BACK-LOADED WAGES AND ON-THE-JOB TRAINING IN A FRICTIONAL LABOR MARKET

This paper analyzes the coexistence of on-the-job (general) training and on-the-job search in a frictional labor market where firms post skill-dependent labor contracts to preemptively back-load compensation after training. The back-loaded compensation scheme discourages trained workers' efficient job-to-job transition, as if they accumulated relationship-specific capital, which induces overintensified training among more productive firms. The quantitative analysis predicts that the market equilibrium, relative to the efficiency benchmark, gets more skilled workers (training inefficiency) and less output (allocation inefficiency). It further demonstrates that efficiency loss is moderate due to positive externality and can be improved, as search friction is mitigated. (JEL J24, J31, J64)     

ECONOMIC GLOBALIZATION AND WOMEN'S STATUS IN THE LABOR MARKET:

This study examines the effects of economic globalization on occupational sex segregation and occupational inequality. A theory of global economic restructuring and its impact on the quality of women's work suggests that national integration into the world economy significantly expands opportunities for women in the workplace but does not remove barriers to women's advancement or ameliorate the predominance of low-paying, menial jobs held by women. Two measures of gender occupational differentiation are employed as dependent variables in cross-sectional OLS regression analyses of fifty-six countries using data from 1970–1990. Results indicate that global economic forces reduce occupational sex segregation and inequality. However, these effects are determined by a country's world system position and region. The analyses illustrate that global economic restructuring is a gendered process that transforms and builds upon existing gender inequalities. Therefore, the inclusion of global structural characteristics into comparative research on occupational sex differentiation is essential.     

THE SUPPLY OF INDIVIDUAL HOURS AND LABOR FORCE PARTICIPATION UNDER UNCERTAINTY

In the absence of labor supply constraints, this paper shows that an increase in wage-rate uncertainty alters the optimal supply of individual hours but leaves the decision to participate unchanged. In the presence of these constraints, it is shown that if researchers are concerned with obtaining consistent parameter estimates of the labor supply function, then it is important to correctly specify the type of uncertainty faced by workers. Specifically, a mean preserving increase- in wage-rate uncertainty lowers the participation rate, while an increase in non-wage income uncertainty raises participation.     

THE LABOR MARKET IN THE ART SECTOR OF BAROQUE ROME

We analyze the labor market for painters in Baroque Rome using unique data on primary sales of portraits, still lifes, genre paintings, landscapes, and figurative paintings. In line with the traditional artistic hierarchy of genres, average price differentials between them were high. The matched painter‐patron nature of the dataset allows us to evaluate the extent to which price heterogeneity is related to unobservable characteristics of painters and patrons. We find that the market allocated artists between artistic genres to the point of equalizing the marginal return of each genre. Residual price differences at the employer level can be explained in terms of incentive mechanisms to induce effort in the production of artistic quality and compensating wage differentials. (JEL C23, D8, J3, Z11)     

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)     

INTERNATIONAL TRADE AND THE COMPOSITION OF LABOR MARKET TURNOVER

The composition of labor market turnover is shown to influence patterns of international trade. Job and worker turnover have opposing marginal effects on industry export intensity, highlighting the importance of relative turnover shares on either side of the labor market, as opposed to total volumes of labor mobility, in shaping economic outcomes. Industries with relatively greater shares of worker turnover export more of total production, and those with higher job turnover export less. Furthermore, relatively high job turnover hinders industry adjustment following trade liberalization. These predictions receive support for U.S. manufacturing industries using turnover data in the Quarterly Workforce Indicators available from the U.S. Census Bureau. (JEL F16)     

LABOR MARKET REGULATION AND THE WINNER'S CURSE

This paper analyzes the impact British Columbia's 1992 Skill Development and Fair Wage Policy (SDFWP) on bid price determination. Econometric analysis of the public school projects tendered between 1989 and 1995 shows that prior to the SDFWP, the common values auction model applied, and bidders facing higher competition surcharged cost estimates in order to avoid the winner s curse. After the SDFWP, collective uncertainty concerning wages declined, and the independent values model became relevant. During this period, bidders responded to rising competition by lowering their bids. This adjustment explains, at least in part, why wage regulation did not raise bid prices. ( JEL D44, J38, L74, H57)     

DISCONTINUITIES IN PENSION BENEFIT FORMULAS AND THE SPOT MODEL OF THE LABOR MARKET: IMPLICATIONS FOR FINANCIAL ECONOMISTS

In their analysis of corporate pension plans, financial economists typically invoke the simplest and the most tractable model of the labor market. This is the spot model, where the worker's cash wage plus accruing pension benefit equals the value of his marginal product in each and every period. This paper provides evidence against the empirical validity of the spot model, and uses provisions common to most pension plans to do so. These findings are relevant to the appropriate measurement of pension liabilities and thus to the present controversy surrounding the termination of overfunded plans and the recapture of surplus assets by the employer. The existence of incentive effects, ruled out by the spot model, may help to unravel certain well known "puzzles," such as the failure of employers to fully fund their plans in spite of the tax advantages of doing so.     

LABOR CONTRACTS AND FLEXIBILITY: EVIDENCE FROM A LABOR MARKET REFORM IN SPAIN

This paper evaluates the effects of a labor market reform in Spain that removed restrictions on fixed‐term or temporary contracts. Our empirical results are based on longitudinal firm‐level data that cover observations before and after the reform. We posit and estimate a dynamic labor demand model with indefinite and fixed‐term labor contracts, and a general structure of labor adjustment costs. Experiments using the estimated model show important positive effects of the reform on total employment (i.e., a 3.5% increase) and job turnover. There is a strong substitution of permanent by temporary workers (i.e., a 10% decline in permanent employment). The effects on labor productivity and the value of firms are very small. In contrast, a counterfactual reform that halved all firing costs would produce the same employment increase as the actual reform, but much larger improvements in productivity and in the value of firms. (JEL J23, J32, J41)     

OLIGOPOLY CAPITALISM, LABOR ORGANIZATION, AND WAGES OF WORKERS IN AMERICAN MANUFACTURING INDUSTRIES

This article investigates the interaction between oligopoly power, labor unionization, and worker wages. Using data from the Panel Study of Income Dynamics for workers in manufacturing industries little evidence is found that workers are exploited by oligopolistic employers, but rather wages for production workers increase with both unionization and employer's market power. There is evidence, however, that unionization reduces variation in wages due to increased oligopoly power.     

EMPLOYER RECRUITMENT STRATEGIES AND THE LABOR MARKET OUTCOMES OF NEW HIRES

The results in this article suggest, among other things, a strong association between recruitment choices and starting wages. The theoretical framework motivating the empirical analysis is a wage‐posting game in which firms make wage offers and choose recruitment strategies while recognizing a trade‐off between hiring speed and match quality. Introducing this theoretical framework to the recruitment literature, I present new evidence on employers' choices of recruitment methods to answer the questions “How do employer recruitment choices vary by firm and vacancy characteristics and the skill requirements of jobs?” and “How do vacancy duration and starting wages vary with recruitment choices?”(JEL MS1)     

LABOR MARKET SEGMENTATION AND INCOME DETERMINATION IN POLAND

The model of income determination, as introduced by labor market segmentation students, is applied to Polish data. This article argues that divisions between sectors, industries, branches, and enterprises, imposed institutionally by the Polish central management system, determine dimensions of labor market segmentation in Polish society. Research findings demonstrate a substantive effect of economic segmentation dimensions on income inequalities, with industrial divisions affecting income variation the most strongly. The second stage of anaysis shows substantive differences in the process of income determination between five industries. This article argues that industrial differentials cannot be explained away by differences in labor force composition and that there are substantial variations in how worker characteristics are rewarded. The results are interpreted as evidence of the effect of labor market segmentation on social inequalities in Poland. In addition, differences in structural mechanisms of segmentation between Poland and capitalist societies are noted.     

THE EFFECT OF A NEGATIVE INCOME TAX ON RISK-TAKING IN THE LABOR MARKET

Theory argues that negative income taxes will increase the economic risks that workers take in the labor market. Data from the income maintenance experiments is analyzed to reveal that those workers subject to a NIT seemed to bear more risks than their control group counterparts. Implications and reservations about this finding are offered.     

THE IMPACT OF MACROECONOMIC CONDITIONS IN CHILDHOOD ON ADULT LABOR MARKET OUTCOMES

This study examines the influence of business cycles in childhood on economic performance later in life. I relate unemployment rates between the year before one's birth and the year of one's 15th birthday to schooling, employment, and income as an adult. The analysis exploits variation in macroeconomic conditions across states over time. I address a number of identification challenges related to cohort effects, linear trends, current events, and economic persistence. The caregiving behaviors and background characteristics of parents are also studied. The average unemployment rate in childhood normally has a negative effect on human capital in adulthood. (JEL J11, J24, J31)     

THE LONDON BOMBINGS AND RACIAL PREJUDICE: EVIDENCE FROM THE HOUSING AND LABOR MARKET

This paper investigates the impact of the London bombings on attitudes toward ethnic minorities, examining outcomes in housing and labor markets across London boroughs. We use a difference‐in‐differences approach, specifying “treated” boroughs as those with the highest concentration of Asian residents. Our results indicate that house prices in treated boroughs fell by approximately 2% in the 2 years after the bombings relative to other boroughs, with sales declining by almost 6%. Furthermore, we present evidence of a rise in the unemployment rate in treated compared to control boroughs, as well as a rise in racial segregation. (JEL J15, J71, R21)     

A QUALITY-ADJUSTMENT MODEL OF THE ACADEMIC LABOR MARKET: THE CASE OF ECONOMISTS

This paper uses some new data on the initial academic placements of new Ph.D. economists to test a quality-adjustment model, which is consistent with the hypothesis that most academic appointments follow a "downstream" pattern. By the use of weighted least squares the authors confirm the importance of the perceived quality of the faculty of the degree granting program, the publishing performance of former graduates of these programs, and the student/faculty ratio of these programs in economics over the period 1960 to 1978. Finally, it is shown that contrary to popular opinion, the extent of the "downstream" pattern has not been magnified in the so-called buyers markets of the 1970's.     

LABOR MARKET SEGMENTATION AND INCOME INEQUALITY IN URBAN CHINA

Though central to the market transition debate, the effect of the institutional realignment on stratification order has not been adequately addressed. I reformulate market transition hypotheses and use data from a recent survey in a Chinese city to test market transition theory and path dependence arguments. I make the linkage between literatures on labor market segmentation and literatures on market transition. I show different returns to human and political capital in the private and state sectors in urban China. My research suggests modifications of the conceptual issues used in the market transition debate.     

THE PHYSICIAN LABOR MARKET IN A MANAGED CARE-DOMINATED ENVIRONMENT

The belief that doctors respond to declining demand by treating patients more aggressively has created skepticism about relying on market forces to restructure physician supply. We argue that even if the physician labor market is dysfunctional under fee-for-service incentives, it can perform better as managed care becomes dominant. Our model implies a nonlinear effect of managed care penetration on incomes. Physicians can offset most or all of initial declines in demand, but cannot insulate themselves indefinitely. This may explain the observation that, until recently, the growth of managed care has not been accompanied by large physician income changes. ( JEL III, J31)