Understanding whether labor market discrimination explains inferior labor market outcomes for many groups has drawn the attention of labor economists for decades—at least since the publication of ...Gary Becker’s The Economics of Discrimination in 1957. The decades of research on discrimination in labor markets began with a regression-based “decomposition” approach, asking whether raw wage or earnings differences between groups—which might constitute prima facie evidence of discrimination—were in fact attributable to other productivity-related factors. Subsequent research—responding in large part to limitations of the regression-based approach—moved on to other approaches, such as using firm-level data to estimate both marginal productivity and wage differentials. In recent years, however, there has been substantial growth in experimental research on labor market discrimination—although the earliest experiments were done decades ago. Some experimental research on labor market discrimination takes place in the lab. But far more of it is done in the field, which makes this particular area of experimental research unique relative to the explosion of experimental economic research more generally. This paper surveys the full range of experimental literature on labor market discrimination, places it in the context of the broader research literature on labor market discrimination, discusses the experimental literature from many different perspectives (empirical, theoretical, and policy), and reviews both what this literature has taught us thus far, and what remains to be done.
Managers of China's state-owned firms work in a closed pyramidal managerial labor market. They enjoy non-transferable benefits if they choose to stay within this system. The higher up are they in ...this labor market hierarchy (their political ranks), the fewer are their outside employment opportunities. Due to career and wealth concerns, they are cautious and risk-averse when managing firms. We examine the effect of managers' political ranks on firms' stock price crash risk and find a negative association. This association mainly exists in firms with younger managers and managers with shorter tenure. Further, this effect is only significant in regions with weak market forces, in firms without foreign investors, without political connections, and during periods with no local government leaders' or managers' political promotions. We conclude that the political ranking system reduces the stock price crash risk.
I examine the role of geography in the market for CEOs and find that firms hire locally five times more often than expected if geography were irrelevant to the matching process. This local matching ...bias is widespread and exists even among the largest U.S. firms. Tests reveal that both labor supply and demand influence local matching. Compensation and unforced turnover are lower for local than for nonlocal CEOs, and the compensation of local CEOs depends on local labor market factors, unlike that of nonlocal CEOs. These findings suggest the presence of market segmentation and contrast with much of the prior literature, which explicitly or implicitly assumes a single national market.
This paper was accepted by Lauren Cohen, finance
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In this essay, I begin by identifying the reasons that automation has not wiped out a majority of jobs over the decades and centuries. Automation does indeed substitute for labor--as it is typically ...intended to do. However, automation also complements labor, raises output in ways that leads to higher demand for labor, and interacts with adjustments in labor supply. Journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor. Changes in technology do alter the types of jobs available and what those jobs pay. In the last few decades, one noticeable change has been a "polarization" of the labor market, in which wage gains went disproportionately to those at the top and at the bottom of the income and skill distribution, not to those in the middle; however, I also argue, this polarization and is unlikely to continue very far into future. The final section of this paper reflects on how recent and future advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth. I argue that the interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine, codifiable tasks while amplifying the comparative advantage of workers in supplying problem-solving skills, adaptability, and creativity.
China's emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets ...adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in the US industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, is a key item on the research agenda for trade and labor economists.
Immigration controls are often presented by government as a means of ensuring 'British jobs for British workers' and protecting migrants from exploitation. However, in practice they can undermine ...labour protections. As well as a tap regulating the flow of labour, immigration controls function as a mould, helping to form types of labour with particular relations to employers and the labour market. In particular, the construction of institutionalised uncertainty, together with less formalised migratory processes, help produce 'precarious workers' over whom employers and labour users have particular mechanisms of control.
We develop an equilibrium wage-posting model with heterogeneous firms that decide to locate in the formal or the informal sector and workers who search randomly on and off the job. We estimate the ...model on Brazilian labor force survey data. In equilibrium, firms of equal productivity locate in different sectors, a fact observed in the data. Wages are characterized by compensating differentials. We show that tightening enforcement does not increase unemployment and increases wages, total output, and welfare by enabling better allocation of workers to higher productivity jobs and improving competition in the formal labor market.
We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to ...changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes.
The past several decades have seen widespread reform of labor markets across advanced industrial countries, but most of the existing research on job security, wage bargaining, and social protection ...is based on the experience of the United States and Western Europe. In Inequality in the Workplace , Jiyeoun Song focuses on South Korea and Japan, which have advanced labor market reform and confronted the rapid rise of a split in labor markets between protected regular workers and underprotected and underpaid nonregular workers. The two countries have implemented very different strategies in response to the pressure to increase labor market flexibility during economic downturns. Japanese policy makers, Song finds, have relaxed the rules and regulations governing employment and working conditions for part-time, temporary, and fixed-term contract employees while retaining extensive protections for full-time permanent workers. In Korea, by contrast, politicians have weakened employment protections for all categories of workers.
In her comprehensive survey of the politics of labor market reform in East Asia, Song argues that institutional features of the labor market shape the national trajectory of reform. More specifically, she shows how the institutional characteristics of the employment protection system and industrial relations, including the size and strength of labor unions, determine the choice between liberalization for the nonregular workforce and liberalization for all as well as the degree of labor market inequality in the process of reform.
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