The national origin of an individual's human capital is a crucial determinant of its value. Education and labor market experience acquired abroad are significantly less valued than human capital obtained domestically. This difference can fully explain the earnings disadvantage of immigrants relative to comparable natives in Israel. Variation in the return to foreign schooling across origin countries may reflect differences in its quality and compatibility with the host labor market. The return to foreign experience is generally insignificant. Acquiring additional education following immigration appears to confer a compound benefit by raising the return to education acquired abroad. Copyright 2000 by University of Chicago Press.

Using Canadian data, I investigate the relationships among sectoral mobility, unemployment spells, and total unemployment. Recent North American evidence suggests that incidence shifts toward high wage-high tenure workers may increase equilibrium unemployment through decreasing sectoral mobility and increasing spells. Using a multiple spell transition model, I find that, while shifts toward such workers may have these effects, composition changes that lead to higher mobility can also increase unemployment. A further investigation into the relative roles of mobility and spell lengths in driving total unemployment indicates that the influence of the former is comparatively small.

This study tests the efficiency wage hypothesis by estimating wage and quit equations with data from the Employment Opportunity Pilot Project survey of firms. An efficiency wage model is derived that predicts effects of turnover costs and unemployment on wages as functions of first and second derivatives from the quit equation. The model is tested by examining the relationships between the coefficients in the wage and quit equations; the results are generally favorable to efficiency wage theory. Other important findings are that firm characteristics raising workers' productivity tend to raise wages and that a rise in turnover costs reduces quits.

This article investigates cyclicality in real wages between 1969 and 1982, using Panel Study of Income Dynamics data. There is little evidence that movements in and out of the labor market induced aggregate wage cyclicality during these years. However, cyclicality in the movement of workers between heterogeneous labor-market sectors affected aggregate wage cyclicality. While sector location is important, sector selectivity is not correlated with wages. Yet, even within sectors, cyclicality is present in real wages over this time period and is the result of cyclicality in overall wage levels, as well as in the coefficients associated with particular worker characteristics.

This paper explores the differential nature of labor-supply decisions regarding weeks of work per year and hours of work per week among female household heads. A model of labor supply that separates the weeks/hours decision is presented and estimated, allowing for simultaneity in the weeks/hours decision, as well as for the presence of either fixed costs or weeks and hours constraints. The results indicate that not only are weeks and hours decisions separate from the labormarket participation decision, but they are also quite different from each other, although they appear to be simultaneously determined.

According to Lazear, workers and firms enter into long-term implicit contracts that discourage shirking and malfeasance by shifting compensation to the end of the contract. Such "delayed payment" contracts are less likely to occur in jobs in which it is comparatively simple to monitor worker effort. This paper uses data from the National Longitudinal Survey and the Dictionary of Occupational Titles to test that hypothesis. In particular, it tests whether jobs that involve repetitive tasks tend to be characterized by an absence of pensions, mandatory retirement, long job tenures, and high wages for older workers.

This article employs a model of Masanori Hashimoto with extensions by Donald Parsons to analyze variation in tenure by sex, age, and firm type. Fixed-wage contracts eliminate postcontractual opportunism associated with firm-specific human capital investment. However, such contracts result in inefficient quits and terminations. Calibration of the sharing of this investment between workers and employers minimizes the costs of these inefficient separations. Moreover, this optimal sharing rate varies systematically with the characteristics listed above. These tenure-slope implications are tested with favorable results.

Human capital models have mainly focused on the rate of return to investment in a homogeneous stock of capital. Yet individuals have different initial attributes that determine comparative advantage in producing different types of human capital. We find that mathematical ability is an important determinant of field choice for college students and that differences in earnings across fields are largely explained as a return to the use of scarce quantitative abilities in the production of each type of human capital. The model successfully accounts for the observed male-female differences in earnings and occupational choices of recent college graduates.

An unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model. In the context of a three-equation model determining union membership and union- and nonunion-sector wage rates, this paper presents an instrumental variables (IV) procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the Hausman specification test. An advantage of our IV procedure in comparison to the widely used inverse Mill's ratio procedure is that our procedure is a distribution-free estimator, whereas the inverse Mill's ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed. Using data for a sample of middle-aged white workers, we estimate the parameters of the union and nonunion wage equations with both procedures. On the key question of the endogeneity of union status, the Hausman test decisively rejects the null hypothesis of exogeneity. The inverse Mill's ratio procedure, in contrast, provides coefficient estimates on the selectivity terms that fail to indicate evidence of sample selectivity in either sector.

This paper analyzes the US Lanham Act of 1940, a heavily subsidized and universal child care program administered during World War II. I first estimate its impact on maternal employment using a triple-differences model. I find that employment increased substantially following the introduction of the program. I then study children’s long-run labor market outcomes. Using Census data from 1970 to 1990, I assess well-being in a life-cycle framework by tracking cohorts of treated individuals throughout their prime working years. Results from difference-in-differences models suggest the program had persistent positive effects, with the largest benefits accruing to the most economically disadvantaged adults.