Labor Studies


On April 3, the NBER's Program on Labor Studies met in Cambridge to discuss recent research. Program Director Richard B. Freeman and Research Associate Lawrence F. Katz, both of NBER and Harvard University, organized the meeting at which the following papers were presented:

Daren Acemoglu, MIT, and Joshua Artgrist, NBER and MIT, "Consequences of Employment Protection: The Case of the Americans with Disabilities Act"

Henry S. Farber, NBER and Princeton University, "Union Success in Representation Elections: Do Large and Small Units Differ?"

Coen Teulings, University of Amsterdam, "Aggregation Bias in Elasticities of Substitution"

John J. Donohue, NBER and Stanford University; James J. Heckman, NBER and University of Chicago; and Petra E. Todd, University of Pennsylvania, "Social Action, Private Choice, and Philanthropy: Understanding the Sources of Improvements in Black Schooling in Georgia, 1911-1960"

Harry Holzer, Michigan State University, and David Neumark, NBER and Michigan State University, "What Does Affirmative Action Do?"

David Card, NBER and University of California, Berkeley, and Alan B. Krueger, NBER and Princeton University, "A Reanalysis of the Effect of the New Jersey Minimum Wage Increase on the Fast Food Industry with Representative Payroll Data"

Acemoglu and Angrist note that the 1990 Americans With Disabilities Act (ADA) requires employers to accommodate disabled workers and outlaws discrimination against the disabled in hiring, firing, and pay. Although the ADA increases costs for employers, its impact turns in part on the provisions that are enforced and on the responsiveness of firm entry and exit to profits. The authors find that the ADA negatively affects employment of disabled workers under age 40 and disabled men over 40, but not disabled women over 40. There is little evidence of an impact on the nondisabled, suggesting that the adverse consequences of employment protection are limited to the protected group.

Farber notes that unions always have been less likely to win National Labor Relations Board (NLRB)-supervised representation elections in large establishments than in small ones, but that the gap in success rates has increased substantially over the last 40 years. lie develops a pair of statistical models of election outcomes, which he then estimates using data on NLRB elections during 1952-95. He finds that the model which constrains the mean difference in prounion vote probability between large and small units to be fixed over time but allows for random heterogeneity across elections can explain the time-series patterns of "win rates" quite well.

While the employment effects of minimum wages are usually reported to be small (suggesting low substitutability among skill types), direct estimates suggest a much larger degree of substitutability. Teulings argues that this is related to a bias induced by the aggregation of skill types into broad categories. He develops a model in which skilled workers have a comparative advantage in complex jobs. His results for the United States show elasticities of complementarity to be underestimated by up to a factor of 5. These results suggest that the reduction of minimum wages during the 1980s contributed substantially to the rise in wage inequality. …

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