Firms' Main Market, Human Capital and Wages

Recent international trade literature emphasizes two features in characterizing the current patterns of trade: efficiency heterogeneity at the firm level and quality differentiation. This paper explores human capital and wage differences across firms in that context. We build a partial equilibrium model predicting that firms selling in more-remote markets employ higher human capital and pay higher wages to employees within each education group. The channel linking these variables is firms’ endogenous choice of quality. Predictions are tested using Spanish employer-employee matched data that classify firms according to four main destination markets: local, national, European Union, and rest of the World. Employees’ average education is increasing in the remoteness of firm’s main output market. Market–destination wage premia are large, increasing in the remoteness of the market, and increasing in individual education. These results suggest that increasing globalization may play a significant role in raising wage inequality within and across education groups

The Labour Market in India

This chapter outlines the salient features of the labour market in India. Firstly, there has been a large shift in the workforce from agriculture to industry and services between 1951 and 2012 with more recent data showing these trends continuing. A consequence of these changes is that productivity in agriculture, relative to overall productivity, has fallen sharply while that of services has risen dramatically. A second noteworthy feature of the Indian labour market is the low participation rate, defined as the proportion of the population aged 15–65 years (the “working age” population) that is either working or seeking employment. In particular, the low (by international standards) female participation rate, which was within the 34–37% range in the 15-year period up to 2005, has declined further and stabilised at a rate of 27%. A third feature of the Indian labour market is the preponderance of informal workers and the domination of the labour market by the unorganised sector comprising enterprises employing less than 10 workers. A fourth feature of the Indian labour market is the existence of draconian labour market regulations which constrain the freedom of employers. The last feature of the Indian labour market is government provision of jobs to the rural poor under the auspices of the National Rural Employment Guarantee Act (NREGA)

The Decomposition of Firm-size Wage Differentials

Oaxaca/Blinder technique, Manufacturing sector, Service sector, Firm size wage premium,

The establishment-size wage premium: evidence from European countries

Establishment-size, Wages, Europe, J31,

The effect of demand-driven structural transformations on growth and technological change

The paper analyses the effect of the dynamics of consumption preferences on the dynamics of macro–economic growth. We endogenously derive micro– dynamics of consumption behavior as a result of the increase in the number of income classes. The different degrees of inertia in the adjustment of consumption levels to income changes affect firm selection and the dynamics of market structure, which is ultimately responsible for different regimes of macro–economic growth. We find, first, that higher heterogeneity in consumption preferences amplifies and accelerates market dynamics, leading to a swift shift from a Malthusian to a Kaldorian growth pattern. Second, consumption smoothing mainly affects the timing of such a take–off. Inertia in consumption delays the occurrence of a Kaldorian engine for growth