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Current Issue: April 2008 (Vol. 61, No. 3)

ARTICLES

Are Two Carrots Better Than One? The Effects of Adding Employment Services to Financial Incentive Programs for Welfare Recipients. By Philip K. Robins, Charles Michalopoulos, and Kelly Foley. Vol. 61, No. 3 (April 2008), pp. 410-423.

Abstract: The Self-Sufficiency Project (SSP) was a social experiment conducted in two Canadian provinces during the 1990s that tested a generous financial incentive program for welfare recipients. A little-known subsidiary experiment, called SSP Plus, had a three-way design that tested the incremental effect of adding employment services to the generous financial incentive program. Employment services are viewed by many welfare analysts as an important component of an overall strategy for helping welfare recipients escape poverty and achieve stable employment. This paper presents the results of the SSP Plus experiment. Adding employment services encouraged more people to take up the earnings supplement, and it appeared to have long-term effects on full-time employment and welfare receipt. This might be because the services improved the jobs people obtained. Compared to program participants who lacked the added services, SSP Plus members had higher earnings and wage rates, and also appear to have held more sustainable jobs.

Gender Differences in the Response to Competition. By Joseph Price. Vol. 61, No. 3 (April 2008), pp. 320-333.

Abstract: To investigate whether men and women respond differently to competition and whether this response depends on the gender mix of the group, the author examines outcomes of the Mellon Foundation's Graduate Education Initiative, a competitive fellowship program instituted in 1991 that was aimed at increasing graduation rates and decreasing time to degree. Men's performance, as measured by time to candidacy, increased 10% in response to the program, with the largest gains for men in departments with the highest proportions of female students. Women did not increase performance, on average, but the response of women did differ greatly depending on the gender mix of their peers, with a more positive response when a larger fraction of the group was female. These results suggest that when devising incentive schemes, policy-makers may need to be mindful of an inherent tradeoff between increasing aggregate outcomes through the use of competition and achieving gender equity.

High-Involvement Work Design and Job Satisfaction. By Robert D. Mohr and Cindy Zoghi. Vol. 61, No. 3 (April 2008), pp. 275-296.

Abstract: Using data from the 1999-2002 Canadian Workplace and Employee Survey, the authors investigate the relationship between job satisfaction and high-involvement work practices such as quality circles, feedback, suggestion programs, and task teams. They consider the direction of causality, identifying both reasons that work practices might affect job satisfaction, and reasons that satisfaction might affect participation in high-involvement practices. They find that satisfaction was positively associated with high-involvement practices, a result that held across different specifications of the empirical model and different subsets of data. Conversely, worker outcomes that might signal dissatisfaction, like work-related stress or grievance filing, appear to have been unrelated to high-involvement jobs. However, the data suggest the presence of self-selection: satisfied workers were more likely to increase participation in high-involvement practices, but participation did not predict future increases in satisfaction.

How Immigrants Fare across the Earnings Distribution in Australia and the United States. By Barry R. Chiswick, Anh T. Le, and Paul W. Miller. Vol. 61, No. 3 (April 2008), pp. 353-373.

Abstract: This paper investigates determinants of the earnings distribution for native-born workers and immigrant workers in two countries. The authors, using data from the 2000 U.S. Census and 2001 Australian Census, employ a methodology (quantile regression) that facilitates measurement of the native-born/immigrant earnings differential and the partial effect of explanatory variables such as schooling and experience at each decile of the earnings distribution. They find evidence that schooling and labor market experience had stronger earnings effects at higher deciles. The native/immigrant earnings gap varied by decile, and in particular increased in the United States at higher deciles. The results suggest that in the United States minimum wages compressed earnings at low deciles, whereas in Australia the minimum (administered) wage system compressed earnings across the entire distribution. A pattern of higher earnings for immigrants than for the native-born at the lowest earnings decile in Australia may reflect favorable selectivity in migration.

Performance Pay and Earnings: Evidence from Personnel Records. By Tuomas Pekkarinen and Chris Riddell. Vol. 61, No. 3 (April 2008), pp. 297-319.

Abstract: This paper examines the earnings effects of performance pay using linked employee-employer panel data from Finland's metal industry for 1990-2000. The authors estimate the effects of performance pay contracts in the presence of individual and firm unobserved heterogeneity as well as in tasks of different complexity. Unobservable firm characteristics explain about 40% of the variance in the use of performance pay. Performance pay workers earned substantially more than fixed rate workers, a finding that persists even in analyses that use for identification only those workers who changed firms (and contracts) due to an establishment closure. There is also evidence of a strong, negative relationship between job complexity and the incentive effects of performance pay. Finally, several "quasi-experiments" show that when one plant underwent a compensation regime change but other highly similar plants in the same firm did not, workers in the "treatment" plant gained substantial earnings premiums.

The Immigrant Wage Differential within and across Establishments. By Abdurrahman Aydemir and Mikal Skuterud. Vol. 61, No. 3 (April 2008), pp. 334-352.

Abstract: Using 1999 and 2001 Canadian matched employer-employee data with rich information on worker and job characteristics, the authors identify the relative importance of immigrant wage differentials within and across establishments and the sources of these differentials. Whereas existing explanations of immigrant wage differentials emphasize immigrants' productive characteristics, differentials across establishments may be entirely independent of immigrants' actual or perceived skills or quality. The findings show highly non-random sorting of immigrants across establishments within Canada's major cities and geographic regions. For immigrant men, this sorting affected wage differentials more than did differences in how immigrant and native men were paid within establishments. For immigrant women, however, particularly those from less developed world regions, within-establishment wage differentials appear to have been more important. These findings raise numerous important questions for future research, such as whether the highly non-random sorting of immigrants across establishments primarily reflects immigrants' search behavior or employers' recruiting methods.

Wage Differentials, Skills, and Institutions in Low-Skilled Jobs. By Nan L. Maxwell. Vol. 61, No. 3 (April 2008), pp. 394-409.

Abstract: The typical study of wage differentials examines workers at all educational levels and attends closely to the link between education and wages. Little research has looked at determinants of wage differentials specifically among workers with low educational attainment. This study, using the 1998-2002 Bay Area Longitudinal Surveys and the 2001-2003 Occupational Information Network, examines which skills and labor market institutions affected wages in jobs for individuals with a high school education or less and little work experience. The author finds that jobs demanding office/clerical skills, mechanical skills, or the "new basic" skills of reading, math, problem-solving, and communication paid higher wages, on average, than did other low-skill jobs, especially those in which physical skills were relatively important. Also positively associated with wages for these low-skilled workers were union representation and location in an industry containing relatively few low-skill jobs.

Wage Growth and Job Mobility in the United Kingdom and Germany. By Christian Dustmann and Sonia C. Pereira. Vol. 61, No. 3 (April 2008), pp. 374-393.

Abstract: Wage Growth and Job Mobility in the United Kingdom and Germany Christian Dustmann and Sonia C. Pereira. Dustmann Using data from the British Household Panel Survey for 1991-99 and the German Socio-Economic Panel for 1984-99, the authors investigate job mobility and estimate the returns to tenure and experience. Job mobility was higher in the United Kingdom than in Germany. Returns to experience also seem to have been substantially higher in the United Kingdom, where the wage gain associated with ten years of labor market experience was around 80%, compared to 35% in Germany. The low returns to labor market experience in Germany appear to have been accountable to one group of workers: those with apprenticeship training, who tended to receive fairly high starting wages but to experience relatively low wage growth thereafter. Wage growth due to labor market experience was similar between the two countries for the other skill groups. Returns to tenure were close to zero in both countries.

BOOK REVIEWS

Chutes and Ladders: Navigating the Low-Wage Labor Market. By Katherine S. Newman. Reviewed by Daniel T. Lichter. Vol. 61, No. 2 (January 2008), pp. 262-263.

Demanding Work: The Paradox of Job Quality in the Affluent Economy. By Francis Green. Reviewed by Michael J. Handel. Vol. 61, No. 2 (January 2008), pp. 266-268.

Higher Ground: New Hope for the Working Poor and Their Children. By Greg J. Duncan, Aletha C. Huston, and Thomas S. Weisner. Reviewed by Lisa Gennetian. Vol. 61, No. 2 (January 2008), pp. 258-260.

Poverty and Discrimination. By Kevin Lang. Reviewed by Robert Plotnick. Vol. 61, No. 2 (January 2008), pp. 265-266.

Reinsuring Health: Why More Middle-Class People Are Uninsured and What Government Can Do. By Katherine Swartz. Reviewed by Robin McKnight. Vol. 61, No. 2 (January 2008), pp. 263-265.

Satanic Mills or Silicon Islands? The Politics of High-Tech Production in the Philippines. By Steven C. McKay. Reviewed by Douglas B. Fuller. Vol. 61, No. 2 (January 2008), pp. 270-271.

The Declining Significance of Gender? Edited by Francine D. Blau, Mary C. Brinton, and David B. Grusky. Reviewed by Lena Nekby. Vol. 61, No. 2 (January 2008), pp. 268-270.

Worker Safety under Siege: Labor, Capital, and the Politics of Workplace Safety in a Deregulated World. Edited by Vernon Mogensen. Reviewed by Nellie J. Brown. Vol. 61, No. 2 (January 2008), pp. 260-262.

Last Updated: 5/9/2008