| Title |
Date |
Publication |
Author(s) |
Type |
| A Closer Look at Cleveland's Latest Poverty Ranking
|
February, 2007 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Brian Rudick; |
Economic Commentary |
| Abstract: News that Cleveland's poverty rate is the worst in the nation--and rising--has elevated the community's concern about conditions in the city. But a closer look at the way poverty rates are calculated suggests that all the possible causes of Cleveland's ranking have not been fully understood.
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| How Wages Change: Micro Evidence from the International Wage Flexibility Project
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December, 2006 |
Federal Reserve Bank of Cleveland, Working Paper no. 0620 |
Mark E Schweitzer; William T Dickens; Lorenz Goette; Erica L Groshen; Steinar Holden; Julian Messina; Jarkko Turunen; Melanie E Ward; |
Working Papers |
| Abstract: How do the complex institutions involved in wage setting affect wage changes? The International Wage Flexibility Project provides new microeconomic evidence on how wages change for continuing workers. We analyze individuals' earnings in 31 different data sets from sixteen countries, from which we obtain a total of 360 wage change distributions. We find a remarkable amount of variation in wage changes across workers. Wage changes have a notably non-normal distribution; they are tightly clustered around the median and also have many extreme values. Furthermore, nearly all countries show asymmetry in their wage distributions below the median. Indeed, we find evidence of both downward nominal and real wage rigidities. We also find that the extent of both these rigidities varies substantially across countries. Our results suggest that variations in the extent of union presence in wage bargaining play a role in explaining differing degrees of rigidities among countries.
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| Paths to Prosperity: Knowledge Is Key for Fourth District States
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August, 2006 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Paul W Bauer; |
Economic Commentary |
| Abstract: Even as per capita income has increased across the United States, differences among states' incomes remain. What are the sources of these remaining differences? This Commentary identifies and analyzes the key factors-patents, educational attainment, and industry structure-that influence income-growth rates and thus per capita incomes. It also explores where the Fourth District falls in relation to other states and the country as a whole
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| State Growth Empirics: The Long-Run Determinants of State Income Growth
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May, 2006 |
Federal Reserve Bank of Cleveland, Working Paper no. 0606 |
Mark E Schweitzer; Paul W Bauer; Scott Shane; |
Working Papers |
| Abstract: Real average U.S. per capita personal income growth over the last 65 years exceeded a remarkable 400 percent. Also notable over this period is that the stark income differences across states have narrowed considerably: In 1939 the highest income state's per capita personal income was 4.5 times the lowest, but by 1976 this ratio had fallen to less than 2 times. Since 1976, the standard deviation of per capita incomes at the state level has actually risen, as some higher-income states have seen their income levels rise relative to the median of the states. A better understanding of the sources of these relative growth performances should help to characterize more effective economic development strategies, if income growth differences are predictable. In this paper, we look for statistically and economically significant growth factors by estimating an augmented growth model using a panel of the 48 contiguous states from 1939 to 2004. Specifically, we control for factors that previous researchers have argued were important: tax burdens, public infrastructure, size of private financial markets, rates of business failure, industry structure, climate, and knowledge stocks. Our results, which are robust to a wide variety of perturbations to the model, are easily summarized: A state's knowledge stocks (as measured by its stock of patents and its high school and college attainment rates) are the main factors explaining a state's relative per capita personal income.
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| Are We Engineering Ourselves Out of Manufacturing Jobs?
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January, 2006 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; |
Economic Commentary |
| Abstract: Since the 1970s, productivity growth in the manufacturing sector has outpaced the overall economy, yet the sector's share of the workforce has declined dramatically. This leads us to ask if we are in fact engineering ourselves out of jobs. This Economic Commentary explores the relationship between productivity and employment and points out why this apparently straightforward relationship may be more complicated than it appears.
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| The Incidence of Nominal and Real Wage Rigidities in Great Britain: 1978-1998
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September, 2005 |
Federal Reserve Bank of Cleveland, Working Paper no. 0508 |
Mark E Schweitzer; Richard D Barwell; |
Working Papers |
| Abstract: This paper analyzes the extent of rigidities in wage setting in Great Britain over the 1980s and 1990s. Our estimation strategy, which generalizes the work of Altonji and Devereux (2000), models the notional wage growth distribution--the distribution of nominal wage growth that would occur in the absence of rigidities in pay--while allowing for the presence of measurement error in the data. The model then allows for the possibility that the nominal wage growth of a fraction of the workforce may be subject to a nominal or real downward rigidity. Our model suggests that real rigidities in wage setting are more prevalent than nominal rigidities, although the incidence of these real wage rigidities has fallen gradually over time. If firms cannot cut real wages in response to negative demand shocks they may resort to laying off workers. Our results support this microfoundation of the wage-unemployment Phillips curve: Workers who are more likely to be protected from wage cuts are also more likely to lose their jobs.
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| The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis
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December, 2004 |
Federal Reserve Bank of Cleveland Working Paper no. 0412 |
Mark E Schweitzer; David Neumark; William Wascher; |
Working Papers |
| Abstract: The primary goal of a national minimum wage floor is to raise the incomes of poor families with members in the work force. We present evidence on the effects of minimum wages on family incomes from March CPS surveys. Using non-parametric estimates of the distributions of family income relative to needs in states and years with and without minimum wage increases, we examine the effects of minimum wages on this distribution, and on the distribution of the changes in income that families experience. Although minimum wages do increase the incomes of some poor families, the evidence indicates that their net effect is, if anything, to increase the proportions of families with incomes below or near the poverty line. Thus, it would appear that reductions in the proportions of families that are poor or near-poor should not be counted among the potential benefits of minimum wages.
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| Employment Surveys Are Telling the Same (Sad) Story
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May, 2004 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Guhan Venkatu; |
Economic Commentary |
| Abstract: Two government surveys are used to gather information about employment in the U.S. economy, but the employment levels calculated from each seem to provide conflicting pictures of the labor market. The surveys are very different, but when the differences are taken into account and the survey results are compared with their respective business-cycle patterns, the conflict disappears.
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| Another Jobless Recovery?
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March, 2003 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; |
Economic Commentary |
| Abstract: The expansion of the 1990s began with such unexpectedly slow employment growth that commentators called it the “jobless recovery.” As the economy now begins to expand after the most recent recession, will employment follow the typical path of most postwar recoveries, or will it repeat the pattern of the 1990s? A look at trends in employment, unemployment, and the labor force participation rate reveals important similarities to the 1990s jobless recovery. That said, one of the similarities is an unusually low unemployment rate, which suggests that the recovery might be better characterized as “jobseekerless.”
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| Ready, Willing, and Able? Measuring Labor Availability in the UK
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January, 2003 |
Federal Reserve Bank of Cleveland, Working Paper no. 0303 |
Mark E Schweitzer; |
Working Papers |
| Abstract: The unemployment rate is commonly assumed to measure labor availability, but this ignores the fact that potential workers, the so-called inactive, frequently come from outside the current set of labor market participants. The UK Longitudinal Labor Force Survey includes information that can be used to predict impending employment transitions. Using this unique data set, new measures of labor availability, and indicators based on the more familiar unemployment rate alternatives, can be constructed and are reported here. The micro- and macroeconomic performances of these labor-force-availability measures are compared. Two simplified models, which include several categories of reasons for not working as well as demographic variables, perform particularly well in all of the tests. The implications of these preferred models are further studied in the context of regional regressions and comparisons with alternative data sources. These results together illustrate the important role that some groups of the inactive can play as a source of potential workers.
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| Productivity Gains: How Permanent?
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September, 2001 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Paul W Bauer; Jeffrey L Jensen; |
Economic Commentary |
| Abstract: This Economic Commentary confirms that productivity growth has been unusually robust over the last few years and explores reasonable assumptions about the likely future pattern of productivity growth. These assumptions can generate substantially different productivity growth paths. Government forecasts, which guide the major tax and benefit programs, have been increased in recent years yet remain cautious.
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| Will electricity deregulation push inflation lower?
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September, 2000 |
Federal Reserve Bank of Cleveland, Economic Review, vol. 36. no. 3, pp. 2-12 |
Mark E Schweitzer; Eric C Thompson; |
Economic Review |
| Abstract: Deregulation of electricity generation will offer consumers many advantages, including dramatically lower energy costs. From a macroeconomic viewpoint, electricity purchases are interesting because they are a major component of consumers' budgets (and thus of the CPI) and a large factor of production for many companies. This raises the possibility that electricity deregulation could create a substantial shock to the overall price trend, comparable to other recent energy shocks. The benefits to consumers and producers identified in this article strongly support legislative efforts to increase competition in one of the last strongholds of regulated profits.
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| Does Wage Inflation Cause Price Inflation?
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April, 2000 |
Federal Reserve Bank of Cleveland, Policy Discussion Paper, no. 1 |
Mark E Schweitzer; Gregory Hess; |
Policy Discussion Papers |
| Abstract: Recent attention has turned from unemployment levels to wage growth as an indicator of imminent inflation. But is there any evidence to support the assumption that increased wages cause inflation? This study updates and expands earlier research into this question and finds little support for the view that higher wages cause higher prices. On the contrary, the authors find more evidence that higher prices lead to wage growth.
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| Measuring Total Employment: Are Few Million Workers Important?
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June, 1999 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Jennifer K Ransom; |
Economic Commentary |
| Abstract: How can we measure total employment in the economy? The Bureau of Labor Statistics provides two different—and sometimes contradictory—measures of this key indicator. During the 1990s, the gap between the two measures has widened to more than five million workers. This Economic Commentary examines the current discrepancy between the two measures of employment and explores its significance in interpreting our economy’s health.
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| Will Increasing the Minimum Wage Help the Poor?
|
February, 1999 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; David Neumark; William Wascher; |
Economic Commentary |
| Abstract: If enacted, the Fair Minimum Wage Act of 1999 would raise the minimum wage an additional dollar over the next two years. But does the minimum wage really benefit the low-income families it purports to help?
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| The effects of minimum wages throughout the wage distribution
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January, 1999 |
Federal Reserve Bank of Cleveland, Working Paper no. 9919 |
Mark E Schweitzer; David Neumark; William Wascher; |
Working Papers |
| Abstract: Workers initially earning near the minimum wage are adversely affected by minimum wage increases, while, not surprisingly, higher-wage workers are little affected. Although the pay of low-wage workers increases, their hours and employment decline, and the combined effect of these changes is a decline in earned income.
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| Firms' Wage Adjustments: A Break from the Past?
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January, 1999 |
Federal Reserve Bank of Cleveland, Working Paper no. 9908 |
Mark E Schweitzer; Erica L Groshen; |
Working Papers |
| Abstract: The paper proceeds as follows. First we describe the wage-setting process in large
firms and discuss the reasons why wage change distributions may not be neutral with
respect to inflation. Then we describe the data. The fourth section describes our main
results on the distributional effects of inflation. To test for robustness, we also consider
the impact of unemployment and changes in returns to education on wage-change
4
distributions. The fifth section investigates two policy-relevant questions: whether some
jobs tend to be the first to respond to changes in inflation, and whether wage changes in
the 1990s have deviated from historical patterns. The sixth section summarizes and
concludes.
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| Productivity gains during business cycles: what's normal?
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July, 1998 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; |
Economic Commentary |
| Abstract: Labor productivity growth is generally acknowledged to be procyclical. The author reviews the leading explanations for this, then uses two approaches to compare the time pattern of productivity gains over the business cycle. One approach describes the pattern in terms of the number of quarters of growth since the cycle's trough; the other uses knowledge about the ends of past recoveries to describe the typical pattern of productivity gains as a cycle ages.
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| Productivity measures and the "new economy"
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June, 1998 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; John B Carlson; |
Economic Commentary |
| Abstract: The U.S. economy's recent extraordinary performance has led some to claim that trend output growth is accelerating to a much higher rate than any we have experienced in a quarter century; they also maintain that the signs of productivity's acceleration have been masked by measurement problems. The authors, however, find scant evidence to support such claims.
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| Will increasing the minimum wage help the poor?
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February, 1998 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; David Neumark; William Wascher; |
Economic Commentary |
| Abstract: Minimum wages help some families to escape poverty, but employment losses associated with raising the minimum also appear to cause some families to fall into poverty. The authors' estimates suggest that on balance, the second of these effects outweighs the first; therefore, the net result of raising the minimum wage is an increase in the proportion of poor families.
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| Wage inflation and worker uncertainty
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August, 1997 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; |
Economic Commentary |
| Abstract: Compares two possible explanations of why pay increases continue to be moderate in a vigorous labor market--workers' uncertainty about their jobs and human resource managers' wage-setting behavior--and looks at how each explanation matches the evidence on the timing of inflation and wage changes.
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| Workforce composition and earnings inequality
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June, 1997 |
Federal Reserve Bank of Cleveland, Economic Review, vol. 33, no. 2, pp. 2-12 |
Mark E Schweitzer; |
Economic Review |
| Abstract: A presentation of a model that incorporates many factors simultaneously -- including education, experience, and industry choice -- to explain the growing disparity in Americans' earnings. Its main finding is that the shifting composition of the U.S. workforce is a significant and direct determinant of the widening earnings gap.
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| Identifying inflation's grease and sand effects in the labor market
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January, 1997 |
Federal Reserve Bank of Cleveland, Working Paper no. 9705 |
Mark E Schweitzer; Erica L Groshen; |
Working Papers |
| Abstract: An effort to distinguish inflation's distortionary effects from its facilitation of adjustments to shocks when wages are rigid downward. It uses the following identification strategy: Inflation-induced deviations among employers' mean wage changes represent unintended intramarket distortions (sand), while inflation-induced, interoccupational wage changes reflect adjustments that might have been prevented by nominal wage rigidity (grease).
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| Earnings, Education and Experience
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October, 1996 |
Federal Reserve Bank of Cleveland, Economic Review, vol 32, no. 4 |
Mark E Schweitzer; Peter C Rupert; Eric K Severance-Lossin; Erin Turner; |
Economic Review |
| Abstract: The value of additional education is typically measured by the increase in earnings that results. The largest gains are realized on completion of a degree, whether high school, college, or post-graduate. Failure to correctly specify an empirical earnings function can lead to substantial bias. In this article, the authors show that a common misspecification-combining college graduates with post-graduates-may bias the returns to a college education upward by as much as 12 percent.
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| State employment 1995: slowing to a recession?
|
March, 1996 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Kristin M Roberts; |
Economic Commentary |
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| Rounding in earnings data
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January, 1996 |
Federal Reserve Bank of Cleveland, Working Paper No. 9612 |
Mark E Schweitzer; Eric K Severance-Lossin; |
Working Papers |
| Abstract: Earnings data are often reported in round numbers. In fact, in the March 1995 Current
Population Survey (CPS), 71% of all full-time earnings responses are some multiple of
$1,000. Rounding is typically ignored in analyses of earnings data, which effectively
treats it as noise in the data. Our GMM estimates of a simple model of rounding indicate
that this behavior is highly systematic and correlated with the respondents? earnings level.
We find that the systematic nature of rounding can affect some commonly used statistics
based on earnings data. The statistics we investigate in this analysis are inequality summary
measures, earnings quantiles, kernel density estimates, and frequency plots of wage
adjustments. We find that rounding alters most of these statistics substantially, that is, by
more than the typical level of annual changes or reported standard errors.
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| Sectoral wage convergence: a nonparametric distributional analysis
|
January, 1996 |
Federal Reserve Bank of Cleveland, Working Paper no. 9611 |
Mark E Schweitzer; |
Working Papers |
| Abstract: The large shift of U.S. employment from goods producers to service producers has
generated concern over future income distribution, because of perceived large relative
pay differences. This paper applies a nonparametric density overlap statistic to compare
the sectors' distribution of full-time, weekly wages at all wage levels.
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| Macro- and microeconomic consequences of wage rigidity
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January, 1996 |
Federal Reserve Bank of Cleveland, Working Paper no. 9607 |
Mark E Schweitzer; Erica L Groshen; |
Working Papers |
| Abstract: An exploration of the micro- and macroeconomic theories, implications, and evidence of wage rigidity from the perspective of human resource managers and economic researchers, showing that human resource policies can subtly alter the rigidity of wages.
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| Another look at part-time employment
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February, 1995 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Max Dupuy; |
Economic Commentary |
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| Sectoral wage convergence: a nonparametric distributional analysis
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January, 1995 |
Federal Reserve Bank of Cleveland, Working Paper no. 9520 |
Mark E Schweitzer; Max Dupuy; |
Working Papers |
| Abstract: An examination of the relative shapes of the wage distribution in the U.S. goods-producing and service-producing sectors that uses a nonparametric measure of density overlap to analyze wage differences between the two sectors over time. What implications do 21st century monetary innovations bring for holdings of central bank money and standards of value? Emerging technologies such as cybercash, e-cash, and smart cards can be expected to reduce demand for central bank money, but the theoretical framework for monetary policy has not changed.
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| Looking back at slow employment growth
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August, 1994 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Kristin M Roberts; |
Economic Commentary |
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| Regional wage convergence and divergence: adjusting wages for cost-of-living differences
|
June, 1994 |
Federal Reserve Bank of Cleveland, Economic Review, vol. 30, no. 2, pp. 26-37 |
Mark E Schweitzer; Randall W Eberts; |
Economic Review |
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| Are Service-Sector Jobs Inferior?
|
February, 1994 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Max Dupuy; |
Economic Commentary |
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| The effects of inflation on wage adjustments in firm-level data: grease or sand?
|
January, 1994 |
Federal Reserve Bank of Cleveland, Working Paper no. 9418 |
Mark E Schweitzer; Erica L Groshen; |
Working Papers |
| Abstract: An analysis of whether inflation facilitates adjustments to shocks or distorts relative prices, examining the wage-setting process across a panel of occupations and employers and finding that the costs of inflation may rise more rapidly than its benefits beyond quite modest rates of increase in the price level.
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| The energy tax: who pays?
|
May, 1993 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Mark E Schweitzer; Adam D Werner; |
Economic Commentary |
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| Accounting for Earnings Inequality in a Diverse Work Force
|
January, 1993 |
Federal Reserve Bank of Cleveland, Working Paper no. 9314 |
Mark E Schweitzer; |
Working Papers |
| Abstract: A general decomposition of earnings inequality is applied to the complete full-time labor force, including minorities and women. The results confirm that education premiums were the largest observable factor in the rise in earnings inequality in the 1980s, and also reveal an offsetting reduction in the role of race- and sex-related earnings differences.
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