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Moving Up or Moving On, Fredrik Andersson, Harry Holzer, and Julia Lane examine the characteristics of both employees and employers that lead to positive outcomes for workers. Using new Census data, Moving Up or Moving On follows a group of low earners over a nine-year period to analyze the behaviors and characteristics of individuals and employers that lead workers to successful career outcomes. The authors find that, in general, workers who "moved on" to different employers fared better than those who tried to "move up" within the same firm. While changing employers meant losing valuable job tenure and spending more time out of work than those who stayed put, workers who left their jobs in search of better opportunity elsewhere ended up with significantly higher earnings in the long term-in large part because they were able to find employers that paid better wages and offered more possibilities for promotion. Yet moving on to better jobs is difficult for many of the working poor because they lack access to good-paying firms. Andersson, Holzer, and Lane demonstrate that low-wage workers tend to live far from good paying employers, making an improved transportation infrastructure a vital component of any public policy to improve job prospects for the poor. Labor market intermediaries can also help improve access to good employers. The authors find that one such intermediary, temporary help agencies, improved long-term outcomes for low-wage earners by giving them exposure to better-paying firms and therefore the opportunity to obtain better jobs. Taken together, these findings suggest that public policy can best serve the working poor by expanding their access to good employers, assisting them with job training and placement, and helping them to prepare for careers that combine both mobility and job retention strategies. Moving Up or Moving On offers a compelling argument about how low-wage workers can achieve upward mobility, and how public policy can facilitate the process. Clearly written and based on an abundance of new data, this book provides concrete, practical answers to the large questions surrounding the low-wage labor market.
Industrial & Labor Relations Review
|Number 4Volume 59 Article 82
Moving Up or Moving On: Who Advances in the
Low-Wage Labor Market?
Fredrik Andersson
Harry J. Holzer
Julia I. Lane
Review of Moving Up or Moving On: Who Advances in the Low-Wage Labor Market?, by Fredrik
Andersson, Harry J. Holzer, and Julia I. Lane. Industrial & Labor Relations Review, Vol. 59, No. 4.
Available at:
Moving Up or Moving On: Who Advances in the Low-Wage Labor
low-wage labor market
This book review is available in Industrial & Labor Relations Review:
benefit public employee pensions (Gary Ander-
son and Keith Brainard). With defined contri-
bution plans not only placing more risk on
workers but also giving them more responsibil-
ity for decision-making, financial education is
playing an increasingly important role in assur-
ing that the pension system meets its objectives.
Pension accounting rules are probably the area
least well understood by most economists who
study pensions, so the chapter on accounting
provides a valuable service by explaining the
rules and their importance in affecting the in-
vestment decisions of pension plan sponsors.
The chapter on defined benefit public employee
pensions presents a picture in sharp contrast
with conditions in the private sector, because
the dramatic decline in private sector defined
benefit plan coverage has not occurred in the
public sector. The reasons for that difference
are not fully explored.
The international chapters discuss pension
developments in Canada (Silvana Pozzebon),
Japan (Masaharu Usuki), and Sweden (Annika
Sundén). Of these three retirement income
systems, Canada’s is closest to that of the United
States. Canada is experiencing a decline in
defined benefit plans and a move toward de-
fined contribution plans, though at a much
slower rate than the United States. Japan has a
system of voluntary carve-outs, whereby employ-
ers may voluntarily withdraw their workers from
part of social security if the employers provide a
defined benefit plan that meets a minimum
standard of generosity. This system has encoun-
tered some of the problems that critics have
claimed would result from President George W.
Bush’s proposal for voluntary carve-out indi-
vidual accounts as part of U.S. Social Security
reform. In the past few years, there has been a
rapid decline in the number of workers partici-
pating in the Japanese carve-out system. Swe-
den, by contrast, has mandatory individual ac-
counts with a contribution rate of 2.5% of pay
that are an add-on to a generous base social
security system that is financed by a contribu-
tion rate of 16% of pay. The designers of the
Swedish system tried to learn from the experi-
ences of the mandatory individual account sys-
tems in Latin America, particularly regarding
ways to minimize the system’s administrative
costs. The experiences of all three countries
may provide valuable lessons for U.S. policy-
makers as they consider various reform options
for both Social Security and private pensions.
The Organization for Economic Coopera-
tion and Development (OECD), whose mem-
bership includes the United States and other
high-income countries, favors workers postpon-
ing retirement as the main way for societies to
deal with population aging and longer life ex-
pectancy. That policy raises questions as to the
ability of people in different occupations to
work at older ages, the changing nature of the
physical and psychological demands of work,
the effects of work on health, the demand for
older workers, and the effect of older work-
ers’ continued work on the demand for
younger workers. Those issues, which are not
covered by Reinventing the Retirement Paradigm,
are sufficiently complex to warrant a book of
their own.
The book’s editors and many of the chapter
authors are leading scholars or practitioners in
the pension field. Across a broad range of
topics, the book contributes to the advance of
our understanding of pension and retirement
issues. It is well worth reading for both the
novice and the seasoned specialist.
John A. Turner
Senior Policy Advisor
AARP Public Policy Institute
Human Resources,
Management, and Personnel
Moving Up or Moving On: Who Advances in
the Low-Wage Labor Market? By Fredrik
Andersson, Harry J. Holzer, and Julia I.
Lane. New York: Russell Sage Foundation,
2005. 192 pp. ISBN 0-87154-057-6, $29.95
Although it joins an already vast literature on
how to improve the labor market success of the
American poor, Moving Up or Moving On is un-
usual in using rich data on workers and their
employers to suggest that the labor market suc-
cess of a poor individual is heavily influenced by
his or her employer. Research frequently con-
siders how the labor market success of the poor
is influenced by their human capital character-
istics, such as education level and training pro-
gram participation. Whether because of data
limitations or lack of interest, however, this
research rarely considers more than a few em-
ployer characteristics, such as firm size and
industry. Because of the unusual data used by
Andersson, Holzer, and Lane (hereafter AHL),
they can consider how the labor market ad-
vancement of a poor individual depends on
many more employer characteristics, such as
whether the employer pays a wage premium or
has previously helped the poor advance.
The authors use the Census Bureau’s Longi-
tudinal Employer-Household Dynamics (LEHD)
database, which is comprised of unemployment
insurance wage records from various states,
linked to Census data. The book includes LEHD
data on five states: California, Florida, Illinois,
Maryland, and North Carolina. The records for
these states span nine years (1993–2001), allow-
ing analysis of fairly long-term effects.
The LEHD data include information on quar-
terly earnings of 96% of private non-farm em-
ployees, for a yearly total, in the five states
studied, of 37 million workers and 1.8 million
employers (Table 2.3). By linking to Census
data, the LEHD also includes information on
the age, gender, race, and ethnicity of 96% of
these individuals. Some limitations of the LEHD
data are that we only know workers’ quarterly
earnings, not work hours, and for most workers
we do not know education or family character-
AHL’s analysis focuses on what happens over
time to “prime-age” workers with consistent la-
bor force attachment who initially have low
earnings. In this study, prime-age workers are
defined as those who were aged 25–54 in 1993;
workers with consistent labor force attachment
are those who had at least one quarter of earn-
ings greater than $2,000 in each year from 1993
through 2001; and initially low-earnings work-
ers are those whose annual earnings, in 1998
dollars, were less than $12,000 in each year from
1993 through 1995. These restrictions reduce
the sample for most of the analyses from 37
million to 1.4 million individuals (p. 153). AHL
examine whether these individuals significantly
increased their earnings during three-year peri-
ods subsequent to 1993–95, particularly the years
1999–2001. As one would expect, they find that
earnings increased more for younger white males
than for other demographic groups.
The innovative part of the analysis is the
demonstration that labor market success for
initial low earners was linked to characteristics
of individuals’ subsequent employers. Consis-
tent with previous studies, these researchers
find that labor market success was more fre-
quent for those who were hired in construction
and manufacturing, as well as for those hired by
larger firms. But AHL turn up other correlates
of success, as well:
moving on to an employer different from the pri-
mary 1993–95 employer, particularly if the individual
moved to a new employer but then stayed to accumu-
late job tenure;
working during 1999–2001 for an employer that
had low average employee turnover;
working for a temporary employment agency dur-
ing 1996–98, and then moving to another employer
during 1999–2001; and
working for an employer that, over the years 1993–
98, paid a high “fixed (over time) earnings pre-
mium,” as indicated by an estimate that controls for
fixed (over time) personal effects of individual work-
ers and each worker’s labor market experience.
Another noteworthy finding is that hiring of
low-earnings workers was concentrated in rela-
tively few firms. For example, 1,000 employers
in these five states did one-quarter of all hires of
these initially low-earnings workers.
In addition, workers’ success after being hired
was concentrated in relatively few employers.
AHL define a worker as “fully escaping” low-
earnings status if the worker’s earnings exceeded
$15,000 during each year of a three-year period.
Such escapes occurred disproportionately at a
few companies. For example, of the 6,000 health
service employers in Maryland, fewer than 2,000
hired an initially low-earnings worker, and just
20 of these employers accounted for one-quar-
ter of all low-earnings workers hired by that
industry who “fully escaped” low-earnings status
(p. 113).
The authors predicate several policy recom-
mendations on their empirical findings. Two of
the options they suggest are expanding the use
of labor market intermediaries, including tem-
porary agencies, to place low-earnings workers
in better jobs, and providing subsidies for cus-
tomized training in order to encourage more
employers to provide advancement opportuni-
ties for low-earnings workers.
The three authors should be commended for
boldly stretching a rich database to its limits to
address policy issues. Also praiseworthy is their
frank admission of our uncertainty about how
employers might influence their employees’
labor market success. Recognizing that an
employer’s personnel practices are not perfectly
predictable based on the employer’s size and
industry, they develop a methodology that al-
lows for “unobserved” employer-specific factors
to influence the labor market success of initially
low-earnings workers. Such an analysis could
only be done using data over time for most
employees of many employers, which would
seem to require the LEHD data for the United
However, I think the authors could have
done more to identify limitations of the study
arising from the way they capture these “em-
ployer effects.” (The only such treatments I
find are two brief discussions on pages 144 and
152.) Because so many of the analyses consider
how outcomes are correlated with employer
“fixed effects” on workers’ earnings, the book
would have been stronger with an additional
appendix detailing how these earnings effects
are estimated, and discussing how these estima-
tion procedures constrain the bounds within
which the effects can be interpreted.
Part of the issue is that the estimation of
employer effects and person effects on earnings
is only identified by the persons who switch
employer. With only a few years of data for each
person, there is substantial measurement error
in estimating person fixed effects. In addition,
the specification used to estimate person and
employer fixed effects on earnings levels does
not allow for person and employer effects on
earnings growth, which are plausible. As a
result, what is estimated to be an employer fixed
effect on earnings levels may in part reflect the
kinds of workers the employer hires. For ex-
ample, an employer may tend to hire workers
whose true person fixed effects on earnings
levels are higher than these workers’ measured
person fixed effects, or workers whose earnings
growth trends are greater than the average
person’s growth rate trend.
The policy discussion also could have more
fully explored some of the limitations of what
can be inferred from these estimates. Even if
the estimates do reflect causal effects of em-
ployer characteristics, the average effects of
employer characteristics on workers’ success
under current labor market policy need not
reflect the marginal effects under policies that
change how workers are placed in jobs. For
example, in research completed after this book
was written, David Autor and Susan Houseman
found that welfare clients, if they are essentially
randomly assigned to welfare-to-work agencies
that tend to place more welfare clients in tem-
porary jobs, have lower earnings later on (“Do
Temporary Help Jobs Improve Labor Market
Outcomes for Low-Skilled Workers?” Working
Paper 11743, National Bureau of Economic
Research, November 2005). Autor and
Houseman’s results may not contradict the re-
sults reported in AHL’s book. Low-earnings
workers who are currently placed in temporary
jobs may on average experience a long-run ben-
efit, but the marginal additional individuals
placed in temporary jobs by policy variations
may not.
However, these are modest caveats regarding
a unique book that should spark needed future
research. Andersson, Holzer, and Lane persua-
sively argue that employers matter in the suc-
cess of low-earnings workers. As the book points
out, this finding should lead to more research
to figure out the specific mechanisms that ex-
plain why and how employers matter. And it
should lead to exploring a wide variety of poli-
cies to see if we can alter the distribution of
opportunities offered by employers to low-earn-
ings workers. Some of these policies might fail,
but continued efforts to work with employers
are likely to be fruitful for both research and
policy regarding low-earnings workers.
Timothy J. Bartik
Senior Economist
W.E. Upjohn Institute for
Employment Research
The Mismanagement of Talent: Employability
and Jobs in the Knowledge Economy. By Phillip
Brown and Anthony Hesketh. New York:
Oxford University Press, 2004. x, 278 pp.
ISBN 0-19-92-6953-X, $39.95 (paper); 978-
0-19-92-6954-9, $124.50 (cloth).
A 1997 landmark study by McKinsey & Com-
pany exposed the “war for talent” as a strategic
business challenge and key driver of company
performance. Although the McKinsey consult-
ants were certainly not the first to note the shift
toward a knowledge-based economy (KBE)—
Peter Drucker predicted the rise of the knowl-
edge worker over a half-century ago—their re-
port has perhaps done most to promulgate the
“war for talent” perspective and the view that
companies that are victorious on this battlefield
will be those that realize competitive advantage
in the KBE.
In The Mismanagement of Talent, Brown and
Hesketh argue that rooted within the dominant
discourse of the “war for talent” are several core
assumptions that have shaped our perspective
on employability in the KBE. The most central
of these is that there is a limited pool of talent
capable of rising to senior managerial posi-
tions, which creates fierce competition to re-
cruit the best and brightest. The perception of
talent as a limited commodity is seen as driving
organizations to diversify their talent pools and
adopt more rigorous recruitment and selection
tools in an effort to get the right people, with
the right knowledge, into the right jobs. That
perception also shapes public policy, as govern-
ments focus on expanding access to higher
education and dismantling barriers to talent
... This makes it imperative to under-stand the individual and contextual factors underlying upward wage mobility. However, while numerous studies have explored the role of individual characteristics of lowwage workers in as well as the benefits of public policies for upward wage mobility (for example, Andersson et al., 2005;Lucifora et al., 2005;Cappellari and Jenkins, 2008;Pavlopoulos et al., 2012), studies on regional contextual factors facilitating upward wage mobility and escaping low-wage jobs are scarce. This relative regional ignorance may bias our understanding of the prospects of escaping low-wage work. ...
... If the worker has switched to a higher-paying job (that is, to any job in the two highest income categories from any category of the three lowestpaying categories) within the region, this is coded 1 (and otherwise 0). This approach draws on the low-wage literature, where escaping low wage is commonly examined by dichotomizing the dependent variable (for example, Andersson et al., 2005;Lucifora et al., 2005; Vacas-Soriano, 2018) 4 to reveal factors that help workers move above such a low-wage threshold. ...
Full-text available
This article investigates how the evolution of local labour market structure enables or constrains workers as regards escaping low-wage jobs. Drawing on the network-based approach of evolutionary economic geography, we employ a detailed individual-level panel dataset to construct skill-relatedness networks for 72 functional labour market regions in Sweden. Subsequent fixed-effect panel regressions indicate that increasing density of skill-related high-income jobs within a region is conducive to low-wage workers moving to better-paid jobs, hence facilitating labour market upgrading through diversification. While metropolitan regions offer a premium for this relationship, it also holds for smaller regions, and across various worker characteristics.
... Motivating this analysis is the well-known fact that, controlling for worker characteristics, employer characteristics contribute importantly to worker earnings and other outcomes; see e.g. Abowd and Kramarz (2002), Andersson, Holzer, and Lane (2005), and Holzer et al. (2011). If WIA and other training programs can improve the quality of the firms to which workers "match," then we have identified an important mechanism through which job training programs might work, over and above their effects on the worker's stock of human capital. ...
... For all three of these variables we code workers without postregistration employment as zeros. Andersson et al. (2005) and Holzer et al. (2011) document the correlations among the firm-related variables in the LEHD. ...
... Motivating this analysis is the well-known fact that, controlling for worker characteristics, employer characteristics contribute importantly to worker earnings and other outcomes; see e.g. Abowd and Kramarz (2002), Andersson, Holzer, and Lane (2005), and Holzer et al. (2011). If WIA and other training programs can improve the quality of the firms to which workers "match," then we have identified an important mechanism through which job training programs might work, over and above their effects on the worker's stock of human capital. ...
... For all three of these variables we code workers without postregistration employment as zeros. Andersson et al. (2005) and Holzer et al. (2011) document the correlations among the firm-related variables in the LEHD. ...
... One issue is the low hourly wages and wage stagnation of poor households. Some observers argue that greater education, training, and other improvements in human capital could lead to higher wages, presumably if the worker shifted to a position that made use of the enhanced skills (Andersson et al., 2005;Besharov & Call, 2009). Others argue that low, poverty-inducing wages are due to employer market power which holds down wages (Lyon, 2018). ...
Full-text available
This study uses Current Population Survey data and econometric techniques to examine whether working poor households improve their economic wellbeing by working more hours. For working households overall, full-time work puts them in a 49–78% better position than part-time work (as measured by resources-to-need and depending on methodology). For poor families, however, full-time work makes them 1.3–2.7% better off than part-time work. The latter finding reflects that the higher earnings of full-time work come at considerable cost: lower public assistance benefits and higher medical, work, and childcare expenditures. We discuss policies that may reduce these tradeoffs for poor working households.
... In this article, we conceptualize upward social mobility as an increase in wages and other forms of compensations (e.g. stipends), as well as career opportunity or potential (Andersson et al., 2005;Gautie and Schmitt, 2010). Most entry level health care jobs can be described as 'bad jobs,' meaning they have low wages and limited opportunities for advancement (Kalleberg, 2011;Ribas et al., 2012). ...
There has been rapid growth in professional certifications in the health care sector, but little is known about the rewards to workers for attaining professional certifications, especially in low social closure occupations where the barriers to entry (e.g., higher education, degrees, licensure) are relatively limited. In this study, we focus on the attainment and rewards for professional certifications in four health care occupations – personal care aides, medical transcriptionists, medical assistants, and community health workers – where certification is generally not required by state or federal regulation but may be attractive to employers. Using the Current Population Survey (IPUMS CPS) from 2015 to 2020, we find that workers of color have significantly lower odds of attaining a certification, while women are 1.2 times more likely than men to an earn a certification. On average, workers who have earned a professional certification have weekly earnings that are 4.8% higher than workers who do not have a certification. Men experience the largest increase in weekly earnings (11.3%) when they have a professional certification as compared to those without, while women experience lower gains from professional certification (3.8%). Black and Hispanic workers experience modest rewards for certification (weekly earnings that are 1.2% and 5% higher, respectively) that are lower than the rewards gained by white workers (6% higher weekly earnings). Our findings suggest that professional certifications may have modest benefits for workers, but professional certifications often come with significant costs for individuals. Strategies for reducing inequality in the return to credentials and for improving job quality in the care sector are discussed.
... Finally, we look downstream to the mobility consequences of turnover for workers leaving jobs with unstable schedules. With schedule instability pressuring workers out of their current jobs, and relatively few ''good'' alternatives, turnover may simply introduce turbulence into workers' earnings and lead to re-employment in similar low-wage work, rather than provide an opportunity for upward mobility (e.g., Andersson, Holzer, and Lane 2005). ...
Full-text available
The authors develop a model of cumulative disadvantage relating three axes of disadvantage for hourly workers in the US retail and food service sectors: schedule instability, turnover, and earnings. In this model, exposure to unstable work schedules disrupts workers’ family and economic lives, straining the employment relation and increasing the likelihood of turnover, which can then lead to earnings losses. Drawing on new panel data from 1,827 hourly workers in retail and food service collected as part of the Shift Project, the authors demonstrate that exposure to schedule instability is a strong, robust predictor of turnover for workers with relatively unstable schedules (about one-third of the sample). Slightly less than half of this relationship is mediated by job satisfaction and another quarter by work–family conflict. Job turnover is generally associated with earnings losses due to unemployment, but workers leaving jobs with moderately unstable schedules experience earnings growth upon re-employment.
... Harry Holzer and his colleagues (2011) use a similar measure-firmlevel earnings efects-in using national UI data to compare how job quality varies by industry, arguing that this measure captures differences in firms' contributions to pay due to capital holdings, compensating diferentials, or human resources policies. 4 Although this measure does not directly capture dimensions of job quality such as fringe benefits, growth opportunities, or safety, evidence suggests that these other dimensions are positively correlated with firm-level earnings efects (Andersson, Holzer, and Lane 2005;Hamermesh 1998). I calculate industry-level quarterly wages per employee using the average across the last quarter of all employment spells within the industry reported in the UI data. ...
Full-text available
Several theories linking post-prison employment to recidivism suggest that the quality of employment has a causal effect on future criminal justice contact. However, previous work testing these theories has not accounted for differential selection into high-quality employment. Using six years of post-release employment records, I document how post-prison job quality varies by industry. Then, I use inverse propensity score weighting to estimate the effect of job quality on future arrests and prison spells. Some evidence indicates that parolees who find high-quality employment experience fewer arrests or returns to prison than otherwise similar parolees who find low-quality employment, with the effects most evident when comparing employment in the highest- and lowest-quality industries. Low-quality employment does not appear to reduce future criminal justice contact relative to unemployment.
... We suggest that one such population of particular academic and policy interest is the employees of specific named firms. Such employer-employee linked data would be valuable to economic sociologists, who are interested in understanding how firm-level characteristics such as ownership structure and unionization affect labor practices (Applebaum and Batt 2014;Fligstein 2001;Weil 2009); to policy scholars, who are interested in assessing the impact of local and state labor laws that focus on specific large employers (Colla et al. 2014); and to economists who are concerned with measuring intraindustry variation in compensation (Andersson, Holzer and Lane 2005;Groshen, 1991aGroshen, , 1991bKrueger and Summers 1988;Lane, Salmon and Spletzer 2007). ...
Full-text available
In this article, we explore the use of Facebook targeted advertisements for the collection of survey data. We illustrate the potential of survey sampling and recruitment on Facebook through the example of building a large employee–employer linked data set as part of The Shift Project. We describe the workflow process of targeting, creating, and purchasing survey recruitment advertisements on Facebook. We address concerns about sample selectivity and apply poststratification weighting techniques to adjust for differences between our sample and that of “gold standard” data sources. We then compare univariate and multivariate relationships in the Shift data against the Current Population Survey and the National Longitudinal Survey of Youth 1997. Finally, we provide an example of the utility of the firm-level nature of the data by showing how firm-level gender composition is related to wages. We conclude by discussing some important remaining limitations of the Facebook approach, as well as highlighting some unique strengths of the Facebook targeted advertisement approach, including the ability for rapid data collection in response to research opportunities, rich and flexible sample targeting capabilities, and low cost, and we suggest broader applications of this technique.
How can employers facilitate economic mobility for workers, particularly workers of color or those without a college degree? The authors integrate a fragmented literature to assess how employers’ practices affect enhanced economic security and mobility. This article first identifies three pathways linking employers’ practices to mobility: improving material job quality, increasing access to better jobs for historically marginalized workers, and promoting sustainability of employment. The authors provide a critical assessment of the research literature on recruitment and hiring practices; pay and wages; promotion practices; scheduling; leaves; diversity, equity, and inclusion initiatives; and work systems as these practices relate to economic mobility. They then identify strategic questions and feasible designs for enhancing future research on these questions in order to guide policy and management practice.
Full-text available
How are changes in the low-wage labor market affecting the mobility of workers out of low-wage work? I investigate changes in the wage mobility of workers starting employment spells in low wages using the Panel Study of Income Dynamics from 1968 to 2014 and discrete-time event history analysis. About half of all low-wage workers move to better wages within four years. Effects on mobility rates are significant by age, gender, race, education, occupation, and job characteristics. Mobility rates out of low-wage work have declined since the late 1990s. Little progress has been made in closing the gaps in mobility for women and nonwhites over time. I find evidence for the decline of firm internal labor markets and lower mobility for part-time workers over time.
Full-text available
This paper estimates the effects of commuting time and housing characteristics on earnings of white male, white female, and black female employees of a single company. Within all three groups, earnings increase directly with commuting time. However, these increases are significantly smaller for employees commuting from census tracts with housing characteristics indicative of lower prices for housing services. Earnings premia for commuting time, net of the interactions between commuting time and housing characteristics are positive for almost all white males. However, they are negative for many white females and most black females. If locational constraints imposed by primary workers or residential segregation restrict the residential mobility of female employees, the employer may have monopsony power. That power may enable the employer to capture the housing market benefits of longer commutes for females.
Full-text available
This paper shows that small establishments are much less likely to hire and employ blacks than are larger establishments. A number of possible explanations for this result are considered, such as differences across establishments in application rates from blacks, skill needs, locations, and recruiting behavior. Although these factors can account for some of the observed differences in race of new hires between small and large establishments, much remains unexplained. The results suggest that discrimination in hiring may be much more pervasive at smaller establishments than larger ones.
Full-text available
Analyzing data from a 1982 survey of firms, the author finds evidence that firms' wage levels are positively associated with the previous experience of new hires, the tenure of employees with the firm, managers' perceptions of employee productivity, and managers' perceptions of the ease of hiring qualified workers; they are negatively associated with job vacancy rates and training time. Although the magnitudes of some of these relationships are not large, in combination they suggest that high-wage firms can sometimes offset more than half of their higher wage costs through improved productivity and lower hiring and turnover costs. The effects are generally stronger for firms that have chosen high wage levels than for firms in which unions have imposed high wage levels. (Abstract courtesy JSTOR.)
In the U.S. economy, approximately 100 million workers are matched with market work activities on any given day. Millions more are matched with the nonmarket activities of various kinds, including child rearing, the home production of a variety of goods and services, and schooling. Economic efficiency requires that (1) specific individuals and activities be appropriately matched and (2) the individuals, once matched, undertake the activity with an appropriate level of effort or intensity. This chapter discusses the economic forces that influence and define the important aspects of elements of the employment relationship in a market economy. In the chapter, three aspects of the employment relationship are reviewed: (1) the supply of work effort by the employee, (2) the investment in employer–employee match specific skills, and (3) the provision of earnings insurance by the employer. The supply and demand for work effort of individual workers is an obvious and crucial factor in the employment relationship. Employers have preferences about the intensity with which employees undertake their tasks, which may be quite at variance with those of the employees.
This paper was prepared for the New Zealand Ministry of Labor Conference on Data Integration and Linked Employer-Employee Data held March 21-22, 2002. I would like to thank my coauthors Patrick Corbel, Rob Creecy, Bruno Crepon, John Haltiwanger, Francis Kramarz, Julia Lane, Paul Lengermann, David Margolis, Kevin McKinney, Ron Prevost, Sebastien Roux, Kristin Sandusky, Martha Stinson, Lars Vilhuber, and Simon Woodcock from whom I borrowed shamelessly for this presentation. I would also like to thank my Cornell, Census, and CREST colleagues Fredrik Andersson, Gary Benedetto, Chet Bowie, Bahattin Buyuksahin, Karen Conneely, Pat Doyle, Ron Ehrenberg, Nancy Gordon, Cheryl Grim, George Jakubson, Frederick Knickerbocker, Guy LaRoque, Cyr Linonis, Charles McCulloch, Nicole Nestoriak, Sebastien Perez-Duarte, Jean-Marc Robin, Marc Roemer, Bryce Stephens, Marty Wells, Bill Winkler, and Laura Zayatz, each of whom contributed substantially to this work. Funding was provided by the US Census Bureau, INSEE/CREST, the National Science Foundation (SES-9978093 to Cornell University), the National Institute on Aging, the Sloan Foundation, and the Russell Sage Foundation.
This paper assesses whether African-Americans are more likely to experience employment discrimination in the suburbs relative to the central city. We compare central city–suburban differences in racial hiring outcomes for firms where whites are in charge of hiring to the comparable difference for firms where blacks are in charge of hiring. Both suburban black and white employers hire fewer blacks than their central-city counterparts. This geographic gap among black employers is at least as large as that of white employers. Assuming no discrimination by black employers in any location, this implies that the probability of experiencing discrimination does not vary over space. Black firms, however, are substantially more likely to hire black workers regardless of location.
Most welfare-to-work programs designed to help single mothers leave welfare for employment focus on the challenge of finding a job. This article looks beyond the point of employment to consider the difficulty many former welfare recipients have keeping their jobs. The authors review evidence showing that many families cycle back and forth between welfare and work, losing jobs and returning to public assistance while they seek work again. Factors contributing to high rates of job loss include characteristics of the job and of the worker. Temporary jobs, frequent layoffs, low pay in relation to work expenses, lack of experience meeting employer expectations, and personal or family problems all lead to dismissals and resignations. Drawing from the experience of innovative programs, the authors recommend policy changes and program approaches that can help families overcome setbacks and stabilize their lives as they move from welfare into increasingly stable employment.
A National Academy of Sciences Panel recently made a number of recommendations to the BLS for improving the Consumer Price Index, while also suggesting some cautions to be observed when considering the adoption of new concepts and techniques. This paper discusses the Panel's analyses in four areas: Should a cost-of-living index be the measurement objective of the CPI? Should the index attempt to capture the effect on living costs from changes in "environmental" conditions? How can hedonic techniques be best applied for measuring quality changes? Should the BLS attempt to measure the consumer surpluses accompanying the introduction of new goods?