Labor Markets

  • Michael Hout
  • Gregory Acs
  • David Card
  • Jesse Rothstein

Leaders: Gregory Acs, David Card, Michael Hout, Jesse Rothstein

The labor market was of course hit very heavily by the Great Recession, as evidenced by (a) the slow recovery of the unemployment rate, (b) and the even slower recovery of the long-term unemployment rate and the prime-age employment ratio (defined as the ratio of employed 25-54 year-olds to the population of that same age). This “jobs problem,” which is especially prominent among low-skill workers, has led to a sharp rise in the number of poor households without any working adults. It also underlies, in part, the sharp increase in the number of disability insurance claims and awards, which in turn has further reduced the supply of labor among low-skilled individuals.

If the first type of “jobs problem” is that there still are not enough of them, the second is that the jobs that are available do not always provide the requisite hours, wages, or security that are needed for a sure pathway out of poverty. As a result, low-skill individuals are not just working less but, even when they are working, there is no guarantee that their jobs will lift them and their families out of poverty. The Labor Markets RG is tasked with conducting research on these and related problems and exploiting administrative and other data to assess possible policy responses to them. We list below a few examples of the work being carried out in this group.

Long-run effects of work incentives: As nonworking poverty increases, the U.S. might well want to turn to new types of work incentive programs. Have these programs worked elsewhere?

Minimum wages and poverty: Throughout the west coast, there are a host of minimum wage “experiments” underway, experiments that have the potential to reset the low-wage labor market in quite fundamental ways. How are these experiments playing out?

Labor Markets - CPI Research

Title Author Media
The Great Recession and the Labor Market Beth Red Bird, David B. Grusky

The Great Recession and the Labor Market

Author: Beth Red Bird, David B. Grusky
Publisher: Annual Review of Sociology
Date: 07/2016

We review the main labor market trends during the Great Recession, the ways in which those trends have been organized into narratives about the Great Recession, the effects of the Great Recession on individual-level behaviors and decisions, the causes of the key labor market dysfunctions of the Great Recession, and the most important economic and noneconomic forces that are likely to generate recessions and other labor market problems in the future.

The Effects of Job Insecurity on Health Care Utilization: Findings from a Panel of U.S. Workers Rita Hamad , Sepideh Modrek, Mark R. Cullen

The Effects of Job Insecurity on Health Care Utilization: Findings from a Panel of U.S. Workers

Author: Rita Hamad , Sepideh Modrek, Mark R. Cullen
Publisher: Health Services Research
Date: 06/2016

Objective

To examine the impacts of job insecurity during the recession of 2007–2009 on health care utilization among a panel of U.S. employees.

Data Sources/Study Setting

Linked administrative and claims datasets on a panel of continuously employed, continuously insured individuals at a large multisite manufacturing firm that experienced widespread layoffs (N = 9,486).

Study Design

We employed segmented regressions to examine temporal discontinuities in utilization during 2006–2012. To assess the effects of job insecurity, we compared individuals at high- and low-layoff plants. Because the dataset includes multiple observations for each individual, we included individual-level fixed effects.

Principal Findings

We found discontinuous increases in outpatient (3.5 visits/month/10,000 individuals, p = .002) and emergency (0.4 visits/month/10,000 individuals, p = .05) utilization in the panel of all employees. Compared with individuals at low-layoff plants, individuals at high-layoff plants decreased outpatient utilization (−4.0 visits/month/10,000 individuals, p = .008), suggesting foregone preventive care, with a marginally significant increase in emergency utilization (0.4 visits/month/10,000 individuals, p = .08).

Conclusions

These results suggest changes in health care utilization and potentially adverse impacts on employee health in response to job insecurity during the latest recession. This study contributes to our understanding of the impacts of economic crises on the health of the U.S. working population.

Long-Run Impacts of Childhood Access to the Safety Net Hilary Hoynes, Diane Whitmore Schanzenbach , Douglas Almond

Long-Run Impacts of Childhood Access to the Safety Net

Author: Hilary Hoynes, Diane Whitmore Schanzenbach , Douglas Almond
Publisher: American Economic Review
Date: 04/2016

We examine the impact of a positive and policy-driven change in economic resources available in utero and during childhood. We focus on the introduction of the Food Stamp Program, which was rolled out across counties between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes. Our findings indicate access to food stamps in childhood leads to a significant reduction in the incidence of metabolic syndrome and, for women, an increase in economic self-sufficiency.

Penalized or Protected? Gender and the Consequences of Nonstandard and Mismatched Employment Histories David S. Pedulla

Penalized or Protected? Gender and the Consequences of Nonstandard and Mismatched Employment Histories

Author: David S. Pedulla
Publisher: American Sociological Review
Date: 04/2016

Millions of workers are employed in positions that deviate from the full-time, standard employment relationship or work in jobs that are mismatched with their skills, education, or experience. Yet, little is known about how employers evaluate workers who have experienced these employment arrangements, limiting our knowledge about how part-time work, temporary agency employment, and skills underutilization affect workers’ labor market opportunities. Drawing on original field and survey experiment data, I examine three questions: (1) What are the consequences of having a nonstandard or mismatched employment history for workers’ labor market opportunities? (2) Are the effects of nonstandard or mismatched employment histories different for men and women? and (3) What are the mechanisms linking nonstandard or mismatched employment histories to labor market outcomes? The field experiment shows that skills underutilization is as scarring for workers as a year of unemployment, but that there are limited penalties for workers with histories of temporary agency employment. Additionally, although men are penalized for part-time employment histories, women face no penalty for part-time work. The survey experiment reveals that employers’ perceptions of workers’ competence and commitment mediate these effects. These findings shed light on the consequences of changing employment relations for the distribution of labor market opportunities in the “new economy.”

The Determinants and Welfare Implications of US Workers’ Diverging Location Choices by Skill: 1980-2000 Rebecca Diamond

The Determinants and Welfare Implications of US Workers’ Diverging Location Choices by Skill: 1980-2000

Author: Rebecca Diamond
Publisher: American Economic Review
Date: 03/2016

From 1980 to 2000, the rise in the US college/high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage, high rent cities. This paper estimates a structural spatial equilibrium model to determine causes and welfare consequences of this increased skill sorting. While local labor demand changes fundamentally caused the increased skill sorting, it was further fueled by endogenous increases in amenities within higher skill cities. Changes in cities' wages, rents, and endogenous amenities increased inequality between high school and college graduates by more than suggested by the increase in the college wage gap alone.

Labor Markets - CPI Affiliates

David Card Labor Markets Research Group Leader; Class of 1950 Professor of Economics University of California, Berkeley
Gregory Acs Labor Markets Research Group Leader; Director of Income and Benefits Policy Center The Urban Institute
Jesse Rothstein Labor Markets Research Group Leader; Professor of Public Policy and Economics; Director of Institute for Research on Labor and Employment (IRLE) University of California, Berkeley
Michael Hout Labor Markets Research Group Leader; Professor of Sociology New York University
Cecilia Elena Rouse Dean, Woodrow Wilson School; Lawrence and Shirley Katzman and Lewis and Anna Ernst Professor in the Economics of Education Princeton University

Pages

Labor Markets - Other Research

Title Author Media
Cash on the Table: Why Traditional Theories of Market Failure Fail Robert H. Frank

Cash on the Table: Why Traditional Theories of Market Failure Fail

Author: Robert H. Frank
Publisher: Journal of Economic Behavior & Organization
Date: 06/2016

Many modern progressives attribute the market's failings to conspiracies by powerful corporate actors to exploit workers and consumers. In this paper I defend the claim that many of the same failures are instead often rooted in competition among individuals for relative advantage. In the familiar stadium metaphor, all stand to get a better view, only to discover that no one sees any better than if all had remained comfortably seated. Analogous discrepancies between individual and collective incentives help explain the presence of overtime laws, workplace safety regulations, and many other institutional features of the modern welfare state. These features would be useful even if all consumers were perfectly informed and rational and markets took the perfectly competitive ideal form described in textbooks.

International Migration and National Development: From Orthodox Equilibrium to Transnationalism Alejandro Portes

International Migration and National Development: From Orthodox Equilibrium to Transnationalism

Author: Alejandro Portes
Publisher: Sociology of Development
Date: 06/2016

This article reviews theoretical perspectives on migration and development, starting with nineteenth-century political economy theories focused on “colonizing” migrations from England and other European powers and concluding with the emerging literature on immigrant transnationalism and its consequences for sending nations. The general concept of equilibrium has until currently dominated orthodox economic theories of both colonizing and labor migrations from peripheral regions to advanced nations. The counteroffensive, led by Gunnar Myrdal and theorists of the dependency school, centered on the notion of cumulative causation leading to increasing poverty and the depopulation of peripheral sending areas. Both perspectives registered numerous empirical anomalies, stemming from a common view of migration flows as occurring between separate politico-economic entities. An alternative conceptualization of such flows as internal to an overarching global system has improved our understanding of causes and consequences of labor migration and has framed the back-and-forth complexities of these movements captured in the novel notion of transnationalism.

Social Mobility Among Second-Generation Latinos Van C. Tran

Social Mobility Among Second-Generation Latinos

Author: Van C. Tran
Publisher: Contexts
Date: 04/2016

New data shows that Latinos weathered the recession well and are poised to seize opportunities for further social mobility.

A Most Egalitarian Profession: Pharmacy and the Evolution of a Family-Friendly Occupation Claudia Goldin, Lawrence F. Katz

A Most Egalitarian Profession: Pharmacy and the Evolution of a Family-Friendly Occupation

Author: Claudia Goldin, Lawrence F. Katz
Publisher: Journal of Labor Economics
Date: 04/2016

Pharmacy today is a highly remunerated female-majority profession with a small gender earnings gap and low earnings dispersion. Using extensive surveys of pharmacists, as well as the US Census, American Community Surveys, and Current Population Surveys, we explore the gender earnings gap, penalty to part-time work, demographics of pharmacists relative to other college graduates, and evolution of the profession during the last half-century. Technological changes increasing substitutability among pharmacists, growth of pharmacy employment in retail chains and hospitals, and related decline of independent pharmacies reduced the penalty to part-time work and contribute to the narrow gender earnings gap in pharmacy.

The Value of Postsecondary Credentials in the Labor Market: An Experimental Study David J. Deming , Noam Yuchtman , Amira Abulafi , Claudia Goldin , Lawrence F. Katz

The Value of Postsecondary Credentials in the Labor Market: An Experimental Study

Author: David J. Deming , Noam Yuchtman , Amira Abulafi , Claudia Goldin , Lawrence F. Katz
Publisher: American Economic Review
Date: 03/2016

We study employers' perceptions of the value of postsecondary degrees using a field experiment. We randomly assign the sector and selectivity of institutions to fictitious resumes and apply to real vacancy postings for business and health jobs on a large online job board. We find that a business bachelor's degree from a for-profit online institution is 22 percent less likely to receive a callback than one from a nonselective public institution. In applications to health jobs, we find that for-profit credentials receive fewer callbacks unless the job requires an external quality indicator such as an occupational license.