Knowledge that Transforms

Previous articleNext article FreeSherwin Rosen PrizePDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreIn 2018, the Society of Labor Economists awards the Sherwin Rosen Prize to Patrick Kline for outstanding contributions in the field of labor economics.Pat Kline is a productive and creative scholar with an outstanding research output. He has written innovative and influential papers on several important topics, including place-based policies, firm-level wage determination, and intergenerational mobility, as well as other areas of labor economics and applied econometrics. Kline’s major papers address important questions that are either directly policy relevant or critical for developing a substantive understanding of the world. Many of his applied papers are at the leading edge of the field, bringing in new ideas from econometrics and creatively utilizing large-scale data sets to provide new insights.His two most important contributions in place-based policies are “Assessing the Incidence and Efficiency of a Prominent Place Based Policy” (American Economic Review, April 2013), coauthored with Matias Busso and Jesse Gregory, and “Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority” (Quarterly Journal of Economics, February 2014), coauthored with Enrico Moretti.In the 2013 AER paper, Kline and coauthors study the economic efficiency of the federal urban Empowerment Zone program as well as the incidence of the program. The program is designed to help low-income urban areas by providing business tax credits for the employment of local residents as well as a series of large block grants aimed at improving local infrastructure and reducing poverty. In the 2014 QJE paper, Kline focuses on the Tennessee Valley Authority (TVA), arguably the most ambitious attempt at a big-push development strategy ever performed in the United States.The two papers also share the same methodological structure: a transparent identification strategy designed to assess the local effect of the program augmented by a more structured approach designed to assess the program’s aggregate impacts. The effects of the two programs on the local economy differ. Both policies have positive local labor market effects. The TVA project also has large positive spillovers to surrounding local economies that are offset by losses elsewhere, leading to no overall aggregate effect.Kline has written two papers that study the role played by firm-specific wage premiums in determining trends in wage inequality and the gender wage gap. One is “Workplace Heterogeneity and the Rise of West German Wage Inequality” (Quarterly Journal of Economics, August 2013), coauthored with David Card and Jörg Heining.This paper documents the importance of workplace-specific pay components for understanding the very sharp rise in wage inequality in Germany in the late 1990s and early 2000s. First, the authors show that workers who move up and down the coworker pay ladder experience approximately symmetric gains and losses in wages—a pattern that rules out endogenous mobility driven by person-specific job match components of pay. They also show that the wage trends of workers who will experience different types of moves are all remarkably similar in the years before the move, with no indication of the wage gains or losses they will experience in the near future.Then they show that simple additive models of wage determination involving worker and firm effects perform surprisingly well. They show that a rise in the degree of assortative matching between high-wage workers and high-wage-premium employers occurs. Overall, the authors conclude that firm-specific pay premiums have become more important over time and are increasingly distributed across workers in a way that magnifies other components of wage inequality.The other paper is “Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women” (Quarterly Journal of Economics, May 2016), coauthored with David Card and Ana Rute Cardoso. The authors explore the impact of firm-specific pay premiums on the overall gender wage gap in Portugal and show that more profitable firms may be less likely to hire female workers—a “sorting” channel. They also show that a profitable firm may offer its female employees a smaller pay premium than its male employees—a “bargaining” channel that is consistent with evidence from social psychology showing that women bargain less aggressively than men and end up with a smaller share of the gains from trade.2018 Nominating Committee:David AutorEnrico MorettiRobert ShimerAloysius Siow (chair)Petra Todd Previous articleNext article DetailsFiguresReferencesCited by Journal of Labor Economics Volume 36, Number 3July 2018 Published for the Society of Labor Economists, Economics Research Center/ NORC Article DOIhttps://doi.org/10.1086/698720 © 2018 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeSOLE 2018 Fellows Awards for Best PostersPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreGroup A: Family Economics and Labor SupplyWinner: Etienne Pasteau and Junyi Zhu, “Love and Money with Inheritance: Marital Sorting between Labor Income and Inherited Wealth in the Modern Partnership”Group B: Human Capital, Education, Training, and HealthWinner: German Blanco and Alfonso Flores-Lagunes, “Does Youth Training Lead to Better Job Quality? Evidence from Job Corps”Group C: Labor Demand and InequalityWinner: Marcus Dillender and Eliza Forsythe, “White Collar Technological Change: Evidence from Job Posting Data”Group D: Topics in Labor EconomicsWinner: Peter Blair, “Outside Options (Now) More Important than Race in Explaining Tipping Points in U.S. Neigborhoods”Judges: John Abowd, Katharine Abraham, Joseph Altonji, Kerwin Charles, Christian Dustmann, Henry Farber, Eric Hanushek, Kevin Lang, W. Bentley MacLeod, Marjorie McElroy, Robert Moffitt, Derek Neal, Kathryn Shaw, Jeff Smith, Petra Todd, and Robert Willis. Previous articleNext article DetailsFiguresReferencesCited by Journal of Labor Economics Volume 36, Number 3July 2018 Published for the Society of Labor Economists, Economics Research Center/ NORC Article DOIhttps://doi.org/10.1086/698721 © 2018 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeOfficers of the SocietyPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMore2018–2019 Board of OfficersPresident: Joseph Altonji, Yale UniversityPresident-Elect: Katharine G. Abraham, University of MarylandVice President: Robert Moffitt, Johns Hopkins UniversityExecutive Board (2017–2019):Jeffrey Smith, University of MichiganNicole Fortin, University of British ColumbiaExecutive Board (2018–2020):Martha J. Bailey, University of MichiganCharlie Brown, University of MichiganDan Black, University of Chicago and NORC, ex officioPaul Oyer, Stanford University and the Journal of Labor Economics, ex officioSecretary-Treasurer: Maggie NewmanFellows of the Society of Labor EconomistsJohn AbowdKatharine AbrahamDaron AcemogluGeorge AkerlofJoseph AltonjiJoshua AngristOrley AshenfelterDavid AutorGary Becker*Marianne BertrandSandra BlackRebecca BlankFrancine BlauRichard BlundellGeorge BorjasJohn BoundCharles BrownKenneth BurdettGlen Cain*David CardKerwin Kofi CharlesPierre-Andre ChiapporiJanet CurrieSteven J. DavisJohn DiNardo*Christian DustmannRon EhrenbergHenry FarberRichard FreemanVictor FuchsRoland G. FryerRobert GibbonsClaudia GoldinReuben GronauRobert HallJohn HaltiwangerDan HamermeshEric HanushekJames HeckmanCaroline M. HoxbyGeorge Johnson*Lawrence KahnLawrence KatzJohn KennanAlan KruegerRobert J. LaLonde*Kevin LangRichard LayardEdward LazearThomas LemieuxShelly LundbergStephen MachinW. Bentley MacLeodThomas MaCurdyAlan ManningMarjorie McElroyCostas MeghirRobert MichaelJacob Mincer*Robert MoffittEnrico MorettiDale Mortensen*Richard MurnaneKevin MurphyDerek NealSteve NickellWalter Oi*John PencavelChristopher PissaridesRobert PollakCanice PrendergastMelvin Reder*Mark RosenzweigKathryn ShawRob ShimerJames SmithJeffrey SmithGary SolonFrank StaffordChris TaberPetra ToddRobert TopelJohn Van ReenenYoram WeissFinis WelchRobert WillisNew Fellows Elected in 2018V. Joseph HotzHilary Hoynes Notes *. Deceased. Previous articleNext article DetailsFiguresReferencesCited by Journal of Labor Economics Volume 36, Number 3July 2018 Published for the Society of Labor Economists, Economics Research Center/ NORC Article DOIhttps://doi.org/10.1086/698518 © 2018 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeH. Gregg Lewis PrizePDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreThe H. Gregg Lewis Prize for the best paper published in the Journal of Labor Economics during 2016–2017 has been awarded to Lena Hensvik and Oskar Nordström Skans for “Social Networks, Employee Selection, and Labor Market Outcomes,” which appeared in the October 2016 issue of the Journal.The Prize Committee consisted of Melvin Stephens Jr. (chair), Marianne Page, and Jessica Pan (previous Lewis Prize winner). Social networks have long been of interest to labor economists, and access to administrative data in recent years has allowed researchers to test the theoretical implications of network models. Hensvik and Skans examine the importance of employee referrals in the hiring of new workers. If high-quality workers tend to interact with other high-quality workers through their social networks, then employers can leverage these relationships through referrals in situations where the quality of potential hires is not easily observed. Employee referrals in the presence of networks yield predictions for the quality and wages of new hires as well as for the probability of using referrals in the hiring process. A long-standing hurdle to empirically testing these ideas, however, is information on worker quality that is unobserved by employers but is observed, perhaps imperfectly, by employees.Hensvik and Skans leverage population register data from Sweden to create a sample of newly hired and incumbent male workers. Worker networks are created through linking spells of overlapping employment at prior employers. Key to their analysis is that nearly every 18- or 19-year-old Swedish male underwent the military draft process in which they were subjected to both cognitive and noncognitive testing, with individuals kept unaware of their own test results. Using these test scores, which are available in the register data, along with information on networks through prior employment, the authors confirm the numerous predictions on the impact of referrals through employee networks. The finding that firms hire workers through the social ties of more productive employees has important implications for understanding wage inequality. The use of such employee referral networks implies that greater ability sorting in the labor market will increasingly work to the disadvantage of equally productive workers without access to high-ability ties. The committee was impressed with the authors’ creative use of population register data to study this important topic.Past H. Gregg Lewis Prize winners:1990–1991Robert Gibbons and Lawrence F. Katz1992–1993James N. Brown and Audrey Light1994–1995John Bound, Charles Brown, Greg J. Duncan, and Willard L. Rodgers1996–1997Christina H. Paxson and Nachum Sicherman1998–1999Derek A. Neal2000–2001H. Lorne Carmichael and W. Bentley MacLeod2002–2003Eric D. Gould2004–2005Pascal Courty and Gerald Marschke2006–2007Fabian Lange2008–2009Maxim Poletaev and Chris Robinson2010–2011William R. Kerr and William F. Lincoln2012–2013Laura Giuliano2014–2015Jessica Pan Previous articleNext article DetailsFiguresReferencesCited by Journal of Labor Economics Volume 36, Number 3July 2018 Published for the Society of Labor Economists, Economics Research Center/ NORC Article DOIhttps://doi.org/10.1086/698528 Views: 273Total views on this site © 2018 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Previous articleNext article FreeJacob Mincer AwardPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreHenry Farber is the 2018 recipient of the Jacob Mincer Award for a lifetime of contributions to labor economics. Farber is the Hughes-Rogers Professor of Economics at Princeton University. He is a fellow of the Society of Labor Economists, the Econometric Society, and the Labor and Employment Relations Association as well as a past president of the Society of Labor Economists.Hank’s study of labor markets and labor unions started well before his academic work in the field. He learned to drive a forklift while in his teens and for several years was a card-carrying member of the Teamsters Union. Hank earned his BA at the Rensselaer Polytechnic Institute before moving to Cornell’s School of Industrial and Labor Relations for an MS. Hank earned his PhD in economics at Princeton University. Hank’s integration of technical economics and econometrics with the traditional study of labor markets is a hallmark of his scholarship. His own background and his education help explain the remarkable success of his research agenda, but his wide breadth of interests and his deep insights into human behavior have been critical to his success.Hank’s first major papers were studies of union bargaining behavior and strikes and the determination of wages and employment in a union setting—both published in 1978, in the American Economic Review and the Journal of Political Economy, respectively. These were papers that defined a new and more quantitative approach to the great topics that occupied labor economists in the early post–Vietnam War period. Hank’s work changed forever the way these topics would be studied by economists.Hank’s first academic position at the Massachusetts Institute of Technology (MIT) brought him into contact with both the old and the new in labor economics. Fruitful collaborations led to a series of influential papers that defined a rigorous paradigm for studying arbitration systems. This work has had a broad impact outside the fields of labor economics and industrial relations, and it even led to the Ghiselli Award for Research Design from the American Psychological Association.Hank continued to work on a broad range of topics in labor economics after moving to Princeton University, making many fundamental contributions. Over the longer term, his study of employer/employee matching in the labor market and the role this plays in determining how pay is determined by the length of these matches has been a major motivation for much of Hank’s research. His work on job loss, returns to seniority, job flows, and wage dynamics has been extremely influential. This work is all characterized by insightful theory, state-of-the-art econometrics, and exceptional care with data.In the past decade, Hank has been involved in a debate about worker incentives that has been played out in an unusual form: the role of worker preferences among taxi drivers. Taxi drivers are among the last of those who work as free agents who may control the length of time that they work, and they form a special case where debates about incentives have been playing out for over a decade or more. Farber has illuminated and elevated this debate to so high a level that his may well be the last word on it.Hank’s contributions to the field of labor economics go well beyond his impressive scholarship. Starting with his tenure at MIT and extending to his time at Princeton, Hank has mentored an army of scholars who have created a whole new body of scholarship. Like Jacob Mincer, for whom this award is named, Hank has also been especially important as a mentor for women in the economics profession.Hank has been very active in the Society of Labor Economists and is always willing to lend a helping hand to younger or less established scholars. He has been on the editorial board (or associate editor) of the Industrial and Labor Relations Review, the Quarterly Journal of Economics, and the American Economic Review.On several occasions Hank has served as director of the Industrial Relations Section at Princeton University. He is known for his collegiality and the breadth of his friendships there.The influence of Hank’s academic accomplishments, the wide nature of his interests, the clarity of his writing, and the rigor of his work make him a natural recipient of the Jacob Mincer Award for a lifetime of contributions to labor economics.2018 Jacob Mincer Award Nominating Committee:John M. AbowdMarianne BertrandKerwin CharlesJohn HaltiwangerMarjorie McElroy (ex officio)Chris Taber (chair)Robert Willis Previous articleNext article DetailsFiguresReferencesCited by Journal of Labor Economics Volume 36, Number 3July 2018 Published for the Society of Labor Economists, Economics Research Center/ NORC Article DOIhttps://doi.org/10.1086/698833 © 2018 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

This paper investigates whether demand-side market pressure explains colleges’ decisions to provide consumption amenities to their students. Using a discrete choice model of college demand, we find that most students appear to value consumption amenities, such as operating spending on student activities, sports, and dormitories, while the taste for academic quality is confined to high-achieving students. Heterogeneity in student preferences creates variation in demand pressure across institutions, which we estimate can account for 11% of the total variation in the ratio of amenity to academic spending across 4-year colleges in the United States.

It is well known that unless worker-firm match quality is controlled for, reduced-form estimates of returns to firm tenure will be biased. In this paper, we show that there is a further pervasive source of bias, namely, the comovement of firm employment and firm wages. We argue that firm-year fixed effects must be used to eliminate this bias. Estimates from two large-panel data sets from Germany and Portugal show that the bias is empirically important. Finally, we show that the results extend to tenure correlates used in macroeconomics, such as the minimum unemployment rate since joining the firm.