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Employer Power: Consequences For Wages, Inequality And Spillovers, Ihsaan Bassier
Employer Power: Consequences For Wages, Inequality And Spillovers, Ihsaan Bassier
Doctoral Dissertations
In several countries, wages have stagnated and union membership declined, even as productivity has increased. The established view of employers helpless to the labor market's invisible hand has increasingly come under question. Attention has turned towards the power of employers to set wages; yet only recently have the data required to investigate this – observing workers at their employers – become available, and then mostly in richer countries. My first chapter, “Monopsony in Movers” (co-authored with Arindrajit Dube and Suresh Naidu), proposes a new credible estimation strategy to measure employer monopsony power. We build on the idea that employers with …
Essays On Exchange Rate Shocks And The Political Economy Of Local Fiscal Policy In Brazil, Raphael Rocha Gouvea
Essays On Exchange Rate Shocks And The Political Economy Of Local Fiscal Policy In Brazil, Raphael Rocha Gouvea
Doctoral Dissertations
Do exchange rate shocks have distributional consequences? Does employment respond to exchange rate shocks? Do political parties matter when it comes to governing cities? Each chapter of this dissertation attempts to answer one of these questions in the Brazilian context. In the first chapter, titled Large devaluations and inflation inequality: evidence from Brazil, I show that prices of tradable goods/lower-priced varieties increase significantly more than the prices of nontradables/higher-priced varieties. These relative price changes may lead to inflation inequality when household consumption baskets are different across the distribution of income. Using Cravino and Levchenko (2017)'s methodology, we show that …
Deindustrialization And The Postsocialist Mortality Crisis, Gabor Scheiring, Aytalina Azarova, Darja Irdam, Katarzyna Doniec, Martin Mckee, Lawrence King
Deindustrialization And The Postsocialist Mortality Crisis, Gabor Scheiring, Aytalina Azarova, Darja Irdam, Katarzyna Doniec, Martin Mckee, Lawrence King
PERI Working Papers
An unprecedented mortality crisis struck Eastern Europe during the transition from socialism to capitalism. Working-class men without a college degree suffered the most. Some argue that economic dislocation caused stress and despair, leading to adverse health behavior and ill health (dislocation-despair approach). Others suggest that hazardous drinking inherited as part of a dysfunctional working-class culture and populist alcohol policy were the key determinants (supply-culture approach). We enter this debate by performing the first quantitative analysis of the association between economic dislocation in the form of industrial employment decline and mortality in postsocialist Eastern Europe. We rely on a novel multilevel …
Delhi Green Deal, Rohit Azad, Shouvik Chakraborty
Delhi Green Deal, Rohit Azad, Shouvik Chakraborty
PERI Working Papers
In this paper, we propose a carbon tax policy for Delhi, the most polluted capital in the world, which will fundamentally change the energy mix of Delhi’s economy toward clean, green energy and will guarantee universal access to electricity, transport and food, up to a certain amount. Any carbon mitigation strategy needs to alter our dependence on fossil fuels, requiring a systemic overhaul of its energy mix. Implementing a carbon tax will mitigate emissions and mobilise revenue for our proposed re-distributive program of Right to Food, Energy and Travel (RFET). The policy is designed to prefer ‘the poor over the …
Large Devaluations And Inflation Inequality: Evidence From Brazil, Raphael Rocha Gouvea
Large Devaluations And Inflation Inequality: Evidence From Brazil, Raphael Rocha Gouvea
Economics Department Working Paper Series
In the aftermath of large devaluations, prices of tradable goods and lower-priced varieties increase significantly more than the prices of nontradables and higher-priced varieties. These relative price changes may lead to inflation inequality when household consumption baskets are different across the distribution of income. Using Cravino and Levchenko [2017]’s methodology, we show that inflation for poor households in Brazil was at least 11 percentage points higher than for rich ones in the aftermath of the 2002 large devaluation. A detailed case study of the City of São Paulo estimates an inflation inequality ranging from 8 to 11 percentage points in …
Green Growth And The Right To Energy In India, Rohit Azad, Shouvik Chakraborty
Green Growth And The Right To Energy In India, Rohit Azad, Shouvik Chakraborty
PERI Working Papers
Can growth in India be simultaneously made equitable and environ- mentally sustainable? The recent pattern of high growth in India has been inequitable even as serious questions have been raised about its ecological sustainability. In contrast to the current growth trajectory, this paper argues that an alternative growth trajectory can be de- veloped which answers the question in the affirmative. We propose an Energy Policy with Equity (EPE), which fundamentally changes the energy mix of the Indian economy towards greener forms of en- ergy as well as guarantees universal access to energy thus generated to the entire population, a feat …
On The Measurement Of “Grayness” Of Cities, Sripad Motiram, Vamsi Vakulabharanam
On The Measurement Of “Grayness” Of Cities, Sripad Motiram, Vamsi Vakulabharanam
PERI Working Papers
We consider a situation where individuals belonging to multiple groups inhabit a space that can be divided into smaller distinguishable units, a feature characterizing many cities in the world. When data on an economic attribute (in our case, income) is available, we conceptualize a phenomenon that we refer to as “Grayness” - a combination of spatial integration based upon group-identity and income. Grayness is high when cities display a high degree of spatial co-existence in terms of both identity and income. We lay down some desirable properties of a measure of Grayness and develop a simple and intuitive index that …
Workers And Technological Change In The United States, Mark Stelzner, Enzo Cerrutti
Workers And Technological Change In The United States, Mark Stelzner, Enzo Cerrutti
PERI Working Papers
In this paper, we put forward a theoretical framework for understanding a positive relationship between labor laws and innovation and rigorously test it against both historical and empirical data. We show how several periods in the economic history of the United States – like the increase in slave-field hand productivity in cotton picking in the Antebellum South, the transition in the North from artisanal shops to nonmechanized factories, the increase in productivity in mechanized textile factories in the Northeast in the late Antebellum period, and the increase in productivity in sharecropping after the Civil War – can be understood, at …
Three Essays On International Economics And Finance, Juan Antonio Montecino
Three Essays On International Economics And Finance, Juan Antonio Montecino
Doctoral Dissertations
This dissertation studies the macroeconomic and social impacts of two increasingly common macroeconomic policies: restrictions on international capital mobility -- capital controls -- and so-called unconventional monetary policy -- often referred to as “quantitative easing.” The consensus view is that capital controls can effectively lengthen the maturity composition of capital inflows and increase the independence of monetary policy but are not generally effective at reducing net inflows and influencing the real exchange rate. The first essay presents empirical evidence that although capital controls may not directly affect the long-run equilibrium level of the real exchange rate, they may enable disequilibria …
Essays On Inequality, Credit Constraints, And Growth In Contemporary Mexico, Leopoldo Gómez-Ramírez
Essays On Inequality, Credit Constraints, And Growth In Contemporary Mexico, Leopoldo Gómez-Ramírez
Doctoral Dissertations
This dissertation presents four essays on inequality, credit constraints, and economic growth in the Mexican economy in its recent history, or “contemporary Mexico”. In the first essay, it is argued that the possibility that wealth/income inequality could affect economic growth has been neglected in the contemporary Mexican economy literature. Also, preliminary thoughts on the channels through which inequality could have been affecting growth are offered. In the second essay, a time series, macroeconometric analysis on the possible relationship between inequality and aggregate production (GDP) in Mexico is presented. The analysis suggests that an increase in inequality boosts the economy, but …
Temporary Employment And Earnings Inequality In South Korea, Hyeon-Kyeong Kim
Temporary Employment And Earnings Inequality In South Korea, Hyeon-Kyeong Kim
Doctoral Dissertations
My dissertation explores the effect of growth of temporary employment on earnings inequality. In the first essay, I find that during a time when there was a nearly 10 percentage points increase in the share of temporary workers in the Korean labor market (but prior to the global recession), the rise in temporary employment can account for a substantial part (20-30 percent) of the growth in overall wage inequality. These results appear to be robust to alternative ways of performing the decomposition, including using the recently developed recentered influence function approach of Firpo, Fortin and Lemieux. In addition, the rise …
American Inequality, A Prose/Poem 3/2/2014, Charles Smith
American Inequality, A Prose/Poem 3/2/2014, Charles Smith
Charles Kay Smith
Science has made possible an increased productivity that creates an economic surplus--science continually teaches us how to do more with less resources. Why should the fruits of science be enjoyed only by the rich, since most of the innovations of science and technology have been funded or subsidized by citizen taxes. If the added productivity of science were shared among all citizens instead of only the 1%, poverty and homelessness could be ended.
Labor Market Reform And Wage Inequality In Korea, Hyeon-Kyeong Kim, Peter Skott
Labor Market Reform And Wage Inequality In Korea, Hyeon-Kyeong Kim, Peter Skott
Economics Department Working Paper Series
Temporary workers make up a sizeable part of the labor force in many countries and typically receive wages that are significantly lower than their permanent counterparts. This paper uses an efficiency wage model to explain the wage gap between temporary and permanent workers. High-performing temporary workers may gain promotion to permanent status, and a high wage to permanent workers therefore serves a dual purpose: it affects the effort of both permanent and temporary workers. Applying the model to the Korean experience, we discuss the effects of the labor market reforms in 1998 on inequality.
Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy
Power, Luck And Ideology In A Model Of Executive Pay, Peter Skott, Frederick Guy
Economics Department Working Paper Series
The microprocessor and related technologies have transformed corporate and industry structure; applied in a neo‐liberal environment, the technologies have had profound effects on the relative power of different groups. Skott and Guy (2007) and Guy and Skott (2008) formalized one aspect of this process of power‐biased technical change: firms' increased ability to monitor low‐paid employees and the resulting changes in inequality and employment at the low end of the income distribution. This paper addresses power biases and income inequality at the high end. Increasing firm‐level financial volatility has intensified the agency problem and increased the power of corporate executives. These …
Power, Luck And Ideology In A Model Of Executive, Peter Skott
Power, Luck And Ideology In A Model Of Executive, Peter Skott
Peter Skott
The microprocessor and related technologies have transformed corporate and industry structure; applied in a neo‐liberal environment, the technologies have had profound effects on the relative power of different groups. Skott and Guy (2007) and Guy and Skott (2008) formalized one aspect of this process of power‐biased technical change: firms' increased ability to monitor low‐paid employees and the resulting changes in inequality and employment at the low end of the income distribution. This paper addresses power biases and income inequality at the high end. Increasing firm‐level financial volatility has intensified the agency problem and increased the power of corporate executives. These …
Erasing Class/ (Re)Creating Ethnicity: Jobs, Politics, Accumulation And Identity In Kenya, Mwangi Wa Githinji
Erasing Class/ (Re)Creating Ethnicity: Jobs, Politics, Accumulation And Identity In Kenya, Mwangi Wa Githinji
Economics Department Working Paper Series
A large literature on African economies argues that ethnicity plays a role in the politics and economics of African countries. Unfortunately, much of this literature is speculative or anecdotal because of the lack of data, with the exception of a few papers that examine ethnic networking as a business or employment strategy. In many ways Africa’s failure to develop is a failure of nationhood. Creating nation is handicapped by the use of ethnicity. In this paper, I empirically examine the relationship between employment, wages and ethnicity in Africa via a case study of Kenya. I challenge the pervasive view that …
Gendered Vulnerabilities After Genocide: Three Essays On Post-Conflict Rwanda, Catherine Ruth Finnoff
Gendered Vulnerabilities After Genocide: Three Essays On Post-Conflict Rwanda, Catherine Ruth Finnoff
Open Access Dissertations
This dissertation addresses gendered vulnerabilities after the genocide of 1994 in Rwanda. It consists of three essays, each focusing on the experience of women in a particular aspect of post-conflict development. The first essay analyzes trends in poverty and inequality in Rwanda from 2000 to 2005. The chapter identifies four important correlates of consumption income: gender, human capital, assets, and geography, and examines their salience in determining the poverty of a household and its position in the income distribution. The second essay is an econometric examination of an important health insurance scheme initiated in post-conflict Rwanda. Employing logistic regression techniques, …
Racial Inequality And Affirmative Action In Malaysia And South Africa, Hwok-Aun Lee
Racial Inequality And Affirmative Action In Malaysia And South Africa, Hwok-Aun Lee
Open Access Dissertations
This dissertation examines racial inequality and affirmative action in Malaysia and South Africa, two countries with a politically dominant but economically disadvantaged majority group - the Bumiputera in Malaysia, and blacks in post-Apartheid South Africa. We aim to contribute comparative perspectives and current empirical research on affirmative action regimes and dimensions of inequality directly pertinent to affirmative action, chiefly, racial representation and earnings inequality among tertiary educated workers and in upper-level occupations. We discuss theoretical approaches to inequality and affirmative action, with attention to particular circumstances of majority-favoring regimes, then survey, compare and contrast affirmative action programs and their political …
Labor Heterogeneity, Inequality And Institutional Change, Peter Skott
Labor Heterogeneity, Inequality And Institutional Change, Peter Skott
Economics Department Working Paper Series
US earnings inequality has increased dramatically since the 1970s, and the prospect of a reversal depends on what caused the trend. The standard explanation emphasizes skill-biased technical change. This paper briefly considers some aggregation issues and then proceeds to outline two alternative perspectives .power biased technical change and the effects of induced mismatch in the labor market .and their implications.
Gender, Distribution, And Balance Of Payments Constrained Growth In Developing Countries, Stephanie Seguino
Gender, Distribution, And Balance Of Payments Constrained Growth In Developing Countries, Stephanie Seguino
PERI Working Papers
An unresolved debate in the development literature concerns the impact of gender inequality on economic growth. Previous studies have found that the effect varies, depending on the measure of inequality (wages or capabilities). This paper expands that discussion by considering both the short- and long-run, evaluating the effects of gender equality in two types of economies—semi-industrialized economies (SIEs) and low-income agricultural economies (LIAEs). Further, it incorporates the effect of gender equity on the balance of payments constraint to growth. These preliminary results suggest that gender equality is more likely to stimulate growth in LIAEs than in SIEs in both the …
Information And Communications Technologies, Coordination And Control, And The Distribution Of Income, Frederick Guy, Peter Skott
Information And Communications Technologies, Coordination And Control, And The Distribution Of Income, Frederick Guy, Peter Skott
Economics Department Working Paper Series
We consider the links between information and communications technologies (ICTs) and the distribution of income, as mediated by problems of coordination and control within organizations. In the large corporations of the mid-twentieth century, a highly developed division of labor was coordinated and controlled with the aid of relatively underdeveloped ICTs. This created a situation in which the options of top management were constrained while the individual and collective power of lower paid workers was enhanced. Only in the late twentieth century, when the microprocessor and related technologies transformed the information systems of organizations, did improvements in the tools of coordination …
Power, Productivity And Profits, Frederick Guy, Peter Skott
Power, Productivity And Profits, Frederick Guy, Peter Skott
Economics Department Working Paper Series
New information and communication technologies, we argue, have been .power- biased.: in many industries they have allowed firms to monitor workers more closely, thus reducing the power of these workers. An efficiency wage model shows that .power- biased technical change’ in this sense may generate rising inequality accompanied by an increase in both unemployment and work intensity.
Accounting For Inequality: A Proposed Revision Of The Human Development Index, Elizabeth Stanton
Accounting For Inequality: A Proposed Revision Of The Human Development Index, Elizabeth Stanton
PERI Working Papers
The Human Development Index (HDI) is a country-level measure of social welfare based on national values for average life expectancy, rates of adult literacy and school enrollment, and gross domestic product (GDP) per capita. Since HDI is based entirely on national averages it can provide only limited information about distribution within countries. The distribution of access to key resources is an important determinant of the effect of health, education and income on both individual well-being and on the aggregate well-being of a population as a whole. This paper makes a case for the importance of inequality to measuring social welfare; …
Relative Advantage, Queue Jumping, And Welfare Maximizing Weath Distribution, Alex Coram, Lyle Noakes
Relative Advantage, Queue Jumping, And Welfare Maximizing Weath Distribution, Alex Coram, Lyle Noakes
Economics Department Working Paper Series
Suppose individuals get utilities from the total amount of wealth they hold and from their wealth relative to those immediately below them. This paper studies the distribution of wealth that maximizes an additive welfare function made up of these utilities. It interprets wealth distribution in a control theory framework to show that the welfare maximizing distribution may have unexpected properties. In some circumstances it requires that inequality be maximized at the poorest and richest ends of the distribution. In other circumstances it requires that all wealth be given to a single individual.
The Second Paycheck To Keep Up With The Joneses: Relative Income Concerns And Labor Market Decisions Of Married Women, Yongjin Park
The Second Paycheck To Keep Up With The Joneses: Relative Income Concerns And Labor Market Decisions Of Married Women, Yongjin Park
Economics Department Working Paper Series
This paper investigates whether one’s effort to keep up with the Joneses has any effect on labor supply behavior. We provide a simple model and empirical evidence that labor supply decisions of married women are influenced by relative as well as absolute income of their husbands. We find, after controlling for husbands’ absolute income and other individual characteristics, that married women are more likely to be in labor force when their husbands’ relative income is low. Results are robust across various settings and measures of relative income and the size of the effect is economically meaningful. We also show that …
Emulation, Inequality, And Work Hours: Was Thorsten Veblen Right?, Samuel Bowles, Yongjin Park
Emulation, Inequality, And Work Hours: Was Thorsten Veblen Right?, Samuel Bowles, Yongjin Park
Economics Department Working Paper Series
We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption …
The New Face Of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, And Global Inequality, James Heintz
The New Face Of Unequal Exchange: Low-Wage Manufacturing, Commodity Chains, And Global Inequality, James Heintz
PERI Working Papers
The institutional structure of global commodity chains and cross-border production networks has a profound impact on how the benefits of globalized production are distributed. This paper engages with this issue by developing a model that combines the insights of earlier unequal exchange theorists and new work on global commodity chains to clarify the distributive dynamics of the expansion of low-wage manufacturing in the developing world. In this framework, the ability of productivity-led development to raise employment incomes in low-wage manufacturing is constrained and depends on how the benefits of productivity improvements are captured – as lower prices for consumers or …
The Crisis Of Egalitarian Policy And The Promises Of Asset-Based Redistribution, Peter Skott
The Crisis Of Egalitarian Policy And The Promises Of Asset-Based Redistribution, Peter Skott
Peter Skott
This paper analyses the links between egalitarian policy and unemployment and the possible use of asset-based redistribution to overcome the crisis of egalitarian policy. Contrary to left- Keynesian belief, egalitarian policies in the postwar period were not the means to ensure high aggregate demand and full employment. The main direction of causation went the other way: full employment generated increasing egalitarian demands while high unemployment after the golden age paved the way for increasing inequality. The breakdown of the golden ages is itself explained by a gradual deterioration of the business climate which undermined the full employment policy. In addition, …