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
State of the Union 2017: Earnings Colin Peterson, C. Matthew Snipp, Sin Yi Cheung

State of the Union 2017: Earnings

Author: Colin Peterson, C. Matthew Snipp, Sin Yi Cheung
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2017

Between 1970 and 2010, the earnings gap between whites and other groups has narrowed, but most of that decline was secured in the immediate aftermath of the Civil Rights Movement. Except in the case of Asians, more recent trends are less favorable, with the post-1980 earnings gap either growing larger (e.g., Hispanics) or remaining roughly stable in size (e.g., black men).

State of the Union 2017: Employment Michael Hout

State of the Union 2017: Employment

Author: Michael Hout
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2017

Full recovery from the job losses of the Great Recession eluded African-American men even as the rest of the population approached full employment. Job loss can also unsettle those who haven’t lost their jobs. 1 in 9 African-Americans and 1 in 6 Hispanic Americans fear a job loss within one year, while just 1 in 18 whites do.

Women’s Economic Empowerment: A Review of Evidence on Enablers and Barriers H. Elizabeth Peters, Nan Marie Astone, Ammar A. Malik, Fenohasina Maret Rakotondrazaka, Caroline Heller

Women’s Economic Empowerment: A Review of Evidence on Enablers and Barriers

Author: H. Elizabeth Peters, Nan Marie Astone, Ammar A. Malik, Fenohasina Maret Rakotondrazaka, Caroline Heller
Publisher: Urban Institute
Date: 10/2016

Besides human rights protection and social welfare improvement, fostering female participation in the economy can stimulate growth with human capital accumulation and enhance the competitiveness of businesses. But women face many barriers to participating in the labor market, particularly in high productivity sectors, due to limited investments in education, time burdens from care responsibilities, legal prohibitions to land ownership, and sexual harassment and violence. We find evidence that improving access to infrastructure and public services, reforms in inheritance laws, family friendly workplace policies, and reduction in levels of violence can significantly improve women’s economic empowerment.

 

The Persistence of Extreme Gender Segregation in the Twenty-First Century Asaf Levanon, David B. Grusky

The Persistence of Extreme Gender Segregation in the Twenty-First Century

Author: Asaf Levanon, David B. Grusky
Publisher: American Journal of Sociology
Date: 09/2016

Why is there so much occupational sex segregation in the 21st century? The authors cast light on this question by using the O*NET archive of occupation traits to operationalize the concepts of essentialism and vertical inequality more exhaustively than in past research. When the new model is applied to recent U.S. Census data, the results show that much vertical segregation remains even after the physical, analytic, and interactional forms of essentialism are controlled; that essentialism nonetheless accounts for much more of total segregation than does vertical inequality; that the physical and interactional forms of segregation are especially strong; that the physical form of essentialism is one of the few examples of female-advantaging segregation; and that essentialism takes on a fractal structure that generates much finely detailed segregation at detailed occupational levels. The authors conclude by discussing how essentialist processes partly account for the intransigence of occupational sex segregation.

Child Poverty, the Great Recession, and the Social Safety Net in the United States Marianne Bitler, Hilary Hoynes, Elira Kuka

Child Poverty, the Great Recession, and the Social Safety Net in the United States

Author: Marianne Bitler, Hilary Hoynes, Elira Kuka
Publisher: NBER
Date: 09/2016

In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at-risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after-tax-and-transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with non-Hispanic black or Hispanic, single, or particularly immigrant household heads-or immigrant spouses, experience larger poverty cyclicality than non-Hispanic white, married, or native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near cash transfers net of taxes but also several measures of medical benefits.

labor markets - CPI Affiliates

David Card's picture David Card Labor Markets Research Group Leader, Class of 1950 Professor of Economics; Director of the Labor Studies Program at the National Bureau of Economic Research; Director, Center for Labor Economics (CLE); Director, Econometrics Laboratory (EML)
University of California, Berkeley
Gregory Acs's picture Gregory Acs Labor Markets Research Group Leader, Director of Income and Benefits Policy Center
The Urban Institute
Jesse Rothstein's picture Jesse Rothstein Labor Markets Research Group Leader; Professor of Public Policy and Economics; Director of Institute for Research on Labor and Employment (IRLE); Research Associate, National Bureau of Economic Research; Co-Director, California Policy Lab
University of California, Berkeley
Michael Hout's picture Michael Hout Labor Markets Research Group Leader, Professor of Sociology
New York University
Cecilia Elena Rouse's picture 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
Family Investments in Education during Periods of Economic Uncertainty: Evidence from the Great Recession Anna Lunn, Sabino Kornrich

Family Investments in Education during Periods of Economic Uncertainty: Evidence from the Great Recession

Author: Anna Lunn, Sabino Kornrich
Publisher: Sociological Perspectives
Date: 07/2017

At the beginning of the Great Recession, household spending on education across the income distribution was highly unequal. We examined how different income groups altered their spending on education for children under 18 during this economic crisis. As national and local economic conditions deteriorated during the recession, the difference in odds that a high-income household spent on education relative to a low-income family increased by 20 percent, and the difference in the amounts that high-income families spent on education relative to low-income families also increased by 20 percent. As state unemployment rates climbed and consumer confidence fell, high-income families’ educational spending increased relative to low-income families’ spending. Decreases in local housing prices were also associated with lower spending for low-income families. Given the importance of educational enrichment for children’s learning outcomes, increasing inequality in families’ educational investments during the Great Recession may contribute to future educational and social inequality.

Intimate Partner Violence in the Great Recession Antonina Pavlenko

Intimate Partner Violence in the Great Recession

Author: Antonina Pavlenko
Publisher: Russell Sage Foundation
Date: 09/2016

The study revealed that rapid increases in unemployment rates during the Great Recession were associated with increases in men's abusive behavior. This association persisted even after individual and household-level experiences with unemployment and material hardship were controlled for. The authors argue that these results indicate that economic uncertainty plays an important role in relationship dynamics, above and beyond its direct effects on job loss and material hardship. 

This brief was published as part of our Recession Trends initiative.

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.