Effects of Minimum Wages on Youth Employment: the Importance of Accounting for Spatial Correlation

The relationship between minimum wage increases and youth employment is investigated using county-level data and spatial econometric techniques. Results that account for spatial correlation indicate that a 10% increase in the effective minimum wage is associated with a 3.2% decrease in youth employment, a result that is 28% higher than the corresponding estimate that does not control for spatial correlation. Thus, estimates that do not take into account spatial correlation may significantly underestimate the negative effect of the minimum wage on teenage employment. Improperly controlling for factors that vary systematically over space can lead to incorrect inferences and misinform policy.

How Living Wage Legislation Affects U.S. Poverty Rates

I investigate how living wage legislation affects poverty. I find evidence that living wage ordinances modestly reduce poverty rates where such ordinances are enacted. However, there is no evidence that state minimum wage laws do so. The difference in the impacts of the two types of legislation conceivably stems from a difference in the party responsible for bearing the burden of the cost.

A Historical Perspective on High School Students’ Paid Employment and Its Association with High School Dropout

Discussions about the role of paid employment in high school students’ lives usually involve untested assumptions about historical trends in the frequency, intensity, and selective nature of students’ employment behaviors. Using several nationally representative data sources, we find few changes in rates of employment or hours worked per week among adolescents since 1940 or among students since 1980. We observe important changes in recent decades in racial/ethnic and gender differences in employment and intensive employment. Finally, we observe that the relationship between students’ intensive employment and high school completion has been stable and persistently significant since the late 1960s.

Gender wage differences and human capital in the early twentieth century: the case of the paper box industry in New York

Women employed in the New York paper box industry in 1913–1914 earned about 60% of what men did. This paper employs the human capital framework to analyze the wage differential due to productivity related factors versus discriminatory nepotism towards men. Years of schooling, years of experience in the paper box trade, and legislative restrictions on working hours of women account for virtually all of the observed wage differential, both for all men and women in the paper box industry, and between the skilled occupations of cutters and strippers.

The working spouse penalty/premium and married women’s labor supply

Using data drawn from the Current Population Surveys, this paper provides a consistent explanation for why the presence of a working wife reduces the husband’s wage among managers, but increases the husband’s wage among non-managers. It is not husband’s occupation per se but rather the distribution of husbands’ wage levels that underlies the working spouse penalty or premium. Positive correlations in earnings between married couples that arise from assortative mating make the cross-wage effects of the husbands’ wages on the wives’ hours of work first positive, then negative in cross-sectional data. The phenomenon of a working spouse penalty/premium is simply the flip side of this relationship.

Britain’s Labor Market Under the Blair Governments

Since the Labor Party returned to power in 1997, a substantial increase in employment regulation has occurred in the United Kingdom. Britain has enacted new laws on labor union recognition, introduced a national minimum wage, enhanced employment protection legislation, strengthened anti-discrimination legislation, and imposed many new obligations on employers. Employment regulation should not, however, be looked at in isolation. The potential for job loss implicit in some of the Blair administrations’ regulation has been offset by other factors which have broadly supported labor market flexibility. This does not mean that further regulation can be imposed with impunity. Although the UK labor market continues to perform better than those of the large continental European economies, its competitiveness may be slipping. When Mr. Blair retires, the prospects may deteriorate.

The Non-Existence of the Labor Demand/Supply Diagram,and other Theorems of Institutional Economics

The most famous and influential diagram in modern (neoclassical) labor economics is the model of wage determination by supply and demand. Using concepts and ideas from institutional economics, I argue that the theory of a perfectly competitive labor market is logically contradictory and, hence, the demand/supply diagram cannot exist on the plane of pure theory. Four other fundamental theorems concerning labor markets are also derived, as are implications about the theoretical foundation of the field of industrial relations and the economic evaluation of labor and employment policy.

Labor Force Supply Decisions of Rural Low-Income Mothers

Employment is crucial to the economic well-being of families. Using a multi-state sample of 412 rural low-income mothers, our study identifies factors influencing two employment decisions they make: labor force entry and number of hours supplied. A logistic regression model correctly predicted 80% of mothers’ work participation decisions. Employed mothers were older, better educated, and less likely to suffer from depression; as well as, more likely to have a driver’s license and receive child care assistance and the Earned Income Tax Credit. An estimated labor supply function explained 33% of the variation in hours worked by the 208 employed rural mothers. Higher wages, availability of health insurance, and overtime benefits predicted the number of hours they were willing to work.

Are Rich Earners Time-Privileged in Taiwan? The Evidence from 1981 to 2006

This paper investigates how the relationship between income and working hours in Taiwan has changed over time. By using the official individual sample in the Manpower Utilization Surveys from DGBAS during 1981–2006, this study concludes that higher earners worked fewer hours as the economy is expanding and the price level increases in Taiwan; however, higher earners lose their time privileges as the economy relies on the service sector more than before. Furthermore, with regard to gender differences, it is found that higher earners still have time advantages relative to lower earners over time for male, but not so for female.

Does Public or Not-for-Profit Status Affect the Earnings of Hospital Workers?

This paper examines the earnings differentials among hospital workers in the public, private nonprofit, and private for-profit sectors. Utilizing data from the 1995 through 2007 Current Population Surveys, unadjusted earnings are highest in the private nonprofit sector and lowest in private for-profit firms. Once measurable characteristics are accounted for, health practitioners in for-profit and nonprofit hospitals earn similar wages while public sector workers earn small but significant wage penalties. Nonprofit hospitals tend to attract workers with higher levels of skill as measured by schooling and potential experience. This could be explained in part by worker sorting and lower cost containment incentives in nonprofit hospitals. Wage change analysis using pooled 2-year panels constructed from the CPS indicate no significant differences in earnings between the three sectors of employment. Whatever the role of the sector of employment on the overall earnings of hospital workers, there is sufficient worker mobility within the industry to largely eliminate systematic wage differences across type of hospital.

“Family-Friendly” Fringe Benefits and the Gender Wage Gap

Evidence suggests a large portion of the gender wage gap is explained by gender occupational segregation. A common hypothesis is that gender differences in preferences or abilities explain this segregation; women may prefer jobs that provide more “family-friendly” fringe benefits. Much of the research provides no direct evidence on gender differences in access to fringe benefits, nor how provision affects wages. Using data from the National Longitudinal Survey of Youth 1979, we find that women are more likely to receive family-friendly benefits, but not other types of fringe benefits. We find no evidence that the differences in fringe benefits explain the gender wage gap.

The Impact of Privatization on the Earnings of Restructured Workers: Evidence From the Oil Industry

We study the long-term impact of job displacement from a big state owned enterprise as a result of its privatization in a developing country. Our results suggest large reductions in earnings, which persist throughout the years. However, we also find that the displaced worker’s post-displacement earnings are in line with competitive market wages, and unrelated to sector of employment or to tenure losses, indicating that the long-term reduction in earnings as a result of displacement because of privatization can be traced to the loss of wage rents. Our results indicate that job displacement in SOEs may have very large redistributive implications for the workers involved but that this loss does not necessarily reflect the loss of specific human capital associated to these jobs.

Sexual Orientation and Labor Market Discrimination

We develop empirical estimates of the return to sexual orientation in the labor market and utilize the 2004 Current Population Survey to determine if lesbians and gay men are treated differently from their heterosexual counterparts. We find strong evidence consistent with the hypothesis of discriminatory treatment against gay men, and this evidence differs substantially by occupation. On the other hand, we find no evidence of discrimination against lesbians. These findings are consistent with priors based on economic theory of the standard taste for discrimination and statistical discrimination models. The results for both men and women are consistent across wage and total compensation regressions.

Testing Fair Wage Theory

Fairness considerations often are invoked to explain wage differences that appear unrelated to worker characteristics or job conditions, but non-experimental tests of fair wage models are rare because market data rarely permit researchers to measure individual workers’ productivity and its value. We use data from the baseball labor market to address this problem, and find no support for fair wage theory. We do find, however, that fairness premia can be illusory: Wages appear to incorporate fairness premia in regressions that control for variation in individuals’ physical output, but such premia evaporate when the value of that output is held constant.

The Decomposition of Firm-size Wage Differentials

No completely satisfactory explanation for the persistent and well-documented large-firm wage premium has been found. I use a novel adaptation of the Oaxaca/Blinder wage discrimination model to examine the firm-size wage differential which allows the wage differential to be decomposed into the portions attributable to (1) differences in employee endowments, (2) how the firm values these endowments, and (3) residual differences. Small firms actually pay higher wages based on how they value their workers’ endowments, but this wage premium was overshadowed by the superior endowments of workers in large firms and a residual differential in favor of large firms.

How Wage Compression Affects Job Turnover

I use Swedish establishment-level panel data to test the hypothesis of Bertola and Rogerson (Eur Econ Rev 41:1147–1171 1997) of a positive relation between the degree of wage compression and job reallocation. Results indicate that the effect of wage compression on job turnover is positive and significant in the manufacturing sector. The wage compression effect is stronger on job destruction than on job creation, consistent with downward wage rigidity. Further results include a strong positive relationship between the fraction of temporary employees and job turnover and a negative relationship between the amount of working-time flexibility and job reallocation.

The economics of gay and lesbian couples: Introduction to a special issue on gay and lesbian households

This article presents a simple conceptual framework integrating three couple-related outcomes analyzed in this volume: wage differentials in earnings related to couple formation, household formation (including cohabitation and registration as Registered Domestic Partnership), and intra-household allocation of income. It also discusses some of the articles’ main findings.

Unions and Employment Growth: Evidence from State Economic Recoveries

We test the hypothesis that in an economic recovery, unionization negatively affects job creation. We examine state-level job growth following two recent recessions, those with troughs in November 1982 and March 1991. In the five years following the troughs, we assess whether variations across states in union membership and right-to-work laws affect the rate of job growth. We find evidence that links union influence to slower job growth during an economic recovery, a finding consistent with previous studies reporting that unions negatively affect average employment and employment growth.

Union Worker Wage Effect in the Public Sector

This study examines union wage premiums in the public sector for the 1998–2004 period. Unlike previous studies, our approach estimates union wage premiums considering differences in the rewards to education, experience, and other personal characteristics for union and non-union workers. The approach provides a larger estimated wage gap than the traditional approach, and allows for simulations of union–nonunion wage gaps for different types of workers. Moreover, we use an Oaxaca decomposition to explain the larger union–nonunion wage gap in the private sector in comparison to that in the public sector. We find that between 50% and 60% of the difference in union wage premiums between the private and public sectors is due to differences in the way unionized workers are rewarded in the private and public sectors, while the remaining portion is due to differences in personal characteristics of private and public sector workers.

Married Couples’ Time Allocation Decisions and Marital Stability

The Panel Study of Income Dynamics (PSID), 1985–1992, are the data used to simultaneously examine the role of family stability to both market and household time allocation for both spouses and the role of couples’ time allocation in their probability of divorce. The study found that increases in the probabilities of divorce were only significantly correlated with decreases in wife’s housework time. It was also found by the study that increases in the husband’s market work hours and increases in the wife’s household work hours had negative effects on the probability of divorce.