اثرات بازار کار غرامت غیردستمزدی

Contrary to the argument that non-wage compensation is a tax on labor reducing employment, we find that employment may increase in response to an increased demand for benefits (a decreased cost of providing benefits or increased government-mandated benefit levels), under the assumption of strong cross-economies of scale. When there are strong cross-diseconomies of scale, employment and hours both decrease. The secular increase in employer-provided insurance and the growth in U.S. employment may well reflect the role of cross-economies of scale, which seems to exist in larger firms with lower marginal non-wage benefit costs.

Non-wage compensation measured as a percentage of total labor compensation has risen significantly in the United States and other developed countries over the past few decades (Hart et al., 1988). For example, in the firms surveyed by the Chamber of Commerce, fringe benefits grew from 16.0% of total compensation in 1951 to 31.6% in 1994 (see Table 1). Two fringe benefit items have experienced particularly large increases over this period: Social Security has increased from 1.1 to 5.5% of total compensation, while the insurance component (life, health, and dental premiums; death benefits) has risen from 1.1 to 8.4%.1 Existing economic analyses suggest that, to the extent that these non-wage payments are quasi-fixed costs, such increases in fringe benefits should reduce employment.2 The argument is that non-wage compensation is a tax on labor that increases total labor cost inducing employers to reduce employment.

We have conducted a market level analysis to evaluate the effects of increased benefits on employment, hours of work and the wage rate. Our model facilitates an analysis of how employment, hours of work and the wage change in response to an increase in the demand for benefits, to a decrease in the cost of providing benefits, or to an increase in government-mandated benefit levels. Our analysis shows that employment may increase, rather than decrease, in response to increased non-wage benefits. Our predictions are found to depend critically on cross-scale effects. When there are strong cross-economies of scale, employment increases in response to an increased demand for benefits, to a decreased cost of providing benefits, or to increased government-mandated benefit levels. Furthermore, hours of work and the wage both decrease. If there are zero or small cross-economies of scale, employment and benefits increase, but no clear predictions emerge either for hours or for the wage. When there are strong cross-diseconomies of scale, employment and hours both decrease, but the effects on benefits and the wage are ambiguous. If there are weak cross-diseconomies, the model generates ambiguous predictions.