search unemployment and the production of jobs the authors investigate the performance of the economy when search is required to find employment and when the duration of unemployment varies across sectors they assume that in one sector factor markets are frictionless while in the other se ctor idle factors of production must actively search each other out i n order to produce they focus on how well the economy allocates work ers across sectors and the conditions under which the factor mix with in a sector is correct the authors demonstrate that in equilibrium t he search sector is too small and its factor intensity is too asymmet ric copyright 1987 by royal economic society

on the efficiency of the rank order contract under moral hazard and adverse selection this article analyzes the efficiency of the rank order contract for a finite number of risk neutral agents under both moral hazard and adverse selection the first best outcome is shown to be supported by a set of rank order contracts which penalize a small fraction of agents but do so heavily the article also shows how these rank order contracts compare with those giving a large prize to few agents finally the article provides an informal argument for why firms do not follow a penalty giving rank order contract in their promotion policies as often as the theory predicts

rank order contracts for a principal with many agents for a principal with many agents rank order contracts remain incentive compatible even when information about agents performance is known only to the principal because the total payment from the principal to all agents taken together is independent of the outcome that occurs under wider conditions than those considered previously in the literature there is shown to exist a rank order contract equivalent exactly or approximately to any nonlinear piece rate contract under those conditions therefore results that depend on the unenforceability of piece rates under such asymmetric information disappear if rank order contracts can be used in principal agent models compensation paid to agents is based on their outputs because their inputs are not public information in this context information is public if it is verifiable in court so that a contract contingent on it is legally enforceable rank order contracts also called tournaments and contests make each agent s compensation a function solely of the ranking of his output relative to the outputs of other agents in contrast individual piece rate contracts make each agent s compensation a function only of his own output lazear and rosen 1981 green and stokey 1983 and nalebuff and stiglitz 1983 all have results comparing the two when agents actions are not observed by the principal but only for the case in which the principal is risk neutral and the utility function of agents additively separable in income and action the main purpose of the present paper is to show that for the case of a continuum of agents these two kinds of contract are in fact formally equivalent or in some cases approximately equivalent under somewhat more general conditions than those considered so far in the

measuring earnings inequality and median earnings in the tourism industry abstract the purpose of this paper is two fold to measure the degree of earnings inequality in tourism employees in south korea using the gini coefficient and the lorenz curve and to examine the level of earnings based on median earnings the results show that tourism generates a moderately equal distribution of earnings in general tourism performs earnings distribution better than secondary and tertiary industries but it performs poorly as compared with primary industry the results also indicate that tourism is more likely to improve living standards for the lower income class than secondary and tertiary industries the analysis of median earnings however indicates that tourism is a low wage industry the labor intensive nature of the tourism industry absorbing many unskilled and semi skilled workers might be attributed to its low wage structure it is interesting to note that tourism was found to be advantageous to female workers in terms of earnings inequality and the level of earnings

does marriage really make men more productive this paper presents new descriptive evidence regarding marital pay premiums earned by white males longitudinal data indicate that wages rise after marriage and that cross sectional marriage premiums appear to result from a steepening of the earnings profile data from a company personnelfile that includes information on job grades and supervisor performance ratings reveal large marital status pay differences within a narrow range of occupations managers and professionals and environments a single firm married workers tend to be located in higher paying job grades there are very small pay differentials within grades married men receive higher performance ratings than single men as a result they are much more likely to be promoted controlling for rated performance however eliminates the promotion differential sanders korenman is an assistant professor of economics and public affairs at princeton university and is a faculty associate of the office of population research at princeton university and a research affiliate of the national bureau of economic research nber david neumark is an assistant professor of economics at the university of pennsylvania and a research affiliate of the nber korenman wishes to acknowledge the hewlett foundation and the harvard university center for population studies for financial support the authors are grateful to james medofffor making available an extract from the company personnelfile questions regarding data availability should be directed to professor james

rising wage inequality and the u s gender gap the u s labor market has recently experienced two dramatic trends a falling male female pay gap and a rising level of labor market inequality after decades of near constancy at about 60 percent the ratio of women s to men s pay has risen steadily since the late 1970 s at the same time there were substantial increases in overall wage inequality for both men and women lawrence f katz and kevin m murphy 1992 blau and kahn 1993 wage inequality rose both within and between education and experience groups and this has been interpreted as reflecting primarily higher returns to both measured and unmeasured labor market skills katz and murphy 1992 chinhui juhn et al 1993 this paper addresses the connection between these two important developments when analyzing gender differentials in pay economists commonly focus on malefemale differences in skills and on differences in the treatment of equally qualified men and women i e discrimination both of these may be considered gender specific factors influencing the pay gap research on these gender specific factors suggests that women tend to be less skilled than men on average and to be located in lower paying industries and occupations this in turn suggests that overall wage structure can also have an important effect on the gender pay gap wage structure describes the array of prices set for various labor market skills measured and unmeasured and the rents received for employment in particular sectors of the economy for example since women on average have less experience than men an increase in the return to experience as in fact occurred over the 1970s and 1980s would cause the gender pay gap to rise even if women s relative level of experience and their gender specific treatment by employers remained the same similarly an increase in the returns to employment in male occupations and industries would widen the gender differential all else equal in earlier work we found overall wage inequality to be very important in explaining international differences in the gender pay gap blau and kahn 1992 1994 in particular we addressed a paradox on the one hand u s women compare favorably to those in other countries in terms of their relative qualifications and occupational status further the united states has had a longer and often stronger commitment to equal pay and equal employment policies than most other industrialized countries yet the gender pay gap in the united states is larger than in most of these countries an important part of the explanation for this pattern is the high level of wage inequality i e high returns to skill in the united states which puts an exceptionally large penalty on being below average in the wage distribution our results suggest that the u s gap would be similar to that in countries like sweden or australia the countries with the smallest gaps if the united states had their level of wage inequality the implication of our earlier research on international differences in the gender gap is that in recent years american women have been swimming upstream in a labor market that was growing increasingly unfavorable to low wage workers in the face of this rising inequality women s relative skills and treatment have to improve merely for the pay gap to remain constant still larger gains are necessary for it to be reduced blau institute of labor and industrial relations university of illinois champaign il 61820 and nber kahn institute of labor and industrial relations university of illinois we thank claudia goldin and participants at the nber labor studies meeting and the university of illinois and cornell labor economics workshops for helpful comments and jennifer berdahl for excellent research assistance portions of this work were completed while the authors were visiting fellows at the australian national university canberra

heterogeneity tournaments and hierarchies tournament contracts are characterized that simultaneously elicit first best efficient effort levels and self selection of risk neutral heterogeneous workers into ability specific contracts comparisons across self selected ability types are shown to be sometimes necessary to attain efficiency rationales are explored for not commonly observing such contracts in hierarchical organizations

globalization and the gender earnings gap evidence from sri lanka and cambodia disasters in bangladesh and protests elsewhere have created an intense debate about the value particularly to women of apparel employment in developing countries this paper focuses on how the forces of globalization specifically the multi fibre arrangement mfa have affected women s wages in the apparel sector in developing countries the paper uses household and labor force surveys from cambodia and sri lanka to estimate both apparel wage premiums relative to other industries and the male female wage gap before and after the end of the mfa the approach builds on new models that apply traditional trade theory e g the heckscher ohlin and stolper samuelson theorems to analyze the effect of globalization on gender based earnings the authors find large positive wage premiums and a closing of the male female wage gap during the mfa period but smaller premiums and a widening wage gap after the end of the mfa the results suggest that the benefits of apparel exports for women in developing countries remain significant post mfa they also model an approach for studying the effects of globalization that differentiates males and females as separate factors this may be a fruitful alternative to discrimination models or those that analyze the effects of globalization on women in terms of skill further research is necessary to identify the potential development effects of post mfa apparel employment and to thoroughly compare the benefits documented in this paper with the costs that may come with apparel jobs

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

discrimination in an equilibrium search model i construct an equilibrium search model where some employers have a distaste for hiring minority workers and show that this bias results in economic discrimination against minority workers although only unprejudiced firms hire minority workers minority workers receive lower wages than workers not facing discrimination whenever any employers in the market have a distaste for minority workers one implication of the model is that gender or racial wage differentials understate the utility loss from discrimination in addition the wages of minority workers increase when their proportion increases in the labor market

marriage motherhood and wages we explore several problems in drawing causal inferences from cross sectional relationships between marriage motherhood and wages we find that heterogeneity leads to biased estimates of the direct effects of marriage and motherhood on wages i e effects net of experience and tenure first difference estimates reveal no direct effect of marriage or motherhood on women s wages we also find statistical evidence that experience and tenure may be endogenous variables in wage equations instrumental variables estimates suggest that both ordinary least squares cross sectional and first difference estimates understate the direct negative effect of children on wages

labor markets as gendered institutions equality efficiency and empowerment issues abstract labor markets are gendered institutions operating at the intersection of the productive and reproductive economies participation in labor markets does not automatically empower women reduction in gender differentials in earnings may be the result of harmonizing down rather than up discrimination against women may persist because in the absence of institutional changes it is profitable it is important to distinguish between static and dynamic and micro and macro efficiency labor market regulation has an important role to play in the institutional transformation needed to reconcile goals of efficiency and equality

fair wages in the open economy we show how an extended theory of fair wages can be incorporated in the two by two heckscher ohlin model an important feature of the model is the existence of involuntary unemployment several results stand out first there is no longer a simple relatio

women and globalization a study of 180 countries 1975 2000 how do rising levels of international interconnectedness affect social economic and political conditions for women research on gender and international relations frequently offers clear propositions but seldom submits them to broad quan titative testing this article begins to fill that gap we advance the hypothesis that on balance and over time increasing cross national exchange and communication lead to improvements in women s status and equality economic aspects of global ization can bring new opportunities and resources to women but equally important globalization promotes the diffusion of ideas and norms of equality for women in an analysis of 180 countries from 1975 to 2000 employing cross sectional time series regression techniques we examine the impact of several measures of global ization on women s levels of life expectancy literacy and participation in the economy and parliamentary office international trade foreign direct investment membership in the united nations un and world bank and ratification of the convention on the elimination of all forms of discrimination against women cedaw are asso ciated with improved conditions for women how do rising levels of international interconnectedness affect the social eco nomic and political conditions for women competing hypotheses are easy to identify indeed research on gender and international relations sometimes offers clear propositions but seldom submits them to broad quantitative testing this article begins to fill that gap we expect to find a considerably mixed picture some women will benefit from globalization and some will be hurt the status of women will improve in some respects but not others nevertheless we advance the hypothesis that on balance and over time increasing cross national exchange

trade and search generated unemployment we argue that trade economists should begin to seriously consider environments in which unemployment is carefully modeled we introduce such a model derive several results and compare them to results derived in full employment models we argue that some traditional results are probably too narrow the determinants of comparative advantage and that some results do not generalize to models with unemployment the link between trade and income distribution for employed factors we also show that in some important cases results do generalize there is an extended stolper samuelson theorem that links trade to the distribution of income for searching factors and that our model allows us to address issues that traditional models cannot handle the impact of trade on unemployment and the welfare of the unemployed 1999 elsevier science b v all rights reserved

gender time use and change the impact of the cut flower industry in ecuador this article uses survey data from ecuador to examine the effects of women s employment on the allocation of paid and unpaid labor within the household the reader compares a region with high demand for female labor with a similar region in which demand for female labor is low the comparison suggests that market labor opportunities for women have no effect on women s total time in labor but increase men s time in unpaid labor the increase in men s time in unpaid work reflects women s increased bargaining power in the home

trade turnover and tithing this paper examines the hypothesis that turnover affects trade preferences high turnover industries are similar to the stolper samuelson assumption of perfect factor mobility so factor of production drives trade preferences among low turnover industries as in the specific factors model net export position determines trade preferences we show that pac contribution patterns are consistent with this hypothesis in high turnover industries capital groups give significantly larger shares of their campaign contributions to free trade supporters than labor groups do among low turnover industries on the other hand exporting and import competing groups differ significantly in their financial support for free traders d 2004 elsevier b v all rights reserved

housework fixed effects and wages of married workers although the primacy of household responsibilities in determining gender differences in labor market outcomes is universally recognized there has been little investigation of the direct effect of housework on wages using data from the panel study of income dynamics cross sectional wage regressions reveal a substantial negative relation between wages and housework for wives which persists in specifications controlling for individual fixed effects the evidence for husbands is inconclusive married women s housework time is on average three times that of married men s the addition of housework time to the wage equations increases the explained component of the gender wage gap from 27 30 percent to 38 percent

good jobs versus bad jobs this article develops a model of noncompetitive labor markets in which high wage good and low wage bad jobs coexist minimum wages and unemployment benefits shift the composition of employment toward high wage jobs because the composition of jobs in the laissez faire equilibrium is inefficiently biased toward low wage jobs these labor market regulations increase average labor productivity and may improve welfare

the structure of simple general equilibrium models with frictional unemployment we develop a two sector general equilibrium model in which equilibrium unemployment arises endogenously because of trading frictions in the labor market of one sector externalities inherent in the search process lead to inefficient equilibria and this has important implication for the basic structure of the economy in particular the relationship between factor rewards and commodity prices is fundamentally different from the analogous relationship in a frictionless economy one implication is that the economy s relative supply curve may be downward sloping especially when the search sector is small we also present several applications of the analysis

factor market search and the structure of simple general equilibrium models this paper presents a simple general equilibrium model in which unemployed workers search for jobs and vacant firms search for employees formally i develop a two sector constrained efficient version of the diamond mortensen pissarides matching model of trade coordination this approach to modeling factor market search appears promising since its algebraic development parallels jones s treatment of the two sector model of production and the latter framework underlies most applied general equilibrium analyses some illustrative short run and steady state results are presented concerning the behavior of open and closed economies that exhibit unemployment and vacancies

globalisation women s economic rights and forced labour economy s penetration by foreign direct investment by and large has no sta tistically significant impact globalisation might weaken the general bargaining position of labour such that outcome related la bour standards might suffer however being more open toward trade is likely to promote rather than hinder the realisation of t wo labour rights considered as core or fundamental by the international labour organisation namely the elimination of economic discrimination and of forced labour

the effect of trade openness on women s welfare and work life summary this study of 134 countries analyzes whether women are generally the losers or winners of globalization the results show that economic integration does not directly improve women s life expectancies women s access to primary and secondary education may improve slightly although women s welfare does not seem to improve more than that of men on the other hand economic integration does influence women s professional lives in developing countries trade openness increases female labor force participation in industrialized states it decreases the share of working women trade openness in developed countries increases the number of women employed in the service sector while in developing states it increases the number of women working in industrial jobs and in agriculture

are you experienced british evidence on age earnings profiles using uk data evidence is provided that the widely used quadratic earnings function may fare badly as indicated by recent work in the usa using data from pooled time series of cross sections from the general household survey the suitability of the quadratic specification alongside higher order polynomials is investigated on samples of men and for the first time in work of this type women working full time it is found that the quadratic specification understates earnings growth at low levels of experience especially for those workers with few formal qualifications the usage of higher order polynomials provides a better fit

equilibrium in a market with sequential bargaining this paper considers a market where pairs of agents who are interested in carrying out a transaction are brought together by a stochastic process and upon meeting initiate a bargaining process over the terms of the transaction the basic bargaining problem is treated with the strategic approach the paper derives the steady state equilibrium agreements analyzes their dependence on market conditions such as the relative numbers of agents of different types and discusses their relations with the competitive equilibrium outcome and other results in the search equilibrium literature this paper considers a market that operates in the following way pairs of agents who have mutual interest in carrying out a transaction are brought together by a stochastic process when two agents meet they initiate a bargaining process over the terms of the transaction if two agents reach an agreement a transaction takes place and they leave the market of course the bargaining positions and hence the agreement reached in any particular meeting will be affected by the conditions prevailing in the market these will include the chances that each of the negotiating parties have of meeting other partners in the event that the agreement in the current negotiations is delayed also the expected length of time required to achieve an alternative transaction and the expected behavior of alternative partners the study of such a market mechanism is of interest for two reasons firstly it captures some realistic aspects of the trade in certain specific markets e g asset markets such as housing and some labor markets secondly it contributes to an understanding of the micro mechanisms of price formation and their role in shaping market outcomes in both cases the features studied are largely neglected in the traditional market equilibrium analyses the related literature includes the articles by diamond 4 5 diamond and maskin 6 mortensen 8 9 and zusman and bell 13 these articles consider markets of the type described above in which transactions are concluded at pairwise meetings of agents the major difference between our work and these articles is in the approach to the basic bargaining problem in the cited articles it is assumed that a meeting is concluded with an instantaneous agreement which divides the associated surplus in an arbitrary predetermined way when the surplus is assumed to be divided equally the division rule is in fact nash s axiomatic bargaining solution in contrast the present paper treats the basic bargaining problem with the strategic approach see rubinstein 19 which constitutes an attempt to look into the bargaining black box this approach explicitly models the time dimension of the bargaining process describes in detail the bargaining procedure and justifies the agreement as a perfect equilibrium in

financial regulatory reform after the crisis an assessment this is a survey of progress with the postcrisis global g20 reform of the financial system in five key areas of new regulation 1 making financial institutions more resilient 2 ending too big to fail 3 making derivatives markets safer 4 transforming shadow banking and 5 improving trade competition and market transparency the resiliency reforms particularly bank capital regulations have been increasingly successful in improving financial stability but have been accompanied by some reduction in secondary market liquidity i review specific areas where reforms are far from complete or have even been counterproductive this paper was accepted by gustavo manso finance conflict of interest statement the author s webpage at http www stanford edu duffie provides related research and disclosure of potential conflicts of interest

global and local subcontracting space ethnicity and the organization of apparel production abstract labor intensive apparel production has shifted to low wage asian nations yet continues to flourish in the united states and other high wage areas this paper explains this apparent contradiction by concluding that in addition to labor costs firm size ethnicity market strategy and trade regulations powerfully affect the location of apparel production large firms are more able to disperse production globally than small firms us based firms owned by ethnic asians are more likely to produce in asian factories than firms of other ethnicities and firms producing for rapidly changing fashion markets are less likely to produce offshore than firms producing less fashion intensive products finally trade restrictions powerfully affect the location of production albeit in ways different than intended by policy makers

negative swap spreads and limited arbitrage since october 2008 fixed rates for interest rate swaps with a thirty year maturity have been mostly below treasury rates with the same maturity under standard assumptions this implies the existence of arbitrage opportunities this paper presents a model for pricing interest rate swaps where frictions for holding bonds limit arbitrage i show analytically that negative swap spreads should not be surprising in the calibrated model swap spreads can reasonably match empirical counterparts without the need for large demand imbalances in the swap market empirical evidence is consistent with the relation between term spreads and swap spreads in the model

employer skill demands and labor market outcomes of blacks and women the author uses data from a 1992 94 survey of employers in four metropolitan areas to investigate the effects of skill demands as measured by hiring requirements and job tasks on the wages and employment of newly hired workers skill demands were generally associated with lower employment of blacks than whites and with higher employment of women than men most tasks and requirements had statistically significant positive effects on starting hourly wages together these effects help to account for some of the differences between the hourly wages of white and black men and for some of the trends over time in the relative wages and employment of race and gender groups

new evidence on sex segregation and sex differences in wages from matched employee employer data we use new matched employer employee data to estimate the contributions of sex segregation and wage differences by sex within occupation industry establishment and occupation establishment cells to the overall sex gap in wages in contrast to earlier data used to study this question our data cover all industries and occupations across all regions of the united states we find that segregation of women into lower paying occupations industries establishments and occupations within establishments accounts for a sizable fraction of the sex gap in wages nonetheless approximately one half of the sex gap in wages remains attributable to the individual s sex

gender inequality and economic growth a cross country analysis abstract this paper investigates empirically the determinants of economic growth for a set of semi industrialized export oriented economies in which women provide the bulk of labor in the export sector the primary hypothesis tested is that gender inequality which contributes to women s relatively lower wages was a stimulus to growth via the effect on exports during 1975 95 empirical analysis shows that gdp growth is positively related to gender wage inequality in contrast to recent work which suggests that income inequality slows growth evidence also indicates that part of the impact of gender wage inequality on growth is transmitted through its positive effect on investment as a share of gdp

earnings differentiation in the tourism industry gender human capital and socio demographic effects abstract this paper draws attention to a somewhat neglected field within tourism research namely the production side of tourism set within a human capital framework the purpose of the study is to examine if and how the variables education work experience and the socio demographic variables parenthood and marriage affect norwegian tourism employees annual wages in the 1994 2002 period furthermore the study specifically examines how the variables gender and time affect these wages among several findings four are of major importance 1 male tourism employees receive about 20 higher wages annually than their female counterparts ceteris paribus 2 there is a concave i e inverted u relationship between work experience and annual wages for both female and male employees but this pattern is much less distinct for females 3 both parenthood and marriage affect wages but their effects differ between male and female employees 4 all tourism employees experience a positive annual wage development in the period studied

the distribution of talent across contests do the contests with the largest prizes attract the most able contestants to what extent do contestants avoid competition in this paper we show theoretically and empirically that the distribution of abilities plays a crucial role in determining contest choice complete sorting exists only when the proportion of high ability contestants is sufficiently small as this proportion increases high ability contestants shy away from competition and sorting decreases such that reverse sorting becomes a possibility we test our theoretical predictions with a large panel data set containing contest choice over twenty years we use exogenous variation in the participation of highly able competitors to provide empirical evidence for the relationship among prizes competition and sorting

risk in banking and capital regulation this paper investigates the role of bank capital regulation in risk control it is known that banks choose portfolios of higher risk because of inefficiently priced deposit insurance bank capital regulation is a way to redress this bias toward risk utilizing the mean variance model the following results are shown a the use of simple capital ratios in regulation is an ineffective means to bound the insolvency risk of banks b as a solution to problems of the capital ratio regulation the theoretically correct risk weights under the risk based capital plan are explicitly derived and c the theoretically correct risk weights are restrictions on asset composition which alters the optimal portfolio choice of banking firms the recent increase in bank failures especially after the 1980 and 1982 deregulatory acts has again ignited a controversy over the risk portfolio of the banking industry given the importance of this sector there has been increased scrutiny of the industry s motives for risk taking and possible regulatory changes to improve its stability these investigations have centered around two rather complementary areas the first of these is the role of deposit insurance and how its current pricing procedure encourages risk taking and justifies current bank regulations the works of buser chen and kane 4 kane 9 and benston et al 2 have made substantive contributions the authors demonstrates the way in which our current fixed rate insurance system rewards risk taking by the firm and insulates it through deposit insurance from the market discipline that needs to exist to ensure proper risk evaluation this realization has led these authors to propose a series of regulatory changes to encourage proper portfolio choice within the industry these include a shift to market value accounting risk based deposit insurance premiums and additional capital regulation the last of these serves as a method of coinsurance whereby higher capital levels require the bank to absorb greater losses in the event of failure and encourage additional prudence in management in essense it is one method of risk reduction that may offset the risk preference imposed on the industry due to the inappropriate insurance pricing because the amount of capital influences the probability of bank insolvency and thus the soundness of the entire banking system the regulators ceteris paribus prefer more capital to

the marriage earnings premium as a distributed fixed effect wage equations using cross sectional data typically find an earnings premium in excess of 10 percent for married men one leading hypothesis for the premium is that marriage facilitates specialization that enables married men to become more productive than single men another is that the premium is attributable to an unobserved fixed effect married men possessing qualities that are valued in the labor market as well as the marriage market this paper suggests that the premium is attributable to an unobserved timedistributed fixed effect that emerges and grows with the approach of marriage and continues to grow for some years after marriage a similar distributed fixed effect is found in the case of women but it is smaller and declines after a few years of marriage the results appear to cast doubt on the specialization hypothesis

markets transparency and the corporate bond market for decades corporate bonds primarily traded in an opaque environment quotations which indicate prices at which dealers are willing to transact were available only to market professionals most often by telephone prices at which bond transactions were completed were not made public the u s corporate bond market became much more transparent with the introduction of the transaction reporting and compliance engine trace in july 2002 beginning that date bond dealers were required to report all trades in publicly issued corporate bonds to the national association of security dealers which in turn made transaction data available to the public in this paper we describe trading protocols in the corporate bond market and assess the impact of the increase in transparency on the market we review how trace has affected the costs that corporate bond investors paid to bond dealers for their transactions we canvass the opinions of a variety of finance professionals and consider articles in the trade press to obtain a broader view of the impact of transparency on the corporate bond market

or forum design of risk weights banking regulations set minimum levels of capital for banks these requirements are generally formulated through a ratio of capital to risk weighted assets a risk weighting scheme assigns a weight to each asset or category of assets and effectively functions as a linear constraint on a bank s portfolio choice it also changes the incentives for banks to hold various kinds of assets in this paper we investigate the design of risk weights to align regulatory and private objectives in a simple mean variance framework for portfolio selection by setting risk weights proportional to profitability rather than risk the regulator can induce a bank to reduce its overall level of risk without distorting its asset mix because the regulator is unlikely to know the true profitability of assets we introduce an adaptive formulation in which the regulator sets weights by observing a bank s portfolio the adaptive scheme converges to the same combination of weights and portfolio choice that would hold if the regulator knew the asset profitability we also investigate other objectives including steering banks to a target mix of assets adding robustness mitigating procyclicality and reducing system wide risk in a setting with multiple heterogeneous banks

work incentives hierarchy and internal labor markets this paper argues that contracts with payment based on a ranking of employee performance can provide performance incentives even under asymmetric information that prevents payment based on individual performance only being enforceable such contracts also fit with five features of labor markets that have aroused considerable interest 1 hierarchical wage structures 2 internal promotion 3 wage rates that rise with seniority and experience more than productivity 4 the variance of earnings increasing with experience and 5 wage rates attached to jobs rather than individuals with differentials set by administrative procedures rather than by reference to external market wages

multiple free trade equilibria in micro models of unemployment abstract neoclassical theory suggests that trade patterns are linked to autarkic differences in relative opportunity costs we demonstrate that when the heckscher ohlin samuelson model is extended to allow for unemployment there are forces present that create multiple free trade equilibria even when both countries are identical and autarkic equilibrium is unique there is no necessary link between relative opportunity costs and trade patterns while our primary focus is on search generated unemployment we argue that the analysis also applies to situations where unemployment is generated by minimum wages efficiency wages or implicit contracts

on the segmentation of markets this paper endogenizes the market structure of an economy with heterogeneous agents who want to form bilateral matches in the presence of search frictions and when utility is nontransferable there exist infinitely many marketplaces and each agent chooses which marketplace to be in agents get to choose not only whom to match with but also whom they meet with perfect segmentation is obtained in equilibrium where agents match with the first person they meet all equilibria have the same matching pattern although perfect assortative matching is not obtained in equilibrium the degree of assortativeness is greater than in standard models

why are the returns to schooling higher for women than for men many studies have found that the impact of schooling on earnings is greater for females than for males despite the fact that females tend to earn less both absolutely and controlling for personal characteristics this study investigates possible reasons for this effect using data from the national longitudinal survey of youth 1979 one explanation is that education appears to have a double effect on the earnings of women it increases their skills and productivity as it does with men and in addition it appears to reduce the gap in male and female earnings attributable to factors such as discrimination tastes and circumstances the latter appear to account for about half of the differential in the returns to schooling

gender and trade aspects of labour markets we provide a comprehensive up to date review of the large body of theory and evidence on the linkages between trade liberalisation and gender inequality in income as well as two of the latter s key underlying determinants wages and employment on balance the evidence for developing countries points to an overall beneficial impact of trade expansion on female employment both relative to male employment and in absolute terms although largely concentrated in unskilled manufacturing by contrast the bulk of the evidence suggests a widening gender wage gap as a result of freer trade

export orientation and female share of employment evidence from turkey abstract we investigate the relationship between export orientation and female share of employment in the turkish manufacturing sector during 1983 85 following the onset of export led industrialization policies using plant level data we find that female share of employment in a plant increases with the export to total output ratio of its sector the contribution of the study to the literature is its use of plant level data for a large number of plants enabling us to control for other determinants of female share of employment such as workers skill composition at the plant level

the internal economics of the firm evidence from personnel data we analyze twenty years of personnel data from one firm the hierarchical structure is quite simple and stable career movements suggest that the employee s rate of learning and the firm s learning about ability are important there are promotion fast tracks exit rates vary little with tenure or salary the firm has personnel policies like those described in the internal labor markets literature although several theoretical preconditions for ilms such as ports of entry and exit are lacking job levels are important to compensation but there is also substantial individual variation in pay within levels our companion paper in this issue explores the wage policy of this firm

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

do men whose wives work really earn less it is common knowledge among empirical labor economists that household status variables can enter significantly in wage equations in particular a substantial marital wage premium for men has been noted recently a series of articles in the management literature has argued that an even larger premium accrues to those married men whose wives do not work for pay single earner husbands our current study arises in response to perceived deficiencies in the conceptual framework and statistical methods used in these studies

globalization and the gender wage gap there are several theoretical reasons why globalization will have a narrowing as well as widening effect on the gender wage gap but little is known about the actual impact except for a number of country studies the author provides a cross country study of the impact of globalization on the occupational gender wage gap based on the rarely used but most far ranging survey of wages around the world the international labour organization s october inquiry this annual survey was started in 1924 and contains a wealth of information on wages and the gender wage gap for the period 1983 99 there is information on the gender wage gap in 161 narrowly defined occupations in more than 80 countries around the world the author finds the following i the occupational gender wage gap appears to be narrowing with increases in gdp per capita ii there is a significantly narrowing impact of trade and foreign direct investment fdi net inflows on the occupational gender wage gap for low skill occupations both in poorer and richer countries and for high skill occupations in richer countries iii there is no evidence of a narrowing impact of trade but there is evidence of a widening impact of fdi net inflows on the high skill occupational gender wage gap in poorer countries iv wage setting institutions have a strong impact on the occupational gender wage gap in richer countries

mind the gender wage gap the impact of trade and competition on sectoral wage differences this paper examines differences between women s and men s wages in 18 selected oecd countries in the period 1970 to 2005 the study is based on 12 manufacturing sector and skill specific sets of panel data on the gender wage gap we apply a system generalised method of moments gmm estimator to the extended version of the conditional gender wage gap convergence equation controlling for sector concentration and industry specific measures of openness using a difference in difference approach trade affected concentrated sectors versus trade affected competitive sectors the results indicate that i an increase in sector concentration is associated with wage gap growth ii both import and export penetration are associated with a reduction of the high skill gender wage gap growth in concentrated industries iii there is evidence of a widening impact of trade on the medium and low skill occupational gender wage gap growth in less competitive industries iv institutional regulations of the labour market have an impact on the development of the gender wage gap for highly skilled labour an increase in labour market regulation raises the growth of the gender wage gap while for medium and low skilled workers it lowers it

public finance from a gender perspective abstract conventional macroeconomic policy design has ignored the way in which gender relations result in distortions caused by biased and absent markets cutbacks in public expenditure have tended to worsen these distortions and crowd out women s contributions to economic growth a new approach to macro policy however is emerging in some international organizations which stresses the complementarity of public investment and private production this opens the way for examining taxation and expenditure through a gender lens to reveal how spreading the burden of the reproduction tax can promote the development of well functioning labor markets and contribute to equitable and sustainable growth

trade theorems with search unemployment we revisit the heckscher ohlin samuelson model in the presence of labour market frictions a la mortensen pissarides relaxing the assumption of the one worker one firm matching rule we show that the stolper samuelson theorem and the rybczynski theorem may not hold in specific circumstances we also demonstrate that the factor price equalization theorem is valid only for capital and unemployed labour across countries but not for employed labour in equilibrium trade patterns are determined by countries factor endowments and relative factor intensities in sectors independent of factor intensities in production finally our results suggest an additional explanation for the missing trade phenomenon jel classification f 16 j64

trade and labour standards will there be a race to the bottom the objective of this paper is to investigate whether international rivalry will lead to a race to the bottom rtb in labour standards we derive the equilibrium levels of labour standards in an environment that is most conducive to a rtb specifically the brander and spencer 1985 model of strategic trade in which each government has an incentive to lower the cost of a domestic firm our analysis suggests that strategic trade considerations do not lead to a rtb in labour standards to the contrary equilibrium labour standards are higher than those in the absence of government intervention in the case where governments are free to choose the rate of an export subsidy labour standards are inefficiently high binding global trade rules that reduce the subsidy rate would move the equilibrium labour standards closer to their efficient level and a prohibition of the subsidy would eliminate the efficiency loss in labour markets

oligopsony and monopsonistic competition in labor markets we argue that models of oligopsony or monopsonistic competition provide insights and explanation for many empirical phenomena in labor markets using a simple model with job differentiation and preference heterogeneity we illustrate how such models can be employed to explain the existence of wage dispersion the persistence of labor market discrimination market failures in the provision of training and the anomalous employment effects of minimum wages

testing in models of asymmetric information this paper explores the role of testing in models of asymmetric information we demonstrate conditions under which testing for underlying characteristics can overcome adverse selection problems and lead to a full information competitive equilibrium this paper provides a more general statement of mirrlees result on the optimal use of infinite fines where testing cannot fully resolve the problems associated with asymmetric information we outline the source of the difficulties our results developed in the context of a labour market can be directly extended to other environments in problems with asymmetric information testing to discover an agent s chosen action or underlying characteristics may significantly reduce the cost of moral hazard and adverse selection

secular changes in the gender composition of employment and growth dynamics in the north and the south abstract in a simple theoretical exercise the paper shows that gender relations matter in the standard analysis of trade liberalization and economic growth it utilizes a model with the two differential equations phase diagram technique which enables us to examine the cumulative interaction between economic growth and changes in the female share of employment the model shows that changes in the gender composition of employment caused by a new global division of labor between the north and the south can thwart the economic benefits customarily associated with trade liberalization in both regions

separate and unequal occupation establishment sex segregation and the gender wage gap the authors report the first large scale empirical investigation of within job wage differences between men and women in the same occupation and establishment using data first on blue collar and clerical employees from 16 u s industries in 1974 83 and second on employees in 10 professional and administrative occupations the authors report three findings first wage differences at the occupation establishment level were small even without controls for individual level characteristics hence within job wage discrimination was much less important than occupation establishment segregation for observed wage differences second establishment segregation was an important cause although not as important as occupational segregation of wage differences third establishment segregation was extensive as was occupational segregation

wage differences in the hospitality sector abstract the article examines the origin of differences between wages in the hospitality sector and the rest of the private sector in spain the evidence obtained for the 2002 2010 period shows that the wage disadvantage of hospitality presents an increasing profile along the wage distribution so that it is particularly relevant for those earning comparatively higher salaries in contrast with other low wage sectors lower wages in hospitality are explained almost entirely by the specific characteristics of its workers and jobs particularly their lower educational qualifications and their higher presence in low skilled occupations and not by the existence of lower rewards to those characteristics highly qualified individuals are however an exception since they suffer a wage penalty for working in the sector furthermore the analysis shows that pay inequality is substantially lower in the hospitality sector and that it is not due to the relative characteristics of its workers and jobs

globalization and the empowerment of women an analysis of spatial dependence via trade and foreign direct investment summary this article tests the hypothesis that higher women s economic and social rights in foreign countries with which a country is connected via trade and foreign direct investment fdi spill over into higher rights among the laggards a phenomenon known as spatial dependence analyzing women s rights over the period 1981 2007 in a global sample and samples of countries at different stages of economic development we find consistent evidence for spill over effects via trade links with the exception of a sample of low income countries we also find some evidence for similar effects via fdi but only for economic rights and only in middle income countries

trade capital accumulation and structural unemployment an empirical study of the singapore economy the past three and a half decades witnessed a distinctly declining trend in singapore s unemployment rate which dropped from an average annual rate of 7 85 percent in 1966 70 to 2 74 percent in 1991 2000 the authors seek to identify and empirically examine the factors that have influenced singapore s unemployment rate in an environment of low and stable inflation they incorporate a union bargaining framework into a standard factors trade model in which an increase in the relative price or capital stock in the export sector raises the demand wage that firms can afford to pay relative to workers fall back income and consequently lowers equilibrium unemployment the magnitude of the effects depends on the fall back income the weight unions attach to employment and the elasticity of labor demand which the authors estimate using data on singapore the results show that labor unions in singapore care more about employment than wages together with a small fall back income and elastic labor demand the authors show that given the same percentage change in relative export prices and capital accumulation in the export sector the effect on unemployment is larger for the former however the empirical importance of capital accumulation in the export sector dominates increases in relative export prices in reducing unemployment since the manufacturing sector experienced a tremendous increase in capital inputs throughout the sample period whereas the relative price of exports experienced a far smaller increase and only in the early part of the sample period the authors conclude that through a very open trading regime the tremendous increase in capital stock of the exporting sector has been the main reason behind singapore s declining unemployment rate

international trade and the gender wage gap new evidence from india s manufacturing sector summary this study examines how increasing competitive forces from india s trade liberalization have affected women s relative wages and employment neoclassical theory implies that costly discrimination against female workers should diminish over time with increased competition we incorporate this idea into a theoretical model of competition and industry concentration and test the model using repeated cross sections of india s national sample survey organization nsso household survey data merged with trade and production data from 1983 to 2004 estimates from ordinary least squares ols and fixed effects regressions at the industry level indicate that increasing openness to trade is associated with larger wage gaps in india s concentrated manufacturing industries

viewpoint male female wage differentials how can that be abstract the paper outlines the main empirical procedures that are used to document the male female wage differential and the extent to which it reflects discrimination it then discusses the evidence on male female wage differentials their existence the extent to which they reflect discrimination their changes over time and the factors that influence the gap particular attention is paid to more recent studies that control for a wider range of conventionally unobserved factors theoretical perspectives are then outlined focusing on the issue of how discriminatory wage differentials can survive given the forces of competition the impacts of policy initiatives are also discussed

unemployment dynamics and labour market tightness an empirical evaluation of matching function models the implications of matching function models for the relationship between labour market tightness and the transition probability into employment are summarized these implications are then tested using monthly data for three canadian provinces british columbia ontario and quebec testing methods use flexible regression techniques so as to reduce the effect of any extraneous restrictions the results show rough concordance between theoretical assumptions and empirical facts evidence of non linearity in the estimated relationships favours a search theoretic model of labour markets over one based on queues and some quantitative results offer guidance to those using calibrated search models in theoretical analysis

north south trade and female labour in manufacturing an asymmetry a simple method of measuring the impact of north south trade on the female intensity of manufacturing is applied to data for developed and developing countries the results confirm that growth of exports has increased the relative demand for female labour in the south however there does not appear to have been a general counterpart reduction in the relative demand for female labour in northern manufacturing even among blue collar workers there are several possible reasons for the apparent conflict between these findings and other evidence that in northern manufacturing females have been disproportionately displaced by trade with the south

corporate bond market transaction costs and transparency using a complete record of u s over the counter otc secondary trades in corporate bonds we estimate average transaction costs as a function of trade size for each bond that traded more than nine times between january 2003 and january 2005 we find that transaction costs decrease significantly with trade size highly rated bonds recently issued bonds and bonds close to maturity have lower transaction costs than do other bonds costs are lower for bonds with transparent trade prices and they drop when the trace system starts to publicly disseminate their prices the results suggest that public traders benefit significantly from price transparency

gender wage inequality and export led growth in south korea this article investigates the relationship between gender wage inequality and export led growth in south korea the persistent gender wage gap in korea s manufacturing sector is found to be linked to women s segregation in the country s major export industries where real wage growth has lagged productivity growth despite favorable market conditions that might drive up women s wages relative to those of men the interaction of state and firm level hiring training and promotion practices that structure women s and men s employment opportunities differently appear to have resulted in a relatively weaker fall back position for women in labour markets econometric results are consistent with the hypothesis that women s weaker fall back position limits their ability to bargain for wage increases commensurate with productivity growth further evidence is presented which links gender wage inequality to the growth of korean exports

efficiency of large double auctions we consider large double auctions with private values values need be neither symmetric nor independent multiple units may be owned or desired participation may be stochastic we introduce a very mild notion of a little independence we prove that all nontrivial equilibria of auctions that satisfy this notion are asymptotically efficient for any alpha 0 inefficiency disappears at rate 1 n 2 alpha