Wage Growth

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity, and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within and between jobs, declines over the first ten years of a career—the “job-shopping” phase of a working life—after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers. (JEL J24, J31, J63, J64)

This paper focuses on the implications of alternative methods of aggregating individual wage data for the behavior of economy-wide wage growth. The analysis is motivated by evidence of significant heterogeneity in individual wage growth and its cyclicality. Because of this heterogeneity, the choice of aggregation will affect the properties of economy-wide wage growth measures. To assess the importance of this consideration, we provide a decomposition of wage growth into aggregation effects and composition effects and use the decomposition to compare growth in an average wage—specifically average hourly earnings—to a measure of average wage growth from the Survey of Income and Program Participation. We find that aggregation effects largely account for average hourly earnings growth being persistently lower and less cyclical than average wage growth over the period 1990-2015, with these effects reflecting a disproportionate weighting of high-earning workers. The analysis also indicate...

We use evidence from worker turnover following M&A events to show that workers’ choices to leave the firm depend on changes in workers’ relative standing, or status, in terms of wage and rank. Our results show that social, rather than pecuniary, preference drives these choices. We also show that social preference varies with reference group. When worker's expected status within a group of co-workers in the same occupation increases, workers are less likely to quit. In contrast, when workers’ expected status compared to all workers within the same firm increases, they are more likely to quit. Moreover, for workers who lose status during M&A, the loss of social rewards is compensated by faster wage growth, suggesting a market for status.

This study examines how the minimum wage raises in Indonesia affect firm-specific factors such as sales growth, return on assets, return on equity, net profit margin, and gross profit margin. The samples used in this study were 135 companies for 12 years’ financial statements ranging from 2008 to 2019, with 1620 observations. An ordinary least square and multivariate analysis of variance are employed. The MANOVA result shows differences in firms specific factors among industries’ types. Meanwhile, sales growth and wage growth showed no difference in the value of sales growth and wage growth between industry types. The regression results show that 1) minimum wage has a positive effect on wage growth, but the non-significant effect on sales growth; 2) economic growth has a negative but non-significant effect on sales growth and wage growth, and 3) only total assets and wage growth variables have a positive and significant effect on gross profit margin. Bodnár et al. (2018) asserted th...

economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Policy Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

This article describes 40 years of trends in wages and labor force participation for the “working class”—workers with a high school education or less—compared to workers with a college degree or more. We compare cyclical peaks over the entire period 1979 to 2019, with particular focus on the Great Recession (2007–2010) and recovery (2010–2019). We also present results by gender and race. We find real wage growth for all workers in the recovery from the Great Recession, but not enough to change the long-term trends of growing inequality and stagnant wages for the less educated. We also find that labor force participation continued to decline for the less educated, even during the recovery. Gaps between whites and Blacks grew, while Hispanics and Asians made more progress than Blacks. We consider various explanations for these findings and show that the early effects of the 2020 to 2021 pandemic recession hurt less-educated workers and those of color more than anyone else.

The Vietnam "renovation" reforms were implemented during the 1990s, but their full effect was only felt several years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. Wage growth was underpinned by changes in the wage structure (mainly associated with experience group) and residual changes. Growth in productive characteristics (mainly education) contributed to wage growth only at higher points of the wage distribution. Conventional measures of inequality as well as a decomposition of the Gini coefficient show that wage inequality decreased sharply through the 1990s until 2006, but levelled-off subsequently. The main contributors to changing inequality were again education (through the composition effect) and over-time changes in the return to experience. The paper also discusses the possible effects of minimum wage policies on wage inequality in Vietnam.

This paper employs a pooled cross-section time-series error-variance-components model applied to panel data to present new estimates of the impact of unions on earnings profiles. It avoids union-status measurement errors alluded to by Freeman (1984) contained in current panel estimates by limiting analysis to a set of one-time union status switches for which union status data could be sufficiently cross-checked. It avoids heterogeneity biases by comparing entire earnings profiles for given workers before and after their union status change. Finally, potential selectivity biases in using a non-random sample of only union switchers, is found not to plague the reported results. ' To our knowledge, panel data for a sample of one-time switchers was first used by Polachek and McCutcheon (1983) to

This paper investigates the effect of displacement on reemployment wages of socially insured West German workers who became unemployed in 1986. Because detailed information on the cause of job loss is unavailable, displacement status is imputed using a probit estimated on the German Socioeconomic Panel (GSOEP). Average wages of those classified as displaced decline only slightly upon reemployment. The lowest earnings quartile, in which displacement is concentrated, even gains slightly (+2%), while wage growth losses for the upper three quartiles are comparable to US findings (-17%). Large wage losses are associated with changes of industry, but not of firm. Our results are robust to controls for heterogeneity, for recalls, and to the probit specification used, and are confirmed in the smaller GSOEP file.

A number of earlier studies have examined whether extensive labour market programmes (ALMPs) contribute to upward wage pressure in the Swedish economy. Most studies on aggregate data have concluded that they actually do. In this paper we look at this issue using more recent data to check whether the extreme conditions in the Swedish labour market in the 1990s and the concomitant high levels of ALMP participation have brought about a change in the previously observed patterns. We also look at the issue using three different estimation methods to check the robustness of the results. Our main finding is that, according to most estimates, ALMPs do not seem to contribute significantly to an increased wage pressure. * We are grateful to Per Jansson, Bank of Sweden, Kerstin Johansson, Office of Labour Market Policy Evaluation (IFAU), Ragnar Nymoen, University of Oslo and seminar participants at IFAU, Bank of Sweden and Växjö University for comments on earlier versions of the paper. The usual caveat applies.

A number of earlier studies have examined whether extensive labour market programmes (ALMPs) contribute to upward wage pressure in the Swedish economy. Most studies on aggregate data have concluded that they actually do. In this paper we look at this issue using more recent data to check whether the extreme conditions in the Swedish labour market in the 1990s and the concomitant high levels of ALMP participation have brought about a change in the previously observed patterns. We also look at the issue using three different estimation methods to check the robustness of the results. Our main finding is that, according to most estimates, ALMPs do not seem to contribute significantly to an increased wage pressure. * We are grateful to Per Jansson, Bank of Sweden, Kerstin Johansson, Office of Labour Market Policy Evaluation (IFAU), Ragnar Nymoen, University of Oslo and seminar participants at IFAU, Bank of Sweden and Växjö University for comments on earlier versions of the paper. The usual caveat applies.

We introduce an efficiency wage mechanism into an innovation‐driven growth model. Due to asymmetric information problems the labour market is segmented and homogeneous workers may be employed either in the non‐competitive intermediate sector or in the competitive research sector. We analyse the impact that the monopoly position enjoyed by intermediate firms in the product market may have on employment, wage inequality and growth, and the sectoral distribution of workers. We find that the lower the product market competition in the capital goods sector, the higher the research employment, the lower the intermediate sector employment and the higher the growth rate. The relationships between growth and inequality, on the one hand, and between growth and employment, on the other, are both negative.

We examine temporary workers' differential extra-role behaviors (ERBs) towards their client and employer; if this varied with the motivation of the worker for being temporary, whether these ERBs are affected by firms' relationship management practices; and whether the ERBs aimed at the client and the employer impact subsequent outcomes. Results showed that temporary workers' motivations are differentially related to agency and client directed ERBs. Agency ERBs were related to longer tenure with the agency, while client ERBs were associated with faster wage growth and more hours worked per week. Organizational relationship management practices elicit different client and agency directed ERBs.

This study will examine the effect of population growth, PDRB, inflation and wages on unemployment rate in East Java in 1986-2015. This research method with this research design is kind of quantitative research by doing hypothesis test. The data used is secondary data by viewing publication of Central Bureau of Statistics of East Java Province. This study uses time series data from 1986-2015. The population of this research is all districts and cities in East Java Province. The sample of this study is from the entire population of district and city governments to be sampled in accordance with the criteria from 1986 to 2015. The analysis tool used is multiple regression analysis which is a linear multiple regression method using Eviews7 program. The result of data analysis shows that the results of population growth does not affect the unemployment rate in East Java, Inflation does not affect the unemployment rate in East Java, GDP does not affect the unemployment rate in East Java a...

The correlation between real wages and aggregate employment growth has beenthe object of several empirical studies conducted with both aggregate and micro data.Despite the new availability of linked employer-employee data, however, we still havelimited empirical evidence [Belzil, 2000] to describe how real wage cyclicality can beexplained by what happens between workers and employers at the firm level. Thispaper makes a

Non-technical summary 1 Introduction 2 Analytical framework 2.1 The model 2.2 Calibration and simulation 3 Empirical framework 3.1 Empirical specifi cation for private sector wages 3.2 Empirical specifi cation for public sector wages 3.3 Econometric issues 4 Estimation results and discussion 4.1 Data and stylised facts 4.2 Private wage determinants 4.3 Public wage determinants 4.4 Robustness, including further dynamics 5 Conclusion References Tables and fi gures Appendices European Central Bank Working Paper Series CONTENTS 4 ECB Working Paper Series No 971

In this paper we analyze career dynamics for the large share of U.S. workers who have more schooling than their peers in the same occupation. We use data from the NLSY79 combined with the CPS to analyze transitions into and out of overeducated employment, together with the corresponding effects on wages. Overeducation is a fairly persistent phenomenon at the aggregate and individual levels, with 66% of workers remaining overeducated after one year. Overeducation is not only more common, but also more persistent among blacks and low-AFQT individuals. Further, the hazard rate out of overeducation drops by about 60% during the first 5 years spent overeducated. However, the estimation of a mixed proportional hazard model suggests that this is attributable to selection on unobservables rather than true duration dependence. Finally, overeducation is associated with lower current as well as future wages, which points to the existence of scarring effects.

We also thank Hugo Ñopo, the editor of this volume, for exceptionally constructive remarks. The usual disclaimer applies. 1. In this paper, we employ multinational and foreign-owned firm interchangeably even if, in recent years, we have been witnessing the rise of many Brazilian multinationals, such as Vale (mining and metals), Petrobras (oil and gas), Gerdau (steel), and Embraer (aviation). See Amann (2009) for a historical perspective and a number of case studies.

This report builds on detailed analysis of the lessons from the pilot programme for the Voluntary Right to Buy (VRTB). The introduction of the right to buy (RTB) for eligible tenants in specified housing association dwellings was a manifesto commitment by the Conservative party for the 2015 general election. In October 2015, the government accepted a proposal by the National Housing Federation (NHF) on behalf of its members to deliver this commitment by way of voluntary agreement rather than legislation. The VRTB pilot scheme was set up by the Department for Communities and Local Government (DCLG) the following month. The research team was commissioned in January 2016 by the National Housing Federation (NHF) and the five pilot housing associations to investigate the programme using an action learning approach. Findings from this research were published in January 2017. These findings were published before the end of the pilot programme. The overwhelming majority of the purchases fro...

In theory, growing wage inequality within gender should cause women to invest more in their market productivity and should differentially pull able women into the workforce, thereby closing the measured gender gap even though women' s wages might have grown less than men' s had their behavior been held constant. Using the CPS repeated cross-sections between 1975 and 2001, we use control function (Heckit) methods to correct married women' s conditional mean wages for selectivity and investment biases. Our estimates suggest that selection of women into the labor market has changed sign, from negative to positive, or at least that positive selectivity bias has come to overwhelm investment bias. The estimates also explain why measured women' s relative wage growth coincided with growth of wage inequality within-gender, and attribute the measured gender wage gap closure to changing selectivity and investment biases, rather than relative increases in women' s earning potential. Using PSID waves 1975-93 to control for the changing female workforce with person-fixed effects, we also find little growth in women' s mean log wages. Finally, we make a first attempt to gauge the relative importance of selection versus investment biases, by examining the family and cognitive backgrounds of members of the female workforce. PSID, NLS, and NLSY data sets show how the cross-section correlation between female employment and family/cognitive background has changed from "negative" to "positive" over the last thirty years, in amounts that might be large enough to attribute most of women' s relative wage growth to changing selectivity bias.

The debate on the macroeconomic effects of the regulation of wages and of unemployment benefits -which has also occurred in the recent years in Italy -is long lasting. Conventional wisdom holds that both may be harmful for efficiency, although often advocated for equity reasons. Another controversial debate concerned the taxation of capital income. In this paper we have shown that, despite the common wisdom which considers harmful the introduction of a minimum wage in that source of output losses, the introduction of a binding minimum wage, although on the one hand it generates market inefficiencies and unemployment, on the other hand it may also, surprisingly, generate production as well as welfare gains in the long run. Moreover, it may generate welfare gains even when it generates a production loss. From a policy point of view, motivated by the recent increase from 12.5% to 20%, starting from the year 2007, in the capital income tax rate, the aim of this paper was to investigate, for the Italian case, whether the introduction of a minimum wage and of an unemployment insurance system may eventually enhance long run welfare, if the increase of the tax burden on capital income is used for preserving the balanced budget instead of financing other public expenditures. Our findings showed that, in contrast with the prevailing wisdom, positive effects always appear with a "calibration" of parameters largely corresponding to the current Italian situation. Therefore these findings offer some important policy implications so far not explored.

We offer an analysis of the existence of a positive relationship between minimum wages and economic growth in a simple one-sector overlapping generations economy where the usual Romer-typed knowledge spill-over mechanism in production represents the engine of endogenous growth, in the case of both homogeneous and heterogeneous (i.e., skilled and unskilled) labour. Assuming also the existence of unemployment benefits financed with consumption taxes not conditioned on age at a balanced budget, it is shown that minimum wages may stimulate economic growth and welfare despite the unemployment occurrence. Moreover, a growth-maximising minimum wage can exist. A straightforward message, therefore, is that a combination of minimum wage and unemployment benefit policies can appropriately be used to promote balanced growth and welfare.

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ABSTRAK: Kalimantan Timur merupakan provinsi dengan struktur ekonomi yang didominasi sektor ekstraktif. Memahami sensitivitas ekonomi regional terhadap guncangan internal dan eksternal penting untuk perumusan kebijakan jangka panjang. Penelitian ini bertujuan untuk menganalisis elastisitas PDRB atas dasar harga konstan 2010 terhadap lima indikator ekonomi periode 2011-2023 menggunakan model log-linear berganda. Masalah multikolinearitas diatasi dengan Bayesian Lasso dan estimasi parameter menggunakan algoritma No-U-Turn Sampler (NUTS) pada Stan. Variabel yang dikaji meliputi volume impor BBM non-minyak mentah, jumlah penduduk bekerja, nilai tengah IHSG, konsumsi listrik, dan konsumsi energi Tiongkok. Hasil analisis menunjukkan hanya dua variabel yang signifikan mempengaruhi PDRB Kalimantan Timur pada tingkat kredibilitas 90 persen. Model log-linear yang dihasilkan memiliki daya prediksi sangat baik dengan 𝑅 2 = 96,71 persen. Volume impor BBM memiliki elastisitas 0,02 persen, sementara konsumsi energi Tiongkok menunjukkan elastisitas 0,59 persen. Temuan ini mengonfirmasi bahwa pertumbuhan ekonomi Kalimantan Timur sangat bergantung pada permintaan energi dari Tiongkok. Implikasi kebijakan dari penelitian ini menekankan urgensi diversifikasi pasar ekspor dan pengembangan sektor non-ekstraktif guna membangun ketahanan ekonomi regional yang berkelanjutan.

For three years after the typical emerging economy opens its stock market to inflows of foreign capital, the average annual growth rate of the real wage in the manufacturing sector increases by a factor of three. No such increase occurs in a control group of countries that do not liberalize. The temporary increase in wage growth drives up the level of the average worker's annual compensation by US $487—an increase equal to nearly one-fifth of their annual pre-liberalization salary. Overall, the results suggest that trade in capital may have a larger impact on wages than trade in goods. (JEL E25, E44, F16, F43, G18, O16)

Gender wage gaps in developed economies have narrowed substantially in past decades: these changes are driven by institutional, cultural, and economic factors. A key economic driver shaping modern labour markets is technological change, yet there is a paucity of evidence on its direct impact on gender wage disparities. We study this question by considering how men and women are differentially exposed to the structural employment and wage changes across occupations associated with advancing technology, and how this has impacted gender wage gaps since the mid-1980s for two countries, Portugal and the United States. Our findings suggest that while women have generally been less exposed to the automation of work, this has not always led to declining gender wage gaps: at times, women have transitioned to jobs where wage levels or wage growth were lower. Non-technological changes appear at least as important in understanding the evolution of the gender wage gap.

economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

This paper considers the role of gender in the promotion process and the impact of promotion on wages and wage growth, using data from the National Longitudinal Survey of Youth (NLSY79). Its focus is upon mid-career promotion and wages, thereby complementing extant studies of the NLSY79 that relate to differences between men and women at an earlier stage in their careers. The paper is further differentiated from these studies and the wider promotions literature in considering the role of unionism and the public sector. It is reported that mid-career females are more likely than males to be promoted in the private sector (and no less likely in the public sector); that wages are increasing in promotion, and the effect is generally higher for females; and that female wage growth from contemporaneous promotion is almost as high as that for males in the private sector and much higher in the public sector. These rather positive results for females represent in most cases an improvement over the early-career findings but in mid-career the mediating influence of unionism is more negative, and not just for females.

Using data from the National Longitudinal Survey of Youth (NLSY79), this paper considers the role of gender in promotion and subsequent earnings development and how this evolves over a career. In its use of three career stages, the study builds on earlier work using the NLSY79 that considers gender differences in the early career years alone. The raw data suggest reasonably favorable promotion outcomes for females over a career. But the advantages seem to be confined to less-educated females. And while there are strong returns to education for males through enhanced promotion probability and attendant wage growth in later career this is not the case for females. Although this latter finding is not inconsistent with fertility choices on the part of educated females, choice is seemingly only part of the explanation.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at .