Skills, Computerization, and Earnings in the Postwar U.S. Economy

Using both time-series and pooled cross-section, time-series data for 44 industries over the period 1947-1997 in the United States, no evidence is found to support the idea that the growth of skills or educational attainment had any statistically significant effect on growth of earnings. On the other hand, earnings growth is found to be positively related to overall productivity growth and equipment investment, while computerization and international trade both had a retardant effect on earnings.

"The Adequacy of Retirement Resources among the Soon-to-Retire, 1983-2001"

A central issue confronting soon-to-retire workers (i.e., those aged 47Ð64) is whether they will have command over enough resources (both private and public) to maintain a decent standard of living in retirement. Typically, the adequacy of projected retirement income is judged in relation to some absolute standard (e.g., poverty threshold) and preretirement income (Òreplacement rateÓ). Using data from the Federal Reserve BoardÕs Survey of Consumer Finances for 1983, 1989, and 2001, I find that expected retirement income grew robustly from 1989 to 2001 (by 38 percent in real terms) and the share with expected retirement income less than twice the poverty line fell by 5 percentage points. The percentage-point decline was even greater for minority households (11.6) and single females (5.7). The change in the share with replacement rates over 50 percent was 4.5 percentage points, though in this case much lower for minorities (0.9 percentage points) and single females (1.8 percentage points). However, percentage point changes for minorities and single females were much smaller, at 75 percent and a 100 percent replacement rates, respectively. Moreover, retirement wealth is very unevenly distributed. Whites and married couples had substantially larger wealth accumulations than their respective counterparts.

Productivity, computerization, and skill change

Until recently, most studies examining the effect of computerization on productivity have shown little evidence of a payoff to computer investment in terms of productivity growth. Most of these studies have focused on the connection between information technology (IT) or information and communications technology (ICT) and productivity, but few have examined the linkages between IT and broader indicators of structural change. This article helps fill that gap. ; The article concentrates on the relation of skills, education, and computerization to productivity growth and other indicators of technological change on the industry level. After reviewing the pertinent literature, the author introduces an accounting framework and model and presents descriptive statistics on post-World War II productivity trends and key variables that have shaped productivity growth patterns during that period. A multivariate analysis on the industry level assesses these variables' influence. ; The analysis shows no evidence that the growth of educational attainment has any statistically measured effect on industry productivity growth. The growth in cognitive skills, on the other hand, is significantly related to industry productivity growth though the effect is very modest. In addition, the study finds no econometric evidence that computer investment is positively linked to total factor productivity growth. The author concludes that the effects of IT show up more strongly in terms of measures of structural change rather than in terms of productivity.Productivity ; Technology ; Information technology ; Employees, Training of

Computerization and Rising Unemployment Duration

With a given unemployment rate, duration of joblessness can vary substantially. The unemployment rate will be the same if four million workers are unemployed for three months on average, as when one million workers loose their jobs for a full year. Yet the consequences for the mental state of the people without jobs, for their behavior, and for the functioning of society are probably far more severe when the average period between jobs is much longer. The authors turn next to their main empirical study, the multivariate regression analysis, to sort out the effects of technological, institutional, and demographic variables on changes in unemployment duration. The analysis is based on aggregate time-series data for the US, covering the period from 1948 to 1997. The duration of unemployment has risen rather dramatically over the last half century. The percentage of unemployed workers out of work 15 or more weeks more than doubled over the same period, while the percentage of the unemployed out of work 27 or more weeks tripled.

"Skills, Computerization, and Earnings in the Postwar U.S. Economy"

Using both time-series and pooled cross-section, time-series data for 44 industries over the period 1947-1997 in the United States, no evidence is found to support the idea that the growth of skills or educational attainment had any statistically significant effect on growth of earnings. On the other hand, earnings growth is found to be positively related to overall productivity growth and equipment investment, while computerization and international trade both had a retardant effect on earnings.

What's Behind the Recent Rise in Profitability?

Profitability in the United States has been rising since the early 1980s and by 1997 was at its highest level since its postwar peak in the mid 1960s, and the profit share, by one definition, was at its highest point. In this paper I examine the role of the change in the profit share and capital intensity, as well as structural change, on movements in the rate of profit between 1947 and 1997. Its recent recovery is traced to a rise in the profit share in national income, a slowdown in capital-labor growth on the industry level, and employment shifts to relatively labor-intensive industries.

The Goodness of Match

Though the statistical techniques vary, the matching problem is essentially the same in each case and can be stated formally as follows: Given "observations on X,Y from one sample and on X,Z from another sample, when will it be true that by matching observations according to X, an artificial Y,Z sample will result whose distribution is the true joint Y,Z distribution?"(Sims,1972, p. 355). Though the imputed Y,Z distribution will, in general, be different from the true Y,Z distribution, the closeness of the two yields a natural criterion of the goodness of match. By making certain simplifying assumptions, we can make this criterion operational. The goodness of match depends on how much of the relation between Y and Z is transmitted through X - that is, on how X "mediates" between Y and Z. Since the functional form the lower and upper bounds on the true correlation between Y and Z takes depends on the number of X variables, we shall treat the problem in three stages: (a) The case of one mediating variable.(b) The case of two mediating variables. (c) The case of n mediating variables.

The Devolution of the American Pension System: Who Gained and Who Lost?

One of the most dramatic transformations in the economy over the last two decades has been the replacement of traditional Defined Benefit (DB) pension plans with Defined Contribution (DC) pensions. Using data from the 1983, 1989, and 1998 Survey of Consumer Finances (SCF), I find that among age group 47-64, the proportion with a DB plan plummeted from 69% to 42% between 1983 and 1998 and the share with a DC plan skyrocketed from 12% to 60%. However, median Private Accumulations (the sum of net worth and pension wealth) fell by 14% among middle-aged households over this period. The inequality of total pension wealth increased sharply over this period as a result of the switchover from DB plans to DC accounts. DB pension wealth is also found to have a very modest equalizing effect on overall wealth inequality. Moreover, DB pension wealth has a weaker offsetting effect on wealth inequality in 1998 than in 1983.Pension

"Recent Trends in Wealth Ownership, 1983-1998"

Using data from the Survey of Consumer Finances, I find that wealth inequality continued to rise in the United States after 1989, though at a reduced rate. The share of the wealthiest 1 percent of households rose by 3.6 percentage points from 1983 to 1989 and by another 0.7 percentage points from 1989 to 1998. Between 1983 and 1998, 53 percent of the total growth in net worth accrued to the top 1 percent of households and 91 percent to the top 20 percent. Another disturbing trend is that median net worth (in constant dollars), after growing by 7 percent from 1983 to 1989, increased by only another 4 percent by 1998. Indeed, the average wealth of the poorest 40 percent fell by 76 percent between 1983 and 1998 and by 1998 was only $1,100. Moreover, the financial resources accumulated by families in the bottom three income quintiles were very meager and dwindled between 1989 and 1998. The new figures also point to the growing indebtedness of the American family, with the overall debt-equity ratio climbing from 0.151 in 1983 to 0.176 in 1998. The ownership of investment assets was still highly concentrated in the hands of the rich in 1998. About 90 percent of the total value of stocks, bonds, trusts, and business equity were held by the top 10 percent. Despite the widening ownership of stock (48 percent of households owned stock shares either directly or indirectly in 1998), the richest 10 percent still accounted for 78 percent of their total value. With regard to racial and ethnic differences, the results show that over the period 1983 to 1998 non-Hispanic African-American households made some gains relative to whites in median net worth and home ownership but remained the same in terms of mean net worth. Hispanic households made significant gains on non-Hispanic white households in terms of mean net worth and home ownership but not in terms of median wealth.