Spillover Effects of Minimum Wages in Experimental Wage Negotiations

Dittrich, Marcus; Knabe, Andreas; Leipold, Kristina

doi:10.1093/cesifo/ifu034

“…Our second observation is that the introduction of a minimum wage and its subsequent increases lift up negotiated wages. This even holds for very low—in fact, nonbinding—levels of the minimum wage (see Dittrich, Knabe, and Leipold 2011, for an in‐depth discussion of this effect).…”

Section: Resultsmentioning

confidence: 98%

“…A positive effect of minimum wages is also found on employers' initial wage offers, but not on employees' initial wage demands (cf. Dittrich, Knabe, and Leipold 2011). Negotiated wages are significantly smaller for female employees than for male employees, independently of the employer's gender.…”

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

Gender Differences in Experimental Wage Negotiations

Dittrich

¹

,

Knabe

²

,

Leipold

³

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We examine behavioral gender differences and gender pairing effects in a laboratory experiment with face-to-face alternating-offers wage bargaining. Our results suggest that male players are able to obtain better bargaining outcomes than female players. Male employees get higher wages than female employees. Male employers pay lower wages to female employees than female employers pay to male employees. Moreover, we find gender differences in the first offers of the bargaining game. Terms of use: Documents in EconStor mayJEL-Code: C720, C910, J160.

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“…Kremer and Maskin (1996) discuss evidence of social pressure for wage equality within the firm. Reference points may also be important for wage determination (see Dittrich et al 2011 for an overview of the literature on the role of relative wages). If the wage structure within the firm provides a reference point for all workers, wages will be affected by the skill composition inside the firm.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

High wage workers and high wage peers

Battisti

¹

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper investigates the effect of co-worker characteristics on wages, measured by the average person effect of coworkers in a wage regression. The effect of interest is identified from within-firm changes in workforce composition, controlling for person effects, firm effects, and sector-specific time trends. My estimates are based on a linked employer employee dataset for the population of workers and firms of the Italian region of Veneto for years [1982][1983][1984][1985][1986][1987][1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001]. I find that a 10 percent increase in the average labour market value of co-workers' skills is associated with a 3.6 percent wage premium. I also find that around one fourth of the wage variation previously explained by unobserved firm heterogeneity is actually due to variation in co-worker skills, and that between 10 and 15 percent of the immigrant wage gap can be explained by differences in coworker characteristics. Terms of use: Documents in EconStor mayJEL Code: J31, J79.

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“…See also Goarant and Muller (2011) for evidence of NMW spillover effects on wages in France. 7 Using experimental data, Dittrich et al (2014) show that wage bargaining is an additional channel through which NMW spillover effects might arise, whereas Dolado et al (1997) provide some evidence of spillover effects of sectoral bargained minimum wages on earnings in Spain.…”

Section: Introductionmentioning

confidence: 99%

The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France

Gautier

¹

,

Fougère

²

,

Roux

³

2016

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Abstract:This paper examines empirically how industry-level wage floors are set in French industrylevel wage agreements and how the national minimum wage (NMW) interacts with industrylevel wage bargaining. For this, we use a unique dataset containing about 48,000 occupationspecific wage floors, in more than 340 French industries over the period [2006][2007][2008][2009][2010][2011][2012][2013][2014]. We find that the NMW has a significant impact on the seasonality and on the timing of the wage bargaining process. Inflation, past sectoral wage increases and real NMW increases are the main drivers of wage floor adjustments; elasticities of wage floors with respect to these macro variables are 0.6, 0.3 and 0.25 respectively. Wage floor elasticities to inflation and to the NMW both decrease along the wage floor distribution but are still positive for all levels of wage floors.Keywords: minimum wage, collective bargaining, wages. For that purpose, we collect a large and unique new data set containing all industry-specific scales of wage floors for more than 340 French industries (covering more than 90% of workers of the private sector) over the period 2006-2014. In each industry, wage floors are defined for a specific classification of representative occupations and are used by firms as a reference to set their wages. In our data set, we are able to compute the size of wage floor adjustments between two wage agreements for each occupation. Overall, our data set contains more than 48,000 wage floors for more than 6,000 different occupations defined in industry agreements.Our paper provides new stylized facts on how wage floors are adjusted in France. We first find that the frequency of wage floor adjustments is highly time-and duration-dependent: industrylevel wage agreements are much more frequent during the first quarter of the year, and the usual duration between two wage agreement signing (and so, between two wage floor adjustments) is one year. The frequency of wage floor adjustments is also positively affected by variations of macro variables such as inflation and the growth rate of aggregate wages. Concerning the size of wage floor adjustments, we provide evidence that past inflation plays a key role in 4 explaining the size of wage adjustments. Industry-specific shocks contribute to wage floor increases as long as NMW or inflation increases are not binding.Our second contribution is to investigate the interactions between NMW adjustments and the setting of industry-level wage floors. In France, one important channel of transmission of NMW increases to other wages may come from industry-level wage agreements. To assess the impact of the NMW increases on wage floors, we rely on a Tobit model to disentangle the simultaneous effects of NMW increases on the frequency of wage agreements and on the size of wage floor adjustments. Using changes in the macro variables since the last wage agreement in a given industry, we are able to construct industry-specific variables and to better identify their effects on wage floor...

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Spillover Effects of Minimum Wages in Experimental Wage Negotiations

Cited by 18 publications

References 14 publications

Gender Differences in Experimental Wage Negotiations

Gender Differences in Experimental Wage Negotiations

High wage workers and high wage peers

The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France

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