Labor Policy and Labor Research Since the 1960s: Two Ships Sailing in Orthogonal Directions?

Abstract

This paper summarizes trends in labor market policy since the 1960s, trends in research in labor economics since the 1960s, and the intersection between the two. Labor policy has moved strongly in the direction of regulating many more aspects of the labor market since the 1960s. Legislation that expanded the scale and scope of labor market regulation includes the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Occupational Safety and Health Act, the Coal Mine Safety and Health Act, the Worker Adjustment and Retraining Notification Act, and the Family and Medical Leave Act. The number of Department of Labor (DOL) employees in regulatory agencies increased by almost 300 percent between 1969 and 1979. The number of employees involved in regulation decreased since 1979, despite continued expansion of labor market regulations, raising questions about the extent of enforcement of many labor standards. Another policy shift is that the job training budget has declined considerably since the late 1970s. To gauge trends in labor economics research, the number of articles published on various topics is presented. Results of a survey of labor economists’ views about several key parameters are also analyzed. Although widespread disagreement exists, the median labor economist expects fairly modest labor supply elasticities, and fairly modest effects of job training on participants’ earnings. Labor-related social experiments are becoming more prevalent in part because of DOL’s support, and labor economists report that they put much stock in such experiments. A case study suggests that research in labor economics has contributed to some of the recent changes in the allocation of the federal job training budget. Finally, hypotheses for the shifts in labor policy since the 1960s are offered.