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Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s

Journal of Labor Economics 1995 13(1), 32-61
Strike outcomes in the 1880s had a "winner-take-all" character. Successful strikes ended with a discrete wage gain; failed strikes ended with a return to work at the prestrike wage. We present a theoretical interpretation of these outcomes based on a war-of-attrition model. We fit an empirical model specifying the capitulation times of the two parties and the size of the wage gain in the event of a strike success. The results show a systematic relation between the determinants of strike success and the determinants of the wage gain for a successful strike.

Design-Based Research in Empirical Microeconomics

American Economic Review 2022 112(6), 1773-1781
I briefly review the emergence of “ design-based” research methods in labor economics in the 1980s and early 1990s. These methods were seen as a partial solution to the problems of credible inference identified by Ashenfelter (1974), Leamer (1978), Hendry (1980), and others. Designed-based studies typically use a simplified one-equation model of the outcome of interest—in contrast to model-based studies that specify a data generating process for all factors determining the outcome. I discuss some of the strengths and weaknesses of the design-based approach and the value of such research in the field. (JEL C20, J01, J24, J31, J38, J51, J53)

Who Set Your Wage?

American Economic Review 2022 112(4), 1075-1090
I discuss the recent literature that has led to new interest in the idea of monopsonistic wage setting. Building on advances in search theory and in models of differentiated products, researchers have used a number of different strategies to identify the elasticity of firm-specific labor supply. A growing consensus is that firms have some wage-setting power, though many questions remain about the sources of that power. (JEL B21, D21, D24, D43, J22, J31, J42)

Origins of the Unemployment Rate: The Lasting Legacy of Measurement without Theory

American Economic Review 2011 101(3), 552-557
The modern definition of unemployment emerged in the late 1930s from research conducted at the Works Progress Administration and the Census Bureau. According to this definition, people who are not working but actively searching for work are counted as unemployed. This concept was first used in the Enumerative Check Census, a follow-up sample for the 1937 Census of Unemployment, and continued with the Monthly Report on the Labor Force survey, begun in December 1939 by the Works Progress Administration. A similar definition is now used to measure unemployment around the world.

Immigration and Inequality

American Economic Review 2009 99(2), 1-21
Immigration is often viewed as a proximate cause of the rising wage gap between highand low-skilled workers. Nevertheless, there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect, and over the precise magnitudes involved. This paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality, focusing on evidence from cross-city comparisons in the U.S. While some researchers have claimed that a cross-city research design is inherently flawed, I argue that the evidence from cross-city comparisons is remarkably consistent with recent findings based on aggregate time series data. In particular, cross-city and aggregate time series comparisons provide support for three key conclusions: (1) workers with below high school education are perfect substitutes for those with a high school education; (2) “high school equivalent” and “college equivalent” workers are imperfect substitutes, with an elasticity of substitution on the order of 2; (3) within education groups, immigrants and natives are imperfect substitutes. Together these results imply that the average impacts of recent immigrant inflows on the relative wages of U.S. natives are small. The effects on overall wage inequality (including natives and immigrants) are larger, reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives. Even so, immigration accounts for a small share (5%) of the increase in U.S. wage inequality between 1980 and 2000.

Time Series Representations of Economic Variables and Alternative Models of the Labour Market

Review of Economic Studies 1982 49(5), 761
Accepting the hypothesis that the time-series “facts” of the aggregate labour market may be summarized by the linear autoregressive and moving average representations of wages, prices, unemployment, and interest rates implies that a useful theory ought to lead to predictions about these representations. Following this approach, this paper first catalogues many of the time-series facts about the aggregate labour market and then compares them against alternative models of the labour market based on the intertemporal substitution and staggered contract hypotheses.

An Empirical Model of Wage Indexation Provisions in Union Contracts

Journal of Political Economy 1986 94(3, Part 2), S144-S175 open access
Cost of living escalators are an important feature of North American labor contracts. This paper presents a measure of the response of indexlinked wage increases to concurrent price increases for a sample of Canadian contracts, and then analyses this response in terms of a simple model of indexation to the aggregate price level. The model highlights the importance of aggregate price movements in conveying information about industryspecific prices. The empirical analysis confirms that industry-specific correlations between input and output prices and the Consumer Price Index are important determinants of the response of wage to prices across index contracts.

What Do Editors Maximize? Evidence from Four Economics Journals

The Review of Economics and Statistics 2020 102(1), 195-217
We study editorial decisions using anonymized submissions matched to citations at four leading economics journals. We develop a benchmark model in which editors maximize the expected quality of accepted papers and citations are unbiased measures of quality. We then generalize the model to allow different quality thresholds, systematic gaps between citations and quality, and a direct impact of publication on citations. We find that referee recommendations are strong predictors of citations and that editors follow these recommendations closely. We document two deviations from the benchmark model. First, papers by highly published authors receive more citations, conditional on the referees' recommendations and publication status. Second, recommendations of highly published referees are equally predictive of future citations, yet editors give their views significantly more weight.