Michael R. Ransom

On discrimination and the decomposition of wage differentials

Abstract In this paper we examine four alternative methods for estimating the extent of labor market discrimination. All of the methods involve the decomposition of gross (unadjusted) wage differentials into discrimination and productivity components. These methods can be expressed in a single generalized form and are shown to differ with respect to the implicity assumed nondiscriminatory, competitive wage structure. Equivalencies among the methods are shown to exist under certain restrictive conditions. These methods are applied to micro data from the U.S. Current Population Survey and from a specific U.S. firm.

Daily Mortality and PM10 Pollution in Utah Valley

The association between daily mortality and respirable particulate pollution (PM10) in Utah County was assessed from April 1985 through December 1989. Poisson regression analysis was used to regress daily death counts on PM10 pollution levels, controlling for variability in the weather. A significant positive association between nonaccidental mortality and PM10 pollution was observed. The strongest association was with 5-d moving average PM10 levels, including the concurrent day and the preceding 4 d. An increase in 5-d moving average PM10 levels, equal to 100 micrograms/m3, was associated with an estimated increase in deaths per day equal to 16%. The association with mortality and PM10 was largest for respiratory disease deaths, next largest for cardiovascular deaths, and smallest for all other deaths. Mean PM10 concentrations during the study period equaled 47 micrograms/m3. The maximum 24-h and 5-d moving average PM10 levels equaled 365 and 297 micrograms/m3, respectively. Relatively low levels of sulfur dioxide, aerosol acidity, and ozone suggested an independent association between mortality and PM10. The relative risk of death increased monotonically with PM10, and the relationship was observed at PM10 levels that were well below the current National Ambient Air Quality Standard of 150 micrograms/m3.

Identification in Detailed Wage Decompositions

The standard wage decomposition methodology produces arbitrary results when attempting to estimate the separate contributions of sets of dummy variables to the unexplained portion of the wage decomposition: the estimates are not invariant with respect to the choice of reference groups. However, the estimated separate contributions of sets of dummy variables to the explained portion and the overall decomposition are shown not to be dependent upon the choice of left-out reference groups. A similar identification problem applies to continuous variables, although this may not be as likely to cause problems in practice.

Elementary school absences and PM10 pollution in Utah Valley.

This study assessed the association between school absenteeism and respirable particulate pollution (PM10) in Utah Valley for the six school years of 1985 to 1990. Weekly absenteeism data from the Provo School District and daily data from a single elementary school in the Alpine School District were analyzed for kindergarten through sixth grade. PM10 concentrations during the study period averaged approximately 50 micrograms/m3 with the 24-hr maximum equal to 365 micrograms/m3. Absenteeism was regressed on PM10 pollution levels, temperature, snowfall, and variables indicating day of week, month of school year, and days preceding and following holidays and extended weekends. Estimated associations between absenteeism and PM10 pollution in both data sets were positive, statistically significant (P less than 0.01), and robust to different model specifications. PM10 effects persisted for up to 3 or 4 weeks. Regression results from both data sets indicated that an increase in 28-day moving average PM10 equal to 100 micrograms/m3 was associated with an increase in the absence rate equal to approximately two percentage points, or an increase in overall absences equal to approximately 40%. Similar relationships were observed for all grade levels, although the response of absences to air pollution was generally greater for grades 1-3 compared with grades 4-6. Associations between absenteeism and PM10 pollution were observed even for levels below 150 micrograms/m3.

Sex differences in the academic labor market in the affirmative action era

Abstract To examine the relative pay of women in the academic labor market between about 1965 and about 1985, we analyse data from several national surveys as well as information from individual institutions. We also review extensively the published research on this issue. We find that although the relative pay of women in higher education has improved since the late 1960s, womens salaries still fall short of mens salaries. Many theories imply that labor market discrimination not only lowers the pay of women but also increases the pay of men. We examine this issue using a new technique that generalizes the well-known Oaxaca decomposition. We estimate that discrimination in higher education has had little effect on mens salaries. We also examine trends in employment and the segregation of women and men faculty by field.

New Market Power Models and Sex Differences in Pay

In the context of certain models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. We use this strategy to estimate the elasticity of labor supply for men and women workers at a chain of grocery stores, identifying separation elasticities from differences in wages and separation rates across different job titles within the firm. We estimate that women have lower elasticities, so a Robinson‐style monopsony model can explain reasonably well the lower relative pay of women in the retail grocery industry.

Estimating the Firm's Labor Supply Curve in a 'New Monopsony' Framework: School Teachers in Missouri

In the context of certain dynamic models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. Using this property, we estimate the average labor supply elasticity to public school districts in Missouri. We leverage the plausibly exogenous variation in prenegotiated district salary schedules to instrument for actual salary. These estimates imply a labor supply elasticity of about 3.7, suggesting that school districts possess significant market power. The presence of monopsony power in this teacher labor market may be partially explained by its institutional features.

Labor Market Monopsony

There has been a renewed interest in monopsony in labor markets in recent years that includes both the traditional static approach to monopsony, ably reviewed by Boal and Ransom (1997), and the “new” approach to monopsony with more attention paid to dynamic issues, developed in detail by Manning (2003). The articles presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of monopsony power may be important. The first use of the term “monopsony” in economics is widely attributed to Robinson (1969). Robinson conceived of monopsony as analogous to monopoly. Whereas monopoly refers to the case of a single seller confronted in a market by many buyers, monopsony refers to the case of a single buyer confronted in a market by many sellers. Just as the monopolist faces a downward-sloping demand curve for his product and

The Generalized Beta Distribution as a Model for the Distribution of Income: Estimation of Related Measures of Inequality

The generalized beta (GB) is considered as a model for the distribution of income. It is well known that its special cases include Dagum’s distribution along with the Singh-Maddala distribution. Related measures of inequality such as the Gini Coefficient, Pietra Index, or Theil Index are expressed in terms of the parameters of the generalized beta. This paper also explores the use of numerical integration techniques for calculating inequality indexes. Numerical integration may be useful since in some cases it may be computationally very difficult to evaluate the equations that have been derived or the equations are not available. We provide examples from the distribution of family income in the United States for the year 2000.

The Labor Supply of Married Men: A Switching Regressions Model

According to the family utility function approach, the labor supply functions of married men should differ according to whether their wives also work. In this paper, I explicitly model the switching nature of labor supply while also accounting for the endogeneity of the labor force participation decision of the wife, using an endogenous switching regressions model based on the quadratic family utility function. The model is estimated from a cross section of 1,210 married couples from the Panel Study of Income Dynamics.