wages sorting on skill and the racial composition of jobs wages for black and white workers are substantially lower in occupations with a high density of black employees following standard controls such correlations can exist absent discrimination or as a result of discrimination in wage level equations partial correlations fall sharply after controlling for occupational skills longitudinal estimates accounting for worker heterogeneity indicate little wage change associated with changes in racial composition results support a quality sorting rather than discrimination explanation with racial density serving as an index of unmeasured skills discrimination reflected in racial wage gaps occurs within occupations or across occupations in a manner uncorrelated with racial composition

the determinants of female recruitment each year the net effect of transitions between jobs and between employment and non employment is that there has been a steady rise in the proportion of women and part timers in employment in britain the determinants of one particular transition namely recruitment are analysed using 1983 data in the light of existing theories about female employment the conclusions are that recruitment of women and part timers is promoted by the expansion of those occupations in which women are traditionally more concentrated by their low pay and conditions in relation to men and by the greater availability of married women for recruitment the buffer mechanism wherein firms are hypothesized to hire more female labour when unemployment is low and to hoard male labour in recessions finds no empirical support

payment schemes and gender in germany the authors estimate the determinants of five types of variable payment schemes using panel data on german establishments in 1994 and 1996 women were disproportionately included in schemes based on individual productivity and on profit sharing but not in those based on work group productivity this pattern seems inconsistent with the claim that women are sorted due to their shorter expected tenure instead the authors argue the critical issue may be that women have a greater need for flexibility between work and home than men do collective bargaining coverage and other industrial relations variables are shown to be influential determinants interacting with gender

what went wrong the erosion of relative earnings and employment among young black men in the 1980s this paper shows a widening in black white earnings and employment gaps among young men from the mid 1970s through the 1980s earnings gaps increased most among college graduates and in the midwest while gaps in employment population rates grew most among dropouts we attribute the differential widening to shifts in demand for subgroups due to shifting industry and regional employment the falling real minimum wage and deunionization the growing supply of black to white workers that was marked among college graduates and to increased crime among dropouts the different factors affecting subgroups highlight the economic diversity of black americans

dreams of urbanization quantitative case studies on the local impacts of nuclear power facilities using the synthetic control method this paper uses the synthetic control sc method to examine how the establishment of nuclear power facilities npfs in japan in the 1970s and 1980s has affected local per capita income levels in the municipalities in which they were localted npf municipalities eight quantitative case studies using the sc method clarify that the effects of npf establishment on per capita taxable income levels are highly heterogeneous the estimated effects are often economically meaningful and in some cases huge the income level was 11 higher on average and 62 higher in one municipality in 2002 when compared with counterfactual units on the other hand a few of the npf municipalities have received only weak or negligible effects from npf establishment the post estimation comparisons of employment between the npf municipalities and the sc units suggest that the size of the direct labor demand shocks and subsequent indirect employment effects on nontradable service sectors have contributed to the increase in per capita income levels

catastrophic natural disasters and economic growth this paper examines the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies the counterfactual of the cases studied is assessed by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event it is found that only extremely large disasters have a negative effect on output both in the short and long run however this result appears in two events where radical political revolutions followed the natural disasters once these political changes are controlled for even extremely large disasters do not display any significant effect on economic growth it is also found that smaller but still very large natural disasters have no discernible effect on output

comparative advantage learning and sectoral wage determination we develop a model in which a worker s skills determine the worker s current wage and sector the market and the worker are initially uncertain about some of the worker s skills endogenous wage changes and sector mobility occur as labor market participants learn about these unobserved skills we show how the model can be estimated using nonlinear instrumental variables techniques we apply our methodology to study wages and allocation of workers across occupations and industries using individual level panel data from the national longitudinal survey of youth we find that high wage sectors employ high skill workers and offer high returns to workers skills

customer discrimination and employment outcomes for minority workers this paper investigates the effects of customer discrimination on the employment and earnings of minorities particularly blacks data are used from a new survey of employers in four large metropolitan areas in the united states our results show that the racial composition of an establishment s customers has sizable effects on the race of who gets hired particularly in jobs that involve direct contact with customers and in sales or service occupations race of customers also affects wages with employees in establishments that have mostly black customers earning less than those in establishments with mostly white customers

the risk and cost of job loss in canada 1978 2008 we assess the risk and cost of worker displacement in canada over the last three decades we show that neither the risk of job loss nor the short term earnings losses of displaced workers trended upwards during that period however short term earnings losses of workers displaced from manufacturing increased in recent years as a smaller proportion found a post displacement job in that sector in line with stevens 1997 and couch and placzek 2010 we find that high seniority workers and individuals with stable labour market attachment experienced five years after displacement earnings losses that ranged between 10 and 18 le risque et le cout d une perte d emploi au canada 1978 2008 on evalue le risque et le cout d un deplacement de travailleur au canada au cours des trois dernieres decennies on montre que ni le risque d une perte d emploi ni les gains perdus a court terme par les travailleurs deplaces n ont eu une tendance a la hausse au cours de cette periode cependant les pertes de gains a court terme des travailleurs deplaces dans le secteur manufacturier ont augmente au cours des annees recentes alors qu une proportion plus faible de ces deplaces ont retrouve un emploi dans ce secteur en coherence avec les resultats de stevens 1997 et de couch et placzek 2010 on decouvre que les travailleurs avec beaucoup de seniorite et les personnes avec un attachement stable au marche du travail ont enregistre cinq ans apres un deplacement des pertes de gains de l ordre de 10 a 18

work history patterns and the occupational attainment of women one of the main differences between the labour market behaviour of men and women lies in the discontinuity of labour force attachment exhibited by most women over their lifetime largely but not exclusively for the purpose of raising a family these interruptions to their labour market experience constitute an important influence on the labour market position of women and provide a potentially important factor in the explanation of their labour market disadvantate skills are obtained to a considerable extent through labour market experience and may be blunted in periods of absence from the labour force in addition absence from the labour force removes an individual labour market and may thereby reduce the probability of gaining extry to the better jobs on re entry the objectives of this paper are firstly to describe the various work history patterns exhibited by u k women and secondly to quantify the effect of these life cycle factors on the occupational attainment occupational progress and earnings of women the data source is the national training survey nts which provides a unique retrospective longitudinal data set on the work histories of over 50 000 individuals for details see manpower services commission 1976 this abstract was borrowed from another version of this item

the spillover effects of state spending abstract this paper estimates the extent to which state spending is influenced by the spending of neighboring states examining several different metrics of neighborliness in order to better identify the channels for interstate spillovers it improves on previous studies by taking advantage of exogenous shocks to state medical spending to abstract from correlated local conditions and by allowing for spatial autocorrelation focusing on mandated increases in medical spending the analysis shows that each dollar of state spending causes spending in neighboring states to increase by almost 90 cents the most predictive measure of neighborliness is the degree of population mobility between states suggesting that rational concerns about adverse migration may drive the interdependence of state spending policy

budget spillovers and fiscal policy interdependence evidence from the states abstract this paper formalizes and tests the notion that states expenditures depend on the spending of similarly situated states we find that even after allowing for fixed state effects year effects and common random shocks among neighbors a state government s level of per capita expenditure is positively and significantly affected by the expenditure levels of its neighbors ceteris paribus a one dollar increase in a state s neighbors expenditures increases its own expenditure by over 70 cents

racial earnings differentials and performance pay this paper presents an information model in which workers receiving output based pay experience less racial earnings discrimination than those receiving time rates and supervisory evaluations tests using the national longitudinal survey of youth reveal no racial wage differential among male workers paid output based pay while confirming a significant differential among those paid time rates in addition the racial wage differential among those receiving bonus pay usually based on supervisory evaluations tends to be larger than for those not receiving such bonuses while both racial earnings differences and payment methods have generated enormous literatures the two subjects rarely interact this paper argues that the observed racial earnings gap should be narrower among those receiving output based pay such as piece rates and commissions when discriminating in earnings the intensity of racial preferences must be greater when an owner or manager confronts a standardized measure of productivity than when effort is subjectively evaluated and those evaluations are used to set earnings more important use of a standardized measure of productivity makes the practice of discrimination more transparent and this improved information increases the probability of detection the increased probability of detection raises the expected cost of racial discrimination and should be associated with a reduction in its extent our empirical estimates confirm that output based pay is associated with reduced racial earnings discrimination

marital status child rearing and earnings differentials in the graduate labour market differential the importance of family role specialisation for the measurement of the residual earnings differential is examined within a sample selection model of participation and earnings the earnings differential between men and women may be divided into that explained by different characteristics and attributes and that due to residual factors one element of this residual may be discrimination although other factors may be incorporated in the unexplained component the residual also incorporates the effects on earnings associated with the production of home goods see polachek ig75 a b these will occur

local economic development agglomeration economies and the big push 100 years of evidence from the tennessee valley authority we study the long run eects of one of the most ambitious place based economic development policies in u s history the tennessee valley authority using a rich panel dataset of counties we conduct an evaluation of the dynamic eects of the tva on local economies in the seventy years following the program s inception we nd that the tva led to short run gains in agricultural employment that were eventually reversed while impacts on manufacturing employment continued to intensify well after the program s subsidies had lapsed a pattern consistent with the presence of strong agglomeration economies in the manufacturing sector economists have long cautioned that the local gains created by place based policies may be oset by losses elsewhere yielding ambiguous eects on the u s as a whole building on the framework in glaeser and gottlieb 2008 we develop a novel approach to assessing the aggregate consequences of shifting the spatial distribution of manufacturing employment our ndings suggest the aggregate productivity gains associated with relocating manufacturing activity to the tva region were probably minimal

male white black wage gaps 1979 1994 a distributional analysis 1 introductionnumerous studies show that during the 1980s the mean white black wage gap among new entrant 0 10 years of potential experience males expanded 1 juhn murphy and pierce 1991 jmp attribute the mean gap s expansion to a widening of the overall u s wage distribution caused by a host of economy wide race neutral changes that led to labor demand shifts toward better educated and better skilled workers regardless of race because african americans tend to be at lower levels of the overall skill distribution the shifts adversely impacted african american men more than white men leading to an expansion in the mean wage gap to arrive at this conclusion jmp decompose the expansion in the mean new entrant wage gap into four components the first two components measure the wage gap s increase because of a widening in observable racial differences in measured characteristics and their prices for example educational attainment and the returns to education the third component captures the contribution of growing racial discrimination and widening differences in unmeasured skills to the wage gap s expansion this term s contribution is measured by the drop in the mean percentile rank of blacks in the white residual wage distribution the fourth component identifies the role of increases in the prices of unmeasured skills and is measured by the increase in the variance of the white residual wage distribution when applied to the march annual demographic files of the current population survey jmp find that from 1979 to 1987 increases in the price of unmeasured skills explain all of the new entrant mean wage gap s expansion indicating that factors that adversely impacted less skilled workers regardless of race are the primary cause of the wage gap s expansion in related work reardon 1997 uses a national sample of white and african american men from the 1980 and 1990 decennial censuses and shows that the mean racial wage gap s expansion is caused by increased variance in the distribution of residual wages generated by labor demand shifts toward high skilled whites and away from medium skilled whites and high skilled african american men the wage gap expands because high skilled african american men earn wages that are similar to those of whites in the middle and upper third of their wage distribution the labor demand shifts led to a stretching or increased variance in the wage distribution that favored high skilled whites relative to high skilled african americans and medium skilled whites this paper makes several contributions to the literature on racial wage gaps and the technical literature on wage decompositions first i examine whether jmp s 1991 results hold up when the analysis is disaggregated by experience and educational attainment this is an important extension for two reasons bound and freeman 1992 rodgers 1997a and others have found that the racial wage gap among high school graduates and particularly among college graduates expanded significantly after the late 1970s over the same time period the variance of wages within these educational categories increased second it is important to determine the extent to which racial inequality that was generated while a cohort was a new entrant persists as it ages the paper s technical innovation is the development of a distribution or skill specific decomposition that identifies whether the stretching of the white wage distribution uniformly contributes to an expansion in racial inequality at all skill levels or quantiles of the wage distribution or whether the contribution of the wage distribution s stretching is specific to a skill level for example does the increase in the price of unmeasured skills explain a greater portion of the increase in the racial wage gap between high skilled african americans and whites than it does between medium skilled african americans and whites

worker quality and labor market sorting abstract we test the hypothesis that labor market sorting into outcomes normally associated with wage premia e g incentive pay coverage urban dwelling employment in large firms marriage and union coverage is related to a series of non standard worker quality measures

prejudice and wages an empirical assessment of becker s the economics of discrimination we test the predictions from becker s 1957 seminal work on employer prejudice and find that relative black wages a vary negatively with the prejudice of the marginal white in a state b vary negatively with the prejudice in the lower tail of the prejudice distribution but are unaffected by the prejudice of the most prejudiced persons in a state and c vary negatively with the fraction of a state that is black our estimates suggest that one quarter of the racial wage gap is due to prejudice with nontrivial consequences for black lifetime earnings

performance pay and the white black wage gap we show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers this results in the white black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs we show that this remains true even when examining suitable counterfactuals that hold observables constant between whites and blacks we explore reasons behind our finding focusing on the interactions between discrimination unmeasured ability and selection

the influence of wages and house prices on british interregional migration decisions this paper considers the paradox of a consistent net outflow of people from areas of high job creation and wages over the past 20 years and suggests the explanation that different individuals have different motivations for moving the labour force survey indicates that workers moving for job reasons have migrated to areas of low unemployment and high nominal wages however the inflow into such areas has been more than compensated for by an outflow of people moving for non job reasons a logit analysis of destination choice indicates that job movers are attracted to areas with high wages but are not affected by high house prices in such areas in contrast active non job movers are deterred from areas of high house prices regional house price differences do not influence the destination choice of homemakers or the terminally sick but they do influence the destination choice of retirees all groups prefer to travel the least distance when moving

race and employment outcomes evidence from nba coaches we study the impact of management diversity on employment outcomes using data on nba head coaches that includes information on the race of each coach and his supervisor we find that a supervisor is more likely to hire a coach of his own race we also find that black coaches are less likely to be rehired to a second job within three years than their white counterparts and that a head coach s race affects the quality of the opportunities he is offered these findings are stronger for first time coaches than experienced coaches suggesting that observable information on performance mitigates bias jel j0 j4 j7

examining equality between public and private sector wage distributions i introduction institutional political and economic factors all contribute to the determination of public sector wages for example the public sector is almost the only place in many advanced economies where unions continue to have a significant presence and an influential voice in setting wages and conditions of work political factors such as desiring to be a good employer may also influence the public sector wage structure as a good employer governments may offer low skilled workers higher rates of pay than they might get in the private sector on the other hand the public sector may be adverse to paying very skilled workers high rates of pay if the public does not like to see public sector workers earning too much economic factors such as spending and tax receipt limits can also affect the wage structure in the public sector all of these factors could make the public sector labor market be less efficient than that of the private sector from an economic perspective if government workers are paid more than private sector workers ceteris paribus then taxes are being wasted if private sector workers are paid more than government workers governments cannot recruit and retain appropriately skilled and productive workers to make the wage structures comparable many countries use surveys to ascertain the prevailing earnings levels for jobs in the private sector that are similar to public sector jobs however as fogel and lewin 1974 and gregory 1990 point out these survey methods are fraught with biases that may affect comparability of wages indeed there is little empirical evidence that wages between the two sectors are equal bender 1998 and gregory and borland 1999 survey the current literature on public private wage differentials and report that most studies find that central governments pay more on average compared to the private sector even after controlling for differences in the productive characteristics of workers furthermore as elliott et al 1999 find comparability in pay is currently important in the debates over public sector pay reform particularly in europe the institutional and political factors outlined above are waning in importance and economic considerations are seemingly coming to the fore because of perceptions of the overpayment of public sector workers and the desire to cut government wage bills politicians in these countries are devising policies to align average rates of pay by slowing the relative rate of public sector wage growth the policies should be different however if wage distributions are not the same indeed there is some evidence that the distributions differ as found in the double imbalance concept articulated by schager 1993 katz and krueger 1993 and elliott and duffus 1996 this imbalance is characterized by public sector workers at the lower end of the occupational hierarchy receiving the largest wage premia and workers at the upper end earning less than their private sector counterparts if the distributions are incomparable ceteris paribus mandating equal average rates of pay growth will not ensure comparability policies aimed at realigning wage structures at the ends of the distribution should then be followed to promote comparability this article compares public and private sector wage distributions and examines the extent to which focusing exclusively on differences in mean wages obscures the true nature of the wage relativities data from the british social change and economic life initiative sceli are employed to investigate comparability this data set is well suited for a comparability study given the range of personal and job characteristics that control for differences in public and private sector jobs moreover the data were collected in 1986 before substantial reform of public sector pay in the united kingdom reviewed in bender and elliott 1999 this offers a test to see if the reform policies were appropriate to promote wage comparability

why do minority men earn less a study of wage differentials among the highly educated en in several minority groups in the united states have wages that are substantially lower than those of the benchmark majority group non hispanic white men several generations of labor economists have sought to understand the forces that drive these disparities this research program is potentially important for the purpose of determining whether minority wage gaps are likely to be narrowed more effectively by increasing enforcement of antidiscrimination laws or by implementing policies that reduce inequity in educational opportunity existing work shows large racial and ethnic differences in premarket factors especially formal schooling and suggests that these differences play a key role in shaping wage differences one example is trejo 1997 who finds that third and higher generation mexican american men earn 21 less than non hispanic white men approximately three quarters of the earnings gap is found to be attributable to the mexican americans relative youth and to differences in english language proficiency and years of schooling a second example is neal and johnson 1996 who find that black men earn 24 less than do non hispanic white men differences in schooling account for only about one fifth of this gap when the authors condition on performance on a basic verbal and math skills test the armed forces qualification test afqt though the differential between wages of blacks and whites declines to approximately onethird of its unadjusted level 1 trejo s 1997 study is a nice example of the traditional approach to studying race ethnicity wage gaps traditional in the sense that the explanatory variables in the study are conventional objective measures of human capital such as years of schooling and language ability neal and john

demand side changes and the relative economic progress of black men 1940 90 this article uses census data from 1940 to 1990 to examine whether the hypotheses advanced for the absence of economic progress of black men relative to white men during the 1980s are consistent with the long run trends the findings indicate that skill biased technological change explains more than changes in industrial composition both in the long run as well as in the 1980s moreover increased competition from women and immigrants does not explain the recent slowed progress of black men instead the evidence suggests that middle skilled white men may be an important source of increased competition

separate and unequal in the labor market human capital and the jim crow wage gap competing explanations for the long standing gap between black and white earnings attribute different weight to wage discrimination and human capital differences using new data on local school quality we find that human capital played a predominant role in determining 1940 wage and occupational status gaps in the south despite entrenched racial discrimination in civic life and the lack of federal employment protections the resulting wage gap coincides with the higher end of the range of estimates from the post civil rights era we estimate that truly separate but equal schools would have reduced wage inequality by 29 48

u s state and local fiscal policy and economic activity do we know more now early reviews of the academic literature on the economic effects of state and local taxes and expenditures suggested that not enough was known upon which to base policy the reviews called for better data and improvements in empirical methodology this paper reviews studies conducted since the early literature reviews to assess our current state of knowledge the conclusion of the study is that we know more now but our knowledge is unlikely to ever be sufficient to provide universal policy guidance rather we suggest that more research is needed on specific state and local policies for specific circumstances consistent with the general principles that guide place based policy

black white wage inequality in the 1990s a decade of progress mary c daly using current population survey data we find that the gap between the wages of black and white males declined during the 1990s at a rate of about 60 percentage point per year wage convergence was most rapid among workers with less than 10 years of potential experience with declines in the gap averaging 1 40 percentage points per year using standard decomposition methods we find that greater occupational diversity and reductions in unobserved or residual differences are important in explaining this trend general wage inequality tempered the rate of wage convergence between blacks and whites during the 1990s jel j15 j31 i introduction following the passage of the civil rights act of 1964 and other measures aimed at reducing labor market discrimination during the 1960s the differential in average weekly wages between black and white men in the united states narrowed substantially among male workers aged 18 64 the black white wage gap fell from 50 in 1967 to 30 in 1974 or by about 1 per year 1 after 1974 however the proportional difference in black and white wages remained essentially constant at 30 through the end of the 1980s following more than a decade of stasis the black white wage gap once again began to decline during the 1990s narrowing at an average annual rate of about 60 percentage point per year a great deal of past research has focused on why the black white wage gap did not continue to decline following the initial progress made through the mid 1970s see for example bound and freeman 1992 and juhn et al 1991 hereafter jmp the results point to a number of important factors including shifts in industry demand greater occupational crowding relative deterioration of unobservable skills among blacks and rising overall male wage inequality see altonji and blank 1999 for a detailed review of this literature in this article we investigate the role that each of these factors played in the wage convergence observed in the 1990s we begin by documenting the recent progress in black white wage convergence placing the 1990s in the context of the past 30 years following previous researchers we then use standard decomposition techniques to examine the role of individual characteristics the employment structure and overall male wage inequality in reducing the racial gap in earnings during the decade of the 1990s we find that greater occupational diversity and reductions in unobserved or residual differences are important in explaining this trend general wage inequality tempered the rate of wage convergence between blacks and whites during the 1990s ii data we use data from the march current population survey cps for the years 1969 1999 as administered by the u s census bureau for the u s bureau of labor statistics these files provide information on earnings hours and related variables for the calendar year prior to the survey date thus our analyses apply to income years 1968 1998 in the formal decomposition analysis we focus on three periods 1968 1979 1979 1989 and 1989 1998 these years span our sample and generally coincide with three business cycles our sample consists of black and white males ages 18 64 who participated in the labor force at least 39 weeks worked at least 1 week during the year and usually worked full time workers who are enrolled in school are excluded from the analysis throughout the analysis we focus on two groups our full sample and men with less than ten years of potential experience i e min age education 6 age 18 2 our empirical analysis focuses on weekly earnings calculated as the ratio of annual earnings to weeks worked during the year weekly earnings are deflated using the personal consumption expenditure deflator from the national income and product accounts to avoid problems associated with changes in cps top coding procedures over the years our sample excludes individuals in the top and bottom 1 of the weekly earnings distribution

gender piece rates and wages evidence from matched employer employee data why are women disproportionately on piece rates we investigate three possible explanations 1 women are more likely to be on piece rates because they have a shorter expected tenure than men 2 a greater demand for flexibility between work and home attracts women to work place technologies suitable for variable pay based on individual performance 3 women prefer piece rates because they are subject to less wage discrimination when objective performance measures are available the weight of our empirical evidence supports the third hypothesis the unexplained gender wage gap is substantially smaller in the piece rate regime than in the time wage regime copyright 2004 oxford university press

optimal contracting with subjective evaluation this paper extends the standard principal agent model to allow for subjective evaluation the optimal contract results in more compressed pay relative to the case with verifiable performance measures moreover discrimination against an individual implies lower pay and performance suggesting that the extent of discrimination as measured after controlling for performance may underestimate the level of true discrimination finally the optimal contract entails the use of bonus pay rather than the threat of dismissal hence neither efficiency wages nor the right to dismiss an employee are necessary ingredients for an optimal incentive contract

black white earnings ratios since the civil rights act of 1964 the importance of labor market dropouts published median earnings of wage and salary workers by race and sex are based on distributions that exclude those without earnings and those not employed as wage and salary workers at the time of the survey it has been argued that the changing importance of these exclusions rather than any improvement in the distribution of offered wages for blacks accounts for the apparent increase in black white relative median earnings this paper presents a new method for correcting the published medians for such censoring the apparent improvement in relative earnings is reduced but not eliminated by the correction

changes in the distribution of male and female wages accounting for employment composition using bounds this paper examines changes in the distribution of wages using bounds to allow for the impact of nonrandom selection into work we show that worst case bounds can be informative however because employment rates in the united kingdom are often low they are not informative about changes in educational or gender wage differentials thus we explore ways to tighten these bounds using restrictions motivated from economic theory with these assumptions we find convincing evidence of an increase in inequality within education groups changes in educational differentials and increases in the relative wages of women

customer discrimination and affirmative action i introduction beginning with the work of becker 1957 economists have been concerned with the relationship between competitive market forces and the persistence of labor market discrimination 1 a major insight of becker and the literature that followed is that competition could tend to eliminate discriminatory pay differentials if competitive forces do eliminate discrimination then empirical findings of persistent discrimination are either a result of faulty testing or market imperfections economic analysis of the link between competition and discrimination depends on the origins of prejudice becker identified at least three possible sources employers co workers and consumers 2 in each of these instances the group against which prejudice is directed e g women or minorities which will be termed minorities in this paper may be able to escape discrimination first minorities can work for nondiscriminatory employers if there are any moreover stiglitz 1973 shows that with constant returns to scale such employers will take over markets from the discriminators eliminating any pay gap based on prejudice 3 second if there is co worker prejudice then minorities can work in segregated firms which under constant returns to scale may have a cost advantage over integrated or all majority firms again discrimination will be driven away 4 third minorities can theoretically escape customer discrimination by specializing in the production of goods for which there is no contact between producers and consumers a case discussed by cain 1986 while competitive forces may in some cases erode discriminatory wage differentials the rate of decline of race and sex wage differentials has evidently not been rapid enough in the eyes of policymakers u s anti discrimination policy has been guided by two major vehicles title vii of the 1964 civil rights act and the office of federal contract compliance programs ofccp 5 the equal employment opportunity commission eeoc was created to enforce title vii and is empowered to aid plaintiffs or bring suit itself against employers the commission monitors the employment practices of federal contractors not only are contractors barred from discrimination against protected groups these firms are also required to take affirmative action not to discriminate the purpose of this paper is twofold first it demonstrates that in a general equilibrium framework the case of customer discrimination is theoretically distinct from employer or co worker prejudice in particular while constant returns to scale and the existence of nondiscriminatory firms can eliminate the latter two forms of discrimination customer discrimination may persist even under such conditions the persistence of discriminatory wage differentials is shown to depend on consumer demand technology and the relative size of the minority labor force 6 second the general equilibrium framework is then used to evaluate the impact of government anti discrimination policy where customers are the source of discrimination it is shown that if the government requires equal pay and proportional representation for minorities then the resulting allocation of resources will under particular assumptions be the same as if customers did not discriminate i then contrast these theoretical results with the predicted general equilibrium impact of affirmative action when there is employer or co worker prejudice among previous general equilibrium models of affirmative action welch 1976 assumed no discrimination while freeman 1978 did not specify the source of discrimination it is shown here that the source of prejudice markedly affects one s conclusions about affirmative action further even in some cases where segregation has eliminated discriminatory wage differentials the introduction of affirmative action has allocative effects finally evidence from studies evaluating the impact of affirmative action is used to distinguish among the various equilibrium models

can fiscal rules constrain the size of government an analysis of the crown jewel of tax and expenditure limitations abstract fiscal rules attempt to alter budget outcomes by constraining policy makers they have been one of the primary responses to the recent string of fiscal crises around the globe we ask if these rules succeed in altering fiscal outcomes by examining what is arguably the most stringent set of fiscal rules in the u s colorado s taxpayer bill of rights tabor as tabor attempts to constrain both taxes and expenditures we develop a novel approach of estimating treatment effects for multiple outcomes simultaneously using the synthetic control methodology of abadie et al 2010 although there will always be a degree of uncertainty over external validity when a policy is enacted in only a single state our results provide no evidence that tabor affected the level of taxes or spending in colorado and are precise enough to rule out large negative effects thus no support is found for the contention that fiscal rules alter budget outcomes instead tabor appears to have been partly evaded by policy makers and voters despite its stringency and partly nothing more than a ratification of the state s preference over the size of its public sector

performance pay and wage inequality an increasing fraction of jobs in the u s labor market explicitly pay workers for their performance using bonus pay commissions or piece rate contracts using data from the panel study of income dynamics we show that compensation in performance pay jobs is more closely tied to both observed and unobserved productive characteristics of workers than compensation in non performance pay jobs we also find that the return to these productive characteristics increased faster over time in performance pay than in non performance pay jobs we show that this finding is consistent with the view that underlying changes in returns to skill due for instance to technological change induce more firms to offer performance pay contracts and result in more wage inequality among workers who are paid for performance thus performance pay provides a channel through which underlying changes in returns to skill get translated into higher wage inequality we conclude that this channel accounts for 21 of the growth in the variance of male wages between the late 1970s and the early 1990s and for most of the increase in wage inequality above the eightieth percentile over the same period

racial differences in access to high paying jobs and the wage gap between black and white women the authors examine the role that racial differences in access to high paying occupations played in determining the racial wage gap in the 1980s analyzing data on black and white women aged 34 44 from the national longitudinal surveys for 1968 88 they estimate the effects of human capital characteristics and discrimination on segregation into high and low wage jobs by race they find that differences in workers measured characteristics explain little of either the observed occupational segregation by race or the racial wage gap in 1988 further analysis suggests that several changes in the wage structure for women during the 1980s notably a widening of occupational wage differentials and an increase in the returns to education abetted direct discrimination in enlarging the racial wage gap among women

tax and expenditure limitations and the fiscal relationships between state and local governments this paper uses comprehensive data on state and local tax and spending limitations for forty nine states between 1976 and 1990 to estimate the effects of these limits on the fiscal relationships between state and local government results indicate that tax and spending limits on local governments are only partially effective in reducing revenues because political agents bypass limitations by transferring revenue reliance to unconstrained revenue sources or because unconstrained levels of government take on additional revenue responsibilities in particular the empirical analysis demonstrates that binding local government fiscal constraints are associated with reductions in local revenues and increases in state aid to local governments in contrast state government limitations are related to reductions in both state and local own source revenues

racial differences in residential and job mobility evidence concerning the spatial mismatch hypothesis abstract the spatial mismatch hypothesis asserts that job decentralization adversely impacts the labor market outcomes of african americans this paper tests whether race and job access have an independent effect on the probability of a joint residential move and job change no evidence is found to indicate that race directly influences the joint probability the paper finds however that poor job access has an independent negative effect on the probability of a joint residential move and job change because african american residences are heavily concentrated in american central cities these results suggest that african american workers may not be able to fully adjust as new jobs are created in the suburbs

downward occupational mobility and part time women workers 1988 downward occupational mobility and part time women workers applied economics vol 20 no 4 pp 485 495

balanced budget rules and fiscal outcomes evidence from historical constitutions this paper studies the long run fiscal consequences of balanced budget rules bbr that are enshrined in a country s constitution using historical data dating back to the 19th century and applying a difference in difference approach we find that the introduction of a constitutional bbr reduces government debt to gdp and expenditure to gdp ratios on average by around 11 and 3 percentage points respectively we do not find evidence that bbrs affect tax revenues our analysis indicates that such rules reduce the probability of experiencing a debt crisis and that the effective enforcement of bbrs can be conditional on the quality of democratic institutions in addition we implement an instrumental variable approach by instrumenting the probability of having budget rules on de jure constraints on changing the constitution this and other tests suggest that the relations we find are largely causal going from bbrs to fiscal outcomes