Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaere, Boris Hirsch, Steffen Müller, Georg Neuschäffer
IWH Discussion Papers,
Nr. 20,
2022
publiziert in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils relate to labour market imperfections and how labour market imperfections relate to employer wage premia. Based on representative German plant data for the years 1999–2016, we document that 70% of employers pay wages below the marginal revenue product of labour and 30% pay wages above. We further find that the prevalence of wage mark-downs is significantly smaller when organised labour is present and that the ratio of wages to the marginal revenue product of labour is significantly bigger. Finally, we document a close link between labour market imperfections and mean employer wage premia, that is wage differences between employers corrected for worker sorting.
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Do Firms Respond to Gender Pay Gap Transparency?
Morten Bennedsen, Elena Simintzi, Margarita Tsoutsoura, Daniel Wolfenzon
Journal of Finance,
Nr. 4,
2022
Abstract
We examine the effect of pay transparency on the gender pay gap and firm outcomes. Using a 2006 legislation change in Denmark that requires firms to provide gender-disaggregated wage statistics, detailed employee-employer administrative data, and difference-in-differences and difference-in-discontinuities designs, we find that the law reduces the gender pay gap, primarily by slowing wage growth for male employees. The gender pay gap declines by 2 percentage points, or 13% relative to the prelegislation mean. Despite the reduction of the overall wage bill, the wage transparency mandate does not affect firm profitability, likely because of the offsetting effect of reduced firm productivity.
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A Note on the Use of Syndicated Loan Data
Isabella Müller, Felix Noth, Lena Tonzer
IWH Discussion Papers,
Nr. 17,
2022
Abstract
Syndicated loan data provided by DealScan has become an essential input in banking research over recent years. This data is rich enough to answer urging questions on bank lending, e.g., in the presence of financial shocks or climate change. However, many data options raise the question of how to choose the estimation sample. We employ a standard regression framework analyzing bank lending during the financial crisis to study how conventional but varying usages of DealScan affect the estimates. The key finding is that the direction of coefficients remains relatively robust. However, statistical significance seems to depend on the data and sampling choice.
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The Urban Wage Premium in Imperfect Labor Markets
Boris Hirsch, Elke J. Jahn, Alan Manning, Michael Oberfichtner
Journal of Human Resources,
April
2022
Abstract
Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from greater competition in denser labor markets. We show that employers possess less wage-setting power in denser markets. We further document that an important part of the observed urban wage premia can be explained by greater competition in denser labor markets.
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Does Working at a Start-up Pay Off?
Daniel Fackler, Lisa Hölscher, Claus Schnabel, Antje Weyh
Small Business Economics,
Nr. 4,
2022
Abstract
Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
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Dilemma and Global Financial Cycle: Evidence from Capital Account Liberalisation Episodes
Xiang Li
IWH Discussion Papers,
Nr. 13,
2021
Abstract
By focusing on the episodes of substantial capital account liberalisation and adopting a new methodology, this paper provides new evidence on the dilemma and global financial cycle theory. I first identify the capital account liberalisation episodes for 95 countries from 1970 to 2016, and then employ an augmented inverse propensity score weighted (AIPW) estimator to calculate the average treatment effect (ATE) of opening capital account on the interest rate comovements with the core country. Results show that opening capital account causes a country to lose its monetary policy independence, and a floating exchange rate regime cannot shield this effect. Moreover, the impact is stronger when liberalising outward and banking flows.
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Worker Participation in Decision-making, Worker Sorting, and Firm Performance
Steffen Müller, Georg Neuschäffer
Industrial Relations,
Nr. 4,
2021
Abstract
Worker participation in decision-making is often associated with high-wage and high-productivity firm strategies. Using linked employer–employee data for Germany and worker fixed effects from a two-way fixed-effects model of wages capturing observed and unobserved worker quality, we find that plants with formal worker participation via works councils indeed employ higher quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.
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Explaining Wage Losses After Job Displacement: Employer Size and Lost Firm Wage Premiums
Daniel Fackler, Steffen Müller, Jens Stegmaier
Journal of the European Economic Association,
Nr. 5,
2021
Abstract
This paper investigates whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We estimate losses in wages and firm wage premiums, the latter being measured as firm effects from a two-way fixed-effects wage decomposition. Using new German administrative data on displacements from small and large employers, we find that wage losses are to a large extent explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses strongly increase with pre-displacement employer size. This provides an explanation for large and persistent wage losses reported in previous displacement studies typically focusing on large employers, only.
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06.10.2021 • 24/2021
IWH-Insolvenztrend: Insolvenzzahlen bleiben niedrig, mehr Industriejobs von Insolvenz betroffen
Die Anzahl der Insolvenzen von Personen- und Kapitalgesellschaften verharrte im September in der Nähe der historischen Tiefststände. Die Zahl der betroffenen Jobs im Verarbeitenden Gewerbe stieg dagegen deutlich an. Das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) liefert mit dem IWH-Insolvenztrend ein monatliches Update zum bundesweiten Insolvenzgeschehen.
Steffen Müller
Pressemitteilung lesen
Access to Public Capital Markets and Employment Growth
Alexander Borisov, Andrew Ellul, Merih Sevilir
Journal of Financial Economics,
Nr. 3,
2021
Abstract
This paper examines the effect of going public on firm-level employment. To establish a causal effect, we employ a novel data set of private firms to investigate employment growth in IPO firms relative to a group of firms that file for an IPO but subsequently withdraw their offering. We find that employment increases significantly after going public, and the increase is more pronounced in industries with requirements for highly skilled labor and greater dependence on external finance. Improved ability to undertake acquisitions and a strategic shift toward commercialization, rather than agency problems, explain employment growth. Overall, these results highlight the importance of going public for firms' employment policies.
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