Unionised employees' influence on executive compensation: Evidence from Korea

This is the final version. Available on open access from Wiley via the DOI in this recordThis paper explores the relationship between executive compensation and employee voiceusing a panel dataset from Korean firms. It was found that the existence and rate of labour unionisation are both negatively associated with executive compensation payment, and that the negative association is progressively stronger for upper percentile executive pay. Labour union existence also has a strong negative correlation with stock option use in executive compensation packages, but unionisation rate does not, implying that union existence is more critical in shaping executive compensation structures than the strength of the union. Membership of large family-owned business conglomerates (chaebol), high financial risk, and high employee wages are identified as channels that reinforce the negative influence of labour unions on executive compensation

Don't tax me? : Determinants of individual attitudes toward progressive taxation

This contribution empirically analyses the individual determinants of tax rate preferences. For that purpose we make use of the representative German General Social Survey (ALLBUS) that offers data on the individual attitudes toward progressive, proportional, and regressive taxation. Our theoretical considerations suggest that beyond self-interest, information, fairness considerations, economic beliefs and several other individual factors drive individual preferences for tax rate structures. Our empirical results indicate that the self-interest view does not offer the sole explanation for the heterogeneity in attitudes toward progressive taxation. Rather, we show that the choice of the favoured tax rate is also driven by fairness considerations

Fiscal Illusion and Fiscal Obfuscation: An Empirical Study of Tax Perception in Sweden

In this paper we present survey evidence suggesting that there exists a sizeable fiscal illusion amongst the general public in Sweden. Respondents in a nation-wide and representative survey systematically underestimate the share of an ordinary workers income that is transferred to the public sector. Furthermore, we make a theoretical distinction between tax illusion and fiscal obfuscation, a proposed novel type of fiscal illusion. It has previously been assumed that fiscal illusion derives from a fragmentized tax system with many small, and largely invisible, taxes which tend to be ignored or underestimated by the tax payers. We hypothesize that this systematic bias could in addition emanate from misapprehensions of the real incidence of a tax. Evidence is presented that this could apply even when taxes are few and large, contrary to the tax complexity hypothesis. When this misperception derives from seemingly deliberate tax design and tax labeling, as appears to be the case with the payroll taxes in Sweden, we call it fiscal obfuscation

Wages and Contracting Out: Does the Law of One Price Hold?

We find that, conditioning on industry of assignment, cleaners and security guards who participate in activities organized by contract companies earn 15 and 17 per cent less, respectively, than workers in those activities organized in-house. These estimates are hardly affected by the inclusion of a set of jointly statistically significant exogenous variables. We can expect that most of the productive traits that characterize a task are transferred to the contractor in the process of contracting out a cleaning or security task. Thus, our findings are hard to rationalize by a simple competitive labour market setting where the law of one price holds. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2007.

Effects of Internal and External Pay Comparisons on Work Attitudes

The effects of internal and external pay comparisons on several work attitudes were assessed within an experimental design. Participants responded to hypothetical scenarios in which their pay was greater, less, or equal to an internal and external individual or group referent. As predicted, internal and external pay comparisons predicted pay satisfaction and perceived pay fairness. Also as expected, internal equity was the stronger predictor of work motivation and perceived organizational support, and external equity predicted turnover intention more strongly. Partial support was found for the hypothesis that work attitudes would be impacted more strongly when individuals made pay comparisons with a group referent than with an individual referent other. Implications for the design of compensation systems are discussed