an article by Sonja Jovicic (University of Wuppertal, Germany) published in IZA Journal of European Labor Studies Volume 5 Article 21 (2016)
Abstract
This paper investigates international differences in wage inequality and skills and whether a compressed wage distribution is associated with high unemployment across core OECD countries.
Wage dispersion and wage structure are widely debated among policymakers; compressed wage structure is often perceived as an important cause of high unemployment.
Firstly, this paper examines differences in wage dispersion across OECD countries and their link to skill dispersion. Some countries that have more compressed (dispersed) wage structures simultaneously have more compressed (dispersed) skill structures as well, and skill differences explain part of the differences in wage dispersion.
However, even when accounted for skills, some countries have a more compressed wage structure, most likely caused by labor market institutions. We do not find an effect of wage compression on the labor market performance in the low-skill sector.
Based on the Program for International Assessment of Adult Competencies (PIAAC) survey of adult skills for core OECD countries, this paper cannot confirm the skill compression nor wage compression hypotheses.
Rather than insisting on the deregulation of labor market institutions and reductions in public welfare policy as the main policy recommendations to achieve higher employment (and higher wage inequality), policymakers should reconsider aggregate demand deficiency and the variation in macroeconomic policies as potential explanations for the employment differences across countries.
JEL Classification: J31, J24, E24
Showing posts with label wage_distribution. Show all posts
Showing posts with label wage_distribution. Show all posts
Thursday, 9 February 2017
Tuesday, 13 March 2012
Still evidence-based? The role of policy evaluation in recession and beyond:
The case of the national Minimum Wage
an article by Tim Butcher (Low Pay Commission) published in National Institute Economic Review Volume 219 Number 1 (January 2012)
Abstract
This article explains the role of evidence in determining the recommendations made by the Low Pay Commission (LPC) for the National Minimum Wage (NMW). First, it sets out the process of recommending the minimum wage including the role of evidence. Second, it summarises the evidence available on the impact of the minimum wage before discussing how that evidence has informed the recommendations for the adult rate of the minimum wage in the LPC’s reports. It concludes by assessing the extent to which the NMW might be regarded as a success and considers whether the recent financial crisis will alter the evidence-based approach so far adopted by the LPC.
an article by Tim Butcher (Low Pay Commission) published in National Institute Economic Review Volume 219 Number 1 (January 2012)
Abstract
This article explains the role of evidence in determining the recommendations made by the Low Pay Commission (LPC) for the National Minimum Wage (NMW). First, it sets out the process of recommending the minimum wage including the role of evidence. Second, it summarises the evidence available on the impact of the minimum wage before discussing how that evidence has informed the recommendations for the adult rate of the minimum wage in the LPC’s reports. It concludes by assessing the extent to which the NMW might be regarded as a success and considers whether the recent financial crisis will alter the evidence-based approach so far adopted by the LPC.
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