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12 Million Salaried Workers Are Missing

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  • Daniel S. Hamermesh

Abstract

Evidence from Current Population Surveys through 1997, various cohorts of the National Longitudinal Surveys, and the Panel Study of Income Dynamics suggests that the fraction of American employees paid salaries stayed constant from the late 1960s through the late 1970s, but fell slightly thereafter through the late 1990s. Accounting for the changing industrial, occupational, demographic and economic structure of the work force shows that the fraction was 9 percentage points below what would have been expected in the late 1970s. This shortfall is not explained by growth in the temporary help industry, by institutional changes in overtime or wage payment regulation, by the increasing openness of American labor and product markets, nor by convergence of nonwage aspects of hourly and salaried employment. A theory of worker commitment and employers' monitoring costs explains the determination of pay status. While monitoring costs may have changed consistent with the decline in salaried work, only declining worker commitment is also consistent with an observed relative decline in earnings of hourly workers. Various waves of the General Social Surveys provide direct evidence that workers' commitment/trustworthiness declined during this period. Data from several cohorts of men in the NLS imply that there was a detrimental change in the work attitudes of young men in the lower half of the distribution of early-career job satisfaction, a conclusion that is bolstered by the relative decline in job tenure among hourly-paid workers.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8016.

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Date of creation: Nov 2000
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Publication status: published as Industrial and Labor Relations Review, Vol. 55, no. 4 (July 2002): 649-666
Handle: RePEc:nbr:nberwo:8016

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  1. Fama, Eugene F, 1991. "Time, Salary, and Incentive Payoffs in Labor Contracts," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 9(1), pages 25-44, January.
  2. Marcello M. Estevao & Saul Lach, 1999. "The Evolution of the Demand for Temporary Help Supply Employment in the United States," NBER Working Papers 7427, National Bureau of Economic Research, Inc.
  3. Charles Brown, 1990. "Firms' Choice of Method of Pay," NBER Working Papers 3065, National Bureau of Economic Research, Inc.
  4. Katharine G. Abraham & Susan N. Houseman, 1993. "Does Employment Protection Inhibit Labor Market Flexibility? Lessons from Germany, France, and Belgium," NBER Working Papers 4390, National Bureau of Economic Research, Inc.
  5. Sanders Korenman & David Neumark, 1991. "Does Marriage Really Make Men More Productive?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 282-307.
  6. Auriol, Emmanuelle & Friebel, Guido & Pechlivanos, Lambros, 1999. "Teamwork Management in an Era of Diminishing Commitment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2281, C.E.P.R. Discussion Papers.
  7. Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  8. Trejo, Stephen J, 1991. "The Effects of Overtime Pay Regulation on Worker Compensation," American Economic Review, American Economic Association, American Economic Association, vol. 81(4), pages 719-40, September.
  9. Frey, Bruno S, 1993. "Does Monitoring Increase Work Effort? The Rivalry with Trust and Loyalty," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 31(4), pages 663-70, October.
  10. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 153, Northwestern University/University of Chicago Joint Center for Poverty Research.
  11. Daniel, K., 1991. "Does Marriage Make Men More Productive?," University of Chicago - Economics Research Center, Chicago - Economics Research Center 92-2, Chicago - Economics Research Center.
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  13. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(3), pages 15-32, Summer.
  14. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
  15. Daniel S. Hamermesh, 1999. "Changing Inequality In Markets For Workplace Amenities," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1085-1123, November.
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Cited by:
  1. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2095, Harvard - Institute of Economic Research.
  2. Kuhn, Peter J. & Lozano, Fernando A., 2006. "The Expanding Workweek? Understanding Trends in Long Work Hours Among U.S. Men, 1979-2004," IZA Discussion Papers 1924, Institute for the Study of Labor (IZA).
  3. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2096, Harvard - Institute of Economic Research.

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