We specify and implement a test for the presence and importance of labor market networks based on residential proximity, in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work; that they are more important for minorities and the less skilled, especially among Hispanics; and that they appear to be race based.

We assemble a new matched employer-employee data set covering essentially all industries and occupations across all regions of the U.S. We use this data set to re-examine the question of the relative contributions to the overall sex gap in wages of sex segregation vs. wage differences by sex within occupation, industry, establishment, and occupation-establishment cells. This new data set is especially useful because earlier research on this topic relied on data sets that covered only a narrow range of industries, occupations, or regions. Our results indicate that a sizable fraction of the sex gap in wages is accounted for by the segregation of women into lower-paying occupations, industries, establishments, and occupations within establishments. Nonetheless, a substantial part of the sex gap in wages remains attributable to the individual's sex. This latter finding contrasts sharply with the conclusions of previous research (especially Further research into the sources of withinestablishment within-occupation sex wage differences is therefore much more important than previously thought.

We use a unique new data set that combines data on individual workers and their employers to estimate marginal productivity differentials among different types of workers. We then compare these to estimated relative wages, leading to new evidence on productivity‐based and nonproductivity‐based explanations of the determination of wages. Among our findings are (1) the higher pay of prime‐aged workers (aged 35–54) and older workers (aged 55+) is reflected in higher point estimates of their relative marginal products, and (2) for the most part, the lower relative earnings of women are not reflected in lower relative marginal products.