Wage Differentials Research Articles

Regional and sectoral wage disparities as a reflection of inequality: The case of Kazakhstan

In today’s world, many countries, including Kazakhstan, are facing growing income inequality, poverty, and an increasing polarization of society. These challenges threaten social stability and make it difficult to achieve the Sustainable Development Goals. The purpose of this study is to investigate the size and trends of regional and sectoral wage disparities in Kazakhstan, as well as to create a typology based on the average wage levels in different regions and to provide recommendations for reducing income inequality. The study tested hypotheses about the relationship between the average nominal wage and the level of GRP, level of education, industry specialization, type of ownership, and size of enterprises. The methods of expert survey, correlation, and cluster analysis were used. The study revealed the tendency of increasing inequality of labor income. The largest differences between wages in extractive industries and agriculture were revealed in the Atyrau (11.5) and Mangystau (9.2) regions and Astana (7.2). Differences in average wages between regions were estimated at 1.7 to 7.8 times. The most significant factors affecting the level of average wages are gross regional product per capita and the share of gross value added of the quasi-public sector in the gross regional product. In order to reduce differences in wages, it is recommended to introduce progressive taxation, apply regional increasing coefficients, and calculate the minimum wage based on the hourly wage rate. AcknowledgmentThis work is supported by the Committee of Science Ministry of Science and Higher Education of the Republic of Kazakhstan (Grant BR21882165).

Gendered Job Search: An Analysis of Gender Differences in Reservation Wages and Job Applications

Using a weekly survey of unemployed workers, this study examines gender differences in reservation wages and applied-for occupational categories. The analysis shows that a large portion of the gender difference in reservation wages is attributable to the fact that women and men search for different occupations. Findings further demonstrate that women are more likely to apply to occupations with higher percentages of female incumbents, and they target these occupations from the earlier stages of their job search, rather than adjusting their preferences over the course of unemployment. Further analysis shows that women are more likely to apply for occupational categories that offer greater flexibility in working hours, more opportunities for interpersonal interactions, less critical decision-making, and a less competitive environment. Finally, the analysis reveals that household responsibilities, particularly the number of children, and willingness to take risks are important factors influencing women’s decisions to pursue occupations with less demanding work hours.

Labor, Management, Government, and Labor Markets: A Festschrift in Honor of Thomas A. Kochan

In September 2022, former students and colleagues of Thomas A. Kochan organized a Festschrift, a “festival of writing,” to honor his impact on Industrial Relations and related fields. The Festschrift generated more than two dozen articles and commentaries in a forthcoming book, as well as the four articles featured here in the ILR Review. These articles include “A Tale of Two Locals,” focused on contrasting responses to the 2019 GM-UAW strike; “The Need for Speed,” focused on the role of employers in immigrant work visa prioritization; “Incentives to Comply with the Minimum Wage,” comparing enforcement in the United States and the United Kingdom; and “Gendered Job Search” focused on gender differences in reservation wages and job applications. The articles highlight the roles of labor, management, and government as actors in an industrial relations system. Together these articles and the additional collection in the forthcoming book exemplify Tom Kochan’s leadership in advancing industrial relations theory, policy, and practice.

What Explains Differences in Minimum Wage Growth Between EU Member States?

Abstract There are considerable differences in minimum wage growth between EU member states with national minimum wages. Potential sources for these differences are discrepancies in economic fundamentals and institutional differences in how minimum wages are adjusted. Using a novel dataset based on macroeconomic data, institutional information on minimum wage setting and data on economic policy orientation and elections, the article tests whether growth differences in the minimum wage of 21 EU member states during the time period 2000 to 2020 can be explained by a catch-up dynamic in new EU member states, by different growth models of EU member states or by differences in the actors that are responsible for the adjustment of minimum wages. The results show that across the entire sample and irrespective of actors, minimum wage growth follows consumer price inflation and wage growth most closely. Higher than average minimum wage growth rates in EU member states stem from overshooting inflation during the period of EU accession, reducing wage inequality and increasing the Kaitz index. Actors also mattered for minimum wage growth. Adjustments by social partner consensus led to higher minimum wage growth than the benchmark of indexed minimum wages, introducing a distributive element to minimum wage adjustments.

Gender differences in reservation wages: New evidence for Germany

Generally, women set lower reservation wages than men what may translate into substantial gender pay gaps in the labor market. This paper compares both parametric and semiparametric estimators to analyze unexplained gender gaps in reservation wages among non-employed individuals in Germany. We examine these estimators using both conventional and data-driven model specifications. The results suggest substantial unexplained gaps in favor of men (up to 8%). In addition, we show that the gaps are larger at the top of the reservation wage distribution as well as among individuals with children and with a high educational attainment. The estimates are robust across the various estimators and model specifications. These findings imply that pronounced unexplained gender gaps in reservation wages do exist in Germany. As they are likely to result in actual gender pay gaps, gender gaps in reservation wages should be on the political agenda.

Determination of Factors Affecting Wage Differentiation in EU Countries

This study aims to identify the determinants of wage differentiation in European Union (EU) countries using panel data analysis. The literature review provides an overview of previous studies on wage differentiation, the current situation of wage differentiation in the EU, and the potential determinants and consequences of wage differentiation. The analysis shows that many potential variables influence wages and that direct modeling is problematic. However, the application of factor analysis led to the identification of significant factors, namely the economic strength of a country, the level of digitalization and working conditions, investment, and the unemployment rate. These findings are consistent with the existing literature. The robustness analysis of the results is provided. The conclusion offers recommendations for increasing wages based on the research results.

“Human Beings Are Too Cheap in India”: Wages and Work Organization as Business Strategies in Bombay's Late Colonial Textile Industry

Abstract This article examines the business strategies employed by early twentieth-century Bombay mill owners in work organization and wage differentiation. The traditionally highly segmented and fluctuating domestic textile markets in India were further complicated by colonial free trade policies, making them highly competitive. This prompted Bombay mills to adopt various strategies, including maintaining a flexible workforce, product diversification, tailoring sales strategies to the Indian market, and increasing labour inputs, related to their heavy reliance on short-stapled Indian raw cotton. Using detailed and disaggregated data reported by textile mills in Bombay during the 1920s and 1930s, this article investigates how employers adopted these strategies in tandem with distinct wage-setting systems as management tools to depress the wage bill. By analysing the motivations behind the adoption of or resistance to these tools across different operations within the production process – such as weaving, spinning, reeling, and winding – the article reveals how gendered and social-class stratifications shaped these strategies and led to wage disparities across the industry. Ultimately, these labour-intensive strategies, conditioned by the broader colonial context in which India's textile industry developed, were at the root of the lower productivity of Indian workers, with long-run adverse consequences for India's general industrial development.

Pendapatan dalam Hubungannya dengan Perencanaan Ekonomi Kabupaten Muaro Jambi dilihat dari Sisi Perkembangan Indeks Gini Kabupaten Muaro Jambi

Analysis of the Gini index based on education level shows significant inequality in the distribution of education in society. Higher levels of education tend to be accessed by groups with higher incomes, while groups with lower incomes often face barriers to obtaining quality education. This is reflected in the Gini index, which shows that the gap between groups with good and limited access to education is widening. This inequality has an impact on economic opportunities and social mobility, suggesting that improvements in a more inclusive education system and equal access to education across all levels of society are essential to reducing inequality and achieving greater social justice. The secondary sector in Muaro Jambi also shows significant levels of inequality. In the manufacturing and processing industries, large companies that produce goods on a large scale often make substantial profits, while small and medium enterprises struggle to compete. Inequality is also reflected in the construction sector, where the income gap between skilled and unskilled construction workers, and between large and small contractors, is quite striking. This contributes to the high Gini index in this sector, reflecting income inequality among workers and employers. In the tertiary sector, which includes services, retail, finance, and insurance, income inequality tends to be higher. In the service sector, the difference in income between workers in customer service and managers or professionals is very large. In the finance and insurance sector, income inequality is also significant because wages in this sector are often very high compared to other sectors, creating a large gap between workers in these fields and those in lower-wage sectors. This unequal distribution of income leads to a high Gini index in the tertiary sector. The quaternary sector in Muaro Jambi, which includes technology, information, and research and development, shows high levels of inequality. This inequality is caused by the large differences in wages between technology professionals and workers in non-technology sectors, as well as between workers in large technology companies and small businesses. Specialized skills and high levels of education in this sector are often directly related to high incomes, while those in less skilled or educated positions earn much lower wages. This creates a clear inequality in the distribution of income in this sector.

Unveiling the automation—wage inequality nexus within and across regions

Since the1800s, automation technologies have been interpreted as a source of displacement effects, largely conceptualised and empirically proved in a vast literature. This paper claims that, despite their non-manufacturing nature, metropolitan regions are not exempted by the negative effects of automation on wage inequalities across workers’ groups. The paper empirically proves this statement by analysing the effects on jobs and wage differentials among groups of workers associated with the diffusion of robot technologies in Italian NUTS3 regions in the period 2012–2019. Results show that automation technologies in the form of robotisation do displace jobs, harming particularly low-skilled workers in non-metropolitan manufacturing regions, where inter-group wage inequalities increase. However, through the creation of high-skilled jobs, also cities experience a rise of inter-group workers inequalities. These results call for appropriate policies to cope with the changing occupational profiles requested by the labour market.

The Employment in the Mines of Skopje In the 15th and 16th Centuries (Kadi, Emin, Nazir and Kâtips)

German Saxon miners played an active role in the exploitation of the rich mineral deposits in Bosnia and Serbia throughout the Middle Ages and in the enrichment of the region. After the conquest of Istanbul, during the reign of Mehmed the Conqueror, these rich mineral deposits were gradually captured and incorporated into the Ottoman borders. As a matter of fact, the Ottoman bureaucracy made great efforts to ensure the continuous operation of these mining areas through the nazirs as well as the kâdi and the emin. Accordingly, the mines in what is today the majority of Macedonia, western Bulgaria, Ko- sovo and the southern parts of Serbia were transformed into a mukataa under the name of the Nezaret of Skopje to be administered from a single source. The silver and gold from these mines were converted into coins at the mints of Novo Brdo, Skopje and Kratovo, located close to the region. Although previous studies have provided information about the people involved in the exploitation of a mine, these are generally evaluated in the context of law codes. In particular, the information on katips is limited, and there is no de- tailed information on how many people served in a mine, what the process was for their appointment and dismissal, how much they were paid, whether there were wage differences between mines, and whether the wage balance varied from mine to mine. This study focuses on the work and remuneration of the scribes (maden, chashni, potok, tsarh, rosht, kalhane and sarraf), especially the kâdis who took part in the supervision phase of the mines and the scribes who recorded every stage of the mines, as well as the scribes who took office with the preference of the refugee and the salaries they received in return for their work. In addition, the nazirs, who assumed an important role in the control of the mukataas, and the military officers who assisted them in fulfilling this task were evaluated. In particular, the literature provides enlightening information about the katips who worked in the mining areas, the jobs they performed, the issues that were taken into consideration in their appointment and dismissal, and the salaries they received while performing these jobs.

Carbon emissions and CEO pay

AbstractOur study examines the link between firms' carbon emissions and their compensation to CEOs and finds a positive association in line with the compensating wage differentials theory. We use Donald Trump's 2016 election win as an exogenous shock to identify a causal relationship. Ruling out managerial power as an alternative explanation, the relations are stronger when firms are better governed and are more likely to be aware of their carbon risk. Additionally, we present evidence that high carbon emissions increase CEOs' risk of job loss, reinforcing the presence of compensating wage differentials as the plausible explanation for the positive association.

Women and Minorities in Science, Technology, Engineering, and Mathematics (STEM): Evidence From Trinidad and Tobago

Using a quantitative research approach, this study aims at investigating the wage returns and the gender wage gap of Trinidad and Tobago’s minority groups in Science, Technology, Engineering, and Mathematics (STEM) fields. To do this, data from the Continuous Sample Survey of Population (CSSP), for the period 1991–2015, is used to estimate a Mincerian earnings function via the quantile regression method, after which the standard Oaxaca–Blinder Decomposition method is employed to decompose the wage differentials. This analysis revealed that regardless of ethnic class (i.e. minority group [persons who are of mixed, white, Syrian/Lebanese, Chinese, and other heritage] or majority group [persons of an Indian and African heritage]), there are more men trained in STEM than women. While the average earnings of female minority workers in STEM are higher than that of male minority workers, the earnings of male majority workers are higher than that of female majority workers. The gender wage gap between minority workers in STEM appears to be much more prominent (9.8%) than that of majority workers (8.5%). This implies that the issue of gender inequality in STEM is more pronounced amongst minority workers in Trinidad and Tobago.

CLUSTER ANALYSIS OF REGIONAL WAGE DIFFERENCE IN KAZAKHSTAN AND THE POSSIBILITY OF ITS REDUCTION

The article is devoted to the study of the problem of regional differences in wages, the development of a cluster typology of the regions of Kazakhstan in terms of wages and the justification of the possibilities of reducing its regional differentiation. The article provides an overview of scientists' points of view on the problem of labor income inequality, assesses the level of regional wage differences in Kazakhstan, conducts a cluster analysis and develops a typology of the country's regions according to the level of average nominal wages, gross regional product per capita and the share of gross value added of the quasi-public sector in the gross regional product. A group of regions has been identified that are most in need of regulatory measures to increase wages. The possibilities of reducing large regional wage differences are substantiated, primarily by attracting investments to boost the economy, increase employment and labor incomes, as well as by introducing increasing regional coefficients when setting minimum wage standards in remote areas, regions with difficult natural and climatic conditions. The methods of systematic literary review, logical analysis? analogies and generalizations, economic and statistical, cluster analysis, and typology are used.

Women Entrepreneurship

Today's women are better equipped than ever to carry out all activities required for a dominant portion of a community to be recognized and accepted. Every society needs women more than anything else, but they do not receive much social recognition for their commitment to community development. Although it is generally accepted that men should handle commercial matters, a considerable wage difference between men and women has been established, and independent women are regarded as having significantly less value by society. The study systematically reviewed some pieces of literature on Women Entrepreneurship: A Systematic Review of Current Trends, Challenges, and Opportunities. Women's entrepreneurship. It utilized a pragmatic research philosophy to improve the world by creating and disseminating knowledge. The literature was taken from published, peer-reviewed journals and scientifically written in English. Similarities in women's entrepreneurship were established and quoted difficulties experienced by these entrepreneurs in their endeavors. Furthermore, a few recommendations were cited to address these difficulties; hence, women's entrepreneurial development should be continuously recorded.

The U.S. Low-Wage Structure: A McWage Comparison

Abstract Thanks to standardized work protocol and technology of McDonald's restaurants, the hourly wage of McDonald's Basic Crew enables wage comparisons under near-identical skill inputs and hedonic job conditions. McWages capture labor costs in entry-level jobs, while the Big Macs (earned) Per Hour (BMPH) index measures corresponding purchasing power of wages. We document large and growing geographical wage differences in standardized jobs using data covering most U.S. counties during 2016-2023. Before the Covid-19 pandemic, there was no BMPH growth where minimum wages stayed constant, but the pandemic wage increase, which diminished the importance of minimum wages, was stronger in these areas.

“Agricultural to Non-agricultural” Ways and Chinese Labor Market Differentiation: Endowment Difference or Identity Discrimination?

Abstract Different methods of transforming rural migrants’ household registration can affect their integration into citizenship. This study assesses the impact of different rural-to- urban hukou conversion methods on labor market wages and job entry, utilizing empirical analysis with China General Social Survey (CGSS) data. Rural migrants transitioning to urban hukou are categorized as active or passive “agricultural to non-agricultural” groups. Wage disparities between these groups are analyzed using the Oaxaca-Blinder decomposition method, revealing that 50% of the wage gap remains unexplained by individual characteristics. Additionally, this paper explores factors contributing to wage and job entry differences using OLS regression analysis. Empirical findings indicate that discrimination significantly contributes to the wage and job entry gap between passive and active groups, with primary mechanisms including statistical bias, information acquisition differences, and identity challenges. These results underscore the inevitable transition of the agricultural population to urban areas in emerging nations’ development trajectory. However, challenges may arise during this transformation, particularly in China, where passive “agricultural to non-agricultural” individuals face discrimination. Addressing the rights and interests of this group is crucial for ensuring smooth urbanization in China and offers insights to improve urbanization efforts in developing nations.

Why are workers in the Spanish energy industry more likely to earn higher wages than other Spanish workers?: Wages in the Spanish energy sector

In Spain, 85.5 % of energy industry workers have a salary that is more than the Spanish average salary. We apply a binomial logit model based on the maximum likelihood estimation method to analyze the factors that determine the probability of obtaining these higher wages. The sample used was taken from the Wage Structure Survey (2018) prepared by the Spanish National Institute of Statistics. Firstly, the results show that this sector has a consolidated workforce and that the workers' educational levels are appropriate for their jobs. Secondly, there are no gender-based wage differences in this industry. Finally, working conditions and wages are established through collective bargaining agreements at the company level, which stands in contrast to other types of agreements established in the rest of the Spanish economy.

Gender Wage Differentials Among Highly Educated in Urban India

This study aims to answer two questions. First, whether highly educated women face a wage penalty compared to their men counterparts in urban India? Second, if there exists a gender wage penalty, then what has happened to its size over time? We use the unit level employment–unemployment data of the National Sample Survey (NSS) for two rounds: 2004–05 and 2011–12 and employ the Neuman and Oaxaca (2004) method to estimate the average wage gap accounting for selection bias. We find that the highly educated men in urban India earn about 30% more than their women counterparts, and there is a marginal decline in the gender wage gap between 2004–05 and 2011–12. The gender wage gap scenario is worse in the ‘post-graduate and above’ sample than in the ‘graduate’ sample. In the ‘graduate’ sample, the wage gap declined between 2004–05 and 2011–12, whereas the gap increased in the ‘post-graduate and above’ sample. Though the gender wage gap among the highly educated as a whole has declined in urban India, the magnitude of the gap is still sizable.

Understanding the complexities of technological penetration and globalisation on labour market performance: The role of complementary policies

Understanding the impact of technological penetration and globalisation on wage differentials and employment is crucial for developing countries aiming for sustainable economic growth and reduced unemployment rates. This study investigates these effects in the Southern African Development Community. It also examines the role of complementary policies, such as financial development and human capital, and their interactive effects with technological penetration on wages and employment. The study employs panel fully modified least squares, dynamic least squares, and Driscoll-Kraay's standard error as a robustness check. Results indicate that technological penetration, financial development, and the interactive effect of human capital and technological penetration negatively affect employment. Conversely, globalisation and the interactive effect of financial development and technological penetration positively influence employment. Technological penetration is insignificant in the wage equation, while human capital, globalisation, and financial development are associated with wage increases. The interactive effect of technological penetration and human capital is not significant, and the interactive effect of financial development and technological penetration negatively impacts wages. Based on the findings, the study recommends enhancing financial development and human capital while carefully managing technological integration to navigate the complexities of technological and global economic integration to maximise employment and wage benefits.

글로벌 가치사슬에서의 위치가 임금에 미치는 영향

This study analyses the impact of Korean manufacturing's position in the global value chain on wages, i.e., estimates the impact of the relative position of Korean manufacturing on the smile curve, which represents the relationship between production stage and value added in the global value chain. The main findings of the analysis are as follows. First, we find that wages are higher at the top and bottom of the value chain in Korean manufacturing. Second, we estimate an interaction between occupational category and the smile curve and find that the wage effect of the smile curve is pronounced for production workers, but not for white collar workers. For production workers, wages are relatively higher at the top and bottom of the value chain, meaning that even within the same production occupation, there are differences in wages depending on the position in the manufacturing value chain. This suggests that productivity and wages need to improve in the middle of the value chain to mitigate the wage polarisation within the same occupation in manufacturing.