candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

spatial equilibrium with entry this paper examines spatial equilibrium in political competition when established parties choose their platforms competitively while rationally anticipating entry of a vote maximizing third party the resulting equilibrium is substantially different from the hotelling median equilibrium established parties are spatially separated and third parties will generally lose the election this provides one theoretical explanation for the stability of two party systems namely that non cooperative behavior between established parties can effectively prevent third parties from winning

breast cancer survival work and earnings relying on data from the health and retirement study hrs linked to longitudinal social security earnings data we examine differences between breast cancer survivors and a non cancer control group in employment hours worked wages and earnings overall breast cancer has a negative impact on employment however among survivors who work hours of work wages and earnings are higher compared to women in the control group we explore possible biases underlying these estimates focusing on selection but cannot rule out a causal interpretation our research points to heterogeneous labor market responses to breast cancer and shows that breast cancer does not appear to be debilitating for women who remain in the work force

towards micropolitical foundations of public finance abstract observed fiscal policy reflects the incentives embedded in political institutions in this paper we illustrate the effects of two general institutional features separation of powers which is common in presidential congressional political systems and legislative cohesion which is typical of parliamentary systems compared to a simple legislative game separation of powers brings about a smaller size of government and lower waste legislative cohesion induces a more equal distribution but more waste and higher taxes than separation of powers

information and strategic political polarisation we develop a model of electoral competition in which two opportunistic candidates select their policy position and invest in quality policy positions are observed and during the campaign the press reveals some information about quality we demonstrate that when information is imperfect the blackdowns median voter theorem fails to hold for intermediate information levels the unique equilibrium is such that candidates propose policies different from the median voter s bliss point by contrast convergence to the median occurs when quality is almost always or almost never revealed we also show that a profit maximising press may collect more information than socially optimal during the 1995 electoral campaign in belgium the vld a traditionally right wing

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

is there job lock evidence from the pre hipaa era we estimate discrete time hazard models of employment duration and standard logarithmic wage equations using the 1987 and 1990 panels of the survey of income and program participation sipp to examine the phenomenon of job lock we test for job lock using differences in differences approaches among those with and without employer provided health insurance and family members with and without health problems we find no statistically significant evidence of job lock on employment duration or wages using this approach we do find some evidence of shorter employment spells for those with employer provided health insurance and spouse provided health insurance and longer employment spells for those with employer provided health insurance and large families others have interpreted these findings as evidence of job lock however the wage equation results using these measures are not consistent with job lock although anecdotal evidence makes it clear that some workers have been locked into less than optimal jobs because of the combination of health problems and employer provided health insurance our results do not suggest that this phenomenon is pervasive in the u s economy

fringe benefits and labor mobility interindustry factor mobility is a crucial determinant of the income distribution effects of exogenous changes in relative commodity prices this examination of interindustry variation in wages and profits using data from manufacturing industries from

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

the impact of employer provided health insurance on dynamic employment transitions we estimate the impact of employer provided health insurance ephi on the job mobility of males over time using a dynamic empirical model that accounts for unobserved heterogeneity previous studies of job lock reach different conclusions about possible distortions in labor mobility stemming from an employment based health insurance system a few authors find no evidence of job lock although most find reductions in the mobility of insured workers of between 20 and 40 percent we use data from the national longitudinal survey of youth which includes variables describing the health insurance an individual holds as well as whether he is offered insurance by his employer this additional information allows us to model the latent individual characteristics that are correlated with the offer of ephi the acceptance of ephi and employment transitions our results provide an estimate of job lock unbiased through correlation with positive job characteristics and individual specific turnover propensity we find no evidence of job lock among married males and produce small estimates of job lock among unmarried males of between 10 and 15 percent

using cost observation to regulate firms the paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier 1 has superior information about the cost of the project and 2 invests in cost reduction the main result states that under risk neutrality the supplier announces an expected cost and is given an incentive contract linear in cost overruns this optimal contract moves toward a fixed price contract as the announced cost decreases an investment choice is then introduced and the use of a rate of return regulation is studied

signalling by underpricing in the ipo market abstract empirical evidence suggests the existence of hot issue markets for initial public offerings in certain periods and in certain industries new issues are underpriced and rationing occurs this paper develops a model consistent with this observation which assumes the firm itself best knows its prospects in certain circumstances firms with the most favorable prospects find it optimal to signal their type by underpricing their initial issue of shares and investors know that only the best can recoup the cost of this signal from subsequent issues

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

health insurance and job mobility theoryand evidence it is widely hypothesized that health insurance deters job mobility because of imperfections in the labor and health insurance markets this paper describes the nature of the welfare loss attributable to such job lock and reviews several studies that empirically test the job lock hypothesis the authors find that estimates of the magnitude and importance of job lock vary studies that support the job lock hypothesis typically report a 20 to 40 reduction in mobility rates depending on worker marital status and gender their own estimates suggest that although job lock is present in the labor market the proportion of workers affected and the magnitude of the welfare loss are less than generally supposed

the effects of employer provided health insurance on worker mobility the authors use data from the 1984 survey of income and program participation sipp to investigate whether employer provided health insurance reduced worker mobility a phenomenon termed job lock the sipp provides information on variables particularly pension receipt job tenure and spouse job change that were omitted from previous studies and are the authors argue key to the estimation of welldefined mobility models for dual earner married men and women the authors estimate a model that accounts for the interaction between husbands and wives job change decisions for both married and single individuals the results provide fairly strong evidence ofjob lock among women but only weak indications of job lock among men the authors speculate that this finding reflects higher health care use by women than by men

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

parties as political intermediaries this paper argues that parties regulate competition among like minded factions so as to enhance reputation building by and voter trust in the politicians standing for a given cause while intra and interparty competition contributes to keeping politicians on their toes unbridled competition may encourage politicians to challenge good platforms and to wage competition along socially suboptimal dimensions for example by privileging form over content the paper builds a simple model of intraparty competition and studies whether various hierarchical or democratic party institutions constitute an efe cient form of party governance the paper shows that intraparty disagreements when they occur hurt the party s position in the general election but that their possibility enhances party image and that parties must be able to avoid behind the scene allocations of portfolios and spoils in order to be credible last it analyzes the impact of political polarization and interparty competition on the choice of party governance

employment separation and health insurance coverage abstract we study the interrelationship between employment separation and insurance coverage we first document that employment separation is associated with large reductions in insurance coverage even conditioning on underlying tastes for insurance we then show that reducing the cost of insurance through state laws mandating continued access to employer provided health insurance for the non employed increases the likelihood of having insurance after separating from a job by 6 7 these mandates also increase the number of individuals who separate and the total amount of time spent jobless finally at least some of this increased non employment appears to be spent in productive job search as the availability of continuation coverage is related to significant wage gains among those who separate from their jobs

party governance and ideological bias abstract informed opinions are essential to a good functioning of democratic institutions political intermediaries such as parties make up the free riding voters informational deficit public opinion and voting outcomes are shaped by those parties whom the voters trust the credibility of parties is fashioned by their internal organization the paper investigates one aspect of party governance namely the allocation of control rights over platform design the party s leadership either selects a platform or simply recommends a platform for adoption by the rank and file under the latter democratic institution the leadership has no formal authority but for informational and procedural reasons may still have substantial real control over the final platform depending on the congruence between leadership and rank and file in particular the rank and file is generally more concerned with the ideological content of the platform than the leadership who is motivated by the benefits from electoral office the paper argues that in centrist parties the high congruence of interest between the rank and file and office seekers leads to systematic rubberstamping of the leadership s electoral platforms the resulting weak internal control mechanism hurts party credibility