Whether, and to what extent, minimum wage legislation helps the poor is a crucial question for policymakers. Recent academic empirical work has sparked a heated debate with two clear sides: those who find evidence of adverse employment effects -in line with the standard theoretical prediction and those who fail to find such evidence (Freeman, 1996; Brown, 1999). If firms do not respond to minim...

Are Older Workers Worthy of Their Pay? An Empirical Investigation of Age-Productivity and Age-Wage Nexuses Using longitudinal employer-employee data spanning over a 22-year period, we compare age-wage and age-productivity profiles and find that productivity increases until the age range of 50-54, whereas wages peak around the age 40-44. At younger ages, wages increase in line with productivity ...

Multiple Glass Ceilings Both vertical (between job levels) and horizontal (within job levels) mobility can be sources of wage growth. We find that the glass ceiling operates at both margins. The unexplained part of the wage gap grows across job levels (glass ceiling at the vertical margin) and across the deciles of the intra-job-level wage distribution (glass ceiling at the horizontal margin). ...

Human Capital Investment with Competitive Labor Search We study human capital accumulation in an environment of competitive search. Given that unemployed workers can default on their education loans, skilled individuals with a larger debt burden prefer riskier but better paid careers than is socially desirable. A higher level of employment risk in turn depresses the skill premium and the incent...

This paper estimates and compares four versions of the sticky price New Keynesian model for the Euro area, using a Bayesian approach as described in Rabanal and Rubio-Ramírez (2003). We find that the average duration of price contracts is between four and eight quarters, similar to the one estimated in the United States, while price indexation is found to be smaller. On the other hand, average ...

Empirical work on Akerlof’s theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort, resulting in higher rents and higher market efficiency, than agents that receive different wages. We present...

This paper investigates possible spillover effects of the UK minimum wage. The halt in the growth in inequality in the lower half of the wage distribution (as measured by the 50:10 percentile ratio) since the mid 1990s, in contrast to the continued inequality growth in the upper half of the distribution, suggests the possibility of a minimum wage effect and spillover effects on wages above the ...

This paper presents a model and some empirical findings on a non-linear specification of the wage curve. The model, which builds upon complimentary elements of the classical and imperfect competition models of the labor market, suggests a downward sloping S-shaped curve in wageunemployment space. The rate of unemployment is argued to be a negatively correlated determinant of wages, but bound wi...