Person:

Borjas, George

Comparing measures of work time in the recall CPS-ASEC data with contemporaneous measures reveals many logical inconsistencies and probable errors. About 8 percent of ASEC respondents report weeks worked last year that contradict their current work histories in the Basic monthly interviews; the error rate is over 50 percent among workers who move in and out of the workforce. Over 20 percent give contradictory information about whether they usually work a full-time weekly schedule. Part of the inconsistency arises because an increasing fraction of ASEC respondents (over 20 percent by 2018) consists of people whose record was fully imputed. The levels and trends of the errors differ by gender and race, and they affect measured wage differentials between 1978 to 2018. Adjusting for the errors and imputations, gender wage gaps among all workers narrowed by 4 log points more than is commonly reported, and residual wage inequality decreased by 6 log points more. In a very carefully defined sample of full-time year-round workers, gender and racial wage differentials narrowed slightly less than previously estimated using ASEC data, but much more than indicated by commonly used estimates from CPS Outgoing Rotation Groups.

In May 1981, President François Mitterrand regularized the status of undocumented immigrant workers in France. The newly legalized immigrants represented 12 percent of the non-French workforce and about 1 percent of all workers. Employers have monopsony power over undocumented workers because the undocumented may find it costly to participate in the open labor market and have restricted economic opportunities. By alleviating this labor market imperfection, a regularization program can move the market closer to the efficient competitive equilibrium and potentially increase employment and wages for both the newly legalized and the authorized workforce. Our empirical analysis reveals that the Mitterrand regularization program particularly increased employment and wages for low-skill native and immigrant men, and raised French GDP by over 1 percent.