How New Is the "New Employment Contract"? Evidence from North American Pay Practices

By David I. Levine; Dale Belman et al. | Go to book overview

Appendix D
How Representative is the Community Salary Survey?

This appendix examines whether the Community Salary Survey wage patterns are similar to those of the CPS, whether CSS employers are similar to matched employers in Compustat, and whether joining or leaving the CSS sample is correlated with unusual movements in wages. (See Groshen [1996] for more detail on salary surveys in general and the CSS in particular.)

In general, Cleveland, Cincinnati, and Pittsburgh are more urban, have more cyclically sensitive employment, and have undergone more industrial restructuring than the nation as a whole. Prior to the 1980s, wages in these three cities were higher than the national average. Now, they are approximately average for the country.


COMPARISONS WITH OTHER DATA ON EMPLOYEES

The CSS is not a random sample either of occupations or employers; thus, it is important to place our results in context of the U.S. economy. In particular, the CSS covers common nonproduction occupations at large employers in three Midwestern cities. Table D.1 compares some features of the CSS to the 1995 Current Population Survey (CPS) Outgoing Rotation File. (The CPS is the broadest and most-studied household survey.) The top panel compares weekly wage statistics in the CSS with those of the CPS and three subsets. The first subset selects the 44 two-digit CPS occupations into which the (more narrow) CSS occupations would fall. The second subset is the states of the East North Central census region (which includes Ohio). The final subset is the most exclusive: CSS occupations in the East North Central region.

As expected, weekly earnings in the CSS sample exceed those of the average U.S. worker. The contrast between overall CPS wage levels and those in CSS occupations suggests that much of this difference is due to the occupations surveyed in the CSS. Restricting the CPS sample to Midwestern states does not noticeably narrow the gap. Remaining differences in wage levels probably reflect the fact that CSS respondents are urban and large; these characteristics correlate with high wages (Brown and Medoff 1989).

Wage variation is considerably lower in the CSS. In this case, restricting the CPS samples to CSS occupations does not improve the correspondence. This result is consistent with the CSS pulling less than the full range of narrow occupations within each two-digit CPS occupational code. In addition, the concentration of large employers in the CSS would also have this effect, because wage variation between large and small firms is omitted.

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