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Nonprofit Wages: Theory and Evidence

Barry T. Hirsch, David A. Macpherson, and Anne E. Preston
Book Chapter Handbook of Research on Nonprofit Economics and Management, Edward Elgar, 2nd edition (2017)

Abstract

The nonprofit sector’s share of wage and salary employment in the U.S. has increased over time, from about 5½ percent in the mid-1990s to 7 percent in 2015. This paper surveys the literature and presents new evidence on the employment and earnings of workers in the nonprofit sector since 1994. As compared to the private for-profit sector, nonprofits have a more educated and older workforce, with employment concentrated in health, education, and service occupations and industries. Standard wage level analysis indicates lower wages for men employed in nonprofits compared to male for-profit workers with similar measured attributes. No such penalty is found for women. Based on panel estimates of wage changes, we find no substantive wage penalties for either women or men moving between jobs in and outside the nonprofit sector. We conclude that wages in the nonprofit and for-profit sectors, on average, differ little for similar workers and jobs.

Economics: Private and Public Choice

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, and David A. Macpherson
Book Cengage | 2017| ISBN-13: 978-1-305-50672-5
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Overview

Prepare students to apply economic concepts to the world around them as Economics: Private and Public Choice, 16e reflects current economic conditions. This readable book integrates public choice analysis and explains the operation of markets and the political process as well as market failure and government failure. The book emphasizes why it is vital to understand both the market and political processes since approximately 40 percent of national income is allocated through the political process. Up-to-date coverage presents major current macroeconomic models and stresses the difficulties models face in explaining recent economic data. Students analyze the Great Recession of 2008-2009. This book dispels common economic myths and uses the "invisible hand" metaphor to explain economic theory. This edition includes Aplia™ online with revised questions, accessibility on mobile devices, improved graphing, and a new interactive eReader with videos and graphing tutorials.

Co-author on 10th to 15th editions as well.

Contemporary Labor Economics

Campbell R. McConnell, Stanley L. Brue, and David A. Macpherson
Book McGraw-Hill | 2017| ISBN-13: 978-1-259-29060-2
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Overview

Contemporary Labor Economics 11e presents labor economics as an applied field of micro and macro theory, no longer an area tangential to the core of analytical economics, but rather a critical component of that core. In the Eleventh edition, the authors deliver new and updated discussions of public policy issues and coverage of the current economic crisis, while still integrating traditional topics such as labor law, structure of unions, and collective bargaining.

Co-author on 5th to 10th editions as well.

The Affordable Care Act and the Growth of Involuntary Employment

William E. Even and David A. Macpherson
Working Papers December 2016, https://ssrn.com/abstract=2653995

Abstract

This study tests whether the employer mandate under the Affordable Care Act (ACA) increased involuntary part-time (IPT) employment. Using data from the Current Population Survey between 1994 and 2015, we find that IPT employment in 2015 was higher than predicted based on economic conditions and the composition of jobs and workers in the labor market. More importantly, using difference-in-difference methods, we find that the increase in the probability of IPT employment since passage of the ACA has been greatest in the occupations with a larger fraction of workers affected by the mandate. Our estimates suggest that up to 700,000 additional workers without a college degree between the ages of 19 and 64 are in IPT employment as a result of the ACA employer mandate.

Union Membership and Earnings Data Book: Compilations from the Current Population Survey (2016)

Barry T. Hirsch and David A. Macpherson
BookBloomberg/BNA | 2016| ISBN-13: 978-1-63359-119-6

Overview

A revealing and detailed resource for researchers, labor unions, consultants, government agencies, and policy analysts. Compiled from the Census Bureau's monthly household survey, the Data Book includes easy-to-read tables, current and historical figures for union membership, as well as earnings for union and nonunion workers. This compilation–not available elsewhere–brings a wide assortment of data into convenient tables. Information from the data book is regularly included in the Census Bureau's Statistical Abstract of the United States.

Co-author on 1994 to 2015 editions as well.

Lives of the Lauretes, 6th Edition

Roger W. Spencer and David A. Macpherson
Book MIT Press | 2015| ISBN-13: 978-0-26202-796-0
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Overview

Lives of the Laureates offers readers an informal history of modern economic thought as told through autobiographical essays by twenty-three Nobel Prize laureates in Economics. The essays not only provide unique insights into major economic ideas of our time but also shed light on the processes of intellectual discovery and creativity. The accounts are accessible and engaging, achieving clarity without sacrificing inherently difficult content.

This sixth edition adds four recent Nobelists to its pages: Eric Maskin, who illustrates his explanation of mechanism design with an example involving a mother, a cake, and two children; Joseph Stiglitz, who recounts his field’s ideological wars linked to policy disputes; Paul Krugman, who describes the insights he gained from studying the model of the Capitol Hill Babysitting Coop (and the recession it suffered when more people wanted to accumulate babysitting coupons than redeem them); and Peter Diamond, who maps his development from student to teacher to policy analyst.

What Do Unions Do to Pension Performance?

William E. Even and David A. Macpherson
Journal PaperEconomic Inquiry, Volume 52, Issue 3, July 2014, Pages 1173-1189

Abstract

Unions can have either positive or negative effects on risk-adjusted returns in pension plans. On the positive side, a union can improve monitoring of pension advisors and asset managers. On the negative side, the union may sacrifice returns by making investments that promote union goals. This paper discusses how the structure of the pension plan affects the union's ability and willingness to sacrifice returns to promote union goals. Using panel data on over 38,000 pension plans drawn from IRS Form 5500 filings between 1988 and 2008, we find the lowest performing plans are unionized multi-employer plans. Among defined contribution plans, the underperformance of multi-employer union plans disappears when the pension is controlled by individual participants.

Deferred Compensation vs. Efficiency Wages: An Experimental Test of Effort Provision and Self-Selection

David A. Macpherson, Kislaya Prasad, and Timothy C. Salmon
Journal PaperJournal of Economic Behavior and Organization, Volume 102, June 2014, Pages 90-107

Abstract

We compare the ability of two common compensation structures, efficiency wages (EW) and deferred compensation (DC), at inducing effort from workers. We test predictions on effort provision and elicit preferences between the two wage structures. The theoretical predictions on effort are generally well supported, although we find over-provision of effort with EW. In consequence, although the theoretical prediction that DC is more cost-effective is supported, the difference is small. We also find a marked preference for EW that cannot be explained by risk aversion. The two effects combine to largely dissipate any advantage that DC may have in inducing effort.

The Effect of the Tipped Minimum Wage on Employees in the U.S. Restaurant Industry

William E. Even and David A. Macpherson
Journal PaperSouthern Economic Journal, Volume 80, Issue 3, January 2014, Pages 633-655

Abstract

According to federal law in 2013, employers can take a credit of up to $5.13 for tips received by workers in satisfying the minimum wage requirement of $7.25. This study uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full services restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.

Computing Lost Profits in Business Interruption Litigation: A General Model

Stanley P. Stephenson, David A. Macpherson, and Gauri Prakash-Canjels
Journal PaperJournal of Business Valuation and Economic Loss Analysis, Volume 7, Issue 1, May 2012, Pages 1-16

Abstract

This paper focuses on business interruption litigation and how to compute lost profits as a remedy. The main contribution of the paper is development of a general model of economic damages which assesses lost profits by measuring the incremental changes in revenue, variable costs, and fixed costs. Prior treatments can be understood as special cases to this general model. Several sources of economic damages can now be considered due to business interruption, including changes in prices, quantity sold, variable cost structures, fixed costs, and extraordinary expenses. We also offer case examples using the proposed framework and provide practitioners with suggestions for damages estimation.

Is Bigger Still Better?: The Decline of the Wage Premium at Large Firms

William E. Even and David A. Macpherson
Journal PaperSouthern Economic Journal, Volume 7, Issue 1, April 2012, Pages 1-16

Abstract

This study shows that the wage premium paid by large firms fell over the past 20 years and that this decline in this size premium is most pronounced among the least educated workers. Empirical evidence supports several explanations for the shrinking size premium. First, there has been a convergence in the returns to worker characteristics at large and small firms over time. Second, small and large firms are hiring more similar workers. Particularly important has been the declining share of workers at large manufacturing firms and the rising share of workers at large retail firms. Also, the greater decline of unionism at large firms has contributed significantly to the decline in the size premium.

Growth of Participant Direction in Defined Contribution Plans

William E. Even and David A. Macpherson
Journal PaperIndustrial Relations, Volume 49, Issue 2, April 2010, Pages 190-206

Abstract

Using data from IRS Form 5500, this study examines the causes and consequences of the shift toward participant direction of investments in defined contribution plans. The analysis reveals that collective bargaining and pension investments in employer stock reduce the chance of a switch to participant direction, whereas below average returns increases the chance. Also, a switch to participant direction increases employee contributions to the pension and reduces the share of assets invested in employer securities.

Managing Risk Caused by Pension Investments in Company Stock

William E. Even and David A. Macpherson
Journal PaperNational Tax Journal, Volume 62, Issue 3, September 2009, Pages 439-453

Abstract

This paper uses simulation methods to determine the optimal mix of assets in a pension plan that has half of its assets in company stock. The optimal share is shown to vary with workers’ risk aversion, non pension wealth, and the financial characteristics of the underlying stock. Relative to a strategy that blends company stock with all bonds, there are substantial efficiency gains from optimizing the mix of stocks and bonds—particularly for workers with lower levels of risk aversion and substantial non pension wealth holdings. The gains from optimizing also differ substantially depending upon the company stock’s mix of systematic and idiosyncratic risk.

Pension Investments in Employer Stock

William E. Even and David A. Macpherson
Journal PaperJournal of Pension Economics and Finance, Volume 7, Issue 1, March 2008, Pages 67-93

Abstract

This study examines the consequences of a pension fund investing in the stock of the sponsoring firm. Using a merger of data on pension asset holdings from IRS Form 5500 filings and financial data on the company's stock from CRSP, two broad questions are addressed: first, what factors influence the extent of a pension fund's investments in the employer's stock? Second, when a pension invests in the employer's stock, how much is lost as a result of poor diversification? The empirical results suggest that investments in employer stock are responsive to non-diversification costs, tax consequences, and the employee's ability to absorb risk. There is also evidence that employers and employees weight these factors differentially in their decision of how much employer stock to include in the pension. Using actual return data on pension plans, we also find that concentrated investments in employer stock substantially reduce risk-adjusted return performance. However, modest holdings of employer stock have negligible effects on pension performance.

Defined Contribution Plans and the Distribution of Pension Wealth

William E. Even and David A. Macpherson
Journal PaperIndustrial Relations, Volume 46, Issue 3, July 2007, Pages 551-581

Abstract

Over the past 20 years, the defined benefit (DB) plan has been replaced by the defined contribution (DC) plan as the most popular form of pension plan. This study examines the likely consequences of this transformation for both the level and distribution of future pension wealth using a sample of DB and DC plans from the Survey of Consumer Finances. The results reveal that the shift from DB to DC plans is likely to simultaneously increase the level and inequality of pension wealth at retirement. The evidence also suggests that the shift to DC plans may result in less pension wealth at retirement for low-income workers, women, and minorities.

Lost Profits Damages to New Businesses: Adjusting for Survival

David A. Macpherson and Stanley P. Stephenson
Journal PaperJournal of Business Valuation and Economic Loss Analysis, Volume 1, Issue 1, October 2006, Pages 1-12

Abstract

Survival risk of new businesses is a challenging issue to incorporate into lost profits analyses used in litigation, an issue some financial experts and courts ignore rather than consider explicitly. This paper considers several ways to make qualitative and quantitative adjustments for the survival rates of new businesses. The paper concludes firm-specific modeling of survival rates is the most appropriate way to weight future economic returns because it offers the best alternative in terms of fitting the analysis to the facts of the case and doing so in a credible and clear manner.

The Effects of Employer Matching in 401(k) Plans

William E. Even and David A. Macpherson
Journal PaperIndustrial Relations, Volume 44, Issue 3, July 2005, Pages 525-549

Abstract

This paper uses data from the April 1993 pension supplements to the Current Population Survey (CPS) to investigate the impact of employer matching and employee tenure on participation levels in 401(k) plans. While earlier studies examine similar issues, this study makes several advances. First, consistent with the theory that employers may use matching contributions to satisfy nondiscrimination rules, the study shows that correcting for the endogeneity of employer matching substantially increases the estimated effect of matching on participation levels. Second, the study provides evidence that the large positive association between employee tenure and 401(k) participation is because “stayers” tend to be “savers.”

When Will the Gender Gap in Retirement Income Narrow?

William E. Even and David A. Macpherson
Journal PaperSouthern Economic Journal, Volume 71, Issue 1, July 2004, Pages 182-200

Abstract

Among recent retirees, women receive substantially less retirement income from Social Security and private pensions than men. Increases in women’s labor market attachment and earnings relative to men over the past 50 years provide some optimism for an improvement in female retirement income, particularly for married women. This study shows that women’s income from Social Security and private pensions has improved only slightly relative to men over the past 25 years. Using data on people approaching retirement age over the next 20 years, prospects for future improvement are investigated. One of the main conclusions is that pension income among women (particularly married women) will rise sharply relative to men’s over the next few decades, but a substantial gap could remain even if women close the gap in experience and salaries.”

Company Stock in Pension Funds

William E. Even and David A. Macpherson
Journal PaperNational Tax Journal, Volume 57, Issue 2, June 2004, Pages 299-313

Abstract

This study examines several issues surrounding the tendency for some pension funds to invest in their own company's stock. After reviewing the existing literature describing the benefits and costs of investing in company stock, the legislative environment surrounding company stock holdings is reviewed. Using data from Internal Revenue Service Form 5500 filings on the pension fund holdings of over 300,000 defined-contribution pension plans in the 1990s, we show that about one out of ten defined-contribution plans invest in their own stock, but about one-third of workers in defined contribution plans have some company stock in their pension plan. Pension funds are shown to be less likely to invest in company stocks that lead to higher risk that financial markets do not reward. We also find that pensions that hold a larger share of assets in company stock earn a higher average return and a higher variance of returns.

Wages, Sorting on Skill, and the Racial Composition of Jobs

Barry T. Hirsch and David A. Macpherson
Journal PaperJournal of Labor Economics, Volume 22, Issue 1, January 2004, Pages 189-210

Abstract

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, the magnitude of the correlation falls sharply after controlling for occupational skills. Longitudinal estimates accounting for worker heterogeneity indicate little if any wage change associated with changes in racial composition. Results support a “quality sorting” explanation, with racial density serving as an index of unmeasured skills. Although past discrimination helps determine the present pattern of job sorting, current discrimination cannot explain the relationship between wages and racial density. Current discrimination reflected in racial wage gaps occurs within occupations or across occupations in a manner uncorrelated with racial composition.

Measuring Union and Nonunion Wage Growth: Puzzles in Search of Solutions

Barry T. Hirsch, David A. Macpherson, and Edward J. Schumacher
Book ChapterThe Changing Role of Unions: New Forms of Representation, Routledge, 2004

Abstract

This paper presents conflicting evidence on trends in private sector union and nonunion wages. The BLS quarterly Employment Cost Index (ECI), constructed from establishment surveys, uses fixed weights applied to wage changes among matched job quotes. The ECI shows a substantial decrease in wage growth for union relative to nonunion workers. The annual Employer Costs for Employee Compensation (ECEC), drawn from the same survey data as the ECI, provides wage level estimates constructed from the full sample of job quotes using current sector weights. Surprisingly, the ECEC shows no trend in relative union-nonunion wages. Household evidence from the Current Population Survey (CPS) can potentially reconcile the conflicting ECI/ECEC evidence, but it is first necessary to account for Census earnings imputation procedures that bias the level and trend in the CPS union gap. CPS wage data absent controls, which should provide results similar to that from the ECEC, instead displays a steep decline in relative union wages, similar to that seen in the ECI. Regression estimates using the CPS, similar in spirit to the ECI, indicate a union premium that declines modestly over time. Union and nonunion wage growth is next calculated from the CPS using methods roughly consistent with the ECI and ECEC. These results shed rather dim light on the sources of ECI/ECEC differences. The contribution of the paper is its unearthing of puzzling and apparently contradictory evidence on union and nonunion wage trends (as well as on economy-wide wage growth). Although our analysis helps account for specific elements of this puzzle, a comprehensive solution remains elusive. We conclude that there has been closing in the union-nonunion wage gap since the mid-1980s, but the magnitude of the closing is anything but clear.

Racial and Ethnic Differences in Pension Wealth

William E. Even and David A. Macpherson
Journal PaperResearch in Labor Economics, Volume 22, 2003, Pages 202-226

Abstract

It is well established that Black and Hispanic workers accumulate leszs wealth for retirement than white workers. This study provides evidence on whether racial and ethnic differences in private pension coverage and benefit levels contribute to the wealth differentials. Using data from the Current Population Survey, Survey of Consumer Finances and the Health and Retirement Survey, several consistent findings emerge. First, most of the racial and ethnic differences in pension benefit levels are accounted for by differences in worker characteristics. Second, among workers who are covered by a private pension, racial and ethnic differences in pension asset accumulation are quite small. Finally, exclusion of pension wealth has a small effect on the comparison of average levels of wealth across racial and ethnic groups, but has a substantial effect for comparisons at the bottom of the wealth distribution. Overall, the findings suggest that, holding worker characteristics constant, minority and majority workers accumulate very similar levels of wealth.

Union Membership and Coverage Database from the Current Population Survey: Note

Barry T. Hirsch and David A. Macpherson
Journal PaperIndustrial and Labor Relations Review, Volume 56, Issue 2, January 2003, Pages 349-354

Abstract

This note describes the construction and provision of an Internet database providing private and public sector union membership, coverage, and density estimates compiled from the Current Population Survey (CPS). Economy-wide estimates are provided beginning in 1973, estimates by state, detailed industry, and detailed occupation begin in 1983, and estimates by metropolitan area begin in 1986. The database will be updated annually and can be accessed at http://www.unionstats.com/.

The Wage and Employment Dynamics of Minimum Wage Workers

William E. Even and David A. Macpherson
Journal PaperSouthern Economic Journal, Volume 69, Issue 3, January 2003, Pages 676-690

Abstract

This study uses 20 years of short panel data sets on minimum wage workers to examine the wage and employment dynamics of minimum wage workers. Compared to workers earning above the minimum wage, minimum wage workers differ substantially in several ways. First, minimum wage workers are much more likely to be new entrants and much more likely to exit the labor market. Second, changes in industry and occupation and access to job training are particularly important to improving the wages of minimum wage workers. Finally, we find evidence that many minimum wage workers are earning less than their potential wage temporarily because of other non-work circumstances that make higher paying jobs less attractive.

Estimates of Union Density by State

Barry T. Hirsch, David A. Macpherson, and Wayne G. Vroman
Journal PaperMonthly Labor Review, Volume 124, Issue 7, July 2001, Pages 51-55

Abstract

This note describes the construction of time-consistent national and state-level estimates of union density for the years 1964 through 1999. Two sources of data are combined to produce these estimates, the Current Population Survey (CPS), a monthly survey of U.S. households, and the discontinued BLS publication Directory of National Unions and Employee Associations, based on data reported by labor unions to the federal government. The union density measure represents the percentage of nonagricultural wage and salary employees who are union members, including employees in the public sector. A more limited database, available for years since 1977 and based exclusively on the CPS, provides a measure of union coverage density, representing the percentage of nonagricultural wage and salary workers covered by a collective bargaining agreement. The databases will be updated annually and distributed freely via the Internet.

The Changing Distribution of Pension Coverage

William E. Even and David A. Macpherson
Journal PaperIndustrial Relations, Volume 39, Issue 2, April 2000, Pages 199-227

Abstract

Data from the Current Population Surveys reveal that between 1979 and 1993 the gap in pension coverage between workers with less than 12 years of education and those with more than 16 years of education nearly tripled among men and more than quadrupled among women. The empirical analysis reveals that differences in labor market characteristics related to gender and education have grown over time and can account for virtually all of the changing distribution of coverage. There is mixed evidence on the extent to which the growth of the 401(k) plan has contributed to the changing distribution of coverage.

Occupational Age Structure and Access for Older Workers

Barry T. Hirsch, David A. Macpherson, and Melissa A. Hardy
Journal PaperIndustrial and Labor Relations Review, Volume 53, Issue 3, April 2000, Pages 401-18

Abstract

This paper examines covariates of the occupational age structure and the openness of jobs to older workers. Using a large number of data sets, which together span the years 1983-98, the authors focus on the structure of compensation, job skill requirements, and working hours and conditions as the principal determinants of occupational access. Older male and female workers, they find, face substantial entry barriers in occupations with steep wage profiles, pension benefits, and computer usage. In addition, union coverage is associated with limited access for older men, while older female hires are concentrated in occupations where flex-time, part-time work, and daytime shifts are common. Segregation across occupations among older new hires exceeds that for younger workers, but there is no evidence that it has worsened over time.

Earnings, Rents, and Competition in the Airline Labor Market

Barry T. Hirsch and David A. Macpherson
Journal PaperJournal of Labor Economics, Volume 18, Issue 1, January 2000, Pages 125-55

Abstract

Transformation of the airline labor market continues long after deregulation. Airline wages changed little immediately following deregulation, implying either the absence of regulatory rents or maintenance of product market power and union strength. Analysis for 1973-1997, however, indicates that prior to recent gains, the relative earnings of air transport workers decreased markedly during the latter half of the 1980s and early 1990s. Some of the earnings advantage of airline workers represents returns to occupational skills and worker-specific quality. Labor rents are attributable largely to union bargaining power, which in turn is constrained by the financial health of carriers.

Estimating Wage Differentials: When Does Cost-of-Living Matter?

J. Michael DuMond, Barry T. Hirsch, and David A. Macpherson
Journal PaperEconomic Inquiry, Volume 37, Issue 4, October 1999, Pages 577-598

Abstract

Wage differentials studies rarely account for interarea differences in cost of living, owing both to data limitations and theoretical ambiguity. This study develops a price index for 185 metropolitan areas comprising about 70% of the U.S. labor force. Current Population Survey data for 1985-95 and data on site specific amenities are used to estimate earnings differentials based on nominal wages, wages fully adjusted for measured cost of living, and a simple approximation of "real" wages with partial adjustment for price level differences. Dispersion in approximate real wages across 185 labor markets and differentials by region and city size are substantially lower than dispersion in nominal or full adjustment wages. Estimates of racial and ethnic differentials display moderate sensitivity to choice of a wage measure, whereas other standard differentials do not. Both nominal wages and wages fully adjusted for cost of living may provide misleading estimates of real wage differentials. Absent data on interarea prices and amenities, researchers should include detailed controls for region and city size in nominal wage equations. (JEL J31, R23).

Pensions and Productivity

Stuart Dorsey, Christopher M. Cornwell, and David A. Macpherson
Book UpJohn | 1998| ISBN-13: 978-0-88099-186-5
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Overview

Employers typically view their investment in pension plans as a means of providing retirement income for their workers. Economists, on the other hand, view pension programs as a way to increase workplace productivity. Dorsey, Cornwell and Macpherson explore the theoretical and empirical basis for this perspective and, in the process, offer a complete and up-to-date discussion on the productivity theory of pensions.

Worker's Compensation Recipency in Union and Nonunion Workplaces

J. Michael DuMond, Barry T. Hirsch, and David A. Macpherson
Journal PaperIndustrial and Labor Relations Review, Volume 50, Issue 2, January 1997, Pages 213-236

Abstract

This study estimates union effects on workers' compensation indemnity claims in 1977-92, based on individual panel data constructed from the March Current Population Survey. Union members were substantially more likely to receive workers' compensation benefits than were similar nonunion workers, and they were more sensitive to variation in benefit levels and waiting periods. The authors suggest that differences in union, as compared to nonunion, workplaces arise because workers are provided with information from their union representatives, supervisors are more likely to inform injured workers about workers' compensation filing procedures and less likely to discourage workers from filing claims, workers are less likely to fear being penalized for filing claims, and management has less discretion and ability to monitor workers and penalize them for questionable claims. The findings suggest that communication of relevant information to workers is an important determinant of workers' compensation recipiency.

Earnings and Employment in Trucking: Deregulating a Naturally Competitive Industry

Barry T. Hirsch and David A. Macpherson
Book ChapterRegulatory Reform and Labor Markets, Kluwer Academic Publishers, 1997

Abstract

The effect of motor carrier deregulation on the employment and earnings of truck drivers is examined, using data for the period 1973-95. The use of a quasi-experimental design is made possible through the comparison of wages before and after deregulation among drivers in the previously regulated for-hire sector, drivers in unregulated private carriage, and an economy-wide group of male non-driver nonprofessionals. Deregulation is associated with approximately a 15 percent relative wage decline among drivers employed in the for-hire sector, resulting primarily from decreases in union wages and a shift from high-wage union to low-wage nonunion employment. In contrast to wage losses among for-hire union drivers, losses among nonunion drivers relative to workers economy-wide are small. The decline in wages among both union and nonunion drivers in the unregulated private carriage sector largely mirrors wage changes among the male non-driver control group. Our results indicate that there was little rent sharing during the regulatory period among drivers in unregulated private carriage or among nonunion drivers in the regulated sector. Sizable wage advantages among for-hire drivers and among union drivers in both the for-hire and private sectors have been maintained throughout the deregulation period.

Panel analysis and use of supplemental data on skills and working conditions indicate that unmeasured worker skills and work shift can account for all of the wage advantage among drivers in the for-hire sector, while worker skills (associated in part with occupational tenure) may account for about two-thirds of the union wage advantage. Deregulation has also affected employment, as evinced by a sharp decline in union density, slow employment growth in private carriage as compared to growth in the for-hire sector and among owner-operators, and through an increase in minority employment in the previously regulated for-hire sector. The "textbook" response of drivers' wages and employment quickly following deregulation may be unique to the motor carrier industry, but the trucking experience is likely to be representative of the long-run labor market effects of deregulation in the other previously regulated industries.

Wages and Gender Composition: Why Do Women's Jobs Pay Less?

David A. Macpherson and Barry T. Hirsch
Journal PaperJournal of Labor Economics, Volume 13, Issue 3, July 1995, Pages 426-471

Abstract

Occupational sex segregation and its relationship with wages during the 1973-93 period are examined. Wage level and wage change models are estimated using data from various CPS earnings files matched with information on occupational skills and job disamenities. Standard wage level equations indicate that female and male wages are substantially lower in occupations with high proportions of women. Estimates of gender composition effects are reduced by about a quarter for women and by over one-half for men following control for skill-related occupational characteristics. Longitudinal analysis indicates that two-thirds or more of the standard gender composition effect can be accounted for by occupational characteristics and unmeasured worker quality or taste differences.