Labor Economics Bonn Graduate School of Economics SS 2000 Magnus Lofstrom Klaus F. Zimmermann Students interested in the below described graduate level course in labor economics should attend the meeting on Friday March 31 at 13:00 to discuss the course, proposed syllabus and meeting times, in IZA's seminar room. The principal objective of this course is to introduce students with research interests in labor economics to several key theoretical and empirical issues in the field. The course will focus on 7 general topics: labor demand, labor supply, human capital, wage setting institutions, labor mobility, unemployment and earnings inequality. The course will be divided into 2 parts. The first part consists of 8 lectures covering the topics listed above. Each lecture will be for 3 hours. Students are expected to have done the readings in advance and to be active, i.e. ask questions and to participate in discussions of the topics, during lectures. The date and time of the lectures are listed by the respective topic. The second part of the course consists of sessions led by the students. In each session students will be assigned to present a review and critique of the respective literature on specific topics. The topics will be decided on early in the course and may be within the proposed general topic of Earnings Inequality. All participants will discuss the presentations. A partial list of references on this topic can be found below. The presentations will take place July 10 and 11. Prerequisites: Sound understanding of microeconomics and econometrics. Text: Ehrenberg, Ronald G. and Smith, Robert S. (1996), Modern Labor Economics: Theory and Public Policy, Sixth edition, Addison-Wesley: New York. This is an introductory text in labor economics. The course will extensively use journal articles to supplement the topics covered in lectures. It is highly recommended that students read the assigned chapters before the course starts. 1
Examination: The examination for the course consists of your presentations and participation in the discussions in the course. Furthermore, you have to write a short term paper (10-15 pages in English) on one of the topics discussed in the lectures. The paper has to be written individually and must be submitted at the end of the semester. There will also be a written in-class exam at the end of the first part of the course. I) Labor Demand (2 lectures: May 16, 9:00-12:00 and May 19, 13:00-16:00) i) Marginal revenue product/ Firms demand for labor ii) Labor demand elasticities iii) Quasi fixed labor costs TEXT BOOK: Ehrenberg and Smith: Chapters 1, 2, 3, 4 and 5 ARTICLES: Abraham, Katharine G. and Taylor, Susan K. (1996), Firms Use of Outside Contractors: Theory and Evidence, Journal of Labor Economics, 14(3), pp. 394-424. Boal, William M. and Ransom, Michael R. (1997), Monopsony in the Labor Market,, Journal of Economic Literature; 35(1), pp. 86-112. Hamermesh, Daniel (1993), Labor Demand, Chapters 2 and 3. (Princeton: Princeton University Press) Hamermesh, Daniel (1986) in Handbook of Labor Economics, Chapter 8, Volume 1. Lazear, Edward (1990), Job Security Provisions and Employment, Quarterly Journal of Economics, 105(3), pp. 699-726. Oi, Walter (1962), "Labor as a Quasi-fixed Factor," Journal of Political Economy, pp. 538-55. Trejo, Stephen J. (1991) The Effects of Overtime Pay Regulation on Worker Compensation, American Economic Review, 81(49), pp. 719-740. II) Labor Supply (1 lecture: May 26, 9:00-12:00) i) The decision to work ii) Compensating wage differentials TEXT BOOK: Ehrenberg and Smith: Chapters 6 and 8 2
ARTICLES: Overview: Blundell, Richard and Macurdy, Thomas (1999) Labor Supply: A Review of Alternative Approaches, in Handbook of Labor Economics, Chapter 27, Volume 3. The Basic Static Model: Killingsworth, Mark (1983), Labor Supply, (Cambridge: Cambridge University Press) Chapters 1 and 2. Ben-Porath, Yoram (1973), "Labor Force Participation Rates and the Supply of Labor", Journal of Political Economy (May/June). Responsiveness of Labor Supply: Heckman, James (1974), "Shadow Prices, Market Wages and Labor Supply", Econometrica (July). Heckman, James (1979), "Sample Selection Bias as a Specification Error With an Application to the Estimation of Labor Supply Functions", in James Smith (Ed.) Female Labor Supply, (Princeton: Princeton University Press). Moffitt, Robert (1984), "The Estimation of a Joint Wage-Hours Labor Supply Model", Journal of Labor Economics, (October). Moffitt, Robert (1992), "Incentive Effects of the U.S. Welfare System: A Review", Journal of Economic Literature, (March). Mroz, Thomas (1987), "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions", Econometrica, (July). Dynamic Models and Models of Intertemporal Substitution: Altonji, Joseph (1986), "Intertemporal Substitution in Labor Supply: Evidence from Micro Data", Journal of Political Economy, (June), Supplement. Heckman, James (1969), "Life Cycle Consumption and Labor Supply: An Explanation of the Relationship between Income and Consumption Over the Life Cycle", American Economic Review (December). Heckman, James and Thomas MaCurdy (1980), "A Life Cycle Model of Female Labor Supply", Review of Economic Studies, (January). 3
Lucas. Robert E. and Leonard Rapping (1969), "Real Wages, Employment, and Inflation", Journal of Political Economy, (October). MaCurdy, Thomas (1981), "An Empirical Model of Labor Supply in a Life Cycle Setting", Journal of Political Economy (December). Compensating Wage Differentials: Hamermesh, Daniel (1997) Immigration and the Quality of Jobs, NBER Working Paper No. 6195. Rosen, Sherwin (1974) Hedonic Prices and Implicit Markets, Journal of Political Economy (January/February). Rosen, Sherwin (1986) The Theory of Equalizing Differences, in Handbook of Labor Economics, Chapter 12, Volume 1. Viscusi, Kip W (1993) The Value of Risks to Life and Health, Journal of Economic Literature, (December). III) Investments in Human Capital (1 lecture: June 2, 9:00-12:00) i) Education and training/returns to Education ii) Human capital theory and signaling TEXT BOOK: Ehrenberg and Smith: Chapter 9 ARTICLES: Education and Training: Freeman, Richard B (1986) The Demand for Education in Handbook of Labor Economics, Chapter 6, Volume 1. Returns to Education: Angrist, Joshua D and Krueger, Alan B (1999) Empirical Strategies in Labor Economics, in Handbook of Labor Economics, Chapter 23, Volume 3. Card, David (1999) The Causal Effect of Education on Earnings in Handbook of Labor Economics, Chapter 30, Volume 3. Methods Heckman Selectivity Correction: Griliches, Zvi (1977), "Estimating the Returns to Schooling: Some Econometric Problems", Econometrica, (January) pp. 1-22. 4
Heckman, James (1979), "Sample Selection Bias as a Specification Error", Econometrica, 47, pp. 153-161. Mincer, Jacob (1974), Schooling, Experience and Earnings, New York: Columbia University Press for NBER. Willis, R.J. and S. Rosen (1979), "Education and Self-Selection", Journal of Political Economy, (Supplement, October), pp. S7-S36 Methods Instrumental Variables: Angrist, Joshua D. and Alan B. Krueger (1991), "Does Compulsory School Attendance Affect Schooling and Earnings?", Quarterly Journal of Economics, 56, #4, pp. 979-1014. Angrist, Joshua D. and Alan B. Krueger (1992), "The Effect of Age at School Entry on Educational Attainment: An Application of Instrumental Variables with Moments from Two Samples", Journal of the American Statistical Association, 87, (June) pp. 328-336. Angrist, Joshua D. and Alan B. Krueger (1994), "Why do World War II Veterans Earn More than Nonveterans?", Journal of Labor Economics, (January) pp. 74-97. Ashenfelter, Orley and Alan Krueger (1994), "Estimates of the Economic Return to Schooling from a New Sample of Twins", American Economic Review, (December). Bound, John, David A. Jaeger and Regina M. Baker (1995), "The Cure Can be Worse than the Disease: A Cautionary Tale Regarding Instrumental Variables", Journal of the American Statistical Association, (June). Card, David (1993), "Using Geographic Variation in College Proximity to Estimate the Return to Schooling", NBER Working Paper 4483. Kane, Thomas J. and Cecilia E. Rouse (1995), "Labor Market Returns to Two- and Four- Year College", American Economic Review (June). Staiger, Douglas and James H. Stock (1997), "Instrumental Variables Regression with Weak Instruments", Econometrica (May) pp. 557-86 Methods Fixed Effects: Altonji, Joseph and Thomas Dunn, (1996), "The Effects of Family Characteristics on the Return to Education", Review of Economics and Statistics, (November). Angrist, Joshua and Whitney Newey (1991), "Over-identification Tests in Earnings Functions with Fixed Effects", Journal of Business and Economic Statistics (July). 5
Ashenfelter, Orley and David Zimmerman (1993), "Estimates of the Returns to Schooling from Sibling Data: Fathers, Sons and Brothers", NBER Working Paper # 4491. Ashenfelter, Orley and Alan Krueger (1994), "Estimates of the Economic Return to Schooling from a New Sample of Twins", American Economic Review (December). (Note: This paper uses both instrumental variables and fixed effects.) Light, Audrey (1995), "The Effects of Interrupted Schooling on Wages", Journal of Human Resources (Summer). Human capital theory and signaling: Review of the Models: Becker, Gary (1975), Human Capital, New York: National Bureau of Economic Research. Spence, Michael (1973), "Job Market Signalling", Quarterly Journal of Economics. Stiglitz, Joseph (1975), "The Theory of Screening, Education, and the Distribution of Income", American Economic Review. Empirical Findings: Altonji, Joseph (1995), "The Effects of High School Curriculum on Education and Labor Market Outcomes", Journal of Human Resources, (Summer). Altonji, Joseph and Charles R. Pierret (1996), "Employer Learning and the Signaling Value of Education", NBER Working Paper # 5438. Farber, Henry S. and Robert Gibbons (1995), "Learning and Wage Dynamics", Quarterly Journal of Economics (November). Gibbons, Robert and Lawrence F. Katz (1991), "Layoffs and Lemons", Journal of Labor Economics, 9, #4, pp. 351-380. Lang, Kevin and David Kropp (1986), "Human Capital versus Sorting: The Effects of Compulsory Attendance Laws", Quarterly Journal of Economics, 101, #3, pp. 609-624. Weiss, Andrew (1988), "High School Graduation, Performance, and Wages", Journal of Political Economy (96:4). IV) Wage Setting Institutions (1 lecture: June 6, 9:00-12:00) i) Unions ii) Minimum wage 6
TEXT BOOK: Ehrenberg and Smith: Chapter 13 ARTICLES: Unions: Ashenfelter, Orley and Johnson, George E. (1969) Bargaining Theory, Trade Unions, and Industrial Strike Activity, American Economic Review (March) pp. 35-49 Allen, Steven G. (1984) Unionized Construction Workers Are More Productive, Quarterly Journal of Economics (May) pp. 251-74. Betts, Julian and Odgers, Cameron (1997) "Do Unions Reduce Investment?", Industrial and Labor Relations Review, (51:1), pp. 18-36. Brown, Charles and Medoff, James. (1978) Trade Unions in the Production Process, Journal of Political Economy (June) pp.355-78. Farber, Henry S. (1986) The Analysis of Union Behavior, in Handbook of Labor Economics, Chapter 18, Volume 1. Minimum Wage: Brown, Charles, Curtis Gilroy, and Andrew Kohen (1982), "The Effect of the Minimum Wage on Employment and Unemployment", Journal of Economic Literature, (June). Card, David (1992), "Do Minimum Wages Reduce Employment? A Case Study of California, 1987-89", Industrial and Labor Relations Review, (October). Card, David and Alan B. Krueger (1994), "Minimum Wages and Employment - A Case Study of the Fast Food Industry in New Jersey and Pennsylvania", American Economic Review (September). Card, David and Alan B. Krueger (1995), Myth and Measurement : The New Economics of the Minimum Wage, (Princeton, N.J.: Princeton University Press). Card, David, Lawrence Katz and Alan Krueger (1994), "Comment on David Neumark and William Wascher, 'Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws'", Industrial and Labor Relations Review, (April). Katz, Lawrence and Alan B. Krueger (1992), "The Effect of the Minimum Wage on the Fast Food Industry", Industrial and Labor Relations Review, (October). 7
Kennan, John (1995), "The Elusive Effects of Minimum Wages", Journal of Economic Literature (December). Neumark, David and William Wascher (1994), "Employment Effects of Minimum and Subminimum Wages: Reply to Card, Katz, and Krueger",.Industrial and Labor Relations Review, (April). Neumark, David and William Wascher (1992), "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws", Industrial and Labor Relations Review, (October). Neumark, David and William Wascher (1995), "Minimum-Wage Effects On School And Work Transitions Of Teenagers", American Economic Review (May). Neumark, David and William Wascher (1995), "The Effect Of New Jersey's Minimum Wage Increase On Fast-Food Employment: A Re-Evaluation Using Payroll Records", NBER Working Paper #5224. V) Labor Mobility (1 lecture: June 9, 9:00-12:00) i) Internal mobility ii) Economics of immigration TEXT BOOK: Ehrenberg and Smith: Chapter 10 ARTICLES: Betts, Julian R. and Lofstrom, Magnus. (2000) The Educational Attainment of Immigrants: Trends and Implications. in George J. Borjas (ed) Issues in the Economics of Immigration. University of Chicago Press. Borjas, George J. (1985) Assimilation Changes in Cohort Quality and the Earnings of Immigrants. Journal of Labor Economics, 4:463-89. George Borjas (1987) "Self-Selection and the Earnings of Immigrants," American Economic Review. Borjas, George J. (1994) The Economics of Immigration. Journal of Economic Literature 32:1667-717. Card, David (1990) The Impact of the Mariel Boatlift on the Miami Labor Market, Industrial and Labor Relations Review, 4(2) pp. 168-192. Carliner, Geoffrey. (1980) Wages, Earnings and Hours of First, Second, and Third Generation American Males. Economic Inquiry 1:87-102. Chiswick, Barry R. (1978) The Effect of Americanization on the Earnings of Foreign- 8
born Men. Journal of Political Economy 5:897-921. Friedberg, Rachel and Hunt, Jennifer (1995) The Impact of Immigrants on Host Country Wages, Employment and Growth, Journal of Economic Perspectives, 9(2) pp. 23-44. Mincer, Jacob (1978) "Family Migration Decisions," Journal of Political Economy. Roy, Andrew D (1951) Some Thoughts on the Distribution of Earnings, Oxford Econ. Pap. N.S. (June), 3, pp. 135-46. VI) Unemployment (1 lecture: June 13, 9:00-12:00) i) The microeconomics of unemployment ii) The macroeconomics of unemployment TEXT BOOK: Ehrenberg and Smith: Chapter 15 ARTICLES: Unemployment Theories - Micro Efficiency Wages: Carmichael, H. Lorne (1990), "Efficiency Wage Models of Unemployment - One View", Economic Inquiry, (April) pp. 269-295. Lang, Kevin and Shulamit Kahn (1990), "Efficiency Wage Models of Unemployment - A Second View", Economic Inquiry, (April) pp. 296-306. The Shirking Model: Carmichael, H. Lorne (1985), "Can Efficiency Wage Unemployment be Involuntary?", American Economic Review, 75, pp. 1213-1214. Macleod, Bentley and James Malcolmsom (1989), "Implicit Contracts, Incentive Compatibility and Involuntary Unemployment", Econometrica, 57, pp. 312-322. MacLeod, Bentley and James M. Malcolmson (1988), "Reputation and Hierarchy in Dynamic Models of Employment", Journal of Political Economy, 96, #4. Shapiro, Carl and Joseph Stiglitz (1984), "Equilibrium Unemployment as a Worker Discipline Device", American Economic Review (June) pp. 433-444. Shapiro, Carl and Joseph Stiglitz (1985), "Can Efficiency Wage Unemployment be Involuntary: Reply", American Economic Review, 75, pp. 1215-1217. Adverse Selection: 9
Weiss, A. (1980), "Job Queues and Layoffs in Labor Markets with Flexible Wages", Journal of Political Economy, (June) pp. 526-538. Turnover Costs: Salop, Steven C. (1979), "A Model of the Natural Rate of Unemployment", American Economic Review, (March) pp. 117-125. Sociological Explanations: Akerlof, George A. (1982), "Labor Contracts as Partial Gift Exchange", Quarterly Journal of Economics, 47, November, pp. 543-569. Akerlof, George A. (1984), "Gift-Exchange and Efficiency Wage Theory: Four Views", American Economic Review, 74, May, pp. 79-83. Empirical Evidence: Blackburn, McKinley and David Neumark (1992), "Unobserved Ability, Efficiency Wages, and Interindustry Wage Differentials", Quarterly Journal of Economics, 107, #4, pp. 1421-1436. Cappelli, Peter and Keith Chauvin (1991), "An Interplant Test of the Efficiency Wage Hypothesis", Quarterly Journal of Economics, 106, #3, pp. 769-787. Gibbons, Robert and Lawrence Katz (1992), "Does Unmeasured Ability Explain Inter- Industry Wage Differentials?", Review of Economic Studies, (July) pp. 515-535. Groshen, Erica L. and Alan B. Krueger (1990), "The Structure and Supervision of Pay in Hospitals", Industrial and Labor Relations Review, 43, #3, Special Issue, pp. S134-S146. Krueger, Alan B. and Lawrence H. Summers (1988), "Efficiency Wages and the Inter- Industry Wage Structure", Econometrica, 56, #2, pp. 259-293. Unemployment Theories - Macro Insider-Outsider/Hysteresis: Blanchard, Olivier J. and Lawrence H. Summers (1986), "Hysteresis and the European Unemployment Problem", in Stanley Fischer (Ed.), NBER Macroeconomics Annual 1986, Cambridge: MIT Press, pp. 15-77. Lindbeck, Assar and Dennis J. Snower (1988), "Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach", American Economic Review 78, #1, pp. 167-188. 10
Sectoral Shifts: Abraham, Katherine G. and Lawrence F. Katz (1986), "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?", Journal of Political Economy (June) pp. 507-522. Brainard, S. Lael and David M. Cutler (1993), "Sectoral Shifts and Cyclical Unemployment Reconsidered", Quarterly Journal of Economics (February) pp. 219-243. Lilien, David M. (1982), "Sectoral Shifts and Cyclical Unemployment", Journal of Political Economy (August) pp. 777-793. Murphy, Kevin M. and Robert H. Topel (1987), "The Evolution of Unemployment in the United States", in NBER Macroeconomics Annual 2, pp. 11-58. VII) Inequality of Earnings (1 lecture: June 14, 9:00-12:00) i) Causes and trends ii) Policy TEXT BOOK: Ehrenberg and Smith: Chapter 14 ARTICLES: Blackburn, McKinley L., Bloom, David E. and Freeman, Richard B. "Changes in Earnings Differentials in the 1980's: Concordance, Converges, Causes and Consequences," National Bureau of Economic Research Working Paper, No. 3901, November 1991. Bound, John, and George Johnson Changes in the Structure of Wages in the 1980s: An Evaluation of Alternative Explanations, American Economic Review, 1992, June, 371-392. Davis, S. Cross-Country Patterns of Change in Relative Wages, NBER Macroeconomics Annual, 1992, Cambridge: MIT Press, 239-300. DiNardo, John E., and Jorn-Steffen Pischke The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?, Quarterly Journal of Economics, 1997, February, 291-303. Edin, Per-Anders, and Bertil Holmlund (1995) The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy? in Richard B. Freeman and Lawrence F. Katz (eds), Differences and Changes in Wage Structures, Chicago: University of Chicago Press, 307-44. 11
Freeman, Richard, and Lawrence Katz (1994) Rising Wage Inequality: The United States vs. Other Advanced Countries, in Richard Freeman (ed.), Working Under Different Rules, New York: Russell Sage Foundation. Gottschalk, Peter, and Timothy Smeeding (1996) Cross-National Comparisons of Earnings and Income Inequality, Journal of Economic Literature (June) pp. 633-687. Snower, Dennis J. (1999) "Causes of Changing Earnings Inequality," IZA Discussion Paper No. 29, (January). Johnson, George E. (1997) Changes in Earnings Inequality: The Role of Demand Shifts, Journal of Economic Perspectives, (Spring) 41-54. Katz, Lawrence F and Murphy, Kevin M. (1992) "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Quarterly Journal of Economics, (February) pp. 35-78. Katz, Lawrence, G. Loveman, and D. Blanchflower (1995) A Comparison of Changes in the Structure of Wages in Four OECD Countries, in Katz and Freeman (eds.), Differences and Changes in Wage Structures, Chicago: University of Chicago Press. 12
Reference List (partial) for proposed student seminar topic Earnings Inequality: Berger, Mark The Effect of Cohort Size on Earnings Growth: A Reexamination of the Evidence, Journal of Political Economy, 1985, June, 93, 201-34. Berman, Ely, John Bound, and Zvi Griliches Changes in the Demand for Skilled Labor with U.S. Manufacturing Industries: Evidence from the Annual survey of Manufacturing, Quarterly Journal of Economics, 1994, May, 2, 109. Blackburn, McKinley L., Bloom, David E. and Freeman, Richard B. "Changes in Earnings Differentials in the 1980's: Concordance, Converges, Causes and Consequences," National Bureau of Economic Research Working Paper, No. 3901, November 1991. Bound, John, and George Johnson Changes in the Structure of Wages in the 1980s: An Evaluation of Alternative Explanations, American Economic Review, 1992, June, 371-392. Davis, S. Cross-Country Patterns of Change in Relative Wages, NBER Macroeconomics Annual, 1992, Cambridge: MIT Press, 239-300. DiNardo, John E., and Jorn-Steffen Pischke The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?, Quarterly Journal of Economics, 1997, February, 291-303. DiNardo, John, Nicole M. Fortin, and Thomas Lemieux Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach, Econometrica, September, 1996, 65, 1001-44. Edin, Per-Anders, and Bertil Holmlund The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy? in Richard B. Freeman and Lawrence F. Katz (eds), Differences and Changes in Wage Structures, Chicago: University of Chicago Press, 1995, 307-44. Freeman, Richard B. Unionism and the Dispersion of Wages, Industrial and Labor Relations Review, 1980, October, 34, 3-23. Freeman, Richard Evaluating the European View that the United States has No Unemployment Problem, American Economic Review, Papers and Proceedings, 1988, May, 78, 294-299. Freeman, Richard B. "How Much has De-Unionisation Contributed to the Rise in Earnings Inequality?," in S. Danziger and P. Gottschalk, Uneven Tides: Rising Inequality in America, 1993, New York: Russell Sage Foundation, 99-164. Freeman, Richard B. Are Your Wages Set in Beijing? Journal of Economic 13
Perspectives, 1995, 9(3), Summer, 15-32. Freeman, Richard, and Lawrence Katz Rising Wage Inequality: The United States vs. Other Advanced Countries, in Richard Freeman (ed.), Working Under Different Rules, New York: Russell Sage Foundation, 1994. Gottschalk, Peter Inequality, income Growth, and Mobility: The Basic Facts, Journal of Economic Perspectives, 1997, 11(2), Spring, 21-40. Gottschalk, Peter, and Robert Moffitt The Growth of Earnings Instability in the U.S. Labor Market, Brookings Papers on Economic Activity, 1994, 2, 217-72. Gottschalk, Peter, and Timothy Smeeding Cross-National Comparisons of Earnings and Income Inequality, Journal of Economic Literature, 1996, 35, June, 633-687. Johnson, George E. Changes in Earnings Inequality: The Role of Demand Shifts, Journal of Economic Perspectives, 1997, 11(2), Spring, 41-54. Katz, Harry C. The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis, Industrial and Labor Relations Review, 1993, 47 (1), 3-22. Katz, Lawrence F and Murphy, Kevin M. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, February 1992, 35-78. Katz, Lawrence, G. Loveman, and D. Blanchflower A Comparison of Changes in the Structure of Wages in Four OECD Countries, in Katz and Freeman (eds.), Differences and Changes in Wage Structures, Chicago: University of Chicago Press, 1995. Katz, Lawrence, and Anna Ravenga Changes in the Structure of Wages, the U.S. vs. Japan, Journal of Japanese and International Economics, 1989, III. Krueger, Alan How Computers have Changed the Wage Structure: Evidence from Microdata, Quarterly Journal of Economics, 1993, 108, 33-60. Krugman, Paul "And Now for Something Completely Different: An Alternative Model of Trade, Education and Inequality," in eds. Robert Feenstra The Impact of International Trade on Wages, University of Chicago Press, 2000. Levy, Frank, and Richard J. Murnane U.S. Earnings Level and Earnings inequality: A Review of Recent Trends and Proposed Explanations, Journal of Economic Literature, 1992, Sept, 30(3), 1333-81. Lindbeck, Assar, and Dennis J. Snower Wage Setting, Unemployment, and Insider- 14
Outsider Relations, American Economic Review, Papers and Proceedings, 1986, 76(2), 235-239. Lindbeck, Assar, and Dennis J. Snower Reorganization of Firms and Labor Market Inequality, American Economic Review, 1996, May, 86(2), 315-321. Machin, Stephen Changes in the Relative Demand for Skills, in Acquiring Skills, ed. by Alison Booth and Dennis J. Snower, Cambridge: Cambridge University Press, 1996, 127-146. Machin, Stephen, and Alan Manning Minimum Wages, Wage Dispersion and Employment: Evidence from the UK Wages Councils, Industrial and Labor Relations Review, 1994, 47, 319-329. Mincer, Jacob Human Capital Responses to Technical Change, NBER Working Paper No 3207, 1989. Mincer, Jacob Human Capital, Technology, and the Wage Structure: What Do the Time Series Show? NBER Working Paper No 3581, 1991. Murphy, Kevin and Welch, Finis. "Industrial Change and the Rising Importance of Skill," in S. Danziger and P. Gottschalk, Uneven Tides: Rising Inequality in America, 1993, New York: Russell Sage Foundation, 101-132. Murnane, Richard, John Willet, and Frank Levy The Growing Importance of Cognitive Skills in Wage Determination, Review of Economics and Statistics, 1995, 77(2), 251-266. Murphy, Kevin, and Finis Welch Industrial Change and the Rising Importance of Skill, in Peter Gottschalk and Sheldon Danziger (eds.), Uneven Tides, New York: Russell Sage Foundation, 1993, 101-132. Nickell, Stephen, and Brian Bell The Collapse in Demand for the Unskilled and Unemployment Across the OECD, Oxford Review of Economic Policy, 1995, 11(1), 40-62. Nickell, Stephen, and Brian Bell Would Cutting Payroll Taxes on the Unskilled Have a Significant Impact on Unemployment in Unemployment Policy, ed. by Dennis J. Snower and Guillermo de la Dehesa, Cambridge: Cambridge University Press, 1996, 296-328. OECD Earnings Inequality, Low-Paid Employment and Earnings Mobility, Employment Outlook, 1998, July, ch. 3, 59-108. 15
Snower, Dennis J. "Converting Unemployment Benefits into Employment Subsidies," American Economic Review, 1994, 84(2), 65-70. Snower, Dennis J. "Causes of Changing Earnings Inequality," IZA Discussion Paper No. 29, January 1999. Topel, Robert H. Regional Labor Markets and the Determinants of Wage Inequality, American Economic Review, Papers and Proceedings, 1993, May, 83, 110-15. 16