The share of U.S. workers in alternative work arrangements has increased substantially in recent decades. Micro longitudinal analyses show that unemployed workers are much more likely to transition into alternative work arrangements than other workers. Macro time-series evidence shows that weak labor market conditions lead to an increase in non-traditional work. But the estimated magnitudes imply that the Great Recession and high unemployment in the 2000s can account for only a modest part of the rise in alternative work. Secular factors associated with rising inequality and technological changes making it easier to contract out work appear to be the driving forces.

Recent technological advances and a widening of the wage structure have led many to conclude that technology and human capital are relative complements. The possibility that such a relationship exists today has prompted a widely held conjecture that technology and skill have always been relative complements. According to this view, technological advance always serves to widen the wage structure, and only large injections of education slow its relentless course. A related literature demonstrates that capital and skill are relative complements today and in the recent past (Zvi Griliches, 1969). Thus capital deepening appears also to have increased the relative demand for the educated, serving further to stretch the wage structure. Physical capital and technology are now regarded as the relative complements of human capital, but have they been so for the past two centuries? Some answers have already been provided. A literature has emerged on the bias to technological change across history that challenges the view that physical capital and human capital have always been relative complements. Many of the major technological advances of the 19th century substituted physical capital, raw materials, and unskilled labor for highly skilled artisans (John A. James and Jonathan S. Skinner, 1985). But if physical capital and human skill were not always relative complements, when did they become so, and when did new technology become skilled labor's complement? We argue that capital-skill complementarity was manifested in the aggregate economy as particular technologies spread, specifically batch and continuous-process methods of production. Across the past two centuries, manufacturing shifted first from artisanal to mechanized and nonmechanized factory production, then from simple factories to assembly lines, and finally from assembly lines to continuous and batch processes. Although few products were manufactured by more than two of the technologies mentioned, manufacturing, as a whole, progressed in the fashion described. In considering our argument it is useful to envision manufacturing as having two distinct stages: (i) a machine-installation and machine-maintenance segment and (ii) a production or assembly portion. Capital and educated (skilled) labor, we will argue, are always complements in the machine-maintenance segment of manufacturing, regardless of the technology. Machinists, for example, are needed to install machinery and make it run. The workable capital created by skilled labor plus raw capital is then used by unskilled labor to create the final product in the production or assembly segment of manufacturing. How the adoption of a technology alters the relative demand for skilled workers will depend on whether the machinemaintenance demand for skilled labor is offset by the production-process demand for unskilled labor.

The Legacy of U.S. Educational Leadership: Notes on Distribution and Economic Growth in the 20th Century by Claudia Goldin and Lawrence F. Katz. Published in volume 91, issue 2, pages 18-23 of American Economic Review, May 2001

Genuine change in the economic and social status of U.S. women did not emanate simply from their increased labor force participation but, rather, from their increase in professions and as “career women. ” Those changes first began in the late 1960s and early 1970s. We examine here one factor of momentous importance in this break with the past. The Economist (December 31, 1999) recently named it the greatest science and technology advance in the twentieth century. It is the oral contraceptive, known worldwide by its moniker “the pill.” In 1960 18.4 percent of professionals were women, as were 4.7 percent of “high powered professionals.”1 But in 1998 36.4 percent of professionals were women and 25.1 percent of the “high powered ” subset were. We explore in this article a series of connections that link the birth control pill to the increase of women in professional occupations. Our evidence for the impact of the pill relies largely on the timing of various changes. Changes in laws giving minors certain adult rights and lowering the age of majority enabled young and unmarried women to obtain the pill. Young women’s control over their fertility directly reduced the costs to them of engaging in long-term career investments. The pill also served to increase the age at first marriage and thus indirectly reduced a potential penalty of

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.(This abstract was borrowed from another version of this item.)