Lori G. Kletzer

Tradable Services: Understanding the Scope and Impact of Services Outsourcing

We develop a new empirical approach to identify tradable service activities. Contrary to conventional views of service activities as nontradable, we find a significant number of service industries and occupations that appear tradable and substantial employment in these tradable activities. Workers employed in tradable service activities differ from those employed in tradable manufacturing and nontradable services. Workers in tradable service activities have higher skill levels and are paid higher wages than manufacturing workers or workers in nontradable service activities. In general, we find little evidence that tradable service activities have lower employment growth than other service activities. However, evidence suggests lower employment growth at the lowest end of the skill distribution. There is also evidence of higher worker displacement rates in tradable services. Workers displaced from tradable service activities are different from displaced manufacturing workers: Displaced tradable service workers have higher skills and higher predisplacement earnings than displaced manufacturing workers.

The Long-Term Costs of Job Displacement for Young Adult Workers.

Using NLSY data, the authors estimate the long-term costs of job displacement for young adults. Earnings and wage losses were large for the first three years following displacement. Compared to earnings losses found by other studies for more mature workers, however, earnings losses for these young adults were short-lived, with differences between observed and expected earnings narrowing considerably five years after job loss. At that point, the shortfall in annual earnings (relative to what would have been expected absent job loss) was 9% for men and 12.5% for women, and the shortfall in hourly wages was 21.2% for men. Young workers also apparently differ from more established workers in the composition of total earnings losses: for older workers, total losses largely represent actual, immediate earnings losses, whereas for young workers the loss of opportunities for rapid earnings growth is more important.

Jobs Lost, Jobs Regained: An Analysis of Black/White Differences in Job Displacement in the 1980s

Over the period 1982 to 1991, black men were considerably more likely to experience job displacement than were white men, and following displacement, the likelihood of reemployment was substantially lower for black men. Using data from the 1984 to 1992 Displaced Worker Surveys, we find that black men experienced rates of job displacement that were 30 percent higher, and reemployment rates that were 30 percent lower, than the corresponding rates for white men. We find that racial differences in education levels and occupational distributions explain part of these racial gaps in job displacement and reemployment, whereas racial differences in industry distributions worked to narrow these gaps.

The Microeconomics of College Choice, Careers, and Wages: Measuring the Impact of Higher Education

Understanding the economic payoff to human investments is very important from the standpoint both of individuals and of society. Correctly estimating these impacts necessitates having a well-developed idea of the microeconomic determinants of human behavior. Without this, empirical analyses of such topics as career choice, college choice, or wage determination will be flawed. We begin with a discussion of why these choice models are important--using examples of similar attempts that do not capture sufficient information--and illustrate their usefulness in a variety of contexts. We also describe the results of our attempts to examine college choice using microeconomic models.

Microeconomics of College Choice, Careers, and Wages

Understanding the economic payoff to human capital investments is very important from the standpoint both of individuals and of society. However, this article argues that correctly estimating these impacts necessitates having a well-developed idea of the microeconomic determinants of human behavior. Without this, empirical analyses of such topics as career choice, college choice, or wage determination will be flawed. The authors begin the article with a discussion of why these choice models are important—using examples of similar attempts that do not capture sufficient information—and illustrate their usefulness in a variety of contexts. They also describe the results of their attempts to examine college choice using microeconomic models.

Race and the Shifting Burden of Job Displacement: 1982-93

Advances in the relative labor market position of black men stagnated in the 1980s, after nearly four decades of steady improvement. The structural change of the early 1980s was particularly costly for black men. Past research shows that black men faced a substantially higher risk of job displacement than white men during this period. In contrast, we provide evidence that the black disadvantage in the incidence of displacement narrowed over the 1980s and vanished by 1992-93. We document this change over the past decade and analyze its potential causes. We also examine trends in the probability of survey date employment and post-displacement earnings losses. Our analysis, based on the 1984 to 1994 Displaced Worker Surveys, shows that over the 1980s and continuing into the 1990s, racial differences in the risk of job displacement narrowed significantly. In the early 1980s recession, the displacement rate for black men employed full-time was 7.05 percent, 43.9 percent higher than the white male displacement rate of 4.9 percent. In 1992-93, the black displacement rate was 4.02 percent, 2.7 percent lower than the white rate of 4.13 percent. The characteristics of job displacement were notably different in the 1990s than in the 1980s. Perhaps the most important difference was that white-collar workers faced a higher risk of losing their jobs in the 1990s than in the 1980s. At the same time, semi-skilled blue-collar workers experienced a substantial reduction in the likelihood of job loss in the slack labor market period in the 1990s as compared to their dramatic job losses of the early 1980s. These trends, combined with the underrepresentation of black men in white-collar occupations and overrepresentation of black men in semi-skilled blue-collar occupations, contributed to the decline in the black/white displacement rate gap in the 1990s. A substantial part of the decline in the aggregate racial gap was due to large reductions in the racial displacement rate gaps within occupations. When we consider the roles of education, region and industry, we find that there were large decreases in the displacement rate gap within most categories. The decline in the probability of job displacement for blacks relative to whites was not confined to only a few types of jobs, sectors of the economy or regions of the country. The relative and absolute decline in displacement rates for black men is an improvement in their labor market situation. Our view of this improvement is tempered by our finding that black relative post-displacement outcomes remained largely unchanged over the decade.