Tax and Benefit Reforms in a Model of Labour Market Transitions. ENEPRI Research Reports No. 25, 9 October 2006

This paper presents a method for taking advantage of labour market transitions to identify the effects of financial incentives on employment decisions. The framework used is very flexible and by imposing few theoretical assumptions it allows us to extend the modelled sample relative to structural models. The authors take advantage of this flexibility to include disabled persons in the model and to jointly analyse the behaviour of disabled and non-disabled persons. A great deal of attention is paid to the appropriate modelling of financial incentives in the labour market. In the case of disabled persons, taking account of financial incentives turns out to be an extremely complex process but one that in the end turns out to be well worth the effort. The model is used to compare reactions in the labour market to marginal changes in financial incentives and also to model one of the most important reforms of the UK Labour government – the introduction of the Working Families’ Tax Credit. The methodology relies on matching the transition and income data derived from cross-sectional and panel surveys, and could be used in other countries for which detailed, reliable income data are not collected in a panel format

A review of static and dynamic models of labour supply and labour market transitions

This paper aims to review the techniques and methods which have been developed by researchers to study labour supply and employment, unemployment and inactivity in the labour market. Progress in labour supply modelling in the last thirty years or so has been considerable. Firstly, the theory of labour supply has become much more sophisiticated; simple static-period models of the budget constraint and the hours decision have been augmented with new developments such as intertemporal optimisation, explicit treatment of the participation decision as distinct from the hours decision, and search theory. Secondly, the econometric techniques available to estimate these more advanced models on the data have expanded massively, along with increases in the amount and quality of data available and huge improvements in computing power. In this report we aim to provide a comprehensive survey of the state of the art in the field of labour supply estimation.

How can the UK boost the wage share? The rebalancing requires, above all, a new social contract with labour

The wage share – wages expressed as a share of total national income – has fallen since the early 1980s, highlighting the decoupling of earnings from output and accounting for a third of the decline in median wages relative to GDP in the UK over the last 35 years. Howard Reed summarises his recent report, arguing a new social contract is required, and estimates the contribution that a selection of policies might make towards reversing the decline in the wage share

Interpreting aggregate wage growth

This paper analyzes the relationship between aggregate wages and individual wages when there is time series variation in employment and in the dispersion of wages. A new and easily implementable framework for the empirical analysis of aggregation biases is developed. Aggregate real wages are shown to contain three important bias terms: one associated with the dispersion of individual wages, a second reflecting the distribution of working hours, and a third deriving from compositional changes in the (selected) sample of workers. Noting the importance of these issues for recent experience in Britain, data on real wages and participation for British male workers over the period 1978-1996 are studied. A close correspondence between the estimated biases and the patterns of differences shown by aggregate wages is established. This is shown to have important implications for the interpretation of real wage growth over this period.Aggregate Real Earnings, Participation, Wage Distribution

Involuntary idleness represents a massive waste of economic resources

As part of the ongoing Social State project, Howard Reed reflects on the macroeconomic significance of involuntary idleness. He argues that it is a waste of economic resources but one rooted in complex underlying causes. Drawing on a recent paper, he outlines ideas for how reform could be enacted and these difficulties overcome

The Impact of Training on Productivity and Wages: Evidence from British Panel Data

It is standard in the literature on training to use wages as a sufficient statistic for productivity. But there are many reasons why wages and productivity may diverge. This paper is part of a smaller literature on the effects of work-related training on direct measures of productivity. We construct a panel of British industries between 1983 and 1996 containing training, productivity and wages. Using a variety of econometric estimation techniques (including system GMM) we find that training is associated with significantly higher productivity. Raising the proportion of workers trained in an industry by one percentage point (say from the average of 10% to 11%) is associated with an increase in value added per worker of about 0.6% and an increase in wages of about 0.3%. Furthermore, we find that the magnitude of the impact of training on wages is only half as large as the impact of training on productivity, implying that the existing literature has underestimated the importance of training. We also show evidence using complementary datasets (e.g. from individuals) that is suggestive of externalities of training and imperfect competition.Productivity, training, wages, panel data

The impact of training on productivity and wages: evidence from British panel data

It is standard in the literature on training to use wages as a sufficient statistic for productivity. This paper examines the effects of work-related training on direct measures of productivity. Using a new panel of British industries 1983-1996 and a variety of estimation techniques we find that work-related training is associated with significantly higher productivity. A one percentage point increase in training is associated with an increase in value added per hour of about 0.6% and an increase in hourly wages of about 0.3%. We also show evidence using individual level datasets that is suggestive of training externalities.Productivity, training, wages, panel data

The histology of the stem bark of rhamnus purshiana variety anonaefolia

Thesis (M.A.)--Boston University, 1936. This item was digitized by the Internet Archive