More Slack than Meets the Eye? Recent Wage Dynamics in Advanced Economies

Hong, Gee Hee; Kóczán, Zsóka; Lian, Weicheng; Nabar, Malhar

doi:10.5089/9781484345351.001

Cited by 18 publications

(24 citation statements)

References 15 publications

(19 reference statements)

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“…In our own work, we consider some cross-country panel regressions of OECD countries, using hourly wage growth as the dependent variable. A model in the style of Hong et al (2018) uses lagged inflation, productivity growth, the unemployment rate, and the change in the unemployment rate as explanatory variables. However, we find that when a variable for solo self-employment is added to the explanatory variables, it has an additional statistically significant effect in line with the notion that it too reflects some degree of slack in the labor market.…”

Section: Wage Moderationmentioning

confidence: 99%

Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs

Boeri

Giupponi

Krueger

et al. 2020

Journal of Economic Perspectives

113

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The nature of self-employment is changing in most OECD countries. Solo self-employment is increasing relative to self-employment with dependent employees, often being associated with the development of gig economy work and alternative work arrangements. We still know little about this changing composition of jobs. Drawing on ad-hoc surveys run in the UK, US, and Italy, we document that solo self-employment is substantively different from self-employment with employees, being an intermediate status between employment and unemployment, and for some, becoming a new frontier of underemployment. Its spread originates a strong demand for social insurance which rarely meets an adequate supply given the informational asymmetries of these jobs. Enforcing minimum wage legislation on these jobs and reconsidering the preferential tax treatment offered to self-employment could discourage abuse of these positions to hide de facto dependent employment jobs. Improved measures of labor slack should be developed to acknowledge that, over and above unemployment, some of the solo self-employment and alternative work arrangements present in today’s labor market are placing downward pressure on wages.

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Section: Wage Moderationmentioning

confidence: 99%

Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs

Boeri

Giupponi

Krueger

et al. 2020

Journal of Economic Perspectives

113

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“…In the post Great Recession years since 2008 we show measures of underemployment replaces unemployment as the primary measure of labor market slack. a) Cross-country evidence Important recent work by Hong et al (2018) from the IMF across 30 countries has shown that the IPTR -expressed as a percent of total employment -enters significantly negative in wage change equations. In the same equations the unemployment rate and the change in the unemployment rates are also significantly negative.…”

Section: Non-unionmentioning

confidence: 99%

Underemployment in the US and Europe

Bell¹,

Blanchflower²

2018

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“…In the post Great Recession years since 2008 we show measures of underemployment replaces unemployment as the primary measure of labor market slack. a) Cross-country evidence Important recent work by Hong et al (2018) from the IMF across 30 countries has shown that the IPTRexpressed as a percent of total employment -enters significantly negative in wage change equations. In the same equations the unemployment rate and the change in the unemployment rates are also significantly negative.…”

Section: Non-unionmentioning

confidence: 99%

“…We are grateful to Hong et al (2018) for providing us with their data. We then mapped onto it our underemployment rates for 19 of the countries in Table 3 and Table 4, making 275 observations in all.…”

Section: Non-unionmentioning

confidence: 99%

Underemployment in the United States and Europe

Bell¹,

Blanchflower

2019

ILR Review

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The authors produce estimates for a new and better rate of underemployment for 25 countries using the European Labor Force Survey that is based on workers’ reports of their preferred hours at the going wage. Both voluntary and involuntary part-time workers report they want more hours. Full-time workers who say they want to change their hours, mostly say they want to reduce them. When the Great Recession hit, the number of hours of those who said they wanted more hours increased, and the number of hours of those who said they wanted fewer hours decreased. The percentage of workers in both categories remains elevated. The authors provide evidence for the United Kingdom and the United States as well as from an international sample that underemployment lowers pay in the years after the Great Recession, but the unemployment rate does not. They also find evidence for the United States that decreases in the home ownership rate have helped to keep wage pressure in check. Underemployment replaces unemployment as the main influence on wages in the years since the Great Recession.

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More Slack than Meets the Eye? Recent Wage Dynamics in Advanced Economies

Cited by 18 publications

References 15 publications

Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs

Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs

Underemployment in the US and Europe

Underemployment in the United States and Europe

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