Xiangdong Wei

THE LAW OF ONE PRICE: EVIDENCE FROM THE TRANSITIONAL ECONOMY OF CHINA

This paper applies the recently developed econometric methods of panel unit root tests and nonlinear mean reversion to investigate price convergence in Chinathe largest transitional economy in the world. We find that prices did converge to the law of one price in China for an overwhelming majority of goods and services, based on a large panel data set. The finding sheds light on the extent of the market economy in China, and casts doubt on Youngs proposition that the economic reform has led to the fragmentation of Chinese domestic markets.

Worker participation and firm performance : evidence from Germany and Britain

The Freeman–Lazear works council/worker involvement model is assessed over two distinct industrial relations regimes. In non‐union British establishments our measures of employee involvement are associated with improved economic performance, whereas for unionized plants negative results are detected. The suggestion is that local distributive bargaining can cause the wrong level of worker involvement to be chosen. Also consistent with the model is our finding that mandatory works councils do not impair, and may even improve, the performance of larger German establishments. Yet smaller plants with works councils under‐perform, illustrating the problem of tailoring mandates to fit heterogeneous populations.

Worker Sorting and Job Satisfaction: The Case of Union and Government Jobs

In initial cross-section estimates using data from the 1991–94 British Household Panel Study, the authors find that union members had lower overall job satisfaction than non-union members, and public sector workers had higher satisfaction than private sector workers. Controlling for individual worker effects (sorting) using panel methods confirms the lower satisfaction of union members, but eliminates the higher satisfaction of public sector workers. These results suggest that unions do not simply attract the dissatisfied, as previously suggested. By contrast, the greater satisfaction expressed by public sector workers seems largely a consequence of sorting, with those who are more easily satisfied being drawn to the public sector. Additional analysis of particular aspects of satisfaction, including satisfaction with pay, the work itself, and relations with the boss, generally supports these conclusions.

Performance pay and job satisfaction

This article estimates the direct effect of performance pay schemes on job satisfaction for a representative sample of US workers. Both individual performance pay and profit sharing are routinely associated with higher satisfaction even as the level of pay and a long list of other determinants are held constant. This result holds in panel estimates designed to control for fixed effects. When individual performance pay is disaggregated into five specific schemes, all but one associate with higher satisfaction and piece rates associate with lower satisfaction. The role of gender is explored as an explanation for the results.

Payment by Results Systems: British Evidence

A model of the firms decision to adopt a payment by results system is developed and tested with British establishment data. The model maintains that payment by results systems have larger set-up costs but lower supervision costs than time rates, particularly for short-tenure workers who are not well motivated by deferred compensation. The evidence confirms the models predictions by showing that payment by results systems substitute for supervision, and that larger establishments and those with shorter-tenure workers are more likely to adopt payment by results. In addition, both the presence of a payment by results system and the new adoption of such a system are shown to exert a positive influence on measures of establishment performance.

Compensating Wage Differentials for Workplace Accidents: Evidence for Union and Nonunion Workers in the UK

This article measures compensating wage differentials for job risks for union and nonunion workers. Job risk is made endogenous to avoid a selectivity bias arising if more able people choose safer jobs. We find that this adjustment has a considerable effect on the union group, raising their fatal risk premium above that of non union workers. This implies that there is more variation in unmeasured ability in the unionized group, and that job risk is an inferior good. The fact that unionized workers are also found in safer jobs might therefore be attributable to their greater wealth, rather than to greater“knowledge” in the unionized plant. The estimated statistical value of a life is £8.8 million in 1990 prices for union workers, with nonunion workers about 20% lower.

Employer size–wage effects: evidence from matched employer–employee survey data in the UK

This paper employs a random sample of matched employer–employee data from the UK to test seven possible explanations for the positive relationship between employer size and pay. Individual wage equations show a large employer size–wage premium. We then control for a range of establishment-level variables, based on seven hypotheses typically advanced to explain this premium. Each establishment-level factor reduces the wage premium, but a sizeable premium nonetheless remains. In adjudicating on these hypotheses, we find a strong association between the internal labour market and the employer size–wage premium. This finding supports the theory that the employer size–wage effect may be due to the higher costs of turnover or monitoring in larger firms. However, we find contrasting effects for public versus private sector establishments.

New evidence on unions and plant closings : Britain in the 1990s

In this paper, we exploit the longitudinal element of the 1990 and 1998 Workplace Employee Relations Surveys for Britain to investigate the effect of unionism on establishment closings. Contrary to both recent U.S. research and long-standing British work, we find a strong positive association between two measures of unionism—union recognition for collective bargaining purposes and union coverage—and plant closings. This association is robust to the inclusion of highly detailed industry controls but is driven by plants that are parts of multiestablishment entities. No such relationship obtains in the case of single-plant enterprises. In explaining our findings, we address their consistency with the widely perceived reduction in the “disadvantages of (British) unionism” in recent years.

Work–life balance: promises made and promises kept

We present evidence on the association between the management practices conventionally identified with high performance workplaces (HPWs) and measures of work–life balance. Our framework identifies those practices associated with workers reporting that their employer makes work–life balance commitments, and separately identifies those practices associated with workers reporting that their employer keeps the commitments they make. Our results do not support a role for HPWs in either the making or the keeping of work–life balance commitments. Rather, they suggest that where workers are interdependent – as in team production – the resulting inflexibility of time scheduling drives down work–life balance commitments.

Measurement error and the effects of unions on the compensating differentials for fatal workplace risks

With essentially the same estimation methods and time period but using different UK data sets and risk measures, Sandy and Elliott (1996) found that nonunion male manual workers had a substantially higher fatal risk premium than union workers while Siebert and Wei (1994) found the opposite. This paper attempts to reconcile these conflicting results using the different measures of fatal risk employed in these two studies together on the same data set. The conflicting results are due to several types of measurement error. We find substantial miscoding in the employee-reported industry affiliation as well as larger errors-in-variables bias in the industry-based risk than in the occupation-based risk.