does working from home work evidence from a chinese experiment about 10 of us employees now regularly work from home wfh but there are concerns this can lead to shirking from home we report the results of a wfh experiment at ctrip a 16 000 employee nasdaq listed chinese travel agency call center employees who volunteered to wfh were randomly assigned to work from home or in the office for 9 months home working led to a 13 performance increase of which about 9 was from working more minutes per shift fewer breaks and sick days and 4 from more calls per minute attributed to a quieter working environment home workers also reported improved work satisfaction and experienced less turnover but their promotion rate conditional on performance fell due to the success of the experiment ctrip rolled out the option to wfh to the whole firm and allowed the experimental employees to re select between the home or office interestingly over half of them switched which led to the gains from wfh almost doubling to 22 this highlights the benefits of learning and selection effects when adopting modern management practices like wfh

work hours wages and vacation leave using the panel study of income dynamics the authors provide a set of facts about vacation leave they show that on average vacation time taken rises one to one with paid vacation annual hours worked fall by about one full time week with every week of paid vacation the amount by which vacation time taken exceeds time paid is highest for women union members and government workers paid vacation weeks are positively associated with hourly wage rates and to a lesser extent with nonwage compensation and vacation time taken is weakly countercyclical vacation leave seems to be determined by broad employer policy rather than by negotiation between the worker and the firm in particular it is strongly related to seniority but depends very little on labor market experience and for job changers it is only weakly related to vacation on the previous job

women s work sibling competition and children s school performance this research offers an interpretation of the relationship between fertility child spacing family resources and market work by mothers and the subsequent cognitive skills of grade schoolers as reported by their teachers first an approach to fertility as the outcome of a deliberate choice process is developed and then empirical evidence from a small panel of u s households first interviewed in 1975 76 when they had preschool children is presented in a 1981 82 reinterview a supplementary project was that of obtaining teacher ratings of school performance of individual children large family size as measured by the number of siblings of given age and sex in the household during preschool years in 1975 76 has an important negative impact on the child s subsequent grade school performance boy siblings in nearby age ranges have the most negative impact on performance while teenage siblings of either sex have no systematic adverse effect parental resources as measured by income education child care time and a mother s reduced market time are associated with greater cognitive skills and can offset the apparent disadvantage of having siblings in nearby age intervals there appears to be a significant tradeoff between a market career and a home career for women women who have more children spaced over wider age intervals and who devote more time to child care and less to market work presumably get more benefits from their home career in the form of enhanced child development on the other hand full time market work i e hours in the labor market for pay is important for earnings growth of the mother mary corcoran greg duncan and michael ponza 1983 and family income has a favorable effect on school performance so the apparent choices facing women are more equivocal

individual and aggregate labor supply with coordinated working times i analyze two extensions to the standard model of life cycle labor supply that feature operative choices along both the intensive and extensive margin one assumes that individuals face continuous wage hours schedules while the other assumes that all work must be coordinated across individuals though similar qualitatively the two models have very different implications for aggregate labor supply responses to tax policy in the first model curvature in the individual utility from leisure function plays relatively little role but in the second model it is of first order importance the second model also has important implications for what data are best able to provide evidence on the extent of curvature in the utility from leisure function

unemployment and effort at work we measure the sensitivity of work effort to local labour market conditions using self reported non work at the workplace in the american time use survey atus 2003 12 non work at work is quantitatively significant and varies positively with local unemployment but in opposite directions at the extensive and intensive margins the fraction of workers reporting positive values declines with unemployment while time spent in non work conditional on any such time rises with unemployment the results speak to issues of labour hoarding efficiency wages and the cyclicality of labour productivity we also demonstrate a relationship between the incidence of non work and unemployment benefits in state data linked to the atus there are also pronounced occupational differences in the incidence and intensity of non work

intertemporal substitution of effort some empirical evidence the labour economics literature refers often to effort but there is little empirical evidence as to how productivity and effort respond to wage rate variations an unusual natural experiment in which wage rates suffered an exogenous change of two weeks duration gives some insight into the magnitude of this effect for a group of workers in victorian county durham the effort response measured as the impact of a temporary wage rate change on output per shift dominates the response of attendance comparison of the estimates presented here with those in treble journal of economic history 61 414 38 2001 suggests that the effects are short lived

the productivity of working hours observations on munition workers most of them women are organised to examine the relationship between their output and their working hours the relationship is non linear below an hour s threshold output is proportional to hours above a threshold output rises at a decreasing rate as hours increase implications of this finding for the estimation of labour supply functions are considered the findings also link up with the current research on the effects of long working hours on accidents and injuries

shirking or productive schmoozing wages and the allocation of time at work this study uses detailed time diaries from household surveys for 1975 and 1981 to examine how changes in the use of time on the job affect earnings among nonunion workers the marginal minute of break time apparently increases earnings but not as much as does the marginal minute of work time among union workers additional time in unscheduled breaks appears to be associated with significantly higher earnings though other break time is not the author concludes that further growth in on the job leisure would reduce productivity that monitoring workers would yield returns to the firm but that entirely eliminating breaks would be counterproductive

does the birth order affect the cognitive development of a child this article investigates the link between position in the birth order and early scholastic ability using matched mother child data from the national longitudinal survey of youth 1979 cohort nlsy79 i find that being the first born is beneficial even after controlling for nonlinear effects of family size and child characteristics the verbal ability of first borns is about one tenth of a sd higher than for children in the middle of the birth order there is no evidence that last borns fare better than intermediate children the first born advantage is confirmed by estimates from within family variation models and i argue that the findings are consistent with the resource dilution hypothesis

public funding of higher education abstract recent criticism from different sides has expressed the view that with scarce resources there is little justification for massive public funding of higher education central to the debate is the conjecture that colleges and universities use their resources inefficiently and focus insufficiently on their mission to expand students human potential our aim in this paper is to examine the theoretical premises of this conjecture in a small open economy and uncover the conditions under which public investment in higher education is efficient and desirable we analyze non stationary equilibria of an olg economy characterized by perfect capital mobility intergenerational transfers and a hierarchical education system the government uses income tax revenues to finance basic education and support higher education that generates skilled labor given this the following issues are considered a the impact of education and international markets on the equilibrium number of low skilled and skilled workers in each generation b the economic efficiency of public subsidies to higher education in generating skilled human capital c the endogenous support for a government s educational policies found in a political equilibrium

a longitudinal analysis of white women s wages according to human capital theory women s work participation decisions will strongly affect their wages and wage growth we test human capital predictions about how labor force withdrawals both past and prospective part time work experience and working in male rather than in female jobs affect wages and wage growth for white women we do this by estimating a wage change model for the years 1967 1979 for a national sample of white women we find that wages drop immediately following withdrawals but that this is followed by a rapid wage growth so that the net loss in wages from dropping out of the labor force is small we further find that wage growth is not significantly lower in female than in male jobs but that part time work experience does not lead to significant wage growth in either male or female jobs

efficient estimation of structural hedonic systems when a product or job is not homogeneous but instead embodies several different characteristics it is difficult to use price information about the product to learn anything about the structure of the supply and demand for the embodied characteristics s rosen 1974 highlighted this problem and suggested that the estimated slope of the price characteristic relation the marginal price could be used instead of standard prices in otherwise standard estimation of the supply and demand system however recently brown and h rosen 1982 brown 1983 and mendelsohn 1985 have pointed out that this method is applicable only when the marginal price depends on variables not found in the supply and demand equations in this paper we show that since the hedonic system matches consumers with high demand for the characteristic to firms with low costs of producing it exogenous variables from the supply equation are not valid instruments in the demand equation and vice versa therefore even when the brown rosen mendelsohn brm condition holds estimation of the identified system by standard simultaneous equations techniques will produce inconsistent estimates we then show that the system can be identified despite the absence of the standard instruments and develop an efficient estimator for the identified system since cross equation constraints make estimation of hedonic systems particularly vulnerable to specification error we also consider some specification tests in this section we consider a simple model with only one characteristic the extension to several characteristics is straightforward the basic model developed by rosen can be described as follows firms with different technologies produce products which provide consumers with varying levels of some characteristic z each consumer buys one unit of the good the product is such that an amount of z from two units of the good provides less utility than the same amount of z embodied in a single unit e g acceleration in a car safety in a job consumers

home alone supervision after school and child behavior as female participation in the labor force continues to grow in the us so too does reliance on non parental child care however the high cost of child care has impeded the ability of many working mothers to find sufficient child care for their children as a result as recently as 1998 over eight million children ages five to 14 spent time without adult supervision on a regular basis in the us i examine the effect of the lack of adult supervision after school on a panel of school age children using ordinary least squares and fixed effect estimation i find that children with adult supervision are less likely to skip school use alcohol or marijuana steal something or hurt someone these findings suggest that expanding after school or child care programs typically geared to preschool age children to accommodate more school age children may have important consequences for their human capital development and labor market outcomes later in life

evidence on the volunteer labor supply of married women 1 introduction in this paper i investigate the volunteer labor supply of married women there are dozens of studies that examine the labor supply of married women and a smaller number that investigate the supply of volunteer labor in general as far as i know there are none that have focused on the supply of volunteer labor by married women i analyze time diary data for the 1970s to consider one main question and three subsidiary questions i what was the direct effect of economic variables after tax wage rate and other income on married women s volunteering both participation and hours ii does the number of children in the family influence the volunteering of married women to the extent that rising wages may induce smaller family size is this an indirect channel that reduces volunteering if one of the motivations for volunteering is to increase the quantity or quality of activities for one s own children the 1970s is an especially interesting time period to examine in the united states as that was the decade that saw the first large increases in married women s labor force participation rates iii are time and donations substitutes or complements for married women iv do the data support the brown and lankford 1992 modeling conjecture concerning a sequence of time allocation decisions as opposed to the gronau model of household time allocation where such decisions are made simultaneously gronau 1986 i find that i the volunteer labor supply for married women is positively sloped and inelastic with an estimated wage elasticity of 0 64 rises in the net wage have a small negative effect on married women s participation in volunteer activities a 25 rise in the net wage is associated with a 1 drop in the probability of volunteering there is a small negative other income from assets and husband s earnings elasticity of volunteer labor supply 0 09 so other sources of income mattered for married women s volunteering in the 1970s the effect of other income on married women s volunteer participation is positive ii having more children increases the probability of volunteering but reduces the number of hours volunteered iii donations of time and money appear to be substitutes overall the elasticity of married women s volunteer hours with respect to the tax price of giving is greater than two the participation effect is again negative this result is tentative because the data are not based on tax return information and i lack good information on cash donations iv there is mixed support for the brown and lankford conjecture the finding of a positive wage elasticity of volunteer labor supply is at odds with the opportunity cost of time interpretation of the wage especially as the finding for other income is also negative implying that volunteer hours are an inferior good substitution and income effects would therefore both be in a negative direction as the net wage rises the results with the sequential specification are sensible and easily interpreted but the key parameter estimate does not quite meet conventional standards of statistical significance increased hours of work decrease married women s participation and hours an added test of the sequential model is less favorable the wage findings suggest that rising wages for women caused a reduced incidence of volunteering among married women but if anything increased the hours of volunteering one possible vehicle for this would be the entry of women into professional careers where volunteering is a normal part of the career another possible explanation is that married women with a loose attachment to volunteering stopped volunteering and those married women with greater attachment to volunteering increased their hours commitments to offset the participation effect the link between children and volunteering is important as an indicator of how much selfinterest is involved in volunteering for example school volunteering may be a way of providing enhanced investment in one s own children where the benefit to others is a by product

infant health and the labor supply of mothers this study examines the association between maternal employment and infant feeding and the health of children and the role of prices wages and other exogenous factors in influencing the association in the philippines data were obtained from the 1983 86 cebu longitudinal health and nutrition survey of 2868 women who were permanent residents of the sample areas and had given birth to a single live child in metro cebu during 1983 84 analysis is based on the conceptual framework in which infant feeding and labor supply are jointly chosen to maximize the utility subject to time budget and health production function constraints findings indicate that the labor supply of the mother had little direct effect on infant health when prices wages and other exogenous factors are taken into account maternal wage rates and prices of key foods affected labor supply and infant feeding and care women with better wage offers were more likely to work and to have healthier infants maternal labor supply only had statistically significant effects on infant health when occupation was accounted for it is suggested that women in developing countries should not be discouraged from working womens earnings increase their ability to pay for food and breast milk substitutes that contribute to healthy infants the authors suggest that other health outcomes such as infant morbidity and mortality could be examined or substitutions for other feeding patterns and child care options

the causes of hours constraints evidence from canada over half of workers are dissatisfied with the number of hours they work and of these the vast majority desire more rather than fewer hours using the canadian survey of work reduction we examine two potential explanations for hours constraints long term contracts due to worker moral hazard or specific capital and implicit contracts in which wages are insured but hours fluctuate our results contradict the moral hazard and insurance models and weakly support the specific capital model les causes des contraintes sur les heures de travail le cas canadien plus de la moitie des travailleurs ne sont pas satisfaits du nombre d heures qu ils travaillent et de ceux ci la grande majorite veut travailler plus et non pas moins d heures a l aide des donnees de l enquete canadienne sur la reduction des heures de travail les auteurs examinent deux sources potentielles d explication pour ce genre de phenomene les contrats a long terme attribuables au probl eme du capital humain specifique des travailleurs et au hasard moral et les contrats implicites par lesquels le niveau de salaire horaire est assure mais le nombre d heures travaillees fluctue les resultats presentes contredisent les modeles fondes sur le hasard moral et l assurance et supportent faiblement le modele de capital humain specifique surveys conducted in the united states consistently show that a substantial fraction of workers wish to work a different number of hours from those that they actually work of those who would like to change their hours the vast majority would prefer to work more hours shank 1986 in previous work kahn and lang 1992 we tested whether u s hours constraints could be explained by lifetime contract agency models in which the earnings profile is structured so as to deter worker cheating or

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

retrospectives the cyclical behavior of labor productivity and the emergence of the labor hoarding concept the concept of labor hoarding at least in its modern form was first fully articulated in the early 1960s by arthur okun 1963 by the end of the 20th century the concept of labor hoarding had become an accepted part of economists explanations of the workings of labor markets and of the relationship between labor productivity and economic fluctuations the emergence of this concept involved the conjunction of three key elements the fact that measured labor productivity was found to be procyclical rising during expansions and falling during contractions a perceived contradiction with the theory of the neoclassical firm in a competitive economy and a possible explanation based on optimizing behavior on the part of firms each of these three elements fact contradiction and explanation has a history of its own dating back to at least the opening decades of the twentieth century telling the story of the emergence of the modern labor hoarding concept requires recounting these three histories histories that involve the work of economists motivated by diverse purposes and often not mainly if at all concerned with the questions that the labor hoarding concept was ultimately used to address as a final twist to the story the long standing positive relationship between labor productivity and output in the us economy began to disappear in the late 1980s and during the great recession labor productivity rose while the economy contracted

labor supply hours constraints and job mobility if hours can be freely varied within jobs the effect on hours of changes in preferences for those who do change jobs should be similar to the effect on hours for those who do not change jobs conversely if employers restrict hours choices then changes in preferences should affect hours more strongly when the job changes than when it does not change for a sample of married women we find that changes in many of the labor supply preference variables produce much larger effects on hours when the job changes

marginal and conditional probabilities of excess demand abstract this note compares and illustrates two criteria for classifying observations on a non clearing market namely the marginal probability of excess demand and the probability of excess demand conditional on the observed quantity

sleep and the allocation of time using aggregated data for 12 countries a cross section of microeconomic data and a panel of households we demonstrate that increases in time in the labor market reduce sleep our theory of the demand for sleep differs from standard models of time use by assuming that sleep affects wages by affecting labor market productivity estimates of a system of demand equations demonstrate that higher wage rates reduce sleep time among men but increase their waking nonmarket time by an equal amount among women the wage effect on sleep is negative but very small

data watch the american time use survey we discuss the new american time use survey atus an on going household survey of roughly 1 200 americans per month 1 800 per month in the first year 2003 that collects time diaries as well as demographic interview information from respondents who had recently been in the current population survey the characteristics of the data are presented as are caveats and concerns that one might have about them a number of novel uses of the atus in economic research including in the areas of macroeconomics national income accounting labor economics and others are proposed to illustrate the magnitude of this new survey s possible applications

birth order family size and achievement family structure and wage determination do birth order and the size of one s childhood family influence environment thereby potentially affecting future achievement this article investigates the hypothesis that they do presenting two major empirical findings first neither birth order nor childhood family size significantly influences the level or growth rate of wages a result that is consistent with previous research second family size is both a statistically and economically significant determinant of women s employment status women from small families work less than women from large families when they are young and more than women from large families when they are more mature

sorting in the labor market do gregarious workers flock to interactive jobs this paper tests a central implication of the theory of equalizing differences that workers sort into jobs with different attributes based on their preferences we present evidence from four new time use data sets for the united states and france suggesting that workers who are more gregarious as revealed by their behavior when they are not working tend to be employed in jobs that involve more social interactions we also find that workers report substantially higher levels of job satisfaction and net affect while at work if their jobs entail frequent interactions with coworkers and other desirable working conditions

tests of the chronic shortage hypothesis the case of poland in the analysis of econometric disequilibrium models it is common to test the n ull hypothesis of equilibrium against the disequilibrium alternat ive this paper tests the null hypothesis of all excess demand tha all observations correspond to positive excess demand against the alternative that permits excess demand of either sign the auth ors use a test due to rogers 1984 which their monte carlo experime nts suggest performs well in small samples as well as a quasi like lihood ratio test which is a suggestive heuristic procedure the da ta are from the aggregate consumption goods market in poland 1955 80 and the paper is thus a test of j kornai s assertion that chroni c shortage characterizes such cpes the results conclusively reject the all excess demand hypothesis for the polish case and the rogers test promises to be of considerable practical use copyright 1988 by mit press

public finance of private goods the case of college education this paper describes a contract theory of public finance of college education that explains why everyone pays for the college education of a lucky minority the contract provides gambles that families desire optimizing the contract determines the taxes paid by all members of society fees paid by those whose children go to college the fraction of children who are admitted to college and the quality of college education changes in wealth lead to changes in taxes and admissions but fees and quality are invariant the practice of using a cutoff level of precollege achievement to determine admission to college is justified by the theory

the effects of progressive taxation on labor supply when hours and wages are jointly determined this paper extends a standard intertemporal labor supply model to account for progressive taxation as well as the joint determination of hourly wages and hours worked we show that these two factors can have implications for both estimating labor supply elasticities as well as for using these elasticities in tax analysis failure to account for wage hours ties and progressive taxation may cause the hours response to marginal tax rate changes to be understated by 5 to 30 percent for men

equilibrium income inequality among identical agents the paper offers a theory of income differences in which income inequality exists and persists despite identical tastes and talents teams of unskilled labor supervised by schooled managers produce goods with increasing returns to scale agents are assumed unable to borrow to fund the human capital investment needed to become managers despite ex ante identical agents the model displays the following equilibrium phenomena i risk averse agents accept fair gambles implying an unequal ex post distribution of unearned income ii agents agree to publicly subsidize education although those receiving the subsidy have the highest material wealth and iii income and educational differences are perpetuated from generation to generation

why do different wage series tell different stories the average wage is a key aspect of economic well being in a society several alternative wage measures based upon official government statistics are available to analysts although these series always have differed in their relative levels since the mid 1970 s their trends have diverged markedly this paper which summarizes and updates our earlier work abraham et al 1998 has several goals to describe several commonly used hourly wage series to characterize differences in their trends and to evaluate alternative explanations for these differences

tied wage hours offers and the endogeneity of wages in the standard model of labor supply each worker is a price taker where the relevant price is an hourly wage rate which is fixed in the short run and which does not depend upon the number of hours supplied with this basic assumption the wage can be regarded as exogenous for the purpose of estimating a labor supply function this paper proposes and implements a pair of tests for the exogeneity of wages in a longitudinal labor supply model and for the particular failure of exogeneity associated with jobs that offer wage hour packages the first test is very simple it amounts to a test of whether hours granger cause wages at the individual level the second test involves a simultaneous estimation of labor supply and wage offer equations both tests indicate that the offered wage is related to hours worked though the offer locus is for this sample very flat the principal conclusion is that labor supply equations cannot properly be estimated in isolation from the process generating wages even when long time series are available on a sample of individuals this abstract was borrowed from another version of this item

job changes and hours changes understanding the path of labor supply adjustment we use british panel data to investigate single women s labor supply changes in response to three reforms that affected individuals work incentives we use these reforms to identify changes in labor supply there is evidence of small hours of work effects for two of such reforms a third reform in 1999 instead led to a significant increase in single mothers hours of work the mechanism by which the labor supply adjustments were made occurred largely through job changes rather than hours changes with the same employer this is little overall effect of the reforms on wages

the trade off between child quantity and quality an empirical investigation of trade offs between number of children and their scholastic performance confirms that family size directly affects children s achievement though parents show no favori

fixed costs and hours constraints hours constraints are typically identified by worker responses to questions asking whether they would prefer a job with more hours and more pay or fewer hours and less pay because jobs with different hours but the same rate of pay may be infeasible when there are fixed costs of employment or mandatory overtime premia the constraint in those cases may be illusory cross section estimates of reported hours constraints are consistent with this model implying that the overall level of hours constraints may exaggerate the extent to which the labor market is characterized by frictions and imperfections

time use during the great recession using data from the american time use survey between 2003 and 2010 we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies leisure absorbs roughly 50 percent of foregone market work hours with sleeping and television watching accounting for most of this increase we document significant increases in time spent on shopping child care education and health job search absorbs between 2 and 6 percent of foregone market work hours we discuss the implications of our results for business cycle models with home production and non separable preferences jel codes d13 e32 j22

cyclical variation in labor hours and productivity using the atus we examine monthly variation in weekly work hours using data for 2003 10 from the current population survey cps on hours worker from the current employment survey ces on hours job and from the american time use survey atus on both the atus data minimize recall difficulties and constrain hours of work to accord with total available time the atus hours worker are less cyclical than the cps series but the hours job are more cyclical than the ces series we present alternative estimates of productivity based on atus data and find that it is more pro cyclical than other productivity measures

canadian jobs and firm size do smaller firms pay less even after controlling for observable workers characteristics and for occupation and industry specific effects a substantial wage differential remains between large and small firms what underlies the remaining wage differential is unclear direct evidence on pension plan coverage and on lay off rates by firm size is inconsistent with the bad working conditions hypothesis the union avoidance hypothesis does not seem to explain an important portion o f the wage differential as suggested by efficiency wage models part of the remaining wage differential may be due to firms heterogeneity similarly perhaps large firms pay higher wages simply partly beca use they employ workers with more unobserved abilities because differen t explanations of the wage differential may lead to different policy implications determining the source of the wage firm size effect is an important question for future research

gambles and the shadow price of death recent papers on the value of life involve preferences of the sort introduced by milton friedman and leonard savage 1948 1 given the choice between undergoing a particular gamble in wealth and possessing the mathematical expectation of the payoffs of the gamble the consumers in these studies may prefer the gamble the presence of such risk loving preferences is inferred from two well established facts life is an indivisible commodity in the models and indivisibility leads to preference for gambles the former fact is made clear by philip cook and daniel graham the latter was first noted by yew kwang ng 1965 and is widely known in spite of the obvious connection the implications of risk loving tastes in this area have not been explored this paper examines some implications of such risk loving the idea that indivisibility produces friedman savage preferences and that such preferences create a demand for gambles is extended in section i to a theory of demand for indivisible goods and derived demand for associated optimum gambles this theory suggests that the price of an indivisible good will not compensate for possessing or not possessing the good section ii applies the demand theory to an equilibrium model of labor supply that is relevant to the determination of the value of life in this model the wage diflerential is useful in guiding policy toward public risks in spite of the fact that the differential is not compensating i demand for gambles and demand for goods

hours flexibility and retirement i introduction standard models of labor supply depict workers as choosing to work any positive amount of hours they wish at the competitive wage paid to persons of their type implicit in these models is the assumption that employers offer to workers at a particular wage a menu of infinitely many hours options from which workers may choose however this assumption seems fundamentally at odds with how the labor market functions in particular the distribution of weekly hours of work suggests that workers may be offered only a limited set of hours options by the employers 1 this study examines how employer imposed minimum hours of work requirements affect workers retirement decisions 2 we present a simple theoretical framework which shows that workers who cannot lower their hours of work in one period are more likely to retire by some subsequent date than workers not so constrained the intuition is straightforward given his characteristics and the wage he commands there is a particular hours level which a person desires to work in any period equivalently between any two time periods a worker initially working a given amount of hours desires that his hours change over time by a particular amount for workers with jobs that feature flexible hours the actual change in hours worked over time always perfectly matches the desired change if the worker desires to withdraw from the labor force then he does so if he desires to work fewer positive hours in the later period he changes his labor supply to precisely the desired level for workers with the same desired change in labor supply but who face hours constraints the only way to lower hours of work from one positive amount to another is to change jobs because such job changes are associated with transition costs the worker chooses from among a set of less than ideal options he can continue at the present job and be overemployed alternatively he can pay a transition cost and work the desired hours level in a new job or he can withdraw completely from the labor force thus unlike the worker whose hours are flexible the hours constrained worker retires both when he desires to work 0 h and when he wishes to work some positive amount less than he did previously but faces relatively high transition costs we tested the prediction that hours constrained workers are more likely to retire over time using a sample of retirement aged individuals from the health and retirement study hrs we found that a large fraction of workers aged 55 64 yr cannot lower their usual weekly hours of work in 1992 these constraints are prevalent for both men and women among people working different hours level and across all types of jobs exploiting the panel feature of the data and using a series of empirical tests we found that hours constrained workers are much more likely than their unconstrained peers to be retired by 1996 we document few differences in observed characteristics between constrained and unconstrained workers suggesting that the results do not derive from differences in latent retirement propensities across workers or to unmeasured job characteristics moreover we controlled carefully for demographic and job information we also conducted some simple tests to assess the likelihood that the results derive from sorting by job type constrained or unconstrained or simple measurement error and found that our main estimates continue to obtain the study s emphasis that hours constraints make it difficult for workers to satisfy changing labor supply preferences without changing jobs is also the main focus of altonji and paxson 1992 these authors showed that in a sample of prime aged women events likely to generate large changes in labor supply preferences such as the birth of a child or a child starting school tend to be associated with large changes in hours worked only for persons who change jobs

clean evidence on peer effects we study subjects who were asked to fill letters into envelopes with a remuneration independent of output in the pair treatment two subjects worked at the same time in the same room and peer effects were possible in the single treatment subjects worked alone and peer effects were ruled out we find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs moreover average output is higher in the pair treatment thus peer effects raise productivity finally low productivity workers are the most sensitive to the behavior of peers

non cognitive child outcomes and universal high quality child care exploiting a rich panel data child survey merged with administrative records along with a pseudo experiment generating variation in the take up of pre school across municipalities we provide evidence of the effects on non cognitive child outcomes of participating in large scale publicly provided universal pre school programs and family day care vis a vis home care we find that compared to home care being enrolled in pre school at age three does not lead to significant differences in child outcomes at age seven no matter the gender or mother s level of education family day care on the other hand seems to significantly deteriorate outcomes for boys whose mothers have a lower level of education finally increasing hours in family day care from 30 40 hours per week to 40 50 hours per week and hours in pre school from 20 30 hours per week to 30 40 hours per week leads to significantly poorer child outcomes

choice among wage hours packages an empirical investigation of male labor supply this article specifies and estimates an empirical model of male labor supply based on an implicit market model of wage hours determination we discuss how moving from a standard labor supply model to an implicit market model affects model specification and choice of estimation technique we find that average hourly earnings are not independent of hours worked and that ols estimates of the wage hours relationship are biased we also show that a labor supply model that assumes wages to be independent of hours worked produces a positively biased estimate of the effect of the wage on labor supply

a fresh look at the rotten kid theorem and other household mysteries gary becker s rotten kid theorem asserts that if all family members receive gifts of money income from a benevolent household member then even if the household head does not precommit to an incentive plan for family members it will be in the interest of selfish family members to maximize total family income i show by examples that the rotten kid theorem is not true without assuming transferable utility i find a simple condition on utility functions that is necessary and sufficient for there to be the kind of transferable utility needed for a rotten kid theorem while restrictive these conditions still allow one to apply the strong conclusions of the rotten kid theorem in an interesting class of examples

labor supply as a choice among latent jobs unobserved heterogeneity and identification this paper discusses aspects of a framework for modeling labor supply where the notion of job choice is fundamental in this framework workers are assumed to have preferences over latent job opportunities belonging to worker specific choice sets from which they choose their preferred job the observed hours of work and wage is interpreted as the job specific hours and wage of the chosen job the main contribution of this paper is an analysis of the identification problem of this framework under various conditions when conventional cross section micro data are applied

the effect of a first child on female labor supply evidence from women seeking fertility services estimating the causal effect of a first child on female labor supply is complicated by the endogeneity of fertility this paper addresses this problem by focusing on a sample of women from the national survey of family growth nsfg who sought help to become pregnant after a certain period only some of these women gave birth results using this strategy show that having a first child younger than one year old reduces female employment by 26 percentage points these estimates are close to ols estimates from census data and to those from ols and fixed effects models on nsfg data

utilitarianism and horizontal equity the case for random taxation this paper establishes that far from being able to derive the principle of horizontal equity from utilitarianism the principle is actually in consistent with utilitarianism in a variety of circumstances we derive conditions under which a it is optimal to impose random tax schedules ex post randomization and b it is optimal to randomize the tax schedules imposed on a set of otherwise identical individuals ex ante randomization the implications for optimal tax theory are discussed more generally it is shown that there are a number of potentially important economic situations with which the principle of horizontal equity may be inconsistent not only with utilitarianism but even with pareto optimality this abstract was borrowed from another version of this item

should unemployment insurance vary with the unemployment rate theory and evidence we study how the marginal welfare gain from increasing the unemployment insurance ui bene t level varies over the business cycle we do this by estimating how the moral hazard cost and the consumption smoothing bene t of ui vary with labor market conditions which we identify using variation in the interaction of ui bene t levels with the unemployment rate within u s states over time we nd that the moral hazard cost is procyclical greater when the unemployment rate is relatively low by contrast we do not nd evidence that the consumption smoothing bene t varies with the unemployment rate we use these empirical results to estimate the marginal welfare gain and we nd that it is modest on average but varies positively with the unemployment rate jel h5 j64 j65

macroeconomic planning and disequilibrium estimates for poland 1955 1980 the authors specify and estimate a four equation disequilibrium model of the consumption goods market in a centrally planned econo my this work is based on previous papers of r portes and d winter 1977 and w charemza and r quandt 1982 the model contains a household demand equation a planners supply equation a min condition and plan adjustment equation through which plan formation becomes endogenous the paper uses a unique new data set of time series for plans for the major macroeconomic variables in poland the overall framework is applicable to any large organization which plans economic variables coauthors are richard e quandt david winter and stephen yeo copyright 1987 by the econometric society

a tale of two cities and a giffen good a scenario is provided in which a house in eden mills ontario is a giffen good the conditions derived in the example apply to other indivisible goods as well jel classification d11

two alternative stochastic specifications and estimation methods for quantity rationing models a monte carlo comparison quantity rationing disequilibrium models can be characterized either by deterministic or by stochastic switching rules this paper reports on monte carlo experiments suggesting that the ml estimator associated with the deterministic switching rule one market model apparently has better small sample properties than its stochastic switching rule counterpart even when the latter is asymptotically superior this seems to be the result of a systematic residual variance underestimation in the stochastic switching rule model the feasibility of the deterministic switching rule estimator in a two market framework is next investigated

h ours constraints and the wage hours locus surveys in the united states and canada reveal that approximately half of all workers would like to work a different number of hours per week if they could continue to receive their usual hourly wage of these about two thirds would like to work more hours and one third would like to work fewer hours kahn and lang 1991 shank 1986 despite the apparent prevalence of hours constraints the reasons why they exist are poorly understood in previous research we showed that lazear s 1981 agency model of the return to seniority is inconsistent with the data and that the specific capital model and insurance based implicit contract models cannot account for important regularities kahn and lang 1992 1995 in this paper we examine whether hours constraints can be explained by the existence of a hedonic wage hours locus we find that the actual wage hours locus is reasonably consistent with the wage hours locus predicted by observed hours constraints when the hedonic model is augmented by considerations of long term contracting we conclude that despite data and estimation shortcomings hedonic choices are an important reason for hours constraints to exist

making do with less working harder during recessions why did productivity rise during recent recessions one possibility is that average worker quality increased a second is that each incumbent worker produced more the second effect is termed making do with less using data from 2006 to 2010 on individual worker productivity from a large firm these effects can be measured and separated for this firm most of the gain in productivity during the recession was a result of increased effort additionally the increase in effort is correlated with the increase in the local unemployment rate presumably reflecting the costs of losing a job

slack shortage and discouraged consumers in eastern europe estimates based on smoothing by aggregation as a consequence of aggregation over markets the observed quantity may be less than the quantity demanded and less than the quantity supplied to deal with such situations a new technique is proposed for estimating demand and supply curves and the extent of shortage and slack the technique is applied to the consumption goods markets of czechoslovakia the german democratic republic hungary poland and yugoslavia it is found that shortage even corrected for a discouraged consumer effect is seldom as great as slack

the likelihood function and a test for serial correlation in a disequilibrium market model abstract the likelihood function for an econometric disequilibrium market model of fair and jaffee with autocorrelated disturbances is derived a statistic is introduced for the test of serial correlation in such a model the statistic can be regarded as generalization of the durbin watson statistic

consumption demand saving behaviour and rational expectations an application of disequilibrium modelling to china 1952 92 in explaining dramatic changes in chinese household savings and money demand behaviour in the reform period previous studies proposed and tested three different hypotheses however no effort has been made to distinguish quantitatively between forced and voluntary savings in terms of their quanta reasons and effects the role of rational expectations in determining household behaviour has not received proper attention and a puzzle of high domestic savings ratio accompanied by low interest rates still remains to be solved this paper adopts a disequilibrium framework capable of investigating these issues our research yields some interesting and important results its findings support the conjecture that both regime shifts and repressed inflation have contributed to the rapidly rising personal money balances during the reform period with the former being a dominant factor it is shown that household voluntary savings can be well explained by official interest rates only forced savings and instantaneou

is lunch and other break time productive in sweden a hedonic earnings approach this hedonic earnings analysis suggests that in sweden in the mid 1980s break time was overall productive at the margin a result that contrasts with findings from similar studies using u s data among workers in male jobs however break time for meals appears to have been significantly less productive at the margin than normal work to try to account for the male job effect the author explores the possibility that high productivity workers took longer breaks than other workers in response to high marginal tax rates union induced wage compression or both the results of his further analysis suggest that union induced wage compression may have contributed to the male job effect but he finds no support for the tax rate explanation

computational controversies in disequilibrium and shortage modelling of centrally planned economies abstract most disequilibrium and shortage models of centrally planned economies fall into three categories testable excess demand the portes school disequilibrium indicators and kornai s economics of shortage these models have generated numerous controversies and conflicting empirical results however this paper argues that some disputes are not caused by the theoretical features of the models but rather by the utilisation of different estimation methods that are not directly comparable this suggests that several controversies are more apparent than real and can be resolved through the improvement of computational techniques and statistical hypothesis testing theory

continued existence of cows disproves central tenets of capitalism we examine the returns from owning cows and buffaloes in rural india with labor valued at market wages households earn large negative median returns from holding cows and buffaloes at 304 and 75 respectively making the stark assumption of labor valued at zero median returns are then 5 for cows and 10 for buffaloes with 52 and 46 of households earning negative returns for cows and buffaloes respectively why do households continue to invest in livestock if economic returns are negative or are these estimates wrong we discuss potential explanations including labor market failures for why livestock investments may persist

child care subsidies and labor supply in sweden this paper utilizes data from a swedish household survey for 1984 the hus data in combination with data on public child care fees and spaces per child by community we argue that the subsidy rate and availability of spaces determined by the political leaders of the community is to a large extent exogenous to the household the joint out of home child care and labor supply decision is analyzed by logit and ordered probit choice models we find that the high quality public child care in sweden encourages labor market activity of women with preschoolers even when the spouse s income is high and that when spaces are not rationed a lower price encourages use

time to eat household production under increasing income inequality eating requires the raw food materials that make up meals and also the time devoted to buying food preparing meals and eating them and cleaning up afterwards using time diary and expenditure data for the u s for 1985 and 2003 i examine how income and time prices affect time and goods inputs into this household produced commodity focusing on these two years between which income and earnings inequality increased allows examining how household production is affected by changing economic opportunities the results demonstrate that both inputs into eating increase with income and that higher time prices at a given level of income reduce time inputs over this period the relative goods intensity of producing this commodity increased especially at the lower part of the income distribution and the average time input dropped substantially the results are consistent with goods time substitution being relatively difficult for eating and with substitution being more difficult as production expands

redistribution and subsidies for higher education the financing of higher education through public spending imposes a transfer of resources from taxpayers to university students and their parents we provide an explanation for this phenomenon those who attend institutions of higher education will earn more income in the future and will pay more taxes people whose children do not receive higher education however should agree to help pay the cost of such education providing that taxes are sufficiently high to ensure an adequate redistribution in favor of their own children at some time in the future

on the rate of return to schooling quality empirical evaluation of the effect of school quality or type and amount of resources per student on adult earnings requires a conceptual framework a model of the returns to schooling in a simple human capital growth context is extended to illustrate how factors such as consumption benefits of students parental concern over equity between siblings and use of schools to facilitate parental labor supply can alter the apparent return to school quality the need for microlevel time diary and other data on human capital formation in both classrooms and families is highlighted copyright 1996 by mit press

smoothing the aggregate fix price model and the use of business survey data recently there have been several attempts to implement empirical versions of the aggregate two market fix price quantity rationing model due to barro and grossman i97i i976 and malinvaud i977 in particular artus et al i98i and vilares 198i for france kooiman and kloek i980 i982 for the netherlands sneessens i98i for belgium and vilares i982 for portugal in these models the explanation of output and employment switches discretely between a small number of alternatives or regimes each of which represents a particular supply or demand constraint it has been stressed by several authors that discrete jumps between all or nothing explanations from the supply side or the demand side may overstate the case in actual aggregate economies supply constraints and demand constraints will always coexist albeit in varying proportions muellbauer i978 was the first to employ explicit aggregation as a smoothing device in this context starting from a continuum of micro markets in disequilibrium he obtains aggregate transactions as the mathematical expectation of the minimum of supply and demand given the size distribution of supply and demand in the population of micro markets as a result the contributions of the supply side and the demand side vary smoothly with the proportion of markets in excess demand both kooiman and kloek i979 and malinvaud i982 have elaborated on muellbauer s approach and the present study essentially contains a further extension in the sense that the goods market and the labour market are now simultaneously dealt with the present approach also deviates from the earlier ones in that the aggregation by integration technique is applied to firms in disequilibrium instead of markets in disequilibrium this has the advantage that one can proceed from a single population of micro level entities from which both aggregate output and employment are obtained 2 spillovers arise naturally when considering the interaction effects between the output and employment decisions of individual firms moreover we automatically obtain expressions for the proportion of firms whose operations are constrained by demand for goods by supply of labour

nonwage benefits in a simultaneous model of wages and hours labor supply functions of young females this article argues that the negative relationship between weekly hours worked and the gross hourly wage rate is due to the provision of fringe benefits as the total weekly wage increases employers and employees avoid taxation by substituting wages with nontaxable nonwage benefits i produce a wage that incorporates the benefit effects and estimate the corresponding labor supply elasticities an estimator is presented for the wage hours market locus and the structural labor supply function an empirical application indicates that an estimated negative labor supply elasticity associated with the observed gross wage is reversed when the adjusted wage is employed

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

the effects of hours constraints on labor supply estimates almost all labor supply models are estimated under the assumption that workers are free to choose their hours however theory casual empiricism and survey data suggest that many workers are not free to vary the hours within a job consequently labor supply estimates based on actual hours of work may be biased using canadian data on desired hours of work the authors find that using actual hours causes labor supply estimates to be biased upwards copyright 1991 by mit press