Grant Category

The Labor Market

How does the labor market affect equitable growth? How does inequality in turn affect the labor market?

The labor market is one of the most important institutions determining economic growth and its distribution, as labor income is more than two-thirds of national income. Skill levels and the efficient matching of skills to jobs are key for economic growth. Yet the labor market is not a perfectly competitive market, but rather one that is regulated by a wide array of institutions that affect labor income and its distribution.

We need a better understanding of the two-way link between equitable growth and the labor market. How does the labor market affect equitable growth? How does inequality, in turn, affect the labor market?

  • The effect of the labor market on equitable growth
  • The effects of inequality on the labor market
  • The effects of productivity on the labor market

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The redistributional consequences of multiple minimum wages

Grant Year: 2020

Grant Amount: $15,000

Grant Type: doctoral

This project will analyze how the labor market absorbs an increase in the minimum wage. Utilizing the case study of Costa Rica’s highly binding and relatively more comprehensive minimum wage policy that includes multiple wage floors based on workers’ skill levels, the author will use employer-employee microdata and administrative data to explain how minimum wages shape the earnings distribution and the labor market equilibrium.

Where does new work come from?

Grant Year: 2020

Grant Amount: $76,000

Grant Type: academic

This project will construct a database of new work from 1900 to 2020 by compiling a list of job titles from the U.S. Census Bureau’s Alphabetical Index of Occupations. Previous research on “new work” measures the introduction of new job titles beginning in 1964 and documents that new work is performed by high-skilled workers and in cities. Preliminary work in this project indicates that at least some of these previously documented patterns may not have been true in the middle of the 20th century. The authors’ aim is: to chart the evolution of new work over 12 decades; to assess the potentially varying importance of new work in job creation and skill demands during different epochs in this period; and to test a set of economic hypotheses about where and when new work arises. The project has the potential to provide insight into why the locus of job creation, measured in terms of occupations, industries, skill demands, and wage levels has varied across decades, and the role of new technologies in the creation of new work. In addition to compiling job titles from U.S. Census data, the researchers will link the text of patents to new job titles to explore the impact of new technologies on jobs, and will link to the Consumer Expenditure Survey to measure demand shifts for the relatively recent period (from 1980 onward) to test the hypothesis that demand shifts may lead to new work.

Domestic outsourcing in the United States

Grant Year: 2020

Grant Amount: $70,000

Grant Type: academic

Recent research finds that most, if not all, of the growth in earnings inequality in the United States may be explained by the growth in inequality across firms or establishments. This finding is consistent with research showing that workers in outsourced establishments—such as call centers, janitorial service companies, or security services—receive lower pay and benefits than those workers doing the same jobs but who are employed by lead or primary firms. But our knowledge of the extent and impact of outsourcing on a broader set of workers is limited, in large part because of data constraints. This study will provide evidence based on rigorous, quantitative analysis of the extent to which outsourcing has contributed to inequality in the United States. The study will rely on Longitudinal Employer-Household Dynamics data linked with American Community Suvey data and will use the methodology established in a previous paper based on German data. A key shortcoming of the LEHD data is that it does not have information on occupation. By linking to ACS data, the authors will be able to observe occupation for a subset of those in the LEHD dataset and to assess the effects of outsourcing on outcomes besides earnings—most critically, health insurance.

Workers’ bargaining power in the United States over time

Grant Year: 2020

Grant Amount: $15,000

Grant Type: doctoral

A prominent feature of the post-Great Recession U.S. economy is the lack of adequate wage growth despite a tight labor market. One explanation is that a decline in workers’ bargaining power put downward pressure on wage growth. The declining labor share of income is popularly cited as one reason behind weakened worker bargaining power, and a burgeoning field of research ascribes much of this decline to the increase in monopsony power in the United States. This researcher seeks to estimate workers’ bargaining power over time in the United States. It will make some important extensions on the job search model, and then move onto a model of wage determination that looks at how labor market dynamics, such as vacancies and unemployment, impact wage determination via worker bargaining power.

Benefit risk, claim timing, and Unemployment Insurance benefit generosity in California

Grant Year: 2020

Grant Amount: $15,000

Grant Type: doctoral

Many social insurance programs replace some percentage of prior earnings while a claimant is away from work during a shock, such as unemployment, disability, or the birth of a child. Implementation relies on “base periods” from which prior earnings are measured in order to establish the wage replacement rate. This project will explore the base period and its implications for a large subset of primarily low-income program recipients. Focusing on California’s Unemployment Insurance program and combining three administrative datasets, this researcher seeks to explain how earnings volatility, among other factors, can impact the value of Unemployment Insurance and claimant experience with the program. Other research shows that low-income workers experience significant volatility in earnings, partially due to a lack of control over how many hours of work they are given. Understanding how income volatility in the base period impacts subsequent volatility/income decline while receiving benefits is an important policy question.

Understanding collective labor action in platform businesses

Grant Year: 2020

Grant Amount: $48,300

Grant Type: academic

This project will use surveys to assess the role customers play as a source of power for U.S. workers who strike or protest working conditions, as well as the effects of different aspects of job quality on the likelihood of workers to leave a current job. The coronavirus pandemic is providing a laboratory for examining how the salience of these issues affect workers’ views of their jobs and their willingness to work under conditions of varying risk. The first survey will use experiments embedded in a Facebook-based convenience sample to target food workers broadly, with a focus on W-2 employees at meat processing facilities, grocery stores, restaurants, and platform-based food delivery workers, including but not limited to Instacart. The second will survey a nationally representative sample of the full U.S. population in order to assess changing food consumption habits, as well as perceptions of food workers and collective action during the pandemic. This timely research promises to bring worker views into the public discussion of quality jobs, including welfare and safety, and will shed light on how workers and customers are intertwined in workplace issues of the day.

Experts

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Jon Steinsson

University of California, Berkeley

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Sylvia Allegretto

University of California, Berkeley

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JW Mason

John Jay College of Criminal Justice

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Jesse Rothstein

University of California, Berkeley

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Atif Mian

Princeton University

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