Documents Booth, Alison L. 14 results

"A striking feature of the past few decades has been the development of wage-determination models that assume that labor markets are imperfectly competitive. This paper discusses two such models (trade unions and oligopsony), although there are many more. It also asks if imperfectly competitive models should be used whenever researchers are modeling the labor market. Some people would argue for this only in cases when the predictions and comparative statics of the imperfectly competitive model differ from those of the competitive model. Of course, to know this, one needs to know precisely what the predictions and comparative statics of the respective models are. Moreover, for policymakers to be able to determine if an intervention is required in the first place, there does need to be some analytical framework to act as a guide. In the perfectly competitive model of the labor markets, for example, typically no intervention or regulation would be justified. However, labor economics has moved far beyond this position, with the incorporation of new ideas into modeling wage determination in imperfectly competitive labor markets, and with the availability of better datasets to facilitate empirical investigation."

"This paper considers how asymmetric tax treatment, where labour market earnings are taxed but household production is untaxed, affects educational choice and labour supply. We show that taxes on labour market earnings can generate a large (non-marginal) switch to home production and the ensuing deadweight losses are large. Using a cross-country panel, we find that gender differences in labour supply responses to tax policy can explain differences in aggregate labour supply and years of education across countries."

"Using harmonised data from the European Union Household Panel, we analyse gender pay gaps by sector across the wages distribution for ten countries. We find that the mean gender pay gap in the raw data typically hides large variations in the gap across the wages distribution. We use quantile regression (QR) techniques to control for the effects of individual and job characteristics at different points of the distribution, and calculate the part of the gap attributable to differing returns between men and women. We find that, first, gender pay gaps are typically bigger at the top of the wage distribution, a finding that is consistent with the existence of glass ceilings. For some countries gender pay gaps are also bigger at the bottom of the wage distribution, a finding that is consistent with sticky floors. Third, the gender pay gap is typically higher at the top than the bottom end of the wage distribution, suggesting that glass ceilings are more prevalent than sticky floors and that these prevail in the majority of our countries. Fourth, the gender pay gap differs significantly across the public and the private sector wages distribution for each of our EU countries."

"Using data for the years 1991-96 from the British Household Panel Survey, the authors investigate how union coverage affected work-related training and how the union-training link affected wages and wage growth for a sample of full-time men. Relative to non-covered workers, union-covered workers were more likely to receive training and also received more days of training. Among workers who received training, those with union coverage enjoyed greater returns to training and higher wage growth than did those without. While some of these results have been found in previous studies, others are new. The wage results, in particular, suggest a need for rethinking the conventional view that union wage formation in Britain reduces the incentives to acquire work-related training."

"Economists have long suggested that labor unions suffer a free rider problem. The argument is that, since union-set wages are available to all workers covered by unions irrespective of their union status, and union membership entails costs, workers will only join if they are coerced or are offered non-wage goods that they value above membership costs. Yet U.S. and British empirical research has found a substantial union membership wage premium among private-sector union-covered workers, implying that there is no free rider problem. The authors of this study hypothesize that these findings arise due to selectivity problems associated with identifying the union membership effect. Their analysis, which uses rich data from a new linked employer-employee survey for Britain and exploits the within-establishment variation in wages as a function of individual union membership status, demonstrates that the apparent wage premium for members is illusory. Hence, a potential free rider problem remains."

"Using harmonized data for the years 1995-2001 from the European Community Household Panel, the authors analyze gender pay gaps by sector across the wage distribution in eleven countries. In estimations that control for the effects of individual characteristics at different points of the distribution, they calculate the part of the gap attributable to differing returns between men and women. The magnitude of the gender pay gap, thus measured, varied substantially across countries and across the public and private sector wage distributions. The gap typically widened toward the top of the wage distribution (the "glass ceiling" effect), and in a few cases it also widened at the bottom (the "sticky floor" effect). The authors suggest that differences in childcare provision and wage setting institutions across EU countries may partly account for the variation in patterns by country and sector."

"A worker's output depends not only on his/her own ability but also on that of colleagues, who can facilitate the performance of tasks that each individual cannot accomplish on his/her own. We show that this common-sense observation generates monopsony power and is sufficient to explain why employers might expend resources on training employees even when the training is of use to other firms. We show that training will take place in better-than-average or ‘good' firms enjoying greater monopsony power, whereas ‘bad' firms will have low-ability workers unlikely to receive much training."