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Putting Tasks to the Test: Human Capital, Job Tasks, and Wages

Journal of Labor Economics 2013 31(S1), S59-S96
Using original, representative survey data, we document that analytical, routine, and manual job tasks can be measured with high validity, vary substantially within and between occupations, are significantly related to workers' characteristics, and are robustly predictive of wage differences between occupations and among workers in the same occupation. We offer a conceptual framework that makes explicit the causal links between human capital endowments, occupational assignment, job tasks, and wages, which motivate a Roy model of the allocation of workers to occupations. We offer two simple tests of the model's gross predictions for the relationship between tasks and wages, both of which receive qualified empirical support.

Women, War, and Wages: The Effect of Female Labor Supply on the Wage Structure at Midcentury

Journal of Political Economy 2004 112(3), 497-551
We exploit the military mobilization for World War II to investigate the effects of female labor supply on the wage structure. The mobilization drew many women into the workforce permanently. But the impact was not uniform across states. In states with greater mobilization of men, women worked more after the war and in 1950, though not in 1940. These induced shifts in female labor supply lowered female and male wages and increased earnings inequality between high school– and college‐educated men. It appears that at midcentury, women were closer substitutes for high school men than for those with lower skills.

The Costs of Wrongful-Discharge Laws

The Review of Economics and Statistics 2006 88(2), 211-231
We estimate the effects on employment and wages of wrongful-discharge protections adopted by U.S. state courts during the last three decades. We find robust evidence that one wrongful-discharge doctrine, the implied-contract exception, reduced state employment rates by 0.8% to 1.7%. The initial impact is largest for female and less-educated workers (those who change jobs frequently), while the longer-term effect is greater for older and more-educated workers (those most likely to litigate). By contrast, we find no robust employment or wage effects of two other widely recognized wrongful-discharge laws: the public-policy and goodfaith exceptions.

Evaluating Econometric Evaluations of Post-Secondary Aid

American Economic Review 2015 105(5), 502-507 open access
In an ongoing evaluation of post-secondary financial aid, we use random assignment to assess the causal effects of large privately-funded aid awards. Here, we compare the unbiased causal effect estimates from our RCT with two types of non-experimental econometric estimates. The first applies a selection-on-observables assumption in data from an earlier, nonrandomized cohort; the second uses a regression discontinuity design. Selection-on-observables methods generate estimates well below the experimental benchmark. Regression discontinuity estimates are similar to experimental estimates for students near the cutoff, but sensitive to controlling for the running variable, which is unusually coarse.

The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market

American Economic Review 2013 103(5), 1553-1597
We offer a unified analysis of the growth of low-skill service occupations between 1980 and 2005 and the concurrent polarization of US employment and wages. We hypothesize that polarization stems from the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we corroborate four implications of this hypothesis. Local labor markets that specialized in routine tasks differentially adopted information technology, reallocated low-skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor. (JEL J24, J31, R23)

Distinguishing Income from Substitution Effects in Disability Insurance

American Economic Review 2007 97(2), 119-124
A set of studies conducted over the last 15 years has produced a near consensus that the Social Security Disability Insurance system (SSDI) has substantial disincentive effects on the labor supply of near elderly males, diminishing labor force participation, increasing the sensitivity of labor force exit decisions to adverse economic shocks, and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the Social Security retirement program. Yet, efforts by the Social Security Administration (SSA) to encourage labor supply among the disabled by removing the work disincentives built into SSDI have been almost entirely unsuccessful. Most notably, in 1999, Congress authorized the Ticket to Work program, which provides an array of inducements for current SSDI beneficiaries to take up employment, including permitting a trial work period of up to nine months, providing 7.75 years of ongoing Medicare eligibility following return to work, and providing three years of automatic benefit reinstatement when claimants’ workplace earnings fall below a threshold level. Each of these steps reduces the implicit tax placed on labor supply by the SSDI program. Despite these lures, fewer than 1,400 (0.01 percent) of the 12.2 million tickets issued to date have led to successful workforce integration (Autor and Duggan 2006).

New Frontiers: The Origins and Content of New Work, 1940–2018

Quarterly Journal of Economics 2024 139(3), 1399-1465
Abstract We answer three core questions about the hypothesized role of newly emerging job categories (“new work”) in counterbalancing the erosive effect of task-displacing automation on labor demand: what is the substantive content of new work, where does it come from, and what effect does it have on labor demand? We construct a novel database spanning eight decades of new job titles linked to U.S. Census microdata and to patent-based measures of occupations’ exposure to labor-augmenting and labor-automating innovations. The majority of current employment is in new job specialties introduced since 1940, but the locus of new-work creation has shifted from middle-paid production and clerical occupations over 1940–1980 to high-paid professional occupations and secondarily to low-paid services since 1980. New work emerges in response to technological innovations that complement the outputs of occupations and demand shocks that raise occupational demand. Innovations that automate tasks or reduce occupational demand slow new-work emergence. Although the flow of augmentation and automation innovations is positively correlated across occupations, the former boosts occupational labor demand while the latter depresses it. The demand-eroding effects of automation innovations have intensified in the past four decades while the demand-increasing effects of augmentation innovations have not.

Trends in U.S. Wage Inequality: Revising the Revisionists

The Review of Economics and Statistics 2008 90(2), 300-323
A recent “revisionist” literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an “episodic” event of the first half of the 1980s driven by nonmarket factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality—which has increased steadily since 1980, even adjusting for changes in labor force composition—and lower-tail (50/10) inequality, which rose sharply in the first half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median of the wage distribution. Models emphasizing rapid secular growth in the relative demand for skills—attributable to skill-biased technical change—and a sharp deceleration in the relative supply of college workers in the 1980s do an excellent job of capturing the evolution of the college/high school wage premium over four decades. But these models also imply a puzzling deceleration in relative demand growth for college workers in the early 1990s, also visible in a recent “polarization” of skill demands in which employment has expanded in high-wage and low-wage work at the expense of middle-wage jobs. These patterns are potentially reconciled by a modified version of the skill-biased technical change hypothesis that emphasizes the role of information technology in complementing abstract (high-education) tasks and substituting for routine (middle-education) tasks.