Wage Growth Research Articles

ІNCOMES AND EXPENSES OF THE RURAL POPULATION AND THEIR IMPACT ON THE STANDART OF LIVING

ІNCOMES AND EXPENSES OF THE RURAL POPULATION AND THEIR IMPACT ON THE STANDART OF LIVING

Social Skills and the Individual Wage Growth of Less Educated Workers

Social Skills and the Individual Wage Growth of Less Educated Workers

Unemployment Rate Convergence in the Case of Turkey: A Regional Analysis within the Scope of Dollarization and Real Wage

The unemployment rate is a fundamental variable in the socioeconomic comparison between regions. Hence, it is included in the focus of regional economic policies. Regional policy sets are frequently used to eliminate regional unemployment differences. This situation raises discussions about the efficiency of the employment policies and questions whether regional unemployment rates tend to converge to national averages. Especially in economies with regional development differences and the labor market does not exhibit a homogeneous structure, the regional analysis of unemployment rates is becoming more critical. This paper analyses the convergence of unemployment rates with the panel data set, which includes 26 regions of Turkey and the period 2004-2020. It is investigated if regional macroeconomic interactions in Turkey make the labor market homogeneous. Besides, the effects of dollarization and real wage on the unemployment rate change are questioned. The study's findings indicate the presence of deterministic and stochastic β convergence. According to the unconditional and conditional β convergence analysis, the change in the unemployment rate depends on the initial value of the unemployment rate. The findings also show that if dollarization and real wage growth increase, unemployment rate growth also increases. σ convergence analysis also confirms the presence of unemployment rate convergence.

Foreign Direct Investment and Labour Productivity: Relationship and Interconnection

The article aims to define the interconnection and interdependence of foreign direct investment (FDI) and labour productivity. The contributing factors of economic modernization, R&D spending, and production cost reduction to labour productivity growth are defined. The comparison analysis of FDI inflow, outflow, and labour productivity in the European Union countries is provided. The paper contributes to the empirical explanation of the relationship between labour productivity and FDI outflow and wage growth in certain sectors of the economy. The existence of higher wages in industries with a higher presence of joint venture foreign investments and industries with greater foreign participation was analysed. Greenfield investments are considered a stimulus for economic growth by the supply increase of both national and companies controllable by foreign proprietors. The sources of enhancing investment in R&D released by labour from economic sectors are proposed.

Analisis Faktor-Faktor yang Mempengaruhi Tingkat Pengangguran Terbuka Provinsi NTB Tahun 2020-2022

This study aims to determine the factors that influence the open unemployment rate in Mataram city at 2020 - 2022. The research method used in this study is a type of quantitative method. The panel data used in this study were processed using Microsoft Excel and Stata 14. This study used panel data regression analysis with a random-effect model. The results of the study show that the labor force and education level have a significant effect on the open unemployment rate in districts/cities in the Province of NTB 2020 - 2022. On the other hand, the minimum wage and economic growth show insignificant results. Minimum wages, labor force, and economic growth have a negative effect on the unemployment rate in Mataram City in 2020 - 2022, while the level of education has a positive effect. Simultaneously the minimum wage, labor force, economic growth, and education level also have a significant effect on the open unemployment rate in Mataram City in 2020 - 2022

Problems of Unorganized Workers

Despite their significant contribution to the economy, only 6 % of unorganized workers avail any type of social security support. The growth of real wages of casual workers has also been relatively slow in the post-reform period. The workers of the unorganized sectors are the worst affected in the event of any kind of crisis. The fundamental socio-economic rights of domestic migrant workers were adversely affected during the lockdown, but the state response was not up to the expectation. Despite expansion in policy and programmes, India`s wage and social security system is quite vulnerable to unorganized workers. The people of our country know how to arrange the means of subsistence on their own, but if they get adequate government sponsored social assistance easily at the right time, then the difficulties related to their life will be greatly reduced.

Back to Cheap Labour? Increasing Employment and Wage Disparities in Contemporary China

AbstractAfter nearly two decades of rising wages for those in the unskilled sectors of China's economy, in the mid-2010s employment and wages in China began to experience new polarizing trends. Using data from the National Bureau of Statistics of China, this paper examines trends in multiple sectors and subeconomies of China, revealing the substantial rise of employment in informal, low-skilled services as well as the steady decline of wage growth in the informal subeconomy. At the same time, we find that although employment growth in the formal subeconomy is relatively moderate, wage growth in high-skilled services is steadily rising. These two trends pose a challenge for China, presenting a new and uncertain period of economic change.

Measuring Financial Sustainability and Social Adequacy of the Italian NDC Pension System under the COVID-19 Pandemic

The COVID-19 pandemic is presently influencing the financial sustainability and the social adequacy of public pension schemes. In this paper, we measure the effects of COVID-19 on the Italian public pension system by introducing a deterministic shock due to the pandemic in the evolution of the variables mainly involved in the system’s evaluation. These variables, namely the unemployment rate, wage growth rate, inflation rate, and mortality rates, are modeled in a stochastic framework. Our results show that COVID-19 worsens the financial sustainability of the pension system in the short–medium term, while it does not appreciably affect social adequacy in the medium term. The Italian pension system already showed a social adequacy problem before 2020, which the pandemic does not further deteriorate essentially.

Consumer expenditures and problems of savings of economic subjects in the conditions of economic shocks – behavioral aspects

The purpose of the article is to reveal the main reasons for the low level of savings, investments and excessive consumer lending and opportunities for improving financial well-being at the micro level and forming sources for future development. The article reveals the main problems of citizens’ savings and consumption that occurred before the crisis caused by the coronavirus pandemic. And which only intensified during it. Some macroeconomic indicators reflecting the state of citizens’ savings and dependence on income were analyzed. Despite the stable growth of the population’s income, the savings rate remains at a low level. On the other hand, the demand for loan funds is ahead of such growth. In this way, the thesis about the negative relationship between wage growth and the rate of savings, put forward by some scientists earlier, was proved. Regardless of the presence of economic factors affecting the level of consumption and savings, the psychological reasons for the low tendency of citizens to save were also analyzed. Among these reasons are the deficit thinking effect, the default effect, confirmation bias, and loss aversion bias. It was also analyzed based on the facts, how much the psychological prejudices of Ukrainians influenced financial behavior. In particular, the fallacy of prejudices regarding the impracticality of investing in deposits of Ukrainian banks, as well as the idea that the Ukrainian banking system underwent catastrophic transformations in the first years after the banking reform, was considered.The research methods are descriptive, analytical, methods of synthesis and comparison. As a result of the analysis, the article proposes a comprehensive approach to men’s behaviour toward savings during the pandemic according to behavioural economics.Consideration of the economic and psychological aspects of the situation with savings led to the provision of conclusions and proposals. The main task for improving the effectiveness of managing one’s own expenses today is to understand the reasons for irrational behavior of people in new circumstances from the point of view of behavioral economics and the application of the theory of “pushing” for the formation of positive socio-economic changes. It is suggested to use this paper for further and deeper practical research of certain aspects of changing people’s behaviour for better investment solutions and financial wellbeing.
 JEL classіfіcatіon: D14, D91, E21

The extent of downward nominal wage rigidity: New evidence from payroll data

We use over a decade of representative payroll data from Great Britain to study the nominal wage changes of employees who stayed in the same job for at least one year. We show that basic hourly pay drives the cyclicality of marginal labour costs, making this the most relevant measure of wages for macroeconomic models that incorporate wage rigidity. Basic hourly pay adjusts much less frequently than previously thought in Britain, particularly in small firms. We find that firms compress wage growth when inflation is low, which indicates that downward rigidity constrains firms' wage setting. We demonstrate that the empirical extent of downward nominal wage rigidity (DNWR) can theoretically cause considerable long-run output losses. Combined, our results all point to the importance of including DNWR in macroeconomic and monetary policy models.

Labor Skill, Trade and Capital Intensity, and the Fall of Manufacturing Real Wages: Panel Evidence from Mexican Industries

Abstract The paper studies the fall in manufacturing real wages that took place in Mexico after the China shock of 2001. It shows, first, that the wage reductions reflected a significant transmission of the China shock, plus a weak link between labor-productivity and real-wage growth; and second, that the weight of these two factors was conditioned by the skill level of workers and the trade and capital intensity of industries in Mexico. Thus, while the China shock hit harder medium and high-skilled workers in capital-intensive industries, the weak link between productivity and wage growth affected more the low-skilled in trade-intensive industries. Results come from the estimation of wage equations by skill level for an annual panel of 20 manufacturing industries at NAICS three-digit level, for different periods but focusing on 1996–2017 (the NAFTA period) and 2003–2017 (the post-China shock period).

Worker flows and wage dynamics: estimating wage growth without composition effects

Abstract Wage dynamics are closely intertwined with job flows. Composition effects associated with the different characteristics of workers and jobs may blur the ‘true’ underlying wage pressure in the economy. We gauge composition effects in wage growth taking into consideration not only changes in employee and job characteristics, but also worker flows among employment states (stayers in the same job, movers to another job, new entrants and exits) controlling for the selection of workers into the different states. Using Spanish Social Security data during the 2006–18 period, we find that the ‘true’ underlying wage growth in the Spanish economy during recessions (expansions) was, on average, significantly lower (higher) than that the observed with raw data. This may help to explain some macro puzzles, such as the ‘vanishing Phillips curve’.

Comparison of the economic performance of the China- and India-born immigrants with US natives

Previous studies on the economic performance of immigrants in the United States of America showed that successive immigrants possess lower skills and experience sluggish wage growth, thereby making the wage convergence with the natives almost impossible. However, analysis of variance (ANOVA) post hoc tests using data from the American Community Survey (ACS) 2010–2019 on China- and India-born immigrants revealed otherwise. Both immigrant groups have significantly higher levels of education, better occupation and higher earnings compared to all foreign-born immigrants and natives. During 2010–2019, the earnings of China- and India-born immigrants increased faster than the natives’ due to their higher educational attainment. Thus, the general characteristics and experiences of all foreign-born vis-a-vis natives cannot be generalized across specific immigrant groups. Immigrants from different origin countries who have different skill levels and competencies show different earning differentials compared with the natives. Some immigrant groups even become more productive over time due to the increased portability of the human capital of their latest cohorts.

PENGARUH PENDAPATAN ASLI DAERAH, UPAH MINIMUM REGIONAL, DAN PERTUMBUHAN EKONOMI TERHADAP TINGKAT PENGANGGURAN DI KAWASAN NON-SARBAGITA PROVINSI BALI

The purpose of this study was to analyze the effect of original local government revenue (PAD), regional minimum wage (UMR), and economic growth simultaneously and partially on the unemployment rate in Non-Sarbagita Regions in Bali Province. The research method used in this research is observation with data collection through a literature study. The data used in this study is secondary data obtained from BPS Bali Province related to original local government revenue, regional minimum wage, economic growth, and unemployment rate. This study uses panel data, which is a combination of time-series data (2014-2020) and cross-section data (5 districts/cities in Bali Province) so that the total observations are 35 observations. The analysis technique used is multiple linear regression. Based on the results of the analysis, it was found that the variables of original local government revenue, regional minimum wages, and economic growth had a significant effect on the unemployment rate in the Non-Sarbagita area, Bali Province. Partially, the original local government revenue variable has a positive and significant effect on the unemployment rate in the Non-Sarbagita Region, Bali Province, while the regional minimum wage and economic growth have a negative and significant impact on the unemployment rate in the Non-Sarbagita Region, Bali Province

Dual returns to experience

In this paper we study how labor market duality affects human capital accumulation and wage trajectories of young workers. Using rich administrative data for Spain, we follow workers since their entry into the labor market to measure experience accumulated under different contractual arrangements and we estimate their wage returns. We document lower returns to experience accumulated in fixed-term contracts compared to permanent contracts and show that this difference is neither due to unobserved firm heterogeneity nor match quality. Instead, we provide evidence that the gap in returns is due to lower human capital accumulation while working under fixed-term contracts. In line with skill-learning complementarity. our results suggest that the widespread use of fixed-term work arrangements reduces skill acquisition of high-skilled workers, holding back life-cycle wage growth by up to 16 percentage points after 15 years since labor market entry.

Intergenerational consequences of gradual pension reforms

Balancing the government budget in an aging economy may require adjusting gradually pension benefits. Such policy change can take two forms: adjusting the accrual rate (the rate at which individuals built-up pension entitlements while working) or the indexation rate (the rate a which accrued entitlements are linked to nominal wage growth). We compare the consequences of such gradual policies across cohorts. We identify a fundamental generational trade-off between democracy and equality. In particular, we show that for Belgium, 80% of the population alive at the time of the reform prefers the accrual to the indexation reform, with the implication that the youngest half of the population would bear 85% of the total adjustment cost. The indexation reform provides more generational equality because the phasing in over time has larger base and thus benefit cut can be smaller per capita. We then consider other reforms improving the generational equality, showing that all those reforms fail to gain majority support. Finally, considering labor incentives, we show that the indexation reform is also more efficient than the accrual reform. Efficiency meets generational equality.

Влияет ли распределение доходов между трудом и капиталом на экономический рост?

The work is devoted to obtaining quantitative estimates of the impact of the dis-tribution of income between labor and capital on the rate of economic growth in the modern world. We used UN data on a set of European countries, post-Soviet countries, Israel, Canada, the USA and Turkey. To assess the impact of the distribution of income between labor and capital on economic growth rates, linear econometric models of the dependence of economic growth rates on the share of labor force in GDP by years of the period from 2007 to 2019 built. The obtained results showed that the relationship between the rates of economic growth and the share of labor force in GDP in the mod-ern world is not significant, the influence of the share of labor force in GDP on econom-ic growth is negative, but declining obliquely, in recent years it has become insignificant. it can be expected that in the 2020s this influence may become positive. Outpacing wage growth rates can help increase labor productivity and accelerate economic growth in the transition to a post-industrial economy.

Why Low Unemployment Rate in the United states Has not Delivered Meaningful Wage Growth

Wages have always been one of the most important concerns for employees and unemployment is one of the most important statistics for society. After studying the unemployment rate and wage growth data in the United States in recent years, it is evident that a low unemployment rate does not lead to meaningful wage growth. This paper explains that the main causes of this are domestic and foreign factors in the United States. This paper divides the influencing factors into two broad categories (domestic factors and foreign factors) and summarizes the foreign factors into the composition of employment, the productivity of labor and companies, inflation and labor unions, and the foreign factors are attributed to the effects brought about by globalization.

Contract Employment: Measurement and Implications for Employer–Employee Relationships

This article utilizes a new nationally representative survey, executed in January 2020, that measures non-standard work. The author estimates the incidence of contract company employment and freelancing and describes who goes into non-standard employment. He then studies earnings and access to employer-provided training among contract company employees—the largest and most mis-measured group of non-standard workers. Training is important because it affects wage growth and career trajectories and also gives insight into the evolving character of employment relationships. Findings indicate that contract company employees face an earnings penalty but that considerable heterogeneity occurs within this category. The analysis of multiple forms of formal training finds that contract company employees receive less training than do standard employees even after multiple controls. Informal training is more textured due to the nature of social interactions inherent in its availability. Throughout the analysis, racial and ethnic disparities are apparent.

Defining the problem of low wage growth in Australia and Denmark: From the actors’ perspectives

Low wage growth is a challenge common to many OECD countries including countries with very different institutional systems. This paper utilises and extends Rochefort and Cobb’s (1993) ‘problem definition’ framework to analyse how employer and union representatives in Australia and Denmark explain the causes of low wage growth. Drawing on elite interviews, which allow us to assess the nuance of actors’ perceptions, we find disagreement among Australian actors about the role of the collective bargaining system in contributing to low wage growth. Despite disagreement over the extent of the low wage growth problem in Denmark, both unions and employers expressed confidence in the ability of the bargaining system to resolve it. We argue that the greater degree of consensus in Denmark compared with Australia reflects differences in national institutional systems and knowledge regimes, which have influenced the ways actors in these countries perceive low wage growth.