Non-production Workers Research Articles

Comparing Hours per Job in the CPS and the ATUS

The number of hours that people work is a key economic and social indicator. Thus, it is important to know whether household surveys measure hours worked correctly. In earlier studies (Frazis and Stewart 2004, 2007, 2008), we examined how hours worked in the Federal government's main economic household survey, the Current Population Survey (CPS), compare with time-diary data from the American Time Use Survey (ATUS). Most of our previous work concentrated on comparing hours worked per person per week for employed persons (Frazis and Stewart 2004, 2007). In Frazis and Stewart (2008), we compared hours worked per job for a particular class of jobs in an attempt to replicate the Bureau of Labor Statistics (BLS) establishment survey, the Current Employment Statistics (CES) survey. In this article, we compare weekly hours worked per job for all jobs in the ATUS and the CPS. Hours worked per job are of interest for a variety of reasons. Studies of hourly wages are usually restricted to main jobs because many surveys do not collect earnings data for second jobs. Official productivity measures mainly use data from the CES (which are per-job estimates), but for jobs not covered by the CES?supervisors, nonproduction workers, and the self employed?productivity measures use data from the CPS.

Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia

We use a panel of manufacturing plants from Colombia to analyze how the rise in payroll tax rates over the 1980s and 1990s affected the labor market. Our estimates indicate that formal wages fall by between 1.4% and 2.3% as a result of a 10% rise in payroll taxes. This “less‐than‐full shifting” is likely to be the result of weak linkages between benefits and taxes and the presence of downward wage rigidities in Colombia. Because the costs of taxation are only partly shifted from employers to employees, employment also falls. Our results indicate that a 10% increase in payroll taxes lowered formal employment by between 4% and 5%. In addition, we find some evidence of less shifting and larger disemployment effects for production than for nonproduction workers. These results suggest that policies aimed at boosting the relative demand of less skilled workers by reducing social security taxes may be effective in Latin American countries, where minimum wages bind and benefits are often not directly linked to contributions.

Occupational structures across 25 EU countries: the importance of industry structure and technology in old and new EU countries

This article analyzes the occupational structure of 25 European Union countries during the period 2000–2004. Shift-share analyses are used to decompose cross-country differences in occupational structure into within sector and between sectors effects. The static analysis for 2004 shows that the new member countries employ a lower share of skilled workers because their industry structure is biased towards less skill-intensive industries and because they use fewer skills within industries. The differences in the shares of (high-skilled) non-production workers are dominated by the between (industrial) effect. In contrast, the dynamic analysis of 2000–2004 showed that changes in the share of high-skilled non-production workers are mostly driven by within sector changes, which are probably related to skill-biased technological change. Similar trends in the countries’ within effects support the catch-up of the new member countries’ skills demand, while the structural developments that could equalize the industry mix of the new and old member countries are related to increased domestic demand and will probably take time.

Investment-specific technological change and labor composition: Evidence from the U.S. manufacturing

This paper examines the impact of investment-specific technological change on labor composition in U.S. manufacturing industries from 1974 to 1994. I show that investment-specific technological change increases the relative demand of non-production workers to production workers, while TFP growth does not change labor composition. Moreover, I find that the demand of skilled labor is stronger in the durable goods sector whereas the deskilling effect is stronger in the non-durable goods sector.

Wage Dispersion in Finland: Searching for Human Capital

In Finland, shifts in compensation have been of a kind comparable to those in the United States, similar but with a moderate, increasing wage variance between plants, an increasing gap between average non-productive- and productive-worker wages, and an increasing share of non-production workers. In the boom period of 1995- 1998 the education premium rose. Despite the rise in individual heterogeneity, there has been no major increase in wage dispersion. The entire rise in wage dispersion has taken place between plants, while the education premium dispersion has risen mainly within plants. At the same time, the distribution of capital and Research and Development (R&D) investment across firms has worked in the direction of mitigating wage inequality.

Firm Size, Productivity, and Manager Wages: A Job Assignment Approach

Ability of managers and other nonproduction professionals is key for the productivity of firms. Hence, the assignment of heterogeneous nonproduction workers across firms determines the distribution of productivity. In turn, the transmission of productivity differences into profit differences -- resulting from product market competition -- determines firms' willingness to pay for higher managerial skills. This paper explores the equilibrium assignment of nonproduction workers across ex ante identical firms which results from this interaction between product market and the market for nonproduction skills. The analysis suggests that, typically, large and productive firms coexist with small, low-productivity firms. Consistent with empirical evidence, a skewed distribution of firm size tends to arise. Moreover, the model predicts a positive relationship of firm size to productivity, manager quality, and manager remuneration. Finally, according to comparative-static analysis, higher intensity of product market competition can account for increases in the compensation at the top of the wage distribution.

Total Factor Productivity Growth in the Sawmill and Wood Preservation Industry in the United States and Canada: A Comparative Study

Abstract By using the Törnqvist-Theil index approach, we analyze trends in total factor productivity (TFP) growth in the United States and Canadian sawmill and wood preservation industries (NAICS 3211) between 1958 and 2003. The results indicate that the TFP grew at an average annual compound rate of 1.11% due to higher growth in aggregate outputs by 1.42% and a smaller growth in aggregate inputs by 0.31% in the United States. In Canada, TFP grew at a smaller average annual compound rate of 0.61% as a result of growth in aggregate outputs and inputs by 3.57% and 2.94%, respectively. Although productivity growth for production worker input was similar in both countries, large gaps in productivity growth existed for nonproduction workers, material, capital, and energy inputs. The gap in TFP growth between the two countries appears to have widened since 1987, primarily due to the differences in capital stock growth. Volatility in lumber prices after 1991 might have also played a role, as the Canadian industry could not adequately respond to changing market situations in the face of uncertainty and trade barriers on softwood lumber exports to the United States.

Globalization and Wage Inequality in the Canadian Manufacturing Sector: A Time Series Analysis

The deteriorating economic position of low-skilled workers relative to high-skilled workers appears to be one harmful effect of the economic globalization that took place during the 1980s and 1990s. In the present paper, we perform a time series investigation for Canada using as the dependent variable the relative wages of production and non-production workers in the manufacturing sector between 1970 and 2001. The independent variables include R&D, union density, immigration, imports from non-OECD countries, foreign direct investment, capital labor ratio, and number of workers in each group. The results show that the R&D expenditures and union density are two important variables in the explanation of the widening wage gap. The effects of immigration, imports, and FDI on wage inequality are found to be moderate.

Skill Dispersion and Firm Productivity: An Analysis with Employer‐Employee Matched Data

We study the relation between workers’ skill dispersion and firm productivity using a unique data set of Italian manufacturing firms with individual records on all their workers. Our measure of skill is the individual worker’s effect from a wage equation. We find that a firm’s productivity is positively related to skill dispersion within occupational status groups (production and nonproduction workers) and negatively related to skill dispersion between these groups. Consistently, most of the overall skill dispersion is within and not between firms. These findings are consistent with some recent hierarchical models of the firms’ organizational structure.

The Influence of Surface Properties of Floor Materials on Ease of Cleaning in Production Animal Houses

The conditions of animal buildings require to some extent different properties of building materials than in other buildings. Floor surfaces are of special interest, since they should stand strong mechanical and chemical stress and they should also, when used in laying areas for animals, be as comfortable as possible to lie on. Besides those properties the floors should be easy to clean. As the production units become bigger the time spend to non-productive work as cleaning should be minimized.Concrete and different kinds of epoxy and polyurethane coatings and compounds with different filling have been tested in laboratory. Friction of dry, wet and dirty surfaces has been measured with different methods. Also the roughness of dry and dirty surfaces has been measured with different methods. The reason for using different measuring methods has been to find out witch of the methods would describe best the desirable properties for floors in animal houses.On concretes friction and roughness and ease of cleaning on the other hand seem to be opposite properties. With plastics the ease of cleaning is also depending on the surface properties. The cleaning time per unit with plastics is much smaller than with concretes even if the measured roughness or friction is on the same level. Wearing affects the ease of cleaning both on concrete and on plastic surfaces.

Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data

We study the relation between workers' skill dispersion and firm productivity using a unique dataset of Italian manufacturing firms from the early eighties to the late nineties with individual records on all their workers. Our measure of skill is the individual worker's effect obtained as a latent variable from a wage equation. Estimates of a generalized CES production function that depends on the skill composition show that a firm's productivity is positively related to skill dispersion within occupational status groups (production and non-production workers) and negatively related to skill dispersion between these groups. Consistently, the variance decomposition shows that most of the overall skill dispersion is within and not between firms. We find no change over time in the share of each component, in contrast with some evidence from other countries, based on less comprehensive data.

Information and communication technology diffusion and skill upgrading in Korean industries

We examine the relationship between the directly observable indicator of new technology, information and communication technology (ICT) investment intensity, and skill upgrading by analyzing changes in employment and wage structure of 25 Korean industrial sectors over the 1993–1999 period. The estimation results indicate the following implications. First, although ICT expenditure and investment have increased sharply since 1993, it appears that ICT investment has begun to be complementarily combined with skilled labor only since 1996. Second, our results support the ‘limited substitution hypothesis’. ICT has substituted low-skilled non-production workers, whereas the increased demand for high-skilled workers is driven by ICT diffusion in the second sub-period. This asymmetric trend between high-skilled and low-skilled non-production workers in Korea reveals significant differences in comparison with the experiences of other OECD countries. Third, the existence of substitutability between ICT diffusion and low-skilled non-production workers in Korea may cast doubt on the appropriateness of the non-production workers' category, a category regarded as a proxy variable of high-skilled workers in most previous studies.

Importance of Substitutability Between Factors of Production in Explaining a Changing Wage Differential

Rising wage differential during the last two decades has become a hot topic of discussion among the academics as well as the politicians and policy makers. One of the popular but debated reasons put forward is skill-biased technological change argument. However, since skill is hard to measure, so is the skill-bias of technological change. Also economists suspect that increasing free trade between countries may have a prominent role to play in this ongoing debate. In this study, a trade model is used to investigate the rising wage differential. The main finding of this paper is that a skill-biased technological change is neither necessary nor sufficient for increasing wage differential in the presence of trade. In other words, even in the presence of a skill-biased technological change we may see a converging wage differential depending on the substitutability between the factors and their distributive shares. To investigate the role of substitutability between the inputs, a translog cost function is used. I use an aggregate dataset on the Indian manufacturing sector for this study. I find complementary relationship between production and non-production workers. Using Hicksian definition of factor bias, I do not find any evidence of a technological change that favors the non-production workers (used as a proxy for skilled workers in many studies). However non-production workers may not always be a good proxy for skilled workers. Also the production process became more capital intensive in the Indian manufacturing industry. Following Griliches' capital-skill complementarity hypothesis, this supports the idea of increasing usage of skill in the production. Thus the evidence of skill-biased technological change is, at best, inconclusive.

Dynamic employment adjustments over business cycles

This paper uses U.S. monthly industrial production employment data between 1964 and 2000 to examine the dynamic labor adjustments of production workers and nonproduction workers in both the short and long-run. The results from the short-run analysis show that the dynamic adjustment of production workers is consistent with business cycles. However, the adjustment of nonproduction workers is relatively fixed, lags behind the shocks over business cycle changes, and exhibits the quasi-fixed factor property. In the long-run, we found that nonproduction workers and production workers are cointegrated indicating that the two series are in long-run equilibrium.

The Last American Shoe Manufacturers: Decreasing Productivity and Increasing Profits in the Shift from Piece Rates to Continuous Flow Production*

This study examines the economic effects of changes in a group of managerial policies, a key element of which was the switch from piece rate to time rate modes of compensation, in one of the last remaining firms in the U.S. shoe industry in the 1990s. The firm, which we call “Big Foot” (BF), entered the 1990s using a set of human resource policies that included piece rates to motivate workers, which induced relatively high productivity. But, faced with severe foreign competition, it switched to time rates and associated managerial policies, which produced higher profits despite lowering productivity. The reason profits increased is that time rate‐related labor management policies reduced labor and other costs by enough to offset a fall in productivity. Data for shoe manufacturing from the Longitudinal Research Data (LRD) files of the U.S. Census show, more generally, that establishments with high labor costs and relatively many nonproduction workers, both of which are associated with management policies that often include piece rates, had lower rates of survival in this period than other establishments. Our finding that labor management policies associated with piece rate compensation can raise productivity but lower profitability is consistent with the broad decline of piece rate pay in advanced economies.

Advanced Joining Techniques in European Shipbuilding

Joining processes are an important key factor for the competitiveness of European shipbuilders. They not only represent a significant portion of the total man hour consumption in hull production and outfitting, but due to heat distortions they also have a significant impact on nonproductive work operations, such as straightening and fitting. Those operations can interfere with on-board outfitting and increase lead time and construction cost. In addition to their contribution to shipyard productivity, joining techniques have a significant impact on material properties and thus on product performance and quality. Those factors become increasingly important for complex structures using comparatively thin and high-strength materials. Considering the importance of efficient joining, European shipbuilders in the past decade have invested significant efforts to develop new joining techniques, such as laser welding, adhesive bonding, and mechanical joining. Based on research results, practical industrial applications have been developed recently. After reviewing the impact of joining processes on competitiveness, the article will summarize a number of past and ongoing research projects with special focus on design methods, process and equipment development, fatigue strength of joints, quality assurance, and approval. It will then present a number of recent applications of new joining techniques in European shipyards. Finally, open problems and future research needs will be briefly discussed. The article is based on a joint effort of leading European experts and will focus on laser and laser hybrid welding, adhesive bonding, and mechanical joining

Tests of Respiratory Muscle Strength In Neonates

After completing this article, readers should be able to: 1. Describe the underlying cause of respiratory failure in about 50% of preterm infants who require intubation and mechanical ventilation. 2. Compare compliance characteristics of the chest wall in infants, older children, and adults. 3. List some of the conditions seen in neonates that can adversely affect respiratory muscle function. 4. List noninvasive tests for assessing respiratory muscle strength in neonates. Chest wall mechanics of neonates and infants play an essential role in ventilation that frequently is underappreciated. Dysfunction of the respiratory muscles can cause both a disease process and an inability of the patient to compensate for it. As an example, respiratory muscle failure may be the underlying cause in about 50% of preterm infants who have ventilatory failure. (1) In this article, we detail the current understanding of the physiology of the respiratory muscles in neonates and discuss a number of tests designed to assess their function. Mechanically, the respiratory system can be thought of as being composed of two components. The first includes the respiratory muscles, the rib cage, and the anterior abdominal wall, which together make up the “pump,” whose function is to move air in and out of the lungs. The second includes the airways and lung parenchyma through which gas exchange occurs and can be referred to as the “load” on which the pump must act. For ventilation to occur, the respiratory pump must overcome both the frictional (eg, airway resistance) and tissue elastic forces (eg, lung and chest wall compliance) that create the load. The balance between the capabilities of the pump and the magnitude of the load can influence whether respiratory “success” or “failure” occurs. The chest wall, which contains muscles and skeletal structures, undergoes dramatic maturational changes over the first several years of life. In addition …

Endemic Volatility of Firms and Establishments: Are Real Options Effects Important?

Consider the intertemporal volatility of the number of firms and establishments within an industry over a relatively long span of time. Data from the U.S. manufacturing sector shows that this degree of endemic volatility varies widely across industries. Examining the determinants of this volatility is important in its own right as it reflects on the underlying forces governing entry and exit. In addition, data shows that the volatility of firms and establishments is significantly correlated with the volatility of the number of production and nonproduction workers employed in an industry. The primary focus of this paper is to evaluate the role played by the real options channel which suggests that sunk costs and uncertainty may be important determinants of the degree of volatility of the number of firms. We also control for other factors related to advertising intensity, industry growth and technological change. An advantage of the manufacturing industry dataset we use in this study is that it combines the annual timeseries data from the Annual Survey of Manufactures with data from the five-yearly Census of Manufactures. This allows us to construct measures of uncertainty about profits, sunk capital costs, technological change, among others. Our key findings are: (1) industries with higher sunk capital costs and profit uncertainty have significantly lower endemic volatility of the number of firms and establishments; and (2) these relationships are non-linear as suggested by theory with even small amounts of sunk costs or profit uncertainty contributing to significantly lower firm volatility. Our findings appear broadly consistent with the predictions of the real options channel. We highlight some implications of our findings for antitrust/competition policy and labor market dynamics.

The Labor Market Effects of Payroll Taxes in a Middle-Income Country: Evidence from Colombia

We use a panel of manufacturing plants from Colombia to analyze how the rise in payroll tax rates over the 1980’s and 1990’s affected the labor market. Our estimates indicate that formal wages fall by between 1.4% and 2.3% as a result of a 10% rise in payroll taxes. This “less-than-full-shifting” is likely to be the result of weak linkages between benefits and taxes and the presence of downward wage rigidities induced by a binding minimum wage in Colombia. Because the costs of taxation are only partly shifted from employers to employees, employment should also fall. Our results indicate that a 10% increase in payroll taxes lowered formal employment by between 4% and 5%. In addition, we find less shifting and larger disemployment effects for production than non-production workers. These results suggest that policies aimed at boosting the relative demand of low-skill workers by reducing social security taxes on those with low earnings may be effective in a country like Colombia, especially if tax cuts are targeted to indirect benefits.

A Shipbuilding Productivity Predictor

The first author has been working on the development of a Shipbuilding Productivity Predictor for many years. His first attempt was presented as a SNAME Section paper in 1998. It used only two parameters, namely, size and Technology Level of the shipyard. However, it was clear that other parameters, such as throughput, vertical integration, range of ship types, and the ratio of production workers versus nonproduction workers also affected productivity, and since that time he has been working to determine what parameters should be included and to develop an equation including all the significant parameters. This paper describes the research performed by the authors and the resulting Shipbuilding Productivity Predictor Equation. It is not the intent that the Productivity Predictor presented should be used by any shipyard to predict a "Target Productivity" based on its values of the parameters, but rather to show an approach how it could be done, and validate it. If the approach was supported by shipyards around the world it would become more acceptable. Shipyards could then benchmark their actual productivity against the target productivity.