ERIC Number: ED435799
Record Type: RIE
Publication Date: 1999-Jul
Aggregate Effects in Local Labor Markets of Supply and Demand Shocks. Upjohn Institute Staff Working Paper No. 99-57.
Bartik, Timothy J.
A study estimated the aggregate effects of antipoverty policies on wages and unemployment of different groups. The context was one in which emphasis was on labor supply policies, such as welfare reform or job training, and not on policies to increase labor demand for the poor, such as public employment or subsidizing private employers to hire the poor. The estimates of the aggregate effects used a structural model of the labor market that described the labor supply and demand of different groups and their relationship to labor market outcomes. The structural model allowed for involuntary unemployment and was estimated using pooled time-series cross-section data, with annual observations on average values of different labor market variables for 50 states and the District of Columbia, from 1979-97. Data were derived from the Current Population Survey-Outgoing Rotation Group. Simulations suggested that forcing more disadvantaged persons into the labor market can displace many other persons from employment in the short and medium run, and increased public employment of the poor may be offset by reduced private employment of the poor in the long run. Wage subsidies to the poor or their employers had little effect on the poor's employment or market wages, although paying wage subsidies to the poor increased take-home pay. Education policies not only directly helped those educated, but also increased average earnings of less-educated groups and reduced average earnings of more-educated groups. (Appendixes include an example of simulations and parameter estimates. Contains 13 references.) (YLB)
Descriptors: Adult Education, Economic Factors, Economic Impact, Economically Disadvantaged, Employment Patterns, Employment Services, Job Training, Labor Demands, Labor Market, Labor Needs, Labor Supply, Models, Unemployment, Wages, Welfare Recipients, Welfare Reform, Welfare Services
Publications Department, W.E. Upjohn Institute for Employment Research, 300 South Westnedge Avenue, Kalamazoo, MI 49007 ($3). Tel: 616-343-7310.
Publication Type: Reports - Evaluative
Education Level: N/A
Sponsor: Rockefeller Foundation, New York, NY.; Russell Sage Foundation, New York, NY.
Authoring Institution: Upjohn (W.E.) Inst. for Employment Research, Kalamazoo, MI.