US Labor Market Research Articles

Between‐firm sorting and parenthood wage gaps in the US service sector

AbstractObjectiveWe assess how the distribution of parents across firms contributes to parenthood wage gaps in a low‐wage US labor market and examine the role of understudied compensating differentials relevant to precarious work.BackgroundIn the United States, parenthood drives a wedge in wages, as mothers often earn less than women without children, whereas fathers typically earn more than men without children. Firms bear influence over setting wages and sorting workers, yet firms are largely omitted from research on parental wage gaps in the United States.MethodWe draw on novel employer–employee matched data on 74,086 hourly service‐sector workers to decompose parental wage gaps into their within‐ and between‐firm components. We leverage uniquely rich data on compensating differentials to test if they sort parents across firms.ResultsWe found that mothers are overrepresented in lower‐wage firms, accounting for 68% of mothers' wage gap. In contrast, fathers' wage gap accrued within firms. We found limited evidence that compensating differentials, even schedule quality, produce parental wage gaps.ConclusionWe show for the first time that in a major US industry, mothers are segregated in low‐paying firms compared to women without children, while fathers are paid more than men without children in the same firms. Our findings largely do not tell a story of parents voluntarily choosing between wages and job quality, instead calling for more research on firm practices.

International comparative analysis of the industry-education relationship in vocational education and training: From the perspective of economic sociology

The relationship between industry and education serves as a focal point in research on vocational education. Previous studies using rigid Weberian ideal types of behavior struggle to capture the complex realities and notable variations both within and across developing countries and often fail to consider the impact of educational systems and the connection between education and employment. This article endeavors to introduce a new framework for international comparative analysis through the lens of economic sociology. This analytical framework examines three key dimensions: the readiness and capacity of industries to engage in vocational education, the willingness of students to enroll in vocational education, and the influence of labor market and education institutions on both industries and students in relation to vocational education. Its purpose is to explore the relationships and critical factors that affect the interactions between industry and education in Germany, the US, and China. The findings can be summarized as follows: In the US, industry has a relatively low demand for a skilled workforce and a diminished inclination to invest in vocational education and training (VET), and the willingness of students to engage in VET is also relatively low. Certain characteristics of US labor market and education system also present significant challenges for the industry-education relationship in VET. In Germany, the industry has a relatively high demand for skilled workers, and there is an interest in investing in VET, and some students are willing to choose VET. The labor markets and education systems in each country also affect the involvement of stakeholders in VET. In China, a more mixed picture can be observed, with a closer similarity to the US in terms of the industry-education relationship in VET, with the exception that the government plays a more active role in this.

Greener pastures: why Indian international students leave the US labor market

ABSTRACT This paper revisits conventional wisdom on US degree premiums for immigrant workers and shows that, despite the benefits of a US degree, migration policies and substandard labor conditions contribute to international student motivations to return home. Using two original datasets, I find that about a third of Indian-born US graduates leave the US, seeking employment opportunities abroad and a respite from US work visa restrictions. I draw on 105 in-depth interviews and 7,177 employment histories constructed from LinkedIn, and the analysis demonstrates the use of digital data to shed new light on under-studied patterns of return migration in institutional perspective. I find that US work visas are related to the underemployment of immigrant workers, and gaps in visa availability are associated with US labor market departure for Indian international students. At the same time, foreign employers reward skills and credentials developed in the US, and the results suggest that US degrees carry a higher premium in foreign labor markets. The paper emphasizes the role of institutions in the skilled migration system and identifies disjunctures in US migration policy. I identify opportunities for policy reform to improve immigrant labor conditions and increase the retention of US-educated migrants in the US labor market.

Human capital and black-white earnings gaps, 1966–2019

This paper estimates the contribution of human capital, measured using educational attainment and standardized test scores, to Black-white gaps in labor market outcomes in three separate samples of both men and women spanning the period from 1966 through 2019. There are three main findings. First, the magnitude of the reduction in the earnings gap that occurs after controlling for education and test scores has become much larger over time, suggesting a growing contribution of these traits to Black-white earnings disparities. Second, growth in the explanatory power of education and test scores has been primarily due to increases in the association between these traits and the likelihood of non-work, with no clear increases for hourly wages or other intensive earnings margins. Third, in most cases these trends are due to changes in the returns to the human capital traits, rather than changing racial gaps in the human capital traits themselves. These main findings apply qualitatively to both men and women. However, the magnitude of attenuation is much larger for women than for men, and conditional racial gaps in labor market outcome among women are often close to zero. Evidence suggests that this parity between Black and white women conditional on education and test scores is not primarily due to sample selection. Overall, the paper’s findings highlight how structural developments in the US labor market, such as increasing returns to skill and changing labor force participation rates by skill level and gender, have had disparate impacts across racial groups despite being race-neutral on their face.

Devaluation for whom? Feminization and wages in an economically polarized labor market, 2003–2019

Abstract Scholars have found that as the proportion of female workers in an occupation grows, wages generally decline. Yet, we know little about how this gender inequality intersects with other labor market inequalities. This study evaluates the feminization-wage relationship of an increasingly economically polarized post-2000 US labor market. First, I hypothesize that the negative effect of feminization on wages has diminished in high-skilled occupations due to the declining prejudice against (highly educated) women and increasing requirements for higher education, which functions as a form of social closure. Second, because of the increasing demand for “people skills” in higher-skilled occupations and their association with women, workers in higher-skilled occupations that require these skills may experience positive effects of feminization on wages. Not all people skills, however, are associated with women and similarly rewarded. Thus, I examine three people skills—persuasion, managerial, and sociability—that have different gender stereotypes. I test hypotheses using occupational-level fixed-effects models with individual-level data from the American Community Survey 2003–2019 (N = 15,996,526) and time-varying occupational-level data from the Occupational Information Network 2003–2019 (N = 460). Results show that for workers in occupations requiring more than sixteen years of education, feminization corresponds with higher wages. Additionally, the positive feminization-wage relationship is larger in occupations with a high demand for a gender-neutral people skill, persuasion. This moderation effect is not found for sociability and managerial skills, which are associated with women and men, respectively. This study calls for greater attention to how labor market polarization has shaped gender inequality.

The paradox of search intensity

In standard labor search and matching models, the search intensity (SI) of unemployed workers is procyclical and complements job creation. Both predictions are at odds with the US labor market following the Great Recession. To address these inconsistencies, this paper extends the standard model to incorporate multi-market simultaneous search (MMSS). Adverse aggregate shocks can raise SI as workers simultaneously search in more markets because the incentives are decreasing in the local job-finding rate. This broader search effort leads to higher offer rejection, which in turn discourages firm entry. The offer-rejection externality can result in multiple equilibria. In the calibrated model, a temporary financial crisis can cause a persistent increase in both SI and unemployment.

A task-based approach to inequality

Abstract This article reviews recent work on how automation and task displacement have contributed to labour share declines and inequality in the US labour market. We summarize the basic building blocks of a task-based framework in which a set of tasks is allocated between capital, skilled labour and unskilled labour. Automation, which corresponds to the use of new technologies expanding the set of tasks that can be performed by capital, always reduces the labour share in value added and may depress overall wages and employment. The negative effects of automation on labour share and its potentially adverse consequences for labour demand can be counterbalanced by the creation of new labour-intensive tasks, which can reinstate labour into the production process. We also show that when automation displaces unskilled labour from the tasks in which they used to specialize (which has been its modal impact so far), it increases the demand for skills and inequality. New tasks may or may not limit the increase in the demand for skills depending on whether they are mostly targeted at skilled workers. We then provide a range of evidence supporting the basic predictions and implications of this framework. Most importantly, the decline in the share of labour in national income and the increase in the demand for skills appear to be related to an acceleration in the pace of automation and a deceleration in technological changes complementing humans during the last 30 years. We end with a discussion of the potential bias towards automation in the development and adoption of digital technologies, and how this will affect the nature of work in the face of recent advances in artificial intelligence.

Public opinion, racial bias and labour market outcomes in the USA.

Here we study the role of negative shifts in public opinion in the economic lives of under-represented racial groups by investigating sudden changes in views towards Asian people following the anti-Chinese rhetoric that emerged with the COVID-19 pandemic, and associated changes in employment status and earnings in the US labour market. Using data from the Current Population Survey, we find that, unlike other under-represented groups, Asian workers in occupations or industries with a higher likelihood of face-to-face interactions before the pandemic were more likely to become unemployed afterwards. While widespread along the political spectrum, negative shifts in the perceived favourability of Asian people, and not of other under-represented groups, were much stronger among those who voted for Donald Trump in 2016 and could have been more influenced by the anti-Asian rhetoric.

The ICT revolution and preferences for taxing top earners

ABSTRACT How has the ICT-driven transformation of labour markets in recent decades affected redistributive preferences? We move beyond existing research by focusing on the ‘winners’ of the ICT revolution and on other-regarding preferences for taxing top earners. We carry out an interactive, online experiment with around 3000 US respondents to test whether fairness perceptions and redistributive preferences differ when top incomes are gained through luck, routine work, or complex work. This set up aims to mirror the changing nature of tasks performed by high-earning workers in the US labour market as a result of the ICT revolution. We find that the desired tax rate on top earners is up to 5.3 percentage points lower for the complex work than the routine work treatment, and that high incomes from complex work are perceived as fairer and more deserved. A follow-up vignettes study then provides strong evidence that high-earning jobs are perceived to be more complex. Taken together, our findings highlight an important and previously under-explored channel through which the ICT revolution may have dampened demand for progressive taxation in the advanced democracies.

Inefficiencies and bias in first job placement: The case of professional Asian nationals in the United States

We study whether the quality of the first job is lower for professional Asian nationals than for non-Asian nationals in the USA. With over a million professionals from Asia entering the US labor market in the past decade, a potential under placement may be both inefficient and discriminatory. We collected data on all newly hired assistant professors of management in research-intensive (R1) universities in the USA between 2010 and 2021. We focus on the quality of the university into which first hires are placed and examine whether first-job placement quality is lower for individuals who were born in East, South and Southeast Asia. We find that the quality and quantity of publication record are positively related to the quality of the placement and that Asian nationals have higher performance. However, Asian nationals are placed at lower-quality universities relative to their peers. Further, Asian nationals require a strong performance signal, in the form of first or second authorship on a publication to narrow the placement gap. Our results are explained by a combination of direct bias against applicants of Asian nationality and a requirement of a higher performance “burden of proof” from these applicants, compared to peers who are non-Asian nationals.

Gender Earnings Gap among African Immigrants In US Labour Market

Gender Earnings Gap among African Immigrants In US Labour Market

Gender Earnings Gap Among African Immigrants In US Labour Market

Gender Earnings Gap Among African Immigrants In US Labour Market

Жінки перемагають: Клаудіа Голдін – лауреатка премії з економічних наук пам’яті імені Альфреда Нобеля 2023 року

The article highlights the main autobiographical events and scientific contribution of the American economic historian, Harvard University professor Claudia Goldin. This year, she was awarded the Alfred Nobel Memorial Prize in Economic Sciences for significant scientific achievements in explaining essential causes of gender differences in the labor market. For the first time, the laureate has provided comprehensive evidence of changes in women’s wages and their participation in the US labor market over two centuries, which had previously been largely unknown. Using historical and economic analysis, C. Goldin showed that despite technological development, economic growth and an increase in the share of employed women in the 20th century, the income gap between women and men almost did not disappear over a long period. However, women’s educational attainment has steadily increased, and in most high-income countries, it is now significantly higher compared with men. In her research, she demonstrated that, in addition to education, women’s access to contraceptives played a crucial role in accelerating revolutionary changes that provided new opportunities for career, marriage, and family planning. C. Goldin explained that most of the gender gap in income before the 1980s was caused by differences in education and career choices between women and men. Exceptionally, the situation changed when women got married and did not return to the labor market. Therefore, in her research on gender pay inequality, C. Goldin focused on analyzing the behavior of married women and changes in their incomes during marriage. Thus, the researcher proved that income inequality in married couples (woman and man) still exists, even if they both have high-paying jobs or are engaged in the same profession. This difference in income occurs mainly with the birth of the first child.

The international transmission of local economic shocks through migrant networks

Using newly validated data on geographic migration networks, we study how labor demand shocks in the United States propagate across the border with Mexico. We show that the large exogenous decline in US employment brought about by the Great Recession affected demographic and economic outcomes in Mexican communities that were highly connected to the most affected markets in the US. In the Mexican locations with strong initial ties to the hardest hit US migrant destinations, return migration increased, emigration decreased, and remittance receipt declined. These changes significantly increased local employment and hours worked, but wages were unaffected. Investment in children’s education also slowed in these communities. These findings document the effects in Mexico when potential migrants lose access to a strong US labor market, providing insight into the potential impacts of stricter US migration restrictions.

Firm Market Power, Worker Mobility, and Wages in the US Labor Market

Firm Market Power, Worker Mobility, and Wages in the US Labor Market

Only the fit survive recessions: Estimating labor market penalties for the obese over the business cycle.

The obesity epidemic is a growing concern in the United States. Aside from the detrimental health effects of obesity, previous work has also documented a negative relationship between obesity and various labor market outcomes. Given that the American adult obesity rate is roughly 40%, obesity affects a large portion of the US labor market. In this study, I analyze the impact of obesity on income and employment over business cycle fluctuations. I find that during economic downturns, obese workers experience larger declines in income and employment relative to their healthy weight peers. These effects exist for both genders and are concentrated amongst younger adults.

Low hourly wages in middle‐age are associated with faster memory decline in older age: Evidence from the health and retirement study

AbstractBackgroundLittle research has investigated the long‐term relationship between low wages and memory decline, despite the growing share of low‐wage workers in the US labor market. We examined whether cumulative exposure to low wages over 12 years in midlife is associated with memory decline in later life.MethodWe used 1992‐2016 data from the Health and Retirement Study, a biennial longitudinal survey of nationally representative samples of Americans aged 50+. We analyzed data from 3,803 individuals born 1936‐1941 using confounder‐adjusted linear mixed‐effects models. Low‐wage was defined as hourly wage lower than two‐thirds of the federal median wage for the corresponding year. Low‐wage exposure history was categorized into ‘never’, ‘intermittent’, and ‘sustained’ based on wages earned from 1992 to 2004. Memory function was measured at each visit from 2004 to 2016 by a memory composite score; on average, participants completed 4.8 memory assessments from 2004‐2016. Estimates were obtained in the total sample and within strata of sex (Nmales = 1,913, Nfemales = 1,890).ResultAt the beginning of cognitive follow‐up (2004) our sample was on average 65 years old with a mean memory score of 1.15 standard units. The confounder‐adjusted annual rate of memory decline among workers who never earned low wages was ‐0.12 standard units, 95% CI: [‐0.14, ‐0.10]. Compared with this, memory decline among workers with sustained earning of low midlife wages was significantly faster (βtime*sustained:‐0.012, 95% CI: [‐0.02, ‐0.01]), corresponding to an annual rate of ‐0.13 standard units for this group. Put into terms of “excess cognitive aging”, the cognitive aging experienced by workers with sustained exposure to low midlife wages over a 10‐year period is what workers never earning low‐wages would experience in 11 years. Similar associations were found among males and females. No significant association between intermittent earning of low wages and memory decline was observed.ConclusionSustained earning of low wages in midlife was significantly associated with a downward trajectory of memory performance in older age. Enhancing social policies to protect low‐wage workers (e.g., increasing minimum wage) may be especially beneficial for the cognitive health of individuals with sustained low‐wage employment in midlife.

Labour reallocation and unemployment fluctuations: A tale of two tails

AbstractThis paper examines the sectoral shifts hypothesis for the US regional labour market using a quantile panel framework. We use a monthly panel dataset that spans over 1990–2016 for the 48 US states and employ a dynamic quantile panel data regression approach to investigate the asymmetric nature of the relationship between sectoral labour reallocation and unemployment fluctuations. The empirical evidence suggests that the impact of the employment dispersion index is relatively small and insignificant for lower levels of unemployment but becomes positive and highly significant for higher rates. Our findings bear out the asymmetry of reallocation disturbances for the US labour market.

The re-domestication of high-skilled immigrant women: modifying career ambitions post-migration

ABSTRACT Existing research indicates that women’s careers are disadvantaged when they migrate for the purposes of a male partner’s career opportunities, but the mechanisms behind that pattern are not fully understood. In this paper, we fill that gap using data from interviews with 18 highly educated Turkish women who migrated to the US with their husbands to pursue a job or educational opportunity for their spouse. We examined the women’s initial career ambitions, constraints for pursuing those ambitions in the US, and the decisions they made in the face of those constraints to identify the interaction of structure, culture and agency that led to all these women having more modest career trajectories than they had anticipated pre-migration. The constraints on their lives emerged from overlapping systems of oppression that presented barriers to their career advancement and pushed them towards reproductive labour instead. Over time, a process of re-domestication unfolded as the women’s priorities and identities as career-focused individuals shifted as a way to adapt to the limitations on their career advancement resulting from structural and cultural barriers to succeeding in the US labour market as dependent migrants.

Age and Hourly Wage: How Aging affect Earning

In an aging society, people need to focus on the consequence of aging in the labor market. This paper aims to uncover the effect of aging on employees wages. To excluded the impact of the COVID-19 and inflation started at the beginning of 2020, the study is based on Current Population Survey (CPS) data collected in 2019. The author explored the issue by adopting the change in peoples age and their hourly wage in the US labor market. The study introduced several regression models, and the analysis of the data shows a positive relationship between peoples age and hourly wage. The findings also suggest that, overall, there is a tendency to raise hourly wage when peoples age increase. In addition, the condition of being White, Asian, or married has a positive effect on people's hourly wage, while being Black, female, or disabled tend to have adverse effects on their hourly wage.