PhD defence: Income Inequality: the Role of Institutions, Firms and Neighborhoods

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On Friday 14 June at 12.15 hrs, Emiel van Bezooijen will defend his PhD thesis Essays on Income Inequality. The Role of Institutions, Firms and Neighborhoods.

For his thesis, Emiel van Bezooijen conducted three empirical studies related to the topic of income inequality.

Increase in minimum wage for 20-22 year olds reduces income inequality


The first study focuses on the minimum wage, an important policy tool that combats income inequality at the lower end of the wage distribution. He investigated the effect of an increase in the Dutch youth minimum wage for 20-22-year-olds in 2017 on employment and on the wages of these age groups. He shows that the increase has had a positive effect on the wages of 20-22-year-olds with low incomes without having a negative effect on employment for these age groups. Thus, the increase in the youth minimum wage has reduced income inequality among 20-22-year-olds.

Dutch companies have wage setting power


In his second research, van Bezooijen focused on the wage setting power of Dutch companies. Wage setting power gives companies the ability to pay employees a wage that is lower than the revenue generated by an employee, without losing a significant portion of their employees. The greater the wage setting power of companies, the greater the difference between the wage and the turnover generated that a company can afford. Based on his research, Van Bezooijen concludes that Dutch companies have this wage setting power. He quantifies how much wage setting power Dutch companies possess and investigated the extent to wage setting power differs between different sectors and groups of employees.

Companies can afford to pay lower wages to women than to men although they generate the same amount of turnover, which can contribute to the gender pay gap. In addition, companies also have relatively more wage power over employees with the highest and lowest paid jobs. For middle-income earners, the possible difference between the turnover generated and the remuneration for it is smaller. Strong wage-setting power over low-wage workers could increase income inequality, while strong wage-setting power over high-wage workers could limit income inequality.

Influence of neighbourhood characteristics on educational outcomes of refugee children


For the third study, Van Bezooijen looked at the influence of the characteristics of the neighbourhood in which someone grows up on results in education, an important factor for later prospects on the labour market. In doing so, he focused on refugee children (a group in society that often experiences strong barriers in terms of integration into the labour market) and investigated the influence of two neighbourhood characteristics: the proportion of people with the same ethnic background as the refugee children and the incomes of these people.

Educational outcomes of refugee children are influenced by the proportion of local residents with the same ethnic background as the refugee child (co-ethnic concentration). The effect of a higher co-ethnic concentration depends on the average income of local residents with the same ethnic background as the refugee-child (co-ethnic incomes). In this context, one could speak of 'ethnic social capital' that can be bigger or smaller. A higher co-ethnic concentration increases the chance that a refugee child will obtain a HAVO/VWO diploma or enrol in higher education if co-ethnic incomes are relatively high, but decreases this chance if co-ethnic incomes are relatively low.

Emiel van Bezooijen is scientific employee at the CPB Netherlands Bureau for Economic Policy Analysis and PhD student at the Utrecht University School of Economics (U.S.E.).

Start date and time
End date and time
Location
Utrecht University Hall, Domplein 29 Utrecht and online
PhD candidate
E.F.S. van Bezooijen
Dissertation
Essays on Income Inequality. The Role of Institutions, Firms and Neighborhoods.
PhD supervisor(s)
Prof. A.M. Salomons
Co-supervisor(s)
Dr. A.W. van den Berge