Stephan Kampelmann

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.

Does it pay to be productive ? The case of age groups

Using longitudinal matched employer-employee data for the period 1999-2006, we investigate the relationship between age, wage and productivity in the Belgian private sector. More precisely, we examine how changes in the proportions of young (16-29 years), middle-aged (30-49 years) and older (more than 49 years) workers affect the productivity of firms and test for the presence of productivity-wage gaps. Results (robust to various potential econometric issues, including unobserved firm heterogeneity, endogeneity and state dependence) suggest that workers older than 49 are significantly less productive than prime age and young workers. In contrast, the productivity of middle-age workers is not found to be significantly different compared to young workers. Findings further indicate that average hourly wages within firms increase significantly and monotonically with age. Overall, this leads to the conclusion that young workers are paid below their marginal productivity while older workers appear to be “overpaid” and lends empirical support to theories of deferred compensation over the life-cycle (Lazear, 1979).

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).

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.

Misalignment of productivity and wages across regions: evidence from Belgium

ABSTRACT This paper is one of the first to estimate how regions affect the productivity, wage cost and cost competitiveness (i.e., the productivity–wage gap) of firms. Detailed linked employer–employee panel data for Belgium and the Hellerstein–Neumark framework are used to estimate dynamic models at the establishment level. The findings show that interregional differences in productivity and wages are significant, but to a large extent due to drivers at the individual and/or firm level. The research provides evidence that the specificity of the Brussels region can be linked to its higher density compared with the rest of Belgium. Robustness tests suggest that the relatively better ceteris paribus performance of firms in Brussels is limited to the service sector.