This paper presents estimates of the average cost of the workers’
compensation insurance program for a homogeneous group of employers by state.
These estimates are of interest because they reflect the operation, direct
costs, and efficiency of workers’ compensation. The paper estimates cost
equations for a variety of alternative specifications. The main finding is
that costs tend to rise equal proportionally with benefits -- doubling
benefits will double insurance costs. The results also indicate that state
provision of workers’ compensation insurance is associated with higher average
costs to employers, all else equal. Finally, we explore the impact that the
minimum standards recommended by the National Commission on State Workmen's
Compensation Laws would have on workers’ compensation costs.

The most widely used measure of employer health care costs, the health insurance component of
the Employment Cost Index, indicates that cost growth has been decelerating since 1989. In
recent years the level of health care costs has even declined in nominal dollars. This paper
analyzes the components of changes in employers’ health care expenditures over the 1992-94 and
1987-93 periods. We find that employer costs have decreased primarily as a result of a decline in
the fraction of workers with coverage and a large decrease in the rate of growth of insurance
premiums. We conclude that the shift to managed care does not appear to be directly responsible
for significant cost savings because managed care premiums are almost as high as those for fee-
for-service plans, on average. Finally, we note that there is a significant need for improved data
collection in this area.

On April 1, 1992 New Jersey's minimum wage rose from $4.25 to $5.05 per hour. To evaluate the impact of the new law we surveyed over 400 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum. Comparisons of the changes in wages, employment, and prices at stores in New Jersey relative to stores in Pennsylvania (where the minimum remained constant at $4.25 per hour) provide simple robust estimates of the effect of the increased minimum wage. Our empirical findings challenge the conventional notion that a rise in the minimum causes employment to decline. Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 2.5 employees per store. We also compare employment changes at stores in New Jersey that were initially paying $5.00 per hour or more (and were therefore largely unaffected by the new law) to the employment changes at lower-wage stores, where the new law raised wages by 10-15 percent. Stores that were unaffected by the minimum wage had the same employment growth as stores in Pennsylvania, while stores that had to increase their wages increased their employment. Finally, we evaluate theoretical models that might explain these results.

As Bill Bradley recently observed, “A pair of strong hands are not what they used to be. Now
those hands have to be able to use a keyboard.” In 1997, over half of all workers directly used a
computer keyboard on the job. Workers who use a computer at work are paid more than those
who do not, and are more highly sought after by employers. The Commerce Department’s 1999
report, Falling Through the Net: Defining the Digital Divide, highlighted that African-American
workers are less likely than others to have access to information technology at home and at work.
The Commerce Department report did not address the issue of training African-American
students and workers to use computer technology. This paper seeks to fill that void by exploring
the magnitude of the racial divide in the use of computer technology among school children, and
considering the consequences of the digital divide. The key findings are summarized below.

This paper reinvestigates the evidence on the impact of the minimum wage on
employment in Puerto Rico. The strongest evidence that the minimum wage had a negative
effect on employment comes from an aggregate time series analysis. The weakest evidence
comes from cross-industry analyses. The main finding of the paper, however, is that the
statistical evidence of a negative employment effect of the minimum wage in Puerto Rico is
surprisingly fragile.

In this paper we study the role of covenants in franchise contracts that restrict the recruitment and hiring of employees from other units within the same franchise chain in suppressing and hiring of employees from other units within the same franchise chain in suppressing find that “no-poaching of workers agreements” are included in a surprising 58 percent of major franchisors’ contracts, including McDonald’s, Burger King, Jiffy Lube and H&R Block. Theoretical models of oligopsony and dynamic monopsony, as well as incentives for investment in job training, are discussed in the context of these no-poaching agreements. Although the occurrence of no-poaching agreements is difficult to predict from franchise or industry characteristics, no-poaching agreements are more common for franchises in low-wage and high-turnover industries.

This paper provides new evidence on time use and subjective well-being of employed and unemployed individuals in 14 countries. We devote particular attention to characterizing and modeling job search intensity, measured by the amount of time devoted to searching for a new job. Job search intensity varies considerably across countries, and is higher in countries that have higher wage dispersion. We also examine the relationship between unemployment benefits and job search.

This paper provides several observations on the impact of employment-based
government mandates on job characteristics, wages, and employment. Special attention is
devoted to evaluating the effects of mandated health insurance because health care is the largest
government mandate potentially on the horizon. In some situations, mandates may be useful
to solve adverse selection problems, and to compel firms to internalize the social costs, of
production. Moreover, in a world with pre-existing distortions, mandates may reduce other inefficiencies. However, it is concluded that in many situations the optimal way for a
government to assure that services are provided is probably not through employment-based
mandates. In many situations, mandates are utilized because alternative schemes are politically
infeasible. Nevertheless, since the labor supply curve is widely believed to be fairly inelastic,
in the long run employers’ costs of meeting government mandates are likely to be shifted to
employees in the form of lower wages. Cost shifting to employees is expected to moderate
the reduction in jobs due to government mandates.

This paper tries to reconcile evidence on the effect of schooling on income and on GDP growth
from the microeconometric and empirical macro growth literatures. Much microeconometric
evidence suggests that education is an important causal determinant of income for individuals
within countries as diverse as Sweden and the United States. At a national level, however, recent
studies have found that increases in educational attainment are unrelated to economic growth.
This finding is shown to be a spurious result of the extremely high rate of measurement error in
first-differenced cross-country education data. Afier accounting for measurement error, the
effect of changes in educational attainment on income growth in cross-country data is at least as
great as microeconometric estimates of the rate of return to years of schooling. We also
investigate another finding of the macro growth literature -- that economic growth depends
positively on the initial stock of human capital. We find that the effect of the initial level of
education on growth is sensitive to the econometric assumptions that are imposed on the data
(e.g., constant-coefficient assumption), as well as to the other covariates included in the model.
Perhaps most importantly, we find that the initial level of education does not appear to have a
significant effect on economic growth among OECD countries. The conclusion comments on
policy implications for Sweden based on the human capital literature.