Suchergebnisse

In a market-clearing view of wage formation it is claimed that only external factors, namely the conditions in the labor market, affect wages for a given type of labor in any one firm. However, there are several non-market-clearing theories in which importance is given also to firm-specific variables. In this article the effects of organizational factors on the wage level of the firm are studied Using a data set with several observations from each establishment, it is possible to distinguish within-establishment and between- establishment differences. Organizational factors such as establishment size, the presence of a personnel officer and managers' ownership are found to create wage differentials across establishments. The results are consistent with implications from several non- market-clearing theories.

The complementarity between wage setting and welfare spending can explain how almost equally rich countries differ in economic and social equality among their citizens. More wage equality increases the welfare generosity via political competition in elections. A more generous welfare state fuels wage equality via an empowerment of weak groups in the labor market. Together the two effects generate a cumulative process that adds up to a social multiplier explaining how equality multiplies. Using data on 18 OECD countries over the period 1976-2002 (determined by the availability of the generosity index of welfare spending) we test the main predictions of the model and identify a sizeable magnitude of the equality multiplier. We obtain additional support by using spending data to extend the panel up to 2007, and by applying another data set for the US over the period 1945-2001.