Recent past issues

April 2014 (Vol. 67, No. 2)

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New Evidence on Gender and the Labor Market: A Symposium By Lawrence M. Kahn

In this issue of the ILRReview, the first five articles provide important new evidence on gender and employment. The papers were all independently submitted and were refereed through the usual editorial process. Because the papersÌ unifying theme is gender and labor market outcomes, the Editors felt that creating a symposium out of this new body of work would serve the research community studying gender, as well as the policymakers concerned with gender and labor market outcomes. All of the articles use new data sources or advanced statistical techniques to greatly enhance our understanding of gender and employment.

People Skills and the Labor-Market Outcomes of Underrepresented Groups By Lex Borghans, Bas ter Weel, and Bruce A. Weinberg

In this article, the authors show that people skills are important determinants of labor-market outcomes, including occupational choice and wages. Technological and organizational changes have increased the importance of people skills in the workplace. The authors particularly focus on how the increased importance of these skills has affected the labor-market outcomes of underrepresented groups, assuming that gender differences in interactions and cultural differences and prejudice may impede cross-racial and ethnic interactions. Estimates for Britain, Germany, and the United States are consistent with such an explanation. An acceleration in the rate of increase in the importance of people skills between the late 1970s and early 1990s in the United States can help explain why the gender wage gap closed and the black-white wage gap stagnated in these years relative to the preceding and following years.

Distributional Changes in the Gender Wage Gap By Sonja C. Kassenboehmer and Mathias G. Sinning

Using Panel Study of Income Dynamics (PSID) data, the authors analyze changes in wage differentials between white men and women over time and across the entire wage distribution. The authors decompose distributional changes in the gender wage gap to assess the contribution of observed characteristics measuring individual productivity. They find that the gender wage gap narrowed by 16% at the lowest decile and by less than 5% at the highest decile. The decomposition results indicate that changes in the gender wage gap are mainly attributable to changes in educational attainment at the top of the wage distribution, with a sizable part due to work history changes at the bottom. The findings further reveal that the accuracy of the results depends on the direction in which the decompositions are performed.

The Impact of Segregation and Sorting on the Gender Wage Gap: Evidence from German Linked Longitudinal Employer-Employee Data By Johannes Ludsteck

For this study, the author inspects the relationship between segregation in the workplace (measured as the proportion female in job cells) and the gender wage gap using linked longitudinal employer-employee data from the German Employment Register. He extends the literature by controlling for nonrandom sorting of workers into job cells, establishments, and occupations. In line with previous studies, the pooled least squares estimates show that the gender wage gap increases as the job-cell-level proportion of females increases. This increase is attributable to the fact that women experience greater wage declines than men do when additional women enter their job cells. Controlling additionally for unobserved heterogeneity at the individual, establishment, occupation, and job-cell levels considerably reduces the size of the proportion female effects on womenís wages while rendering the effects on menís wages insignificant or even positive. The same controls also significantly decrease the proportion effects on the wage gap. The related sorting analysis shows that a good deal of the proportion effects can be explained by unobserved individual ability and suggests that especially women working in job cells with small proportions of females show above-average unobserved individual ability.

Manager Impartiality: Worker-Firm Matching and the Gender Wage Gap By Lena E. Hensvik

Using a rich matched employer-employee data set from Sweden, the author examines whether female managers in a firm narrow the gender pay gap. The studyÌs main contribution is its ability to account for unobserved heterogeneity among both workers and firms that is potentially correlated with manager gender. The results show a substantial negative association between the representation of female managers and the establishmentÌs gender wage gap. Estimates that account for sorting on unobserved worker skills, however, do not support the conclusion that managers favor same-sex workers in wage setting. Additional results show that organizations with more female managers recruit more nonmanagerial, high-wage women. Together these findings suggest that associations between manager gender and male-female wage gaps should be interpreted with caution, as worker sorting seems to be a crucial component behind this relationship.

Workforce Reductions at Women-Owned Businesses in the United States By David A. Matsa and Amalia R. Miller

The authors find that privately held firms owned by women were less likely than those owned by men to downsize their workforces during the Great Recession. Year-to-year employment reductions were as much as 29% smaller at women-owned firms, even after controlling for industry, size, and profitability. Using data that allow the authors to control for additional detailed firm and owner characteristics, they also find that women-owned firms operated with greater labor intensity after the previous recession and were less likely to hire temporary or leased workers. These patterns extend previous findings associating female business leadership with increased labor hoarding.

The Changing Nature of Labor Unrest in China By Manfred Elfstrom and Sarosh Kuruvilla

A qualitative shift is underway in the nature of labor protest in China. Contrary to prior literature that characterized strikes as being largely defensive in nature, the authors suggest that since 2008, Chinese workers have been striking offensively for more money, better working conditions, and more respect from employers. They explain these developments using a Ïpolitical processÓ model that suggests economic and political opportunities are sending Ïcognitive cuesÓ to workers that they have increased leverage, leading them to be more assertive in their demands. Such cues include a growing labor shortage, new labor laws, and new media openness. Their argument is supported by a unique data set of strikes that the authors collected, two case studies of strikes in aerospace factories, and interviews with a variety of employment relations stakeholders.

Economic Development and Sectoral Unions in China By Eli D. Friedman

Drawing on qualitative fieldwork in Chinaís Guangdong and Zhejiang Provinces, the author asks how post-socialist unions respond to worker unrest and why the development of sectoral-level bargaining has been uneven in different regions of China. While Zhejiang has had relative success in establishing the organizational infrastructure for sectoral bargaining, Guangdong has had little success despite ongoing attempts by unions. The author explains variation in sectoral-level bargaining through an analysis of the different models of economic development, which are characterized as local entrepreneurialism and global integration for Zhejiang and Guangdong, respectively. Despite having different organizational forms, unions in both places suffer from a lack of credibility and capacity to enforce contracts. Given the ACFTUís ongoing focus on sectoral-level bargaining, however, experiments will likely continue in various regions and industries throughout China.

Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002 By Thomas Dohmen, Hartmut F. Lehmann, and Mark E. Schaffer

The authors use a rich personnel data set from a Russian firm for the years 1997 to 2002 to analyze how the firm adjusts wages and employment during this period in which local labor market conditions changed in the aftermath of the financial crisis in 1998. They relate the development of turnover and wages for various employment categories to alternative models of wage and employment determination. The authors argue that the firmís behavior is consistent with the predictions of efficiency wage models of the shirking and turnover type.

Union Coverage and Work-Related Training in the Construction Industry By C. Jeffrey Waddoups

Using data from the Survey of Income and Program Participation, the author estimates the impact of union coverage on training in the United States, comparing the construction industry with other broad industry sectors. The author finds no statistically significant union training effect in construction or other private-sector industries for employer-paid training. For a more broadly defined job-training measure, however, a large union effect is found in construction, and a smaller, yet statistically significant, effect is found in other private-sector industries. The results are not entirely consistent with either the standard human capital model or models of imperfect competition.

Book Reviews

Global Unions, Local Power: The New Spirit of Transnational Labor Organizing By Jamie K. McCallum . Reviewed by Gay W. Seidman .

The Chicken Trail: Following Workers, Migrants, and Corporations across the Americas By Kathleen C. Schwartzman . Reviewed by Joseph C. Bazler .

January 2014 (Vol. 67, No. 1)

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Pathways to Enforcement: Labor Inspectors Leveraging Linkages with Society in Argentina By Matthew Amengual

Regulations essential for improving labor standards are often ignored to the detriment of workers. In many countries, the agencies charged with enforcement lack resources and are subject to political interference. How can inspectors in flawed bureaucracies overcome these barriers and enforce labor regulations? In this article, based on case studies of subnational variation in Argentina, the author develops a theory to explain enforcement in places with weak and politicized labor inspectorates. The framework focuses on two factors: the strength of linkages between bureaucrats and allied civil society organizations, and the level of administrative resources in the bureaucracy. Linkages facilitate routinized resource sharing and the construction of pro-enforcement coalitions, and administrative resources determine whether bureaucrats use societal resources passively or strategically. By identifying pathways to enforcement that are obscured by dominant approaches to studying labor inspection, this research opens up new possibilities for crafting strategies to improve labor standards.

Union Recognition by Multinational Companies in China: A Dual Institutional Pressure Perspective By Sunghoon Kim, Jian Han, and Longkai Zhao

Over the last decade, Chinese authorities have pressed foreign multinational companies to recognize official trade unions. Employing cross-classified multilevel modeling on a large data set (10,108 foreign-owned firms cross-embedded in 32 home countries and 755 Chinese cities), this study examines the antecedents of the varied positions of foreign-owned firms toward union recognition around the midpoint of the first decade of the 2000s?a time when the government-led union recognition campaign in China was gaining strength. Drawing on a dual institutional pressure perspective, the authors theorize that the likelihood that a foreign- owned firm will recognize a union depends on both the industrial relations system in the home country and the location of its operations in the host country. Specifically, a foreign-owned firm is more likely to recognize unions if it originated from a nation where the legitimacy of collective representation is high and if it is located in a Chinese city where union recognition is prevalent among Chinese-owned firms.

Effects of Union Organization on Strike Incidence in EU Companies By Giedo Jansen

The author reinvestigates the relationship between the organizational power of trade unions and strikes based on data from the European Company Survey 2009 (ECS-2009) and the Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts (ICTWSS) database, which include more than 5,000 firms across all 27 European Union (EU) member states. He shows that the incidence of strikes is higher in companies for which workplace union membership is high, the number of workplace unions is high, and unions dominate establishment-level works councils. These factors interact to affect strike incidence. In addition, the company-level effects of union organization on strike incidence vary across countries. These country differences can partially be explained by differences in national trade union systems, such as decentralization and membership density.

Temporary Weapons: Employers' Use of Temps against Organized Labor By Erin Hatton

Since the 1970s, U.S. employers have restructured their relationship to the labor market. This restructuring has included their rising use of nonstandard workers, particularly agency temps, and their systematic attacks on labor unions. These two trends are generally understood to be related but separate facets of a broader restructuring of the employment relationship. In this article, the author shows where and how these trends intersect by analyzing 106 labor-management disputes. Employers use temps as weapons against unions in four primary ways: to prevent unions from forming, to weaken existing unions, to apply pressure on unions during negotiations, and to intimidate or harass striking workers. The author concludes that deploying agency temps in this way is a qualitatively new phenomenon--not simply a continuation of employers' longstanding practice of replacing union workers with scab labor.

Work-Life Flexibility Policies: Do Unions Affect Employee Access and Use? By Peter Berg, Ellen Ernst Kossek, Kaumudi Misra, and Dale Belman

The authors examine the influence of individual and collective voice mechanisms on employee access to and use of six work?life flexibility practices. Their multilevel analyses are based on an original survey of 897 workers nested in departments across eight unionized establishments in the United States. Collective voice measures include the effectiveness of union pay benefits and union schedule support at the individual and union (group) levels. The authors? analyses indicate that when unions are perceived to effectively support workers? schedule needs, individual access to flextime, gradual return to work, and a compressed workweek is higher. By contrast, when unions are perceived to effectively negotiate higher wages and benefits and enforce the collective agreement, individual access to flextime and a compressed workweek is lower. Collective voice measures are also significantly related to the use of a number of work?life flexibility practices. These findings suggest that union behavior can have a significant and varied influence on access to and use of work?life flexibility practices.

The Changing Size Distribution of U.S. Trade Unions and Its Description by Pareto's Distribution By John Pencavel

The size distribution of trade unions in the United States and changes in this distribution are documented. Because the most profound changes are taking place among very large unions, these are subject to special analysis by invoking Pareto?s distribution--a new application of this distribution. Extensions to trade union wealth and to Britain are broached. The role of the public sector in these changes receives particular attention. A simple model helps account both for the logarithmic distribution of union membership and for the contrasting experiences of public- and private-sector unions since the 1970s.

Justice or Just between Us? Empirical Evidence of the Trade-Off between Procedural and Interactional Justice in Workplace Dispute Resolution By Zev J. Eigen and Adam Seth Litwin

In this article, the authors examine the relationship between an employer?s implementation of a typical dispute resolution system (DRS) and organizational justice, perceived compliance with the law, and organizational commitment. They draw on unique data from a single, geographically expansive, U.S. firm with more than 100,000 employees in more than 1,000 locations. Holding all time-constant, location-level variables in place, they find that the introduction of a DRS is associated with elevated perceptions of interactional justice but diminished perceptions of procedural justice. They also find no discernible effect on organizational commitment, but a significant boost to perceived legal compliance by the company. The authors draw on these findings to offer a ?differential-effects? model for conceptualizing the relationship among organizational justice, perceived legal compliance, and the implementation of dispute resolution mechanisms. This paper draws on unique data from a single, geographically-expansive, US firm with well over 100,000 employees in over 1,000 locations to examine the relationship between an employer?s implementation of a typical dispute resolution system (DRS) and organizational justice, perceived compliance with the law, and organizational commitment. Holding all time-constant, location-level variables in place, we find that introduction of the DRS is associated with elevated perceptions of interactional justice but diminished perceptions of procedural justice. We also find no discernible effect on organizational commitment, but a significant boost to perceived legal compliance by the company. The authors draw upon these findings to offer a ?differential-effects? model for conceptualizing the relationship among organizational justice, perceived legal compliance, and implementation of dispute resolution mechanisms.

Are Worker-Managed Firms More Likely to Fail than Conventional Enterprises? Evidence from Uruguay By Gabriel Burdin

Various theories suggest that worker-managed firms (WMFs) are prone to failure in competitive environments. Using a long panel of Uruguayan firms, the author presents new evidence on firm survival by comparing WMFs with conventional firms. After excluding microenterprises and controlling for differences in the effective tax burden faced by the two types of firms, the hazard of dissolution is 29% lower for WMFs than for conventional firms. This result is robust to alternative estimation strategies based on semiparametric and parametric frailty duration models that take into account unobserved firm-level heterogeneity and impose a range of distributional assumptions about the shape of the baseline hazard. The higher survival rates of worker-managed firms seem to be associated with their greater employment stability. This evidence suggests that the marginal presence of WMFs in actual market economies cannot be explained by the fact that these firms are less likely to survive than conventional firms.

Sexual Orientation and Earnings in Young Adulthood: New Evidence from Add Health By Joseph J. Sabia

Using data from a rich new data source, the National Longitudinal Study of Adolescent Health, the author examines the sensitivity of the estimated earnings penalty faced by sexual minorities to 1) the use of multiple measures of sexual orientation, including both identity/attraction and behaviorally based definitions, and 2) controls for family and individual heterogeneity. Baseline regression results show that gay males and bisexuals earn less than their heterosexual counterparts, a result that persists after controlling for family-level observables. However, after controlling for personality and isolating self-identified sexual minorities who are most likely to be observed as such by employers, the estimated wage penalty for bisexuals falls sharply in absolute magnitude while the wage penalty for gay males persists. Preferred specifications show that relative to heterosexual males, gay males earn wages that are 13.1% lower, a result that is consistent with labor market discrimination. Neither lesbians nor bisexual females earn significantly less than their heterosexual counterparts.

Book Reviews

The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy By Richard M. Locke. Reviewed by Stephanie Barrientos.

Outsourcing Economics: Global Value Chains in Capitalist Development. By William Milberg and Deborah Winkler. Reviewed by Stephanie Barrientos.

The Political Economy of the Service Transition. By Anne Wren. Reviewed by Jill Rubery.

Welfare States and Immigrant Rights: The Politics of Inclusion and Exclusion. By Diane Sainsbury. Reviewed by Sofia Perez.

Rediscovering Collective Bargaining: Australia's Fair Work Act in International Perspective. Edited by Breen Creighton and Anthony Forsyth. Reviewed by Alexander Colvin.

Union Voices: Tactics and Tensions in UK Organizing By Melanie Simms, Jane Holgate, and Edmund Heery. Reviewed by Maite Tapia.

October 2013 (Vol. 66, No. 5)

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Is U.S. Public Sector Labor Relations in the Midst of a Transformation? By Harry C. Katz

In this article the author assesses whether a fundamental transformation is underway in public sector (state and local government) labor relations in the United States by revisiting the arguments made by the author and Kochan and McKersie (1986) regarding the transformation of labor relations in the private sector. The author argues that the economic pressures that led to a transformation of private sector labor relations starting in the 1980s have not played a comparable role in recent developments in the public sector because of the political nature of labor relations in that sector. Other insights are drawn from a comparison of recent developments with events that occurred during the mid-1970s, an earlier taxpayer revolt era. The author concludes that a fundamental transformation in public sector labor relations has not occurred, attributable to some degree to the limited decline in public employee union membership and the fact that a majority of the public has favorable attitudes toward public sector employees and union collective bargaining rights. Factors that might lead to such a transformation in the future are highlighted.

Convergence in Industrial Relations Institutions: The Emerging Anglo-American Model? By Alexander J. S. Colvin and Owen Darbishire

At the outset of the Thatcher/Reagan era, the employment and labor law systems across six Anglo-American countries could be divided into three pairings: the Wagner Act model of the United States and Canada; the Voluntarist system of collective bargaining and strong unions in the United Kingdom and Ireland; and the highly centralized, legalistic Award systems of Australia and New Zealand. The authors argue that there has been growing convergence in two major areas: First, of labor law toward a private ordering of employment relations in which terms and conditions of work and employment are primarily determined at the level of the enterprise; and second, of individual employment rights, toward a basket of minimum standards that can then be improved upon by the parties. The greatest similarity is found in Canada, the United Kingdom, New Zealand, and Australia. Ireland retains a greater degree of public ordering, while the United States diverges in favoring the interests of employers over those of employees and organized labor. The authors explore reasons for the convergence.

When Does Money Make Money More Important? Survey and Experimental Evidence By Sanford E. DeVoe, Jeffrey Pfeffer, and Byron Y. Lee

The authors investigate how the amount and source of income affects the importance placed on money. Using a longitudinal analysis of the British Household Panel Survey and evidence from two laboratory experiments, they found that larger amounts of money received for labor were associated with individuals placing greater importance on money; but this effect did not hold for money not related to work. The longitudinal survey analysis demonstrated these differential effects of the source of income on money?s importance while holding constant stable individual differences. The experiments provide causal evidence that the source of income has an effect on the importance of money as well as on the effort expended to earn more money. The authors? results suggest that, even as individual differences in the importance placed on money may affect peoples? income, depending on its source, income can also affect the importance people place on money. The come affects the importance placed on money using a longitudinal analysis of the British Household Panel Survey and evidence from two laboratory experiments. Larger amounts of money received for labor were associated with individuals placing greater importance on money, but this effect did not hold for money not related to work. The longitudinal survey analysis demonstrated these differential effects of the source of income on money?s importance while holding constant stable individual differences. The experiments provide causal evidence that the source of income has an effect on the importance of money as well as on the effort expended to earn more money. Even as individual differences in the importance placed on money may affect peoples? income, our results suggests that income can also affect the importance people place on money, depending on its source.

Monopsony Power, Pay Structure, and Training By Samuel Muehlemann, Paul Ryan, and Stefan C. Wolter

Although interest in monopsonistic influences on labor market outcomes has revived in recent years, only a few empirical studies provide direct evidence on this topic. In this article, the authors analyze the effect of monopsony power on pay structure, using a direct measure of labor market thinness. The authors find evidence of monopsony power, as firms facing fewer local competitors offer lower wages to skilled labor and trainees, but not to unskilled labor. The findings have important implications for the economic theory of training, as most recent models assume monopsonistic pay-setting for skilled labor, but not for trainees.

The Diffusion of Pay for Performance across Occupations By Alberto Bayo-Moriones, Jose Enrique Galdon-Sanchez, and Sara Martinez-de-Morentin

The authors analyze the differences in the incidence of pay-for-performance plans across occupations in a sample of Spanish manufacturing establishments. Results show that significant differences occur across occupations in the incidence of individual, group, and firm-or plant-level pay for performance plans. They also examine the roles of establishment size, multinational ownership, and the human resource department in the incidence of pay-for-performance plans and their variability across occupations within the same firm. These factors are correlated with a greater use of pay for performance and, in most cases, this effect is similar across occupations.

Going Abroad: HR Policies, National IR Systems, and Union Activity in Foreign Subsidiaries of U.S. Multinationals By John J. Lawler, Po-Chien Chang, Woonki Hong, Shyh-Jer Chen, Pei-Chuan Wu, and Johngseok Bae

Previous research is limited regarding the effects of the HR policies of foreign subsidiaries of U.S. multinational companies on union activity. An important topic is the extent to which multinationals employ practices that can be used to reduce unionization in parent company domestic operations and whether they have the same effect in foreign subsidiaries. In this study, the authors examine the effects of a subsidiary's implementation of high-performance work systems, its greenfield site status, and its usage of contract or temporary workers on union activity within the subsidiary. Results from a survey of a number of geographically dispersed foreign subsidiaries of U.S.-based multinationals show that greenfield site status has a strong, negative effect on subsidiary union activity, whereas high-performance work systems have a more modest, negative effect. The authors also show that national IR system characteristics moderate the effect of HR policies, especially if enterprise unionism plays a dominant role in the host country.

Is Part-Time Employment Beneficial for Firm Productivity? By Annemarie Kunn-Nelen, Andries De Grip, and Didier Fouarge

With this article, the authors are the first to analyze and explain the relationship between part-time employment and firm productivity. Using a unique data set on the Dutch pharmacy sector that includes the working hours of all employees and a hard physical measure of firm productivity, the authors estimate a production function including heterogeneous employment shares based on working hours. The authors find that firms with a large part-time employment share are more productive than firms with a large share of full-time workers: a 10% increase in the part-time share is associated with 4.8% higher productivity. Additional data on the timing of labor demand show that this can be explained by a different allocation of part-timers compared with full-timers. This enables firms with large part-time employment shares to allocate their labor force more efficiently across working days.

The Causal Effect of Faculty Unions on Institutional Decision-Making By Stephen R. Porter

The author's goal in this article is to estimate the causal effect of unionization on institutional decision-making, using a national survey of presidents and faculty senate leaders to measure the level of shared governance at 341 public universities in 15 different areas. To handle the endogeneity of faculty unionization, an index of state employee collective bargaining rights is used as an instrument for unionization. Findings indicate that unionization greatly increases faculty influence over institutional decision-making, both in compensation and in areas outside of compensation.

Strategies of Disruption: Factory Unions Facing Asset-Strippers in Post-Communist Romania and Ukraine By Mihai Varga

The author uses ethnographic fieldwork to examine what forms of disruption trade unions use in resisting asset-strippers at four factories in the metal sector of post-Communist Romania and Ukraine. He shows how understanding disruption as differentiating among various targets and protest actions, and adapting actions to targets, allows researchers to make sense of how, when employers are uninterested in production, unions can effectively protest even if they cannot strike. In addition, he discusses how in many cases in Eastern Europe the search to create disruption is complicated by the persistence of nonadversarial forms of trade unionism coupled with employer actions that exploit such forms.

Book Reviews

From Iron Rice Bowl to Informalization: Markets, Workers, and the State in a Changing China Edited by Sarosh Kuruvilla, Ching Kwan Lee, and Mary E. Gallagher. Reviewed by William Hurst.

Walmart in China Edited by Anita Chan. Reviewed by Eli Friedman.

Markets and Bodies: Women, Service Work, and the Making of Inequality in China By Eileen Otis. Reviewed by Emma Samsioe.

Trade Unions in China: The Challenge of Labour Unrest By Tim Pringle. Reviewed by Mingwei Liu.

Law and Fair Work in China By Sean Cooney, Sarah Biddulph, and Ying Zhu. Reviewed by Cynthia Estlund.

China's Changing Welfare Mix: Local Perspectives Edited by Beatriz Carrillo and Jane Duckett. Reviewed by Qin Gao.

Reforming Asian Labor Systems: Economic Tensions and Worker Dissent By Frederic C. Deyo. Reviewed by Chris King-Chi Chan.