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The attraction of foreign direct investment (FDI) is considered to be of particular importance for emerging economies because it represents a channel through which international convergence in standards of living may be achieved. One important effect of FDI is its impact on wages, both within the targeted firm (direct) and the local firms within the same geographic region and sector (indirect). In this paper, we investigate the question whether multinational enterprises (MNEs) raise or lower wages directly and indirectly, both theoretically and empirically. Importantly, the magnitude of these changes may depend on how many firms in the sector are already foreign-owned. Generally, the effect of MNEs on wages has not been studied as intensively in the international business (IB) literature as other aspects of FDI, and ours is the first article to specifically investigate the moderating effect of variation in foreign employment shares across industry–province cells (clusters). Using Chinese data on 146,199 firms, we estimate the direct wage effect of foreign ownership to be positive and to increase with the employment share of foreign-owned firms. We also find that the indirect effect on domestic wages varies with the foreign share and may even turn negative.

By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standardmodels of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or nonemployment, suggesting that “outsiders” shield “insiders” from the increased competition.

The authors revisit the long-running minimum wage–employment debate to assess new studies claiming that estimates produced by the panel data approach commonly used in recent minimum wage research are flawed by that approach's failure to account for spatial heterogeneity. The new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the United States have not reduced employment. The authors explore the ability of the new research designs to isolate reliable identifying information, and they test the designs' untested assumptions about the construction of better control groups. Their analysis reveals problems with the new research designs. Moreover, using methods that let the data identify the appropriate control groups, their results reaffirm the evidence of disemployment effects, with teen employment elasticities near -0.15. This evidence, they conclude, still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others.

Previous research has generally shown a very small although statistically significant economic benefit from attending high-quality colleges. This small effect was at odds with what students' college choice and various social theories would seem to suggest. This study sought to reconcile the empirical evidence and theories. The effort was in two directions. First, the economic effect of college quality was expanded from examining only the economic benefit to considering other student outcomes including job satisfaction and graduate degree accomplishment. A new perspective regarding the social role of college quality was offered in conclusion. 1. Introduction 2. Literature Review and Theoretical Framework 3. Who Competes at High-Quality Colleges? 4. The Economic Effect of College Quality 5. Variability in the Economic Effect of College Quality 6. College Quality and Earnings Distribution 7. College Quality and Graduate Education 8. College Quality and Job Satisfaction 9. Summary and Discussion Liang Zhang is Assistant Professor of Public Policy at Vanderbilt University's Peabody College.

PurposeThis study aims to investigate the extent to which overeducation imposes wage effects on university graduates, taking into account the individual heterogeneity due to skills and innate ability.Design/methodology/approachUsing Graduates Occupation and Mobility Survey (GOMS) 2019 and Korea Dictionary of Occupations (KDOT) 2019, the overeducated and adequately educated graduates are differentiated by the job analysis (JA) measure. To unveil the masked results, the unconditional quantile regression (UQR) accompanying skills and field of study mismatches is adopted to explore the wage effects of overeducation across the overall wage distribution.FindingsEmpirical evidence shows that the incidence of overeducation is high; however, overeducated graduates only suffer a 6.5% wage loss relative to their adequately matched peers. The findings indicate that regardless of being derived from either overskilled or field of study mismatch, genuine overeducation impose a higher wage penalty at all percentiles relative to the apparent overeducation. Meanwhile, high-ability men suffer lower-wage penalties than their low-ability peers, whereas the inverted “U” pattern is exhibited for women. The theoretical hypotheses differ depending on the estimated results by gender.Research limitations/implicationsEach measure of educational mismatch has been criticized for its insurmountable shortcoming. The recent graduates are likely to overstate the job requires of skills.Originality/valueThis paper contributes to the insufficient evidence on the multiple aspects of wage effects of overeducation by providing new and rigorous examinations and by focusing on the country experiencing rapid economic growth, industrial upgrading and educational expansion.

The authors address the question of how a minimum wage increase affects the wages of low-wage workers relative to the wage the worker would have if there had been no minimum wage increase. The authors’ method allows for the effect to depend not only on the initial wage of the worker but also nonlinearly on the size of the minimum wage increase. Results indicate that low-wage workers who experience a small increase in the minimum wage tend to have lower wage growth than if there had been no minimum wage increase. A large increase to the minimum wage not only increases the wages of those workers who previously earned less than the new minimum wage but also spills over to workers with moderately higher wages. Finally, the authors find little evidence of heterogeneity in the effect by age, gender, income, and race.

This book answers the question of how to maintain effective labour regulation as the market for labour moves towards globalization. This issue is addressed from legal, economic, social and cultural perspectives. The authors consider the effects of free trade and investment, with and without labour standards, on employment, competitiveness, wages and working conditions in the global economy. Deriving and analysing policy options, they seek ways in which principles of labour regulation can operate at an international level. The work concludes with a call for a rule-based global trading system in which core labour standards play a significant part.

A method is proposed for defining the threshold of a ‘bad job’, based on a discontinuity in the relationship between a composite index of job quality and subjective wellbeing. Applied to European data, there is a monotonic relationship between the job quality index and psychological wellbeing. However, there is a distinctly large increase in psychological wellbeing, and in several measures of work-related wellbeing, between workers in the lowest decile and those in the second lowest decile of job quality. We therefore propose that ‘bad jobs’ should be designated as those in lowest decile. Using this threshold gives a ‘bad jobs’/ ‘other jobs’ dichotomy that discriminates on wellbeing far better than definitions based only on low earnings and job insecurity. Using multi-level probit analysis, we find that bad jobs are more common in poorer countries and in countries with weaker labour regulation. Three findings differentiate the distributional pattern of bad jobs from that of low-earnings jobs: first, the prevalence of bad jobs is greater in large establishments; second, there is no gender gap in the prevalence of bad jobs; third, working in the private sector raises the chance of being in a bad job but not of being in a low earnings job.

Purpose – Applied research shows higher wages are associated with lower mobility at the establishment level. A usual interpretation is that high pay decreases labour turnover. The purpose of this paper is to test if such relationship holds for every type of worker in every type of firm. Design/methodology/approach – The analysis is based on a linked employer-employee panel dataset covering the French private sector from 2002 to 2005. The authors compute establishment wage effects and use them as explanatory variables in labour mobility equations (for churning rate and quit rate). Using spline regression models enables to investigate for potential non-linearities. Findings – The authors show that the relationship between churning rate and wage is non-linear and has the shape of an inverted J: the relation is negative and intense for establishments with low wage effect, weaker for average paying establishments and even becomes positive for very high-paying ones. This is true whatever the skill group of workers. It is also true for large establishments while the relationship is still negative but linear for small ones. The relationship between wages and quit rates has a strikingly similar pattern. This suggests that the link between churning and establishment wage effect is strongly related to quit decisions. Practical implications – A possible interpretation of our results is that paying higher wages may be an effective stabilizing tool especially for employers in small establishments and when starting wages are relatively low. Originality/value – The paper is the first to decompose the relationship between wage and mobility. It shows the relationship differs across establishment size and is not linear. The paper also shows quits play a role in this relationship.