CES-WP-09-14
Estimating the "True" Cost of Job Loss: Evidence Using Matched Data from Califormia 1991-2000
Till von Wachter, Elizabeth Handwerker, Andrew Hildreth
June 01, 2009
Estimates of the cost of job displacement from survey and administrative data differ markedly.
This paper uses a unique match of data between the Displaced Worker Survey (DWS) and administrative wage records from California to examine the sources of this discrepancy. When we use similar estimation methods and account for measurement error in survey wages correlated with worker demographics, estimates of earnings losses at displacement are similar from both datasets and significantly larger than those based on the DWS alone. Also correcting for measurement errors in reported displacements suggests both sources of such estimates may yield lower bounds for the true cost of displacement.
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CES-WP-09-13
Firms' Exporting Behavior under Quality Constraints
Juan Carlos Hallak, Jagadeesh Sivadasan
May 01, 2009
We develop a model of international trade with export quality requirements and two
dimensions of firm heterogeneity. In addition to "productivity", firms are also heterogeneous in
their "caliber" {the ability to produce quality using fewer fixed inputs. Compared to singleattribute
models of firm heterogeneity emphasizing either productivity or the ability to produce
quality, our model provides a more nuanced characterization of firms' exporting behavior. In
particular, it explains the empirical fact that firm size is not monotonically related with export
status: there are small firms that export and large firms that only operate in the domestic market.
The model also delivers novel testable predictions. Conditional on size, exporters are predicted
to sell products of higher quality and at higher prices, pay higher wages and use capital more
intensively. These predictions, although apparently intuitive, cannot be derived from singleattribute
models of firm heterogeneity as they imply no variation in export status after size is
controlled for. We find strong support for the predictions of our model in manufacturing
establishment datasets for India, the U.S., Chile, and Colombia.
JEL codes:
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CES-WP-09-12
The Micro-Dynamics of Skill Mix Changes in a Dual Labor Market: The Spanish Manufacturing Experience
Adela Luque, C.J. Krizan
May 01, 2009
As in many other developed countries, the share of skilled workers in Spain’s labor force
dramatically increased during the 1990s. This paper decomposes the aggregate skill mix change
by a set of key firm characteristics and in the context of Spain’s dual labor market. We find that
continuing firms were the major drivers of skill mix growth and that expanding firms in
particular increased their ratio of skilled workers. Net entry played a smaller but positive role
due to higher-skilled entrants and lower-skilled exiters. Finally, we find that although firms with
higher concentrations of temporary workers make bigger employment changes overall, firms’
low-skilled employment is more strongly pro-cyclical than is high skilled employment.
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CES-WP-09-11
Concording U.S. Harmonized System Categories Over Time
Justin Pierce, Peter Schott
May 01, 2009
This paper: outlines an algorithm for concording U.S. ten-digit Harmonized System export and
import codes over time; describes the concordances we construct for 1989 to 2004; and provides
Stata code that can be used to construct similar concordances for arbitrary beginning and ending
years from 1989 to 2007.
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CES-WP-09-10
Complex Survey Questions and the Impact of Enumeration Procedures: Census/American Community Survey Disability Questions
Andrew Houtenville, William Erickson, Melissa Bjelland
April 01, 2009
This paper explores challenges relating to the identification of the population with disabilities,
focusing on Census Bureau efforts using the 2000 Decennial Census Long-Form (Census 2000)
and 2000-2005 American Community Survey (ACS). In particular, the analyses explore the
impact of survey methods on responses to the work limitation (i.e., employment disability)
question in these two Census products. Building on the research of Stern (2003) and Stern and
Brault (2005), we look for further evidence of misreporting of an employment disability by
specific sub-populations using the participation in the Supplemental Security Income program as
an exogenous employment disability status indicator along with a subset of ACS disability
questions. We expand upon these earlier studies by examining both false-positive and falsenegative
reports of employment disability by implementing logit estimations to examine the role
of respondent/enumerator error on the accuracy of the employment disability response. In this
manner, we enhance our understanding of Census 2000 and ACS responses to employment
disability questions through an exploration of the role of enumeration procedures in two types of
misclassifications, as well as by evaluating existing data and estimates to uncover characteristics
that might make an individual more likely to misreport an employment disability.
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CES-WP-09-09
Exploring Differences in Employment between Household and Establishment Data
Katharine Abraham, John Haltiwanger, Kristin Sandusky, James Spletzer
April 01, 2009
Using a large data set that links individual Current Population Survey (CPS) records to
employer-reported administrative data, we document substantial discrepancies in basic measures
of employment status that persist even after controlling for known definitional differences
between the two data sources. We hypothesize that reporting discrepancies should be most
prevalent for marginal workers and marginal jobs, and find systematic associations between the
incidence of reporting discrepancies and observable person and job characteristics that are
consistent with this hypothesis. The paper discusses the implications of the reported findings for
both micro and macro labor market analysis
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CES-WP-09-08
Employer Health Benefit Costs and Demand for Part-Time Labor
Jennifer Feenstra Schultz, David Doorn
April 01, 2009
The link between rising employer costs for health insurance benefits and demand for part-time
workers is investigated using non-public data from the Medical Expenditure Panel Survey-
Insurance Component (MEPS-IC). The MEPS-IC is a nationally representative, annual
establishment survey from the Agency for Healthcare Research and Quality (AHRQ). Pooling
the establishment level data from the MEPS-IC from 1996-2004 and matching with the
Longitudinal Business Database and supplemental economic data from the Bureau of Labor
Statistics, a reduced form model of the percent of total FTE employees working part-time is
estimated. This is modeled as a function of the employer health insurance contribution,
establishment characteristics, and state-level economic indicators. To account for potential
endogeneity, health insurance expenditures are estimated using instrumental variables (IVs). The
unit of analysis is establishments that offer health insurance to full-time employees but not part
time employees. Conditional on establishments offering health insurance to full-time employees,
a 1 percent increase in employer health insurance contributions results in a 3.7 percent increase
in part-time employees working at establishments in the U.S.
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CES-WP-09-07
Credit Market Competition and the Nature of Firms
Nicola Cetorelli
April 01, 2009
Empirical studies show that competition in the credit markets has important effects on the entry
and growth of firms in nonfinancial industries. This paper explores the hypothesis that the
availability of credit at the time of a firm’s founding has a profound effect on that firm’s nature. I
conjecture that in times when financial capital is difficult to obtain, firms will need to be built as
relatively solid organizations. However, in an environment of easily available financial capital,
firms can be constituted with an intrinsically weaker structure. To test this conjecture, I use
confidential data from the U.S. Census Bureau on the entire universe of business establishments
in existence over a thirty-year period; I follow the life cycles of those same establishments
through a period of regulatory reform during which U.S. states were allowed to remove barriers
to entry in the banking industry, a development that resulted in significantly improved credit
competition. The evidence confirms my conjecture. Firms constituted in post-reform years are
intrinsically frailer than those founded in a more financially constrained environment, while
firms of pre-reform vintage do not seem to adapt their nature to an easier credit environment.
Credit market competition does lead to more entry and growth of firms, but also to complex
dynamics experienced by the population of business organizations.
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CES-WP-09-06
Trends in Regional Industrial Concentration in the United States
Joshua Drucker
April 01, 2009
In a seminal article, Benjamin Chinitz (1961) raises the question of the effects that industry size,
structure, and economic diversification may have on firm performance and regional economies.
His line of inquiry suggests a related but conceptually distinct issue: how does the extent to
which a industry is regionally dominated—concentrated locally in a single or small number of
firms—impact the local performance of that industry? This question has received little attention,
principally because accurately measuring industrial concentration at the regional scale requires
firm-level information. This paper makes use of confidential plant- and firm-level manufacturing
data to explore patterns of industrial concentration in the United States at the regional scale.
Regional analogues of concentration ratios and other measures commonly used in the aspatial
industrial organization literature indicate the extent to which manufacturing activity is
concentrated in a small number of firms. Both the manufacturing sector as a whole and major
manufacturing industry sectors are examined in order to determine the extent of industrial
concentration in the continental United States, to explore changes over time in geographic
patterns of concentration, and to investigate associations between industrial concentration and
employment growth at the regional scale. Implications for understanding regional growth and for
devising regional economic development policy are discussed.
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CES-WP-09-05
Measuring Inequality Using Censored Data: A Multiple Imputation Approach
Stephen Jenkins, Richard Burkhauser, Shuaizhang Feng, Jeff Larrimore
April 01, 2009
To measure income inequality with right censored (topcoded) data, we propose multiple imputation
for censored observations using draws from Generalized Beta of the Second Kind distributions to
provide partially synthetic datasets analyzed using complete data methods. Estimation and inference
uses Reiter’s (Survey Methodology 2003) formulae. Using Current Population Survey (CPS) internal
data, we find few statistically significant differences in income inequality for pairs of years between
1995 and 2004. We also show that using CPS public use data with cell mean imputations may lead
to incorrect inferences about inequality differences. Multiply-imputed public use data provide an
intermediate solution.
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