It seems to outperform human hiring, at least according to Mitch Hoffman and others, who write,

We evaluate the staggered introduction of a job test across 130 locations of 15 firms employing service sector workers. We show that testing improves the match-quality of hired workers, as measured by their completed tenure, by about 14%.

Here is an abstract of a more recent version. Some questions:

1. How does this affect diversity?

2. Can testing work for high-skilled jobs, also? Software engineers? Middle managers?

3. What would Tyler Cowen say?

Catherine Rampell writes,

But it’s still a bit strange that women are more likely to spend money on ever-rising tuition when they’re not seeing the same financial upside as men.

She goes on to write,

The three fields in which women outnumbered men in the highest numbers are more traditionally utilitarian: health professions (125,000 more women than men), education (61,000) and psychology (60,000).

I am sorry, but psychology is not a utilitarian major. It is a self-indulgent major. There are approximately zero jobs seeking anyone with an undergraduate degree in psychology. Meanwhile, the number of jobs for people with advanced degrees in psychology is very small relative to the number of undergraduate psychology majors, so admission to graduate programs is quite selective.

As for education and allied health professions, I would note that these are occupations that are highly regulated. That is, people with less formal education could do many of these jobs, but they are not allowed to compete for them. They are also fields that strongly resist the concept of merit pay.

Rampell adds,

There are, at least for the time being, lots of decent, middle-class jobs predominantly held by men that don’t require higher education (such as construction and other trades); comparably paying jobs disparately held by less educated women are few and far between.

Females riding garbage trucks are like Black Swans–they may exist but I have never seen one.

A very crude version of evolutionary psychology is that women gather and men hunt. That is, women look for safe and reliable income while men seek income in ways that are more dangerous and can involve extremes of success and failure. I do not think that one should carry this idea too far, but Rampell’s column can be placed in that framework.

The WSJ reports,

Scant availability of skilled construction workers has hampered home construction at various times in the past few years of recovery. But the shortfall seems to have grown more acute of late, as new-home sales are up 21.2% so far this year from the same period last year and commercial construction has increased steadily.

This is an interesting phenomenon for several reasons. First, what happened to all of the construction workers that were laid off after the housing bust? Second, what is happening to wages in the construction industry?

In particular, why have wages not risen to a point where the market clears? Or have they in fact risen, and the phrase “scant availability” of workers means “scant availability at the wage that we would prefer to pay,” which is below the market-clearing wage.

He writes,

The chief failure in labor markets is that wages tend to be too high, leading to durably high unemployment.

Why? Mostly because so many workers view employers with resentment and suspicion. To contain this resentment and suspicion, employers compress wages and avoid wage cuts even when there’s high unemployment. The unintended effect is to make unemployment far higher – and hence more traumatic – than it needs to be, especially for the least-skilled. It’s the Tinkerbell Principle at work. Involuntary unemployment, free labor markets’ chief shortcoming, exists largely because workers believe that free labor markets are bad for workers.

Several links omitted. Read the whole post. I think it could provoke a lot of useful discussion.

For the most part, Bryan challenges the view that in the boss-employee relationship, the boss takes advantage of higher status and power. That is the way I think that sociologists view labor markets.

Bryan writes,

Everyone talks as if bosses have the better end. But talk is very different from action. If everyone were trying to start their own businesses and hire workers, that would count as “acting as if bosses have the better end of the deal.” Most workers, however, make no effort to become entrepreneurs. You could object that most workers don’t have the money to open their own businesses, but most rich workers make no effort to become entrepreneurs either.

Almost nobody likes having a boss. But going out on your own is risky and stressful, so most people put up with it. Still, I think that one could argue that in the workplace, this fact gives bosses the sort of power that sociologists impute to them.

From this point of view, the best public policy to support workers would be to make it easier to go out on your own. Starting your own business can be daunting from the standpoint of paperwork: getting a license, filling out tax forms, etc. Also, health insurance is much more subsidized for large businesses, particularly those that do business in more than one state. If government were to take its thumb off the scale, perhaps the “exit option” would be more valuable to employees, which would raise their bargaining power in the workplace.

Just as almost nobody likes having a boss, Bryan would turn that around and ask whether anybody likes having employees. Employees grouse and they malinger. Public policy also could mitigate this by improving the “exit option” for bosses, that is by make it easier to screen potential employees and easier to fire those who fail to perform.