Knowledge that Transforms

This article examines the impact of a workplace education program at two companies (one in the manufacturing sector, the other in the service sector). We examine a broad range of outcome variables, including earnings, turnover, performance awards, job attendance, and subjective performance measures. We estimate a small, positive impact of the program on earnings at the manufacturing company but an insignificant impact at the service company. Trainees were equally likely to exit the company as nontrainees. We also find that the training had a positive association with the incidence of job bids, upgrades, performance awards, and job attendance.

This article investigates the consequences of labor market search for the theory of hedonic wages. We find that the introduction of search has surprising consequences for the theory of hedonic wages. In particular, we demonstrate that the equilibrium distribution of wage and nonwage amenity bundles generally bears little resemblance to workers' underlying preferences. A consequence of this analysis is that estimates of workers' marginal willingness to pay, derived from the conventional hedonic wage methodology, are biased. In addition, we demonstrate that search generates differences between firm‐level and employee‐level data that can cause substantial deviations in the estimates of hedonic wage equations.

Data from the National Longitudinal Survey of Youth indicate that the employer often pays the explicit costs of not only on‐site training but also off‐site general training. Although few of these costs appear to be passed on to workers in the form of a lower wage while in training, completed spells of general training paid for by previous employers have a larger wage effect than completed spells of general training paid for by the current employer. A model where contract enforcement considerations cause employers to share the costs and returns to purely general training can explain these findings.

Using multinomial probit estimates of the probability of job‐to‐job and job‐to‐nonemployment turnover, I find that differences between women's and men's turnover are due to the behavior of less educated women. Both the job‐to‐job and job‐to‐nonemployment turnover of less educated women are significantly different from that of more educated women as well as both groups of men. I also find that distinguishing between types of turnover—job‐to‐job versus job‐to‐nonemployment—is quite important, particularly in understanding the turnover patterns of women.

This article analyzes the dynamics of joint labor force behavior of older couples in the United States. Using the Retirement History Survey (RHS) I analyze the determinants of joint retirement and the effect of one spouse's labor force status on the labor force transitions of the other spouse. The results reveal strong associations between the labor force transition probabilities of one spouse and the labor force status of the other spouse. These result from structural differences in exit and entry behavior by the spouse's status. Several lagged endogenous variables have substantial effects on behavior even after controlling for unobserved heterogeneity.

Recent advances in incentive theory stress the multidimensional nature of agent effort and specifically cases where workers affect one anothers' performance through “helping” efforts. This article models helping efforts as determined by the compensation package and task allocation. The model is tested with Australian evidence on reported helping efforts within work groups. The evidence consistently supports the hypothesis that helping efforts are reduced, while individual efforts are increased, when promotion incentives are strong. Piece rates and profit‐sharing appear to have little effect on helping efforts, while task variety and helping efforts are positively correlated.

Do competitive markets remove the effect of social norms on market outcomes? Or are norms capable of exerting a persistent influence? In this article we report the results of a series of competitive market and bilateral bargaining experiments. They indicate that the norm of reciprocity gives rise to wages that are persistently above the competitive level. Moreover, wages under bilateral bargaining conditions coincide with wages in competitive markets, indicating that competition has a limited effect when the norm of reciprocity is operative. In addition, the results show that workers' reciprocal behavior increases effort and, hence, the efficiency of trades.

To study the problem of widespread youth crime, the author analyzes a time-allocation model in which consumers face parametric wages and diminishing marginal returns to crime. The theory motivates an econometric model that he estimates using data from the National Longitudinal Survey of Youth. The author's estimates suggest that youth behavior is responsive to price incentives and that falling real wages may have been an important determinant of rising youth crime during the 1970s and 1980s. Moreover, wage differentials explain a substantial component of both the racial differential in criminal participation and the age distribution of crime. Copyright 1998 by University of Chicago Press.

The authors propose models with an ascriptive characteristic generating earnings differentials and causing sectoral sorting, allowing them to distinguish among sources producing such differentials. They use longitudinal data on a large sample of graduates from one law school and measure beauty by rating matriculation photographs. Better-looking attorneys who graduated in the 1970s earned more than others after five years of practice, an effect that grew with experience. Attorneys in the private sector are better-looking than those in the public sector, differences that rise with age. These results support theories of dynamic sorting and customer behavior. Copyright 1998 by University of Chicago Press.

In the United States and Britain, there is a "family gap" between the wages of mothers and other women. Differential returns to marital and parental status explain 40%–50% of the gender gap. Another 30%–40% is explained by women's lower levels of work experience and lower returns to experience. Taking advantage of "quasi experiments" in job‐protected maternity leave in the United States and Britain, this article finds that women who had leave coverage and returned to work after childbirth received a wage premium that offset the negative wage effects of children.