unionization and labor market institutions in advanced capitalism 1950 1985 this article examines the depedence of unionization on labor market institutions and long run trends in inflation unemployment and the sectoral composition of the labor force in 18 oecd countries the large number of contending explanations highlights the difficulty in comparative sociology of drawing confident conclusions when there are few cases to compare this problem is addressed through diverse evidence a review of the comparative historical record and a time series analysis to form a bayesian prior distribution which is combined with a cross sectional data set to sharpen conventional estimates of economic and institutional effects this analysis indicates working class organization in trade unions expanded in the postwar period where labor acquired an institutional influence over capitalist labor markets

implications of economic interdependence for endogenous wage indexation decisions this paper shows how economic interdependence affects the indexation decisions of atomistic wage setters in an environment in which monetary authorities do not observe stochastic disturbances before making their policy choices if stochastic disturbances are common across countries interdependence has no effect on equilibrium indexation choices in identical countries however if disturbances are country specific numerical simulations show that interdependence is likely to reduce equilibrium indexation choices relative to a small open economy we also show that indexation choices may be either strategic complements or strategic substitutes but that strategic complementarity becomes more likely as the degree of interdependence rises

factor shares and inequality in the uk trends in factor shares in both national and household income are estimated from the national accounts and compared to those derived from the fes household survey in order to obtain more reliable measures of the contribution of changes in factor shares to the contemporary growth in income inequality the national accounts indicate that upward trends in the shares of investment related and self employment incomes have contributed directly to the rise in inequality during the past 20 years though to a generally secondary extent until 1986 at least the paper outlines the importance and the difficulty of including appropriate measures of capital gains and private benefit income in estimates of household investment related income whether the national accounts or household surveys are used for evidence indicating the continuing value of national income shares as a guide to the longer run implications of factor shares for inequality copyright 1996 by oxford university press

generalized travel cost model and water quality benefits a reconsideration with federal agencies required to conduct benefit cost analyses for each new major regulation analyses of water quality changes are likely to be an increasingly important part of the policymaking process a revised version of the travel cost demand model and illustrations show the importance of these revisions for the model s estimates although the magnitude of the difference in benefit estimates between the original and new versions of the model varies with the specific recreation site selected the findings indicate that the original model generally implied estimated benefits from three to over 30 times as large as the revised model this implies that judgment can play an important role in the definition and use of economic models as well as the need for better information on households recreation decisions and more complete description of recreation site characteristics 15 references 4 tables

social security benefits and the baby boom generation the future of the u s social security system is examined with consideration given to the impact of political forces the social security administrations projections of future benefit levels are first reviewed the authors then present a theoretical model that postulates first as the number of retirees increases relative to the number of workers the retirees acquire additional political power which can be used to raise individual benefits however at the same time the cost of increasing individual benefits is greater and this may lead to a lowering of individual benefits the results suggest that the benefits received by the baby boom generation will be significantly lower than those projected by the social security administration excerpt

theoretical and empirical specifications issues in travel cost demand studies the ultimate objective of empirical travel cost demand studies is to obtain an estimate of the welfare derived from utilizing outdoor recreational resources thus it is apparent that travel cost demand equations must be linked to utility maximization deyak and smith freeman bockstael and mcconnell hanemann bockstael hanemann and strand we specify a model of utilitymaximizing recreation demand behavior which postulates that individuals choose the total number of days that they wish to spend at the recreation site this total number of recreation days is the product of the number of trips

lobbying by capital and labor over trade and labor market policies abstract this paper uses the common agency approach to analyze the joint determination of product and labor market distortions in a small open economy capital owners and union members lobby the government on both tariffs and minimum wages while other factors of production are not organized the paper shows that product and labor market distortions always move in the same direction and that their level is not modified by social pacts between capital and labor it also shows that labor market distortions are second best hence conditionality by foreign organizations should target distortions in product markets but not in labor markets

the two faces of janus institutions policy regimes and macroeconomic performance in greece greece the two faces of janus institutions policy regimes and macroeconomic performance the clear change in policy regime in greece around 1974 offers an opportunity to assess the extent to which economic performance depends on institutional underpinning for twenty years up to 1974 greece enjoyed rapid growth high investment and low inflation during the next twenty years growth and investment collapsed and inflation became high and persistent i describe the political background to such clear institutional change and the nature of the two economic regimes the first providing coordination and commitment mechanisms to sustain adequate returns for high investment the second failing to do so the same change in political climate after 1974 raised public sector deficits and debt fuelling a trade deficit and monetary expansion entry to the ec did not cause the economic slowdown in greece but transfers from the ec did mask the underlying problem delaying necessary adjustment recent attempts to reverse greece s fortunes are in the right direction but as yet inadequate george alogoskoufis

the supply and demand for exports in israel abstract using annual data for israel over the period 1960 1989 we estimate an econometric model for the supply and demand for exports a novel feature is that domestic absorption crowds out export supply exports are imperfect substitutes in world markets for tradeables produced abroad the price elasticity of demand is about 1 3 while the price elasticity of supply is about 1 5 the model is simulated to calculate the effects of policy instruments and other exogenous variables on exports and export prices

functional form and welfare measures in truncated recreation demand models this article examines the effect on welfare measures of functional form choice and sample truncation a truncated general box cox model is developed for discriminating between alternative truncated functional forms the model is applied to the valuation of three texas coastal recreation sites neither the truncated double log nor the truncated semilog forms are appropriate for the truncated data used in the empirical analysis different functional forms yield different consumer s surplus estimates when samples are truncated

the economics of worldwide stagflation the last fifteen years have witnessed dramatic changes in economics not only in the manner in which the economics profession views economics but also in the manner in which the general public views economics and economists by the late 1960 s there had emerged more or less a consensus macroeconomic framework that is an agreed upon structure to be used to study economic problems at the aggregate level robert solow stated as quoted in leijonhufvud 1968

the political economy of government domestic expenditure in the affluent democracies 1960 80 despite the large number of studies of the determination of government expenditure in the affluent democracies most students of the subject admit that we know relatively little about the complex dynamics of spending change using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980 this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses by introducing and testing several relatively new hypotheses and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political economic eras results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras overall the self interests and ideological preferences of policymakers the institutional and extrainstitutional political action of policy relevant groups and needs for state assistance emerge as principal sources of changes in domestic expenditure

the anti inflationary influence of corporatist structures and central bank independence the importance of the hump shaped hypothesis many studies have found strong negative correlations between central bank independence and inflation but the casual significance of this relationship is often challenged we find that the negative relationship remains even when a number of other explanatory variables are considered special attention is given to the role of corporatism following calmfors and driffell it is argued that both high and low levels of centralization should be associated with lower inflation we present empirical support for his hump shaped hypothesis and find that the inclusion of corporatism does not diminish the significance of central bank independence

what caused the rise of conservatism a french view conservatism daniel cohen existing theories of political cycles fail to provide an adequate explanation for the widespread shift to conservative economic policies on one view political parties merely court the median voter but this theory is incomplete because it fails to explain why the median voter has become conservative other theories differentiate parties by their ideologies but they wholly fail to explain where changes of ideology come from this author proposes an explanation that does not need to rely on changes in the underlying preferences of voters or parties but in which changing economic conditions lead to different policy choices thus while ends remain unchanged the means to achieve these ends may vary over time the distinction between right and left is still portrayed by the classical trade off between economic efficiency and equity in order to promote equity the government can always redistribute wealth but in order to preserve economic efficiency wealth redistribution should not be expected to be repeated systematically hence the median voter will prefer a laissez faire to an interventionist government when the economy is understood to be affected by a persistent disturbance and the converse when disturbances are temporary thus the shift to conservatism is seen as the result of the sometimes belated realization by the electorate that the shocks of the 1970s were long lasting current forecasts that unemployment in europe is unlikely to fall suggest the continuation of conservative policies irrespective of whether they are implemented by the right or the left

organized labor and the political economy of product market distortions why are economic reforms reversed through strikes and demonstrations in some countries but backed by the labor movement in other countries why do product and labor market distortions differ so much across countries this article addresses these questions by means of a simple heuristic model of the economy that replicates in an integrated manner several independent results from the recent political economy literature unlike most of this literature however the model focuses on the role played by organized labor rather than by rent seeking firms and guilds a two stage game between the government and organized labor determines the level of product market distortions for example import tariffs in the first stage the players may undertake costly actions such as redistributing income or striking in order to increase their bargaining power in the second stage they negotiate over product market distortions and wages under very general assumptions several policy regimes exist changes in the key parameters of the economy may trigger a switch in the strategy of trade unions from confrontation to cooperation and hence change the policy regime cross country data highlight that in spite of its simplicity the model reproduces some observed empirical regularities

can we afford to grow older population aging and social security over the past decade many governments have been attempting to reduce current and future planned expenditure on social security in justifying these reductions great stress has been laid on the projections of increasing dependency ratios that will result from population aging especially as the post war baby boom generation reaches retirement age in the early part of the next century indeed some commentators have referred to a world crisis in social security rosa 1982 it seems as if those demographers who have not been fully occupied in arguing that rapid population growth constitutes a major threat in one part of the world are warning that fertility decline constitutes a serious issue for the rest admittedly the expenditure projections look serious in the united states the medicare fund is expected to go into deficit in the 1990s and remain in deficit thereafter while projections by the fund s trustees suggest that old age survival and disability insurance oasdi benefits will exceed the revenues from the scheduled oasdi payroll tax rate of 12 4 in every year after 2015 levy 1984 in the united kingdom expenditure on state pensions was expected to rise from f 15 4 billion in 1984 85 to between f36 and f50 billion in 2023 24 at 1984 85 prices the range depending on the type of indexation hmso 1985a see also hemming and kay 1982 this growth will however be reduced by recent legislation designed to reduce replacement ratios in the state scheme and to encourage private rather than public pension provision creedy and disney 1988a other countries also face substantial rises in real pension expenditure between 1980 and 2025 in

sample selection bias in the estimation of recreation demand functions an application to sportfishing estimating the value of public actions through behavior implied by the demand for recreation has proved valuable in many settings early applications were based on grouped data however the sharpening of tools of welfare analysis has led economists to exploit individual rather than grouped data the appropriate use of individual observations in estimating recreational demand models is not obvious and depends on the economic theory and its behavioral implications and the statistical characteristics of models the difficulty in exploiting individual observations in estimating recreational demand functions is that a large portion of a randomly sampled population in a given geographical region is likely to be non participants in the recreational activity of interest that is they are observed to demand zero trips the qualitative implications of such samples seem to be recognized bockstael hanemann and strand 1986 mullahy 1987 but there are few smith 1988 shaw 1988 published comparisons of the implications of alternative models

corporatism monetary policy and macroeconomic performance a simple game theoretic analysis the effects of corporatism on inflation and output are analyzed in a model of a game between a government and a union this model allows consideration of aspects of corporatism other than centralization of wage bargaining and permits monetary policy to be endogenized corporatist attitudes on the part of the union have beneficial effects on economic performance provided the game is played noncooperatively with simultaneous moves through the nature of their impact depends critically on the government s preferences if the government leads certain forms of corporatism can be inflationary cooperative play reduces inflation but has an ambiguous effect on output copyright 1995 by the editors of the scandinavian journal of economics

imported input price and the current account in an optimizing model without capital mobility abstract this paper analyses the effect of an oil price increase in an economy which cannot borrow in the international capital markets current account surpluses and deficits are matched by reserve changes at the central bank it is shown in an optimizing setup that an unanticipated oil price increase worsens the current account and lowers the real interest rate contrary to models which assume perfect capital markets

structural distortions and decentralized fiscal policies in emu the combination of discretionary monetary policy labor market distortions and nominal wage rigidity yields excessive inflation as monetary policy tries to exploit nominal wage contracts to address labor market distortions an inflation target reduces inflation but creates a conflict between monetary policy and discretionary fiscal policy if fiscal policy is set at a higher frequency than nominal wages are preventing the associated excessive accumulation of public debt calls for debt ceilings if countries differ substantially in terms of structural distortions uniform debt ceilings must be complemented by country specific debt targets in order to prevent decentralized fiscal authorities from employing debt policy strategically

real wage adjustment and employment policies in the nordic countries nordic employment lars calmfors and ragnar nymoen sweden and norway but also finland have managed to avoid the general western european rise in unemployment the article discusses to what extent this can be explained by a smoothly functioning wage setting system and by active labour market policies the analysis confirms earlier findings of an unusually large responsiveness of wages to unemployment in sweden and norway it is however questionable whether this can be explained by centralized bargaining nor do the authors find any evidence that corporatist tax wage bargains should have contributed to wage restraint the absence of hysteresis effects may be one explanation of why unemployment rises were easily reversed the most controversial finding is that active labour market policies may have strong wage raising effects if so labour market programmes may actually reduce regular employment and even increase open unemployment the authors argue that a reduced rather than an increased emphasis on labour market policies may have been an important factor for real wage restraint especially in sweden this may be an important lesson for those who regard extensive labour market programmes of the swedish type as a blueprint to follow

the role of shocks and institutions in the rise of european unemployment the aggregate evidence two key facts about european unemployment must be explained the rise in unemployment since the 1960s and the heterogeneity of individual country experiences while adverse shocks can potentially explain much of the rise in unemployment there is insufficient heterogeneity in these shocks to explain cross country differences alternatively while explanations focusing on labour market institutions explain current heterogeneity well many of these institutions pre date the rise in unemployment based on a panel of institutions and shocks for 20 oecd nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts

selected works of michael wallerstein centralized bargaining and wage restraint the literature on corporatism has presented much evidence associating highly centralized systems of collective bargaining with wage restraint and relatively successful macroeconomic performance in addition centralized bargaining is associated with relatively small wage differentials this paper presents a model of the impact of centralized wage setting on both real wages and relative wages the central assumption is that the centralization of wage setting at the national level unites unions who are complements in production since a wage increase for one group of workers negatively affects the welfare of other workers who are complements in production centralized wage setters choose wages below the equilibrium of decentralized wage setting it is also shown that if the union confederation maximizes a utilitarian welfare function with equal weights centralized wage setting decreases wage dispersion while low paid workers clearly gain from centralized bargaining high paid workers may prefer that bargaining be decentralized

bootstrapping in applied welfare analysis bootstrapping procedures are used to estimate the statistical properties of common empirical welfare measures results from a monte carlo experiment indicate that welfare estimates such as marshallian consumer surplus often exhibit significant bias standard errors of welfare estimates are found to often exceed the magnitude of the point estimate for typical cross section data sets and are generally larger than the difference between comparable hicksian and marshallian measures precision of welfare estimates can be markedly enhanced through generating larger data sets obtaining better model fits and through imposition of innocuous inequality restrictions on the demand function parameters

government special interest groups and economic growth in descending order of robustness and strength the four major conclusions are i the experience of industrial countries in the postwar period indicates that a large welfare state has been associated with a high rate of economic growth ii the olson thesis that powerful special interest groups impede growth receives empirical support iii the relation between growth and the welfare state is non linear with increases in the size of the welfare state beyond some critical level one sixth of gdp according to our estimates resulting in reductions rather than increases in the growth rates and iv the strength of the growth promoting properties of the welfare state is positively related to the strength of special interest groups as proxied by the proportion of the work force unionized one possible interpretation of these results runs as follows a large welfare state may retard economic growth by reducing the incentives to work to save to move and to change on the other hand in a situation where special interest groups have aquired significant power to block change if they so desire the welfare state which offers assistance to those who are the victims of change may play a growth enhancing role in reducing the incentive to block change the fourth conclusion just stated supports this view the welfare state may also foster economic growth through favourable effects on social consensus political stability and labour management relations the results suggest that the growth promoting forces predominate as long as the welfare state is not too large but beyond a certain point which corresponds more or less to the median situation among developed countries today the growth retarding elements come to the fore

monetary policy and the informational implications of the phillips curve in this paper i examine optimal monetary policy and the informational implications of the phillips curve in a stochastic macroeconomic model it is assumed that wages are not only indexed to the price level but respond to the state of the labor market as well if information about current disturbances is conveyed only through market prices it turns out that wages have independent informational content over and above the informational content of other aggregate prices the optimal policy in this model implies reactions to changes in both wages and the aggregate price level as unlike the commonly used model of gray and fischer wages and prices are only partially correlated signals about the unobserved disturbances the paper also discusses an extension to an open economy and the relation between exchange rate policy and wages copyright 1990 by the london school of economics and political science

the return of lockouts down under in comparative perspective globalization the state and employer militancy virtually unheard of since the great depression lockouts have reemerged strongly in australia and new zealand just as they have all but disappeared in germany the decline of lockouts in germany is convincingly attributed to the enhanced vulnerability of firms to stoppages in certain circumstances amid globalization but the small open economies of australia and new zealand are equally subject to these pressures using macro and micro level data this article illustrates that neoliberal legislative reforms and institutional change have reconfigured the risks costs and payoffs associated with lockouts amid globalization in doing so some flaws in the varieties of capitalism dual convergence literature are highlighted in particular the post hoc classification of the antipodes as liberal market economies bypasses the role of legislative reform in reconstituting employer interests and the differences in electoral party and state structures that impeded facilitated the rise of neoliberal reformers in

are we willing to pay enough to back the bid valuing the intangible impacts of london s bid to host the 2012 summer olympic games using a contingent valuation survey this paper provides the first empirical test of the proposition that intangible impacts might justify hosting major sporting events on cost benefit grounds respondents drawn from london manchester and glasgow were asked for their willingness to pay wtp to host the 2012 olympic games in london on the basis of the intangible impacts that this event might provide annual mean wtp is 22 12 and 11 per year for 10 years in these 3 uk cities respectively an illustrative total uk wtp for intangible impacts is in the region of 2 billion statistical analysis of wtp determinants reveals a range of plausible explanatory factors such as respondents degree of support for the bid

unions and interindustry wage differentials abstract we investigate the importance of trade unions in collective bargaining in the context of a developing country manufacturing labor market the methodology we adopt to estimate wage differentials follows the method proposed by haisken denew j p and schmidt c m 1997 review of economics and statistics 79 516 521 since it improves on the standard procedure popularized by krueger a b and summers l h 1988 econometrica 56 193 259 our findings indicate that wage dispersion is far greater in the unionized sector of brazilian manufacturing in contrast to evidence from other countries

selection and recreation demand increased use of on site and user group surveys to estimate travel cost demand models e g caulkins bishop and bowes smith and desvousges has raised inevitable questions about the significance of relying on demand estimates derived solely from surveys of users many of the questions relate to selection effects that is the potential for specification errors and bias caused by an inability to reflect the decisions of nonusers with these types of surveys this issue has received some attention in the recreation literature brown et al bockstael and mcconnell but specific empirical evidence on the implications of alternative approaches for estimating demand models from on site surveys does not exist this article reports the first such evidence using a data set based on a general population sample to compare five methods for estimating travel cost demand models with microdata the findings suggest that the differences in the demand and in the benefit estimates raised by treating the problem using models with either single heckman or double selection catsiapis and robinson ham poirier effects are small however the effects of using alternative estimators for site demands are not these findings are limited because they apply to only one site nonetheless they do highlight the importance of the assumptions used to consider the behavior of nonusers consequently they provide direct motivation for more detailed conceptual and empirical work on the choice processes underlying recreation decisions

why are more women working in britain in britain female labor force participation rose steadily from the second world war to 1977 to explain this we estimate a pooled time series cross section supply function for single year age groups of women the life cycle pattern is explained quite well by the presence of children at a second stage we try to explain the rising level of the cohort intercepts estimated at the first stage real wage growth may be an explanatory factor as cross section evidence suggests it should be finally we point to the 15 rise in the relative pay of women in the mid 1970s caused by the equal pay act this did not cause the expected decline in the relative demand for female employees

the olympic effect why should countries offer to host costly mega events such as the olympic games we show that hosting a mega event increases exports this effect is statistically robust permanent and large trade is over 20 higher for host countries interestingly unsuccessful bids to host the olympics have a similar impact on exports we conclude that the olympic effect on trade is attributable to the signal a country sends when bidding to host the games rather than the act of actually holding a mega event we develop an appropriate formal model and derive conditions under which liberalising countries will signal through a mega event bid

partially independent central banks politically responsive governments and inflation theories of central bank independence have more exact implications regarding inflation in different political economic environments than generally understood or empirically examined they imply that inflation in any given country time will be a weighted average of what it would be if the central bank completely controlled monetary policy and what it would be if the government completely controlled it with the degree of central bank independence weighting the former an equation embodying this theoretical expectation is estimated by constrained least squares from a time series cross section of inflation rates in developed democracies since the bretton woods era the results confirm that the antiinflationary benefit of central bank independence is not constant but rather depends on every variable in the broader politicaleconomic environment to which wholly autonomous central banks and governments would respond differently conversely the inflationary impacts of all such political economic variables depend on the degree of central bank independence

fiscal policy profits and investment this paper evaluates the effects of fiscal policy on investment using a panel of oecd countries we find a sizeable negative effect of public spending and in particular of its wage component on profits and on business investment this result is consistent with different theoretical models in which government employment creates wage pressure for the private sector various types of taxes also have negative effects on profits but interestingly the effects of government spending on investment are larger than those of taxes our results can explain the so called non keynesian i e expansionary effects of fiscal adjustments jel e22 e62

unemployment in open economies the impact of trade finance and european integration this article compares variations in the level of unemployment in four small open economies austria belgium the netherlands and sweden rather than focusing on the political institutional differences between these four countries the article examines international economic variables such as the role of the european monetary system the structure of foreign trade and linkages to international markets to understand the greater deterioration of employment in belgium and the netherlands in turn the decision to join the european community and to seek firmer integration into financial markets is attributed to the relatively greater influence of banking capital or the financial sector in the systems of economic policy making of belgium and the netherlands the article concludes that the detachment of the austrian and swedish economies from the european experience in economic integration has greatly helped the social democrats in these countries in fulfilling their promises of full employment

wage setting and unemployment persistence in europe japan and the usa the persistence of high unemployment in the main european economies is one of the most puzzling economic developments of the past fifteen years average japanese unemployment has risen slightly since the mid seventies whereas unemployment in the united states still exhibits cyclical fluctuations around a gently rising level in marked contrast average unemployment in france germany and the united kingdom rose to a higher plateau during the latter part of the seventies shot up again in the early eighties and has remained persistently high identification of the causes of such unemployment persistence is crucial before one makes policy recommendations three possible causes spring to mind first persistence in the determinants of equilibrium and disequilibrium unemployment second excessive power of insiders in wage setting combined with high correlation between employment status and insider status and finally a high degree of state dependence sluggishness in labour demand although in general one expects all three causes to have played a role in the persistence of high european unemployment there is still a need to identify their relative importance the first set of factors has been assessed empirically in recent papers by among others sachs 1983 bruno and sachs 19x5 bruno 1986 layard and nickel1 1985 bean layard and nickel1 1986 newell and symons 1985 and others many of these papers have also allowed for sluggishness in labour demand although they did not particularly focus on it the second set of factors has been investigated by blanchard and summers 1986 who concluded that there is evidence of much higher correlation between employment status and insider status in the three largest european economies than in the united states

relative wages under decentralized and corporatist bargaining systems in studying the relationship between wage inequality and centralization in collective bargaining we distinguish central from local systems of wage determination by assuming that a central union takes the employment effects of negotiated wages into account whereas unions disregard these effects in decentralized systems two different sources of wage differentials are studied separately i heterogeneous workers with different skills and ii heterogeneous firms with varying levels of economic rent per employee with respect to skill levels the impact of centralization is ambiguous whereas inter firm wage differentials are likely to be lower in corporatist systems

the importance of composition of fiscal policy evidence from different exchange rate regimes abstract we study the macroeconomic effects of fiscal policies in an open economy we emphasize two transmission mechanisms the cost channel by which wage government spending and labor taxes raise the real wage firms must pay and the exchange rate channel by which the nominal exchange rate shifts induced by fiscal policy have real effects if some prices and wages are sticky the latter channel implies that changes in wage government spending or in labor taxation should have different effects under flexible than under fixed exchange rates in a 1964 93 panel of oecd countries we find significant evidence for both channels moreover we find that the real product wage and profitability are more responsive than quantities employment and output to fiscal policy innovations

the costs of the state earnings related pension scheme in her introduction to the white paper better pensions describing the new state pension scheme which came into effect in britain in i978 the then secretary of state for social services wrote the cost of the commitments in this white paper has been very carefully considered in relation to the capacity of the country to support it hmso i974 we can find little to indicate that this is a true statement the memorandum on the financial implications of the scheme provided in that paper by the government actuary contained estimates of the costs of the whole national insurance scheme until 2008 9 it did not measure and did not claim to measure the cost of the additional pension commitments which the white paper proposed and which were with minor amendments subsequently implemented it is that cost which we attempt to measure in this paper we find that these costs are very substantial their magnitude was masked in the government actuary s calculations by favourable demographic trends which reduce the costs of the existing commitments of the national insurance scheme in the early 2ist century however these trends are dramatically reversed and the full cost of the i978 scheme will emerge it is by no means fanciful to speculate that when the scheme is approaching maturity the burden of state pensions on the working population will be twice what it is todayif indeed future generations prove willing to honour the promises which have been so casually made on their behalf the approach we adopt in this paper is to treat the new provision for earningsrelated pensions as a self contained pension scheme in its own right the state earnings related pension scheme serps in section i we describe the central elements of that scheme and our analysis of it while section ii considers the implications of contracting out we discuss how costs are affected by demographic factors in section iii and in section iv relate our projections to those of the government actuary

the rise in unemployment a multi country study one of the most remarkable features of recent economic history has been the remorseless rise in unemployment throughout the industrialized countries however while the trend to higher unemployment is universal the experience of individual countries also differs widely the increase is especially marked within the european community where unemployment rates rival those reached in the interwar years by contrast in the scandinavian countries and japan unemployment is lower and has risen very much less experience in the united states lies somewhere between these extremes and in the last few years unemployment there has fallen sharply

excessive wages and the return on capital received wisdom suggests that excessive wages defined as the part of real wages that do not follow labour productivity developments are adversely associated with the return on capital this paper argues that excessive wages and profits are better thought of as responses to changes in the economic political and institutional environment and there is no a priori reason for a negative relationship between them we thus investigate whether there is a causal effect of excessive wages on capital return using aggregate panel data for 19 oecd countries for the period 1970 2000 we account for the endogeneity of excessive wages by exploiting variations in institutional and labour market characteristics our main finding is that excessive wages do not affect the return on capital this result remains robust to alternative empirical specifications and to alternative definitions of profitability and excessive wages and questions the standard advice by international economic organizations on wage moderation copyright the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

how strong is the macroeconomic case for downward real wage rigidity we explore the existence of downward real wage rigidity drwr at the industry level based on data from 19 oecd countries for the period 1973 1999 the results show that drwr compresses the distributions of industry wage changes overall as well as for specific geographical regions and time periods but there are not many real wage cuts that are prevented more important however drwr attenuates larger real wage cuts thus leading to higher real wages there is stronger evidence for downward nominal wage rigidity than for drwr real wage cuts are less prevalent in countries with strict employment protection legislation and high union density

collective wage bargaining and the role of institutional stability a cross national comparison of macroeconomic performance since the advent of the economic crisis interest in the efficacy of collective wage bargaining institutions has increased as the labour market was required to bear the burden of economic adjustment and became an important policy field for institutional reform in many countries in this article the role of institutional stability trust and certainty for the efficacy of collective bargaining systems is investigated and their effects on macroeconomic outcomes inflation and unemployment are analysed we argue that stability of the institutional framework of collective bargaining is of major importance for its efficacy as it reduces uncertainty and provides the necessary basis for trust among bargaining actors thus we hypothesise that institutional change and instability are associated with significant transaction costs and have at least temporarily negative effects on economic outcomes the hypotheses are confirmed by an empirical analysis which uses data of 34 industrialised countries from 1965 to 2014

can productivity growth explain the nairu long run evidence from britain 1871 1999 this paper investigates the effect of productivity growth on the non accelerating inflation rate of unemployment nairu over the long run using historically consistent time series for the uk from 1871 to 1999 a two equation model of unemployment and wage setting that incorporates productivity effects is estimated over the whole period allowing for shifts associated with changes in labour market institutions the results indicate that faster productivity growth reduces the nairu but that this goes only part of the way towards explaining wide swings in average unemployment across the decades

a theoretical foundation for count data models the paper develops a theoretical foundation for using count data models in travel cost analysis two micro models are developed a restricted choice model and a repeated discrete choice model we show that both models lead to identical welfare measures

functional form and the statistical properties of welfare measures this paper uses monte carlo analysis to compare the variance of consumer s surplus for several functional forms for demand although the semilog and linear forms fit the data well by statistical criteria the coefficients of variation for consumer s surplus generated by these forms were substantially larger than for the double log and linear log forms while this paper is framed in the travel cost approach to recreational demand there are implications for the choice of functional form whenever the measure of interest is a nonlinear transformation of the estimated parameters in an influential article ziemer musser and hill note the importance of the choice of functional form for the magnitude of estimated measures of welfare change in a study of the demand for a recreation site based on the travel cost model they report nearly a fourfold difference between consumer s surplus based on a linear demand curve and surplus computed from a semilog demand their research emphasizes that good estimates of demand may not yield good estimates of welfare the estimate of consumer s surplus is a

postwar unionization in eighteen advanced capitalist countries unionization follows strongly divergent patterns among oecd countries in the postwar period i propose business cycle demographic and political arguments to explain varying unionization over time centralized union movements that engage in corporatist bargaining and union disbursement of unemployment benefits suggest explanations of crossnational variability in unionization analysis of annual data for 18 oecd countries from 1950 to 1985 indicates strong positive effects of union centralization and union disbursement of unemployment benefits on unionization union centralization also shapes the longitudinal effect of strike activity on unionization while union disbursement of unemployment benefits positively influences longitudinal effects of unemployment and employment growth results suggest that labor movementsflourish when they establish an institutional control over labor market outcomes beyond wage bargaining when labor s institutional control is weak worker militancy may encourage working class organization in trade unions

what should you pay to host a party an economic analysis of hosting sports mega events governments all over the world put huge amounts of money into bidding for and then hosting sports events like football s world cup or the olympic games they also give money to professional sports teams and other mega events to encourage them to locate within a particular constituency this article examines the statistical relationship between tourism and three football world cups and five olympic games finding very little positive effect given this conclusion the article looks at why governments continue to bid for these competitions it presents evidence that shows that these sports contests make people happy and argues that politicians capitalize on this feel good factor harnessing the hubris associated with these events for political gain the article then contends that the best way to reduce the politics associated with bidding for mega events is to allocate them via an auction rather than the wasteful rent seeking methods that are currently used

the implications of institutional design for macroeconomic performance reassessing the claims of consensus democracy the choice between a proportional representation pr or plurality based electoral system is commonly assumed to involve a trade off the former is assumed to provide fairer representation but at a

competitive devaluation and the great depression a theoretical reassessment abstract historical accounts indict the devaluations of the 1930s for worsening the great depression to assess the consistency of these arguments we develop a two country model of the gold exchange standard its analysis reveals that devaluation under a gold standard need not be beggar thy neighbor contrary to the thrust of the existing literature competitive devaluations like those of the 1930s could have hastened recovery from the great depression