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
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.

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


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).


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.

labor markets - CPI Affiliates

Vered Kraus's picture Vered Kraus Professor, Department of Sociology and Anthropology
University of Haifa
Adina Sterling Assistant Professor of Organizational Behavior
Stanford University
Arne L. Kalleberg's picture Arne L. Kalleberg Kenan Distinguished Professor of Sociology; Adjunct Professor of Management, Kenan-Flager School of Business; Adjunct Professor of Public Policy and Global Studies, University of North Carolina at Chapel Hill
University of North Carolina
Charles Halaby's picture Charles Halaby Martindale Bascom Professor of Sociology Emeritus, Research Director of General Education Assessment
University of Wisconsin-Madison
David H. Autor Ford Professor of Economics, Director of National Bureau of Economic Research Disability Research Center; Co-director of the School Effectiveness and Inequality Initiative
Massachusetts Institute of Technology


Labor Markets - Other Research

Title Author Media
People Versus Machines: The Impact of Minimum Wages on Automatable Jobs Grace Lordan, David Neumark

People Versus Machines: The Impact of Minimum Wages on Automatable Jobs

Author: Grace Lordan, David Neumark
Date: 08/2017

We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers from whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. The findings imply that groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.

Indirect Inference with Importance Sampling: An Application to Women's Wage Growth Robert M. Sauer, Christopher R. Taber

Indirect Inference with Importance Sampling: An Application to Women's Wage Growth

Author: Robert M. Sauer, Christopher R. Taber
Publisher: NBER
Date: 08/2017

This paper has two main parts. In the first, we describe a method that smooths the objective function in a general class of indirect inference models. Our smoothing procedure makes use of importance sampling weights in estimation of the auxiliary model on simulated data. The importance sampling weights are constructed from likelihood contributions implied by the structural model. Since this approach does not require transformations of endogenous variables in the structural model, we avoid the potential approximation errors that may arise in other smoothing approaches for indirect inference. We show that our alternative smoothing method yields consistent estimates. The second part of the paper applies the method to estimating the effect of women’s fertility on their human capital accumulation. We find that the curvature in the wage profile is determined primarily by curvature in the human capital accumulation function as a function of previous human capital, as opposed to being driven primarily by age. We also find a modest effect of fertility induced nonemployment spells on human capital accumulation. We estimate that the difference in wages among prime age women would be approximately 3% higher if the relationship between fertility and working were eliminated.

Choice of Majors: Are Women Really Different from Men? Adriana D. Kugler, Catherine H. Tinsley, Olga Ukhaneva

Choice of Majors: Are Women Really Different from Men?

Author: Adriana D. Kugler, Catherine H. Tinsley, Olga Ukhaneva
Publisher: NBER
Date: 08/2017

Recent work suggests that women are more responsive to negative feedback than men in certain environments. We examine whether negative feedback in the form of relatively low grades in major-related classes explains gender differences in the final majors undergraduates choose. We use unique administrative data from a large private university on the East Coast from 2009-2016 to test whether women are more sensitive to grades than men, and whether the gender composition of major-related classes affects major changes. We also control for other factors that may affect a student's final major including: high school student performance, gender of faculty, and economic returns of majors. Finally, we examine how students' decisions are affected by external cues that signal STEM fields as masculine. The results show that high school academic preparation, faculty gender composition, and major returns have little effect on major switching behaviors, and that women and men are equally likely to change their major in response to poor grades in major-related courses. Moreover, women in male-dominated majors do not exhibit different patterns of switching behaviors relative to their male colleagues. Women are, however, more likely to switch out of male-dominated STEM majors in response to poor performance compared to men. Therefore, we find that it takes multiple signals of lack of fit into a major (low grades, gender composition of class, and external stereotyping signals) to impel female students to switch majors.

Women, Work, and Family Francine D. Blau, Anne E. Winkler

Women, Work, and Family

Author: Francine D. Blau, Anne E. Winkler
Publisher: NBER
Date: 08/2017

This chapter focuses on women, work, and family, with a particular focus on differences by educational attainment. First, we review long-term trends regarding family structure, participation in the labor market, and time spent in household production, including time with children. In looking at family, we focus on mothers with children. Next we examine key challenges faced by mothers as they seek to combine motherhood and paid work: workforce interruptions associated with childbearing, the impact of home and family responsibilities, and constraints posed by workplace culture. We also consider the role that gendered norms play in shaping outcomes for mothers. We conclude by discussing policies that have the potential to increase gender equality in the workplace and mitigate the considerable conflicts faced by many women as they seek to balance work and family.

Knowledge of Future Job Loss and Implications for Unemployment Insurance Nathaniel Hendren

Knowledge of Future Job Loss and Implications for Unemployment Insurance

Author: Nathaniel Hendren
Publisher: American Economic Review
Date: 07/2017

This paper studies the implications of individuals' knowledge of future job loss for the existence of an unemployment insurance (UI) market. Learning about job loss leads to consumption decreases and spousal labor supply increases. This suggests existing willingness to pay estimates for UI understate its value. But it yields new estimation methodologies that account for and exploit responses to learning about future job loss. Although the new willingness to pay estimates exceed previous estimates, I estimate much larger frictions imposed by private information. This suggests privately traded UI policies would be too adversely selected to be profitable, at any price.

Labor Markets - Multimedia

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