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

affirmative action and opportunity a study of female quit rates t he effectiveness of affirmative action efforts has been a topic of some controversy and the literature is unclear about whether women and or minorities benefit one source of confusion is that in some models the economywide effect can be in a different direction than the effect upon regulated or covered individuals and firms in a sense this is much like the minimum wage in that while some individuals benefit there is considerable controversy about the gains for target groups as a whole what is more surprising however is that the affirmative action literature is unclear about whether the programs achieve their goals for firms which are covered again in part this confusion is theoretical for wage and hiring directives may provide conflicting incentives beller 1978 another difficulty is methodological in that measures of affirmative action activity tend to be indirect 1 this last point as we shall see is especially true for studies of the federal contract compliance program this paper assesses the effectiveness of the federal contract compliance program which is administered by the office of federal contract compliance ofcc in improving opportunities for women rather than focusing on wage growth or the sex composition of occupations or firms as have all the previous studies we examine quit rates quits are a useful measure of people s perceptions about their opportunities and effective affirmative action programs may improve intra firm opportunities for advancement as a result subject to some caveats discussed below we expect that program effectiveness is captured by a reduction in quit rates from previous levels in addition this paper employs a more defensible measure of ofcc activities than is typical in most studies part i of the paper develops the model part ii introduces the data and the specifications the basic results are presented in part iii two major conometric difficulties whether the ofcc variables are actually proxies for other industry effects and the possible endogeneity of ofcc activity are addressed in part iv and the results are summarized in the final section

are those paid more really more productive the case of experience this study uses computerized personnel microdata on the white male managerial and professional employees at a major u s corporation to address the following question can the additional earnings which are associated with more labor market experience at a point in time really be explained by higher productivity at the same point in time our answer to this question based on both cross sectional and longitudinal information is that performance plays a substantially smaller role in explaining cross sectional experience earnings differentials and earnings growth than is claimed by those who have adopted the human capital explanation of the experience earnings profile this response depends critically on our assumption that the performance ratings which supervisors give to their white male managerial and professional subordinates adequately reflect the subordinates relative productivity in the year of assessment we present a great deal of evidence which strongly supports this assumption

political budget cycles with informed voters evidence from italy i exploit a reform that required italian municipalities to disclose their balance sheetsbefore elections to study whether having more informed voters aects the political budgetcycle to start inve

adoption of organic farming in germany and austria an integrative dynamic investment perspective farm level adaptation to changing economic environments is often slower than expected technological innovations for instance are frequently adopted at a later date than the net present value of investment suggests this can be explained by a model of investment under uncertainty which consistently accounts for uncertainty sunk costs and the flexibility of investment timing its essential conclusion is that due to temporal opportunity costs critical incremental cash flows that trigger investments might be higher than those needed for simple cost recovery this accounts for an ostensible reluctance to invest economic hysteresis in this article we demonstrate how slow conversion to organic farming in general and the different rates of conversion in germany and austria in particular can be explained by the new investment theory

mommy tracks and public policy on self fulfilling prophecies and gender gaps in hiring and promotion abstract consider a model with two types of jobs the profitability of hiring a worker to a fast track job depends not only on his or her observable talent but also on incontractible effort we investigate whether self fulfilling expectations may lead to higher hiring or promotion standards for women if employers expect women to do more household work than men thereby exerting less effort in their paid job then women must be more talented to make it profitable to hire them specialization in the family will then result in women doing most of the household work such self fulfilling prophecies can be defeated by affirmative action or family policy however it is unlikely that temporary policy can move the economy to a symmetric equilibrium policy must be made permanent anti discrimination policy need not enhance efficiency and from a distribution viewpoint this is a policy with both winners and losers

on gender gaps and self fulfilling expectations alternative implications of paid for training i introduction the recent literature on gender differences in the labor market has focused mainly on two issues the first one deals with the mechanisms e g adverse selection that can amplify initial differences in preferences or productivity across genders leading to sizeable gender gaps in wages labor force participation or working hours these models help us understand to what extent changes in gender gaps have been due to changes in fundamentals including differences in the pattern of endogenous accumulation of human capital by men and women 1 the second one is related to the channels explaining persistence in gender gaps even when exogenous differences across the sexes are of little importance or even absent 2 these studies tend to rely upon the existence of incentive problems in the labor market e g moral hazard leading to self fulfilling prophecies about differences in gender roles without assuming any initial comparative advantages our paper falls into this second strand of the literature by considering an alternative mechanism based on statistical discrimination by firms in the provision of paid for training to male and female workers this yields multiplicity of equilibria in gender gaps even in the absence of moral hazard 3 the basic idea in models of gender gaps relying upon self fulfilling prophecies is that employers beliefs about women s lower attachment to the labor market lead to wage differentials in favor of men hence since women expect to face a lower expected opportunity cost they end up devoting more time to housework validating in this way firms beliefs for example albanesi and olivetti 2009 propose a model where firms are subject to incentive compatible constraints due to their imperfect monitoring of workers effort a moral hazard problem and of hours of housework an adverse selection problem as a result different types of labor contracts are offered to men and women in a similar vein lommerud and vagstad 2007 deal with a model where firms allocate workers to fast and slow track jobs the former requiring a fixed investment cost if women have traditionally exerted primary major responsibility at home and wages are non contractible they will predominantly follow a mommy track in equilibrium while incentive problems often used to derive additional predictions on the structure of wages to be confronted with the data provide a useful modeling device they could be somewhat restrictive for instance concerning the difficulty of perfectly monitoring effort pay gaps should be negligible for routine tasks performed by less skilled employees for whom effort and output should be easily observable yet even after removing differences in observable characteristics and in the overall wage dispersion there is evidence about substantial gender gaps in hourly wages in these categories see e g blau and kahn 2000 bassanini and saint martin 2008 de la rica et al 2008 our paper contributes to this literature by proposing a novel mechanism which does not rely on incentive problems we consider a two period model in which firms initially offer paid for training to workers taking as given the division of housework between spouses in the second period spouses decide on how to split the certain and uncertain parts of housework where the latter is captured by the realization of a shock affecting household tasks during this period e g unexpected need of housework or events that require parental leave etc both decisions interact because the housework decision determines whether a spouse works or quits after receiving training and the firm chooses the amount of training without observing the household s housework allocation statistical discrimination arises in this setup as a result of firms prior beliefs about which spouse is more likely to quit the job under the key assumptions that wages are predetermined with respect to housework shocks and that the household does not re optimize after the shock is revealed asymmetric beliefs will induce differences in the provision of training across spouses

sending the pork home birth town bias in transfers to italian municipalities we ask whether the birthplaces of italian members of parliament are favoured in the allocation of central government transfers using a panel of municipalities for the years between 1994 and 2006 we find that municipal governments of legislators birth towns receive larger transfers per capita exploiting variation in birthplaces induced by parliamentary turnover for estimation we find that this effect is driven by legislators who were born in a town outside their district of election as a result we argue that our findings cannot be a consequence of re election incentives the usual motivation for pork barrel policies in the literature rather politicians may be pursuing other personal motives in line with this hypothesis we find that the birth town bias essentially disappears when legislative elections are near we explore several possible mechanisms behind our results by matching parliamentarians to a detailed dataset on local level administrators

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

psychological bias and gender wage gap basing our work on the literature on psychology that highlights differences in confidence levels between men and women we provide a rationale for the simultaneous existence of the two dimensions of the gender wage gap i on average men earn more than women and ii the difference in wages depends on the gender structure we also argue that although an equal compensation policy does not eliminate the gender wage gap it nonetheless increases social welfare finally endogenizing the choice of task by agents we show how women in a vast majority can self select on low paying jobs

beauty vs earnings gender differences in earnings and priorities over spousal characteristics in a matching model abstract i develop a model of marriage matching where males and females care about two distinct characteristics of their spouse beauty and earnings each individual s beauty is exogenous but earnings depend on human capital investments made by each individual prior to entering the marriage market i show that even if males and females constitute ex ante identical populations with identical underlying preferences and equal access to human capital investment and labor market opportunities there can still exist an equilibrium where on average one gender invests more in human capital than the other and moreover members of one gender are more likely to prioritize beauty over earnings in a spouse while members of the other gender are more likely to prioritize a potential spouse s earnings over beauty

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

do firms pay efficiency wages evidence with data at the firm level this study tests the efficiency wage hypothesis by estimating wage and quit equations with data from the employment opportunity pilot project survey of firms an efficiency wage model is derived that predicts effects of turnover costs and unemployment on wages as functions of first and second derivatives from the quit equation the model is tested by examining the relationships between the coefficients in the wage and quit equations the results are generally favorable to efficiency wage theory other important findings are that firm characteristics raising workers productivity tend to raise wages and that a rise in turnover costs reduces quits

why the gender gap in wages narrowed in the 1980s since 1976 the gender gap in wages on average declined by about 1 per year this article focuses on identifying the factors underlying this trend three data sets are analyzed the current population survey the panel study of income dynamics and the national longitudinal survey we find that convergence in measurable work related characteristics schooling and work experience explains one third to one half the narrowing the remainder is attributable to a relative increase in women s returns to experience as well as to declining wages in blue collar work and other factors

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

exposing corrupt politicians the effects of brazil s publicly released audits on electoral outcomes author s finan frederico ferraz claudio abstract this paper examines the extent to which access to information enhances political accountability based upon the results of brazil s recent anti corruption program that randomly audits municipal expenditures of federally transferred funds it estimates the effect of the disclosure of local government corruption practices upon the re election success of incumbent mayors in municipal elections comparing municipalities which were randomly audited before the elections with those audited after the analysis shows that the disclosure of audit results had a significant impact on the re election rates of mayors found to be corrupt for a one standard deviation increase in reported corruption the audit policy reduced the incumbent s likelihood of re election by 25 percent this effect is more pronounced in municipalities where radio stations are present and higher levels of corruption are identified these findings highlight the value of information and the role of the media in reducing informational asymmetries in the political process thus enabling voters to not only hold corrupt politicians accountable but also to reward non corrupt politicians

will affirmative action policies eliminate negative stereotypes a key question concerning affirmative action is whether the labor market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market the authors argue that this depends on how the policy affects employers beliefs about the productivity of minority workers they study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments the authors prove that even when identifiable groups are equally endowed ex ante affirmative action can bring about a situation in which employers correctly perceive the groups to be unequally productive ex post copyright 1993 by american economic association

the role of social capital in financial development to identify the effect of social capital on financial development we exploit social capital differences within italy in high social capital areas households are more likely to use checks invest less in cash and more in stock have higher access to institutional credit and make less use of informal credit the effect of social capital is stronger where legal enforcement is weaker and among less educated people these results are not driven by omitted environmental variables since we show that the behavior of movers is still affected by the level of social capital of the province where they were born

the political economy of government responsiveness theory and evidence from india the determinants of government responsiveness to its citizens is a key issue in political economy here we develop a model based on the solution of political agency problems having a more informed an politically active electorate strengthens incentives for governments to be responsive this suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy the ideas behind the model are tested on panel data from india we show that public food distribution and calamity relief expenditure are greater controlling for shocks where governments face greater electoral accountability and where newspaper circulation is highest

human capital true love and gender roles is sex destiny abstract we assume optimal specialization in the nuclear family involves one partner doing homework and the other wagework basic human capital for one or the other is imparted to individuals through early childhood training mates are chosen on the basis of noneconomic criteria true love because love strikes randomly after basic human capital is acquired a coordination problem arises in choosing complementary specializations even with no discrimination there exist equilibria characterized by gender roles perfect correlation between sex and family roles there may also exist other equilibria in which the correlation between sex and family roles is imperfect and individuals are trained by aptitude we rank the equilibria when they coexist and demonstrate that affirmative action policies can increase average welfare by eliminating some equilibria the analysis is conducted in a framework which characterizes individuals by training by aptitude and by family role in a 2 2 2 model in this framework we formalize the equality of the sexes as well as the relative importance of nature versus nurture and various types of training

gender interactions within hierarchies evidence from the political arena this paper studies gender interactions within hierarchical organizations using a large data set on the duration of italian municipal governments elected between 1993 and 2003 a municipal government can be viewed as a hierarchy whose stability over time depends on the degree of cooperation between and within ranks we find that in municipalities headed by female mayors the probability of early termination of the legislature is higher this result persists and becomes stronger when we control for municipality fixed effects as well as for non random sorting of women into municipalities using regression discontinuity in gender mixed electoral races decided by a narrow margin the likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male and in regions with less favourable attitudes towards working women this evidence is suggestive that group dynamics are an important factor in driving the gender difference other interpretations receive less support in the data our results may provide an alternative explanation for the underrepresentation of women in leadership positions

firms choice of method of pay using data from the bls industry wage survey the author tests the theory that firms choose their methods of pay by balancing the gains from more precise links between performance and pay against m

broadband internet an information superhighway to sex crime does internet use trigger sex crime we use unique norwegian data on crime and internet adoption to shed light on this question a public program with limited funding rolled out broadband access points in 2000 2008 and provides plausibly exogenous variation in internet use our instrumental variables and fixed effect estimates show that internet use is associated with a substantial increase in reported incidences of rape and other sex crimes we present a theoretical framework that highlights three mechanisms for how internet use may affect reported sex crime namely a reporting effect a matching effect on potential offenders and victims and a direct effect on crime propensity our results indicate that the direct effect is non negligible and positive plausibly as a result of increased consumption of pornography

job discrimination market forces and the invisibility hypothesis the invisibility hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers but that promotion enhances visibility and alleviates this problem then at a competitive labor market equilibrium firms profit by hiding talented disadvantaged workers in low level jobs consequently those workers are paid less on average and promoted less often than others with the same education and ability as a result of the inefficient and discriminatory wage and promotion policies disadvantaged workers experience lower returns to investments in human capital than other workers

pay differences among the highly paid the male female earnings gap in lawyers salaries this article uses very detailed information on graduates of the university of michigan law school to examine male female pay differences in that population men and women in this population have virtually identical human capital on graduation from law school allowing us to examine carefully the different impact of children and work history on men s and women s careers and earnings taking time from work in order to care for children reduces wages significantly but a rich set of controls including childcare work history school performance and job setting measures still leave one fourth to one third of the earnings gap unexplained

lame ducks and local fiscal policy quasi experimental evidence from portugal i use the introduction of mayoral term limits in portugal to identify how an exogenous variation in eligibility for office affects policy decisions relying on a quasi experimental difference in differences approach i find that term limited incumbents pursue more conservative fiscal policies than those who are eligible for re election heterogeneous effects show that the treatment effects primarily reflect the behaviour of right leaning term limited incumbents results are in line with a model in which right leaning officeholders try to maintain a good reputation by pleasing an electorate prone to redistribution while they are eligible but adopt policies closer to their true preferences when term limited

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

will you marry me a perspective on the gender gap abstract this paper develops a general equilibrium model of the gender wage gap the difference in earnings is a consequence of a demographic regularity that men tend to marry younger women which may limit women s labor mobility and hence their average earnings however couples are always free not to marry and do so only if it is in each s self interest the intrafamily allocation of resources is determined via non cooperative bargaining this leads to interesting interactions between the game played by husband and wife on the one hand and the competitive environment in which they are immersed on the other the predictions resulting from this model s interplay between locational choice and family bargaining are consistent with the observation that the increasing stress put by women on their careers over the past 30 years has been contemporaneous with reductions in both marriage rates and the gender gap the model provides insight into the consequences of this for the relative welfare of men and women as well as exploring its wider economic implications

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

election results and opportunistic policies a new test of the rational political business cycle model the literature on the rational pbc suggests that politicians systematically manipulate economic and fiscal conditions before elections to increase their chances of reelection most tests of this theory look for evidence of pre election distortions in fiscal policy we propose a new test that explores the two way interaction between the magnitude of the opportunistic distortion and the margin of victory the test is implemented using a large panel of portuguese municipalities the results show that opportunism leads to a larger win margin for the incumbent and that incumbents behave more opportunistically when their win margin is small these results are consistent with the theoretical model

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

electoral manipulation via voter friendly spending theory and evidence abstract we present a model of the political budget cycle in which incumbents try to influence voters by changing the composition of government spending rather than overall spending or revenues rational voters may support an incumbent who targets them with spending before the election even though such spending may be due to opportunistic manipulation because it may also reflect sincere preference of the incumbent for types of spending voters favor classifying expenditures into those which are likely targeted to voters and those that are not we provide evidence supporting our model in data on local public finances for all colombian municipalities our findings indicate both a pre electoral increase in targeted expenditures combined with a contraction of other types of expenditure and a voter response to targeting

gender discrimination without gender difference theory and policy responses abstract this paper provides an explanation for the continued existence of gender discrimination in competitive labour markets and analyzes the effects of policies designed to alleviate it unlike previous explanations of gender discrimination this theory arises from the interaction between women and men within the household and does not rely on inherent asymmetries between women and men even though discrimination is seen to be related to factors which can be thought external to the labour market such as higher job turnover and labour market exit rates for women policies which target only labour market outcomes and do not deal with external factors can both lead to reduced discrimination and also alter external factors thereby reducing discrimination further however policies aimed at external factors will in general be less effective in reducing discrimination unless combined with more direct policies

opportunistic political cycles test in a young democracy setting this paper tests the theory of opportunistic cycles in a decade old democracy russia finds strong evidence of cycles and provides an explanation for why previous literature often found weaker evidence using regional monthly panel data we find that 1 the budget cycle is sizable and short lived public spending shifts toward direct monetary transfers to voters 2 the magnitude of the cycle decreases with democracy government transparency media freedom voter awareness and over time and 3 preelectoral manipulation increases incumbents chances for reelection the short length of the cycle explains underestimation of its size by previous literature because of low frequency data used in previous studies

implicit contracts incentive compatibility and involuntary unemployment this paper considers the enforceability of employment contracts when employees performance cannot be verified in court so that piece rate contracts are not legally enforceable part i shows that there exists a variety of self enforcing implicit contracts modelled as perfect equilibria in a repeated game and characterizes all the wage and performance outcomes that can be implemented implementation requires a strictly positive surplus from employment the form of the contract depending on how this surplus is divided between firm and employee piece rate contracts and contracts with an informally agreed bonus can be made self enforcing but the use of severance pay and bonding does not extend the set of implementable allocations the resulting contracts resemble actual labor contracts more than do the contracts in standard principal agent models part ii analyses market equilibrium with these contracts also modelled as perfect equilibria in a repeated game and shows that many such equilibria exist unfilled vacancies and unemployed workers can co exist despite the existence of contracts that are potentially mutually beneficial for those jobs that are filled any division of the potential surplus is possible so that the market can have at the same time involuntary unemployment and vacancies that are unfilled despite filled jobs earning positive profits as a criterion for selecting equilibria a notion of renegotiation proofness is applied then either all workers are employed or all jobs filled but any division of the potential surplus is still possible the paper explores what further restrictions on beliefs give rise to a walrasian outcome in which all the potential surplus goes to the short side of the market and to an efficiency wage type outcome in which the potential surplus goes to the long side

pork barrel politics and electoral returns at the local level does the targeted spending of public resources provide electoral benefits for incumbents despite the attention of scholars to that question the empirical results are mixed thus far the present paper supplies insights into the electoral benefits of discretionary funding on local elections i study the consequences of pork barrel politics in 7355 competitive mayoral elections in slovakia between 2006 and 2018 finding that more grants from the central government enhance the likelihood of mayors winning reelection the same advantage applies to mayors whose municipalities receive grants in local election years the effects of the number of grants obtained as well as the timing of their distribution are however moderated by municipal population more specifically a larger number of grants and resources obtained near the end of the mayoral term provides electoral benefits only to small town mayors but give no advantage to the mayors of larger urban areas

property tax and property values evidence from the 2012 italian tax reform abstract this paper assesses the extent to which property taxes are capitalized into property values exploiting the 2012 italian tax reform municipal level variation in the level of the property tax rates is instrumented using the exogenous staggered timing of local elections we show that the incumbent local governments with upcoming elections in 2013 shifted the composition of fiscal revenues towards lower property tax our 2sls estimate shows that a one standard deviation increase in municipal level property tax intensity leads to a 2 7 reduction of municipal property values in the year of the reform we elicit information on the characteristics of the compliers and show that these municipalities feature inefficient public spending and low social capital