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In the Papers: Retail Wages, Work-Study, School Breakfast And Job Polarization

Every Monday, the National Bureau of Economic Research, a nonprofit organization made up of some of North America’s most respected economists, releases its latest batch of working papers. The papers aren’t peer-reviewed, so their conclusions are preliminary (and occasionally flat-out wrong). But they offer an early peek into some of the research that will shape economic thinking in the years ahead. Here are a few of the past two weeks’ most interesting papers:


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Title: “Do Large Modern Retailers Pay Premium Wages?”

Authors: Brianna Cardiff-Hicks, Francine Lafontaine, Kathryn Shaw

What they found: Big retailers offer better pay than small companies, especially for more educated workers.

Why it matters: In recent decades, U.S. manufacturing employment has declined steadily, while retail employment has grown. Politicians and policymakers have fretted about the replacement of “good” factory jobs with low-paying retail and restaurant jobs. But in this paper, the authors note that while manufacturing jobs do offer better wages on average than retail jobs, not all retail jobs are low paying. In particular, they highlight the rise of big, modern retail companies, such as Wal-Mart and Starbucks, which pay better, on average, than small retailers. For workers with only a high school diploma, companies with 1,000 or more employees pay 15 percent better than small companies with less than 10 workers. For workers with a college degree, pay is 25 percent higher at big companies. Big companies also employ more college graduates and offer a bigger wage premium for managers (presumably because they’re managing more people). But though the retail sector employs a lot of women, it still has a significant gender-wage gap: Even looking only at cashiers (to avoid the problem that men and women often perform different jobs), and controlling for education and other factors, women earn, on average, about 20 percent less than men.

Key quote: “In ongoing policy discussions, it is suggested that resources should go into bringing outsourced manufacturing jobs back to the U.S., or to improving the training that workers need for today’s manufacturing jobs. … There is an alternative to policies aimed at building up manufacturing. That alternative is to prepare workers to be managers in modern retail firms. A manager in the retail sector makes more per hour than an operative in manufacturing, and the need for managers in retail is greater than in manufacturing, as indicated by the higher proportions of managers in all size firms.”

Data they used: Current Population Survey, National Longitudinal Survey of Youth


Title: “Should Student Employment Be Subsidized? Conditional Counterfactuals and the Outcomes of Work-Study Participation”

Authors: Judith Scott-Clayton, Veronica Minaya

What they found: The Federal Work-Study Program improves grades and graduation rates among students who would have worked while in school anyway, and improves future employment prospects for students who would not have.

Why it matters: The Federal Work-Study Program is a major piece of the government’s student aid efforts, providing subsidized employment for 700,000 students every year, including 1 in 10 full-time freshmen. But there has been relatively little research into the program’s impact. In this paper, the authors find that six years after entering college, work-study participants are 3.2 percentage points more likely to have a bachelor’s degree and 2.4 percentage points more likely to be employed than similar students who didn’t participate in the program. But those figures are a bit misleading. About half of work-study participants probably would have worked anyway and are actually able to work less because of the program; the other half work more hours because of the program. The program affects the two groups differently. Those who would have worked anyway see their GPA rise and graduate at a higher rate, but they don’t see any gains in post-graduation employment. Those who wouldn’t have worked without the program don’t experience the same academic gains and may do worse academically, but they have better work prospects when they graduate. Lower-income students experienced especially large academic gains. Somewhat surprisingly, work-study participants also had significantly higher debt loads.

Key quote: “Groups that we would expect to have a higher likelihood of employment in the absence of the subsidy experience smaller employment impacts, and more positive subsequent impacts. These positive impacts appear driven by reductions in weekly hours and improvements in job amenities (such as on-campus location and relationship to major) for students who would have been working anyway had they not received [Federal Work-Study]. An implication is that effectiveness of Federal Work-Study funds might be increased by modifying the allocation formula — which currently provides disproportionate support to students at elite private institutions — to better target lower-income and lower-scoring students.”

Data they used: Beginning Postsecondary Students Longitudinal Study


Title: “Expanding the School Breakfast Program: Impacts on Children’s Consumption, Nutrition and Health”

Authors: Diane Whitmore Schanzenbach, Mary Zaki

What they found: Expanding access to school breakfast programs has no statistically significant impact on students’ health, attendance or test scores.

Why it matters: School lunch programs have been highly successful at addressing childhood hunger, but the related breakfast program, which launched in the 1960s, has historically reached fewer students, despite evidence that breakfast is important to childhood development and learning. In recent years, there have been efforts to expand use of the breakfast program by offering it to all students, regardless of income, and by serving breakfast in classrooms at the start of the school day, rather than requiring students to arrive early. In this paper, the authors find the in-classroom programs (but not expanded cafeteria-based programs) make children more likely to eat breakfast. But the programs don’t improve health or raise reading or math scores, and provide at most a minimal boost to attendance rates. The authors did find a small but statistically significant improvement in health for certain sub-groups, such as students in high-poverty, urban schools.

Key quote: “Our results do not indicate that the school breakfast program is not effective. There is already a reasonably high program participation rate among the control group, and a higher breakfast consumption rate among the control group, indicating that some children who do not participate in the school program eat breakfast at home. In other words, our results do not shed light on what would happen if the school breakfast program were reduced or eliminated, nor do they suggest that reducing or eliminating the school breakfast program is warranted. The results speak only to attempts to further expand the program, through universal access or [breakfast-in-classroom] programs.”

Data they used: “Data from a randomized experiment implemented in 153 schools across six school districts.”


Title: “The Micro and Macro of Disappearing Routine Jobs: A Flows Approach”

Authors: Guido Matias Cortes, Nir Jaimovich, Christopher J. Nekarda, Henry E. Siu

What they found: Fewer Americans are taking jobs that are easily automated, and more people who have such jobs are leaving the labor force entirely.

Why it matters: One of the hottest topics in economics in recent years has been “job polarization,” the idea, popularized by Massachusetts Institute of Technology economist David Autor, that technology, globalization or other forces have wiped out many middle-skill (and thus middle-wage) jobs, leaving only jobs at the top or bottom of the top or bottom of the skills spectrum. (The thesis, though very influential, hasn’t been universally accepted.) In this paper, the authors look at jobs that involve repetitive tasks that can be performed by computers or robots. Unsurprisingly, they find that fewer people are finding such jobs, and more people are leaving them. But the two trends are being driven by different groups. The decline in people entering routine jobs has been driven by women, prime-age workers (those between 25 and 54) and the more highly educated. The increase in people leaving routine jobs, on the other hand, has been driven by men and by younger workers. Moreover, the rise in people leaving such jobs has been driven by people leaving the labor force (such as to retire or to go back to school) rather than people losing jobs and becoming unemployed.

Key quote: “Our findings suggest that changes in the occupational choices of young workers play a prominent role in accounting for the decline of routine employment. A further empirical analysis of these changes and their implications for entry wages and future career progression would be an interesting direction for future research.”

Data they used: Longitudinally linked Current Population Survey data.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

Filed under In the Papers 47 posts, Wages 26, Quick Hits 24, College 13, Manufacturing 11, Nutrition 6, Retail 2, Job Polarization 1, Work-Study 1

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