Wage Data Research Articles

Do Minimum Wages Make Wages More Rigid? Evidence from French Micro Data

How do minimum wages (MW) shape the aggregate wage dynamics when wage adjustment is lumpy? In this paper, we document new empirical findings on the effect of MW on wage rigidity using quarterly micro wage data matched with sectoral bargained MW. We estimate a micro empirical model of wage rigidity taking into account minimum wage dynamics and we use a simulation method to investigate implications of lumpy micro wage adjustment for the aggregate wage dynamics. Our main findings are the following. Both national and sectoral MW have a large effect on the timing and on the size of wage adjustments. At the aggregate level, MW contribute to amplify, by a factor of 1.7, the response of wages to past inflation. Ignoring MW leads to underestimate the speed of aggregate wage adjustment by about a year. The elasticities of wages with respect to past inflation, the national MW and industry-level MW are respectively 0.42, 0.17 and 0.16. Finally, there are significant spillover effects of the NMW on higher wages transiting through industry-level MW.

How Prevalent is Downward Rigidity in Nominal Wages? International Evidence from Payroll Records and Pay Slips

For more than 80 years, many macroeconomic analyses have been premised on the assumption that workers’ nominal wage rates cannot be cut. Contrary evidence from household surveys reasonably has been discounted on the ground that the measurement of frequent wage cuts might be an artifact of reporting error. This article summarizes a more recent wave of studies based on more accurate wage data from payroll records and pay slips. By and large, these studies indicate that, except in extreme circumstances (when nominal wage cuts are either legally prohibited or rendered beside the point by very high inflation), nominal wage cuts from one year to the next appear quite common, typically affecting 15-25 percent of job stayers in periods of low inflation. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Value-chain activities and individual wages

PurposeThe purpose of this paper is to contribute to a better understanding of whether emerging economies benefit or suffer more because of value-chain activities than advanced economies do. Specifically, it focuses on the consequences in terms of individual wages.Design/methodology/approachPanel data techniques are used to estimate an expanded Mincerian wage equation over the period 1995-2007. The analysis is performed using micro-level data for two countries that represent two different experiences of value-chain activities in Central Europe: Germany and Slovenia.FindingsIncreasing value-chain activities reduce wages for low-skilled workers in high-skill-intensive industries in Germany, hence driving up the skill wage premium. Conversely, evidence is found of a decreasing skill wage premium as a consequence of increasing value-chain activities in Slovenia. Finally, increasing value-chain activities reduces the wages of workers in low-skill-intensive industries in both Germany and Slovenia.Originality/valueThis paper analyses the effect of value-chain activities on wages. It is the first empirical assessment that brings individual wage data directly into the picture for an international comparison focussed on two Central European countries that represent “two faces” of value chains. This paper shows that the effects of increasing value-chain activities on wages differ by country, by industry and by individual skills.

Was (English) Canada Poorer than the United States? Living Standards Circa 1830 to Circa 1845

This paper uses the censuses of 1842 of Canada East (modern day Quebec) and Canada West (modern day Ontario) to help explain the historical differences in living standards between Canada and the United States. The argument made in this paper is that Canada East was substantially poorer than the rest of Canada. The wage and price data contained in the censuses suggest a gap of 42% between Canada East and Canada West. As it represented such a large of the total population (north of 35%) of Canada, that relative poverty weighed heavily in determining the extent of living standards differences between Canada and the United States. This changes the perspective on the roots of the differences between the two countries. It proposes that any research agenda trying to explain them should focus heavily on Quebec.

The American Society for Clinical Pathology’s 2017 Wage Survey of Medical Laboratories in the United States

To inform the pathology and laboratory field of the most recent national wage data. Historically, the results of this biennial survey have served as a basis for additional research on laboratory recruitment, retention, education, marketing, certification, and advocacy. The 2017 Wage Survey was conducted through collaboration between the American Society for Clinical Pathology's (ASCP's) Institute of Science, Technology, and Policy in Washington, DC, and the ASCP Board of Certification in Chicago, IL. Compared with 2015, results show an overall increase in salaries for most of the laboratory occupations surveyed except histotechnologists and pathologists' assistants. Geographically, laboratory professionals from urban areas earn more than their rural counterparts. Survey results encourage laboratory professionals to be actively engaged in advocating for the profession in the workforce and educational training programs. Awareness of the career opportunities and value of the profession is needed to strengthen the future of the field.

ON THE USE OF FIRM FIXED EFFECTS AS A PRODUCTIVITY MEASURE FOR ANALYZING LABOR MARKET MATCHING

ABSTRACTThe present note evaluates the performance of firm fixed effects as a productivity measure when identified from wage regressions with two‐way fixed effects in matched employer‐employee data. This setting is frequently applied to study the matching between workers and firms. Exploiting wage and production data from a large administrative German data set, I find that the correlation between firm fixed effects (FFE) and total factor productivity is close to zero. Once TFP is used, the matching pattern is positive assortative, whereas the two‐way fixed effect technique yields the opposite result.

Downward nominal wage rigidity: Evidence from Canada 1901–1950

AbstractThis paper tests for the presence of downward nominal wage rigidity in Canadian wage data for 26 occupations in 38 cities from the first half of the 20th century. The sample is of particular interest as it contains periods with average inflation rates that are close to zero as well as two sharp deflations. Results from a variety of different tests indicate that wage change distributions are consistent with the presence of downward nominal wage rigidity. However, for two subsamples containing sharp declines in output and prices, estimates of the extent of downward nominal wage rigidity are much lower. This suggests that downwards adjustments did occur during times of severe depression and deflation.

The short-run employment effects of the German minimum wage reform

We assess the short-term employment effects of the introduction of a national statutory minimum wage in Germany in 2015. For this purpose, we exploit variation in the regional treatment intensity, assuming that the stronger a minimum wage ‘bites’ into the regional wage distribution, the stronger the regional labour market will be affected. In contrast to previous studies, we construct two regional bite indicators based upon detailed individual wage data from the Structure of Earnings Survey (SES) 2014 and combine it with administrative information on regional employment. Moreover, using the Socio-Economic Panel (SOEP), we are able to affirm the absence of anticipation effects and verify the assumption of a common trend in wages before the reform. In sum, we find only moderate negative effects on overall employment of about 140,000 (0.4%) jobs, which are mainly driven by a sharp decline of marginal employment (‘mini-jobs’), while we do not find pronounced significant effects for regular employment in most specifications. Our results are robust to a variety of sensitivity tests.

Personality and pay: do gender gaps in confidence explain gender gaps in wages?

This study explores whether gender patterns in personality traits contribute to the gender gap in hourly wage rates, focusing on traits that reflect an individual's confidence to take on a challenge. To capture confidence, we use a psychological measurement known as Achievement Motivation, which is dually comprised of 'hope for success' and 'fear of failure'. This personality dimension is examined in addition to the Big Five personality traits and Locus of Control (LOC). Using 2013 wage data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, our Oaxaca-Blinder decomposition model reveals that men's stronger hope for success, lower fear of failure and lower agreeableness contribute to the gender wage gap, while women's higher level of conscientiousness is the only trait that serves to narrow it. JEL J31 - Wage Level and Structure; Wage Differentials D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving J16 - Economics of Gender; Non-labor Discrimination

International Migration and Wages

Understanding the determinants of migration patterns and the selection of migrants is of paramount importance in a world in which over 240 million people have migrated and many more are considering doing so. This paper adds to the literature on this topic by (i) using micro-level wage data for a large number of source and destination countries, and (ii) identifying the impact of bilateral variables, e.g. distance, and source and destination country characteristics using a two-step estimation strategy that allows for estimation over a full matrix of migration corridors and better addresses the issue of multilateral resistance to migration. The results highlight how geography (distances, contiguity and country size) and wage differentials matter for determining migration flows and the differential selection of low and high skilled migrants.JEL Codes: F22, F66, J61.

Cost Analysis of 3 Concurrent Public Health Response Events: Financial Impact of Measles Outbreak, Super Bowl Surveillance, and Ebola Surveillance in Maricopa County.

To generate estimates of the direct costs of mounting simultaneous emergency preparedness and response activities to respond to 3 major public health events. A cost analysis was performed from the perspective of the public health department using real-time activity diaries and retrospective time and activity self-reporting, wage and fringe benefit data, and financial records to track costs. Maricopa County Department of Public Health (MCDPH) in Arizona. The nation's third largest local public health jurisdiction, MCDPH is the only local health agency serving Maricopa's more than 4 000 000 residents. Responses analyzed included activities related to a measles outbreak with 2 confirmed cases, enhanced surveillance activities surrounding Super Bowl XLIX, and ongoing Ebola monitoring, all between January 22, 2015, and March 4, 2015. Time data were sought from all MCDPH staff who participated in activities related to any of the 3 relevant responses. In addition, time data were sought from partners at the state health department and a community hospital involved in response activities. Time estimates were received from 128 individuals (response rate 88%). Time and cost to MCDPH for each response and overall. Total MCDPH costs for measles-, Super Bowl-, and Ebola-related activities from January 22, 2015, through March 4, 2015, were $224 484 (>5800 hours). The majority was for personnel ($203 743) and the costliest response was measles ($122 626 in personnel costs). In addition, partners reported working more than 700 hours for these 3 responses during this period. Funding for public health departments remains limited, yet public health responses can be cost- and time-intensive. To effectively plan for future public health responses, it may be necessary to share experiences and financial lessons learned from similar public health responses. External partnerships represent a key contribution for responses such as those examined. It can be expensive for local public health departments to mount effective responses, especially when multiple responses occur simultaneously.

Black Pepper Consumption in the Roman Empire

AbstractDuring the Roman Imperial period huge quantities of black pepper arrived into the Empire from southern India and were employed in a range of contexts, from the culinary and medicinal, to the religious. This article seeks to examine the popularity of black pepper in the Roman Empire and test the theory that its consumption was not simply restricted to elite circles, but reached a wider spectrum of the population. In particular, price and wage data from theEdict of Maximum Pricesis examined to see how feasible it was for those lower down the socio-economic spectrum to make such purchases.

Downward Nominal Wage Rigidity and Inflation Dynamics During and After the Great Recession

I develop a New Keynesian model that embeds heterogeneous workers with asymmetric wage adjustment costs in order to address two inflation puzzles: missing deflation during the Great Recession and the subsequent missing inflation. When the wage adjustment costs are estimated according to U.S. micro wage data, downward nominal wage rigidity emerges, inducing the flattening of the observed price Phillips curve during and after recessions. Moreover, endogenous evolution of the cross-sectional wage distribution generates nonlinear dynamics such as the sign-, size-, and state-dependence. These nonlinearities help the model address the inflation puzzles as well as matching micro evidence on wage adjustments.

Wage differentials, economic restructuring and the solidaristic wage policy in Sweden

The Swedish model has been seen as way to combine rapid growth with small wage gaps. The solidaristic wage policy negotiated by peak organizations between 1956 and 1983 was designed to induce restructuring by reducing wage differences across the economy. Several authors have linked this to decreased wage dispersion and rapid structural change, especially during the 1960s. However, there is disagreement on when the policy started to affect dispersion and little evidence exist before the 1970s. Using new wage data, I examine differentials using a regression–decomposition framework. The results show that inequality was stable before the late-1960s but declined rapidly thereafter. According to the decomposition, the decline in the 1970s was the likely result of deliberate union policy while developments in the 1960s were unrelated to union action. In contrast to what some authors have argued, this study shows that decreased wage dispersion coincided with a fall in growth and structural change.

The Real Cost of CEO Compensation: The Effect of Behindness Aversion of Employees

Do employees who compare themselves to the CEO matter for executive compensation? We hypothesize that employees have relative wealth concerns and compare their wage to the CEO's pay. Using German establishment-level wage data, we indeed show that employee wages are increasing in CEO compensation. We use a regulatory shock to the public observability of German CEO compensation and establish causality by using a difference-in-difference approach. We find that the envious behavior is geared to CEOs themselves rather than to the management team. We separate CEO pay in expected and abnormal pay, and find that the expected pay doesn't explain the envious behavior. This is in line with the public attention playing the key role of inciting envy among employees. Our findings suggest that relative wealth concerns of employees are a driver of wages and significantly increase the costs of executive compensation.

State-level minimum wage and heart disease death rates in the United States, 1980–2015: A novel application of marginal structural modeling

Despite substantial declines since the 1960's, heart disease remains the leading cause of death in the United States (US) and geographic disparities in heart disease mortality have grown. State-level socioeconomic factors might be important contributors to geographic differences in heart disease mortality. This study examined the association between state-level minimum wage increases above the federal minimum wage and heart disease death rates from 1980 to 2015 among ‘working age’ individuals aged 35–64 years in the US. Annual, inflation-adjusted state and federal minimum wage data were extracted from legal databases and annual state-level heart disease death rates were obtained from CDC Wonder. Although most minimum wage and health studies to date use conventional regression models, we employed marginal structural models to account for possible time-varying confounding. Quasi-experimental, marginal structural models accounting for state, year, and state × year fixed effects estimated the association between increases in the state-level minimum wage above the federal minimum wage and heart disease death rates. In models of ‘working age’ adults (35–64 years old), a $1 increase in the state-level minimum wage above the federal minimum wage was on average associated with ~6 fewer heart disease deaths per 100,000 (95% CI: −10.4, −1.99), or a state-level heart disease death rate that was 3.5% lower per year. In contrast, for older adults (65+ years old) a $1 increase was on average associated with a 1.1% lower state-level heart disease death rate per year (b = −28.9 per 100,000, 95% CI: −71.1, 13.3). State-level economic policies are important targets for population health research.

A flying goose chase: China’s overseas direct investment in manufacturing (2011–2013)

ABSTRACTThis paper examines whether rising wages have driven Chinese manufacturers to make foreign direct investment abroad to reduce the costs of production. We match the Chinese Ministry of Commerce’s register of Overseas Direct Investments with China’s Industrial Enterprise Survey data from 2011 to 2013 and annual average wage data for prefecture-level cities. Although high-income developed economies are the preferred destinations for Chinese manufacturing investment abroad, labor-intensive light manufacturing sectors related to the textiles, clothing and leather industries are focused on the low-income countries – consistent with a ‘flying goose’ effect. But, these are only a small part of the Chinese investment – account for 6% of the number of matched official ODI registrations. Yet, it might be still too early to observe that rising factor prices are systematically driving investments offshore.

Value added, wages and labour market flows at the establishment level

ABSTRACTIn this article, we analyse the connection between value added, wages and labour market flows at the establishment level. We develop a simple model to illustrate the expected comovement of these variables. For the empirical analysis, we link the new German Administrative Wage and Labor Market Flow Panel data set to the IAB Establishment Panel. We show that establishments’ hires rates have a positive and separations rates a negative comovement with establishment-specific value added, whereby hires react by more than separations. In addition, we provide evidence that establishments’ partial equilibrium reaction is an important driver for aggregate labour market dynamics.

Were Wages That Low? Real Wages in the Strasbourg Region Before 1775

Robert Allen characterized the region of Strasbourg in France in the period before 1789 as exceptionally poor. New evidence suggests, however, that Allen underestimated wage levels because of a failure to include payments in-kind and to clarify the differences between skilled and unskilled workers. Moreover, his wages came from a region that is wider than Strasbourg per se. The use of wage data for the agricultural sector that were higher in nominal terms than Allen’s, with reference to regions like Paris and southern England, elevates the economic standing of Strasbourg and, by extension, that of France.

Black living standards in South Africa before democracy: New evidence from height

Very little income or wage data were systematically recorded about the living standards of South Africa’s black majority during much of the 20th century. We used four data sets to provide an alternative measure of living standards – namely stature – to document, for the first time, living standards of black South Africans over the course of the 20th century. We found evidence to suggest that living standards in the first three decades of the century were particularly poor, perhaps because of the increasingly repressive labour policies in urban areas and famine and land expropriation that weighed especially heavily on the Basotho. The decade following South Africa’s departure from the gold standard, a higher international gold price and the demand for manufactured goods from South Africa as a consequence of World War II seem to have benefitted both black and white South Africans. The data also allowed us to disaggregate by ethnicity within the black population group, revealing levels of inequality within race groups that have been neglected in the literature. Finally, we compared black and white living standards, and revealed the large and widening levels of inequality that characterised 20th-century South Africa.
 Significance: 
 
 We provide the first long-run estimates of black living standards in South Africa and evidence of inter-group differences in the effects of 20th-century events and policies.