wages

Abstract

Some workers bargain with prospective employers before accepting a job. Others could
bargain, but find it undesirable, because their right to bargain has induced a sufficiently
favorable offer, which they accept. Yet others perceive that they cannot bargain over
pay; they regard the posted wage as a take-it-or-leave-it opportunity. Theories of wage
formation point to substantial differences in labor-market equilibrium between bargained
and posted wages. The fraction of workers hired away from existing jobs is another key
determinant of equilibrium, because a worker with an existing job has a better outside
option in bargaining than does an unemployed worker. Our survey measures the
incidences of wage posting, bargaining, and on-the-job search. We find that about a
third of workers had precise information about pay when they first met with their
employers, a sign of wage posting. We find that another third bargained over pay before
accepting their current jobs. And about 40 percent of workers could have remained on
their earlier jobs at the time they accepted their current jobs.

Year of Publication
2008
Number
534
Date Published
10/2008
Publication Language
eng
Citation Key
7847
Hall, R., & Krueger, A. (2008). Wage Formation between Newly Hired Workers and Employers: Survey Evidence. Retrieved from http://arks.princeton.edu/ark:/88435/dsp016h440s45s (Original work published October 2008)
Working Papers
Abstract

Both marital status and computer usage on the job have been found to increase earnings by as much as two
additional years of schooling. If correct, these findings suggest that factors other than long-term human
capital investments are key determinants of earnings. Data on identical twins are used in this paper to sweep
out selection effects and examine the effect of marital status and computer usage on wages. Within-twin
estimates indicate that, unlike education, job tenure and union status, neither marital status nor computer
usage have a large or significant effect on wages.

Year of Publication
2000
Number
439
Date Published
06/2000
Publication Language
eng
Citation Key
8399
Krashinsky, H. (2000). Do Marital Status and Computer Usage Really Change the Wage Structure? Evidence from a Sample of Twins. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01w9505046q (Original work published June 2000)
Working Papers
Author
Abstract

This paper uses a variety of data sources to track the earnings
of airline industry employees over the past two decades and assess
the changes that have occurred since deregulation in 1978.
Individual microdata from Census files as well as collective
bargaining contract information are used to follow wages for
pilots, flight attendants, mechanics, and workers as a whole.
Perhaps surprisingly, I find that the real earnings of airline
workers have declined only modestly in the past 10 years.
Comparisons with other groups of workers suggest that these
declines have been about the same or only slightly larger than
those observed for most other workers in the economy. Furthermore,
within the airline industry, the declines in earnings have been
similar for all three groups of skilled workers. If the
deregulated industry can be taken as a competitive benchmark, these
findings suggest that the regulatory rents earned by airline
workers prior to deregulation were relatively small. This view
fails to explain the wide inter-firm variation in earnings that has
emerged in the post-deregulation period, however. An alternative
interpretation is that rents continue to exist at many airline
firms, and that these rents continue to be shared by employees at
the successful airlines.

Year of Publication
1989
Number
247
Date Published
01/1989
Publication Language
eng
Citation Key
7858
Card, D. (1989). Deregulation and Labor Earnings in the Airline Industry. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01sb397825h (Original work published January 1989)
Working Papers
Keywords
Abstract

Periods of rapid U.S. economic growth during the 1960s and 1970s coincided with improved
living standards for many segments of the population, including the disadvantaged as well as the
affluent, suggesting to some that a rising economic tide lifts all demographic boats. This paper
investigates the impact of U.S. business cycle conditions on population well-being since the
1970s. Aggregate employment and hours worked in this period are strongly procyclical,
particularly for low-skilled workers, while aggregate real wages are only mildly procyclical.
Similar pattems appear in a balanced panel of PSID respondents that removes the effects of
changing workforce composition, though the magnitude of the responsiveness of real wages to
unemployment appears to have declined in the last 20 years. Economic upturns increase the
likelihood that workers acquire jobs in sectors with positively sloped career ladders. Spending
by state and local govemments in all categories rises during economic expansions, including
welfare spending, for which needs vary countercyclically. Since the disadvantaged are likely to
benefit disproportionately from such govemment spending, it follows that the public finances
also contribute to conveying the benefits of a strong economy to diverse population groups.

Year of Publication
2001
Number
454
Date Published
07/2001
Publication Language
eng
Citation Key
7883
Hoynes, H., Hines, J., & Krueger, A. (2001). Another Look at Whether a Rising Tide Lifts All Boats. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01jm214p131 (Original work published July 2001)
Working Papers
Abstract

This paper presents evidence on the quality of schooling by race and ethnic
origin in the United States. Although substantial racial segregation
across schools exists, the average pupil-teacher ratio is approximately the
same for black and white students. Hispanic students, however, on average have
l0 percent more students per teacher. Relative to whites, blacks
and Hispanics are less likely to use computers at school and at work. The
implications of these differences in school quality for labor market
outcomes are examined. We conclude by examining reasons for the increase
in the black-white earnings gap since the mid-1970s.

Year of Publication
1992
Number
301
Date Published
03/1992
Publication Language
eng
Citation Key
Brookings Papers on Economic Activity: Microeconomics, in Martin N. Bailey and Clifford Winston (eds.) 1992, pp. 269-326.
Boozer, M., Wolkon, S., & Krueger, A. (1992). Race and School Quality Since Brown vs. Board of Education. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01cz30ps65d (Original work published March 1992)
Working Papers
Author
Abstract

Is there a systematic relation between wage rates and strike out-
cones? This paper addresses the question using a panel of over 2,000
collective bargaining agreements from the Canadian manufacturing sector.
Contrary to the implications of recent signalling and sequential
bargaining models, there is no correlation between contract real wage
rates and strike duration or incidence. Furthermore, lagged strike out-
comes do not affect future wage settlements. On the other hand, there
is some evidence that contract wages affect future strike outcomes, and
also that lagged strike outcomes affect future strike probabilities.

Year of Publication
1987
Number
221
Date Published
05/1987
Publication Language
eng
Citation Key
7948
Card, D. (1987). An Empirical Study of Strikes and Wages. Retrieved from http://arks.princeton.edu/ark:/88435/dsp015425k9691 (Original work published May 1987)
Working Papers
Keywords
Abstract

In 1988, the wage distribution in East Germany was much more
compressed than in West Germany or the U.S. Since the
collapse of Communism and unification with West Germany,
however, the wage structure in eastern Germany has changed
considerably. In particular, wage variation has increased,
the payoff to education has decreased somewhat, industry
differentials have expanded, and the white collar premium has
increased. Although average wage growth has been remarkably
high in eastern Germany, individual variation in wage growth
is similar to typical western levels. The wage structure of
former East Germans who work in western Germany resembles the
wage structure of native West Germans in some respects, but
their experience-earnings profile is flat.

Year of Publication
1992
Number
307
Date Published
08/1992
Publication Language
eng
Citation Key
In Richard B. Freeman and Lawrence F. Katz (eds.) Differences and Changes in Wage Structures (Chicago:University of Chicago Press, 1995)
Pischke, J. -S., & Krueger, A. (1992). A Comparative Analysis of East and West German Labor Markets: Before and After Unification. Retrieved from http://arks.princeton.edu/ark:/88435/dsp017p88cg546 (Original work published August 1992)
Working Papers
Abstract

In this paper we provide theoretical and empirical analyses of an
asymmetric-information model of layoffs in which the current employer is
better informed about its workers’ abilities than prospective employers
are. The key feature of the model is that when firms have discretion with
respect to whom to lay off, the market infers that laid-off workers are of
low ability. Since no such negative inference should be attached to
workers displaced in a plant closing, our model predicts that the post-
displacement wages of otherwise observationally equivalent workers will be
higher for those displaced by plant closings than for those displaced by
layoffs. A simple extension of our model predicts that the post-
displacement unemployment duration of otherwise observationally equivalent
workers will be lower for those displaced by plant closings than for those
displaced by layoffs.
In our empirical work, we use data from the Displaced Workers Supplements
in the January l984 and 1986 Current Population Surveys. For our whole
sample, we find that the evidence (with respect to both re-employment wages
and post-displacement unemployment duration) is consistent with the idea
that laid-off workers are viewed less favorably by the market than are
those losing jobs in plant closings. Furthermore, our findings are much
stronger for workers laid-off from jobs where employers have discretion
over whom to lay off, and much weaker for workers laid-off from jobs where
employers have little or no discretion over whom to lay off.

Year of Publication
1989
Number
249
Date Published
04/1989
Publication Language
eng
Citation Key
Journal of Labor Economics, Vol. 9, No. 4, October 1991.
Gibbons, R., & Katz, L. (1989). Layoffs and Lemons. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01bg257f06q (Original work published April 1989)
Working Papers
Author
Abstract

This paper examines the relationship between price growth and
skill intensity across 150 manufacturing industries between 1989
and 1995. There are two main findings. First, wage growth and
intermediate goods price increases are passed through to final
product prices roughly in proportion to their factor shares.
Second, product prices have grown relatively less in sectors that
more intensively utilize less-skilled labor. The latter finding
is consistent with the Stolper-Samuelson theory of expanded trade
with countries that are abundant in less-skilled workers, as well
as with some models of technological change.

Year of Publication
1997
Number
375
Date Published
01/1997
Publication Language
eng
Citation Key
8024
Krueger, A. (1997). Labor Market Shifts and the Price Puzzle Revisited. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01bc386j21k (Original work published January 1997)
Working Papers