The Rise of Guard Labor in the United States: Evidence from Local Labor Markets

35 Pages Posted: 25 Oct 2021 Last revised: 28 Oct 2021

See all articles by Luke Petach

Luke Petach

Belmont University

Anastasia Wilson

Hobart and William Smith Colleges

Date Written: October 22, 2021

Abstract

This paper explores the importance of the exercise of private and public power in the execution of contracts and defense of property rights at the local labor market level in the United States. Using Census microdata, we examine the rise of "Guard Labor"---classified as individuals employed in occupations devoted to the exercise of power---at the commuting zone level in the United States from 1950 to the present. Between 1950 and 2017 the share of the labor force employed in guard labor activities increased from 19.5% to 29.4%. The majority of this increase is driven by the growth of supervisory occupations. Using our estimates we explore the local labor market correlates of guard labor and validate several predictions of the canonical labor discipline model. Our findings indicate the share of the local labor force employed in guard labor occupations is positively correlated with the household income Gini coefficient, negatively correlated with the fraction of a commuting zone that is White, negatively correlated with the fraction of the labor force in a union, and positively correlated with historical measures of local racial animosity. Consistent with the labor discipline model, our findings indicate that an increase in the share of the labor force employed in supervisory occupations has a large negative effect on non-supervisory wages, a positive effect on local profits, and a negative effect on the wages of Black non-supervisory workers that exceeds the effect for White non-supervisory workers.

Keywords: Guard Labor, Supervisory Labor, Incomplete Contracts, Inequality, Local Labor Markets

JEL Classification: O17, P16, Z13, B51, B52

Suggested Citation

Petach, Luke and Wilson, Anastasia, The Rise of Guard Labor in the United States: Evidence from Local Labor Markets (October 22, 2021). Available at SSRN: https://ssrn.com/abstract=3948013 or http://dx.doi.org/10.2139/ssrn.3948013

Luke Petach (Contact Author)

Belmont University ( email )

1900 Belmont Blvd.
Nashville, TN 37212-3757
United States

Anastasia Wilson

Hobart and William Smith Colleges ( email )

Geneva, NY 14456
United States

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