Alexandre Mas

First name
Alexandre
Last name
Mas
Abstract

We investigate the time-series properties of firm effects in the AKM models popularized by
Abowd et al. (1999). We consider two approaches. The first approach — labelled as the rolling
approach — estimates AKM models separately in each T = 2 adjacent time interval. The
second approach is based on an extension of the original AKM — labelled as the Time Varying
AKM Model (TV-AKM) — in which we allow for unrestricted interactions of year and firm
dummies. We correct for biases in the resulting variance decompositions using the leave out
correction of Kline et al. (2019). These approaches allow us to examine how firm effects evolve
stochastically, their relation to the business cycle, and their contribution to changes in the wage
structure at a higher frequency than previously possible. Using data from Washington State, we
find that firm effects in earnings and hourly wages are highly persistent. The autocorrelation
coefficient between firm effects for wage rates in 2002 and 2014 is 0.74, and between firm
effects for earnings in 2002 and 2014 is 0.82. The rolling approach uncovers a significant
degree of cyclicality in firm effects. Variability in firm premiums tended to increase during
the great recession while the degree of worker and firm assortativity decreased. Time-varying
firm effects explains 13% of the variance of log wages and 21% of the variance of log earnings
in the Washington state over 2002–2014. Between 2002-2003 and 2013-2014 the variance of
firm wage premia decreased by 10%, but this decline was offset by increases in the variance in
individual premia and increases in assortative matching that resulted in an overall increase in
the variance of wages. Auxiliary evidence suggests that misspecification in AKM models due
to the drifting of firm effects is a second-order concern.

Year of Publication
2019
Number
629
Date Published
10/2019
Publication Language
eng
Citation Key
11441
Mas, A., Lachowska, M., Saggio, R., & Woodbury, S. (2019). Do firm effects drift? Evidence from Washington Administrative Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01ws859j538 (Original work published 10/2019AD)
Working Papers
Abstract

We estimate the magnitudes of reduced earnings, work hours, and wage rates of workers displaced during the Great Recession using linked employer-employee panel data from Washington State. Displaced workers’ earnings losses occurred mainly because hourly wage rates dropped at the time of displacement and recovered sluggishly. Lost employer-specific premiums explain only 17 percent of these losses. Fully 70 percent of displaced workers moved to employers paying the same or higher wage premiums than the displacing employers, but these workers nevertheless suffered substantial wage rate losses. Loss of valuable specific worker employer
matches explain more than half of the wage losses.

Year of Publication
2019
Number
631
Date Published
10/2019
Publication Language
eng
Citation Key
11446
Mas, A., Lachowska, M., & Woodbury, S. (2019). Sources of Displaced Workers’ Long-Term Earnings Losses. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01n870zt699 (Original work published 10/2019AD)
Working Papers
Abstract

We examine the impact of public sector salary disclosure laws on university faculty salaries in Canada. The laws, which enable public access to the salaries of individual faculty if they exceed specified thresholds, were introduced in different provinces at different times. Using detailed administrative data covering the majority of faculty in Canada, and an event-study research design that exploits within-province variation in exposure to the policy across institutions and academic departments, we find robust evidence that that the laws reduced the gender pay gap between men and women by approximately 30 percent. There is suggestive evidence that higher female salaries contributed to the narrowing of the gender gap. The reduction in the gender gap is
primarily in universities where faculty are unionized.

Year of Publication
2019
Number
630
Date Published
11/2019
Publication Language
eng
Citation Key
11451
Mas, A., Baker, M., Halberstam, Y., Kroft, K., & Messacar, D. (2019). Pay Transparency and The Gender Gap. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01s1784p60g (Original work published 11/2019AD)
Working Papers
Author
Abstract

Using newly digitized data from the Federal Trade Commission, I examine the evolution of executive compensation during the Great Depression, before and after mandated pay disclosure in 1934. I find that disclosure did not achieve the intended effect of broadly lowering CEO compensation. If anything, and in spite of popular outrage against compensation practices, average CEO compensation increased following disclosure relative to the upper quantiles of the non-CEO labor income distribution. Pay disclosure coincided with compression of the CEO earnings distribution. Following disclosure there was a pronounced drop in the residual variance of earnings—computed with size and industry controls—that accounts for almost the entire drop in the unconditional variance. The evidence suggests an upward “ratcheting” effect whereby lower paid CEOs given the size and industry of their firm experienced relative gains while well paid CEOs conditional on these characteristics were not penalized. The exception is at the extreme right tail of the CEO distribution, which fell precipitously, suggesting that disclosure may only have restrained only the most salient and visible wages.

Year of Publication
2019
Number
632
Date Published
11/2019
Publication Language
eng
Citation Key
11461
Mas, A. (2019). Does Disclosure affect CEO Pay Setting? Evidence from the Passage of the 1934 Securities and Exchange Act. Retrieved from http://arks.princeton.edu/ark:/88435/dsp010k225d92n (Original work published 11/2019AD)
Working Papers
Abstract

In a classic paper, Schelling (1971) showed that extreme segregation can arise from
social interactions in preferences: once the minority share in a neighborhood exceeds a
"tipping point", all the whites leave. We use regression discontinuity methods and
Census tract data from the past four decades to test for the presence of discrete nonlinearities
in the dynamics of neighborhood racial composition. White mobility patterns
in most cities exhibit tipping-like behavior, with a range of tipping points centered
around a 13% minority share. These patterns are very pronounced during the 1970s
and 1980s, and diminish but do not disappear in the 1990s. We find similar dynamic
patterns in neighborhoods and in schools. A variety of specification checks rule out the
possibility that the discontinuity in the initial minority share is driven by income
stratification or other factors, and underscore the importance of white preferences over
neighbors ' race and ethnicity in the dynamic process of segregation. Finally, we relate
the location of the estimated tipping points in different cities to measures of the racial
attitudes of whites, and find that cities with more racially tolerant whites have higher
tipping points.

Year of Publication
2006
Number
515
Date Published
10/2006
Publication Language
eng
Citation Key
7875
Card, D., Mas, A., & Rothstein, J. (2006). Tipping and the Dynamics of Segregation in Neighborhoods and Schools. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kk91fk532 (Original work published 10/2006AD)
Working Papers
Abstract

Alternative work arrangements, defined both by working conditions and by workers’ relationship to their employers, are heterogeneous and common in the U.S. This article reviews the literature on workers’ preferences over these arrangements, inputs to firms’ decision to offer them, and the impact of regulation. It also highlights several descriptive facts. Work arrangements have been relatively stable over the past 20 years, work conditions vary substantially with education, and jobs with schedule or location flexibility are less family-friendly on average. This last fact helps explain why women are not more likely to have schedule or location flexibility and seem to largely reduce hours to get more family-friendly arrangements.

Year of Publication
2019
Number
634
Date Published
12/2019
Publication Language
eng
Citation Key
11541
Mas, A., & Pallais, A. (2019). Alternative Work Arrangements. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01bk128d78n (Original work published 12/2019AD)
Working Papers
Abstract

A great deal of urban policy depends on the possibility of creating stable, economically and
racially mixed neighborhoods. Many social interaction models- including the seminal
Schelling (1971) model- have the feature that the only stable equilibria are fully segregated.
These models suggest that if home-buyers have preferences over their neighborhoods' racial
composition, a neighborhood with mixed racial composition is inherently unstable, in the
sense that a small change in the composition sets off a dynamic process that converges to
either 0% or 100% minority share. Card, Mas, and Rothstein (2008) outline an alternative
"one-sided" tipping model in which neighborhoods with a minority share below a critical
threshold are potentially stable, but those that exceed the threshold rapidly shift to 100%
minority composition. In this paper we examine the racial dynamics of Census tracts in
major metropolitan areas over the period from 1970 to 2000, focusing on the question of
whether tipping is "two-sided" or "one-sided". The evidence suggests that tipping behavior
is one-sided, and that neighborhoods with minority shares below the tipping point attract
both white and minority residents.

Year of Publication
2008
Number
529
Date Published
07/2008
Publication Language
eng
Citation Key
8100
Card, D., Mas, A., & Rothstein, J. (2008). Are Mixed Neighborhoods Always Unstable? Two-Sided and One-Sided Tipping. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01hm50tr73g (Original work published 07/2008AD)
Working Papers
Abstract

Although economists acknowledge that various indicators of educational attainment (e.g., highest
grade completed, credentials earned) might serve as signals of a worker’s productivity, the practical
importance of education-based signaling is not clear. In this paper we estimate the signaling value
of a high school diploma, the most commonly held credential in the U.S. To do so, we compare the
earnings of workers that barely passed and barely failed high school exit exams, standardized tests
that, in some states, students must pass to earn a high school diploma. Since these groups should, on
average, look the same to firms (the only difference being that "barely passers" have a diploma while
"barely failers" do not), this earnings comparison should identify the signaling value of the diploma.
Using linked administrative data on earnings and education from two states that use high school exit
exams (Florida and Texas), we estimate that a diploma has little effect on earnings. For both states, we
can reject that individuals with a diploma earn eight percent more than otherwise-identical individuals
without one; combining the state-specific estimates, we can reject signaling values larger than five or six
percent. While these confidence intervals include economically important signaling values, they exclude
both the raw earnings difference between workers with and without a diploma and the regression-adjusted
estimates reported in the previous literature.

Year of Publication
2010
Number
559
Date Published
09/2010
Publication Language
eng
Citation Key
8230
Card, D., Mas, A., Moretti, E., & Saez, E. (2010). Inequality at Work: The Effect of Peer Salaries on Job Satisfaction. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01qj72p715n (Original work published 09/2010AD)
Working Papers
Abstract

This paper studies the effect of labor relations on product quality. We consider whether a
long, contentious strike and the hiring of permanent replacement workers by
Bridgestone/Firestone in the mid-1990s contributed to the production of an excess
number of defective tires. Using several independent data sources we find that labor
strife in the Decatur plant closely coincided with lower product quality. Count data
regression models based on two data sets of tire failures by plant, year and age show
significantly higher failure rates for tires produced in Decatur during the labor dispute
than before or after the dispute, or than at other plants. Also, an analysis of internal
Firestone engineering tests indicates that P235 tires from Decatur performed less well if
they were manufactured during the labor dispute compared with those produced after the
dispute, or compared with those from other, non-striking plants. Monthly data suggest
that the production of defective tires was particularly high around the time wage
concessions were demanded by Firestone in early 1994 and when large numbers of
replacement workers and permanent workers worked side by side in 1996.

Year of Publication
2002
Number
461
Date Published
01/2002
Publication Language
eng
Citation Key
Journal of Political Economy, vol. 112, no. 2, 2004
Krueger, A., & Mas, A. (2002). Strikes, Scabs and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01k930bx035 (Original work published 01/2002AD)
Working Papers
Abstract

We estimate the effect of new unionization on firms’ equity value over the 1961-1999 period using a newly
assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market
data. Event-study estimates show an average union effect on the equity value of the firm eq uivalent to a cost of at
least $40,500 per unionized worker. At the same time, point estimates from a regression-discontinuity design –
comparing the stock market impact of close union election wins to close losses – are considerably smaller and close
to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of
the union, allowing us to reconcile these seemingly contradictory findings. Using the magnitudes from the analysis,
we calibrate a structural “median voter” model of endogenous union determination in order to conduct
counterfactual policy simulations of policies that would marginally increase the ease of unionization.

Year of Publication
2009
Number
547
Date Published
01/2009
Publication Language
eng
Citation Key
8336
Mas, A., & Lee, D. (2009). Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961-1999. Retrieved from http://arks.princeton.edu/ark:/88435/dsp011c18df784 (Original work published 01/2009AD)
Working Papers