Audra J. Bowlus

A Search Interpretation of Male-Female Wage Differentials

A general equilibrium search framework is used to examine the role of gender differences in labor market behavior patterns (e.g., quit rates for personal reasons) in determining gender wage differentials. For samples of high school and college graduates from the National Longitudinal Survey of Youth (NLSY), these behavioral patterns are found to be significantly different across the sexes and account for 20%–30% of the wage differentials. In particular, they play a key role in explaining the male‐female wage differential that remains after controlling for the gender composition across occupations.

Matching Workers and Jobs: Cyclical Fluctuations in Match Quality

Using National Longitudinal Survey of Youth data on tenure and wages, this article analyzes the extent to which the level of job mismatching varies over the business cycle and how it is dealt with by the labor market. I find significant cyclical variation in job match quality and an internalization of the variation by the labor market through wages. Mismatching occurs more during recessions but is primarily captured in starting wages. The evidence suggests the cyclical phenomenon is one of general mismatching rather than an increased number of stopgap jobs during recessions.

Moving toward markets? Labor allocation in rural China

Abstract Chinas economic reforms have brought rapid growth in rural off-farm employment, raising questions about the assumption that rural China is labor surplus and has poorly functioning factor markets. We investigate this by testing for separability between household labor demand and supply using panel data. We find that separability is rejected overall, indicating that factor markets remain underdeveloped. Nonseparability, however, is associated with labor surplus in some areas and labor shortage in others. Moreover, separability holds where substantial employment opportunities exist in the wider township, suggesting that such employment promotes competitive allocation within villages as well as the inter-village movement of resources.

Domestic Violence, Employment, and Divorce

Conventional wisdom suggests abused women get caught in a cycle of violence and are unable or unwilling to leave their spouses. We estimate a model of domestic violence to determine who abuses, who is abused, and how women respond to abuse via employment and divorce. In contrast to conventional wisdom, abused women are 1.7-5.7 times more likely to divorce. Employment before abuse occurs is found to be a significant deterrent. For men, witnessing violence as a child is a strong predictor of abusive behavior: re-socializing men from violent homes lowers abuse rates by 26%-48%. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Equilibrium Search Models and the Transition from School to Work

This paper applies an equilibrium search to study the transition from schooling to work of U.S. high school graduates. We consider the case where there is heterogeneity in firm productivity and the number of firm types is discrete. For this case the estimation problem is non-standard and the likelihood function is non-differentiable. This paper provides a computational method to obtain the MLE and, through several Monte Carlo studies, characterizes the behavior of the estimator. Applying these methods to the transition from school to work, our results show that nonemployed blacks receive fewer offers than whites and employed blacks are more likely to lose their jobs. Importantly, employed blacks and whites receive job offers at the same rate. However, the difference in job destruction rates is so great that it accounts for three-quarters of the black-white wage differential.

Business Cycle Models, Aggregation, and Real Wage Cyclicality

A substantial literature has developed to estimate the “true” cyclicality of real wages, that is, composition bias free. Two major issues are addressed in this article: aggregation of heterogeneous workers and potential bias in the measurement of the labor input. A general analysis of the biases is presented, and alternative approaches in the literature are nested in a single framework. Estimates based on an efficiency units concept that avoids the usual aggregation problems are presented. Composition bias underestimates the usual parameters of interest unless both the price and the quantity of the labor input are adjusted appropriately.

U.S.-Canadian Unemployment and Wage Differences Among Young Low-Skilled Males in the 1980s

During the mid 1980s young, low-skilled adults in Canada were much more likely to be out of work than their U.S. counterparts. The unemployment rate gap for this cohort was 7 percentage points. At the same time wage inequality was higher in the United States. Using panel data from the U.S. National Longitudinal Survey of Youth and the Canadian Labour Market Activity Survey, in this study a general equilibrium search model of the labor market is employed to identify structural differences contributing to these gaps. The results reveal that both wage and unemployment differences are driven by a higher job destruction/separation rate in Canada and higher job offer arrival rates in the United States. In general, the model characterizes the U.S. labor market as having less search frictions than that of Canada. That is, Canadian firms are found to have more monopsony power than their U.S. counterparts.

Search Friction in the U.S. Labor Market: Equilibrium Estimates from the PSID

In this paper we determine the feasibility of using data from thePanel Study of Income Dynamics to estimate the Burdett-Mortensengeneral equilibrium search model. The data contain sufficientinformation on wages, labor force states, durations, and transitionsto generate estimates of the models structural parameters. Ouranalysis compares the relative labor market search friction forblack and white male household heads. In general we find blacks facegreater search friction while unemployed than whites, but a similarlevel while employed. Within the model this finding impliessubstantial productivity differentials are needed to generate theblack-white wage differentials found in the data.

Immigrant job search assimilation in Canada

Immigrant assimilation is a major issue in many countries. While most of the literature studies assimilation through a human capital framework, we examine the role of job search assimilation. To do so, we estimate an equilibrium search model of immigrants operating in the same labour market as natives, where newly arrived immigrants have lower job offer arrival rates than natives but can acquire the same arrival rates according to a stochastic process. Using Canadian panel data, we find substantial differences in job offer arrival and destruction rates between natives and immigrants that are able to account for three quarters of the observed earnings gap. The estimates imply that immigrants take on average 13 years to acquire the native search parameters. Due to immigrants facing much lower on-the-job offer arrival rates than natives, the model predicts that earnings growth through job search is minimal for immigrants prior to their job search assimilation.