Showing papers by "Robert E. Lucas published in 1998"

The Rise in Union Wage Premia in South Africa

Abstract: The change in the premia earned by African, urban, male, union members, relative to earnings of other, comparable workers in South Africa, between 1985 and 1993, is examined using two independent, national, sample surveys. The interval from 1985 to 1993 was part of a period of rapidly rising union membership for African workers, following the Industrial Conciliation Amendment Act of 1979 which extended the definition of an employee to encompass African workers for collective bargaining. Membership now reported by the unions suggests one of the highest rates of unionization of wage employees among the developing countries. Meanwhile, the simple average earnings of African employees has risen substantially, in real terms, despite extremely high rates of unemployment. In this context, our sample data show that the premia in mean earnings of African urban, male, union members relative to other African, urban male regular employees rose 18.5 percent from 1985 to 1993. Clearly this rise could reflect changes in composition of regular employees and of union membership in particular during this episode of rapidly rising membership. Four apporaches to estimation of the union premia are applied to examine this possibility: earnings equations whith a union dummy; separate earnings regimes for members and non-members; a switching model with separate earnings regimes and endogenous membership; and a multinomial logit model which extends the standard switching model to encompass sample selection into employment as well as into regular employment among the employed. A series of nesting hypotheses are conducted to explore the significance of differences between these approaches. The levels of estimated premia differ widely across the various approaches. However, there is uniform agreement that the union earnings premia, based on either the mean observed characteristics of union or non-union members, had risen by 1993 and that the change in measured characteristics of union and non-union members between sample years actually tended to diminish the premium. This suggests that the observed rise in union premium must either reflect an increase in rents to union members as compared to identical non-member workers or some change in the composition of union members which we are unable to detect in our data.

Small manufacturing plants, pollution, and poverty: new evidence from Brazil and Mexico

Abstract: The authors use new data from Brazil and Mexico to analyze relationships linking economic development, the size distribution of manufacturing plants, and exposure to industrial pollution. For lack of data, prior work in this field has been limited largely to water pollution and medium-size plants. This study examines air pollution and encompasses small plants (with 1 to 20 employees) as well as medium-size and large plants. Four main questions are addressed (with answers from plant-level data): a) Are small plants more pollution-intensive than large facilities? Clearly, yes. b) Are there proportionately more small plants in low-income regions? The answer is yes, in thousands of Brazilian municipalities. Small plants dominate poor regions and are a relatively low source of employment in high-income areas. c) Is industry more pollution-intensive in low-income regions? In Brazil, yes. For each municipality, the authors estimate the share of the six most pollution-intensive ("dirty") sectors in total industrial activity. They find that the dirty-sector share declines continuously with increases in municipality income per capita. d) Do poor areas suffer more than wealthy areas from industrial air pollution? Paradoxically, no. The risk of mortality from industrial air pollution is much higher in the top two income deciles among Brazil's municipalities and the great majority of projected deaths is attributable to emissions from large plants.The scale of large-plant emissions dominates all other factors. Lower-income areas suffer much less from industrial air pollution in Brazil, despite the greater emissions-intensity of smaller plants and the prevalence of smaller plants in lower income areas.