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The paper aims to introduce the special issue of IJM, a collection of papers that were originally presented at the 88^th Applied Econometrics Association Conference.

Provides a general outline of the focus of the issue.

The conference papers aimed to stimulate discussion on the “Econometrics of labour demand”. They focus on aspects of HRM, including incentive pay schemes, job satisfaction, promotion and social concerns.

The paper outlines the development of personnel economics over the past 25 years and introduces the papers in the special issue of IJM.

The purpose of this paper is to introduce this special issue on work organization, performance and health.

The authors provide a general review of the literature and describe the main findings of the papers appearing in this special issue.

This issue provides new evidence regarding the impact of work organization (essentially defined in terms of payment methods, teamwork, workforce age structure and labour contracts) on performance (measured through employment, productivity and sickness absenteeism indicators). It also sheds more light on the determinants of workers’ health by gender, with particular attention to working conditions and mobbing.

The papers collected in this special issue provide some fine examples of recent work at the crossroads of health and personnel economics.

This paper aims to introduce the contributions in this special issue on “Unemployment, innovation and R&D”, and provide a brief outline of the international conference organised by the Applied Econometrics Association on “Policies against Unemployment”.

The paper is descriptive in nature.

The papers presented in this special issue shed some light on the key determinants of unemployment levels, and help to identify policies that can tackle unemployment successfully.

Some radically different approaches to the issue of tackling unemployment are presented. The special issue, of which this paper is a part, provides further new evidence on the impact of innovation and R&D on employment/unemployment and unemployment persistence.

The purpose of this paper is to evaluate empirically the relationship between workforce age, wage and productivity at the firm level.

Panel data techniques are applied to Belgian data on private sector workers and firms during 1999‐2006.

Results (robust to various potential econometric issues, including unobserved firm heterogeneity, endogeneity and state dependence) suggest that older workers are significantly less productive than prime age and young workers. In contrast, the productivity of middle‐aged workers is not found to be significantly different compared to young workers. Findings further indicate that average hourly wages within firms increase significantly with workers’ age. Overall, this leads to the conclusion that young (older) workers appear to be “underpaid” (“overpaid”).

These findings contribute to the growing literature on how the workforce age structure affects productivity and wages.

This paper analyses the magnitude and sources of the firm‐size wage premium in the Belgian private sector.

Using a unique matched employer‐employee data set, our empirical strategy is based on the estimation of a standard Mincer wage equation. We regress individual gross hourly wages (including bonuses) on the log of firm‐size and insert step by step control variables in order to test the validity of various theoretical explanations.

Results show the existence of a significant and positive firm‐size wage premium, even when controlling for many individual characteristics and working conditions. A substantial part of this wage premium derives from the sectoral affiliation of the firms. It is also partly due to the higher productivity and stability of the workforce in large firms. Yet, findings do not support the hypothesis that large firms match high skilled workers together. Finally, results indicate that the elasticity between wages and firm‐size is significantly larger for white‐collar workers and comparable in the manufacturing and the service sectors.

Unfortunately, we are not able to control for the potential non‐random sorting process of workers across firms of different sizes.

This paper is one of the few to test the empirical validity of recent hypotheses (e.g. productivity, job stability and matching of high skilled workers). It is also the first to analyse the firm‐size wage premium in the Belgian private sector.

This paper introduces the Special Issue on competitive versus non‐competitive wage differentials, a collection of papers originally presented at the 79th Conference of the Applied Econometrics Association held in Brussels in May 2002.

This paper aims to measure and analyse the wage gap between male part‐ and full‐timers in the private sector of six European countries, i.e. Belgium, Denmark, Ireland, Italy, Spain, and the UK.

Using a unique matched employer‐employee data set providing harmonised information on six European countries (the 1995 European Structure of Earnings Survey), the empirical strategy is based on the estimation of standard Mincer wage equations and the Oaxaca and Ransom wage gap decomposition technique. First, individual gross hourly wages are regressed on a set of human capital variables only and second, a wider range of control variables related to e.g. occupation, sector of activity, firm size, and level of wage bargaining is inserted.

The study finds that the raw gap in hourly gross pay amounts to 16 per cent of a male part‐timer's wage in Spain, to 24 per cent in Belgium, to 28 per cent in Denmark and Italy, to 67 per cent in the UK and to 149 per cent in Ireland. Human capital differences explain between 31 per cent of the observed wage gap in the UK and 71 per cent in Denmark. When the whole set of explanatory variables is included in the wage regressions, a much larger part of the gap is explained by differences in observed characteristics (except in Italy).

Unfortunately, the paper is not able to correct for workers' potential self‐selection into part‐time and full‐time employment. Results suggest that policy initiatives to promote lifelong learning and training are of great importance to help part‐timers catch up with full‐timers in terms of human capital. Moreover, except for Italy, they point to a persisting problem of occupational and sectoral segregation between men working part‐time and full‐time which requires renewed policy attention.

Economic theory advances a number of reasons for the existence of a wage gap between part‐time and full‐time workers. Empirical work has concentrated on the wage effects of part‐time work for women. For men, much less empirical evidence exists, mainly because of lacking data. This paper therefore makes a valuable contribution. The more so given that (to the best of our knowledge) there exists no cross‐national evidence with respect to men's part‐time wage penalty.

The purpose of this paper is to examine the impact of wage dispersion on sickness absenteeism observed in Belgian firms.

The authors use detailed linked employer-employee panel data for the period 1999-2006 that allow the authors to compute a conditional wage dispersion indicator following the Winter-Ebmer and Zweimüller (1999) methodology and to estimate the relationship between sickness absenteeism and wage dispersion while controlling for time-invariant workplace characteristics.

The authors find a positive and hump-shaped relationship between intra-firm wage dispersion and sickness absenteeism, the turning point of this relation being extremely high. In addition, the magnitude of the influence of wage dispersion on sickness absenteeism is found to be stronger in firms employing a larger share of blue-collar workers.

The results could therefore suggest that wage dispersion, suggestive of larger pay-for-performance mechanisms, decreases worker satisfaction and the workplace climate in general. Only a minority of workers, who are less sensitive to equity and cohesion considerations, would be less absent as pay-for-performance increases.

While numerous approaches analyse the link between wage dispersion and firm productivity, very few studies we are aware of are devoted to the relationship between wage dispersion and sickness absenteeism. Yet, the outcomes in terms of productivity and sickness absenteeism may be different. Furthermore, the influence of wage dispersion on sickness absenteeism does not seem unambiguous from a theoretical point of view. To the authors knowledge, it is the first time that this relation is analysed with Belgian data.