Vim

Vim or MacVim, a marvellous piece of software I have discovered too late but at least.

It is a text file editor. Do not expect anything else. It's like notepad, but with functionality. It highlights programming syntax like Notepad ++, but it is also on Mac.

You need to understand the two modes:

• Edit
• Insert

The Insert mode is your ordinary text editor. You can type in this mode. The Edit mode is everything else you do with the text, such as copying and pasting, finding and replacing strings, 

You activate Insert mode by pressing -a- and leave it by pressing -esc-. 

Here's the function(s) I have been using:

• Delete all blank lines (using regular expressions): :g/^$/d
• Replace character by newline: :%s/,/\n/g
• Alphabetical sorting of text blocks

Waarom onderhandelen over anciënniteit?

Een stuk over anciënniteit naar aanleiding van een debat in De Zevende Dag (16/6/2014) waarin Groen pleitte voor hogere starterslonen en het sociaal model dat ouderen bevoordeelde in vraag stelde.

Hogere startlonen, een sterkere loongroei in de eerste jaren, of een vlakkere looncurve: het lijkt beter aan te sluiten bij de wensen van de werknemers. We zouden namelijk willen dat het loon het wijzigende consumptiepatroon volgt over de levensloop, maar dit maakt de rekening van de werkgever niet. Die gaat voort op de verwachte productiviteitsstijging. Daarom kunnen, in functies waarvoor ervaring belangrijk is, cao-afspraken rond anciënniteit gemaakt worden. Merk op dat arbeidsjurist Marc De Vos, directeur van Itinera en zetelend in de Hoge Raad voor de Werkgelegenheid, nog steeds verwijst naar leeftijdsbarema's, hoewel die op sectoraal niveau al sinds 2009 zijn afgevoerd, en nu ook verdwijnen voor het nationaal minimumloon. Lonen zijn nu gekoppeld aan ervaring, omdat ervaring gekoppeld is aan productiviteit. Dat is klassieke arbeidseconomie.

Als werknemers een hoogtepunt van productiviteit kennen, dan ligt dit waarschijnlijk niet op 65 jaar. De productiviteitscurve is wat men noemt concaaf: een bult. Daarom zijn de anciënniteitstrappen beperkt in de tijd. Er is naar mijn weten geen enkele sectorale cao waarin een werknemer die op z'n twintigste anciënniteit begint te sprokkelen, na 25 jaar, dus halverwege de veertiger jaren, nog een anciënniteitsverhoging geniet in dezelfde functie. Voor wie later instroomt kan dit uiteraard wel, net door het afschaffen van de leeftijdsdiscriminatie, maar bij een verandering van functie of sector wordt de teller eerst weer op nul gezet. De extra's om op gelijke hoogte te komen met leeftijdsgenoten met meer anciënniteit, moeten dan individueel onderhandeld worden. Dit is al bij al een behoorlijk liberaal systeem, waardoor de stelling dat oudere werknemers te duur zijn, gedateerd lijkt.

Echter, wanneer na de productiviteitspiek de lonen niet dalen, dan is er opnieuw een onevenwicht. Daar zijn een aantal adaptaties voor. Nu is ten eerste het zo dat loondalingen economische fictie zijn. Zelfs in crises zit niemand daarop te wachten (lees Bewley 1999 'Why wages don't fall during a recession'). In dat geval zal de toekomstige meerkost verrekend worden in het loon op het hoogtepunt van de carrière. Dit vereist een grote mate van loyauteit, die kan afgedwongen worden door ontslagbescherming, en eventueel door een gevoel van betrokkenheid. Een tweede aanpassing is het toelaten van enige onderhandelingsmarge zodat het collectief onderhandelde loon de productiviteitsstijging niet langer volgt op een niveau dat na de piek niet kan worden aangehouden - vandaar ook dat de extra verhogingen met de jaren kleiner worden. Een derde aanpassing is het omkeren van de causaliteit loon-productiviteit: men moet investeren in ergonomie, vaardigheden, verantwoordelijkheid, en gezondheid. Zo blijven werknemers langer hun centen waard. Als die adaptaties niet baten, dan moet demotie kunnen worden besproken.

Wat collectieve onderhandelingen doen, zowel voor anciënniteit als bij indexering, is niet het verhogen van de lonen of de loonkost, maar het beperken van de loonspreiding en coördineren van speltheoretische problemen, waarbij een gezamenlijke strategie voor iedereen meer oplevert dan elke individuele nutsmaximalisatie. Zonder een lineair automatisme - zelfs als dat procentueel is - zouden bepaalde werknemers niets krijgen, en andere méér. Collectieve onderhandelingen verankeren de relatieve loonverschillen tussen functies die nodig zijn om voldoende arbeidsinzet te creëren, en ze zorgen voor een gelijkere verdeling onder werknemers aan dezelfde kostprijs voor de werkgevers.

Samengevat: het verband tussen loon en ervaring is natuurlijk, deels ingegeven door toenemende productiviteit, deels door loyauteit. De mate waarin dit collectief onderhandeld wordt beperkt de loonongelijkheid en komt zo tegemoet aan de risicoaversie van werknemers. Het is een beperkte solidariteit binnen een sector, die bijvoorbeeld niet bestaat tussen arbeiders, die zelden anciënniteitsstijgingen krijgen, en bedienden, die een hoger en sneller toenemend loon hebben. Men kan het rechtvaardiger vinden als tussen arbeiders en bedienden, of tussen jongeren en ouderen, meer gelijkheid bestaat, maar dat is een zaak van herverdeling. De overheid kan dat dit voor haar rekening nemen via progressieve belastingen of goedkope leningen aan werknemers die de nodige middelen nog niet ter beschikking hebben. Het sociaal overlegmodel hoeft daarvoor niet in vraag gesteld te worden.

Variance eaten up by extreme means (truncation)

If scales are continuous and limitless, variance and means are two different things. If scales are limited, however, this is not the case: towards the bounds, there will be substantially less variation than toward the center of the scale because of censoring.

The issue arose when we wanted to see whether there was divergence or convergence of job quality in Europe. If the scale was wide, the evolution of the variance would tell this, but if the scale is limited and the average moves towards one of the bounds, the variance will be wrongly considered to indicate convergence.

As a solution, I would compute some kind of one-tail variance on the longest tail if the other is strongly censored, hence assuming the latent distribution is symmetric. I have not seen such a measure yet, but it is easy to calculate.

In a way, it is a measure that should be possible to derive from truncated regression. It would be nice to do that.

Variance eaten up by extreme means (truncation)

If scales are continuous and limitless, variance and means are two different things. If scales are limited, however, this is not the case: towards the bounds, there will be substantially less variation than toward the center of the scale because of censoring.

The issue arose when we wanted to see whether there was divergence or convergence of job quality in Europe. If the scale was wide, the evolution of the variance would tell this, but if the scale is limited and the average moves towards one of the bounds, the variance will be wrongly considered to indicate convergence.

As a solution, I would compute some kind of one-tail variance on the longest tail if the other is strongly censored, hence assuming the latent distribution is symmetric. I have not seen such a measure yet, but it is easy to calculate.

In a way, it is a measure that should be possible to derive from truncated regression. It would be nice to do that.

Why social bargaining?

Much of the research I do centers around social bargaining. Time and time again, social bargaining advocates need to withstand the intuitive logic of perfect competitive markets. Their stance however is obviously biased by self-interest.

I try to sum a few point that in my view are essential in justifying social bargaining.

1. Social bargaining is insider-oriented. It unites workers and companies already employed and functioning. While this implies that often outsiders are forgotten and the government would need to intervene, in most cases they have a shared interest in improving the economy. Politics, because of the majority rule, may changes sides much more often and creates instabilities. When reflecting on, for example, European economic policy established the European monetary area, it is clear many decision have been unwise and had no economic, but rather political ends.
2. There is - in my view - a fallacy in the way we intuitively think about economic decisions. As we see demand and supply curves, we believe companies en employees think in such terms. While to some extent this may be the case, many relations come about by selection: the companies and workers that do not comply to the economic laws are ruled out. The remaining actors either are aware of these laws, or they are too a large extent ignorant of this, which is what I believe is way more common then we would expect. The reason we don't is that people who think about the economy are smart and have models in mind. People that make up the economy don't. This is where social bargaining comes in: shared experience over time may lead to more sensible pay scales, working condition, etc. then one could come up with himself. This is hard to admit, but I'm afraid it is true.
3. Sometimes, having perfect information (but imperfect control) can lead to micro-economically well motivated decisions, which turn out wrong at the macro level. In fact, wages are the best example of such dynamics. Every company would like to minimize costs (remember point 2: they might simply not survive otherwise), and wages are a cost. I am aware that wages should equal marginal productivity, but when marginal productivity goes to zero, so would wages. So when wage have a tendency to go down or, because of market imperfections such as monopsonies, the firm will profit. However, if every firm behaves in this way, aggregate demand drops. Therefore it is better to consider a coördinated pay level. Social bargaining does just that. In addition, for wages, it is accepted that in the medium run productivity adapts to the wage level, not the other way around. If one wants to direct the economy toward capital intensive, innovative industries, this can be done through social bargaining.

Type I and Type II errors

Type I: Ho true -- accept Ha / reject Ho -- try to limit this through minimizing the standard errors on your estimates, estimates should be efficient

Type II: Ha true -- reject Ha / accept Ho -- harder to know, estimates should be more consistent

http://en.wikipedia.org/wiki/Type_I_and_type_II_errors

Joseph E Stiglitz

Academic board progressive economist alliance, and also a Noble Prize winner.

Joe Stiglitz is a very political economist, a rare species nowadays. He started his research in economics with the study of inequality, but also contributed to the economics of market failures and information asymmetry.

I like his explanation of monopoly power of small firms. He showed that even if the market appears to be quite competitive and easy to enter, we may have an implicit kartel in, for instance, grocery stores. Every firm owner knows that if the customer is in the shop, he will not bother and run to the next for a very small price increase. He also knows the next grocer thinks the same, so a price increase is harmless for his business and monopoly profits can be made. This game goes on and distorts markets or creates and inflationary bias. It's fascinating.

Here's a great interview with Joe Stiglitz on the Ezra Klein show: http://www.stitcher.com/podcast/vox/the-ezra-klein-show/e/joseph-stiglitz-on-broken-markets-bad-trade-deals-and-basic-48035656?autoplay=true. (he criticizes the universal basic income in this bite)

Shapiro, C & Stiglitz JE (1984) Equilibrium unemployment as a worker discipline device, AER 74

Modelspecificatie: RESET test

Ramsey's specificatietest (RESET test) onderzoekt of er quadratische of kubieke termen moeten toegevoegd worden aan het model. Het komt neer op een F-test voor de gecombineerde significantie van de coëfficiënten van de toegevoegde voorspelde waarden uit een lineair model.

The Wage Curve

In 1995 publiceerden David Blanchflower en Andrew Oswald The Wage Curve. Daarin vonden ze een quasi universele negatieve relatie tussen de werkloosheid en de lonen. Dit klinkt weinig verbazingwekkend: indien de werkloosheid hoog is, is er een overaanbod aan werknemers, die elkaar onderbieden.

Toch is dit moeilijk te begrijpen vanuit een klassiek supply & demand denkkader. Nemen we een normale dalende vraagcurve en een stijgende aanbodscurve. Het totale aanbod is inelastisch, en bepaalt de werkloosheid (het verschil met het evenwicht). Dan zijn er twee mogelijkheden:

1. De vraag daalt, waardoor het evenwicht zich verplaatst langs de aanbodscurve, en de werkloosheid toeneemt.
2. Men bevindt zich niet in het evenwicht, maar ergens op een punt met een lager loon en boven de aanbodscurve. 

Dit zijn twee eigenaardige posities. In de eerste moeten we een verklaring vinden voor de daling van de vraag. Depreciatie van het kapitaal (uitgestelde investeringen) of technologische achterstand zijn de eerste kandidaten. Naderhand verwachten we echter dat het totale aanbod endogeen is, en zich eveneens zal bijstellen. In het tweede geval is er een imperfecte marktwerking. In het schema bevinden we ons op een punt op of boven de aanbodscurve en onder het equilibrium, waar bij perfecte concurrentie hogere lonen mogelijk zijn. Dit is niet het geval, bijvoorbeeld door beperkte arbeidsmobiliteit, waardoor de werkgever als een monopsonist opereert en louter rekening dient te houden met de (lokale) aanbodscurve. In dit geval kan de werkloosheid als exogeen opgevat worden: neemt de werkloosheid af, dan is er effectief druk om hogere lonen uit te betalen.

Het zou interessant zijn een decompositie te doen van de wage curve volgens het aandeel vraagverschuiving en het aandeel marktimperfectie.

MathJax

To include LaTeX formatting in a blog, one should just load the MathJax script if needed. The example below also loads AMSmath and AMSsymbols, so simple formatting goes easily. Put this on top of the page:

<script src="http://cdn.mathjax.org/mathjax/latest/MathJax.js" type="text/javascript">    
    MathJax.Hub.Config({
        HTML: ["input/TeX","output/HTML-CSS"],
        TeX: { extensions: ["AMSmath.js","AMSsymbols.js"], 
               equationNumbers: { autoNumber: "AMS" } },
        extensions: ["tex2jax.js"],
        jax: ["input/TeX","output/HTML-CSS"],
        tex2jax: { inlineMath: [ ['$','$'], ["\\(","\\)"] ],
                   displayMath: [ ['$$','$$'], ["\\[","\\]"] ],
                   processEscapes: true },
        "HTML-CSS": { availableFonts: ["TeX"],
                      linebreaks: { automatic: true } }
    });
</script>

Andrew Oswald

http://www.andrewoswald.com/

Britse economist met interesse in arbeidseconomie, happiness, etc.

Publiceerde samen met Blanchflower uitgebreid rond de Wage Curve, het negatieve verband tussen werkloosheid en lonen.

The meaning and measurement of wage drift

Meaning

Wage drift is the difference in the growth rate of the actual and (collectively) negotiated pay, as it appears in collective agreements made in multi-employer (branche level) or single-employer (company level) wage negotiations. Collective agreements imply the involvement of worker's

Wage drift is a relevant concept in the context of free wage negotiations and the right for collective bodies to take part in those, representing the members as well as non-members in many cases. When wage drift is close to zero, it indicates that collective bargaining has a large influence on wage setting. This influence may be direct, through high coverage (e.g. high unionization or the extension of agreements) or indirect, through the adoption of the same wage growth in individual negotiations or non-negotiated wage arrangements.

When wage drift is positive (i.e. the actual pay increase is higher than the negotiated pay increase), there are elements beyond negotiated pay that push wages higher. When wage drift is negative, there should be a lack of coverage, as the negotiated pay increase is strictly applicable as a minimum to the workers covered and in stable employment.

Measurement

The wage that is monitored is the wage which has been negotiated. This means that when premiums are negotiated, they should be included in both the measure of the actual wage growth and the contractual wage growth. In many cases, however, only data on the base salary will be available.

We therefore have four measures of wage drift:

• Multi-employer with premiums
• Multi-employer without premiums
• Single-employer with premiums
• Single-employer without premiums

We suspect that the wage drift will be lower and variability in the wage drift will be weaker when measured including single-employers, premiums, or both. The reason for this is that decentralization and negotiations on premiums allows fine tuning and therefor actual pay will more closely correspond to negotiated pay. This will in particular be the case when economic growth is strong.

Two major problems appear when attempting to measure wage drift: there is no good indicator of actual wage growth, and indicators of negotiated pay increases are biased because of the changing composition of the aggregates they represent. The first point is particularly problematic. Comparing labour cost figures as they appear in national accounts with wage surveys reveals the issues with consistency of the former and representativity of the latter. Accountancy tricks and taxation influence labour cost, while very few surveys have enough information to allow branche level analysis. In some countries, notably in Scandinavia and Belgium, public administration is well equipped and provides data that is complete and consistent. It would be interesting to compare national accounts with such a source to evaluate the difference we may expect in other countries as well.

The second point relies on the researcher. If one obtains branche level data for consecutive years, it is possible to correct the negotiated pay increase by estimating the effect of known confounding variables. Some important variables in this respect are age (because of seniority pay increases), and schooling (because of college wage premiums) or occupational composition (technological change). The effect of these variables should be distracted from the observed negotiated pay increase. This is standard practice in wage drift analyses in the Netherlands. An alternative approach is to observe the wage growth for the 10th percentile of the workers that remain in stable employment. This group, however, differs strongly from the workforce at any moment in time, even at the lower percentile, or may especially so, because of the reasons just outlined.

Explanations

As noted before, coverage is an important explanatory variable in establishing the link between actual pay and negotiated and contractual wages.

Minimum wages and marginal profit

In 1946, Stigler did not believe minimum wages could be any good.

Wages represent marginal profit, so imposing a minimum wages equals increasing marginal productivity, or discharging unproductive employees.

It should be noted that a discharged employee can always go to a sector with a lower minimum wage, until there is only the national minimum wage or migration left, in which case unemployment because likelier.

But my thoughts are the following: is it not a much simpler explanation to consider the market as imperfect. In a supply and demand framework, one would be to the left of the equilibrium. Employers might hire more employees in order to optimize profit, but for some reason they don't do it. They all prefer to higher a few workers less, as if it was a collusive decision to keep a pool of workers unemployed, reasoning unemployment will increase their value (schooling, reduce aspirations, increase motivation, etc.). Certainly, as for many companies, the pool of possible employees is actually well known. They are aware of the fact that the emptier the pool, the higher the likelihood that the pre-estimated productivity will be wrong. Therefor, they rather select one worker when there are 20 more available in a town, then when it is the last one.

As a result, increasing the minimum wage literally changes nothing. Well, it does increase the labour supply and puts some limit on labour demand, but it may well be the case that from the point out of equilibrium one was in, the minimum wage is payable and not even touching marginal productivity, which moves with the labour demand curve. Actually, this should be the case. We know what there is to prove: minimum wages do not alter employment. The only question remaining is why the equilibrium is not regarded as an optimal position.

Stigler refers to this in the paragraph on Employer wage determination. Arguably, multi-employer collective agreements speak in favour of this option. However, he believes this wage cannot be above marginal productivity. Again, this might be wrong: there can be wage compression within firms or industries, by paying high-wage earners below marginal productivity, which is quite possible for the very same reasons as stated above. Don't these employees start their own business instead to obtain a higher income? It seems that risk aversion acts as a barrier to such movements.

Industry classifications

International Standard Industry Classification (ISIC)

This is the classification used by the United Nations.

• http://unstats.un.org/unsd/cr/registry/isic-4.asp
• http://unstats.un.org/unsd/cr/registry/regdnld.asp?Lg=1 (downloadable)
• http://en.wikipedia.org/wiki/International_Standard_Industrial_Classification

Statistical Classification of Economic Activities in the European Community (NACE)

This is the classification used in the European Union.

• http://en.wikipedia.org/wiki/Statistical_classification_of_economic_activities_in_the_European_Community

Country database

The link below gives access to a database with country names and groupings by institution or from theory.

Database

LaTeX document structure

Latex means structure. An interesting application is to use separate tex-files for part of the document.

For example, in the preamble I put.
\input{preamble.tex}
% \input{languageA.tex}
\input{languageB.tex}
\input{locationA.tex}
% \input{locationB.tex}

The preamble file has all specifications I need to set up a regular document.
The language files hold some settings that are - obviously - language dependent. Say, one in Dutch, one in English, et cetera.
The location files hold paths that may be different on the work and home computer - even though I always use the same files on dropbox.

Then the document starts. The chapters or paragraphs can be replaced by separate files as well using either \input{} or \include{}. The former can be nested and just copies the contents of the file inside the document. The latter inserts a \clearpage as well and allows for a limitation of the files to include by using \inputonly{} in the preamble. Also, it does not return an error if the file does not exist.