Two-digit manufacturing industry-level production functions are used to test efficiency wage propositions. Conclusive tests require functional forms which allow differences in elasticities of substitution between observable human capital, wage premia and other inputs. Results demonstrate that unexplained industry wage premia and higher unemployment rates raise productivity. Wage premia and the ...

The present paper examines a two-country model, one with flexible wage and prices (which seems to characterize most high performance East Asian economies), and the other with sticky wage and prices. Wage and prices often “over-shoot” in the flexible wage economy. The impacts of fixed and floating exchange rage regime on the flexible wage economy is typically different. A fixed (floating) exchan...

Local minimum wage laws are becoming common across U.S. cities, and their effects may be different from the effects of state or nationwide minimum wage policies. This paper studies the effect of changes in the minimum wage on spatial equilibriums in local labor markets. Using residence and workplace data for the United States, I analyze how commuting, residence, and employment locations change ...

this study examins effects of trade liberalization on the wage inequality between urban and rural labor by utilizing the data of micro-level households’ income and expenditures surveys and trade statistics over 2001-2011. the analysis is carried based on the heckscher–ohlin’s theory in international trade and baker’s taste discrimination theory at firms. we use quantile regression and ordinary ...

Wage Gaps Large and Small The law of one wage does not strictly hold, nor should it be expected to hold, in contemporary labor markets. The law of one wage, however, provides a surprisingly good first approximation of the structure of U.S. wages. This generalization is drawn from research on a diverse set of topics: the Mincerian wage equation and earnings imputation, union wage differentials, ...

The recent rise in wage inequality is usually attributed to skill-biased technical change (SBTC), associated with new computer technologies. We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage differentials between groups. A key problem for the SBTC hypothesis is that wage inequality stabilized in the 1990s despite...

Inter-industry Wage Dispersion in Portugal: high but falling This paper examines the size of inter-industry wage dispersion in Portugal and compares with other countries. We find that the country has a high inter-industry wage inequality compared with the European standard. Nevertheless, the dispersion reduced over the 1980s and the early 1990s along a process of centralisation of the wage sett...

We interpret workers’ confidence in their own skills as their morale, and investigate the implication of worker overconfidence on the firm’s optimal wage-setting policies. In our model, wage contracts both provide incentives and affect worker morale, by revealing private information of the firm about worker skills. We provide conditions for the non-differentiation wage policy to be profit-maxim...

A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil The international literature on minimum wage greatly lacks empirical evidence from developing countries. Brazil’s minimum wage policy is a distinctive and central feature of the Brazilian economy. Not only are increases in the minimum wage large and frequent but the minimum wage has also been used...

Abstract—This paper uses a primary data from 670 Chinese manufacturing firms, together with the newly introduced regressionbased inequality decomposition method, to study the effect of openness on wage inequality. We find that openness leads to a positive industry wage premium, but its contribution to firm-level wage inequality is relatively small, only 4.69%. The major contributor to wage ineq...