Wage Gaps Large and Small

The law of one wage does not strictly hold, nor should it be expected to hold, in contemporary labor markets. The law of one wage, however, provides a surprisingly good first approximation of the structure of U.S. wages. This generalization is drawn from research on a diverse set of topics: the Mincerian wage equation and earnings imputation, union wage differentials, product market regulation and the labor market, wages in male and female jobs, the wage effects of military service, and inter-area wages and cost of living. Working Paper 08-1

ON MODELING SYSTEMS OF CROP ACREAGE DEMANDS

This article presents an alternative approach to the specification of systems of crop acreage responses. Derived demands for acreages of individual crops are specified as conditional on total crop acreage, and related separability and dynamic specifications help to reduce the effects of multicollinearity in the system. A simple econometric model of crop acreage demands for Western Canada illustrates the methodology.Crop Production/Industries,

Organizational Differences in Managerial Compensation and Financial Performance

The present study has two general purposes. First, based on the compensation strategy literature, we examine the extent to which organizations facing similar conditions make different managerial compensation decisions regarding base pay, bonus pay, and eligibility for long-term incentives. Second, working from expectancy and agency theory perspectives, we explore the consequences of these decisions for subsequent firm performance as measured by return on assets. Using longitudinal data on approximately 16,000 top and middle level managers and 200 organizations, significant between-organization differences in compensation decisions are found. The smallest organization effects are on the level of base pay. The largest organization effects are on bonus levels and eligibility for long-term incentives. In other words, our results suggest that organizations tend to distinguish themselves through decisions about pay contingency or variability rather than through decisions about the level of base pay. To study consequences, residualized measures (adjusted for employee and job factors) of organization pay level and pay mix are used. Pay level is not associated with organization financial performance. On the other hand, greater contingency of pay in the form of bonuses and long-term incentives is associated with better financial performance

Salaries, Salary Growth, and Promotions of Men and Women in a Large, Private Firm

[Excerpt] Salaries, promotions, and salary growth of men and women in a large, diversified firm were examined for the years 1980 through 1986. Consistent with other studies, men\u27s average salary was higher than women\u27s average salary. However, statistical adjustment for gender differences in-education, tenure, time at level, experience, and job level substantially reduced the salary advantage of men over women. Although the average salary of men was higher than that of women in 1980 and 1986, women actually received greater numbers of promotions, as well as larger percentage salary increases between 1980 and 1986. One reason for women\u27s salary growth advantage was the higher average performance ratings of women between 1980 and 1986. One important reason for women\u27s promotion advantage was their greater likelihood of being in (lower) job levels where promotion opportunities were greatest

Employee Compensation: Research and Practice

[Excerpt] An organization has the potential to remain viable only so long as its members choose to participate and engage in necessary role behaviors (March & Simon, 1958; Katz & Kahn, 1966). To elicit these contributions, an organization must provide inducements that are of value to its members. This exchange or transaction process is at the core of the employment relationship and can be viewed as a type of contract, explicit or implicit, that imposes reciprocal obligations on the parties (Barnard, 1936; Simon, 1951; Williamson, 1975; Rousseau, 1990). At the heart of that exchange are decisions by employers and employees regarding compensation

Ethnic Wage Inequality in Vietnam: Empirical Evidence from 2002

This paper complements earlier studies on ethnic minority underdevelopment in Vietnam by empirically examining the ethnic wage gap in the Vietnamese labour market, using data from a large-scale household survey conducted in 2002. The paper uses the ‘index number’ decomposition method suggested by Oaxaca (1973) to decompose the ethnic wage gap into treatment and endowment effects at both the mean and at selected quantiles of the conditional wage distribution. The results confirm the existence of an ethnic wage gap in the labour market, through this gap is found to be substantially narrower than the ethnic gap observed using household living standard measures for Vietnam. Decomposition results reveal that the ethnic wage gap is largely attributable to differentials in the returns to endowments, a finding invariant to whether the mean or selected quantiles of the conditional wage distribution is examined.Wage inequality, ethnic minority, quantile regression, Vietnam

The Gender Pay Gap In Vietnam, 1993-2002: A Quantile Regression Approach

This paper uses mean and quantile regression analysis to investigate the gender pay gap for the wage employed in Vietnam over the period 1993 to 2002. It finds that the Doi moi reforms have been associated with a sharp reduction in gender wage disparities for the wage employed. The average gender pay gap in this sector halved between 1993 and 2002 with most of the contraction evident by 1998. There has also been a contraction in the gender pay at most selected points of the conditional wage distribution with the observed effect most pronounced at the top end of the distribution. However, the decomposition analysis suggests that the treatment effect is relatively stable across the conditional wage distribution and little evidence of a ?glassceiling? is detected for Vietnamese women in the wage employment sector in any of the years examined.Gender pay gap, Quantile regression, Vietnam

Lessons from the Laureates

This paper uses as source material twenty-three autobiographical essays by Nobel economists presented since 1984 at Trinity University (San Antonio, Texas) and published in Lives of the Laureates (MIT Press). A goal of the lecture series is to enhance understanding of the link between biography and the development of modern economic thought. We explore this link and identify common themes in the essays, relying heavily on the words of the laureates. Common themes include the importance of real-world events coupled with a desire for rigor and relevance, the critical influence of teachers, the necessity of scholarly interaction, and the role of luck or happenstance. Most of the laureates view their research program not as one planned in advance but one that evolved via the marketplace for ideas.autobiography, Nobel economists, economic thought

Acceptability of road pricing and revenue use in the Netherlands

It is generally acknowledged that the implementation of other, more efficient, road pricing measures meet public resistance and that acceptability is nowadays one of the major barriers to successful implementation. Despite the fact that politicians and the public regard transport problems as very urgent and important, people do have concerns about road pricing, resulting in low acceptance levels. This paper presents the empirical results of a questionnaire among Dutch commuters regularly facing congestion asking for their opinion (in terms of acceptance) on road pricing measures and revenue use targets. We find that road pricing is in general not very acceptable and that revenue use is important for the explanation of the level of acceptance. Road pricing is more acceptable when revenues are used to replace existing car taxation or to lower fuel taxes. Moreover, personal characteristics of the respondent have an impact on support levels. Higher educated people, as well as respondents with a higher value of time and with higher perceived effectiveness of the measure, seem to find road pricing measures more acceptable than other people. The same holds for people that receive financial support for their commuting costs and for respondents driving many kilometers in a year. When we ask directly for the acceptability of different types of revenue use (not part of a road pricing measure), again abandoning of existing car (ownership) taxes receives most support whereas the general budget is not acceptable.