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How Workers Fare When Employers Innovate

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  • Sandra E. Black
  • Lisa Lynch
  • Anya Krivelyova

Abstract

Complementing existing work on firm organizational structure and productivity, this paper examines the impact of organizational change on workers. We find evidence that employers do appear to compensate at least some of their workers for engaging in high performance workplace practices. We also find a significant association between high performance workplace practices and increased wage inequality. Finally, we examine the relationship between organizational structure and employment changes and find that some practices, such as self-managed teams, are associated with greater employment reductions, while other practices, such as the percentage of workers involved in job rotation, are associated with lower employment reductions.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9569.

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Date of creation: Mar 2003
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Publication status: published as Black, Sandra E., Lisa M. Lynch, and Anya Krivelyova. "How Workers Fare When Employers Innovate." Industrial Relations 43, 1 (January 2004): 44-66.
Handle: RePEc:nbr:nberwo:9569

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  1. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
  2. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc.
  3. Even Caroli & John Van Reenen, 1999. "Organization, skill and technology: evidence from a panel of British and French establishments," IFS Working Papers, Institute for Fiscal Studies W99/23, Institute for Fiscal Studies.
  4. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(4), pages 1169-1213, November.
  5. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
  6. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(2), pages 367-97, May.
  7. John E. DiNardo & Jorn-Steffen Pischke, 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," NBER Working Papers 5606, National Bureau of Economic Research, Inc.
  8. Sandra E Black & Lisa M Lynch, 2002. "What's Driving the New Economy? The Benefits of Workplace Innovation," Working Papers, Center for Economic Studies, U.S. Census Bureau 02-03, Center for Economic Studies, U.S. Census Bureau.
  9. Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers, Centre for Economic Performance & Institute of Economics 24, Centre for Economic Performance & Institute of Economics.
  10. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(2), pages 173-188, January.
  11. Daron Acemoglu, 1998. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," NBER Working Papers 6658, National Bureau of Economic Research, Inc.
  12. Peter Cappelli & William H. Carter, 2000. "Computers, Work Organization, and Wage Outcomes," NBER Working Papers 7987, National Bureau of Economic Research, Inc.
  13. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 253-90, February.
  14. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 19(2-3), pages 179-208, April.
  15. Krueger, Alan B, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984-1989," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(1), pages 33-60, February.
  16. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(4), pages 801-17, August.
  17. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(1), pages 339-376, February.
  18. Brent Boning & Casey Ichniowski & Kathryn Shaw, 2007. "Opportunity Counts: Teams and the Effectiveness of Production Incentives," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 613-650.
  19. Casey Ichniowski, 1990. "Human Resource Management Systems and the Performance of U.S. Manufacturing Businesses," NBER Working Papers 3449, National Bureau of Economic Research, Inc.
  20. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1777, Harvard - Institute of Economic Research.
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Cited by:
  1. Monika Hamori, 2006. "Are franchises bad employers?," Working Papers Economia, Instituto de Empresa, Area of Economic Environment wp06-11, Instituto de Empresa, Area of Economic Environment.
  2. Felipe Balmaceda, 2006. "Task-Specific Training and Job Design," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 223, Centro de Economía Aplicada, Universidad de Chile.
  3. Uwe Jirjahn & Kornelius Kraft, 2010. "Teamwork And Intra-Firm Wage Dispersion Among Blue-Collar Workers," Scottish Journal of Political Economy, Scottish Economic Society, Scottish Economic Society, vol. 57(4), pages 404-429, 09.
  4. Guadalupe, Maria, 2005. "Product Market Competition, Returns to Skill and Wage Inequality," IZA Discussion Papers 1556, Institute for the Study of Labor (IZA).
  5. Tushar Kanti Nandi, 2006. "Employee Participation and Wages: An Empirical Investigation with Selectivity Correction," Department of Economics University of Siena, Department of Economics, University of Siena 483, Department of Economics, University of Siena.
  6. Sandra E. Black & Lisa M. Lynch, 2005. "Measuring Organizational Capital in the New Economy," NBER Chapters, in: Measuring Capital in the New Economy, pages 205-236 National Bureau of Economic Research, Inc.
  7. Stephanie Lluis, . "Human Resource Management Practices and Wage Dispersion in U.S. Establishments," Working Papers, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus) 0603, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).

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