This paper utilizes a Norwegian experiment with exogenous wage changes to study teacher’s turnover decisions. Within a completely centralized wage setting system, teachers in schools with a high degree of teacher vacancies in the past got a wage premium of about 10 percent during the period 1993-94 to 2002-03. The empirical strategy exploits that several schools switched status during the empir...

Does International Outsourcing Really Lower Workers’ Income? We analyze the impact of international outsourcing on income, if the domestic labor market is imperfect. We distinguish in our analysis between the case where the parties negotiate over the wage only and where they negotiate over both wage and profit share. We find that in the first case outsourcing will reduce (increase) workers’ inc...

This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider and estimate both wage and price Phillips-curves for the U.S., using OLS and nonparametric estimation techniques. The finding is that on the whole wages are more fle...

This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides differentiated cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider from the theoretical perspective and estimate for the USA, using OLS and more advanced methods, both separately and simultaneously wage and price Phil...

Wage Setting in the Colombian Manufacturing Industry We show that wage setting in the Colombian manufacturing industry is not fundamentally driven by labor productivity in contrast to the standard theoretical prediction. On the contrary, internal institutional arrangements – payroll taxation, the minimum wage or the price wedge between manufacturing and consumption prices – together with a high...

globalization may have different impacts on the gender wage gap depending on the specialization and trade pattern as well as the socio-economic situation. the main purpose of this paper is to examine an impact of globalization on gender wage inequality. specifically, the hypothesis is that globalization reduces gender wage gap. for this, we have employed a panel technique for 21 selected develo...

This paper provides a theoretical analysis of optimal minimum wage policy in a perfectly competitive labor market. We show that a binding minimum wage -while leading to unemployment -is nevertheless desirable if the government values redistribution toward low wage workers and if unemployment induced by the minimum wage hits the lowest surplus workers first. This result remains true in the prese...

This paper presents a theoretical analysis of optimal minimum wage policy in a perfectly competitive labor market. Introducing a minimum wage is desirable if the government values redistribution toward low wage workers. This result remains true in the presence of optimal nonlinear taxes and transfers. In that context, a minimum wage effectively rations low skilled labor which is subsidized by t...