2024
The Impact of Unions on Non-union Wage Setting: Threats and Bargaining
David A. Green, Ben M. Sand, Iain G. Snoddy, Jeanne Tschopp
In this paper we provide new estimates of the impact of unions on non-union wage setting. We allow the presence of unions to affect non-union wages both through the typically discussed channel of non-union firms emulating union wages in order to fend off the threat of unionisation and through a bargaining channel in which non-union workers use the presence of union jobs as part of their outside option. In our most complete model, we specify these channels in a search and bargaining framework that includes union formation and the possibility of non-union firm responses to the threat of unionisation. Our results indicate an important role played by union wage spillovers in lowering wages over the 1980-2010 period. We find that de-unionisation can account for 35% of the decline in the mean hourly wage between 1980 and 2010 in the US, with two-thirds of that effect being due to spillovers. Both the traditional threat and bargaining channels are operational, with the bargaining channel being more important.
Who Benefits from Place-based Policies? Evidence from Matched Employer-Employee Data
Philipp Grunau; Florian Hoffmann; Thomas Lemieux; Mirko Titze. Halle Institute for Economic Research
This study evaluates a German policy subsidizing job-creating investments, with varying subsidy rates across regions. Using extensive data on establishments and employees, it finds that the program effectively creates jobs, particularly benefiting younger and less-educated workers. Wage increases in funded establishments are temporary, unlike employment gains. Local employment effects are slightly larger than those at the establishment level, indicating limited spillover. The cost to create a new job in disadvantaged areas is estimated at around EUR 25,000.
Asset Demand and Real Interest Rates
Paul Beaudry; Katya Kartashova; Césaire Meh. National Bureau of Economic Research
This study examines factors driving asset demand and their impact on long-term real interest rates. It finds that, over 30 years before COVID-19, US households, especially those aged 55-64, significantly increased their asset holdings, with wealth-to-income ratios rising by 45-55%. A model indicates that declining interest rates boosted demand for retirement wealth. Differences among income groups, partly due to social security, are also analyzed. The study concludes by discussing the macroeconomic implications of asset demands decreasing with lower interest rates.
Do Reforms Aimed at Reducing Time to Graduation Work? Evidence from the Italian Higher Education System
Raffaele Saggio; Davide Malacrino; Samuel Nocito. Social Science Research Network
This study investigates the effects of a reform in Italian universities aimed at speeding up graduation by reducing the number of exams required for a fixed number of credits. Using event-study estimates based on the reform’s staggered implementation, it finds that the policy increased on-time graduation rates. However, it also decreased the probability of employment one year after graduation. This negative employment effect disappears in the medium run, suggesting that students who graduated on time due to the reform may have initially engaged in less intensive job search efforts.
Manufacturing Investment and Employee Earnings: Evidence from Accelerated Depreciation
Yige Duan; Terry S. Moon. Social Science Research Network
This study analyzes the impact of a Canadian tax policy aimed at boosting manufacturing investment on employee earnings. The policy, implemented in 2007, accelerates depreciation schedules for capital costs. Treated firms see increased investment and overall growth but also experience decreased earnings for incumbent workers, particularly those displaced and moving to smaller firms. This decline mainly affects lower-earning workers and leads to increased within-firm wage inequality, indicating a shift toward skill-biased technological change.
