The Institute for Research on Labor and Employment promotes better understanding of the conditions, policies, and institutions that affect the well-being of workers and their families and communities. We inform public debate with hard evidence about inequality, the economy, and the nature of work.
To build support for a cause, activists frame issues in ways they think will resonate with the public. UC Berkeley researchers find that one of the primary tactics for activists—using a civil rights framework to frame an issue—can actually decrease public support. Particularly in the case of immigrant rights and legalization, activists should reevaluate their strategies in order to successfully persuade the public to adopt change.
The Great Recession has ruined the finances of millions of families and has had long-lasting impacts on employment. But less is known about its social consequences, about how it affected the intimate lives of the most disadvantaged – and in particular how it affected their fertility. Prior research has found that fertility decisions are often disconnected from economic concerns. In a new paper, I find the opposite: fertility falls in response to severe economic shocks among unmarried and teen women.1 I show that during the Great Recession, unmarried women increased their use of contraceptives and made use of more effective contraceptive methods. My results suggest that the Great Recession decreased fertility with consequences for the society as a whole.
People who have been arrested, convicted of a crime, or incarcerated face many barriers to employment. While much of the difficulty in finding employment is due to institutional exclusion, a UC Berkeley researcher has attributed some of the problem to ineffective job search methods. What can policymakers do to ensure that people who have interacted with the carceral system can find employment?
We examine how the racial patchwork of federal and state minimum wage changes between 1990 and 2019 has affected racial wage gaps, with specific attention to effects on labor market frictions. Black workers on average are less likely to live in high-wage states that have raised their wage floors. The effect of state minimum wages on the national racial wage gap is thus not self-evident.
Using five different causal specifications, including the “bunching” estimator of Cengiz et al. (2019), and data from the CPS and the QWI, we find that minimum wage changes since 1990 did reduce the 2019 racial wage gaps, by 12 percent among all workers and 60 percent among less-educated workers. The reductions are greater among black women and among black prime age workers. The gains for black workers are concentrated well above the new minimum wage, beyond the usual spillover estimates. Earnings of all race/ethnic/gender groups grew, with larger effects among black workers. We do not find disemployment effects for any group.
Surprisingly, racial differences in initial wages do not explain the reduction in the racial wage gap. Rather, minimum wages expand job opportunities for black workers more than for white workers. We present a model in which minimum wages assist the job search of workers who do not own automobiles and who live farther from jobs. Our causal results using the ACS show that minimum wages increase commuting via automobile among black workers, supporting our model. Minimum wages also reduce racial gaps in separations and hires, further suggesting the policies especially enhance job opportunities for black workers.
Immigration is a hotly contested policy issue in the United States. Diametrically opposed advocacy groups exchange counterclaims on immigration’s blessings or banes, sometimes with little pretext of objectivity. However, recent decades have also seen a growing body of nonpartisan scholarly analysis of immigration’s fiscal and economic impact in the US. An exploration of such study finds that the preponderance of evidence points to positive net fiscal and economic impacts—albeit modest ones—and negligible effects on native wages and employment rates. Immigration may have other economic impacts—positive and/or negative—not yet captured or measured. More research is needed to further our understanding of immigration’s fiscal and economic effects.
In this paper, I ask how immigrant/native-born wage gaps differ in two institutionally distinct receiving societies in Western Europe: Sweden, with a comparatively equal wage structure, and the United Kingdom, with a comparatively unequal wage structure. Using large, nationally representative data sets and focusing on 30 immigrant groups that reside in both countries, I document two distinct kinds of inequality between immigrant and native-born workers. In terms of wage percentiles, immigrants fare unambiguously better in the UK, net of human capital, demographic characteristics, and sending country. That is, immigrants achieve higher relative positions in the British labor market than in the Swedish labor market. But immigrant/nativeborn gaps in terms of real wages are at least as large in the UK as in Sweden, and for some groups larger, because overall earnings inequality is so high in the UK. These findings suggest that policies to improve immigrant pay must consider immigrant-specific barriers in the labor market and the detrimental effects of earnings inequality for immigrant workers.
A recent literature has constructed top income shares time series over the long run for more than 20 countries using income tax statistics. Top incomes represent a small share of the population but a very significant share of total income and total taxes paid. Hence, aggregate economic growth per capita and Gini inequality indexes are sensitive to excluding or including top incomes. We discuss the estimation methods and issues that arise when constructing top income share series, including income definition and comparability over time and across countries, tax avoidance and tax evasion. We provide a summary of the key empirical findings. Most countries experience a dramatic drop in top income shares in the first part of the 20th century in general due to shocks to top capital incomes during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries and in India and China but not in continental European countries or Japan. This increase is due in part to an unprecedented surge in top wage incomes. As a result, wage income comprises a larger fraction of top incomes than in the past. Finally, we discuss the theoretical and empirical models that have been proposed to account for the facts and the main questions that remain open.
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