Using new establishment-by-occupation microdata, we show that the use of discretionary wage setting significantly expanded in the 1970s and 1980s. Increasingly, wages for blue-collar workers were not standardized by job title or seniority but instead subject to managerial discretion. When establishments abandoned standardized pay rates, wages fell, particularly for the lowest-paid workers in a job and for those in establishments that previously paid above market rates. This shift away from standardized pay rates, in context of a broader decline in worker bargaining power, accelerated the decline in real wages experienced by blue-collar workers in the 1980s. (JEL J31, J33, J52, M52, O33)
{"title":"Wage Stagnation and the Decline of Standardized Pay Rates, 1974–1991","authors":"Maxim Massenkoff, Nathan Wilmers","doi":"10.1257/app.20200819","DOIUrl":"https://doi.org/10.1257/app.20200819","url":null,"abstract":"Using new establishment-by-occupation microdata, we show that the use of discretionary wage setting significantly expanded in the 1970s and 1980s. Increasingly, wages for blue-collar workers were not standardized by job title or seniority but instead subject to managerial discretion. When establishments abandoned standardized pay rates, wages fell, particularly for the lowest-paid workers in a job and for those in establishments that previously paid above market rates. This shift away from standardized pay rates, in context of a broader decline in worker bargaining power, accelerated the decline in real wages experienced by blue-collar workers in the 1980s. (JEL J31, J33, J52, M52, O33)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75691694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the impact of labor supply on the creation of new technology, exploiting a large exogenous shock to the US agricultural labor supply caused by the termination of the Bracero agreements between the US and Mexico at the end of 1964. Using a text-search algorithm allocating patents to crops, I show a negative labor-supply shock induced a sharp increase in innovation in technologies related to more affected crops. The effect is stronger for technology related to labor-intensive production tasks. Farm-value dynamics indicate that, despite the positive technology reaction, the policy change was undesirable for farm owners. (JEL J22, J43, N32, O33, O34, Q12, Q16)
{"title":"Labor Supply and Directed Technical Change: Evidence from the Termination of the Bracero Program in 1964","authors":"Shmuel San","doi":"10.1257/app.20200664","DOIUrl":"https://doi.org/10.1257/app.20200664","url":null,"abstract":"This paper studies the impact of labor supply on the creation of new technology, exploiting a large exogenous shock to the US agricultural labor supply caused by the termination of the Bracero agreements between the US and Mexico at the end of 1964. Using a text-search algorithm allocating patents to crops, I show a negative labor-supply shock induced a sharp increase in innovation in technologies related to more affected crops. The effect is stronger for technology related to labor-intensive production tasks. Farm-value dynamics indicate that, despite the positive technology reaction, the policy change was undesirable for farm owners. (JEL J22, J43, N32, O33, O34, Q12, Q16)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134955528","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use the introduction of the Texas Top Ten Percent rule to estimate the effect of access to a selective college on graduation and earnings outcomes for two groups of students. For highly ranked students at more disadvantaged high schools, who gained access under the policy, college enrollment and graduation increased. Less highly ranked students at more advantaged schools, who tended to lose access, shifted toward less-selective colleges under the policy, but did not see declines in overall college enrollment, graduation, or earnings. The policy thus benefited students targeted for admission without evidence of adverse effects on displaced students. (JEL I21, I23, I24, I26)
{"title":"Winners and Losers? The Effect of Gaining and Losing Access to Selective Colleges on Education and Labor Market Outcomes","authors":"Sandra Black, Jeffrey Denning, Jesse Rothstein","doi":"10.1257/app.20200137","DOIUrl":"https://doi.org/10.1257/app.20200137","url":null,"abstract":"We use the introduction of the Texas Top Ten Percent rule to estimate the effect of access to a selective college on graduation and earnings outcomes for two groups of students. For highly ranked students at more disadvantaged high schools, who gained access under the policy, college enrollment and graduation increased. Less highly ranked students at more advantaged schools, who tended to lose access, shifted toward less-selective colleges under the policy, but did not see declines in overall college enrollment, graduation, or earnings. The policy thus benefited students targeted for admission without evidence of adverse effects on displaced students. (JEL I21, I23, I24, I26)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136092734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms’ adjustment costs upon worker absence. The reform increased women’s leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased coworkers to make it coworkers’ hours, incurring wage costs corresponding to 10 full-time equivalent months in addition to replacing the workers. These adjustment costs varied by firms’ availability of internal substitutes. We also analyze a daddy-month reform and find similar employer responses to male workers’ leave, albeit smaller in magnitude. (JEL J16, J22, J32, J64, M52)
{"title":"Employer Responses to Family Leave Programs","authors":"Arizo Karimi, Rita Ginja, Pengpeng Xiao","doi":"10.1257/app.20200448","DOIUrl":"https://doi.org/10.1257/app.20200448","url":null,"abstract":"Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms’ adjustment costs upon worker absence. The reform increased women’s leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased coworkers to make it coworkers’ hours, incurring wage costs corresponding to 10 full-time equivalent months in addition to replacing the workers. These adjustment costs varied by firms’ availability of internal substitutes. We also analyze a daddy-month reform and find similar employer responses to male workers’ leave, albeit smaller in magnitude. (JEL J16, J22, J32, J64, M52)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136297301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bernardus Van Doornik, David Schoenherr, Janis Skrastins
Exploiting an unemployment insurance reform in Brazil, we study incentive effects of UI in the presence of informal labor markets. We find that eligibility for UI benefits increases formal layoffs by 11 percent. Most of the additional layoffs are related to workers transitioning to informal employment. We further document formal layoff and recall patterns consistent with rent extraction from the UI system. Workers are laid off as they become eligible for UI benefits and recalled when benefits cease. These patterns are stronger for industries and municipalities with a high degree of labor market informality. (JEL J22, J46, J63, J65, K31, O15)
{"title":"Strategic Formal Layoffs: Unemployment Insurance and Informal Labor Markets","authors":"Bernardus Van Doornik, David Schoenherr, Janis Skrastins","doi":"10.1257/app.20200787","DOIUrl":"https://doi.org/10.1257/app.20200787","url":null,"abstract":"Exploiting an unemployment insurance reform in Brazil, we study incentive effects of UI in the presence of informal labor markets. We find that eligibility for UI benefits increases formal layoffs by 11 percent. Most of the additional layoffs are related to workers transitioning to informal employment. We further document formal layoff and recall patterns consistent with rent extraction from the UI system. Workers are laid off as they become eligible for UI benefits and recalled when benefits cease. These patterns are stronger for industries and municipalities with a high degree of labor market informality. (JEL J22, J46, J63, J65, K31, O15)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135076322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We estimate the effect on recidivism of replacing time served in a common closed-cell prison with time served in an open-cell one. We deal with the endogenous assignment of inmates to different prison regimes using variation that is driven by nearby prisons’ overcrowding. Switching regimes for a year reduces recidivism by around 6 percentage points. The effects are largest for inmates with low levels of education and are weak for violent and hardened criminals. (JEL K14, K42)
{"title":"Leave the Door Open? Prison Conditions and Recidivism","authors":"G. Mastrobuoni, D. Terlizzese","doi":"10.1257/app.20190038","DOIUrl":"https://doi.org/10.1257/app.20190038","url":null,"abstract":"We estimate the effect on recidivism of replacing time served in a common closed-cell prison with time served in an open-cell one. We deal with the endogenous assignment of inmates to different prison regimes using variation that is driven by nearby prisons’ overcrowding. Switching regimes for a year reduces recidivism by around 6 percentage points. The effects are largest for inmates with low levels of education and are weak for violent and hardened criminals. (JEL K14, K42)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2022-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76375203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Container ships travel between a fixed set of origins and destinations in round trips, inducing a negative correlation in their freight rates. I study the implications of this round trip effect on international trade and trade policy. I identify this effect and develop an instrument using it to estimate the impact of transport costs on trade. I simulate counterfactual import tariff increases in a quantitative model and quantify the importance of endogenizing transport costs with respect to this effect: an exogenous transport costs model predicts a trade balance improvement from protectionist policies, while the round trip model finds the opposite. (JEL D22, F13, F14, L92, R41)
{"title":"The Round Trip Effect: Endogenous Transport Costs and International Trade","authors":"Woan Foong Wong","doi":"10.1257/app.20190721","DOIUrl":"https://doi.org/10.1257/app.20190721","url":null,"abstract":"Container ships travel between a fixed set of origins and destinations in round trips, inducing a negative correlation in their freight rates. I study the implications of this round trip effect on international trade and trade policy. I identify this effect and develop an instrument using it to estimate the impact of transport costs on trade. I simulate counterfactual import tariff increases in a quantitative model and quantify the importance of endogenizing transport costs with respect to this effect: an exogenous transport costs model predicts a trade balance improvement from protectionist policies, while the round trip model finds the opposite. (JEL D22, F13, F14, L92, R41)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2022-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74594656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Interference across competing firms in RCTs can be informative about market structure. An experiment that subsidizes a random subset of traders who buy cocoa from farmers in Sierra Leone illustrates this idea. Interpreting treatment-control differences in prices and quantities purchased from farmers through a model of Cournot competition reveals differentiation between traders is low. Combining this result with quasi-experimental variation in world prices shows that the number of traders competing is 50 percent higher than the number operating in a village. Own-price and cross-price supply elasticities are high. Farmers face a competitive market in this first stage of the value chain. (JEL L13, L14, O13, Q12, Q13)
{"title":"Using Individual-Level Randomized Treatment to Learn about Market Structure","authors":"L. Casaburi, T. Reed","doi":"10.1257/app.20200306","DOIUrl":"https://doi.org/10.1257/app.20200306","url":null,"abstract":"Interference across competing firms in RCTs can be informative about market structure. An experiment that subsidizes a random subset of traders who buy cocoa from farmers in Sierra Leone illustrates this idea. Interpreting treatment-control differences in prices and quantities purchased from farmers through a model of Cournot competition reveals differentiation between traders is low. Combining this result with quasi-experimental variation in world prices shows that the number of traders competing is 50 percent higher than the number operating in a village. Own-price and cross-price supply elasticities are high. Farmers face a competitive market in this first stage of the value chain. (JEL L13, L14, O13, Q12, Q13)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2022-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91224196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use practice variation across physicians to uncover the role of medical care in causing opioid dependence. Using health records of 2 million US veterans with emergency department visits, we find that quasi-random assignment to a top (versus bottom) decile prescribing provider significantly increases subsequent opioid use and misuse rates. Instrumental variable results show that opioid prescription receipt leads to a 20 percent increase in the probability of long-term prescription opioid use and sizable increases in the development of opioid use disorder and opioid overdose mortality. We find suggestive evidence of transition into illicit opioids due to prescription opioid exposure. (JEL I11, I12, I18)
{"title":"Pathways into Opioid Dependence: Evidence from Practice Variation in Emergency Departments","authors":"Sarah Eichmeyer, Jonathan Zhang","doi":"10.1257/app.20210048","DOIUrl":"https://doi.org/10.1257/app.20210048","url":null,"abstract":"We use practice variation across physicians to uncover the role of medical care in causing opioid dependence. Using health records of 2 million US veterans with emergency department visits, we find that quasi-random assignment to a top (versus bottom) decile prescribing provider significantly increases subsequent opioid use and misuse rates. Instrumental variable results show that opioid prescription receipt leads to a 20 percent increase in the probability of long-term prescription opioid use and sizable increases in the development of opioid use disorder and opioid overdose mortality. We find suggestive evidence of transition into illicit opioids due to prescription opioid exposure. (JEL I11, I12, I18)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2022-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78116656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper evidenced the sensitivity of US immigration judge decisions to temperature in the city of arbitration on the date of a case's completion. This note serves to correct errors noted since publication. The results from both the main linear specifications are qualitatively unchanged, with estimated treatment effects similar in size to the original and retaining statistical significance at conventional levels. Some secondary results lose significance with the erosion of sample size. We also acknowledge the additional finding by Spamann (2022) with respect to external validity. (JEL K37, K41, Q54)
{"title":"Correction to “Temperature and Decisions: Evidence from 207,000 Court Cases” and Reply to Spamann","authors":"A. Heyes, Soodeh Saberian","doi":"10.1257/app.20200068","DOIUrl":"https://doi.org/10.1257/app.20200068","url":null,"abstract":"This paper evidenced the sensitivity of US immigration judge decisions to temperature in the city of arbitration on the date of a case's completion. This note serves to correct errors noted since publication. The results from both the main linear specifications are qualitatively unchanged, with estimated treatment effects similar in size to the original and retaining statistical significance at conventional levels. Some secondary results lose significance with the erosion of sample size. We also acknowledge the additional finding by Spamann (2022) with respect to external validity. (JEL K37, K41, Q54)","PeriodicalId":48212,"journal":{"name":"American Economic Journal-Applied Economics","volume":null,"pages":null},"PeriodicalIF":6.2,"publicationDate":"2022-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84744444","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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