for other groups.

Categorical Distinctions and Claims-Making: Opportunity, Agency, and Returns from Wage Negotiations

In this article, we examine wage negotiations as a specific instance of claims-making, predicting that the capacity to make a claim is first a function of the position, rather than the person, and that lower-status actors—women, migrants, fixed-term, part-time, and unskilled workers—are all more likely to be in positions where negotiation is not possible. At the same time, subordinate-status actors may be less likely to make claims even where negotiation is possible, and when they do make wage claims they may receive lower or no returns to negotiation. Analyses of wage negotiations by more than 2,400 German employees largely confirm these theoretical expectations, although the patterns of opportunity, agency, and economic returns vary by categorical status. All low-status actors are more likely to be in jobs where negotiation is not possible. Women, people in lower-class jobs, and people with temporary contracts are less likely to negotiate even when given the opportunity. Regarding returns, agency in wage claims does not seem to improve the wages of women, migrants, or working-class individuals. The advice to “lean-in” will not substantially lower wage inequalities for everyone, although men who lean in do benefit relative to men who do not.

Associations between childhood maltreatment and educational, health and economic outcomes among middle-aged Chinese: The moderating role of relative poverty

BackgroundDespite substantial evidence in developed countries showing that child maltreatment can lead to serious life-long consequences, relatively few studies so far have examined the associations between childhood maltreatment and adulthood outcomes in developing countries, such as China. It also remains unclear as to the impact of relative poverty on the long-term development of maltreated children. ObjectiveThis study aims to investigate the associations between childhood maltreatment and educational, health, and economic outcomes among middle-aged Chinese, as well as explore the moderating effects of relative poverty. Participants and settingThe participants of this study were the middle-aged respondents (aged 45 to 59) in the 2011, 2013, and 2015 China Health and Retirement Longitudinal Studies (CHARLS) and the CHARLS Life History Survey (N = 24,114). MethodsPhysical abuse and emotional neglect were measured to investigate childhood maltreatment. Subjective and objective indicators were used to examine relative poverty. A broad range of midlife outcomes were explored, including educational attainment, physical health, mental health, cognitive functions, labor force participation, wage expenditure, and financial strain. Data analyses were conducted using fixed effects model for panel data and a propensity score matching approach. ResultsChildhood physical abuse and emotional neglect were both significantly associated with lower levels of midlife educational attainment, cognitive functions, individual wages, and household expenditures, as well as higher rates of chronic diseases, depressive symptoms, poverty, and welfare involvement. Childhood physical abuse also predicted higher risks of difficulty performing the activities of daily living (ADL), unemployment, and fewer work hours. Early-life exposure to relative poverty was linked to a greater likelihood of childhood maltreatment and mid-life adversities. It further aggravated the negative impacts of childhood maltreatment on middle-age outcomes. ConclusionChild maltreatment had a profound effect on long-term child development and midlife outcomes in Chinese contexts. Relative poverty in early life was a moderator that exacerbated the outcomes associated with childhood maltreatment.

Do employers discriminate against obese employees? Evidence from individuals who are simultaneously self-employed and working for an employer

We test whether the lower wages of obese employees result from employer discrimination using a novel empirical strategy. Using data from two nationally representative surveys from the US, we analyze the wages of individuals who are simultaneously self-employed and working for an employer. While lower productivity and customer discrimination against obese individuals may affect wages in both types of jobs, employer discrimination cannot affect the wages of solo entrepreneurs. Our estimates suggest that, even after controlling for productivity (proxied by their concurrent wage in self-employment), white women (men) who are obese earn 11.4% (9.7%) less than their healthy-weight counterparts in their paid employment jobs. We also find that white women (but not men) who are overweight earn 9.1% less than their healthy-weight counterparts. We do not find any evidence of significant bodyweight discrimination among black and Hispanic workers. These results suggest that white workers, especially white women, are likely to face bodyweight discrimination in their workplaces. We report the results for a series of robustness checks to rule out alternative explanations, such as reverse causality, differences in healthcare costs, and occupation-specific customer discrimination.

Decentralization of wage determination: Evidence from a national teacher reform

This paper presents new evidence on the labor market effects of wage decentralization, exploiting a Swedish reform that replaced the fixed national pay scale for teachers with individual wage bargaining. The paper provides three sets of results. First, I show that the reform significantly changed the wage structure of teachers. Second, I demonstrate that these wage changes did not impact teacher retention, recruitment, or composition, and did not affect student outcomes. Finally, I provide suggestive evidence of a wage spillover effect to substitute occupations. I propose that the suggestive spillover effect helps explain the null results on teacher and student outcomes.

Monopsony in Movers

We provide new estimates of the separations elasticity, a proximate determinant of the labor supply facing a firm with respect to hourly wage, using matched Oregon employer-employee data. Existing estimates using individual wage variation may be biased by mismeasured wages and use of wage variation unrelated to firm choices. We estimate the impact of the firm component of wage variation on separations using both firm fixed effects estimated from a wage equation as well as a matched IV event study around employment transitions between firms. Separations are a declining function of firm wage policies: we find that the implied firm-level labor supply elasticities generated are around 4, consistent with recent experimental and quasi-experimental evidence, and that they are approximately 3 to 4 times larger that those using individual wages. Further, we find lower separations elasticities for low wage workers, high turnover sectors, and periods of economic downturn but with little heterogeneity by urban status or labor market concentration. We conclude that monopsonistic competition is pervasive, and largely independent of forces driving classical monopsony.

Empirical process results for exchangeable arrays

Exchangeable arrays are natural tools to model common forms of dependence between units of a sample. Jointly exchangeable arrays are well suited to dyadic data, where observed random variables are indexed by two units from the same population. Examples include trade flows between countries or relationships in a network. Separately exchangeable arrays are well suited to multiway clustering, where units sharing the same cluster (e.g. geographical areas or sectors of activity when considering individual wages) may be dependent in an unrestricted way. We prove uniform laws of large numbers and central limit theorems for such exchangeable arrays. We obtain these results under the same moment restrictions and conditions on the class of functions as those typically assumed with i.i.d. data. We also show the convergence of bootstrap processes adapted to such arrays.

Heterogeneity and wage inequalities over the life cycle

Using data on French male wage workers observed over 30 years, we estimate by random and fixed effect methods a wage equation with pervasive heterogeneity. Individual wage profiles are derived from a human capital investment model and described by a level, a slope and a curvature. Among others, our empirical application delivers original results on issues like the Mincer dip, and the time-varying correlations between wage growth and levels, or between initial wages and growth. Static and long-run inequality indices can easily be compared and decomposed into their multidimensional components.

Model Averaging for Nonlinear Regression Models

This article considers the problem of model averaging for regression models that can be nonlinear in their parameters and variables. We consider a nonlinear model averaging (NMA) framework and propose a weight-choosing criterion, the nonlinear information criterion (NIC). We show that up to a constant, NIC is an asymptotically unbiased estimator of the risk function under nonlinear settings with some mild assumptions. We also prove the optimality of NIC and show the convergence of the model averaging weights. Monte Carlo experiments reveal that NMA leads to relatively lower risks compared with alternative model selection and model averaging methods in most situations. Finally, we apply the NMA method to predicting the individual wage, where our approach leads to the lowest prediction errors in most cases.