David Levine                                                                                                Industrial Relations

January 19, 2005                                                                                               PHDBA 259C




Class: Tuesday 9:30 to 12:30 in F678 Haas.

Professer: You can reach me at my office, F671 Haas, phone 642-1697, fax 643-1420, email Levine@haas.berkeley.edu

Office hours: are by appointment or just drop by.

Grading: is based 30% on class participation, 10% on several class presentations, and 60% on an empirical project. Class participation is required. Most presentations should use a one-page handout.

Problem sets: are due Wednesdays at 3:00 p.m. I will not grade them, but records of your turning them in will be used to decide close grading decisions. You are encouraged to work together on the homework.

Section: Students should set up a section meeting to go over the material.

Project: The project applies the theories and tools of this class to a situation that interests you. You are invited to work with a classmate. The ideal length of the project is 15 to 20 double-spaced pages plus tables and references. Projects should include a theoretical framework and relevant data. Everyone must hand in a tentative abstract with the question to be addressed and with references to one or more data sources before Spring Break. The project is due without exception on May 12. More on the assignment is in the handout.

Mailing list: If you have not already received email from the class email alias phdba259c-1, sign up for it by the end of the week. To do this, visit www.haas.berkeley.edu/majordomo. Readings and messages will be emailed to you; you are expected to read your email several times a week.

The class web page: is at http://faculty.haas.berkeley.edu/levine/ba254c/ (I realize the class # is an anachronism.)

About you: Please email me or bring to the next class a page with your name, career background, phone number, where you are from, and interests.

Lunch: I would be pleased to have lunch on Thursdays after class with anyone who is free.

Reading List

Each week there are assigned (marked with an *) readings.

Others readings and questions are unmarked. A single student will do each unstarred reading and answer each question. That student will then present the reading and/or question to the group. The notes How to Present in Class should help you prepare brief presentations of each paper.

Each week also has homework questions. You are encouraged to work on homework questions in groups, and it is fine to hand in collective solutions. For collective solutions, if a question asks for two reasons for some fact, the collective answer should typically include more than two reasons. Please email me answers to the questions by Wednesday at 3:00 p.m.

Required Book

* The Economic Nature of the Firm: A Reader, edited by Louis Putterman and Randall S. Kroszner, Cambridge University Press, second edition, 1996.

Recommended Books

Ronald Ehrenberg and Robert Smith, Modern Labor Economics, Eighth Edition, AddisionWesley. An advanced undergraduate labor economics text such as this one provides crucial background reading. If you have not taken a previous course in graduate or undergraduate labor economics, I am assuming you are reading this or a similar textbook’s chapters for each topic.

Paul Milgrom and John Roberts, Economics, Organization and Management, Prentice Hall, 1992. This is an excellent introductory text on the economics of organizations.

I. Introduction to Industrial Relations and Labor Economics


Reading list (this document).

Paper assignment

How to Present in Class

II. Wages

A. Facts and Anomalies

* Lawrence Katz and David H. Autor, “Changes in the Wage Structure and Earnings Inequality,” chapter 26 in vol. 3A, Handbook of Labor Economics, 1999.

* Richard Thaler, Anomalies: Inter-Industry Wage Differences," Journal of Economic Perspectives, Spring 1989, pp 181-194.

* 1. What are two characteristics of a person, an establishment, and an occupation that predict high wages? Describe two theories (in 2 sentences per theory) of why each characteristic is a good predictor. Provide one fact or test that would support the importance of each theory.

* 2. What two (or more) of these characteristics are more important now than 25 years ago? Why do you think these factors have risen in importance?

* 3. What are three reasons that inequality has risen in the U.S. in the last generation? How would you test the importance of each potential explanation?

Background: Ehrenberg and Smith, Ch. 1 and 2.  Be sure you can do ch. 1 appendix problems 1-3 (p. 14) and ch. 2 review problems 1, 6, 9, and 10 (pp. 54-55).

B. Compensating differences

“It all evens out in the end.”

* “Compensating Differences," handout.

* Brown, Charles, "Equalizing Differences in Labor Markets," Quarterly Journal of Economics, 85, 1980. Stable URL: http://links.jstor.org/sici?sici=0033-5533%28198002%2994%3A1%3C113%3AEDITLM%3E2.0.CO%3B2-T

Background: “Compensating Wage Differentials and Labor Markets,” ch. 8 in Ehrenberg and Smith.  Make sure you can do the review problems 4 and 6 (the latter answer should use the concept of adverse selection).

* 1. Under what assumptions would safety regulation harm those in unsafe jobs?

* 2. Why might we not detect compensating differences, even if they are present?

  3. What is the main advantage of longitudinal vs. cross-sectional tests of compensating differences? What, if any, are the problems of longitudinal data?

C. Human Capital

“You earn what you learn”

* “Regression, Causality and the Returns to Education, “ handout. 

* Becker, Gary , Human Capital, 2nd ed., University of Chicago Press, 1975, pp. 15-44.

David Card, “The Causal Effect of Education on Earnings,” chapter 30 in The Handbook of Labor Economics, volume IIIA, 1999, pp. 1801-1859. Esp. sections 3.3 to 3.5.

Joshua D. Angrist and Alan B. Krueger, “Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments,” Journal of Economic Perspectives, Vol. 15, No. 4, Fall 2001: 69-87. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28200123%2915%3A4%3C69%3AIVATSF%3E2.0.CO%3B2-3

Background: “Investments in Human Capital: Education and Training,” ch. 9 in Ehrenberg and Smith.

* 1. In Becker’s theory, who pays for general human capital? What are examples in reality?

* 2. In Becker’s theory, who pays for firm-specific general capital? What are examples?

  3. What conditions might lead to under-investment in general human capital?

  4. What conditions might lead to under-investment in firm-specific human capital?

D. Signaling, Adverse Selection, and Job Matching

“It’s not how you feel it’s how you look, and you look marvelous.”

-- Models when people differ in hard-to-observe ways.

* “Adverse selection,” “Signaling,” and “Recruiting,” in Paul Milgrom and John Roberts, Economics, Organization and Management, Prentice Hall 1992: 149-159, 339-344.

* Imperfect Information Problem Set , handout.

Spence, Michael, "Job Market Signaling," Quarterly Journal of Economics , August, 1973: 355-79. Stable URL: http://links.jstor.org/sici?sici=0033-5533%28197308%2987%3A3%3C355%3AJMS%3E2.0.CO%3B2-3

Henry S. Farber and Robert Gibbons, "Learning and Wage Dynamics," Quarterly Journal of Economics, 1996, Nov, 111, 4: 1007‑1047.  Stable URL: http://links.jstor.org/sici?sici=0033-5533%28199611%29111%3A4%3C1007%3ALAWD%3E2.0.CO%3B2-U

E. Incentive theories

“You get what you sweat.”

* Roy, Donald, "Quota Restriction and Goldbricking in a Machine Shop," American Journal of Sociology, 57, March 1952: 426-442.

* Robert Gibbons and Michael Waldman. (1999) “Careers in organizations: theory and evidence,” in the Handbook of Labor Economics, Vol. 3B, O. Ashenfelter and D. Card, eds. Amsterdam : Elsevier Science. See esp. sections 2.3 to 4.3 (pp. 2384-2420).

Hideo Owan, Barton H. Hamilton and Jack A. Nickerson, “Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation,” with Journal of Political Economy, v111, n3, 465-497, June 2003.


Lazear, Edward, and Sherwin Rosen, "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, 89, October 1981, pp. 841-864. Stable URL: http://links.jstor.org/sici?sici=0022-3808%28198110%2989%3A5%3C841%3ARTAOLC%3E2.0.CO%3B2-E

Dye, Ronald A., "The Trouble with Tournaments," Economic Inquiry, 22, 1 January, 1984: 147-149.

Lazear, Edward, "Why is there Mandatory Retirement?" Journal of Political Economy, 87, 1979, pp. 1261-1264. Stable URL: http://links.jstor.org/sici?sici=0022-3808%28197912%2987%3A6%3C1261%3AWITMR%3E2.0.CO%3B2-C

Mars, Gerald, Cheats at Work, George, Allen, and Unwin, London , 1982. [Each student takes one chapter.]

* 1. What are the potential beneficial effects of piece rates on incentives and selection?

* 2. What are four reasons employers do not always pay piece rates?

* 3. What are two problems of piece rates that tournaments might solve?

* 4. What are two new problems tournaments create?

  5. What are two common processes in organizations that work somewhat like tournaments? Is there any evidence of the theoretical advantages and disadvantages of tournaments?

  6. Where are two settings other than piece rates where principals must set output targets (perhaps implicitly) but agents are better informed? Do you have any evidence (perhaps anecdotal) that agents restrict output? If so, how do agents enforce the agreement? If not, why not?

F. Rent-sharing and conflict theories of wages

“You make what you take.”

Assar Lindbeck; Dennis J. Snower Insiders versus Outsiders  The Journal of Economic Perspectives, Vol. 15, No. 1. (Winter, 2001), pp. 165-188. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28200124%2915%3A1%3C165%3AIVO%3E2.0.CO%3B2-P

Bertrand, Marianne, and Sendhil Mullainathan, “Is There Discretion in Wage Setting? A Test Using Takeover Legislation,” RAND Journal of Economics, Autumn 1999 v30 i3 p535(2). Stable URL: http://links.jstor.org/sici?sici=0741-6261%28199923%2930%3A3%3C535%3AITDIWS%3E2.0.CO%3B2-C

* 1. What are three tactics that employees can individually do to increase their bargaining power? What are two potential employer responses?

* 2. What are two tactics that a work group can do to increase their bargaining power? What are two potential employer responses?

* 3. What are two tactics that employees can do as an occupational group in a firm to increase their bargaining power?

* 4. What are two tactics that employees can do as a class nationally to increase their bargaining power? What are two potential employer responses?

* 5. What are three characteristics of employee groups (workgroups, within an employer, or within an occupation) that increases their cohesiveness?  What are two potential employer responses?

* 6. What are three factors that might provide an employer the ability to pay above-market wages? Which of these factors are persistent, and which erode over time?

G. Efficiency Wage Theories and Unemployment

“Employers get what they pay for.”

* Katz, Larry, "Efficiency Wage Theories: A Partial Evaluation," in S. Fischer ed., NBER Macroeconomics Annual, MIT Press, Cambridge MA , 1986.

* Levine, David I., "What Do Wages Buy?" Administrative Science Quarterly , 38, 3, September, 1993, pp. 462-483.  Stable URL: http://links.jstor.org/sici?sici=0001-8392%28199309%2938%3A3%3C462%3AWDWB%3E2.0.CO%3B2-D

Holzer, Harry, "Wages, Employer Costs, and Employee Performance in the Firm," Industrial and Labor Relations Review, 43, 3, February 1990, pp. 146-164. Stable URL: http://links.jstor.org/sici?sici=0019-7939%28199002%2943%3A3%3C147S%3AWECAEP%3E2.0.CO%3B2-Y

* 1. What are three reasons that employers might not cut wages when there is a queue of unemployed workers of observably similar skills who are willing to work at a lower wage?

  2. What are two pieces of evidence that these theories might hold?

  3. What is a weakness with each form of evidence, so that employers might actually just be paying for high skills or poor working conditions?

H. Fairness Theories

“You don’t make money when you treat people funny.”

* “Labor contracts as partial gift exchange,” George Akerlof; [in Putterman & Kroszner ]

* Levine, David I., "Fairness, Markets and Ability to Pay: Evidence from Compensation Executives," American Economic Review, 83, 5, December 1993, pp. 1241-1259. Stable URL: http://links.jstor.org/sici?sici=0002-8282%28199312%2983%3A5%3C1241%3AFMAATP%3E2.0.CO%3B2-8

* Doeringer, Peter, and Michael Piore, Internal Labor Markets: ch. 4.

Fehr, Ernst, and Simon Gächter. 2000. “Fairness and Retaliation: The Economics of Reciprocity.” Journal of Economic Perspectives 14: 159-81. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28200022%2914%3A3%3C159%3AFARTEO%3E2.0.CO%3B2-3

* 1. What are two reasons most large companies administer pay with complex structures based on job analysis and job evaluation, instead of just paying market wages?

  2. What are three factors that influence which reference group an employee considers relevant?

  3. What are two ways organizations might attempt to manipulate employees’ choice of salient reference group?


At the end of this section you should be able to answer a question such as:

What are three theories of why wages (Y) differ by industry (X)? How might you shed light on the relative validity of these theories? How would your answer change for other outcomes (Y) such as safety, promotions, or job satisfaction? How would your answer change for other X’s such as:

How does your answer change when you consider the endogeneity of many of these factors?

III. Economic Theories of Organization

Most of the readings in this section are found in The Economic Nature of the Firm, edited by Louis Putterman and Randall Krosner, Cambridge University Press, 2nd edn, 1996.

A. Why are there Firms?

* Putterman, Louis and Randall Krosner, "Introduction," pages 1-34, The Economic Nature of the Firm.

* Alchian, Armen A. and Demsetz, Harold, "Production, Information Costs, and Economic Organization," American Economic Review, Dec. 1972, 62: 777‑95. [inPutterman & Kroszner]

Raghuram G. Rajan, Luigi Zingales, “Power in a Theory of the Firm,” Quarterly Journal of Economics, Vol. 113, no. 2 (May 1998): 387-432.  Stable URL: http://links.jstor.org/sici?sici=0033-5533%28199805%29113%3A2%3C387%3APIATOT%3E2.0.CO%3B2-C

Hirschman, Albert, Exit Voice, and Loyalty, Harvard University Press, Cambridge MA, 1970.

From Coase, Ronald, "The Nature of the Firm," Economica, 4, 1937. [in Putterman and Kroszner]

* 1. What are three reasons why firms exist?

* 2. What are two arguments why organizations usually reach (near to) efficiency?

* 3. What are two arguments why organizations often do not reach efficiency?

  4. What are two reasons capital almost always hires labor, instead of workers renting capital?

B. Internal Labor Markets

* Doeringer, Peter B., and Michael Piore Internal Labor Markets and Manpower Analysis, Heath, Lexington, MA , 1971, pp. 1-63.

* Ronald Clark, The Japanese Company, 140-179.

David Neumark, “Changes in Job Stability and Job Security,” ch. 1 in On the Job: Is Long-term Employment a Thing of the Past? Sage, NY, 2000.

* 1. How would you know an internal labor market if you saw one?

* 2. What are four reasons for the presence of internal labor markets?

* 3. Some claim internal labor markets are declining. What evidence should we examine to understand whether this claim is true?

C. Human Resource Policies and Firm Performance

* Casey Ichniowski, Thomas Kochan, David I. Levine, Craig Olson, and George Strauss, "What Works at Work: A Critical Review," Industrial Relations, 35, 3, Summer , 1996, pp. 299-333.

* Casey Ichniowski, Kathryn Shaw, and Giovanna Prennushi, “The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines,” American Economic Review , June 1997.

* “Measuring Organizational Performance,” handout.

* 1. What is a good study design to determine the effects of a human resource policy on performance? Pick a real or hypothetical sample, human resource policy, performance measure, and method of analysis.

* 2. Why might there be bundles of human resource policies? How would one test for their importance?

At the end of this section you should be able to answer a question such as:

·    What are three theories of why productivity (Y) differs by whether profitsharing is present (X)?

·    How might you shed light on the relative validity of these theories?

·    How would your answer change for other outcomes such as stock market value, customer satisfaction, or employment stability?

How would you answer change for other X’s & interactions:

Also, how and why do the endogenous management practices relate to the more exogenous factors:

· Management and HR policies = f(market and other environmental characteristics) ?

D. Input markets and the hold-up problem

* Ronald Coase, From “The Nature of the Firm,” [in Putterman & Kroszner ]

* Benjamin Klein, Robert Crawford, and Armen Alchian, “Vertical integration, appropriable rents, and the competitive contracting process,” Journal of Law and Economics, 21, 978: 297-326. [in Putterman & Kroszner]

* Oliver Williamson, “The Governance of Contractual Relations.” [in Putterman & Kroszner]

* David Teece, “Towards an economic theory of the multiproduct firm,” [in Putterman & Kroszner]

Susan Helper and David I. Levine, "Long Term Supplier Relations and Product Market Structure," Journal of Law Economics and Organization, 8, 3, October, 1992, pp. 561-581. Stable URL: http://links.jstor.org/sici?sici=8756-6222%28199210%298%3A3%3C561%3ALSRAPS%3E2.0.CO%3B2-G

Oliver Williamson. "The Economics of Organization: The Transaction Cost Approach." American Journal of Sociology. 87(1981):548-577.

Monteverde, Kirk, and David J. Teece. (1982). "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics 13: 206-213.  Stable URL: http://links.jstor.org/sici?sici=0361-915X%28198221%2913%3A1%3C206%3ASSCAVI%3E2.0.CO%3B2-4

Helper, Susan, John Paul MacDuffie, and Charles Sabel. (2000). "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change 9(3): 443-488.

* 1. What are the main determinants of whether a company makes (vertical integration) or buys inputs?

* 2. What are 3 factors that shift the relative cost of making, buying from an arms’-length supplier, or buying from a supplier with a long-term relationship? How does having a network of relationships with others affect these trade-offs? What are three attributes of nations, time periods, legal environments, or other environmental shifters that affect the trade-off among these choices?

  3. How would you test one or more theory of supplier relations?

Thought questions for everyone: How does the rise of the Internet affect the make-or-buy decision? How does the Internet affect the choice to have arms’-length vs. long-term supplier relations?

E. Capital markets and agency problems

* Jensen, Michael and Meckling, William, "Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure," Journal of Financial Economics, October, 1976, 3: 305-360. Excerpt in Putterman & Krozner .

* Henry Manne, from “Mergers and the Market for corporate control,” in Putterman & Kroszner.

* Eugene Fama, “Agency problems and the theory of the firm,” in Putterman & Kroszner.

* Milgrom, Paul and John Roberts, “Financial Structure, Ownership, and Corporate Control,” ch. 15 in Economics, Organization and Management, pp. 482-521.

Marianne Bertrand, Sendhil Mullainathan, “Are CEOs rewarded for luck? The ones without principals are, Quarterly Journal of Economics; Cambridge ; 116, 3, Aug 2001: 901-932.

Johnson, W. Bruce; Magee, Robert P.; Nagarajan , Nandu J.; Newman, Harry A.; Schwert, G. William. An Analysis of the Stock Price Reaction to Sudden Executive Deaths: Implications for the Managerial Labor Market/Comment Journal of Accounting and Economics, Apr 1985, 7(1-3): 151-178.


For this homework, each student should each pick one incentive mechanism.

* 1. How important is each form of oversight or incentive in the U.S. ? Conversely, to what extent are executives free agents, able to make decisions for their own goals or benefit?

* 2. What are the advantages and disadvantages of each form of oversight or incentive?

* 3. What factors shift the relative importance of fear of bankruptcy, fear of replacement, fear of takeover, hope for high future pay, hope for high status, social norms, and hope for appreciation of assets (as opposed to independence and opportunism) in shaping executive behavior? How do these factors vary among nations, time periods, legal environments, technology or product characteristics etc.?

* 4. What possibilities do executives have to minimize the effectiveness of each form of monitoring? How does your answer depend on the specifics of the firm or the wider environment?

* 5. How would you test one or more theory of executive pay, capital structure, and/or executive behavior?

IV. Unions and Collective Bargaining

* Freeman and Medoff, What Do Unions Do?, Basic, 1984, chapters1 and 11.

Background: “Unions and the Labor Market,” ch. 13 in Ehrenberg and Smith.

A. Modeling Union Behavior

* Henry S. Farber “The Analysis of Union Behavior,” Handbook of Labor Economics Volume 2, Chapter 18.

  1. What are three factors that influence union leaders’ emphasis on wage growth vs. employment stability or growth (that is, new organizing) vs. other goals? How would you show the importance of one or more of these factors?

  2. What are two factors suggested by OB theories that might influence union behavior? How would you test one of these theories?

B. The Economic Effects of Unions

* Freeman, Richard, "The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits and Separations," Quarterly Journal of Economics , June 1980: 643‑672.

Richard Freeman, "Longitudinal Analyses of the Effects of Trade Unions" Journal of Labor Economics, January 1984.

Clark, Kim, “ Unionization and Productivity: Micro-Econometric Evidence ,” The Quarterly Journal of Economics, Vol. 95, No. 4. (Dec., 1980), pp. 613-639.

David G. Blanchflower, Alex Bryson, “What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?” NBER Working Paper 9973, 2003. http://papers.nber.org/papers/w9973.pdf

* 1. Why is it difficult to determine the effect of unions on wages?

* 2. What are three reasons unions might increase productivity?

* 3. What are two reasons unions might decrease productivity?

* 4. What are three aspects of the company, union, workforce, or organizational environment that might lead you to expect unions to decrease vs. increase productivity?

C. Growth and Decline

* Dickens, William T., and Jonathan Leonard, "Accounting for the Decline in Union Membership" Industrial and Labor Relations Review, April 1985, pp. 323-334.  Stable URL: http://links.jstor.org/sici?sici=0019-7939%28198504%2938%3A3%3C323%3AAFTDIU%3E2.0.CO%3B2-Y

* 1. What are three hypotheses for union decline in the U.S. What evidence is consistent with each of them?

V. Discrimination

A. Measuring Discrimination and Reverse Discrimination

* Joseph Altonji and Rebecca Blank, “Race and Gender in the Labor Market,” (skip 2.4, skim 3.5, skip 4.2, 5 and 6). Chapter 48 in Handbook of Labor Economics , v. 3C, 1999.

* David I. Levine, " Overt Discrimination by Multinational Firms," Industrial Relations, 37, 2, April 1998, pp. 121-125.  http://faculty.haas.berkeley.edu/levine/discedit2.html

* Jonathan Leonard and David I. Levine, “ Diversity, Discrimination, and Performance.” Working paper, 2002.  http://faculty.haas.berkeley.edu/levine/papers/Diversity%20and%20Performance%201-7-04.doc

“Gender Differences in Pay” Francine D. Blau and Lawrence M. Kahn, Journal of Economic Perspectives Vol. 14, No. 4, Fall 2000: 75-100 http://www.ilr.cornell.edu/extension/files/20010919034808-pub645.pdf

Hellerstein, Judith K; Neumark, David; Troske, Kenneth R. “Wages, productivity, and worker characteristics: Evidence from plant-level production functions and wage equations,” Journal of Labor Economics , Jul 1999, 17(3): 409-446. Stable URL: http://links.jstor.org/sici?sici=0734-306X%28199907%2917%3A3%3C409%3AWPAWCE%3E2.0.CO%3B2-%23

Groshen, Erica, "The Structure of the Female Male Wage Differential ‑ Is it Who You Are, What You Do, or Where You Work," Journal of Human Resources, 1991 Summer, V. 26 N. 3:457‑472. Stable URL: http://links.jstor.org/sici?sici=0022-166X%28199122%2926%3A3%3C457%3ATSOTFW%3E2.0.CO%3B2-I

Jonathan Leonard and David I. Levine, “The Effect of Diversity on Turnover: A Very Large Case Study,” working paper, 2002. http://faculty.haas.berkeley.edu/levine/Papers/div52.doc

Darity , William A., Jr., and Patrick L. Mason, “Evidence on Discrimination in Employment,” Journal of Economic Perspectives, 12, 2, Spring 1998: 63-90. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28199821%2912%3A2%3C63%3AEODIEC%3E2.0.CO%3B2-R

Heckman, James, “Detecting Discrimination,” Journal of Economic Perspectives , 12, 2, Spring 1998: 101-116. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28199821%2912%3A2%3C101%3ADD%3E2.0.CO%3B2-I

(For this homework, each student takes one method.)

* 1. How can one detect discrimination on the job? What are good and bad features of:

· Wage equations;

· Field experiments with matched testers applying for a job;

· Laboratory experiments such as simulated hiring decisions based on resumes;

· Surveys of self-reported discriminatory attitudes;

· Surveys of self-reported victimization of discrimination;

· Complaints to anti-discrimination enforcers such as company equal opportunity offices, the EEOC, or the courts;

· Discriminatory want ads or other aspects of the formal hiring process;

· Using customer buying patterns (that is, prices or quantities) to detect customer discrimination;

· Using employee behaviors such as quitting to detect co-worker discrimination;

· Any other method?

* 2. What are the results of each method?

  3. What are human capital theory explanations of the racial and gender wage gaps in the U.S. ?

Background: Ehrenberg and Smith, “Measured and Unmeasured Sources of Earnings Differences,” pp. 379-393.

B. Theory

* “Gender, Race, and Ethnicity in the Labor Market,” ch. 12 in Ehrenberg and Smith

Lundberg, Shelly and Richard Startz, “Private Discrimination and Social Intervention in Competitive Labor Markets,” American Economic Review, 73, 3, June 1993: 340-7. Stable URL: http://links.jstor.org/sici?sici=0002-8282%28198306%2973%3A3%3C340%3APDASII%3E2.0.CO%3B2-6

Rosabeth Moss Kanter, Men and Women of the Corporation, ch. 8.

* 1. How can one differentiate employer discrimination, mistaken stereotypes, customer discrimination, and employee discrimination?

* 2. In theory, which of these forms of discrimination will market forces erode?

* 3. Provide two examples of market forces breaking down those forms of discrimination.

  4. Why might statistical discrimination persist?

  5. What do psychology & micro-OB tell us about persistent stereotypes that could lead to persistent discrimination? Compare and contrast stereotypes with statistical discrimination.

  6. What do sociology & macro-OB tell us about norms concerning sex & race roles that could lead to persistent discrimination?

Background: Ehrenberg and Smith, “Theories of Market Discrimination,” 394-407.

Some Useful Links

Some advice on writing

Links to Libraries, etc.

Links to Disciplinary Indices

·        Sociology

Socioweb Web index

U. of Chicago grad students’s summaries of articles on Formal Organization

·        Psychology

Links to Social Psychology Topics

Work and Organizational Psychology (Division 1 of the IAAP)

·        Economics

Resources for Economists on the Internet

·        Human Resource Management

Internet resources on human resource management

·        Employees’ perspectives

F***ked Company

·        Industrial Relations

Guide to Labor Oriented Internet Resources (Maintained by IIR)

·        Management

Academy of Management

·        Humor

The Dilbert Zone

Economist Jokes

This page is maintained by David I. Levine. Send suggestions to levine@haas.berkeley.edu