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ILRReview, Volume 67, Issue 2
New Evidence on Gender and the Labor Market: A Symposium
By Lawrence M. Kahn
In this issue of the ILRReview, the first five articles provide important new evidence on gender and employment. The papers were all independently submitted and were refereed through the usual editorial process. Because the papers' unifying theme is gender and labor market outcomes, the Editors felt that creating a symposium out of this new body of work would serve the research community studying gender, as well as the policymakers concerned with gender and labor market outcomes. All of the articles use new data sources or advanced statistical techniques to greatly enhance our understanding of gender and employment.
People Skills and the Labor-Market Outcomes of Underrepresented Groups
By Lex Borghans, Bas ter Weel, and Bruce A. Weinberg
In this article, the authors show that people skills are important determinants of labor-market outcomes, including occupational choice and wages. Technological and organizational changes have increased the importance of people skills in the workplace. The authors particularly focus on how the increased importance of these skills has affected the labor-market outcomes of underrepresented groups, assuming that gender differences in interactions and cultural differences and prejudice may impede cross-racial and ethnic interactions. Estimates for Britain, Germany, and the United States are consistent with such an explanation. An acceleration in the rate of increase in the importance of people skills between the late 1970s and early 1990s in the United States can help explain why the gender wage gap closed and the black-white wage gap stagnated in these years relative to the preceding and following years.
Distributional Changes in the Gender Wage Gap
By Sonja C. Kassenboehmer and Mathias G. Sinning
Using Panel Study of Income Dynamics (PSID) data, the authors analyze changes in wage differentials between white men and women over time and across the entire wage distribution. The authors decompose distributional changes in the gender wage gap to assess the contribution of observed characteristics measuring individual productivity. They find that the gender wage gap narrowed by 16% at the lowest decile and by less than 5% at the highest decile. The decomposition results indicate that changes in the gender wage gap are mainly attributable to changes in educational attainment at the top of the wage distribution, with a sizable part due to work history changes at the bottom. The findings further reveal that the accuracy of the results depends on the direction in which the decompositions are performed.
The Impact of Segregation and Sorting on the Gender Wage Gap: Evidence from German Linked Longitudinal Employer-Employee Data
By Johannes Ludsteck
For this study, the author inspects the relationship between segregation in the workplace (measured as the proportion female in job cells) and the gender wage gap using linked longitudinal employer-employee data from the German Employment Register. He extends the literature by controlling for nonrandom sorting of workers into job cells, establishments, and occupations. In line with previous studies, the pooled least squares estimates show that the gender wage gap increases as the job-cell-level proportion of females increases. This increase is attributable to the fact that women experience greater wage declines than men do when additional women enter their job cells. Controlling additionally for unobserved heterogeneity at the individual, establishment, occupation, and job-cell levels considerably reduces the size of the proportion female effects on women's wages while rendering the effects on men's wages insignificant or even positive. The same controls also significantly decrease the proportion effects on the wage gap. The related sorting analysis shows that a good deal of the proportion effects can be explained by unobserved individual ability and suggests that especially women working in job cells with small proportions of females show above-average unobserved individual ability.
Manager Impartiality: Worker-Firm Matching and the Gender Wage Gap
By Lena E. Hensvik
Using a rich matched employer-employee data set from Sweden, the author examines whether female managers in a firm narrow the gender pay gap. The study's main contribution is its ability to account for unobserved heterogeneity among both workers and firms that is potentially correlated with manager gender. The results show a substantial negative association between the representation of female managers and the establishment's gender wage gap. Estimates that account for sorting on unobserved worker skills, however, do not support the conclusion that managers favor same-sex workers in wage setting. Additional results show that organizations with more female managers recruit more nonmanagerial, high-wage women. Together these findings suggest that associations between manager gender and male-female wage gaps should be interpreted with caution, as worker sorting seems to be a crucial component behind this relationship.
Workforce Reductions at Women-Owned Businesses in the United States
By David A. Matsa and Amalia R. Miller
The authors find that privately held firms owned by women were less likely than those owned by men to downsize their workforces during the Great Recession. Year-to-year employment reductions were as much as 29% smaller at women-owned firms, even after controlling for industry, size, and profitability. Using data that allow the authors to control for additional detailed firm and owner characteristics, they also find that women-owned firms operated with greater labor intensity after the previous recession and were less likely to hire temporary or leased workers. These patterns extend previous findings associating female business leadership with increased labor hoarding.
The Changing Nature of Labor Unrest in China
By Manfred Elfstrom and Sarosh Kuruvilla
A qualitative shift is underway in the nature of labor protest in China. Contrary to prior literature that characterized strikes as being largely defensive in nature, the authors suggest that since 2008, Chinese workers have been striking offensively for more money, better working conditions, and more respect from employers. They explain these developments using a "political process" model that suggests economic and political opportunities are sending "cognitive cues" to workers that they have increased leverage, leading them to be more assertive in their demands. Such cues include a growing labor shortage, new labor laws, and new media openness. Their argument is supported by a unique data set of strikes that the authors collected, two case studies of strikes in aerospace factories, and interviews with a variety of employment relations stakeholders.
Economic Development and Sectoral Unions in China
By Eli D. Friedman
Drawing on qualitative fieldwork in China's Guangdong and Zhejiang Provinces, the author asks how post-socialist unions respond to worker unrest and why the development of sectoral-level bargaining has been uneven in different regions of China. While Zhejiang has had relative success in establishing the organizational infrastructure for sectoral bargaining, Guangdong has had little success despite ongoing attempts by unions. The author explains variation in sectoral-level bargaining through an analysis of the different models of economic development, which are characterized as local entrepreneurialism and global integration for Zhejiang and Guangdong, respectively. Despite having different organizational forms, unions in both places suffer from a lack of credibility and capacity to enforce contracts. Given the ACFTU's ongoing focus on sectoral-level bargaining, however, experiments will likely continue in various regions and industries throughout China.
Wage Policies of a Russian Firm and the Financial Crisis of 1998: Evidence from Personnel Data, 1997 to 2002
By Thomas Dohmen, Hartmut F. Lehmann, and Mark E. Schaffer
The authors use a rich personnel data set from a Russian firm for the years 1997 to 2002 to analyze how the firm adjusts wages and employment during this period in which local labor market conditions changed in the aftermath of the financial crisis in 1998. They relate the development of turnover and wages for various employment categories to alternative models of wage and employment determination. The authors argue that the firm's behavior is consistent with the predictions of efficiency wage models of the shirking and turnover type.
Union Coverage and Work-Related Training in the Construction Industry
By C. Jeffrey Waddoups
Using data from the Survey of Income and Program Participation, the author estimates the impact of union coverage on training in the United States, comparing the construction industry with other broad industry sectors. The author finds no statistically significant union training effect in construction or other private-sector industries for employer-paid training. For a more broadly defined job-training measure, however, a large union effect is found in construction, and a smaller, yet statistically significant, effect is found in other private-sector industries. The results are not entirely consistent with either the standard human capital model or models of imperfect competition.
Book Reviews
Global Unions, Local Power: The New Spirit of Transnational Labor Organizing. By Jamie K. McCallum. Reviewed by Gay W. Seidman.
The Chicken Trail: Following Workers, Migrants, and Corporations across the Americas. By Kathleen C. Schwartzman. Reviewed by Joseph C. Bazler.
Rosemary Batt, Editor, ILRReview
Alice H. Cook Professor of Women and Work
ILR School, Cornell University
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