The Impact of Deregulation on the Employment and Wages of Airline Mechanics

This paper describes the effects of deregulation on negotiated wage rates and employment levels of aircraft mechanics in the scheduled airline industry. Firm-specific data for the incumbent trunk airlines show relatively small changes in real wage rates since deregulation,and only recent increases in interfirm wage differentials. Employment growth rates, on the other hand, have varied widely among the incumbents, and between the incumbent trunks and the local service and new-entrant airlines. The data suggest that deregulation resulted in a transfer of 5000-7000 maintenance jobs from the incumbent trunks to the smaller airlines. This shift in employment reduced mechanics' earnings in the industry by as much as 5 percent.

The Impact of the Mariel Boatlift on the Miami Labor Market

This paper presents an empirical analysis of the effect of the Mariel Boatlift on the Miami labor market, focusing on the wages and unemployment rates of less-skilled workers. The Mariel immigrants increased the population and labor force of the Miami metropolitan area by 7 percent. Most of the immigrants were relatively unskilled: as a result, the proportional increase in labor supply to less-skilled occupations and industries was much greater. Nevertheless, an analysis of wages of non-Cuban workers over the 1979-85 period reveals virtually no effect of the Mariel influx. Likewise, there is no indication that the Boatlift lead to an increase in the unemployment rates of less-skilled blacks or other non-Cuban workers. Even among the Cuban population wages and unemployment rates of earlier immigrants were not substantially effected by the arrival of the Mariels.

Unexpected Inflation, Real Wages, and Employment Determination in Union Contracts

This paper presents new microeconometric evidence on the relevance of nominal contracting for employment determination in the unionized sector. Real wages in long term union contracts contain an unanticipated component that reflects unexpected changes in prices and the degree of indexation. These unexpected wage components provide a convenient tool for separating the causal effects of wages on employment from other endogenous sources of employment and wage variation. The empirical analysis of employment and wage outcomes among collective agreements in the Canadian manufacturing sector reveals that employment and wages are only weakly related. When unexpected changes in real wages are used as an instrumental variable for the contract wage, however, employment is consistently negatively related to wages. The results imply that the institutional structure of wage determination has important effects on the cyclical characteristics and persistence of employment changes.

Longitudinal Analysis of Strike Activity

This paper presents evidence on two aspects of strike activity associated with the renegotiation of union contracts: the effects of contract characteristics on dispute probabilities; and the effects of lagged strike outcomes on the incidence and duration of subsequent disputes. The empirical results show that strike probabilities are higher following a longer contract, and lower in limited reopening situations. Strike probabilities are also higher in summer and fall than in winter and spring. Finally, strike probabilities are significantly affected by lagged strike outcomes. Relative to a peaceful settlement, strike probabilities are 10 percentage points higher following a strike of two weeks or less, and 5 to 7 percentage points lower following a longer dispute.

Regression Discontinuity Inference with Specification Error

A regression discontinuity (RD) research design is appropriate for program evaluation problems in which treatment status (or the probability of treatment) depends on whether an observed covariate exceeds a fixed threshold. In many applications the treatment-determining covariate is discrete. This makes it impossible to compare outcomes for observations "just above" and "just below" the treatment threshold, and requires the researcher to choose a functional form for the relationship between the treatment variable and the outcomes of interest. We propose a simple econometric procedure to account for uncertainty in the choice of functional form for RD designs with discrete support. In particular, we model deviations of the true regression function from a given approximating function -- the specification errors -- as random. Conventional standard errors ignore the group structure induced by specification errors and tend to overstate the precision of the estimated program impacts. The proposed inference procedure that allows for specification error also has a natural interpretation within a Bayesian framework.

School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina

This paper reviews and interprets the literature on the effect of school resources on students' eventual earnings and educational attainment. In addition, new evidence is presented on the impact of the great disparity in school resources between black and white students in North and South Carolina that existed in the first half of the 20th century, and the subsequent narrowing of these resource disparities. Following birth cohorts over time, gaps in earnings and educational attainment for blacks and whites in the Carolinas tend to mirror the gaps in school resources.

Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis

Although the college-high school wage gap for younger men has doubled over the past 30 years, the gap for older men has remained nearly constant. We argue that these shifts reflect changes in the relative supply of highly-educated workers across age groups. Cohorts born in the first half of the century had steadily rising educational attainments that offset rising demand for better-educated workers. This trend ended abruptly in the early 1950s and has only recently resumed. Using a model with imperfect substitution between similarly-educated workers in different age groups, we show that a slowdown in the rate of growth of educational attainment across cohorts will lead to a rise in the return to college for young workers that eventually works its way through the age distribution. This prediction is remarkably consistent with data for the U.S. over the period from 1959 to 1995. Estimates based on a version of the model with two education groups high school equivalent and college equivalent workers suggest that the elasticity of substitution between different age groups is large but finite (around 5) while the elasticity of substitution between the two education groups is about 2.5. We also examine data for the United Kingdom and Canada: both countries experienced similar slowdowns in the rate of growth of educational attainment. Results from these countries are comparable to the U.S. findings, and underscore the importance of cohort-specific relative supplies in interpreting movements in education-related wage differentials.

Racial Segregation and the Black-White Test Score Gap

Racial segregation is often blamed for some of the achievement gap between blacks and whites. We study the effects of school and neighborhood segregation on the relative SAT scores of black students across different metropolitan areas, using large microdata samples for the 1998-2001 test cohorts. Our models include detailed controls for the family background of individual test-takers, school-level controls for selective participation in the test, and city-level controls for racial composition, income, and region. We find robust evidence that the black-white test score gap is higher in more segregated cities. Holding constant family background and other factors, a shift from a fully segregated to a completely integrated city closes about one-quarter of the raw black-white gap in SAT scores. Specifications that distinguish between school and neighborhood segregation suggest that neighborhood segregation has a consistently negative impact but that school segregation has no independent effect (though we cannot reject equality of the two effects). We find similar results using Census-based data on schooling outcomes for youth in different cities. Data on enrollment in honors courses suggest that within-school segregation increases when schools are more highly integrated, potentially offsetting the benefits of school desegregation and accounting for our findings.

A software technology evaluation program

A set of quantitative approaches is presented for evaluating software development methods and tools. The basic idea is to generate a set of goals which are refined into quantifiable questions which specify metrics to be collected on the software development and maintenance process and product. These metrics can be used to characterize, evaluate, predict, and motivate. They can be used in an active as well as passive way by learning form analyzing the data and improving the methods and tools based upon what is learned from that analysis. Several examples were given representing each of the different approaches to evaluation. The cost of the approaches varied inversely with the level of confidence in the interpretation of the results

Why Have Unemployment Rates in Canada and the U.S. Diverged?

Throughout the post-war period, U.S. and Canadian unemployent rates moved in tandem, but this historical link apparently ended in 1982. During the past three years, Canadian unemployment rates have been some three percentage points higher than their U.S. analogues, and this gap shows no sign of diminishing. This paper is an empirical evaluation of a variety of explanations for this new unemployment gap. We first show that the demographic and industrial composition of the two countries is remarkably similar, so that no simple mechanical hypothesis explain the basic puzzle. It is also evident that the increase in Canadian unemployment relative to U.S. unemployment can not be fully attributed to output movements. We find that the gap between actual and predicted Canadian output, based on U.S. output, has fallen dramatically since 1982 while the unemployment gap has widened. We also find that unemployment in Canada was 2 to 3 percentage points higher in 1983 and 1984 than predicted by Canadian output. We have investigated a variety of hypotheses to explain the slow growth of employment in Canada after 1982. These hypotheses attribute the slow growth of employment to rigidities in the labor market that raise employers' costs and restrict the flow of workers between sectors. The evidence does not support the notion that the growth in relative unemployment in Canada is due to differences in the regulation of the labor market in the two countries. Minimum wage laws and unemployment benefits are fairly similar in Canada and the U.S., and neither has changed relative to the other in the last decade. Unionization rates have increased in Canada relative to US. since 1970. Most of this divergence occured before 1980, however, and does not seem to have created an unemployment gap prior to 1980. Finally,the hypothesis that differential real wage rates are a major determinant of relative employment in the U.S. and Canada is soundly rejected by the data. Real wage rates have been essentially uncorrelated with employment movements within each country and between the two countries.