Précis
Contingent “new economy” jobs?
Pollution and discrimination
California’s minimum wage workers
Retirement and well-being
Contingent “new economy” jobs?
Are "new economy" jobs more likely to involve contingent or alternative employment relationships? Before that question can be answered, "new economy" jobs need to be identified. David Neumark and Deborah Reed, in "Employment Relationships in the New Economy" (NBER Working Paper 8910), show that this is no easy task.
Neumark, of Michigan State University and NBER, and Reed, of the Public Policy Institute of California, operationalized the concept of "new economy" workers in three ways for their analysis. One way is to look at workers in high-tech industries; for this, they used a classification from an article by Daniel Hecker that appeared in this Review a few years back (see "High-technology employment: a broader view," June 1999). A second way is to define "new economy" workers as those who reside in high-tech cities—the authors based this classification on a recent Brookings Institution study. The third approach used by Neumark and Reed is to look at workers in the fastest-growing industries.
After defining "new economy" jobs in these three different ways, Neumark and Reed compared the nature of such jobs to other jobs using the Contingent and Alternative Employment Arrangement Supplements of the Current Population Survey. These Supplements are from surveys conducted in February of 1995, 1997, 1999, and 2001.
The results obtained by Neumark and Reed depend on the definition of "new economy" workers. With the first definition, employment in high-tech industries, the authors did not find greater use of nontraditional employment relationships. Based on the second definition, residence in high-tech cities, there is evidence that contingent and alternative employment relationships are more common in the new economy. Finally with the third definition, jobs in the fastest-growing industries, "new economy" workers are much more likely to have contingent or alternative employment relationships, with much of the difference driven by employment in construction and personnel supply services; it may be that employment in these two particular industries is inherently contingent or alternative.
Neumark and Reed do emphasize the "provisional nature" of their conclusions. They indicate that their paper may do more to raise questions and stimulate research than to supply definitive answers.
Although less so than in the past, occupations are still segregated by sex. In a recent paper, Claudia Goldin of Harvard University develops a "pollution" theory of discrimination in an attempt to explain such segregation ("A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings," NBER Working Paper 8985).
In Goldin’s model, discrimination is treated as "the consequence of a desire by men to maintain their occupational status or prestige, distinct from the desire to maintain their earnings." The notion is that the prestige of an occupation can be "polluted" by entry into the occupation of a person whose qualifications are judged based on the average of the group that the individual belongs to, rather than on individual merits.
Therefore, men in an all-male occupation might exhibit hostility towards permitting a woman to enter their occupation, even if a particular woman meets the entry qualifications. Her entry could be perceived in the wider society as a signal that the occupation has been altered. A key aspect of this model is informational asymmetry—in the model, women know what their own levels of qualifications are, and so do their employers, but only their average or median level is widely known.
Goldin notes that a "mechanism that increases information, such as the credentialization of occupations, will foster integration." In addition, the visibility of successful women "may help shatter old stereotypes and in-crease knowledge about the true distribution of female attributes."
California’s minimum wage workers
There were just over a million workers in California who in 2000 were earning somewhere between that year’s State minimum wage of $5.75 and the new State minimum wage of $6.25 enacted in 2001 according to a report, Minimum Wages: The Economic Impact of the 2001 California Minimum Wage Increase, from the California Department of Industrial Relations.
The author, Jeffrey G. Woods, describes the typical minimum wage worker: "She is a teenage, foreign-born Hispanic without U.S. citizenship. Having never been married, she has no more than a high school education. She is less likely to be a member of a labor union and her total family income is less than $20,000 per year."
The raw correlation between retirement status and subjective well-being is generally negative. Correlation is not causation, however, as a recent NBER Working Paper, "Is Retirement Depressing? Labor Force Inactivity and Psychological Well-Being in Later Life," by Kerwin Kofi Charles, reminds us. In the case of retirement and well-being, Charles attempts to account for the fact that the two are simultaneously determined. "In particular, people with idiosyncratically low well-being, or people facing transitory shocks which adversely affect well-being might disproportionately select into retirement." Once such factors are taken into account, Charles finds that retired men tend to report lower scores on measures of depression and loneliness.
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