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
Are Referees and Editors in Economics Gender Neutral? David Card, Stefano DellaVigna, Patricia Funk, Nagore Iriberri

Are Referees and Editors in Economics Gender Neutral?

Author: David Card, Stefano DellaVigna, Patricia Funk, Nagore Iriberri
Publisher: The Quarterly Journal of Economics
Date: 02/2020

We study the role of gender in the evaluation of economic research using submissions to four leading journals. We find that referee gender has no effect on the relative assessment of female- versus male-authored papers, suggesting that any differential biases of male referees are negligible. To determine whether referees as a whole impose different standards for female authors, we compare citations for female- and male-authored papers, holding constant referee evaluations and other characteristics. We find that female-authored papers receive about 25% more citations than observably similar male-authored papers. Editors largely follow the referees, resulting in a 1.7 percentage point lower probability of a revise and resubmit verdict for papers with female authors relative to a citation-maximizing benchmark. In their desk rejection decisions, editors treat female authors more favorably, though they still impose a higher bar than would be implied by citation maximization. We find no differences in the informativeness of female versus male referees or in the weight that editors place on the recommendations of female versus male referees. We also find no differences in editorial delays for female- versus male-authored papers.

Beveridgean Unemployment Gap Pascal Michaillat, Emmanuel Saez

Beveridgean Unemployment Gap

Author: Pascal Michaillat, Emmanuel Saez
Publisher: National Bureau of Economic Research
Date: 12/2019

This paper measures the unemployment gap (the difference between actual and efficient unemployment rates) using the Beveridge curve (the negative relationship between unemployment and job vacancies). We express the unemployment gap as a function of current unemployment and vacancy rates, and three sufficient statistics: elasticity of the Beveridge curve, recruiting cost, and nonpecuniary value of unemployment. In the United States, we find that the efficient unemployment rate started around 3% in the 1950s, steadily climbed to almost 6% in the 1980s, fell just below 4% in the early 1990s, and remained at that level until 2019. These variations are caused by changes in the level and elasticity of the Beveridge curve. Hence, the US unemployment gap is almost always positive and highly countercyclical—indicating that the labor market tends to be inefficiently slack, especially in slumps.

Overwork, Specialization, and Wealth Brian Aronson, Lisa A. Keister

Overwork, Specialization, and Wealth

Author: Brian Aronson, Lisa A. Keister
Publisher: Journal of Marriage and Family
Date: 07/2019

Objective: This study examines how overwork and traditional household specialization—defined as households with one dedicated female homemaker and one dedicated male breadwinner—are associated with wealth across socioeconomic strata.

Background: Although overwork and household specialization are clearly associated with income, less is known about how these behaviors affect household wealth. Household wealth is only moderately correlated with household income and is influenced by many factors that do not affect income, suggesting that overwork and specialization have different associations with wealth than with income. Moreover, because wealth is so unevenly distributed, overwork and specialization likely have different associations with wealth across socioeconomic strata.

Method: With data from the Survey of Consumer Finances, a nationally representative survey of households that includes an oversample of high‐wealth households, the authors estimate unconditional quantile regression models to investigate how overwork and household specialization are associated with household wealth across socioeconomic strata and over time.

Results: Overwork has the greatest absolute benefits at the top of the wealth distribution but the greatest relative benefits in lower portions of the wealth distribution. Specialization yields distinct advantages for high‐wealth households that have grown over time, whereas specialization comes with trade‐offs for low‐wealth households that outweigh its benefits.

Conclusion: The financial trade‐offs associated with overwork and specialization vary considerably across the wealth distribution. Contrary to findings in income‐based research, overwork premiums appear most crucial to the financial well‐being of underprivileged households, whereas specialization premiums are evident only for the economic elite.

 

Babies, Work, or Both? Highly Educated Women's Employment and Fertility in East Asia Mary C. Brinton, Eunsil Oh

Babies, Work, or Both? Highly Educated Women's Employment and Fertility in East Asia

Author: Mary C. Brinton, Eunsil Oh
Publisher: American Journal of Sociology
Date: 07/2019

Highly educated women’s likelihood of combining childrearing with continuous employment over the life course has increased among recent U.S. cohorts. This trend is less evident in many postindustrial countries characterized by very low fertility. Among such countries, Japan and Korea have exceptionally low proportions of women who remain employed after having children, despite aggressive government policies designed to encourage this. We draw on over 160 in-depth interviews with highly educated Japanese and Korean men and women of childbearing age to uncover the central incompatibilities between married women’s employment and childrearing. Individuals’ narratives reveal how labor market structure and workplace norms contribute to a highly gendered household division of labor, leading many married women to either forsake employment or to consider having only one child.

State of the Union 2019: Employment Harry J. Holzer

State of the Union 2019: Employment

Author: Harry J. Holzer
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2019
  • Labor force activity has declined for all prime-age workers, but the decline among young workers has been especially rapid. This means that millennials who are currently 25–34 years old are working less than Gen Xers at the same age.
  • Declines are most evident among men, though women’s labor force activity is also lower. Large gaps by education remain, with the highest labor force participation among college graduates.

 

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, Vice President 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
Mark Granovetter's picture Mark Granovetter Joan Butler Ford Professor of Sociology; Joan Butler Ford Professor in the School of Humanities and Sciences
Stanford University

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Labor Markets - Other Research

Title Author Media
Unpacking Skill Bias: Automation and New Tasks Daron Acemoglu, Pascual Restrepo

Unpacking Skill Bias: Automation and New Tasks

Author: Daron Acemoglu, Pascual Restrepo
Publisher: National Bureau of Economic Research
Date: 01/2020

The standard approach to modeling inequality, building on Tinbergen's seminal work, assumes factor-augmenting technologies and technological change biased in favor of skilled workers. Though this approach has been successful in conceptualizing and documenting the race between technology and education, it is restrictive in a number of crucial respects. First, it predicts that technological improvements should increase the real wages of all workers. Second, it requires sizable productivity growth to account for realistic changes in relative wages. Third, it is silent on changes in job and task composition. We extend this framework by modeling the allocation of tasks to factors and allowing richer forms of technological changes in particular, automation that displaces workers from tasks they used to perform, and the creation of new tasks that reinstate workers into the production process. We show that factor prices depend on the set of tasks that factors perform, and that automation: (i) powerfully impacts inequality; (ii) can reduce real wages; and (iii) can generate realistic changes in inequality with small changes in productivity. New tasks, on the other hand, can increase or reduce inequality depending on whether it is skilled or unskilled workers that have a comparative advantage in these new activities. Using industry-level estimates of displacement driven by automation and reinstatement due to new tasks, we show that displacement is associated with significant increases in industry demand for skills both before 1987 and after 1987, while reinstatement reduced the demand for skills before 1987, but generated higher demand for skills after 1987. The combined effects of displacement and reinstatement after 1987 explain a significant part of the shift towards greater demand for skills in the US economy.

Relative Sizes of Age Cohorts and Labor Force Participation of Older Workers David Neumark, Maysen Yen

Relative Sizes of Age Cohorts and Labor Force Participation of Older Workers

Author: David Neumark, Maysen Yen
Publisher: Demography
Date: 12/2019

We study the effects of the size of older cohorts on labor force participation and wages of older workers in the United States. We use panel data on states, treating the age structure of the population as endogenous, owing to migration. When older cohorts (50–59 or 60–69) are large relative to a young cohort (aged 16–24), the evidence fits the relative supply hypothesis. However, when older cohorts are large relative to 25- to 49-year-olds, the evidence points to a relative demand shift. Thus, we need a more nuanced view than simply whether the older cohort is large relative to the population: the cohort that they are large relative to matters.

Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men Christopher R. Taber, Nicolas A. Roys

Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men

Author: Christopher R. Taber, Nicolas A. Roys
Publisher: National Bureau of Economic Research
Date: 11/2019

This paper studies the effect of the change in occupational structure on wages for low skilled men. We develop a model of occupational choice in which workers have multi-dimensional skills that are exploited differently across different occupations. We allow for a rich specification of technological change which has heterogenous effects on different occupations and different parts of the skill distribution. We estimate the model combining four datasets: (1) O*NET, to measure skill intensity across occupations, (2) NLSY79, to identify life-cycle supply effects, (3) CPS (ORG), to estimate the evolution of skill prices and occupations over time, and (4) NLSY97 to see how the gain to specific skills has changed. We find that while changes in the occupational structure have affected wages of low skilled workers, the effect is not dramatic. First, the wages in traditional blue collar occupations have not fallen substantially relative to other occupations-a fact that we can not reconcile with a competitive model. Second, our decompositions show that changes in occupations explain only a small part of the patterns in wage levels over our time period. Price changes within occupation are far more important. Third, while we see an increase in the payoff to interpersonal skills, manual skills still remain the most important skill type for low educated males.

Gender Pay Gaps in U.S. Federal Science Agencies: An Organizational Approach Laurel Smith-Doerr, Sharla Alegria, Kaye Fealing, Debra Fitzpatrick, Donald Tomaskovic-Devey

Gender Pay Gaps in U.S. Federal Science Agencies: An Organizational Approach

Author: Laurel Smith-Doerr, Sharla Alegria, Kaye Fealing, Debra Fitzpatrick, Donald Tomaskovic-Devey
Publisher: American Journal of Sociology
Date: 09/2019

This study advances understanding of gender pay gaps by examining organizational variation. The gender pay gap literature supplies mechanisms but does not attend to organizational variation; the gender and science literature provides insights on the role of masculinist culture in disciplines but misses pay gap mechanisms. A data set of federal workers allows comparison of men and women in the same jobs and workplaces. Agencies associated with traditionally masculine (engineering, physical sciences) and gender-neutral (biological, interdisciplinary sciences) fields differ. Pay-gap mechanisms vary: human capital differences explain a larger share in gender-neutral agencies, while at male-typed agencies men are frequently paid more than women within the same job. Although beyond the federal workers’ standardized pay scale, some interdisciplinary agencies more often pay men off grade, leading to higher earnings for men. Our theory of organizational variation helps explain local agency variation and how pay practices matter in specific organizational contexts.

On Her Own Account: How Strengthening Women's Financial Control Affects Labor Supply and Gender Norms Erica M. Field, Rohini Pande, Natalia Rigol, Simone G. Schaner, Charity Troyer Moore

On Her Own Account: How Strengthening Women's Financial Control Affects Labor Supply and Gender Norms

Author: Erica M. Field, Rohini Pande, Natalia Rigol, Simone G. Schaner, Charity Troyer Moore
Publisher: National Bureau of Economic Research
Date: 09/2019

Can greater control over earned income incentivize women to work and influence gender norms? In collaboration with Indian government partners, we provided rural women with individual bank accounts and randomly varied whether their wages from a public workfare program were directly deposited into these accounts or into the male household head’s account (the status quo). Women in a random subset of villages were also trained on account use. In the short run, relative to women just offered bank accounts, those who also received direct deposit and training increased their labor supply in the public and private sectors. In the long run, gender norms liberalized: women who received direct deposit and training became more accepting of female work, and their husbands perceived fewer social costs to having a wife who works. These effects were concentrated in households with otherwise lower levels of, and stronger norms against, female work. Women in these households also worked more in the long run and became more empowered. These patterns are consistent with models of household decision-making in which increases in bargaining power from greater control over income interact with, and influence, gender norms.