Orley Ashenfelter

Discrimination in Labor Markets

This volume contains revised versions of the papers presented in 1971 at the Princeton University Conference on Discrimination in Labor Markets, and the formal discussions of them.This paper is by Kenneth Arrow, winner of the Nobel Prize in Economics, who lays the theoretical foundations of the economic analysis of discrimination in labor markets. Finis Welch discusses the relationship between schooling and labor market discrimination. Orley Ashenfelters paper presents a method for estimating the effect of an important institution--trade unionism--on the wages of black workers relative to whites. Ronald Oaxaca provides a framework for measuring the extent of discrimination against women. Finally, Phyllis Wallace examines public policy on discrimination and suggests strategies for public policy in this area.Originally published in 1974.The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

American Trade Union Growth: 1900–1960

I. Some determinants of union growth, 435. — II. Empirical results, 439. — III. Consideration of some subperiods, 445. — IV Conclusion, 447.

Auctions and the Price of Art

This paper contains a review of the burgeoning new research of the last decade that has been designed to shed light on how the art auction system works, what it indicates about price formation, and how well it performs. We begin with a short description of the mechanics of the auction system and then organize the remainder of our discussion around two major topics: how auction prices can be used to determine and compare overall price movements within the art market and with other markets; and how the auction mechanism influences prices.

Compliance with the Minimum Wage Law

This paper investigates the extent and patterns of compliance with the federal minimum wage. Using a profit-maximizing model of compliance, predictions about compliance with weak or random government enforcement are made. Such enforcement is not random, however, and our measures of compliance suggest that government enforcement, while not inducing anything near complete compliance, does have an impact. Overall compliance in 1973 is estimated to be about 65 percent, while it is about 10 percentage points lower after the new minimum was established in 1975. Compliance appears highest among regional/racial/sex (but not age) groups where market incentives for violation are strongest.

Estimates of the Returns to Schooling from Sibling Data: Fathers, Sons and Brothers

Data on brothers and on fathers and sons from the National Longitudinal Survey are used to consider the impact of omitted variables and measurement errors on the economic returns to schooling. The analysis suggests that the upward bias in estimated returns due to omitted variables is likely offset by an equal downward bias resulting from measurement errors in reported schooling. Controlling for both of these potential sources of bias yields results comparable to conventional regression estimates of the economic return to schooling.

Education, Unemployment, and Earnings

Using data on adult male workers, we first investigate the incremental effect of 1 year of schooling on unemployed hours and use this calculation to explain the difference in the proportional effects of schooling on earnings and wages. Schooling apparently reduces unemployed hours by reducing the incidence of unemployment spells, but it does not significantly affect their duration. We next test whether unemployed hours represent real constraints on worker behavior. To do this we develop and estimate life-cycle models of labor supply for workers with and without spells of unemployment, using longitudinal data. The results imply that perhaps three-quarters of the unemployed hours of male workers are part of the offer to sell labor.

Sex Discrimination and Product Market Competition: The Case of the Banking Industry

This paper examines the relationship between product market competition and employment discrimination using an especially constructed data set that links microeconomic data on female employment with measures of market concentration in the banking industry. The use of firm-specific data drawn from this one industry allows estimation of this relationship in a manner that avoids the problems of interindustry differences that have troubled previous studies. The results provide strong support for a negative relationship between market concentration and the relative employment of women. Further, we find that individual market shares are unrelated to female employment, suggesting that the relationship is due primarily to differences across markets rather than individual firms.

Determining Participation in Income-Tested Social Programs

Abstract Estimates of the number of participants to expect in income-tested social programs may be made from data on income distributions alone. These simple estimates will be biased if the social program induces incentive effects or if some eligible participants do not pursue their application for benefits. This article brings these issues together and sets out a statistical framework for testing whether the simple estimates are likely to be adequate in practice. The data used for the empirical work come from the Seattle and Denver Income Maintenance Experiments, the largest of several similar experiments thus far undertaken. The results imply that the simple estimates of program participation may be adequate if a program of the experimental type investigated here is implemented nationally.

Racial Discrimination and Trade Unionism

Whether the presence of trade unionism in the U.S. economy exacerbates or mitigates the extent of labor market discrimination against black workers depends on the size of union/nonunion wage differentials for black and white workers as well as the extent to which black and white workers are unionized. This paper contains an analysis of the likely determinants of a unions policy regarding race and estimates of the effect of the presence of unionism on the average wage of black workers relative to the average wage of white workers under various types of union organizational structure. The results imply that in 1967 the ratio of black to white male wages might have been 4 percent higher in the industrial union sector and 5 percent lower in the craft union sector than they would have been in the absence of all unionism.

Politics and the Judiciary: The Influence of Judicial Background on Case Outcomes

It is widely believed that the background and worldview of judges influence their decisions. This article uses the fact that judges are assigned their cases randomly to assess the effect of judicial background on the outcome of cases from the day-to-day docket in three federal trial courts. Unlike the political science findings of ideological influence in published opinions, we find little evidence that judges differ in their decisions with respect to the mass of case outcomes. Characteristics of the judges or the political party of the judges appointing president are not significant predictors of judicial decisions.