ILR Review

The authors examine the consequences of workplace discipline practices involving the use of last chance agreements (LCAs)—contracts governing the non-arbitral reinstatement of discharged employees. Using data from one manufacturing firm's 15-year experience with LCAs, they explore the impact of LCA-based employee reinstatement on subsequent years' discharge rates. They also seek to identify individual and work-related factors predictive of individual reinstatement “success.” Consistent with moral hazard theory, the analysis shows evidence of a positive relationship between the number of LCAs signed in one year and the rate of discharge in subsequent years; and consistent with the theory of reintegrative shaming, LCAs appear to be most effective among those most susceptible to shaming.

Using data from a 1992 survey of 211 organizations with gainsharing experience, the author examines determinants of the survival of gainsharing. He finds statistically significant associations between program survival and several factors, including employee approval by vote, union participation in program administration, low reliance on outside consultants, re-training, new employee training, small bonus group, labor intensity, sound corporate financial health, and major capital investment. Also positively correlated with program survival was program performance (the degree of success in achieving program goals), but that association was considerably weaker for young programs than for older ones. Variables such as re-training, new employee training, small bonus group, and good corporate financial health affected program survival via their influence on program performance.

Using work-history data from the British Household Panel Survey, the authors examine job mobility and job tenure over the period 1915–90. British men and women held an average of five jobs over the course of their work lives, and half of all lifetime job changes occurred in the first ten years. Separation hazards were higher for more recent cohorts, implying an increase in job instability. As jobs accumulated, average tenure lengthened, but the proportion of involuntary separations increased. For both men and women, the rise in job instability was particularly marked in the lowest occupational classification. In general, job insecurity was greater for men than women.

Using data from the National Longitudinal Survey of Youth (1988–90), the author investigates the relationship between methods of pay, including piece rates and bonuses, and the level and variance of wages. Among men, piece rate workers earned a premium compared to other workers, but the evidence on bonuses is mixed. The author finds evidence that female piece rate workers earned more than other female workers once a control variable for the presence of dependents is interacted with the piece rate variable. With controls for the wage effects of schooling and experience, unobserved worker productivity is found to have accounted for most of the wage variance among both male and female piece rate workers; wage variance among workers not having explicit pay for performance schemes, in contrast, was predominantly due to other factors.

Applying a multi-level wage regression model to a matched employer-employee data set for the years 1983 and 1992, the author investigates whether changes in company wage policies can account for the sharp rise in labor market inequality in Portugal. The results suggest that traditional wage progression mechanisms based on seniority lost influence between the two years, whereas general skills became more valued by employers. Changes in the returns to tenure at the micro level thus had an equalizing impact on the distribution, but sharply increased returns to education, as well as a rising wage disadvantage for women relative to men, increased overall inequality.

The author examines wage patterns under an incomes policy in Mexico in 1987–94. The policy specified increases in the minimum wage rate, but also guided salary negotiations more generally. The author finds indications of a substantial but largely temporary effect on wage rates, and evidence consistent with more intensive monitoring of compliance in large firms than in smaller ones. For example, three years after policy implementation, public sector wages had fallen approximately 10% relative to private sector wages, and wages in the largest private firms had fallen 15% relative to those in the smallest private firms. These relative wage effects are consistent with the centralized administration of the policy.

Women earned about 20.8% less than men in Mexico in 1987, a difference that increased to 22.0% by 1993. Using 1987–93 data from Mexico's National Urban Employment Survey, the authors study the role of occupational attainment in this wage differential. Most of the 1987–93 increase in the gender log monthly earnings gap, they find, can be explained by relative chnges in human capital endowments; wage coefficient changes would have slightly reduced the gap, all else equal. The increasing male-female earnings differential was tempered by a substantial decline in gender differences in occupational attainment from 1987 to 1993. Most of the male-female differences in earnings in both 1987 and 1993 can be explained by differences in rewards to individual endowments rather than gender differences in endowments.

This paper analyzes how school year employment affected high school academic performance among a sample of young people surveyed between 1979 and 1983. Regular employment at modest weekly hours was associated with higher grades within each grade level, but between-grade transitions into and out of employment were accompanied by very slight performance declines and gains, respectively. While the average effect of school year employment was quite small, extensive school year employment had a large, statistically significant negative impact on the academic performance of racial minorities. Summer employment did not affect grades, suggesting that school year employment affected grades by “crowding out” study time.