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Job Creation in the United States: Good Jobs or Bad?

Author

Listed:
  • Henry S. Farber

    (Princeton University)

Abstract

Despite a record of sustained growth in employment in the United States, there is longstanding concern that the new jobs are of poor quality, implying that the quality of the stock of jobs in the economy is deteriorating. In fact, it is difficult to define a new job, much less identify such jobs and evaluate their quality. In this study, I define new jobs operationally as worker-firm matches that have begun within the last year (i.e., tenure less than one year), and I investigate the extent to which the quality of new (low tenure) jobs relative to old (higher tenure) jobs has changed over the period from 1979-1996. I consider three dimensions of quality: real wages, the rate of part-time employment, and the rate of coverage by employer-provided health insurance. The empirical analysis relies on data from eight mobility and benefit supplements to the Current Population Survey over the period studied. The results are clear cut. Real hourly wages on new jobs have deteriorated slightly relative to wages on older jobs, but the general patterns of the wage distribution on new jobs have changed in ways similar to the overall wage distribution (a large increase in the return to education driven by a large decline in wages for less-skilled workers). There is no evidence of an increase in the rate of part-time employment on either new jobs or old jobs so that the quality of new jobs has not changed absolutely or relative to the quality of older jobs in this dimension. The quality of new jobs has deteriorated substantially for some workers in the provision of employer-provided health insurance. Less-educated workers have become substantially less likely to be covered by or offered health insurance by their employer, and the decline is particularly large on new jobs. There has been a smaller decline in employer-provided health insurance coverage for more-educated workers on both old and new jobs, but the decline is no larger on new jobs than on old jobs. On balance, there has been a decline in the quality of jobs for less-skilled workers, as measured by the availability of a key fringe benefit, that is especially severe for new jobs and that reinforces the well-known deterioration of the labor market for less-skilled workers more generally. There has been relatively little change in the quality of jobs available to more highly-skilled workers, either on new or on old jobs.

Suggested Citation

  • Henry S. Farber, 1997. "Job Creation in the United States: Good Jobs or Bad?," Working Papers 764, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:385
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    Citations

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    Cited by:

    1. Lehmann, Hartmut & Wadsworth, Jonathan, 2000. "Tenures That Shook the World: Worker Turnover in Russia, Poland, and Britain," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 639-664, December.
    2. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    3. Farber, Henry S. & Levy, Helen, 2000. "Recent trends in employer-sponsored health insurance coverage: are bad jobs getting worse?," Journal of Health Economics, Elsevier, vol. 19(1), pages 93-119, January.
    4. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    5. Daniel S. Hamermesh, 1999. "Changing Inequality in Markets for Workplace Amenities," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1085-1123.
    6. Henry S. Farber, 2008. "Employment Insecurity: The Decline in Worker-Firm Attachment in the United States," Working Papers 1056, Princeton University, Department of Economics, Center for Economic Policy Studies..
    7. repec:eee:labchp:v:3:y:1999:i:pb:p:2165-2214 is not listed on IDEAS

    More about this item

    Keywords

    employment; real wages; part-time employment; employer provided health insurance;
    All these keywords.

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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