signalling or human capital evidence from the finnish polytechnic school reform we use data from the finnish polytechnic reform to distinguish between human capital and signalling theories of the value of education we find that the reform increased the earnings of polytechnic graduates compared with those graduating from the same schools before the reform as predicted by both the human capital and the signalling models however we also find that the relative earnings of vocational college graduates decrease after polytechnic graduates start entering the labour market this finding is inconsistent with the pure human capital model and can be interpreted as evidence that supports the signalling model

globalisation growth and convergence this paper devoted to the study of globalisation analyses two distinct but closely related issues first it aims at evaluating disparities in the degree of globalisation observed in a sample of 101 countries over the period 1970 2005 second the paper tries to shed some light to the much debated issue of whether globalisation affects economic growth and in so doing whether convergence in globalisation brings about convergence in per capita income the results obtained are both encouraging on the one side as it is shown that there has been a clear process of globalisation convergence on the other the paper concludes that globalisation has been one of the main drivers of economic growth thus fostering convergence in per capita income

future inequality in co2 emissions and the impact of abatement proposals this paper analyzes future carbon emissions inequality using a group decomposition of the gini index business as usual projections to the year 2100 for 135 countries show inequality in per capita emissions declines slowly next the impact on emissions levels and inequality of the kyoto protocol and other abatement proposals for annex ii countries in 2010 are measured with a focus on the gap narrowing and reranking effects substantial reranking of per capita emissions between annex ii and non annex ii countries will not occur unless the former reduce their emissions by at least 50 versus 1990 levels and the latter continue growing unabated

geopolitics and international organizations an empirical study on imf facilities there is growing awareness that the distribution of imf facilities may not be influenced only by the economic needs of borrowers this paper focuses on the fact that the imf may favour geopolitically important countries in the distribution of imf loans differentiating between concessional and non concessional facilities to carry out the empirical analysis we construct a new database that compiles a wide array of proxies for geopolitical importance for 107 imf countries over 1990 2003 focusing on emerging and developing economies we use a factor analysis to capture the common underlying characteristic of countries geopolitical importance as well as a potential analysis since we also want to account for the geographical situation of the loan recipients while controlling for economic and political determinants our results show that geopolitical factors influence notably lending decisions when loans are non concessional whereas results are less robust and in opposite direction for concessional loans this study provides empirical support to the view that geopolitical considerations are an important factor in shaping imf lending decisions potentially affecting the institution s effectiveness and credibility

carbon inequality at the sub national scale a case study of provincial level inequality in co2 emissions in china 1997 2007 abstract this study asks whether sub national inequalities in carbon dioxide co2 emissions mirror international patterns in carbon inequality using the case study of china several studies have examined global level carbon inequality however such approaches have not been used on a sub national scale this study examines inter provincial inequality in co2 emissions within china using common measures of inequality coefficient of variation gini index theil index to analyze provincial level data derived from the ipcc reference approach for the years 1997 2007 it decomposes co2 emissions inequality into its inter regional and intra regional components patterns of per capita co2 emissions inequality in china appear superficially similar to though slightly lower than per capita income inequality however decomposing these inequalities reveals different patterns while inter provincial income inequality is highly regional in character inter provincial co2 emissions inequality is primarily intra regional while apparently similar global patterns in co2 emissions are not mirrored at the sub national scale

international inequalities in per capita co2 emissions a decomposition methodology by kaya factors in this paper we provide a methodology for decomposing international inequalities in per capita co2 emissions into kaya multiplicative factors and two interaction terms we use the theil index of inequality and show that this decomposition methodology can be extended for analyzing between and within group inequality components we can thus analyze the factors behind inequalities in per capita co2 emissions across countries between groups of countries and within groups of countries the empirical illustration for international data suggests some points firstly international inequality in per capita co2 emissions is mainly attributable to inequalities in per capita income levels which helps to explain its recent reduction while differences in carbon intensity of energy and energy intensity have made a less significant contribution this result is strongly influenced by the performance of china and india secondly the between group inequality component which is the biggest component is also largely explained by the income factor thirdly the within group inequality component increased slightly during the period something mainly due to the change in the income factor and the interaction terms in a few regions

distributional aspects of emissions in climate change integrated assessment models the recent failure of copenhagen negotiations shows that concrete actions are needed to create the conditions for a consensus over global emission reduction policies a wide coalition of countries in international climate change agreements could be facilitated by the perceived fairness of rich and poor countries of the abatement sharing at international level in this paper i use two popular climate change integrated assessment models to investigate the path and decompose components and sources of future inequality in the emissions distribution results prove to be consistent with previous empirical studies and robust to model comparison and show that gaps in gdp across world regions will still play a crucial role in explaining different countries contributions to global warming

political internalization of economic externalities and environmental policy abstract this paper derives the characteristics of endogenous environmental policy in a common agency model of politics and proceeds to show that competition between lobby groups is an important source of internalization of economic externalities our analysis generalizes bhagwati s principle of targeting to the case of distorted political markets moreover we show that the politically optimal structure of environmental taxes incorporates a pigouvian adjustment however since lobby groups care about the distribution of income as well as about efficiency the equilibrium structure of taxes differs considerably from the pigouvian rule

human capital versus sorting the effects of compulsory attendance laws under the educational sorting hypothesis a state compulsory school attendance law will increase the educational attainment of high ability workers who are not directly affected hy the law under the human capital hypothesis such laws affect only those individuals whose hehavior is directly constrained we find that compulsory attendance laws do increase enrollment rates in age groups they do not affect directly thus our results contradict the human capital hypothesis and are consistent with the sorting hypothesis i introduction the last decade has seen considerable debate between supporters of the human capital and sorting models of education the former assert that the effect of education on wages reflects increased productivity the latter maintain that it reflects at least in part correlation between education and unobserved ability workers use education to signal their ability while employers use education to screen workers despite the importance of the debate no fully convincing tests of the hypotheses have been developed in fact many members of the profession maintain at least privately that these hypotheses cannot be tested against each other and that the debate must therefore be relegated to the realm of ideology in this paper we show that the models can be tested against each other by examining the effects of state compulsory school attendance laws we show that under the human capital hypotheis such laws will affect the educational attainment only of those who in the absence of the law would have left school prior to the minimum school leaving age on the other hand under the sorting hypothesis the effects of the law will percolate through the system increasing educational attainment even among workers not directly constrained by the law our results are consistent with the predictions of the sorting model

disjoint search for the prices of two goods consumed jointly the extensive literature on searching for price information deals almost exclusively with the search for the price of a single good casual empiricism shows that consumers buy more than one good and search for the price of more than one good before any single purchase more importantly not all of these goods are sold at the same store search theory should therefore consider the problem of multiple search in order to determine the robustness of conclusions based on a theory developed from the problem of search for the price of a single good this paper reveals a number of insights that emerge when decisions taken in other markets are made explicit consider the situation facing the builder and designer of a new house among other things the builder must decide on the amount of insulation and the method of heating before construction starts the decision depends on the prices offered hence the builder will search for an acceptable offer when prices are not known with certainty if a low price for heat is found then little insulation is needed because the cost of lost heat is relatively low when relatively little insulation is needed the potential savings from a lower price of insulation are also small therefore the builder may be willing to accept a relatively high price for insulation in the event of costly search and having already found a low price for heat more generally the price that would be accepted in one market depends on what has been found in the other market the influence of one market on another is not clear consider another example when a low price for heating is known the cost in terms of lost heat of windows may be low thus the builder can install more windows at a lower opportunity cost

multiproduct search and the joint search effect abstract this paper presents a sequential search model where consumers look for several products from multiproduct firms multiproduct search can significantly influence firms pricing decisions for example it can make market prices decrease with search costs possible applications of the model are also discussed jel d11 d43 d83

multi commodity consumer search abstract this paper analyses the optimal search strategy for consumers who wish to purchase several different commodities possibly from several different firms but are not perfectly informed about the prices charged by each firm for every commodity it is shown that in general the optimal search strategy will not possess the reservation property the multi commodity equivalent of a reservation price necessary and sufficient conditions are identified for the optimal search strategy to possess the reservation property and it is shown that a critical sufficient condition is that the indirect utility function is submodular comparative static results are also presented journal of economic literature classification numbers d11 d81 d83

sequential search without reservation price abstract for a consumer who searches sequentially from a known distribution but subject to a budget constraint the optimal search policy does not necessarily have a reservation price and may generate demand curves with positively sloped segments however absence of risk aversion and inferiority is sufficient to avoid these implications

optimal adaptive price search consider the problem of a consumer desiring to buy a good which is sold at a variety of prices such a buyer will be able to obtain a sequence of price quotations from various sellers when should the buyer stop searching for a lower price if he continues he may obtain a lower price but he incurs additional time effort and expense in searching the optimal price search decision is one of balancing the expectation of a possibly lower price obtained by continued search against cumulative costs from search when the prices arise from a known probability distribution the optimal search strategy has certain well defined and desirable properties in the more realistic case that the buyer has only partial information about the price distribution and must update his beliefs after observing prices in the marketplace the problem becomes more complex and search strategies become less well behaved the major purpose of this article is to determine new conditions under which optimal policies have these desirable characteristics in the case where the consumer possesses only incomplete information about the distribution of prices price quotations he receives in addition to providing him with price possibilities provide him with information about that distribution rothschild 151 in citing an unpublished paper of gastwirth has noted that small specification errors for an assumed distribution can lead to substantial changes in expected number of searches and expected cost consequently the assumption of a known distribution of prices can have a profound effect on total cost 1 0022 053 l 8 l 040001 20 02 00 o

geographical spread of global emissions within country inequalities are large and increasing abstract in spite of the extensive literature on greenhouse gas emission inequalities at the world wide level most of the evidence so far has been based on country level data however the within country dimension matters for both the implementation and the policy formation of climate policies as a preliminary step towards a better understanding of within country inequalities this paper measures their extent for the two major greenhouse gases co2 and ch4 over the 1970 2008 period using theil index decompositions we show that within country inequalities account for the bulk of global inequality and tend to increase over the sample period in contrast with diminishing between country inequalities including differences across sectors reveals that between sector inequalities matter more than between country inequalities and between sector inequalities become the dominant source of global inequality at the end of the sample period in the co2 case finally estimated social tensions arising from the disconnection between emissions and future damages turn out to be increasing as soon as within country disparities are taken into account these orders of magnitude should be kept in mind while discussing the efficiency and fairness of alternative paths in combating global warming

inequality in co2 emissions across countries and its relationship with income inequality a distributive approach this paper analyses the inequality in co2 emissions across countries and groups of countries and the relationship of this inequality with income inequality across countries for the period 1971 1999 the research employs the tools that are usually applied in income distribution analysis the methodology used here gives qualitative and quantitative information on some of the features of the inequalities across countries that are considered most relevant for the design and discussion of policies aimed at mitigating climate change the paper studies the relationship between co2 emissions and gdp and shows that income inequality across countries has been followed by an important inequality in the distribution of emissions this inequality has diminished mildly although the inequality in emissions across countries ordered in the increasing value of income inequality between rich and poor countries has diminished less than the simple inequality in emissions lastly the paper shows that the inequality in co2 emissions is mostly explained by the inequality between groups with different per capita income level the importance of the inequality within groups of similar per capita income is much lower and has diminished during the period especially in the low middle income group

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

carbon dioxide emission and income a temporal analysis of cross country distributional patterns the existence of a cointegrating relationship between income and co2 emission for individual country groups suggests existence of a corresponding relationship between the inter country disparities in the levels of income and co2 emission this paper explores the relationship between the patterns of cross country distribution of income and co2 emission and temporal shifts in such a relationship this paper also examines how the mean level of per capita co2 emission and its distributional inequality are related to the corresponding mean income level and the distributional inequality of income the analysis is based on a cross country panel data set at the level of country group environmental quality demanded is treated as a private good and not as a public good as done in most other studies the technique of lorenz and specific concentration curve analysis are used as the basic analytical framework to argue that a measure of relative distributional inequality of income should be used as an explanatory variable in the environmental kuznets curve ekc relationship along with the mean income level in the empirical exercise johansen s cointegration analysis technique is used to explore existence of statistically significant cointegrating vector s relating mean level of emission and specific concentration ratio scr of emission to mean income level and lorenz ratio lr of income the empirical results confirm that the pattern of cross country income distribution has significant effect on the mean level of emission for all the country groups considered

schooling as human capital or a signal a new way is proposed to distinguish between the human capital and the signaling theories of the value of education if education is a signal then the essence of the signal should be distilled in the position of an individual in the distribution of education for his cohort estimating earnings equations that include both absolute years and relative percentile measures of education provides a test of the two competing theories analyzing two separate panel data sources under a range of alternative specifications we find that the years measure of schooling has a consistently significant positive effect on earnings but that the rank measure rarely does this evidence supports the conclusion that human capital rather than signaling is the predominant explanation of schooling s value

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

spatially uneven development and low carbon transitions insights from urban and regional planning the ageing of existing energy system infrastructure the threat of climate change and uncertainty in the movement of energy prices have resulted in a widespread agreement on the need for a transition to a low carbon energy system yet the nature of this transition i e what when how and where and its socio economic outcomes at different scales are not well understood the interdependence of the energy sector and economic growth has been mostly studied at the national level via some general equilibrium or econometric models whilst sub national studies at community or urban levels mostly focus on the governance of transitions hence we suggest that a regional perspective to energy policy and research promises to integrate these two approaches by providing a more robust and comprehensive understanding of the implications of low carbon transitions as well as contributing to the development of more effective policies by building on recent ideas on geographical aspects of energy transitions this article offers insights on the changing relationship between the spatial organisation of economic activities and energy systems and identifies tools and methods from urban and regional planning to help with the delivery of efficient and equitable policy outcomes

multiproduct pricing in oligopoly abstract this paper proposes a two good model of price competition where some consumers visit all shops and others visit only one we find that information frictions lead to price dispersion when the two goods are complements their prices will tend to be negatively correlated so if one is priced high the other will be discounted this finding is supported by some empirical evidence which suggests that simultaneous price discounts of complements are infrequent if the goods are substitutes their prices will be uncorrelated potentially rationalizing the lack of evidence on their co pricing when selling complements retailers earn higher profits than in the one good model through taxing captive consumers with a high overall price tag and attracting shoppers by pricing one of the goods aggressively bundling practices are thus shown to be detrimental to retailers profits

equity in climate change an analytical review how global emissions reduction targets can be achieved equitably is a key issue in climate change discussions this paper presents an analytical framework to encompass contributions to the literature on equity in climate change and highlights the consequences in terms of future emissions allocations of different approaches to equity progressive cuts relative to historic levels for example 80 percent by industrial countries and 20 percent by developing countries in effect accord primacy to adjustment costs and favor large current emitters such as the united states canada australia oil exporters and china in contrast principles of equal per capita emissions historic responsibility and ability to pay favor some large and poor developing countries such as india indonesia and the philippines but hurt industrial countries as well as many other developing countries the principle of preserving future development opportunities has the appeal that it does not constrain developing countries in the future by a problem that they did not largely cause in the past but it shifts the burden of meeting climate change goals entirely to industrial countries given the strong conflicts of interest in defining equity in emission allocations it may be desirable to shift the emphasis of international cooperation toward generating a low carbon technology revolution equity considerations would then play a role not in allocating a shrinking emissions pie but in informing the relative contributions of countries to generating such a pie enlarging revolution

explanatory factors of co2 per capita emission inequality in the european union the design of european mitigation policies requires a detailed examination of the factors explaining the unequal emissions in the different countries this research analyzes the evolution of inequality in co2 emissions per capita in the european union eu 27 in the period 1990 2009 and its explanatory factors for this purpose we decompose the theil index of inequality into the contributions of the different kaya factors the decomposition is also applied to the inequality between and within groups of countries north europe south europe and east europe the analysis shows an important reduction in inequality to a large extent due to the smaller differences between groups and because of the lower contribution of the energy intensity factor the importance of the gdp per capita factor increases and becomes the main explanatory factor however within the different groups of countries the carbonization index appears to be the most relevant factor in explaining inequalities the policy implications of the results are discussed

does education raise productivity or just reflect it education has an important effect on wages but it not clear whether this is because education raises productivity or because education is simply a signal of ability we implement a number of existing tests for discriminating between these two explanations and find that they do not support the signalling hypothesis however we have severe reservations about these results and we propose an alternative test based on changes in education incentives caused by changes in the minimum school leaving age in the 1970s using this idea we find that uk data appear to strongly support the human capital explanation an important issue in the economics of education is that an individual s education has an effect on wages paid in the labour market for example blundell et al 2003 uses detailed education and subsequent earnings information for a cohort of male individuals born in 1958 to estimate that the returns to a uk degree typically of 3 year duration relative to graduating from high school at 18 with 2 a level qualifications a necessary but not sufficient condition for admission to university is a 24 wage premium human capital explanations pioneered by becker 1962 and schultz 1963 suggest that the correlation between education and wages is due to education enhancing productivity however earnings may rise in response to education not because of any effect on productivity but simply because education may act as a signal of productivity employers believing that education is correlated with productivity will screen workers for their education and pay higher wages to the more educated the employers beliefs will be confirmed by their experience if it is the case that high productivity individuals signal this by choosing high levels of education it will be optimal for individuals to behave in this way if the cost of acquiring education is less for high productivity individuals than it is for low productivity individuals thus under reasonable conditions the market will be characterised by a separating equilibrium where higher productivity individuals choose higher levels of education than lower productivity workers and earn correspondingly higher wages the theory is largely due to spence 1973 1979 and the subsequent empirical literature was reviewed by groot and oosterbeek 1994 riley 2001 provides an excellent modern survey chevalier harmon and walker are fellows of iza in bonn and are affiliated with the institute for the study of social change issc in dublin this paper is part of the issc policy evaluation programme chevalier and walker are also affiliated with the centre for the economics of education at the london school of economics lse the support of all of these bodies for facilitating our collaboration is acknowledged harmon is grateful to university college london for their hospitality during his nuffield foundation new career development fellowship in the social sciences comments from steve machin and three anonymous referees greatly improved the exposition of this paper we are also grateful to richard blundell and to seminar participants at the lse and the tinbergen institute in amsterdam for their comments and to vincent o sullivan for excellent research assistance the usual disclaimer applies

information multiprice search and cost of living index theory this paper derives the cost of living index of an individual who faces imperfect and costly information about prices traditional cost of living in dexes assume that the consumer passively accepts prices as given the authors derive a multiprice search model in which the consumer choos es the search strategy that minimizes the expected cost of buying a g iven level of utility in contrast to existing search models the mod el allows the consumer to change the allocation of expenditures among goods as information about prices changes and enables them to constr uct a cost of living index for an agent who searches across distribut ions of offer prices unlike traditional cost of living measures that ignore search behavior the searcher s cost of living index depends on search costs copyright 1987 by university of chicago press

a global compass for the great divergence emissions vs production centers of gravity 1820 2008 we construct the world s centres of gravity for human population gdp and co2 emissions by taking the best out of five recognised data sources covering the last two centuries on the basis of a novel distortion free representation of these centres of gravity we find a radical western shift of gdp and co2 emission centres in the nineteenth century in sharp contrast with the stability of the demographic centre of gravity both gdp and emissions trends are reversed in the first half of the twentieth century after world war i for co2 emissions after world war ii for gdp since then both centres are moving eastward at an accelerating speed these patterns are perfectly consistent with the lead of western countries starting the industrial revolution the gradual replacement of coal by oil and gas as alternative sources of energy and the progressive catch up of asian countries in the recent past