Edward J. Schumacher

Match Bias in Wage Gap Estimates Due to Earnings Imputation

About 30% of workers in the Current Population Survey have earnings imputed. Wage gap estimates are biased toward zero when the attribute being studied (e.g., union status) is not a criterion used to match donors to nonrespondents. An expression for “match bias” is derived in which attenuation equals the sum of match error rates. Attenuation can be approximated by the proportion with imputed earnings. Union wage gap estimates with match bias removed are presented for 1973–2001. Estimates for recent years are biased downward 5 percentage points. Bias in gap estimates accompanying other non–match criteria (public sector, industry, etc.) is examined.

Monopsony power and relative wages in the labor market for nurses

This paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets. Using data from the 1985-93 Current Population Surveys, measures of relative nurse/non-nurse wage rates for 252 labor markets are constructed. Contrary to predictions from the monopsony model, no positive relationship exists between relative nursing wages and hospital density or market size. Nor is support found for the presence of monopsony power based on evidence on union wage premiums, slopes of experience profiles, or the mix of RN to total hospital employment.

Labor Earnings, Discrimination, and the Racial Composition of Jobs

This paper examines the effect of the racial composition of labor markets on wage rates and the racial wage gap. The wage rates of white as well as black workers are significantly lower in industry-occupation-regional groups with high densities of black workers, while the racial wage gap does not vary systematically with respect to racial density. Interpretation of racial gap estimates can be sensitive to inclusion of a racial density variable, particularly in sparse specifications. An explanation for the wage-density relationship cannot be established, but results are most consistent with a quality sorting explanation and, to a lesser extent, the crowding hypothesis.

Compensating Differentials and Unmeasured Ability in the Labor Market for Nurses: Why Do Hospitals Pay More?

Registered nurses (RNs) employed in hospitals realize a large wage advantage relative to RNs employed elsewhere. Cross-sectional estimates indicate a hospital RN wage advantage of roughly 20%. This paper examines possible sources of the hospital premium, a topic of some interest given the current shifting of medical care out of hospitals. Longitudinal analysis of Current Population Survey data for 1979–94 suggests that a third to a half of the advantage is due to unmeasured worker ability, and the authors conclude that the remainder of the advantage probably reflects compensating differentials for hospital disamenities. Supporting these conclusions is evidence that hospital RNs have higher cognitive ability and higher-quality job experience than non-hospital RNs, and indications that shift work accounts for roughly 10% of the hospital premium.

What Explains Wage Differences between Union Members and Covered Nonmembers

An individual covered by a collective bargaining agreement but who is not a union member is estimated to earn about 13% lower wages than a union member. Sectors with relatively few covered nonmembers are associated with a large coverage differential, while sectors with high proportions of covered nonmembers are associated with small differentials. This suggests freeriders either weaken the bargaining position of the union or weak bargaining positions increase the incentive to freeride. Only a modest amount of this differential is accounted for by unmeasured ability, the probationary period associated with newly hired union workers, or union status misclassification.

Foreign-born nurses in the US labor market.

This paper examines immigration and the wages of foreign and native nurses in the US labor market. Data from the Current Population Survey identifies a workers country of birth and the National Survey of Registered Nurses (NSRN) identifies nurses who received their basic training outside the US. In 2004 about 3.1% of the registered nurse (RN) workforce is foreign-born non-US citizens, and 3.3% received their basic education elsewhere. The principal countries of origin are the Philippines, Canada, India, and England. Regression results show a 4.5% lower wage for non-citizen nurses born outside of the US (Canadian nurses are an exception). The wage disadvantage is concentrated on foreign-born nurses new to the US; once a nurse has been in the US for 6 years there is no longer a significant penalty. Results from the NSRN show relatively little overall wage differences between RNs who received their basic training outside versus inside the US, but there is a significant wage disadvantage for those new to the US market. The presence of foreign-trained nurses appears to decrease earnings for native RNs, but the effects are small.

A Note on Job Mobility Among Workers with Disabilities

This article uses data from the 1990 and 1993 panels of the Survey of Income and Program Participation to analyze relationships between disability status and job mobility. We identify individuals who experienced voluntary or involuntary job separations over a 20-month period and examine the effect of disability status on rates of job change and wage growth following a job change. The results show that disabled workers are more likely to experience involuntary job changes than are nondisabled workers, but there is little difference in the wage effects of job changes by disability status.

Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes

The nursing labor market presents an apparent puzzle. Hospitals report chronic shortages, yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college-educated women. This paper addresses this puzzle. Data from the Current Population Survey (CPS) are matched with detailed job content descriptors from the Occupational Information Network (O*NET). Nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers. A standard CPS-only wage regression shows a registered nurse (RN) wage advantage of .22 log points compared to a pooled male/female group of college-educated workers. Control for O*NET job attributes reduces the RN gap to .08, while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero. We conclude that nurses receive compensation close to long-run opportunity costs, narrowing if not resolving the RN wage-shortage puzzle.

Measuring Union and Nonunion Wage Growth: Puzzles in Search of Solutions

This paper presents conflicting evidence on trends in private sector union and nonunion wages. The BLS quarterly Employment Cost Index (ECI), constructed from establishment surveys, uses fixed weights applied to wage changes among matched job quotes. The ECI shows a substantial decrease in wage growth for union relative to nonunion workers. The annual Employer Costs for Employee Compensation (ECEC), drawn from the same survey data as the ECI, provides wage level estimates constructed from the full sample of job quotes using current sector weights. Surprisingly, the ECEC shows no trend in relative union-nonunion wages. Household evidence from the Current Population Survey (CPS) can potentially reconcile the conflicting ECI/ECEC evidence, but it is first necessary to account for Census earnings imputation procedures that bias the level and trend in the CPS union gap. CPS wage data absent controls, which should provide results similar to that from the ECEC, instead displays a steep decline in relative union wages, similar to that seen in the ECI. Regression estimates using the CPS, similar in spirit to the ECI, indicate a union premium that declines modestly over time. Union and nonunion wage growth is next calculated from the CPS using methods roughly consistent with the ECI and ECEC. These results shed rather dim light on the sources of ECI/ECEC differences. The contribution of the paper is its unearthing of puzzling and apparently contradictory evidence on union and nonunion wage trends (as well as on economy-wide wage growth). Although our analysis helps account for specific elements of this puzzle, a comprehensive solution remains elusive. We conclude that there has been closing in the union-nonunion wage gap since the mid-1980s, but the magnitude of the closing is anything but clear.

The production of health and the valuation of medical inputs in wage-amenity models

Using a hedonic wage-amenity model, this paper examines the valuation of medical inputs into the production of health. The data used in this study include the incomes, demographics and measures of human capital for households in eastern North Carolina with county level medical input supply. These data allow an estimate of the marginal value of medical care inputs such as the physician to population ratio and the availability of specialized services in an area of the country where the lack of available medical care has been of particular concern to policy makers. Our results indicate that while health care inputs are not a significant determinant of earnings overall, they are important in counties that have been designated as medically underserved. In underserved counties each additional physician per 10,000 individuals in the county decreases earnings by about 11.6%. This suggests that physicians act as an amenity and workers are willing to accept lower wages to locate in counties with a higher physician to population ratio.