Working Paper
Chi W, Freeman R, Li H. Adjusting to Really Big Changes: The labor Market in China, 1989-2009. Working Paper.Abstract

China's emerging labor market was buffeted by changes in demand and supply and institutional changes in the last two decades. Using the Chinese Urban Household Survey data from 1989 to 2009, our study shows that the market responded with substantial changes in the structure of wages and in employment and types of jobs that workers obtained that mirrors the adjustments found in labor markets in advanced economies. However, the one place where the Chinese labor market appears to diverge from the labor markets in advanced countries is the rapid convergence in earnings and occupational positions of cohorts who entered the job market under more or less favorable conditions. On this dimension, China's labor market seems more flexible than those in other countries. Three related factors may explain this pattern: (1) the rapid growth of China's economy; (2) the high rate of employee turnover; (3) the relative weakness of internal labor markets in China. Bottom line, the Chinese labor market has responded about as well as one could expect to the changes in the demand and supply factors and institutional shocks in this critical period in Chinese economic history.

Salzman H. U.S. Engineering in a Global Economy. (Freeman RB). Chicago, IL: University of Chicago Press for NBER; Forthcoming.Abstract

The labor market for specialists in STEM jobs is a complex and controversial topic for economists, labor market researchers, and policy makers. U.S. Engineering in a Global Economy continues a long tradition of research by the NBER into both the supply and demand sides of the engineering job market, while also expanding the scope beyond the United States to consider the practice of engineering and innovation in a global economy. Contributors draw on the most up-to-date data on engineering education and practice to explore the challenges of developing an engineering workforce that can contribute substantially to the innovation driving modern economic growth. These authors highlight what economists and labor market researchers have learned and identify issues that might be addressed in future research, including a labor market that is not optimally employing STEM qualified workers in their field of training, and the ways in which US students, firms, and educational institutions are responding to increased competition in the global economy.


This book examines both the demand and supply side of the engineering job market in the United States and the practice of engineering and innovation in a global economy. The authors provide assessments of engineering education, engineering practice, and careers which can inform science and engineering educational institutions, funding agencies, and policy makers about the challenges facing the U.S. in developing its engineering workforce in the global economy.
Barth E, Davis JC, Freeman RB, Wang A. "The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work,”. In: Engineering in a Global Economy. Chicago : University of Chicago Press ; Forthcoming.Abstract

This paper uses linked establishment-firm-employee data to examine the relationship between the scientists and engineers proportion (SEP) of employment, and productivity and labor earnings. We show that: (1) most scientists and engineers in industry are employed in establishments producing goods or services, and do not perform research and development (R&D); (2) productivity is higher in manufacturing establishments with higher SEP, and increases with increases in SEP; (3) employee earnings are higher in manufacturing establishments with higher SEP, and increase substantially for employees who move to establishments with higher SEP, but only modestly for employees within an establishment when SEP increases in the establishment. The results suggest that the work of scientists and engineers in goods and services producing establishments is an important pathway for increasing productivity and earnings, separate and distinct from the work of scientists and engineers who perform R&D.

Barth E, Davis J, Freeman RB. "Augmenting the Human Capital Earnings Equation with Measures of Where People Work," JOLE 36:S1 (2018), Special Issue on Firm Heterogeneity and Income Inequality. . Forthcoming;36 (S1).Abstract

We augment standard log earnings eq1uations for workers in US manufacturing with variables reflecting measured and unmeasured attributes of their employer. Using panel employee-establishment data, we find that establishment-level employment, education of co-workers, capital equipment per worker, and firm-level R&D intensity affects earnings substantially. Unobserved characteristics of employers captured by employer fixed effects also contribute to the variance of log earnings, although less than unobserved characteristics of individuals captured by individual fixed effects. The observed and unobserved measures of employers mediate the effects of individual characteristics on earnings and increase earnings inequality through sorting of workers among establishments.

Doucouliagos H, Freeman RB, Laroche P. The Economics of Trade Unions: A Study of a Research Field and Its Findings. Routledge; 2017 pp. 190. Publisher's VersionAbstract

Richard B. Freeman and James L. Medoff’s now classic 1984 book What Do Unions Do? stimulated an enormous theoretical and empirical literature on the economicimpact of trade unions. Trade unions continue to be a significant feature of many labormarkets, particularly in developing countries, and issues of labor market regulationsand labor institutions remain critically important to researchers and policy makers.

The relations between unions and management can range between cooperation and conflict; unions have powerful offsetting wage and non-wage effects that economists and other social scientists have long debated. Do the benefits of unionism exceed the costs to the economy and society writ large, or do the costs exceed the benefits? The Economics of Trade Unions offers the first comprehensive review, analysis and evaluation of the empirical literature on the microeconomic effects of trade unions using the tools of meta-regression analysis to identify and quantify the economic impact of trade unions, as well as to correct research design faults, the effects of selection bias and model misspecification.

This volume makes use of a unique dataset of hundreds of empirical studies and their reported estimates of the microeconomic impact of trade unions. Written by three authors who have been at the forefront of this research field (including the co-author of the original volume, What Do Unions Do?), this book offers an overview of a subject that is of huge importance to scholars of labor economics, industrial and employee relations, and human resource management, as well as those with an interest in meta-analysis.

Blasi J, Kruse D, Freeman R. “Having a Stake: Evidence and Implications for Broad-based Employee Stock Ownership and Profit Sharing,”. Third Way | Economy [Internet]. 2017;(February ). Publisher's Version having_a_stake_broad-based_esop_and_profit-sharing_third-way_feb2017.pdf
Barth E, Davis J, Freeman RB, Kerr SP. Weathering the Great Recession: Variation in Employment Responses by Establishments and Countries. The Russell Sage Foundation Journal of the Social Sciences [Internet]. 2017;3 (3) :50-69. Publisher's VersionAbstract

This paper finds that U.S. employment changed differently relative to output in the Great Recession and recovery than in most other advanced countries or in the United States in earlier recessions. Instead of hoarding labor, U.S. firms reduced employment proportionately more than output in the Great Recession, with establishments that survived the downturn contracting jobs massively. Diverging from the aggregate pattern, U.S. manufacturers reduced employment less than output while the elasticity of employment to gross output varied widely among establishments. In the recovery, growth of employment was dominated by job creation in new establishments. The variegated responses of employment to output challenges extant models of how enterprises adjust employment over the business cycle.



weathering-great-recession_submit-wp-3_7-20-16_barth-davis-freeman-kerr_sage.pdf weathering_the_great_recession_rsf-2017v3issue3_may2017.pdf
Bryson A, Clark AE, Freeman RB, Green CP. “Shared Capitalism and Worker Wellbeing”. Labour Economics [Internet]. 2016;42 (October) :151-58. Publisher's VersionAbstract

We show that worker wellbeing is determined not only by the amount of compensation workers receive but also by how compensation is determined. While previous theoretical and empirical work has often been preoccupied with individual performance-related pay, we find that the receipt of a range of group-performance schemes (profit shares, group bonuses and share ownership) is associated with higher job satisfaction. This holds conditional on wage levels, so that pay methods are associated with greater job satisfaction in addition to that coming from higher wages. We use a variety of methods to control for unobserved individual and job-specific characteristics. We suggest that half of the share-capitalism effect is accounted for by employees reciprocating for the “gift”; we also show that share capitalism helps dampen the negative wellbeing effects of what we typically think of as “bad” aspects of job quality.

Bryson A, Freeman RB. Profit Sharing Boosts Employee Productivity and Satisfaction. [Internet]. 2016. Publisher's Version shared_capitalism_-_what_is_it_and_what_does_it_do_final-ms_hbr-dec2016.pdf
Tong Z, Chen Y, Malkawi A, Liu Z, Freeman RB. “Energy Saving Potential of Natural Ventilation in China: The Impact of Ambient Air Pollution,”. Applied Energy 179 [Internet]. 2016;179 :660-668. Publisher's VersionAbstract

Natural ventilation (NV) is a key sustainable solution for reducing the energy use in buildings, improving thermal comfort, and maintaining a healthy indoor environment. However, the energy savings and environmental benefits are affected greatly by ambient air pollution in China.  Here we estimate the NV potential of all major Chinese cities based on weather, ambient air quality, building configuration, and newly constructed square footage of office buildings in the year of 2015. In general, little NV potential is observed in northern China during the winter and southern China during the summer. Kunming located in the Southwest China is the most weather-favorable city for natural ventilation, and reveals almost zero loss due to air pollution. Building Energy Simulation (BES) is conducted to estimate the energy savings of natural ventilation in which ambient air pollution and total square footage must be taken into account. Beijing, the capital city, displays limited per-square-meter saving potential due to the unfavorable weather and air quality for natural ventilation, but its largest total square footage of office buildings makes it become the city with the greatest energy saving opportunity in China. Our analysis shows that the aggregated energy savings potential of office buildings at 35 major Chinese cities is 112 GWh in 2015, even after allowing for a 43 GWh loss due to China’s serious air pollution issue especially in North China. 8–78% of the cooling energy consumption can be potentially reduced by natural ventilation depending on local weather and air quality. The findings here provide guidelines for improving current energy and environmental policies in China, and a direction for reforming building codes.

Blasi JR, Freeman RB, Kruse DL. “Evidence: What the U.S. Research Shows about Worker Ownership,”. In: Oxford Handbook of Mutual, Co-operative and Co-Owned Business. London: UK: Oxford University Press ; 2016. evidence_what_the_research_shows_ms-final_blasi-freemann-kruse_oup-hdbk_2016.doc
Freeman RB. Who Owns the Robots Rules the World: The deeper threat of robotization. Harvard Magazine. 2016.
Freeman RB, Han E, Duke B, Madland D. “How Does Declining Unionism Affect the American Middle Class and Inter-generational Mobility?”. Federal Reserve Bank, 2015 Community Development Research Conference Publication. 2016. how_does_declining_unionism_affect_mobilty_final-ms_fed-reserve_freeman-han-madland-duke_1-25-16.pdf
Blasi J, Freeman R, Kruse D. “Do Broad-based Employee Ownership, Profit Sharing, and Stock Options Help the Best Firms Do Even Better?”. British Journal of Industrial Relations [Internet]. 2016;54 (1) :55-82. Publisher's VersionAbstract
This paper analyzes the linkages among group incentive methods of compensation
(broad-based employee ownership, profit sharing, and stock options), labor practices, worker
assessments of workplace culture, turnover, and firm performance in firms that applied to the
“100 Best Companies to Work For in America” competition from 2005 to 2007. Although
employers with good labor practices self-select into the 100 Best Companies firms sample,
which should bias the analysis against finding strong associations among modes of
compensation, labor policies, and outcomes, we find that employees in the firms that use group
incentive pay more extensively participate more in decisions, have greater information sharing,
trust supervisors more, and report a more positive workplace culture than in other companies.
The combination of group incentive pay with policies that empower employees and create a
positive workplace culture reduces voluntary turnover and increases employee intent to stay and
raises return on equity.
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Barth E, Bryson A, Davis JC, Freeman RB. It’s Where You Work: Increases in the Dispersion of Earnings across Establishments and Individuals in the United States. Journal of Labor Economics, Special Issue dedicated to Edward Lazear [Internet]. 2016;34 (S2) :S67-S97. Publisher's VersionAbstract

This paper analyzes the role of establishments in the upward trend in dispersion of earnings that has become a central topic in economic analysis and policy debate. It decomposes changes in the variance of log earnings among individuals into the part due to changes in earnings among establishments and the part due to changes in earnings within establishments. The main finding is that much of the 1970s–2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work. Our results direct attention to the role of establishment-level pay setting and economic adjustments in earnings inequality.