Monográfico 2012 'Wages and Regional Labour Markets'



Raul Ramos, Jordi Suriñach

Introduction to the Special Issue

This introduction summarises the main contributions included in the special issue. These papers were discussed (among others) in the special session on «Wages and Regional Labour Markets» organised within the activities of the 51st Congress of the European Association of Regional Science (ERSA) and the 37th conference of the Spanish Regional Science Association held in Barcelona in August 2011. This special issue contains six of the nine papers discussed in the session, plus three additional papers clearly related to this topic that were discussed in other conference sessions or included at a later stage due to their relevance. Moreover, we also decided to include a brief discussion of each paper in order to incorporate other points of view and some additional thoughts on the topic.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Vicente Royuela

Regional Science trends through the analysis of the main facts of the 51st ERSA Conference

The 51st ERSA Conference held in Barcelona in 2011 was one of the largest ever. By examining the characteristics of the conference, this paper identifies the main trends in Regional Science and draws on a broad array of sources of information: the delegates’ demographic details, the conference program itself, a satisfaction survey conducted among delegates, a quality survey addressed to those chairing the sessions and, finally, a bibliometric database including each author signing a paper presented at the conference. We finally run a regression analysis from which we show that for ERSA delegates what matters most is quality, and this must be the direction that future conferences should move toward. Ultimately, ERSA conferences are comprehensive, all-embracing occasions, representing an ideal opportunity for regional scientists to present their work to each other and to network.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Inmaculada García-Mainar, Víctor M. Montuenga-Gómez

Wage dynamics in Spain: evidence from individual data (1994-2001)

In this paper, we test the hypothesis of a wage curve against a Phillips curve for Spain, within a dynamic framework that allows for both of these, and for more general alternatives. To this end, we use data from the European Community Household Panel, providing micro-information for the period 1994-2001. The results indicate that, contrary to the situation in other European countries, the wage adjustment occurs in just one period, with the elasticity of wages to unemployment being close to the «empirical law of economics» of –0.1.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Laura Hernández, Lorenzo Serrano

Overeducation and its effects on wages: a closer look at the Spanish regions

This paper uses data from the 2004 to 2009 Living Conditions Survey (LCS) to analyze the wage gap between the adjusted and the overqualified employees in the Spanish regions using standard Mincer equations, quantile regression and the Oaxaca-Blinder decomposition. The results indicate that in Spain there is a 28% difference between the gross hourly wage between the overqualified and well-matched employees, of which 25 percentage points correspond to the discrimination effect and only three percentage points correspond to the characteristics of the individuals and the firms they work in. These results show that the effects of overeducation on the regional economies are genuine and substantial and present a considerable heterogeneity.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Bruno de Oliveira Cruz, Paolo Naticchioni

Falling urban wage premium and inequality trends: evidence for Brazil

In this paper, we use data from the National Household Survey (PNAD) for Brazil to investigate the dynamics of the urban wage premium and the relationship between the urban wage premium and inequality trends, and we find two main results. First, we find a decreasing urban wage premium over the period 2002-2009 using both OLS and quantile regression. Second, we show that the fall in the urban wage premium is more pronounced at the 90th percentile than at the 10th percentile. This finding suggests that the falling urban wage premium has contributed to the reduction in inequality observed in Brazil in the last decade.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Claudia Tello , Raúl Ramos

Wage inequality and economic growth in Mexican regions

Only a few studies have analysed the relationship between intraregional inequality and growth, although several studies have measured inequality at the regional level. The objective of this paper is to analyse the relationship between income (wage) inequality and economic growth in different regions of Mexico. We also try to identify factors that explain the variation of intra-regional inequality across Mexican regions and over time. Using macroeconomic databases and publicly available microdata, we apply techniques used in the fields of statistics and econometrics to obtain robust evidence on the relationship between growth and inequality. Our aim is to provide policy recommendations to support the design and implementation of growth-promoting measures thatavoid the exclusion of certain social groups. This paper provides reasons to use a spatial approach and an analysis of particular regions to avoid «one size fits all» policy recommendations.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

David Castells-Quintana, Vicente Royuela

Unemployment and long-run economic growth: The role of income inequality and urbanisation

Two of the most dramatic aspects of the current economic crisis are with no doubt the experience of high and persistent rates of unemployment and the accelerated pace at which inequalities increase. But high and persistent levels of unemployment and increasing inequality are more than a consequence of scarcer opportunities related to the crisis; they can also be negative determinants for subsequent long-run economic growth. In this work, we consider unemployment and income inequality, and interactions between both, as possible determinants of longrun growth by using cross-sectional international data. Our results suggest that: 1) while initial high unemployment rates do not seem to be statistically significant to explain long-run growth, they do have a negative and significant effect when interacting with increases in inequality. 2) When we differentiate based on levels of urbanization, increasing inequality harms growth in countries with high levels of urbanization, as well as in countries with low levels of urbanization in which there is high and persistent unemployment.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Roberto Bande, Melchor Fernández, Víctor Montuenga

Wage flexibility and local labour markets: a test on the homogeneity of the wage curve in Spain

In this paper we analyse wage flexibility in Spain and its regional differences, departing from the estimation of wage curves. Using data from the Structure of Earnings Survey for 1995, 2002 and 2006, we estimate regional wage equations, relating the observed wage received by workers to a group of personal and job characteristics, as well as to the regional unemployment rate. This analysis allows us to test for the existence of regional differences in the degree of wage flexibility, which may have an important influence on the evolution of regional unemployment, given its impact on the ability of the local labour market to absorb negative shocks. Estimated results indicate that regions suffering from higher unemployment rates exhibit lower wage flexibility. Collective bargaining reforms should pursue greater wage flexibility, especially in regions with high rates of joblessness.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Gonca Konyalı

Wage Curve Evidence From Turkey’s 2007-2009 Income and Living Conditions Survey

The aim of this paper is to investigate the labour market conditions of Turkey via disaggregated wage curves following the argument that group specific regional unemployment rates might better describe wage curves than aggregate ones. Using 2007-2009 panel survey of Income and Living Conditions, I found that there is weak evidence in favour of the existence of a wage curve for Turkey. Different categories of unemployment rate give different results on the unemployment elasticity of pay. For male workers, wage curve relationship seems to exist only when male unemployment rates are used and for female workers, there is no evidence in favor of a wage curve. When the data are split into two age groups, and age specific unemployment rates are used, there appears a wage curve for women of age twenty-five to sixty-four and a positive unemployment elasticity of pay for the women of age fifteen to twenty-four. These results might be explained by ·Ilkkaracan and Selim (2003)’s argument focusing on the labour force participation dynamics of women in Turkey.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.

Aleksandra Majchrowska, Zbigniew Zółkiewski

The impact of minimum wage on employment in Poland

The purpose of this paper is to verify the hypothesis that minimum wage might have negative impact on employment in Poland, at least for some workers groups and regions. After having reviewed theoretical literature on minimum wage and having discussed stylized facts on labour market in Poland, the authors define econometric model to check the impact of minimum wage on employment in Poland and then discuss the results. The main conclusions of the study may be summarized as follows: i) minimum wage has had an adverse impact on employment in 1999-2010; ii) the adverse effect of minimum wage on employment has been pronounced for the young workers during the period of substantial increase of the minimum wage (2005-2010), and iii) there is some evidence that a uniform national minimum wage may be particularly harmful to employment in poorest regions.

Check other articles from the issue Monográfico 2012 'Wages and Regional Labour Markets' or from other issues.