wage determination

Year of Publication
1991
Abstract

More immigrants entered the United States during the l980s than
in any comparable period since the 1920s. Although at a national
level the inflow rates were relatively modest, most of the newly
arriving immigrants settled in only a handful of cities. In this
paper, we study the effects of immigration during the 1980s on the
evolution of wages within a sample of 24 major cities. We
concentrate on changes in wages for relatively low-paid workers,
and on changes in the gap between highly-paid and low-paid
workers. Our analysis reveals significant differences across
cities in the relative growth rates of wages for low-paid and
highly-paid workers. However, the relative growth rates of wages
at the low end of the earnings distribution bear little or no
relation to the relative size of immigrant inflows to different
cities.

Number
281
Date Published
02/1991
Publication Language
eng
Citation Key
American Economic Review, 81, May, 1991
Butcher, K., & Card, D. (1991). Immigration and Wages: Evidence From the 1980s. Retrieved from http://arks.princeton.edu/ark:/88435/dsp012b88qc18j (Original work published 02/1991AD)
Working Papers

Year of Publication
1988
Abstract

This paper provides an empirical test of the predictions of a standard private
information model of labor strike activity using firm-specific sales data and wage and strike
data from 1124 collective bargaining agreements made in the U.S. manufacturing sector.
The implications of the private information model are tested directly by using the error in
forecasted sales as a proxy for the private information on profitability held by the firm, and
the variance of the forecast error in sales as a proxy for the union’s ex ante uncertainty. In
support of the model, strike incidence and unconditional duration are negatively correlated
with the forecast error and positively correlated with the variance of the forecast error.
Furthermore, the variance of the forecast error is systematically related to the stage of
settlement of collective bargaining agreements. Contrary to the predictions of the model,
there is no evidence that wages are correlated with the forecast error in sales in those
bargaining agreements which involve a strike.

Number
231
Date Published
06/1988
Publication Language
eng
Citation Key
7877
Herrington, D. (1988). The Effect of Private Information on Wage Settlements and Strike Activity. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01b5644r53v (Original work published 06/1988AD)
Working Papers

Year of Publication
1989
Abstract

In this paper we develop and test a very general implication of
competitive contractual arrangements in the labor market. Toward this end
we examine whether the level of unemployment prevailing at the beginning of
the job has lasting effects on wage payments throughout the job. The
intuition behind this test is straightforward. If the labor market
functions as a competitive contracting market, then it is the supply and
demand conditions at the time of negotiating the contract that determine
the wage provisions of the contract. Using data from the Current
Population Survey (CPS) and the Panel Study of Income Dynamics (PSID) we
find that wages strongly depend on the labor market conditions prevailing
at the beginning of one’s job. Moreover, our results indicate that the
value of new employment contracts varies by approximately l0 percent over
the business cycle.

Number
252
Date Published
05/1989
Publication Language
eng
Citation Key
8115
DiNardo, J., & Beaudry, P. (1989). Long-Term Contracts and Equilibrium Models of the Labor Market: Some Favorable Evidence. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kd17cs85n (Original work published 05/1989AD)
Working Papers

Author
Year of Publication
1995
Abstract

In The Wage Qurve, David G. Blanchflower and Andrew J. Oswald argue that there is
a fundamental negative relation between wages and the unemployment rate in a worker’s local
labor market. Blanchflower and Oswald use large-scale micro data sets to estimate this relation
for the United States, Britain, and 10 other countries. I review their empirical methods and
findings, and provide some further evidence on the nature of the wage curve relationship in the
United States. I conclude that there is a strong statistical correlation between rates of pay and
local unemployment, although the interpretation of this correlation remains unresolved.

Number
343
Date Published
02/1995
Publication Language
eng
Citation Key
Journal of Economic Literature, Vol 33, June 1995
Card, D. (1995). The Wage Curve: A Review. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01pn89d659s (Original work published 02/1995AD)
Working Papers

Author
Year of Publication
1985
Abstract

This paper presents data on airline mechanics at eight of the
largest U.S. airlines and describes the impact of the 1978 Airline
Deregulation Act on their wage rates and employment levels. The major
findings are: (1) up to 1983, real and relative wage rates of airline
mechanics remained more or less constant across firms and over time; (2)
the independence of mechanics’ wage rates from firm-specific employment
conditions after 1978 is consistent with pre-deregulatory experiences;
(3) deregulation contributed to an existing trend of declining
employment; and (4) deregulation did not bring about any systematic
increase in mechanics’ productivity.

Number
190
Date Published
06/1985
Publication Language
eng
Citation Key
Industrial and Labor Relations Review, 39, July 1986
Card, D. (1985). The Impact of Deregulation on the Employment and Wages of Airline Mechanics. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01f1881k908 (Original work published 06/1985AD)
Working Papers

Year of Publication
1990
Abstract

This paper estimates the role of insider power in wage determination in a
unionized industry, examining the direction and magnitude of biases which may
arise through failure to control for variation in both hours of work and the
composition of the labor force and through failure to control for the endogeneity
of measured profits. Furthermore, by examining the extent to which rent-sharing
is related to exogenous demand shocks rather than to potentially endogenous
productivity, we provide a test of the bargaining and ‘pure’ efficiency wage
models, finding that the majority of the insider weighting can be explained by
the bargaining model. Our data set covers earnings and profitability in the New
South Wales coal industry from 1952 to 1987. We estimate a partial adjustment
model and test for co-integration of the time series in order to establish
whether or not a long-run stable equilibrium exists.

Number
277
Date Published
11/1990
Publication Language
eng
Citation Key
Review of Economics and Statistics, Vol. 76, No. 2, May 1994
Mumford, K., & Dowrick, S. (1990). Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01gt54kn03v (Original work published 11/1990AD)
Working Papers