Take This Job
Future Skill Shortages in the U.S. Economy?
David Neumark, Hans Johnson & Marisol Cuellar Mejia
NBER Working Paper, July 2011
Abstract:
The impending retirement of the baby boom cohort represents the first time in the history of the United States that such a large and well-educated group of workers will exit the labor force. This could imply skill shortages in the U.S. economy. We develop medium-term labor force projections of the educational demands on the workforce and the supply of workers by education to assess the potential for skill imbalances to emerge. Based on our formal projections, we see little likelihood of skill shortages emerging by the end of this decade. More tentatively, though, skill shortages are more likely as all of the baby boomers retire in later years, and skill shortages are more likely in the medium-term in states with large and growing immigrant populations. We discuss conflicting evidence on skill shortages based on alternative projections as well as criticisms of the definition of skill requirements, concluding that our projections are likely the most reasonable.
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Richard Florida et al.
Journal of Economic Geography, forthcoming
Abstract:
This research examines the effect of skills in cities on regional wages. We use cluster analysis to identify three broad skill types - analytical, social intelligence and physical skills from 87 occupational skills. We examine how each skill contributes to regional wages and how they are related to regional size, using data from 1999 and 2008. We find that analytical and social intelligence skills have a significant positive effect on regional wages, while physical skills have a negative effect. Analytical skills are also somewhat more closely associated with regional wages than social intelligence skills, after controlling for education, industry, immigration and regional size. Furthermore, wage return to analytical and social intelligence skills has increased over time, and the return to physical skills has declined significantly. We also show that larger cities reward analytical and social intelligence skills to a higher degree, whereas smaller cities rely more on physical skills.
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Mark Aguiar, Erik Hurst & Loukas Karabarbounis
NBER Working Paper, July 2011
Abstract:
We use data from the American Time Use Survey (ATUS), covering both the recent recession and the pre-recessionary period, to explore how foregone market work hours are allocated to other activities over the business cycle. Given the short time series, it is hard to distinguish business cycle effects from low frequency trends by simply comparing time spent on a given category prior to the recession with time spent on that category during the recession. Instead, we identify the business cycle effects on time use using cross state variation with respect to the severity of the recessions. We find that roughly 30% to 40% of the foregone market work hours are allocated to increased home production. Additionally, 30% of the foregone hours are allocated to increased sleep time and increased television watching. Other leisure activities absorb 20% of the foregone market work hours. We use our evidence from the ATUS to calibrate and test the predictions of workhorse macroeconomic models with home production. We show that the quantitative implications of these models regarding the allocation of time over the business cycle matches reasonably well the actual behavior of households.
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William Terry
Geoforum, forthcoming
Abstract:
The cruise industry enjoys arguably the most flexible and globalized of all labor markets. Yet, in an apparent paradox, cruise lines face a potential labor shortage, despite the fact that the bulk of their labor is sourced from the Global South where a large labor surplus would seemingly make recruitment a simple process. This paper examines this paradox in greater detail with a focus on the tension that exists between the industry's demand for a flexible labor force, and the need for workers who maintain the skills required of a cruise ship job. It is argued that the contemporary geography of global labor recruitment is constrained by the particular political, economic and cultural circumstances of individual source countries that make certain cohorts less attractive or available as a workforce. In practice the need for skill and flexibility are not always reconcilable and cruise lines have found that there is a geographic limit to labor market flexibility. The article is based on interviews with various stakeholders involved in either working on cruise ships or in recruiting workers. Special emphasis is placed on Filipino cruise ship workers and labor recruiters as a means to discuss labor recruitment for the entire industry.
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Unions, Norms, and the Rise in U.S. Wage Inequality
Bruce Western & Jake Rosenfeld
American Sociological Review, August 2011, Pages 513-537
Abstract:
From 1973 to 2007, private sector union membership in the United States declined from 34 to 8 percent for men and from 16 to 6 percent for women. During this period, inequality in hourly wages increased by over 40 percent. We report a decomposition, relating rising inequality to the union wage distribution's shrinking weight. We argue that unions helped institutionalize norms of equity, reducing the dispersion of nonunion wages in highly unionized regions and industries. Accounting for unions' effect on union and nonunion wages suggests that the decline of organized labor explains a fifth to a third of the growth in inequality-an effect comparable to the growing stratification of wages by education.
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Earnings Volatility in America: Evidence from Matched CPS
James Ziliak, Bradley Hardy & Christopher Bollinger
Labour Economics, forthcoming
Abstract:
We offer new evidence on earnings volatility of men and women in the United States over the past four decades by using matched data from the March Current Population Survey. We construct a measure of total volatility that encompasses both permanent and transitory instability, and that admits employment transitions and losses from self employment. We also present a detailed decomposition of earnings volatility to account for changing shares in employment probabilities, conditional variances of continuous workers, and conditional mean variances from labor-force entry and exit. Our results show that earnings volatility among men increased by 15 percent from the early 1970s to mid 1980s, while women's volatility fell, and each stabilized thereafter. However, this pooled series masks important heterogeneity in volatility levels and trends across education groups and marital status. We find that men's earnings volatility is increasingly accounted for by employment transitions, especially exits, while the share of women's volatility accounted for by continuous workers rose, each of which highlights the importance of allowing for periods of non-work in volatility studies.
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Assessing Post-ADA Employment: Some Econometric Evidence and Policy Considerations
John Donohue et al.
Journal of Empirical Legal Studies, September 2011, Pages 477-503
Abstract:
This article explores the relationship between the Americans with Disabilities Act (ADA) and the relative labor market outcomes for people with disabilities. Using individual-level longitudinal data from 1981 to 1996 derived from the previously unexploited Panel Study of Income Dynamics (PSID), we examine the possible effect of the ADA on (1) annual weeks worked; (2) annual earnings; and (3) hourly wages for a sample of 7,120 unique male household heads between the ages of 21 and 65, as well as for a subset of 1,437 individuals appearing every year from 1981 to 1996. Our analysis of the larger sample suggests the ADA had a negative impact on the employment levels of disabled persons relative to nondisabled persons but no impact on relative earnings. However, our evaluation of the restricted sample raises questions about these findings. Using these data, we find little evidence of adverse effects on weeks worked but strong evidence of wage declines for the disabled, albeit declines beginning in 1986, well before the ADA's passage. These results therefore cast doubt on the adverse ADA-related impacts found in previous studies, particularly Acemoglu and Angrist (2001). The conflicting narratives that emerge from our analysis shed new light on, but also counsel caution in reaching final conclusions about, the impact of the ADA on employment outcomes for people with disabilities.
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Norma Perez et al.
Hispanic Journal of Behavioral Sciences, May 2011, Pages 221-233
Abstract:
There is little known about the association between socioeconomic status and job stress in Mexican Americans. To address this issue, data were originated on a community level using personal interviews from working Mexican Americans using a multistage probability sample. In this study we described the population's sociodemographic characteristics, health conditions, and job stress measures in Mexican Americans, non-Hispanic Whites, and non-Hispanic Blacks. Regression models were used to examine the associations of sociodemographic characteristics and health conditions for each job stress measure among 937 individuals. Our results indicate an association between low socioeconomic status and the perception of less job control, less job security, and less social support. Mexican Americans demonstrated more job security and social support in comparison to non-Hispanic Whites of similar socioeconomic status. We were able to define potential factors that may contribute to an individual's perception of job stress.
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Labor market policy: A comparative view on the costs and benefits of labor market flexibility
Lawrence Kahn
Journal of Policy Analysis and Management, forthcoming
Abstract:
I review theories and evidence on wage-setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English-speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth, and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality.
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The Costs of Free Entry: An Empirical Study of Real Estate Agents in Greater Boston
Panle Jia Barwick & Parag Pathak
NBER Working Paper, July 2011
Abstract:
This paper studies the real estate brokerage industry in Greater Boston, an industry with low entry barriers and substantial turnover. Using a comprehensive dataset of agents and transactions from 1998-2007, we find that entry does not increase sales probabilities or reduce the time it takes for properties to sell, decreases the market share of experienced agents, and leads to a reduction in average service quality. These empirical patterns motivate an econometric model of the dynamic optimizing behavior of agents that serves as the foundation for simulating counterfactual market structures. A one-half reduction in the commission rate leads to a 73% increase in the number of houses each agent sells and benefits consumers by about $2 billion. House price appreciation in the first half of the 2000s accounts for 24% of overall entry and a 31% decline in the number of houses sold by each agent. Low cost programs that provide information about past agent performance have the potential to increase overall productivity and generate significant social savings.
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William Lester
Economic Development Quarterly, August 2011, Pages 237-254
Abstract:
Traditional local economic development policies entice private businesses to create high-paying jobs in a given jurisdiction through direct subsidies or by projecting a positive "business climate" within regional and global arenas. Since 1994 however, living wage ordinances have emerged as an alternative response to labor market polarization in urban areas. However, these laws raise labor costs for employers and may thus reduce economic growth. This article advances the empirical literature on living wage impacts through the use of a novel data set - the National Establishment Time Series - to track employment and establishment growth at the city level among directly affected employers (e.g., government contractors), as well as other establishments that may be indirectly signaled by a change in the local political environment. Using panel regression models that account for structural differences between living wage and non-living wage cities, this article finds that living wage laws have no significant impact on employment or establishment growth. Additionally, this article finds no evidence that living wage laws "signal" businesses about a potentially harmful change in the local business climate.
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Psychology Degrees: Employment, Wage, and Career Trajectory Consequences
D.W. Rajecki & Victor Borden
Perspectives on Psychological Science, July 2011, Pages 321-335
Abstract:
Psychology is a very popular undergraduate major. Examining wage data from a range of degree holders reveals much about the expected career trajectories of those with psychology degrees. First, regarding baccalaureates, psychology and other liberal arts graduates-compared with those from certain preprofessional and technical undergraduate programs-generally fall in relatively low tiers of salary levels at both starting and later career points. Salary levels among baccalaureate alumni groups correlate with averaged measures of salary satisfaction, repeated job seeking, and perceptions of underemployment. These patterns seem to stem from the specific occupational categories (job titles) entered by graduates in psychology compared with other graduates, calling into question the employability advantage of so-called generic liberal arts skills. Second, psychology master's degree holders also generally fall in a low tier of salary among their science, engineering, and health counterparts. Third, psychology college faculty (including instructors) fall in low tiers of salary compared with their colleagues from other academic fields. Such broadly based indications of the relative economic disadvantages of psychology degrees have implications for career counseling in the field.
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Patrick McKay et al.
Organization Science, May-June 2011, Pages 788-803
Abstract:
Extending insights from Cox's interactional model of cultural diversity [Cox, T. H., Jr. 1994. Cultural Diversity in Organizations: Theory, Research and Practice. Berett-Koehler, San Francisco], we examine the influence of diversity climate on customer satisfaction, a key business-unit outcome. In addition, we explore service climate and minority and female representations as boundary conditions of the diversity climate-customer satisfaction relationship. Utilizing longitudinal data from 59,592 employees and 1.2 million customers of 769 store units of a large U.S. national retail organization, the results reveal that, as hypothesized, diversity climate is positively and significantly related to customer satisfaction measured a year later. Moreover, the diversity climate-customer satisfaction relationship is most strongly positive in predominately minority, highly pro-service store units, whereas female representation exhibits null moderating effects. These findings have important research and practical implications.
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Eden King et al.
Academy of Management Journal, forthcoming
Abstract:
Integrating sociological and psychological perspectives, this research considers the value of organizational ethnic diversity as a function of community diversity. Employee and patient surveys, census data, and performance indices relevant to 142 hospitals in the United Kingdom suggest that intraorganizational ethnic diversity is associated with reduced civility toward patients. However, the degree to which organizational demography was representative of the community demography was positively related to civility experienced by patients and ultimately enhanced organizational performance. These findings underscore the understudied effects of community context, and imply that intergroup biases manifested in incivility toward outgroup members hinder organizational performance.