This paper examines a unique data set based on surveys of 139 compensation executives. Respondents read scenarios describing a hypothetical company and its labor market, and recommended wage changes for several positions. Contrary to some popular theories, differences in unemployment, quit rates, and a company's return of assets led to almost no change in respondents' recommended wage increases. When market wages for closely related occupations diverged, most respondents did not recommend adjusting relative wages within the company; but when the occupations were not closely related (blue vs. white collar), most respondents recommended adjusting relative wages to reflect market forces.

This article utilizes a rich data set on workers and their employers in the United States and Japan to test several predictions of human capital theory. The data set incorporates both prospective and retrospective measures of turnover, includes multiple measures of training, and provides a basis for calculating plant-specific returns to tenure. Contrary to human capital theory, there is no evidence that establishments with high levels of training have either high returns to tenure or low levels of turnover. Surprisingly, establishments with high returns to tenure do not have low levels of turnover.

The free market may not lead to the efficient level of just-cause employment protection if workers are heterogeneous. Any firm that switches to just cause will attract a disproportionate share of workers that provide low effort yet are difficult to dismiss with cause. Thus, there is an externality concerning each firm's just-cause policy. If all firms had just-cause policies, then the efficiency gains of just cause might outweigh the burden of the undesirable workers. Nevertheless, no single firm may find it in its interest to switch to just cause. It is possible for laws that require just cause to increase efficiency.

This paper examines a unique data set based on surveys of 139 compensation executives. Respondents read scenarios describing a hypothetical company and its labor market, and recommended wage changes for several positions. Contrary to some popular theories, differences in unemployment, quit rates, and a company's return on assets led to almost no change in respondents' recommended wage increases. When market wages for closely related occupations diverged, most respondents did not recommend adjusting relative wages within the company; but when the occupations were not closely related (blue versus white collar), most respondents recommended adjusting relative wages to reflect market forces.

Using personnel data from a large U.S. retail firm, we examine whether the race or ethnicity of the hiring manager affects the racial composition of new hires. We exploit manager turnover to estimate models with store fixed effects and store-specific trends. First, we find that all nonblack managers-that is, whites, Hispanics, and Asians-hire more whites and fewer blacks than do black managers. This is especially true in the South. Second, in locations with large Hispanic populations, Hispanic managers hire more Hispanics and fewer whites than do white managers. We also examine possible explanations for these differential hiring patterns.

Teen out-of-wedlock mothers have lower education and earnings than do peers who have children later. This study uses the National Educational Longitudinal Survey of 1988 to examine the extent to which the apparent effects of out-of-wedlock teen childbearing are due to preexisting disadvantages of the young women and their families. We use a novel method that matches teen mothers to similar young women in their junior high school (that is, prior to pregnancy). We find that out-of-wedlock fertility reduces education substantially, although far less than the cross-sectional comparisons of means suggest. We further find that this effect is larger among those with lower probabilities of having a child out of wedlock.

Loss of a parent is one of the most traumatic events a child can face. If loss of a parent reduces investments in children, it can also have long-lasting implications. This study uses parametric and seminonpara-metric matching techniques to estimate how one human capital investment, school enrollment, is affected by a parent's recent death. We analyze data from 600,000 households from Indonesia's National Socioeconomic Survey (Susenas) during 1994–1996. We find a parent's recent death has a large effect on a child's enrollment. We also use this shock to test several theories of intrahousehold allocation and find little differential treatment based on the gender of the child or the deceased parent.

We test for customer discrimination with data from more than 800 retail stores employing over 70,000 individuals matched to census data on the demographics of each store's community. While our tests detect some increase in sales when the workforce more closely resembles potential customers, the effects we find are modest in magnitude. Customer discrimination is neither strong nor pervasive. We find little payoff to matching employee demographics to those of potential customers except when the customers do not speak English.