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Abstract:
Current concern with relationships among particular technologies, capital and the wage structure motivates this study of the origins of technology-skill complementarity in manufacturing. We offer evidence of the existence of technology-skill and capital-skill (relative) complementarities from 1909 to 1929 and suggest that they were associated with continuous-process and batch methods and the adoption of electric motors. Industries that used more capital per worker and a greater proportion of their horsepower in the form of purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their blue-collar workers substantially more from 1909 to 1929. We also infer capital-skill complementarity using the wage-bill for non-production workers and find that the relationship was as large from 1909-19 as it has been recently. Finally, we link our findings to those on the high- school movement (1910 to 1940). The rapid increase in the supply of skills from 1910 to 1940 may have prevented rising inequality with technological change.

Abstract:
A recent "revisionist " literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an "episodic " event of the first-half of the 1980s driven by non-market factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality -- which has increased steadily since 1980, even adjusting for changes in labor force composition -- and lower tail (50/10) inequality, which rose sharply in the first-half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median of the wage distribution. Models emphasizing rapid secular growth in the relative demand for skills -- attributable to skill-biased technical change -- and a sharp deceleration in the relative supply of college workers in the 1980s do an excellent job of capturing the evolution of the college/high-school wage premium over four decades. But these models also imply a puzzling deceleration in relative demand growth for college workers in the early 1990s, also visible in a recent "polarization" of skill demands in which employment has expanded in high-wage and low-wage work at the expense of middle-wage jobs. These patterns are potentially reconciled by a modified version of the skill-biased technical change hypothesis that emphasizes the role of information technology in complementing abstract (high-education) tasks and substituting for routine (middle-education) tasks.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
A large literature documents a substantial rise in U.S. wage inequality and educational wage differentials over the past several decades and finds that these trends can be primarily accounted for by shifts in the supply of and demand for skills reinforced by the erosion of labor market institutions affecting the wages of low- and middle-wage workers. Drawing on an additional decade of data, a number of recent contributions reject this consensus to conclude that (1) the rise in wage inequality was an episodic event of the first-half of the 1980s rather than a secular phenomenon, (2) this rise was largely caused by a falling minimum wage rather than by supply and demand factors; and (3) rising residual wage inequality since the mid-1980s is explained by confounding effects of labor force composition rather than true increases in inequality within detailed demographic groups. We reexamine these claims using detailed data from the Current Population Survey and find only limited support. Although the growth of overall inequality in the U.S. slowed in the 1990s, upper tail inequality rose almost as rapidly during the 1990s as during the 1980s. A decomposition applied to the CPS data reveals large and persistent rise in within-group earnings inequality over the past several decades, controlling for changes in labor force composition. While changes in the minimum wage can potentially account for much of the movement in lower tail earnings inequality, strong time series correlations of the evolution of the real minimum wage and upper tail wage inequality raise questions concerning the causal interpretation of such relationships. We also find that changes in the college/high school wage premium appear to be well captured by standard models emphasizing rapid secular growth in the relative demand for skills and fluctuations in the rate of growth of the relative supply of college workers - though these models do not accurately predict the slowdown in the growth of the college/high-school gap during the 1990s. We conclude that these patterns are not adequately explained by either a 'unicausal' skill-biased technical change explanation or a revisionist hypothesis focused primarily on minimum wages and mechanical labor force compositional effects. We speculate that these puzzles can be partially reconciled by a modified version of the skill-biased technical change hypothesis that generates a polarization of skill demands.

Wage structure, inequality, technological change, skills, labor market institutions, minimum wage

Abstract:
We study adult economic and health outcomes in the Moving to Opportunity (MTO) demonstration, a randomized housing mobility experiment in which families living in high-poverty U.S. public housing projects in five cities were given vouchers to help them move to private housing units in lower-poverty neighborhoods. An experimental group was offered vouchers valid only in a low-poverty neighborhood; a Section 8 group was offered traditional housing vouchers without geographic restriction; a control group was not offered vouchers. Our sample consists largely of black and Hispanic female household heads with children. Five years after random assignment, the families offered housing vouchers through MTO lived in safer neighborhoods that had significantly lower poverty rates than those of the control group not offered vouchers. We find no significant overall effects on adult employment, earnings, or public assistance receipt - though our sample sizes are not sufficiently large to rule out moderate effects in either direction. In contrast, we do find significant mental health benefits of the MTO intervention for the experimental group. We also demonstrate a more general pattern for the mental health results using both voucher groups of systematically larger effect sizes for groups experiencing larger changes in neighborhood poverty rates. In our analysis of physical health outcomes, we find a significant reduction in obesity for the experimental group, but no significant effects on four other aspects of physical health (general health, asthma, physical limitations, and hypertension) or on our summary measure of physical health.

neighborhood effects, social experiments, Economics - Microeconomics, Housing¸ Urban Development and Transportation, Welfare / Health Care/ Social Policy

Abstract:
During the early 1980s, earnings inequality in the U.S. labor market rose relatively uniformly throughout the wage distribution. But this uniformity gave way to a significant divergence starting in 1987, with upper-tail (90/50) inequality rising steadily and lower tail (50/10) inequality either flattening or compressing for the next 16 years (1987 to 2003). This paper applies and extends a quantile decomposition technique proposed by Machado and Mata (2005) to evaluate the role of changing labor force composition (in terms of education and experience) and changing labor market prices to the expansion and subsequent divergence of upper- and lower-tail inequality over the last three decades We show that the extended Machado-Mata quantile decomposition corrects shortcomings of the original Juhn-Murphy-Pierce (1993) full distribution accounting method and nests the kernel reweighting approach proposed by DiNardo, Fortin and Lemieux (1996). Our analysis reveals that shifts in labor force composition have positively impacted earnings inequality during the 1990s. But these compositional shifts have primarily operated on the lower half of the earnings distribution by muting a contemporaneous, countervailing lower-tail price compression. The steady rise of upper-tail inequality since the late 1970s appears almost entirely explained by ongoing between-group price changes (particularly increasing wage differentials by education) and residual price changes.

Abstract:
During the early 1980s, earnings inequality in the U.S. labor market rose relatively uniformly throughout the wage distribution. But this uniformity gave way to a significant divergence starting in 1987, with upper-tail (90/50) inequality rising steadily and lower tail (50/10) inequality either flattening or compressing for the next 16 years (1987 to 2003). This paper applies and extends a quantile decomposition technique proposed by Machado and Mata (2005) to evaluate the role of changing labor force composition (in terms of education and experience) and changing labor market prices to the expansion and subsequent divergence of upper- and lower-tail inequality over the last three decades We show that the extended Machado-Mata quantile decomposition corrects shortcomings of the original Juhn-Murphy-Pierce (1993) full distribution accounting method and nests the kernel reweighting approach proposed by DiNardo, Fortin and Lemieux (1996). Our analysis reveals that shifts in labor force composition have positively impacted earnings inequality during the 1990s. But these compositional shifts have primarily operated on the lower half of the earnings distribution by muting a contemporaneous, countervailing lower-tail price compression. The steady rise of upper tail inequality since the late 1970s appears almost entirely explained by ongoing between-group price changes (particularly increasing wage differentials by education) and residual price changes.

Wage structure, residual inequality, technological change, labor market institutions, quantile regression

Abstract:
Prevailing wage laws, which require that construction workers employed by private contractors on public projects be paid at least the wages and benefits that are 'prevailing' for similar work in or near the locality in which the project is located, have been the focus of an extensive policy debate. We find that the relative wages of construction workers decline slightly after the repeal of a state prevailing wage law. However, the small overall impact of law repeal masks substantial differences in outcomes for different groups of construction employees. Repeal is associated with a sizeable reduction in the union wage premium and a significant narrowing of the black/nonblack wage differential for construction workers.

Abstract:
Prevailing wage laws, which require that construction workers employed by private contractors on public projects be paid at least the wages and benefits that are 'prevailing' for similar work in or near the locality in which the project is located, have been the focus of an extensive policy debate. We find that the relative wages of construction workers decline slightly after the repeal of a state prevailing wage law. However, the small overall impact of law repeal masks substantial differences in outcomes for different groups of construction employees. Repeal is associated with a sizeable reduction in the union wage premium and a significant narrowing of the black/nonblack wage differential for construction workers.

Abstract:
We examine the effects of family background variables and neighborhood peers on the behaviors of inner-city youths in a tight labor market using data from the 1989 NBER survey of youths living in low-income Boston neighborhoods. We find that family adult behaviors are strongly related to analogous youth behaviors. The links between the behavior of older family members and youths are important for criminal activity, drug and alcohol use, childbearing out of wedlock, schooling, and church attendance. We also find that the behaviors of neighborhood peers appear to substantially affect youth behaviors in a manner suggestive of contagion models of neighborhood effects. Residence in a neighborhood in which a large proportion of other youths are involved in crime is associated with a substantial increase in an individual's probability of them being involved in crime. Significant neighborhood peer effects are also apparent for drug and alcohol use, church attendance, and the propensity of youths to be out of school and out of work. Our results indicate that family and peer influences both operate in manner such that "like begets like."

Abstract:
U.S. educational and occupational wage differentials were exceptionally high at the dawn of the twentieth century and then decreased in several stages over the next eight decades. But starting in the early 1980s the labor market premium to skill rose sharply and by 2005 the college wage premium was back at its 1915 level. The twentieth century contains two inequality tales: one declining and one rising. We use a supply-demand-institutions framework to understand the factors that produced these changes from 1890 to 2005. We find that strong secular growth in the relative demand for more educated workers combined with fluctuations in the growth of relative skill supplies go far to explain the long-run evolution of U.S. educational wage differentials. An increase in the rate of growth of the relative supply of skills associated with the high school movement starting around 1910 played a key role in narrowing educational wage differentials from 1915 to 1980. The slowdown in the growth of the relative supply of college workers starting around 1980 was a major reason for the surge in the college wage premium from 1980 to 2005. Institutional factors were important at various junctures, especially during the 1940s and the late 1970s.

Abstract:
A simple supply and demand framework is used to analyze changes
in the U.S. wage structure from 1963 to 1987. Rapid secular
growth in the demand for more-educated workers, "more-skilled"
workers, and females appears to be the driving force behind
observed changes in the wage structure. Measured changes in the
allocation of labor between industries and occupations strongly
favored college graduates and females throughout the period.
Movements in the college wage premium over this period appear
to be strongly related to fluctuations in the rate of growth of
the supply of college graduates.

Abstract:
Several important social science literatures hinge on the functional relationship between neighborhood characteristics and individual outcomes. Although there have been numerous non-experimental estimates of these relationships, there are serious concerns about their reliability because individuals self-select into neighborhoods. This paper uses data from HUD's Moving to Opportunity (MTO) randomized housing voucher experiment to estimate the relationship between neighborhood poverty and individual outcomes using experimental variation. In addition, it assesses the reliability of non-experimental estimates by comparing them to experimental estimates. We find that our method for using experimental variation to estimate the relationship between neighborhood poverty and individual outcomes - instrumenting for neighborhood poverty with site-by-treatment group interactions - produces precise estimates in models in which poverty enters linearly. Our estimates of nonlinear and threshold models are not precise enough to be conclusive, though many of our point estimates suggest little, if any, deviation from linearity. Our non-experimental estimates are inconsistent with our experimental estimates, suggesting that non-experimental estimates are not reliable. Moreover, the selection pattern that reconciles the experimental and non-experimental results is complex, suggesting that common assumptions about the direction of bias in non-experimental estimates may be incorrect.

Economics - Economic and Econometric Theory, Economics - Microeconomics, Housing¸ Urban Development and Transportation, Welfare / Health Care/ Social Policy

Abstract:
This paper examines the evolution of the Mexican-born workforce in the United States using data drawn from the decennial U.S. Census throughout the entire 20th century. It is well known that there has been a rapid rise in Mexican immigration to the United States in recent years. Interestingly, the share of Mexican immigrants in the U.S. workforce declined steadily beginning in the 1920s before beginning to rise in the 1960s. It was not until 1980 that the relative number of Mexican immigrants in the U.S. workforce was at the 1920 level. The paper examines the trends in the relative skills and economic performance of Mexican immigrants, and contrasts this evolution with that experienced by other immigrants arriving in the United States during the period. The paper also examines the costs and benefits of this influx by examining how the Mexican influx has altered economic opportunities in the most affected labor markets and by discussing how the relative prices of goods and services produced by Mexican immigrants may have changed over time.

Abstract:
Women are currently the majority of U.S. college students and of those receiving a bachelor%u2019s degree, but were 39 percent of undergraduates in 1960. We use three longitudinal data sets of high school graduates in 1957, 1972, and 1992 to understand the narrowing of the gender gap in college and its reversal. From 1972 to 1992 high school girls narrowed the gap with boys in math and science course taking and in achievement test scores. These variables, which we term the proximate determinants, can account for 30 to 60 percent of the relative increase in women%u2019s college completion rate. Behind these changes were several others: the future work expectations of young women increased greatly between 1968 and 1979 and the age at first marriage for college graduate women rose by 2.5 years in the 1970s, allowing them to be more serious students. The reversal of the college gender gap, rather than just its elimination, was due in part to the persistence of behavioral and developmental differences between males and females.

Abstract:
In the 1980s, the wages and employment rates of less-skilled Americans fell relative to those of more-skilled workers. This paper examines the contribution of the continuing inflow of less-skilled immigrants and the increasing importance of imports in the U.S. economy to these trends. Our empirical evidence indicates that both trade and immigration augmented the nation's supply of less-skilled workers, particularly workers with less than a high school education. By 1988, trade and immigration increased the effective supply of high school dropouts by 28 percent for men and 31 percent for women. We estimate that from thirty to fifty percent of the approximately 10 percentage point decline in the relative weekly wage of high school dropouts between 1980 and 1988 can be attributed to the trade and immigration flows. In addition, our analysis suggests that from 15 to 25 percent of the 11 percentage point rise in the earnings of college graduates relative to high school graduates relative to high school graduates from 1980 to 1985 can be attributed to the massive increase in the trade deficit over the same period, but that the effects of trade on the college/high school wage differential diminished with improvements in the trade balance during the late 1980s.

Abstract:
The fraction of U.S. college graduate women entering professional programs increased substantially just after 1970, and the age at first marriage among all U.S. college graduate women began to soar around the same year. We explore the relationship between these two changes and the diffusion of the birth control pill ('the pill') among young, unmarried college graduate women. Although the pill was approved in 1960 by the Food and Drug Administration and spread rapidly among married women, it did not diffuse among young, single women until the late 1960s after state law changes reduced the age of majority and extended 'mature minor' decisions. We present both descriptive time series and formal econometric evidence that exploit cross-state and cross-cohort variation in pill availability to young, unmarried women, establishing the 'power of the pill' in lowering the costs of long-duration professional education for women and raising the age at first marriage.

Abstract:
The fraction of U.S. college graduate women entering professional programs increased substantially around 1970 and the age at first marriage among all U.S. college graduate women soared just after 1972. We explore the relationship between these two changes and how each was shaped by the diffusion of the birth control pill among young, single college educated women. Although the pill' was approved in 1960 by the FDA and diffused rapidly among married women, it did not diffuse among young single women until the late 1960s when a series of state law changes reduced the age of majority and extended mature minor decisions. We model the impact of the pill on women's careers as consisting of two effects. The pill had a direct positive effect on women's career investment by almost eliminating the chance of becoming pregnant and thus the cost of having sex. The pill also created a social multiplier effect by encouraging the delay of marriage generally and thus increasing a career woman's likelihood of finding an appropriate mate after professional school. We present a collage of evidence pointing to the power of the pill in lowering the costs of long-duration professional education for women. The evidence consists of the striking coincidences in the timing of changes in career investment, marriage age, state laws, and pill use among young single women. The connection between changes in the age at first marriage and the pill is further explored using state variation in laws affecting young single women's pill access. We also evaluate alternative explanations for the changes in career and marriage.

Abstract:
Wage subsidies to private employers have often been proposed by economists as a potentially flexible and efficient method to improve the earnings and employment of low-wage workers. This paper lays out the basic economics of wage subsidies; examines issues arising in the design of alternative forms of wage subsidies; and reviews evidence on the effectiveness of recent U.S. wage subsidy programs and demonstration projects. Wage subsidies to employers to hire disadvantaged workers appear to modestly raise the demand for labor for those workers. Stand-alone wage subsidies (or employment tax credits) that are highly targeted on very specific groups (such as welfare recipients) appear to have low utilization rates and may (in some cases) stigmatize the targeted group. But new evidence based on an examination of changes in eligibility rules for the Targeted Jobs Tax Credit, the major U.S. wage subsidy program for the economically disadvantaged from 1979 to 1994, suggests modest positive employment effects of the TJTC on economically disadvantaged young adults. Policies combining wage subsidies with job development, training, and job search assistance efforts appear to have been somewhat successful in improving the employment and earnings of specific targeted disadvantaged groups.

Abstract:
No abstract is available for this paper.

Abstract:
Using data from a longitudinal survey of fast food restaurants in Texas, the authors examine the impact of recent changes in the federal minimum wage on a low-wage labor market. The authors draw four main conclusions. First, the survey results indicate that less than 5 percent of fast food restaurants use the new youth subminimum wage even though the vast majority paid a starting wage below the new hourly minimum wage immediately before the new minimum went into effect. Second, although some restaurants increased wages by an amount exceeding that necessary to comply with higher minimum wages in both 1990 and 1991, recent increases in the federal minimum wage have greatly compressed the distribution of starting wages in the Texas fast food industry. Third, employment increased relatively in those firms likely to have been most affected by the 1991 minimum wage increase. Fourth, changes in the prices of meals appear to be unrelated to mandated wage changes. These employment and price changes do not seem consistent with conventional views of the effects of increases in a binding minimum wage.

Abstract:
This paper assesses the relative importance of various explanations for the gender gap in career outcomes for highly-educated workers in the U.S. corporate and financial sectors. The careers of MBAs, who graduated between 1990 and 2006 from a top U.S. business school, are studied to understand how career dynamics differ by gender. Although male and female MBAs have nearly identical (labor) incomes at the outset of their careers, their earnings soon diverge, with the male annual earnings advantage reaching almost 60 log points at ten to 16 years after MBA completion. We identify three proximate reasons for the large and rising gender gap in earnings: differences in training prior to MBA graduation; differences in career interruptions; and differences in weekly hours. These three determinants can explain the bulk of gender differences in earnings across the years following MBA completion. The presence of children is the main contributor to the lesser job experience, greater career discontinuity and shorter work hours for female MBAs. Some MBA mothers, especially those with well-off spouses, slow down in the labor market within a few years following their first birth. Disparities in the productive characteristics of male and female MBAs are small, but the pecuniary penalties from shorter hours and any job discontinuity are enormous for MBAs.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper examines the short-run impacts of a change in residential neighborhood on the well-being of low-income families, using evidence from a program in which eligibility for a housing voucher was determined by random lottery. We examine the experiences of households at the Boston site of Moving To Opportunity (MTO), a demonstration program in five cities. Families in high poverty public housing projects applied to MTO and were assigned by lottery to one of three groups: Experimental - offered mobility counseling and a Section 8 subsidy valid only in a Census tract with a poverty rate of less than 10 percent; Section 8 Comparison - offered a geographically unrestricted Section 8 subsidy; or Control - offered no new assistance, but continued to be eligible for public housing.

Our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment, a follow-up survey administered 1 to 3.5 years after random assignment, and state administrative data on earnings and welfare receipt. Forty-eight percent of the Experimental group and sixty-two percent of the Section 8 Comparison group moved through the MTO program. One to three years after program entry, families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the Control group. However, while members of the Experimental group were much more likely to be residing in suburban communities than were those in the Section 8 group, the lower program take-up rate among the Experimental group resulted in more families remaining in the most distressed communities. Households in both treatment groups experienced improvements in multiple measures of well-being relative to the Control group including increased safety, improved health among household heads, and fewer behavior problems among boys. Experimental group children were also less likely to be a victim of a personal crime, to be injured, or to experience an asthma attack. There are no significant impacts of either MTO treatment on the employment, earnings, or welfare receipt of household heads in the first three years after random assignment.

Well-being, health, neighborhoods, experiment

Abstract:
The American university was shaped in a formative period from 1890 to 1940 long before the rise of federal funding, the G.I. Bill, and mass higher education. Both the scale and scope of institutions of higher education were greatly increased, the research university blossomed, states vastly increased their funding of higher education, and the public sector greatly expanded relative to the private sector. Independent professional institutions declined, as did theological institutes and denominational colleges in general. Increases in the scale and scope of institutions of higher education were generated by exogenous changes in the that affected the professions generally and that of the clergy in particular. The increase in the share of students in the public sector may also have been prompted by these exogenous changes for they gave advantages to institutions, such as those in the public sector, that had research facilities, reputation, and a long purse. The high school movement, which swept parts of the country from 1910 to 1940, brought students from less privileged backgrounds to college and thus also buoyed enrollments in the public sector. States differed widely in their funding of higher education per capita and we find that greater generosity in 1929 was positively associated with later statehood, lower private college enrollments in 1900, greater shares of employment in mining and manufacturing, higher income, and a proxy for greater and more equally distributed wealth.

Abstract:
Over the past three decades, a large amount of research has attempted to identify the determinants of the natural rate of unemployment. It is this body of work we assess in this paper. We reach two main conclusions. First, there has been considerable theoretical progress over the past 30 years. A framework has emerged. We present it, and show how it can be used to think for example about the relation between technological progrss and unemployment. Second, empirical knowledge lags behind. Economists do not have a good quantitative understanding of the determinants of the natural rate, either across time or across countries. We look at two issues, the relation of wages to unemployment, and the risk of European unemployment.

Abstract:
Over the past three decades, a large amount of research has attempted to identify the determinants of the natural rate of unemployment. It is this body of work we assess in this paper. We reach two main conclusions. First, there has been considerable theoretical progress over the past 30 years. A framework has emerged. We present it and show how it can be used to think, for example, about the relations between technological progress and unemployment. Second, empirical knowledge lags behind. Economists do not have a good quantitative understanding of the determinants of the natural rate, either across time or across countries. We look at two issues: the relation of wages to unemployment and the rise of European unemployment.

Abstract:
The U.S. wage structure evolved across the last century: narrowing from 1910 to 1950, fairly stable in the 1950s and 1960s, widening rapidly during the 1980s, and â¬Spolarizingâ¬? since the late 1980s. We document the spectacular rise of U.S. wage inequality after 1980 and place recent changes into a century-long historical perspective to understand the sources of change. The majority of the increase in wage inequality since 1980 can be accounted for by rising educational wage differentials, just as a substantial part of the decrease in wage inequality in the earlier era can be accounted for by decreasing educational wage differentials.

Although skill-biased technological change has generated rapid growth in the relative demand for more-educated workers for at least the past century, increases in the supply of skills, from rising educational attainment of the U.S. work force, more than kept pace for most of the twentieth century. Since 1980, however, a sharp decline in skill supply growth driven by a slowdown in the rise of educational attainment of successive U.S. born cohorts has been a major factor in the surge in educational wage differentials. Polarization set in during the late 1980s with employment shifts into high- and low-wage jobs at the expense of the middle leading to rapidly rising upper tail wage inequality but modestly falling lower tail wage inequality.

Abstract:
Economic inequality is higher today than it has been since 1939, as measured by both the wage structure and wealth inequality. But the comparison between 1939 and 1999 is largely made out of necessity; the 1940 U.S. population census was the first to inquire of wage and salary income and education. We address what the returns to skill were prior to 1940 and piece together the first century-long history of skill premiums, the dispersion of the wage structure, and returns to formal schooling. We use the 1915 Iowa State Census, a remarkable and unique document, as well as several less-obscure but untapped reports. Using all of these sources, we find that the wage structure narrowed at several moments in the first half of the 20th century, not just in the 1940s, both coinciding with major economic disruptions brought about by war. The returns to education were in fact higher in 1914 than in 1939, and the enormous expansion in secondary schooling beginning in the 1910s was a contributing factor to the decrease in educational returns. Inequality and the returns to education across the entire century, therefore, first declined before their more recent and steep ascent.

Abstract:
This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the %u201Cpolarization%u201D of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market.

Abstract:
This paper surveys recent developments in the literature on
efficiency wage theories of unemployment. Efficiency wage models
have in common the property that in equilibrium firms may find it
profitable to pay wages in excess of market clearing. High wages
can help reduce turnover, elicit worker effort, prevent worker
collective action, and attract higher quality employees. Simple
versions of efficiency wage models can explain normal involuntary
unemployment, segmented labor markets, and wage differentials
across firms and industries for workers with similar productive
characteristics. Deferred payment schemes and other labor
market bonding mechanisms appear to be able to solve some
efficiency wage problems without resultant job rationing and
involuntary unemployment. A wide variety of evidence on
inter-industry wage differences is analyzed. Efficiency wage
models appear useful in explaining the observed pattern of wage
differentials. The models also provide several potential
mechanisms for cyclical fluctuations in response to aggregate
demand shocks.

Abstract:
This paper examines the extent of interindustry wage differences for nonunion workers and finds that even after controlling for a wide range of individual characteristics and geographic location a substantial amount of individual wage variation can be accounted for by industry differences. In the aggregate industry effects explain at least 6.7% of inter-personal wage variation. At most they explain 30%.

While the importance of industry differences is clear, the reasons for the differences are more difficult to establish. Independent of the problems of interpreting the correlates of industry differences, even the sign of the relation of many variables with wages is difficult to establish when other variables are included as controls. This conclusion is suggested by a literature review and confirmed by an analysis of a large number of alternative specifications of an industry wage equation using individual wage data from the CPS and industry characteristics from a number of recent sources. Only industry average education and industry profitability have the same (positive) sign in every specification and in all the studies reviewed. Of these two only average education was nearly always significantly related to wages. Average establishment size had a nearly consistent positive relation.

What does emerge from the analysis is a pattern of correlations. There appears to be one major dimension (and perhaps other less important dimensions) along which industries differ. A principal components analysis of an industry characteristics data set is used to demonstrate this. High wage industries have lower quit rates, higher labor productivity, fewer women, more educated workers, longer work weeks, a higher ratio of nonwage to wage compensation, higher unionization rates, larger establishments and firms, higher concentration ratios and are more profitable. An analysis of a limited number of industry characteristics in 1939 yields a similar pattern. The implications of these results for alternative theories of wage determination are considered.

Abstract:
The Moving to Opportunity (MTO) demonstration assigned housing vouchers via random lottery to public housing residents in five cities. We use the exogenous variation in residential locations generated by MTO to estimate neighborhood effects on youth crime and delinquency. The offer to relocate to lower-poverty areas reduces arrests among female youth for violent and property crimes, relative to a control group. For males the offer to relocate reduces arrests for violent crime, at least in the short run, but increases problem behaviors and property crime arrests. The gender difference in treatment effects seems to reflect differences in how male and female youths from disadvantaged backgrounds adapt and respond to similar new neighborhood environments.

Abstract:
This paper examines the short-run impacts of a change in residential neighborhood on the well-being of low-income families, using evidence from the Moving To Opportunity (MTO) program in which eligibility for a housing voucher was determined by random lottery. Applicants in high poverty public housing projects were assigned by lottery to one of three groups: Experimental offered mobility counseling and a voucher valid only in a low-poverty Census tract; Section 8 Comparison offered a geographically unrestricted voucher; or Control offered no new assistance, but continued eligibility for public housing.

Our quantitative analyses of program impacts at the Boston site of MTO uses data on 540 families approximately two years after program enrollment. 48 percent of the Experimental group and 62 percent of the Section 8 Comparison group moved through the MTO program. Households in both treatment groups experienced improvements in multiple measures of well-being relative to the Control group including increased safety, improved health among household heads, and fewer behavior problems among boys. There were no significant short-run impacts of either MTO treatment on employment, earnings, or welfare receipt. Experimental group children were less likely to be personally victimized by crime, to be injured, or to experience an asthma attack.

Abstract:
We compare two approaches to analyzing the effects of immigration on the labor market and find that the estimated effect of immigration on U.S. native labor outcomes depends critically on the empirical experiment used. Area analyses contrast the level or change in immigration by area with the level or change in the outcomes of non- immigrant workers. Factor proportions analyses treat immigrants as a source of increased national supply of workers of the relevant skill. Cross-section comparisons of wages and immigration in the 1980 and 1990 Censuses yield unstable results casting doubt on the validity of these calculations. Analyses of changes over time for various education groups within regions give negative estimated immigration effects, which increase in magnitude the wider the area covered. Factor proportions calculations show that immigration was somewhat important in reducing the relative pay of U.S. high school dropouts during the 1980s, while immigration and trade contributed much more modestly to the falling pay of high school equivalent workers. The different effects of immigration on native outcomes in the area and factor proportions methodologies appear to result from the diluting effect of native migration flows across regions and failure to take adequate account of other regional labor market conditions in area comparisons.

Abstract:
This paper examines the effect of technological change and other factors on the relative demand for workers with different education levels and on the recent growth of U.S. educational wage differentials. A simple supply-demand framework is used to interpret changes in the relative quantities, wages, and wage bill shares of workers by education in the aggregate U.S. labor market in each decade since 1940 and from 1990 to 1995. The results suggest that the relative demand for college graduates grew more rapidly on average during the past 25 years (1970-95) than during the previous three decades (1940-70). The increased rate of growth of relative demand for college graduates beginning in the 1970s did not lead to an increase in the college/high school wage diffe- rential until the 1980s because the growth in the supply of college graduates increased even more sharply in the 1970s before returning to historical levels in the 1980s. The acceleration in demand shifts for more-skilled workers in the 1970s and 1980s relative to the 1960s is entirely accounted for by an increase in within-industry changes in skill utilization rather than between- industry employment shifts. Industries with large increases in the rate of skill upgrading in the 1970s and 1980s versus the 1960s are those with greater growth in employee computer usage, more computer capital per worker and larger investment as a share of total investment. The results suggest that the spread of computer technology may `explain` as much as 30-50% of the increase in the rate of growth of the relative demand for more-skilled workers since 1970.

Abstract:
In the three decades from 1910 to 1940, the fraction of U.S. youths enrolled in public and private secondary schools increased from 18 to 71 percent and the fraction graduating soared from 9 to 51 percent. At the same time, state compulsory education and child labor legislation became more stringent and potentially constrained secondary-school aged youths. It might appear from the timing and the specifics of this history that the laws caused the increase in education rates. We evaluate the possibility that state compulsory schooling and child labor laws caused the increase in education rates by using contemporaneous evidence on enrollments. We also use micro-data from the 1960 census to examine the effect of the laws on overall educational attainment. Our estimation approach exploits cross-state differences in the timing of changes in state laws. We find that the expansion of state compulsory schooling and child labor laws from 1910 to 1939 can, at best, account for 5 percent of the increase in high school enrollments and can account for about the same portion of the increase in the eventual educational attainment for the affected cohorts over the period.

Abstract:
U.S. macroeconomic evidence shows a negative relation between the rate of change of wages and unemployment. In contrast, most theories of wage determination imply a negative relation between the level of wages and unemployment. In this paper, we ask whether one can reconcile the empirical evidence with theoretical wage relations. We reach three main conclusions. First, we derive the condition under which the two can indeed be reconciled. We show the constraints that such a condition imposes on the determinants of workers' reservation wages as well as the relative importance of workers' outside options as opposed to match specific productivity in wage determination. Second, in the light of this condition, we reinterpret the presence of an "error correction" term in macroeconomic wage relations for most European economies but not in the United States. Third, we show that whether this condition holds or not has important implications for the effects of a number of variables -- from real interest rates to oil prices to payroll taxes -- on the natural rate of unemployment.

Abstract:
This paper shows the importance of explicitly accounting for the possibility of recalls when analyzing the determinants of unemployment spell durations and the effects of unemployment insurance (UI) on unemployment outcomes in the United States. These issues are examined using a unique sample of UI recipients from Missouri and Pennsylvania covering unemployment spells in the 1979- 1981 period. We find that those expecting recall who are not recalled tend to have quite long unemployment spells. Furthermore, ex-ante temporary layoff spells (the spells of individuals` who initially expect to be recalled) may account for over 60 percent of the unemployment of UI recipients and appear to account for much more unemployment than ex-post temporary layoff spells (spells actually ending in recall). We estimate a competing risks model in which the finding of a new job and recall are treated as alternate routes of leaving unemployment. Our results using this approach show that the recall and new job exit probabilities have quite different time patterns and are often affected in opposite ways by explanatory variables. We also find that the probability of leaving unemployment (both through recalls and new job finding) increases greatly around the time that UI benefits lapse.

Abstract:
Efficiency wage models have been criticized because worker malfeasance can be prevented in a pareto efficient manner by requiring workers to post a bond which they lose if they are caught cheating. However, since it is costly to monitor workers and costless to demand a larger bond, firms should pay nothing for monitoring and demand very large bonds. Since we observe that firms devote considerable resources to monitoring workers, bonds must be limited. Therefore firms must use second best alternatives -- intensive monitoring and/or efficiency wages. The payment of efficiency wages cannot be ruled out on a priori theoretical grounds.

Abstract:
No abstract is available for this paper.

Abstract:
This paper examines changes in the distribution of income and consumption in the United States during the 1980s, using data from the Current Population Survey (income) and Consumer Expenditure Survey (consumption). We reach three primary conclusions. First, changes in the distribution of consumption parallel changes in the distribution of income. The lowest quintile of the consumption distribution received 0.9 percentage points less of total consumption in 1988 than in 1980; the corresponding decline for income was 0.6 percentage points. Second, broad conclusions concerning recent changes in the consumption distribution are not very sensitive to the exact choice of a measure of family needs. Under a wide variety of alternative household equivalence scales, there is a widening in the consumption distribution in the 1980s. Third, the use of consumption measures of well-being in place of measures based on current money income does change conclusions concerning the extent of poverty in the United States. Using the official federal poverty thresholds, we find that the overall consumption poverty rate was three percentage points below the income poverty rate in 1988. Comparisons of the poverty rates of the elderly and the non-elderly are substantially affected by the choice of poverty measure. The consumption poverty rate for the elderly was only 60 percent of the rate for adults and one-third of the rate for children in 1988.

Abstract:
In this paper we provide theoretical and empirical analyses of an asymmetric-information model of layoffs in which the current employer is better informed about its workers' abilities than prospective employers are. The key feature of the model is that when firms have discretion with respect to whom to lay off, the market infers that laid-off workers are of low ability. Since no such negative inference should be attached to workers displaced in a plant closing, our model predicts that the post-displacement wages of otherwise observationally equivalent workers will be higher for those displaced by plant closings than for those displaced by layoffs. An extension of our model predicts that the average post-displacement unemployment spell of otherwise observationally equivalent workers will be shorter for those displaced by plant closings than for those displaced by layoffs.

In our empirical work, we use data from the Displaced Workers Supplements in the January 1984 and 1986 Current Population Surveys. We find that the evidence (with respect to both re-employment wages and post-displacement unemployment duration) is consistent with the idea that laid-off workers are viewed less favorably by the market than are those losing jobs in plant closings. Our findings are much stronger for workers laid-off from jobs where employers have discretion over whom to lay off.

Abstract:
Numerous studies have shown large differences in wages for apparently similar workers across industries. These findings pose a challenge to standard models of labor market behavior. A problem with past studies of industry wage differences is that they have failed to distinguish between union and nonunion workers. Many economists may expect union workers wages to be set in a noncompetitive fashion but would be surprised if nonunion wages were.

We examine the differences in wages across industries for both union and nonunion workers. We find that even after controlling for a wide range of personal characteristics and geographic location large wage differences persist for both union and nonunion workers. Furthermore the premiums of union and nonunion workers are highly correlated. We review past studies which demonstrate that industry wage premiums are also highly correlated across countries and have been very similar over many decades. We present new evidence that the wages of different occupation are highly correlated across industries - that is if any occupation in an industry is highly paid all occupations are. We also review the evidence which suggests that people who move from low to high paying industries receive a large fraction of the industry wage premium and that those who move from high to low paying industries lose the premium. Finally, we review the evidence on the correlates of industry wage differences. Quit rates, human capital variables, capital labor ratios and market power measures are all positively correlated with industry wage differences individually though the data are not adequate to determine their independent contributions in multiple regression.

On the basis of all the evidence we conclude that standard labor market clearing models can not easily explain all the facts. Several alternative models are discussed including efficiency wage and collective action threat models. These are found to be more consistent with the facts though some troubling problems remain.

Abstract:
The second transformation' of U.S. education the growth of secondary schooling occurred swiftly in the early 1900s and placed the educational attainment of Americans far ahead of that in other nations for much of the twentieth century. Just 9 percent of U.S. youths had high school diplomas in 1910, but more than 50 percent did by 1940. By the mid-1950s the United States was 35 years in front of the United Kingdom in the educational attainment of 14 to 17-year olds. What can explain why secondary schooling advanced in the United States, why differences in secondary schooling emerged across U.S. states and cities, and why America led the world in educational attainment for much of the twentieth century? Although we motivate the paper with international comparisons, the core of the analysis exploits the considerable cross-state, cross-city, and time-series variation within the United States. The areas of the United States that led in secondary school education (the Far West, Great Plains, and parts of New England) were rich in income and wealth, had high proportions of the elderly, and had relative equality of wealth or income. Given wealth, they also contained a low proportion of jobs in manufacturing and low percentages immigrant and Catholic. Homogeneity of economic and social conditions, and the social stability of community, given a modicum of income or wealth, also fostered the extension of education to the secondary school level.

Abstract:
Families, primarily female-headed minority households with children, living in high-poverty public housing projects in five U.S. cities were offered housing vouchers by lottery in the Moving to Opportunity program. Four to seven years after random assignment, families offered vouchers lived in safer neighborhoods that had lower poverty rates than those of the control group not offered vouchers. We find no significant overall effects of this intervention on adult economic self-sufficiency or physical health. Mental health benefits of the voucher offers for adults and for female youth were substantial. Beneficial effects for female youth on education, risky behavior, and physical health were offset by adverse effects for male youth. For outcomes exhibiting significant treatment effects, we find, using variation in treatment intensity across voucher types and cities, that the relationship between neighborhood poverty rate and outcomes is approximately linear.

Abstract:
By the mid-nineteenth century school enrollment rates in the United States exceeded those of any other nation in the world and by the early twentieth century the United States had accomplished mass education at all levels. No country was able to close the gap until the last quarter of the twentieth century. For much of its history U.S. education was spurred by a set of 'virtues', the most important of which were public provision by small fiscally independent districts, public funding, secular control, gender neutrality, open access, a forgiving system, and an academic curriculum. The outcomes of the virtues were an enormous diffusion of educational institutions and the early spread of mass education. America borrowed its educational institutions from Europe but added to them in ways that served to enhance competition and openness. The virtues of long ago need not be the virtues of today, and they also need not have been virtuous in all places and at all times in the past. In this essay we explore the historical origins of these virtues and find that almost all were in place in the period before the American Civil War.

Abstract:
We develop a model in which a worker's skills determine the worker's current wage and sector. Both the market and the worker are initially uncertain about some of the worker's skills. Endogenous wage changes and sector mobility occur as labor-market participants learn about these unobserved skills. We show how the model can be estimated using non-linear instrumental-variables techniques. We then apply our methodology to study the wages and allocation of workers across occupations and across industries. For both occupations and industries, we find that high-wage sectors employ high-skill workers and offer high returns to workers' skills. Estimates of these sectoral wage differences that do not account for sector-specific returns are therefore misleading. We also suggest further applications of our theory and methodology.

Abstract:
This paper compares changes in the structure of wages in France,
Great Britain, Japan, and the United States over the last twenty
years. Wage differentials by education and occupation (skill
differentials) narrowed substantially in all four countries in
the 1970s. Overall wage inequality and skill differentials
expanded dramatically in Great Britain and the United States and
moderately in Japan during the 1980s. In contrast, wage
inequality did not increase much in France through the mid-1980s.
Industrial and occupational shifts favored more-educated workers
in all four countries throughout the last twenty years.
Reductions in the rate of the growth of the relative supply of
college-educated workers in the face of persistent increases in
the relative demand for more-skilled labor can explain a
substantial portion of the increase in educational wage
differentials in the United States, Britain, and Japan in the
1980s. Sharp increases in the national minimum wage (the SMIC)
and the ability of French unions to extend contracts even in the
face of declining membership helped prevent wage differentials
from expanding in France through the mid-1980s.

Abstract:
Unemployment compensation in the United States was signed into law in August 1935 as part of the omnibus Social Security Act. Drafted in a period of uncertainty and economic distress, the portions that dealt with unemployment insurance were crafted to achieve a multiplicity of goals, among them passage of the act and a guarantee of its constitutionality. Along with the federal-state structure went experience-rating and characteristics added by the states, such as the limitation on duration of benefits. The U.S. unemployment compensation system is distinctive among countries by virtue of its federal-state structure, experience-rating, and limitation on benefits. We contend that these features were products of the times, reflecting expediency more than efficiency, and thus that UI would have been different had it been passed in another decade. But how different is the UI system in the United States because of these features, and how have they affected the U.S. labor market? We present evidence showing that more seasonality in manufacturing employment in 1909-29 is related to higher UI benefits from 1947 to 1969, if a state's manufacturing employment share is below the national mean. Lobbying activities of seasonal industries appear important in the evolution of the parameters. We also present suggestive evidence on the relationship between declining seasonality and experience-rating.

Abstract:
The United States led all other nations in the development of universal and publicly-funded secondary school education and much of the growth occurred from 1910 to 1940. The focus here is on the reasons for the high school movement' in American generally and why it occurred so early and swiftly in America's heartland - a region we dub the 'education belt.' At the center of this belt' was the state of Iowa and we use information from the unique 1915 Iowa State Census to explore the factors, at both the county and individual levels, that propelled states like Iowa to embrace secondary school education very early. Iowa's small towns, as well as those across the nation, were the loci of the high school movement. In an analysis at the national level, we find that greater homogeneity of income or wealth, a higher level of wealth, greater community stability, and more ethnic and religious homogeneity fostered high school expansion from 1910 to 1930. The pecuniary returns to secondary school education were high - on the order of 12 percent per year in 1914 - providing substantial private incentives for high school attendance. State-level measures of social capital today are strongly correlated with economic and schooling variables from 1900 to 1930. The social capital assembled locally in the early part of the century, which apparently fueled part of the high school movement, continues to contribute to human capital formation.

Abstract:
This paper shows that the prospect of recall to previous employer is important for a significant number of the unemployed in the United States and that taking into account the possibility of recalls has important implications for the study of unemployment spell durations. A job search model that allows for recalls is shown to lead naturally to a competing risks specification of the distribution of layoff unemployment spell durations in which recall and the taking off of a new job are alternate routes for leaving unemployment. A large sample of individual layoff unemployment spell observations derived from the Panel Study of Income Dynamics is analyzed. The common finding for samples containing individuals with nonnegligible recall prospects of an escape rate from unemployment that declines with spell duration is shown to almost entirely result from a declining recall rate. The apparent declining recall rate may be indicative of important uncontrolled heterogeneity rather than true negative duration dependence. Strong positive duration dependence in the new job finding rate is uncovered for UI recipients. Factors raising the likelihood and value of recall appear to depress the new job finding rate. Substantial differences in the distribution of unemployment spell durations are found for UI recipients and nonrecipients. Large positive jumps in both the recall rate and new job finding rate are apparent around the point of UI benefits exhaustion for UI recipients. The results indicate that the potential duration of UI benefits plays an important role in the timing of recalls and of new job acceptances.

Abstract:
No abstract is available for this paper.

Abstract:
This paper examines changes in wage differentials by educational
attainment and experience in the U.S. and Japan since the early
1970s. While educational earnings differentials have expanded
dramatically in the U.S. in the 1980s, the college wage premium
has increased only slightly in Japan. In contrast to the large
expansion in experience differentials for high school males in
the U.S., the wages of male new entrants have risen relative to
more experienced workers for both high school and college
graduates in Japan from 1979 to 1987. Macroeconomic factors
(incresed openness, trade deficits, and labor market slack) and
changes in institutional structures (the decline in unionization)
are likely to have amplified each other in contributing to an
unprecedented decline in real and relative earnings of young
less-skilled males in the U.S. in the 1980s. We further find
that a sharp deceleration in the rate of growth of college
graduates as a fraction of the labor force in the U.S. helps
account for the much larger increase in the college wage
premium in the U.S. than in Japan in the 1980s.

Abstract:
No abstract is available for this paper.

Abstract:
Recent work by David Lilien has argued that the existence of a strong positive correlation between the dispersion of employment growth rates across sectors (G) and the unemployment rate implies that shifts in demand from some sectors to others are responsible for a substantial fraction of cyclical variation in unemployment. This paper demonstrates that, under certain empirically satisfied conditions, aggregate demand movements alone can produce a positive correlation between G and the unemployment rate. Two tests are developed which permit one to distinquish between a pure sectoral shift interpretation and a pure aggregate demand interpretation of this positive correlation. The finding that G and the volume of help wanted advertising are negatively related and the finding that G is directly associated with the change in unemployment rather than with the level of unemployment both support an aggregate demand interpretation. A proxy for sectoral shifts that is purged of the influence of aggregate demand is then developed. Models which allow sectoral shifts in the composition of demand and fluctuations in the aggregate level of demand to affect the unemployment rate independently are estimated using this proxy. The results support the view that pure sectoral shifts have not been an important source of cyclical fluctuations in unemployment.

Abstract:
We present the first estimates of the returns to years of schooling before 1940 using a large sample of men and women, employed in a variety of sectors and occupations, from the Iowa State Census of 1915. We find that the returns to a year of high school, and to a year of college, were substantial in 1915 - about 11 percent for all males and in excess of 12 percent for young males. Some of the return to years of high school and college arose because more education allowed individuals to enter lucrative white-collar jobs. But we also find sizable educational wage differentials within the white- and blue-collar sectors. Returns to education above the 'common school' grades were substantial even within the agricultural sector. Given the high overall rate of return to secondary schooling, it is no wonder that the 'high school movement' took root in America around 1910, even in agricultural areas such as Iowa. Census data for 1940, 1950, and 1960 are used to show that returns to years of schooling were greater in 1915 than in 1940. We conclude that the return to education decreased sometime between 1915 and 1940 and then declined again during the 1940s.

Abstract:
This paper defines a concept, a worker`s trust fund, which is useful in analyzing optimal age-earnings profiles. The trust fund represents what a worker loses if dismissed from a job for shirking. In considering whether to work or shirk, a worker weighs the potential loss due to forfeiture of the trust fund if caught shirking against the benefits from reduced effort. This concept is used to show that the implicit bonding in upward sloping age-earnings profiles is not a perfect substitute for an explicit upfront performance bond (or employment fee). It is also shown that the second-best optimal earnings profile in the absence of an upfront employment fee pays total compensation in excess of market clearing in a variety of stylized cases.

Abstract:
Between 1890 and the late 1920s the premium to high school education declined substantially for both men and women. In 1890 ordinary office workers, whose positions generally required a high school diploma, earned almost twice what production workers did. But by the late 1920s they earned about one and one-half times as much. The premium earned by female office workers, male office workers, and male office workers plus supervisors fell by about 30%. Several factors operated in tandem to narrow differentials to education. The supply of high school graduates relative to those without high school degrees increased by 16% from 1890 to 1910, but by 40% from 1910 to 1920 and by 50% from 1920 to 1930. Immigration restriction is another factor, but is dwarfed by the expansion of high schools; reduced immigrant flows explain just 1/8th of the relative supply increase of educated workers. The impact of rapidly increasing supplies of high school educated workers was reinforced by technological changes in the office that enabled the substitution of educated workers and machines for the exceptionally able. The premium to high school graduation, rather than declining further in the 1930s, levelled off as the demand for high school educated workers expanded in the manufacturing sector. We make comparisons between this historical period of narrowing wage differentials in the face of technological progress in the office and ours of widening differentials.

Abstract:
We re-examine recent cross-state evidence on the employment effect of the minimum wage. A re-evaluation of the data used in Neumark and Wascher's (1992) study of the minimum wage provides no support for their conclusion that the minimum wage has an adverse effect on teenage employment. Neumark and Wascher's findings are shown to be due to an inadvertent mistake in the definition of their school enrollment variable. In addition, Neumark and Wascher's coverage-weighted relative minimum wage index is shown to be negatively correlated with average teenage wages. We also re-analyze the experiences of individual states following the April 1990 increase in the Federal minimum wage, allowing for a full year lag in the effect of the law and controlling for changes in (properly measured) enrollment rates. These changes actually strengthen Card's (1992a) conclusion that the 1990 increase in the Federal minimum had no adverse employment effect. Lastly, we find that subminimum wages are rarely used, casting doubt on the claim that subminimum wage provisions temper any employment losses attributable to the minimum wage.

Abstract:
No abstract is available for this paper.

Abstract:
No abstract is available for this paper.

Abstract:
This paper examines the impact of selected labor market changes on the decline in the unemployment rate in the 1990s. The first section provides an overview of aggregate unemployment trends, inflation, and price and wage Phillips curves. The second section examines the effect of demographic changes on the unemployment rate. The third section examines the impact of the 150 percent increase in the number of men in jail or prison since 1985 on the unemployment rate. The fourth section examines the impact of evolving labor market intermediaries (namely worker profiling by the Unemployment Insurance system and the growth of the temporary help industry) on the unemployment rate. The fifth section explores whether worker bargaining power has become weaker, allowing for low unemployment and only modest wage pressure, because of worker job anxiety, the decline in union membership, or increased competitive pressures. The final section examines the impact of the tightest labor market in a generation on poverty. Our main findings are that changes in the age structure of the labor force, the growth of the male prison population, and, more speculatively, the rise of the temporary help sector, are the main labor market forces behind the low unemployment rate in the late 1990s.