an empirical analysis of life cycle fertility and female labor supply this paper examines us household fertility and female labor supply over the life cycle using data from the panel study of income dynamics the authors investigate how maternal time inputs and market expenditures on offspring as well as the benefits they yield their parents vary with ages of offspring and influence female labor supply and contraceptive behavior the econometric framework combines a female labor supply model and a contraceptive choice index function it also accounts for the fact that conceptions are not perfectly controllable events using longitudinal data on married couples the authors estimate these equations and test alternative specifications of the technologies governing child care the findings suggest that while parents cannot perfectly control conceptions variations in child care costs do affect life cycle spacing of births furthermore the results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level authors modified

selection investment and women s relative wages over time in theory growing wage inequality within gender should cause women to invest more in their market productivity and should differentially pull able women into the workforce our paper uses heckman s two step estimator and identification at infinity on repeated current population survey cross sections to calculate relative wage series for women since 1970 that hold constant the composition of skills we find that selection into the female full time full year workforce shifted from negative in the 1970s to positive in the 1990s and that the majority of the apparent narrowing of the gender wage gap reflects changes in female workforce composition we find the same types of composition changes by measuring husbands wages and national longitudinal survey iq data as proxies for unobserved skills our findings help to explain why growing wage equality between genders coincided with growing inequality within gender

automation and labor force participation in advanced economies macro and micro evidence abstract technological advances raise productivity and growth but are also likely to reshape labor markets we examine the impact of automation on aggregate labor force participation rates and individuals attachment to the workforce in advanced economies cross country analysis which leverages the variation in the routinizability of occupations and occupational composition points to significant negative effects of automation on the participation rates of prime age men and women individual level analysis confirms that workers previously employed in routinizable occupations are more likely to drop out of the labor force encouragingly higher spending on active labor market programs and education are however associated with smaller negative effects of technological change on participation

interrupted work careers depreciation and restoration of human capital the quantitative effects and even the existence of a human capital depreciation phenomenon have been a subject of controversy in the recent literature prior work however was largely cross sectional and the longitudinal dimension if any was retrospective using longitudinal panel data on married women in nls we have now established that real wages at reentry are indeed lower than at the point of labor force withdrawal and the decline in wages is greater the longer the interruption another striking finding is a relatively rapid growth in wages after the return to work this rapid growth appears to reflect the restoration or repair of previously eroded human capital the phenomenon of depreciation and restoration is also visible in data for immigrants to the united states however while immigrants eventually catch up with and often surpass natives returnees from the nonmarket do not fully restore their earnings potential

affirmative action or just discrimination a study on the endogenous emergence of quotas affirmative action rules are often implemented to promote women on labor markets little is known however about how and whether such rules emerge endogenously in groups of potentially affected subjects we experimentally investigate whether subjects vote for affirmative action rules against or abstain if approved by the vote a quota rule is implemented that favors women in one treatment but members of an artificially created group based on random color assignment in another treatment we find that quota rules based on gender are implemented frequently and do not affect the performance of men and women in a contest quota rules based on an arbitrary criterion however are less often approved and lead to strong individual reactions of advantaged and disadvantaged group members and to efficiency losses these results show that the effects of affirmative action policies largely depend on whether these policies are viewed favorably within the affected groups

a quantitative theory of the gender gap in wages abstract this paper measures how much of the gender wage gap over the life cycle is due to the fact that working hours are lower for women than for men we build a quantitative theory of fertility labor supply and human capital accumulation decisions to measure gender differences in human capital investments over the life cycle we assume that there are no gender differences in the human capital technology and calibrate this technology using wage age profiles of men the calibration of females assumes that children involves a forced reduction in hours of work that falls on females rather than on males and that there is an exogenous gender gap in hours of work we find that our theory accounts for all of the increase in the gender wage gap over the life cycle in the nlsy79 data the impact of children on the labor supply of females accounts for 56 and 45 of the increase in the gender wage gap over the life cycle among non college and college females while the rest is due to the exogenous gender differences in hours of work

homework in labor economics household production and intertemporal substitution abstract we argue that estimates of intertemporal substitution elasticities obtained from standard life cycle models are subject to a downward bias because they neglect changes in work done at home over the life cycle we extend the standard life cycle model to include home production and estimate it using data from three time use surveys we find that the downward bias is large

social security life insurance and annuities for families abstract in this paper we ask whether an aspect of social security namely its role as a provider of insurance against uncertain life spans is welfare enhancing to this end we use an olg model where agents have a bequest motive and differ in sex and marital status and where families are formed and destroyed and their characteristics evolve exogenously according to u s demographic patterns of marriage divorce fertility and mortality we compare the implications of social security under a variety of market structures that differ in the extent to which life insurance and annuities are available we find that social security is a bad idea in economies where the private sector provides annuities and life insurance it is a bad idea for the standard reason that it distorts the intertemporal margin by lowering the capital stock in the absence of such securities social security is still a very bad idea only marginally less so compared with economies with annuities and life insurance we also explore these issues in a world where people live longer and we find no differences in our answers as a by product of our analysis we find that the existence of life insurance opportunities for people is important in welfare terms while that of annuities is not

unforeseen contingencies and incomplete contracts we scrutinize the conceptual framework commonly used in the incomplete contract literature this literature usually assumes that contractual incompleteness is due to the transaction costs of describing or of even foreseeing the possible states of nature in advance we argue however that such transaction costs need not interfere with optimal contracting i e transaction costs need not be relevant provided that agents can probabilistically forecast their possible future payoffs even if other aspects of the state of the nature cannot be forecast in other words all that is required for optimality is that agents be able to perform dynamic programming an assumption always invoked by the incomplete contract literature the foregoing optimality result holds very generally provided that parties can commit themselves not to renegotiate moreover we point out that renegotiation may be hard to reconcile with a framework that otherwise presumes perfect rationality however even if renegotiation is allowed the result still remains valid provided that parties are risk averse

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

measuring the effects of regulation with stock price data this article examines the usefulness of stock returns in measuring the effects of regulation when the dates on which market expectations change are not known and standard sources e g the wall street journal are used to choose announcement dates twenty major changes in regulatory constraint since 1887 are considered tests using either monthly or daily data are found to have surprisingly little ability to detect the effects of regulation the evidence shows that formal regulatory announcements are generally anticipated in cases where it is unclear when expectations change

why are u s women decreasing their labor force participation if their wages are rising given the traditional interpretation of women s labor force participation rate lfpr trends as movements along a positively sloped labor supply curve it is surprising that the recent downward trend in u s women s lfpr has occurred over a period when women s real wages were commonly believed to be rising i find that almost two thirds of the decline since 2000 is attributable to aging of the adult female population the remainder due to declining labor force participation for women under 55 becomes less puzzling in light of my evidence that the wage education locus faced by women actually may have worsened since 2000 jel j21 j31 j82

taxation and household labor supply we evaluate reforms to the u s tax system in a life cycle setup with heterogeneous married and single households and with an operative extensive margin in labor supply we restrict our model with observations on gender and skill premia labor force participation of married females across skill groups children and the structure of marital sorting we concentrate on two revenue neutral tax reforms a proportional income tax and a reform in which married individuals flle taxes separately separate flling our flndings indicate that tax reforms are accompanied by large increases in labor supply that difier across demographic groups with the bulk of the increase coming from married females under a proportional income tax reform married females account for more than 50 of the changes in hours across steady states while under separate flling reform married females account for all the change in hours

micro and macro elasticities in a life cycle model with taxes we build a life cycle model of labor supply that incorporates changes along both the intensive and extensive margin and use it to assess the consequences of changes in tax and transfer policies on equilibrium hours of work we find that changes in taxes have large aggregate effects on hours of work moreover we find that there is no inconsistency between this result and the empirical finding of small labor elasticities for prime age workers in our model micro and macro elasticities are effectively unrelated our model is also consistent with other cross country patterns

a new test of the relationship between regulatory change in financial markets and the stability of beta risk of depository institutions the us economy experienced major regulatory changes in the banking and finance industry with the passage of five major acts over the period 1980 to 1991 this has generated an extensive literature investigating the effects of these changes on the us banking industry in particular this body of research has examined the share market reaction to regulatory changes as well as their impact on the risk return market value and profitability of banking industry stocks generally it has been found that the regulatory changes have had a substantial impact although the effect has not been uniform across all depository institutions this paper extends this literature by analysing the stability of a sample of eighteen us banking industry stock betas across five periods a pre regulatory change period a monetary experiment period a deregulation period a reregulation period and a post regulatory change period based on an analysis of weekly returns we find that the level of bank risk has increased further we also find a tendency towards greater beta instability in both the monetary experiment and deregulation samples the degree of beta instability is lowest in the pre regulatory change and post regulatory change samples overall the monetary experiment and regulatory change coincided with an increased tendency towards beta instability we also compare our results to a randomly selected control sample of non banks and find some more general effects of regulatory change on individual stock betas

quantifying the disincentive effects of joint taxation on married women s labor supply we quantify the disincentive effects of elements of joint taxation in the labor income tax codes of 17 european countries and the us we analyze the extent to which hours worked of married men and women would change if each country switched to a system of separate taxation of married couples in this hypothetical tax reform we keep the average tax burden of married households constant with the exception of four countries featuring already a system of separate taxation the model predicts that married women s hours worked increase on average by 115 hours or 10 5 percent through this reform

long term changes in married couples labor supply and taxes evidence from the us and europe since the 1980s abstract we document the time series of employment rates and hours worked per employed by married couples in the us and seven european countries belgium france germany italy the netherlands portugal and the uk from the early 1980s through 2016 relying on a model of joint household labor supply decisions we quantitatively analyze the role of non linear labor income taxes for explaining the evolution of hours worked of married couples over time using as inputs the full country and year specific statutory labor income tax codes we further evaluate the role of consumption taxes gender and educational wage premia and the educational composition the model is quite successful in replicating the time series behavior of hours worked per employed married woman with labor income taxes being the key driving force it does however capture only part of the secular increase in married women s employment rates in the 1980s and early 1990s suggesting an important role for factors not considered in this paper an independent and important contribution of the paper is that we make the non linear tax codes used as an input into the analysis available as a user friendly and easily integrable set of matlab codes

unintended consequences of maternity leave legislation the case of colombia abstract we estimate the impact on female labor outcomes of the extension in maternity leave period from 12 to 14 weeks an amendment to the colombian labor law in 2011 to identify this impact we compare labor market outcomes of different groups of individuals with women of child bearing age first we compared two groups of women with different fertility rates low elasticity of substitution finding that as result of the extension women in the high fertility age group experience an increase in inactivity informality and self employment when comparing high fertility age women with men in the same age group high elasticity of substitution we find that the extension increases the probability of unemployment informality and self employment and decreases wages of women compared with men

family labor supply and aggregate fluctuations abstract this paper considers an economy which is populated by a continuum of identical families consisting of two members the two members have different productivities and the family faces a fixed utility cost if both members supply labor simultaneously although both family members have the same preferences they display very different elasticities of labor supply a real business cycle model is calibrated and it is seen that this cross sectional heterogeneity results in interesting forms of aggregation bias

the market valuation effects of the financial institutions reform recovery and enforcement act of 1989 abstract this paper evaluates the stock market effects of events leading to the passage of the financial institutions reforms recovery and enforcement act of 1989 the evidence suggests that the signing of the act by president bush produced positive abnormal returns for both banks and s ls and that the addition of tougher capital standards produced positive returns for s ls in addition the act increased the risk of both banks and s ls

german income taxation and the timing of marriage i investigate how the german income tax code affects the timing of marriages the german income tax code allows married couples to benefit from full income splitting relative to unmarried couples

effects of tax reform on labor supply investment and saving the u s tax system received two major overhauls during the 1980s the tax cuts of 1981 and the tax reform act of 1986 supporters of both reforms argued that major changes in tax policy could boost saving investment labor supply and entrepreneurship eventually it was argued such changes could reverse the slowdown in economic growth that began in the early 1970s and spur improvements in american living standards the aim of this paper is to assess whether the goals of increased labor supply and capital formation were achieved

cooperative investments and the value of contracting recent articles have shown that contracts can support the efficient outcome for bilateral trade even in the face of specific investments and incomplete contracting these studies typically considered selfish investments that benefit the investor e g the seller s investment reduces her production costs the authors find very different results for cooperative investments that directly benefit the investor s partner e g the seller s investment improves the buyer s value of the good most importantly if committing not to renegotiate the contract is impossible then contracting has no value i e the parties cannot do better than to abandon contracting altogether in favor of ex post negotiation

ex ante efficient mechanism with private entry costs this paper studies ex ante efficient resource allocation mechanism in an environment where agents endowed with their private values must incur private entry costs to participate due to the nature of this bidimensional screening problem and the difficulty in fully characterizing all implementable endogenous entries the domain of the related social planner s problem that is essential for establishing the existence of efficient mechanism needs to be carefully designed we find that a second price auction among the entrants with a reserve price equal to the seller s valuation is ex ante efficient and any ex ante efficient mechanism must be ex post efficient jel d44 d61 d82

the family gap for young women in the united states and britain can maternity leave make a difference in the united states and britain there is a family gap between the wages of mothers and other women differential returns to marital and parental status explain 40 50 of the gender gap another 30 40 is explained by women s lower levels of work experience and lower returns to experience taking advantage of quasi experiments in job protected maternity leave in the united states and britain this article finds that women who had leave coverage and returned to work after childbirth received a wage premium that offset the negative wage effects of children

stock market reactions to the depository institutions deregulation and monetary control act of 1980 abstract this paper evaluates the effects of events leading to the passage of the depository institutions deregulation and monetary control act of 1980 the evidence suggests that the initial proposal of the act by then president carter and the final passage of the act by the house of representatives produced positive abnormal returns to stockholders of large commercial banks stockholders of small commercial banks and small savings and loans on the other hand generally experienced negative abnormal returns furthermore when hopes of passage of the act faced significant negative positive abnormal returns were experienced by stockholders of large small commercial banks

ex post renegotiation proof mechanism design we study what kind of equilibria of which mechanisms are ex post renegotiation proof eprp i e robust against the possibility of ex post renegotiation under a variety of renegotiation procedures and which social choice functions are eprp implementable in complete information environments with two agents only budget balanced groves allocations are eprp implementable while with three or more agents all ex post efficient allocations are in environments with independent private values essentially only the budget balanced groves in expectations allocations are eprp implementable while with three or more agents and correlated beliefs all ex post efficient allocations are

labor supply and taxes a survey i survey the male and female labor supply literatures focusing on implications for effects of wages and taxes for males i describe and contrast results from three basic types of model static models especially those that account for nonlinear taxes life cycle models with savings and life cycle models with both savings and human capital for women more important distinctions are whether models include fixed costs of work and whether they treat demographics like fertility and marriage and human capital as exogenous or endogenous the literature is characterized by considerable controversy over the responsiveness of labor supply to changes in wages and taxes at least for males it is fair to say that most economists believe labor supply elasticities are small but a sizeable minority of studies that i examine obtain large values hence there is no clear consensus on this point in fact a simple average of hicks elasticities across all the studies i examine is 0 30 several simulation studies have shown that such a value is large enough to generate large welfare costs of income taxation for males i conclude that two factors drive many of the differences in results across studies one factor is use of direct vs ratio wage measures with studies that use the former tending to find larger elasticties another factor is the failure of most studies to account for human capital returns to work experience i argue that this may lead to downward bias in elasticity estimates in a model that includes human capital i show how even modest elasticities as conventionally measured can be consistent with large welfare costs of taxation

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

wage structure and gender earnings differentials an international comparison using microdata to analyse the gender pay gap in ten industrialized nations we focus on the role of wage structure the prices of labour market skills in influencing the gender gap we find wage structure enormously important in explaining why the us gender gap is higher than that in most other countries we conclude that the us gap would be similar to that in sweden and australia the countries with the smallest gaps if the united states had their levels of wage inequality this finding reflects the larger penalty in the united states for those with low skill levels or employed in low wage sectors 650 o 75 the united states was amoung the countries with the largest differ entials oecd ilo usbls this paper uses microdata to analyse inter national differences in the gender pay gap among a sample of ten industrialized nations we focus particularly on explaining the surprisingly low ranking of the united states in comparison with other industrialized countries an advan tage of an international perspective is that countries vary considerably with respect to governmental policies women s relative labour market qualifications and wage setting institutions such variability allows one to infer reasons for differences in the pay gap and by implication the impact of alternative govern ment policies empirical research on gender pay gaps has traditionally focused on the role of gender differences in qualifications and on differences in the treatment of otherwise equally qualified male and female workers i e labour market dis crimination analyses of trends over time in the gender differential within countries as well as inter country comparisons of gender earnings ratios have tended to emphasize these types of gender specific factors an innovative feature of our study is to focus on the role of wage structure as an additional factor influencing the gender gap to analyse the impact of wage structure we adapt a framework developed by juhn et al 1991 to analyse trends over time in race differentials in the united states our findings suggest that labour market institutions that affect overall wage inequality have an extremely impor tant effect on the gender earnings gap wage structure describes the array of prices set for various labour market skills measured and unmeasured and rents received for employment in par

dangerous flexibility retirement reforms reconsidered flexible retirement is supposed to increase labor supply of older workers without touching the third rail of pension politics the highly unpopular increase of the retirement age while this may have intuitive appeal this paper shows that it might be wishful thinking economic theory tells us that flexible retirement policies can have a zero or positive effect on labor force participation while the effect on hours worked can be positive or negative depending on the distribution of leisure preferences thus the overall effect is ex ante unclear empirical results from nine oecd countries show that the effect on labor force participation is ex post small and positive while the effect on hours worked is negative overall there is no evidence of the desired positive effect on total labor supply rather we see evidence of a dangerous decline in total labor supply we conclude that the flexibility reforms enacted so far have failed to increase old age labor supply and delineate several alternative options to achieve this aim

female labor supply why is the united states falling behind abstract in 1990 the us had the sixth highest female labor participation rate among 22 oecd countries by 2010 its rank had fallen to seventeenth we find that the expansion of family friendly p

an examination of the impact of the garn st germain depository institutions act of 1982 on commercial banks and savings and loans this paper evaluates the effects of events leading to the passage of the garn st germain depository institutions act of 1982 the evidence suggests that the call for reform by president reagan s housing commission and the senate passage of the bill produced positive abnormal returns to stockholders of large savings and loans and commercial banks stockholders of small s ls and banks on the other hand generally experienced negative abnormal returns furthermore when hopes of passage of the act faded significant negative positive abnormal returns were experienced by stockholders of large small s ls and banks this study examines the impact of the passage of the garn st germain depository institutions gsgdi act of 1982 on commercial bank and savings and loan stockholder returns the gsgdi act represents one of two major revisions of the financial system over the last twenty years the other being the depository institutions deregulation and monetary control act of 19801 the proposal for such a change reflected the growing inadequacy of the regulatory structure of financial institutions to adapt to rapid changes in technology shifting consumer demands for financial services and extremely volatile interest rates efforts to reform the financial system resulted in passage of the gsgdi act of 1982 which included provisions seeking to improve both the implementation of monetary policy and the degree of equity in the regulation of financial institutions such improvements were intended to reduce the operational and financial risk of financial institutions a central issue in the economics of regulation is whether regulatory actions benefit the economic agents they are intended to benefit a large body of literature exists which examines the economic effects of regulation much of this literature has utilized the concepts and methods of welfare economics to assess the extent

easing the constraints of motherhood the effects of all day schools on mothers labor supply low rates of female labor force participation lfp have been linked to the absence of childcare policies this article examines the degree to which extending the school day by 3 5 hours in elementary schools a large implicit childcare subsidy affects lfp the number of weekly hours worked and the monthly earnings of females with elementary school age children to do so we exploit within individual variation in access to full time schools and a rotating panel of households that contains 12 years of individual level data on labor outcomes and sociodemographic characteristics results from long difference models show that extending the school day increases mothers labor supply increasing lfp by 5 5 percentage points and the number of weekly hours worked by 1 8 moreover these increases are accompanied by a raise in monthly earnings jel i25 j13 j22

husband s unemployment and wife s labor supply the added worker effect across europe this article investigates the responsiveness of women s labor supply to their husband s job loss the so called added worker effect the authors contribute to the literature by taking an explicit internationally comparative perspective in analyzing the variation of the added worker effect across welfare regimes using longitudinal data from the european union statistics on income and living conditions eu silc survey covering 28 european countries from 2004 to 2013 they find evidence of an added worker effect which however varies over both the business cycle and the different welfare regimes in europe the latter result might be explained in part by differences in the design of the unemployment benefit system across countries which create different incentives for the labor supply of wives of unemployed men

complexity and renegotiation a foundation for incomplete contracts the paper considers a hold up model where only one of n future trading opportunities will prove to be efficient and where ex post renegotiation of the ex ante contract cannot be prevented as the environment becomes more complex n the outcome under any message contingent long term contract converges to that of the incomplete contracting model where trade is contractible ex post but not ex ante when trades are costly to describe both ex ante and ex post the incomplete contracting result is extended to a broader class of environments

why is the labour force participation of women declining in india summary this paper explores the recent fall in female labour force participation and its socio economic determinants in india the major contribution of this paper is to explore both micro and macro level factors which determine female labour force participation rate lfpr to examine the u shape female lfpr by examining the likely income and substitution effects of the real wage increase to identify the sub sectors within manufacturing and service sectors that could create jobs for new female job aspirants and those older women displaced from agriculture in recent years and thus to understand the conditions under which female lfpr could be raised using both macro level and household survey nss data we find that the recent fillip in the process of structural transformation has pushed a large number of females out of agriculture the growing mechanization in agriculture and rising capital intensity in manufacturing sectors together have limited the opportunity for females because of their low education and skill and due to other cultural constraints we also found that the rise in real wages in rural areas and the consequent improvement in the standard of living has produced a strong negative income effect which outweighs the positive substitution effect and as a result female lfpr has declined substantially however with the massive increase in female enrollment in secondary and higher levels of education it could be expected that the substitution effect of the increase in real wage would become stronger if appropriate measures are taken by the government which are suggested

ceba of 1987 and the security returns and market risk of savings and loan institutions a note abstract this article examines the market reaction to announcements leading to the eventual passage of the competitive equality banking act ceba of 1987 using portfolios of savings and loans negative announcement effects of the ceba legislation are observed for well capitalized savings and loans and positive announcement effects are observed for less capitalized savings and loans the evidence also indicates that the market risk for the less capitalized savings and loans decreased following the passage of the ceba legislation

children of a policy revolution the introduction of universal child care and its effect on fertility what role does affordable and widely available public child care play for fertility we exploit a major german reform generating large temporal and spatial variation in child care coverage for children under the age of three our precise and robust estimates on birth register data reveal that increases in public child care have significant positive effects on fertility the fertility effects are more pronounced at the intensive than at the extensive margin and are not driven by changes in the timing of births or selective migration our findings inform policy makers concerned about low fertility by suggesting that universal early child care holds the promise of being an effective means of increasing birth rates

flat tax reform a quantitative exploration abstract this paper explores quantitatively the general equilibrium implications of a revenue neutral tax reform in which the current income and capital income tax structure in the u s is replaced by a flat tax as proposed by hall and rabushka 1995 the flat tax 2nd ed hoover the central aspects of such reform the impact of tax reform on capital accumulation and labor supply as well as its distributional consequences are analyzed in a dynamic general equilibrium model main results are that i the elimination of the actual taxation of capital income has an important and positive effect on capital accumulation ii mean labor hours are relatively constant across tax systems but aggregate labor in efficiency units increases iii in all circumstances analyzed the distributions of earnings income and especially wealth become more concentrated

citicorp travelers group merger challenging barriers between banking and insurance abstract the citicorp travelers group merger increased the prospects for new legislation to remove the barriers between banking and insurance resulting in a positive wealth effect for institutions most likely to gain from deregulation analysis of abnormal returns surrounding the merger show that life insurance companies and large banks excluding citicorp and travelers group have significant stock price increases while the returns of small banks health insurers and property casualty insurers are insignificantly different from 0 this analysis provides evidence that investors expect large banks and insurance companies to receive significant benefits from recent congressional legislation removing barriers to bancassurance

renegotiation proof implementation and time preferences this paper explores how the requirement that the implementation of contracts be renegotiation proof affects the set of contracts that can be implemented in a seller buyer scenario in which the information regarding the agents valuations is nonverifiable this paper explicitly adds a time dimension to an implementa tion problem and introduces a natural criterion of renegotiation proofness for the case of time consuming renegotiation the main insight gained is that the addition of the time dimension enlarges significantly the set of contracts that can be implemented in a renegotiation proof manner jel c70 d23 this paper explores how the requirement that the implementation of contracts be renegotiation proof affects the set of con tracts that can be implemented in a seller buyer scenario in which the informa tion regarding the agents valuations is non verifiable the paper s main contributions are that first it explicitly adds a time di mension to an implementation problem and second it introduces a natural criterion of renegotiation proofness for the case of time consuming renegotiation for concreteness the discussion will be conducted in the context of the following example there are two agents a seller and a buyer who sign a contract for the sale of one unit in the future their valuations for the unit denoted by s and b respectively are not known when they sign the contract they become known to both parties after the contract is signed and before it is imple mented thus when it comes to implement ing the contract the parties information is complete but it is assumed to be nonverifi able i e not observable to third parties such as a court 1 when they sign the con tract the parties want to specify for any possible realization of the valuations s b whether or not there will be trade and the price p s b at which it will take place the contract describes the procedure that will be followed after the valuations are real ized the purpose of this procedure is to make sure that the original intentions of the parties are indeed carried out the idea is that the steps laid out in the contract are independent of s b and hence are en forceable by a third party or by a social convention in game theoretic terms a contract specifies a game form that imple ments the function p in the sense that for all s and b p s b is the resulting game s unique subgame perfect equilibrium out come in the context of this scenario we shall investigate the set of price functions p s b that can be so implemented by a contract and examine how this set is affected by the requirement that the contract be renegotia

progressive taxation in a dynastic model of human capital abstract we develop a quantitative theory of economic inequality to investigate the effects of replacing the current u s progressive income tax system with a proportional one the cross sectional implications of the theory are used to discipline the assessment of the effects of tax policy and circumvent the lack of conclusive micro evidence on the parameterization of the human capital production technology we find that the elimination of progressive taxation increases steady state level of output by 12 6 capital by 21 8 and consumption by 13 2 moreover it increases economic inequality and its persistence across generations

equal but inequitable who benefits from gender neutral tenure clock stopping policies many skilled professional occupations are characterized by an early period of intensive skill accumulation and career establishment examples include law firm associates surgical residents and untenured faculty at research intensive universities high female exit rates are sometimes blamed on the inability of new mothers to survive the sustained negative productivity shock associated with childbearing and early childrearing in these environments gender neutral family policies have been adopted in some professions in an attempt to level the playing field the gender neutral tenure clock stopping policies adopted by the majority of research intensive universities in the united states in recent decades are an excellent example but to date there is no empirical evidence showing that these policies help women using a unique data set on the universe of assistant professor hires at top 50 economics departments from 1985 2004 we show that the adoption of gender neutral tenure clock stopping policies substantially reduced female tenure rates while substantially increasing male tenure rates

taxation and labor supply of married couples across countries a macroeconomic analysis we document contemporaneous dierences in the aggregate labor supply of married couples across 18 oecd countries relative to their us counterparts european married men work on average 9 to 17 percent and married women in western and southern europe 26 and 31 percent fewer hours married women in scandinavia and eastern europe however work almost as many hours as us married women we nd that a model of joint household decision making can largely replicate these facts if the full non linearity of labor income taxes and the tax treatment of married couples are taken into account going to a system of strictly separate taxation would increase labor supply of married women by more than 100 hours annually in a third of our sample countries

cross country evidence on the relationship between overwork and skilled women s job choices this paper examines the relationship between the prevalence of overwork and skilled women s labor force participation and occupational choice using country level variation we find a negative relationship between the share of males working 50 hours a week and the lfp of young married women with the correlation being much smaller for single women and older married women using a panel of occupations across countries we find that overwork in an occupation is negatively correlated with the share of married women working in that occupation this finding is robust to controlling for the occupational distribution of groups with fewer household responsibilities

partially verifiable information and mechanism design in a principal agent model with adverse selection we study the implementation of social choice functions when the agent s message space is a correspondence which depends on this true characteristic we characterize such correspondence for which the revelation principle is valid returns must not contradict easily observable elements of the taxpayer s lifestyle in this paper we present a model of two person organizations in which these considerations are important we ask whether the restrictions on fallacious statements inherent in the system are sufficient to achieve the goals of the organization we show that the optimal way of eliciting the agent s response may not be to establish incentives for truthtelling in all instances in our model there is one player the agent who observes the state of the economic system another player the principal takes an action based on the information presented to him by the agent this class of models is often referred to as the principal agent problem in the extensive and growing literature on this problem it has always been assumed that the agent could lie to the principal and therefore that he had to be properly motivated to act at least partially in the principal s interest our formal way of modelling the partial verifiability of information is to introduce the restriction that the agent s responses must lie in a set m o that varies with the true state 0 it is assumed that this set always admits the possibility of responding with the true state the way in which the allowable response set varies with the true state is known to the principal in other respects we retain the usual principal agent formalization in particular the principal is the stackelberg leader in this game he can commit himself to choose a collective action as a function of the message transmitted by the agent whether the variation of the message space with the true observation is purely technological or whether it is induced by the severity of potential actions of the principal

coase lecture the glass ceiling despite decades of progress women remain underrepresented in the upper part of the earnings distribution we review the recent research trying to explain this phenomenon after briefly revisiting gender differences in education we turn our attention to a body of work that has argued that gender differences in psychological attributes are holding back women s earnings we then review another active area of research focused on the challenges that women may face when trying to juggle competing demands on their time in the workplace and the home particularly when the home includes children we discuss recent work documenting women s greater demand for flexibility in the workplace as well as work measuring the labour market penalties associated with such demand for flexibility particularly in the higher paying occupations in the economy we highlight possible countervailing forces both at work and at home that may explain why these work family considerations may remain highly relevant to today s glass ceiling despite reduced time spent in non market work and a trend towards a more equal division of non market work between men and women finally we discuss the role that public policy and human resource practices may play in adding more cracks to the glass ceiling

the mirrlees approach to mechanism design with renegotiation with applications to hold up and risk sharing the paper studies the implementation problem first analyzed by maskin and moore 1999 in which two agents observe an unverifiable state of nature and may renegotiate inefficient outcomes following play of the mechanism we develop a first order approach to characterizing the set of implementable utility mappings in this problem paralleling mirrlees s 1971 first order analysis of standard mechanism design problems we use this characterization to study optimal contracting in hold up and risk sharing models in particular we examine when the contracting parties can optimally restrict attention to simple contracts such as noncontingent contracts and option contracts where only one agent sends a message

national family policies and mothers employment how earnings inequality shapes policy effects across and within countries although researchers generally agree that national family policies play a role in shaping mothers employment there is considerable debate about whether how and why policy effects vary across co

impact of low skilled immigration on female labour supply wir untersuchen die auswirkungen von zuwanderung auf das arbeitsangebot einheimischer frauen insbesondere betrachten wir die auswirkung des anstiegs geringqualifizierter zuwanderer die im haushaltssektor arbeiten auf hoch und geringqualifizierte einheimische frauen wir modellieren individuelle entscheidungen uber die haushaltsproduktion und testen die wichtigsten aussagen dieses modells anhand eines harmonisierten datensatzes cnef unsere stichprobe enthalt lander mit unterschiedlich groszugiger familienpolitik unsere ergebnisse zeigen dass mit einem hoheren anteil an migranten im dienstleistungssektor eines lokal begrenzten arbeitsmarktes die einheimischen hochqualifizierten frauen ihr arbeitsangebot erhohen gleichzeitig steigt die partizipationsrate unqualifizierter einheimischer frauen daruber hinaus zeigen wir dass diese effekte in landern mit restriktiverer familienpolitik starker ausfallen

deceleration in female labor force participation in latin america after half a century of sustained growth female labor force participation has decelerated in latin america especially among married vulnerable women based on a large database of microdata from household surveys this paper documents this recent deceleration and provides evidence on the determinants we argue that the fast economic growth experienced by the region in the 2000s was an important driving force lower unemployment and higher earnings of male partners plus increased social assistance may have reduced the pressing need for vulnerable women to take low quality jobs

the impact of the 1980 depository institutions deregulation and monetary control act on market value and risk evidence from the capital markets the depository institutions deregulation and monetary control act of 1980 brought about major changes in the banking industry this study employs capital market data to examine the act s impact on the relative competitive positions of distinct classes of firms within the industry the evidence supports the hypothesis that federal reserve system banks profited from the regulatory change at the expense of nonmember banks and savings and loans copyright 1988 by ohio state university press

paid parental leave laws in the united states does short duration leave affect women s labor force attachment abstract i analyze the effects of short duration paid parental leave on maternal labor supply using monthly longitudinal data from the survey of income and program participation my event study research design estimates impacts of paid leave laws in california and new jersey on women s labor force outcomes around childbirth i find that paid leave laws are associated with a substantial increase in labor force attachment in the months directly around birth while us style short duration leave is unlikely to change prolonged exits from the labor force my findings imply that paid leave laws induce some women stay more attached to jobs particularly low skill women

consumption taxes and economic efficiency with idiosyncratic wage shocks fundamental tax reform is examined in an overlapping generations model in which heterogeneous agents face idiosyncratic wage shocks and longevity uncertainty a progressive income tax is replaced with a flat consumption tax if idiosyncratic wage shocks are insurable i e no risk this reform improves interim efficiency a result consistent with the previous literature but if more realistically wage shocks are uninsurable this reform reduces efficiency even though national wealth and output increase over the entire transition path this efficiency loss in large part stems from reduced intragenerational risk sharing that was previously provided by the progressive tax system

simulating fundamental tax reform in the united states this paper uses a new large scale dynamic life cycle simulation model to compare the welfare and macroeconomic effects of transitions to five fundamental alternatives to the u s federal income tax including a proportional consumption tax and a flat tax the model incorporates intragenerational heterogeneity and a detailed specification of alternative tax systems simulation results project significant long run increases in output for some reforms for other reforms namely those that seek to insulate the poor and initial older generations from adverse welfare changes long run output gains are modest

the economic consequences of parental leave mandates lessons from europe this study investigates the economic consequences of rights to paid parental leave in nine european countries over the 1969 through 1993 period since women use virtually all parental leave in most nations men constitute a reasonable comparison group and most of the analysis examines how changes in paid leave affect the gap between female and male labor market outcomes the employment to populations ratios of women in their prime childbearing years are also compared with those of corresponding aged men and older females parental leave is associated with increases in women s employment but with reductions in their relative wages at extended durations

mechanism design with renegotiation and costly messages in one interpretation of the mechanism design problem the agents in volved are designing a mechanism for themselves rather than having it im posed on them by an outside planner the mechanism may for example be a contract or a constitution in that case they will presumably choose a mecha nism that will deliver a pareto efficient outcome in equilibrium suppose how ever that play of the mechanism results in an out of equilibrium outcome and that this outcome is pareto inefficient then unless they have been able some how to commit to this mechanism the agents can be expected to tear up the contract and negotiate a new pareto efficient outcome in the two agent case this possibility of renegotiation limits the set of social choice rules that can