Essays on the changing labor market: Computerization, inequality, and the development of the contingent work force

This dissertation explores three prominent U.S. labor market developments of the 1980s and 90s: the rapid advent of workplace computerization, the historic rise in earnings inequality, and the unprecedented growth of temporary help supply employment. Essay 1, joint with Lawrence F. Katz and Alan B. Krueger, asks whether computerization is in part responsible for the dramatic growth of U.S. earnings inequality between 1980 and 1996. Using a supply-demand framework and extensive technology measures, the essay presents evidence that computerization contributed to an observed acceleration in the growth of relative demand for college graduates thereby leading, in combination with supply shifts, to increased earnings differentials by education. In this framework, approximately 30 to 40 percent of the observed acceleration in skill upgrading within detailed industries since 1970 is explained by measures of computer capital and computer investment.;Essay 2 investigates the poorly understood labor market role of Temporary Help Supply (THS) agencies by exploring a unique industry practice: offering nominally free, non-contracted training in general, portable skills---particularly computer skills---to temporary help workers, seemingly in defiance of the competitive model of training. Drawing on a confidential Bureau of Labor Statistics industry survey, the essay presents theory and evidence suggesting that in addition to skills formation, training serves an informational role at THS firms by helping to elicit private information that workers hold about ability---and that THS firms may in turn play this informational role in the broader labor market.;Building on the view of THS as an information broker, Essay 3 explores whether the erosion of the common law doctrine of employment at will that permitted employers unlimited discretion to terminate workers has contributed to the growth of THS by generating increasing demand for screening and arms-length contracting. By exploiting variation in the timing of state court decisions recognizing exceptions to the at will doctrine, the empirical analysis demonstrates that adoption of one class of exception, the 'implied contract' exception, has had a sizable and robust impact on THS employment, resulting in an estimated 291 to 399 thousand additional workers in THS on a daily basis as of 1998.