Arthur E. Blakemore

Seniority Rules and Productivity: An Empirical Test

The primary purpose of this paper is to test empirically the effect of labor quality on short-run manufacturing productivity. In doing so, the study makes major advances in two areas. For the first time, a job tenure function is estimated, and a time series of job tenure in manufacturing is developed. This estimated tenure series empirically verifies the use of seniority rules in the firm-worker employment relationship. Having generated a tenure series, the authors then test whether tenure enhances productivity in manufacturing. The results clearly indicate that seniority rules have a statistically significant positive impact on productivity, and the pattern of the seniority rules is reminiscent of a model where human capital has a specific component. Copyright 1989 by The London School of Economics and Political Science.

Employment Bonuses and Labor Turnover

The purpose of this paper is to illustrate how a two-part compensation system composed of a rigid base salary and a flexible bonus can reduce turnover. It is shown that bonus pay is an effective retention device if it is risk reducing and is correlated with outside contract offers. For the first time, to the best of our knowledge, a model of bonus payments is tested with U.S. instead of Japanese data. The empirical results are suggestive of the conditions that give bonuses an important, even dominant, role in worker retention.

Employer Tax Evasion in the Unemployment Insurance Program

We use unique data to analyze employer tax compliance with Unemployment Insurance (UI) provisions. The data indicate that employers may have underreported

Collective Bargaining and Union Membership Effects on the Wages of Male Youths

728 million of UI taxes nationally in 1987 alone. To formally examine this noncompliance, a theoretical model of payroll tax evasion is developed showing that increasing payroll tax rates, among other things, likely increases noncompliance by risk-neutral firms. This prediction is empirically verified. The finding that UI tax evasion is systematically related to various firm characteristics suggests that UI audits may be effectively targeted by statistical profiles derived from our model, thereby improving compliance.

The high-school dropout decision and its wage consequences

The objective of this paper is to demonstrate that the nonunion wage differential consists of two effects. The first represents the differential between the wage of a nonunion worker in a collective bargaining unit and the wage paid to a comparable worker not covered by a bargaining agreement. This effect arises from the monopoly power of organized labor. The second is the wage differential between union and nonunion workers in collective bargaining units. This latter effect is attributed to economic benefits that unionism brings to its members. Empirical evidence is presented in support of both effects.

Bargaining Effect and Membership Effect in Public Sector Unions

Abstract The purpose of this study is to investigate the wage consequences of leaving high school prior to graduation. The dropout process is modeled as interdependent events involving the dropout decision itself and expected wage offers. Since selectivity biases may occur in such models, our empirical analysis permits adjustment for any such biases. Our empirical results provide support for the existence of a self-selection bias in the initial work experiences following high school. We also find that wages for dropouts progressively decline in subsequent years relative to high-school graduates.

A test for structural instability in the secular growth rate of productivity

The vast majority of the literature on public sector unionism focuses on union wage effects and the extent of unionization. In this paper we investigate some additional aspects of public sector unionism that have been discussed recently with respect to the private sector. The first is an analysis of the wage effects attributable to the legal status of the worker/union. Specifically, we investigate the difference between an individuals membership in a union and an individuals employment in a collective bargaining unit. Second, we examine the return to human capital and seniority in unionized versus non-unionized public sector employment. The two issues under scrutiny here are not unrelated for each measures in its own way the ability of the union to deliver benefits to, and elicit the support of, its membership. In other words, both are issues of union security. For the most part, the literature on union wage effects makes no distinction between union membership and collective bargaining coverage. As an exception, Christensen and Maki use a cross-section of three-digit industries to investigate both an industry coverage variable and an industry membership variable [3]. They conclude that membership in the union is the key status in the collective bargaining process. In two other papers, Jones [15] and Blakemore, Hunt and Kiker, [1] use panel data that allow the workers union status to be identified according to union membership and collective bargaining coverage. Both find that nonunion workers employed in a collective bargaining unit receive a wage premium over workers who are not covered, and that union members receive an extra bonus.

Public expenditures on higher education and their impact on enrolment patterns.

Abstract In this paper we challenge the orthodox notion that long-run productivity in the U.S. has suffered two distinct structural breaks. Instead, we find that the slowdown in the secular growth rate can be more appropriately characterized as a continuous, non-linear decline since the early 1950s.

Sex Differences in Occupational Selection: The Case of College Majors

The purpose of this paper is to estimate the declines in enrolment that can be expected if government-provided scholarship aid is reduced and basic student charges are increased. A model of the scholarship aid process is interacted with a traditional human capital approach to enrolment behaviour. These models are then estimated using a large microdata set of young persons, and the fitted values utilized to simulate enrolment probabilities for white and nonwhite males and females given alternative fiscal scenarios.