the effect of distance and road quality on food collection marketing margins and traders wages evidence from the former zaire abstract food price variation is typical of the food economies of many low income countries the presence or absence of road infrastructure is perceived to be one of the main determinants of this variation this analysis shows that in the case of the former zaire food price dispersion is significant both across products and across regions it is demonstrated that transportation costs explain most of the differences in food prices between producer regions and that road quality is an important factor in the transportation costs however food prices decrease relatively faster than transportation costs increase and traders wages are higher on bad roads

wage curve analyses of establishment data from western germany using the iab establishment panel which is representative for western germany the authors find that establishment level wages reacted to variations in the regional unemployment rate the elasticity of wages with respect to unemployment they estimate was about 0 1 this responsiveness of the wage to regional variation is close to estimates found by other researchers using individual rather than establishment data for other countries and contradicts the view that germany s labor market largely due to the nature of collective bargaining in that country is relatively inflexible possible explanations for this finding are that the negotiated wage is treated like a minimum wage with firms deviating from it in order to increase work effort bargaining between firms and individual workers or between firms and works councils produces wage differences or collective agreements do not restrict firms to the extent that is often assumed

the leontief paradox continued or resolved cited in giancarlo gandolfo s textbook international economics i the pure theory of international trade springer verlag 1995 abstract currently unavailable this abstract was borrowed from another version of this item

the last word on the wage curve abstract since 1990 there has been extensive international research on the responsiveness of wages of individuals to changing local labour market conditions for many countries an inverse relationship between wages and local unemployment rates has been found in their book the wage curve blanchflower and oswald argued that the unemployment elasticity of pay is around 0 1 in most countries in a 1995 literature survey card referred to this striking empirical regularity as being close to an empirical law of economics nonetheless reported elasticities do vary even excluding outliers between about 0 5 and 0 1 there is also considerable heterogeneity among wage curve studies in terms of data and model specification this paper carries out meta analytic techniques on a sample of 208 elasticities derived from the literature to uncover the reasons for the differences in empirical results across studies several causes of variation are identified there is also clear evidence of downward publication bias in addition many reported t statistics are biased upwards due to the use of aggregate unemployment rates a maximum likelihood method and a trimming procedure are used to correct for these biases both methods give similar results for our sample an unbiased estimate of the wage curve elasticity at the means of study characteristics is about 0 07

trade policies and welfare in a harris todaro economy in many developing countries rising unemployment is often attributed to increases in foreign imports triggered by declining foreign prices of imports to correct the chronic unemployment problem some developing countries chose an import substitution strategy by shutting off imports whereas others adopted an outward oriented policy by promoting exports north american free trade agreement nafta was favored by mexico but opposed by organized labor in this country because it was feared that nafta may increase unemployment in the u s which of these policies is more effective in reducing unemployment and raising domestic income protection has been ardently supported as a practical cure for unemployment in chile and argentina and many other ldcs in latin america similarly india adopted import substitution strategies behind high protection and a considerable bias against exports 1 the literature has also justified the use of tariffs for small countries under uncertainty and unemployment 10 9 but in general protection distorts the trade pattern and magnify the extent of the leontief paradox by limiting imports of capital intensive products into these developing countries that suffer from high labor unemployment 7 in the literature there have been two types of models that analyze trade problems in the presence of unemployment the generalized unemployment models have been developed by brecher 5 6 and batra and seth 3 2 in these models wage rigidity is ubiquitous and unemployment exists in all sectors and they are appropriate to analyze the impact of trade policies on unemployment in developed economies the harris todaro ht hereafter model 13 on the other hand assumes sector specific wage rigidity and permits unemployment only in the urban sector thus the ht model is appropriate for investigating the impacts of trade policies of ldcs that suffer

informal insurance arrangements with limited commitment theory and evidence from village economies recent work on consumption allocations in village economies finds that idiosyncratic variation in consumption is systematically related to idiosyncratic variation in income thus rejecting the hypothesis of full risk pooling we attempt to explain these observations by adding limited commitment as an impediment to risk pooling we provide a general dynamic model and completely characterise efficient informal insurance arrangements constrained by limited commitment and test the model using data from three indian villages we find that the model can fully explain the dynamic response of consumption to income but that it fails to explain the distribution of consumption across households

on measuring the benefits of lower transport costs despite large amounts invested in rural roads in developing countries little is known about their benefits this paper derives an expression for the willingness to pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project estimation is based on novel cross sectional data collected in a small region of madagascar with enormous yet plausibly exogenous variation in transport cost a road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households those facing transport costs of about usd 75 ton by nearly half mostly by raising non farm earnings this benefit estimate is contrasted to one based on a hedonic approach

are schooling and roads complementary evidence from income dynamics in rural indonesia summary we examine the impact of spatial connectivity on household income growth and non agriculture labor supply in indonesia by combining household panel data and village census data during the period of 1995 2007 our empirical results show that the impacts of improved local road quality on income growth and the transition to non agricultural labor markets depend on household education and distance to economic centers in particular post primary education significantly increases the benefit from the improvement of local spatial connectivity in remote areas promoting labor transition to non agricultural sectors education and local road quality are complementary mutually increasing non agricultural labor supply and income in remote areas in contrast the initial landholding size does not affect the benefit from improved road quality

pattern of trade between underemployed economies in this paper the authors analyze the factors determining the pattern of trade between underemployed economies they find among other things that a low wage land abundant country exports the land using labor intensive product to a high wage capital abundant country the authors also find conditions under which a high wage capital rich country may export the labor intensive product the leonteif paradox copyright 1990 by the london school of economics and political science

urban rural structural adjustment urban unemployment with traded and non traded goods abstract this paper extends the harris todaro model to include non traded goods and to analyze structural adjustment in ldcs we assume that the urban region produces two goods a manufactured good and an urban non traded good and the rural region also produces two commodities an agricultural and a rural non traded good our results reveal an asymmetry in the behaviour of the urban and rural regions in response to parametric changes or external shocks the effects of such changes on the endogenous urban variables are completely determinate however the responses of the endogenous variables in the rural region are ambiguous a deterioration in the terms of trade increases the relative price of the urban non traded good and increases its output at the expense of the urban traded good thus structural adjustment in urban and rural areas may be in opposite directions non regional models of structural adjustment ignore the possibility of having opposite effects in the urban and rural areas our results also provide a generalization of the dutch disease type phenomenon to a model with migration and unemployment

long term impacts of global food crisis on production decisions evidence from farm investments in indonesia did the rise in food prices have a long term impact on agricultural production using household level panel data from seven provinces of indonesia this paper finds that the price shock created a forward looking incentive to invest which can dynamically enhance productivity in agriculture it also finds that the impact of the price shock on investment behavior differs by initial wealth in response to price increases wealthy farmers invested more in productive assets while poor farmers increased their financial savings as well as consumption price spikes relax liquidity constraints which increases investments among the richer while do so savings and consumptions among the poor possibly leading to diverging income inequality in the long run

wage flexibility evidence from five eu countries based on the wage curve abstract this paper examines wage flexibility in five eu countries by estimating their respective wage curves using information provided by a homogeneous panel data set the echp we are able to demonstrate that contrary to the habitual finding the wage elasticity to unemployment in fact varies across countries

is the wage curve formal or informal evidence for colombia the objective of this paper is to analyse the existence or not of a wage curve in colombia paying special attention to the differences between formal and informal workers an issue that has been systematically ignored in the age curve literature the obtained results using microdata from the colombian continuous household survey chs between 2002 and 2006 show the existence of a wage curve with a negative slope for the colombian economy using information on metropolitan areas the estimates of the elasticity of individual wages to local unemployment rates was 0 07 a value that is very close to those obtained for other countries however the disaggregation of statistical information for formal and informal workers has shown significant differences among both groups of workers in particular for the less protected groups of the labour market informal workers both men and women a high negatively sloped wage curve was found this result is consistent with the conclusions from efficiency wage theoretical models and should be taken into account when analysing the functioning of regiona labour markets in developing countries

consumption and income seasonality in thailand many households in developing countries rely on seasonal agriculture for their incomes this paper investigates whether household consumption expenditure tracks income across seasons using data from thailand i contrast the seasonal consumption patterns of households with different seasonal income patterns and estimate the responsiveness of seasonal consumption to seasonal income i find little evidence that consumption tracks income over the course of the year the findings suggest that observed seasonal consumption patterns are the result of seasonal variations in preferences or prices common to all households rather than an inability of households to use savings behavior to smooth consumption

wage subsidies and distortionary taxes in a mobile capital harris todaro model in prescribing policy to eliminate or mitigate the effects of labour market distortions some form of wage subsidy is usually among the highest ranking options rarely is the source of revenues for these subsidies treated as an explicit issue this omission has special significance for the harris todaro h t model of the labour market since the policy most frequently recommended whether capital is sector specific or intersectorally mobile is an across the board wage subsidy 2 this effectively eliminates the possibility of taxing one subset of sectors rather than subsidizing its complement an option often favoured by those theorists who concern themselves with revenue considerations the next section of this paper sets forth the model of a small open h t economy with mobile capital that is the basis for this analysis section ii re examines three wage subsidies on manufacturing wages on agricultural wages or on both sectors assuming that resources for the subsidies are raised by an across the board tax on profits this is in the tradition of cordenfindlay and we replicate their results though stating them in more precise form so that we might have a standard for later comparison the subsequent sections examine the effects of these subsidies on unemployment and resource allocation if they are financed by a tax on profits in the manufacturing sector section iii or by import tariffs section iv owing to the second best nature of the h t model it will be demonstrated that taxes normally considered distortionary in their own right can be superior to an across the board tax if revenues are constrained and can be very useful instruments if it is the variety of policy tools that is limited section v concludes with a ranking of the various subsidy tax packages

urban unemployment terms of trade and welfare it is generally accepted prior to 1970 that a deterioration in the terms of trade results in lower social welfare in particular prebisch 11 and singer 12 have expressed the basic concern with the terms of trade the secular deterioration in the terms of trade facing less developed countries ldcs leads to income and welfare losses batra and pattanaik 2 nevertheless shows that a deterioration in the terms of trade in the presence of an intersectoral wage differential may raise welfare bhagwati and brecher 5 demonstrate that a decline in the terms of trade can improve real income if capital is mobile internationally recently anam 1 obtains a similarly interesting result for an economy engaging in quota induced rent seeking activities it is notable that none of these studies considers a key feature inherent in a typical ldc namely the existence of substantial urban unemployment thus the purpose of this paper is to examine the welfare impacts of terms of trade losses for ldcs plagued by pervasive urban unemployment the well known harris todaro 7 framework of sector specific unemployment is utilized in addition we derive and contrast various welfare effects of a change in the terms of trade when a ldc pursues alternative import substitution policies i e tariffs vs quotas over the short vs the long run the paper is organized as follows section ii develops the model and provides the transformation relation between urban and rural outputs section iii examines the welfare effects of an exogenous shift in the terms of trade for a tariff or quota distorted economy in the short run as well as in the long run finally concluding remarks are set out in section iv

wage curve evidence from panel data abstract we examine the us wage curve using longitudinal micro data results support the wage curve but are sensitive to inclusion of regional and or personal fixed effects we find that hourly wages are less responsive to local unemployment than annual earnings

the wage curve a review in the wage qurve david g blancflower and andrew j oswald argue that there is a fundamental negative relation between wages and the unemployment rate in a worker s local labor market blancflower and oswald use large scale micro data sets to estimate this relation for the united states britain and 10 other countries i review their empirical methods and findings and provide some further evidence on the nature of the wage curve relationship in the united states i conclude that there is a strong statistical correlation between rates of pay and local unemployment although the interpretation of this correlation remains unresolved this abstract was borrowed from another version of this item

the wage curve revisited estimates from a uk panel abstract panel data from the uk are used to estimate a wage curve allowing simultaneously for time individual and spatial effects thereby correcting for grouped and cross classified data bias estimates of the unemployment elasticity of the wage are volatile and imprecise

foreign aid economic structure and dependence abstract an inflow of foreign capital leads to structural changes in the economy by lowering the relative price of tradable to non tradable goods it induces a decline of the relative share of tradables in the country s production the effect on consumption shares is less obvious since price and income effects may tend to be offsetting the existence of foreign aid also establishes a dependence of the economy on the outside world estimates of the degree of such dependence through the use of national accounts aggregates would be biased by the afore mentioned effect on relative prices hence specifically estimates of time tends based on the use of current prices may lead to different conclusions from those which employ constant prices for comparison the inferences of this paper are derived in a simple two sector small country model the concreteness and probable relevance of the main propositions are then demonstrated by empirical illustrations

job competition and the wage curve longhi s job competition and the wage curve regional studies the wage curve literature consistently finds a negative relationship between regional unemployment rates and regional wages the most widely accepted theoretical explanations interpret the unemployment rate as a measure of job competition this paper proposes new ways of measuring job competition alternative to the unemployment rate and finds that the negative relationship still holds when job competition is measured following the job search literature while for men the wage impact of the theoretically based measures of job competition is rather similar to the wage impact of the unemployment rate for women the difference is substantial longhi s la competition pour l emploi et la courbe des salaires regional studies la documentation sur la courbe des salaires affirme systematiquement que le taux de chomage regional est en correlation faible avec les salaires regionaux les explications theoriques les plus recues considerent le taux de

urban unemployment and the gains from trade a welfare ranking of alternative commercial policies is constructed for the mobile capital harris todaro economy it is sh own that despite the presence of unemployment most noninterventioni st policies suggested by the competitive model of gains from trade ca rry over to the mobile capital harris todaro economy yet in contradi ction to the competitive model it is shown that all forms of trade i ntervention are not detrimental to welfare only those that reduce th e volume of trade are the export promotion policies so copiously fol lowed by developing countries are vindicated but their import substi tution policies are shown to be without justification copyright 1987 by the review of economic studies limited

anatomy of a crisis the causes and consequences of surging food prices although the potential causes and consequences of recent rising international food prices have attracted widespread attention many existing appraisals are superficial and or piecemeal this article attempts to provide a more comprehensive review of these issues based on the best and most recent research as well as on fresh theoretical and empirical analysis we first analyze the causes of the current crisis by considering how well standard explanations hold up against relevant economic theory and important stylized facts some explanations turn out to hold up much better than others especially rising oil prices the depreciation of the u s dollar biofuels demand and some commodity specific explanations we then provide an appraisal of the likely macro and microeconomic impacts of the crisis on developing countries we observe a large gap between macro and micro factors which when identifying the most vulnerable countries often point in different directions we conclude with a brief discussion of what ought to be learned from this crisis

historic paths and future expectations the macroeconomic impacts of the offshore wind technologies in the uk abstract offshore wind power osw plays a key role within the uk strategy for a transition towards a low carbon economy offering vast potential for establishing a high tech manufacturing industry previous experiences in the onshore sector owp suggest the uk might fail in fully capturing these macroeconomic benefits in this work we investigate the history of uk renewable policies comparing its national strategy to those of other major osw export countries through the use of a numerical general equilibrium model we quantify the macroeconomic impacts under three scenarios a baseline which relies on previous estimates and foresee limited local content a contamination scenario where the uk content reaches the same levels of owp and a non myopic scenario where investors expect governmental support to decrease or disappear replicating a common path of past renewable policies we identify the uk as a fdi oriented country our results suggest that increasing the share of locally sourced capital goods in osp to owp level could generate larger income and employment effects in the uk economy we find that under forward looking investors the economic benefits are significantly lower than the case of myopic agents our results show an inherent conflict with stated purposes of uk policy for osw

wage dynamics reconciling theory and evidence u s macroeconomic evidence shows a negative relation between the rate of change of wages and unemployment in contrast most theories of wage determination imply a negative relation between the level of wages and unemployment in this paper we ask whether one can reconcile the empirical evidence with theoretical wage relations we reach three main conclusions first we derive the condition under which the two can indeed be reconciled we show the constraints that such a condition imposes on the determinants of workers reservation wages as well as the relative importance of workers outside options as opposed to match specific productivity in wage determination second in the light of this condition we reinterpret the presence of an error correction term in macroeconomic wage relations for most european economies but not in the united states third we show that whether this condition holds or not has important implications for the effects of a number of variables from real interest rates to oil prices to payroll taxes on the natural rate of unemployment this abstract was borrowed from another version of this item

disaggregated wage curves in the united states evidence from panel data of young workers the paper presents wage curve results disaggregated over time by individual characteristics occupations industries and regions in the united states using a panel data set of young workers the results suggest that instead of a strong aggregate wage curve there are a number of different wage curves over time and for different worker groups the slope of the aggregate wage curve varies over time with the strongest wage curves in the late 1980s wage curves exist for most labour market groups the wages of the least educated hispanics those in relatively low skill occupations or service industries are most sensitive to changes in unemployment wages of government workers and those in the mining industry increase with unemployment finally wage curves are steepest in the western states

the german wage curve evidence from the iab employment sample abstract this paper examines the german wage curve using the institut fur arbeitsmarkt und berufsforschung iab employment sample over the period 1981 1990 a random sample of 6590 employees covering 142 labor market regions over a ten year period is considered the total number of observations is 40 852 taking into account the endogeneity of unemployment as well as controlling for region and time effects this paper finds support for the wage curve in germany the overall unemployment elasticity estimate is 0 07 and is higher for younger workers than older workers the wages of less qualified workers are more responsive to local unemployment rates than the wages of more qualified workers also the wages of men are slightly more responsive to local unemployment rates than the wages of women ignoring endogeneity of the local unemployment rate yields results in favor of the wage curve only for younger and less qualified workers accounting for endogeneity of the unemployment rate yields evidence in favor of the wage curve across all types of workers

the east german wage curve 1993 1998 abstract this paper examines the east german wage curve using the employment statistics of the federal employment services of germany bundesanstalt fur arbeit over the period 1993 1998 the six waves of this panel include a total of 32 188 684 individual employment spells the statistics comprise the entire population of people gainfully employed and included in the social insurance system these are classified into 114 administrative districts landkreise taking into account the endogeneity of unemployment as well as controlling for region and time effects this paper finds support for the wage curve in east germany the overall unemployment elasticity estimate is 0 15 and is higher for female workers than male workers

risks and spatial connectivity evidence from food price crisis in rural indonesia abstract this paper examines the impact of the agricultural commodity price surge globally experienced in 2007 2008 and thereafter on income growth of agricultural producers and non producers using recent panel data from indonesia first during this period producers experienced significantly higher earnings and total income growth than non producers narrowing their income gap second the negative effect on non producers real incomes was smaller in spatially well connected areas where to mitigate the impact private transfers such as remittances as well as employment incomes increased among non producers in contrast government programs did not effectively cushion the income shock therefore informal insurance was more effective than formal government funded social protection programs to mitigate the crisis shock

unionized contracts with fixed wage rates and state contingent employment levels a union sets a state independent wage the firm sets employment along the state contingent demand for labor curve the union s maximand is the welfare of its cu rrent members however it sets a wage at which outsiders are recruit ed in good states so as to protect insiders employment prospects in bad states if these newly recruited workers join the union there m ay exist an equilibrium membership comparative statics results are o btained for government policy measures copyright 1988 by the london school of economics and political science

sector specific minimum wages economic growth and some policy implications abstract economic growth is introduced in the urban unemployment model of harris and todaro it is shown that in the steady state the optimal savings ratio is greater than the golden rule savings ratio under full employment also the optimal proportion of total investment allocated to the urban sector is not necessarily higher than the optimal proportion under full employment

optimal trade policies for a small open economoy this paper investigates optimal trade policies for a small open economy with unemployment when factor prices are rigid random foreign prices result in random unemployment of resources the ranking of second best policies is investigated if the marginal propensity to consume the importable is positive and nonincreasing in income the optimal composite tariff dominates the optimal target price which in turn dominates the optimal quota copyright 1993 by the london school of economics and political science

labor market slack and the wage curve abstract the unemployment rate might not serve as an accurate measure of labor market slack when analysing countries with large scale labor market programs we replicate and extend the wage curve for east germany the results are in favor of the incorporation of such policy measures