Katharine G. Abraham

Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?

Recent work by David Lilien has argued that the positive correlation between the dispersion of employment growth rates across sectors (σ) and the unemployment rate implies that sectoral shifts in labor demand are responsible for a substantial fraction of cyclical variation in unemployment. This paper demonstrates that, under empirically satisfied conditions, traditional single-factor business-cycle models will produce a positive correlation between σ and the unemployment rate. Information on the job vacancy rate permits one to distinguish between a pure sectoral shift and a pure aggregate demand interpretation of this positive correlation. The finding that σ and the volume of help wanted advertising (a job vacancy proxy) are negatively related supports an aggregate demand interpretation.

How Social Processes Distort Measurement: The Impact of Survey Nonresponse on Estimates of Volunteer Work in the United States1

The authors argue that both the large variability in survey estimates of volunteering and the fact that survey estimates do not show the secular decline common to other social capital measures are caused by the greater propensity of those who do volunteer work to respond to surveys. Analyses of the American Time Use Survey (ATUS)—the sample for which is drawn from the Current Population Survey (CPS)—together with the CPS volunteering supplement show that CPS respondents who become ATUS respondents report much more volunteering in the CPS than those who become ATUS nonrespondents. This difference is replicated within subgroups. Consequently, conventional adjustments for nonresponse cannot correct the bias. Although nonresponse leads to estimates of volunteer activity that are too high, it generally does not affect inferences about the characteristics of volunteers.

Job security and work force adjustment: How different are U.S. and Japanese practices?

Abstract The paper compares employment and hours adjustment in Japanese and U.S. manufacturing. In contrast to some previous work, we find that adjustment of total labor input to demand changes is significantly greater in the United States than in Japan; adjustment of employment is significantly greater in the United States, while that of average hours is about the same in the two countries. Although workers in Japan enjoy greater employment stability than do U.S. workers, we find considerable variability in the adjustment patterns across groups within each country. In the United States, most of the adjustment is borne by production workers. In Japan, female workers, in particular, bear a disproportionate share of adjustment.

Length of Service and Promotions in Union and Nonunion Work Groups

This study provides evidence on the relative importance of seniority and ability in the promotion process in union and nonunion settings. The analysis is based on survey data collected from managers in a random sample of about 400 firms, supplemented by an examination of personnel records concerning the pattern of promotions in two manufacturing firms. The results show that, as expected, the weight assigned seniority is significantly greater in union than in nonunion settings, but the difference is smaller than many would have predicted.

New developments in the labor market : toward a new institutional paradigm

The structure of employer/employee relationships is changing. These original contributions report on new developments taking place in todays labor market and on the role of public policy in shaping that process. They provide an illuminating description of the current state of internal labor market theory and practice, document the evolution of trends in the public and private sectors, and are joined in a concern for disadvantaged and unemployed workers that is all too rare in scholarly work. A central theme is the adaptation of labor market institutions to the important environmental changes of recent years, including the shift to an international marketplace for goods and services, the spread of new workplace technologies, new work force demographics, and changing conceptions of the role that government should be expected to play.Katharine Abraham is Associate Professor of Economics at the University of Maryland. Robert McKersie is Professor of Industrial Relations at the Sloan School of Management at MIT.Contents: Introduction, Katharine G. Abraham. Norms and Cycles: The Dynamics of Nonunion Industrial Relations in the United States, 1897-1987, Sanford M. Jacoby. The Effects of Worker Participation in Management, Profits and Ownership of Assets on Enterprise Performance, Michael A. Conte, Jan Svenjar. Restructuring the Employment Relationship: The Growth of MarketMediated Work Arrangements, Katharine G. Abraham. The Evolving Role of Small Business and Some Implications for Employment and Training Policy, Gary W. Loveman, Michael J. Piore, Werner Sengeneberger. Employment Security and Employment Policy: An Assessment of the Issues, Paul Osterman, Thomas A. Kochan. The Equity and Efficiency of job Security: Contrasting Perspectives on Collective Dismissal Laws in Europe, Susan N. Houseman. ContinuousProcess Technologies and the Gender Gap in Manufacturing Wages, Susan B. Carter, Peter Philips. Reducing Gender and Racial Inequality: The Role of Public Policy, Peter Gottschalk. Government and the Labor Market, Robert M. Solow.

Health-related activities in the American Time Use Survey.

Objectives:The Bureau of Labor Statistics’ American Time Use Survey (ATUS), launched in 2003, offers the first comprehensive look at how individuals spend their time. Health services researchers can use it to study time spent on a variety of health-related activities. We explain the surveys structure and provide an overview of the health-related activities reported by 34,693 respondents in 2003–2004. Methods:For the ATUS, computer-assisted phone interviewers ask respondents age 15 or older to report their activities during the day before the call (their “designated day”), including where they were and who was with them. Activities are assigned 6-digit codes, grouped into 17 major categories. Associated waiting and travel time have separate codes. Certain household types are oversampled to ensure reliable estimates. Results:In 2003–2004, 11.3% of American adults reported spending time (mean, 108 minutes) on activities related to health on their designated day. Some 5.6% reported personal health self-care (86 minutes); 3.4% reported medical and care services (123 minutes); and about 1% each reported activities related to the health of household children, household adults, and nonhousehold adults (78–115 minutes). The prevalence of health-care related activities rose with age. Sports, exercise, and recreation were reported by 17.6% of respondents (114 minutes), with men more likely than women to report these activities. Conclusions:The ATUS, a new publicly available resource, allows researchers to explore factors that influence time devoted to health-related activities, and the relationships among them and other activities, in a nationally representative sample.

Toward a Cost-of-Living Index: Progress and Prospects

A lmost anyone with an interest in consumer price trends wants to know how those trends affect consumers, and, in principle, that effect is best captured by an appropriate cost-of-living index. It therefore seems curious that so few of the statistical offices around the world have adopted the cost-of-living index objective for their consumer price indexes. “Accurately tracking the cost of purchasing a fixed market basket of goods and services” no doubt offers a more comfortable standard for a statistical agency to aspire to than “accurately tracking the cost of living.” But if the latter is what one really would like to measure, it seems better just to say so. For some years, the theory of the cost-of-living index has guided Bureau of Labor Statistics (BLS) decisions about the Consumer Price Index (CPI), and in the recent past, the agency has stated more explicitly that the goal for the CPI program is to approximate a “conditional” cost-of-living index—that is, an index that measures changes in the cost of living that are due to changes in prices of goods and services, conditional on other outside influences that affect the standard of living remaining unchanged. It may be that a true cost-of-living index is unattainable as a practical matter. Still, the Consumer Price Index surely can be moved closer to that ultimate objective, and the theory of the cost-of-living index has the considerable advantage of offering a unified framework for the evaluation of the methods used to produce the CPI.

Returns to seniority in union and nonunion jobs: A new look at the evidence

In cross-sectional data, the positive association between seniority and earnings is typically much stronger for nonunion workers than for union workers, a finding that seems inconsistent with the generalization that seniority is more important in the union sector than in the nonunion sector. The authors of this paper show that standard estimates of the return to seniority are likely to be biased upward due to unmeasured worker heterogeneity, job heterogeneity, or both, and they argue that this bias is likely to be larger in the nonunion sector than in the union sector. When they correct for this problem in analyzing data on male blue-collar workers for the years 1968–80, they find a larger return to seniority in the union sector than in the nonunion sector.

Exploring Differences in Employment between Household and Establishment Data

Using a large data set that links individual Current Population Survey (CPS) records to employer-reported administrative data, we document substantial discrepancies in basic measures of employment status that persist even after controlling for known definitional differences between the two data sources. We hypothesize that reporting discrepancies should be most prevalent for marginal workers and for marginal or nonstandard jobs, and we find systematic associations between the incidence of reporting discrepancies and observable person and job characteristics that are consistent with this hypothesis. The paper discusses the implications of the reported findings for both micro and macro labor market analysis.

Distinguished Lecture on Economics in Government—What We Don't Know Could Hurt Us: Some Reflections on the Measurement of Economic Activity

The routine production of U.S. economic statistics dates back to the early part of the twentieth century. But in recent decades, as services output has continued to expand a system of economic statistics that had been designed during the manufacturing era began to seem increasingly outdated. Over the past decade, the statistical agencies have done yeoman work to expand the availability and quality of service sector statistics, but the task is far from completed. Moreover, the traditional accounting framework for economic statistics has focused almost exclusively on market transactions. Looking ahead, more comprehensive measurement of productive activities, however they may be organized, must be a priority.