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The Declining Labor Market Prospects of Less-Educated Men

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  • Ariel J. Binder
  • John Bound

Abstract

Over the last half century, U.S. wage growth stagnated, wage inequality rose, and the labor-force participation rate of prime-age men steadily declined. In this article, we examine these labor market trends, focusing on outcomes for males without a college education. Though wages and participation have fallen in tandem for this population, we argue that the canonical neo-classical framework, which postulates a labor demand curve shifting inward across a stable labor supply curve, does not reasonably explain the data. Alternatives we discuss include adjustment frictions associated with labor demand shocks and effects of the changing marriage market—that is, the fact that fewer less-educated men are forming their own stable families—on male labor supply incentives. Our observations lead us to be skeptical of attempts to attribute the secular decline in male labor-force participation to a series of separately-acting causal factors. We argue that the correct interpretation probably involves complicated feedback between falling labor demand and other factors which have disproportionately affected men without a college education.

Suggested Citation

  • Ariel J. Binder & John Bound, 2019. "The Declining Labor Market Prospects of Less-Educated Men," NBER Working Papers 25577, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25577
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    Cited by:

    1. Cappelen, Alexander W. & Falch, Ranveig & Tungodden, Bertil, 2019. "The Boy Crisis: Experimental Evidence on the Acceptance of Males Falling Behind," Discussion Paper Series in Economics 6/2019, Norwegian School of Economics, Department of Economics, revised 01 Mar 2019.
    2. Jonathan Heathcote & Fabrizio Perri & Gianluca Violante, 2020. "The Rise of US Earnings Inequality: Does the Cycle Drive the Trend?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 181-204, August.
    3. Hodges, Leslie, 2020. "Do low-income parents who receive unemployment insurance pay more child support?," Children and Youth Services Review, Elsevier, vol. 111(C).

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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