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At Home and Abroad: U. S. Labor-Market Performance in International Perspective

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Overview

Throughout the latter part of the 20th century, the U.S. labor market performed differently than the labor markets of the world's other advanced industrialized societies. In the early 1970s, the United States had higher unemployment rates than its Western European counterparts. But after two oil crises, rapid technological change, and globalization rocked the world's economies, unemployment fell in the United States, while increasing dramatically in other nations. At the same time, wage inequality widened more in the United States than in Europe. In At Home and Abroad, Cornell University economists Francine D. Blau and Lawrence M. Kahn examine the reasons for these striking dissimilarities between the United States and its economic allies.

Comparing countries, the authors find that governments and unions play a far greater role in the labor market in Europe than they do in the United States. It is much more difficult to lay off workers in Europe than in the United States, unemployment insurance is more generous in Europe, and many fewer Americans than Europeans are covered by collective bargaining agreements. Interventionist labor market institutions in Europe compress wages, thus contributing to the lower levels of wage inequality in the European Union than in the United States.

Using a unique blend of microeconomic and microeconomic analyses, the authors assess how these differences affect wage and unemployment levels. In a lucid narrative, they present ample evidence that, as upheavals shook the global economy, the flexible U.S. market let wages adjust so that jobs could be maintained, while more rigid European economies maintained wages at the cost of losing jobs.

By helping readers understand the relationship between different economic responses and outcomes, At Home and Abroad makes an invaluable contribution to the continuing debate about the role institutions can and should play in creating jobs and maintaining living standards.

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Editorial Reviews

Booknews
Blau and Kahn (both professors of labor economics at Cornell U.) compare the labor market performance between the United States and other Western industrialized nations. Focusing primarily on the effect of direct attempts to change market outcomes with respect to pay setting and firms' utilization of labor, they look at collective bargaining agreements and regulations of wage determination, as well as other less direct mechanisms. Economic performance of the OECD countries from the 1970s to the 1990s is related to international differences in institutions. The reasons for wage inequality in the United States are related to a lack of collective bargaining agreements, but Europe's relative lack of inequality is blamed for higher rates of aggregate unemployment. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

  • ISBN-13: 9780871540829
  • Publisher: Russell Sage Foundation
  • Publication date: 4/28/2007
  • Pages: 326
  • Product dimensions: 5.90 (w) x 8.80 (h) x 0.90 (d)

Meet the Author

FRANCINE D. BLAU is Frances Perkins Professor of Industrial and Labor Relations, and LAWRENCE M. KAHN is Professor of Labor Economics and Collective Bargaining, School of Industrial and Labor Relations, Cornell University.

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Table of Contents

About the Authors
Acknowledgments
Ch. 1 Introduction: The Labor-Market Performance of the United States in an International Context 1
Ch. 2 Labor-Market Performance: How Does Labor-Market Performance in the United States Compare to That in Other Countries? 19
Ch. 3 Labor-Market Institutions: How Do Labor-Market Institutions in the United States Compare to Those in Other Countries? 70
Ch. 4 Detecting the Effect of Institutions on Labor-Market Performance: Conceptual Issues 101
Ch. 5 Labor-Market Institutions and Unemployment: Macroeconomic Evidence 133
Ch. 6 Labor-Market Institutions, Relative Wages, and Employment: Microeconomic Evidence 168
Ch. 7 Labor-Market Institutions and the Gender Pay Gap 228
Ch. 8 Policy Implications and Future Research Directions 255
Notes 267
References 285
Index 305
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