Labor Economics Commons^™

Wage Posting Or Wage Bargaining? A Test Using Dual Jobholders, Marta Lachowska, Alexandre Mas, Raffaele Saggio, Stephen A. Woodbury

Upjohn Institute Working Papers

This paper examines the behavior of dual jobholders to test a simple model of wage bargaining and wage posting. We estimate the sensitivity of wages and separation rates to wage shocks in a worker’s secondary job to assess the degree of bargaining versus wage posting in the labor market. We interpret the evidence within a model where workers facing hours constraints in their primary job may take a second, flexible-hours job for additional income. When a secondary job offers a sufficiently high wage, a worker either bargains with the primary employer for a wage increase or separates. The model provides …

Labor Market Trends And Outcomes: What Has Changed Since The Great Recession?, Erica L. Groshen, Harry J. Holzer

Upjohn Institute Working Papers

We describe trends in wages and labor force participation for the “working class”—whom we define as workers with high school or less education—compared to those with college or more. We compare cyclical peaks over the entire period 1979–2019, with particular focus on the Great Recession (2007–2010) and recovery (2010–2019). We also present results by gender and race. We find real wage growth in the latter period for all workers, but not enough to change the long-term trends of growing inequality and stagnant wages for the less-educated; and we also find that labor force participation continued to decline for the less-educated, …

Human Capital And Black-White Earnings Gaps, 1996–2017, Owen Thompson

Upjohn Institute Working Papers

This paper estimates the contribution of human capital to the Black-white earnings gap in three separate samples of men spanning from 1966 through 2017, using both educational attainment and performance on standardized tests to measure human capital. There are three main findings. First, the magnitude of reductions in the Black-white earnings gap that occur after controlling for human capital has become much larger over time, suggesting a growing contribution of human capital to Black-white earnings disparities. Second, these increases are almost entirely due to growth in the returns to human capital, which magnify the impact of any racial differences in …

Firms, Jobs, And Gender Disparities In Top Incomes: Evidence From Brazil, Felipe Benguria

Upjohn Institute Working Papers

This paper studies the gender disparities among top incomes in Brazil during the period 1994-2013 using administrative data on the universe of formal-sector job spells and detailed information on educational attainment, employers, and occupations performed. Over these two decades, differences in pay and participation between genders have narrowed, yet the process has been slow and women are still severely underrepresented, especially within the very top percentiles of the earnings distribution. The following findings highlight the role of firms and occupations in explaining these patterns. At the start of the period, women in the top percentile of the distribution owe a …

How Many Americans Have Lost Jobs With Employer Health Coverage During The Pandemic?, Paul Fronstin, Stephen A. Woodbury

External Papers and Reports

ISSUE: During the COVID-19 pandemic, most states issued lockdown orders that closed many workplaces. The ensuing job losses may have left millions of workers without employer health coverage.

GOAL: To estimate how many workers lost jobs that came with employer-sponsored insurance (ESI) — by industry, age, and gender — during the pandemic.

METHODS: Health insurance coverage data were used to generate the proportion of workers with ESI, by various characteristics. Data on unemployment benefit recipients were used to generate the proportion of workers who lost jobs because of the pandemic. We apply the proportion of workers with ESI to the …

The Evolution Of Local Labor Markets After Recessions, Brad J. Hershbein, Bryan A. Stuart

Upjohn Institute Working Papers

This paper studies how U.S. local labor markets respond to employment losses that occur during recessions. Following recessions from 1973 through 2009, we find that areas that lose more jobs during the recession experience persistent relative declines in employment and population. Most importantly, these local labor markets also experience persistent decreases in the employment-population ratio, earnings per capita, and earnings per worker. Our results imply that limited population responses result in longer-lasting consequences for local labor markets than previously thought, and that recessions are followed by persistent reallocation of employment across space.

The Political Economy Of Inequality: U.S. And Global Dimensions, Sisay Asefa Editor, Wei-Chiao Huang Editor

Upjohn Press

The contributors to this book discuss a variety of forms of social inequality which include large gaps in accumulated assets, discrepancies in access to quality education, unstable family life, lack of access to banking services, poor employment prospects, lack of health care services, and underrepresentation for political and legal matters. Together, they show how these forms of inequality are interrelated with income inequality and that, taken together, they pose the risk for societal and political unrest should they be left unresolved.

Immigrants And The U.S. Wage Distribution, Vasil I. Yasenov

Upjohn Institute Working Papers

A large body of literature estimates the relative wage impacts of immigration on low- and high-skill natives, but it is unclear how these effects map onto changes of the wage distribution. I document the movement of foreign-born workers in the U.S. wage distribution, showing that, since 1980, they have become increasingly overrepresented in the bottom. Downgrading of education and experience obtained abroad partially drives this pattern. I then undertake two empirical approaches to deepen our understanding of the way foreign-born workers shape the wage structure. First, I estimate a standard theoretical model featuring constant elasticity of substitution technology and skill …

Does The Healthcare Educational Market Respond To Short-Run Local Demand?, Marcus Dillender, Andrew Friedson, Cong Gian, Kosali Simon

Upjohn Institute Policy and Research Briefs

No abstract provided.

Does The Healthcare Educational Market Respond To Short-Run Local Demand?, Marcus Dillender, Andrew Friedson, Cong Gian, Kosali Simon

Upjohn Institute Working Papers

The Patient Protection and Affordable Care Act (ACA) increased demand for healthcare across the U.S., but it is unclear if or how the supply side has responded to meet this demand. In this paper, we take advantage of plausibly exogenous geographical heterogeneity in the ACA in order to examine the response of the healthcare education sector to increased demand for healthcare services. We look across educational fields, types of degrees, and types of institutions; we pay particular attention to settings where our conceptual model predicts heightened responses. We find no statistically significant evidence of increases in graduates and can rule …

Computerization Of White Collar Jobs, Marcus Dillender, Eliza C. Forsythe

Upjohn Institute Working Papers

We investigate the impact of computerization of white-collar jobs on wages and employment. Using online job postings from 2007 and 2010-2016 for office and administrative support (OAS) jobs, we show that when firms adopt new software at the job-title level they increase the skills required of job applicants. Furthermore, firms change the task content of such jobs, broadening them to include tasks associated with higher-skill office functions. We aggregate these patterns to the local labor-market level, instrumenting for technology adoption with national measures. We find that a 1 standard deviation increase in OAS technology usages reduces employment in OAS occupations …

Medical Innovation And The Employment Of Cancer Patients, R. Vincent Pohl

Employment Research Newsletter

No abstract provided.

Medical Innovation And The Employment Of Cancer Patients, R. Vincent Pohl

Upjohn Institute Policy and Research Briefs

No abstract provided.

Longer-Run Effects Of Antipoverty Policies On Disadvantaged Neighborhoods, David Neumark, Brian J. Asquith, Brittany Bass

Upjohn Institute Working Papers

We estimate the longer-run effects of minimum wages, the Earned Income Tax Credit, and welfare on key economic indicators of economic self-sufficiency in disadvantaged neighborhoods. We find that the longer-run effects of the EITC are to increase employment and to reduce poverty and public assistance. We also find some evidence that higher welfare benefits had longer-run adverse effects, and quite robust evidence that tighter welfare time limits reduce poverty and public assistance in the longer run. The evidence on the long-run effects of the minimum wage on poverty and public assistance is not robust, with some evidence pointing to reductions …

Can Antipoverty Policies Change Neighborhood Outcomes In The Long Run?, Brian J. Asquith

Upjohn Institute Policy and Research Briefs

No abstract provided.

[Job] Locked And [Un]Loaded: The Effect Of The Affordable Care Act Dependency Mandate On Reenlistment In The U.S. Army, Michael S. Kofoed, Wyatt J. Frasier

Upjohn Institute Policy and Research Briefs

No abstract provided.

[Job] Locked And [Un]Loaded: The Effect Of The Affordable Care Act Dependency Mandate On Reenlistment In The U.S. Army, Michael S. Kofoed, Wyatt J. Frasier

Employment Research Newsletter

No abstract provided.

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 …

Payroll, Revenue, And Labor Demand Effects Of The Minimum Wage, Ekaterina (Roshchina) Jardim, Emma Van Inwegen

Upjohn Institute Working Papers

We study the impact of the minimum wage hike in Seattle from $9.47 to $13 on wagebill, labor demand, and firm revenue using administrative data from the state of Washington. We show that the minimum wage affected businesses both at the intensive and extensive margins. At the intensive margin, businesses increased their labor costs and adjusted to the minimum wage by mildly reducing demand for low-wage jobs, but they largely did not pass the increase in labor costs to prices. At the extensive margin, the minimum wage led to higher rates of business exit and shifted the composition of entering …

[Job] Locked And [Un]Loaded: The Effect Of The Affordable Care Act Dependency Mandate On Reenlistment In The U.S. Army, Michael S. Kofoed, Wyatt J. Frasier

Upjohn Institute Working Papers

One concern with employer-based health insurance is job lock or the inability for employees to leave their current employment for better opportunities for fear of losing benefits. We use the implementation of the Affordable Care Act’s dependency mandate as a natural experiment. Data from the United States Army overcome some limitations in previous studies including the ability to examine workers with fixed contract expiration dates, uniform pay, and health coverage. We find that the ACA decreased reenlistment rates by 3.13 percent for enlisted soldiers aged 23–25. We also find that younger veterans who leave the army are more likely to …

Labor Market Effects Of U.S. Sick Pay Mandates, Nicolas R. Ziebarth, Stefan Pichler

Employment Research Newsletter

No abstract provided.

Unobserved Heterogeneity And Labor Market Discrimination Against Homosexuals, Miguel Sarzosa

Upjohn Institute Working Papers

Sexual minorities have historically been subject to many kinds of discrimination. Prejudicial treatment in the labor market could arguably be one of them. Despite that, economic literature has remained mostly silent on the topic. This paper fills that void by leveraging on a novel longitudinal data set that collects detailed information on sexual orientation. I develop an empirical strategy that exploits the fact that sexuality is not a dichotomous trait but rather a wide assortment of sexual preferences. I use empirical models that rely on the identification of unobserved heterogeneity, in the forms of skills and sexual orientation, to allow …

Labor Market Effects Of U.S. Sick Pay Mandates, Stefan Pichler, Nicolas R. Ziebarth

Upjohn Institute Working Papers

This paper exploits temporal and spatial variation in the implementation of nine-city- and four state-level U.S. sick pay mandates to assess their labor market consequences. We use the synthetic control group method and traditional difference-in-differences models along with the Quarterly Census of Employment and Wages to estimate the causal effects of mandated sick pay on employment and wages. We do not find much evidence that employment or wages were significantly affected by the mandates that typically allow employees to earn one hour of paid sick leave per work week, up to seven days per year. Employment decreases of 2 percent …

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.

Careers Within Firms: Occupational Mobility Over The Life Cycle, Eliza C. Forsythe

Upjohn Institute Working Papers

With falling labor market dynamism in the United States, opportunities within firms take on increasing importance in young workers’ career progression. Developing a variety of occupational ranking metrics, I show that occupational mobility within firms follows a standard life cycle pattern in which the frequency, distance, and wage return from mobility falls with age. However, when upward and downward mobility are considered separately, the average magnitude of directional mobility increases through middle age. I find that wage growth for young workers deteriorated substantially in the first decade of the 2000s, primarily driven by a reduction in wage growth within firms. …

Degrees Of Poverty: The Relationship Between Family Income Background And The Returns To Education, Timothy J. Bartik, Brad J. Hershbein

Upjohn Institute Working Papers

Drawing on the Panel Study of Income Dynamics, we document a startling empirical pattern: the career earnings premium from a four-year college degree (relative to a high school diploma) for persons from low-income backgrounds is considerably less than it is for those from higher-income backgrounds. For individuals whose family income in high school was above 1.85 times the poverty level, we estimate that career earnings for bachelor’s graduates are 136 percent higher than earnings for those whose education stopped at high school. However, for individuals whose family income during high school was below 1.85 times the poverty level, the career …

Wage Setting In The United States, Randall W. Eberts

Presentations

No abstract provided.

New Hires Quality Index, Brad J. Hershbein

Presentations

No abstract provided.

The New Hires Quality Index: A Wage Metric For Newly Hired Workers, Brad J. Hershbein

Reports

No abstract provided.

Charles Ballard Interview, Justin Carinci

External Papers and Reports

Professor Charles Ballard of Michigan State University delivered the lecture “The Fall and Rise of Income Equality in the United States” Sept. 27, 2017 as part of the Werner Sichel Lecture Series at Western Michigan University. Ballard detailed the “Great Convergence” of income equality in the United States that grew out of policies of the 1930s and 1940s and a “Great Divergence” of inequality starting about 1980. Ballard called this income gap, which is now greater than during the Gilded Age, “the largest economic phenomenon of our lifetimes.”