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An Assessment of the Economic Conditions in the City of Battle Creek
Get PDFThe City of Battle Creek offers current and future residents many benefits including a lower cost of living, growing health care and manufacturing sectors, and relatively high wages for the region. At the same time, the City of Battle Creek, like many small-sized midwestern cities, faces many challenges. Its workforce is shrinking and aging. Residents lack the educational attainment needed to compete in the twenty-first-century economy. And, economic, social, racial, and ethnic divisions exist within the city. Together, these issues could risk the ability of the City of Battle Creek to reach a new level of competitiveness and attract new residents, businesses, and opportunities to the city. This report reviews trends surrounding these challenges and opportunities to present the City of Battle Creek with a complete assessment of its economic conditions
Labor Market Trends and Outcomes: What Has Changed since the Great Recession?
Get PDFWe describe trends in wages and labor force participation for the “working class”—whom we define as workers with high school or less education—compared to those with college or more. We compare cyclical peaks over the entire period 1979–2019, with particular focus on the Great Recession (2007–2010) and recovery (2010–2019). We also present results by gender and race. We find real wage growth in the latter period for all workers, but not enough to change the long-term trends of growing inequality and stagnant wages for the less-educated; and we also find that labor force participation continued to decline for the less-educated, even during the recovery. Gaps between whites and blacks also grew, while Hispanics and Asians made more progress. We consider various explanations of these findings and show that the early effects of the 2020‒2021 pandemic recession hurt less-educated workers and those of color more than anyone else
College Majors and Skills: Evidence from the Universe of Online Job Ads
No full textWe document the skill content of college majors as perceived by employers and expressed in the near universe of U.S. online job ads. Social and organizational skills are general in that they are sought by employers of almost all college majors, whereas other skills are more specialized. In turn, general majors––Business and General Engineering––have skill profiles similar to all majors; Nursing and Education are specialized. These cross-major differences in skill profiles explain considerable wage variation, with little role for within-major differences in skills across areas. College majors can thus be reasonably conceptualized as portable bundles of skills
Wage Posting or Wage Bargaining? A Test Using Dual Jobholders
No full textWe employ a revealed-preference test to distinguish between wage posting and wage bargaining in the labor market. Using a sample of dual jobholders in Washington State, we estimate the sensitivity of wages and separation rates to wage shocks in a secondary job. In lower parts of the wage distribution, improvements in the outside option lead to higher separations rates but not to higher wages, consistent with wage posting. In the highest wage quartile, improved outside options translate to higher wages, but not higher separation rates, consistent with bargaining. In the aggregate, bargaining appears to be a limited determinant of wage setting
Why Are Older Workers Moving Less While Working Longer?
No full textOlder workers’ labor force participation (LFP) and migration across state lines have been trending in opposite directions, counter to conventional economic wisdom. This paper investigates what might explain this puzzle using data from the Current Population Survey (CPS) and Health and Retirement Study (HRS). Descriptive analysis identifies several factors that may explain the decline in migration, including greater housing price dispersion, fewer opportunities for wage arbitrage, and greater geographical sorting.
I employ a series of empirical tests to examine how older workers’ LFP, retirement, and migration decisions respond to income and housing wealth losses by exploiting job losses to identify individual income shocks, and shocks to specific labor markets to identify housing wealth losses by using an import competition shock that began in 2001 after Congress ratified permanent normalized trade relations with China in October 2000.
The puzzle appears to be driven by composition effects. For example, in response to a housing wealth shock, non-college educated homeowners (the largest subgroup of older workers) reduce their two-year migration rate by 54% but only slightly reduce their labor supply, while college-educated renters (the smallest subgroup) increase their labor supply by 13% but only weakly increase their propensity to move
The COVID-19 Pandemic\u27s Evolving Impacts on the Labor Market: Who\u27s Been Hurt and What We Should Do
Get PDFIn this paper, we shed light on the impacts of the COVID-19 pandemic on the labor market, and how they have evolved over most of the year 2020. Relying primarily on microdata from the CPS and state-level data on virus caseloads, mortality, and policy restrictions, we consider a range of employment outcomes—including permanent layoffs, which generate large and lasting costs—and how these outcomes vary across demographic groups, occupations, and industries over time. We also examine how these employment patterns vary across different states, according to the timing and severity of virus caseloads, deaths, and closure measures. We find that the labor market recovery of the summer and early fall stagnated in late fall and early winter. As noted by others, we find low-wage and minority workers are hardest hit initially, but that recoveries have varied, and not always consistently, between Blacks and Hispanics. Statewide business closures and other restrictions on economic activity reduce employment rates concurrently but do not seem to have lingering effects once relaxed. In contrast, virus deaths—but not caseloads—not only depress current employment but produce accumulating harm. We conclude with policy options for states to repair their labor markets
Minimum Wages and Employment Composition
No full textAlthough minimum wages mechanically increase the hourly pay of low-wage workers, such workers may not benefit if employers cut hours or employment. The tension between the objectives and the theoretical predictions of minimum wage policies has inspired a large literature examining whether higher minimum wages actually lead firms to reduce the overall number of low-wage workers they employ or substitute towards other factors of production.
There is less research on how minimum wages affect scheduling practices and which workers firms employ. For example, increases in the minimum wage reduce the relative cost of high-wage employees, which may lead employers to shift towards higher-wage occupations. Moreover, within a given low-wage occupation, new hires are likely to receive the largest wage gains. Accordingly, employers may allocate hours to more experienced or skilled workers. These compositional effects are largely unexplored by previous research and represent an important way in which minimum wage laws may benefit some workers at the expense of others.
This project provides some of the first empirical evidence on how minimum wage reforms change firms’ occupational composition and scheduling practices by leveraging daily, shift-level data on each employee’s occupation, employment arrangement (contract, wage, or salary), and hours worked in all US nursing homes. These administrative data allow us to observe how individual hours, overtime, and occupational roles change after increases in the minimum wage. Our results therefore broaden our understanding of how low-wage labor markets interact with government policy and can help policymakers design minimum wage reforms that best achieve their objectives
Effects of Peer Groups on the Gender-Wage Gap and Life After the MBA: Evidence from the Random Assignment of MBA Peers
No full textThe paper explores the causes of the gender-wage gap among MBA students upon graduation and the evolution of this gap over the course of their careers. By exploiting the historical random assignment of MBA students to peer groups at an elite business school in the United States, this paper explores the effect of the gender composition of a student\u27s peers on the starting salary at graduation, the field of study in business school, and on long-term outcomes up to 20 years after graduation. Preliminary results show that women who are randomly assigned to a peer group with a larger share of men have significantly higher salaries at graduation, are more likely to enter male-dominated industries and job functions in their first job after graduation, such as investment banking, venture capital and investment management, and are less likely to accept job offers in relatively more female-dominated industries, such as marketing and product management. Though the wage differences are not large in the first year post-graduation, the effects of the gender composition of the peer group on wages of female MBAs accumulate over time. In particular, in the first year after graduation, an increase in the share of male peers (from 0 to 100 percent) leads female students to choose industries at graduation that have an hourly wage that are 180 an hour greater on average than the hourly wages in the industries chosen by women with a lower share of men in their peer group. In addition, women with more male peers are less likely to have a career interruption, have fewer career interruptions, and are less likely to have children. These results reveal some underlying mechanisms through which the gender-wage gap, which starts out small at graduation, can accumulate to the documented magnitudes over the course of the lifecycle