This propitious state of affairs means that when commenting on the poor performance of African nations on severaleconomic metrics, one must understand that it is Africa that has a problem and not just the Muslim nations of Africa.

Let me conclude this review with the following five observations. First, Cohen's account of the pros and cons ofglobalization is, in general, rather insightful. Even so, somewhat surprisingly, he pays virtually no attention to theenvironmental limits of globalization. Second, although Cohen does discuss the role played by the media in furtheringglobalization, he could have done a better job of discussing the changing nature of the media itself and the resultingdifferences in the ways in which the media influences and is, in turn, influenced by the citizens of the world. Third,there are a small number of factual errors scattered throughout this book. For instance, unlike what Cohen says on p. 91,only East Asia and not all of Asia experienced a financial crisis in 1997. In fact, South Asia was pretty well insulatedfrom the ill effects of this crisis. Fourth, the book has a number of grammatical errors that could have been correctedwith more meticulous proofreading. Finally, the above caveats notwithstanding, I would be remiss in my duties if I didnot point out that this book contains a very readable retrospective and prospective account of globalization. Therefore, Irecommend the book to all readers who would like to learn why, for the poorest nations of the world, the problem is lessthat they are exploited by globalization and more that they are simply forgotten and excluded.

Amitrajeet A. BatabyalDepartment of Economics Rochester Institute of Technology,92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA

E-mail address: aabgsh@rit.edu.

doi:10.1016/j.iref.2007.05.003

Economic Turbulence: Is a Volatile Economy Good for America? Clair Brown, John Haltiwanger, Julia Lane.The University of Chicago Press, (2006).

Economic turbulence has become one of the new buzzwords. Layoffs, outsourcing, and other illustrations ofturbulence have caused many to question it, and recommend measures to restrict firms' hiring and layoff practices.

In this volume Brown, Haltiwanger, and Lane (BHL) take a comprehensive look at the issue. They examine the U.S.Census Bureau's Longitudinal Employer–Household Dynamics (LEHD) program encompassing detailed micro datafrom five diverse sectors of the American economy — financial services, retail and food services, trucking,semiconductors, and software. The rich data base makes possible a detailed look at many interesting policy questions.Among their more noteworthy findings are:

• In any given quarter, one in four job matches begins or ends.• One in thirteen jobs are created or destroyed.• One in twenty establishments starts or closes.• Over a five year period one in four establishments enters and exits.

The sectors are chosen to bracket the types of situations now facing American industry. Average pay varies acrossthese sectors, unionization varies, the impact of globalization is varied, some of the sectors are experiencing reducedregulation and some not, job and career ladders vary. A first substantive chapter looks at these firms and their survivalrates. BHL find that the sectors with higher pay have lower employee turnover, and that firms with higher qualityworkforces are more likely to survive. Larger firms also seem to have less churning.

The next chapter looks at job ladders in more detail (job ladders are within the firm, career ladders are defined for theworker). BHL find that growing firms have better job ladders than shrinking firms, and large firms have better jobladders than small firms. Job ladders are better (more implied wage growth) for men than women.

They then extend the analysis to career ladders, for the workers. Over a ten-year horizon BHL find that loyalists(who do not switch jobs) do better than job switchers (who switch once in a ten year period), and that job switchers in

605Book reviews

turn do better than job hoppers (who switch more than once). This all makes very good sense, but it is also difficult toparse out the effect of simultaneous bias. For example, do loyalists do better because they do not switch jobs, or is it thebetter wage increases that induce loyalism?

Finally, BHL examine the good jobs issue. Four of their five sectors had more good jobs (defined by wages) at theend of the ten-year period than at the beginning. All five of their sectors had more dominant, or main, jobs.

The overall message here is reasonably hopeful. Of course there is turbulence, and of course laid off workers willhave trouble in recovering from the layoff. But BHL keep stressing that good jobs are growing, dominant jobs aregrowing, and that there are job and career ladders that allow workers to get ahead.

The authors' language is generally quite reserved, without unsupported pronouncements. But there are some big puzzleshere. One was mentioned above— does loyalty to a firm generate wage increases, or do wage increases generate loyalty?Another is how the BHL results could be true at exactly the time of thewell-known hollowing out of thewage distribution. Ifjob and career ladders are this strong, why is wage growth so sluggish for workers with average or below-average wages?Another is the source of causation—BHLoften refer to foreign trade and outsourcing, but sincemany of these sectors do notoutsource and are not particularly connected to trade, plain old technological progress is more likely to be the driving force.

The book shows that economic turbulence can be a complicated matter. Firms come and go in a Darwinian processthat seems to work to the ultimate benefit of most workers, though certainly not all workers. Although BHL give manyanecdotes, the real revelation is how complicated and dangerous it can be to rely on anecdotes. There are simply lots offirms and workers out there, and it is too easy for press and social commentators to use anecdotes to illustrate their ownhobbyhorses, and ignore the larger statistical realities. In this regard, the authors quote H.L. Mencken, who said thatcomplex questions have answers that are simple, easy to understand, and wrong.

While this is an integrated and informative look at an important part of the labor market, it probably adds to theoverall research agenda more than it subtracts. One cannot help but wonder whether the results of the book, and inparticular the more optimistic results, come from the sectoral selection. Would different sectors show different results?

One could ask similar questions on the worker side. The authors have already established that job ladders look worsefor women than men — what about for other racial and ethnic groups? The LEHD data follow workers, and henceprobably understate the importance of transitory workers — would a more complete look give less optimistic results?

One also is curious about the time period — the authors' positive story took place at a time when the overall labormarket was hollowing out, with high-wage wage increases much greater than low-wage increases. What in the worldwould have happened had BHL taken their sample at a different time when overall wage growth was more buoyant? Atsome point the research should be extended over time, and over more sectors. Indeed, it would be fascinating to extendsuch a study to countries where the labor market is alleged to be less flexible than in the United States.

So there we are. This is a very interesting study full of nuggets for policymakers, reporters, and scholars alike. Weshould have been doing studies like this long ago, and we should redouble our efforts now. Through studies like this wecan understand the process of labor market dynamics much better than before, and avoid mistakes interpreting macrolabor market data. But just as we can make interpretive mistakes in misunderstanding macro labor statistics, we can alsomake mistakes in misunderstanding the results of studies like these. The book has enabled us to take a few steps up onthe ladder of understanding labor markets, but we are still only part way up.

Edward M. GramlichThe Urban Institute, Washington DC 20037, USA

doi:10.1016/j.iref.2006.10.003

606 Book reviews