Income taxation and the allocation of market labor

The allocation of work effort within the market economy will be unaffected by taxation if all returns from labor market activity are taxed equally. However, if the earnings from certain types of market employment are taxed at relatively lower rates, labor will shift into these areas until after-tax earnings are equal across all types of employment. This paper presents evidence suggesting that income taxation induces labor to move from high- to low-tax geographic areas and from wage and salaried jobs into self-employment activities. By affecting the allocation of market labor, the income tax generates a welfare loss in addition to that resulting from the tax’s effect on total work effort.     

The impact of deregulation on labor demand in class-I railroads

This paper examines the impact of the Staggers Rail Act of 1980 on labor demand in Class-I railroads during 1961–1990. The demand for labor is a function of output, hourly wage rates, a time trend, and a vector of interactive dummy variables. Since deregulation, the labor demand curve has shifted downward; wage elasticities have become more elastic, ranging from −0.668 in 1980 to −1.187 in 1990; output elasticities trended upward from 0.557 to 0.809; and the marginal product of labor rose from 3.421 to 5.296 during 1980–1990. These findings suggest that unions’ bargaining power has declined, that the total wage bill is likely to decrease if the real wage rate rises further, and that cost savings and efficiency gains are realized through increases in the marginal product of labor. We thank an anonymous referee and Henry McFarland for insightful comments and assistance.     

Unemployment: A labor market perspective

Twentieth century economists have made countless attempts to resolve the causes and cures of unemployment. However none have ventured to consider unemployment not as a social problem but as a market response to political and economic incentives. By treating unemployment as a labor market, where workers rationally select periods of joblessness and where special interest groups profit from unemployment, this paper develops a theoretically consistent model to explain the effects that policy and economic variables have on unemployment. Empirical results support this approach and the worker disincentive effects of UI compensation by estimating simultaneously a demand and supply for unemployment.     

Intergenerational correlation of labor market outcomes

This paper contributes to the relatively limited literature on the correlation of labor market outcomes of parents and their children. This literature is relevant to the larger literature on intergenerational income mobility since correlation in intergenerational labor market outcomes is one of the potential factors contributing to the intergenerational correlation of permanent incomes. In this paper, we consider the time spent in unemployment by both sons and daughters, while accounting for the potential endogeneity of education. Using the Household, Income and Labour Dynamics in Australia data, we find evidence of a positive correlation of labor market outcomes between fathers and sons and, to a lesser extent, between mothers and daughters. In addition, the results reveal a significant relationship between parents’ and children’s education levels, indicating that there is an indirect association of parental education with their children’s labor market outcomes through education.     

Childhood health and labor market inequality over the life course

The authors use data from the Health and Retirement Study's Earnings Benefit File, which links Health and Retirement Study to Social Security Administration records, to estimate the impact of childhood health on earnings curves between the ages of 25 and 50 years. They also investigate the extent to which diminished educational attainment, earlier onset of chronic health conditions, and labor force participation mediate this relationship. Those who experience poor childhood health have substantially diminished labor market earnings over the work career. For men, earnings differentials grow larger over the early to middle career and then slow down and begin to converge as they near 50 years of age. For women, earnings differentials emerge later in the career and show no evidence of convergence. Part of the child health earnings differential is accounted for by selection into diminished educational attainment, the earlier onset of chronic disease in adulthood, and, particularly for men, labor force participation.     

Adaptation of migrants in the New Zealand labor market

"This article addresses economic aspects of New Zealand immigration during the 1980s. General features are overall net emigration coinciding with high levels of immigration from Asia and Pacific Island countries. Earnings by years in New Zealand profiles for immigrants with selected occupations are steeper for Pacific Island-born males than for other immigrant groups. Although there are few data, there is some evidence that profiles differ between cohorts."     

Organizational perspectives on digital labor market intermediaries

Dramatic changes in organizational forms and employee-employer relationships have coincided with a proliferation of labor market intermediaries. Often digital and internet-based, these new hiring technologies assist organizations in recruiting and screening potential job candidates. We identify three types of digital labor market intermediaries (dLMIs): connectors, curators, and comminglers. We examine the use of dLMIs through the lens of organizational theory, focusing on implications for organizational efficiency, power, and equity. dLMI use is patterned but variable across different organizations and has unintended outcomes that defy efficiency expectations. It poses new constraints for job seekers while allowing organizations and intra-organizational groups to negotiate institutional pressures and power imbalances. Finally, dLMI use appears to reproduce pre-existing inequalities among different types of employees.     

The labor market in a socio-economic perspective

This article argues for a socio-economic approach to the analysis of labor markets. Three problems of the traditional economic approach are discussed. It is shown that the most fundamental flaw in the traditional analysis is the failure to analyze the role of time.     

The division of labor and the market areas of manufacturing firms

A sociological framework for relating the division of labor to the market areas of manufacturing firms is reformulated. The growth of exchange and the dynamics of differentiation and integration are discussed as key processes that explain changes in these market areas from local to regional to multiregional to national and also the rise of industrial regions. A case study of nineteenth-century plow manufacturing in the United States illustrates the utility of the proposed framework.     

Arbitrator bias and self-interest: Lessons from the baseball labor market

Their desire for enduring employment is commonly assumed to induce arbitrators to make fair awards. We find, however, that in major league baseball's unique institutional setting, selfinterested behavior by arbitrators has led to bias against players and preservation of monopsony rents for team owners. We apply a standard model of arbitrator behavior to all 391 arbitrated cases in baseball since 1979. Under conditions that should lead to an even split in awards to teams and players, probit analysis indicates that arbitrators favor teams 61 percent of the time. Furthermore, bias against African-American and Latinborn players is even more pronounced.     

Returning migrant characteristics and labor market demand in Greece

Immigrants who repatriate bring with them modern work skills which many observers in labor exporting regions describe as a great contribution to the mother country. Using data from 2 samples of Greek repatriates as well as projections of industrial labor force demands in Greece for the 1980s, this article challenges this concept. The authors find that the uneven regional development and stunted industrial growth which pushed these workers abroad are also responsible for the narrowly limited employment options which they face once they repatriate. For the urban repatriate, the market is limited to unemployment, the urban informal sector and scattered jobs, while for the rural repatriate, small-scale agriculture, multiple job holdings and unemployment are the only viable options.     

International competition and the labor market prospects of union and nonunion workers

We investigate the relationship between international competition and the labor mar-ket prospects of a representative sample of British workers. Our analysis, which sets out the first explicit test of both the wage and employment implications of increased international competition, highlights an interesting asymmetry with competition neg-atively affecting the wage, but not the employment, prospects of unionized workers and the employment, but not the wage, prospects of nonunion workers. We have benefited from discussions with Monojit Chatterji, Michael Devereux, Lisa Grobar, Alan Man-ning, Chris Milner, and Ian Walker. Helpful comments were also received from seminar participants at the Universities of Aberdeen, City, Keele, and Loughborough. We are grateful to Daniel Kwok for excellent research assistance. The normal disclaimer applies.