the commuting time paradox abstract we examine the conditions for the commuting time paradox which states that the average commuting time does not vary between different periods we develop therefore an equilibrium job search model with endogenously chosen commuting costs presuming wage bargaining between workers and firms the optimally chosen maximum commuting costs jointly maximise the worker s and firm s payoffs we demonstrate that when productivity levels increase over time average commuting costs and average wages both increase which affects the optimally chosen commuting time we establish the conditions under which the paradox holds

the two faces of janus institutions policy regimes and macroeconomic performance in greece greece the two faces of janus institutions policy regimes and macroeconomic performance the clear change in policy regime in greece around 1974 offers an opportunity to assess the extent to which economic performance depends on institutional underpinning for twenty years up to 1974 greece enjoyed rapid growth high investment and low inflation during the next twenty years growth and investment collapsed and inflation became high and persistent i describe the political background to such clear institutional change and the nature of the two economic regimes the first providing coordination and commitment mechanisms to sustain adequate returns for high investment the second failing to do so the same change in political climate after 1974 raised public sector deficits and debt fuelling a trade deficit and monetary expansion entry to the ec did not cause the economic slowdown in greece but transfers from the ec did mask the underlying problem delaying necessary adjustment recent attempts to reverse greece s fortunes are in the right direction but as yet inadequate george alogoskoufis

choosy search and the mismatch of talents this article proposes a multi sector matching model where workers have symmetric sector specific skills and the search market is segmented by sector workers choose the range of markets they are willing to participate in i identify a composition externality workers do not take into account the impact of their choice on sector specific mean productivity among the pools of job seekers consequently workers prospect too many market segments and there is room for public policy even when the so called hosios condition holds

sorting and the output loss due to search frictions we analyze a general search model with on the job search ojs and sorting of heterogeneous workers into heterogeneous jobs for given values of nonmarket time the relative efficiency of ojs and the amount of search frictions we derive a simple relationship between the unemployment rate mismatch and wage dispersion we estimate the latter two from standard micro data our methodology accounts for measurement error which is crucial to distinguish true from spurious mismatch and wage dispersion we find that without frictions output would be about 9 5 higher if firms can commit to pay wages as a function of match quality and 15 5 higher if they cannot noncommitment leads to a business stealing externality which causes a 5 5 drop in output

the long term effects of job search requirements evidence from the uk jsa reform this paper investigates long term returns from unemployment compensation exploiting variation from the uk jsa reform of 1996 which implied a major increase in job search requirements for eligibility and in the related administrative hurdle search theory predicts that such changes should raise the proportion of non claimant nonemployed with consequences on search effort and labor market attachment and lower the reservation wage of the unemployed with negative effects on post unemployment wages i test these ideas on longitudinal data from social security records llmdb using a difference in differences approach i find that individuals who start an unemployment spell soon after jsa introduction as opposed to six months earlier are 2 5 3 more likely to move from unemployment into incapacity benefits spells and 4 5 less likely to have positive earnings in the following year this latter employment effect only vanishes four years after the initial unemployment shock also annual earnings for the treated individuals are lower than for the non treated these results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits they were not successful in moving them onto long lasting or better jobs with fairly long lasting unintended consequences on a number of labor market outcomes

green commuting and gasoline taxes in the united states abstract this paper analyzes how gasoline tax rates are related to the time workers in the united states spend commuting by private car public transport or with other physical modes of transport our identification strategy relies on both inter state differences and time variations in gasoline taxes using the american time use surveys for the years 2003 2015 we find that higher gasoline tax rates are related to less time spent in commuting furthermore higher gasoline taxes are related to less commuting by private car and more commuting by public transport and or a physical mode of transport walking or cycling our results highlight the importance of gasoline taxes in the consumption of energy for personal transport as higher gasoline taxes are related to a greater use of green modes of transport showing that fuel taxes are important for good environmental management

transferable skills job matching and the inefficiency of the natural rate of unemployment the idea of the natural rate of unemployment has been with us since friedman i 968 this can be interpreted simply as an assertion of the long run homogeneity of the walrasian or flexible price is lm system in prices see e g sargent i979 p 325 over the last ten years however attempts have been made to model the natural rate explicitly following the original friedman phelps idea that it could be thought of as the equilibrium rate of unemployment in a search framework although the main focus of attention especially on the empirical side has been on the determinants of the equilibrium rate and changes in this rate see johnson and layard i 984 it was soon recognised that in a search environment the equilibrium rate may not be efficient this point was made by tobin i972 among others who said the external effects are the familiar ones of congestion theory a worker deciding to join a queue or stay in one considers the probabilities of getting a job but not the effects of his decision on the probabilities that others face external effects also occur in the decisions of employers whether to fill a vacancy with the applicant at hand or to wait for someone more qualified recent papers by diamond and pissarides see diamond i 98 i i 982 pissarides i983 i984 have attempted to model these external effects in a stochastic matching model that can be described briefly as follows there are a number of jobs and workers who are paired by a stochastic matching process the number of jobs or workers may be fixed or determined by free entry conditions once a job and worker are paired the productivity of the match is determined by random draw and the partners must decide whether to accept or reject it there are potentially three margins of decision making in this type of model the decision to enter or exit the market the choice of lowest acceptable reservation productivity and the choice of search or advertising intensity it has been shown that individual decision making at each of these three margins may be socially inefficient what these inefficiencies have in common as pissarides i 983 makes clear is that they are all due to external effects that work through the matching technology that is when individuals choose to enter a market accept a match or search more intensively they ignore the impact of their decisions on the matching probabilities of other agents in the market one important limitation of the diamond pissarides model is that both firms and workers are assumed homogeneous we show in this paper that if this

inequality income growth and mobility the basic facts during the 1950s and 1960s mean wages in the united states grew rapidly and the dispersion around this growing mean changed very litde starting in the 1970s and continuing into the 1980s and 1990s these patterns were reversed mean wages grew slowly and inequality increased rapidly these changes in labor markets were reflected in changes in the distribution of family income the mean of the distribution of family income did increase after 1973 in spite of the near constancy of mean real wages as family members increased the number of hours they worked however the increase in inequality of wages was mirrored by an increase in the dispersion of family income a large descriptive literature has documented the rise in inequality while a smaller behavioral literature has sought to delineate the causes of this rise these changes in the distribution of family income a fected rates of poverty directly during the 1950s and 1960s temporary increases in poverty during recessions were more than offset by declines in poverty during economic expansions as long as the poor gained along with everyone else fi om the secular growth in the mean one could be confident that poverty rates would ratchet down this is exactly what happened as poverty rates fell from 22 4 percent in 1959 to 11 1 percent in 1973

unemployment vs mismatch of talents reconsidering unemployment benefits we develop an equilibrium search matching model with risk neutral agents and two sided ex ante heterogeneity unemployment insurance has the standard effect of reducing employment but also helps workers to get a suitable job we show through calibrations how the mere difference on unemployment insurance when countries experience a common skilled biased technological shock may result in differences in unemployment productivity growth and wage inequality these results are consistent with the contrasting performance of the labour market in europe and the united states in the last twenty five years the model is used to address some political economy issues

unemployment insurance and the business cycle an equilibrium model is developed to study the interaction of the business cycle unemployment insurance and the labor market for young men in canada the model combines optimal job oer layo and recall decisions within a numerically solved and restricted bayesian nash equilibrium we consider the long run implications of changes made to unemployment insurance in canada during the 1990s the changes lead to equilibrium increases in average rates of unemployment layos and recalls eliminating ui lowers the equilibrium unemployment

some pervasive challenges to sustainability by design of electronic products a conceptual discussion sustainability should encompass responsibility for unintended environmental consequences of modern developments this study examined some pervasive challenges to sustainability by design of electronic products namely i product and consumption redundancies i embodied environmental and social impacts occurring distant in time and space from the point of consumption and iii production and consumption dynamics this analysis identified essential developments in certain areas that can assist design practice in preventing unintended environmental consequences these were 1 complementing life cycle assessment studies with analyses of unintended environmental consequences and 2 exploiting the vital role of product design in fostering a circular economy indicators that provide information about a the increasing spatial and decreasing temporal separation of production consumption and waste management b constraints in raw materials supply and c marginal changes in money and time spent should be available to product designers and consumers furthermore information technology namely computer aided design cad tools should be refined to assist product designers in designing for effective circularity and end of waste and limiting hibernation of resources in the use phase

the informational content of surnames the evolution of intergenerational mobility and assortative mating we propose a new methodology for measuring intergenerational mobility in economic well being our method is based on the joint distribution of surnames and economic outcomes it circumvents the need for intergenerational panel data a long standing stumbling block for understanding mobility it does so by using cross sectional data alongside a calibrated structural model to recover the traditional intergenerational elasticity measures our main idea is simple if inheritance is important for economic outcomes then rare surnames should predict economic outcomes in the cross section this is because rare surnames are indicative of familial linkages if the number of rare surnames is small this approach will not work however rare surnames are abundant in the highly skewed nature of surname distributions from most western societies we develop a model that articulates this idea and shows that the more important is inheritance the more informative will be surnames this result is robust to a variety of different assumptions about fertility and mating we apply our method using the 2001 census from catalonia a large region of spain we use educational attainment as a proxy for overall economic well being a calibration exercise results in an estimate of the intergenerational correlation of educational attainment of 0 60 we also find evidence suggesting that mobility has decreased among the different generations of the 20th century a complementary analysis based on sibling correlations confirms our results and provides a robustness check on our method our model and our data allow us to examine one possible explanation for the observed decrease in mobility we find that the degree of assortative mating has increased over time overall we argue that our method has promise because it can tap the vast mines of census data that are available in a heretofore unexploited manner

on the inefficiency of matching models of unemployment with heterogeneous workers and jobs when firms rank their applicants in a circular matching model with bargained wages firms rank their applicants and pick the most suitable one job creation appears to lower the average output as firms do not internalize this effect there are too many jobs in a laissez faire equilibrium under the hosios condition by contrast job rejection is efficient for the equilibrium value of market tightness consequently introducing unemployment compensation raises the aggregate income by lowering market tightness due to the isomorphism between the two models these results extend to match specific productivities however competitive search restores market efficiency

job matching when employment contracts suffer from moral hazard abstract we consider a job matching model where the relationships between firms and wealth constrained workers suffer from moral hazard specifically effort on the job is non contractible so that parties that are matched negotiate a bonus contract higher unemployment benefits affect the workers outside option the latter is improved for low skilled workers hence they receive a larger share of the surplus which strengthens their effort incentives and increases productivity effects are reversed for high skilled workers moreover raising benefit payments affects the proportion of successful matches which induces some firms to exit the economy and causes unemployment to increase

on the job search mismatch and efficiency this paper characterizes the equilibrium for a large class of search models with two sided heterogeneity and on the job search besides the well known congestion externalities we show that on the job search in combination with monopsonistic wage setting without commitment creates a business stealing externality in the absence of congestion effects this leads to excessive vacancy creation under wage setting with commitment this externality is absent because when posting a wage firms take into account the expected productivity of future workers in their current jobs if firms are able to make and respond to counteroffers then they will not have to pay no quit premia and this also leads to excessive vacancy creation

car ownership and the labor market of ethnic minorities we show how initial wealth differences between low skilled minorities and white workers can generate differences in their labor market outcomes this even occurs in the absence of a taste for discrimination against ethnic minorities or exogenous differences in distance to jobs because of the initial wealth difference minorities cannot afford to buy a car while whites can car ownership allows whites to reach more jobs per unit of time which gives them a better bargaining position in the labor market as a result in equilibrium ethnic minorities end up with both higher unemployment rates and lower wages than whites furthermore we also show that it takes more time for minorities to reach their jobs even though they travel less miles when employed those predictions are consistent with the data better access to capital markets or better public transportation will reduce the differences in labor market outcomes

search mismatch and unemployment abstract this paper explores the efficiency of the equilibrium allocation in a matching model with heterogeneous workers and jobs in the basic setup there are two types of workers with different skill levels both types can perform the simple tasks of unskilled jobs while the complex tasks of skilled jobs require a high ability worker we demonstrate that the equilibrium outcome with random search and ex post bargaining is never efficient under the hosios condition the average wage is correct but bargaining compresses the wage distribution relative to workers shadow values this feature distorts the relative profits of jobs making it too attractive for firms to create skilled jobs furthermore due to the low skill premium the high ability workers may accept too many jobs finally in an extension we show that the introduction of separate markets for the two types of jobs is not sufficient to guarantee efficiency

the redistributive roles of unemployment insurance and the dynamics of voting abstract public unemployment insurance is analyzed as the majority voting equilibrium policy of a dynamic stochastic economy abstracting from incentive effects we focus on redistribution some results are because of the distribution of heterogeneous employment opportunities public insurance may be democratically chosen even if complete private markets exist and because of the dynamics even when agents are intrinsically homogeneous the equilibrium benefit level or duration benefit schedule deviates from what has been described as optimal in the literature the effects of differences in the average frequency or duration of unemployment on equilibrium taxes and benefits are investigated with some unanticipated results

long run implications of investment specific technological change an attempt is made to disentangle its effects from the more traditional hicksneutral form of technological progress the balanced growth path for the model is characterized and calibrated to u s national income and product account nipa data the quantitative analysis suggests that investment specific technological change accounts for the major part of growth jel e13 030 041 047

adaptability productivity and educational incentives in a matching model abstract we study the connections between the labour market and the education sector in a matching framework with ex post wage bargaining workers have multidimensional skills and the search market is segmented by technology education is a time consuming activity and determines jointly the scope or adaptability and intensity or productivity of individual skills we establish three main results first unemployment provides incentives to schooling by raising the need for adaptability second private returns to productivity are below social returns but no hold up phenomenon is involved third due to wage and congestion externalities private returns to adaptability exceed social returns as a consequence both over and under education may take place in equilibrium

labor search and matching in macroeconomics abstract the labor search and matching model plays a growing role in macroeconomic analysis this paper provides a critical selective survey of the literature four fundamental questions are explored how are unemployment job vacancies and employment determined as equilibrium phenomena what determines worker flows and transition rates from one labor market state to another how are wages determined what role do labor market dynamics play in explaining business cycles and growth the survey describes the basic model reviews its theoretical extensions and discusses its empirical applications in macroeconomics the model has been developed against the background of difficulties with the use of the neo classical frictionless model of the labor market in macroeconomics its success includes the modelling of labor market outcomes as equilibrium phenomena the reasonable fit of the data and when inserted into business cycle models improved performance of more general macroeconomic models at the same time there is evidence against the nash solution used for wage setting and an active debate as to the ability of the model to account for some of the cyclical facts