Results for “age of em” 15650 found
Cousin Marriage and Democracy
In the United States consanguineous marriage (marriage between close relatives, often cousins) is frowned upon and in many states banned but it is common elsewhere in the world. Approximately 0.2% of all marriages are consanguineous in the United States but in India 26.6% marriages are consanguineous, in Saudi Arabia the figure is 38.4% and in Niger, Pakistan and Sudan a majority of marriages are consanguineous. Cousin marriage used 
to be more common in the West and was particularly common among royal families which gives some hints as to why it may sometimes be useful. Among families with titles or estates, cousin marriage will tend to keep the wealth intact–literally within the family–whereas wealth becomes more dilute more quickly with outside marriage. Cousin marriage may also increase cooperation within the extended family and help to fight off parasites.
A recent paper finds that consangunuity is strongly negatively correlated with democracy:
How might consanguinity affect democracy? Cousin marriages create extended families that
are much more closely related than is the case where such marriages are not practiced. To illustrate,
if a man’s daughter marries his brother’s son, the latter is then not only his nephew but also
his son-in-law, and any children born of that union are more genetically similar to the two grandfathers
than would be the case with non-consanguineous marriages. Following the principles of
kin selection (Hamilton, 1964) and genetic similarity theory (Rushton, 1989, 2005), the high
level of genetic similarity creates extended families with exceptionally close bonds. Kurtz succinctly
illustrates this idea in his description of Middle Eastern educational practices:If, for example, a child shows a special aptitude in school, his siblings might willingly
sacrifice their personal chances for advancement simply to support his education. Yet once
that child becomes a professional, his income will help to support his siblings, while his
prestige will enhance their marriage prospects. (Kurtz, 2002, p. 37).Such kin groupings may be extremely nepotistic and distrusting of non-family members in the
larger society. In this context, non-democratic regimes emerge as a consequence of individuals turning to reliable kinship groupings for support rather than to the state or the free market. It has
been found, for example, that societies having high levels of familism tend to have low levels of
generalized trust and civic engagement (Realo, Allik, & Greenfield, 2008), two important correlates
of democracy. Moreover, to people in closely related kin groups, individualism and the
recognition of individual rights, which are part of the cultural idiom of democracy, are perceived
as strange and counterintuitive ideological abstractions (Sailer, 2004).
By the way, cousin marriage results in an elevated risk of birth defects but on the same order as a 40 year old woman having children as opposed to a 30 year old. In other words, the risks are small relative to other accepted risks. Results do get worse when cousin marriage is prevalent over many generations.
Hat tip to Chris Blattman and Joshua Keating. FYI, Steve Sailer wrote an interesting piece on this issue.
Is there a shortage of STEM workers in the United States?
Via Matt, Hal Salzman, Daniel Kuehn, and Lindsay Lowell suggest there is no shortage because we do not observe significant wage rises for STEM workers. That’s a fact worth knowing and I am happy to praise the study in that regard. But it’s painting the basic worry into too narrow a box with its use of the word “shortage,” interpreted so literally.
The core claim is that STEM sectors will be those which produce the future social increasing returns for the economies which house them. If true (I am not trying to prejudge this), that means we should invest in both more STEM workers and more complementary inputs, whether that be particle colliders, NIH funding, the right broadband infrastructure, legalizing driverless cars, better IP law, tougher schools, or whatever. With the new, additional STEM workers, and the complementary inputs, America will (supposedly) be much better off.
To point out that the current supply of STEM workers stands in proper proportion to the other inputs suggests only that we are at a local optimum, not a global optimum. Similarly, it could have been pointed out that, before the rise of Hyundai, South Korea had just the right number of auto workers (not many) for their factories (also not many). That could have been true enough, but still investing in more auto factories and more auto workers was for Korea a very good path forward.
On top of all that, the report shows a worrying lack of concern about the notion of an economic margin. Even without boosts in the complementary inputs, more STEM workers still can be put to good use, even if there is no “shortage” today.
Here is a related post by Adam Ozimek. And Daniel Kuehn responds.
Scott Sumner on sticky wages for the unemployed
Scott writes (and Alex seconds, and here is a Woolsey response):
Nominal wages are fixed for the employed. NGDP falls 5%, and 5% of workers are laid off. Now the unemployed workers lower their wage demands by 20%. Why not by even more? Because of minimum wage laws, unemployment insurance, fear of loss of prestige, etc.
Suppose companies are not worried about workers making invidious comparisons (a big if, but I’ll grant this point to my opponents.) In the best case scenario firms lay off 4% percent of their workers and hire back the 5% who are unemployed at the same total wage bill. The excess unemployment is now 4% instead of 5%. The total unemployment rate falls from 10% to 9% (assuming 5% is the natural rate.) No big deal, we are still deep in recession. Thus wage flexibility among the unemployed doesn’t really help very much. If all employed workers accepted a 5% pay cut (or if the government ordered such a cut) and the Fed kept targeting inflation, we’d experience rapid economic growth.
Most of all, I praise Scott for being the only respondent, of many, to actually try and explain why nominal wages are sticky.
As the argument is presented, I would respond: “There is talk of fixed NGDP and talk of a fixed total wage bill. Both conditions are assuming away the possibility of an easy solution. An unemployed worker shows up, he and the employer cut a deal, a job is created, monetary velocity goes up, NGDP goes up, and the Pareto improvement occurs. To use a different terminology, velocity should be elastic with respect to available gains from trade and thus so is NGDP. More concretely, referring to the current day, employers are sitting on plenty of cash. There is nothing in the NGDP identities to prevent further hiring from that stash.”
You can read Scott’s not-easy to-summarize counter-response to a comparable comment of mine here. I do not interpret it as defending the relevance of nominal stickiness over the longer run or even as hoeing to the above passage. For instance Scott writes “the actual change in NGDP is a sufficient statistic for understanding the net effect of wage flexibility on NGDP, PLUS monetary policy on NGDP.” I believe Scott could have more accurately written”: “the actual change in NGDP is a sufficient statistic for understanding the net effect of labor market and other coordination breakdowns on NGDP, PLUS monetary policy on NGDP,” removing wage stickiness from the sentence altogether. We’re back to viewing wage stickiness as one component of GDP problems, without knowing how important wage stickiness for the unemployed is, which is precisely where we started.
A simple model of unemployment, wage stickiness and ZMP
Following up on yesterday’s discussion of wage stickiness for the unemployed and the employed (Tyler, Alex).
Imagine a farmer whose farm produces 100 bushels of wheat. He hires 10 workers to bring in the wheat, paying each of them 9 bushels. Thus, each worker carries 10 bushels, the wage is 9, the wage bill is 90, and the farmer earns 10.
Now suppose that due to climate change or a swarm of locusts the farm only produces 90 bushels of wheat. If wages were fully flexible then an equilibrium exists in which each worker is paid a wage of 8 leaving the farmer with 10 bushels as before. The farmer doesn’t want to reduce everyone’s wages, however, because that will reduce morale so he fires one worker leaving nine. Each worker now brings in 10 bushels, as before, and is paid a wage of 9, for a total wage bill of 81 leaving the farmer with 9 bushels. The unemployment rate is 10%.
The unemployed worker doesn’t want to be unemployed and offers to work for less, a lot less, say 5 bushels. Even at the lower wage, however, the farmer doesn’t want to hire the worker because the worker doesn’t generate enough additional output to justify even a low wage. In fact, in this scenario the worker has ZMP.
The best the farmer can do in response to the lower wage offer by the unemployed worker is to fire an employed worker and hire the unemployed worker at the lower wage. Eventually this will restore equilibrium but it takes time to cycle through enough firings and hirings to reach full employment. Note also that in this model the farmer only has a weak incentive to do this since in the equilibrium with 10% unemployment he earns 9, almost as much as before. As an aside, also note that in my model the unemployed workers are simply unlucky (as I argued earlier). If they were to switch places with the employed, productivity would be just as high. The unemployed worker has ZMP but is not a ZMP worker.
Since the driving shock that lowers productivity in this model is a real factor (weather, locusts), this is a real business cycle model . That raises a very interesting point. The most that wage flexibility can do in this model is to restore full employment; wage flexibility cannot restore full output. Thus, the workers in this model have a very good reason to dislike wage flexibility. In the equilibrium in which wages fall the unemployed worker is better off by a lot but the 9 employed workers are all worse off than in the unemployment equilibrium. In contrast, in a Keynesian model wage flexibility can restore full output not just full employment. Thus, and somewhat surprisingly, it’s easier to justify wage stickiness in an RBC model than in a Keynesian model since the gains from wage flexibility are so much higher in the latter!
Even in a Keynesian model along the lines of the Sweeney/Krugman babysitter model it will still be the case that lower wages by the unemployed don’t get you far enough to restore equilibrium–although as noted, we will need a coordination failure story in the Keynesian model since in principle everyone would be better off in that model with wage flexibility.
Sticky wages and unemployment
In my post ZMP vs. sticky wages I argued:
By the way, the problem of sticky wages is often misunderstood. The big problem is not that the wages of unemployed workers are sticky, the big problem is that the wages of employed workers are sticky. This is why stories of the unemployed being reemployed at far lower wages are entirely compatible with the macroeconomics of sticky wages.
At lunch with Tyler today discussing his recent post I expanded on this point arguing that since a large fraction of GDP is wages that a 5% cut in the wage bill is a very big number and that even a large cut in the wages of the unemployed just isn’t enough. Scott Sumner wasn’t at lunch but nails it with a simple example:
Nominal wages are fixed for the employed. NGDP falls 5%, and 5% of workers are laid off. Now the unemployed workers lower their wage demands by 20%. Why not by even more? Because of minimum wage laws, unemployment insurance, fear of loss of prestige, etc.
Suppose companies are not worried about workers making invidious comparisons (a big if, but I’ll grant this point to my opponents.) In the best case scenario firms lay off 4% percent of their workers and hire back the 5% who are unemployed at the same total wage bill. The excess unemployment is now 4% instead of 5%. The total unemployment rate falls from 10% to 9% (assuming 5% is the natural rate.) No big deal, we are still deep in recession. Thus wage flexibility among the unemployed doesn’t really help very much. If all employed workers accepted a 5% pay cut (or if the government ordered such a cut) and the Fed kept targeting inflation, we’d experience rapid economic growth.
See Scott’s post for more.
Note that this doesn’t mean that I think sticky wages are necessarily “the answer” or even the most important problem (sticky debt is an issue as well etc.) but the evidence for sticky wages for the employed is very strong and it certainly is a problem.
How are nominal wages sticky for the *unemployed*?
There are good arguments that wages are sticky for (many of) the employed. Observed wage changes cluster in funny ways, indicating an unwillingness of the boss to change the nominal wage at all, and employers testify to morale problems from wage cuts (see Alan Blinder’s work). In terms of the financial crisis, Keynesian theory explains the initial lay-offs fairly well, but it — at least the sticky nominal wage version — has a tougher time explaining unemployment persistence at such a high level.
Why don’t the unemployed lower their wages to find a job? The more tragic you think unemployment is, the greater the puzzle here, and yet the people who stress the tragedy are often least likely to admit the positive puzzle (and vice versa).
There’s pretty clear evidence that, during the crisis, when the elderly wanted to work more, the elderly were able to work more.
I hear various arguments in response:
1. Falling wages can lead to a downward deflationary spiral, but a) these wage cuts would be for only a few percent of the workforce, b) let’s not confuse the wage rate with the total wage bill, and c) our Fed, however weak, is committed to stopping a downward deflationary spiral.
2. Maybe firms don’t have enough money to take on more workers, especially since the wages of the employed are fairly sticky. Yet businesses are sitting on record-high levels of cash. So while #2 may make sense in theory, it takes a lot more work to apply it to 2011. I don’t see people even trying.
3. In a few unionized sectors, hiring lower-wage add-on workers may antagonize the incumbent workers. Yet a) these sectors are not creating many jobs anyway, and b) in most modern sectors the real morale problem comes when you hire the newbies at higher wages, not lower wages.
4. Another claim is that it is hard for workers to signal that they are willing to work for twenty percent less, or whatever it takes. How about applying for a job at a Washington non-profit? Every time you do so you are signaling an ability to work for considerably less than what you are worth elsewhere. Yet this labor market seems to hire as many people as its revenue stream can support and employers do not throw out all applications. More generally, in down times the unemployed worker doesn’t need to signal much of anything. The worker applies for a job. The employer knows there are a number of workers competing for the job. The employer makes a low-ball wage offer. The worker accepts the offer. End of story.
5. Often I get arguments which either refer back to nominal wage stickiness for the employed, or it is observed that lots of people are out of work so the nominal wage story must be true somehow. Those responses are signs of a weak paradigm. Another set of responses point to and then attack some excessively strong version of the nominal flexibility view, such as mocking the view that the Great Depression was a big voluntary holiday. Another sign of a weak paradigm, don’t fall for it.
One simple view is that Keynesian economics holds true in the short run — it explains a lot of layoffs — but it doesn’t explain longer-run unemployment, precisely because wages are sticky only for a while. That’s what most neo-Keynesian models imply and for the most part those are good (but not perfect) models. What we’re seeing is a previously rejected form of Keynesianism, applied across increasingly long and increasingly implausible time frames — suddenly pretending to be the mainstream view. It’s not and has not been for a long time.
In other words, Keynesianism is morphing into a theory of the long run.
Often when this topic comes up I feel I am playing a game of whack-a-mole. Most of all, I am struck by how little attention people pay to their own sticky nominal wage hypotheses. If that were the problem, and if unemployment were today’s biggest issue (a totally plausible claim), you might expect people to blog the microfoundations of nominal wage stickiness very, very often. You might expect ethnography. Micro-level data. Lots of juicy anecdotes and journalistic features, not just on the unemployed but on the stickiness itself. Perhaps some micro-level advice. Dozens, no hundreds of blog posts on the all-important microfoundations of the #1 social problem of our time.
But no, there’s not much of those to be seen. At some level it is understood, if only implicitly, that the sticky nominal wage theory is an embarrassment — when it comes to the unemployed across the longer run (but not the employed). It doesn’t get too close a look.
What else? Few people want to come out and utter the possibility: “They’re just too stupid and too stubborn to lower their wage demands.” Mood affiliation reigns, and the prevailing mood is to express sympathy with the unemployed. In fact that sentence is not my view, but it actually makes somewhat more sense than most of what is listed above. A lot of people don’t like hypotheses which suggest the unemployed are not victims of the system, so it doesn’t get much of a hearing.
I think, by the way, that excess capacity theories are one of the most plausible attempts to explain continuing unemployment (you’ve already heart about PSST and ZMP, among others). I’ll blog excess capacity more soon, but in the meantime note the hypothesis doesn’t rely on nominal wage stickiness. The firm doesn’t want to produce any more output, so the worker’s wage demands don’t matter so much. This will have real import for the analysis of monetary and fiscal policy, so the microfoundations really matter here.
In the meantime, beware of claims about sticky nominal wages among the unemployed.
Addendum: Arnold Kling comments. And Brad DeLong responds but a) he cannot bring himself to tell us what makes wages sticky for the unemployed, and b) he simply misrepresents my point of view, plus he ignores #1. Scott Sumner responds, but no need to fire the old workers to hire more and don’t reify NGDP! Here is Matt Yglesias, the question is why the labor market adjustment isn’t quicker, unless you are assuming excess capacity. As time passes, the gap should narrow, even for a given level of spending. Kevin Drum seems to embrace excess capacity explanations. Here is Karl Smith, and Ryan Avent, and Robert from Angry Bear.
Raising the Medicare retirement age
This has never seemed like a good fiscal solution to me. In part it simply shifts expenditures from the public books to private hands. That may have useful “shadow value properties” (if the government budget constraint is more immediately binding), but it’s not a net real resource savings for the economy as a whole.
And in part I am suspicious of such a discrete “notch” in how we treat individuals. Right before your birthday you’re in one program and the day after your birthday you’re in a totally different program? Something has to be screwy, though you can debate whether that screwiness is ex ante or ex post. I usually think more in terms of smoothly sliding schedules and, when needed, changes in their slopes, with only gentle bumps in the relevant notches.
If the choice is “cut all payments by ?? percent” or “raise the retirement age by two years” I would opt for the former. If (and oh what a huge if) you had a Cowenian dictatorial technocrat in charge, you could even think about lowering the eligibility age. That said, everyone would be “buying in” to the program at much less favorable rates than is the case today. I do fully understand the public choice reasons why that wouldn’t stick, why it would survive only in a Cowenian dictatorial technocratic equilibrium, and why in real democracy it would quickly become a “goodie” to be handed out to poorly informed, short time horizon voters in a disastrous, budget-busting manner.
Put all that behind us but store it in memory. When I see President Obama considering an increase in the Medicare retirement age, here is what I do not infer:
1. I do not infer he is a coward (didn’t he stake his whole political future on ACA?).
2. I do not infer that he is a worse bargainer than are the Republicans.
3. I do not infer that he is a very stupid man.
4. I do not infer White House cabal theories which have his mind in the hands of evil villains, hellbent on reelection and ready to throw all progressive principles to the winds.
Here is what I do infer:
1. I infer he understands that the Medicare Payment Advisory Board isn’t going to live up to the high hopes for it. It may not even survive.
2. I infer he understands that most other plans for Medicare cuts won’t get through Congress, and that it will only get tougher to pass such plans each year.
3. I infer he understands that somewhat fewer Medicare recipients at any point in time will, possibly, make it easier to reform and indeed improve other aspects of the program.
4. I infer he understands that Medicare truly is the budget-buster of our time and that its future will not ever be ruled by technocratic principles.
Most of all, I infer that our President has had a very deep, very true, and indeed very depressing education in public choice economics. And I infer that any path to a workable fiscal conservatism will be tougher and more painful and more distortionary than we had thought.
Personally, I still would opt for an alternative route, even if it were doomed to fail politically. But that’s a luxury I have precisely because I am not…President of the United States.
Addendum: Ezra Klein comments.
Mood management of customers
Apple employees are banned from saying “unfortunately” when delivering bad news to a customer, urged instead to replace it with the more positive “as it turns out.” And management apparently takes the ban seriously: One former Apple employee tells us that his coworker was put under a 90-day probationary period because he said “unfortunately” too much at the Genius Bar.
As it turns out, “unfortunately” is just one of a number of “stop words” that are not supposed to pass an Apple Store employee’s lips.
Here is more. Elsewhere, inspiration from Minnesota may motivate the median voter and help resolve the state’s fiscal disputes:
The Star Tribune of Minneapolis reported Wednesday that bars, restaurants and stores across the state are unable to replenish their liquor and beer supplies because they can’t renew $20 state-issued alcohol purchasing cards.
As it turns out, Minnesota cigarette markets will go away by Labor Day as well. Unfortunately, it is hard to think of a comparable commitment device for the federal debt-ceiling logjam.
Pain as an agency problem: do smart or stupid species suffer more?
It is an interesting question, incidentally, why pain has to be so damned painful. Why not equip the brain with the equivalent of a little red flag, painlessly raised to warn, “Don’t do that again”? In The Greatest Show on Earth
, I suggested that the brain might be torn between conflicting urges and tempted to ‘rebel’, perhaps hedonistically, against pursuing the best interests of the individual’s genetic fitness, in which case it might need to be whipped agonizingly into line. I’ll let that pass and return to my primary question for today: would you expect a positive or a negative correlation between mental ability and ability to feel pain? Most people unthinkingly assume a positive correlation, but why?
Isn’t it plausible that a clever species such as our own might need less pain, precisely because we are capable of intelligently working out what is good for us, and what damaging events we should avoid? Isn’t it plausible that an unintelligent species might need a massive wallop of pain, to drive home a lesson that we can learn with less powerful inducement?
That is from Richard Dawkins, via The Browser, still the best site on the internet.
China arbitrage story of the day German flight attendants arrested in quantitative easing scheme
Six Lufthansa employees, including four flight attendants, have been arrested after sneaking in more than 63,000 pounds of out-of-circulation, €1 and €2 coins from China back to Germany over the last four years.
Euro coins have two color tones, gold and silver, and when the German Central Bank takes the coins out of circulation, the two colors (see picture to the left) are separated then sent to China to be melted down into scrap metal.
A wily group in China reassembled the coins rather melting them, then sent them back to Germany with four LH flight attendants serving as “mules.”…The FAs would then take the coins to the Bundesbank (only the central bank in Germany accepts damaged coins) and turn them in for bills.
The story is humorous throughout, and for the pointer I thank none other than Air Genius Gary Leff. Here is further detail (NYT) as to how the arbitrage worked and relied on low Chinese wages to reassemble the coins in a cost effective manner.
What is the state employee union wage premium?
How much does collective bargaining matter? On Twitter, Will Wilkinson asks for data. I find this web site specifying the average Virginia state employee to be earning $50,298. Rortybomb says that for Wisconsin the comparable number is $48,267.
Yet Wisconsin had collective bargaining for state employees and Virginia does not. Of course this comparison is a gross one and it is not holding constant the composition of each work force, seniority, cost of living differences, and it also does not seem to pick up possible differences in benefits. Furthermore it does not consider the 48 other states. Yet, crude as this one-to-one comparison may be, it is more empirically sophisticated than most (all?) other discussions I have seen.
This David Blanchflower and Alex Bryson paper (see pp.9-10), using 1980s data, finds a union wage premium, for state employees, of 14.5 percent, with the premium being strongest for unskilled workers, as is the case in the private sector as well. (NB: I am not sure if they are adjusting for differential benefits but I think not.) Alan Krueger tells us that the union/non-union wage gap is smaller in the public sector than in the private sector ("overwhelming evidence").
I'm not pushing any particular answer, I'd just like to put the question on the table. What else do you all know?
Addendum: from Adam Ozimek: "The regression coefficients on page 8 of the report show that the union wage premium is between 15% to 16%, while the public sector wage discount is around 11%, meaning unionized public sector employees are paid 4% to 5% wage premium." Adam also provides further references and discussion.
Does disability insurance discourage employment?
Jagadeesh Gokhale writes:
Jobs lost during the recent recession caused a deluge of applications to the Social Security Disability Insurance program – more than 6 million each year in 2009 and 2010 – and threw into relief the fact that the SSDI program is structurally unsound.
The current applications surge will accelerate the exhaustion of SSDI's trust fund and will force Congress to have to choose among two unpalatable options – increase SSDI payroll taxes or reduce benefit allowance rates.
But that is not enough. If the particularly vulnerable population the SSDI is designed to serve is to be protected, while preserving incentives to work, the program has to be radically restructured.
Even in normal economic times, those with marginally physical or mental impairments apply in the hope of acquiring disabled status under SSDI. Among those already receiving SSDI benefits, the incentive to return to the work force is very poor.
Revealing one's ability to work, especially if it's in a low-paid occupation, could cause permanent loss of SSDI benefits. Strong work disincentives under SSDI result from its eligibility standard that guides benefit awards: an inability to engage in substantial gainful activity for 12 months or more.
Is this an underreported story? What's the success rate on coming out of disability and finding a decent job? What percent of the disabled, permanently unemployed are truly unable to engage in productive work? I was put onto this question by a tip from Larry Katz.
Real wages for the previously unemployed
Catherine Rampell reports:
Nearly 7 in 10 of the survey’s respondents who took jobs in new fields say they had to take a cut in pay, compared with just 45 percent of workers who successfully found work in their original field.
Of all the newly re-employed tracked by the Heldrich Center, 29 percent took a reduction in fringe benefits in their new job. Again, those switching careers had to sacrifice more: Nearly half of these workers (46 percent) suffered a benefits cut, compared with just 29 percent who stayed in the same career.
*We Have Met the Enemy: Self-Control in an Age of Excess*
The author is Daniel Akst, a former guest-blogger at MR and the book is due out January 6. I should finish grading exams, but in fact I am writing this blog post…
The wage premium at large firms
Do very wealthy CEOs yank potential wage gains away from median-like workers? The excellent Adam Ozimek writes to me:
You say: 6. If the top earners are screwing over their wage earners in the big companies, by pulling in excess wages, options, and perks, we should observe non-stagnant median pay for people who avoid working in firms with fat cat CEOs. Or we should observe talented lower-tier workers fleeing the big corporations, to keep their wages up. Yet no evidence for these predictions is given, nor are the predictions considered. It is likely that the predictions are false.
And in fact isn't this precisely the opposite of what the evidence on the employer size wage-premium tells us? If large firms were better at keeping wages down, then the employer size wage-premium would be negative, since small firms would pay more for comparable workers. Apparently this has been true for a long time, for instance from this paper http://gatton.uky.edu/Faculty/Troske/publish_pap/restat_sizewage_feb99.pdf
The fact that large employers pay higher wages than small employers has long been recognized as an important component of the variation in worker wages.This phenomenon was first documented by Moore (1911) and later confirmed by King (1923), Mellow (1982), Oi (1983), and Brown and Medoff (1989) among others.
That paper also argues:
Davis and Haltiwanger (1991) show that the gap in real hourly wages between production workers in plants with 20 to 49 employees and production workers in plants with more than 5,000 employees increased by 79% between 1963 and 1986, and that the gap for nonproduction workers in these same plants increased by 49% over this period.
So the firm size premium is growing. This seems inconsistent with their story.
That is all connected to my earlier review of the new Hacker and Pierson book.