Papers Containing Tag(s): 'Cornell Institute for Social and Economic Research'
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Viewing papers 31 through 37 of 37
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Working PaperThe interactions of workers and firms in the low-wage labor market
August 2002
Working Paper Number:
tp-2002-12
This paper presents an analysis of workers who persistently have low earnings in the labor market over a period of three or more years. Some of these workers manage to escape from this low-earning status over subsequent years, while many do not. Using data from the Longitudinal Employer Household Dynamics (LEHD) project at the U.S. Census Bureau, we analyze the characteristics of persons and especially of their firms and jobs that enable some to improve their earnings status over time.View Full Paper PDF
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Working PaperAbandoning the Sinking Ship: The Composition of Worker Flows Prior to Displacement
August 2002
Working Paper Number:
tp-2002-11
declines experienced by workers several years before displacement occurs. Little attention, however, has been paid to other changes in compensation and employment in firms prior to the actual displacement event. This paper examines changes in the composition of job and worker flows before displacement, and compares the "quality" distribution of workers leaving distressed firms to that of all movers in general. More specifically, we exploit a unique dataset that contains observations on all workers over an extended period of time in a number of US states, combined with survey data, to decompose different jobflow statistics according to skill group and number of periods before displacement. Furthermore, we use quantile regression techniques to analyze changes in the skill profile of workers leaving distressed firms. Throughout the paper, our measure for worker skill is derived from person fixed effects estimated using the wage regression techniques pioneered by Abowd, Kramarz, and Margolis (1999) in conjunction with the standard specification for displaced worker studies (Jacobson, LaLonde, and Sullivan 1993). We find that there are significant changes to all measures of job and worker flows prior to displacement. In particular, churning rates increase for all skill groups, but retention rates drop for high-skilled workers. The quantile regressions reveal a right-shift in the distribution of worker quality at the time of displacement as compared to average firm exit flows. In the periods prior to displacement, the patterns are consistent with both discouraged high-skilled workers leaving the firm, and management actions to layoff low-skilled workers.View Full Paper PDF
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Working PaperThe Creation of the Employment Dynamics Estimates
July 2002
Working Paper Number:
tp-2002-13
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Working PaperIs it Who You Are, Where You Work, or With Whom You Work? Reassessing the Relationship Between Skill Segregation and Wage Inequality
June 2002
Working Paper Number:
tp-2002-10
In a recent paper, Kremer & Maskin (QJE, forthcoming) develop an assignment model in which increases in the dispersion and mean of the skill distribution can lead simultaneously to increases in wage inequality and skill segregation. They then present evidence that, concurrent with rising wage inequality, wage segregation increased for production workers in the United States between 1975 and 1986. My paper argues that relying on wages as a proxy for skill may be problematic. Using a newly developed longitudinal dataset linking virtually the entire universe of workers in the state of Illinois to their employers, I decompose wages into components due, not only to person and firm heterogeneity, but also to the characteristics of their co-workers. Such "co-worker effects" capture the impact of a weighted sum of the characteristics of all workers in a firm on each individual employee's wage. While rising wage segregation can result from greater skill segregation, it may also be due to changes in the variance of co-worker effects in the economy, or to changes in the covariance between the person, firm, and co-worker components of wages. Due to the limited availability of demographic information on workers, I rely on the person specific component of wages to proxy for co-worker "skills." Because these person effects are unknown ex ante, I implement an iterative estimation approach where they are first obtained from a preliminary regression that excludes any role for co-workers. Because virtually all person and firm effects are identified, the approach yields consistent estimates of the co-worker parameters. My estimates imply that a one standard deviation increase in both a firm's average person effect and experience level is associated, on average, with wage increases of 3% to 5%. Firms that increase the wage premia they pay workers appear to do so in conjunction with upgrading worker quality. Interestingly, the average effect masks considerable variation in the relative importance of co-workers across industries. After allowing the co-worker parameters to vary across 2 digit industries, I find that industry average co-worker effects explain 26% of observed inter-industry wage differentials. Finally, I decompose the overall distribution of wages into components due to persons, firms, and coworkers. While co-worker effects do indeed serve to exacerbate wage inequality, the tendency for high and low skilled workers to sort non-randomly into firms plays a considerably more prominent role.View Full Paper PDF
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Working PaperThe Measurement of Human Capital in the U.S. Economy
April 2002
Working Paper Number:
tp-2002-09
We develop a new approach to measuring human capital that permits the distinction of both observable and unobservable dimensions of skill by associating human capital with the portable part of an individual's wage rate. Using new large-scale, integrated employer-employee data containing information on 68 million individuals and 3.6 million firms, we explain a very large proportion (84%) of the total variation in wages rates and attribute substantial variation to both individual and employer heterogeneity. While the wage distribution remained largely unchanged between 1992-1997, we document a pronounced right shift in the overall distribution of human capital. Most workers entering our sample, while less experienced, were otherwise more highly skilled, a difference which can be attributed almost exclusively to unobservables. Nevertheless, compared to exiters and continuers, entrants exhibited a greater tendency to match to firms paying below average internal wages. Firms reduced employment shares of low skilled workers and increased employment shares of high skilled workers in virtually every industry. Our results strongly suggest that the distribution of human capital will continue to shift to the right, implying a continuing up-skilling of the employed labor force.View Full Paper PDF
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Working PaperChanging the Boundaries of the Firm: Changes in the Clustering of Human Capital
January 2002
Working Paper Number:
tp-2002-02
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Working PaperWithin and Between Firm Changes in Human Capital, Technology, and Productivity Preliminary and incomplete
December 2001
Working Paper Number:
tp-2001-03
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