Winner of the 2000 James S. Coleman Best Book Award from the Rational Choice Section of the American Sociological Association

Institutions play a pivotal role in the economic functioning of any society. Understanding the foundation of social norms, networks, and beliefs within institutions is crucial to explaining much of what occurs in modern economies. Recently, economic sociologists have explored how ties among individuals and groups facilitate economic activity, while "institutional economists" have focused on the formal "rules of the game" that regulate economic processes via government and law. The New Institutionalism in Sociology argues that a full understanding of economic life will depend on blending these new lines of research on institutions with traditional sociological insights into the social structures that lie at their core.

The contributors to this volume explore many questions about the way institutions emerge and operate. How do grassroots mores and practices evolve to an institutional level? How do institutional norms then regulate economic activity, and what are the advantages of formal versus informal constraints? What are the sources of trust and cooperation in trading markets? What role do cultural networks play in the economic survival of immigrant communities? And how does conflict and bargaining affect the evolution of community norms?

The New Institutionalism in Sociology also discusses how economic fluctuations arise from interactions between local agencies and the institutional environment. Among the topics addressed here are the influence of labor activism on the distribution of income, the association between highly competitive "winner-take-all" job markets and increased wage inequality in the United States, and the effect of property right conventions on technical innovation and productivity in pre-industrial England. A final section explores how deeply embedded cultural traditions have colored the transition from state socialism to market economies in Eastern Europe.

The New Institutionalism in Sociology establishes a valuable template for a sociological conception of economic organization. Its interdisciplinary paradigm signals an important advance in understanding how institutions shape social and economic life.

MARY C. BRINTON is associate professor of sociology at the University of Chicago.

VICTOR NEE is Goldwin Smith Professor of Sociology and chair of the Department of Sociology at Cornell University.

CONTRIBUTORS: Robert C. Ellickson, Jean Ensminger, Robert Feenstra, Robert H. Frank, Avner Greif, Gary G. Hamilton, Rosemary L. Hopcroft, Paul Ingram, Takehiko Kariya, Jack Knight, Eric Kostello, Douglas C. North, Alejandro Portes, Julia Sensenbrenner, Ivan Szelenyi, Bruce Western. 

The mere word “bureaucracy” brings to mind images of endless lines, piles of paperwork, and frustrating battles over rules and red tape. But some bureaucracies are clearly more efficient and responsive than others. Why? In Teaching, Tasks, and Trust, distinguished political scientists John Brehm and Scott Gates show that a good part of the answer may be found in the roles that middle managers play in teaching and supporting the front-line employees who make a bureaucracy work.

Brehm and Gates employ a range of sophisticated modeling and statistical methods in their analysis of employees in federal agencies, police departments, and social service centers. Looking directly at what front-line workers say about their supervisors, they find that employees who feel they have received adequate training have a clearer understanding of the agency’s mission, which leads to improved efficiency within their departments. Quality training translates to trust – employees who feel supported and well-trained for the job are more likely to trust their supervisors than those who report being subject to constant monitoring and a strict hierarchy. Managers who “stand up” for employees—to media, government, and other agency officials—are particularly effective in cultivating the trust of their workers. And trust, the authors find, motivates superior job performance and commitment to the agency’s mission. Employees who trust their supervisors report that they work harder, put in longer hours, and are less likely to break rules. The authors extend these findings to show that once supervisors grain trust, they enjoy greater latitude in influencing how employees allocate their time while working.

Brehm and Gates show how these three executive roles are interrelated—training and protection for employees gives rise to trust, which provides supervisors with the leverage to stimulate improved performance among their workers. This new model—which frames supervisors as teachers and protectors instead of taskmasters—has widespread implications for training a new generation of leaders and creating more efficient organizations.

Bureaucracies are notorious for inefficiency, but mid-level supervisors, who are often regarded as powerless, retain tremendous power to build a more productive workforce. Teaching, Tasks, and Trust provides a fascinating glimpse into a bureaucratic world operating below the radar of the public eye—a world we rarely see while waiting in line or filling out paperwork.

JOHN BREHM is professor of political science at the University of Chicago.

SCOTT GATES is research professor at the International Peace Research Institute, Oslo, and professor at the Norwegian University of Science and Technology.

A Volume in the Russell Sage Foundation Series on Trust

In recent years, the German government has intentionally expanded the low-wage work sector in an effort to reduce exceptionally high levels of unemployment. As a result, the share of the German workforce employed in low-paying jobs now rivals that of the United States. Low Wage Work in Germany examines both the federal policies and changing economic conditions that have driven this increase in low-wage work. The new “mini-job” reflects the federal government’s attempt to make certain low-paying jobs attractive to both employers and employees. Employers pay a low flat rate for benefits, and employees, who work a limited number of hours per week, are exempt from social security and tax contributions. Other factors, including slow economic growth, a declining collective bargaining system, and the influx of foreign workers, also contribute to the growing incidence of low-wage work. Yet while both Germany and the United States have large shares of low-wage workers, German workers receive health insurance, four weeks of paid vacation, and generous old age support—benefits most low-wage workers in the United States can only dream of. The German experience offers an important opportunity to explore difficult trade-offs between unemployment and low-wage work.

GERHARD BOSCH is professor of sociology at the University of Duisburg-Essen.

CLAUDIA WEINKOPF is deputy director of the Institute for Work, Skills, and Training at the University of Duisburg-Essen.

CONTRIBUTORS: Lars Czommer, Karen Jaehrling, Thorsten Kalina, Robert Solow, Achim Vanselow, Dorothea Voss-Dahm.

A Volume in the RSF Case Studies of Job Quality in Advanced Economies

One in four American adults doesn’t have a bank account. Low-income families lack access to many of the basic financial services middle-class families take for granted and are particularly susceptible to financial emergencies, unemployment, loss of a home, and uninsured medical problems. Insufficient Funds explores how institutional constraints and individual decisions combine to produce this striking disparity and recommends policies to help alleviate the problem.

Mainstream financial services are both less available and more expensive for low-income households. High fees, minimum-balance policies, and the relative scarcity of banks in poor neighborhoods are key factors. Michael Barr reports the results of an in-depth study of financial behavior in 1,000 low- and moderate-income families in metropolitan Detroit. He finds that most poor households have bank accounts, but combine use of mainstream services with alternative options such as money orders, pawnshops, and payday lenders. Barr suggests that a tax credit for banks serving primarily disadvantaged customers could facilitate greater equality in the private financial sector.

Drawing on evidence from behavioral economics, Sendhil Mullainathan and Eldar Shafir show that low-income individuals exhibit many of the same patterns and weaknesses in financial decision making as middle-class individuals and could benefit from many of the same financial aids. They argue that savings programs that automatically enroll participants and require them to actively opt out in order to leave the program could drastically increase savings ability. Ronald Mann demonstrates that significant changes in the credit market over the past fifteen years have allowed companies to expand credit to a larger share of low-income families. Mann calls for regulations on credit card companies that would require greater disclosure of actual interest rates and fees. Raphael Bostic and Kwan Lee find that while home ownership has risen dramatically over the past twenty years, elevated risks for low-income families—such as foreclosure—may well outweigh the benefits of owning a home.

The authors ultimately argue that if we want to demand financial responsibility from low-income households, we have an obligation to assure that these families have access to the banking, credit, and savings institutions that are readily available to higher-income families. Insufficient Funds highlights where and how access is blocked and shows how government policy and individual decisions could combine to eliminate many of these barriers in the future.

REBECCA M. BLANK is the Robert S. Kerr Senior Fellow at the Brookings Institution.

MICHAEL S. BARR is professor of law at the University of Michigan Law School.

CONTRIBUTORS: Raphael W. Bostic, Daryl Collins, Kwan Ok Lee, Ronald J. Mann, Jonathan Morduch, Sendhil Mullainathan, Una Okonkwo Osili, Anna L. Paulson, Daniel Schneider, John Karl Scholz, Ananth Seshadri, Eldar Shafir, Michael Sherraden, Peter Tufano.

A Volume in the National Poverty Center Series on Poverty and Public Policy

Winner of the 2001 Richard A. Lester prize for Outstanding Book in Labor Economics and Industrial Relations from Princeton University

Winner of the Cornell Center for the Study of Inequality Distinguished Book Award

The promise of upward mobility—the notion that everyone has the chance to get ahead—is one of this country's most cherished ideals, a hallmark of the American Dream. But in today's volatile labor market, the tradition of upward mobility for all may be a thing of the past. In a competitive world of deregulated markets and demanding shareholders, many firms that once offered the opportunity for advancement to workers have remade themselves as leaner enterprises with more flexible work forces. Divergent Paths examines the prospects for upward mobility of workers in this changed economic landscape. Based on an innovative comparison of the fortunes of two generations of young, white men over the course of their careers, Divergent Paths documents the divide between the upwardly mobile and the growing numbers of workers caught in the low-wage trap.

The first generation entered the labor market in the late 1960s, a time of prosperity and stability in the U.S. labor market, while the second generation started work in the early 1980s, just as the new labor market was being born amid recession, deregulation, and the weakening of organized labor. Tracking both sets of workers over time, the authors show that the new labor market is more volatile and less forgiving than the labor market of the 1960s and 1970s. Jobs are less stable, and the penalties for failing to find a steady employer are more severe for most workers. At the top of the job pyramid, the new nomads—highly credentialed, well-connected workers—regard each short-term project as a springboard to a better-paying position, while at the bottom, a growing number of retail workers, data entry clerks, and telemarketers, are consigned to a succession of low-paying, dead-end jobs.

While many commentators dismiss public anxieties about job insecurity as overblown, Divergent Paths carefully documents hidden trends in today's job market which confirm many of the public's fears. Despite the celebrated job market of recent years, the authors show that the old labor market of the 1960s and 1970s propelled more workers up the earnings ladder than does today's labor market. Divergent Paths concludes with a discussion of policy strategies, such as regional partnerships linking corporate, union, government, and community resources, which may help repair the career paths that once made upward mobility a realistic ambition for all American workers.

ANNETTE BERNHARDT is Senior Research Associate at the Center on Wisconsin Strategy, University of Wisconsin, Madison.

MARTINA MORRIS is the Blumstein-Jordan Professor of Sociology and Statistics at the University of Washington, Seattle.

MARK S. HANDCOCK is Professor of Statistics and Sociology in the Center for Statistics and the Social Sciences at the University of Washington, Seattle.

MARC A. SCOTT is Assistant Professor of Educational Statistics at the School of Education, New York University.

Globalization, technological change, and deregulation have made the American marketplace increasingly competitive in recent decades, but for many workers this “new economy” has entailed heightened job insecurity, lower wages, and scarcer benefits. As the job market has grown more volatile, a variety of labor market intermediaries—organizations that help job seekers find employment—have sprung up, from private temporary agencies to government “One-Stop Career Centers.” In Staircases or Treadmills? Chris Benner, Laura Leete, and Manuel Pastor investigate what approaches are most effective in helping workers to secure jobs with decent wages and benefits, and they provide specific policy recommendations for how job-matching organizations can better serve disadvantaged workers.

Staircases or Treadmills? is the first comprehensive study documenting the prevalence of all types of labor market intermediaries and investigating how these intermediaries affect workers’ employment opportunities. Benner, Leete, and Pastor draw on years of research in two distinct regional labor markets—“old economy” Milwaukee and “new economy” Silicon Valley—including a first-of-its-kind random survey of the prevalence and impacts of intermediaries, and a wide range of interviews with intermediary agencies’ staff and clients. One of the main obstacles that disadvantaged workers face is that social networks of families and friends are less effective in connecting job-seekers to stable, quality employment. Intermediaries often serve as a substitute method for finding a job.  Which substitute is chosen, however, matters: The authors find that the most effective organizations—including many unions, community colleges, and local non-profits—actively foster contacts between workers and employers, tend to make long-term investments in training for career development, and seek to transform as well as satisfy market demands. But without effective social networks to help workers locate the best intermediaries, most rely on private temporary agencies and other organizations that offer fewer services and, statistical analysis shows, often channel their participants into jobs with low wages and few benefits. Staircases or Treadmills? suggests that, to become more effective, intermediary organizations of all types need to focus more on training workers, teaching networking skills, and fostering contact between workers and employers in the same industries.

A generation ago, rising living standards were broadly distributed and coupled with relatively secure employment. Today, many Americans fear that heightened job insecurity is overshadowing the benefits of dynamic economic growth. Staircases or Treadmills? is a stimulating guide to how private and public job-matching institutions can empower disadvantaged workers to share in economic progress.

CHRIS BENNER is assistant professor of urban and economic geography at Pennsylvania State University.

LAURA LEETE is the Fred H. Paulus Director of Public Policy Research and associate professor of economics and public policy at Willamette University.

MANUEL PASTOR is a professor of geography and American Studies and ethnicity at the University of Southern California.

Over the past eight years, a marked shift in the national political mood has substantially reduced the federal government's involvement in ameliorating urban problems and enhanced the prominence of state and local governments in the domestic policy arena. Many states and big cities have been forced to reassess their traditionally vexed relationships.

Nowhere has this drama been played out more stormily than in New York. In The Two New Yorks, experts from government, the academy, and the non-profit sector examine aspects of an interaction that has a major impact on the performance of state and city institutions. The analyses presented here explore current state-city strategies for handling such troubling policy areas as education, health care, and housing. Attention is also given to important contextual factors such as economic and demographic trends, and to structural features such as the political framework, relationships with the national government, and the system of public finance.

Despite its uniquely large scope, the drama of the new New Yorks parallels or presages issues faced by virtually all large cities and their states. This unprecedented study makes a vital contribution in an era of declining federal aid and pressing urban need.

GERALD BENJAMIN is at SUNY New Paltz.

CHARLES BRECHER is at New York University.

CONTRIBUTORS: Richard D. Alba, Mary Jo Bane, Gerald Benjamin, Robert Berne, Susan Blamk, Barbara B. Blum, Matthew Drennan, Barbara Gordon Espejo, Ester Fuchs, Cynthia B. Green, James M. Hartman, Raymond D. Horton, Sarah F. Liebschutz, David Lewin, Irene Lurie, Paul D. Moore, James C. Musselwhite Jr., Martin Shefter, Kenneth E. Thorpe, Emanuel Tobier, Katherine Trent, 

Over the last forty years, rising national income has helped reduce poverty rates, but this has been accompanied by an increase in economic inequality. While these trends are largely attributed to technological change and demographic shifts, such as changing birth rates, labor force patterns, and immigration, public policies have also exerted a profound affect on the welfare of Americans. In Public Policy and the Income Distribution, editors Alan Auerbach, David Card, and John Quigley assemble a distinguished roster of policy analysts to confront the key questions about the role of government policy in altering the level and distribution of economic well being.

Public Policy and the Income Distribution tackles many of the most difficult and intriguing questions about how government intervention—or lack thereof—has affected the incomes of everyday Americans. Rebecca Blank analyzes welfare reform, and presents systematic research on income, poverty rates, and welfare and labor force participation of single mothers. She finds that single mothers worked more and were less dependent on public assistance following welfare reform, and that low-skilled single mothers had no greater difficulty finding work than others. Timothy Smeeding compares poverty reduction programs in the United States with policies in other developed countries. Poverty and inequality are higher in the United States than in other advanced economies, but Smeeding argues that this is largely a result of policy choices. Poverty rates based on market incomes alone are actually lower in the United States than elsewhere, but government interventions in the United States were less than half as effective at reducing poverty as were programs in the other countries. The most dramatic poverty reduction story of twentieth century America was seen among the elderly, who went from being the age group most likely to live in poverty in the 1960s to the group least likely to be poor at the end of the century. Gary Englehardt and Jonathan Gruber examine the role of policy in alleviating old-age poverty by estimating the impact of Social Security benefits on the income of the elderly poor. They find that the growth in Social Security almost completely explains the large decline in elderly poverty in the United States.

The twentieth century was remarkable in the extent to which advances in public policy helped improve the economic well being of Americans. Synthesizing existing knowledge on the effectiveness of public policy and contributing valuable new research,Public Policy and the Income Distribution examines public policy's successes, and points out the areas in which progress remains to be made.

ALAN J. AUERBACH is Robert D. Burch Professor of Economics and Law at the University of California, Berkeley.

DAVID CARD is Class of 1950 Professor of Economics at the University of California, Berkeley.

JOHN M. QUIGLEY is I. Donald Terner Distinguished Professor and professor of economics at the University of California, Berkeley.

CONTRIBUTORS: Rebecca M. Blank,  Dora L. Costa,  Janet Currie,  Gary V. Engelhardt,  Jonathan Gruber,  Matthew E. Kahn, Steven Raphael,  Emmanuel Saez,  Jonathan Skinner,  Timothy M. Smeeding,  Weiping Zhou.   

Anti-immigrant sentiment reached a fever pitch after 9/11, but its origins go back much further. Public rhetoric aimed at exposing a so-called invasion of Latino immigrants has been gaining ground for more than three decades—and fueling increasingly restrictive federal immigration policy. Accompanied by a flagging U.S. economy—record-level joblessness, bankruptcy, and income inequality—as well as waning consumer confidence, these conditions signaled one of the most hostile environments for immigrants in recent memory. In Brokered Boundaries, Douglas Massey and Magaly Sánchez untangle the complex political, social, and economic conditions underlying the rise of xenophobia in U.S. society. The book draws on in-depth interviews with Latin American immigrants in metropolitan New York and Philadelphia and—in their own words and images—reveals what life is like for immigrants attempting to integrate in anti-immigrant times.

What do the social categories “Latino” and “American” actually mean to today’s immigrants? Brokered Boundaries analyzes how first- and second-generation immigrants from Central and South America and the Caribbean navigate these categories and their associated meanings as they make their way through U.S. society. Massey and Sánchez argue that the mythos of immigration, in which newcomers gradually shed their respective languages, beliefs, and cultural practices in favor of a distinctly American way of life, is, in reality, a process of negotiation between new arrivals and native-born citizens. Natives control interactions with outsiders by creating institutional, social, psychological, and spatial mechanisms that delimit immigrants’ access to material resources and even social status. Immigrants construct identities based on how they perceive and respond to these social boundaries. The authors make clear that today’s Latino immigrants are brokering boundaries in the context of unprecedented economic uncertainty, repressive anti-immigrant legislation, and a heightening fear that upward mobility for immigrants translates into downward mobility for the native-born. Despite an absolute decline in Latino immigration, immigration-related statutes have tripled in recent years, including many that further shred the safety net for legal permanent residents as well as the undocumented.

Brokered Boundaries shows that, although Latin American immigrants come from many different countries, their common reception in a hostile social environment produces an emergent Latino identity soon after arrival. During anti-immigrant times, however, the longer immigrants stay in America, the more likely they are to experience discrimination and the less likely they are to identify as Americans.

DOUGLAS S. MASSEY is Henry G. Bryant Professor of Sociology and Public Affairs at the Woodrow Wilson School.

MAGALY SÁNCHEZ R. is senior researcher and visiting scholar at the Office of Population Research at Princeton University.