(You Gotta) Strike if the Right (Is the Party!)
Strike Petitions and the Electoral cycle in Mexico
This paper exploits Mexican administrative data on all strike threats between 1991-2012, a period of political institutional improvement. This paper asks: Are strike threats partially caused by the political cycle? Using municipal electoral data, I employ a sharp regression discontinuity approach, and find a causal effect from close elections of right- and left-wing mayors on strike threats two years after an election. Narrow electoral victories of the right-wing (left-) party increase the number of strike threats by 1.056 (1.456) per 10,000 of the municipal population two years after the election. This finding is robust to alternate specifications. I suggest that threats may be misused for campaigning in upcoming elections. To test this hypothesis a differences-in-differences model is employed to estimate changes in electoral turnout in narrow win municipalities. I find that electoral turnout is stimulated by strike threats, in the context of tight electoral rules surrounding campaigning, these findings may be interpreted confirmation of illegal campaigning.
JEL Codes: C23, D72, J52, P48
PDF (updated 04/17) (New version coming soon)
Other Works in Progress
Are there gains to be made from joining a union? Evidence from Mexico
Union density in Mexico has been in decline since the 1980s. In light of this trend this paper asks: “Are there any gains (losses) to joining (leaving) a union?” The paper provides evidence on the worker compensation gains (losses) made by males upon joining (leaving) a union. If one believes that that workers are only likely to join effective unions, then perhaps, these estimates may be regarded as the gains to independent unionisation. I estimate the gains and losses associated with transitioning between non-union and union status using a difference-in-difference estimator. The findings suggest that joining and leaving a union is associated with no wage gains and small wage losses respectively. This is in contrast to what is reported in the literature for most industrialised nations. This paper also contributes to the wider literature by providing the first estimates of the gain (loss) associated with joining (leaving) a union with respect to non-wage benefits. The findings reveal joining (leaving) a union increases (decreases) the probability of being in receipt of legally guaranteed benefits such as bonuses, paid holidays and pensions. This suggests that although union density may be in decline, unions still have an important role to play in voicing worker’s preferences with respect to compensation and ensuring that employers are compliant with the law.
Striking a Deal? Strike threats and the business cycle in Mexico
It is well documented that unions have effects on wages and non-wage benefits, these gains are obtained through collective bargaining. The theoretical literature motivates these gains as the products of successful bargains achieved using the threat of a strike as the bargaining signal. This paper provides a novel exploration of the bargaining signalling mechanism between unions and employers by exploiting administrative data on all strike threats in Mexico in the private sector 1991-2012. I explore the relationship between strike threats and the business cycle for a 20 year period and confirm their role in wage bargaining for workers.
What have Mexican unions done to wages over the last decade?
Unions in Mexico have a long history of being co-opted by the state, given this historic discrepancy in behaviour, this paper seeks to analyse the effect of unions in the labour market. In the spirit of Freeman and Meddoff (1984), I ask: What do Mexican unions do to wages? This paper provides new evidence on the union wage gap over the last decade. The empirical work exploits the Mexican labour force survey survey. The analysis is divided into two parts: In the first, the magnitude of the union wage gap is investigated using the well known Oaxaca-Blinder decomposition. The potential issue of union selection is addressed through the application of a Lee (1978) endogenous switching model. Further estimates of the Union wage mark-up are obtained by exploiting the panel nature of the ENOE survey, to obtain an individual fixed-effects regression. I then give a synthesis of all of these competing estimates. In the final part of the analysis, I ask: `Did unions wield a `sword-of-justice’ across the wage distribution over the last decade?’ This is explored through the application of a variance decomposition and the use of quantile regression models.
With A Newell
Joining the dots and fitting curves: A practitioner’s guide to estimating income inequality using group data
One of the challenges of working with historical data relate to the passage of time. Often, the microdata of surveys no longer survives. This paper is a guide on how to estimate income inequality from tabulated results that may survive in reports. We consider various data structures and propose parametric estimation methods which overcome the lack of individual returns. Microsimulations using the 1953-54 UK MoL Survey (Gazeley et al., 2015) and the 1853 Survey of Belgian workers (Dupéctiaux, 1855), for which individual level data exist, are employed to demonstrate the performance of these methods once the data have been collapsed into groups on modern stratified data and snowball samples, respectively.
with I Gazeley, C Lanata Briones, A Newell, K Reynolds and R Holmes
“Inequality among European working households 1890–1960,” IZA DP 11355 February 2018. PDF here
In this article we map, for the first time, the time-path of the size distribution of income among working class households in Western Europe, 1890-1960. To do this we exploit data extracted from a large number of newly digitised household expenditure surveys. Many are not representative of the population, or even of their target-subpopulation, as methods of social investigation were initially primitive, though rapidly evolving over this period. We overcome the consequent problem of comparability by exploiting our knowledge of the methods used by early social investigators to estimate of the scale of known biases. For some we have the original household data, but in most cases we have tables by income group. One by-product of this work is an evaluation of the range of estimation methods for distributional statistics from these historical tables of grouped data. Our central finding is that inequality among working households does not follow the general downward trend in inequality for the early part of the century found in labour share and top income studies.
Contrary to Kuznets’ prediction, our evidence suggests that on average income inequality among European working households remained stable for three generations from the late nineteenth century onwards
JEL Classification: N33, N34, O15
Keywords: inequality, working households, Europe, 20th century
“The Evolution of Income Inequality in Latin America 1914–1968: Evidence from Household Surveys,” University of Sussex, mimeo.
with I Gazeley, A Newell, K Reynolds and R Holmes
“Escaping from hunger before WW1: Nutrition & living standards in Western Europe and USA in the Late Nineteenth Century,” IZA DP 11037 September 2017. PDF here
We estimate calories available to workers’ households in the USA, Belgium, Britain, France and Germany in 1890/1. We employ data from the United States Commissioner of Labor survey (see Haines, 1979) of workers in key export industries. We estimate that households in the USA, on average, had about five hundred daily calories per equivalent adult more than their French and German counterparts, with Belgian and British workers closer to the USA levels. We ask if that energy bonus gave the US workers more energy for work, and we conclude that, if stature is taken into account, workers in the US and UK probably had roughly the same level energy available for work, whereas the German and French workers most likely had significantly less. Finally we ask economic migration leads to taller children. To answer that we estimate the influence of children on calorie availability among ethnically British workers in the USA and, separately, among British workers in Britain. We find that US-based British households are at least as generous in terms of the provision of calories to their children as their Britain-based counterparts. Other things equal, this means that US-based British children would grow taller.
JEL Classification: J11, J61, N30
Keywords: living standards, nutrition, international comparisons, migration
with I Gazeley, A Newell, and K Reynolds
“What Really Happened to British Inequality in the Early 20th Century? Evidence from National Household Expenditure Surveys 1890–1961,” IZA DP 11071 October 2017. PDF here
We estimate income/expenditure inequality in Britain, exploiting five household surveys, spanning the years 1890 to 1961, some of which we recovered and digitised. After adjusting for differences in scope and sampling, we find little change in inequality among worker households over the period and that the three decades after World War 2 were probably the low point of survey-based inequality measures in the eight decades since the late 1930s. Our findings are consistent with the evidence from wage censuses on the overall variance of earnings, which only falls marginally over the period. We argue this relative steadiness was the result of opposing proximate forces, one being the decline in manual skill differentials due largely to changing wage-setting institutions. On the other side was growth in the employment share of non-manuals, with their higher skill and wage variance. We also argue that two demographic factors also played their parts. The sharp decline in fertility in the early part of the century reduced inequality, while the emergence of pensioner households in the 1950s tended to increase inequality in the lower end of the distribution. Lastly, our work suggests a substantial downward revision in the estimated size of the fall in inequality through World War Two. We find a fall of between one and two Gini percentage points between 1937/8 and 1953/4, compared with the often-quoted Blue Book estimate of almost seven Gini percentage points.
JEL Classification: D31, J31, N14
Keywords: United Kingdom, inequality, wage differentials