Are flexible contracts bad for workers? Evidence from job satisfaction data

If workers can choose between permanent and flexible contracts, compensating wage differentials should arise to equalize on-the-job utility in the two types of contracts. Estimating job satisfaction using the British Household Panel Survey shows that agency and casual contracts are associated with routinely lower satisfaction. This results because the low job satisfaction associated with less job security is not offset by higher compensation or other job characteristics. Job security is sufficiently important that holding constant this one facet of satisfaction eliminates the overall gap in job satisfaction between flexible and permanent contracts

Performance Pay and the White-Black Wage Gap

We show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers. This results in the white-black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs. We show this remains true even when examining suitable counterfactuals that hold observables constant between whites and blacks. We explore reasons behind our finding that performance pay is associated with greater racial earnings gaps at the top of the wage distribution focusing on the interactions between discrimination, unmeasured ability and selection.Racial wage differentials, compensation practices

Unions, Dissatisfied Workers and Sorting

A persistent and sizeable literature argues that the reported job dissatisfaction of union members is spurious. It reflects either the sorting of workers across union status or the sorting of union recognition across jobs. We cast doubt on this argument presenting the first estimates that use panel data to hold constant both worker and job match fixed effects. The estimates demonstrate that covered union members report greater dissatisfaction even when accounting for sorting in both dimensions. Moreover, covered union members are less likely to quit holding job satisfaction constant and their quit behaviour is far less responsive to job satisfaction. The paradox of the discontented union member remains intact.

Profit Sharing and the Quality of Relations with the Boss

Profit sharing generates conflicting changes in the relationship between supervisors and workers. It may increase cooperation and helping effort. At the same time it can increase direct monitoring and pressure by the supervisor, and mutual monitoring and peer pressure from other workers that is transmitted through the supervisor. Using data on satisfaction with the boss, we initially show that workers under profit sharing tend to have lower satisfaction with their supervisor. Additional estimates show this is largely generated by groups of workers who would be least likely to respond to increased supervisory pressure with increase effort: women, those with dependents and those with health limitations. Despite this finding, profit sharing seems to have little or no influence on overall job satisfaction as the reduction in satisfaction with the boss is offset with increased satisfaction with earnings, a finding consistent with profit sharing enhancing productivity and earnings.

Performance Pay and the White-Black Wage Gap

We show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers. This results in the white-black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs. We show this remains true even when examining suitable counterfactuals that hold observables constant between whites and blacks. We explore reasons behind our finding that performance pay is associated with greater racial earnings gaps at the top of the wage distribution focusing on the interactions between discrimination, unmeasured ability and selection.Racial Wage Differentials, Compensation Practices

Does profit sharing increase training by reducing turnover?

We test the theoretical prediction that profit sharing reduces worker separations and by doing so increases the incidence of training. Using individual level UK data, we confirm that profit sharing is a robust determinant of lower separation rates and of greater training incidence. Critically, we cannot confirm the predicted link between separations and training. Instead, the evidence supports alternative theories suggesting a direct link between profit sharing and training. Our results suggest that profit sharing changes employer-worker relations in a way that leads to greater formal and informal investment in worker skills but that this is independent of its influence on reducing separations.

Are flexible contracts bad for workers? Evidence from job satisfaction data

If workers can choose between permanent and flexible contracts, compensating wage differentials should arise to equalize on-the-job utility in the two types of contracts. Estimating job satisfaction using the British Household Panel Survey shows that agency and casual contracts are associated with routinely lower satisfaction. This results because the low job satisfaction associated with less job security is not offset by higher compensation or other job characteristics. Job security is sufficiently important that holding constant this one facet of satisfaction eliminates the overall gap in job satisfaction between flexible and permanent contracts.

Mergers among leaders and mergers among followers

We are the first to confirm that sufficient cost convexity in a Stackelberg model generates profitable mergers between two leaders and between two followers. Moreover, the degree of convexity required for leaders to merge is generally far smaller than that required for followers. Most importantly, the structure of the stage game means that the convexity required for either two followers or two leaders to merge is less than that required for two Cournot competitors.

Performance pay, sorting and the dimensions of job satisfaction

This paper investigates the influence of performance related pay on several dimensions of job satisfaction. In cross-sectional estimates, performance related pay is associated with increased overall satisfaction, satisfaction with pay, satisfaction with job security and satisfaction with hours. It appears to be negatively associated with satisfaction with the work itself. Yet, after accounting for worker fixed-effects, the positive associations remain and the negative association vanishes. These results appear robust to a variety of alternative specifications and support the notion that performance pay allows increased opportunities for worker optimization and do not generally demotivate workers or crowd out intrinsic motivation.

Educational Mismatch Among Ph.D.s: Determinants and Consequences

Using the Survey of Doctoral Recipients, the magnitude and consequences of job mismatch are estimated for Ph.D.s in science. Approximately one-sixth of academics and nearly one-half of nonacademics report some degree of mismatch. The influence of job mismatch is estimated for three job outcomes: earnings, job satisfaction and turnover. Surprisingly large and robust influences emerge. Mismatch is associated with substantially lower earnings, lower job satisfaction and a higher rate of turnover. These results persist across a variety of specifications and hold for both academics and nonacademics. Estimates of the determinants of mismatch indicate that older workers and those in rapidly changing disciplines are more likely to be mismatched and there is a suggestion that women are more likely to be mismatched.