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: 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.

State of the Union 2016: Labor Markets Michael Hout

State of the Union 2016: Labor Markets

Author: Michael Hout
Publisher:
Date: 02/2016
The prime-age employment rate in the U.S. still languishes well below pre-recession levels. If the current (slow) rate of improvement continues, the U.S. will likely fall into another recession before the male rate returns to its pre-recession level. 

labor markets - CPI Affiliates

Marlis Buchmann Professor, Soziologisches Institut
University of Zurich
Marta Tienda's picture Marta Tienda Professor, Maurice P. During '22 Professor in Demographic Studies; Professor of Sociology and Public Affairs; Director, Program in Latino Studies
Princeton University
Martina Morris's picture Martina Morris Professor of Sociology and Statistics
University of Washington - Seattle
Mary C. Brinton Reischauer Institute Professor of Sociology
Harvard University
Patricia A. Roos's picture Patricia A. Roos Professor of Sociology
Rutgers University-New Brunswick

Pages

Labor Markets - Other Research

Title Author Media
Women’s Progress for Men’s Gain? Gender-Specific Changes in the Return to Education as Measured by Family Standard of Living, 1990 to 2009–2011 ChangHwan Kim, Arthur Sakamoto

Women’s Progress for Men’s Gain? Gender-Specific Changes in the Return to Education as Measured by Family Standard of Living, 1990 to 2009–2011

Author: ChangHwan Kim, Arthur Sakamoto
Publisher: Demography
Date: 08/2017

This study investigates gender-specific changes in the total financial return to education among persons of prime working ages (35–44 years) using U.S. Census data from 1990 and 2000, and the 2009–2011 American Community Survey. We define the total financial return to education as the family standard of living as measured by family income adjusted for family size. Our results indicate that women experienced significant progress in educational attainment and labor market outcomes over this time period. Ironically, married women’s progress in education and personal earnings has led to greater improvement in the family standard of living for married men than for women themselves. Gender-specific changes in assortative mating are mostly responsible for this paradoxical trend. Because the number of highly educated women exceeds the number of highly educated men in the marriage market, the likelihood of educational marrying up has substantially increased for men over time while women’s likelihood has decreased. Sensitivity analyses show that the greater improvement in the family standard of living for men than for women is not limited to prime working-age persons but is also evident in the general population. Consequently, women’s return to education through marriage declined while men’s financial gain through marriage increased considerably.

The Effect of Fertility on Mothers' Labor Supply over the Last Two Centuries Daniel Aaronson, Rajeev Dehejia, Andrew Jordan, Cristian Pop-Eleches, Cyrus Samii, Karl Schulze

The Effect of Fertility on Mothers' Labor Supply over the Last Two Centuries

Author: Daniel Aaronson, Rajeev Dehejia, Andrew Jordan, Cristian Pop-Eleches, Cyrus Samii, Karl Schulze
Publisher: NBER
Date: 08/2017

This paper documents the evolving impact of childbearing on the work activity of mothers. Based on a compiled dataset of 441 censuses and surveys between 1787 and 2015, representing 103 countries and 48.4 million mothers, we document three main findings: (1) the effect of fertility on labor supply is small and typically indistinguishable from zero at low levels of development and economically large and negative at higher levels of development; (2) this negative gradient is remarkably consistent across histories of currently developed countries and contemporary cross-sections of countries; and (3) the results are strikingly robust to identification strategies, model specification, data construction, and rescaling. We explain our results within a standard labor-leisure model and attribute the negative labor supply gradient to changes in the sectoral and occupational structure of female jobs as countries develop.

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
Publisher:
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.

Labor Markets - Multimedia

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