Now showing 1 - 10 of 36
  • Publication
    The formal sector wage premium and firm size for self-employed workers
    (University College Dublin. School of Economics, 2012-03) ; ; ; ;
    We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in self-employment only when they cannot find a salaried job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model is used for illustration as a special case of our more general framework. Empirical evidence from Mexico is provided and demonstrates that firm size wage effects for employees and self-employed workers are broadly consistent with the model.
  • Publication
    Changes in the gender wage gap and the returns to firm specific human capital
    (University College Dublin. School of Economics, 1999-03) ;
    If employers believe females are more likely to separate from a job than males, efficient cost sharing of on-the-job training implies that females will have higher returns to tenure. Becker and Lindsay (1994) argue that this is true empirically. (1994). Updating the analysis we find that that there is no longer a difference in the probability of leaving jobs or in returns to tenure by gender. Differences in contracts to finance on the job training can no longer explain any of the “discrimination” component in the gender wage gap.
  • Publication
    Monopsony power with variable effort
    (University College Dublin. School of Economics, 2000-11)
    A monopsony model of the labour market is developed where wages and the effort level are chosen by the firm. Higher wages raise labour supply while higher effort reduces it. Wages will be below the socially optimal level while effort will be too high. Under a sufficient condition which is satisfied in many reasonable cases a minimum wage policy (with the effort level unrestricted) will lower worker utility and welfare. Under a sufficient condition a maximum effort level (with wages unrestricted will raise employees utility but lower welfare. To be confident that regulatory policies improve welfare the government must be confident that it can choose and enforce the regulated levels of wages and effort correctly. By contrast an employment subsidy which depends only on the slope of the firms labour supply curve can achieve the social optimum. The model can be thought of as a generic monopsony model where wage is input price, effort input quality and workers utility the input suppliers profit. A simplified version of Bhaskar and To’s (1999) model is used to illustrate. The cost of the employment subsidy which achieves the social optimum (and is equal to the transport costs of the marginal worker) is equal to monopsony profits.
  • Publication
    The Re-Building Effect of Hurricanes: Evidence from Employment in the US Construction Industry
    (Economics Bulletin, 2009-12) ;
    We examine the impact of hurricane strikes on the construction industry in US counties. To this end we use a measure of hurricane destruction derived from a wind field model and historical hurricane track data and employ this within a dynamic labour demand framework. Our results show that destruction due to hurricanes causes on average an increase in county level employment in construction of a little over 25 per cent.
  • Publication
    Union membership in Ireland since 2003
    (The Statistical and Social Inquiry Statistical Society of Ireland, 2015-02-19)
    Using data from the Quarterly National Household Survey supplemented with some data from the European Social Survey we document a steady decline in union density in Ireland since 2003. While the great recession appeared to halt the decline this was temporary and density has continued to decline, indeed when changes in composition of worker and job attributes are accounted for there is a steady decline throughout the period. The analysis suggests that changes in the composition of job and worker characteristics during the deep recession between 2008 and 2011 served to offset the underlying decline in density. We also look respectively at the contributions of flows of workers into and out of union/non-union employment to the change in density. While the bulk of transitions into and out of union employment are associated with job changes, in fact the inflows and outflows cancel out for this category. The bulk of the change in membership came from changes in the net flow of workers who stayed in the same job into and out of union employment. We show that union members were much less likely to exit employment throughout the period compared to non-members. We present suggestive evidence from the European Social Survey that there is a substantial free rider effect associated with working in establishments where unions have influence without being a member. The paper concludes with a brief discussion of the possible implications of declining membership for labour market outcomes.
  • Publication
    An equilibrium search model of the informal sector
    (University College Dublin. School of Economics, 2006-12) ; ;
    We use an equilibrium search framework to model a formal- informal sector labour market where the informal sector arises endogenously. In our model large firms will be in the formal sector and pay a wage premium, while small firms are characterised by low wages and tend to be in the informal sector. Using data from the South African labour force survey we illustrate that the data is consistent with these predictions.
  • Publication
    The minimum wage and hours per worker
    (University College Dublin. School of Economics, 2010-10) ;
    In a competitive model we ease the assumption that efficiency units of labour are the product of hours and workers. We show that a minimum wage may either increase or decrease hours per worker and the change will have the opposite sign to the slope of the equilibrium hours hourly wage locus. Similarly, total hours worked may rise or fall. We illustrate the results throughout with a Cobb-Douglas example.
  • Publication
    Productivity, Non-Compliance and the Minimum Wage
    (University College Dublin. School of Economics, 2021-11) ;
    Many informal firms in developing countries would not be viable if they were to comply with the minimum wage law. This means the authorities have an incentive to turn a blind eye to non-enforcement in a substantial share of firms. We also survey enforcement mechanisms for the minimum wage across developing countries and find that worker complaints are an important element in determining whether firms will be inspected for non-compliance or not. We develop a theoretical monopsony model which rationalises the stylised facts we observe. For a given minimum wage, the government can choose a level of enforcement and penalties for non-compliance such that employment will not fall for any optimising firm, irrespective of their productivity. Low productivity firm’s optimal choice of employment and wage will be unaffected by the introduction of the minimum wage. High productivity firms comply so that wage and employment effects are non-negative for these firms.
  • Publication
    Recent Trends in Trade Union Membership in Ireland
    (Economic and Social Research Institute, 2009) ;
    Using micro data from the Quarterly National Household Survey we look at trends in Irish union membership from 2001-2006. There was a steep decline in union density. Decomposition analysis suggests that most of the decline is associated with a decline in the underlying probability of becoming a member for different groups of workers rather than a change in composition.
  • Publication
    The ambiguous effect of minimum wages on workers and total hours
    (University College Dublin. School of Economics, 2007-08) ;
    We model a standard competitive labour market where firms choose combinations of workers and hours per worker to produce output. If one assumes that the scale of production has no impact on hours per worker, then the change in the number of workers and hours per worker resulting from a minimum wage are inversely related. We also demonstrate that total hours worked at the firm may rise if there are small fixed costs to hiring workers.