The sources of wage variation and the direction of assortative matching: Evidence from a three-way high-dimensional fixed effects regression model

Torres, Sonia Felipe; Portugal, Pedro; Addison, John T.; Guimarães, Paulo

doi:10.1016/j.labeco.2018.06.004

Cited by 29 publications

(25 citation statements)

References 48 publications

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“…A different measure is proposed by Torres et al . (), who directly include occupation dummies in an AKM model to study the effect of job title membership on wages. However, in the Italian context, our approach is more suitable for studying the influence of collective bargaining on wage dynamics , since the rules for assigning each worker to a job title are set by the relevant collective contract and can change over time.…”

Section: The Impact Of Collective Bargaining On Wage and Human Capitamentioning

confidence: 99%

“…Given this institutional context, the between job titles variance in workers' portable wage components can be considered an informative parameter to quantify the impact of collective bargaining on wages. A different measure is proposed by Torres et al (2013), who directly include occupation dummies in an AKM model to study the effect of job title membership on wages. However, in the Italian context, our approach is more suitable for studying the influence of collective bargaining on wage dynamics, since the rules for assigning each worker to a job title are set by the relevant collective contract and can change over time.…”

Section: Wage Components Dispersion Within and Between Job Titlesmentioning

confidence: 99%

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Collective Bargaining and the Evolution of Wage Inequality in Italy

Devicienti

Fanfani

Maida

2018

Brit J Industrial Rel

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Italian male wage inequality has increased at a relatively fast pace from the mid‐1980s until the early 2000s, while it has been persistently flat since then. We analyse this trend, focusing on the period of most rapid growth in pay dispersion. By accounting for worker and firm fixed effects, it is shown that workers' heterogeneity has been a major determinant of increased wage inequalities, while variability in firm wage policies has declined over time. We also show that the growth in pay dispersion has entirely occurred between livelli di inquadramento, that is, job titles defined by national industry‐wide collective bargaining institutions, for which specific minimum wages apply. We conclude that the underlying market forces determining wage inequality have been largely channelled into the tight tracks set by the centralized system of industrial relations.

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Section: The Impact Of Collective Bargaining On Wage and Human Capitamentioning

confidence: 99%

Section: Wage Components Dispersion Within and Between Job Titlesmentioning

confidence: 99%

Collective Bargaining and the Evolution of Wage Inequality in Italy

Devicienti

Fanfani

Maida

2018

Brit J Industrial Rel

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“…The AKM methodology has seen a very large number of applications, e.g Abowd et al (2003),,Abowd et al (2006) Abowd et al (2007),Abowd et al (2008),,,Carneiro et al (2012) Torres et al (2012)…”

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confidence: 99%

Does exporting improve matching? Evidence from French employer-employee data

Bombardini

Orefice

Tito

2019

Journal of International Economics

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Using linked employer-employee data from France, we show that exporters and non-exporters match with sets of workers that are different: exporters employ workers of higher type and lower type dispersion. Exporters employ workers of higher type and lower type dispersion. The matching between exporting firms and workers is tighter in sectors characterized by better exporting opportunities. We rationalize this finding using a model of matching with search frictions where more productive firms and exporting firms match with better workers and tolerate a lower degree of dispersion among the workers employed.

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“…These assumptions have strong empirical support. The analysis of matched employer-employee data sets over the past 15 years has consistently documented the importance of both worker and firm unobserved heterogeneity to explain observed differences in wages across workers (see Abowd et al (1999), Lopes De Melo (2013 and Torres et al (2013)). Production complementarities are increasingly seen as a plausible description of the production technology characteristic of modern labor markets.…”

Section: Introductionmentioning

confidence: 99%

“…Shimer and Smith (2000) established the equivalence between a specific form of production complementarities and positive assortative matching in a random search environment, generalizing the famous result in a competitive setup put forth by Becker (1973). Several papers in the applied search literature have tried to measure the sign and strength of assortative matching in skill nonparametrically (see Abowd et al (1999), Eeckhout and Kircher (2011), Hagedorn et al (2012), Torres et al (2013) and Lopes De Melo (2013)), or estimate the degree of skill complementarities in production using a structural approach (see Bagger and Lentz (2012) and Lise et al (2013)). Although this question is not fully settled, there is a growing consensus that positive sorting on skill is an important characteristic of modern labor markets.…”

Section: Introductionmentioning

confidence: 99%

Racial discrimination in the U.S. labor market: Employment and wage differentials by skill

2018

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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 In the US labor market the average black worker is exposed to a lower employment rate and earns a lower wage compared to his white counterpart. Lang and Lehmann (2012) argue that these mean differences mask substantial heterogeneity along the distribution of workers' skill. 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 SIn particular, they argue that black-white wage and employment gaps are smaller for highskill workers. In this paper we show that a model of employer taste-based discrimination in a labor market characterized by search frictions and skill complementarities in production can replicate these regularities. We estimate the model with US data using methods of indirect inference. Our quantitative results portray the degree of employer prejudice in the US labor market as being strong and widespread, and provide evidence of an important skill gap between black and white workers. We use the model to undertake a structural decomposition and conclude that discrimination resulting from employer prejudice is quantitatively more important than skill differences to explain wage and employment gaps. In the final section of the paper we conduct a number of counterfactual experiments to assess the effectiveness of different policy approaches aimed at reducing racial differences in labor market outcomes.JEL Classification: J31, J64, J71

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The sources of wage variation and the direction of assortative matching: Evidence from a three-way high-dimensional fixed effects regression model

Cited by 29 publications

References 48 publications

Collective Bargaining and the Evolution of Wage Inequality in Italy

Collective Bargaining and the Evolution of Wage Inequality in Italy

Does exporting improve matching? Evidence from French employer-employee data

Racial discrimination in the U.S. labor market: Employment and wage differentials by skill

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