Andrea Garnero

The Heterogeneous Effects of Workforce Diversity on Productivity, Wages, and Profits

We estimate the impact of workforce diversity on productivity, wages, and productivity–wage gaps (i.e., profits) using detailed Belgian linked employer–employee panel data. Findings show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. While gender diversity is found to generate significant gains in high-tech/knowledge-intensive sectors, the opposite result is obtained in more traditional industries. Estimates neither vary substantially with firm size nor point to sizeable productivity–wage gaps except for age diversity.

Part-time Work, Wages and Productivity:Evidence from Belgian Matched Panel Data

The authors use matched employer-employee panel data on Belgian private-sector firms to estimate the relationship between wage/productivity differentials and the firm’s labor composition in terms of part-time work and gender. Findings suggest that the groups of women and part-timers generate employer rents but also that the origin of these rents differs (relatively lower wages for women, relatively higher productivity for part-timers). Interactions between gender and part-time work suggest that the positive productivity effect is driven by male part-timers working more than 25 hours, whereas the share of female part-timers is associated with wage penalties. The authors conclude that men and women differ with respect to motives for reducing working hours and the types of part-time jobs available to them: women often have to accommodate domestic constraints by downgrading to more flexible jobs, whereas male part-time work is frequently related to training and collectively negotiated reductions in hours that do not affect hourly pay.

Sharp Teeth or Empty Mouths? European Institutional Diversity and the Sector‐Level Minimum Wage Bite

The article explores the link between different institutional features of minimum wage systems and the minimum wage bite. We notably address the striking absence of studies on sectoral-level minima and exploit unique data covering 17 European countries and information from more than 1,100 collective bargaining agreements. Results provide evidence for a neglected trade-off: systems with bargained sectoral-level minima are associated with higher Kaitz indices than systems with statutory floors, but also with more individuals actually paid below prevailing minima. Higher collective bargaining coverage can, to some extent, reduce this trade-off between sharp teeth (high wage floors) and empty mouths (non-compliance/non-coverage).

Institutional Determinants of Worker Flows

There is little cross-country comparative evidence on the way labour market institutions shape gross job and worker flows, by and large because comparable data for many countries are scarce. By using a unique harmonised dataset on hirings and separations at the industry-level for a large majority of OECD countries, we fill this gap, by analysing the role of a number of labour and product market institutions in shaping cross-country differences in gross worker flows. In order to identify the effect of policies and institutions we consider an industry-level difference-in-difference approach. The basic premise of this approach is that the effect of a particular policy on gross job flows is greater in industries where the policy is more likely to constrain firm behaviour. We check, however, the robustness of our results using more standard cross-country/time-series estimates. The richness of the data available to us allows estimating the impact of the institutions also on the transitions from job to job, the transitions from job to nonemployment and the transitions from non-employment to jobs. We find that cross-country differences in job protection for open-ended contracts and unemployment benefits can explain a large share of crosscountry variation in gross worker flows. However, the effect of the former is essentially limited to job-tojob flows. Il y a peu de resultats comparatifs a travers les pays sur la maniere dont les institutions du marche du travail faconnent les flux bruts d’emplois et de main d’oeuvre, en raison d’un manque de donnees comparables pour un certain nombre de pays. Cet article comble cet ecart, en s’appuyant sur une base de donnees harmonisees sur les embauches et les cessations d‘emplois au niveau des secteurs d’activite pour un grand nombre de pays de l’OCDE, et en analysant comment un certain nombre d’institutions nationales des marches du travail et des produits faconnent les ecarts de reallocation de main d’oeuvre entre les pays. Afin d’identifier l’effet des politiques et des institutions nationales, nous considerons un modele de difference en differences au niveau des secteurs d’activite. Le principe de base de cette methode est que l’effet d’une certaine politique sur le flux brut d’emplois est superieur dans les industries ou cette politique est de nature a imposer une contrainte sur le comportement des entreprises. Nous verifions, cependant, la robustesse des resultats en utilisant des estimations plus standards en coupe transversale et serie temporelle. La richesse des donnees disponibles permet egalement l’estimation de l’impact des institutions sur les transitions d’un emploi a l’autre, les transitions d’un emploi au non-emploi et les transitions du nonemploi vers l’emploi. Nous trouvons que les differences inter-pays dans la protection de l’emploi pour les contrats a duree indeterminee et les prestations de chomage peuvent expliquer une large proportion des variations inter-pays des flux bruts de main d’oeuvre. Cependant, l’effet du premier est essentiellement limite aux flux d’un emploi a l’autre.

Productivity, wages and profits among Belgian firms: do fixed-term contracts matter?

Purpose – The purpose of this paper is to estimate the impact of fixed-term contracts (FTCs) on labour productivity, wages (i.e. labour cost), and productivity-wage gaps (i.e. profits). Design/methodology/approach – The authors apply dynamic panel data techniques to detailed Belgian linked employer-employee panel data covering the period 1999-2006. Findings – Results indicate that FTCs exert stronger positive effects on productivity than on wages and (accordingly) that the use of FTCs increases firms’ profitability. Originality/value – This paper is one of the first to examine the FTC-productivity-wage nexus while addressing three important methodological issues related to the state dependency of the three explained variables, to firm time-invariant heterogeneity, and to the endogeneity of FTCs.

Are part-time workers less productive and underpaid?

About one in five workers across OECD countries is employed part-time, and the share has been steadily increasing since the beginning of the economic and financial crisis in 2007. Part-time options play an important economic role by providing more flexible working arrangements for both workers and firms. Part-time employment has also contributed substantially to increasing the employment rate, especially among women. However, part-time work comes at a cost of lower wages for workers, mainly because part-time jobs are concentrated in lower paying occupations and sectors, while the impact on firms’ productivity is still not very clear.