Labor Economics Commons^™

The Ups And Downs In Women's Employment—Shifting Composition Or Behavior From 1970 To 2010?, Kristin E. Smith

Upjohn Institute Working Papers

This paper tracks factors contributing to the ups and downs in women’s employment from 1970 to 2010 using regression decompositions focusing on whether changes are due to shifts in the means (composition of women) or due to shifts in coefficients (inclinations of women to work for pay). Compositional shifts in education exerted a positive effect on women’s employment across all decades, while shifts in the composition of other family income, particularly at the highest deciles, depressed married women’s employment over the 1990s contributing to the slowdown in this decade. A positive coefficient effect of education was found in all decades, …

Use Of Supplemental Nutritional Assistance Program Benefits By Unemployment Insurance Applicants In Michigan During The Great Recession, Christopher J. O'Leary, Kenneth J. Kline

Upjohn Institute Working Papers

During the Great Recession, both the Supplementary Nutrition Assistance Program (SNAP) and the federal-state unemployment insurance (UI) program experienced dramatic increases in participation. Using Michigan program administrative data on all SNAP (2006–2011) recipients and all UI (2001–2010) applicants, we examine SNAP use before and after UI application. Both past and future receipts of SNAP are highly negatively correlated with meeting UI income and job separation eligibility requirements. Unemployment insurance applicants with insufficient wage credits or job separations because of quitting or employer discharge are much more likely to have received SNAP in the past. Furthermore, such UI applicants are also …

Financing Unemployment Insurance, Wayne Vroman, Stephen A. Woodbury

Upjohn Institute Working Papers

Following the Great Recession, most states’ unemployment insurance (UI) trust funds became insolvent, requiring the states to borrow from the U.S. Treasury to finance benefit payments. This article describes the basics of UI financing and reviews the origins of the financial crisis facing the federal-state UI system. It then examines the main components of the UI payroll tax—the taxable wage base and the experience-rated payroll tax—and considers how these might be modified to avoid future widespread insolvency. We conclude with some speculative remarks on the future of UI financing.

Unemployment Insurance, Stephen A. Woodbury

Upjohn Institute Working Papers

Unemployment insurance (UI) provides temporary income support to workers who have lost their jobs and are seeking reemployment. This paper reviews the origins of the federal-state UI system in the United States and outlines its principles and goals. It also describes the conditions for benefit eligibility, the benefits themselves, and their financing through the UI payroll tax. The UI system is complex and includes many interested parties, including employers, worker advocates, state UI administrators, and the federal government. These parties’ differing views have led to controversies over benefit eligibility, adequacy, and whether the states or federal government should bear primary …

Short-Time Compensation As A Tool To Mitigate Job Loss? Evidence On The U.S. Experience During The Recent Recession, Katharine G. Abraham, Susan N. Houseman

Upjohn Institute Working Papers

During the recent recession only 17 states offered short-time compensation (STC)—pro-rated unemployment benefits for workers whose hours are reduced for economic reasons. New federal legislation will encourage the expansion of STC. Exploiting cross-state variation in STC, we present new evidence indicating that jobs saved during the recession as a consequence of STC could have been significant in manufacturing, but that the overall scale of the STC program was generally too small to have substantially mitigated aggregate job losses in the 17 states. Expansion of the program is necessary for STC to be an effective counter-cyclical tool in the future.

Partial Disability System And Labor Market Adjustment: The Case Of Spain, Jose I. Silva, Judit Vall-Castello

Upjohn Institute Working Papers

Although partially disabled individuals in Spain are allowed to combine the receipt of disability benefits with a job, the empirical evidence shows that employment rates for this group of individuals are very low. Therefore, in this paper we construct labor market model with search intensity and matching frictions in order to identify the incentives and disincentives to work provided by the partial disability system in Spain from the point of view of both disabled individuals and employers. According to the model, the high employment rate gap observed between nondisabled and disabled workers can be partially explained by the presence of …

Predictors Of Employment Growth And Unemployment In U.S. Central Cities, 1990-2010, Laura Wolf-Powers

Upjohn Institute Working Papers

This paper considers employment growth and unemployment from 1990-2010 in a cross-section of cities in light of practical tools that city governments have at their disposal to provide relief. In particular, I test educational attainment (both initial levels and growth over time) and public capital investment as influences on job growth and changes in unemployment rates in 83 central cities in the United States. Change in educational attainment over time is suggestive of causing higher job growth and lower unemployment. The implication is that initiatives to attract and retain college-educated professionals and investments in increasing college attainment among incumbent residents …

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.

Do Minimum Wage Laws Affect People Who Are Not Covered? Evidence From Documented And Undocumented, Hourly And Piece Rate Workers In U.S. Agriculture, Anita Alves Pena

Upjohn Institute Working Papers

While a stated goal of minimum wage increases is to benefit low-income workers, some employers are not obligated to provide at least minimum wages to all employees. U.S. farm employers comprise one of these groups. Employees of large farms and H2-A workers (temporary nonimmigrant workers lawfully admitted to perform temporary or seasonal agricultural services) are protected by minimum wage legislation, while other migrant workers (especially those who are paid piece rate) are exempt. Furthermore, U.S. agriculture is characterized by a large percentage of illegal migrants, and workers who are illegal may or may not receive wages above minimum levels. This …

Social Costs Of Jobs Lost Due To Environmental Regulations, Timothy J. Bartik

Upjohn Institute Working Papers

This paper estimates the social costs of job loss due to environmental regulation. Per job lost, potential social costs of job loss are high, plausibly over $100,000 in present value costs (2012 dollars) per permanently lost job. However, these social costs will typically be far less than the earnings associated with lost jobs, because labor markets and workers adjust, increased leisure has some value, and employers benefit from wage reductions. A plausible range for social costs is 8–32 percent of the associated earnings of the lost jobs. Social costs will be higher for older workers, high-wage jobs, and in high …

The Impact Of Financialization On Management And Employment Outcomes, Rosemary L. Batt, Eileen Appelbaum

Upjohn Institute Working Papers

This paper examines three questions: 1) How and why have financial models of doing business emerged in the last three decades? 2) What new forms of financial capitalism have become important in the current period? 3) How do new financial intermediaries, such as private equity, and the financial strategies of nonfinancial corporations affect the management of companies and employment outcomes? The paper describes how deregulation and institutional change created the conditions for a new, more powerful role for finance capital in the governance of U.S. companies, and it synthesizes the empirical evidence on the process and outcomes of financialization in …

Worker Signals Among New College Graduates: The Role Of Selectivity And Gpa, Brad J. Hershbein

Upjohn Institute Working Papers

Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multidimensional signaling model relying on college grades and selectivity that rationalizes students’ choices of effort and firms’ wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages, namely that the return on college GPA should fall the more selective the institution attended. Using five data sets that span the early …

A Methodology For Setting State And Local Regression-Adjusted Performance Targets For Workforce Investment Act Programs, Randall W. Eberts, Wei-Jang Huang, Jing Cai

Upjohn Institute Working Papers

Beginning with PY2009, the U.S. Department of Labor’s Employment and Training Administration (USDOL/ETA) adopted a regression-adjusted approach for setting national targets for several federal workforce development programs, including WIA Adult, Dislocated Worker, and Youth programs. Prior to that time, national targets were based on past performance and the desire to encourage continuous improvement in the workforce programs. The continuous improvement approach typically increased target levels from year to year without a systematic way of accounting for changes in economic conditions or the ability to meet previous targets. The onset of the 2007–2009 recession drew into question this practice, and the …

Return On Investment In Workforce Development Programs, Kevin Hollenbeck

Upjohn Institute Working Papers

Under more and more fiscal scrutiny because of shrinking state and local budgets, workforce development programs are being asked to estimate their return on investment (ROI). This paper introduces basic concepts of ROI in workforce development programs. It distinguishes ROIs estimated for workforce programs from those that are estimated for financial investments or capital projects. The paper furthermore exposits the basic ingredients of an ROI study—identification of the treatment and time periods of analysis, identification of the net impacts of the program, and identification of net costs. Finally, the paper presents results from the estimation of the ROI for postsecondary …

An Analysis Of The Employment Effects Of The Washington High Technology Business And Occupation (B&O) Tax Credit: Technical Report, Timothy J. Bartik, Kevin Hollenbeck

Upjohn Institute Working Papers

This paper estimates the effects of an R&D tax credit in the state of Washington on job creation. The research uses micro-data on the job creation and tax credits received by individual firms in the state of Washington from 2004 to 2009. We correct for the endogeneity of R&D tax credits received by individual firms by using instrumental variables based in part on national industry factor shares for R&D. We estimate that this tax credit created jobs, but at a high cost. The cost per job-year created is estimated to be between $40,000 and $50,000. The credit was so high …

Discrimination And The Effects Of Drug Testing On Black Employment, Abigail Wozniak

Upjohn Institute Working Papers

Nearly half of U.S. employers test job applicants and workers for drugs. I use variation in the timing and nature of drug testing regulation to study discrimination against blacks related to perceived drug use. Black employment in the testing sector is suppressed in the absence of testing, consistent with ex ante discrimination on the basis of drug use perceptions. Adoption of pro-testing legislation increases black employment in the testing sector by 7–30 percent and relative wages by 1.4–13.0 percent, with the largest shifts among low skilled black men. Results suggest that employers substitute white women for blacks in the absence …

Short Hours, Long Hours: Hour Levels And Trends In The Retail Industry In The United States, Canada, And Mexico, Françoise Carré, Chris Tilly

Upjohn Institute Working Papers

In settings where most workers have full-time schedules, hourly wages are appropriate primary indicators of job quality and worker outcomes. However, in sectors where full-time schedules do not dominate—primarily service-producing activities—total hours matter, in addition to hourly wages, for job quality and worker outcomes. In this paper we employ a sector-focused, comparative framework to further examine hours levels—measured as average weekly hours—and trends in Canada, the United States, and Mexico. We analyze the retail sector, which is of interest because of its high rate of part-time employment in the U.S. Based on our fieldwork in the United States and Mexico …

America's Human Capital Paradox, Thomas A. Kochan

Upjohn Institute Working Papers

It is widely recognized that human capital is essential to sustaining a competitive economy at high and rising living standards. Yet acceptance of persistent high unemployment, stagnant wages, and other indicators of declining job quality suggests that policymakers and employers undervalue human capital. This paper traces the root cause of this apparent paradox to the primacy afforded shareholder value over human resource considerations in American firms and the longstanding gridlock over employment policy. I suggest that a new jobs compact will be needed to close the deficit in jobs lost in the recent recession and to achieve sustained real wage …

An Analysis Of Risk-Taking Behavior For Public Defined Benefit Pension Plans, Nancy Mohan, Ting Zhang

Upjohn Institute Working Papers

This paper investigates the determinants of public pension plan risk-taking behavior using the percentage of total plan assets invested in the equity markets and the pension asset beta as measures of investment risk. We find that government accounting standards strongly affect public fund investment risk, as higher return assumptions (used to discount pension liabilities) are associated with higher equity allocation and beta. Unlike private pension plans, public funds undertake more risk if they are underfunded and have lower investment returns in the previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing financial constraints allocate more …

Including Jobs In Benefit-Cost Analysis, Timothy J. Bartik

Upjohn Institute Working Papers

Public policies may affect employment by directly creating jobs, facilitating job creation, or augmenting labor supply. In labor markets with high unemployment, such employment changes may have significant net efficiency benefits, which should be included in benefit-cost analyses.
The research literature offers diverse recommendations on measuring employment benefits. Many of the recommendations rely on arbitrary assumptions. The resulting employment benefit estimates vary widely.
This paper reviews this literature, and offers recommendations on how to better measure employment benefits using estimable parameters. Guidance is provided on measuring policy-induced labor demand, estimating the demand shock’s impact on labor market outcomes, and translating …

The Secular Rise In Unemployment Insurance Exhaustions And What Can Be Done About It, Ralph E. Smith

Upjohn Institute Working Papers

Over the past several decades, the rate at which regular unemployment insurance recipients run out of benefits before they have found jobs, even in a strong labor market, has been gradually rising. For example, in 1973, 27.4 percent of UI recipients exhausted their benefits; in 2007 (with a similar unemployment rate) 35.6 percent exhausted. This paper documents the increase in the exhaustion rate, along with the parallel rise in long-term unemployment; examines the consequences; and reviews what has been learned about the efficacy of various approaches for reversing, or at least halting, the trend.

The research on the rise in …

The Persistence Of Employee 401(K) Contributions Over A Major Stock Market Cycle: Evidence On The Limited Power Of Inertia On Savings Behavior, Leslie A. Muller, John A. Turner

Upjohn Institute Working Papers

Many middle-income workers save for retirement through 401(k) plans. This study addresses the concern that low account balances of older workers may indicate that these vehicles are not sufficient to insure adequate retirement savings. In particular, the study shows that workers are not persistent (continuing once a worker has started) in contributing, and a weak stock market exacerbates the problem.
/="/">The study suggests that the concept of inertia, which is in vogue in behavioral economics, does not seem to hold for 401(k) saving behavior. Furthermore, the investment strategy of dollar cost averaging does not seem to hold, either. Using …

Benefit Payment Costs Of Unemployment Insurance Modernization: Estimates Based On Kentucky Administrative Data, Christopher J. O'Leary

Upjohn Institute Working Papers

The American Recovery and Reinvestment Act (ARRA) of 2009 provided financial incentives for UI modernization. The financial incentive is the state share of $7 billion available nationwide. States can receive one-third of their allocation by having an alternate base period (ABP) for monetary determination of UI eligibility that includes the most recently completed calendar quarter. States can receive the remaining two-thirds of their allocation for having two of four additional program features: 1) UI eligibility while seeking only part-time work, 2) UI eligibility after job separations due to harassment or compelling family reasons, 3) continuation of UI benefits for at …

Unemployment Insurance And Low-Educated Single Working Mothers Before And After Welfare Reform, H. Luke Shaefer, Liyun Wu

Upjohn Institute Working Papers

Using the Survey of Income and Program Participation (SIPP), a nationally representative, longitudinal survey, this study examines changing levels of Unemployment Insurance (UI) eligibility and benefit receipt among working low-educated single mothers, 1990–2005. It also examines changing participation in cash welfare and the Food Stamp Program (FSP). Relative to single childless women, there has been no increase in UI benefit receipt among single mothers entering a spell of unemployment in the postreform period, even though single mothers have increased their relative rates of UI eligibility. Because of declining cash assistance receipt, UI became a more common income support than cash …

Women's Work After War, Meredith A. Kleykamp

Upjohn Institute Working Papers

In the more than 30 years following the all-volunteer force (AVF), the proportion of women serving in the military has increased from 1.8 percent just before the AVF to 14.2 percent in 2008. The majority of women do not stay in the military for a 20-year or longer career; like men, most women only serve a few years before transitioning to the civilian workforce. Although the fraction of the military who are women has risen, as has the fraction of veterans who are women, little research informs how female veterans of the AVF fare economically after leaving service, or whether …

Offshoring And The State Of American Manufacturing, Susan N. Houseman, Christopher Kurz, Paul A. Lengermann, Benjamin R. Mandel

Upjohn Institute Working Papers

The rapid growth of offshoring has sparked a contentious debate over its impact on the U.S. manufacturing sector, which has recorded steep employment declines yet strong output growth—a fact reconciled by the notable gains in manufacturing productivity. We maintain, however, that the dramatic acceleration of imports from developing countries has imparted a significant bias to the official statistics. In particular, the price declines associated with the shift to low-cost foreign suppliers generally are not captured in input cost and import price indexes. To assess the implications of offshoring bias for manufacturing productivity and value added, we implement the bias correction …

Policies For Displaced Workers: An American Perspective, Christopher J. O'Leary

Upjohn Institute Working Papers

American employment policy for displaced workers started in the Great Depression with programs for the employment service, unemployment insurance, work experience, and direct job creation. Assistance for workers displaced by foreign competition emerged in the 1960s along with formalized programs for occupational job skill training. The policy focus on displaced workers was sharpened in the 1980s through the Worker Adjustment and Retraining Notification Act and the Economic Dislocation and Worker Adjustment Assistance Act. Field experiments on services to dislocated workers led to Worker Profiling and Reemployment Services systems in all states, and federal rules adopted as part of the North …

Employment And Training Policy In The United States During The Economic Crisis, Christopher J. O'Leary, Randall W. Eberts

Upjohn Institute Working Papers

This paper examines labor market conditions and public employment policies in the United States during what some are calling the Great Recession. We document the dramatic labor market changes that rapidly unfolded when the rate of gross domestic product growth turned negative, from the end of 2007 through early 2009. The paper reviews the resulting stress on labor market support programs and the broad federal response. That response came through modifications to existing programs and the introduction of new mechanisms to help Americans cope with job loss and protracted unemployment. The particular focus is on federally supported public programs for …

What Do We Know About Contracting Out In The United States? Evidence From Household And Establishment Surveys, Matthew Dey, Susan N. Houseman, Anne E. Polivka

Upjohn Institute Working Papers

A variety of evidence points to significant growth in domestic contracting out over the last two decades, yet the phenomenon is not well documented. In this paper, we pull together data from various sources to shed light on the extent of and trends in domestic outsourcing, the occupations in which it has grown, and the industries engaging in outsourcing for the employment services sector, which has been a particularly important area of domestic outsourcing. In addition, we examine evidence of contracting out of selected occupations to other sectors. We point to many gaps in our knowledge on trends in domestic …

Estimated State And Local Fiscal Effects Of The Nurse Family Partnership Program, Timothy J. Bartik

Upjohn Institute Working Papers

This short paper estimates the state and local fiscal benefits of the Nurse Family Partnership (NFP) program. NFP provides nurse home visiting services to low-income first-time mothers. In addition to social benefits, NFP provides state and local fiscal benefits by reducing costs of social services, welfare, and crime, and increasing tax receipts due to increased earnings of mothers and former child participants when they grow up. Based on previous studies, this paper estimates that the present value, in 2007 dollars, of these state and local fiscal benefits is a little over $15,000 per NFP case.