KNOWLEDGE AND EARNINGS

ABSTRACT.  This paper examines the effects of knowledge about a wide variety of subjects on the wages and salaries of U.S. workers. Knowing a lot about topics such as medicine and dentistry, engineering and technology, and production and processing has a positive effect on individual earnings, whereas high knowledge in the areas of food production and personnel and human resources is not rewarded in the labor market. Spillover effects, where the share of metropolitan area employment in high-knowledge occupations enhances earnings, were uncovered primarily in subjects related to producer services and information technology.     

Undocumented Immigration and Host‐Country Welfare: Competition Across Segmented Labor Markets*

Abstract. In this paper's model, undocumented workers are endogenously sorted into secondary labor markets. When further illegal immigration occurs, some new migrants follow their fellows into already migrant‐dominated jobs, lowering migrant wages and raising real incomes of host‐country labor and capital. Some submarkets switch from employing legal workers to employing migrants, lowering demand for and wages of legal workers. Undocumented immigration is Pareto‐improving when enforcement reserves primary‐sector jobs for legal workers. Pareto‐dominant policies target the number of migrant‐dominated submarkets, not the number of migrants. This appears consistent with U.S. enforcement practices. The effects of deportations, employer sanctions, and amnesties are explored.     

MIGRATION AND SELF‐SELECTION: MEASURED EARNINGS AND LATENT CHARACTERISTICS*

ABSTRACT Research in regional and labor economics has established that economic incentives play a significant role in the process of internal migration. The most common approach is to view migration as a form of human capital investment undertaken by individuals who expect to benefit from the standpoint of increased earnings. One of the central concepts in these models is self‐selection. Individuals who self‐select the option of migration tend to differ from the nonmigrant population in ways that are not measured in most data sets. The contribution of this paper is in its distinction between two aspects of migrant selection. On one hand, some workers possess unmeasured traits that might simultaneously affect their wages and their propensity to engage in risky human capital investment such as migration. On the other hand, measured earnings might exert a direct effect on migration. Based on samples of employed Swedish males and females at two points in time, this study seeks first to examine whether migration between the two periods occurs in the presence of correlation between unmeasured factors present in both earnings during the first period and the subsequent decision to migrate. Second, it looks for an explicit role of earnings per se in the migration decision. Results of the study provide support for selection based on unmeasured traits for both genders. For females, there is also evidence of selection based on measured earnings.     

Spatial distribution of US employment in an urban efficiency wage setting

We analyze whether efficiency wages operate in urban labor markets, within the framework proposed by Ross and Zenou, in which shirking at work and leisure are assumed to be substitutes. We use unique data from the American Time Use Survey (ATUS) that allow us to analyze the relationships between leisure, shirking, commuting, employment, and earnings. We confirm that shirking and leisure are substitutes, and present an estimate of this relationship, representing the only empirical test of the relationship between a worker's time endowment and shirking at work. Our findings point to the existence of efficiency wages in labor markets.     

Workers’ Compensation and State Employment Growth*

Abstract. Workers’ compensation reforms have been on the table in virtually every state over the last several years, and many states have launched comprehensive reforms. At least nine states undertook major reforms of their workers’ compensation systems in 2004 alone, and the reforms were driven largely by claims that higher workers’ compensation costs are driving away businesses and the employment that comes with them. This paper examines the relationship between workers’ compensation costs, as proxied by benefits/earnings, and employment across U.S. states and the District of Columbia from 1976 to 2000. Workers’ compensation costs are found to have a statistically significant negative impact on employment and wages, but the elasticities are very small, suggesting that workers’ compensation is not a likely cause of jobs woes in most states. Unemployment insurance appears to have an effect of similar magnitude. Medical cost inflation is found to be a significant factor in explaining movements in workers’ compensation costs over time.     

Residence and Workplace Relocation: A Bivariate Duration Model Approach

Different economic theories suggest that residential and labor market relocations are mutually related. This has been verified in various empirical studies. We analyze this relationship based on a bivariate duration model of residential and labor market mobility. This specification is motivated by a search model that allows for simultaneous search on the labor and housing market, taking commuting costs into account. We investigate this relationship by using information on job and residence durations. In order to be able to analyze properly empirical duration data, we derive the statistical distributions of interest. Our empirical results based on a Dutch sample of full-time employed workers show that residential and labor market mobility depend positively on one another, which is in line with the theoretical search model presented. Moreover, we present easy-to-interpret measures for this dependency.     

Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?*

There are several hypotheses why urban scale affects wages. Most focus on agglomeration economies that increase labor demand, especially for high‐skilled workers (e.g., dynamic externalities stress knowledge transfers, and imply the urban wage gap favors skilled workers). Others stress urban amenities that increase labor supply and decrease wages. Amenities should have a stronger influence on affluent households if they are normal goods. By examining whether urban‐scale affects net returns to education, it can be determined whether skilled workers are influenced more by urban productivity or amenities. Empirical results suggest net returns to education decline with urban scale, implying a key role for urban amenities in affecting skilled workers.     

Big City Labor Markets and Immigrant Economic Performance

Franklin J. James spent much of his career working to understand and improve our metropolitan communities. His interests were varied, ranging from impacts of fiscal and economic distress on urban areas to understanding socioeconomic forces reviving our central cities. During the last several years, Professor James had turned his attention to examining the positive economic impacts immigrants and ethnic communities have for reinvigorating our central cities-and beginning to investigate how non-native American's will impact America's suburbs in metropolitan settings
This preliminary exploration examines destination choices of immigrants, the characteristics of immigrant labor markets, and the determinants of immigrant earnings. The article begins to explore indirect evidence on the economic efficiency with which immigrants and native workers distribute themselves within and among labor markets as well as the assimilation process facing new immigrants. Evidence is presented to explain how the earnings of recent immigrants are affected by their human capital characteristics, their race, and ethnicity, and other factors. We reject the hypothesis that immigrants participate in a tertiary sector of urban labor markets and conclude that the determinants of immigrant earnings are similar enough to those of U.S. natives that it makes sense to assume that they work in the same primary labor market in which most native White Americans work. We find that urban labor markets for immigrants are surprisingly efficient, thus enabling immigrants to take advantage of economic opportunities. A major exception concerns what appears to be a powerful effect of discrimination on the economic progress of Black immigrants.     

CITIES,WAGES, AND THE URBAN HIERARCHY

In this paper, we estimate the size of the wage premium necessary to compensate for remoteness incurred by workers compared to the city size productivity effects. We construct five urban hierarchy tiers for cities in Chile based on their level of remoteness from the urban system. We then contrast the effect generated by these variables on worker wages. We report a positive gradient of wages the higher the size of the urban tier and a loss in wages that can reach 35 percent for more remote cities.     

Elastic labor supply and agglomeration

This study analyzes the interplay between the agglomeration of economic activities and interregional differences in working hours, which are typically longer in large cities, as they are normally more developed than small cities. For this purpose, we develop a two‐region model with endogenous labor supply. Although we assume a symmetric distribution of immobile workers, the symmetric equilibrium breaks in the sense that firms may agglomerate when trade costs are intermediate and labor supply is elastic. We also show that the price index is always lower, while labor supply, per capita income, real wages, and welfare are always higher in the more agglomerated region.     

Won with Blood: Archaeology and Labor’s Struggle

Traditionally when Americans went to work they expected that they would earn a reasonable wage, work in a safe environment, put in a 40 h week, collect paid vacation days, earn sick leave, have the right to organize and receive health and retirement benefits. Increasingly, however, fewer and fewer workers receive these rights and today only a minority of people in the United States work under these conditions. The decline in real wages, benefits, rights and safety experienced by twenty-first century American workers has correlated with a decline in organized labor. Corporations and the right have assailed unions to erode worker’s rights and “increase competitiveness” in a globalized, neo-liberal, capitalist, world. The attacks on unions spring from a monstrous lie, that politicians and corporations gave labor these benefits and thus workers no longer need unions. On the battlefield of public policy, these assaults on organized labor work in a fundamentally ideological way that calls the continued existence of unions into question. In this paper, I will discuss how archaeological studies of labor’s struggle can reveal that contrary to the monstrous lie, workers and their families won worker’s rights with blood and that solidarity and organization remain essential to maintain these rights. The paper begins with the present state of labor’s struggle and looks to the past to consider its preconditions. Archaeologists have studied strikes, the lived experience of working class life and class war to study history backwards and these studies contribute to the labor’s struggle for the future.     

MIGRATION,SKILL FORMATION,AND THE WAGE STRUCTURE*

ABSTRACT We analyze the impacts of migration and of labor market integration on the distribution of skills and the wage structure in both the short and the long run. To do so, we develop a framework where workers have heterogeneous skills and where in‐migration expands the range of available skills in the economy. In the short run, this expansion leads to productivity gains, which may more than offset the negative endowment effects of a larger labor supply so that all workers may be better off. In the long run, in‐migration impacts wages further by altering the workers' incentives to acquire skills, thereby affecting the wage structure indirectly by changing the economy's skill composition. Since the short and the long‐run effects of in‐migration on wages may differ, compositional changes may be an important element to take into consideration. A numerical illustration calibrated on U.S. data suggests that the immigration of skilled workers negatively affects the incentives for domestic skill formation, thereby suggesting that endowment effects dominate externalities. We finally extend the model to cope with the simultaneous impacts that migration and skill formation have on the host and the source region, and we show that more migration increases wage disparities and the skill gap across regions.     

REGIONAL TECHNOLOGICAL DYNAMISM AND NONCOMPETE CLAUSES: EVIDENCE FROM A NATURAL EXPERIMENT

In this paper, we examine the causal impact of enforceable covenants not to compete (CNCs) on labor market matching and the technological dynamism of regions. Exploiting the fact that the Michigan Antitrust Reform Act (MARA) of 1985 inadvertently repealed Michigan' s prohibition on CNC enforcement, we show that technical professionals in Michigan became increasingly likely to switch industry relative to similar workers in other U.S. states after prohibition. Workers switching industries after the introduction of MARA also earned lower wages, implying that they shifted into technical fields where their skills from previous employment were less productive. Estimates further show that the technological dynamism of Michigan declined in tandem, as fewer workers shifted into new types of jobs associated with recent technological advances. These findings are consistent with the view that skilled professionals that are subject to CNCs are more likely to leave their field of work postemployment to avoid lawsuits.     

The Crisis of Social Reproduction among Migrant Workers: Interrogating the Role of Migrant Civil Society

Abstract:  Transformations in urban economies are leading to the growth of jobs where labor and employment laws are routinely violated. Workers in these jobs are subject to harsh conditions such as low wages, hazardous work sites, and retaliation for speaking up. Many of these workers are undocumented migrants who are in a weak position to make demands on their employers or to request government assistance. These workers often turn to migrant civil society organizations for help with the multiple conflicts they face at work. Drawing on case studies of nonprofit organizations in Chicago, this paper focuses on the role of such organizations in the social reproduction of the migrant workforce. I posit that such organizations are integral to the functioning of the informal economy because the wide range of programs and services that they provide are essential to the social reproduction of migrant workers.     

Spaces of hidden labor: migrant women and work in nonprofit organizations

Laboring in low-paid jobs with poor conditions, migrant women are some of the most vulnerable workers in the US labor market. These women often carry a disproportionate burden at home, expected to care for children and elderly relatives and maintain a stable and loving family. Given the weight of work and family obligations, migrant women workers often turn to community-based organizations for assistance with securing work, negotiating an abusive workplace situation, and making ends meet on low wages. Increasingly, organizations are recognizing the social reproduction concerns of migrant women. In crafting responses to this reality, much work is undertaken by staff members, clients, and volunteers that is hidden from the organizations' funders, from the clients' employers, and from official statistics. The objective of this article is to reveal how and why nonprofit organizations can act as a space for the hidden labor of social reproduction, as well as for economic development experiments that account for the needs of social reproduction. Hidden labor is conceptualized as filling gaps in the social safety net created by a neoliberalizing society. In addition, it is the argument of this article that social reproduction is being reframed as a collective endeavor within organizations, where the ethic of care is potentially transforming an insidious political-economic context into a source of strength and resiliency for migrant women. Based on semi-structured interviews and participant observation in an organization in Chicago, this article provides a review of hidden labor within the space of nonprofit organizations.     

The Paradox of Narrowing Wage Differentials and Widening Wage Inequality in Mexico

This article examines the parallel phenomena of narrowing wage differentials among major groups of workers and widening wage inequality in general in Mexico during the 1980s and 1990s. In trying to understand this paradox, it finds that a human-capital model cannot explain wage determination in the 1990s. Although employees with higher skills and education have enjoyed increasingly higher relative returns to their human capital, much of the variance in wages is not attributable to differences in human capital or rates of return. Discriminatory wage policies have combined with policies of trade liberalization to markedly widen the wage gap between lower-paid and higher-paid workers.     

Labor agency and the importance of the national scale: Emergent aquaculture unionism in Chile

In this article we argue for the continuing relevance of the national scale in understanding the geographies that shape and constrain labor agency. Recent contributions to labor geography have held that some of the central concepts used to understand the transformative capacities of labor, such as agency and scale, are under-theorized. On the basis of our study of the emergent labor movement in the Chilean aquaculture industry, we suggest that this field suffers from what we term “glocalocentrism”, which overshadows the fundamental importance of structures and processes that are primarily scaled nationally. With the labor repression of the Pinochet regime imprinted in current national institutions and organizational traditions, the aquaculture sector was able to develop in southern Chile from the early 1980s onwards, without a significant union movement to press workers’ claims, and it benefited from exploitative practices and low wages. The first company level unions did not appear until the late 1980s, and a national confederation of aquaculture unions was formed as late as 2006. After the outbreak of the ISA virus in 2007, thousands of workers were left unemployed, and the young union movement struggled for state intervention and programs, with some success. International networks brought attention to the issue, but structures and processes at the national level conditioned the possibilities for the emergent labor movement to press its claims successfully.     

Urban bound migration and rural investment: the case of Mexico

The authors investigate an agriculturally based policy for improving rural incomes and for retarding the rural-urban migration flow. The production of agricultural goods is characterized by a production function in which output increases with increases in agricultural labor inputs, capital, public infrastructure, land, and technology. Differences among regions in agricultural technology will reflect regional differences in education, the institutionalized form of productive organization, and differences in access to technological information channeled through more technically advanced cities. To pick up the effect of out-migration changes in state agricultural labor supply and upon agricultural output, the state's agricultural out-migration rate is included together with the agricultural labor force. The gross migrant flow between 2 locations is hypothesized to depend upon a set of variables influencing the individual's perception of the economic rate of return to be gained by moving, a set of variables reflecting the individual's propensity to relocate, the labor displacement effects of investments, and the at risk population at 1 location available to migrate. It is also taken into account that individuals differ in their response to information about origin and destination wage differentials and that individuals may or may not perceive a new ecnomic gain from migration but may base the decision on other considerations. Results of a statistical analysis using data from the Mexican census of population for 1960 and 1970 are: 1) size of the rural labor force was negatively associated with agricultural wages, contrary to expectations; 2) small farmers have benefited from the expansion of irrigation in Mexico; and 3) higher urban wages attract migration, and higher growth rate of agricultural income retards rural-urban migration. With respect to the 1950-60 decade both agricultural income and rural out-migration impacts could have been substantial but both the impact on local urban growth and on the rate of in-migration to the primate city would have been slight.     

Cogs in the Machine: The Experiences of Female Munitions Workers and Members of the Australian Women’s Land Army in South Australia, 1940–45

Mobilisation on the Australian ‘home front’ during the Second World War enabled some women to move temporarily into employment usually reserved for men, and to earn significantly higher wages than they were accustomed to, but the benefits of this have been often overstated. Focusing on South Australian women in the city and rural areas who took up the new working opportunities — in munitions factories and the Australian Women’s Land Army in particular — this article demonstrates that relatively few women were entitled to higher wages, such wages were lower and paid later in South Australia than in other states, and that working conditions were unattractive and often dangerous. At the war’s end, the social imperative to marry and raise children, coupled with demands that they give up their place for male workers, then saw many women return to domesticity or less-rewarded and lower status ‘female occupations’.     

A HEDONIC MODEL OF INTERREGIONAL WAGES,RENTS, AND AMENITY VALUES*

ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location-specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focus on a single market such as labor or housing and ignore interactions implicit in a more global compensation mechanism. Examination of the comparative statics of our model indicates that single-market differentials are partial prices and are unreliable measures of amenity values in an interregional context. Unbiased amenity values are estimated for a comprehensive set of amenities using data on housing prices for 34,414 households and wages for 46,004 workers from the 1980 Census of Population and Housing. Statistically significant differences in housing prices and wages are found due to amenities.