an article by Sarah Bridges (University of Nottingham, UK) and Samuel Mann (Swansea University, UK; Wales Institute of Social and Economic Research, Data and Methods, UK) published in Work, Employment and Society Volume Issue 3 (December 2019)
Abstract
This article uses data from the Labour Force Survey to examine the effect sexual orientation has on wages in Britain. In doing so it provides the first empirical investigation of the effect being in a same-sex legal partnership has on wages.
The results show that gay cohabitees and lesbians face a wage premium compared to their heterosexual counterparts. Decomposition results show that for gay cohabitees this arises due to differences in observable characteristics, while lesbians not only earn significantly more due to differences in their observable characteristics, but they also receive a higher return for these characteristics.
In contrast, although no significant difference in earnings is observed for men in a legal partnership, decomposition results suggest that legally partnered gay males should earn more due to differences in their observable characteristics, while there is also evidence that they face barriers to advancement to senior positions, or a glass ceiling.
Showing posts with label wages. Show all posts
Showing posts with label wages. Show all posts
Tuesday, 17 December 2019
Thursday, 5 December 2019
From Immigrants to Robots: The Changing Locus of Substitutes for Workers
an article by George J. Borjas (Harvard Kennedy School, USA) and Richard B. Freeman (Harvard University, USA) published in RSF: The Russell Sage Foundation Journal of the Social Sciences Volume 5 Issue 5 (December 2019)
Abstract
Using numbers of industrial robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment by roughly two to three workers overall and by three to four workers when robots are likely to be good substitutes for humans.
The supply shock also reduces wages. The estimates far exceed those of an additional immigrant on employment and wages.
While growth of robots in the 2000s was too modest to be a major determinant of wages and employment, the estimated effects suggest that continued exponential growth of industrial robots could disrupt job markets in the foreseeable future and thus merit attention from analysts and policymakers concerned about the economic well-being of workers.
Full text (PDF 23pp)
Abstract
Using numbers of industrial robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment by roughly two to three workers overall and by three to four workers when robots are likely to be good substitutes for humans.
The supply shock also reduces wages. The estimates far exceed those of an additional immigrant on employment and wages.
While growth of robots in the 2000s was too modest to be a major determinant of wages and employment, the estimated effects suggest that continued exponential growth of industrial robots could disrupt job markets in the foreseeable future and thus merit attention from analysts and policymakers concerned about the economic well-being of workers.
Full text (PDF 23pp)
Monday, 2 December 2019
Beyond the Phillips curve: Understanding low wage growth in the euro area
a column by Christiane Nickel, Elena Bobeica, Gerrit Koester, Eliza Lis, Mario Porqueddu and Cecilia Sarchi for VOX: CEPR’s Policy Portal
Wage growth in the euro area over 2013 to 2017 was subdued despite notable improvements in the labour market, leading some to claim a breakdown of the output–inflation relationship.
This column presents comparative analyses of wage developments in the euro area, showing that the Phillips curve is alive and well and can be used to explain much of the weakness in wage growth during 2013-2017. Other factors also found to have played a role include compositional effects, the possible non-linear reaction of wage growth to cyclical improvements, and structural and institutional factors.
Figure 1 Measures of wage growth over the cycle
Note: left-hand scale: annual rates of change; right-hand scale: percentage of the labour force. Latest observation: Q2 2019 for unemployment rate and negotiated wages and Q1 2019 for the rest.
Sources: Eurostat, national statistical offices, NCB and ECB staff calculations.
Continue reading and find some illuminating graphs and charts.
Wage growth in the euro area over 2013 to 2017 was subdued despite notable improvements in the labour market, leading some to claim a breakdown of the output–inflation relationship.
This column presents comparative analyses of wage developments in the euro area, showing that the Phillips curve is alive and well and can be used to explain much of the weakness in wage growth during 2013-2017. Other factors also found to have played a role include compositional effects, the possible non-linear reaction of wage growth to cyclical improvements, and structural and institutional factors.
Figure 1 Measures of wage growth over the cycle
Note: left-hand scale: annual rates of change; right-hand scale: percentage of the labour force. Latest observation: Q2 2019 for unemployment rate and negotiated wages and Q1 2019 for the rest.
Sources: Eurostat, national statistical offices, NCB and ECB staff calculations.
Continue reading and find some illuminating graphs and charts.
Friday, 15 November 2019
Solidarity Within and Across Workplaces: How Cross-Workplace Coordination Affects Earnings Inequality
an article by Nathan Wilmers (MIT Sloan School of Management, USA) published in RSF: The Russell Sage Foundation Journal of the Social Sciences Volume 5 Issue 4 (September 2019)
Abstract
The post–World War II period of wage compression provides a strong contrast to the last forty years of rising inequality.
In this article, I argue that inequality was previously constrained by pay coordination that spanned multiple workplaces. Cross-workplace coordination practices range from multi-employer bargaining agreements to informal employer collusion.
To quantify the influence of these practices on inequality, I draw on establishment-level Bureau of Labor Statistics microdata from 1968 to 1977. Inequality between workplaces did not increase during the 1970s and inequality was lower among workers likely to be covered by cross-workplace coordination.
Unionization, large establishments, and pension provision reduced inequality across workplaces, not only among coworkers within workplaces. These findings indicate that cross-workplace coordination mitigated inequality during the postwar period of egalitarian economic growth.
Full text (PDF 26pp)
Hazel’s comment
Despite this research being based in the USA I believe that it is also relevant to the UK starting as it does by telling us that the inequality gap is growing with the rich getting richer.
Abstract
The post–World War II period of wage compression provides a strong contrast to the last forty years of rising inequality.
In this article, I argue that inequality was previously constrained by pay coordination that spanned multiple workplaces. Cross-workplace coordination practices range from multi-employer bargaining agreements to informal employer collusion.
To quantify the influence of these practices on inequality, I draw on establishment-level Bureau of Labor Statistics microdata from 1968 to 1977. Inequality between workplaces did not increase during the 1970s and inequality was lower among workers likely to be covered by cross-workplace coordination.
Unionization, large establishments, and pension provision reduced inequality across workplaces, not only among coworkers within workplaces. These findings indicate that cross-workplace coordination mitigated inequality during the postwar period of egalitarian economic growth.
Full text (PDF 26pp)
Hazel’s comment
Despite this research being based in the USA I believe that it is also relevant to the UK starting as it does by telling us that the inequality gap is growing with the rich getting richer.
Tuesday, 8 October 2019
Migrants and Low-Paid Employment in British Workplaces
an article by Alex Bryson (University College London, UK) amd Michael White (University of Westminster, UK) published in Work, Employment and Society Volume 3434 Issue 5 (October 2019)
Abstract
Using nationally representative workplace data for Britain, we identify where migrants work and examine the partial correlation between workplace wages and whether migrants are employed at a workplace.
Three-in-ten workplaces with five or more employees employ migrant workers, with the probability rising substantially with workplace size.
We find the bottom quartile of the log earnings distribution is 4–5% lower in workplaces employing migrants, ceteris paribus.
However, the effect is confined to workplaces set up before the introduction of the National Minimum Wage (NMW) in the late 1990s, consistent with the proposition that minimum wage regulation limits employers’ propensity to pay low wages in the presence of migrant workers.
Abstract
Using nationally representative workplace data for Britain, we identify where migrants work and examine the partial correlation between workplace wages and whether migrants are employed at a workplace.
Three-in-ten workplaces with five or more employees employ migrant workers, with the probability rising substantially with workplace size.
We find the bottom quartile of the log earnings distribution is 4–5% lower in workplaces employing migrants, ceteris paribus.
However, the effect is confined to workplaces set up before the introduction of the National Minimum Wage (NMW) in the late 1990s, consistent with the proposition that minimum wage regulation limits employers’ propensity to pay low wages in the presence of migrant workers.
Tuesday, 1 October 2019
Driving the superstar economy: Skilled tradable services
a column by Fabian Eckert, Sharat Ganapati and Conor Walsh for VOX: CEPR’s Policy Portal
In recent years, wages for highly skilled workers have grown rapidly.
Using US data between 1980 and 2015, this column studies a group of service industries that are skill-intensive, widely traded, and have recently seen explosive wage growth. It shows that, unlike any other sector, the wage growth in these industries was strongly biased toward the densest local labour markets and the highest-paying firms.
These developments alone explain 30% of the increase in inequality between the 50th and 90th percentiles of the wage distribution.
Continue reading
In recent years, wages for highly skilled workers have grown rapidly.
Using US data between 1980 and 2015, this column studies a group of service industries that are skill-intensive, widely traded, and have recently seen explosive wage growth. It shows that, unlike any other sector, the wage growth in these industries was strongly biased toward the densest local labour markets and the highest-paying firms.
These developments alone explain 30% of the increase in inequality between the 50th and 90th percentiles of the wage distribution.
Continue reading
Wednesday, 11 September 2019
Costs of employment and flexible labour demand
a column by Yukiko Asai for VOX: CEPR’s Policy Portal
One factor exacerbating gender gaps in employment is the cost of affording maternity and parental leave to women as primary caregivers.
This column analyses the relationship between the costs of providing parental leave and labour demand for childbearing-age women. As evidenced by a series of reforms in Japan in the last two decades, reducing the burden of parental leave costs from firms to social insurance systems increases both labour demand and starting wages for such workers.
Continue reading
One factor exacerbating gender gaps in employment is the cost of affording maternity and parental leave to women as primary caregivers.
This column analyses the relationship between the costs of providing parental leave and labour demand for childbearing-age women. As evidenced by a series of reforms in Japan in the last two decades, reducing the burden of parental leave costs from firms to social insurance systems increases both labour demand and starting wages for such workers.
Continue reading
Tuesday, 14 May 2019
Opening the floodgates: Immigration in the aftermath of the eastern enlargement
a column by Bernt Bratsberg, Andreas Moxnes, Oddbjørn Raaum and Karen-Helene Ulltveit-Moe for VOX: CEPR’s Policy Portal
In the aftermath of the eastern enlargement of the EU, Norway experienced one of the largest immigration shocks of the 21st century.
This column uses data from the episode to examine the general equilibrium response of wages, labour costs, and industry employment to such shocks. One finding is that although real wages in some occupations decline, the aggregate welfare effects on natives are close to zero as natives switch to higher-wage occupations.
The welfare effect on the existing population of immigrants, on the other hand, is negative as they have a comparative advantage in low-wage occupations.
Continue reading
In the aftermath of the eastern enlargement of the EU, Norway experienced one of the largest immigration shocks of the 21st century.
This column uses data from the episode to examine the general equilibrium response of wages, labour costs, and industry employment to such shocks. One finding is that although real wages in some occupations decline, the aggregate welfare effects on natives are close to zero as natives switch to higher-wage occupations.
The welfare effect on the existing population of immigrants, on the other hand, is negative as they have a comparative advantage in low-wage occupations.
Continue reading
Tuesday, 2 April 2019
Short-time work in the Great Recession: firm-level evidence from 20 EU countries
an article by Reamonn Lydon (Central Bank of Ireland, Dublin),Thomas Y. Mathä (Banque centrale du Luxembourg) and Stephen Millard (Bank of England, Durham University Business School and Centre for Macroeconomics,
Durham, UK) published in IZA Journal of Labor Policy Volume 8 Article 2 (2019)
Abstract
Using firm-level data from a large-scale European survey among 20 countries, we analyse the determinants of firms using short-time work (STW). We show that firms are more likely to use STW in case of negative demand shocks. We show that STW schemes are more likely to be used by firms with high degrees of firm-specific human capital, high firing costs, and operating in countries with stringent employment protection legislation and a high degree of downward nominal wage rigidity.
STW use is higher in countries with formalised schemes and in countries where these schemes were extended in response to the recent crisis. On the wider economic impact of STW, we show that firms using the schemes are significantly less likely to lay off permanent workers in response to a negative shock, with no impact for temporary workers.
Relating our STW take-up measure in the micro data to aggregate data on employment and output trends, we show that sectors with a high STW take-up exhibit significantly less cyclical variation in employment.
JEL classification: C25, E24, J63, J68
Full text (PDF 29pp)
Durham, UK) published in IZA Journal of Labor Policy Volume 8 Article 2 (2019)
Abstract
Using firm-level data from a large-scale European survey among 20 countries, we analyse the determinants of firms using short-time work (STW). We show that firms are more likely to use STW in case of negative demand shocks. We show that STW schemes are more likely to be used by firms with high degrees of firm-specific human capital, high firing costs, and operating in countries with stringent employment protection legislation and a high degree of downward nominal wage rigidity.
STW use is higher in countries with formalised schemes and in countries where these schemes were extended in response to the recent crisis. On the wider economic impact of STW, we show that firms using the schemes are significantly less likely to lay off permanent workers in response to a negative shock, with no impact for temporary workers.
Relating our STW take-up measure in the micro data to aggregate data on employment and output trends, we show that sectors with a high STW take-up exhibit significantly less cyclical variation in employment.
JEL classification: C25, E24, J63, J68
Full text (PDF 29pp)
Monday, 4 February 2019
The Sheltering Effect of Occupational Closure? Consequences for Ethnic Minorities’ Earnings
an article by Ida Drange and Håvard Helland (Oslo Metropolitan University, Norway) published in Work and Occupations Volume 46 Issue 1 (February 2019)
Abstract
It has been widely documented that immigrants receive lower earnings than the majority of the population in most Western countries.
Previous research has pointed to various forms of discrimination that affect immigrants’ wage rates. The authors discuss whether the source of this wage inequality can be found at the occupational level. In this article, the authors argue that occupational closures reduce within-occupation wage inequality.
To test their expectations, the authors use Norwegian register data that span all employees. The results align with their expectations, as both occupational licensing and union density strongly reduce immigrant-majority earnings’ inequality. However, neither certifications nor credentialization reduces the immigrant-majority earnings gap.
Abstract
It has been widely documented that immigrants receive lower earnings than the majority of the population in most Western countries.
Previous research has pointed to various forms of discrimination that affect immigrants’ wage rates. The authors discuss whether the source of this wage inequality can be found at the occupational level. In this article, the authors argue that occupational closures reduce within-occupation wage inequality.
To test their expectations, the authors use Norwegian register data that span all employees. The results align with their expectations, as both occupational licensing and union density strongly reduce immigrant-majority earnings’ inequality. However, neither certifications nor credentialization reduces the immigrant-majority earnings gap.
Monday, 28 January 2019
Monopsony in the UK
a column by Will Abel, Silvana Tenreyro and Gregory Thwaites for VOX: CEPR’s Policy Portal
Concentrated labour markets, in which workers have few choices of potential employers, reduce the wages of workers when they are not covered by collective wage bargaining agreements.
But these types of agreements have become much less common in the past 20 years.
This column uses employee-level data to show that even though UK labour markets have not on average become much more concentrated, concentration – which varies a great deal across regions and industries – is having a bigger impact on wages than before.
Continue reading
Concentrated labour markets, in which workers have few choices of potential employers, reduce the wages of workers when they are not covered by collective wage bargaining agreements.
But these types of agreements have become much less common in the past 20 years.
This column uses employee-level data to show that even though UK labour markets have not on average become much more concentrated, concentration – which varies a great deal across regions and industries – is having a bigger impact on wages than before.
Continue reading
Friday, 5 October 2018
The productivity-wage premium: It’s productivity, not size, that matters in a service economy
a column by Giuseppe Berlingieri, Sara Calligaris and Chiara Criscuolo for VIX: CEPR’s Policy Portal
The evidence that bigger firms pay higher wages and have higher productivity is mainly based on manufacturing, which nowadays accounts for a small share of the economy.
Drawing on a unique micro-aggregated dataset, this column reveals that while the size premia for both wages and productivity are significantly weaker in market services than in manufacturing, the link between wages and productivity is stronger – the most productive firms at the top are not necessarily the largest ones in terms of employment, but they do pay the best.
This increases the likelihood of productivity and wage gains being shared with fewer workers, a further challenge to achieving inclusive growth in the new service economy.
Continue reading
The evidence that bigger firms pay higher wages and have higher productivity is mainly based on manufacturing, which nowadays accounts for a small share of the economy.
Drawing on a unique micro-aggregated dataset, this column reveals that while the size premia for both wages and productivity are significantly weaker in market services than in manufacturing, the link between wages and productivity is stronger – the most productive firms at the top are not necessarily the largest ones in terms of employment, but they do pay the best.
This increases the likelihood of productivity and wage gains being shared with fewer workers, a further challenge to achieving inclusive growth in the new service economy.
Continue reading
Thursday, 4 October 2018
Alternative paths to success? The jobs landscape facing young non-graduates today
a post by Conor D'Archy and Kathleen Henehan for the Resolution Foundation blog
From photos of jumping A level students to guides to freshers’ week, at this time of year it can feel like university is the only route taken by teenagers. But in fact, fewer than half of young people follow this seemingly well-trodden path at 18. And, as this morning’s ONS publication about non-graduates’ employment patterns reminds us, non-graduates are a diverse group with diverse outcomes in the world of work.
During 2017, the employment rate for non-graduates aged 22-29 was 78 per cent, compared to 90 per cent for their similarly-aged graduate counterparts. The proportion of young non-graduates classed as ‘economically inactive’ (meaning those not available nor looking for work) was 17 per cent, compared to just 6 percent for young graduates.
It would be wrong to think of non-graduates as a homogeneous block. As the chart below illustrates, roughly 60 per cent of today’s 22-29 year-olds are without a bachelor’s degree. But educational attainment varies widely within this group: 7 per cent of 22-29 year-olds have a Level 4 or 5 qualification (higher education below degree-level), nearly a quarter (24 per cent) have a Level 3 (A level or equivalent) qualification and just below a quarter (23 per cent) have a Level 2 (GCSE or equivalent) qualification. Another 8 per cent either have no formal qualifications or qualifications classed as ‘other.’
Continue reading
From photos of jumping A level students to guides to freshers’ week, at this time of year it can feel like university is the only route taken by teenagers. But in fact, fewer than half of young people follow this seemingly well-trodden path at 18. And, as this morning’s ONS publication about non-graduates’ employment patterns reminds us, non-graduates are a diverse group with diverse outcomes in the world of work.
During 2017, the employment rate for non-graduates aged 22-29 was 78 per cent, compared to 90 per cent for their similarly-aged graduate counterparts. The proportion of young non-graduates classed as ‘economically inactive’ (meaning those not available nor looking for work) was 17 per cent, compared to just 6 percent for young graduates.
It would be wrong to think of non-graduates as a homogeneous block. As the chart below illustrates, roughly 60 per cent of today’s 22-29 year-olds are without a bachelor’s degree. But educational attainment varies widely within this group: 7 per cent of 22-29 year-olds have a Level 4 or 5 qualification (higher education below degree-level), nearly a quarter (24 per cent) have a Level 3 (A level or equivalent) qualification and just below a quarter (23 per cent) have a Level 2 (GCSE or equivalent) qualification. Another 8 per cent either have no formal qualifications or qualifications classed as ‘other.’
Continue reading
Tuesday, 2 October 2018
The ‘Great Recession’ and low pay in Europe
an article by Carlos Vacas-Soriano (European Foundation for the Improvement of Living and Working Conditions (Eurofound), Ireland) published in European Journal of Industrial Relations Volume 24 Issue 3 (September 2018)
Abstract
This article contributes to the literature on low-paid work by analysing the shares of low-paid employment in the period 2006–2014 and the underlying causes.
I use an inflation-adjusted low-pay threshold anchored at 60 percent of median wages to assess the impact of the Great Recession, which increased the share of low-paid employees in two-thirds of European countries and in the EU as a whole. This was driven by a general decline in real wages, which was particularly intense in European periphery countries and at the bottom of the wage distribution as well as among employees with shorter tenure.
However, compositional effects either prevented a larger expansion of low-pay shares by masking the real extent of the wage correction or were generally negligible in driving low-pay shares. Moreover, growing part-time employment emerges as a significant source of low-paid work from the onset of the crisis.
This article contributes to the literature on low-paid work by analysing the shares of low-paid employment in the period 2006–2014 and the underlying causes.
I use an inflation-adjusted low-pay threshold anchored at 60 percent of median wages to assess the impact of the Great Recession, which increased the share of low-paid employees in two-thirds of European countries and in the EU as a whole. This was driven by a general decline in real wages, which was particularly intense in European periphery countries and at the bottom of the wage distribution as well as among employees with shorter tenure.
However, compositional effects either prevented a larger expansion of low-pay shares by masking the real extent of the wage correction or were generally negligible in driving low-pay shares. Moreover, growing part-time employment emerges as a significant source of low-paid work from the onset of the crisis.
Saturday, 7 April 2018
The economic impacts of immigration to the UK
a column by Jonathan Portes for VOX: CEPR’s Policy Portal
Much public and policy concern has focused on the distributional impacts of immigration – in particular, potential negative impacts on employment and wages for low-skilled workers.
This column summarises evidence and draws conclusions from the now considerable literature on the impact of migration to the UK on the economy and labour market, including the potential economic impacts of Brexit-induced reductions in migration.
Continue reading
Much public and policy concern has focused on the distributional impacts of immigration – in particular, potential negative impacts on employment and wages for low-skilled workers.
This column summarises evidence and draws conclusions from the now considerable literature on the impact of migration to the UK on the economy and labour market, including the potential economic impacts of Brexit-induced reductions in migration.
Continue reading
Thursday, 1 March 2018
Job seekers react to market incentives: Implications for labour market policies
a column by Benjamin Villena-Roldán and Stefano Banfi for VOX: CEPR’s Policy Portal
Researchers often pick a random or a directed search model based on convenience and theoretical implications, but distinguishing between the two is important as many labour market regulations may be welfare-improving under random search, but not under directed search.
This column uses data from Chile to show that job-seekers respond to information posted by employers, suggesting that policy design should consider the prescriptions of directed search models. However, the evidence also shows that relevant features of these markets are not well captured by existing models.
Continue reading
Researchers often pick a random or a directed search model based on convenience and theoretical implications, but distinguishing between the two is important as many labour market regulations may be welfare-improving under random search, but not under directed search.
This column uses data from Chile to show that job-seekers respond to information posted by employers, suggesting that policy design should consider the prescriptions of directed search models. However, the evidence also shows that relevant features of these markets are not well captured by existing models.
Continue reading
Sunday, 11 February 2018
On three canonical responses to labour saving technical change
a column by Ravi Kanbur for VOX: CEPR’s Policy Portal
Technological innovation is broadly accepted as a driving force behind diverging wage trends in the last three decades.
If this is set to continue, policymakers must choose how to respond to the ensuing income inequality.
This column assesses two established policy response ideas – state-sponsored formal education, and tax and transfer mechanisms – and postulates a third, namely, that the pace and distributional effects of technological change should themselves be policy goals.
A policy intervention that would make innovation more labour intensive would be the most powerful response of all.
Continue reading
Technological innovation is broadly accepted as a driving force behind diverging wage trends in the last three decades.
If this is set to continue, policymakers must choose how to respond to the ensuing income inequality.
This column assesses two established policy response ideas – state-sponsored formal education, and tax and transfer mechanisms – and postulates a third, namely, that the pace and distributional effects of technological change should themselves be policy goals.
A policy intervention that would make innovation more labour intensive would be the most powerful response of all.
Continue reading
Friday, 2 February 2018
Immigration in the era of automation
a column by Gaetano Basso, Giovanni Peri and Ahmed Rahman for VOX: CEPR’s Policy Portal
The US and Europe have both seen wage polarisation in the last three decades, in parallel with increasing technical automation. This column analyses the impact of immigration on this wage divergence via its effect on the labour supply side. It finds that immigration partially reverses natives’ polarisation of employment opportunities and wages by expanding aggregate demand and allowing natives to move to better paying occupations. Policies to reduce low-skilled migration with the aim of favouring native middle-class labour market opportunities may in fact do the opposite.
Continue reading
The US and Europe have both seen wage polarisation in the last three decades, in parallel with increasing technical automation. This column analyses the impact of immigration on this wage divergence via its effect on the labour supply side. It finds that immigration partially reverses natives’ polarisation of employment opportunities and wages by expanding aggregate demand and allowing natives to move to better paying occupations. Policies to reduce low-skilled migration with the aim of favouring native middle-class labour market opportunities may in fact do the opposite.
Continue reading
Monday, 8 January 2018
2018 risks being a standstill year on pay
a post by Torsten Bell for the Resolution Foundation blog
2018 looks set to be a standstill year. On the biggest political issue of our time we will spend all 365 days of it leaving, but not out of, the EU. It also looks set to be a standstill year for our economy as most people experience it – on pay and employment we may well end it pretty much where we began.
That flat pay may be seen as good news shows quite how far we’ve come as a country. The recent catastrophe of wages in Britain has well and truly managed our expectations. The living standards story of 2017 was the return of shrinking pay packets – still £15 a week below their pre-crisis peak and not forecast to fully recover until 2025. Far from catching back up, we’ve started digging again.
Continue reading
2018 looks set to be a standstill year. On the biggest political issue of our time we will spend all 365 days of it leaving, but not out of, the EU. It also looks set to be a standstill year for our economy as most people experience it – on pay and employment we may well end it pretty much where we began.
That flat pay may be seen as good news shows quite how far we’ve come as a country. The recent catastrophe of wages in Britain has well and truly managed our expectations. The living standards story of 2017 was the return of shrinking pay packets – still £15 a week below their pre-crisis peak and not forecast to fully recover until 2025. Far from catching back up, we’ve started digging again.
Continue reading
Friday, 17 February 2017
Should governments of OECD countries worry about graduate underemployment?
an article by Francis Green and Golo Henseke (UCL Institute of Education) published in Oxford Review of Economic Policy Volume 32 Number 4 (Winter 2016)
Abstract
To assess potential public concerns, this paper examines theory and evidence surrounding graduate educational underemployment (overeducation) in this era of mass higher education. Using a new, validated, index of graduate jobs, we find that the prevalence of graduate underemployment across 21 countries is correlated with the aggregate supply-demand imbalance, but not with indicators of labour market flexibility.
Underemployment’s association with lower job satisfaction and pay is widespread. Yet in most countries there are external benefits (social trust, volunteering, and political efficacy) associated with higher education, even for those who are underemployed.
Taken together with existing studies we find that, in this era of mass higher education participation, under-employment is a useful indicator of the extent of macroeconomic disequilibrium in the graduate labour market.
We conclude that governments should monitor graduate underemployment, but that higher education policy should be based on social returns and should recall higher education’s wider purposes.
JEL Classification: I23, I28, J2, J3, J4
Full text (PDF)
Abstract
To assess potential public concerns, this paper examines theory and evidence surrounding graduate educational underemployment (overeducation) in this era of mass higher education. Using a new, validated, index of graduate jobs, we find that the prevalence of graduate underemployment across 21 countries is correlated with the aggregate supply-demand imbalance, but not with indicators of labour market flexibility.
Underemployment’s association with lower job satisfaction and pay is widespread. Yet in most countries there are external benefits (social trust, volunteering, and political efficacy) associated with higher education, even for those who are underemployed.
Taken together with existing studies we find that, in this era of mass higher education participation, under-employment is a useful indicator of the extent of macroeconomic disequilibrium in the graduate labour market.
We conclude that governments should monitor graduate underemployment, but that higher education policy should be based on social returns and should recall higher education’s wider purposes.
JEL Classification: I23, I28, J2, J3, J4
Full text (PDF)
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