Non-wage Benefits Research Articles

Race, inclusion, and equity: do ESOP jobs deliver for Black workers?

ABSTRACT This paper investigates whether ESOPs closed the wage gap and provided better benefits for millennial workers during the COVID-19 pandemic. The four factors that will be the focus are wages, non-wage benefits, COVID-19 outcomes, and risk of catching COVID-19. The sample size of this study is 4,417, and logit regressions were used to analyse data from Round 20 of the National Longitudinal Study of Youth, collected in 2021. The study found that ESOP jobs provide higher wages and more non-wage benefits than non-ESOP jobs. ESOP workers were less likely to experience a work stoppage during the COVID-19 pandemic. There were no significant differences in the risk of catching COVID-19. Scholarship focuses on ESOPs’ ability to close the wealth gap between Black and White workers. While ESOPs do provide better wages than non- ESOP jobs, there is a large disparity between the wages of Black and White ESOP workers.

Labour Market Screening and the Design of Social Insurance: An Equilibrium Analysis of the Labour Market for the Disabled

Abstract This article studies how firms’ screening incentives in the labour market affect the optimal design of social insurance programs and quantitatively assesses the U.S. disability policies accounting for firms’ screening of the disabled. We develop an equilibrium search model where workers with different productivities have heterogeneous preferences over non-wage benefits and firms cannot offer an employment contract that explicitly depends on worker types. In this environment, firms may use contracts to screen out a certain type of workers, distorting employment rates and contracts in equilibrium. Therefore, the optimal structure of social insurance policies depends on firms’ screening incentives. We extend and structurally estimate this framework to quantitatively understand the inefficiencies arising from firms’ incentives to screen out disabled workers and examine the optimal joint design of disability insurance (DI) and various forms of firm subsidies. We find that hiring subsidies mitigate screening distortions; at the same time, they interact with DI by reducing the labour supply disincentives it generates. The optimal policy structure leads to a considerable welfare gain by simultaneously making firm subsidies and DI benefits more generous.

The Distribution of Nonwage Benefits: Maternity Benefits and Gender Diversity

Abstract Why do firms offer nonwage compensation instead of the equivalent amount in financial compensation? We argue that firms use nonwage benefits, specifically female-friendly benefits, such as maternity leave, to increase gender diversity by efficiently attracting women. Using Glassdoor data, we show that firms offer higher-quality maternity leave benefits in labor markets in which female talent is relatively scarce. This result also holds more generally when examining all female-friendly nonwage benefits and is not present when looking at gender-neutral benefits. Moreover, using staggered adoption of state laws, we show that voluntary provision of these benefits can increase firm value. Wei Jiang. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

Explaining Heterogeneity in Use of Non-wage Benefits: The Role of Worker and Firm Characteristics in Disability Accommodations

Non-wage benefits are an important component of employment arrangements, but are not available to or used by all workers. Do differences in firm, worker, or match-specific characteristics drive benefit take-up? We provide new evidence on heterogeneity in use of non-wage benefits, focusing on disability accommodations. Using administrative data in Oregon, we document significant dispersion in accommodation rates across worker and firm characteristics. We decompose the variance in accommodation use, finding that firm characteristics explain substantially more than worker or injury characteristics (29 percent vs. 4 percent). This finding highlights the firm's role in use of non-wage benefits like disability accommodations.

The impact of target costing on the competitiveness and financial security of enterprises

The main goal of companies operating on the market is the desire to achieve success. The feelings and criteria for assessing the company's success are varied. For employees, success means a high level of remuneration, additional non-wage benefits, job security and a good atmosphere at the workplace. Management measures success with financial results, product quality, market share, customer satisfaction, innovation, production efficiency, manufacturing costs, and the company's image.In the literature on the subject, the basic measure of the company's success is achieving a competitive advantage, gaining a relatively large market share, which will ensure financial security allowing for further development.Financial security depends largely on the extent to which management knowledge is known and understood, what are the financial skills and behavior of the management staff, the use of which contributes to the effective management of the company's resources.In the current economic reality, gaining a competitive advantage by an enterprise is a difficult and complicated process. The determinants of competitiveness and financial stability are not only the products and services offered by economic entities, but the unique and specific knowledge in the enterprise. This fact caused the search and implementation of modern methods and concepts known as the lean approach.The lean approach in the field of management is currently the dominant approach in Polish literature. Among the many publications in this area, we can mention, inter alia, the studies by Ohl, Sobańska, Wawer, Obłója et al. , Świderska and Raulinajtys, Michalak, Krajewska and Stronczek, Szczerbak.The aim of the article is to show the impact of target costing - a lean management tool on the competitiveness and financial security of enterprises. To achieve this goal, the method of analyzing the literature on the subject was used.

Gender Inequality and Job Satisfaction in Senegal: A Multiple Mediation Model

Women are often found to be in inferior jobs with lower wages and lower job quality, but to report higher job satisfaction. This gender-job satisfaction paradox is documented for high-income countries and is explained by gender inequality in job quality and expectations. In this paper we document this paradox for a developing country. We explore the complex relationship between gender, job quality and job satisfaction among agro-industry workers in Senegal, using primary data from a comprehensive worker survey. We use a multiple mediation model to disentangle direct and indirect pathways through which gender relates to job satisfaction. We find that women’s job satisfaction is higher, despite earning lower wages, receiving fewer nonwage benefits, being more in casual employment, and working fewer hours than men. Moreover, job satisfaction varies more strongly with gender than with worker education, wages or other job quality characteristics. We find that gender inequality in job quality mitigates the positive relationship between gender and job satisfaction, with wage and nonwage benefits as major mediating variables. Our findings imply opposing direct and indirect gender effects on job satisfaction, and bring some nuance in the debate on how reducing gender inequality in job quality may affect women’s job satisfaction.

Job attributes affect the relationship between perceived overqualification and retention

The paper explores the possibility of reducing the effect of perceived overqualification on employee retention (i.e., turnover intentions and job search behaviors) through non-salary (nonwage benefits, elasticity of work hours, and procedural justice) and salary (pay satisfaction) attributes of work. The problem of overqualification arises when the skills and experience or the knowledge and education of an employee are higher than those required for the job that the employee performs. This situation may induce an employee to leave the organization. This research uses the concept of perceived overqualification and addresses three unresolved issues regarding salary and non-salary job attributes which can modify the effects of perceived overqualification. These issues include the mechanism through which the aforementioned effects are transferred onto retention, interpersonal justice as a moderator, and the importance of negative affectivity, which may be responsible for the relationship between perceived overqualification and employee retention. The study uses conditional analysis of the process developed by Hayes and data from a survey conducted among 100 overqualified employees, who were identified among 826 randomly selected people in Poland. The findings show that non-salary job attributes can be a better instrument than salary in increasing the organizational commitment perceived by overqualified employees. A stronger organizational commitment prevents the overqualified from leaving the organization. As regards the relationship between perceived overqualification and turnover intention, the moderation impact of interpersonal justice (respect from supervisors) is stronger than that of pay satisfaction. Negative affectivity does not create the common tendency in perceived overqualification and retention. Based on the findings, I propose several practical recommendations.

Mixed-methods economic evaluation of the implementation of tobacco treatment programs in National Cancer Institute-designated cancer centers

BackgroundThe Cancer Center Cessation Initiative (C3I) was launched in 2017 as a part of the NCI Cancer Moonshot program to assist NCI-designated cancer centers in developing tobacco treatment programs for oncology patients. Participating centers have implemented varied evidence-based programs that fit their institutional resources and needs, offering a wide range of services including in-person and telephone-based counseling, point of care, interactive voice response systems, referral to the quitline, text- and web-based services, and medications.MethodsWe used a mixed methods comparative case study design to evaluate system-level implementation costs across 15 C3I-funded cancer centers that reported for at least one 6-month period between July 2018 and June 2020. We analyzed operating costs by resource category (e.g., personnel, medications) concurrently with transcripts from semi-structured key-informant interviews conducted during site visits. Personnel salary costs were estimated using Bureau of Labor Statistics wage data adjusted for area and occupation, and non-wage benefits. Qualitative findings provided additional information on intangible resources and contextual factors related to implementation costs.ResultsMedian total monthly operating costs across funded centers were $11,045 (range: $5129–$20,751). The largest median operating cost category was personnel ($10,307; range: $4122–$19,794), with the highest personnel costs attributable to the provision of in-person program services. Monthly (non-zero) cost ranges for other categories were medications ($17–$573), materials ($6–$435), training ($96–$516), technology ($171–$2759), and equipment ($10–$620). Median cost-per-participant was $466 (range: $70–$2093) and cost-per-quit was $2688 (range: $330–$9628), with sites offering different combinations of program components, ranging from individually-delivered in-person counseling only to one program that offered all components. Site interviews provided context for understanding variations in program components and their cost implications.ConclusionsAmong most centers that have progressed in tobacco treatment program implementation, cost-per-quit was modest relative to other prevention interventions. Although select centers have achieved similar average costs by offering program components of various levels of intensity, they have varied widely in program reach and effectiveness. Evaluating implementation costs of such programs alongside reach and effectiveness is necessary to provide decision makers in oncology settings with the important additional information needed to optimize resource allocation when establishing tobacco treatment programs.

Union ‘facilitation effect’ and access to non-wage benefits in the Ghanaian labour market

ABSTRACT Effective access to mandatory non-wage benefits is key to workers achieving decent working conditions. This paper investigates the effects of union presence on workers’ access to non-wage benefits in the Ghanaian labor market. The study draws its data from the 2012–2013 Ghana Living Standards Survey (GLSS 6) and specifies a multivariate model that simultaneously controls for endogeneity and potential sample-selection biases. We find that unions have a significant effect on facilitation among workers by improving awareness of and access to work benefits. Other factors that affect benefit entitlements in Ghana include the gender of a worker, urbanization, firm size, sector formality, public v.s. private sector jobs, type of occupation, and the presence of work contracts amongst others. Results presented here indicate that workers from formal-sector firms with union presence are more likely to have access to non-wage benefits. It is also found that despite the statutory nature of these non-wage benefits, non-compliance was common, predominantly in the informal sector but also in the formal sector. This is particularly the case with respect to maternity leave benefits and indicates a need for greater enforcement of these laws.

Remuneration and reward systems during an economic crisis: case study from Attica region, Greece

This study investigated the structure of employees’ remuneration and rewards systems, focusing on medium- and large-sized firms in the region of Attica in Greece during the economic crisis. Data were collected using a structured questionnaire based on relevant literature. A sample of 150 companies filled out a total of 500 questionnaires. The results revealed that medium- and large-sized companies applied various remuneration systems, including the base wage, performance-related bonuses, and a combination of additional non-wage benefits. Greek firms did not avoid wage cut in times of low turnover, although hypotheses testing revealed no relationship between firm size and the use of flexible remuneration systems. However, a positive relationship between the unions’ engagement and the use of non-wage cutting strategies was confirmed. Furthermore, a positive correlation between wage rigidity, labor market legislation, and collective agreements for setting minimum wage levels was found. Finally, a hypothesis test regarding the association between the firm, the business sector, and wages cut over the last seven years was accepted. The study concludes that wages cut should be the final choice by firms since remuneration is a source to satisfy, engage, and attract employees.

Who pays for workplace benefits?

AbstractIn a simple model with hidden action, we analyze the role of nonwage benefits (perks) in the structure of incentive‐compatible contracts. We show that the provision of perks depends on the size of the agent’s reservation wage. The two main results are: (a) for low levels of the reservation wage, perks are never provided by the principal, but the agent may decide to buy, as own consumption, a certain amount of private benefits; (b) for high levels, the principal may find it profitable to offer perks, and the equilibrium quantity increases more than proportionally with the reservation wage, up to the first‐best level.

Labour challenges in Ethiopia’s textile and leather industries: no voice, no loyalty, no exit?

Abstract A state-led industrialization push inspired by the East Asian ‘developmental state’ model is at the centre of Ethiopia’s recent economic success. This model has historically proved potent for achieving rapid industrialization, but the business-state alliance at the heart of the model generally aimed to curb the power of labour. Focusing on textile and leather manufacturing in Ethiopia, this article addresses two questions: are workers capable of extracting gains from the process of industrialization, and have the actions of workers affected global value chain integration in the two industries? Our data show that opportunities for collective voice among workers are limited. However, workers have expressed their discontent by leaving employers when working conditions fail to meet their expectations. The resulting turnover has generated significant obstacles for local and foreign firms attempting to participate in global value chains. In response, the Ethiopian state and employers implemented a number of measures, including restrictions on emigration and more generous non-wage benefits. Recent research on global value chains and labour highlights how workers are able to influence work practices through individual action. The present article builds on these ideas, but shows that firms and governments have the ability to respond and limit this power.

The Effects of Work-Life Benefits on Employment Outcomes in Canada: A Multivariate Analysis

Using the longitudinal Workplace and Employee Survey of Canada, we examine the association between the provision of work-life benefits and various employment outcomes in the Canadian labour market. Whilst the theory of compensating wage differentials hypothesizes an inevitable trade-off between higher wages and non-wage benefits, the efficiency wage theory suggests otherwise. The empirical evidence broadly supports the efficiency wage theory, thus rejecting the compensating wage differentials theory. If bundled appropriately, it appears that work-life benefits are positively associated with increased wages, in addition to a greater number of promotions, enhanced employee morale in the form of job satisfaction, and improved employee retention. The study concludes that organizations and employees can both profit when work-life benefits are offered.

Directions of change in corporate fringe benefits

Purpose - The purpose of the article is to show the directions of changes in the area of the most popular and most desirable benefits. The types and functions of non-wage benefits are presented, granted to employees by enterprises in order to increase motivation and involvement in the performance of their tasks. Companies make use of a vast range of non-wage benefits of different impact. Research methodology - The article uses critical analysis of the reference materials and analysis of empirical data obtained as a result of surveys conducted each year by Sedlak &Sedlak. Results - The analysis of survey data showed that the most popular benefits are: primary and special health care, professional training and courses, gym and fitness club passes, use of business phone for private purposes and life insurance. While the most desirable additional benefits among employees include an extended medical package, a company car for private use and flexible working hours. Originality/Value - Recognising the most popular and most desirable benefits makes it easier for enterprises to select them, particularly since the employees’ preferences change over time. This is extremely important for companies because benefits allow them to improve employees’ commitment and increase their motivation to work. The Y generation is entering the labour market and employers must consider their expectations when designing benefit packages.

Trade, Competition and Welfare in Global Online Labour Markets: A 'Gig Economy' Case Study

This study focuses on collaborative economy platforms that specialize in purely digital tasks that require no physical delivery or proximity between workers and their clients, which we call Online Labour Markets (OLMs). They have a global reach. There is a debate on job fragmentation and deteriorating working conditions in OLMs. This study emphasizes the economic opportunities and explores (a) the drivers of global trade in digital tasks, (b) the determinants of online wages and (c) the welfare impact of OLMs on workers and employers. This is a case study based on data obtained from a single UK-based OLM. Our findings cannot necessarily be generalised to other OLMs with different characteristics. Using panel data we find that the vast majority of employers are located in high-income countries while many workers are located in low-income countries. Workers in low-income countries are motivated to participate mostly by labour productivity gains and the corresponding higher wages. Workers in high income countries combine opportunities for additional work and income with the benefits of flexible time use and other non-wage benefits. Employers are motivated by wage savings and task unbundling. Despite the global nature of digital OLMs, there is an impression of home bias in hiring. OLMs are heterogeneous markets where about half of all transactions are settled above the lowest price bid. Workers' skills and experience as well as their countries of residence have an impact on the agreed wage and the probability of being hired. Worker quality signaling induces superstar effects and a very uneven distribution of work. Taking into account only the difference between online and offline wages in the countries of residence of workers and employers we estimate that this particular OLM has positive monetized welfare effects, both for workers (+17%) and even more so for employers (+70%). Unobservable non-monetized benefits such as increased flexibility and savings in transport or migration costs for workers and task unbundling for employers give a further boost to welfare. The extent of unbundling is demonstrated by the very short duration of the average task in this OLM: slightly less than 8 hours. Workers in this case study platform are self-employed and responsible for compliance with regulations in their country of residence.

Is Cash Still King: Why Firms Offer Non-Wage Compensation and the Implications for Shareholder Value

Why do firms offer non-wage compensation instead of the equivalent amount in financial compensation? We argue that firms use non-wage benefits, specifically maternity leave, to efficiently target workers with desirable characteristics. Using Glassdoor data, we show that firms offer higher quality maternity benefits in industries and locations where female talent is relatively scarce -- a relationship robust to an instrumental variable analysis. Second, using plausibly exogenous variation in the timing of government policy, we show that these benefits can increase firm value. Third, we document novel stylized facts about non-wage benefits and how they are correlated with firm characteristics.

The new German statutory minimum wage in comparative perspective: Employment effects and other adjustment channels

Germany was one of only seven EU member states without a statutory minimum wage before its new legislation took effect in January 2015. We explore the consequences for wage structure, employment and companies. The new wage floor brought significant increases for low-paid employees, with limited observable negative employment effects thus far. To explain these benign outcomes, we refer to institutionalist and behavioural theories and discuss a number of other adjustment channels for companies. Preliminary evidence suggests that companies in sectors highly affected have responded by reducing working hours and/or increasing work intensity and prices. Some have cut special payments and non-wage benefits, reduced labour turnover and attempted to absorb higher wages by hiring more qualified staff. Non-compliance may also constitute an adjustment channel.

An Empirical Assessment of the Union 'Facilitation Effect' in the Ghanaian Labor Market

Workers effective access to mandatory non-wage benefits is key to achieving decent working conditions in the Ghanaian labor market. Thus, this paper investigates the effects of union presence on workersO reported access to non-wage benefits. The study draws its data from the 2012/ 2013 Ghana Living Standards Survey (GLSS VI) and specifies a Structural Equation Model (SEM) that controls for endogeneity and potential sample-selection biases. We find that unions have statistically significant facilitation effects among workers in Ghana, that is, unions appear to play an important role in improving workersO awareness of their work benefits. Furthermore, informal and larger firms exhibit lower facilitation effects. It is also found that despite the statutory nature of these non-wage benefits, non-compliance was present, even in the formal sector, particularly with respect to maternity leave benefits, which indicates a need for greater enforcement of these laws.

Education As Protection? The Effect of Schooling on Non-Wage Compensation in a Developing Country

This is the first paper identifying the causal effect of schooling on non-wage compensation using data from Vietnam. The paper takes an advantage of the establishment of the compulsory primary schooling reform that was introduced in Vietnam in 1991 to instrument for exogenous variations in years of schooling to surmount the endogeneity problem as a primary threat to idenfication facing the causal effect estimation. The paper finds that education is positively associated with non-wage benefits. In particular, the baseline 2SLS estimates indicates that one additional year of schooling is causally linked to a 6 percentage point increase in the likelihood of receiving monetary payments for public holidays, a 4.6 percentage point increase in the likelihood of receiving monetary employee benefits, a 7.3 percentage point increase in the likelihood of having annual paid leave and a 6.8 percentage point increase in the likelihood of having firm-provided social insurance. The baseline estimates are strongly robust to the estimates from some robustness checks. The paper also inspects that the causal associations between schooling and formal employment, skilled occupation and employee-friendly firm are three potential mechanisms through which schooling causally affects non-wage compensation.

Minimum Wage Impacts on Inequality, Job Formality and the Ethnic Wage Gap in Urban China

This paper examines the effects of a minimum wage on wage inequality and employment outcomes in China’s urban minority regions and whether those effects vary for Han and ethnic minorities. Minimum wage data is combined with a proprietary datasource obtained from China’s Household Ethnic Survey (CHES) project. Results reveal that a higher minimum wage reduces wage inequality and leads to larger positive effects for lower-wage minority workers compared to their Han counterparts. In terms of employment, a higher minimum wage promotes formalization of the labour market without any evidence of adverse effects on the likelihood of being unemployed in the formal sector, although some adjustments are made at the intensive margin. The results are robust to alternate estimations that take into account censoring and endogeneity. The findings’ policy implications indicate that the minimum wage is an effective social policy tool that reduces the Han-minority wage gap, as well as induces non-wage benefits, which in turn, should promote social cohesion in China’s urban minority regions.