Job Mobility and Earnings Growth

This paper uses detailed data on the salary histories of individuals to show how an individual's observed earnings growth can be decomposed into growth occurring on the job and growth occurring between jobs. it is shown that the relative contributions of these two components to overall earnings growth differ across race and education groups. Further, as predicted by the specific training hypothesis, the more mobile individuals are found to have smaller on-the-job earnings gains in absolute terms than the less mobile.

Location Decisions of the New Immigrants to the United States

This paper estimates a multinomial logit model of the location decisions of new immigrants to the United States. Data from the 5- percent Public Use Samples of the 1970 and 1980 Censuses of Population are used to study the geographic distribution of immigrants who arrived after 1965. The major findings are as follows: (1) In choosing both initial and subsequent locations, immigrants are considerably more geographically concentrated than native Americans who move to a new city. (2) All of the immigrant groups prefer to live in cities where their countrymen are already located, but this relationship is much weaker for the more educated immigrants. (3) There is ambiguous evidence on the question of whether immigrants learn about economic opportunities as they spend time in this country. On the one hand, with the exception of the Mexicans, distance from the home country has a much weaker negative impact on location choice as time in the U.S. elapses. On the other hand, the expected wage variable, which should have a larger positive effect over time, only did so for the Asians, and to some extent, the Central and South Americans (excluding Mexicans and Cubans). (4) Within each ethnic group, there are significant differences in the location choice behavior of the 1965-69 and 1975-79 immigrant cohorts. The results are consistent with an increase over time in the quality of Asian immigrants, and a decrease in the quality of Mexican, Cuban and European immigrants.

Formal Employee Training Programs and Their Impact on Labor Produc- tivity: Evidence from a Human Resources Survey

Although economic models of training decisions are framed in terms of a company's calculation of the costs and benefits of such training, empirical work has never been able to test this model directly on company behavior. This paper utilizes a unique database to analyze the determinants of the variation in formal training across businesses and the impact of such training on labor productivity. Major findings are that large businesses, those introducing new technology end those who rely on internal promotions to fill vacancies are more likely to have formal training programs. Formal training is found to have a positive effect on labor productivity.

The Economics of Migration: An Empirical Analysis with Special Referenceto the Role of Job Mobility

This article continues the work on the analysis of the individual's decision to migrate, but differs from the previous studies by focusing on the relationship between job mobility and migration. First, the proportion of geographic mobility that occurs in conjunction with a job change is calculated. Second, it is shown that the true effects of human capital variables, job characteristics, and family variables on the decision to migrate are best measured when one takes account of the relationship between migration and job mobility. Third, the effect of migration on the wage gains of individuals is studied and again the need for distinguishing among moves that were associated with quits, layoffs, and transfers is clearly shown. Finally, by using three data sets that encompass different age groups (the National Longitudinal Surveys [NLS] of Young and Mature Men and the Coleman-Rossi Retrospective Life History Study), the importance of the relationship between migration and job mobility is demonstrated at different points in the life cycle.

Ownership versus Environment: Why are Public Sector Firms Inefficient?

In this paper we disentangle the sources of public sector inefficiency using 1982-1995 panel data on manufacturing firms in Indonesia. We consider two leading hypotheses: (1) public sector enterprises are inefficient due to monitoring problems and (2) public sector enterprises are inefficient because of the environment in which they operate, as measured by the soft budget constraint. The two models are nested in a production function framework and the empirical results provide support for the second hypothesis. Public sector enterprises are inefficient because of their access to soft loans; public sector ownership has no independent impact on productivity growth. The finding that ownership per se does not matter, but environment does, holds when we control for fixed effects and when we allow for the endogeneity of government loans. Interestingly, private sector firms with access to government loans did not perform more poorly than other private sector enterprises. Another dimension of the environment, i.e. import penetration, also matters; public sector enterprises that have been shielded from import competition are inferior performers.

Ownership versus environment : disentangling the sources of public sector inefficiency

The authors compare the performance of public and private sector manufacturing firms in Indonesia for 1981-95. They analyze whether public sector inefficiency is due primarily to agency-type problems ("ownership") or to the business environment in which public enterprises operate, as measured by soft budget constraints or barriers to competition. They nest the two alternatives in a production function framework. The results, obtained from fixed-effects specifications, provide support for both models. The business environment matters. Only public enterprises that received loans from state banks or those shielded from import competition performed worse than private enterprises. Ownership matters. For a given level of import competition or soft loans, public enterprises perform worse than their counterparts in the private sector. Eliminating soft loans to Indonesia's public enterprises would raise total factor productivity by 6 percentage points; the same result could be achieved by increasing import penetration by 15 percentage points. The authors show that these findings are not due to selection effects for either privatization or the receipt of soft loans.Labor Policies,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Economic Theory&Research,Public Sector Economics&Finance

The Comparative Advantage of Educated Workers in Implementing New Technology: Some Empirical Evidence

In this paper we estimate variants of a labor demand equation derived from a (restricted variable) cost function in which "experience"on a technology (proxied by the mean age of the capital stock) enters "non-neutrally." Our specification of the underlying cost function isbased on the hypothesis that highly educated workers have a comparative advantage with respect to the adjustment to and implementation of new technologies. Our empirical results are consistent with the implication of this hypothesis, that the relative demand for educated workers declines as the capital stock (and presumably the technology embodied therein) ages. According to our estimates, the education-distribution of employment depends more strongly on the age of equipment than on the age of plant, and the effect of changes in equipment age on labor demand is magnified in R&D-intensive industries.

Predation through Regulation: The Wage and Profit Impacts of OSHA and EPA

This paper documents the importance of studying the indirect effects of OSHA and EPA regulations -- the competitive advantages which arise from the asymmetrical distributions of regulatory impact among different types of firms. We argue that if the competitive advantage gained through indirect effects is sufficiently large, it can more than offset any direct costs producing a net benefit for the regulated firm and its workers. The indirect effects of OSHA and EPA regulations arise in two ways. The first source is compliance asymmetries, whereby one firm suffers a greater cost burden even when regulations are evenly enforced across firms. The second source is enforcement asymmetry, whereby regulations are more vigorously enforced against certain firms. Earlier research shows that these asymmetries do exist and are based on firm size, unionization, and regional location. In this paper we empirically document that the indirect effects produced by these asymmetries mitigate the direct costs of regulations for manyfirms. Large, unionized firms in the Frostbelt are clearly gaining wealth at the expense of small, nonunionized firms in the Sunbelt.

OSHA Enforcement, Industrial Compliance and Workplace Injuries

This paper develops and tests a three-equation simultaneous model of OSHA enforcement behavior, industrial compliance and workplace injuries. The enforcement equation is based on the assumption that OSHA acts as a political institution that gains support through the transfer of wealth from firms to employees; the empirical results are largely consistent with this notion. Contrary to previous work, we find that OSHA enforcement efforts have, indeed, had a statistically significant impact on industrial compliance and, further, that this compliance has led to a statistically significant decrease in worker injuries. The point estimate of the elasticity of the lost workday rate with respect to the OSHA inspection rate is -.04.

Technical Change, Learning, and Wages

This paper examines the relationship between technological change and wages using pooled cross-sectional industry-level data and several alternative indicators of the rate of introduction of new technology. Our main finding is that industries with a high rate of technical change pay higher wages to workers of given age and education, compared to less technologically advanced industries. This is Consistent with the notion that the introduction of new technology creates a demand for learning, that learning is a function of employee ability and effort, and that increases in wages are required to elicit increases in ability and effort. A related finding is that the wages of highly educated workers (especially recent graduates) relative to those of less educated workers are highest in technologically advanced industries; this is consistent with the notion that educated workers are better learners.