German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination

Dawson, Peter; Hinks, Timothy; Watson, Duncan

doi:10.3790/vjh.70.1.107

Cited by 7 publications

(5 citation statements)

References 15 publications

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“…Even when many employers are present in a labor market, the other factors may mean that individual workers face "few employment opportunities," because of the costs of locating vacancies or traveling to distant locations, which means that labor markets are effectively "thin" (Manning 2003a: 106-108). Much of the evidence of monopsony power has been indirect, involving aspects of wage dispersion, the finance of work-based training, pay differences by race and sex, and the effects of changes in statutory minimum wages (e.g., Card and Krueger 1995;Dawson, Hinks, and Watson 2001;Bhaskar, Manning, and To 2002;Dube, Lester, andReich 2010, 2012). Recent research has focused on more direct evidence, in terms of the elasticity of labor supply to individual firms (e.g., Ransom and Sims 2010;Staiger, Spetz, and Phibbs 2010).…”

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confidence: 99%

Monopsony Power, Pay Structure, and Training

Muehlemann¹,

Ryan²,

Wolter³

2013

ILR Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA 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. Although interest in monopsonistic influences on labour market outcomes has revived in recent years, only a few empirical studies provide direct evidence on it. This paper analyses empirically the effect of monopsony power on pay structure, using a direct measure of labour market 'thinness'. We find that having fewer competitors for skilled labour is associated at the level of the establishment with lower pay for both skilled labour and trainees, but not for unskilled labour. These findings have potentially important implications for the economic theory of training, as most recent models assume that skilled pay is set monopsonistically but both unskilled and trainee pay are determined competitively. Our results support those assumptions for skilled pay and unskilled pay, but not for trainee pay.JEL Classification: J24, J31, J42

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confidence: 99%

Monopsony Power, Pay Structure, and Training

Muehlemann¹,

Ryan²,

Wolter³

2013

ILR Review

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“…Aside from the afore-mentioned job search inefficiencies, the aspect which appears to have attracted the greatest wave of studies is the pay gap caused by differences in race, gender, nationality, demographic/ socio-economic status and education. In an international context, some pioneering papers using stochastic frontier analysis to highlight this issue include papers by Robinson and Wunnava (1989), Hunt-McCool and Warren (1993), Croppenstedt and Meschi (1997), Polachek and Robst (1998), Dawson et al (2001), Salas and Contreras (2003), Lang (2005), Adamchik and King (2007) or Jensen et al (2010).…”

Section: Literature Reviewmentioning

confidence: 99%

Wage Frontiers in Pre and Post-crisis Spain: Implications for Welfare and Inequality

Bashford-Fernández

Rodríguez

2018

Soc Indic Res

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This paper explores the evolution of wages in Spain using a stochastic frontier approach (SFA) to estimate the wage frontiers of workers in Spain as a function of their human capital (education, experience and occupation), year and region. Once the wage frontier has been estimated an analysis is made of determinants (type of contract, economic cycle, gender and region), which may contribute to the workers having difficulties in achieving their maximum attainable potential salary. Given our specific interest in comparing wages before and after the crisis, we monitor the effect on hourly wage of changes in the level of Spanish Gross Domestic Product for the period 2004-2015. For this purpose, a panel data model (Greene, 2005) is used to estimate the stochastic frontier. The data is obtained from the Spanish Living Conditions Survey. Coinciding with three waves (2004-2007, 2008-2011 and 2012-2015) of the SCLS, our database conveniently encompasses differing economic cycles for estimation. Results show that the difficulty of workers in achieving their potential wage is greater at the end of the post-crisis period than the pre-crisis period. Whilst serving to throw some light on the potential and real wages available to Spanish workers before and after the onset of the economic crisis, the paper also offers a brief glimpse of the effect on individual welfare and evidence of an increasing trend in inequality in the post-crisis period.

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“…McClure et al (1998) also take up the question of wage inefficiency but compare Stochastic Frontier estimations for the United States and Canada. Dawson et al (2001) analyze the question of relative underpayments to male and female workers. Prieto et al (2003) use the Stochastic Frontier wage model to estimate returns to education for potential and effective wages.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Brazilian Female Labor Market: Racial-Skin Color Discrimination and Inefficiency

Fernandes¹

2015

Econ. Apl.

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ResumoO mito da democracia racial é ainda muito presente na sociedade brasileira, embora a literatura econômica aponte para a existência de um alto grau de discriminação racial. Este artigo visa inferir sua existência nos salários eficientes do mercado de trabalho feminino, levando-se em conta o problema do viés de seleção. As causas da ineficiência são também investigadas. Os resultados mostram que o diferencial de salário eficiente, não explicadas por diferenças no capital humano, é significativo, sendo maior entre as trabalhadoras mais eficientes. Por conseguinte, políticas tradicionais possuem apenas um efeito limitado para reduzir as diferenciais salariais entre raças.Palavras-chave: Discriminação Racial; Discriminação de Gênero; Fronteira de Produção Estocastica AbstractThe myth of racial democracy is still widespread in the Brazilian society, although economic literature has continuously documented pervasive racial discrimination. This study analyzes racial discrimination in the Brazilian female labor market using a Mincer stochastic wage frontier, corrected for sample selection. The results, using Oaxaca-Blinder decomposition, showed that an efficient wage differential, not explained by differences in human capital does exist and is large among the most efficient workers. Wage inefficiencies are also explained and it is a claim of the study that traditional policies might be a tool in reducing underpayment dispersion, but cannot cope with pure discrimination.

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German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination

Abstract: Summary

Cited by 7 publications

References 15 publications

Monopsony Power, Pay Structure, and Training

Monopsony Power, Pay Structure, and Training

Wage Frontiers in Pre and Post-crisis Spain: Implications for Welfare and Inequality

Brazilian Female Labor Market: Racial-Skin Color Discrimination and Inefficiency

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