Etla » human capital

Intangible capital and wages: An analysis of wage gaps across occupations and genders in Czech Republic, Finland and Norway

Rita Asplund — Tue, 12 Apr 2011 11:00:00 +0000

This paper compares the effects of intangible capital on wage formation among white-collar manufacturing workers using comparative data from three European countries : the Czech Republic, Finland and Norway. The analysis is undertaken in two steps. First, we explore the wage differentials and the underlying sources for two occupation groups : innovation and non-innovation workers. In a second step, this analysis is broken down by gender. We apply a decomposition method based on unconditional quantile regression techniques to examine the factors underlying the wage gaps observed along the whole wage distribution. The use of comparative cross-country data and a more elaborated wage decomposition method provides important new insights. We find, for example, that although innovation workers earn more than non-innovation workers in all three countries under scrutiny, there is considerable variation across the countries both in the levels and profiles of these wage differentials. Also the sources underlying these wage differentials vary between the countries. The levels and profiles of the gender wage gaps prevailing among innovation and non-innovation workers also reveal conspicuous cross-country differences. However, when it comes to the major sources contributing to these gender wage gaps, the results are strikingly similar across countries : what matters is marked gender differences in the rewards to similar basic human capital characteristics, not gender differences in these endowments.

JEL: J16, J31
Publication year: 2011
Pages: 22
Price: 10€
Language: English
Discussion Papers no. 1248

Career and Wage Dynamics: Evidence from Linked Employer-Employee Data

admin — Mon, 28 Mar 2011 11:00:00 +0000

We study career and wage dynamics within and between firms using a large linked employer-employee panel dataset spanning 26 years. We construct six-level hierarchies for more than 5,000 firms. We replicate most of the analyses from Baker, Gibbs and Holmström (Quarterly Journal of Economics, 1994) and make some extensions. Many of our results corroborate their findings. Careers within firms are important, but the strong version of the theory of internal labor markets does not fit the data. Recent theories of career and wage dynamics explain our findings well.

JEL: M51, M12, J62, L22
Publication year: 2011
Pages: 32
Price: 10€
Language: English
Discussion Papers no. 1244

Intangibles and the gender wage gap: An analysis of gender wage gaps across occupations in the Finnish private sector

admin — Wed, 23 Mar 2011 11:00:00 +0000

The paper compares the gender wage differentials of two occupation groups innovation and non-innovation workers separately for manufacturing and services using Finnish private-sector data. We apply a decomposition method based on unconditional quantile regression techniques to identify key factors underlying the gender wage gaps observed along the whole wage distribution, as well as changes in these wage gaps between 2002 and 2009. This more nuanced approach provides important new insights. We find conspicuous differences in average gender wage gaps, in gender wage-gap profiles across the wage distribution and also in the evolution of gender wage differentials over time between sectors and occupation groups. Our results imply that sector-specific factors are a more important driving force behind these differences in patterns and trends of gender wage gaps, although occupation-specific factors cannot be totally dismissed. Hence, comparisons of gender wage gaps, including their underlying sources, of innovation and non-innovation workers for too broadly defined segments of the labour market may result in misleading conclusions concerning the factual role of intangible capital.

Publication year: 2011
Pages: 29
Price: 10€
Language: Finnish
Discussion Papers no. 1243

Wage formation and gender wage gaps: The changing role of human capital in the Finnish technology industry

admin — Tue, 07 Dec 2010 11:00:00 +0000

Both academia and policymakers express a strong belief in higher average education levels exerting a narrowing impact on wage inequality in general and gender wage gaps in particular. The present paper scrutinizes whether or not this effect extends to R&D- and export-intensive branches such as the technology industry. The answer seems to be a cautious no. Indeed, while changes in standard human capital endowments can explain little, if anything, of the growth in real wages or the widening of wage dispersion among the Finnish technology industrys white-collar workers, a new job task evaluation scheme introduced in 2002 seems to have succeeded, at least in part, to make the wage-setting process more transparent by re-allocating especially the industrys female white-collar workers in a way that better reflects their skills, efforts and responsibilities. One crucial implication of this finding is that improving the standard human capital of women closer to that of men will not suffice to narrow the gender wage gap in the advanced parts of the economy and, hence, not also the overall gender wage gap. The reason is obvi-ous : concomitant with rising average education levels, other skill aspects have received increasing attention in working life. Consequently, a conscious combination of formal and informal competencies as laid down in well-designed job task evaluation schemes may, in many instances, offer a more powerful path to tackling the gender wage gap.

JEL: J16, J31
Publication year: 2010
Pages: 22
Price: 10€
Language: English
Discussion Papers no. 1230

Toimihenkilöiden työ- ja palkkaurat Suomen teollisuudessa

admin — Wed, 13 May 2009 11:00:00 +0000

Tutkimuksessa tarkastellaan toimihenkilöiden välisiä eroja työ- ja palkkaurissa sekä niiden taustalla vaikuttavia tekijöitä. Lisäksi tutkimuksessa kiinnitetään huomiota siihen, missä uravaiheessa merkittävimmät erot syntyvät ja mikä merkitys erilaisilla siirtymillä on palkkakehityksen kannalta. Teoriaosuudessa liitetään työvoiman liikkuvuus perinteiseen inhimillisen pääoman teoriaan sekä yritysten sisäisiä työmarkkinoita käsittelevään kirjallisuuteen. Kuvainnollisessa analyysissä arvioidaan erilaisten urakehitystä määrittävien siirtymien yleisyyttä ja tärkeyttä urapolkujen määräytymiselle. Ekonometrinen osuus koostuu ylennyksen ja työnantajan vaihdon estimoimisesta lineaarisilla todennäköisyysmalleilla sekä yritysten sisäisten ja yritysten välisten siirtymien vertailusta. Tutkimuksen viimeisessä osiossa analysoidaan siirtymien palkkavaikutuksia. Käytettävä aineisto on Elinkeinoelämän keskusliiton (EK) palkkatilasto vuosilta 19812006. Tutkimustulosten mukaan merkittävät yksilöiden työuria erottavat ratkaisut tehdään koulutusvalintojen muodossa. Korkeammin koulutetut paitsi sijoittuvat heti uran alussa vaativampiin tehtäviin kuin vähemmän koulutetut, mutta he myös ylenevät muita nopeammin. Myös koulutusalalla on merkitystä : teknisen koulutuksen hankkineet etenevät kaupallisen tutkinnon suorittaneita todennäköisemmin vaativampiin tehtäviin. Tutkimuksessa myös havaitaan, että työuran alku on ratkaiseva myöhemmän urakehityksen kannalta. Todennäköisyys ylentyä on suurin alle 30-vuotiailla toimihenkilöillä, joiden työsuhde on kestänyt alle neljä vuotta. Myös sukupuolella on merkitystä : miehet ylenevät naisia todennäköisemmin ja saavat myös suuremman palkankorotuksen ylennyksen yhteydessä. Yritysten sisäisten siirtymien lisäksi myös yritysvaihtoihin liittyy merkittäviä palkkahyötyjä. Yritystä vaihtavat todennäköisimmin korkeasti koulutetut ja parhaiten palkatut, vaativissa tehtävissä olevat toimihenkilöt. Myös työnantajan vaihto ajoittuu tyypillisesti uran alkupuolelle.

JEL: J24, J30, J62, M51, M52
Publication year: 2009
Pages: 99
Language: Finnish
Discussion Papers no. 1186

Education – A Job Market Signal?

admin — Wed, 20 Aug 2008 11:00:00 +0000

This paper reviews the theoretical and empirical literature on job market signalling and on education as a job market signal. Possible economic implications of educational job market signalling to an individual and the society are represented based on existing theories. The paper also reviews central methods in empirical testing of the signalling/screening hypothesis.

The empirical section of the paper carries out two alternative methods for testing the signalling/sorting hypothesis. The first method is a so-called natural experiment where the Finnish comprehensive school reform (implemented in the 1970s) is used as an exogenous shock variable in an econometric model explaining educational attainment. Besides qualitative changes to the old comprehensive school system, the reform increased minimum school leaving age from 12 to 15 years. Enforcing the idea of Lang and Kropp (1986), I argue that under the human capital hypothesis the reform should only have affected schooling choices of those individuals whose behaviour was directly constrained by the reform, whereas under the sorting hypothesis it should also have affected those who were not directly constrained. I find no evidence of such an indirect effect on post-comprehensive educational attainment as predicted by the sorting hypothesis. However, my results indicate that the reform may have had an effect on non-constrained individuals tertiary educational attainment. I regard this result as tentative, because it clearly contradicts with the ripple effect observed by Lang and Kropp.

The second method studies the importance of relative education as an explanatory variable in a Mincerian-style wage equation. I find the conclusions of this method to be dependent on the reference group used in defining relative education. Consequently also the second method yields somewhat inconclusive results on the importance of education as a job market signal. The sorting hypothesis gains most support when I use jointly the regional distribution of education and the age distribution of education to define an individuals education relative to his reference group.

The overall impression from the empirical section suggests that the signalling effect of education on wages is minor compared to the human capital effect. I conclude that even though the comprehensive school reform had a positive effect on average productivity, one should not make any hasty generalizations from this result regarding the whole educational system.

The sample used in the empirical analysis consists of over 120 000 men, born in Finland between 1962 and 1966. It is a cross-section of the Finnish Longitudinal Census Data File generated by Statistics Finland.

JEL: I21, J31
Publication year: 2008
Pages: 78
Price: 10€
Language: Finnish
Discussion Papers no. 1147

Is There a Motherhood Wage Penalty in the Finnish Private Sector?

admin — Tue, 20 Nov 2007 11:00:00 +0000

Using data from the Finnish private sector, this paper shows that giving birth to a child has negative effects on the mothers wage. Analysis of the reasons for the wage penalty associated with motherhood suggests that the loss of human capital during the child-related career break is an important factor behind the motherhood wage penalty. The paper also finds some evidence that mothers selection into different types of firms than childless women may contribute to the wage penalty. Instead differences in unobserved time-invariant individual characteristics between mothers and childless women seem to be unimportant in explaining the motherhood wage penalty. Finally, there seems to be variation in the child-penalty across worker and firm characteristics. For example, the penalties are lower in the female-dominated industries than in the male-dominated industries. There is also variation in the motherhood wage penalty across the conditional wage distribution. Most notably, the large average wage penalties for mothers who spend longer periods at home taking care of their children appear to be driven by heavy penalties at the upper tail of the conditional wage distribution.

JEL: J13, J24
Publication year: 2007
Pages: 46
Price: 10€
Language: English
Discussion Papers no. 1107