This paper summarizes the results of nearly a dozen new papers presented at the Sundance Conference on Monopsony in Labor Markets held in October 2018. These papers, to be published as a special issue of the Journal of Human Resources, study various aspects of monopsony and failures of competition in labor markets. It also reports on the new developments in public policies associated with widespread concerns about labor market competition and efforts to ameliorate competitive failures. The conference papers range from studies of the labor supply elasticity individual firms face to studies of local labor market concentration to studies of explicit covenants suppressing labor market competition. New policies range from private and public antitrust litigation to concerns about the effect of mergers and inter-firm agreements on labor market competition. We provide a detailed discussion of the mechanics of the Silicon Valley High Tech Worker conspiracy to suppress competition based on Court documents in the case. Non-compete agreements, which are not enforceable in three states already, have also come under scrutiny.
Henry Farber
It has often been argued that voter turnout in the United States is too low, particularly
compared with turnout in other industrialized democracies, and that a healthy democracy
should have higher turnout. One proposal that has been considered by Congress to increase
voter turnout is the creation of “Democracy Day,” making Election Day a national holiday.
In this study I evaluate the likely effectiveness of an election holiday in increasing turnout
by studying how state regulations making election day a holiday for state employees affects
voter turnout among state employees in those states. I exploit these “natural experiments”
in a difference-in-difference context, using various groups of non-state employees as controls.
My analysis relies on data from Voting Supplements to the Current Population Survey in
November 2004 and 2006. The results are clear. There is no evidence from the “natural
experiment” of states providing an election holiday for state employees that such holidays
significantly increase voter turnout. I conclude that having an election holiday, by itself, is
not an effective strategy to increase voter turnout.
I examine changes in the incidence of job loss between 1981 and 1995 using
data from the Displaced Workers Surveys (DWS) from 1984-1996. The rate of job loss
followed a cyclical pattern between 1981 and 1991, starting at a high level in the slack
labor market of the early 1980’s, falling during the economic expansion of the middle and
late 1980’s, and rising during the weak labor market at the end of the 1980’s and early
1990’s. A puzzle is that the overall rate of job loss has increased in the 1990’s despite the
sustained expansion. I document these facts and address the possibility that the elevated
rates of job loss in the 1990’s are a statistical artifact resulting from changes in the wording
of key questions in the DWS in 1994 and 1996 exacerbating a problem of misclassification
of some workers as displaced. Using additional data from a debriefing of respondents to the
the February 1996 DWS to adjust rates of job loss to estimate a consistent time series of
job loss rates, I find 1) that the overall rate of job loss has not declined in the 1993-95 time
period, despite the strong labor market and 2) the overall rate of job loss in the 1993-95
period may be as high as it was during the slack labor market of 1989-91 and almost as
high as it was during the very slack labor market of 1981-83.
Despite a record of sustained growth in employment in the United States,
there is longstanding concern that the new jobs are of poor quality, implying that the
quality of the stock of jobs in the economy is deteriorating. In fact, it is difficult to define
a new job, much less identify such jobs and evaluate their quality. In this study, I define new
jobs operationally as worker-firm matches that have begun within the last year (i.e., tenure
less than one year), and I investigate the extent to which the quality of new (low tenure)
jobs relative to old (higher tenure) jobs has changed over the period from 1979-1996. I
consider three dimensions of quality: real wages, the rate of part-time employment, and
the rate of coverage by employer-provided health insurance. The empirical analysis relies
on data from eight mobility and benefit supplements to the Current Population Survey
over the period studied. The results are clearcut. Real hourly wages on new jobs have
deteriorated slightly relative to wages on older jobs, but the general patterns of the wage
distribution on new jobs have changed in ways similar to the overall wage distribution (a
large increase in the return to education driven by a large decline in wages for less-skilled
workers). There is no evidence of an increase in the rate of part-time employment on
either new jobs or old jobs so that the quality of new jobs has not changed absolutely
or relative to the quality of older jobs in this dimension. The quality of new jobs has
deteriorated substantially for some workers in the provision of employer-provided health
insurance. Less-educated workers have become substantially less likely to be covered by
or offered health insurance by their employer, and the decline is particularly large on new
jobs. There has been a smaller decline in employer-provided health insurance coverage for
more-educated workers on both old and new jobs, but the decline is no larger on new jobs
than on old jobs. On balance, there has been a decline in the quality of jobs for less-skilled
workers, as measured by the availability of a key fringe benefit, that is especially severe
for new jobs and that reinforces the well-known deterioration of the labor market for
less-skilled workers more generally. There has been relatively little change in the quality
of jobs available to more highly-skilled workers, either on new or on old jobs.
The Great Recession from December 2007 to June 2009 is associated with a dramatic weakening of the labor market from which it has recovered only slowly. I use data from the Displaced Workers Survey (DWS) from 1984-2016 to investigate the incidence and consequences of job loss from 1981-2015. In particular, the 2010-2016 DWSs provide a window through which to examine the experience of job losers in the Great Recession and its aftermath and to compare their experience to that of earlier job losers. These data show a record high rate of job loss in the Great Recession, with almost one in six workers reporting having lost a job in the 2007-2009 period, that slowly returned to pre-recession levels in the 2011-2015 period. The employment consequences of job loss are also very serious during this period with very low rates of reemployment and difficulty finding full-time employment during the Great Recession and its aftermath. The reduction in weekly earnings for those full-time job losers during the 2007-2015 period who were able to find new full-time employment are relatively small, even for those displaced since 2008. In fact, a substantial minority of these job losers report earning more on their new job than on the lost job. Most of the cost of job loss comes from difficulty in finding new full-time employment. [JEL Classification: J63]
After documenting the long decline in private sector unionism over the last 50 years, we examine data on NLRB representation elections to determine if changes in the administration of the NLRA during the 1980s reduced the level
of organizing activity and success. While organizing activity sharply declined in
1981 (just before President Reagan's showdown with the air traffic controllers'
union, PATCO), we find little evidence that the changes in the administration of the NLRA later in the decade adversely affected the level of union organizing activity. We then present an accounting framework that decomposes the sharp
decline in the private-sector union membership rate into components due to 1) differential growth rates in employment between the union and nonunion sectors and 2) changes in the union new organization rate (through NLRB-supervised
representation elections). We find that most of the decline in the union membership rate is due to differential employment growth rates and that changes in union organizing activity had relatively little effect. Given that the differential employment growth rates are due largely to broader market and regulatory
forces, we conclude that the prospects are dim for a reversal of the downward
spiral of labor unions based on increased organizing activity.
We use a resume audit study to better understand the role of employment and unemployment histories in affecting callbacks to job applications. We focus on how the effect of career history varies by age, partly in an attempt to reconcile disparate findings in prior studies. While we cannot reconcile earlier findings on the effect of unemployment duration, the findings solidify an emerging consensus on the role of age and employment on callback. First, among applicants across a broad age range, we find that applicants with 52 weeks of unemployment have a lower callback rate than do applicants with shorter unemployment spells. However, regardless of an applicant's age, there is no relationship between spell length and callback among applicants with shorter spells. Second, we find a hump-shaped relationship between age and callback, with both younger and older applicants having a lower probability of callback relative to prime-aged applicants. Finally, we find that those applicants who are employed at the time of application have a lower callback rate than do unemployed applicants, regardless of whether the interim job is of lower or comparable quality relative to the
applied-for job. This may reflect a perception among employers that it is harder or more expensive to attract an applicant who is currently employed.
I examine the extent to which workers who lose jobs find work in alterna-
tive employment arrangements such as temporary work, part-time work, and independent
contracting rather than as conventional full-time “regular” employees. The analysis is
based on data from two sources. First, I use matched data from the Displaced Worker
Supplement (DWS) to the February 1994 Current Population Survey (CPS) and the Con-
tingent and Alternative Employment Arrangements Supplement (CAEAS) to the February
1995 DWS. Second, I use data from the seven DWS’s conducted between 1984 and 1996.
The results are clear. Using the matched DWS-CAEAS, I find that job losers are signif-
icantly more likely than non-losers to be in temporary jobs (including on-call work and
contract work). There is also some evidence from the matched data that the likelihood
of temporary employment falls with time since job loss while the likelihood of “regular”
employment increases with time since job loss. Using the combined DWS data. where
unfortunately I cannot identify workers in temporary jobs, I find that job losers are less
likely than non-losers to be either in regular jobs or self-employed subsequent to job loss.
But job losers are more likely than non-losers to be employed part-time subsequent to job
loss. The time-series pattern in the DWS data shows that the part-time alternative to
regular employment for job losers was less important in the tight labor market of the late
1980’s than in the looser labor markets of the early 1980’s and early 1990’s. There is also
evidence that the likelihood of part-time employment falls with time since job loss while
the likelihood of “regular” employment increases with time since job loss. Thus, it appears
that temporary and part-time jobs are taken by workers subsequent to job loss, but these
alternative employment arrangements are often part of a transitional process leading to
regular full-time permanent employment.