migration age and earnings the special case of employee transfers the regional relocation of workers within firms is examined this aspect of migration has received little attention in spite of the routine occurance of employee transfers the existence of such transfers suggests that a portion of each worker s human capital is employer specific and readily transferrable across locations thus a different age profile for transfers than that for conventional migrants may be expected specially a model of employee relocation and the consequences of relocation on post transfer earnings is examined

the measurement and trend of inequality comment in a recent article in this review morton paglin proposes a measure of concentration which he claims will correct the gini ratio for overstatement in populations where each individual may be expected to vary his income or wealth over his life cycle the paglin measure suggests that the gini ratio overstates income concentration in the united states by a third and does not reveal a 23 percent decline in concentration which has occurred between 1947 and 1972 these results are based on an improper decomposition of the gini ratio in this note i decompose the gini ratio to derive the paglin measure it is shown to correct for neither demographic nor life cycle income effects and to understate intracohort income or wealth inequality if properly normalized the paglin measure shows that the gini overstates u s income concentration by 7 percent or less and indicates a decline in u s interfamily income concentration of less than 12 percent four percentage points of this decline are the result of demographic change while less than 7 points comparable to the 5 percent decline of the gini are the result of decreased income concentration within cohorts of family heads decomposition further reveals major changes in the division of income among cohorts and in concentration of income within cohorts these changes compensate each other in the paglin measure the use of which as a measure of income or wealth concentration is not recommended the gini concentration ratio

a decomposition analysis of the trend in uk income inequality post war britain has experienced a number of dramatic demographic and social changes that have undoubtedly influenced the distribution of income there has been a rise in the number of pensioners whose incomes are relatively low a considerable increase in the number of young and old households living on their own and a remarkable expansion in the proportion of working wives the potential importance of these structural changes suggests that their impact on the income distribution needs to be examined systematically before any attempt can be made to interpret the observed trend in overall income inequality adequately the method usually adopted for this purpose attempts to create a comparable time series of distributions based on the structural characteristics pertaining in one particular year for example if we wished to investigate the effect of shifts in the age structure of the population this approach would disaggregate the distribution in one year tl and estimate what the distribution would have been like if the age structure had been the same as that observed in some other year to on the assumption that other distributional characteristics such as ageincome differentials and inequality within age groups remain invariant to this demographic change the comparison between the actual distribution at t1 and the constructed distribution at t1 with to s age structure is taken to indicate the impact of changes in the age structure over the period concerned this comparison can be presented in terms of quantile shares summary measures of inequality or the entire lorenz curves this approach known as shift share analysis or standardising the inequality series see semple i975 love and wolfson i976 dinwiddy and reed i977 royal commission i977 rowley and henderson i978 macleod and horner i980 is perfectly adequate for simple and straightforward structural changes when several changes are occurring simultaneously however it becomes difficult to identify the contribution of the individual factors and to assess their relative importance to the overall trend in inequality furthermore the combined impact of several structural influences will not in general sum up to the inequality change requiring explanation the purpose of this paper is to propose an alternative method of analysing

us federal redistributive income policies the purpose of this paper is to present a statiscial model of inequality that allows us to analyse simultaneously the impact of several major redistributive expenditure policies as well as analysing the impact of income taxation on inequality the paper includes multivariate exogeeity tests to determine whether the policies have caused the observed income distribution or if there is feedback i e inequality in the distribution has lead to enhanced or diminished redistributive policies the direction of causality for these policies has not to ourr knowledge been previously examined this paper examines the usual redistributive vehicles of transfer payments social security medicare and medicaid as well as analysing the impact of the personal income tax system on inequality using time series analysis we can allow for lagged effects of these policies as well as current period effects this lagged effects specification may be sugggestive of behavioural responses to policy changes

private sector shrinkage and the growth of industrialized economies reply further tests and thoughts on the oecd data lead me to conclude that if anything my 1986 paper underestimated the magnitude of the inverse relation between economic growth and government size if one takes the nominal based measure of government scale as advised by saunders the significance levels coefficient magnitudes and goodness of fits improve over what i found with my initial investigation i would suggest that saunders reconsider his reluctance to believe that the size of the public sector is unrelated to economic growth in oecd countries over this time period

the rise of intra occupational wage inequality in the united states 1983 to 2002 wage inequality has increased dramatically in the united states since the 1980s this article investigates the relationship between this trend and occupational structure measured at the three digit level using the current population survey from 1983 to 2002 we find that the direct association between occupations and wage inequality declined over this period as within occupational inequality grew faster than betweenoccupational inequality we estimate multilevel growth models using detailed occupational categories as the unit of analysis to assess how the characteristics of occupations affect changes in mean wages and levels of wage inequality across this time period the results indicate that changes in mean wages across occupations vary depending on the characteristics of individuals in those occupations and that intraoccupational inequality is difficult to predict using conventional labor force data these findings seem largely inconsistent with the common sociological view of occupation as the most fundamental feature of the labor market correspondingly a more comprehensive approach one that incorporates the effects of organizational variables and market processes on rising wage inequality in the new economy is warranted

the macro and asset pricing implications of rising italian uncertainty evidence from a novel news based macroeconomic policy uncertainty index abstract we develop a new monthly and daily index of economic policy uncertainty for italy based on articles from the sole 24 ore a popular italian business daily newspaper var investigations document that an unexpected rise in the sole 24 ore news based epu index epu24 has mild effects on the real economic activity cross sectional asset pricing tests then show that both monthly and daily epu24 shocks command a positive risk premium a standard event study finally indicates the presence of statistically significant positive cumulative abnormal returns cars in the energy sector following different categories of policy related events negative and significant cars in the financial sector are instead found to be generated by international related events and political elections

the impact of late budgets on state government borrowing costs abstract we analyze how a key component of fiscal governance the ability of governments to pass a budget on time affects government bond yield spreads based on a sample of 36 us states from 1988 to 1997 and using an original data set on budget enactment dates we estimate that a 30 day budget delay has a cumulative impact that is equivalent to a one time increase in the yield spread of around 10 basis points states with sufficient liquidity incur no costs from late budgets while unified governments face large penalties from not finishing a budget on time

trouble in the tails what we know about earnings nonresponse thirty years after lillard smith and welch earnings nonresponse in household surveys is widespread yet there is limited knowledge of how nonresponse biases earnings measures we examine the consequences of nonresponse on earnings gaps and

using selection on observed variables to assess bias from unobservables when evaluating swan ganz catheterization distinguishing causal effects from correlations is a key objective of research regardless of field even in medicine controlled experiments are not always practical or ethical in economics and we suspect in most other fields identification strategies based upon observational data are rarely bulletproof in their landmark study a f connors et al 1996 use propensity score matching methods with an extremely rich set of demographic characteristics and health status measures to assess whether swan ganz catheterization 1c 2 a widely used device for monitoring intensive care unit icu patients raises or lowers mortality in their sample of icu patients they find that receiving c within the first 24 hours raises mortality rates casting serious doubt on the value of this procedure for critically ill patients jay bhattacharya azeem m shaikh and edward vytlacil 2007 2008 hereafter bsv observe that since c recipients are sicker on many observed dimensions propensity score matching which ignores selection on unobservables might overstate the negative consequences of c they apply a set of bounds estimators including an extension of shaikh and vytlacil 2004 that incorporates prior information that weekend applications of recent methodology in project evaluation

private sector shrinkage and the growth of industrialized economies comment the main conclusion which emerges from the results in tables 1 3 is the extreme sensitivity of marlow s results to the countries included in the sample particularly japan to the time period and to the other variables included in the analysis this conforms with the oecd s own analysis of these data and subsequent research based on them it suggests that the underlying relationship being investigated is inherently unstable and that the estimated model leaves a considerable proportion of the variance of the dependent variable unexplained these aspects of the results are consistent with most of the other empirical work on the relationship between economic growth and the size and growth of government in industrialised economies it is to be emphasised however that the results presented here do not refute the claims that the size and growth of government have not had any detrimental impact on economic performance in general and economic growth in particular what they do point to is the absence of any simple aggregative relationships linking government size and growth to the rate of economic growth if such relationships are to be uncovered this will require a more detailed and complex investigation of the impact of government which is embedded in a more rigorously formulated structural model of the growth process

fiscal variables and growth a cross sectional analysis this paper examines the impact of the key fiscal variables taxes expenditures and deficits on economic growth performance using a reduced form model and cross sectional data for a sample of 76 developed and developing countries for the period 1972 81 its simultaneous consideration of fiscal variables overturns the results of some existing studies while taxes seem negatively associated with gdp growth they are concommitant with a higher rate of growth when their benefits in terms of reducing deficits are taken into account the positive association of government expenditures with gdp growth is rendered negative when their impact on deficits are factored in deficits are contractionary and deficit reducing tax increases and expenditure cuts are positively associated with growth a balanced budget expansion of taxes and expenditures is negatively associated with growth when separating the sample into low middle and high income countries these results hold only for the second group indicating that the level of development influences the linkages between fiscal variables and gdp growth

do political protests matter evidence from the tea party movement can protests cause political change or are they merely symptoms of underlying shifts in policy preferences this paper studies the effect of the tea party movement in the united states which rose to prominence through a series of rallies across the country on april 15 tax day 2009 to identify the causal effect of protests we use an instrumental variables approach that exploits variation in rainfall on the day of the coordinated rallies weather on tax day robustly predicts rally attendance and the subsequent local strength of the movement as measured by donations media coverage social networking activity and later events we show that larger rallies cause an increase in turnout in favor of the republicans in the 2010 congressional elections and increase the likelihood that incumbent democratic representatives retire incumbent policymaking is affected as well representatives respond to large protests in their district by voting more conservatively in congress finally the estimates imply significant multiplier effects for every protester republican votes increase by seven to fourteen votes together our results show that protests can build political movements that ultimately affect policy and they suggest that it is unlikely that these effects arise solely through the standard channel of private information revelation

gender and ethnicity married immigrants in britain in this paper we investigate the economic activity of married or cohabiting female immigrants in britain we distinguish between two immigrant groups foreign born females who belong to an ethnic minority group and their husbands and foreign born white females and their husbands we compare these to native born white women and their husbands our analysis deviates from the usual mean analysis and investigates employment hours worked and earnings for males and females as well as their combined family earnings along the distribution of husbands economic potential we analyse the extent to which economic disadvantage may be reinforced at the household level and investigate the extent to which it can be explained by differences in observable characteristics we find that white female immigrants and their husbands have an overall advantage in earnings over white native born both individually and at the household level minority immigrants do less well in particular at the lower end of the husbands economic potential distribution this is mainly due to the low employment of both genders which leads to a disadvantage in earnings intensified at the household level only part of this differential can be explained by observable characteristics

economic policy uncertainty and real output evidence from the g7 countries we use economic policy uncertainty index and impulse response based test to assess the impact of economic policy related uncertainty on real economic activity we use monthly data over the period

does electoral accountability affect economic policy choices evidence from gubernatorial term limits this paper analyzes the behavior of u s governors from 1950 to 1986 to investigate a reputation building model of political behavior we argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model we find evidence that taxes spending and other policy instruments respond to a binding term limit if a democrat is in office the result is a fiscal cycle in term limit states which lowers state income when the term limit binds

rent seeking distributional coalitions taxes relative prices and economic growth the results clearly indicate that much of the considerable variation in the pace and pattern of economic growth between the various american states is explainable by institutional arrangements amenable to revisions through public policy the findings suggest that long run economic growth would be best served by constraining distributional coalitions be it through constitutional restraints e g balanced budget amendments the item veto statutory changes e g subjecting coalitions like labor unions to the antitrust laws or some other means e g labor and capital fleeing distributional coalitions such as in the movement of workers and plants to nonunion areas

the measurement and trend of inequality comment in the september 1975 issue of this review morton paglin posits a new summary statistic the paglin gini which he uses to measure and analyze the level and trend of income inequality in the united states this measure intends to recognize only income differences among families unrelated to the observed age income profile as contributing to meaningful income inequality this is to be contrasted with the standard lorenz gini in which all differences in income among living units contribute to inequality paglin s measure indicates substantially less inequality in the united states than is indicated by the lorenz gini moreover paglin inequality falls considerably in the post world war ii period while other measures indicate very little change in inequality over this period paglin is addressing an important problem for the postwar period when the age distribution the length of time spent in school and the propensity of the young and the old to form their own households have all changed rapidly the trend in the conventional gini coefficient has no obvious normative interpretation however it is often given one unfortunately paglin s proposed index of inequality does not meet its objective and even if it did its normative content would be no clearer than that of the standard measure indeed no single indicator is sufficient to capture trends in normatively relevant inequality without further analysis like any other time series a time series of inequality must be approached with a well specified multivariate model after describing paglin s procedure in the next section we challenge his measure in section ii in section iii paglin s interpretation of policy relevant inequality is questioned and in section iv the implications of the paglin gini for the equity of the transfer system are analyzed section v is a summary of our critique

what do we really know about wages the importance of nonreporting and census imputation in the most frequently used microdata sets over a quarter of all respondents now refuse to answer some questions about their incomes the census bureau has dealt with this problem which has been increasing in severity over time by imputing incomes of non respondents their imputation procedure called the hot deck essentially matches nonrespondents with demographically similar donors in this paper we evaluate the census imputation methodology and raise some questions first the census procedure is tied to commonality of events in the population rather than the more appropriate informational content of regressors clearly the census procedure severely understates income in certain occupations because it is based on the apparently invalid assumption that income does not affect reporting propensities it most likely understates average incomes as well

mortgage debt consumption and illiquid housing markets in the great recession using a model with housing search endogenous credit constraints and mortgage default this paper accounts for the housing crash from 2006 to 2011 and its implications for aggregate and cross sectional consumption during the great recession left tail shocks to labor market uncertainty and tighter down payment requirements emerge as the key drivers an endogenous decline in housing liquidity amplifies the recession by increasing foreclosures contracting credit and depressing consumption balance sheets act as a transmission mechanism from housing to consumption that depends on gross portfolio positions and the leverage distribution low interest rate policies accelerate the recovery in housing and consumption

investment with uncertain tax policy does random tax policy discourage investment we consider the impact of tax policy uncertainty on firm level and aggregate investment comparing investment behaviour when uncertainty is due to a shock following geometric brownian motion gbm versus when random discrete jumps in tax policy occur expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional gbm model but can be enhanced in the jump process model

philanthropic motives and contribution policy this paper discusses different forms of transfer from a group of rich individuals to a group of poor individuals this transfer is based on the philanthropic motive of the donor who is not indifferent to the use of his contribution in particular the poor individual s vector of consumption is entered as a part in the donor s utility function

external shocks politics and private investment some theory and empirical evidence abstract the manner in which the political system responds to external economic shocks in developing countries is a key determinant of the private investment response we look at a simple model of political economic equilibrium to make this intuition more precise and developed the idea of a political transmission mechanism even in the confines of this simple model we find that ambiguities abound domestic politics can magnify or dampen the effect of the external shock in our empirical work we find that a high level of urbanization magnifies the investment reduction in response to an external shock this is consistent with the supposition that high levels of urbanization are conductive to distributive politics with pernicious economic effects we also find that the provision of political rights is conductive to superior private investment behavior

match bias from earnings imputation in the current population survey the case of imperfect matching this article examines match bias arising from earnings imputation wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings the latter assigned earnings of donors regressions including attributes not used as imputation match criteria e g union are severely biased match bias also arises with attributes used as match criteria but matched imperfectly imperfect matching on schooling age flattens earnings profiles within education age groups and creates jumps across groups assuming conditional missing at random a general analytic expression correcting match bias is derived and compared to alternatives reweighting a respondent only sample proves an attractive approach

black white earnings ratios the role of cohort size effects abstract while black white earning ratios have been rising over time across cohorts there is some evidence that they have been dropping over time within cohorts of recent entrants to the labor market this has coincided with the entry of the large baby boom cohorts into the labor market this paper examines the role of race differences in cohort size effects on black white earnings ratios for male high school graduates using current population survey data in larger cohorts the black white earnings ratio is lower at entry and falls as the cohort progresses through the career consistent with recent evidence

is earnings nonresponse ignorable abstract earnings nonresponse in the current population survey is roughly 30 in the monthly surveys and 20 in the march survey if nonresponse is ignorable unbiased estimates can be achieved by omitting nonrespondents little is known about whether cps nonresponse is ignorable using sample frame measures to identify selection we find clear cut evidence among men but limited evidence among women for negative selection into response wage equation slope coefficients are affected little by selection but because of intercept shifts wages for men and to a lesser extent women are understated as are gender gaps selection is least severe among household heads

government expenditure and economic growth in the developed countries 1952 76 in the past decade or more the pace of economic growth has slowed considerably and the share of government expenditure in national product has increased considerably the average annual growth rate of per capita gdp for the 16 most important developed market economies was 6 3 from 1955 73 and 2 0 from 1973 79 the average share of government in gdp went from 27 in 1955 to 34 in 1970 to 43 in 1979 2 the simple correlation proves nothing but it suggests the growth of government might be one of the causes of the slowdown many economists have theorized that government production is staticly less efficient than private sector production with competitive markets see

empirical earnings functions for iran some recent studies have debated the appropriateness of semi log earnings function in approximating actual earnings profiles this study contributes further to this debate by estimating four specifications of earnings function namely semi log quadratic semi log cubic quadratic and cubic with cross section data for 4035 full time urban male earners in iran for 1993 the analysis shows that the semi log quadratic earnings function fits the actual empirical earnings profiles very poorly the quadratic earnings function provides a much better approximation to the actual earnings measures of out of sample prediction errors also show the superiority of quadratic function over others

educational attainment and cohort size we argue that the postwar baby boom caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades if substitutability between young and old workers diminishes with education the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers reducing incentives for educational attainment the opposite is true for pre and postboom cohorts the diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers

to each the same and to each his own a proposal to measure responsibility sensitive income inequality this paper deals with the question of how to incorporate modern responsibility catering egalitarianism into economic theory on the measurement of income inequality i present a particular axiomatic expression of the main aspects of such egalitarianism then to measure offensive inequality separately i construct a norm or reference income distribution based upon the axiomatic model to replace the perfectly equal income distribution that is used as norm by all common inequality measures i defend the use of a particular measure of distributional change to determine the degree of offensive inequality and apply the method to belgian income data

imputing a continuous income variable from grouped and missing income observations abstract most cross sectional data sets collect income in a discrete number of categories that is in grouped form to simplify the respondent s task and to encourage a response in spite of such grouped data collection many respondents refuse to provide information on income this paper develops a method to impute a continuous and reliable value for income from grouped and missing income data

determinants of the increase in the number of interest groups in western democracies theoretical considerations and evidence from 21 oecd countries mancur olson s theory of institutionalsclerosis is based on the notion that thenumber of interest groups within a countryincreases with the duration of itspolitical stability the following paperargues that the increase in the number ofinterest groups over time could also be aconcomitant of economic development theoretically both explanations provetenable an empirical cross sectionalregression analysis using data from 21oecd countries finds no evidence for asignificant impact of the duration ofpolitical stability on the number ofinterest groups a significantly positiveeffect is however reported for the degreeof economic development

tax uncertainty and business activity abstract we investigate the extent to which uncertainties about tax policies affect business activities we develop a statewide tax uncertainty measure tu measure and show that it captures state corporate tax uncertainty by comparing adjacent counties across state borders we show that increasing tax uncertainty by one standard deviation a 30 increase in the tu measure leads to a 0 17 point per year decrease in the growth rate of establishments over two years the result holds after conducting a variety of robustness checks and is not likely to be driven by general state policy uncertainties

empirical age earnings profiles the human capital earnings function in which earnings are expressed as a quadratic in potential experience is probably the most widely accepted empirical specification in economics in spite of its widespread acceptance the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience the standard formulation understates early career earnings growth by about 30 50 and overstates midcareer growth by 20 50 however simple alternative specifications that fit the data are available

communicating uncertainty in official economic statistics an appraisal fifty years after morgenstern federal statistical agencies in the united states and analogous agencies elsewhere commonly report official economic statistics as point estimates without accompanying measures of error users of the statistics may incorrectly view them as error free or may incorrectly conjecture error magnitudes this paper discusses strategies to mitigate misinterpretation of official statistics by communicating uncertainty to the public sampling error can be measured using established statistical principles the challenge is to satisfactorily measure the various forms of nonsampling error i find it useful to distinguish transitory statistical uncertainty permanent statistical uncertainty and conceptual uncertainty i illustrate how each arises as the bureau of economic analysis periodically revises gdp estimates the census bureau generates household income statistics from surveys with nonresponse and the bureau of labor statistics seasonally adjusts employment statistics i anchor my discussion of communication of uncertainty in the contribution of oskar morgenstern 1963a who argued forcefully for agency publication of error estimates for official economic statistics

economic growth and alternative deficit reducing tax increases and expenditure cuts a cross sectional study this paper assesses empirically the relative desirability of alternative deficit reducing tax increases and expenditure cuts in terms of their individual impact on economic growth using cross sectional data for a sample of 21 developed countries for the period 1972 81

pareto optimal redistribution comment occurs in the context of the hochmanrodgers scheme is a function of a people s rate of substitution between the satisfaction derived from retaining income and that derived from giving it and b the initial distribution of earnings which exists before giving occurs whatever the values of a the outcome will differ depending on b such at least will be the case unless everybody s rate of substitution is such that complete equality results pareto optimal redistribution thus constitutes a secondary redistribution which depends on the initial distribu

fiscal incentives and direct foreign investment in less developed countries this study found no support for the belief by the governments of most less developed countries ldcs that the provision of fiscal incentives is necessary to attract direct foreign investment and that the greater the generosity of these incentive programmes the greater would be the level of such investment what mattered were the presence of natural resources and a proven record of economic performance the provision of incentives could not compensate for the absence of either of these two factors the study is a cross sectional one of 27 ldcs for the period 1965 73

uncertainty and the geography of the great recession we document the link between increased levels of economic and policy uncertainty and unemployment at the state level during the 2007 2009 recession the cross sectional variation in uncertainty robustly matches the distribution of employment outcomes during this period when we instrument for this cross sectional variation using preexisting institutions we find evidence for a causal role for uncertainty in increasing unemployment a simple model of hiring and firing under uncertainty rationalizes these results and the within state distribution of effects across industries occupations and individuals is consistent with this model s predictions together these results suggest that increased uncertainty contributed to the severity of the great recession

the employment effects of credit market disruptions firm level evidence from the 2008 9 financial crisis this article investigates the effect of bank lending frictions on employment outcomes i construct a new data set that combines information on banking relationships and employment at 2 000 nonfinancial firms during the 2008 9 crisis the article first verifies empirically the importance of banking relationships which imply a cost to borrowers who switch lenders i then use the dispersion in lender health following the lehman crisis as a source of exogenous variation in the availability of credit to borrowers i find that credit matters firms that had precrisis relationships with less healthy lenders had a lower likelihood of obtaining a loan following the lehman bankruptcy paid a higher interest rate if they did borrow and reduced employment by more compared to precrisis clients of healthier lenders consistent with frictions deriving from asymmetric information the effects vary by firm type lender health has an economically and statistically significant effect on employment at small and medium firms but the data cannot reject the hypothesis of no effect at the largest or most transparent firms abstracting from general equilibrium effects i find that the withdrawal of credit accounts for between one third and one half of the employment decline at small and medium firms in the sample in the year

older or wealthier the impact of age adjustment on wealth inequality differences in individual wealth holdings are widely viewed as a driving force of economic inequality however as this finding relies on cross sectional data a concern is that older is confused with wealthier we propose a new method to adjust for age effects in cross sections which eliminates wealth inequality due to age yet preserves inequality arising from other factors using a new cross country comparable database we examine the impact of age adjustments on wealth inequality across countries and over time we find that the most widely used method yields a substantially different picture of age adjusted wealth inequality than our method 2011 the editors of the scandinavian journal of economics

aggregate employment dynamics building from microeconomic evidence this paper studies quarterly employment flows of approximately 10 000 u s manufacturing establishments the authors use establishments hours week to construct measures of the deviation between desired and actual employment and use these as the establishments main state variables the main findings are 1 microeconomic adjustment functions are nonlinear with plants adjusting disproportionately to large shortages 2 adjustments are often either large or nil suggesting the presence of nonconvexities in the adjustment cost technologies 3 the bulk of average employment fluctuations is accounted for by aggregate rather than reallocation shocks and 4 microeconomic nonlinearities amplify the impact of large aggregate shocks copyright 1997 by american economic association

opec in the news abstract this paper introduces a newspaper article count index related to opec that rises in response to important opec meetings and events connected with opec production levels i use this index to measure how interest in opec varies over time and investigate how oil price volatility behaves when the index unexpectedly changes i find that unexpected increases in the newspaper index are strongly associated with higher levels of oil price volatility both realized and implied in some cases these unexpected movements appear to be driven by an unpredictable opec event such as the iraq invasion of kuwait in other cases such as the oil price collapses in late 2008 and late 2014 unforeseen developments in the oil market or broader economy seem to generate the unexpected movements in price volatility and interest in opec the newspaper index is highly correlated with google search volume data on opec an alternative measure of the amount of attention paid to opec events

self selection and the distribution of hourly wages this article formulates and estimates alternative equilibrium models of industrial wage determination and self selection in explaining industrial wage differentials we find that it is important to account for heterogeneous sector specific skills and self selection decisions by agents concerning their sector of employment the classical roy model is rejected so is an efficiency units model of the labor market a revised roy model that accounts for comparative advantage in the choice of industrial sectors and choice between market and nonmarket work is much more successful in explaining cross section wage distributions and their evolution over time

estimates of year to year volatility in earnings and in household incomes from administrative survey and matched data abstract we document trends in the volatility in earnings and household incomes between 1985 and 2005 in three different data sources administrative earnings records the survey of income and program participation sipp matched to administrative earnings records and sipp survey data in all data sources we find a substantial amount of year to year volatility in workers earnings and household incomes in the data sources that contain administrative earnings we find that volatility has been roughly constant and has even declined slightly since the mid 1980s these findings differ from what is found using survey data and what has been reported in previous studies

who does dot respond to the agricultural resource management survey and does it matter the agricultural resource management survey is the primary annual source of information on u s farms but in a typical year one third of sampled farms do not respond we use census of agriculture data to study nonresponse to the survey and how it affects estimates in two econometric models despite larger farms responding less the coefficients estimated from the respondent subsample always fall inside confidence intervals based on draws from the full sample of respondents and nonrespondents although nonresponse bias can vary by application the findings suggest that bias is unlikely to undermine conclusions based on econometrics using respondent data

revisiting the shape of earnings nonresponse abstract previous research shows a u shaped relationship between earnings and survey earnings nonresponse we demonstrate that this pattern depends upon the treatment of individuals who worked according to tax data but lack work in surveys including these individuals reveals a wave of earnings nonresponse that is increasing in the tails and decreasing for middle earnings quantiles we illustrate that individuals with positive earnings in tax data yet survey reports of nonemployment lie disproportionately at the bottom of the earnings distribution bending down the left tail of the traditional u shaped earnings nonresponse pattern the reporting behavior of survey nonworkers can have important implications for evaluating inequality estimates based on survey data

levels of responsibility in jobs and the distribution of earnings among u s engineers 1961 1986 this study using data from the professional administrative technical and clerical pay survey and the current population survey examines how the assignment of responsibility within firms affected the structure of wages of u s engineers between 1961 and 1986 patterns of wage dispersion in this sample mirrored patterns found in broader segments of the labor market during the same period in engineering wage dispersion within levels of responsibility fell steadily between 1976 and 1986 while wage dispersion between levels rose at the same time engineering jobs began to migrate to lower levels within firms the author explains the trends in wages and job assignments as responses to changes in the supply of and demand for engineers within the framework of hierarchy models of responsibility

take the money and run political turnover rent seeking and economic growth abstract we find a negative and significant relationship between gubernatorial turnover and u s state economic growth although our finding of an inverse relationship between growth and political instability may seem to contradict olson s 1982a famous hypothesis regarding the growth retarding nature of political stability such constitutional political changes were not primarily what olson had in mind we argue that enhanced political turnover is associated with more rent seeking since payoffs to focusing on special interest redistributive policies vs general growth enhancing ones are greater for less durable regimes therefore we interpret our evidence as supportive of olson s broader argument concerning the negative affect of rent seeking behavior on growth

human capital prices productivity and growth separate identification of the price and quantity of human capital has important implications for understanding key issues in labor economics and macroeconomics price and quantity series are derived and subjected to robustness checks the human capital price series associated with dierent education levels are highly correlated and exhibit a strong secular trend three result

the relative efficiency of private and public transfers this paper develops a model for comparing the relative efficiency of private versus public financing of transfers a distinctive feature of the analysis is explicit recognition of important weaknesses and strengths of each form of financing a collective consumption good our results show that the preferred financing method is ultimately an empirical issue with the answer depending critically on donor motives and the government s ability to correctly ascertain donors tastes

the tullock bastiat hypothesis inequality transfer curve and the natural distribution of income conventional wisdom has long held that public policy has worked to reduce income inequality in contemporary america or that at least it has the real capability of achieving that goal thurow 1971 for example the evidence is strong that there was a pronounced decline in measured inequality during the 1930s and 1940s a period of greatly increased governmental intervention on both the tax and expenditure side designed to reduce inequality lindert and williamson 1980 increased government expenditures went or so it was argued largely to alleviate the plight of the poor and thus greater federal public aid expenditures brought about greater equality similarly it commonly has been maintained that higher and more progressive federal taxes serve to further reduce inequality in america there is another view however which holds that governmental intervention in markets may have a different impact while he believes the modern welfare state has clearly reduced incomes for the extremely wealthy tullock 1983 has suggested that many government transfers are not transfers from higher to lower income groups but rather transfers within the middle class allowing at least the possibility that governmental transfer activity might not in the aggregate increase income equality in any significant manner perhaps the citizenry are interested in promoting income equality but only to some limited extent in that regard evidence compiled by lebergott 1975 is interesting since the midnineteenth century there has been a remarkable rough constancy in government payment levels to the poor relative to wage levels of common laborers to be sure there have been some periods of increased support for the poor such as during the heyday of the war on poverty in the late 1960s but as tullock has expressed in private correspondence with us the body politic has spasms of feeling more than usually charitable and then goes back to normal the conventional wisdom had previously been questioned by reynolds and smolensky 1977 and for that matter by bastiat 1848 1964 who said that the state produces more poverty than it cures along similar lines lebergott 1975 15 speaking of poor elderly americans observed they are not impoverished in spite of the american capitalist welfare state they are in poverty because of it

forecasting the recovery from the great recession is this time different abstract this paper asks whether the slow recovery of the us economy from the trough of the great recession was anticipated and identifies some of the factors that contributed to surprises in the course of the recovery we construct a narrative using news reports and government announcements to identify policy and financial shocks we then compare forecasts and forecast revisions of gdp to the narrative successive financial and fiscal shocks emanating from europe together with self inflicted wounds from the political stalemate over the us fiscal situation help explain the slowing of the pace of an already slow recovery

match bias in wage gap estimates due to earnings imputation about 30 of workers in the current population survey have earnings imputed wage gap estimates are biased toward zero when the attribute being studied e g union status is not a criterion used to match donors to nonrespondents an expression for match bias is derived in which attenuation equals the sum of match error rates attenuation can be approximated by the proportion with imputed earnings union wage gap estimates with match bias removed are presented for 1973 2001 estimates for recent years are biased downward 5 percentage points bias in gap estimates accompanying other non match criteria public sector industry etc is examined

uncertainty and consumer durables adjustment we characterize infrequent durables stock adjustment by consumers who also derive utility from non durable consumption flows in the presence of idiosyncratic income uncertainty the data we analyse include subjective future income uncertainty measures which we use as instruments in the estimation of relevant parameters of heterogeneous consumers dynamic adjustment problems the data feature two conceptually distinct sources of variation cross sectional heterogeneity of the sampled households dynamic problems and history dependent heterogeneity in their situation during the observation period we note that the latter should affect the likelihood but not the size of stock adjustment decisions and find broad support for theoretical predictions in formal selection controlled regressions based on this insight

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate

explaining the rain the rise and decline of nations after 25 years in the quarter century since the publication of mancur olson s rise and decline of nations a large literature has evolved testing the central hypothesis regarding olson s thesis on institutional sclerosis these tests have taken the form of both econometric regression analysis involving a sample of various nations and detailed narrative case studies of specific nations tests have appeared in both economics and political science journals as well as in collected volumes and independent books performed primarily by authors from america and europe a review of over 50 separate works reveals that on the whole the theory of institutional sclerosis is generally but certainly not universally supported no systematic bias in favor of or opposition to olson is found to have arisen on the basis of methodology publication outlet or authorship location