Stephen G. Bronars

Consumer Discrimination and Self-Employment

Self-employment rates and incomes differ significantly by race. We show that these differentials arise in markets with consumer discrimination and incomplete information about the price of the good and the race of the seller. Equilibrium income distributions have two properties: mean black incomes are lower than mean white incomes, and the returns to ability are lower for black than for white sellers. Able blacks, therefore, are less likely to self-select into the self-employment sector than able whites. Using the 1980 census data, we find that observed racial differences in the self-employment income distributions are consistent with the theoretical predictions.

The Threat of Unionization, the Use of Debt, and the Preservation of Shareholder Wealth

This paper argues that firms use debt to protect the wealth of shareholders from the threat of unionization. Under U. S. labor law the firm cannot prohibit its workers from attempting to form a collective bargaining unit. Debt policy offers a method of reducing the impact of this monopoly right on shareholders. By issuing debt, the firm credibly reduces the funds that are available to a potential union. Empirical evidence that strongly supports this hypothesis is presented.

Immigration and the Family

This article studies the role of the family in determining the skill composition and labor market experiences of immigrants in the United States. Our theoretical framework, based on the assumption that family migration decisions maximize household income, shows that the family attenuates the selection characterizing the skills of the immigrant population. The empirical analysis uses the 1970 and 1980 Public Use Samples of the U.S. census and reveals that an immigrants skills and labor market performance are greatly influenced by the composition of the household at the time of migration and by his placement in the immigration chain.

Time series evidence on shirking in the U.S. House of Representatives

This paper presents time series evidence on the voting behavior of members of the U.S. House of Representatives from 1975 to 1990. The empirical results indicate that voting behavior of individual congressmen is remarkably stable over time. We find no evidence of economically significant last term effects on voting behavior, nor are there important effects of legislative tenure on voting patterns. The most significant deviations in voting behavior occur for congressmen who failed to win their reelection bid, suggesting that sizable deviations from previous policy positions may result in swift retribution by constituents in the district.

Assimilation and the Earnings of Young Internal Migrants

This paper investigates if young internal migrants in the United States experience economic assimilation as they adapt to their new residential location. Using data from the National Longitudinal Survey of Youth, the authors examine how the hourly earnings of interstate migrants are affected by the number of years they have spent in their destination state. Their study indicates that internal migrants initially earn less than natives but that this wage differential disappears within a few years. Moreover, the initial wage disadvantage of internal migrants depends upon the distance moved and economic conditions in the destination labor market. Copyright 1992 by MIT Press.

Unionization, Incomplete Contracting, and Capital Investment

This article examines empirically the hypothesis that incomplete contracts and resulting opportunistic behavior over the return to sunk assets reduces investment. Union-firm contracts are incomplete because they (1) do not prevent all actions aimed at changing the existing contract; (2) cover a relatively short time period; and (3) do not extend to union members yet to be hired. The primary response of firms is to reduce investment in specific durable assets and also to reduce employment growth and increase debt. The authors find fairly strong evidence of these effects in a sample of large publicly traded firms using firm-specific measures of unionization. Copyright 1993 by University of Chicago Press.

Wage, Tenure, and Wage Growth Variation within and across Establishment

We estimate employer-specific wage, tenure, and wage growth differentials using a unique Bureau of Labor Statistics establishment survey of full-time, white-collar workers. Employer wage and tenure differentials, conditional on worker characteristics, are substantial in these data. Education, potential experience, and tenure are highly correlated within an establishment. High-wage establishments generally employ higher quality workers, and the most skilled men and professionals typically work with the most skilled women and nonprofessionals. There is significant variation in wage growth rates across employers, and high wage growth establishments tend to have longer tenure, all else equal.

The Effect of Welfare Payments on the Marriage and Fertility Behavior of Unwed Mothers: Results from a Twins Experiment

We study the relationship between welfare benefits and the time to first marriage and time to next birth among initially unwed mothers. We use twin births to generate random within‐state variation in benefits, effectively controlling for unobservables that may confound the relationship between welfare payments and behavior. Higher base welfare benefits (1) lead unwed white mothers to forestall their eventual marriage and (2) lead unwed black mothers to hasten their next birth. The magnitudes of these effects are fairly modest. Moreover, we find no evidence that the marginal benefit paid at the birth of an additional child—the focus of the family cap debate—affects fertility.

Shareholder Wealth and Wages: Evidence for White-Collar Workers

We present empirical evidence on the relationship between individual wages, conditional on worker characteristics, and equity returns using a unique survey from the Bureau of Labor Statistics. Equity returns affect the wages only of workers with three or more years of tenure. A 4 percent increase in a firms market value raises pay by 0.3 percent within three years. Our estimates suggest that each

The geographic distribution of unemployment rates in the U.S. : A spatial-time series analysis

10 increase in shareholder wealth raises the present value of a firms wage bill by