an overview of experimental u s consumer price indexes the consumer price index cpi has come under intense scrutiny in recent years to help assess potential differences between what the cpi measures and how it is used for various purposes the bureau of labor statistics has created a series of experimental price indexes this article contrasts how the cpi is currently constructed with those experimental indexes specifically experimental cpps have been constructed for two population groups older americans and poor americans in addition experimental geometric mean and superlative indexes have been developed that move the cpi away from its traditional fixed market basket concept

the demand for post compulsory education in the uk and the effects of educational maintenance allowances in this paper the author develops a model of investment in postcompulsory schoolin g based on human capital theory the model is estimated using data on a sample of sixteen and seventeen year olds derived from the family expenditure survey the results reveal significant differences in the factors influencing enrollment in postcompulsory education between m ales and females mot notably household income is an important deter minant of educational participation for females but not for their ma le counterparts on the basis of these results the author assesses t he effects of the introduction of educational maintenance allowances on participation rates in the united kingdom

language and the earnings of immigrants several studies most of them employing straightforward regression analysis have concluded that immigrants proficiency in the language of their adopted country is correlated with their productivity as measured by earnings two weaknesses of these studies are potential unobserved heterogeneity which could result in over estimated effects if overall ability is linked with language acquisition and potential measurement error in the language proficiency measures which would probably result in under estimation of language effects the present study which uses panel data for a 10 year period in germany yields evidence that the latter bias tends to be much larger than the former implying that language proficiency is far more important than suggested by the existing literature

the determinants of teenage schooling in jamaica rich vs poor females vs males the belief that schooling is an important way to reduce poverty and increase social mobility has lead to large government sponsored investment in education in developing countries jamaica has an impressive literacy and primary enrolment rate yet the ability of its secondary school system to enhance social mobility and reduce inequality is limited regression results from a nationally representative household survey show that family background variables parental education and income are important determinants of secondary school enrolment and income is the single most important determinant of enrolment in an elite high school with the impact being twice as large for females part of the income effect is shown to represent unobserved community heterogeneity one conclusion is that the recent cost sharing education policy of the jamaican government if applied selectively to the elite academic high schools will fall disproportionately upon rich households

oppositional identities and employment for ethnic minorities evidence from england where a community or group is socially excluded from a dominant group some individuals of that group may identify with the dominant culture and others may reject that culture the aim of this article is to investigate this issue by empirically analysing the potential trade off for ethnic minorities between sticking to their own roots and labour market success we find that the social environment of individuals and attachments to culture of origin has a strong association with identity choice our results also suggest that those non whites who have preferences that accord with being oppositional do experience an employment penalty

employment discrimination in northern ireland and the good friday agreement abstract the paper analyses employment differences between northern ireland s catholics and protestants and examines whether the good friday agreement signed in 1998 was followed by an improvement in the relative position of catholics

unemployment and early school leaving theoretical predictions about the effect of unemployment on school leaving are ambiguous unemployment might affect the decision to leave school in a number of different ways i current youth unemployment a higher probability of current unemployment for those who choose to leave school would tend to discourage early school leaving first by reducing the expected gains from job search a discouraged worker effect and second by reducing the opportunity cost of additional education ii expected future unemployment the theoretical predictions here are less clear cut an increase in the probability of future unemployment that affected both those with and without additional education would tend to reduce the rate of return to education and hence education demand on the other hand those with more education may be less affected by rises in unemployment and this may encourage further schooling these two opposing effects have been formalised as a shift and a tilt in the unemployment probability schooling relationship kodde i988 fig i suggests that in the united kingdom both effects could have accompanied the transition from the late 1970s to the i98o the full effects of uncertainty on education investment in a two period model depend on the correlation between the uncertainty in the two periods levhari and weiss 1974 how current unemployment rates are used to form expectations of future unemployment is clearly an important issue here also some individuals may be able to undertake job search before committing themselves to leave school and whilst affected by the risk of future unemployment may be comparatively unaffected by the risk of current unemployment iii effects ofparental unemployment parents unemployment in general reduces family income their children s educational demand may fall as a consequence for three reasons first the consumption demand for education will be lower second a reduction in the first period income reduces the investment demand for education assuming decreasing absolute risk aversion kodde i 988

evaluating the evidence on union employment and wages using current population survey data for the years 1973 86 this study tests the hypothesis that the steep decline of union employment shares since 1973 is related to increases in union wages relative to nonunion wages the authors show that although the aggregate union wage premium has changed little since 1973 some industry specific premiums have risen substantially and the industries with the rising premiums are those experiencing declines in union employment shares the increase in the premium explains from 21 to 64 of the decline in union shares depending on the equation specification the paper also presents a detailed set of union wage premiums and employment shares for the sample period

returns to foreign languages of native workers in the european union most of the literature on returns to languages is concerned with immigrants the authors study which uses the european community household panel survey for the period 1994 2001 infers returns to non native languages by native workers in nine countries of the european union the study differs from other studies that deal with the same issue in three respects first instead of using a dummy for each language they use the ratio of the population not proficient in a given country s national language and compare the results with the more traditional approach using dummies second they correct for time independent measurement errors in self reporting and find that the resulting iv estimates are much larger than those obtained by ols they also suggest that there is little room for time persistent errors and heterogeneity and that therefore their estimates should suffer ostensibly little from unobserved ability biases finally they estimate iv quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings

the impact of language ability on employment and earnings of britain s ethnic communities the fourth national survey of ethnic minorities contains useful information about the language ability of britain s non whites as well as a wealth of comparative information for whites the paper attempts to establish how much of the lower unemployment and higher earnings enjoyed by whites is the result of a comparative advantage in language language is shown to contribute to a part of the non white disadvantage but after language effects are removed non whites males still have higher unemployment rates and lower earnings language disadvantage among non white females leads to higher inactivity rates rather than more unemployment

a simple solution to the identification problem in detailed wage decompositions i introduction oaxaca and ransom 1999 show that the oaxaca decomposition suffers from one nagging conceptual problem the detailed oaxaca decomposition of wage differentials is not invariant to the choice of reference group when dummy variables are used 1 that is if one uses dummy variable s then the detailed coefficients effect attributed to dummy variables is not invariant to the choice of the omitted group s 2 this invariance or identification problem is well known to labor economists and has plagued decomposition and discrimination analysis for a long time 3 this article proposes a simple and practical solution to this identification invariance problem the solution is based on the intuitive idea that if alternative reference groups yield different estimates of the characteristics and coefficients effects for each individual variable then it is natural to obtain estimates of the two effects for every possible specification of the reference groups and take the average of the estimates of the two effects with various reference groups as the true contributions of individual variables to wage differentials a close inspection shows that averaging the two effects in the decomposition equation with varying reference groups the averaging approach is equivalent to finding average estimates of constant and dummy variables in wage equations with varying reference groups and then using the average estimates to calculate the oaxaca decomposition equation researchers may react a bit negatively to this suggestion because it could be quite cumbersome and tedious to estimate wage equations permuting the choice of reference groups this article shows that there is no need to estimate multiple wage equations one set of regression estimates is sufficient to resolve the identification problem in the detailed decompositions that is the average of the estimates with varying reference groups can be easily calculated by using only one set of regression estimates with any specific reference group s the identification problem for the detailed decomposition disappears once the contribution of the dummy variables and the constant in the regression equations are identified 4 ii identification problem and invariant decomposition an illustration to understand what the identification problem in the detailed wage decomposition is i will first illustrate the problem with a simple example suppose that there are three categories and the regression equation has only a constant and two dummy variables on the right hand side where the reference group is the first category 5 that is 1 y sub i alpha sub i 3 summation over k 2 d sub ki beta sub ki e sub i where y is log wages and i a or b for two comparison groups coefficients for two dummy variables taking category one as the reference group are estimated using ordinary least squares ols regression and are reported in the second column of table 1 for sample a and for sample b note that the coefficient of the reference group category 1 is restricted to zero similarly i may change my reference group specification and estimate the wage equation two more times the estimates taking category 2 or 3 as the reference group are reported on the next two columns because i have three sets of estimates with varying reference groups i may decompose the wage differentials 0 15 0 76 0 61 into characteristics and coefficients effects three times the characteristics effect delta sub x 1 and coefficients effects delta sub beta 1 are specified as follows when category 1 is the reference group delta sub x 1 summation sup 3 sub k 2 bar d sub ka bar d sub kb beta sub kb and delta sub beta 1 alpha sub a alpha sub b summation sup 3 sub k 2 bar d sub ka beta sub ka beta sub kb

an analysis of substitution bias in measuring inflation 1959 851 we analyze the substitution bias in laspeyres type price indexes such as the cpi using 1959 1985 nipa consumption data for 101 commodities we employ two methodological approaches to calculation of the bias first we construct the tightest theoretical bounds on the col by applying nonparametric methods using algorithms developed by afriat and by varian second following diewert we construct superlative price index formulas namely tomqvist and fisher s ideal indexes under a chain as well as a fixed base specification homothetic preferences are found to be consistent with the data and sensitivity tests indicate that this result is not vacuous if the hypothesis of homotheticity is maintained the col bias has upper and lower limits of 0 22 and 0 14 percent per year respectively using the superlative indexes as the measure of the col the bias is about 0 18 percent per year for the period 1959 85 this estimate is somewhat larger than found in earlier studies our use of more disaggregated data is found to be responsible for part of the difference with the size of the estimated bias directly related to the extent of the aggregation

born in britain how are native ethnic minorities faring in the british labour market in spite of the 40 years that have passed since legislation was first introduced to combat racial discrimination british born ethnic minorities fare little better than their immigrant parents in the uk labour market

housework wages and the division of housework time for employed spouses while the popular press may have declared housework passe with the advent of the two income household see housework is obsolescent by barbara ehrenreich 1993 for one such example the facts indicate that housework continues to consume a substantial amount of time particularly for women while estimates vary widely depending on the sample examined and the methods used to generate the information representative values of housework time range around 6 14 hours per week for men and 20 30 hours for women since wages are likely to be influenced both directly and indirectly by the time and effort devoted to other activities and since gender differences in household responsibilities are significant and often assumed to be a driving force behind gender earnings differentials decisions regarding the overall amount of time spent on housework and the division of that time within the household are important ones the goal of this paper is to shed some light on these allocation decisions we begin by discussing the various methods by which time and effort spent on housework may affect wages and summarize the available empirical evidence overall the empirical evidence indicates that time spent on housework has a negative effect on wages an effect which is most pronounced for women we next examine the amount of time spent on housework and the division of that time between working spouses to do so we draw upon the human capital literature and the bargaining literature to construct simple regression equations for time spent on housework by each spouse as well as the share of housework time contributed by the husband the results indicate that husbands do less housework than their wives as their relative earnings and hours spent in the labor market increase

the ethnic wage gap and employment differentials in the 1990s evidence for britain abstract it is twenty years since britain passed legislation to combat racial discrimination despite this britain s nonwhite ethnic minorities still appear to face substantial amounts of discrimination in the labour market unemployment is particularly severe

sex related wage differentials and women s interrupted labor careers the chicken or the egg wage differentials between men and women are often attributed to differences in on the job training the lower investment of women being explained by their plans to interrupt their careers for family reasons career interruptions however are often explained by low wages to trace this interrelationship i adopt a simultaneous equations approach trying to explain wages planned separations on the job training and the skill intensity of the job simultaneously skill intensity is found to be a key variable in the explanation of the wage differential traditional theory is hard pressed to explain the sex related differences in this variable

native immigrant wage differentials and occupational segregation in the greek labour market this article explores native immigrant wage differentials in the greek labour market data from the most recent greek household budget survey 2004 05 were employed four alternative occupational categories were considered and occupational choice was explicitly modelled controlling for occupational selectivity occupation specific wage regressions for representative samples of employed native and immigrant workers were estimated and an augmented decomposition technique was utilized to analyse inter and intra occupation wage differentials the obtained results demonstrate that roughly 48 of the average wage differential cannot be explained by differences in observed characteristics and that the larger component of this unexplained part is due to asymmetrical occupational access by native and immigrant workers

the trend in the male female wage gap in the united states despite the rise in the feminist movement the enactment of equal opportunity legislation and the rapid increase in women s labor force participation a substantial sex differential in wages has persisted in the united states for at least 4 decades measured by hourly earnings of year round workers this wage gap was 31 in 1955 widened to a 35 37 range by the 1960s and early 1970s and then narrowed to 33 by 1982 this paper examines the extent to which changes in the characteristics of men and women in the labor force and other factors can account for the observed pattern the main finding is that increases in women s labor force participation were initially associated with a declining skill level of employed women relative to employed men where skill is measured by years of schooling and job tenure more recently the work experience of employed women has been increasing which helps account for the recent narrowing trend in the wage gap during the 1970s the wage gap probably woul have narrowed m

austrian economics and the limits of markets sagoff s recent criticisms of the shadow pricing of environmental goods deploy arguments from within the austrian tradition of economics against market mimicking approaches to public policy his arguments against market mimicry by public authorities do not lead him to scepticism about markets rather they form part of an austrian argument for solutions to environmental problems within actual markets themselves in this paper i argue that it is not only shadow pricing but the use of actual markets that is open to austrian forms of criticism hayek s epistemic arguments against central planning and in defence of market economies are more ambivalent than is often supposed the paper examines the ways in which the premises in hayek s own arguments point in the opposite direction to the epistemic limits of markets and in particular their limitations for the resolution of environmental problems copyright oxford university press

ecological economics and the politics of knowledge the debate between hayek and neurath hayek s epistemic arguments against planning were aimed not just against socialism but also the tradition of ecological economics the concern with the physical preconditions of economic activity and defence of non monetary measures in economic choice were expressions of the same rationalist illusion about the scope of human knowledge that underpinned the socialist project neurath s commitment to physicalism in natura calculation and planning typified these errors neurath responded to these criticisms in unpublished notes and correspondence with hayek these highlighted the epistemological premises his work shared with hayek s representing a response to hayek from hayek s own assumptions this paper examines the cogency and continuing relevance of the arguments in this debate

union membership in the united states 1973 1981 this paper reports estimates of union membership gathered from may current population surveys from 1973 to 1981 the authors present data by occupation industry selected states and smsas race gender and educational attainment the paper both extends and differs from that by freeman and medoff which presents unionism estimates for the private sector for 1968 75 to facilitate longitudinal analysis this paper reports three year moving averages of occupational and industry data and annual estimates of demographic classifications the data include public sector as well as private sector workers and they exclude workers not covered by the national labor relations act also the authors provide only union membership estimates not estimates on workers covered by union contracts this paper suggests that the percentage of all workers that are unionized in the united states remained fairly constant over the 1973 81 period

social norms and random matching games abstract nash equilibrium has been tremendously useful in understanding economic problems in which strategic behavior is important the theoretical foundations of the solution concept often include the assumption that the game to be played is common knowledge an unrealistic assumption in games with many players we introduce the concept of norm equilibrium for random matching games a norm equilibrium is a nash equilibrium that relies on substantially less information than common knowledge of the game we use norm equilibria to provide a folk theorem for random matching games and to analyze increasing numbers of players in a random matching game journal of economic literature classification numbers c70 c72

variance estimation for price indexes from a two stage sample with rotating panels estimation of price indexes in the united states is generally based on complex rotating panel surveys the sample for the consumer price index for example is selected in three stages geographic areas establishments and individual items with 20 of the sample being replaced by rotation each year at each period a time series of data is available for use in estimation this article examines how to best combine data for estimation of long term and short term changes and how to estimate the variances of the index estimators in the context of two stage sampling i extend the class of estimators introduced by valliant and miller of laspeyres indexes formed using sample data collected from the current period back to a previous base period linearization estimators of variance for indexes of long term and short term change are derived the theory is supported by an empirical simulation study using two stage sampling of establishments and items from a population derived from u s bureau of labor statistics

segregation preferences and labour market outcomes abstract controlling for other variables including neighbourhood ethnic composition minorities in england and wales with a preference for ethnic residential segregation have significantly worse employment rates between 8 and 20 percentage points lower than those who prefer more integrated areas

new evidence on pay gap between men and women in turkey abstract this paper studies gender wage differentials between men and women in turkey i find that the estimated wage gap between men and women in turkey is almost entirely explained by labor market discrimination toward women

the endogeneity between language and earnings international analyses this study is concerned with the determinants of dominant language fluency its effects on earnings and its endogeneity with earnings among immigrants dominant language fluency is hypothesized to

staying on in full time education reasons for higher participation rates among ethnic minority males and females individuals from ethnic minorities have a greater tendency to stay on in full time education beyond the compulsory age there are however wide variations between groups and the paper explores the role for human capital considerations such as earnings and increased employability in this choice economic considerations and socioeconomic background are found to be important but there is evidence for a separate ethnicity effect influencing choice the method used is to fit a joint leaving and employment equation for males and females aged 18 24 using combined micro data from the british labour force survey and the sample of anonymized records from the 1991 census

job search methods and their success a comparison of immigrants and natives in the uk a major issue in the immigration debate concerns whether immigrants take jobs away from natives in this article we present new evidence on the job search methods used by immigrants and their relative success in gaining employment in the uk we find that 1 immigrant job search is less successful than that of natives 2 immigrants are as likely to gain employment through informal methods as via verifiable routes 3 the probability of success increases with years since migration the finding that immigrants do not effectively compete for jobs may help explain why immigration has little impact on native employment

the labour market performance of recent migrants migrant workers constitute a vital component of many western labour markets although migrants can benefit greatly by moving to higher wage economies it is important to compare their labour market outcomes with those of native born workers in this paper we discuss factors that have been found to influence labour market success in the receiving country and examine the actual performance of recent migrants to the uk the uk provides a good case study for conducting such an exercise because of the very large increases in immigration that have been seen over the past decade we find that labour market performance varies greatly between migrant groups and that outcomes have changed noticeably following the uk government s decision to allow migrants from poland and other central and eastern european countries more or less free access to the labour market after eu enlargement in 2004

the economic situation of first and second generation immigrants in france germany and the united kingdom a central concern about immigration is the integration into the labour market not only of the first generation but also of subsequent generations little comparative work exists for europe s largest economies france germany and the uk have all become perhaps unwittingly countries with large immigrant populations albeit with very different ethnic compositions today the descendants of these immigrants live and work in their parents destination countries this article presents and discusses comparative evidence on the performance of first and second generation immigrants in these countries in terms of education earnings and employment it is widely believed that many european countries have a serious problem with the integration of immigrants and their children leed 2006 many northern european countries have accumulated sizeable populations of immigrants but the lack of longterm strategies and policies to integrate these into societal structures and the labour market is often cited as one reason for social and economic exclusion of the children of these immigrants in the past decade southern european countries such as spain and italy have experienced similar if not larger immigrations than the large northern european economies france germany and the uk in the late 1950s to early 1970s again it seems that there is little thought devoted to long term strategies for immigrants and their descendants the experience of those countries that had large scale immigration in the last half of the twentieth century should be of importance for devising future immigration and integration policies however there is rather little hard evidence in the literature about the relative position of immigrants and their descendants in these countries in a manner that allows comparisons to be made in this article we aim to provide a comparative study of a number of outcomes education earnings and employment of both first and second generation immigrants of different origins in the three largest european economies france germany and the uk

the wage effects of cumulative job mobility this analysis of data from the national longitudinal survey of youth shows that cumulative job mobility had statistically significant effects on wages in the years 1979 88 the direction of the wage effects positive or negative and their magnitude varied depending on the type of cumulative mobility examined employee initiated versus employerinitiated separations economic versus family related quits layoffs versus discharges the results also indicate that although men and women had different mobility histories men for example had been discharged more often than women and women had quit for family related reasons more often than men the wage effects of each type of cumulative mobility economic quits family related quits layoffs and discharges were similar for men and women tn this paper we examine the impact of cumulative job mobility on the subsequent wages of young men and women most previous work on this subject has focused on the impact of specific mobility events such as quits or layoffs rather than on the impact of total job history on wages researchers looking at single mobility decisions have consistently reported evidence that a change in employers does affect a worker s subsequent wage therefore it is reasonable to ask whether the impact ofjob change is cumulative that is does a worker s current wage reflect the impact of all past mobility decisions quits layoffs and discharges also since most of the

english deficiency and the native immigrant wage gap using the interaction of language of country of birth and age at arrival as instruments we find strong evidence of a causal effect of english as additional language eal on the native immigrant wage gap for male employees in the uk

learn english not the local language ethnic russians in the baltic states this paper analyzes the return to dominant language fluency for ethnic russians in the baltic states we look at male workers using estonian labor force survey for years 2000 2010 and the 1998 wave of a panel of high school graduates of 1982 the results indicate that the ethnic russian men enjoy little income premium on their skills of the dominant language we identify positive returns only in the low end of the income distribution and in public administration sector surprisingly the returns to english fluency are far larger these outcomes point toward segregation and discrimination at the upper end hiring

poverty among minorities in the united states explaining the racial poverty gap for blacks and latinos the two largest minorities in the united states african americans and people of hispanic origin show official poverty rates at least twice as high as those of non hispanic whites these similarly high poverty rates between the two minorities are however the result of different combinations of factors related to the specific characteristics of these two groups in this article we analyse the role of demographic and labour related variables in the current differential of poverty rates among racial and ethnic groups in the united states and its recent evolution our results show first that these differentials are largely explained by differing family characteristics of the ethnic groups furthermore we show that while labour market activity of family members and a preponderance of single mothers play a more significant role in the higher poverty rates of blacks a larger number of dependent children is closely associated with higher poverty among latinos who also suffer from a larger educational att

the impact of unionization on male female earnings differences in canada the impact of unionization on male female earnings differences in canada is analyzed using data spanning 1981 to 1988 a period in which the male female unionization gap narrowed considerably gender differences in union density union wages and nonunion wages are decomposed into characteristics related and discriminatory components we find that the drop in the gender unionization gap prevented an increase of 7 percent in the overall wage differential between men and women also male female earnings differences in the nonunion sector make a substantially larger contribution to the gender earnings gap than do those in the union sector

formula bias and within stratum substitution bias in the u s cpi in 1978 bls adopted an estimator for u s cpi component indexes that incorporates scientific samples of outlets and varieties and that allows the calculation of reliable standard errors consumer substitution of outlets and varieties offering better values could cause bias in these indexes a more important source of bias is however a tendency to give excessive weight to items whose initial price is temporarily low the empirical evidence is striking average price series and matched food cpis grew at almost the same rate before 1978 but between 1980 and 1992 the cpis average about 1 4 per year more growth for unleaded gasoline the discrepancy averages 0 8 per year

a theory of dual labor markets with application to industrial policy discrimination and keynesian unemployment this paper develops a model of dual labor markets based on employers need to motivate workers in order to elicit effort from their workers employers may find it optimal to pay more than the going wage this changes fundamentally the character of labor markets the model is applied to a wide range of labor market phenomena it provides a coherent framework for understanding the claims of industrial policy advocates it also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces finally the model provides the basis for a theory of involuntary unemployment

endogenous job contact networks we use the uk quarterly labour force survey to document the presence of two phenomena first a positive correlation between unemployment rate and the proportion of job seekers who use social networks to nd jobs network use second a non monotone relation between unemployment rate and the proportion of recently employed workers who found their job through friends or relatives network productivity this second relation is positive for low levels of unemployment rate while it becomes negative for high levels of unemployment rate existing models of social networks and labor market generally assume that social networks are exogenous this assumption implies a negative correlation between unemployment rate and network productivity we develop a model where social networks are used to collect job oers but workers decide strategically how much to invest in their network we show that equilibrium job contact networks are dense and more productive in transmitting information when labor market turnover is moderate while they are less productive and segmented into clusters for either high or low turnover the equilibrium response of job contact networks to changes in labor market conditions is sucient to generate

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

returns to foreign languages of native workers in the eu most papers on returns to languages are concerned with immigrants we use the european community household panel survey echp to infer returns on non native languages by non immigrants in nine countries of the european union we differ from the few other studies that deal with the same problem in three respects first we correct for time dependent measurement errors in self reporting as suggested by dustmann and van soest and find that the resulting iv estimates are much larger than those obtained by ols we also suggest that there is little room for time persistent errors and heterogeneity and that therefore our estimates should not suffer from the other usual biases secondly instead of using a dummy for each language we use the ratio of the population that is not proficient in a language in each country considered finally we estimate instrumental variable quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings

employers discriminatory behavior and the estimation of wage discrimination this paper considers the linkage of empirical estimates of wage discrimination between two groups introduced by oaxaca 1973 to a theoretical model of employers discriminatory behavior it is shown that conditional on different assumptions about employers discriminatory tastes oaxaca s estimators of wage discrimination can be derived that the approach is more generally useful is demonstrated by deriving an alternative estimator of wage discrimination based on the assumption that within each type of labor e g unskilled skilled the utility function capturing employers discriminatory tastes is homogeneous of degree zero with respect to labor inputs from each of the two groups the estimators are compared empirically in an application to male female wage differentials

weak comparability of values as a foundation for ecological economics the main argument of this paper is that weak comparability of values should be seen as one characteristic feature of ecological economics the formal properties of the concepts of strong comparability implying strong or weak commensurability and weak comparability implying incommensurability will be clarified multicriteria evaluation offers the methodological and mathematical tools to operationalize the concept of incommensurability at both macro and micro levels of analysis the concept of incommensurability of values already has a long tradition in economics moreover we will show that analytic philosophy theories of complexity post normal science and the recent theories of rationality lead with different trajectories to a non algorithmic approach which in our view could be implemented by some forms of multicriteria evaluation 1998 elsevier science b v all rights reserved

intergenerational mobility in britain in this paper we use longitudinal data on children and their parents to assess the extent of intergenerational mobility in britain based on data from the national child development survey a cohort of all individuals born in a week of march 1958 we find that the extent of intergenerational mobility is limited we report an intergenerational correlation of the order 40 to 60 for fathers and sons and 45 to 70 for fathers and daughters in terms of labour market earnings and years of schooling an examination of quartile transition matrices between parental and child earnings outcomes reveals a similar pattern finally it seems on the basis of these transition matrices that there is an important asymmetry in intergenerational earnings mobility with upward mobility from the bottom of the earnings distribution being more likely than downward mobility from the top

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

the effect of unions on the employment of blacks hispanics and women to investigate whether unions have helped or hindered the employment prospects of minorities and women the author analyzes data on 1 273 california manufacturing plants for the period 1974 80 the

matching the demand for and supply of training in the school to work transition this empirical paper investigates skill formation in the youth labour market using event history data collected from the administrative records of lancashire careers service we model training preferences formed at school by young people and training destinations ie the occupation of the first job training scheme we also model the duration of the individual s first unemployment spell competing risks models with flexible piece wise linear baseline hazards and unobserved heterogeneity are estimated there is evidence of occupational segregation by gender and an excess demand for general training outcomes are mainly determined by examination performance ethnicity and whether disadvantaged

prospects for a heterodox economics of the environment and sustainability this paper introduces a special issue on heterodox economics of the environment and sustainability at present humanity faces several challenges such as resource scarcity biodiversity loss and climate change and yet we would argue contributions from traditional heterodox schools of thought such as post keynesianism marxism and to a lesser extent institutionalism have had relatively little to say about them instead the economic analysis of environmental issues has been dominated by approaches inspired by neoclassical economics and latterly by ecological economics the special issue is part of an effort to stimulate more heterodox work on the environment and to explore connections between existing groups of scholars particularly between ecological and heterodox economists

the decline of unionization in the united states what can be learned from recent experience the dramatic decline in unionization over the last decade is investigated in the context of a supply demand model of union status determination using data from surveys of workers conducted in 1977 and 1984 along with data from the national labor relations board on representation elections it is concluded that the decline in unionization since 1977 is accounted for largely by 1 an increase in employer resistance to unionization probably due to increased product market competitiveness and 2 a decrease in demand for union representation by nonunion workers due to an increase in the satisfaction of nonunion workers with their jobs and a decline in nonunion workers beliefs that unions are able to improve wages and working conditions

gender race pay and promotion in the british nursing profession estimation of a generalized ordered probit model we analyse job grading within the uk national health service nursing profession using 1994 survey data we start from the ordered probit model for which we develop and apply appropriate specification tests threshold constancy and covariate exogeneity are rejected with important consequences for estimates of the influence of gender ethnicity training and career interruptions we find little evidence of disadvantage for females relative to males but significant differences in speed of promotion between ethnic groups implying non negligible differences in lifetime earnings copyright 2000 john wiley sons ltd

the impact of pension benefits on the distribution of earned income using standard measures of income inequality and detailed pension benefit information on participants in the 1983 survey of consumer finances scf the authors investigate how pension benefits affected the distribution of earned income the results suggest that private pensions increased annual income inequality relative to inequality observed in the distribution of wage income by only about 2 among all employed individuals but by 21 among unionized workers further analysis indicates that private pensions raised annual income inequality primarily by increasing the rate of return to tenure possibly through pension backloading setting accruals to grow when earnings rise near retirement and the increasing incidence of pensions with age private pensions had little effect on estimates of the distribution of expected lifetime income but the addition to the analysis of social security benefits public pensions strongly reduced inequality in that distribution a renewed interest in the distribution of income has developed recently as new evidence suggests that income inequality has worsened over the past twenty years researchers suggest several reasons for rising inequality including an increase in the incomes of well educated men relative to other groups for example juhn murphy and pierce 1993 demographic changes resulting from the entrance of the baby boom generation into the work force lawrence 1982 and a sectoral shift away from manufacturing and toward the ser

the economics of immigration this literature review concerns the impact of immigration on the economy of the host country focusing on the experience of the united states the emphasis is on the period from the 1970s to the 1990s the author shows that research earlier in this period generally concluded that the economic effects of immigration were positive but that more recent research on later migrations have generally concluded that immigration may be having an adverse effect on the earnings of native unskilled workers and be placing an increased burden on welfare programs the importance of such economic analysis for the formulation of appropriate migration policies is stressed

intergenerational mobility among the rich and poor results frm the national child development survey using data from the uk national child development survey we look at the relationship between sons and fathers and their position in the population income distribution particular attention is paid to those who start or end up near the top or bottom of the distribution people at these extreme ends of the distribution are found to be particularly subject to immobility across the generations among those whose fathers are at the bottom of the distribution a clear positive relationship between test scores at age seven and likelihood of moving up the distribution appears evident copyright 1996 by oxford university press

the employment of married women in the united kingdom 1970 83 the proportion of married women in employment in the united kingdom grew rapidly during the 1970s rising from around 50 to 60 per cent the paper investigates this change using a time series of cross sections from the family expenditure survey an attempt is made to assess how much of the change was due to trends in the observable characteristics of the population and what part was played by changes in behavioural and other factors reflected in the coefficients of the model a technique of growth accounting is proposed and used to this purpose excerpt

a note on the estimation of models with sample selection biases abstract econometric models with sample selection biases are widely used in various fields of economics such as labor economics heckman s two step estimator is widely used to estimates these models this paper points out some limitations and problems of heckman s two step estimator

from school to university the demand for post compulsory education in britain the work reported here was done at the centre for labour economics lse and it is a revision of earlier work done at the national bureau of economic research this revision owes much to the comments and suggestions of richard layard and to the technical expertise of george alogoskoufis thanks are also due to the department of education and science for their comments and help with the data and to the manpower services commission the department of employment and the ford foundation for finance

male female wage differentials in job ladders much of the male female wage differential exists because men and women are assigned to different jobs within narrow job categories there is no male female differential only a tortured taste theory of discrimination can reconcile these facts we argue that differential movement along job ladders entails comparative advantage so the ability standard for promotion is higher for women this implies that more able women will be passed over in favor of less able men women assumed to have the same ability distribution as men earn less the differential reflects females lower promotion probability not within job discrimination

patterns of ethnic self employment in time and space evidence from british census microdata the over representation of certain ethnic minority and immigrant groups in self employment is in common with other developed countries a notable feature of the uk labour market compared to the substantial growth in self employment in the 1980s the 1990s saw overall self employment rates plateau despite this some minority groups experienced continued growth whilst others particularly chinese and indian males and pakistani bangladeshi and chinese females saw their self employment rates decline in this paper we use microdata samples from the 1991 and 2001 censuses to investigate the dynamic and spatial patterns of ethnic entrepreneurship using decomposition methods we find that for males from the asian groups changes in observable characteristics associated with an increasing proportion of second generation individuals explain much of the decline in self employment this which is also true of chinese females reflects in part the age structure and educational experiences of the second generation the dynamics of black male and pakistani bangladeshi male and female entrepreneurship are less easy to explain we also find that while there is no evidence of self employment being an enclave phenomenon local economic conditions do affect rates of entrepreneurship for some groups notably pakistanis and bangladeshis

the role of human capital in earnings differences between black and white men d uring the past 50 years the earnings of black men have increased substantially both in absolute terms and relative to those of white men as shown in figure 1 in 1940 the black white weekly earnings ratio among men ages 25 34 was 49 percent by 1980 it had increased to 79 percent during the 1980s however the overall black white earnings gap did not narrow and at younger ages the gap actually widened although the 1980s is not the first decade since 1940 in which black men made little or no gains in relative earnings the 1950s was another the lack of progress in the 1980s is nevertheless puzzling and a source of concern this article examines the factors underlying the differential in earnings between black men and white men with a focus on the role of human capital since 1940 successive generations of black men entering the labor force have been increasingly more educated relative to white men both in terms of years of school completed and in the quality of schooling obtained as the education and income levels of black parents increased racial differences in the transmission of human capital in the home were also likely to have narrowed this convergence in educational differences combined with the migration of blacks out of the south contributed to the narrowing in the racial gap in earnings over the 1940 80 period particularly in the first half of the period but human capital factors education and migration were not the only source of convergence in black white differences in earnings the patterns of change in the earnings gap support the contention that declining labor market discrimination against blacks has also contributed to the rise in the black white earnings ratio moreover the acquisition of human capital itself has been strongly affected by societal and governmental discrimination since blacks were long provided with greatly inferior schooling resources

the effect of implicit contracts on the movement of wages over the business cycle evidence from the national longitudinal surveys a 1991 study by paul beaudry and john dinardo found evidence of internal labor markets that augment incumbent workers wages when the external labor market is tight when unemployment is low and shield their wages when it is slack current wages they found depend on the tightest labor market conditions observed since a worker was hired not current labor market tightness or labor market tightness at the time of hiring this paper replicates and extends that research using data from six cohorts of the national longitudinal surveys that together span more than three decades as well as an estimation framework more robust than that in the original study the author finds strong support for beaudry and dinardo s key prediction supplementary regressions confirm other implications of the theory as well recently at least the effect of implicit contracting on wages has been similar for men and women

the decline of private sector unionism and the gender wage gap between 1973 and 1988 private sector unionism fell by 9 5 percentage points more for men than women and the gender wage gap one minus the ratio of female to male wages decreased by 09 these trends support two findings first unionism fell more slowly for women primarily because the probability of unionism fell most rapidly in jobs dominated by males second the greater decline in unionism among males is responsible for approximately one seventh of the 09 decline in the gender wage gap

separate spheres bargaining and the marriage market this paper introduces the separate spheres bargaining model a new model of distribution within marriage it differs from divorce threat bargaining models e g manser brown mcelroy horney in that the threat point is not divorce but a noncooperative equilibrium within marriage this noncooperative equilibrium reflects traditional gender roles the predictions of our model thus differ from those of divorce threat bargaining models in the separate spheres model cash transfer payments to the mother and payments to the father can but need not imply different equilibrium distributions in existing marriages in the long run the distributional effects of transfer policies may be substantially altered by changes in the marriage market equilibrium

using scanner data to construct cp1 basic component indexes this article considers how scanner data could be used in constructing component indexes for the u s consumer price index one product coffee in two cities generates over 1 8 million observations in just over two years so coping with the sheer volume of data would be a challenge some other findings are 1 some aggregation of prices into unit value averages is necessary for practical reasons and to avoid bias 2 chained laspeyres indexes are very high 3 modified laspeyres indexes have some upward bias but much less than a true laspeyres index 4 fisher ideal or modified edgeworth indexes perform well and 5 aggregating prices across outlets to form city level unit values reduces the discrepancies between index number formulas

plant size and the decline of unionism abstract declining plant size is shown to explain a significant portion of the recent decline in unionism particularly in manufacturing the paper also shows how to use the probit model to decompose the change in unionism into explained and unexplained components

why is poverty so high among afro brazilians a decomposition analysis of the racial poverty gap this study aimed to identify the major factors underlying the large discrepancy in poverty levels between two brazilian racial groups whites and afro brazilians we performed an oaxaca blinder type decomposition for nonlinear regressions in order to quantify the extent to which differences in observed geographic sociodemographic and labor characteristics characteristics effect account for this difference the remaining unexplained part coefficients effect provides evidence on how these characteristics differentially impact on the risk of poverty in each group a detailed decomposition of both effects allows the individual contribution of each characteristic to be determined our results show that the characteristics effect explains a large part of the discrepancy in poverty levels with education and labor variables of household members explaining at least one half of the effect and geographic and demographic variables accounting for the remainder however the unexplained part that remains significant has increased in importance in recent last years and probably results from unequal access to high quality education and the persistence of discrimination against colored workers in the labor market

union membership determination and industry characteristics recent literature on the economics of unionism has expanded beyond its customary focus on the wage and nonwage effects of collective bargaining and given increased attention to the determinants of union membership previous union membership studies have been couched primarily within an individual choice framework whereby utility maximizing individuals choose either to join or not to join a union empirical work typically treats membership as a function of some vector of personal characteristics 1 2 10 11 21 it is our contention that such studies can best be interpreted as explaining the determination of the union status of jobs and that several industry and firm characteristics in addition to personal characteristics can be expected to affect significantly union membership in this paper theory and evidence relating to the effects of firm and industry characteristics on union membership are presented industry level data are bridged with a large microdata set containing individual characteristics in order to examine the determinants of unionism among workers in manufacturing utilizing a simultaneous model and controlling for sample selection bias we find that product market concentration capital intensity establishment size and job risk significantly affect the likelihood of union membership

black white male earnings and employment prospects in the 1970s and 1980s evidence for britain abstract using a sample of around 80 000 whites and 2500 blacks the paper highlights not just the economic disadvantage of blacks but also that this disadvantage worsened in the 1980s in britain