The Evolution Of Wage Structure

The distribution of income, the rate of pay raises, and the mobility of employees is crucial to understanding labor economics. Although research abounds on the distribution of wages across individuals in the economy, wage differentials within firms remain a mystery to economists. The first effort to examine linked employer-employee data across countries, The Structure of Wages:An International Comparison analyzes labor trends and their institutional background in the United States and eight European countries. A distinguished team of contributors reveal how a rising wage variance rewards star employees at a higher rate than ever before, how talent becomes concentrated in a few firms over time, and how outside market conditions affect wages in the twenty-first century. From a comparative perspective that examines wage and income differences within and between countries such as Denmark, Italy, and the Netherlands, this volume will be required reading for economists and those working in industrial organization.

Seminar paper from the year 2013 in the subject Economics - Job market economics, grade: 1,0, Humboldt-University of Berlin (Angewandte Mikroökonometrie / Arbeitsmarktökonomik), course: Topics in Labour Economics, language: English, abstract: Using a large administrative data set, a recent study by Dustmann, Ludsteck, and Schönberg [2009] finds convincing evidence for rising wage inequality in West Germany during the past three decades. Their paper shows that the increase occurred above the median during the 1980s, and was augmented by rising inequality below the median in the 1990s. These results challenge the pervasive conception of the German wage structure being a paragon of stability. Within the scope of this seminar paper, I replicate parts of their analysis using a different data set, namely the German Socio-Economic Panel (GSOEP) for the period from 1984 to 2009. Using monthly and hourly earnings constructs, I assess the extent to which the results of Dustmann, Ludsteck, and Schönberg [2009] can be recovered from GSOEP data. I do so by exploring the wage distribution along several dimensions. In addition to this, I analyze composition-constant counterfactual wage densities using the kernel density reweighting method advanced by DiNardo, Fortin, and Lemieux [1996]. A provisional evaluation of my results suggests that I can confirm the majority of findings of the original paper along a qualitative dimension. A quantitative assessment, however, reveals considerable deviations.

During the past two decades, wages of skilled workers in the United States rose while those of unskilled workers fell; less-educated young men in particular have suffered unprecedented losses in real earnings. These twelve original essays explore whether this trend is unique to the United States or is part of a general growth in inequality in advanced countries. Focusing on labor market institutions and the supply and demand forces that affect wages, the papers compare patterns of earnings inequality and pay differentials in the United States, Australia, Korea, Japan, Western Europe, and the changing economies of Eastern Europe. Cross-country studies examine issues such as managerial compensation, gender differences in earnings, and the relationship of pay to regional unemployment. From this rich store of data, the contributors attribute changes in relative wages and unemployment among countries both to differences in labor market institutions and training and education systems, and to long-term shifts in supply and demand for skilled workers. These shifts are driven in part by skill-biased technological change and the growing internationalization of advanced industrial economies.

The objective of this paper is to document the evolution of the German wage structure over the period 1984-97. The paper also investigates the roles of various factors that could have influenced patterns of changes in the wage structure. While a documentation of the evolution of the wage structure in Germany is interesting in its own right, the analysis in this paper, by facilitating comparisons with changes in the wage structures of other industrial countries, could potentially provide important clues to understanding the poor functioning of the German labor market in recent years. In particular, the analysis sheds light on the reasons behind and possible solutions for a particularly troubling problem, the high and rising rate of nonemployment among low-skilled workers.

USA. Study of theoretical and administrative aspects of wage policy at the enterprise level - analyses the role of management and of trade unions in the development of a rational wage structure, and includes such variables as labour turnover, fringe benefits, wage payment systems, etc. References.