Macroeconomic Stability and Wage Inequality: A Model with Credit and Labor Market Frictions

While macroeconomic volatility in the US economy decreased since the early 1980's, individual earnings volatility and wage inequality increased. This paper argues that increasing financial development can contribute to both changes. I develop a real business cycle model with sectoral productivity shocks and labor as well as credit market frictions. Credit market frictions take the form of collateral-based credit constraints. It is shown that there are interactions between the labor and the credit market that matter for the development of wages and output. When workers are not perfectly mobile between sectors, financial development comes along with an increase in the volatility of individual earnings and in wage inequality, although aggregate output volatility is lower.Financial development, labor market frictions, sectoral shocks, volatility, wage inequality

Non-base wage components as a source of wage adaptability to shocks : evidence from european firms, 2010-2013

This paper provides evidence on the role of non-base wage components as a channel for firms to adjust labour costs in the event of adverse shocks. It uses data from a firm-level survey for 25 European countries that covers the period 2010–2013. We find that firms subject to nominal wage rigidities, which prevent them from adjusting base wages, are more likely to cut non-base wage components in order to adjust labour costs when needed. Firms thus use non-base wage components as a buffer to overcome base wage rigidity.We further show that while non-base wage components exhibit some degree of downward rigidity, they do so to a lesser extent than base wages.info:eu-repo/semantics/publishedVersio

Macroeconomic Stability and Wage Inequality : a Model with Credit and Labor Market Frictions

While macroeconomic volatility in the US economy decreased since the early 1980's, individual earnings volatility and wage inequality increased. This paper argues that increasing financial development can contribute to both changes. I develop a real business cycle model with sectoral productivity shocks and labor as well as credit market frictions. Credit market frictions take the form of collateral-based credit constraints. It is shown that there are interactions between the labor and the credit market that matter for the development of wages and output. When workers are not perfectly mobile between sectors, financial development comes along with an increase in the volatility of individual earnings and in wage inequality, although aggregate output volatility is lower

The rise of part-time work: A German-French comparison

I study possible determinants of part-time employment among women in France and Germany using microdata of the Labour Force Survey. Voluntary part-time work is substantially more widespread among women in Germany than it is in France. Estimation results show that while the presence of children and marital status are related to the choice to work part time in both countries, their impact is substantially greater in Germany. Controlling for several factors, the probability of working part time in Germany exceeds that in France among married women and among women with children, while there is hardly any difference among single women and women without children living in the same household. Further results suggest that, besides financial incentives, social norms and cultural legacy play a role in choosing to work part time

Job Search and the Age-Inequality Profile

In line with earlier literature, I document a U-shaped relationship between age and wage dispersion in the U.S.. To explain this outcome, I consider a life-cycle model of labor market search with strategic wage bargaining, heterogeneous firm-worker matches, and endogenous search effort. Three factors shape the age-inequality profile of wages in the model economy: the time until retirement, match heterogeneity, and the workers’ bargaining power. Young workers switch employers often and are gradually matched to better jobs, which leads to the initial reduction in the variance of log wages. Middle-aged and older workers switch employers less frequently and have a longer search history. As workers are differently successful in the labor market, the variance of match productivities rises in the second half of the working life. The calibrated model captures the U-shape of the age-inequality profile of wages in conjunction with the hump-shaped age profile of average wages, as well as employment-to-employment transitions that decrease with age

Non-base wage components as a source of wage adaptability to shocks:evidence from European firms, 2010–2013

This paper provides evidence on the role of non-base wage components as a channel for firms to adjust labour costs in the event of adverse shocks. It uses data from a firm-level survey for 25 European countries that covers the period 2010–2013. We find that firms subject to nominal wage rigidities, which prevent them from adjusting base wages, are more likely to cut non-base wage components in order to adjust labour costs when needed. Firms thus use non-base wage components as a buffer to overcome base wage rigidity. We further show that while non-base wage components exhibit some degree of downward rigidity, they do so to a lesser extent than base wages

Asymmetric Wage Adjustment and Employment in European Firms

We explore the impact of wage adjustment on employment with a focus on the role of downward nominal wage rigidities. We use a harmonised survey dataset, which covers 25 European countries in the period 2010-2013. These data are particularly useful for this paper given the firm-level information on the change in economic conditions and collective pay agreements. Our findings confirm the presence of wage rigidities in Europe: first, collective pay agreements reduce the probability of downward wage adjustment; second, the rise in the probability of downward base wage responses following a decrease in demand is significantly smaller than the rise in the probability of an upward wage response associated with an increase in demand. Estimation results point to a negative effect of downward wage rigidities on employment at the firm level

Sea Level Variability and Change

Land surface albedo represents the fraction of solar radiation scattered backward by land surfaces. In the presence of vegetation, surface albedo results from complex nonlinear radiation transfer processes determining the amount of radiation that is scattered by the vegetation and its background, transmitted through the vegetation layer, or absorbed by the vegetation layer and its background. Anomalies in mid- and high latitude regions of the Northern Hemisphere result mainly from interannual variations in snow cover extent and duration in winter and spring. The large negative anomalies over the United States reflect the lack of snowfall and snowpack over the Rockies, the Midwest, and much of the eastern half of the country.JRC.H.7-Climate Risk Managemen