Wage Compression within the Firm: Evidence from an Indexation Scheme

2019 ◽  
Vol 129 (624) ◽  
pp. 3256-3291 ◽  
Author(s):  
Marco Leonardi ◽  
Michele Pellizzari ◽  
Domenico Tabasso
Keyword(s):  
Job Search ◽  
Search Model ◽  
Skilled Workers ◽  
Unskilled Workers ◽  
Lower Wage ◽  
Wage Indexation ◽  
Wage Increases ◽  
Firm Evidence ◽  
Wage Compression

Abstract We revisit the role of labour market institutions by showing how they affect the sharing of firm-specific rents between employers and employees. We look at an Italian wage indexation mechanism (‘Scala Mobile’) that compressed the distribution of wages, imposing real wage increases at the bottom of the distribution. After developing a simplified version of a search model with intra-firm bargaining and on-the-job search, we document that skilled workers received lower wage adjustments when employed at firms with many unskilled workers and they tended to move towards more skill-intensive firms. Moreover, the system drove the least skill-intensive firms out of the market.

JOB COMPETITION, CROWDING OUT, AND UNEMPLOYMENT FLUCTUATIONS

2010 ◽  
Vol 16 (1) ◽  
pp. 1-34 ◽  
Author(s):  
Sherif Khalifa
Keyword(s):  
Unemployment Rate ◽  
Job Search ◽  
Crowding Out ◽  
Skilled Workers ◽  
Search Intensity ◽  
Unskilled Workers ◽  
The Business Cycle ◽  
Low Educated ◽  
Unemployment Persistence ◽  
Job Competition

This paper attempts to determine the factors generating the persistence of unemployment over the business cycle. The observations show that the total unemployment rate is highly persistent, and that the persistence of the unemployment rate of unskilled workers is higher than that of skilled workers. To account for these observations, the paper develops a framework that features search frictions. Individuals are either high educated or low educated, and firms post two types of vacancies: the complex, which can be matched with the high educated, and the simple, which can be matched with the high and the low educated. On-the-job search for a complex occupation is undertaken by the high educated in simple occupations. A negative aggregate technological shock induces the high educated unemployed to compete with the low educated by increasing their search intensity for simple vacancies. As the high educated occupy simple vacancies, they crowd out the low educated into unemployment. This downgrading of jobs in a cyclical downturn, or the increase in the labor input of the high educated in simple occupations, and the subsequent crowding out of the low educated into unemployment, provide a possible explanation for unemployment persistence.

scholarly journals Tenure, Experience, Human Capital, and Wages: A Tractable Equilibrium Search Model of Wage Dynamics

2014 ◽  
Vol 104 (6) ◽  
pp. 1551-1596 ◽  
Author(s):  
Jesper Bagger ◽  
François Fontaine ◽  
Fabien Postel-Vinay ◽  
Jean-Marc Robin
Keyword(s):  
Human Capital ◽  
Job Search ◽  
Capital Accumulation ◽  
Wage Growth ◽  
Search Model ◽  
Human Capital Accumulation ◽  
Wage Dynamics ◽  
Equilibrium Search ◽  
Individual Level ◽  
Wage Increases

We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity, and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search, within and between jobs. Human capital accumulation is largest for highly educated workers. The contribution from job search to wage growth, both within and between jobs, declines over the first ten years of a career—the “job-shopping” phase of a working life—after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers. (JEL J24, J31, J63, J64)

scholarly journals Job Seekers’ Self-Directed Learning Activities Explained Through the Lens of Regulatory Focus

2021 ◽  
pp. 089484532199164
Author(s):  
Adam M. Kanar ◽  
Dave Bouckenooghe
Keyword(s):  
Job Search ◽  
Regulatory Focus ◽  
Self Efficacy ◽  
Learning Activities ◽  
Job Seekers ◽  
Self Directed Learning ◽  
Significant Relationships ◽  
Directed Learning ◽  
Job Searching

This study aimed to understand the role of regulatory focus for influencing self-directed learning activities during a job search. The authors surveyed 185 job-searching university students at two time points to explore the conditions under which regulatory focus (promotion and prevention foci) impacts self-directed learning activities and the number of employment interviews secured. Both promotion and prevention foci showed significant relationships with self-directed learning activities and number of interviews, and positive and negative affect partially mediated these relationships. The relationships between both regulatory focus strategies and self-directed learning were also contingent on self-efficacy. More specifically, prevention focus and self-directed learning showed a positive relationship for job seekers with high levels of self-efficacy but a negative one for job seekers with low levels of self-efficacy. This research extends the understanding of the role of regulatory focus in the context of self-directed learning during a job search. Implications for research and practice are discussed.

An Empirical Equilibrium Job Search Model With Search on the Job and Heterogeneous Workers and Firms

1999 ◽  
Vol 40 (4) ◽  
pp. 1039-1074 ◽  
Author(s):  
Christian Bontemps ◽  
Jean-Marc Robin ◽  
Gerard J. Van den Berg
Keyword(s):  
Job Search ◽  
Search Model

scholarly journals Searching For Better Prospects: Endogenizing Falling Job Tenure and Private Pension Coverage

2006 ◽  
Vol 6 (1) ◽  
Author(s):  
Leora Friedberg ◽  
Michael T Owyang ◽  
Tara M Sinclair
Keyword(s):  
Job Search ◽  
Search Costs ◽  
Private Pension ◽  
Search Model ◽  
Defined Benefit ◽  
Job Tenure ◽  
Relative Wages ◽  
Pension Coverage ◽  
New Evidence ◽  
General Conditions

Abstract Recent declines in job tenure have coincided with a shift away from traditional defined benefit (DB) pensions, which reward long tenure. New evidence also points to an increase in job-to-job movements by workers, and we document gains in relative wages of job-to-job movers over a similar period. We develop a search model in which firms may offer tenure-based contracts like DB pensions to reduce the incidence of costly on-the-job search by workers. Either reduced search costs or an increase in the probability of job matches can, under fairly general conditions, lower the value of deterring search and the use of DB pensions.

The Labor Government's Industrial Relations Policy: Flexibility with Equity

1992 ◽  
Vol 3 (1) ◽  
pp. 112-125 ◽  
Author(s):  
Peter Cook
Keyword(s):  
Management Practices ◽  
Industrial Relations ◽  
Safety Net ◽  
International Markets ◽  
Vital Role ◽  
Workplace Culture ◽  
Equity And Efficiency ◽  
The Government ◽  
Wage Increases

The fundamental objective of the Government's industrial relations policy is to encourage and assist Australian companies and their employees to adopt work and management practices that will strengthen their capacity to compete successfully both in domestic and international markets. To this end we support co-operative and equitable workplace bargaining, with wage increases being linked to the reform of work practices and attitudes. Our support for decentralised bargaining is aimed at improving productivity by fostering a new workplace culture of striving for continuous improvement. We emphatically reject the view that such an outcome will be achieved by wholesale deregulation and reliance on unfettered market forces. The Government is committed, for both equity and efficiency reasons, to maintaining the Accord approach to wages policy. We are also committed to an independent Australian Industrial Relations Commission playing the vital role of protecting lower paid employees through the safety net of minimum award wages and conditions.

scholarly journals U.S. TREND INFLATION REINTERPRETED: THE ROLE OF FISCAL POLICIES AND TIME-VARYING NOMINAL RIGIDITIES

2014 ◽  
Vol 19 (6) ◽  
pp. 1294-1308 ◽  
Author(s):  
Nicola Acocella ◽  
Giovanni Di Bartolomeo ◽  
Patrizio Tirelli
Keyword(s):  
Strong Impact ◽  
Fiscal Policies ◽  
Time Varying ◽  
Nominal Rigidities ◽  
Distortionary Taxation ◽  
Trend Inflation ◽  
Wage Indexation ◽  
Joint Evolution

This paper offers a reinterpretation of the Fed's time-varying implicit inflation target, based on two considerations. The first is that the need to alleviate the burden of distortionary taxation may justify the choice of a positive inflation rate. The second is based on compelling evidence that the degree of price and wage indexation falls with trend inflation. In fact, we find that a proper characterization of the joint evolution of fiscal variables and nominal rigidities has a strong impact on the Ramsey optimal policies, implying optimal inflation dynamics that are consistent with the observed evolution of U.S. trend inflation. By contrast, tax policies have been too lax, especially at the time of the controversial Bush tax cuts.

The Role of Selective Job Search in UK Unemployment

1998 ◽  
Vol 108 (448) ◽  
pp. 646-664 ◽  
Author(s):  
Jonathan M. Thomas
Keyword(s):  
Job Search
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