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Beyond Degrees: Longer Term Outcomes Of The Kalamazoo Promise, Brad J. Hershbein, Isabel Mcmullen, Brian Pittelko, Bridget F. Timmeney
Beyond Degrees: Longer Term Outcomes Of The Kalamazoo Promise, Brad J. Hershbein, Isabel Mcmullen, Brian Pittelko, Bridget F. Timmeney
Upjohn Institute Working Papers
We estimate the effects on workforce and location outcomes of the Kalamazoo Promise, a generous, place-based college scholarship. Drawing upon administrative unemployment insurance wage records merged with individual-level education data, we identify Promise effects by comparing eligible to ineligible graduates before and after the Promise’s initiation. We supplement this quantitative analysis with surveys and interviews. Despite earlier research showing that the Kalamazoo Promise substantially increased degree attainment, we find little evidence that the program affected average earnings within 10 years of high school graduation. However, the Kalamazoo Promise may have increased the likelihood of eligible graduates having earnings, within Michigan, …
Impacts Of The Covid-19 Pandemic And The Cares Act On Earnings And Inequality, Guido Matias Cortes, Eliza C. Forsythe
Impacts Of The Covid-19 Pandemic And The Cares Act On Earnings And Inequality, Guido Matias Cortes, Eliza C. Forsythe
Upjohn Institute Working Papers
Using data from the Current Population Survey (CPS), we show that the Covid-19 pandemic led to a loss of aggregate real labor earnings of more than $250 billion between March and July 2020. By exploiting the panel structure of the CPS, we show that the decline in aggregate earnings was entirely driven by declines in employment; individuals who remained employed did not experience any atypical earnings changes. We find that job losses were substantially larger among workers in low-paying jobs. This led to a dramatic increase in inequality in labor earnings during the pandemic. Simulating standard unemployment benefits and Unemployment …
Job Search And Hiring With Two-Sided Limited Information About Workseekers’ Skills, Eliana Carranza, Robert Garlick, Kate Orkin, Neil Rankin
Job Search And Hiring With Two-Sided Limited Information About Workseekers’ Skills, Eliana Carranza, Robert Garlick, Kate Orkin, Neil Rankin
Upjohn Institute Working Papers
We present field experimental evidence that limited information about workseekers’ skills distorts both firm and workseeker behavior. Assessing workseekers’ skills, giving workseekers their assessment results, and helping them to credibly share the results with firms increases workseekers’ employment and earnings. It also aligns their beliefs and search strategies more closely with their skills. Giving assessment results only to workseekers has similar effects on beliefs and search, but smaller effects on employment and earnings. Giving assessment results only to firms increases callbacks. These patterns are consistent with two-sided information frictions, a new finding that can inform design of information-provision mechanisms.
Medical Innovation, Education, And Labor Market Outcomes Of Cancer Patients, Sung-Hee Jeon, R. Vincent Pohl
Medical Innovation, Education, And Labor Market Outcomes Of Cancer Patients, Sung-Hee Jeon, R. Vincent Pohl
Upjohn Institute Working Papers
Innovations in cancer treatment have lowered mortality, but little is known about their economic benefits. We assess the effect of two decades of improvements in cancer treatment options on the labor market outcomes of breast and prostate cancer patients. In addition, we compare this effect across cancer patients with different levels of educational attainment. We estimate the effect of medical innovation on cancer patients’ labor market outcomes employing tax return and cancer registry data from Canada and measuring medical innovation by using the number of approved drugs and a quality-adjusted patent index. While cancer patients are less likely to work …
Health Shocks, Human Capital, And Labor Market Outcomes, Francisco Parro, R. Vincent Pohl
Health Shocks, Human Capital, And Labor Market Outcomes, Francisco Parro, R. Vincent Pohl
Upjohn Institute Working Papers
Health, human capital, and labor market outcomes are linked though complex connections that are not fully understood. We explore these links by estimating a flexible yet tractable dynamic model of human capital accumulation in the presence of health shocks using administrative data from Chile. We find that (i) human capital mitigates the negative labor market effects of health events, (ii) these alleviating effects operate through channels involving occupational choice, the frequency of exposure to health events, and access to health care, and (iii) the effect of health shocks on labor market outcomes is heterogeneous across industries and types of diagnoses.
Veterans In Workforce Development: Participation And Labor Market Outcomes, Colleen Chrisinger
Veterans In Workforce Development: Participation And Labor Market Outcomes, Colleen Chrisinger
Upjohn Institute Working Papers
This paper compares the employment status and earnings of veterans and nonveterans following their receipt of public workforce development services in Washington State during the years 2002–2012. It also describes workforce program participation patterns for veterans and nonveterans to determine if veterans have equal or prioritized access to key programs, where prioritization is required by law. Based on tabulations and propensity score weighted regressions using administrative data, the results indicate slightly lower levels of participation by veterans than nonveterans in two major workforce programs (Wagner-Peyser and the Workforce Investment Act Adult program), and high participation in veteran-specific programs (Disabled Veterans …
Nafta And The Gender Wage Gap, Shushanik Hakobyan, John Mclaren
Nafta And The Gender Wage Gap, Shushanik Hakobyan, John Mclaren
Upjohn Institute Working Papers
Using U.S. Census data for 1990–2000, we estimate effects of NAFTA on U.S. wages, focusing on differences by gender. We find that NAFTA tariff reductions are associated with substantially reduced wage growth for married blue-collar women, much larger than the effect for other demographic groups. We investigate several possible explanations for this finding. It is not explained by differential sensitivity of female-dominated occupations to trade shocks, or by household bargaining that makes married female workers less able to change their industry of employment than other workers. We find some support for an explanation based on an equilibrium theory of selective …
The Effects Of Increasing The Minimum Wage On Prices: Analyzing The Incidence Of Policy Design And Context, Daniel Macdonald, Eric Nilsson
The Effects Of Increasing The Minimum Wage On Prices: Analyzing The Incidence Of Policy Design And Context, Daniel Macdonald, Eric Nilsson
Upjohn Institute Working Papers
We analyze the price pass-through effect of the minimum wage and use the results to provide insight into the competitive structure of low-wage labor markets. Using monthly price series, we find that the pass-through effect is entirely concentrated on the month that the minimum wage change goes into effect, and is much smaller than what the canonical literature has found. We then discuss why our results differ from that literature, noting the impact of series interpolation in generating most of the previous results. We then use the variation in the size of the minimum wage change to evaluate the competitive …
The Labor Market Consequences Of Regulating Similar Occupations: The Licensing Of Occupational And Physical Therapists, Jing Cai, Morris M. Kleiner
The Labor Market Consequences Of Regulating Similar Occupations: The Licensing Of Occupational And Physical Therapists, Jing Cai, Morris M. Kleiner
Upjohn Institute Working Papers
This study shows the influence of occupational licensing on two occupations that provide similar services: occupational therapists and physical therapists. Most of the tasks for these two occupations differ, but several jobs overlap, and individuals in both occupations could have legal jurisdiction over these tasks. We empirically examine how these two occupations interact with one another in the labor market on wage determination and employment. Unlike previous studies, our study examines two occupations that are female dominated both within the professions and among its leadership. Our results show that occupational licensing can raise the wages of members of both occupations, …
Effects Of The Affordable Care Act On Part-Time Employment: Early Evidence, Marcus O. Dillender, Carolyn J. Heinrich, Susan N. Houseman (Corresponding Author)
Effects Of The Affordable Care Act On Part-Time Employment: Early Evidence, Marcus O. Dillender, Carolyn J. Heinrich, Susan N. Houseman (Corresponding Author)
Upjohn Institute Working Papers
The Affordable Care Act (ACA) requires employers with at least 50 full-time-equivalent employees to offer “affordable” health insurance to employees working 30 or more hours per week. If employers do not comply with the mandate, they may face substantial financial penalties. Employers can potentially circumvent the mandate by reducing weekly hours below the 30-hour threshold or by using other nonstandard employment arrangements (direct-hire temporaries, agency temporaries, small contractors, and independent contractors). We examine the effects of the ACA on short-hours, part-time employment. Using monthly CPS data, we estimate that the ACA resulted in an increase in low-hours, involuntary part-time employment …
Testing The Heckscher-Ohlin-Vanek Theory With A Natural Experiment, Assaf Zimring
Testing The Heckscher-Ohlin-Vanek Theory With A Natural Experiment, Assaf Zimring
Upjohn Institute Working Papers
This paper uses the historical episode of the near-elimination of commuting from the West Bank into Israel, which caused a large and rapid expansion of the local labor force in the West Bank, to test the predictions of the Heckscher-Ohlin-Vanek (HOV) mode of trade. I use variation between districts in the West Bank to test these predictions, and find strong support for them: Wage changes were not correlated with the size of the shock to the district labor force (Factor Price Insensitivity); Districts that received larger influx of returning commuters shifted production more towards labor intensive industries (Rybczynski effect); And …
The Rise Of Domestic Outsourcing And The Evolution Of The German Wage Structure, Deborah Goldschmidt, Johannes Schmieder
The Rise Of Domestic Outsourcing And The Evolution Of The German Wage Structure, Deborah Goldschmidt, Johannes Schmieder
Upjohn Institute Working Papers
The nature of the relationship between employers and employees has been changing over the last three decades, with firms increasingly relying on contractors, temp agencies, and franchises rather than hiring employees directly. We investigate the impact of this transformation on the wage structure by following jobs that are moved outside of the boundary of lead employers to contracting firms. For this end we develop a new method for identifying outsourcing of food, cleaning, security, and logistics services in administrative data using the universe of social security records in Germany. We document a dramatic growth of domestic outsourcing in Germany since …
Military Retention Incentives: Evidence From The Air Force Selective Reenlistment Bonus, Justin Joffrion, Nathan Wozny
Military Retention Incentives: Evidence From The Air Force Selective Reenlistment Bonus, Justin Joffrion, Nathan Wozny
Upjohn Institute Working Papers
The limited lateral entry and rigid pay structure for U.S. military personnel present challenges in retaining skilled individuals who have attractive options in the civilian labor market. One tool the services use to address this challenge is the Selective Reenlistment Bonus (SRB), which offers eligible personnel with particular skills a substantial cash bonus upon reenlistment. However, the sequential nature of the bonus offer and reenlistment process limits the ability to adjust manpower quickly, raising interest in research that estimates the effect of the SRB on retention. While this literature has acknowledged challenges including potential endogeneity of bonus levels, attrition, and …
The Potential Effects Of Federal Health Insurance Reforms On Employment Arrangements And Compensation, Marcus O. Dillender, Carolyn J. Heinrich, Susan N. Houseman
The Potential Effects Of Federal Health Insurance Reforms On Employment Arrangements And Compensation, Marcus O. Dillender, Carolyn J. Heinrich, Susan N. Houseman
Upjohn Institute Working Papers
The Affordable Care Act (ACA) presents an opportunity to significantly improve compensation for American workers. A potential concern, though, is that employers will circumvent the employer mandate by increasing their use of workers in staffing arrangements that are not covered by the mandate: workers averaging less than 30 hours per week, working on a temporary basis, or working in organizations with fewer than 50 full-time employees. In this paper, we shed light on the likely effects that the ACA will have on employment arrangements. We first examine how part-time employment in Massachusetts changed after its health insurance reform, which is …
Who Benefits From A Minimum Wage Increase?, John W. Lopresti, Kevin J. Mumford
Who Benefits From A Minimum Wage Increase?, John W. Lopresti, Kevin J. Mumford
Upjohn Institute Working Papers
This paper addresses the question of how a minimum wage increase affects the wages of low-wage workers. Most studies assume that there is a simple mechanical increase in the wage for workers earning a wage between the old and the new minimum wage, with some studies allowing for spillovers to workers with wages just above this range. Rather than assume that the wages of these workers would have remained constant, this paper estimates how a minimum wage increase impacts a low-wage worker’s wage relative to the wage the worker would have if there had been no minimum wage increase. The …
Trade Reform And Regional Dynamics: Evidence From 25 Years Of Brazilian Matched Employer-Employee Data, Rafael Dix-Carneiro, Brian K. Kovak
Trade Reform And Regional Dynamics: Evidence From 25 Years Of Brazilian Matched Employer-Employee Data, Rafael Dix-Carneiro, Brian K. Kovak
Upjohn Institute Working Papers
We empirically study the dynamics of labor market adjustment following the Brazilian trade reform of the 1990s. We use variation in industry-specific tariff cuts interacted with initial regional industry mix to measure trade-induced local labor demand shocks, and then examine regional and individual labor market responses to those one-time shocks over two decades. Contrary to conventional wisdom, we do not find that the impact of local shocks is dissipated over time through wage-equalizing migration. Instead, we find steadily growing effects of local shocks on regional formal sector wages and employment for 20 years. This finding can be rationalized in a …
Mothers' Long-Term Employment Patterns, Alexandra Killewald, Xiaolin Zhuo
Mothers' Long-Term Employment Patterns, Alexandra Killewald, Xiaolin Zhuo
Upjohn Institute Working Papers
Previous research on maternal employment has disproportionately focused on married, college-educated mothers and examined either current employment status or postpartum return to employment. Following the life course perspective, we instead conceptualize maternal careers as long-term life course patterns. Using data from the NLSY79 and optimal matching, we document four common employment patterns of American mothers over the first 18 years of maternity. About two-thirds follow steady patterns, either full-time employment (38 percent) or steady nonemployment (24 percent). The rest experience “mixed” patterns: long-term part-time employment (20 percent), or a multiyear period of nonemployment following maternity, then a return to employment …
Employment Relations And Wages: What Can We Learn From Subjective Assessments?, Marta Lachowska
Employment Relations And Wages: What Can We Learn From Subjective Assessments?, Marta Lachowska
Upjohn Institute Working Papers
This paper studies the link between hourly wages and workers’ subjective assessments of how easy it would be to find another job as good as the present one, and how easy it would be for an employer to replace an employee. First, using high-quality data, I study the correlates of these two assessments. Second, I study whether respondents who report better outside opportunities and respondents who think they are difficult to replace receive higher wages. The results appear to be consistent with predictions of at least three theoretical frameworks: human capital theory, search theory, and a “locus of control” model.
The Efficiency Of A Group-Specific Mandated Benefit Revisited: The Effect Of Infertility Mandates, Joanna N. Lahey
The Efficiency Of A Group-Specific Mandated Benefit Revisited: The Effect Of Infertility Mandates, Joanna N. Lahey
Upjohn Institute Working Papers
This paper examines the labor market effects of state health insurance mandates that increase the cost of employing a demographically identifiable group. State mandates requiring that health insurance plans cover infertility treatment raise the relative cost of insuring older women of child-bearing age. Empirically, wages in this group are unaffected, but their total labor input decreases. Workers do not value infertility mandates at cost, and so will not take wage cuts in exchange, leading employers to decrease their demand for this affected and identifiable group. Differences in the empirical effects of mandates found in the literature are explained by a …
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Upjohn Institute Working Papers
This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernible …
Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
We estimate the effects of privatization on firm-level wages and employment in four transition economies. Applied to longitudinal data on manufacturing firms, our fixed effect and random trend models consistently fail to support workers' fears of job losses from privatization, and they never imply large negative effects on wages; only for domestic privatization in Hungary and Russia are small (3-5%) negative wage effects found. Privatization to foreign investors has positive estimated impacts on both employment and wages in all four countries. The negligible consequences of domestic privatization for workers result from effects on scale, productivity, and costs that are large …
The Role Of Temporary Agency Employment In Tight Labor Markets, Susan N. Houseman, Arne L. Kalleberg, George A. Erickcek
The Role Of Temporary Agency Employment In Tight Labor Markets, Susan N. Houseman, Arne L. Kalleberg, George A. Erickcek
Upjohn Institute Working Papers
This paper examines the reasons why employers used and even increased their use of temporary help agencies during the tight labor markets of the 1990s. Based on case study evidence from the hospital and auto supply industries, we evaluate various hypotheses for this phenomenon. In high-skilled occupations, our results are consistent with the view that employers paid substantially more to agency help to avoid raising wages for their regular workers and to fill vacancies while they recruited workers for permanent positions. In low-skilled occupations, our evidence suggests that temporary help agencies facilitated the use of more "risky" workers by lowering …
Group Wage Curves, Timothy J. Bartik
Group Wage Curves, Timothy J. Bartik
Upjohn Institute Working Papers
Using panel data on U.S. MSAs, this paper estimates how a typical MSA's wages of different demographic groups, and prices, are affected by overall MSA unemployment, the distribution of unemployment among different groups, and national prices and wages. MSA unemployment has strong effects on MSA wages and prices, but the distribution of unemployment among different groups has weak effects on wages and prices. Using these estimates, simulations show that targeting high-unemployment groups for unemployment reductions will not reduce wage or price inflation pressures. The estimates also show that the effects of MSA unemployment on prices and disadvantaged groups' wages are …
Short-Term Employment Persistence For Welfare Recipients: The "Effects" Of Wages, Industry, Occupation And Firm Size, Timothy J. Bartik
Short-Term Employment Persistence For Welfare Recipients: The "Effects" Of Wages, Industry, Occupation And Firm Size, Timothy J. Bartik
Upjohn Institute Working Papers
Using data from 13 years (1983-95) of the March Current Population Survey, this study examines how the types of jobs held by welfare mothers during the preceding year affects their employment and earnings at the time of the March interview. The estimates suggest that the wages of last year's job affect current employment and earnings, but the effects of wages are more modest than might be expected. The industry and occupation of last year's job make a great deal of difference, with industry being more important than occupation. The industries with the most positive effects on current employment are hospitals …
Seniority, External Labor Markets, And Faculty Pay, Byron W. Brown, Stephen A. Woodbury
Seniority, External Labor Markets, And Faculty Pay, Byron W. Brown, Stephen A. Woodbury
Upjohn Institute Working Papers
We estimate the returns to seniority (the wage-tenure profile) for university faculty, and the degree to which these returns respond to entry-level salaries (or opportunity wages) a relationship unexplored in work to date. Using data on faculty at a Big Ten university (ours), we estimate elasticities of senior-faculty salaries with respect to entry-level salaries, and find that these elasticities decline with seniority. The evidence both provides an explanation of faculty salary compression and suggests the importance of controlling for entry-level salaries in obtaining estimates of the returns to seniority.
Who Moonlights And Why? Evidence From The Sipp, Jean Kimmel, Karen Smith Conway
Who Moonlights And Why? Evidence From The Sipp, Jean Kimmel, Karen Smith Conway
Upjohn Institute Working Papers
Multiple job-holding is a significant characteristic of the labor market, with approximately 6 percent of all employed males reporting a second job in 1993 (Mishel and Bernstein, 1995, p. 226). Moonlighting reflects growing financial stress arising from declining earnings, as well as an increased need for flexibility to combine work and family. Approximately 40 percent of moonlighters report taking the second job due to economic hardship. Additionally, moonlighting is a reflection of the worker's choice to pursue entrepreneurial activities while maintaining the financial stability offered by the primary job. To restate in economic terminology, moonlighting arises from at least two …
Rural Wages And Returns To Education: Differences Between Whites, Blacks And American Indians, Jean Kimmel
Rural Wages And Returns To Education: Differences Between Whites, Blacks And American Indians, Jean Kimmel
Upjohn Institute Working Papers
Workers in rural areas earn lower wages than nonrural workers and previous evidence has attributed these differences to lower returns to worker characteristics. This paper builds on that data by examining racial and gender differences within the broader group of rural workers. While there is extensive evidence on both the structure of wages and the source of racial wage differentials between Whites and Blacks, there is no such evidence for those in either group living in rural areas. Nor is there much evidence in this literature for American Indians. This paper's contribution to the literature is two-fold. First, it broadens …
Earnings Inequality In Germany, Katharine G. Abraham, Susan N. Houseman
Earnings Inequality In Germany, Katharine G. Abraham, Susan N. Houseman
Upjohn Institute Working Papers
Recent studies have documented the growth of earnings inequality in the United States during the 1980s. In contrast to these studies' findings, our analysis of micro data for the former West Germany yields virtually no evidence of growth in earnings inequality over the same period. Between 1978 and 1988, a reduction in the dispersion of earnings among workers in the bottom half of the earnings distribution led to a narrowing of the overall dispersion of earnings in Germany. Earnings differentials across education and age groups remained roughly stable, and there was no general widening of earnings differentials within either education …
Culture, Human Capital, And The Earnings Of West Indian Blacks, Stephen A. Woodbury
Culture, Human Capital, And The Earnings Of West Indian Blacks, Stephen A. Woodbury
Upjohn Institute Working Papers
This paper offers an empirical analysis of West Indians' performance in the U.S. labor market, drawing adjusted comparisons between the earnings of native-born black American men of West Indian ancestry and the earnings of other native-born men, both black and white. The data required for these comparisons come from the 1980 Census of Population, in which native-born respondents reported their ancestry. The results offer a mixed picture of the success of West Indians, suggesting that native-born blacks of West Indian ancestry do have somewhat higher earnings than other native-born blacks, other things equal. Nevertheless, there is still a large earnings …
Moonlighting Behavior: Theory And Evidence, Karen Smith Conway, Jean Kimmel
Moonlighting Behavior: Theory And Evidence, Karen Smith Conway, Jean Kimmel
Upjohn Institute Working Papers
Two labor supply issues that have received substantial attention are the responsiveness of labor supply to wage changes and the imposition of labor supply constraints. Adjusting hours worked on a second job may be the practical and perhaps only available response to either event yet, most labor supply studies only examine behavior on the primary job. Examining the motives for moonlighting provides evidence on both the wage-responsiveness of labor supply in general and the existence and consequences of labor supply constraints.