ILR Review

Power and dependence in economic exchange shape industry structure. When a focal industry faces powerful suppliers or buyers, this can reduce industry rents. The authors argue that these dynamics also affect job quality by reducing the economic surplus available to be shared with workers. Drawing on ideas from power-dependency theory, this article explains industry earnings and job quality differences by examining inter-industry exchange patterns. The authors build on Ronald Burt’s seminal analysis of structural constraint in economic exchange using industry input-output tables. They calculate market constraint measures for recent years in the United States and link these with CPS data on wages and benefits. Analyses reveal that workers in more buyer-constrained industries (dependence on powerful buyers) experience lower wages and benefits. Findings also show that market constraint reduces the economic surplus available for union bargaining. Theory and results suggest that market concentration reduces suppliers’ economic rents, harming job quality.

Using a 20-month qualitative study of four US states that implemented career pathways spanning from high schools to colleges to employers, the authors illustrate the potential for state government actors to facilitate coordination of workforce development systems across geographies and industries. As a complement to explanations situated in workforce intermediary practices or formal state policies, the authors show that state actors can address barriers to coordination by using state actor orchestration—structuring provisional goal setting and revision, encouraging experimentation, and framing coordination to inspire collective action. This approach involves three types of practices: structural (building statewide governance structures and modifying governance processes), political (providing initial direction and piloting and broadening the set of stakeholders), and cultural (identifying key problems and collective action solutions and building social accountability for new roles). These practices vary according to states’ institutional environments: Where governance is more centralized, state actors gain latitude to guide regional workforce development.

The authors explore the educational response to fracking—a recent technological breakthrough in the oil and gas industry—by taking advantage of the timing of its diffusion and spatial variation in shale reserves. They show that fracking has significantly increased relative demand for less-educated male labor and increased high school dropout rates of male teens, both overall and relative to females. Estimates imply that, absent fracking, the teen male dropout rate would have been 1 percentage point lower over the period 2011–15 in the average labor market with shale reserves, implying an elasticity of school enrollment with respect to earnings below historical estimates. Fracking increased earnings and job opportunities more among young men than male teenagers, suggesting that educational decisions respond to improved earnings prospects, not just opportunity costs. Other explanations for the findings, such as changes in school quality, migration, or demographics, receive less empirical support.

The authors analyze the effect of technological innovation on employment and job quality using a difference-in-differences matching model and a unique matched data set of French firms (the Community Innovation Survey with administrative and fiscal data). Overall, they find evidence that product innovation increases employment and certain dimensions of job quality, such as the number of permanent contracts and working hours. The authors consider this virtuous circle between innovation, employment, and job quality to be nuanced, however, for two reasons. First, not all social groups benefit from firm innovation, as lower-skilled workers are less positively affected in terms of employment and are sometimes negatively affected in terms of wages. Second, the positive effects of innovation appear mainly in manufacturing and not in services. Public policy should pay attention, then, to the consequences of innovation across individuals and sectors to ensure that innovation is beneficial to all.

This study examines the effect of safety enforcement on workplace injuries and worker productivity in coal mines. The author exploits the introduction of a “flagrant” violation standard—with penalties of up to 0.22 million dollars per violation—established by the Mine Improvement and New Emergency Response (MINER) Act of 2006. Using an event-study model, the author finds that after the issuance of a flagrant violation, the workplace injuries decreased significantly by 20% and miner productivity decreased by 6%. The results suggest that the monetary value of the productivity loss is 1.3 times the costs saved from fewer injuries, which highlights the costs of workplace safety regulations.

Income inequality in the United States has been lower in periods when trade unionism has been strong. Using observations on wages by occupation, by geography, and by gender in collective bargaining contracts from the 1940s to the 1970s, patterns in movements of wage differentials are revealed. As wages increased, some contracts maintained relative wage differentials constant, some maintained absolute differences in wages constant, others combined these two patterns, and some did not reveal an obvious pattern. The patterns persisted even as price inflation increased in the 1970s. The dominant pattern implies a reduction in inequality as usually measured.

The authors investigate what determines differences in change in pay between men and women executives who move to new employers. Using proprietary data of 2,034 executive placements from a global search firm, the authors observe narrower pay differences between men and women after job moves. The unconditional gap shrinks from 21.5% in the prior employer to 15% in the new employer. After controlling for typical explanatory factors, the residual gap falls by almost 30%, from 8.5% at the prior employer to 6.1% in the new placement. This change reflects a relative increase in performance-based compensation for women and a lower level of unexplained pay inequality generally in external placements. Controlling for individual fixed effects, observed women have higher pay raises than do men. Finally, the authors find suggestive evidence that pay differences may also be moderated by differences in the supply and demand for women executives.

To better understand how network-based job matching responds to market development, the authors investigate network matching in China. They examine this question from the perspective of referrers, those who share information about job opportunities with potential job candidates. Using unique data from a population survey and leveraging interprovincial differences in market development, the authors show that market development has a negative association with individuals’ propensity to share job information. People who work at firms that offer a referral bonus and people who work at private firms, however, are more likely to share information and share it with more people, and the number of such employers increases with market transition. This increase can produce a positive association between market development and overall prevalence of job information-sharing. Results clarify the role employer-side processes play in job information-sharing and carry important implications for understanding network matching.

Using data from the Current Population Survey’s Merged Outgoing Rotation Groups, the authors examine whether greater Medicaid generosity encourages people to switch toward better quality occupations. Exploiting variation in Medicaid eligibility expansions for children across states during the 1990s and early 2000s, they find that a one standard deviation increase in Medicaid infant income thresholds increased the likelihood that working parents move to a new occupation by 1.6 percentage points or 3.3%. Findings show that these effects are larger for those below 150% of the poverty line and for married parents who were not benefiting from Medicaid prior to the expansions. In addition, findings indicate that Medicaid generosity also increased mobility toward occupations with higher average wages and higher educational requirements. This article contributes to the literature on job lock by showing that access to public health insurance not only increases employment and job switches but also encourages occupational upgrading.