This article considers the estimation of the structure of wages in union and nonunion sectors. It proposes an estimator that extends standard panel data techniques to the case in which the return to the permanent component of the error term is differently rewarded in the two sectors. The econometric model is used to estimate the effect of unions on both the level and the variance of wages in Canada. The findings indicate that unions increase the average wage of workers and compress the returns to observable measures of skill and to a time‐invariant unobservable measure of skill.

This paper shows that a large fraction of the 1973–2003 growth in residual wage inequality is due to composition effects linked to the secular increase in experience and education, two factors associated with higher within-group wage dispersion. The level and growth in residual wage inequality are also overstated in the March Current Population Survey (CPS) because, unlike the May or Outgoing Rotation Group (ORG) CPS, it does not measure directly the hourly wages of workers paid by the hour. The magnitude and timing of the growth in residual wage inequality provide little evidence of a pervasive increase in the demand for skill due to skill-biased technological change.

The paper presents descriptive evidence from quantile regressions and more “structural” estimates from a human capital model with heterogenous returns to show that most of the increase in wage inequality between 1973 and 2005 is due to a dramatic increase in the return to post-secondary education. The model with heterogenous returns also helps explain why both the relative wages and the within-group dispersion among highlyeducated workers have increased in tandem over time. These findings add to the growing evidence that, far from being ubiquitous, changes in wage inequality are increasingly concentrated in the very top end of the wage distribution.

This paper looks at the surprisingly different labor market performance of the United States, Canada, Germany, and several other OECD countries during and after the Great Recession of 2008–9. A first important finding is that the large employment swings in the construction sector linked to the boom and bust in US housing markets is an important factor behind the different labor market performances of the three countries. We also find that cross-country differences among OECD countries are consistent with a conventional Okun relationship linking gross domestic product growth to employment performance.

This paper uses micro data from a randomized survey carried out in the Metropolitan area of Quebec City, Canada, to analyze the decision to evade taxes and work in the "underground" economy. The results indicate that taxes distort labor-market activities away from the regular sector to the underground sector, but the distortion is small for the average worker. The distortion is large, however, for particular groups of the population such as welfare claimants.

This paper provides an introduction and “user guide” to Regression Discontinuity (RD) designs for empirical researchers. It presents the basic theory behind the research design, details when RD is likely to be valid or invalid given economic incentives, explains why it is considered a “quasi-experimental” design, and summarizes different ways (with their advantages and disadvantages) of estimating RD designs and the limitations of interpreting these estimates. Concepts are discussed using examples drawn from the growing body of empirical research using RD.

This paper examines the role of spillover effects of minimum wages and threat effects of unionization in changes in wage inequality in the United States between 1979 and 2017. A distribution regression framework is introduced to estimate both types of spillover effects. Threat effects double the contribution of deunionization to the increase in male wage inequality. Spillover effects magnify the explanatory power of declining minimum wages to two-thirds of the increase in inequality at the bottom end of the female wage distribution.

Between 1965 and 1975 the enrollment rate of college-age men in the United States rose and then fell abruptly. Many contemporary observers (e.g., James Davis and Kenneth Dolbeare, 1968) attributed the surge in college attendance to draft-avoidance behavior. Under a policy first introduced in the Korean War, the Selective Service issued college deferments to enrolled men that delayed their eligibility for conscription. These deferments provided a strong incentive to remain in school for men who wanted to avoid the draft. For example, the college entry rate of young men rose from 54 percent in 1963 to 62 percent in 1968 (the peak year of the draft). Moreover, both the college entry rate and the number of inductions dropped sharply between 1968 and 1973 as the draft was being phased out. Although these parallel trends are suggestive, they do not necessarily prove that draft avoidance raised the education of men who were at risk of service during the Vietnam War. Such an inference requires an explicit specification of the “counterfactual”: What would have happened to schooling outcomes in the absence of the draft? In this paper we use trends in enrollment and completed schooling of men relative to those of women to measure the effects of draftavoidance behavior during the Vietnam War. Our maintained hypothesis is that, in the absence of gender-specific factors such as the draft, the relative schooling outcomes of men and women from the same cohort would follow a smooth trend. In light of the sharp discontinuity in military induction rates between 1965 and 1970, we look for similar patterns in the relative enrollment rate of men, and in the relative college graduation rate of men from cohorts that were at risk of induction during this period.