Over the past 3 decades, the U.S. Temporary Help Services (THS) industry grew five times more rapidly than overall employment. Contemporaneously, courts in 46 states adopted exceptions to the common law doctrine of employment at will that limited employers' discretion to terminate workers and opened them to litigation. This article assesses the contribution of "unjust dismissal" doctrine to THS employment specifically, and outsourcing more generally, finding that it is substantialexplaining 20% of the growth of THS between 1973 and 1995 and contributing 500,000 additional outsourced workers in 2000. States with smaller declines in unionization also saw substantially more THS growth.

This article presents evidence that turnover is negatively selective on a worker's job performance. At establishments with about seventeen employees, workers who are one standard deviation (21 percent) less productive than average during the first few months on the job are 11 percentage points more likely to be laid off or fired and 7 percentage points more likely to quit during the succeeding year. At large nonunion establishments and in small labor markets, productivity has large effects on involuntary separations, but almost no effect on quits. Productivity appears to be positively related to layoffs and quits at unionized establishments.

We examine Henry Ford's introduction of the five-dollar day in 1914 in an effort to evaluate the relevance of efficiency wage theories of wage and employment determination. We conclude that the Ford experience strongly supports the relevance of these theories. Ford's decision to increase wages dramatically is most plausibly the consequence of labor problems of the kind efficiency wage theorists stress. The structure of the five-dollar day program is consistent with the predictions of efficiency wage theories. There is vivid evidence that the introduction of the five-dollar day resulted in substantial queues for Ford jobs. Significant increases in Ford productivity and profits accompanied the new regime.

In labor market equilibrium, sectoral differences in "natural" rates of unemployment generate a conformable distribution of wage differentials that compensate workers for bearing unemployment risk. This paper offers new empirical evidence on the determinants of this equilibrium. The analysis consists of two stages. First, I estimate a three-state model of employment and unemployment that identifies the determinants of individuals' rates of entering and leaving unemployment spells. Sectoral, demographic, and policy-induced differences in unemployment probabilities evolve naturally from this framework. Second, I estimate the impact of these differences on the distribution of wages. An important finding is the powerful impact of the unemployment insurance (UK) system both on unemployment and on equalizing wage differences. The evidence is strong that the availability of UK increases unemployment, while simultaneously reducing the magnitude of compensating wage differentials. Most of the effect of UK on unemployment is due to an increased probability of entering spells of unemployment, mainly temporary layoffs, though the duration of spells is also affected. Neglect of the role of UK as a substitute for wages partially accounts for the small compensating differentials estimated in previous research. In the absence of UK, each point of anticipated unemployment raises an individual's wage by about 2.5%.

The ability of unions to raise the wages of their members above the wages of similar but nonunionized workers is well documented. This paper examines empirically the implications of that wage differential for resource allocation and economic efficiency. This is accomplished by explicitly solving a numerically specified general equilibrium system with and without the wage differential. Comparison of the two solutions yields the desired information. The findings indicate that the wage premium results in adjustments in prices and quantities of factors and commodities that vary widely across industries. These adjustments are found to carry a small deadweight loss, as measured by the Hicksian equivalent variation.

In this article, I provide both econometric and case study evidence on the labor market effects of the U.S. Supreme Court’s 1985 Garcia v. San Antonio Metropolitan Transit Authority decision that made 80% of state and local government workers eligible to receive compensation for overtime hours worked. Empirical evidence suggests that the behavior of public sector workers is consistent with a Coasian model in which overtime provisions are explicitly bargained for by the parties involved, likely making overtime legislation an ineffective tool for influencing the amount of overtime hours worked by public sector employees.

We model the endogenous emergence of social perceptions about occupations and their impact on occupational choice. In particular, an individual’s social approval increases with his community's perception of his skill in his chosen career. These perceptions vary across communities because individuals better assess the skill of those in occupations similar to their own. Such imperfect assessment can distort choices away from comparative advantage. When skill distributions differ across occupations and/or correlate positively, the community perceives one occupation more favorably. This favored sector experiences overcrowding, but misallocation occurs across both sectors. Furthermore, a positive skill correlation can produce multiple steady states.

Social and emotional learning (SEL) programs that target disruptive students aim to improve their classroom behavior. Small-scale programs in high-income countries have demonstrated positive effects. Using a randomized experiment, we show that a nationwide SEL program in Chile has no effect. Very disruptive students seem to reduce the program’s effectiveness. With attention deficit hyperactivity disorder being more prevalent in middle- than high-income countries, very disruptive students may be more present there, which could diminish the effectiveness of SEL programs. Moreover, implementation fidelity seems lower in this program than in the small-scale ones considered earlier, which could also explain the program’s null effect.

This paper develops a model of dual labor markets based on employers' need to motivate workers. In order to elicit effort from their workers, employers may find it optimal to pay more than the going wage. This changes fundamentally the character of labor markets. The model is applied to a wide range of labor market phenomena. It provides a coherent framework for understanding the claims of industrial policy advocates. It also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces. Finally, the model provides the basis for a theory of involuntary unemployment.

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.