welfare reform and unemployment in new zealand in the early 1990s new zealand cut benefits and tightened eligibility criteria under its main social welfare programmes these benefit changes varied substantially across both time and demographic groups synthetic panel data are used econometrically to isolate the effects of these reforms on several dimensions of unemployment behaviour a simple theoretical model suggests that cutting benefits could either increase or decrease excess labour supply our results indicate that these reforms increased the official unemployment rate by nearly one quarter of a percentage point but significantly reduced broader measures of economic inactivity or the under utilization of labour in the new zealand economy

from welfare to work does the neighborhood matter abstract this paper investigates whether individual transition rates from welfare to work are influenced by neighborhood effects we use a unique administrative database on welfare recipients in rotterdam the second largest city of the netherlands we find that conditional on personal characteristics there is a negative relationship between the neighborhood unemployment rate and the transition rate from welfare to work of young dutch welfare recipients we do not find any neighborhood effects for older dutch welfare recipients and non dutch welfare recipients when performing some sensitivity analyses this result is robust to different specifications

what drives unemployment disparities in european regions a dynamic spatial panel approach abstractwhat drives unemployment disparities in european regions a dynamic spatial panel approach regional studies this study analyzes unemployment differentials in european regions during the period 2000 11 to that end a theoretical model with substantive spatial interactions among regions is developed the solution implies a dynamic spatial durbin model specification including regional and institutional level factors as explanatory variables in conjunction with dynamic spatial panel estimates relative importance metrics are used to quantify the effect of regional disequilibrium equilibrium and national level factors relative importance analysis suggests that during the pre crisis period unemployment disparities were mainly driven by regional level equilibrium factors nevertheless labour market institutions are of major importance to explain increasing disparities during 2009 11

union power policy making and unemployment in western europe 1972 1993 most recent research on the relationship between trade unions and unemployment focuses on the size and structure of trade union movements and argues either that strong unions are bad for unemployment due to their effect on wages or that encompassing unions are good for unemployment because their wage setting behavior takes economic externalities into account this article reports the results of testing the more political hypothesis that trade union influence on government economic policy is important in leading to lower unemployment via the implementation by governments of more vigorous anti unemployment policies than would otherwise be used a pooled time series analysis provides support for this theory in revealing that union influence as indicated by a newly developed measure of union participation in economic policy making was consistently associated with lower unemployment over a range of 13 west european countries during the period 1972 to 1993

the political economy of the neoliberal transformation of french industrial relations the author advances the literature on the role of the state in the decentralization of industrial relations in france by providing a political economic analysis of right and left backed governments in recent decades while both have pursued reforms to reduce regulation and to increase labor market flexibility they have used the state apparatus in different ways to achieve these goals the right has reformed labor law by obtaining partial support from employers associations and unions the social partners the left by contrast has relied on decentralized bargaining with the social partners because its political base would not have accepted flexibility increasing legal reforms the author examines critical episodes of reform in collective bargaining unemployment insurance and employment protection laws to show how the state has intervened in different ways depending on the political identity of the governing coalition

tax delinquency and abandonment an expanded model with application to industrial and commercial properties this study expands on the literature of residential abandonment by considering five types of industrial and commercial properties and three levels of explanatory variables parcel neighbourhood and city using data for cleveland ohio it shows that tax policies have a limited impact on abandonment instead two categories of variables not previously modelled are significant and policy relevant first the more specialised a property and the greater the cost of conversion to alternative uses the greater the likelihood of tax delinquency and abandonment suggesting policies to ease transition to new uses second abandonment spillovers are highly significant even after accounting for neighbourhood common factors this suggests that spatial solutions such as land use planning may be more effective than tax abatement policies in dealing with abandonment and approaches to abandonment must be differentiated by type of property residential abandonment should be re examined in light of these findings

unemployment insurance and the business cycle an equilibrium model is developed to study the interaction of the business cycle unemployment insurance and the labor market for young men in canada the model combines optimal job oer layo and recall decisions within a numerically solved and restricted bayesian nash equilibrium we consider the long run implications of changes made to unemployment insurance in canada during the 1990s the changes lead to equilibrium increases in average rates of unemployment layos and recalls eliminating ui lowers the equilibrium unemployment

general equilibrium macroeconomic models of unemployment can they explain the unemployment path in the oecd several theories which seek to explain the high and apparently persistent unemployment in the oecd countries over the past two decades have arisen within the framework of imperfections in the goods and labour markets probably the most prominent theories within this class of models are the general equilibrium models of phelps 1994 layard and nickell 1986 and layard et al 1991 labelled structuralist theories of unemployment by phelps 1994 common to the structuralist theories is that the low frequency movements in unemployment or the nairu are determined by structural variables such as unemployment benefits taxes real interest rates etc however the high frequency movements in unemployment are determined by wage and price surprises and in the layard and nickell 1986 model also by cyclical mark ups employment is entirely determined by the firms willingness to supply and the firms are never sales constrained by contrast the general equilibrium model of sarantis 1993 which is in post keynesian spirit suggests that unemployment on all frequencies is mainly an outcome of demand side factors in this model imperfections in the goods and labour markets are less important determinants of unemployment in this paper i estimate the extent to which the models of phelps 1994 layard and nickell 1986 henceforth l n and sarantis 1993 are able to explain the unemployment path of the oecd countries using annual data over the period 1960 to 1993 the theoretical set up of the models is presented in section 1 and the empirical estimates are set out in section 2

a nonparametric approach to the von liebig paris technology we develop the dual implications of the von liebig paris nutrient response technology and parametric and nonparametric tests for this technology we discuss the nonparametric approach using two different representations corresponding to optimistic and pessimistic nonparametric approximations of the technology application of the nonparametric approach to two experimental data sets and to two data sets generated by monte carlo methods confirms the presence of yield plateaus but provides mixed evidence regarding input nonsubstitution the optimistic representation exhibits virtually no input substitution while the pessimistic representation shows considerable substitutability

cross national differences in the rise in earnings inequality market and institutional factors this paper uses data from the luxembourg income study to explore the role of differences in supply shifts in explaining cross national differences in the rise in earnings inequality changes in returns to age and education are estimated for eight countries using a common specification of earnings functions across years and countries we find that the small overall increase in earnings inequality in many countries reflects large but offsetting changes in returns to skill and changes in inequality within age education cells furthermore these differences in returns to skill can largely be explained by differences in supply shifts

decomposing productivity indexes into explanatory factors abstract productivity measures are increasingly regarded as key indicators of economic performance identifying sources of productivity growth is of interest to both firms and policy makers this paper revisits the debate on how to decompose productivity growth into explanatory factors with a focus on extracting technical progress technical efficiency change and returns to scale components using bjurek s concept of the malmquist index introduced into production theory in a systematic way by caves christensen and diewert a reference technology is required to define the components of interest unlike other approaches ours do not make any convexity assumptions on the reference technology but instead follows the example of tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions a new decomposition of a productivity index is provided with the existence and properties of the underlying distance functions of the decomposition proven under relatively unrestrictive assumptions the paper also provides for the first time a theoretical justification for the geometric average form of the bjurek productivity index these rigorous theoretical contributions provide significant avenues for enhanced understanding of empirical productivity performance

theory ahead of language in the economics of unemployment this paper discusses from the perspective of modern theories of unemployment several unemployment concepts that have been used over the years it argues that many of these concepts are of limited value and are dominated by a few simple concepts that are basic in the analysis of stochastic general equilibrium models

the phillips curve as a long run phenomenon in a macroeconomic model with complex dynamics abstract in this paper we derive a phillips curve as the image of a chaotic attractor of the state variables of a non linear dynamical system describing the evolution of an economy this has two important consequences the phillips curve in our model is a true long run phenomenon but to exploit the apparent unemployment inflation trade off may require unrealistically complex policy measures the model is based on an overlapping generations non t tonnement approach involving temporary equilibria with stochastic rationing in each period and price adjustment between successive periods in this way we are able to obtain complex sequences of consistent allocations allowing for recurrent unemployment and inflation

competition between employed and unemployed job applicants swedish evidence we use the swedish applicant database to investigate empirically whether being unemployed per se reduces the probability of getting contacted by a firm all searchers looking for a new job are invited to submit their personal details to this database over the internet since we have access to exactly the same information as the firms we can minimize the problems associated with unobserved heterogeneity our results show that an unemployed applicant faces a lower contact probability than an otherwise identical employed applicant thus supporting the notion that firms view employment status as a signal of productivity

labor market institutions and aggregate fluctuations in a search and matching model abstract this paper explores the influence of labor market institutions on aggregate fluctuations it uses a dynamic stochastic general equilibrium model characterized by search and matching frictions in the labor market and nominal rigidities in the goods market it finds that firing costs and unemployment benefits can have substantial effects on aggregate fluctuations increasing firing costs decreases the volatility of output employment and job flows due to the reduction in the mass of jobs sensitive to disturbances and lower incentives for firms to hire and fire workers hence firms adjust to shocks mainly through prices causing inflation to become more volatile raising unemployment benefits has the reverse effect on aggregate fluctuations

capital accumulation and unemployment a tale of two continents in contrast to much recent work regarding the causes of european unemployment in this paper we emphasize the importance of capital accumulation but unlike the few previous studies which have examined the relationship between capital accumulation and unemployment we argue that what matters for the evolution of employment and the unemployment rate is not the absolute growth rate of a country s capital stock but its evolution relative to other countries capital stock the empirical validity of the above statement is demonstrated for almost all oecd countries using quarterly time series data for the period 1961 1995 more detailed evidence is also presented for germany japan and the united kingdom

the role of selective job search in uk unemployment selective search where unemployed job losers confine their job seeking efforts to matches in the pre separation sector has attracted consid erable attention as a possible source of high and persistent unemployment however this idea is questionable those opting for selection may do so because this strategy is more effective at gener ating an acceptable offer using uk microdata i find evidence in support of the latter view selective searchers cannot account for the persistence of high unemployment since the early 1980s

the structure of unemployment we test for a unit root in postwar unemployment rates for sixteen oecd countries when a one time structural break is incorporated the unit root hypothesis can be rejected for most of the countries and the measured persistence of unemployment falls dramatically we then test for multiple structural changes and find evidence of one or two breaks for those countries for which the unit root hypothesis could be rejected almost all of the breaks are positive reflecting the sustained rise in european unemployment the major exception is the united states where long term unemployment rose in the 1970s and fell in the 1980s

a re evaluation of the relation between wages and unemployment in the united kingdom this paper examines the long run or equilibrium relationship between wages prices and the unemployment rate in the united kingdom using annual data covering the period 1860 1999 using johansen s maximum likelihood method of testing for cointegration two long run relations are found in a small system of four variables the first relation depicts the co movement of the level of real wages adjusted for productivity together with the unemployment rate and the rate of inflation the second relation shows the co movement between the rate of inflation and deviations of productivity from its trend growth

long term unemployment the invention of hysteresis and the misdiagnosis of structural unemployment in the uk this paper investigates the empirical basis for the belief that unemployment makes people less employable and that the existence of a pool of long term unemployed people is therefore in itself a barrier to full employment drawing on data for great britain from the 1940s to the present day it shows that this idea has arisen through misinterpretations of the statistical evidence the resulting policies besides diverting resources from the demand side pro grammes appropriate to the true situation of structural unemployment appear to have created a problem of the kind they were intended to address by encouraging unemployed people to move onto sickness benefits

emu and labour market reform needs incentives and realisations despite improving labour market conditions in recent years a number of emu countries still suffer from high and persistent unemployment it could therefore be expected that labour market reform would be given a prominent position on the political agenda the new constraints associated with the common monetary policy only increase the pressure for reform relying on the introduction of the single currency as a trigger for labour market reform may be a risky strategy emu generates a complex set of re optimising strategies of the players on the labour market which makes it difficult to get a clear idea what impact it will have on labour market reform evaluation of recent reform measures does not make one confident either the empirical analysis confirms to some extent the idea that countries with higher unemployment rates have carried out more labour market reform this finding holds however only for countries that do not belong to emu emu countries have on average carried out no more reform than countries outside emu and any link between the initial unemployment level and the labour market reform indicators seems to lack it may become apparent that more reform is needed once the macroeconomic environment becomes more unfavourable

property taxes and urban housing abandonment this paper formulates and estimates an economic mode1 of landlord housing abandonment using new york city data a major focus of the study is to investigate the importance of property taxes in the abandonment decision as opposed to such factors as the types of buildings or the characteristics of households occupying the neighborhood there are two major results first cities can reduce the rate of abandonment by initiating foreclosure as soon as buildings go into arrears on property tax payments rather than allowing a grace period and second property taxes are an important and significant determinant of abandonment rates the benefits and costs of a policy whereby cities would systematically reduce property taxes in blighted neighborhoods by lowering assessment levels are also explored

unemployment equilibria and input prices theory and evidence from the united states the paper develops an efficiency wage model where input prices affect the equlibrium rate of unemployment we show that a simple framework based on only two prices the real price of oil and the real rate of interest is able to explain the main post war movements in the rate of u s joblessnss the equations do well in forecasting unemployment many out of sample and provide evidence that the oil price spike associated with iraq s invasion of kuweit appears to be a component of the mystery recession which followed

the economic impacts of climate change evidence from agricultural output and random fluctuations in weather fisher et al 2012 hereafter fhrs have uncovered coding and data errors in our paper deschenes and greenstone 2007 hereafter dg we acknowledge and are embarrassed by these mistakes we are grateful to fhrs for uncovering them we hope that this reply will also contribute to advancing the literature on the vital question of the impact of climate change on the us agricultural sector fhrs main critiques of dg are as follows i there are errors in the weather data and climate change projections used by dg ii the climate change projections are based on the hadley 2 model and scenarios rather than the more recent hadley 3 model and scenarios iii standard errors are biased due to spatial correlation iv the inclusion of state by year fixed effects does not leave enough weather variation to obtain meaningful estimates of the relationship between agriculture profits and weather v storage and inventory adjustment in response to yield shocks invalidate the use of annual profit data and vi fhrs argue that a better specified hedonic model produces robust estimates unlike the results reported in dg four of these critiques have little basis and we respond to them here in the introduction specifically with respect to ii the more recent daily climate predictions were not available when we wrote dg nevertheless the most important issue is providing the reliable estimates of climate change and in this note we report estimates based on the climate model we used in dg and a more recent one that we gained access to in the meantime iii in the primary table on agricultural profits dg reports two sets of standard errors with the first clustered at the county level and the second based on a variance covariance matrix that accounts for spatial correlation using the method proposed in conley 1999 thus the claim of fhrs 2012 seems overblown nevertheless to ease comparisons of papers in this literature this note will adopt the fhrs convention of reporting estimated standard errors clustered at the county and state levels we find that inference is largely unaffected by the choice between these different assumptions about the variance covariance matrix

the trade off interpretation of phillips s dynamic stabilization exercise this paper which examines phillips s famous curve is based on phillips s private papers and the london school of economics methodology measurement and testing seminar records sources previously thought to be lost these sources plus phillips s theoretical work suggest that the equilibrium menu of choice is a misinterpretation of phillips s dynamic stabilization exercise phillips had a clearly articulated role for inflationary expectations in his model and had no toleration for the notion that ongoing inflation could purchase sustainable reductions in the rate of unemployment evidence is cited which indicates that milton friedman was profoundly influenced by phillips s analysis of inflationary expectations

unemployment dynamics in britain we examine the inter related dynamics of the unemployment flows and stock our model allows them to be linked through the standard accounting identity but also through behavioural relationships we find that for the uk the bulk of the correlation between duration and the unemployment stock arises from the dependence of duration on unemployment taking careful account of the inter temporal identity outflow shocks have contributed little to the evolution of unemployment since the late 1960s given that the correlation of duration and unemployment arises from the behavioural relationship we show that unemployment dynamics arise mostly from shocks to the inflow unemployment remains one of europe s more pressing economic and social problems as highlighted in the eu s lisbon declaration of 2000 a dynamic approach to unemployment starts from the recognition that unemployment is a stock and changes through shocks to the outflow and inflow the research and policy focus has generally been on the outflow process or equivalently unemployment duration a glance at figure 1 shows why this might be so it reveals a very strong co movement of the unemployment rate and the proportion of the unemployed out of work for a year or more analysts have used data like this to argue that the source of unemployment fluctuations has been changes in the outflow process 1 possibly as a consequence of this most policies directed at reducing unemployment focus on improving the search effectiveness and employability of the currently unemployed the unemployment flows and stock are related in quite complex ways and in this paper we focus on these inter related dynamics the model we use allows them to be linked in two ways first there is the simple accounting relationship whereby shocks to the flows accumulate in the stock second search and matching models suggest behavioural relationships of the flows depending on unemployment the presence of the nonlinear accounting identity in the model makes the analysis of the joint system problematic so we proceed sequentially investigating first one link and then the other we find that for the uk the bulk of the correlation between duration and the unemployment stock displayed in figure 1 arises from the dependence of the former on the latter we find a strong dependence of the outflow rate on unemployment taking careful account of the inter temporal identity on the other hand outflow shocks have contributed little to the evolution of unem

intertemporal labour supply with search frictions starting in the 1970 s wage inequality and the number of hours worked by employed u s prime age male workers have both increased we argue that these two facts are related we use a labour market model with on the job search where by working longer hours individuals acquire greater skills since job candidates are ranked by productivity greater skills not only increase worker s productivity in the current job but also help the worker to obtain better jobs when job offers become more dispersed wage inequality increases and workers work longer hours to obtain better jobs as a result average hours per worker in the economy increase this mechanism accounts for around two thirds of the increase in hours observed in data part of the increase is inefficient since workers obtain better jobs at the expense of other workers competing for the same jobs copyright oxford university press

unemployment vs mismatch of talents reconsidering unemployment benefits we develop an equilibrium search matching model with risk neutral agents and two sided ex ante heterogeneity unemployment insurance has the standard effect of reducing employment but also helps workers to get a suitable job we show through calibrations how the mere difference on unemployment insurance when countries experience a common skilled biased technological shock may result in differences in unemployment productivity growth and wage inequality these results are consistent with the contrasting performance of the labour market in europe and the united states in the last twenty five years the model is used to address some political economy issues

unemployment and the labour management conspiracy we study a model in which management and a union bargain sequentially first choosing a rule that will later determine the level of employment and then choosing a wage the government then chooses an output or an employment subsidy an exogenous natural turnover rate in the unionized sector creates unemployment whenever the union wage exceeds the competitive wage government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour because of the induced change in the endogenous wage unemployment weakens but does not eliminate the possibility of a labour management conspiracy

credit market imperfections and persistent unemployment abstract this paper develops the thesis that credit market frictions may be an important contributor to high unemployment in europe when a change in the technological regime necessitates the creation of new firms this can happen relatively rapidly in the u s where credit markets function efficiently in contrast in europe job creation is constrained by credit market imperfections so unemployment rises and remains high for an extended period the data show that there has not been slower growth in the most credit dependent industries in europe relative to the u s but the share of employment in these industries is lower than in the u s this suggests that although credit market imperfections are unlikely to have been the major cause of the increase in european unemployment they may have played some role in limiting european employment growth

unemployment labour markets and structural change in eastern europe labour markets in eastern europe michael burda unemployment is a major concern in the transforming economies of central and eastern europe the modern flow approach to labour markets suggests both that unemployment is an important component of the transformation process and that the labour market institutions adopted will influence the rate of unemployment in the long run to date eastern european countries exhibit considerable divergences in several of these institutions especially in unemployment benefit systems collective bargaining structures and active labour market policies an aggregate matching function is successfully estimated for data from czech and slovak employment offices emerging labour markets in the east function not so differently from those in the west the implied dynamics make both big bang and benign neglect unattractive strategies for transformation a mixed bang is more appropriate quantitative evidence about the effects on unemployment of different labour market institutions in oecd countries is used to make long term projections of equilibrium rates of unemployment in central and eastern europe given the labour market institutions now in place there with the possible exception of the czech republic high unemployment is likely to be pervasive and persistent

are the unemployed unemployable abstract this paper develops a matching model of the labor market under wage rigidity when hiring decisions are irreversible there are two types of workers the skilled and the unskilled the model is used to analyze whether technological advances may have increased unemployment it is shown that it is likely to be so if they are associated with an increase in the productivity and or the supply of skilled workers relative to unskilled workers these effects are stronger when hiring decisions are more irreversible

party identification retrospective voting and moderating elections in a federal system west germany 1961 1989 the hypotheses of retrospective voting and moderating elections rationalize some empirical regularities in u s presidential and congressional elections that posed a challenge for the party identification hypothesis here these hypotheses are applied to the german federal system that is characterized by staggered national and land provincial elections they are tested using data on real gnp growth at the national and land levels party vote shares in national and land elections party seat shares in national and land parliaments and the party composition of national and land governments over the time period 1961 1989 perhaps surprisingly all three hypotheses party identification retrospective voting and moderating elections find empirical support when applied to the german federal system although these hypotheses were formulated with reference to u s political institutions they travel well bar some modifications that take into account special features of the german political system

the effect of unions on productivity u s surface mining of coal the purpose of this paper is to compare the abilities of two competing analytical techniques mathematical programming and statistical regression to shed light on the union nonunion productivity differential in u s surface coal mining the programming approach has the virtues of being nonparametric and thus extremely flexible and of being able to provide a decomposition of productivity differentials into three components differences in technical efficiency differences in scale efficiency and differences in congestion identification of these three components provides an aid to management in its search for the sources of and remedies for productivity gaps the econometric approach on the other hand is neither flexible nor does it provide such a decomposition its chief virtue lies in the fact that being stochastic it allows for the presence of noise and measurement error that plagues most if not all empirical data thus the two approaches have complementary virtues the two techniques are used to investigate productivity in two samples of u s surface coal mines the programming approach finds a large and significant positive union nonunion productivity differential this differential is due primarily to greater congestion occurring in the smaller nonunion mines in one sample and to scale inefficiency in the smaller nonunion mines in the other sample the econometric analysis finds nearly the same union nonunion productivity differential but sheds no light on the composition of and thus the cure for the differential

the output composition puzzle a difference in the monetary transmission mechanism in the euro area and u s we revisit recent evidence on how monetary policy affects output and prices in the u s and in the euro area the response patterns to a shift in monetary policy are similar in most respects but differ noticeably as to the composition of output changes in the euro area investment is the predominant driver of output changes while in the u s consumption shifts are significantly more important we dub this difference the output composition puzzle and explore its implications and several potential explanations for it while the evidence seems to point at differences in consumption responses rather than investment as the proximate cause for this fact the source of the consumption difference remains a puzzle

asymmetric time series and temporal aggregation the detection of nonlinearities could depend on the sampling frequency asymmetric monthly series may become symmetric when aggregated to quarterly or annual frequencies we test against nonlinearity using the nonlinear autoregressive asymmetric moving average arasma model which nests the linear arma model as a special case using monthly quarterly and annual swedish unemployment series we find support for symmetry linearity in the annual series but not in the monthly and quarterly series

a note on unemployment and capital tax competition abstract we introduce a labor market imperfection into the capital tax competition literature to study the equilibrium tax formulae and their efficiency in the presence of unemployment since we allow for labor market imperfection the standard conclusions of the tax competition literature would be generalized in the case of non full employment our first result shows that even when head taxes on immobile residents are available the optimal capital tax rate for jurisdictional governments is not zero our second finding is that decentralized equilibrium might be characterized by the overprovision of local public goods when the labor market is imperfect

capital and the theory of productivity measurement the purpose of this paper is twofold to provide a brief survey of recent approaches to the measurement of total factor productivity and to comment on some of the special problems which are associated with capital thus in sections i iv below four approaches to the measurement of total factor productivity are outlined while section v compares and contrasts the approaches in section vi i consider how the various approaches have to be modified when welldefined rental markets for components of the capital stock do not exist the usual case

urban unemployment in the eu tertiary sector employment growth and urban size the paper uses regio data to study recent change in unemployment in major urban areas of europe previous results suggested a significant role for tertiarisation in employment and a systematic ass

a phillips curve interpretation of error correction models of the wage and price dynamics this paper presents a model of employment distribution and inflation in which a modern error correction specification of the nominal wage and price dynamics referring to claims on income by workers and firms occupies a prominent role it is brought out explicitly how this rather typical error correction setting which actually seems to capture the wage and price dynamics of many large scale econometric models quite well is fully compatible with the notion of an old fashioned phillips curve with finite slope it is shown how the steady state impact of various shocks to the model can be profitably conceived of and interpreted in terms of and to some extent even calculated by means of this long run phillips curve copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

estimating the natural rate of unemployment and testing the natural rate hypothesis how should one measure the natural rate of unemployment this paper proposes a systems procedure as an alternative to nairu the natural rate is treated as an unobserved state variable in a system that includes measurement equations for the unemployment rate the rate of wage growth and the rate of inflation the model is derived from a version of the wage bargaining model of blanchard and embodies a version of the natural rate hypothesis the model is estimated by embedding the kalman filter within the full information maximum likelihood procedure for us data the estimated model implies substantial post war variation in the natural rate and a negative but weak effect of inflation surprises on unemployment copyright 1999 john wiley sons ltd

the relationship between unemployment and vacancies in australia the paper addresses the existence of an equilibrium unemployment vacancies uv relationship in australia cointegration test results suggest that no bivariate long run uv relationship exists moreover this finding fails to support the basic model of labour job search however a modified beveridge curve is proposed where it is found that a number of trivariate equilibrium relationships exist between unemployment vacancies and one other variable the replacement ratio the proportion of long term unemployed or the real wage the existence of an equilibrium relationship in the multivariate framework is due to the endogenous modelling of the un employment flows which are assumed to be exogenous in the bivariate framework of the beveridge curve

will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach wolfram schlenker w michael hanemann and anthony c fisher there has been a lively debate about the potential impact of global climate change on u s agriculture most of the early agro economic studies predict large damages see for example richard m adams 1989 harry m kaiser et al 1993 and adams et al 1995 in an innovative paper robert mendelsohn william d nordhaus and daigee shaw 1994 hereafter mns propose a new approach using the variation in temperature and precipitation across u s counties to estimate a reduced form hedonic equation with the value of farmland as the dependent variable a change in temperature and or precipitation is then associated with a change in farmland value which can be interpreted as the impact of climate change adams et al 1998 characterize the hedonic approach as a spatial analogue approach and acknowledge that the strength of the spatial analogue approach is that structural changes and farm responses are implicit in the analysis freeing the analyst from the burden of estimating the e ects of climate change on particular region speci c crops and farmer responses on the other hand one of the potential disadvantages of the hedonic approach is that it is a partial equilibrium analysis i e agricultural prices are assumed to remain constant 1 while year to year uctuations in annual weather conditions certainly have the potential to impact current commodity prices especially for crops produced only in a relatively localized area such as citrus fruits which are grown mainly in california and florida changes in long run weather patterns i e changes in climate might have a smaller e ect on commodity prices because of the greater potential for economic adaptation particularly shifts in growing regions 2 the hedonic approach as implemented by mns predicts that existing agricultural land on average might be more productive and hence result in bene ts for u s farmers 3 the hedonic approach has received considerable attention in our judgment in part because the conclusions are at variance with those of some other studies

prices productivity and wage bargaining in open economies according to the standard union bargaining model unemployment benefits should have big effects on wages but product market prices and productivity should play no role in the wage bargain we formulate an alternative strategic bargaining model where labour and product market conditions together determine wages a wage equation is derived and estimated on aggregate data for four nordic countries wages are found to depend not only on unemployment and the replacement ratio but also on productivity international prices and exchange rates there is evidence of considerable nominal wage rigidity exchange rate changes have large and persistent effects on competitiveness

applications of option pricing theory twenty five years later nobel lecture to the memory of alfred nobel december 9 1997 this abstract was borrowed from another version of this item

technological change technological catch up and capital deepening relative contributions to growth and convergence we decompose labor productivity growth into components attributable to 1 technological change shifts in the world production frontier 2 technological catch up movements toward or away from the frontier and 3 capital accumulation movement along the frontier the world production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections we analyze the evolution of the cross country distribution of labor productivity in terms of the tripartite decomposition finding that technological change is decidedly nonneutral and that both growth and bipolar international divergence are driven primarily by capital deepening jel o30 o47 d24

small system modelling of real wages inflation unemployment and output per capita in italy 1970 1994 the relationships between real wages output per capita inflation and unemployment in italy between 1970 and 1994 are modelled using a cointegrated vector autoregression there is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables probably associated with the substantial changes in many sectors of the italian economy after 1979 alternative ways to model structural change in the italian labour market are considered in adopting a split sample approach the results favour an hysteresis interpretation of unemployment

does active labour market policy increase employment theoretical considerations and some empirical evidence from sweden does active labour market policy increase employment theoretical considerations and some empirical evidence from sweden

in search of economic well being worker power and the effects of productivity inflation unemployment and global trade on wages in ten wealthy countries theory the theory addresses the forces that determine the real wages which workers receive it is proposed that in the free market system worker power plays a crucial mediating role between economic considerations involving labor supply and productivity and the real wages available to workers in the economy hypotheses in moderate and weak worker power countries real wages will vary inversely with the labor supply in terms of domestic unemployment and international trade in strong worker power countries real wages will vary with changes in productivity and inflation methods separate regression analyses are developed for 10 countries varying in their level of worker power over a 30 year time frame results in moderate and weak worker power countries changes in real wages were best predicted by levels of unemployment and changes in global trading in strong worker power countries changes in real wages were best predicted by changes in productivity and inflation although in one case of a strong worker power country a significant positive association occurred between global trading and real wages

hysteresis in unemployment unemployment has risen sharply in a number of countries and it appears to be becoming more persistent the experience of the 1970s and 1980s showed that adverse unemployment shocks could have long lasting effects with very serious economic and social consequences a key mechanism producing these adverse consequences was hysteresis in unemployment whereby temporary rises in unemployment generated by supply and or demand shocks had permanent or at least very persistent effects clearly it is important to understand how hysteresis mechanisms might operate in order to avoid such adverse outcomes on the other hand experience during the subsequent two decades showed that under more favourable macroeconomic conditions it is possible to observe good hysteresis effects now is a very appropriate time to re visit the issue of hysteresis in unemployment in order to avoid the errors of the 1970s and 1980s and if possible to get hysteresis effects working in a positive direction copyright 2011 oxford university press

how do flexible labour markets really work the role of profitability in influencing unemployment this paper assesses the theoretical justifications available for policies of flexible labour markets flms in reducing the level of unemployment in developed economies it empirically assesses the oecd s rationalisation of policy linking profitability to investment and job creation in four country cases new capital investment is found to be significant for unemployment in all cases but it is not found to be a consequence of the mechanistic achievement of normal profits without an empirically supported mechanism for how flms reduce unemployment the policy is open to the accusation of being no more than a political tool for altering distribution without concern for the wider socio economic consequences copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

environmentally adjusted multifactor productivity methodology and empirical results for oecd and g20 countries abstract this paper extends the analytical framework for measuring multifactor productivity in order to account for environmental services a growth accounting approach is used to decompose a pollution adjusted measure of output growth into the contributions of labour produced capital and natural capital these indicators allow the sources of economic growth and its long run sustainability to be better assessed results presented here cover oecd and g20 countries for the 1990 2013 period and account for the extraction of subsoil natural assets and emissions of air pollutants and greenhouse gases the main findings suggest that growth in oecd countries has been generated almost exclusively through productivity gains while briics countries have drawn largely on increased utilisation of factor inputs to generate additional growth regarding natural capital in countries such as russia saudi arabia and chile reliance on subsoil assets extraction has contributed to a significant share of income growth results also point to a shift towards more environmentally friendly production processes in many countries in fact most oecd countries have decreased their emissions over the last two decades and these pollution abatement efforts result in an upward adjustment of their gdp growth rates allowing for a more accurate assessment of their economic performance

inflation investment and growth a money and banking approach output growth investment and the real interest rate in long run evidence tend to be negatively affected by inflation theoretically inflation acts as a human capital tax that decreases output growth and the real interest rate but increases the investment rate opposing evidence this paper resolves this puzzle by requiring exchange for investment as well as consumption inflation then decreases the investment rate and still decreases both output growth and real interest up to some moderately high rate of inflation above which increasingly low investment finally causes capital to fall relative to labour and the real interest rate to rise

measuring structural unemployment nawru estimates in the nordic countries the non accelerating wage rate of unemployment nawru indicator used by the oecd as a measure of structural unemployment has risen for the four nordic countries denmark finland norway and sweden in this paper we present stable empirical wage equations for the same countries over the period 1964 1994 in sharp contrast to the increased nawru estimates the instability of the nawru estimates is an artefact of a misspecified underlying wage equation and not due to instability in wage setting itself

the natural rate of unemployment reflections on 25 years of the hypothesis 1 introduction rod cross part i the theoretical framework 2 the origins and further development of the natural rate of unemployment edmund phelps 3 the natural rate as new classical macroeconomics james tobin 4 theoretical reflections on the natural rate of unemployment frank hahn 5 of coconuts decomposition and a jackass the genealogy of the natural rate huw dixon part ii adjustment ranges of equilibria and hysteresis 6 the economics of adjustment andrew caplin and john leahy 7 hysteresis and memory in the labour market g c archibald 8 models of the range of equilibria ian mcdonald 9 hysteresis revisited a methodological approach bruno amable jerome henry frederic lordon and richard topol 10 is the natural rate hypothesis consistent with hysteresis rod cross part iii empirical tests and macro models 11 the natural rate hypothesis and its testable implications hashem pesaran and ron smith 12 non linear dependence in unemployment output and inflation empirical evidence for the uk david peel and alan speight 13 prices wages and unemployment in the us economy a traditional model and tests of some alternatives albert ando and flint brayton 14 the natural rate in empirical macroeconomic models simon wren lewis part iv political economy 15 is the natural rate of unemployment a useful concept for europe maria demertzis and andrew hughes hallett 16 the natural rate of unemployment a fundamentalist keynesian view meghnad desai 17 politics and the natural rate hypothesis a historical perspective bernard corry

unemployment compensation and high european unemployment a reassessment with new benefit indicators generous unemployment benefits lie at the heart of the conventional explanation for persistent high unemployment the effects of benefit generosity on work incentives are more ambiguous in a broader behavioural framework in which workers get substantial disutility from unemployment given income and know that unemployment has scarring effects in the future the micro evidence suggests modest effects of changes in generosity but there are reasons to doubt that the impacts on national unemployment rates are consequential the empirical case for the orthodox prediction comes from cross country regressions on the oecd s gross replacement rate grr but the published evidence is mixed and we find little support in the pattern of annual changes in the grr and the unemployment rate for oecd countries over the last three decades we take advantage of new and much improved net replacement indicators from the oecd which show little correlation with either the grrs or with unemployment and employment rates we conclude that the available evidence does not offer compelling support for the conventional view

price and quantity adjustments in the austrian labour market austria is among the very few countries in the european union which have managed to maintain comparatively low unemployment rates and high employment rates this study looks at the price and quantity adjustment mechanisms in the austrian labour market which may have contributed to this favourable outcome after reviewing briefly the basic theoretical reasoning an empirical investigation is began into gross flow dynamics in the labour market and the cyclical volatility of employment and unemployment in austria in international comparison austrian unemployment is very stable over the business cycle this is due mainly to the high sensitivity of the labour force on cyclical conditions and partly also on the relatively weak responsiveness of employment to cyclical fluctuations in output the latter being possibly attributable to the high degree of real wage flexibility in austria the study proceeds to show that the long run elasticity of wages with respect to unemployment is indeed quite high in austria

punitive sanctions and the transition rate from welfare to work in the netherlands the average exit rate out of welfare is dramatically low most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency if they do not then a sanction in the form of a temporary benefit reduction can be imposed this article investigates the effect of such sanctions on the transition rate from welfare to work using a unique set of rich register data on welfare recipients we find that the imposition of sanctions substantially increases the individual transition rate from welfare to work

panel tests of okun s law for ten industrial countries donald g freeman i introduction okun s law describes an empirical regularity between unemployment and real output growth each extra percentage point in the unemployment rate above four percent i e full employment has been associated with about a three percent decrement in real gnp okun 1962 9 1 okun s law has proved to be one of the more durable relationships in modern macroeconomics and is now often presented as an element of core beliefs as in textbooks by hall and taylor 1993 77 and in policy discussions by blinder 1997 durability and simplicity being relatively scarce commodities in macroeconomics okun s law is appealing as a shorthand guide to policy outcomes whether okun s law travels well is another question cross country comparisons of the relationship between unemployment and output have been estimated for other countries by knoester 1986 paldam 1987 and moosa 1997 among others but magnitudes vary depending on country and time period estimates in these papers of the increase in output growth associated with unemployment reduction of one percent range from a low of around two percent in the u s and canada to three to five percent in europe to more than 10 percent in japan with estimates for europe tending to be higher for more recent time periods because of the way that okun s law is framed tests of its proposition involve two imposing empirical problems first as usually stated the law refers to the relationship between departures of real gdp 2 and unemployment from their long run or equilibrium trends often referred to as potential gdp and the natural rate of unemployment respectively these equilibrium trends must be estimated either by time series methods as in moosa 1997 or by construction using a modified production function approach in which potential output is estimated using fully employed inputs as in gordon 1984 or adams and coe 1989 either of these fapproaches invites considerable criticism of assumptions and methods see for example the comments of clark 1984 and of baily 1984 on gordon 1984 second in formulating his law okun seems clearly not to be referring to a ceteris paribus relationship between changes in the unemployment rate and changes in real gdp writing later okun posited that other factors and inputs would be changing pari passu with employment the 3 percent result from a reduction of one percent in the unemployment rate implies that considerable output gains in a period of rising utilization rates stem from some or all of the following induced increases in the size of the labor force longer average weekly hours and greater productivity okun 1970 p 140 thus a complete specification of the effect of changing unemployment rates on output would include factors such as capital inputs labor hours and participation rates all measured as deviations from long run trends this article addresses these two obstacles by using a recent trend cycle decomposition developed by baxter and king 1999 to measure gaps in output unemployment capital stock and the labor force the baxter king bandpass filter extracts the trend component of economic time series by eliminating both high frequency those less than two years and low frequency more than eight years components it is both flexible and easy to implement by using the bandpass filter to filter all the time series using the same methodology this paper departs from previous research of prachowny 1993 and attfield and silverstone 1997 incorporating capital and labor to augment estimates of okun s law additionally using the bandpass filter allows the estimates in this article to incorporate more timely data reflecting the shift to lower levels of unemployment in the u s and higher levels of unemployment in europe and japan during the 1990s the latest year of observation for the constructed data sets of gordon and of adams and coe used for example by prachowny 1993 and attfield and silverstone 1997 is 1988

the option value of tax delinquency theory abstract how taxes are enforced matters current enforcement of real property taxes does not consider the option value of delinquency the ultimate penalty is confiscation of property sometime in the future but the value of the property to be confiscated is not known with certainty if redemption fees are sufficiently small it can be optimal to wait and see what the size of the penalty will be before paying taxes we show how this can lead to excessive abandonment and examine proposals for reform

regional inequalities and the business cycle an explanation of the rise in european unemployment demertzis m and hughes hallett a 1996 regional inequalities and the business cycle an explanation of the rise in european unemployment reg studies 30 15 29 the introduction of a system of fixed exchange rates in europe has succeeded in inducing price convergence amongst its participants but at the same time has increased the divergence between their rates of unemployment in this paper we attempt to measure the level of the inefficiency imposed on the labour markets as a result of having different labour market structures under one monetary policy and then use these results to provide a new explanation for the secular rise in european unemployment based on the degree of labour market heterogeneities and the asymmetries in wage settings in each market as a closer monetary union of its own regions the uk is used as a comparison for the europe wide results demertzis m et hughes hallet a 1996 les inegalites regionales et le cycle economique une explication de la montee du chomage en europe

complex business cycles and recurrent unemployment in a non walrasian macroeconomic model abstract in a dynamic non t tonnement macroeconomic model trades take place in each period even when prices are not walrasian prices are adjusted between trading periods according to the intensity of disequilibrium a reliable measure of which is obtained by means of stochastic rationing the degree of downward nominal wage stickiness as well as government policy parameters are decisive for the dynamics that emerge in particular it is possible for the economy to converge to quasi stationary states involving permanent unemployment and decreasing nominal wages or to produce complex business cycles with structural features recurrent over time but varying and unpredictable shape and size

a nonparametric investigation of agricultural production behavior for u s subregions this research provides an empirical application of nonparametric techniques to determine whether agricultural production behavior in the united states and ten farm production regions over the period 1939 to 1982 has been inconsistent with the joint hypothesis of profit maximization convex technology and monotonic nonregressive technical change

an empirical equilibrium job search model with continuously distributed heterogeneity of workers opportunity costs of employment and firms productivities and search on the job in this paper we present and estimate a synthesis of previous equilibrium search models allowing for continuous distributions of workers opportunity costs of employment as wellas firms productivities the model allows for on the job search and we assume that job offer arrival rates for workers are independent of their labormarket state we derive the theoretical implications of these assumptions we provide simulations and we develop a semi parametric estimation procedure that we apply to a dataset ofindividual labor market histories

unemployment dynamics across oecd countries abstract the european community and the us have experienced vastly different unemployment dynamics over the last two decades this paper investigates whether these differences are due to exposure to different shocks or reacting differently to the same shocks with the premise of a search theoretic framework and a structural var methodology the paper robustly identifies aggregate versus reallocative shocks with the exception of spain where most of the dynamics seem to be driven by reallocation it is found that most differences in unemployment dynamics arise because of differences in responses to shocks in particular the us labour market is quicker to adjust than the european community this implies that eec economies might be dynamically sclerotic even if the size of the steady state labour market flows give the impression that european labour markets are quite active various identifying assumptions additional labour supply shocks and different variables are used yet the results appear robust

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

unemployment a survey this paper presents a survey of the economics of unemployment it covers competitive and imperfect competition models the role of different methods of wage determination and explanation of postwar unemployment patterns in the oecd countries copyright 1990 by royal economic society

exploring the political economy of labour market institutions labour markets how reforms took place many economists argue that the european unemployment problem relates to large labour market rigidities this paper argues that many of those inflexibilities and the underlying institutional regulations can be understood as the outcome of political influence by incumbent employees this is because many policies that increase unemployment actually benefit these insiders an empirical investigation of the determinants of labour market institutions demonstrates that the observations are consistent with this view the findings imply 1 higher exposure of the employed to unemployment facilitates a reduction in the level of employment protection 2 unemployment benefits are lower the more employment reacts to wages 3 a higher level of unemployment and the existence of a right wing government slow down the growth rate of the minimum wage giles saint paul

estimating unemployment inflows outflows and long term unemployment in britain using the cointegration approach a model is estimated of flows into and out of unemployment using the johansen multivariate cointegration approach and uk data for the period 1974q4 to 1993q3 two long run equilibrium relationships are obtained covering the outflow rate and unemployment duration which include variables such as the replacement ratio structural change and output a unique feature of the model is that it allows the inflow rate to determine the outflow rate and vice versa this is argued to be important given the common european stylized fact that inflows and outflows are both countercyclical and strongly correlated thus if firms and workers are heterogeneous hiring and firing is contemporaneous necessitating the type of model estimated here some interesting results include the finding that output is not important in determining the outflow rate and that the speed of adjustment of the outflow rate to changes in its underlying equilibrium is slow in contrast the proportion of long term unemployed is positively re

unemployment questions and some answers in more or less every country in the oecd unemployment was lower in the decades following the second world war than in any other period of comparable length either before or since for example in britain unemployment has exceeded 5 in every peacetime decade from 1850 onwards except for the 1950s and 1960s alternatively as we can see in table 1 p 779 average unemployment in the 1980s and 90s is higher generally much higher than in the 1960s in every country considered why this is so is one of the questions which underlies this paper a second question which is also illustrated in the unemployment numbers presented in table 1 p 779 concerns the causes of the enormous variation in unemployment rates across the oecd countries as we shall see these are difficult questions the first in particular is one for which we do not have a complete answer by this i do not mean that we do not have theories which are broadly consistent with these numbers in fact we have theories consistent with more or less any numbers what we lack is a satisfactory empirical explanation of the time series pattern of oecd unemployment in what follows we remain focused on these two questions first considering the theoretical background and then looking at some possible answers we finish with some speculative conjectures on the first question

a nonparametric approach to expenditure constrained profit maximization a nonparametric approach to expenditure constrained profit maximization is developed a deterministic frontier profit function is constructed with and without expenditure constraints foregone profit is used as dual evidence for the existence of expenditure constraints individual evaluations on performance and expenditure constraints are produced empirical analysis is based on survey data for california rice farms seventeen of the eighty two surveyed farms experience profit loss as a result of expenditure constraints

economic growth lessons from two centuries of american agriculture this paper reviews the growth experience of u s agriculture over the past two centuries in consonance with the view that growth is determined by the economic environment which consists of the available technology incentives constraints and institutions within this framework the implemented technology is determined jointly with the resource allocation the review covers the role played by resource endowment resource flow technical change and its factor bias and product demand it highlights the importance of the income elasticity of demand and the labor augmentation of the technical change the total factor productivity tfp was almost nil at the beginning of the nineteenth century increasing gradually to the point where it exhausted output growth in the latter part of the twentieth century this pattern is consistent with the postulate emerging from this framework where the tfp is endogenous and determined jointly with growth rather than determining it the more recent performance of u s agriculture is placed within a global perspective in order to generalize the discussion

contrasting models of the effect of inflation on growth the paper formulates a nesting model for studying the theoretical literature on inflation and endogenous growth it analyses different classes of endogenous growth models with different usage of physical and human capital with different exchange technologies first the paper shows that a broad array of models can all generate significant negative effects of inflation on growth second it shows that these models can be differentiated primarily by the fact whether there is a tobin type effect of inflation and also whether the inflation growth effect becomes weaker as the inflation rate rises a non linearity or stays essentially constant over the range of inflation rates the paper compares these features of the models to empirical evidence as a way to summarize the efficacy of the models

dynamic adjustment in us agriculture under climate change we construct a stochastic dynamic dual model to investigate the structural adjustment of two aggregate output and three aggregate input categories in us agriculture under stochastic climatic change more than a century of national annual data 1910 2011 is used in the empirical analysis no constraints on asset fixity are imposed results indicate that with rational expectations both output categories as well as all input categories exhibit quasi fixity in response to market change and stochastic climate change crops adjust more than twice as fast as livestock 49 versus 20 of the way toward their long run equilibrium in one year fertilizer adjusts most rapidly toward equilibrium levels 88 in one year and capital adjusts most slowly 5 in one year labor oscillates rather than converging smoothly toward equilibrium its distance from equilibrium is the same as if it adjusted 59 of the way toward its optimal level in one year failing to anticipate climate change dramatically slows the estimated rate of adjustment for two netputs and modestly speeds the rate for two others thus likely increasing overall adjustment costs failing to account for uncertainty in anticipated climate change has little impact on adjustment rates

human capital and convergence a production frontier approach using nonparametric production frontier methods we decompose labor productivity growth into components attributable to technological change shifts in the world production frontier technological catch up movements toward or away from the frontier and physical and human capital accumulation movements along the frontier we find that 1 technological change is decidedly nonneutral 2 productivity growth is driven primarily by physical and human capital accumulation 3 the increased international dispersion of productivity is explained primarily by physical capital accumulation and 4 international polarization the shift from a unimodal to a bimodal distribution is brought about primarily by efficiency changes technological catch up

unemployment in regional labor markets using structural theories to understand local jobless rates in west virginia the author uses a range of structural labor market models to understand differing regional jobless rates in a state affected by pockets of structural unemployment four theories of regional structural unemployment are presented and their hypotheses are statistically evaluated using west virginia county panel data the author then presents case study evidence to compare these statistical results with the realities of the county labor markets both types of empirical evidence suggest that a segmented non market clearing model in which structural unemployment stems from queuing for above market clearing wages in both a high wage primary sector and a lower wage secondary sector can shed the most light on regional unemployment rates in west virginia

labour market institutions and wage setting evidence for oecd countries the main channel through which labour market institutions are supposed to work in affecting unemployment is through their effects on the key parameters of the wage curve in particular labour market institutions may have both a direct wage push or level effect i e change the level of the real wage for any given level of the unemployment rate and productivity and an indirect slope effect i e change the responsiveness of the real wage to the unemployment rate the question this article addresses is whether there is any evidence that these transmission mechanisms were at work in a group of 20 organization for economic co operation and development oecd countries over the period 1960 to 1999 the analysis is accomplished in two steps pooled mean group pmg estimates of a wage equation including unemployment productivity and a set of wage push institutions are first obtained allowing only a subset of institutional coefficient to be homogeneous while leaving the unemployment and other coefficients