nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒05‒09
three papers chosen by
Maximo Rossi
University of the Republic

  1. Race-Specific Agglomeration Economies: Social Distance and the Black-White Wage Gap By Elizabeth Ananat; Shihe Fu; Stephen L. Ross
  2. Cohort size and youth employment outcomes By Newhouse, David; Wolff, Claudia
  3. Wage Premia in Employment Clusters: How Important is Worker Heterogeneity? By Shihe Fu; Stephen Ross

  1. By: Elizabeth Ananat; Shihe Fu; Stephen L. Ross
    Abstract: We demonstrate a striking but previously unnoticed relationship between city size and the black-white wage gap, with the gap increasing by 2.5% for every million-person increase in urban population. We then look within cities and document that wages of blacks rise less with agglomeration in the workplace location, measured as employment density per square kilometer, than do white wages. This pattern holds even though our method allows for non-parametric controls for the effects of age, education, and other demographics on wages, for unobserved worker skill as proxied by residential location, and for the return to agglomeration to vary across those demographics, industry, occupation and metropolitan areas. We find that an individual’s wage return to employment density rises with the share of workers in their work location who are of their own race. We observe similar patterns for human capital externalities as measured by share workers with a college education. We also find parallel results for firm productivity by employment density and share college-educated using firm racial composition in a sample of manufacturing firms. These findings are consistent with the possibility that blacks, and black-majority firms, receive lower returns to agglomeration because such returns operate within race, and blacks have fewer same-race peers and fewer highly-educated same-race peers at work from whom to enjoy spillovers than do whites. Data on self-reported social networks in the General Social Survey provide further evidence consistent with this mechanism, showing that blacks feel less close to whites than do whites, even when they work exclusively with whites. We conclude that social distance between blacks and whites preventing shared benefits from agglomeration is a significant contributor to overall black-white wage disparities.
    JEL: J15 J24 J31 R23 R32
    Date: 2013–10–14
    URL: http://d.repec.org/n?u=RePEc:wyi:wpaper:002057&r=ltv
  2. By: Newhouse, David; Wolff, Claudia
    Abstract: This paper utilizes a cross-country panel of 83 developing countries to examine how changes in cohort size are correlated with subsequent employment outcomes for workers at different ages. The results depend on countries'level of development. In low-income countries, young adults that are born into smaller cohorts are less likely to work, but school attendance remains unchanged. In middle-income countries, young adults in smaller cohorts are less likely to be unemployed and more likely to work outside of agriculture. Neither pattern can be discerned among older adults, although the estimates are imprecise. In sum, reductions in cohort size are associated with moderate improvements in employment outcomes for youth in middle-income countries, but there is scant evidence that these improvements persist into adulthood.
    Keywords: Labor Markets,Labor Policies,Youth and Governance,Income,Inequality
    Date: 2014–04–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6848&r=ltv
  3. By: Shihe Fu; Stephen Ross
    Abstract: This paper tests whether the correlation between wages and the spatial concentration of employment can be explained by unobserved worker productivity differences. Residential location is used as a proxy for a worker’s unobserved productivity, and average workplace commute time is used to test whether location-based productivity differences are compensated away by longer commutes. Analyses using confidential data from the 2000 Decennial Census Long Form find that the agglomeration estimates are robust to comparisons within residential location and that the estimates do not persist after controlling for commuting costs suggesting that the productivity differences across locations are not due to productivity differences across individuals.
    Keywords: Agglomeration, Wages, Sorting, Locational Equilibrium, Human Capital Externalities
    JEL: R13 R30 J24 J31
    Date: 2013–10–14
    URL: http://d.repec.org/n?u=RePEc:wyi:journl:002155&r=ltv

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