Membership and wage impact of right-to-work laws

This paper examines the effects of “Right-to-Work” laws on union membership and on the earnings of union and nonunion members. Using regression analysis, we find that once the simultaneous equations bias between the degree of unionization and RTW laws is eliminated, RTW laws have no statistically significant influence on union membership. Similarly, using a human-capital earnings model, we find that RTW laws have no significant influence on the wages of all workers, union workers, or nonunion workers. However, we did find evidence that such laws may promote aggressive union wage policies resulting in a larger union/nonunion relative wages advantage in RTW states than in non-RTW states.     

RENT CREATION AND RENT SHARING: NEW MEASURES AND IMPACTS ON TOTAL FACTOR PRODUCTIVITY

This analysis proposes new measures of rent creation and rent sharing and assesses their impact on productivity on cross‐country‐industry panel data. We find first that: (1) anticompetitive product market regulations positively affect rent creation and (2) employment protection legislation boosts hourly wages, particularly for low‐skill workers. However, we find no significant impact of this employment legislation on rent sharing, as the hourly wage increases are offset by a negative impact on hours worked. Second, using regulation indicators as instruments, we find that rent creation and rent sharing both have a substantial negative impact on total factor productivity. (JEL E22, E24, O30, L50, O43, O47, C23)     

RISING AUTISM PREVALENCE: REAL OR DISPLACING OTHER MENTAL DISORDERS? EVIDENCE FROM DEMAND FOR AUXILIARY HEALTHCARE WORKERS IN CALIFORNIA

Autism is a development disorder that has increased in prevalence from 0.5 to 14.7 per 1,000 children over 1970–2010. Using annual wages and provider counts from the American Community Survey and information from 21 regional development centers in California, we estimate the labor demand for auxiliary health providers. We focus on this subset of providers because, unlike physicians and psychologists who can diagnose autism, these workers cannot induce their own demand. If the incidence of autism is increasing independently of other mental disorders, then the demand for auxiliary health providers should increase, leading to higher wages and labor supply. Otherwise, the increase in autism diagnosis is merely displacing other mental disorders. We find that a 100% increase in autism cases increases the wages of auxiliary health workers over non‐autism health occupations by 8–11% and the number of providers by 9–14%. Furthermore, we find that one of every three new autism diagnoses is merely supplanting mental retardation diagnoses, but does not displace other mental disorders. These estimates suggest that at least part of the increase in autism diagnoses, about 50–65%, reflects an increase in the true prevalence of the disorder. (JEL L11, J2, J3)     

INTERMARRIAGE AND THE LABOR MARKET OUTCOMES OF ASIAN WOMEN

The impact of intermarriage with natives, on labor market outcomes of immigrants, is not homogeneous across ethnic groups. Wages of Asian women are compared with non‐Asians. Both ordinary least squares and instrumental variables estimates of the effects of intermarriage on the wages of Asian women are negative and significant. Non‐Asian women earn a wage premium that becomes insignificant when controls for selection into marriage are introduced. One possible explanation for the intermarriage penalty for Asians is an income effect of having a high‐earning native husband. Intermarriage penalties rise with husband's education. Assimilation patterns of intermarried Asians indicate that they have lower initial wages, market hours, and employment, but exhibit faster rates of growth over their years of stay. The results are robust across Asian subgroups and husband's ethnicity. (JEL J16, J12, J31, J61)     

ANTI‐POACHING AGREEMENTS IN LABOR MARKETS

We analyze competition for experienced workers among wage‐setting firms. The firms can design poaching offers with higher wages to workers who switch from rivals relative to wages paid to their own existing employees. We evaluate the profit and welfare effects of anti‐poaching agreements that eliminate poaching offers as a recruiting method. Anti‐poaching agreements increase industry profits, whereas workers are made worse off. We show that the effects of anti‐poaching agreements on total welfare are determined by the magnitude of workers' switching costs and the productivity change associated with switching employers. (JEL L41, L40, J42)     

DO COLLEGE‐PREPARATORY PROGRAMS IMPROVE LONG‐TERM OUTCOMES?

This paper presents an analysis of the longer‐run effects of a college‐preparatory program implemented in inner‐city schools that provided teacher training in addition to payments to 11th‐ and 12th‐grade students and their teachers for passing scores on Advanced Placement (AP) exams. Affected students passed more AP exams, were more likely to remain in college beyond their first and second years, and earned higher wages. Effects are particularly pronounced for Hispanic students who experienced a 2.5‐percentage‐point increase in college degree attainment and an 11% increase in earnings. While the study is based on nonexperimental variation, the results are robust across a variety of specifications, and most plausible sources of bias are ruled out. The results provide credible evidence that implementing high‐quality college‐preparatory programs in existing urban schools can improve the long‐run educational and labor‐market outcomes of disadvantaged youth. (JEL I2, I24, J0)     

Could “Acculturation” Effects Be Explained by Latent Health Disadvantages Among Mexican Immigrants?

This paper tests portions of a new theory of immigrant health by focusing exclusively on latent biomarkers of future health risks. Using data from the National Health and Nutrition Examination Survey III, 1988–1994 – we uncover the typically observed immigrant health advantage among recent immigrants that diminishes among long‐term immigrants. In addition, we observe worse health among U.S.‐born Mexican Americans relative to non‐Hispanic Whites. Finally, although our theory suggests that recent immigrants may have latent health risks due to disadvantaged childhood experiences, we do not find evidence in support of this theory.     

Racial and Ethnic Differences in Experiencing Parents’ Marital Disruption During Late Adolescence

Using panel data from 9,252 adolescents in the National Education Longitudinal Study, this study finds that among children who experience parents’ marital disruption during late adolescence, European, Asian, and African American adolescents exhibit wider and greater maladjustment both before and after the disruption than their Hispanic American counterparts. This finding lends general support to the hypothesis of prevalence of disadvantages, although it is less consistent with the hypothesis of prevalence of divorce. Moreover, whereas Asian American adolescents in predisrupted families are more vulnerable to a shortage of family social resources, their African American peers are affected more by a shortage of financial/human resources. Finally, postdisruption effects on non‐Hispanic American adolescents are either completely or partially attributable to predisruption factors.     

The Effects of Being Out of the Labor Market on Subsequent Wages: Evidence for Uruguay

Based on administrative data combining workers’ earnings histories and unemployment insurance benefits, we document short and long term wage losses for a large sample of Uruguayan formal workers with high tenure. The contribution of this paper is to provide original evidence about job separation costs in a developing country, based on a unique array of social security and unemployment insurance administrative micro-data. Our main findings indicate that workers lose around 38 % of their previous wages in the first quarter after separation, and 1 year after, losses are still more than 14 %. If we consider earnings plus unemployment insurance benefits, losses at the quarter of separation are considerable lower, amounting 22 % of previous wages. We also provide original evidence about how wage losses vary across age groups, gender, industry and size of the firm. Differences between switchers and non switchers, as well as the effects of the economic cycle are also analyzed.     

Immigration and the American Obesity Epidemic1

Immigration is an important population dynamic at work in the U.S., but we know little about its impact on American obesity. Built on nutrition transition and immigration theories, this paper provides explanations for immigrants’ initial body composition advantage, its partial erosion over time, and the gender difference in the erosion. We find evidence that the American obesity epidemic would be much more severe without the mass immigration that began in 1965. In addition to confirming the erosion in immigrants’ body composition advantage, we further find that this erosion is weaker for men than for women. Once immigration’s impact is teased out, racial/ethnic disparities in body composition greatly differ from what we observe. This study provides gender‐specific estimates for the differences in obesity by nativity and residence duration and the net level of Hispanic‐white and Asian‐white disparities at the mean body mass index (BMI) as well as the overweight, Stage‐1, and Stage‐2 obesity cutoffs. Our findings suggest that immigration must be taken into account when addressing public health concerns.     

ARE WORKERS WILLING TO PAY TO JOIN A BETTER TEAM?

Using data from the Major League Baseball free‐agent market, this study is the first to show that the productivity expected of the team a worker will join produces a significant, negative compensating wage differential. The younger workers in the sample drive this result, trading 25% of their wages to join teams with an expected productivity one standard deviation higher. This investment can be recouped if a reasonable increase in human capital occurs. These results are robust to contract length‐wage simultaneity and indicate that investment in human capital motivates the observed tradeoff, suggesting a new pathway through which human capital accumulation can affect wages. Reliable measures of workers' own past productivity and the productivity expected of a worker's future team provide key advantages to identifying these effects. (JEL J31, J24, M54)     

OFFSHORING PRODUCTION: A SIMPLE MODEL OF WAGES,PRODUCTIVITY, AND GROWTH

We examine the relationship between offshoring and the labor market in an occupational choice model of trade and endogenous growth where workers are employed on the basis of their individual skill levels. Trade liberalization leads to offshoring and reduces employment in the manufacturing sector. Displaced workers move into traditional and innovation sectors according to their skill levels, shaping real wages and aggregate productivity in the manufacturing sector. The paper aims to show how inter‐sectoral labor market adjustments, highlighted by skill heterogeneity, could be a possible explanation for the simultaneous rise in productivity and reduction in real wages that have coincided with the sharp escalation of offshoring activities in the U.S. manufacturing sector since 2004. (JEL F16, F23, J24)     

A COMPARATIVE ANALYSIS OF THE NATIVITY WEALTH GAP*

We investigate the relative wealth position of immigrant households residing in Australia, Germany, and the United States. In Germany and the United States, wealth differentials stem from differences in the educational attainment and demographic characteristics of the native and immigrant populations, rather than income differentials. In contrast, the small nativity wealth gap in Australia exists because immigrants to Australia do not translate their relative educational and demographic advantage into a wealth advantage. Overall, we find substantial disparity in the economic well‐being of immigrant and native families which is largely consistent with domestic labor markets and immigration policies. (JEL F22, D31)     

DO RACE AND ETHNICITY MATTER AMONG FRIENDS?

Using the National Longitudinal Study of Adolescent Health (or Add Health), a nationally representative sample of adolescents in 1994–1995, we examine if and how friendship activities differ among interracial, interethnic, and interethnic friendships of white, black, Hispanic, and Asian youths. We find that best friends are more likely than higher-order friends to be from the same ethnic group and that best friends report more shared activities during the past week than do their higher-order friendship counterparts. Hence, we argue that shared activities is a useful indicator of friendship intimacy. In general, interracial friends report fewer shared activities than do intraracial friends, although this difference is strongest for white respondents. Moreover, we find that white, Asian, and Hispanic youths all report fewer activities with their black friends. We find little difference in friendship activities between interethnic and intraethnic friendships. Our findings suggest that, even when youths manage to break racial boundaries in friendship selection, these friendships face greater challenges than do those between individuals of the same race.     

The effect of domain prestige and interlocutors' bilingualism on loanword adaptations

There is great variability in whether foreign sounds in loanwords are adapted, such that segments show cross‐word and cross‐situational variation in adaptation. Previous research proposed that word frequency, speakers' level of bilingualism and neighborhoods' level of bilingualism can explain such variability. We test for the effect of these factors and propose two additional factors: interlocutors' level of bilingualism and the prestige of the donor language in the loanword's domain. Analyzing elicited productions of loanwords from Spanish into Mexicano in a village where Spanish and Mexicano enjoy prestige in complementary domains, we show that interlocutors' bilingualism and prestige influence the rate of sound adaptation. Additionally, we find that speakers accommodate to their interlocutors, regardless of the interlocutors' level of bilingualism. As retention of foreign sounds can lead to sound change, these results show that social factors can influence changes in a language's sound system.     

EMPLOYMENT AND DEADWEIGHT LOSS EFFECTS OF OBSERVED NONWAGE LABOR COSTS

To assess the employment effects of labor costs, it is crucial to have reliable estimates of the labor cost elasticity of labor demand. Using a matched firm‐worker data set, we estimate a long‐run unconditional labor demand function, exploiting information on workers to correct for endogeneity in the determination of wages. We evaluate the employment and deadweight loss effects of observed employers' contributions imposed by labor laws (health insurance, training, and taxes) as well as of observed workers' deductions (social security and income tax). We find that nonwage labor costs reduce employment by 17% for white collars and by 53% for blue collars, with associated deadweight losses of 10% and 35% of total contributions, respectively. Since most firms undercomply with mandated employers' and workers' contributions, we find that full compliance would imply employment losses of 4% for white collars and 12% for blue collars, with respective associated deadweight losses of 2% and 6%. (JEL J23, J32)     

The relationship between employer‐provided training and the retention of older workers: Evidence from Germany

A substantial portion of Germany's workforce will soon retire, making it difficult for businesses to meet their human capital needs; training older workers may help to manage this demographic transition. The authors therefore examine the relationships between employer‐provided training programmes, wages and retirement among older workers. They find that when establishments offer special training programmes targeted at these workers, women – especially low‐paid women – are less likely to retire, possibly because of consequent wage growth. Their results suggest that such targeted training can indeed play an important role in retaining low‐wage older women and advancing their careers.     

The Grand Challenge of Reducing Gender and Racial/Ethnic Disparities in Service Access and Needs Among Adults with Alcohol Misuse

This study examined the impact of the Affordable Care Act (ACA) on gender and racial and ethnic disparities in accessing and using behavioral health services among a national sample of adults who reported heavy or binge alcohol use (n = 52,496) and those with alcohol use disorder (AUD; n = 22,966). Difference-in-differences models estimated service-related disparities before (2008–2009) and after (2011–2014) health care reform. A subanalysis was conducted before (2011–2013) and after (2014) full implementation of the ACA. Asian subgroups among respondents with heavy or binge drinking were excluded from substance use disorder (SUD) treatment and unmet need outcome models due to insufficient cell size. Among heavy or binge drinkers, unmet SUD treatment need decreased among Black women and increased among Black men. Mental health (MH) treatment decreased among Asian men, whereas unmet MH treatment need decreased among Hispanic men. MH treatment increased among Hispanic women with AUD. Although there were improvements in service use and access among Black and Hispanic women and Hispanic men, there were setbacks among Black and Asian men. Implications for social workers are discussed.     

FINANCIAL DEVELOPMENT AND WAGE INEQUALITY: THEORY AND EVIDENCE

We argue that financial market development contributed to the rise in the skill premium and residual wage inequality in the United States since the 1980s. We present an endogenous growth model with imperfect credit markets and establish how improving the efficiency of these markets affects modes of production, innovation, and wage dispersion between skilled and unskilled workers. The experience of U.S. states following banking deregulation provides empirical support for our hypothesis. We find that wages of skilled workers increased by between 0.5% and 6.3% following deregulation while those of unskilled workers fell by between 3.5% and 8.7%. Similarly, residual (or within‐group) inequality increased; the 90–50 percentile ratio of residuals from a Mincerian wage regression and their standard deviation increased by 4.2% and 1.7%, respectively. (JEL E25, J31, G24)     

Race,Ethnicity, and Underemployment in Nonmetropolitan America: A 30‐Year Profile*

Abstract Historically, rural racial and ethnic minorities have been among the most economically disadvantaged groups in the United States. Key to understanding economic deprivation is employment hardship, trends in which serve as a benchmark for progress toward racial and ethnic equality. We conceptualize employment hardship as underemployment, which goes beyond unemployment to include discouraged workers, involuntary part‐time workers, and the working poor. Analyzing data from the March Current Population Surveys of 1968 through 1998, we find that (1) there are large and persistent racial and ethnic inequalities in underemployment prevalence; (2) these disadvantages are explained only partially by other predictors of underemployment; (3) nonmetropolitan (nonmetro) minorities are more likely than either all metropolitan (metro) or central‐city minorities to be underemployed; (4) black‐white inequality has held steady overall, though it has declined markedly in nonmetro areas; and (5) Hispanic‐white inequality has increased; this trend, however, is restricted to metro areas, central cities in particular.