Economists analyzing a well-conducted randomized controlled trial or natural experiment and finding a statistically significant effect conclude that the null of no effect is unlikely to be true. But how frequently is this conclusion warranted? The answer depends on the proportion of tested nulls that are true and the test's power. I model the distribution of t-statistics in leading economics journals. Using my preferred model, 65% of narrowly rejected null hypotheses and 41% of all rejected null hypotheses with |t|<10 are likely to be false rejections. For the null to have only a .05 probability of being true requires a t of 5.48.

Prior to trade liberalization in the 1980s, New Zealand heavily protected low‐wage industries. Consequently, trade liberalization was desirable from the perspective of both traditional and new trade theories. While liberalization decreased employment in protected industries somewhat, it also significantly affected wages, noticeably diminishing the effect of liberalization on employment in previously protected industries and thus reducing the postliberalization shift in the industrial composition of employment. The small effect of liberalization on the composition of employment suggests that the effect of tariffs on wages and firms' monopoly power substantially eliminated any effect of protection on the distribution of employment.

In his valuable contribution, After Civil Rights, John Skrentny shows that in many sectors of the labor market, race is used in ways that were unanticipated when the 1964 Civil Rights Act was enacted. With separate chapters on the professions and business, the public sector, media and entertainment, and the low-skill market, he demonstrates that the new racial realism is widespread, generally has some justification from social scientific research, and is usually inconsistent with judicial decisions. I review the racially realistic practices (racial matching, increasing diversity, racial signaling, and racial characteristics) and discuss their implications for labor economics and for policy.

Any advanced industrial society is composed of a number of speech communities with different verbal and nonverbal languages. In particular, in the United States blacks and whites and men and women have sharply differing methods of speaking and listening. This paper develops a model in which people can only work together if they "speak" the same language and in which it is costly to learn a second language. The competitive market will tend to minimize communication through segregation, but if interaction is required, the cost will be borne by the minority. A number of nontrivial predictions are derived from the model.

Under the educational sorting hypothesis a state compulsory school attendance law will increase the educational attainment of high-ability workers who are not directly affected by the law. Under the human capital hypothesis such laws affect only those individuals whose behavior is directly constrained. We find that compulsory attendance laws do increase enrollment rates in age groups they do not affect directly. Thus, our results contradict the human capital hypothesis and are consistent with the sorting hypothesis.

We review theories of race discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing model explains the unemployment rate differential. Models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment. At their current state of development, models of statistical discrimination based on rational stereotypes have little empirical content. It is plausible that models combining elements of the search models with statistical discrimination could fit the data. We suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy.

We examine inference in panel data when the number of groups is small, as is typically the case for difference-in-differences estimation and when some variables are fixed within groups. In this case, standard asymptotics based on the number of groups going to infinity provide a poor approximation to the finite sample distribution. We show that in some cases the t-statistic is distributed as t and propose simple two-step estimators for these cases. We apply our analysis to two well-known papers. We confirm our theoretical analysis with Monte Carlo simulations.

Studies of the earnings of union workers have consistently shown that they earn considerably more than nonunion workers.This paper considers whether part of this observed union/nonunion differential is due to unions organizing high paying primary sector jobs.We extend our earlier work on the dual labor market in which we used an unknown regime switching regression to identify two labor market sectors --a high wage primary sector and a low wage secondary sector.Here we estimate a model where worker's wages are determined by one of three wage equations: a union wage equation, a nonunion primary equation or a nonunion secondary equation.If individuals are in the union sector their sector is treated as known.If they are not then their sector is treated as unknown.Parameter estimates for this model suggest that union/nonunion differences are very large for average workers even when comparing union and nonunion primary workers.We continue to find distinct primary and secondary sectors with wage equations similar to those that would be expected from the dual market perspective.Since it appears that union workers may be receiving large wage premiums it seems likely that there is non-price rationing of union jobs.If there is, our finding in previous papers of non-price rationing of primary sector jobs may have been due only to the rationing of union jobs.We test for the existence of non-price rationing of nonunion primary sector employment in this three sector model and continue to find evidence that at least black workers find it difficult to secure primary sector employment.

A simple econometric model of investment in schooling is developed and estimated. The measure of individual discount rates implicit in their educational investment decisions suggests no difference between individuals from different socioeconomic backgrounds. Differences in individual speeds of educational attainment, which do vary with background, explain most of the variation in levels of attainment that is attributable to family background.

Using a model of statistical discrimination and educational sorting, we explain why blacks get more education than whites of similar cognitive ability, and we explore how the Armed Forces Qualification Test (AFQT), wages, and education are related. The model suggests that one should control for both AFQT and education when comparing the earnings of blacks and whites, in which case a substantial black-white wage differential emerges. We reject the hypothesis that differences in school quality between blacks and whites explain the wage and education differentials. Our findings support the view that some of the black-white wage differential reflects the operation of the labor market.