INTRODUCTION TO CLASSIC AND THE NEW LABOR ECONOMICS

Transcription

1 INTRODUCTION TO CLASSIC AND THE NEW LABOR ECONOMICS SYRACUSE UNIVERSITY W. W. NORTON AND COMPANY NEW YORK LONDON

2 Preface xv PRELIMINARIES 1 Introduction 1 2 The U.S. Labor Market 33 PARTI FOUNDATIONS 3 The Short-Run Demand for Labor 55 4 The Supply of Labor Human Capital 141 S On-the-Job Training 1??? Competitive Equilibrium 205 PARTS! APPLICATIONS 8c EXTENSIONS 8 Policy Application: The Minimum Wage Policy Application: The War on Poverty Death and Injury in the U.S. Workplace: A Hedonic Analysis Discrimination I: Theory 32? 12 Discrimination II: Evidence and Policy The Hiring Process 415 PART III THE EMPLOYMENT RELATION 14 Incentives Tasks, Technologies, and Organizational Design 513 1G Careers and the Employment Relation 545 1? Executive Pay Trade Unions I: Density and Impact 625 PAOTi THE AGGREGATE LABOR MARKET 19 Earnings I: The Wage Structure Labor Mobility I: Migration 68? 21 Labor Mobility II: Immigration and Outsourcing Unemployment I: Contractual Frictions?55 23 Unemployment II: Market Frictions 801 VII

3 viii Brief Contents 24 Turnover I: Job Search and Accessions Turnover II: Quits and Layoffs 861 PARTY TOOLS OF THE TRADE Appendix A Econometric Methods A-3 Appendix B Proportions, Percentages, and Elasticities A-23 Appendix C Present Values and Discounted Utilities A-33 Appendix D Decision Making under Uncertainty A-41 Notes N-l References R-l End of Chapter Review Questions and Problems Solutions S-l Credits C-l Name Index 1-1 Subject Index 1-5 SUPPLEMENTARY WEBSITE CHAPTERS 26 The Long-Run Demand for Labor and Adjustment Costs 2? Policy Application: Income Taxes 28 Labor Supply over the Life Cycle 29 The Family 30 Retirement 31 Crime 32 Trade Unions II: Collective Bargaining and Strikes 33 Earnings II: Sectoral Shocks and Aggregate Disturbances 34 Education I: The Performance of Schools and Colleges 35 Education II: Governance and Finance

4 Preface xv PRELIMINARIES Chapter 1 Introduction i 1.1 Methodology The Supply and Demand Framework Applications: Supply and Demand Shocks Elements of Microeconomics 22 Chapter 2 The U.S. Labor Market Core Concepts I: Populations Core Concepts II: Labor Costs Core Concepts III: Empirical Aspects of the U.S. Labor Market 45 PARTI FOUNDATIONS Chapter 3 The Short-Run Demand for Labor The Neoclassical Labor-Demand Model The Constraints Bl 3.3 Perfect Competition and Monopoly Power Monopsony 80 Technical Appendix 3.A Mathematical Derivations 94 Chapter 4 The Supply of Labor Preferences The Constraints The Optimal Choice I: Determination The Optimal Choice II: Properties B The Empirical Evidence 128 Appendix 4.A The Supply of Labor: A Mathematical Approach 137 Chapter 5 Human Capital Human Capital: An Overview The Individual Investment Decision The Level of Human Capital Investments 152

5 Contents 5.4 Extensions 15? 5.5 The Return to Investments in Human Capital 166 Appendix 5.A Econometric Obstacles and Remedies 172 On-the-Job Training 1?? 6.1 Overview The Theory of General and Specific Training The Specifics of Specific Human Capital The OJT Model: The Evidence 192 Appendix 6.A Do Wages Rise with Seniority? 200 Chapter? Competitive Equilibrium Competitive Equilibrium Policy Applications Compensating Wage Differentials Fringe Benefits 226 PARTH APPLICATIONS 8c EXTENSIONS Chapter 8 Policy Application: The Minimum Wage From Perfect Competition to Monopsony Offsets, Inequality, and Education The Minimum Wage: The U.S. Experience 245 Chapters Policy Application: The War on Poverty The Battlefield: Poverty in the United States The Armory The Economic Consequences of Five Major Policy Weapons The Battle Is Joined: Welfare Reforms 282 Chdpifei 10 Death and Injury in the U.S. Workplace: A Hedonic Analysis The Hedonic Framework I: Building Blocks The Hedonic Framework II: Equilibrium Death and Cost-Benefit Analysis Policy Application: OSHA Policy Application: Workers'Compensation 318 D-.Sf)ter ii Discrimination I: Theory 32? 11.1 Discrimination: An Overview Employer Discrimination 336

6 Contents xi 11.3 Coworker Discrimination Consumer Discrimination The Modern Theory of Discrimination 355 Chapter 12 Discrimination II: Evidence and Policy Measuring Discrimination Race Gender Public Policy Antidiscrimination Policies: The Evidence 399 Appendix 12.A Estimation Difficulties 406 Appendix 12.B Occupational Crowding 410 Chapter 13 The Hiring Process The Economics of Hiring Public Information (The Roy Model) Asymmetric Information I: Signaling Asymmetric Information II: Screening Symmetric Information 440 Appendix 13.A The Theory of Job-Market Signaling 448 PART III THE EMPLOYMENT RELATION Chapter 14 Incentives Incentives: An Overview Risk Sharing and Incentives Extensions of the Principal Agent Framework The "You Get What You Pay For" Principle Tournaments 489 Appendix 14.A Risk Sharing and Incentives 500 Appendix 14.B Relative Performance Pay 507 Appendix 14.C Multitasking: The Root Cause of the "You Get What You Pay for" Principle 508 Chapter IS Tasks, Technologies, and Organizational Design Task Assignments Organizational Design Human-Resource Management Hierarchies 539

7 xii Contents Chapter 16 Careers and the Employment Relation Internal Labor Markets Careers I: Investments Careers II: Payments Over Time Careers III: The Employment Relationship 571 Appendix 16.A Ability Shocks and Insurance 587 Appendix 16.B A Model of the Rat Race 590 Appendix 16.C Implicit or Relational Contracts 593 Appendix 16.D The Waldman Model 600 Chapter 1? Executive Pay The Evidence The Theory of Executive Pay 613 Chapter 18 Trade Unions I: Density and Impact Evidence and Institutional Background Union Coverage The Economic Impact of Trade Unions 639 PART If THE AGGREGATE LABOR MARKET Chapter 19 Earnings I: The Wage Structure The Distribution of Earnings 654 $ 19.2 Superstars Earnings Inequality: The Evidence Explaining the Evidence of Inequality Institutional Factors and the SDI Framework 680 f. Chapter 20 Labor Mobility I: Migration 68? 20.1 The Individual Migration Decision Topics: Risk, Repeat and Return Migration, and Tied Moves Regional Migration Rural-Urban Migration 70? Chapter 21 Labor Mobility II: Immigration and Outsourcing?1? 21.1 Immigration and Outsourcing: The Evidence Immigration: Labor-Market Effects The Assimilation of Immigrants 729»% 21.4 Illegal Immigration Outsourcing 744 1

8 Contents xiii Chapter 22 Unemployment I: Contractual Frictions Unemployment: Concepts, Measurement, and the U.S. Experience The Theory of Unemployment Efficiency Wage Models Other Models of Unemployment Wage Rigidity: The Empirical Evidence 785 Appendix 22.A Implicit Contracts 797 Chapter 23 Unemployment II: Market Frictions The Flow Approach to Labor Markets Worker and Job Flows: The Evidence The Stock-Flow Approach: Steady-State Unemployment Matching Job Destruction 82? Chapter 24 Turnover I: Job Search and Accessions Search Activity Extensions of the Simple Search Model Wage Determination 845' 24.4 Accessions: Search Models 852 Appendix 24.A The Reservation Wage 859 Chapter 25 Turnover II: Quits and Layoffs Turnover: Evidence and Interpretation Efficient Separations Displaced Workers: The Evidence Displaced Workers: Theory Easing the Burden of Worker Displacements 888 PAiT TOOLS OF THE TRADE AppendixA Econometric Methods A-3 A.I Linear Regression A-4 A.2 Hypothesis Testing and the Goodness of Fit A-10 A.3 Problems and Pitfalls A-14 A.4 Categories of Economic Data A-19 Appendix B Proportions, Percentages, and Elasticities A-23 B.I Proportionate and Percentage Changes A-23 B.2 Elasticities A-26

9 xiv Contents Appendix C Present Values and Discounted Utilities A-33 C.I Present Values A-34 C.2 Payment Streams A-36 C.3 Discounted Utilities A-38 Appendix D Decision Making under Uncertainty A-41 D.I The Expected Utility Hypothesis A-42 D.2 Attitudes Toward Risk A-45 D.3 The Insurance Business A-48 Notes N-l References R-l End of Chapter Review Questions and Problems Solutions S-l Credits C-l Name Index 1-1 Subject Index 1-5 SUPPLEMENTARY WEBSITE CHAPTERS Chapter 26 The Long-Run Demand for Labor and Adjustment Costs Chapter 2? Policy Application: Income Taxes Chapter 28 Labor Supply over the Life Cycle Chapter 29 The Family Chapter 30 Retirement Chapter 31 Crime Chapter 32 Trade Unions II: Collective Bargaining and Strikes Chapter 33 Earnings II: Sectoral Shocks and Aggregate Disturbances Chapter 34 Education I: The Performance of Schools and Colleges Chapter 35 Education II: Governance and Finance