New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2006‒07‒02
four papers chosen by

  1. The Limited Influence of Unemployment on the Wage Bargain By Robert E. Hall; Paul R. Milgrom
  2. Does the Liberalization of Trade Advance Gender Equality in Schooling and Health? By T. Paul Schultz
  3. U.S. Unemployment Duration: Has Long Become Longer or Short Become Shorter? By José A.F. Machado; Pedro Portugal; Juliana Guimaraes
  4. The U.S. Gender Pay Gap in the 1990s: Slowing Convergence By Francine D. Blau; Lawrence M. Kahn

  1. By: Robert E. Hall; Paul R. Milgrom
    Date: 2006–06–21
  2. By: T. Paul Schultz (Economic Growth Center, Yale University)
    Abstract: This paper assesses the empirical relationship between the liberalization of international trade and the economic status of women. Although historically globalization is not generally linked to the advancement of women, several recent country studies find export led growth in middle and low income countries is associated with improvements in women’s employment opportunities. Does intercountry empirical evidence confirm this association across a wider range of countries, and suggest the mechanisms by which it operates? Measures of wages for men and women are an unreliable basis for study of gender inequality in many low-income countries, and thus schooling and health are analyzed here as indicators of productivity and welfare and gender gaps. For a sample of 70 countries observed at five year intervals from 1965 to 1980, tariff, quota, and foreign exchange restrictions are found to be inversely associated with trade, and with the levels of education and health, especially for women. Natural resource exports, although providing foreign exchange for imports, appear to reduce investments in schooling and health, and delay the equalization of these human capital investments between men and women. Liberalization of trade policy is consequently linked in the cross section to increased trade, to greater accumulation of human capital, and to increased gender equality.
    Keywords: Trade Liberalization, Schooling, Health, Gender Equality
    JEL: I12 J16 I21
  3. By: José A.F. Machado (Universidade NOVA de Lisboa); Pedro Portugal (Banco de Portugal, Universidade NOVA de Lisboa and IZA Bonn); Juliana Guimaraes (Universidade Federal de Pernambuco)
    Abstract: The U.S. labor market has been experiencing unprecedented high average unemployment duration. The shift in the unemployment duration distribution can be traced back to the early nineties. In this study, censored quantile regression methods are employed to analyze the changes in the US unemployment duration distribution. We explore the decomposition method proposed by Machado and Mata (2005) to disentangle the contribution of the changes generated by the covariate distribution and by the conditional distribution. The data used in this inquiry are taken from the nationally representative Displaced Worker Surveys of 1988 and 1998. We provide evidence that the change in the unemployment duration distribution is mainly produced by the opposing effects of a sharp rise in job-to-job transition rates and an increased sensitivity of unemployment duration to unemployment rates. Compositional changes in the labor force played a limited role. We rationalize our findings by arguing that improved screening technology is likely to be the relevant underlying mechanism at work.
    Keywords: quantile regression, duration analysis, unemployment duration, counterfactual decomposition
    JEL: C14 C21 C41 J64
    Date: 2006–06
  4. By: Francine D. Blau (Cornell University, NBER, CESifo and IZA Bonn); Lawrence M. Kahn (Cornell University, CESifo and IZA Bonn)
    Abstract: Using Michigan Panel Study of Income Dynamics (PSID) data, we study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. We find that changes in human capital did not contribute to the slowdown, since women’s relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women’s relative wages in the 1980s, explaining a portion of the slower 1990s convergence. However, the largest factor was that the “unexplained” gender wage gap fell much faster in the 1980s than the 1990s. Our evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, as well as changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap.
    Keywords: gender pay gap, wage differentials
    JEL: J16 J31
    Date: 2006–06

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.