Mokre Patrick and Rehm Miriam, 2020. “Inter-Industry Wage Inequality: Persistent differences and turbulent equalization,” Cambridge Journal of Economics.

Abstract

The empirical stylised fact of persistent inter-industry wage differentials is an enduring challenge to economic theory. This paper applies the classical theory of ‘real competition’ to the turbulent dynamics of these inter-industrial wage differentials.

Theoretically, we argue that competitive wage determination can be decomposed into equalising, dispersing and turbulently equalising factors. Empirically, we show graphically and econometrically for 31 US industries in 1987–2016 that wage differentials, like regulating profit rates, are governed by turbulent equalisation. Furthermore, we apply a fixed-effects OLS as well as a hierarchical Bayesian inference model and find that the link between regulating profit rates and wage differentials is positive, significant and robust.

Mokre Patrick (2019), Ausnahmezustand Geringverdienst? Ursachen der Beschäftigungsverhältnisse unter der Steuergrenze. Wirtschaft und Gesellschaft 2019, Band 45 Nr.2, S. 203-227

Abstract

Wage income lower than the minimum threshold for taxation is an exception. However, the share of low-income earners in Austria is substantial: A quarter of all wage earners and 12% of all employees. The extensive literature on the subject agrees that low income is an exceptional situation that can be traced to atypical employment and demographic factors. Based on the 2016 micro-census, I estimate the impact of both demographic and labor relations-factors on low-income susceptibility. I conclude that low income in Austria is more likely to affect women and young people, workers with lower formal education, those with care responsibilities, part-time employees and temporary workers.