Interregional migration 'wage premia': the case of creative and science and technology graduates in the UK

We analyze the migration behavior of graduates from UK universities with a focus on the salary benefits they receive from the migration process. We focus on sequential interregional migration and specifically examine the case of Science, Technology, Engineering and Mathematics (STEM) and Creative subject graduates. Our analysis differs from previous studies in that it accounts explicitly for migrant selectivity through propensity score matching, and it also classifies graduates into different migration behavior categories. Graduates were classified according to their sequential migration behavior first from their pre-university domicile to university and then from university to first job post-graduation. Our results show that ‘repeat migration’, as expected, is associated with the highest wage premium (around 15%). Other migration behaviors are also advantageous although this varies across different types of graduates. Creative graduates, for instance, do not benefit much from migration behaviors other than repeat migration. STEM graduates, on the contrary, benefit from both late migration and staying in the university area to work.

Recovering the counterfactual wage distribution with selective return migration

This paper recovers the distribution of wages for Mexican-born workers living in the U.S. if no return migration of Mexican-born workers occurred. Because migrants self-select in the decision to return, the overarching problem addressed by this study is the use of an estimator that also accounts for selection on unobservables. I find that Mexican returnees are middle- to high-wage earners at all levels of educational attainment. Taking into account self-selection in return migration, wages would be approximately 7.7% higher at the median and 4.5% higher at the mean. Owing to positive self-selection, the immigrant-native wage gap would, therefore, partially close if there was no return migration.

Coordination, inclusiveness and wage inequality between median and bottom income workers

What explains cross-national variation in wage inequality? Research in comparative political economy stresses the importance of the welfare state and wage coordination in reducing not only disposable income inequality but also gross earnings inequality. However, the cross-national variation in gross earnings inequality between median and low income workers is at odds with this conventional wisdom: the German coordinated market economy is now more unequal in this type of inequality than the UK, a liberal market economy. To solve this puzzle, I argue that non-inclusive coordination benefits median but not bottom income workers and is as a result associated with higher – rather than lower - wage inequality. I find support for this argument using a large N quantitative analysis of wage inequality in a panel of Western European countries. Results are robust to the inclusion of numerous controls, country fixed effects, and also hold with a sample of OECD countries. Taken together these findings force us to reconsider the relationship between coordination and wage inequality at the bottom of the income distribution.

Is there wage premium to computer use in Sweden

This paper examines the wage premium to computer use in Sweden in the early 1990’s. I use simple regression model and interaction terms in my paper to examine the effect of computer use at work. Although the data is only one-year cross-section data, my results clearly show a wage premium to computer use in Sweden. There are also interesting findings in my paper by using Swedish data. From the results, I find wage premium to be related to intensity of computer use at work.

Endogenous wage compression and aggregation boundaries in a model of hierarchical human capital

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Occupational tasks and changes in the wage structure

This paper argues that changes in the returns to occupational tasks have contributed to changes in the wage distribution over the last three decades. Using Current Population Survey (CPS) data, we first show that the 1990s polarization of wages is explained by changes in wage setting between and within occupations, which are well captured by tasks measures linked to technological change and offshorability. Using a decomposition based on Firpo, Fortin, and Lemieux (2009), we find that technological change and deunionization played a central role in the 1980s and 1990s, while offshorability became an important factor from the 1990s onwards.

Trade Liberalization and Regional Impacts on Residual Wage Inequality: Evidence from Brazil

O objetivo deste trabalho é entender mais sobre o papel da liberalização sobre a desigualdade salarial, mais precisamente, sobre a desigualdade residual dos salários. Usando a abertura comercial brasileira, a extensa redução tarifária que ocorreu entre 1987 e 1995, é investigado empiricamente se os diferentes níveis de exposição ao comércio entre os estados contribuíram para os diferentes movimentos da desigualdade. Os resultados indicam que estados mais expostos à liberalização comercial experimentaram um aumento relativo da desigualdade residual dos salários ou, de forma equivalente, uma menor redução. Estes resultados enriquecem a discussão dos efeitos da abertura comercial sobre a desigualdade.

The role of profits in wage determination: evidence from US manufacturing

We estimate the effect of firms' profitability on wage determination for the American economy. Two standard bargaining models are used to illustrate the problems caused by the endogeneity of profits-per-worker in a real wage equation. The profit-sharing parameter can be identified with instruments which shift demando Using information from the input-output table, we create demand-shift variables for 63 4-digit sectors of the US manufacturing sector. The LV. estimates show that profit-sharing is a relevant and widespread phenomenon. The elasticity of wages with respect to profits-per-worker is seven times as large as OLS estimates here and in previous papers. Sensitivity analysis of the profit-sharing parameter controlling for the extent of unionization and product market concentration reinforces our results.

The effects of the minimum wage on earnings and employment in Brazil

This paper analyzes the effects of the mlmmum wage on both, eammgs and employment, using a Brazilian rotating panel data (Pesquisa Mensal do Emprego - PME) which has a similar design to the US Current Population Survey (CPS). First an intuitive description of the data is done by graphical analysis. In particular, Kemel densities are used to show that an increase in the minimum wage compresses the eamings distribution. This graphical analysis is then forrnalized by descriptive models. This is followed by a discussion on identification and endogeneity that leads to the respecification of the model. Second, models for employment are estimated, using an interesting decomposition that makes it possible to separate out the effects of an increase in the minimum wage on number of hours and on posts of jobs. The main result is that an increase in the minimum wage was found to compress the eamings distribution, with a moderately small effect on the leveI of employment, contributing to alleviate inequality.

The firm size wage premium : a quantile analysis

Empirical evidence shows that larger firms pay higher wages than smaller ones. This wage premium is called the firm size wage effect. The firm size effect on wages may be attributed to many factors, as differentials on productivity, efficiency wage, to prevent union formation, or rent sharing. The present study uses quantile regression to investigate the finn size wage effect. By offering insight into who benefits from the wage premi um, quantile regression helps eliminate and refine possible explanations. Estimated results are consistent with the hypothesis that the higher wages paid by large firms can be explained by the difference in monitoring costs that large firms face. Results also suggest that more highly skilled workers are more often found at larger firms .

Regulation and wage adjustment patterns : non parametric evidence from longitudinal data

This paper gives a first step toward a methodology to quantify the influences of regulation on short-run earnings dynamics. It also provides evidence on the patterns of wage adjustment adopted during the recent high inflationary experience in Brazil.The large variety of official wage indexation rules adopted in Brazil during the recent years combined with the availability of monthly surveys on labor markets makes the Brazilian case a good laboratory to test how regulation affects earnings dynamics. In particular, the combination of large sample sizes with the possibility of following the same worker through short periods of time allows to estimate the cross-sectional distribution of longitudinal statistics based on observed earnings (e.g., monthly and annual rates of change).The empirical strategy adopted here is to compare the distributions of longitudinal statistics extracted from actual earnings data with simulations generated from minimum adjustment requirements imposed by the Brazilian Wage Law. The analysis provides statistics on how binding were wage regulation schemes. The visual analysis of the distribution of wage adjustments proves useful to highlight stylized facts that may guide future empirical work.