Ken-Hou Lin

Financialization and U.S. Income Inequality, 1970-2008

Focusing on U.S. nonfinance industries, we examine the connection between financialization and rising income inequality. We argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production, strengthening owners’ and elite workers’ negotiating power relative to other workers. The result was an incremental exclusion of the general workforce from revenue-generating and compensation-setting processes. Using time-series cross-section data at the industry level, we find that increasing dependence on financial income, in the long run, is associated with reducing labor’s share of income, increasing top executives’ share of compensation, and increasing earnings dispersion among workers. Net of conventional explanations such as deunionization, globalization, technological change, and capital investment, the effects of financialization on all three dimensions of income inequality are substantial. Our counterfactual analysis suggests that financialization could account for more than half of the decline in labor’s share of income, 9.6% of the growth in officers’ share of compensation, and 10.2% of the growth in earnings dispersion between 1970 and 2008.

Mate Selection in Cyberspace: The Intersection of Race, Gender, and Education

In this article, the authors examine how race, gender, and education jointly shape interaction among heterosexual Internet daters. They find that racial homophily dominates mate-searching behavior for both men and women. A racial hierarchy emerges in the reciprocating process. Women respond only to men of similar or more dominant racial status, while nonblack men respond to all but black women. Significantly, the authors find that education does not mediate the observed racial preferences among white men and white women. White men and white women with a college degree are more likely to contact and to respond to white daters without a college degree than they are to black daters with a college degree.

Positioning Multiraciality in Cyberspace Treatment of Multiracial Daters in an Online Dating Website

The U.S. multiracial population has grown substantially in the past decades, yet little is known about how these individuals are positioned in the racial hierarchies of the dating market. Using data from one of the largest dating websites in the United States, we examine how monoracial daters respond to initial messages sent by multiracial daters with various White/non-White racial and ethnic makeups. We test four different theories: hypodescent, multiracial in-betweenness, White equivalence, and what we call a multiracial dividend effect. We find no evidence for the operation of hypodescent. Asian-White daters, in particular, are afforded a heightened status, and Black-White multiracials are treated as an in-between group. For a few specific multiracial gender groups, we find evidence for a dividend effect, where multiracial men and women are preferred above all other groups, including Whites.

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Wage inequality in the United States has risen dramatically over the past several decades, prompting scholars to develop a number of theoretical accounts for the upward trend. This study takes an organizational approach to examine how changes in the firm-size wage effect (FSWE) — a phenomenon whereby otherwise similar workers earn more when employed by large firms — have affected the wage distribution in the U.S labor market. Using data from the Current Population Survey and Survey of Income and Program Participation, our findings reveal that in 1987, although all workers benefited from a firm-size wage premium, the premium was significantly higher for individuals at the bottom (e.g., 10th and 25th percentiles) and middle of the wage distribution (e.g., 50th percentile) compared to those at the top (90th percentile). Between 1987 and 2014, however, whereas the average FSWE declined markedly, the decline was exclusive to those at the bottom and middle of the wage distribution while there was no change for those at the top. As such, the uneven declines in the FSWE across the wage distribution explain between 20 and 30 percent of rising wage inequality during this period, suggesting firms are of great importance to the study of rising inequality.

The Rise of Finance and Firm Employment Dynamics

This article sheds light on the ongoing employment stagnation in the United States by investigating the links between the rise of finance and firm employment dynamics during the 1982–2005 period. I argue that the rise of finance marginalized the role of labor in revenue generating and sharing processes, which led to employment stagnation among the largest nonfinancial firms in the United States. Evidence suggests that increasing investment in financial assets depresses the workforce size. The growing dependence on debt reprioritizes the order of distribution, heightening the need for workforce reduction. The increasing rewards for shareholders generate a downsize-and-distribute spiral, in which labor expense becomes a primary target of cost-cutting strategies. Further analysis indicates that production and service workers are more vulnerable to shifts associated with the rise of finance than managers and professionals.