Preunemployment search is the fundamental labor market process generating beneficial effects of advance notice. Yet theory indicates that workers receiving notice may not search, whereas others may search even without advance notice. Our weighted results indicate that over one-third of all nonnotified workers still search and over 40% of workers receiving notice do not respond by searching. Further, preunemployment search determinants differ for notified (nonnotified) workers and men (women). For notified men, search is strongly increased by longer notice and strongly decreased by higher unemployment insurance benefits. But neither factor affects the employed search decisions of notified women.

Comparative advantage and the division of labor make geographic concentration of production within a nation profitable and cause many cities to be specialized in one or a few main industries. Specialized cities, however, suffer greater unemployment risk. The theory of compensating wage differentials predicts that individuals living in more specialized cities will be compensated in the form of higher wage rates. We study the effects of specialization on wages and unemployment in the United States. We find evidence of compensating wage differentials. That firms choose to locate in more specialized, higher-wage cities is indirect evidence of the gains to specialization.

A model of unemployment duration is estimated with weekly micro data on Canadian men. Ent itlement provisions in the unemployment insurance program and demand conditions are found to have a significant effect on the probability of leaving unemployment. The probability of a worker leaving unemploy ment declines with the duration of unemployment, holding unemployment insurance entitlement constant. When entitlement is allowed to vary, the probability of leaving first falls and then generally rises with unemployment duration. These results are robust with respect to allo wing for person-specific unobserved heterogeneity and alternative spe cifications of duration dependence. Copyright 1987 by University of Chicago Press.

The employment and earnings effects of the minimum wage are estimated by parameterizing a hypothesized relationship between underlying market employment and wage relationships versus observed wage and employment distributions in the presence of a legislated minimum. If there had been no minimum during the 1973-78 period, we estimate that employment among out-of-school men 16-24 would have been approximately 4% higher than it was. Among young men 16-19 employment would have been about 7% higher; among those 20-24, 2% higher. Employment among black youth 16-24 would have been almost 6% higher than it was, compared with somewhat less than 4% for white youth. Although it is sometimes argued that the adverse employment effects of the minimum are offset by increased earnings, we find virtually no earnings effect. Had the minimum not been raised over the 1973-78 period, inflation would have greatly moderated the adverse employment effects of the minimum, with approximately two-thirds of the potential employment gains from elimination of the minimum attained. The weight of our evidence is inconsistent with a general increase in youth wage rates with increases in the real minimum. Our findings support the hypothesis that the effects of the minimum are concentrated on youth with subminimum market wage rates.

In 2004, the Chicago Public Schools and the Chicago Teachers Union signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (those with fewer than 5 years of experience) for any reason and without the hearing process typical in many urban districts. Results suggest that the policy reduced annual teacher absences by roughly 10% and reduced the incidence of frequent absences by 25%. The majority of the effect was due to changes in the composition of teachers in the district, although there is evidence of modest incentive effects for young untenured teachers.

Exploiting long term interindustry demand shifts, this article provides evidence that (1) industry‐level wages do not respond to industry demand conditions; (2) at the industry level, the employment of young workers responds more to demand shifts than does the employment of experienced workers; and (3) the postdisplacement wages of displaced workers are strongly affected by demand in their predisplacement industries. These findings are consistent with a model in which worker's investments in industry‐specific skills pose a barrier to interindustry labor mobility and wages do not respond to spot labor market conditions.

This article compares immigrant and native‐born male occupational distributions in Canada in the 1980s. Three questions are addressed: (1) How do immigrant and native‐born occupational distributions differ? (2) Are immigrants more occupationally mobile? and (3) How do immigrant occupations and mobility relate to characteristics used in immigrant selection? Results indicate that immigrants are more skilled, but this declines across successive cohorts. Immigrants are more occupationally mobile even long after arrival, indicating immigration may contribute to a more flexible labor force. Immigrants who are not assessed on their skills or are not fluent at arrival are less occupationally mobile.

Researchers agree that household equivalence scales are intended to measure the variation in income needed to bring households of different composition to the same welfare level. Researchers do not agree, however, about how the term "household welfare" is to be defined. This article traces the historical and philosophical development of three distinct definitions. When the conceptual bases of several popular methods for the estimation of equivalence scales are explored, it becomes clear that advances in theoretical rigor have not always worked to bring the literature closer to answering questions of policy concern.

This research utilizes new data to track the earnings effect of the National Supported Work experiment (NSW) on the youth and Aid to Families with Dependent Children (AFDC) target groups for 8 years following training. The research indicates that the NSW's effect on the AFDC recipients ranged from $375 to $525 in 1978 dollars during the years 1982-86. The sum of the estimated earnings effects for the AFDC treatments over the observed posttraining period more than offset the costs of the training program. The NSW was found to have no discernible effect on the earnings of the youth target group.

Decentralized wage setting in search equilibrium models is inefficient because the meeting firm and worker ignore the dependence of job-matching probabilities on the number of firms and workers engaged in search. This paper investigates whether risk-neutral monopolistic unions will have an incentive to internalize this externality. I find that the externality will be internalized only if the union's policy is chosen by unemployed persons. If employed persons influence union policy, both the union wage and unemployment will be too high. A tax on the union wage combined with an employment subsidy to firms can correct this inefficiency.