The US Labor Market

Public policy is rightly concerned with fostering a vibrant labor market in which individuals can earn their own success, realize their potential, and enjoy the dignity that hard work provides. But public policy faces serious challenges in today's labor market: low workforce participation and high unemployment among many Americans, technological innovation, globalization, persistent poverty, education and training, and public policy's unintended consequences are just a few. Which characteristics of today's labor market demand attention? Which are simply realities to be accepted? And how should policy respond? Asking the right questions is a good place to start, and this volume asks some of the most important: Should we be concerned about economic mobility and inequality? What is the relationship between productivity and compensation, immigrants and native workers, public policy and labor supply, and corporate taxes and employment? How can we make work pay, and build workers' skills? What can be done for workers who are difficult to employ? A competitive market in ideas is the best mechanism to understand the world, and to find the best solutions to problems. This volume makes manifest that proposition, answering each of the questions outlined above-twice, with two papers authored by economists. Each paper offers a different point of view and a different emphasis. This volume will inform policy for many years to come, helping to move policy in a direction that will better allow all of us to contribute, and to lead lives of fulfillment through work.

Contents Acknowledgments vii Preface ixMichael R. Strain I. Should We Be Concerned About the State ofEconomic Mobility in the US? 1 How Much Social Mobility? More, but NotWithout Other Things 2Miles Corak What Should Be Done to IncreaseIntergenerational Mobility in the US? 14Bhash Mazumder II. Is Productivity the Most Important Determinantof Compensation? 29 Marginally True: The Connection of Pay toProductivity 30Dean Baker Does Productivity Still Determine WorkerCompensation? Domestic and InternationalEvidence 42Robert Z. Lawrence III. How Can We Build Workers' Skills? 63 Is "Skill" a Topic for Policy? 64Peter Cappelli Worker Skills and the US Labor Market:What Role Should Policy Play? 77Harry J. Holzer IV. How Can We Make Work Pay? 95 Supporting Work, Inclusion, and MassProsperity 96Glenn Hubbard What Do We Really Know About theEmployment Effects of the Minimum Wage? 106Justin Wolfers V. Do Public Policies That Reduce the Reward toWork Significantly Diminish Labor Supply? 121 The US Safety Net and Work Incentives:Is There a Problem? What Should Be Done? 122Robert A. Moffitt The Rise of Employment Taxation 138Casey B. Mulligan VI. What Are the Economic Effects of Lesser-SkilledImmigration on Lesser-Skilled Native Workers? 151 Low-Skill Immigration 152George J. Borjas Less-Skilled Immigration: Economic Effectsand Policy Responses 166Pia M. Orrenius and Madeline ZavodnyVII. Would Cutting the Corporate Tax RateSignificantly Increase Jobs in the US? 179 Would Reducing the US Corporate Tax RateIncrease Employment in the United States? 180Martin Feldstein Business Tax Reform and the Labor Market 187Jason Furman and Betsey Stevenson VIII. What Should We Do About Those AmericansWho Are Especially Difficult to Employ? 203 Making Work a Priority for Working-AgePeople with Disabilities 204Richard V. Burkhauser and Mary C. Daly How to Help the Hard-to-Employ: A Focus onYoung Men, Especially the Ex-Incarcerated 221Timothy M. Smeeding IX. Should We Be Concerned About IncomeInequality? 247 Is the Concept of Inequality the Best Way ofThinking About Our Economic Problems? 248Tyler Cowen Should We Be Concerned About IncomeInequality in the United States? 264Melissa S. Kearney About the Authors 281