In 1960, 94% of American doctors and lawyers were white men: by 2010, the fraction was just 62%. Similar changes in other high-skilled occupations have occurred throughout the US economy over the last 60 years. Given that the innate talent for these professions is not likely to be any different across groups, the change in […]
Labour Markets
We report on research that concerns the education and training people receive, the amount that they work, what they do, and what they earn. Topics of interest include:
• Unemployment
• The wage and employment response to unemployment insurance, disability insurance, and income taxes and transfers
• School quality, educational attainment, and economic outcomes
• Regulations governing minimum wages, overtime pay, hiring and firing, and collective bargaining
• Discrimination in employment and pay
• The labour market effects of immigration
• The decision to retire
• Inequality and intergenerational mobility
• Marriage, fertility, and labour market behavior
Latest articles
Consumer spending during unemployment: evidence from US bank account data
Nearly all of us experience unemployment at some point in our careers. For example, the Bureau of Labor Statistics finds that 90% of baby boomers have been out of work at least once in their lives. Unemployment is stressful in part because many people do not have enough savings to maintain their standard of living […]
Performance management and workplace culture: evidence from a US trucking firm
There is a growing consensus among economists that management practices are an important explanation for the large observed variation in productivity among firms. Different firms often adopt different practices, even in a narrowly defined industry. In turn, some researchers have speculated that this variety is related to differences in the less tangible attributes of firms. […]
Providing low-cost labor market information to assist jobseekers
Do jobseekers benefit from tailored advice about suitable occupations provided by employment agencies? This column reports the results of a randomized field experiment in which a group of unemployed people received suggestions for alternative occupations based on labor market statistics. The researchers find that the information stimulates the recipients to broaden their search to a more diverse set of occupations. What’s more, they receive a significantly larger number of invitations to job interviews, which is concentrated among those with longer unemployment. These findings suggest that jobseekers find it difficult to access relevant labor market information themselves, and that they can be offered valuable tailored advice in a low-cost, automated way.
Nominal wage rigidity in village labor markets: evidence from India
Markets for daily wage labor are ubiquitous in poor countries, providing employment for hundreds of millions of workers in India alone. In an exploration of how nominal wages in these markets respond to changing economic conditions, this research finds strong evidence of limited downward adjustment in the face of a negative shock. A key part of the explanation lies in perceptions that wage cuts are unfair and reduce worker productivity. The higher unemployment that results from nominal wage rigidity could be addressed by counter-cyclical employment programs, and by modest levels of inflation that allow real wages to adjust in a way that avoids too much harm to workers.
The costs of public sector patronage: lessons from the British Empire
Civil servants constitute a key element of state capacity, with the responsibility for raising government revenues, providing public services and implementing reforms. But what happens to their performance when they are appointed to office less on the basis of their talents than on their social connections to powerful patrons? This research examines the costs of patronage through the lens of a historical bureaucracy that spanned the globe: Britain’s Colonial Office. The research combines newly digitized personnel and public finance data from the administration of the British Empire over the period 1854-1966 to show how patronage influenced the promotion and performance of colonial governors.
US manufacturing jobs and trade liberalization with China
Trade relations between the United States and China have grown increasingly tense, spurred by concerns that growing imports from China have led to plant closures and job loss in the United States. We find a link between the sharp decline in U.S. manufacturing employment after 2000 and the granting of Permanent Normal Trade Relations (PNTR) to China, which eliminated uncertainty about China‘s continued access to the U.S. market. Our research into the reactions of U.S. and Chinese firms to PNTR highlights the sensitivity of firm behavior to policy uncertainty.
The career cost of children: career and fertility trade-offs
Women are often paid less than men, they are often underrepresented in leading positions, and their careers develop at a slower pace than those of men. Here, we ask to what extent these differences can be explained by childbearing. To evaluate the career cost associated with having children, we consider women’s decisions regarding labor supply, occupation, fertility and savings. We evaluate the life-cycle career cost of children to be equivalent to 35 percent of a woman’s total earnings. We further show that part of this cost arises well before children are born through selection into careers characterized by lower wages but also lower skill depreciation.
Marital choices and widening economic inequality
While much attention has been paid to the education premium on the labor market, little study has been devoted to the marriage market. Looking back at four decades of US marriages, this research finds that more highly educated people are more likely to marry and that their spouses tend to be of similar academic achievement. Additionally, more educated couples invest greater time in developing their children’s potential. Meanwhile, children from less educated households enjoy fewer resources and are less likely to marry highly educated spouses, the upshot of which could be less social mobility and wider economic inequality.
Gender gaps among high-skilled professionals: the case of US lawyers
Are differences in earnings between career-minded men and women the result of differences in performance – and if so, what explains the gender gaps in performance? This column explores these questions by analysing data on the careers of American lawyers who graduated at the turn of the millennium. Among these highly skilled young professionals, a key explanation of gender gaps in performance, earnings and career progression is the difference between men and women’s desire to ‘make partner’.
