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39 p., Minimum wages have been widely discussed in the literature. The minimum wage impact on employment strongly depends on labor market concentration and the point at which it is located in the income distribution. Therefore, its study essentially involves exploring whether it has been set too far, beyond the competitive market wage. In 2019, the Spanish government decided to raise the minimum wage by 22.3%. This increase is of a previously unseen magnitude. Using rich administrative data, we combine Propensity Score Matching and a Difference-in-Differences model to evaluate the short- unemployment effect of this policy. We fi nd that the reform increased the probability of job loss within a range of 0.38pp.(7.8%) and 0.44 pp. (9.2%) for workers below the new minimum wage, which implies an employment elasticity between 0.3 and 0.4. In addition, our results suggest that the bulk of this effect is concentrated in the group of workers furthest from the new minimum wage. This is the segment of the income distribution that bore the bulk of the employment costs of the minimum wage increase.

Agricultural production outsourcing, a new means of agricultural production, can optimise the allocation of resources, reduce agricultural production costs, and improve agricultural productivity. However, farmers’ outsourcing behaviours are strongly interfered with by many factors such as economics, technology and institutions. Using a farmer-level data set from 2014 to 2018 in China, we examine the effects of the minimum wage increase on rice farmers’ production outsourcing behaviours. Our study relies on a Logit regression framework and uses the control function (C.F.) approach to address potential endogeneity concerns. Results show that the minimum wage increase significantly reduces the probability of farmers conducting production outsourcing. We also examine the heterogeneous effects of the minimum wage increase, and find that compared with other outsourcing services, the adverse effects on harvesting outsourcing are the strongest; the negative effects on production outsourcing are stronger for rice farmers with higher education. Our results provide new insights into understanding how labour regulation affects labour division in agricultural production.

With its introduction in 2015, the statutory minimum wage in Germany intends to benefit primarily low-wage workers. Thus, this paper aims at estimating the effectiveness of the im- plemented wage floor on gender wage gaps in the lower half of the wage distribution. Using administrative data, distinct regional differences regarding magnitudes of wage differentials and responses to the minimum wage are identified. Overall, wage gaps between men and women at the 10th percentile decrease by 2.46 and 6.34 percentage points respectively in the West and East of Germany after 2015. Applying counterfactual wage distributions, the study provides new evidence that around 60% and even 95% of the decline result from the introduction of the minimum wage in each region. Further, group-specific analyses identify concrete responses on the basis of age, educational level and occupational activity. Having yearly data, the study ad- ditionally reveals new results on the impact of the successive minimum wage raises in 2017 and 2019. Counterfactual aggregate decompositions of gender wage gaps finally indicate a decrease in discriminatory remuneration structures in the West of Germany due to the introduced wage floor.

The Directive on Adequate Minimum Wages represents a watershed initiative adding substance to the EU’s social dimension. It contains two ambitious objectives: establishing the minimum level of statutory minimum wages at 60% of the gross median wage, and increasing collective bargaining coverage (CBC) to at least 80% of workers. In this article, we assess how statutory minimum wages and collective bargaining coverage are associated with the likelihood of low pay. Using a time series cross-section of EU-SILC for income years 2004–2019, we identify and assess the absolute and relative size of ‘effective wage floors’ for full-time employees in 30 countries. We specify multilevel, random effects within-between regression models to assess the individual and joint associations of SMW and collective bargaining coverage with wage floors. Our results indicate that SMWs and CBC both have distinct roles in establishing the effective wage floor. First, higher collective bargaining coverage is on average associated with a lower share of workers earning below 60% gross median wages. Second, higher SMWs are strongly associated with higher effective wage floors. Third, both collective bargaining coverage and union density are strongly associated with higher wage floors.

Reservation wages are part of the transmission mechanism between minimum wages and unemployment via the labour force participation decision. The limited available empirical evidence on the relationship between reservation wages and legal minimum wages suggest that individuals use minimum wages as benchmarks against which their reservation wages are set. This has a profound behavioural effect that may encourage individuals to either enter the labour force or price themselves out of potential employment. We employ a fuzzy regression discontinuity design to explore the influence of minimum wages on reservation wages. Our findings suggest that the behavioural response is too small to be extracted from the variability of the reservation wage data. For policy makers this finding is important. While minimum wages raise earnings and living standards, they can push some workers out of the labour force by increasing their reservation wage beyond the minimum. We do not find any evidence of such a response of the reservation wage of jobseekers to the minimum wage in the UK.

This dissertation examines several aspects of labor markets and public policy. Chapter 1 examines the prevalence of unobserved sub-state policy in the US and provides a novel method for estimating consistent effects of these unobserved policies. Chapter 2 estimates the spillover effects of minimum wage policies on self-employed workers. Chapter 3 explores a new method for estimating differences between genders in incentive responsiveness. Chapter 1 provides evidence on the effects of treatment contamination and non-compliance in estimates of the impact of state-level public policy. When treatment may varying within jurisdiction, estimating the effects of policy and failing to control for within-jurisdiction variation will bias estimates away from their true values. Even when the non-compliant population is small estimates may not obtain the true effect. This chapter shows that combining standard intention-to-treat corrections for non-compliance with two-sample instrumental variable methods can obtain consistent estimates of the effect of interest, even when the non-compliant population is unobserved in the data. Chapter 2 studies the effects of minimum wages on unincorporated self-employed workers in the US using the 1988-2020 Current Population Survey. Standard state-level difference-in-differences estimates of employment and earnings elasticities find that increasing the minimum wage tends to decrease self-employment but has little effect on hours worked or earnings in the year following the change. Instrumental variable estimates are consistent with these findings but show large earnings gains for these workers. Using a simple model of labor market search, I show that minimum wage increases are potentially welfare improving and the welfare effects can be identified by changes in self-employment. Over this period empirical estimates of minimum wage effects indicate that these policies were on average welfare improving. Chapter 3 examines gender differences in responsiveness to incentives by modeling players' continuation value in head-to-head competition directly using real-world betting odds and data from the 2011-2019 tennis Grand Slam tournaments. In early round match-ups men tend to exert more effort than women given the same continuation value, but when examining competitors of similar ability across the whole tournament differences in responsiveness disappear. For a 100,000 unit increase in the expected value of winning a match, men tend to increase their probability of winning by 0.9 percent, versus 0.7 percent for women. These results highlight the importance of the value of remaining in the competition verses the contemporaneous round prize in these settings.

All three chapters of this dissertation study different aspects of internal organization, and two of the chapters go a step further to understand how decisions within the firm impact markets outside the firm.The first chapter of this dissertation studies empirically how worker task assignments within firms interact with labor and product markets. Using data from a software company, I observe millions of task assignments within hundreds of hair salons, many of which are competitors. I develop a measure of organization complexity, which is the amount of information required to implement a given task assignment, to provide evidence of firm-specific organization costs, which grant complex salons a comparative advantage in producing high-quality products.Based on these facts, I develop a model where oligopolistic firms with different organization costs choose their internal structure. Complexity is costly, but it allows firms to improve product quality by better matching workers with multidimensional skills to tasks. I characterize the profit-maximizing organization, and use results from the literature on rational inattention and information theory to identify and estimate the model for Manhattan hair salons. Counterfactuals reveal that allowing internal organization to be heterogeneous and endogenous changes the equilibrium effects of policy. A sales tax cut increases specialization and therefore the productivity of all workers, while a minimum wage increase generates new types of wage spillovers.The second chapter of this dissertation studies empirically how voluntary labor supply decisions within an organization impact workplace injury rates using novel data on the payroll and workers' compensation claims of Los Angeles traffic officers. I use the leave taken by coworkers as an instrument to estimate the causal effect of daily labor supply decisions on workplace injury. Self-selection via voluntary labor supply reduces injuries by 48 percent compared to the underlying injury rate. The majority of the effect is driven by private factors, implying decentralized overtime assignment mechanisms like shift auctions can be used to reduce injury rates.The third chapter of this dissertation (joint with Stepan Aleksenko) studies theoretically how the use of recruiters impacts the types of workers hired. The chapter considers a model where a firm delegates search for a worker to a recruiter. Productivity is uncertain prior to hire with recruiter beliefs characterized by an expectation and variance. Delegation occurs using a refund contract which is common in the industry. We analyze how delegation in this setting shapes search behavior and the composition of hires. We demonstrate that delegation is theoretically equivalent to making the search technology less accurate. This generates inefficiency: search effort and social surplus are lower under delegation than in the first-best benchmark. We show this inefficiency is driven by moral hazard with a multitasking flavor. The recruiter wastes search effort finding low variance workers at the expense of high expectation workers. As a result, as workers become more homogeneous with respect to productivity variance, delegation becomes more efficient. Our model provides a microfoundation for variance-based statistical discrimination.

This thesis contains five self-contained papers on firms’ hiring decisions regarding outsiders and how these decisions interact with insiders. Outsiders are broadly defined as people with a weak labor market position, e.g., unemployed, non-Western migrants or minimum-wage workers. Insiders are those who are securely employed. In paper (1), we investigate what characterizes the firms that hire unemployed non-Western immigrants. The results show that firms active in the service industries are more likely to hire unemployed non-Western immigrants. However, this is a rare event, suggesting this sector is unlikely to ever be able to absorb more than a fraction of this outsider group under current labor market conditions. In paper (2), we analyze whether labor cost reductions induce firms to hire outsiders in the retail industry. In this case, a Swedish youth payroll tax cut is used to determine if a reduction in firms’ labor costs increases their employment of minimum-wage retail workers. The results show that reduced labor costs incentivize firms to increase their employment of workers whose wages are close to negotiated minimum wages. In paper (3), we investigate whether the gains from the abovementioned payroll tax cut have been absorbed in higher wages for insiders rather than increasing employment. The results show that while insiders saw their total earnings increase, the main reason for their earnings increase was that they worked more hours. Finally, we explore whether firms’ hiring decisions regarding outsiders are related to their growth rate in papers (4) and (5). The results in paper (4) show that the fastest growing firms are more likely to hire outsiders. However, this finding does not hold when new firms are examined separately and over time. In contrast, the results in paper (5) indicate that high-growth new firms tend to recruit individuals with higher skills during their first three years of operation, suggesting that a firm’s time dimension and point in its lifecycle are important.

This report describes how living wage estimates were calculated for New Providence and Grand Bahama. This report uses primary and secondary sources and is inspired by the Anker methodology. We calculated that $2625 and $3550 were needed each month as the gross living wage for a full-time worker who must sustain a family of four in New Providence and Grand Bahama, respectively. We estimated the net living wage to be $2500 per month for New Providence and $3400 for Grand Bahama. Our estimates are almost 200% higher than the minimum wage and nearly 130% higher than the poverty line for New Providence; for Grand Bahama, they are almost 300% higher than the minimum wage and 160% higher than the poverty line. The study should inform national discussions on public policy matters related to reducing the country’s cost of living, improving its income equity, and pursuing economic justice for all.

This paper estimates the pass-through of minimum wage increases into the prices of US grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that the pricing of groceries is forward-looking. The rise in prices occurs mostly through an increase in the frequency of price increases. Prices rise to the same extent for goods consumed by low-income and high-income households. Our results suggest that consumers rather than firms bear the cost of minimum wage increases in the retail sector., The Review of Economics and Statistics, 104 (5), ISSN:0034-6535, ISSN:1530-9142