Found 22 article(s) for author 'Wages'

Productivity and Pay: is the link broken?

Productivity and Pay: is the link broken? Lawrence Summers, November 2017, Paper, “After growing in tandem for nearly 30 years after the second world war, since 1973 an increasing gap has opened between the compensation of the average American worker and her/his average labor productivity. Brynjolffson and McAfee (2014) use the phrase “the great decoupling” to describe this phenomenon; Bivens and Mishel (2015) refer to it as a “historic divergence”. In recent years discussion has centered on understanding why this phenomenon has occurred and how policy should respond.Link

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Wages, Prices, and Employment in a Keynesian Long Run

Wages, Prices, and Employment in a Keynesian Long Run. Stephen Marglin, 2017, Paper, “The central question this paper addresses is the same one I explored in my joint work with Amit Bhaduri 25 years ago: under what circumstances are high wages good for employment? I extend our 1990 argument in three directions. First, instead of mark-up pricing, I model labor and product markets separately. The labor supply to the capitalist sector of the economy is assumed à la Lewis to be unlimited. Consequently the wage cannot be determined endogenously but is fixed by an extended notion of subsistence based on Smith, Ricardo, and Marx. For tractability the product market is assumed to be perfectly competitive. The second innovation is to show how disequilibrium adjustment resolves the overdetermination inherent in the model.Link

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The Expanding Gender Earnings Gap: Evidence from the LEHD-2000 Census

The Expanding Gender Earnings Gap: Evidence from the LEHD-2000 Census. Claudia Goldin, 2017, Paper, “The gender earnings gap is an expanding statistic over the lifecycle. We use the LEHD Census 2000 to understand the roles of industry, occupation, and establishment 14 years after leaving school. The gap for college graduates 26 to 39 years old expands by 34 log points, most occurring in the first 7 years. About 44 percent is due to disproportionate shifts by men into higher-earning positions, industries, and firms and about 56 percent to differential advances by gender within firms. Widening is greater for married individuals and for those in certain sectors. Non-college graduates experience less widening but with similar patterns.Link

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Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit

Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit. Michael Luca, April 11, 2017, Paper, “We study the impact of the minimum wage on firm exit in the restaurant industry, exploiting recent changes in the minimum wage at the city level. The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).Link

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The Earnings of Undocumented Immigrants

The Earnings of Undocumented Immigrants. George Borjas, March 2017, Paper, “Over 11 million undocumented persons reside in the United States, and there has been a heated debate over the impact of legislative or executive efforts to regularize the status of this population. This paper examines the determinants of earnings for undocumented workers. Using newly developed methods that impute undocumented status for foreign-born persons sampled in microdata surveys, the study documents a number of findings. First, the age-earnings profile of undocumented workers lies far below that of legal immigrants and of native workers, and is almost perfectly flat during the prime working years.Link

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Racial Inequality in Employment and Earnings after Incarceration

Racial Inequality in Employment and Earnings after Incarceration. Bruce Western, February 2017, Paper, “This paper analyzes monthly employment and earnings in the year after incarceration with survey data from a sample of individuals just released from prison. More than in earlier research, the data provide detailed measurement of temporary and informal employment and richly describe the labor market disadvantages of formerly-incarcerated men and women. We find that half the sample is jobless in any given month and average earnings are well below the poverty level. Jointly modeling employment and earnings, blacks and Hispanics are estimated to have lower total earnings than whites even after accounting for health, human capital, and criminal involvement.Link

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Globalization and Wage Inequality

Globalization and Wage Inequality. Elhanan Helpman, December 9, 2016, Paper, “Globalization has been blamed for rising inequality in rich and poor countries. Yet the views of many protagonists in this debate are not based on evidence. To help form an evidence-based opinion, I review in this paper the theoretical and empirical literature on the relationship between globalization and wage inequality. While the initial analysis that started in the early 1990s focused on a particular mechanism that links trade to wages, subsequent studies have considered several other channels, and the quantitative assessment of the size of these influences has been carried out in multiple studies. Building on this research, I conclude that trade played an appreciable role in increasing wage inequality, but that its cumulative effect has been modest, and that globalization does not explain the preponderance of the rise in wage inequality within countries.Link

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Share Capitalism and Worker Wellbeing

Share Capitalism and Worker Wellbeing. Richard Freeman, 2016, Paper, “We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual performance-related pay, we here demonstrate a robust positive link between the receipt of a range of group performance schemes (profit shares, group bonuses and share ownership) and job satisfaction. Critically, this relationship remains after conditioning on wage levels, which suggests these pay methods provide utility to workers in addition to that through higher wages. These findings survive a variety of methods aimed at accounting for unobserved
individual and job-specific characteristics.Link 

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E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India. Rohini Pande, October 16, 2016, Paper, “In collaboration with the Government of Bihar, India, we conducted a large-scale experiment to evaluate whether transparency in fiscal transfer systems can increase accountability and reduce corruption in the implementation of a workfare program. The reforms introduced electronic fund-flow, cut out administrative tiers, and switched the basis of transfer amounts from forecasts to documented expenditures. Treatment reduced leakages along three measures: expenditures and hours claimed dropped while an independent household survey found no impact on actual employment and wages received; a matching exercise reveals a reduction in fake households on payrolls; and local program officials’ self-reported median personal assets fell.Link

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Does Productivity Still Determine Worker Compensation? Domestic and International Evidence

Does Productivity Still Determine Worker Compensation? Domestic and International Evidence. Robert Lawrence, 2016, Book Chapter. “The American dream is that each generation should live twice as well as the previous one, and this requires that incomes rise at an annual rate of around 2 percent per year. At this pace, incomes will double every 35 years. Between 1947 and 1970, average real compensation in the US increased at annual rate of 2.6 percent—a pace that was actually faster than required to achieve the dream. But since 1970, the average real compensation of US workers has grown at less than 1 percent per year, and at that pace it would take almost a lifetime to see incomes double.Link

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