Benoît Mahy

Testing for the Price- and Wage-Setting Model in Belgium Using Multivariate Cointegration Tests

Using multivariate cointegration tests based on Johansens approach, this paper tests for the existence of long-run relationships between real wages and other explaining variables in Belgium. We retain two cointegrating vectors which can refer to wage and price setting behaviours. Copyright Fondazione Giacomo Brodolini and Blackwell Publishers Ltd 1997.

Work organization, labour contracts and employment

Purpose - To ease adjustments in the labour market, many countries have softened their legislation since the 1970s by introducing flexible labour contracts or by making their use easier. The purpose of this paper is to document labour management of temporary contracts during the last 20 years in Belgium, compared to the situation in its neighbouring countries. The authors investigate the determinants of the use of flexible labour contracts and the consequences of their introduction on labour dynamics. Design/methodology/approach - A dynamic Probit is considered to model the use of fixed term labour contracts (FTCs) and standard dynamic labour demand equations are used to test the impact of labour contracts on the labour adjustment at the firm level, using a panel of around 8,000 firms during the period 1998-2005. Findings - The results indicate that some firms follow labour management based on a core (indefinite term contracts – ITCs) and a peripheral component (FTCs) and manage temporary contracts on a “permanent” basis, from a long run perspective. Estimates also confirm a much faster temporary contracts employment adjustment, while ITCs adjustment does not depend on whether firms employ FTCs. ITCs short-term employment elasticity with respect to wages suggests that workers protection against redundancies is strengthened when firms manage work organisation with both types of contracts. In contrast to ITCs, FTCs are used to meet unexpected demand shocks. Originality/value - This paper contributes to the growing literature on the impact of the introduction of new flexible contracts on the labour demand at the firm level.

Human resource management and labour demand dynamics in Belgium

– This paper aims to estimate whether human resource (HR) practices influence labour demand dynamics behaviour., – Groups practices in terms of employees satisfaction and work organisation, financial incentives and individuals career perspectives, and explains how they may influence labour productivity and cost. Considering five HR variables, estimates two specifications of labour demand dynamics, under production constrained by demand or monopolistic competition regimes. Applies the two‐step GMM estimator proposed by Blundell and Bond to a balanced panel of 452 Belgian firms observed during the period 1998‐2002., – In the complete monopolistic competition specification, estimates a positive one lag relation explaining labour demand by average training hours combined with an indicator of well‐being of workers, the fact that they are engaged in long term contracts and stay in firms. Some evidence therefore seems to show that some combined HR practices can improve labour demand., – Provides information on whether HR practices influence labour demand dynamics in a Belgian context.

Short Notice, Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors

This paper is one of the first to examine how the use of fixed-term employment contracts (FTCs) affects firm competitiveness (i.e. productivity, wages and profits) while controlling for key econometric issues such as time-invariant unobserved workplace characteristics, endogeneity and state dependence. We apply dynamic panel data estimation techniques to detailed Belgian linked employer-employee data covering all years from 1999 to 2010. Results show that the effects of FTCs on firm competitiveness vary across sectors: while temporary employment is found to enhance productivity and profits in (labour-intensive) services, this is not the case in manufacturing and construction.

Does corporate social responsibility make over-educated workers more productive?

ABSTRACT This article provides first evidence on whether corporate social responsibility (CSR) influences the productivity effects of over-education. By relying on detailed Belgian-linked employer–employee panel data covering the period 1999–2010, our empirical results exhibit a positive and significant impact of over-education on firm productivity. Moreover, they suggest that the effect of over-education is positively enhanced when the firm implements a CSR process, especially when it aims to have: (i) a good match between job requirements and workers’ educational level, (ii) a diverse workforce in terms of gender and age, and (iii) a long-term relationship with its workers. When focussing on required education and over-education, the results suggest that CSR, besides representing an innovative and proactive approach for the firms’ stakeholders, may also be beneficial for the firm itself through a bigger increase in productivity for each additional year of required education or over-education.

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 workers less absent when wage dispersion is small

Purpose - – The purpose of this paper is to examine the impact of wage dispersion on sickness absenteeism observed in Belgian firms. Design/methodology/approach - – The authors use detailed linked employer-employee panel data for the period 1999-2006 that allow the authors to compute a conditional wage dispersion indicator following the Winter-Ebmer and Zweimuller (1999) methodology and to estimate the relationship between sickness absenteeism and wage dispersion while controlling for time-invariant workplace characteristics. Findings - – The authors find a positive and hump-shaped relationship between intra-firm wage dispersion and sickness absenteeism, the turning point of this relation being extremely high. In addition, the magnitude of the influence of wage dispersion on sickness absenteeism is found to be stronger in firms employing a larger share of blue-collar workers. Practical implications - – The results could therefore suggest that wage dispersion, suggestive of larger pay-for-performance mechanisms, decreases worker satisfaction and the workplace climate in general. Only a minority of workers, who are less sensitive to equity and cohesion considerations, would be less absent as pay-for-performance increases. Originality/value - – While numerous approaches analyse the link between wage dispersion and firm productivity, very few studies we are aware of are devoted to the relationship between wage dispersion and sickness absenteeism. Yet, the outcomes in terms of productivity and sickness absenteeism may be different. Furthermore, the influence of wage dispersion on sickness absenteeism does not seem unambiguous from a theoretical point of view. To the authors knowledge, it is the first time that this relation is analysed with Belgian data.

Work organization, performance and health: introduction

Purpose - The purpose of this paper is to introduce this special issue on work organization, performance and health. Design/methodology/approach - The authors provide a general review of the literature and describe the main findings of the papers appearing in this special issue. Findings - This issue provides new evidence regarding the impact of work organization (essentially defined in terms of payment methods, teamwork, workforce age structure and labour contracts) on performance (measured through employment, productivity and sickness absenteeism indicators). It also sheds more light on the determinants of workers’ health by gender, with particular attention to working conditions and mobbing. Originality/value - The papers collected in this special issue provide some fine examples of recent work at the crossroads of health and personnel economics.

La dispersion salariale augmente-t-elle l’absentéisme au sein des firmes ?

The aim of this paper is to provide a critical summary of the literature regarding the relationship between wage dispersion and sickness absenteeism. From a theoretical point of view, according to the tournament theory, this relation could be either i) negative, due to the incentive effect induced by the expected attribution of the largest prize to the most productive worker or ii) positive, because of adverse working conditions associated to required increased productivity in order to win the prize. On the other hand, according to a group of theories based on fairness considerations, this relation could be i) positive, because of the lower cooperation induced among the workforce, or ii) negative, if a higher wage dispersion is perceived as a sign of gratitude by the more productive workers. We present the very few studies we are aware of analyzing the influence of wage dispersion on sickness absenteeism with particular attention devoted to the empirical results that have been obtained for the Belgian private sector.