IDEAS home Printed from https://ideas.repec.org/p/ags/umrfwp/14347.html
   My bibliography  Save this paper

The Grocery Stores' Wage Distribution: A Semi-Parametric Analysis Of The Role Of Retailing And Labor Market Institutions

Author

Listed:
  • Budd, John W.
  • McCall, Brian P.

Abstract

How and why has the wage distribution in U.S. grocery stores changed between 1984 and 1994? Unlike other industries in the time period, the important change in the wage distribution is not rising inequality, but the real wages fell across the entire wage distribution. Changes in labor market institutions explain more than half of the change in the wage distribution in grocery stores. Specifically, the decline in the real value of the minimum wage explains little of the decline in the mean real wage but much of the change in the shape of the distribution between 1984 and 1994, and 95 percent of the decline at the lowest 10th percentile. The decline in union coverage in grocery stores and the narrowing of the union-nonunion wage gap explains much of the decline above the 25th percentile. A third institutional change, the use of part-time employees, is not associated with the changes in grocery industry wage outcomes. One might think that the major changes in operation and technologies that occurred during this time period are at least contributing factors, but we find quite the contrary. If average store size, weekly operating hours, and the use of scanning technology had remained at their 1984 levels, the real wage decline would have been even greater than that actually seen, and for the entire wage distribution. Changes in grocery retailing prevented and even greater decline in real wages. Again unlike many other industries, skill-biased technological change does not appear important for grocery industry wage outcomes. The basis of our analysis is a statistical technique which combines nonparametric kernel density estimation with a parametric re-weighting, applied to Current Population Survey data supplemented with secondary data sources on the Grocery industry.

Suggested Citation

  • Budd, John W. & McCall, Brian P., 1999. "The Grocery Stores' Wage Distribution: A Semi-Parametric Analysis Of The Role Of Retailing And Labor Market Institutions," Working Papers 14347, University of Minnesota, The Food Industry Center.
    • Handle: RePEc:ags:umrfwp:14347
    DOI: 10.22004/ag.econ.14347
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/14347/files/tr99-04.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.14347?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    2. Chinhui Juhn, 1999. "Wage Inequality and Demand for Skill: Evidence from Five Decades," ILR Review, Cornell University, ILR School, vol. 52(3), pages 424-443, April.
    3. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
    4. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    5. John Dinardo & Thomas Lemieux, 1997. "Diverging Male Wage Inequality in the United States and Ganada, 1981–1988: Do Institutions Explain the Difference?," ILR Review, Cornell University, ILR School, vol. 50(4), pages 629-651, July.
    6. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
    7. Budd, John W. & McCall, Brian P., 1999. "Decomposing Changes In Retail Food Wage Distributions, 1983-1998: A Semi-Parametric Analysis," Working Papers 14327, University of Minnesota, The Food Industry Center.
    8. repec:fth:prinin:399 is not listed on IDEAS
    9. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
    10. David S. Lee, 1998. "Wage Inequality in the U.S. during the 1980s: Rising Dispersion or Falling Minimum Wage?," Working Papers 778, Princeton University, Department of Economics, Industrial Relations Section..
    11. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    12. David S. Lee, 1999. "Wage Inequality in the United States During the 1980s: Rising Dispersion or Falling Minimum Wage?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 977-1023.
    13. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    14. Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June.
    15. Kinsey, Jean D. & Senauer, Benjamin & King, Robert P. & Phumpiu, Paul F., 1996. "Changes In Retail Food Delivery: Signals For Producers, Processors And Distributors," Working Papers 14352, University of Minnesota, The Food Industry Center.
    16. David S. Lee, 1998. "Wage Inequality in the U.S. during the 1980s: Rising Dispersion or Falling Minimum Wage?," Working Papers 778, Princeton University, Department of Economics, Industrial Relations Section..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Budd, John W. & McCall, Brian P., 1999. "Decomposing Changes In Retail Food Wage Distributions, 1983-1998: A Semi-Parametric Analysis," Working Papers 14327, University of Minnesota, The Food Industry Center.
    2. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," NBER Chapters,in: Standards, Patents and Innovations National Bureau of Economic Research, Inc.
    3. Richard J. Butler & Gene Lai, 2023. "Insurance wage-offer disparities by gender: random forest regression and quantile regression evidence from the 2010–2018 American Community Surveys," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 48(2), pages 192-229, September.
    4. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," NBER Chapters, in: Standards, Patents and Innovations, National Bureau of Economic Research, Inc.
    5. Cho, Seung Jin & Lee, Jun Yeong & Winters, John V., 2020. "COVID-19 Employment Status Impacts on Food Sector Workers," ISU General Staff Papers 202006080700001107, Iowa State University, Department of Economics.
    6. Richard Volpe, 2014. "Supercenters, Unionized Labor, and Performance in Food Retail," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(2), pages 325-355, April.
    7. Busso, Matias & DiNardo, John & McCrary, Justin, 2009. "New Evidence on the Finite Sample Properties of Propensity Score Matching and Reweighting Estimators," IZA Discussion Papers 3998, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Budd, John W. & McCall, Brian P., 1999. "Decomposing Changes In Retail Food Wage Distributions, 1983-1998: A Semi-Parametric Analysis," Working Papers 14327, University of Minnesota, The Food Industry Center.
    2. Dennis J. Snower, 1998. "Causes of changing earnings inequality," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 69-133.
    3. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    4. Paolo Naticchioni & Andrea Ricci & Emiliano Rustichelli, 2007. "Wage Structure, Inequality And Skill-Biased Change: Is Italy An Outlier?," Quaderni del Dipartimento di Economia, Finanza e Statistica 38/2007, Università di Perugia, Dipartimento Economia.
    5. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    6. Barrett, Alan & FitzGerald, John & Nolan, Brian, 2002. "Earnings inequality, returns to education and immigration into Ireland," Labour Economics, Elsevier, vol. 9(5), pages 665-680, November.
    7. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    8. Lawrence F Katz, 1998. "Reflections on US Labour Market Performance," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    9. Wolff, Edward N., 2002. "The impact of IT investment on income and wealth inequality in the postwar US economy," Information Economics and Policy, Elsevier, vol. 14(2), pages 233-251, June.
    10. Wolff, Edward N., 2009. "Are computers driving real wages down?," Information Economics and Policy, Elsevier, vol. 21(3), pages 211-228, August.
    11. Handel, Michael J., 2003. "Implications of Information Technology for Employment, Skills, and Wages: A Review of Recent Research," MPRA Paper 80077, University Library of Munich, Germany.
    12. Leora Friedberg, 2003. "The Impact of Technological Change on Older Workers: Evidence from Data on Computer Use," ILR Review, Cornell University, ILR School, vol. 56(3), pages 511-529, April.
    13. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    14. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers 2095, Harvard - Institute of Economic Research.
    15. R. D. Plotnick & E. Smolensky & E. Evenhouse & S. Reilly, "undated". "The Twentieth Century Record of Inequality and Poverty in the United States," Institute for Research on Poverty Discussion Papers 1166-98, University of Wisconsin Institute for Research on Poverty.
    16. Cappellari, Lorenzo, 2000. "The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?," ISER Working Paper Series 2000-41, Institute for Social and Economic Research.
    17. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    18. A. Dupuy, 2007. "Will the skill-premium in the Netherlands rise in the next decades?," Applied Economics, Taylor & Francis Journals, vol. 39(21), pages 2723-2731.
    19. Wasmer, Etienne, 2001. "Between-group Competition in the Labor Market and the Rising Returns to Skill: US and France 1964-2000," IZA Discussion Papers 292, Institute of Labor Economics (IZA).
    20. Thomas Lemieux, 2010. "What Do We Really Know About Changes in Wage Inequality?," NBER Chapters, in: Labor in the New Economy, pages 17-59, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Agribusiness; Labor and Human Capital;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:umrfwp:14347. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/rfumnus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.