Erica L. Groshen

The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?

The efficacy of policies to narrow the male/female wage differential depends partly on the size of the portion(s) of the gap targeted. Previous research finds no between-sex wage gap within occupations within employer (job-cell). This is the first study to disentangle segregation by occupation from that based on employer or on job-cell. In five industries, controlling for other forms of segregation, occupational segregation produces a gap of 11 percent (manufacturing) to 26 percent (services). The wage gaps from establishment and job-cell segregation are about 6 percent each. Since comparable worth acts on the occupation and job-cell components, it has a potentially large impact.

Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?

Observed human capital explains less than half of wage variation. In BLS Industry Wage Surveys, establishment-based wage differentials (controlling for occupation) account for 20–70 percent of intra-industry wage variation. This corresponds to a standard deviation in wages of 14 percent of the mean, almost as large as interindustry wage variation. Investigation suggests that establishment wage differentials are not random variations or returns to usual measures of human capital.

The Effects of Inflation on Wage Adjustments in Firm-Level Data:Grease or Sand?

An analysis of whether inflation facilitates adjustments to shocks or distorts relative prices, examining the wage-setting process across a panel of occupations and employers and finding that the costs of inflation may rise more rapidly than its benefits beyond quite modest rates of increase in the price level.

Turbulent firms, turbulent wages?

Has greater turbulence among firms fueled rising wage instability in the U.S.? Gottschalk and Moffitt ([1994]) find that rising earnings instability was responsible for one third to one half of the rise in wage inequality during the 1980s. These growing transitory fluctuations remain largely unexplained. To help fill this gap, this paper further documents the recent rise in transitory fluctuations in compensation and investigates its linkage to the concurrent rise in volatility of firm performance documented by Comin and Mulani [2005] among others. After examining models that explain the relationship between firm and wage volatility, we investigate the linkage in three complementary panel data sets, each with its own virtues and limitations: the Panel Study of Income Dynamics (detailed information on workers, but no information on employers), COMPUSTAT (detailed firm information, but only average wage and employment levels about workers), and the Federal Reserve Bank of Clevelands Community Salary Survey (wages and employment for specific occupations for identified firms). We find complementary support for the hypothesis in all three data sets. We can rule out straightforward compositional churning as an explanation for the link to firm performance in high-frequency (over spans of 5 years) wage volatility, although not in more persistent fluctuations (between successive 5-year averages). We conclude that the rise in firm turbulence explains about sixty percent of the recent the rise in the high frequency (5-year) volatility of wages.

Opportunities and Challenges Facing the Bureau of Labor Statistics

The Bureau of Labor Statistics (BLS) is one of the most important sources of data for business economists. This paper describes recent and planned new products, improvements to existing products, and improvements in users’ ability to access data. It also describes initiatives within the BLS to make it even more efficient and responsive than it is at present, including means of providing feedback from users. The paper also emphasizes the importance of users in responding to requests for survey information and support of BLS programs.

Structural Changes in U. S. Labor Markets: Causes and Consequences

During much of the 1980s, US wage growth has been unexpectedly slow in the face of relatively low unemployment rates and high capacity utilization rates. This collection of papers resulting from the Wage Structure Conference held by the Federal Research Bank of Cleveland, November 1989, helps explain labour market behaviour in that period. The contributors - academic and research economists in labour economics - provide a comprehensive assessment of the current state of the wage-setting process in the US labour market.