This book provides an historical analysis of the co-evolution of educational attainment and U.S. wage structure through the 20th century. During the first 80 years of the 20th century, the increase of educated workers was higher than demand for them. This boosted income for most and lowered inequality. The reverse has been true since about 1980.

The U.S. wage structure evolved across the last century: narrowing from 1910 to 1950, fairly stable in the 1950s and 1960s, widening rapidly during the 1980s, and "polarizing" since the late 1980s. We document the spectacular rise of U.S. wage inequality after 1980 and place recent changes into a century-long historical perspective to understand the sources of change. The majority of the increase in wage inequality since 1980 can be accounted for by rising educational wage differentials, just as a substantial part of the decrease in wage inequality in the earlier era can be accounted for by decreasing educational wage differentials. Although skill-biased technological change has generated rapid growth in the relative demand for more-educated workers for at least the past century, increases in the supply of skills, from rising educational attainment of the U.S. work force, more than kept pace for most of the twentieth century. Since 1980, however, a sharp decline in skill supply growth driven by a slowdown in the rise of educational attainment of successive U.S. born cohorts has been a major factor in the surge in educational wage differentials. Polarization set in during the late 1980s with employment shifts into high- and low-wage jobs at the expense of the middle leading to rapidly rising upper tail wage inequality but modestly falling lower tail wage inequality.

This paper shows the importance of explicitly accounting for the possibility of recalls when analyzing the determinants of unemployment spell durations and the effects of unemployment insurance (UI) on unemployment outcomes in the United States. These issues are examined using a unique sample of UI recipients from Missouri and Pennsylvania covering unemployment spells in the 1979- 1981 period. We find that those expecting recall who are not recalled tend to have quite long unemployment spells. Furthermore, ex-ante temporary layoff spells (the spells of individuals' who initially expect to be recalled) may account for over 60 percent of the unemployment of UI recipients and appear to account for much more unemployment than ex-post temporary layoff spells (spells actually ending in recall). We estimate a competing risks model in which the finding of a new job and recall are treated as alternate routes of leaving unemployment. Our results using this approach show that the recall and new job exit probabilities have quite different time patterns and are often affected in opposite ways by explanatory variables. We also find that the probability of leaving unemployment (both through recalls and new job finding) increases greatly around the time that UI benefits lapse.

This paper examines the effect of technological change and other factors on the relative demand for workers with different education levels and on the recent growth of U.S. educational wage differentials. A simple supply-demand framework is used to interpret changes in the relative quantities, wages, and wage bill shares of workers by education in the aggregate U.S. labor market in each decade since 1940 and from 1990 to 1995. The results suggest that the relative demand for college graduates grew more rapidly on average during the past 25 years (1970-95) than during the previous three decades (1940-70). The increased rate of growth of relative demand for college graduates beginning in the 1970s did not lead to an increase in the college/high school wage diffe- rential until the 1980s because the growth in the supply of college graduates increased even more sharply in the 1970s before returning to historical levels in the 1980s. The acceleration in demand shifts for more-skilled workers in the 1970s and 1980s relative to the 1960s is entirely accounted for by an increase in within-industry changes in skill utilization rather than between- industry employment shifts. Industries with large increases in the rate of skill upgrading in the 1970s and 1980s versus the 1960s are those with greater growth in employee computer usage, more computer capital per worker and larger investment as a share of total investment. The results suggest that the spread of computer technology may `explain' as much as 30-50% of the increase in the rate of growth of the relative demand for more-skilled workers since 1970.

We compare two approaches to analyzing the effects of immigration on the labor market and find that the estimated effect of immigration on U.S. native labor outcomes depends critically on the empirical experiment used. Area analyses contrast the level or change in immigration by area with the level or change in the outcomes of non- immigrant workers. Factor proportions analyses treat immigrants as a source of increased national supply of workers of the relevant skill. Cross-section comparisons of wages and immigration in the 1980 and 1990 Censuses yield unstable results casting doubt on the validity of these calculations. Analyses of changes over time for various education groups within regions give negative estimated immigration effects, which increase in magnitude the wider the area covered. Factor proportions calculations show that immigration was somewhat important in reducing the relative pay of U.S. high school dropouts during the 1980s, while immigration and trade contributed much more modestly to the falling pay of high school equivalent workers. The different effects of immigration on native outcomes in the area and factor proportions methodologies appear to result from the diluting effect of native migration flows across regions and failure to take adequate account of other regional labor market conditions in area comparisons.

In this paper we provide theoretical and empirical analyses of an asymmetric-information model of layoffs in which the current employer is better informed about its workers' abilities than prospective employers are. The key feature of the model is that when firms have discretion with respect to whom to lay off, the market infers that laid-off workers are of low ability. Since no such negative inference should be attached o workers displaced in a plant closing, our model predicts that the postdisplacement wages of otherwise observationally equivalent workers will be higher for those displaced by plant closings than for those displaced by layoffs. An extension of our model predicts that the average postdisplacement unemployment spell of otherwise observationally equivalent workers will be shorter for those displaced by plant closings than for those displaced by layoffs. In our empirical work, we use data from the Displaced Workers Supplements in the January 1984 and 1986 Current Population Surveys. We find that the evidence (with respect to both re-employment wages and postdisplacement unemployment duration) is consistent with the idea that laid off workers are viewed less favorably by the market than are those losing jobs in plant closings. Our findings are much stronger for workers laid off from jobs where employers have discretion over whom to lay off.

"The major portion of this paper examines the impacts on housing costs of the most important types of land-use, environmental, and construction regulations - zoning, subdivision controls, growth management techniques, building codes, and environmental regulations - by reviewing the literature and presenting some simple theoretical models. A final section of this paper presents some initial empirical results of the author's research on the impact of local land-use regulations on land and housing costs in California."--Page 3

This paper uses two data sets to examine the impact of the potential duration of unemployment insurance (UI) benefits on the duration of unemployment and the time pattern of the escape rate from unemployment in the United States. The first part of the empirical work uses a large sample of household heads to examine differences in the unemployment spell distributions of UI recipients and nonrecipients. Sharp increases in the rare of escape from unemployment both through recalls and new job acceptances are apparent for UI recipients around the time when benefits are likely to lapse. The absence of such spikes in the escape rate from unemployment for nonrecipients strongly suggests that the potential duration of UI benefits affects firm recall policies and workers' willingness to start new jobs. The second part of our empirical work uses administrative data to examine the effects of the level and length of UT benefits on the escape rate from unemployment of UI recipients. The results indicate that a one week increase in potential benefit duration increases the average duration of the unemployment spells of UI recipients by 0,16 to 0.20 weeks. The estimates also imply that policies that extend the potential duration of benefits increase the mean duration of unemployment by substantially more than policies with the same predicted impact on the total UI budget that raise the level of benefits while holding potential duration constant.