Knowledge that Transforms

"Implications of the quantity (number) and quality (skill) of immigration on the destination economy are analyzed, including impacts on value added, wages, quasi rents, rates of return, and the skill distribution of the native labor force. Quantity-quality trade-offs are considered for both immigrant and native workers. Medium- and long-run labor-supply responses by natives to immigrant-induced changes in wage rates are shown to have second-order effects which subtantively affect the impacts of immigrants. The impact of immigration policy depends on the quality as well as quantity of immigrants, the time horizon, and the speed of factor market adjustment."

The primary goal of this article is to specify and estimate a structural simultaneous search model and then determine the empirical importance of simultaneous search. The results indicate that new labor force entrants search simultaneously. A secondary goal is to identify and estimate job offer arrival rates and wage offer rejection probabilities separately. The results indicate that a significant portion of unemployment spells are caused by slow arrival rates, but policies intended to speed arrival rates would increase the average length of unemployment spells.

This article specifies and estimates an empirical model of male labor supply based on an implicit market model of wage-hours determination. We discuss how moving from a standard labor supply model to an implicit market model affects model specification and choice of estimation technique. We find that average hourly earnings are not independent of hours worked and that OLS estimates of the wage-hours relationship are biased. We also show that a labor supply model that assumes wages to be independent of hours worked produces a positively biased estimate of the effect of the wage on labor supply.

Despite an extensive literature examining the effects of unions on wages, little attention has been paid to the resultant aggregate employment consequences of this change in the relative cost of unionized labor. This article uses 1983 Current Population Survey data to estimate the effects of union strength on the probability of employment and labor force participation. Union strength, which reflects both union coverage and the union wage differential, is found to decrease employment and increase unemployment by a small but significant amount. These effects are concentrated primarily among females and young males, while little impact is found on prime-age males.

This article analyzes the growth of regulatory litigation under the National Labor Relations Act by modeling the compliance and enforcement decisions made by the employers, unions, and workers covered by the act. An empirical analysis of the model on time-series data for 1950-80 confirms the importance of compliance and enforcement incentives in explaining the growth of unfair labor practice charges. While some actions of the National Labor Relations Board, the regulatory agency established by the act, influence these incentives and the resulting regulatory litigation, changes in some important incentives, notably relative labor costs, are beyond the board's influence.

The simplest economic theories of crime predict that profit-maximizing firms should follow strategies of minimal monitoring with large penalties for employee crime. We investigate possible reasons why firms actually spend considerable resources trying to detect employee malfeasance. We find that the most plausible explanations for firms' large outlays on monitoring of employees-legal restrictions on penalty clauses in contracts and the adverse impact of harsh punishment schemes on worker morale-are also consistent with the payment of premium (rent-generating) wages by cost-minimizing firms.

This article formulates job search models, incorporating certain types of the "stigma" effect of unemployment. It is assumed that the probability of getting a job offer, given the unemployment individual contacts the firm, is influenced by the duration of unemployment and is justified in a signaling context. The optimal search is analyzed for one sector as well as across several independent labor-market segments. It is shown that there are reasonably general conditions on the search environments, for which both the individual reservation wage and escape rate are negative-duration dependent, a fact observed in empirical studies.

Using special CPS data on displaced workers, this article investigates the wage consequences of job displacement in a framework that emphasizes the effects of past job duration(s) and unemployment duration(s) on postdisplacement wages. Our model also attempts to take account of the simultaneity between unemployment duration and the postdisplacement wage. It is found that duration strongly reduces subsequent earnings and that considerable overstatement of the loss in firm-specific training investments is implied by conventional routes to measuring wage losses.

This article interprets literature examining union effects on economic performance. Production function studies indicate small overall union impacts on productivity; positive effects, where they exist, appear to result from management response to decreased profit expectations and from a natural selection process. Lower profitability among unionized firms is well established; more interesting is the possibility that unions appropriate quasi rents deriving from long-lived tangible and intangible capital. The connection between unions, investment behavior, and productivity growth emerges as a particularly fruitful line of empirical inquiry, although it does not encourage a sanguine view of unionism's long-run impact.

This article quantifies the role of plant construction, expansion, contraction, and closing in generating net and gross changes in U.S. manufacturing employment over the 1963-82 period. A new longitudinal data set, constructed from the plant-level observations collected in the last five Census of Manufactures, is utilized. The reallocation of employment opportunities across and within sectoral, regional, and cohort boundaries is measured. Over 70% of the turnover in employment opportunities occurs across plants within the same two-digit industry and geographic region. Systematic differences in the employment fluctuations of plants of different ages are also found.