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 Effect of Unemployment Benefits on the Duration of Unemployment Insurance Receipt: New Evidence from a Regression Kink Design in Missouri, 2003-2013 David Card, Andrew Johnston, Pauline Leung, Alexandre Mas, Zhuan Pei

The Effect of Unemployment Benefits on the Duration of Unemployment Insurance Receipt: New Evidence from a Regression Kink Design in Missouri, 2003-2013

Author: David Card, Andrew Johnston, Pauline Leung, Alexandre Mas, Zhuan Pei
Publisher: American Economic Review
Date: 05/2015

We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.

Promoting Social and Economic Mobility in Washington, DC Gregory Acs, Lauren Eyster, Jonathan Schwabish

Promoting Social and Economic Mobility in Washington, DC

Author: Gregory Acs, Lauren Eyster, Jonathan Schwabish
Publisher: The Urban Institute
Date: 04/2015

As Mayor Bowser settles into her office, she leads a city that is growing more prosperous. Yet too many DC residents are not sharing in that prosperity. Since the last recession began in 2007, median income in DC has grown by three times the national average, reaching nearly $61,000 in 2013. Yet DC’s unemployment rate persistently remains about 1 percentage point higher than in the nation as a whole. Removing barriers to mobility and creating meaningful opportunities for all DC residents to prosper require various strategies. DC’s new mayor should adopt strategies and policies that can help city residents who struggle the most with becoming and staying connected to the labor market.

Teacher Quality Policy When Supply Matters Jesse Rothstein

Teacher Quality Policy When Supply Matters

Author: Jesse Rothstein
Publisher: American Economic Review
Date: 01/2015

Teacher contracts that condition pay and retention on demonstrated performance can improve selection into and out of teaching. I study alternative contracts in a simulated teacher labor market that incorporates dynamic self-selection and Bayesian learning. Bonus policies create only modest incentives and thus have small effects on selection. Reductions in tenure rates can have larger effects, but must be accompanied by substantial salary increases; elimination of tenure confers little additional benefit unless firing rates are extremely high. Benefits of both bonus and tenure policies exceed costs, though optimal policies are sensitive to labor market parameters about which little is known.

Not Enough Work: Access to Full-Time Jobs with Decent Pay and Benefits Varies by Race/Ethnicity and Place of Residence Marybeth J. Mattingly, Justin R. Young

Not Enough Work: Access to Full-Time Jobs with Decent Pay and Benefits Varies by Race/Ethnicity and Place of Residence

Author: Marybeth J. Mattingly, Justin R. Young
Publisher: National Agricultural & Rural Development Policy Center
Date: 12/2014

In this brief, we consider differences across rural and urban America in each of these measures, given the very different economic conditions that prevail in rural America, where higher paying jobs and those with employer-provided health insurance areless common (McLaughlin and Coleman-Jensen 2008), nonstandard work is more ubiquitous (McCrate 2011), and the best-educated and young often move away (Carr and Kefalas 2010: Hollowing Out the Middle). Further, we break down these differences by both race and gender, as prior research suggests racial-ethnic differences in underemployment (Glauber 2013; Sum and Khatiwada 2010; Young2012), and we know from the literature that different factors mayinfluence women and men’s employment (see, for example, Hollister 2011). We use data from the 2013 Annual Social and Economic Supplement to the Current Population Survey—the most currently available data for assessing labor force dynamics across the country in this way.

Does working from home work? Evidence from a Chinese experiment Nicholas Bloom, James Liang, John Roberts, Zhichun Jenny Ying

Does working from home work? Evidence from a Chinese experiment

Author: Nicholas Bloom, James Liang, John Roberts, Zhichun Jenny Ying
Publisher: Quarterly Journal of Economics
Date: 11/2014

A rising share of employees now regularly engage in working from home (WFH), but there are concerns this can lead to “shirking from home.” We report the results of a WFH experiment at Ctrip, a 16,000-employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned either to work from home or in the office for nine months. Home working led to a 13% performance increase, of which 9% was from working more minutes per shift (fewer breaks and sick days) and 4% from more calls per minute (attributed to a quieter and more convenient working environment). Home workers also reported improved work satisfaction, and their attrition rate halved, but their promotion rate conditional on performance fell. Due to the success of the experiment, Ctrip rolled out the option to WFH to the whole firm and allowed the experimental employees to reselect between the home and office. Interestingly, over half of them switched, which led to the gains from WFH almost doubling to 22%. This highlights the benefits of learning and selection effects when adopting modern management practices like WFH.

labor markets - CPI Affiliates

Patricia A. Roos's picture Patricia A. Roos Professor of Sociology
Rutgers University-New Brunswick
Peter Hedstrom's picture Peter Hedstrom Director, Institute for Analytical Sociology
Linköping University
Robert H. Topel's picture Robert H. Topel Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics; Research Associate, National Bureau of Economic Research
The University of Chicago
Steven J. Davis's picture Steven J. Davis William H. Abbott Professor of International Business and Economics; Research Associate, National Bureau of Economic Research
The University of Chicago
Tali Kristal's picture Tali Kristal Senior Lecturer, Department of Sociology and Anthropology
University of Haifa

Pages

Labor Markets - Other Research

Title Author Media
The Great Recession and Parents' Relationships Christopher Wimer

The Great Recession and Parents' Relationships

Author: Christopher Wimer
Publisher: Russell Sage Foundation
Date: 06/2015

Economic downturns are stressful experiences for those affected by them, as well as those connected to affected family members and loved ones. Did the recent Great Recession lead to significant changes in the relationships between parents of young children?

Leave policies in challenging times: what have we learned? What lies ahead? Janet Gornick

Leave policies in challenging times: what have we learned? What lies ahead?

Author: Janet Gornick
Publisher: Community, Work & Family
Date: 05/2015

This article reflects on the studies included in this special issue on leave policies during challenging economic times. It highlights three major conclusions: (1) the regime-type framework remains illuminating; (2) the recent period is characterized by resilience of leave provisions; and (3) persistent gender disparities in leave-taking continue to shape policy debates. Three recommendations are made for future lines of work: (1) adopt a life course perspective; (2) reassess the growing emphasis on instrumental justifications for policy provision; and (3) continue to assess the possibility of unintended consequences, in particular the potential for harmful effects on women’s employment outcomes.

The Great Recession and the Private Safety Net Christopher Wimer

The Great Recession and the Private Safety Net

Author: Christopher Wimer
Publisher: Russell Sage Foundation
Date: 02/2015

In a recent paper, Princeton University’s Aaron Gottlieb and Columbia University’s Natasha Pilkauskas and Irwin Garfinkel provide some of the first insights into how families’ private safety nets responded to the Great Recession. Using data from the Fragile Families and Child Wellbeing Study (FFCWS), the authors investigate whether the Great Recession was associated with increased transfers to parents of young children by anyone other than the child’s father.

Race, Self-Selection, and the Job Search Process Devah Pager, David S. Pedulla

Race, Self-Selection, and the Job Search Process

Author: Devah Pager, David S. Pedulla
Publisher: American Journal of Sociology
Date: 01/2015

While existing research has documented persistent barriers facing African-American job seekers, far less research has questioned how job seekers respond to this reality. Do minorities self-select into particular segments of the labor market to avoid discrimination? Such questions have remained unanswered due to the lack of data available on the positions to which job seekers apply. Drawing on two original data sets with application-specific information, we find little evidence that blacks target or avoid particular job types. Rather, blacks cast a wider net in their search than similarly situated whites, including a greater range of occupational categories and characteristics in their pool of job applications. Additionally, we show that perceptions of discrimination are associated with increased search breadth, suggesting that broad search among African-Americans represents an adaptation to labor market discrimination. Together these findings provide novel evidence on the role of race and self-selection in the job search process.

Is It Worth It? Postsecondary Education and Labor Market Outcomes for the Disadvantaged Ben Backes, Harry J Holzer, Erin Dunlop Velez

Is It Worth It? Postsecondary Education and Labor Market Outcomes for the Disadvantaged

Author: Ben Backes, Harry J Holzer, Erin Dunlop Velez
Publisher: IZA Journal of Labor Policy
Date: 01/2015

In this paper we examine a range of postsecondary education and labor market outcomes, with a particular focus on minorities and/or disadvantaged workers. We use administrative data from the state of Florida, where postsecondary student records have been linked to UI earnings data and also to secondary education records. Our main findings can be summarized as follows: 1) Gaps in secondary school achievement can account for a large portion of the variation in postsecondary attainment and labor market outcomes between the disadvantaged and other students, but meaningful gaps also exist within achievement groups, and 2) Earnings of the disadvantaged are hurt by low completion rates in postsecondary programs, poor performance during college, and not choosing high-earning fields. In particular, significant labor market premia can be earned in a variety of more technical certificate and Associate (AA) programs, even for those with weak earlier academic performance, but instead many disadvantaged (and other) students choose general humanities programs at the AA (and even the BA level) with low completion rates and low compensation afterwards. A range of policies and practices might be used to improve student choices as well as their completion rates and earnings.

Labor Markets - Multimedia

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