Kenneth A. Couch

A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey

We estimate the employment effects of federal minimum wage increases using monthly Current Population Survey (CPS) data from 1979 through 1997. We find that the empirical differences in the new minimum wage literature based on CPS data primarily can be traced to alternative methods of controlling for macroeconomic conditions. We argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate. We consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay.

Intergenerational Correlations in Labor Market Status: A Comparison of the United States and Germany

We use data from the Panel Study of Income Dynamics and the German Socio-economic Panel to calculate comparable measures of intergenerational correlations of earnings, hours, and education in the United States and in Germany. Our results indicate that there is remarkable similarity across the two countries in the correlations of earnings and of annual work hours of fathers and sons. The corresponding correlations for daughters and mothers are stronger in the United States than Germany, most likely due to the greater labor market integration of women in the United States. We also find that intergenerational correlations in educational attainment are considerably stronger in the United States.

Sample selection rules and the intergenerational correlation of earnings

Abstract This paper investigates the sensitivity of estimates of the intergenerational correlation of earnings to different sample selection rules. Recent articles report father–son correlations to be on the order of 0.4. Those estimates, however, are based on samples which exclude observations with low or zero earnings. Since events such as unemployment are common, it is not clear that such episodes should be excluded. We show that estimated correlations are quite sensitive to the selection rule used. The sensitivity of estimates to selection rules suggests one should be cautious about using recent estimates to infer the degree of intergenerational mobility.

Last Hired, First Fired? Black-White Unemployment and the Business Cycle

Studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because cyclical movements in the underlying transitions into and out of unemployment are not examined. Using Current Population Survey data matched across adjacent months from 1989–2004, this article provides the first detailed examination of labor market transitions for primeage black and white men to test the last hired, first fired hypothesis. Considerable evidence is presented that blacks are the first fired as the business cycle weakens. However, no evidence is found that blacks are the last hired. Instead, blacks appear to be initially hired from the ranks of the unemployed early in the business cycle and later are drawn from nonparticipation. The narrowing of the racial unemployment gap near the peak of the business cycle is driven by a reduction in the rate of job loss for blacks rather than increases in hiring.

A LONGITUDINAL ANALYSIS OF FAMILY MIGRATION AND THE GENDER GAP IN EARNINGS IN THE UNITED STATES AND GREAT BRITAIN

This article uses longitudinal data for the United States and Great Britain to examine the impact of residential mobility and childbirth on the earnings of women, their family earnings, and the related division of earnings by gender. This project is the _ rst to compare explicitly the impact of childbirth and family migration on women’s earnings, and it extends prior cross-sectional and longitudinal studies on isolated countries by providing a direct contrast between two major industrialized nations, using comparable measures. The results indicate that families respond in similar ways in both countries to migration and childbirth. In response to both migration and childbirth, women’s earnings fall at the time of the event and recover slowly afterward, but the magnitude of the impact is roughly twice as large for childbirth as for migration. However, migration but not the birth of a child is also associated with a significant increase in total family earnings because of increased husbands’ earnings. As a result, the effect of migration on the relative earnings of wives to husbands is similar to the effect of childbirth. These results suggest that family migration should be given consideration in the literature on the gender earnings gap.

Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and the CPS

We use monthly data from the Survey of Income and Program Participation and the Current Population Survey to estimate the effect of the minimum wage. Minimum wage increases significantly reduce the employment of the most vulnerable groups in the working-age population—young adults without a high school degree (aged 20–24), young black adults and teenagers (aged 16–24), and teenagers (aged 16–19). While we also find that minimum wage increases significantly reduce the overall employment of young adults and teenagers, these more vulnerable subpopulations are even more adversely affected.

The Response of Hours of Work to Increases in the Minimum Wage

This paper examines the effect of minimum wage increases on the hours of work of teenagers (ages 16 to 19) using monthly data from the Current Population Survey. Our findings are consistent with the prediction from neoclassical theory that minimum wage increases have a negative effect on labor demand. However, the estimates we provide here for the elasticity of hours of teen labor demanded with respect to the minimum wage suggest that alternative estimates based on aggregate employment consistently understate the total impact of minimum wage increases on teenage labor utilization.

Earnings losses and unemployment of displaced workers in Germany

Data from the German Socio-Economic Panel are used to examine the experiences of German workers following job displacement due to plant closure. In the year of displacement, annual earnings declined by about 13.5%, and the typical worker experienced between 6 and 10 additional days of annual unemployment. Two years later, annual earnings were only 6.5% less than before displacement, and the largest estimated increase in annual unemployment was 4 days. These estimated effects lie near the lower end of the range of similar estimates for U.S. workers.

Earnings Losses of Older Displaced Workers A Detailed Analysis with Administrative Data

This article provides detailed estimates of earnings losses of older workers (aged 40 years and older) who experience mass layoffs relative to a continuously employed comparison group. The analysis made use of information from the unemployment insurance system for the state of Connecticut. These administrative records contain payroll information for virtually all workers in the state and, relative to previous research on the basis of survey data, contain many more instances of workers displaced because of mass layoffs. These data provided the basis for detailed, disaggregated estimates by age, gender, and industry of employment. The estimates indicated that earnings losses associated with displacement rose sharply with age and were larger for those subsequently reemployed in different industry sectors. These findings are consistent with the idea that earnings decline following displacement due to losses of firm-specific human capital. Earnings reductions were larger for men than women but were proportionately very similar.

Economic and Health Implications of Long-Term Unemployment: Earnings, Disability Benefits, and Mortality

Data from the 1984 Survey of Income and Program Participation are linked to longitudinal records from the Social Security Administration to examine the relationship between the long-term unemployment that prime-aged (ages 25-55) male workers experienced around the time of the 1980-1982 twin recessions with earnings, receipt of either Disability Insurance or Supplemental Security Income (DI-SSI) benefits, and mortality. Separate estimations are made for those who voluntarily and involuntarily left employment and the combined sample of these two groups. We find that 20 years later, long-term joblessness was associated with significantly lower earnings and higher likelihoods of the receipt of DI-SSI benefits as well as mortality.