This is an archived course. A more recent version may be available at ocw.mit.edu.

Readings

* An asterisk denotes a required reading.

First Part - Taught by Steve Pischke

TOPICS READINGS
I. Moral hazard and agency
Moral hazard and agency

*Prendergast, C. "The Provision of Incentives in Firms." Journal of Economic Literature 37, no. 1 (March 1999): 7-63.

*Acemoglu, D. "Incentives, Agency Theory, and Efficiency Wages." Part 2 of Lecture Notes for Graduate Labor Economics (mimeo).
Static single agent models

Holmström, B. "Moral Hazard and Observability." Bell Journal of Economics 10, no. 1 (1979): 74-91.

Holmström, B., and P. Milgrom. "Aggregation and Linearity in the Provision of Intertemporal Incentives." Econometrica 55, no. 2 (1987): 303-328.

*Lazear, E. "Performance Pay and Productivity." American Economic Review 90, no. 5 (December 2000): 1346-1391.

Shearer, B. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment." Review of Economic Studies 71 (April 2004): 513-534.

Asch, B. "Do Incentives Matter? The Case of Navy Recruiters." Industrial and Labor Relations Review 43, no. 3, Special Issue: Do Compensation Policies Matter? (1990): 89S-106S.

Oyer, P. "Fiscal Year Ends and Nonlinear Incentive Contracts: The Effect on Business Seasonality." Quarterly Journal of Economics 113, no. 1 (February 1998): 149-185.

Levitt, S., and B. Jacob. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating." Quarterly Journal of Economics 118, no. 3 (August 2003): 843-877.

Ackerberg, D., and M. Botticini. "Endogenous Matching and the Empirical Determinants of Contract Form." Journal of Political Economy 110, no. 3 (June 2002): 564-591.

Jensen, M., and K. Murphy. "Performance Pay and Top Management Incentives." Journal of Political Economy 98, no. 2 (April 1990): 225-264.

Aggarwal, R., and A. Samwick. "The Other Side of the Trade-Off: The Impact of Risk on Executive Compensation." Journal of Political Economy 107, no. 1 (February 1999): 65-105.

*Prendergast, C. "The Tenuous Trade-off Between Risk and Incentives." Journal of Political Economy 110, no. 5 (October 2002): 1071-1102.
Intrinsic motivation

Frey, B., and F. Oberholzer-Gee. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out." American Economic Review 87, no. 4 (September 1997): 746-755.

Gneezy, U., and A. Rustichini. "Pay Enough or Don't Pay at All." Quarterly Journal of Economics 115, no. 3 (August 2000): 791-810.

Nagin, D., J. Rebitzer, S. Sanders, and L. Taylor. "Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment." American Economic Review 92, no. 4 (September 2002): 850-873.

Fehr, E., and S. Gächter. "Do Incentive Contracts Crowd Out Voluntary Cooperation?" Center for Economic Policy Research Discussion Paper No. 3017, October 2001.

Falk, A., and M. Kosfeld. "The Hidden Costs of Control." American Economic Review 96, no. 5 (December 2006): 1611-1630.

Besley, T., and M. Ghatak. "Competition and Incentives with Motivated Agents." American Economic Review 95, no. 3 (June 2005): 616-636.
Multiple tasks

Kerr, S. "On the Folly of Rewarding A, While Hoping for B." Academy of Management Journal 18, no. 4 (December 1975): 769-783.

Holmström, B., and P. Milgrom. "Multi-Task Principal Agent Analysis: Incentive Contracts, Asset Ownership, and Job Design." Journal of Law Economics and Organization 7, Special Issue: Papers from the Conference on the New Science of Organization (1991): 24-52.

Milgrom, P., and J. Roberts. "Complementarities and Fit. Strategy, Structure, and Organizational Change in Manufacturing." Journal of Accounting and Economics 19 (March-May 1995): 179-208, especially section 5.

Brickley, J., and J. Zimmerman. "Changing Incentives in a Multitask Environment: Evidence from a Top-tier Business School." Journal of Corporate Finance 7 (December 2001): 367-396.

Jacob, B. "Accountability, Incentives and Behavior: Evidence from School Reform in Chicago." Journal of Public Economics 89 (2005): 761-796.

Cockburn, I., R. Henderson, and S. Stern. "Balancing Incentives in Pharmaceutical Research." mimeograph, MIT, 2004.
Multiple agents

Holmström, B. "Moral Hazard in Teams." Bell Journal of Economics 13, no. 2 (1982): 324-340.

Lazear, E., and S. Rosen. "Rank-Order Tournaments as Optimum Labor Contracts." Journal of Political Economy 89, no. 5 (October 1981): 841-864.

Gaynor, M., and M. Pauly. "Compensation and Productive Efficiency in Partnerships: Evidence from Medical Groups Practice." Journal of Political Economy 98, no. 3 (June 1990): 544-573.

Gaynor, M., J. Rebitzer, and L. Taylor. "Physician Incentives in HMOs." Journal of Political Economy 112, no. 4 (August 2004): 915-931.

Ehrenberg, R., and M. Bognanno. "The Incentive Effects of Tournaments Revisited: Evidence from the European PGA Tour." Industrial and Labor Relations Review 43, Special Issue (February 1990): 74S-88S.

Eriksson, T. "Executive Compensation and Tournament Theory: Empirical Tests on Danish Data." Journal of Labor Economics 17, no. 2 (April 1999): 262-280.

Gibbons, R., and K. Murphy. "Relative Performance Evaluation for CEOs." Industrial and Labor Relations Review 43, Special Issue (February 1990): 30S-51S.

Duggan, M., and S. Levitt. "Winning Isn't Everything: Corruption in Sumo Wrestling." American Economic Review 92, no. 5 (December 2002): 1594-1605.

Kandel, E., and E. Lazear. "Peer Pressure and Partnerships." Journal of Political Economy 100, no. 4 (1992): 801-817.

Knez, M., and D. Simister. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines." Journal of Labor Economics 19, no. 4 (2001): 743-772.

Hamilton, B., J. Nickerson, and H. Owan. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation." Journal of Political Economy 111, no. 3 (June 2003): 465-497.

Falk, A., and A. Ichino. "Clean Evidence on Peer Effects." Journal of Labor Economics 24, no. 1 (January 2006): 39-57.

Mas, A., and E. Moretti. "Peers at Work." National Bureau of Economic Research Working Paper No. 12508, September 2006, pp. 1-51.

Bandiera, O., I. Barankay, and I. Rasul. "Social Preferences and the Response to Incentives: Evidence from Personnel Data." Quarterly Journal of Economics 120, no. 3 (August 2005): 917-962.
Dynamic agency

Lazear, E. "Why Is There Mandatory Retirement?" Journal of Political Economy 87, no. 6 (December 1979): 1261-84.

Buy at Amazon Holmström, B. "Managerial Incentive Schemes - A Dynamic Perspective." In Vetenskap och företagsledning: studier i ekonomi och ledarskap tillägnade Lars Wahlbeck (Essays in Economics and Management in the Honor of Lars Wahlbeck). Helsingfors, Sweden: Svenska handelshögskolan, 1982. ISBN: 9789515551580.

———. "Managerial Incentive Problems: A Dynamic Perspective." The Review of Economic Studies 66, no. 1, Special Issue: Contracts (January 1999): 169-182.

Gibbons, R., and K. Murphy. "Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence." Journal of Political Economy 100, no. 3 (1992): 468-505.

Chevalier, J., and G. Ellison. "Career Concerns of Mutual Fund Managers." Quarterly Journal of Economics 114, no. 2 (May 1999): 389-432.
Efficiency wages

*Shapiro, C., and J. Stiglitz. "Equilibrium Unemployment as a Worker Discipline Device." American Economic Review 74, no. 3 (1984): 433-444.

Bulow, J., and L. Summers. "A Theory of Dual Labor Markets with Applications to Industrial Policy, Discrimination, and Keynesian Unemployment." Journal of Labor Economics 4, no. 3 (1986): 376-415.

Krueger, A. "Ownership, Agency, and Wages: An Examination of Franchising in the Fast Food Industry." Quarterly Journal of Economics 106, no. 1 (1991): 75-101.

Holzer, H., L. Katz, and A. Krueger. "Job Queues and Wages." Quarterly Journal of Economics 106, no. 3 (August 1991): 739-768.

Cappelli, P., and K. Chauvin. "An Interplant Test of the Efficiency Wage Hypothesis." Quarterly Journal of Economics 106, no. 3 (1991): 769-787.

Buy at Amazon *Bewley, T. Why Wages Don't Fall During a Recession. Cambridge, MA: Harvard University Press, 1999, sections 7.1 and 11.2, pp. 87-92, 173-180. ISBN: 9780674952416.

Fehr, E., G. Kirchsteiger, and A. Riedl. "Does Fairness Prevent Market Clearing? An Experimental Investigation." Quarterly Journal of Economics 108, no. 2 (1993): 437-460.

Gneezy, U., and J. List. "Putting Behavioral Economics to Work: Field Evidence on Gift Exchange." Econometrica 74, no. 5 (September 2006): 1365-1384.
II. Employer wage differentials
Industry and firm size differentials

*Krueger, A., and L. Summers. "Efficiency Wages and the Inter-industry Wage Structure." Econometrica 56, no. 2 (March 1988): 259-293.

Katz, L., and L. Summers. "Industry Rents: Evidence and Implications." Brookings Papers on Economic Activity, Special Issue (1989): 209-275.

Brown, C., and J. Medoff. "The Employer Size Wage Effect." Journal of Political Economy 97, no. 5 (October 1989): 1027-1059.

Buy at Amazon Murphy, K., and R. Topel. "Efficiency Wages Reconsidered: Theory and Evidence." In Advances in the Theory and Measurement of Unemployment. Edited by Y. Weiss and G. Fishelson. New York, NY: St. Martin's Press, 1990. ISBN: 9780312027971.

Neal, D. "Industry-Specific Human Capital: Evidence from Displaced Workers." Journal of Labor Economics 13, no. 4 (October 1995): 653-677.

*Gibbons, R., and L. Katz. "Does Unmeasured Ability Explain Inter-Industry Wage Differentials?" Review of Economic Studies 59, no. 3 (July 1992): 515-535.

Gibbons, R., L. Katz, T. Lemieux, and D. Parent. "Comparative Advantage, Learning, and Sectoral Wage Determination." Journal of Labor Economics 23, no. 4 (2005): 681-723.

Bertrand, M., and S. Mullainathan. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences." Journal of Political Economy 111, no. 5 (October 2003): 1043-1075.

Abowd, J., F. Kramarz, and D. Margolis. "High Wage Workers and High Wage Firms." Econometrica 67, no. 2 (March 1999): 251-333.
Compensating differentials

Buy at Amazon Rosen, S. "The Theory of Equalizing Differences." In Handbook of Labor Economics. Vol. 1. Edited by Orley Ashenfelter and P. R. G. Layard. New York, NY: Elsevier, 1986. ISBN: 9780444878564.

*Brown, C. "Equalizing Differences in the Labor Market." Quarterly Journal of Economics 94, no. 1 (February 1980): 113-134.

Buy at Amazon Abowd, J., and O. Ashenfelter. "Temporary Layoffs, Anticipated Unemployment and Compensating Wage Differentials." In Studies in Labor Markets. Edited by S. Rosen. Chicago, IL: University of Chicago Press, 1981, pp. 141-170. ISBN: 9780226726281.

Buy at Amazon Murphy, K., and R. Topel. "Unemployment, Risk, and Earnings: Testing for Equalizing Differences in the Labor Market." In Unemployment and the Structure of Labor Markets. Edited by K. Lang and J. Leonard. New York, NY: Blackwell, 1987, pp. 103-140. ISBN: 9780631153788.

Gruber, J. "The Incidence of Mandated Maternity Benefits." American Economic Review 84, no. 3 (June 1994): 622-641.

Fishback, P., and S. Kantor. "Did Workers Pay for the Passage of Workers' Compensation Laws?" Quarterly Journal of Economics 110, no. 3 (August 1995): 713-742.

Stern, S. "Do Scientists Pay to be Scientists?" Management Science 50, no. 6 (June 2004): 835-853.

Buy at Amazon Krueger, A. B., and L. H. Summers. "Reflections on the Inter-industry Wage Structure." In Unemployment and the Structure of Labor Markets. Edited by K. Lang and J. S. Leonard. New York, NY: B. Blackwell, 1987. ISBN: 9780631153788.
III. Discrimination and differentials by race and gender
Discrimination and differentials by race and gender

Buy at Amazon Altonji, J., and R. Blank. "Race and Gender in the Labor Market." In Handbook of Labor Economics. Vol. 3C. Edited by O. Ashenfelter and D. Card. New York, NY: Elsevier, 1999, chapter 48, pp. 3143-3259. ISBN: 9780444501899.

Buy at Amazon Becker, G. The Economics of Discrimination. 2nd ed. Chicago, IL: University of Chicago Press, 1971. ISBN: 9780226041155.

Buy at Amazon Arrow, K. "The Theory of Discrimination." In Discrimination in Labor Markets. Edited by O. Ashenfelter and A. Rees. Princeton, NJ: Princeton University Press, 1973, pp. 3-33. ISBN: 9780691041704.

Smith, J., and F. Welch. "Black Economic Progress after Myrdal." Journal of Economic Literature 27 (June 1989): 519-564.

*Donohue III, J., and J. Heckman. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks." Journal of Economic Literature 29 (December 1991): 1603-1643.

Chay, K. "The Impact of Federal Civil Rights Policy on Black Economic Progress: Evidence from the Equal Employment Opportunity Act of 1972." Industrial and Labor Relations Review 51, no. 4 (July 1998): 608-632.

Buy at Amazon Juhn, C., K. Murphy, and B. Pierce. "Accounting for the Slowdown in Black-White Wage Convergence." In Workers and Their Wages: Changing Patterns in the United States. Edited by M. Kosters. Washington, DC: AEI Press, 1991, chapter 4, pp. 107-143. ISBN: 9780844737478.

Card, D., and T. Lemieux. "Wage Dispersion, Returns to Skill and Black-White Wage Differentials." Journal of Econometrics 74 (October 1996): 319-361.

Oaxaca, R. "Male-Female Wage Differentials in Urban Labor Markets." International Economic Review 14, no. 3 (October 1973): 693-709.

Blinder, A. "Wage Discrimination: Reduced Form and Structural Estimates." Journal of Human Resources 8, no. 4 (1973): 436-455.

Buy at Amazon Goldin, C. Understanding the Gender Gap: An Economic History of American Women. New York, NY: Oxford University Press, 1992, chapter 4, pp. 83-118. ISBN: 9780195050776.

Wood, R., M. Corcoran, and P. Courant. "Pay Differentials Among the Highly Paid: The Male-Female Earnings Gap in Lawyer's Salaries." Journal of Labor Economics 11, no. 3 (1993): 417-441.

Neal, D., and W. Johnson. "The Role of Premarket Factors in Black-White Wage Differences." Journal of Political Economy 104, no. 5 (1996): 869-895.

Mincer, J., and S. Polacheck. "Family Investments in Human Capital: Earnings of Women." Journal of Political Economy 82, no. 2 (1974): S76-S110.

Buy at Amazon Polachek, S., and S. Siebert. "Gender in the Labour Market." Chapter 6 in The Economics of Earnings. New York, NY: Cambridge University Press, 1992, pp. 137-173. ISBN: 9780521367288.

Altonji, Joseph G., and C. Pierret. "Employer Learning and Statistical Discrimination." Quarterly Journal of Economics 116, no. 1 (February 2001): 313-350.

Black, S., and P. Strahan. "The Division of Spoils: Rent-Sharing and Discrimination in a Regulated Industry." American Economic Review 91, no. 4 (September 2001): 814-831.

List, J. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field." Quarterly Journal of Economics 119, no. 1 (February 2004): 49-89.

Fershtman, C., and U. Gneezy. "Discrimination in a Segmented Society." Quarterly Journal of Economics 116, no. 1 (February 2001): 351-377.

Goldin, C., and C. Rouse. "Orchestrating Impartiality: The Impact of Blind Auditions on the Sex Composition of Orchestras." American Economic Review 90, no. 4 (September 2000): 715-41.

Bertrand, M., and S. Mullainathan. "Are Emily and Brendan More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination." American Economic Review 94, no. 4 (September 2004): 991-1014.

Wolfers, J. "Diagnosing Discrimination: Stock Returns and CEO Gender." Journal of the European Economic Association 4, nos. 2-3 (April/May 2006): 531-541.

Buy at Amazon *Babcock, L., and S. Laschever. Women Don't Ask: Negotiation and the Gender Divide. Princeton, NJ: Princeton University Press, 2003, introduction, pp. 1-16. ISBN: 9780691089409.

Gneezy, U., M. Niederle, and A. Rustichini. "Performance in Competitive Environments: Gender Differences." Quarterly Journal of Economics 118, no. 3 (August 2003): 1049-1074.

Niederle, N., and L. Vesterlund. "Do Women Shy Away from Competition? Do Men Compete too Much?" Forthcoming in Quarterly Journal of Economics (2007).

Paserman, D. "Gender Differences in Performance in Competitive Environments: Field Evidence from Professional Tennis Players." mimeograph, Hebrew University, January 2007, pp. 1-42. (This resource may not render correctly in a screen reader.PDF)
IV. Changes in the wage structure and inequality
The facts

*Katz, L., and K. Murphy. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors." Quarterly Journal of Economics 107, no. 1 (February 1992): 35-78.

*Juhn, C., K. Murphy, and B. Pierce. "Wage Inequality and the Rise in Returns to Skill." Journal of Political Economy 101, no. 3 (1993): 410-442.

Buy at Amazon Katz, L., and D. Autor. "Changes in the Wage Structure and Earnings Inequality." In Handbook of Labor Economics. Vol. 3A. Edited by O. Ashenfelter and D. Card. New York, NY: Elsevier, 1999, chapter 26, pp. 1463-1555. ISBN: 9780444501875.

Goldin, C., and R. Margo. "The Great Compression: The Wage Structure in the United States at Mid-Century." Quarterly Journal of Economics 107, no. 1 (February 1992): 1-34.

Goldin, C., and L. Katz. "The Returns to Skill in the United States across the Twentieth Century." National Bureau of Economic Research Working Paper No. 7126, May 1999, pp. 1-51.

Piketty, T., and E. Saez. "Income Inequality in the United States, 1913 - 1998." Quarterly Journal of Economics 118, no. 1 (February 2003): 1-39.

Frydman, C., and R. Saks. "Historical Trends in Executive Compensation, 1936 - 2003." mimeograph, MIT, 2007.

*Autor, D., L. Katz, and M. Schettini Kearney. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists." National Bureau of Economic Research Working Paper No. 11627, September 2005, pp. 1-60.

———. "The Polarization of the U.S. Labor Market." American Economic Review Papers and Proceedings 96, no. 2 (May 2006): 189-194.

Lemieux, T. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?" American Economic Review 96, no. 3 (June 2006): 461-498.

Gottschalk, P., and R. Moffitt. "The Growth of Earnings Instability in the U.S. Labor Market." Brookings Papers on Economic Activity 2 (1994): 217-272.
Explanations: Supply and demand for skills

*Katz, L., and K. Murphy. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors." Quarterly Journal of Economics 107, no. 1 (February 1992): 35-78.

*Autor, D., L. Katz, and M. Schettini Kearney. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists." National Bureau of Economic Research Working Paper No. 11627, September 2005, pp. 1-60.

Card, D., and T. Lemieux. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis." Quarterly Journal of Economics 116, no. 2 (May 2001): 705-746.
Skill biased technical and organizational change

*Acemoglu, D. "Technical Change, Inequality and the Labor Market." Journal of Economic Literature 40 (March 2002): 7-72.

———. "Why do New Technologies Complement Skills: Directed Technical Change and Wage Inequality." Quarterly Journal of Economics 113, no. 4 (November 1998): 1055-1089.

Autor, D., L. Katz, and A. Krueger. "Computing Inequality: Have Computers Changed the Labor Market." Quarterly Journal of Economics 113, no. 4 (November 1998): 1169-1213.

Card, D., and J. DiNardo. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles." Journal of Labor Economics 20, no. 4 (2002): 733-783.

Autor, D., F. Levy, and R. Murnane. "The Skill Content of Recent Technological Change: An Empirical Exploration." Quarterly Journal of Economics 118, no. 4 (November 2003): 1279-1333.

Bresnahan, T., E. Brynolfsson, and L. Hitt. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-level Evidence." Quarterly Journal of Economics 117, no. 1 (February 2002): 339-376.
International trade and immigration

Acemoglu, D. "Patterns of Skill Premia." Review of Economic Studies 70, no. 2 (2003): 199-230.

Berman, E., J. Bound, and S. Machin. "Implications of Skill-Biased Technological Change: International Evidence." Quarterly Journal of Economics 113, no. 4 (November 1998): 1245-1280.

Feenstra, R., and G. Hanson. "The Impact of Outsourcing and High Technology Capital on Wages: Estimates for the United States 1979 - 1990." Quarterly Journal of Economics 114, no. 3 (August 1999): 907-940.

———. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages." National Bureau of Economic Research Working Paper No. 8372, July 2001, pp. 1-66.

Krueger, A. "Labor Market Shifts and the Price Puzzle Revisited." National Bureau of Economic Research Working Paper No. 5924, February 1997, pp. 1-32.

Borjas, G. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market." Quarterly Journal of Economics 118, no. 4 (November 2003): 1335-1374.
Labor market institutions and wage compression

DiNardo, J., N. Fortin, and T. Lemieux. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach." Econometrica 64, no. 5 (September 1996): 1001-1044.

Lee, D. "Wage Inequality in the U.S. During the 1980's: Rising Dispersion or Falling Minimum Wage." Quarterly Journal of Economics 114, no. 3 (August 1999): 941-1024.

*Autor, D., L. Katz, and M. Schettini Kearney. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists." National Bureau of Economic Research Working Paper No. 11627, September 2005, pp. 1-60.

Card, D. "The Effect of Unions on the Distribution of Wages: Redistribution or Relabelling?" National Bureau of Economic Research Working Paper No. 4195, October 1992, pp. 1-61.

Acemoglu, D., P. Aghion, and G. Violante. "Deunionization, Technical Change, and Inequality." Carnegie-Rochester Conference Series on Public Policy (February 2001): 1-37.
International evidence

Organisation for Economic Co-operation and Development (OECD). "Earnings Inequality: Changes in the 1980s." Chapter 5 in OECD Employment Outlook 1993. Paris, France: OECD. pp. 157-184.

Piketty, T., and E. Saez. "The Evolution of Top Incomes: A Historical and International Perspective." American Economic Review Papers and Proceedings 96, no. 2 (May 2006): 200-205.

Blau, F., and L. Kahn. "International Differences in Male Wage Inequality: Institutions versus Market Forces." Journal of Political Economy 104, no. 4 (August 1996): 791-837.

Leuven, E., H. Oosterbeek, and H. van Ophem. "Explaining International Differences in Male Skill Wage Differentials by Differences in Demand and Supply of Skill." Economic Journal 114 (April 2004): 466-486.

Blau, F., and L. Kahn. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?" Review of Economics and Statistics 87, no. 1 (February 2005): 184-193.

Krugman, P. "Past and Prospective Causes of High Unemployment." In Reducing Unemployment: Current Issues and Policy Options, A Symposium, Jackson Hole, Wyoming, August 24-27, 1994. Kansas City, MO: Federal Reserve Bank of Kansas City, 1994, pp. 23-43.

Nickell, S., and B. Bell. "The Collapse in Demand for the Unskilled and Unemployment across the OECD." Oxford Review of Economic Policy 11, no. 1 (1995): 40-62.

Card, D., F. Kramarz, and T. Lemieux. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France." Canadian Journal of Economics 32, no. 4 (August 1999): 843-877.

Acemoglu, D. "Cross-country Inequality Trends." Economic Journal 113 (February 2003): F121-F149.

Pischke, J.-S. "Labor Market Institutions, Wages, and Investment: Review and Implications." CESifo Economic Studies 51 (January 2005): 47-75.

Beaudry, P., and D. Green. "Wages and Employment in the United States and Germany: What Explains the Differences?" American Economic Review 93, no. 3 (June 2003): 573-602.

 

Second Part - Taught by Michael Piore

Topics READINGS
I. Introduction and overview
Introduction and overview

Buy at Amazon Osterman, Paul, Thomas Kochan, Richard Locke, and Michael Piore. Working in America: A Blueprint for the New Labor Market. Cambridge, MA: MIT Press, 2001, chapters 1 and 2, pp. 1-56. ISBN: 9780262151054.

Piore, Michael, and Sean Safford. "Changing Regimes of Workplace Governance: Shifting Axes of Social Mobilization and the Challenge to Industrial Relations Theory." Industrial Relations: A Journal of Economy and Society 45, no. 3 (2006): 299-325.

Buy at Amazon Berger, Peter, and Thomas Luckman. "From the Social Construction of Reality: A Treatice in the Sociology of Knowledge." In The New Economic Sociology. Edited by Frank Dobbin. Princeton, NJ: Princeton University Press, 2004, pp. 325-348 and 496-517. ISBN: 9780691049069.

Additional recommended reading

Buy at Amazon Mishel, Lawrence, Jared Bernstein, and Sylvia Allegretto. The State of Working America 2004/2005. Ithaca, NY: Cornell University Press, 2005. ISBN: 9780801489624.
II. Worker motivation and behavior
Worker motivation and behavior

Buy at Amazon McKenna, Richard. The Sand Pebbles. New ed. Annapolis, MD: U.S. Naval Institute Press, 2000, pp. 143-149. ISBN: 9781557504463.

Buy at Amazon Bloch, Marc. "The Characteristics of Customary Law." In Feudal Society. Vol. 1. Chicago, IL: University of Chicago Press, 1961, chapter 2, pp. 113-116. ISBN: 9780226059785.

Buy at Amazon Winograd, Terry, and Fernando Flores. Understanding Computers and Cognition: A New Foundation for Design. Reading, MA: Addison-Wesley, 1987, pp. 14-37. ISBN: 9780201112979.

Fehr, Ernst, Urs Fischbacher, and Michael Kosfeld. "Neuroeconomic Foundations of Trust and Social Preferences." Center for Economic Policy Research Discussion Paper No. 5127 (forthcoming in American Economic Review).
III. Technology, Job Characteristics, and Structure
Technology, job characteristics, and structure

Autor, David H., Frank Levy, and Richard J. Murnane. "The Skill Content of Recent Technological Change: An Empirical Exploration." Quarterly Journal of Economics 118, no. 4 (November 2003): 1279-1333.

Buy at Amazon Marx, Karl. Capital: A Critique of Political Economy. Vol. 1. Reprint ed. New York, NY: Penguin Classics, part IV, chapters 12-15, pp. 312-394. ISBN: 9780140445688.

Young, Allyn. "Increasing Returns and Economic Progress." The Economic Journal 38 (December 1928): 527-542.

Marglin, Stephen A. "What Do Bosses Do? The Origins and Functions of Hierarchy in Capitalist Production." Review of Radical Political Economics 6, no. 2 (1974): 60-112.

Becker, Gary, and Kevin Murphy. "The Division of Labor, Coordination Costs and Knowledge." Quarterly Journal of Economics 107, no. 4 (November 1992): 1137-1160.

Sabel, Charles, and Jonathan Zeitlin. "Neither Modularity nor Relational Contracting: Inter-Firm Collaboration in the New Economy." Enterprise and Society 5, no. 3 (2004): 388-403.

Buy at Amazon Baldwin, Carliss Y., and Kim B. Clark. "Modularity after the Crash." Mimeo, Harvard Business School, 2001.
Also in Garud, Raghu, Arun Kumaraswamy, and Richard Langlois, eds. Managing the Modular Age: Architectures, Networks And Organizations. Malden, MA: Blackwell Publishers, 2003. ISBN: 9780631233169.

See also:

Kremer, Michael. "The O-Ring Theory of Economic Development." Quarterly Journal of Economics 108, no. 3 (1993): 551-575.
Also: Some recent empirical evidence and additional theoretical speculation.

Ichniowski, Casey, Kathryn Shaw, and Giovanna Prennushi. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines." American Economic Review 87, no. 3 (1997): 291-313.

MacDuffie, John Paul. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Automobile Industry." Industrial and Labor Relations Review 48, no. 2 (January 1995): 197-221.

Osterman, Paul. "Work Reorganization in an Era of Restructuring: Trends in Diffusion and Effects on Employee Welfare." Industrial and Labor Relations Review 53, no. 2 (January 2000): 179-196.

Milgrom, Paul, and John Roberts. "Complementarities and Fit: Strategy, Structure and Organizational Change in Manufacturing." Journal of Accounting and Economics 19, nos. 2-3 (April 1995): 179-208.

Piore, Michael. "Labor Standards and Business Strategies." In Labor Standards and Development in the Global Economy. Edited by Stephen Herzenberg, and Jorge Perez Lopez. U.S. Department of Labor, Bureau of International Labor Affairs, Washington, D.C., 1990.
IV. The social dimensions of the labor force
Social class

Marx, Karl. The Communist Manifesto.

Buy at Amazon Gans, Herbert. Urban Villagers. Expanded ed. New York, NY: Free Press, 1982, pp. 229-262. ISBN: 9780029112403.

Buy at Amazon Newman, Katherine S. No Shame in My Game: The Working Poor in the Inner City. New York, NY: Alfred A. Knopf, 1999. ISBN: 9780375402548. (skim)
Social capital

Granovetter, Mark S. "The Strength of Weak Ties." American Journal of Sociology 78, no. 6 (1973): 1360-1380.

Coleman, James S. "Social Capital in the Creation of Human Capital." American Journal of Sociology 94, Supplement (1988): S95-S120.

Adler, Paul, and Seok-Woo Kwon. "Social Capital: Prospects for a New Concept." Academy of Management Review 27, no. 1 (2002): 17-40.

Buy at Amazon Wilson, William J. The Truly Disadvantaged. Chicago, IL: University of Chicago Press, 1990, chapters 1-3, pp. 3-92. ISBN: 9780226901312. (skim)
Identity

Akerlof, George, and Rachel Kranton. "Economics and Identity." Quarterly Journal of Economics 115, no. 3 (2000): 715-753.

Lazear, Edward. "Culture and Language." Journal of Political Economy 107, no. 6, part 2 (December 1999): S95-126.

Buy at Amazon Sabel, Charles. Work and Politics: The Division of Labor in Industry. Reprint ed. New York, NY: Cambridge University Press, 1982, pp. 1-32 and 78-194. ISBN: 9780521319096.

Buy at Amazon Barley, Steven. "Careers, Identities and Institutions: the Legacy of the Chicago School of Sociology." In Handbook of Career Theory. Edited by Michael B. Arthur, Douglas T. Hall, and Barbara S. Lawrence. New York, NY: Cambridge University Press, 1989, pp. 41-65. ISBN: 9780521389440.
Special topics

Networks

Granovetter, Mark S. "The Strength of Weak Ties." American Journal of Sociology 78, no. 6 (1973): 1360-1380.

Podolny, Joel, and James Baron. "Resources and Relationships: Social Networks and Mobility in the Workplace." American Sociological Review 62, no. 5 (1997): 673-693.

Uzzi, Brian. "The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect." American Sociological Review 61, no. 4 (1996): 674-698.

Immigration

Jasso, Guillermina, Douglas S. Massey, Mark R. Rosenzweig, and James P. Smith. "The U.S. New Immigrant Survey: Overview and Preliminary Results Based on the New Immigrant Cohorts of 1996 and 2003." March 2005. London, UK: Immigration Research and Statistics Service. (Forthcoming.)

Buy at Amazon Piore, Michael J. Birds of Passage: Migrant Labor and Industrial Societies. New York, NY: Cambridge University Press, 1979, chapter 3. ISBN: 9780521224529.

Buy at Amazon Saxenian, AnnaLee. Silicon Valley's New Immigrant Entrepreneurs. San Francisco, CA: Public Policy Institute of California, 1999. ISBN: 9781582130095.

See also:

Saxenian, AnnaLee. "Silicon Valley's New Immigrant Entrepreneurs: Skills, Networks and Careers." Task Force on Reconstructing America's Labor Market Institutions Working Paper #WP05, MIT Sloan School of Management, 1999.

Kerr, William R. "Ethnic Scientific Communities and International Technology Diffusion." Harvard Business School Working Paper No. 06-022, 2006.

Borjas, George. "The Labor Market Impact of High-Skill Immigration." American Economic Review 95, no. 2 (May 2005): 56-60.

Freeman, Richard B. "Fellowship Stipend Support and the Supply of Science and Engineering Students: NSF Graduate Research Fellowships." American Economic Review 95, no. 2 (May 2005): 61-65.

Chen, Yiu Por. "Skill-Sorting, Self-Selectivity, and Immigration Policy Regime Change: Two Surveys of Chinese Graduate Students' Intention to Study Abroad." American Economic Review 95, no. 2 (May 2005): 66-70.

Stephan, Paula, and Jennifer Ma. "The Increased Frequency and Duration of the Postdoctorate Career Stage." American Economic Review 95, no. 2 (May 2005): 71-75.
V. Institutions
General

Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silane, Andrei Shleifer, and Juan Botero. "The Regulation of Labor." National Bureau of Economic Research Working Paper No. 9756, 2003.

Buy at Amazon Streeck, Wolfgang, and Kathleen Thelen. Beyond Continuity: Institutional Change in Advanced Political Economies. New York, NY: Oxford University Press, 2005, pp. 1-39. ISBN: 9780199280452.

Buy at Amazon Hall, Peter A., and David Soskice, eds. "An Introduction to Varieties of Capitalism." In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. New York, NY: Oxford University Press, 2001, pp. 1-68. ISBN: 9780199247752.

Milgrom, Paul, and John Roberts. "Complementarities and Fit: Strategy, Structure and Organizational Change in Manufacturing." Journal of Accounting and Economics 19, nos. 2-3 (April 1995): 179-208.

Acemoglu, Daron. "Constitutions, Politics, and Economics: A Review Essay on Persson and Tabellini's The Economic Effects of Constitutions." Journal of Economic Literature 43, no. 4 (2005): 1025-1048.

See also, for a classic perspective:

Buy at Amazon North, Douglass. Institutions, Institutional Change and Economic Performance. New York, NY: Cambridge University Press, 1990. ISBN: 9780521397346.

Buy at Amazon Thelen, Kathleen. How Institutions Evolve: The Political Economy of Skills in Germany, Britain, the United States, and Japan. Cambridge, UK: Cambridge University Press, 2004. ISBN: 9780521546744.
Trade unions

Dunlop, John. Industrial Relations Systems. Carbondale, IL: Southern Illinois University Press, 1977, 1958, chapter 1, pp. 43-61.

Buy at Amazon Kochan, Thomas, Harry Katz, and Robert McKersie. The Transformation of American Industrial Relations. Ithaca, NY: ILR/Cornell University Press, 1994, chapters 2-3. ISBN: 9780875463209.

Buy at Amazon Freeman, Richard B., and James L. Medoff. What Do Unions Do? New York, NY: Basic Books, 1984, chapters 1 and 16, pp. 3-25 and 246-251. ISBN: 9780465091331.

Buy at Amazon Piore, Michael. "The Future of Unions." In The State of the Unions. Edited by George Strauss, Daniel Gallagher, and Jack Fiorito. Madison, WI: Industrial Relations Research Association, 1991, pp. 387-410. ISBN: 9780913447499.

Buy at Amazon Osterman, Paul, Thomas Kochan, Richard Locke, and Michael Piore. Working in America: A Blueprint for the New Labor Market. Cambridge, MA: MIT Press, 2001, chapter 4. ISBN: 9780262650625.
Quasi-unions in the new labor market

Fine, Janice. "Community Unions and the Revival of the American Labor Movement." Politics & Society 33, no. 1 (March 2005): 153-199.

Safford, Sean. "The Role of National Membership Organizations in Contemporary American Industrial Relations." Mimeo, University of Chicago, Graduate School of Business, September 2005.
Labor market institutions in the new economy

Dobbin, Frank, and John Sutton. "The Strength of a Weak State: The Rights Revolution and the Rise of Human Resources Management Divisions." American Journal of Sociology 104, no. 2 (1998): 441-476.

Supreme Court of the United States. Circuit City Stores, Inc., Petitioner v. Saint Clair Adams. No. 99-1379 (9th Cir. 2001).

Van Wezel Stone, Katherine. "Labor/Employment Law: Mandatory Arbitration of Individual Employment Rights: The Yellow Dog Contract of the 1990s." Denver University Law Review 1017, no. 73 (1996).

Autor, David. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing." Journal of Labor Economics 21, no. 1 (January 2003): 1-42.

Buy at Amazon Piore, Michael. "Reconfiguration of Work and Employment Relations in the United States at the Turn of the Century." In Changing Life Patterns in Western Industrial Society. Edited by Janet Giele and Elke Holst. Oxford, UK: Elsevier, 2004, pp. 23-44. ISBN: 9780762310203.

Buy at Amazon Osterman, Paul, Thomas Kochan, Richard Locke, and Michael Piore. Working in America: A Blueprint for the New Labor Market. Cambridge, MA: MIT Press, 2001, chapter 5, pp. 131-148. ISBN: 9780262650625.
International comparison

Buy at Amazon Auer, Peter, and Sandrine Cazes. Employment Stability in an Age of Flexibility, Evidence from Industrialized Countries. Geneva, Switzerland: ILO, 2003, intro, chapter 3 (Denmark) and chapter 5 (Japan), pp. 59-105 and 159-217. ISBN: 9789221127161.

Buy at Amazon Bertola, Guiseppe, Francine Blau, and Lawrence Kahn. "Comparative Analysis of Labor Market Outcomes: Lessons for the United States from International Long-Run Evidence." In The Roaring Nineties: Can Full Employment Be Sustained. Edited by Alan Krueger and Robert Solow. New York, NY: Russell Sage Foundation, 2002, pp. 159-218. ISBN: 9780871548177.

Mosher, Jim. "The Institutional Origins of Wage Equality: Labor Unions and Their Wage Policies." Mimeo, University of Wisconsin-Madison, 1999. Prepared for delivery at the APSA Annual Meeting, September 2-5, 1999, Atlanta, Georgia.
Labor market regulations in a global economy

Schrank, Andrew. "Labor Standards and Human Resources: A Natural Experiment in an Unlikely Laboratory." Mimeo, University of New Mexico, 2005.

———. "Professionalization and Probity in the Patrimonial State: Labor Law Enforcement in the Dominican Republic." Mimeo, Yale University, 2005.

Buy at Amazon Piore, Michael. "Rethinking International Labor Standards." In Labor and the Globalization of Production: Causes and Consequences of Industrial Upgrading. Edited by Will Milberg. New York, NY: Palgrave Macmillan, 2004, pp. 249-265. ISBN: 9781403935021.

Weil, David. "Are Mandated Health and Safety Committees Substitutes or Supplements for Labor Unions?" Industrial and Labor Relations Review 52, no. 3 (April 1999): 339-360.