migration age and earnings the special case of employee transfers the regional relocation of workers within firms is examined this aspect of migration has received little attention in spite of the routine occurance of employee transfers the existence of such transfers suggests that a portion of each worker s human capital is employer specific and readily transferrable across locations thus a different age profile for transfers than that for conventional migrants may be expected specially a model of employee relocation and the consequences of relocation on post transfer earnings is examined

turnover in an accounting firm we use a unique data set to investigate whether a matching model can describe turnover in an accounting firm the main focus of the article is to determine whether the probability of separation from employment varies in the way described by jovanovic the evidence suggests that as tenure increases both terminations and quits follow the predicted pattern

regressive sin taxes with an application to the optimal soda tax a common objection to sin taxes corrective taxes on goods that are thought to be overconsumed such as cigarettes alcohol and sugary drinks is that they often fall disproportionately on low income consumers this paper studies the interaction between corrective and redistributive motives in a general optimal taxation framework and delivers empirically implementable formulas for sufficient statistics for the optimal commodity tax the optimal sin tax is increasing in the price elasticity of demand increasing in the degree to which lower income consumers are more biased or more elastic to the tax decreasing in the extent to which consumption is concentrated among the poor and decreasing in income effects because income effects imply that commodity taxes create labor supply distortions contrary to common intuitions stronger preferences for redistribution can increase the optimal sin tax if lower income consumers are more responsive to taxes or are more biased as an application we estimate the optimal nationwide tax on sugar sweetened beverages using nielsen homescan data and a specially designed survey measuring nutrition knowledge and self control holding federal income tax rates constant our estimates imply an optimal federal sugar sweetened beverage tax of 1 to 2 1 cents per ounce although optimal city level taxes could be as much as 60 lower due to cross border shopping

a new year a new you within individual variation in food purchases abstract we document that within individual variation in food choices is substantial and has potentially important consequences for nutrition and hence well being we develop an approach that allows us to study the determinants of this within individual variation within an economic framework and allow for across individual preference heterogeneity we show that around one fifth of within individual fluctuations in diet quality is explained by standard economic variables prices and budgets along with advertising and weather the residual fluctuations are important and are larger for lower income and younger people and individuals who state they are impulsive we propose a two selves model of food purchase behavior to structurally interpret these empirical patterns we use nonparametric revealed preference techniques to show that this model rationalizes our food purchase data

job matching within and across firms this article proposes a matching model of the labor market in the presence of uncertainty and learning about ability that provides a simple unified framework for analyzing the dynamics of jobs and wages within firms and in the labor market the model allows for different degrees of generality of ability as well as speeds of learning across jobs and firms equilibrium assignments and wages are consistent with a broad range of empirical findings on careers suggest a novel interpretation for well documented patterns and help explain features of careers usually thought difficult to reconcile with the presence of uncertainty and learning

how late to pay understanding wage arrears in russia we organize an empirical analysis of russian wage arrears around hypotheses concerning incentives for firms to pay late and for workers to tolerate late payment nationally representative household panel data matched with employer data show that arrears are positively related to firm age size state ownership and declining performance constrained multinomial logit estimates reveal intrafirm variation related to job tenure and small shareholdings in the firm wage arrears unlike wage cuts have a theoretically ambiguous effect on workers quit behavior and we show empirically that the effect varies negatively with the extent of the practice in the local labor market

in defense of base drift the federal reserve has been criticized for allowing the base from which it calculates its target growth paths for the monetary aggregatesto drift from year to year in response to past deviations from target drift in the base implies that target misses permanently affect the levels of the monetary aggregates using a simple theoretical model this paper shows that the optimal degree of base drift consistent withprice stability depends on the importance of permanent versus transitory income and velocity disturbances neither zero base drift nor complete base drift are likely to be compatible with price stability copyright 1986 by american economic association

testing the response of consumption to income changes with noisy panel data this paper tests the rational expectations lifecycle model of consumption against i a keynesian model and ii the rational expectations lifecycle model with imperfect capital markets the tests are based upon the relative responsiveness of consumption to income changes that can be predicted from past information and income changes that cannot he predicted the tests allow for measurement error in income the results reject the keynesian model and generally support the lifecycle model but the results are not sufficiently precise to rule out the possibility that some households are liquidity constrained measurement error has a strong influence on the relationship between consumption and income

labor market frictions human capital accumulation and long run growth positive analysis and policy evaluation we construct a search model with endogenous human capital and labor participation to study the growth effects of short run frictions and the effectiveness of human capital policies employment learning effort and output growth increase with more effective learning better labor market matching lower job separation or less costly vacancy creation although output growth employment vacancy creation and learning and search effort are most responsive to changes in a human capital policy that directly affects learning effort such a policy need not be more beneficial for welfare the effects of human capital policies become larger as the severity of labor market frictions rises

wages mobility and firm performance advantages and insights from using matched worker firm data to illustrate the wide applicability of longitudinal matched employer employee data we study the simultaneous determination of worker mobility and wage rates using an econometric model that allows for both individual and firm level heterogeneity the model is estimated using longitudinally linked employer employee data from france structural results for mobility show remarkable heterogeneity with both positive and negative duration dependence present in a significant proportion of firms the average structural returns to seniority are essentially zero but this result masks enormous heterogeneity with positive seniority returns found in low starting wage firms

the impact of obesity on wages abstract previous studies of the relationship between body weight and wages have found mixed results this paper uses a larger data set and several regres sion strategies in an attempt to generate more consistent estimates of the effect of weight on wages differences across gender race and ethnicity are explored this paperjnds that weight lowers wages for white females ols esti mates indicate that a difference in weight of two standard deviations roughly 65 pounds is associated with a difference in wages of 9 percent in absolute value this is equivalent to the wage effect of roughly one and a half years of education or three years of work experience negative cor relations between weight and wages observed for other gender ethnic groups appear to be due to unobserved heterogeneity i introduction several previous studies have found among females a negative cor relation between body weight and wages there exist three broad categories of ex planations for this finding the first explanation is that obesity lowers wages for example by lowering productivity or because of workplace discrimination the sec ond is that low wages cause obesity this would be true if poorer people consume

sources of economic fluctuations in the united states there has been much recent discussion about the ultimate sources of macroeconomic variability a number of authors attribute most of this variability to only a few sources sometimes only one although there may be only a few important sources this is far from obvious since economies seem complicated the purpose of this paper is to provide quantitative estimates of various sources of variability using a u s econometric model stochastic simulation is used to estimate how much the overall variances of real gnp and the gnp deflator are reduced when various shocks are suppressed in the model

job search and asset accumulation under borrowing constraints this article examines the relationship between wealth accumulation and job search dynamics it proposes a model in which risk averse individuals search for jobs save and borrow to smooth their consumption one motivation for accumulating wealth is to finance voluntary quits in order to search for better jobs using data on men from the national longitudinal survey 1979 cohort i estimate the individual s dynamic decision problem the results show that borrowing constraints are tight and reinforce the influence of wealth on job acceptance decisions namely that more initial wealth and access to larger amounts of credit increase wages and unemployment duration

relative wages wage growth and quit behavior using italian social security records for male workers from a sample of firms in turin from 1981 to 1983 we show that conditional on the worker s own wage the average wage in the establishment for similar workers is negatively related to quits we also find that this variable predicts future wage growth this is consistent with an economic model in which workers compare the longrun value of employment opportunities when making quit decisions

the role of energy in real business cycle models abstract this paper modifies hansen s 1985 analysis of a real business cycle mode with indivisible labor by explicitly including energy as a productive input and modelling the relative price of energy as an exogenous random process one goal is to determine the extent to which the introduction of energy price shocks reduces the reliance of the real business cycle model on unobserved technology shocks the other goal following christiano and eichenbaum 1991 is to compare the correlation between real wages and hours predicted by the energy inclusive model to that predicted by hansen s model

is addiction rational theory and evidence this paper makes two contributions to the modeling of addiction first we provide new and convincing evidence that smokers are forward looking in their smoking decisions using state excise tax increases that have been legislatively enacted but are not yet effective and monthly data on consumption second we recognize the strong evidence that preferences with respect to smoking are time inconsistent with individuals both not recognizing the true dife culty of quitting and searching for self control devices to help them quit we develop a new model of addictive behavior that takes as its starting point the standard rational addiction model but incorporates time inconsistent preferences this model also exhibits forward looking behavior but it has strikingly different normative implications in this case optimal government policy should depend not only on the externalities that smokers impose on others but also on the internalities imposed by smokers on themselves we estimate that the optimal tax per pack of cigarettes should be at least one dollar higher under our formulation than in the rational addiction case

learning by doing vs learning about match quality can we tell them apart understanding the accumulation of match specific capital is crucial in shedding light on the reasons for the prevalence of long term employ ment relationships and on the welfare consequences of turnover in the labor market one of the most important source of match specific capital is human capital acquired through match specific learning such learn ing can take on two distinct forms in the first case workers accumulate match specific human capital through learning by doing in the second case a worker and a firm in an employment relationship learn about the quality of the match over time thereby acquiring valuable information i construct a structural model that embeds these two learning explana tions i show that it is possible to distinguish the two explanations given turnover data on employing firms coupled with data on workers such data now exist in the form of matched employer employee data sets i use a matched french data set to estimate the structural model using the efficient method of moments a simulation based estimation method i find that while learning by doing could be present in the first few months of an employment relationship learning about match quality dominates at tenures above half a year this finding has important consequences for economists understanding of the sources of match specific capital and for the desirability of policies that alter the incentives for turnover for workers of different tenure

minimum wage effects on labor market outcomes under search matching and endogenous contact rates building upon a continuous time model of search with nash bargaining in a stationary environment we analyze the effect of changes in minimum wages on labor market outcomes and welfare although minimum wage increases may or may not lead to increases in unemployment in our model they can be welfare improving to labor market participants on both the supply and demand sides of the labor market we discuss identification of the model using current population survey data on accepted wages and unemployment durations and show that by incorporating a limited amount of information from the demand side of the market it is possible to obtain credible and precise estimates of all primitive parameters we show that the optimal minimum wage in 1996 depends critically on whether or not contact rates can be considered to be exogenous and we note that the limited variation in minimum wages makes testing this assumption problematic

market structure and spells of employment and unemployment evidence from the construction sector in egypt summary this paper investigates the links between market structure and spells of employment and unemployment in the construction sector in egypt using an augmented job search framework two key features of the model are the reservation frontier which allows for a trade off between wages and expected duration of employment and the dependency of unemployment durations on expected employment durations and expected wages these as well as conjectures concerning the influence of demand side forces obtained from the expressions for the transition rates out of employment and unemployment are examined using weibull log logistic and generalized gamma parameterizations of the hazard rate the parametric assumptions are exploited to resolve problems associated with selectivity and use of generated regressors

gluttony and sloth calories labour market activity and the rise of obesity the rise in obesity has largely been attributed to an increase in calorie consumption we show that official government household survey data indicate that levels of calorie consumption have declined in england between 1980 and 2013 while there has been an increase in calories from food eaten out at restaurants fast food soft drinks and confectionery overall there has been a decrease in total calories purchased households have shifted towards more expensive calories both by substituting away from home production towards market production and substituting towards higher quality foods we show that the decline in calories can be partially but not entirely rationalized with weight gain by a decline in the strenuousness of work and daily life jel d12 i12 i18

who pays for obesity adult obesity is a growing problem from 1962 to 2006 obesity prevalence nearly tripled to 35 1 percent of adults the rising prevalence of obesity is not limited to a particular socioeconomic group and is not unique to the united states should this widespread obesity epidemic be a cause for alarm from a personal health perspective the answer is an emphatic yes but when it comes to justifications of public policy for reducing obesity the analysis becomes more complex a common starting point is the assertion that those who are obese impose higher health costs on the rest of the population a statement which is then taken to justify public policy interventions but the question of who pays for obesity is an empirical one and it involves analysis of how obese people fare in labor markets and health insurance markets we will argue that the existing literature on these topics suggests that obese people on average do bear the costs and benefits of their eating and exercise habits we begin by estimating the lifetime costs of obesity we then discuss the extent to which private health insurance pools together obese and thin whether health insurance causes obesity and whether being fat might actually cause positive externalities for those who are not obese if public policy to reduce obesity is not justified on the grounds of external costs imposed on others then the remaining potential justification would need to be on the basis of helping people to address problems of ignorance or self control that lead to obesity in the conclusion we offer a few thoughts about some complexities of such a justification

testing long run neutrality using intra year data previous tests of the long run neutrality hypothesis have generally relied on annual time series data this paper analyses the long run neutrality of money in australia using different sources of intra year data which permits an examination of the effects of seasonality and the robustness of previous empirical results a reduced form arima model is used with both quarterly seasonally unadjusted and adjusted australian real gdp and nominal money supply to test the neutrality hypothesis using two measures of money stock namely m1 and m3 it is shown that the hypothesis is supported using m1 as the measure of money supply while it is rejected using m3 recent trends and developments in the money and credit markets in australia provide a possible explanation of the sensitivity of the outcome to the measure of money stock employed in the analysis

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

the dynamic effects of aggregate demand and supply disturbances we interpret fluctuations in gnp and unemployment as due to two types of disturbances disturbances that have a permanent effect on output and disturbances that do not we interpret the first as supply disturbances the second as demand disturbances demand disturbances have a hump shaped mirror image effect on output and unemployment the effect of supply disturbances on output increases steadily over time peaking after two years and reaching a plateau after five years

impatience incentives and obesity this paper explores the relationship between time preferences economic incentives and body mass index bmi using data from the 2006 national longitudinal survey of youth we rst show that greater impatience increases bmi and the likelihood of obesity even after controlling for demographic human capital occupational and nancial characteristics as well as risk preference next we provide evidence of an interaction

worker inflow outflow and churning linked employer employee data from finnish business sector is used in analysing worker turnover the data set is an unbalanced panel with over 219 000 observations in 1991 97 the churning excess worker turnover worker inflow and worker outflow rates are explained by plant and employee characteristics the probabilities of observing non zero churning inflow and outflow rates increase with plant size the magnitudes of the non zero churning and inflow rates depend positively on size but the magnitude of outflow rate depends negatively on size high wage plants have low turnover plants with large within plant variation in wages have high turnover average tenure of employees has a negative impact on turnover high plant employment growth increases churning and separation but reduces hiring in the next year also controlled are average age and education of employees shares of women and homeowners among employees foreign ownership ownership changes and regional unemployment

incentives and children s dietary choices a field experiment in primary schools we conduct a field experiment in 31 primary schools in england to test the effectiveness of different temporary incentives on increasing choice and consumption of fruit and vegetables at lunchtime in each treatment pupils received a sticker for choosing a fruit or vegetable at lunch they were eligible for an additional reward at the end of the week depending on the number of stickers accumulated either individually individual scheme or in comparison to others competition overall we find no significant effect of the individual scheme but positive effects of competition for children who had margin to increase their consumption competition increases choice of fruit and vegetables by 33 and consumption by 48 these positive effects generally carry over to the week immediately following the treatment but are not sustained effects six months later we also find large differences in effectiveness across demographic characteristics such as age and gender

firm specific training layoffs and unreliable workers firm specific training layoffs and unreliable workers 1 introduction early work in implicit contract theory argues that a long term relationship between a worker and a firm evolves due to the risk sharing nature of the implicit contract between a risk averse worker and a risk neutral firm some authors have criticized this initial argument see for example haltiwanger 1983 feeling that a long term relationship between a worker and a firm and the terms of an implicit contract between the two in large parts is explained via hiring costs training costs and the like this is the approach taken in the early work of becker 1975 oi 1962 and the most recent work of jovanovic 1979a these latter explanations are also appealing because long term relations between a worker and a firm are typically characterized by quits that decline with tenure and wages that increase with tenure as discussed in mortensen 1988 explanations of these phenomena fall into two categories job search theories or job training theories job search theories stress that there is a match specific component to the productivity of any worker firm match that a good match will result in a long term relationship explains why wages are positively correlated with tenure to explain a rising wage profile within a given match requires that the firm and the worker learn about the quality of their match over time a good match will be a long term one and the wage will rise over time as the match is discovered to be a good one jovanovic 1979b and barron and loewenstein 1985 model such a learning process job training theories maintain that long term relationships with rising wages exist because of firm specific training that increases with tenure again see jovanovic 1979a as an example this paper integrates these two theories in this paper firm specific training evolves as an increasing function of a worker s tenure with a firm this is so because there is a positive probability that a worker is unreliable in that he will be searching for another employer the firm being unable to identify in advance which workers are unreliable will update its prior belief as to a worker s reliability as a function of the worker s tenure the total level of training at any point in time will be an increasing function of this updated belief thus learning about the quality of a match an aspect of the job search theories plays an important role in explaining the level of firm specific training this learning process can also play a role in determining optimal layoffs if an unreliable worker is more likely to receive an acceptable outside offer when the worker is laid off than when he is employed the firm can use layoffs to elicit information about the worker s reliabiliy based upon this fact layoffs may occur even when the worker s marginal product exceeds his value of leisure before discussing the model in detail one crucial assumption deserves comment unlike previous work such a salop and salop 1976 enforceable self revealing contracts are ruled out by assumption thus the firm here cannot commit itself to a wage contract promising low wages initially in exchange for high wages as job tenure increases which contract would attract only reliable workers this assumption is of course a polar extreme but as such is consistent with more recent work in contract theory which investigates the terms of self enforcing contracts see for example holmstrom 1983 the idea is to provide a comparison with contracts in an idealized economy with no enforcement problems this assumption is justified if the cost of writing a legally enforceable contract is prohibitive or if as suggested in charmichael 1984 reputational forces are insufficient to deter a firm from cheating although workers here are risk neutral the model could be amended to include risk averse agents

durable goods and the forward looking theory of consumption estimates implied by the dynamic effects of money abstract in this paper we analyze the effects of money on the market for durable goods using quarterly us data we estimate the dynamic responses of the price and quantity of durable goods and housing to money supply shocks assuming only that money is neutral in the long run we then match these responses to those predicted by an equilibrium model of the markets for durable goods the model relies on the standard theory of intertemporal consumer choice and the trade off between durable and non durable goods we find that money has important dynamic effects on the markets for durable goods and that the theory provides a reasonable framework for interpreting these responses for plausible parameter values

wage contracts and the unit root hypothesis a model in which nominal wages are set by contracts that have cost of living objectives is likely to be consistent with the evidence of a unit root in the real gnp process of many countries values of the autoregressive root in the gnp process are calculated numerically for many countries using evidence available on the conduct of monetary policy and on the determination of inflation

measuring match quality using subjective data we examine whether subjective information routinely collected in general surveys can be used to construct a single measure of underlying match quality which helps test matching models and predict labour market outcomes of workers

an estimate of a sectoral model of labor mobility this paper develops a model of sectoral labor mobility and tests its main implications the model nests two distinct hypotheses on the origin of mobility a sectoral shocks and b worker employer mismatch we estimate the relative importance of each hypothesis and find that the bulk of labor mobility is caused by mismatch rather than by sectoral shift we then try to put a value on society s match specific information that is we ask to what extent the availability of the option to change jobs raises gnp we find that the mobility option raises expected earnings by roughly between 8 5 percent and 13 percent of labor earnings which translates to an increase in gnp of between 6 percent and 9 percent

wage growth due to human capital accumulation and job search a comparison between the united states and germany this paper compares the sources of wage growth of young male workers in two countries with very different labor market institutions the united states and germany the author first develops a simple method for decomposing wage growth into components due to general human capital accumulation firm specific human capital accumulation and job search the empirical analysis uses data from administrative records germany and the national longitudinal survey of youth united states for cohorts entering the labor market in the late 1970s and early 1980s although the two countries differed substantially in mobility rates they were similar in the sources of wage growth with general human capital accumulation being the most important single source and job search accounting for an additional 25 or more of total wage growth there is no evidence that returns to firm specific human capital accumulation were higher for german apprentices than for u s high school dropouts or graduates

job matching and the wage distribution this paper brings together the microeconomic labor and the macroeconomic equilibrium views of matching in labor markets we nest a job matching model a la jovanovic 1984 into a mortensen and pissarides 1994 type equilibrium search environment the resulting framework preserves the implications of job matching theory for worker turnover and wage dynamics and it also allows for aggregation and general equilibrium analysis we obtain two new equilibrium implications of job matching and search frictions for wage inequality first learning about match quality and worker turnover map gaussian output noise into an ergodic wage distribution of empirically accurate shape unimodal skewed with a paretian right tail second high idiosyncratic productivity risk hinders learning and sorting and reduces wage inequality the equilibrium solutions for the wage distribution and for the aggregate worker flows quits to unemployment and to other jobs displacements hires provide the likelihood function of the model in closed form

human capital matching and job satisfaction we offer an explanation of the negative tenure effect in empirical job satisfaction equations if job satisfaction measures match quality the explanation follows from specific human capital accumulation and how this affects workers reactions to outside job opportunities

earnings instability and tenure we study the effect of tenure on earnings instability in italy using two alternative estimation strategies first we use a descriptive measure of earnings instability and fixed effects regressions second we develop a formal model of earnings dynamics distinguishing permanent from transitory earnings and exploit variation of tenure and instability over time and across birth cohorts in estimation we use the two approaches also to evaluate earnings instability associated with temporary contracts short tenure contracts our results indicate that each year of tenure on the job reduces earnings instability on average by 11 workers on a temporary contract have an earnings instability up to 50 higher than workers on a permanent contract

job duration seniority and earnings an important stylized fact about labor markets is that workers with longer seniority with their current employer have higher earnings than other workers with the same total labor market experience this study shows that workers in longer jobs earn more throughout than workers in a series of shorter jobs and that the measured positive cross sectional return seniority is largely a statistical artifact due to the correlation of seniority with an omitted variable representing the quality of the worker the job or the worker employer match the implication is tha t earnings do not in fact rise very much with seniority copyright 1987 by american economic association

wages and job mobility of young workers this paper presents a discrete time version of jovanovic s model of worker firm matching descriptive evidence is presented that supports the notion that unobserved worker firm heterogeneity is an important component in the intertemporal structure of wages for young workers a structural econometric model of wage dynamics under worker firm sorting is developed and estimated finally a formal test of the matching model is carried out and the matching structure on intertemporal covariances of wages is not rejected my results indicate the necessity of jointly considering processes of turnover and wage growth when analyzing the labor market experiences of young workers

the wage effects of cumulative job mobility this analysis of data from the national longitudinal survey of youth shows that cumulative job mobility had statistically significant effects on wages in the years 1979 88 the direction of the wage effects positive or negative and their magnitude varied depending on the type of cumulative mobility examined employee initiated versus employerinitiated separations economic versus family related quits layoffs versus discharges the results also indicate that although men and women had different mobility histories men for example had been discharged more often than women and women had quit for family related reasons more often than men the wage effects of each type of cumulative mobility economic quits family related quits layoffs and discharges were similar for men and women tn this paper we examine the impact of cumulative job mobility on the subsequent wages of young men and women most previous work on this subject has focused on the impact of specific mobility events such as quits or layoffs rather than on the impact of total job history on wages researchers looking at single mobility decisions have consistently reported evidence that a change in employers does affect a worker s subsequent wage therefore it is reasonable to ask whether the impact ofjob change is cumulative that is does a worker s current wage reflect the impact of all past mobility decisions quits layoffs and discharges also since most of the

convergence and divergence in british housing space abstractthe degree of convergence that exists among british house prices is an open question inferences vary with the method applied and periods considered using the rank of the cointegrating matrix among four decades of regional data two contiguous groups of regions are revealed these super regions have some common members through which price changes are transmitted from south to north with london found to be deviating from the south east neither it nor the uk are likely to be indicative of the regional series of the south of england

determining long run neutrality in a partially nonstationary model abstract the objective of this paper is to derive the conditions for long run neutrality assuming a model with nonstationary variables first we derive expressions that account for the long run differential of a variable on another variable we then obtain the conditions for long run neutrality in terms of restrictions on the parameters of what we call the structural form of the model

wages separations and job tenure on the job specific training or matching a general stochastic model of optimal job separation behavior is developed in the paper the model nests both the job training and the job matching hypotheses of the wage tenure relationship as special cases the purpose of the paper is to compare the implications of the two hypotheses for job turnover that expected wealth maximizing separation strategies are qualitatively identical under the two hypotheses is the principal theoretical result although the empirical implications of the two hypotheses for observations on the distribution of completed job spell lengths are similar as a consequence they are not quite identical

how large are the effects from changes in family environment a study of korean american adoptees i analyze a new set of data on korean american adoptees who were quasi randomly assigned to adoptive families i find large effects on adoptees education income and health from assignment to parents with more education and from assignment to smaller families parental education and family size are significantly more correlated with adoptee outcomes than are parental income or neighborhood characteristics outcomes such as drinking smoking and the selectivity of college attended are more determined by nurture than is educational attainment using the standard behavioral genetics variance decomposition i find that shared family environment explains 14 percent of the variation in educational attainment 35 percent ofthe variation in college selectivity and 33 percent of the variation in drinking behavior

the internal economics of the firm evidence from personnel data we analyze twenty years of personnel data from one firm the hierarchical structure is quite simple and stable career movements suggest that the employee s rate of learning and the firm s learning about ability are important there are promotion fast tracks exit rates vary little with tenure or salary the firm has personnel policies like those described in the internal labor markets literature although several theoretical preconditions for ilms such as ports of entry and exit are lacking job levels are important to compensation but there is also substantial individual variation in pay within levels our companion paper in this issue explores the wage policy of this firm

the relation between price and marginal cost in u s industry an examination of data on output and labor input reveals that some u s industries have marginal cost well below price the conclusion rests on the finding that cyclical variations in labor input are small compared with variations in output in booms firms produce substantially more output and sell it for a price that exceeds the costs of the added inputs the paper documents the disparity between price and marginal cost where marginal cost is estimated from annual variations in cost it considers a variety of explanations of the findings that are consistent with competition but none is found to be completely plausible

how well does the is lm model fit postwar u s data postwar u s time series for money interest rates prices and gnp are characterized by a multivariate process driven by four exogenous disturbances those disturbances are identified so that they can be interpreted as the four main sources of fluctuations found in the is lm phillips curve model money supply money demand is and aggregate supply shocks the dynamic properties of the estimated model are analyzed and shown to match most of the stylized predictions of the model the estimated decomposition is also used to measure the relative importance of each shock to interpret some macroeconomic episodes and to study sources of permanent shocks to nominal variables

do wages rise with job seniority many previous studies have found a strong positive effect of job seniority tenure on wages this paper re examines the evidence using a simple instrumental variables scheme to deal with the fact that tenure is likely to be related to unobserved individual and job characteristics that affect the wage we use the variation of tenure over a given job match as the principal instrumental variable for tenure the variation in tenure over the job is uncorrelated by construction with the fixed individual and job match specific components of the error term of the wage equation our main finding is that the partial effect of tenure on wages is small and that general labour market experience and job shopping account for most wage growth over a career the strong cross section relationship between tenure and wages is due primarily to heterogeneity bias prior researchers see mincer and jovanovic 1981 bartel and borjas 1981 borjas 1981 cline 1979 and mellow 1981 and many others have established that job seniority has a strong positive relationship with wage rates in a cross section or a cross section time series of individuals in this paper we re evaluate the evidence concerning the partial effects on wages of job seniority tenure and total labour market experience the extent to which wages rise with tenure is important for several reasons first and foremost the wage tenure profile is a fundamental question about the structure of earnings over careers second the wage tenure profile is a key determinant of the extent to which the earnings power of individuals is tied to specific jobs and it is important for assessment of the losses suffered by displaced workers hamermesh 1984 third evidence that wages rise with job tenure has been used to explain the decline in quits with tenure since the wage growth on the current job lowers the probability that the worker will locate a superior alternative a growing theoretical literature surveyed in parsons 1984 has taken the evidence of a strong wage tenure profile at face value and sought to provide an explanation for the relationship the most prominent explanation is the theory of specific human capital oi 1962 becker 1962 mincer 1974 parsons 1972 kuratani 1973 and hashimoto 1980 in which the growth of wages with tenure holding experience constant is attributed to the worker s share of investments in firm specific skills more recently lazear 1981 has presented a supervision model of wage growth in which firms defer compensation as a means of inducing workers not to shirk freeman 1977 and harris and holmstrom 1982 provide an explanation for wage growth based on an insurance motive salop and salop 1976 nickell 1976 and guasch and weiss 1982 present adverse selection models of wage growth in which firms use a wage tenure profile as a

efficient learning and job turnover in the labor market this article nests a continuous time learning model a la jovanovic journal of political economy 92 1984 108 22 into a directed on the job search framework we prove that the socially efficient allocation is separable that is the workers value functions and optimal controls are independent of both the distribution of workers across their current match qualities and the unemployment rate we characterize the dynamics of job transitions in the efficient allocation furthermore when the matching technology is linear our numerical results show that increasing the vacancy creation cost and the speed of learning have ambiguous effects on the unemployment rate and aggregate job transition

tests of long run neutrality using permanent monetary and real shocks abstract we present tests of long run monetary neutrality using an empirical framework that allows for the effects of real shocks on the long run behavior of both output and monetary aggregates our findings support long run monetary neutrality as a feature of the post world war ii u s economy we further find that permanent innovations in labor supply as measured by working age population are a principal factor in the long run movements in u s output and monetary aggregates

long run monetary neutrality in this article we provide a test of long run monetary neutrality employing cointegration and vector error correction modelling methodology using quarterly data for the united states we estimate the long run relationships among money supply and output and other key macroeconomic variables our findings in general raise doubts about the long run monetary neutrality proposition

the simple analytics of tobacco taxation with illegal supply this paper examines the impact of tobacco excise taxes where legal and illegal supplies coexist the government s objective is to minimize cigarettes smoked in the economy or to maximize revenue or to minimize illegal activity it reacts to a competitive illegal supply in an adjoining jurisdiction a model of consumer choice is used to demonstrate how demand response to tax changes can yield counterintuitive results while the model mimics the canadian market similar situations characterize the us and european markets a novel element of the paper is the treatment of externalities on the supply side rather than the demand side resume analytique simple des taxes sur le tabac quand il y a offre illegale ce memoire examine l impact des taxes sur la vente de tabac quand des offres legale et illegale coexistent l objectif du gouvernement est de minimiser les cigarettes fumees dans l economie ou de maximiser le revenu fiscal ou de minimiser l activite illegale il doit prendre en compte l offre concurrentielle illegale dans une juridiction contigue on utilise un modele de choix du consommateur pour montrer comment la reaction de la demande aux changements dans les taxes peut engendrer des resultats contre intuitifs bien que le modele soit concu pour le marche canadien on trouve des situations avec des caracteristiques similaires dans les marches americain et europeens un element novateur du memoire est sa prise en compte des externalites du cote de l offre plutot que du cote de la demande

understanding gross worker flows across u s states abstract the main cross sectional and time series properties of state level gross and net worker flows wages and rents are characterized using micro data from the u s census a dynamic general equilibrium model of worker migration is introduced to explain the stylized facts in the model a location may experience simultaneous inflows and outflows of workers recent migrants choose to migrate more often than incumbent workers thus locations that attract high numbers of migrants also tend to experience high outflow rates this pattern is a robust feature of the data and cannot be explained by models of net flows only

implications of a sugar sweetened beverage ssb tax when substitutions to non beverage items are considered abstract using the 2006 homescan panel we estimate the changes in energy fat and sodium purchases resulting from a tax that increases the price of sugar sweetened beverages ssbs by 20 and the effect of such a tax on body weight in addition to substitutions that may arise with other beverages we account for substitutions between ssbs and 12 major food categories our main findings are that the tax would result in a decrease in store bought energy of 24 3 kcal per day per person which would translate into an average weight loss of 1 6 pounds during the first year and a cumulated weight loss of 2 9 pounds in the long run we do not find evidence of substitution to sugary foods and show that complementary foods could contribute to decreasing energy purchases despite their significantly lower price elasticity the tax has a similar effect on calories for the largest purchasers of ssbs

an economy of scales a selective review of obesity s economic causes consequences and solutions this paper reviews the economic research on obesity covering topics such as the measurement of and trends in obesity the economic causes of obesity e g the monetary price and time cost of food food assistance programs income education macroeconomic conditions and peer effects and the economic consequences of obesity e g lower wages a lower probability of employment and higher medical care costs it also examines the extent to which obesity imposes negative externalities and economic interventions that could potentially internalize such externalities such as food taxes subsidies for school based physical activity programs and financial rewards for weight loss it discusses other economic rationales for government intervention with respect to obesity such as imperfect information time inconsistent preferences and irrational behavior it concludes by proposing a research agenda for the field overall the evidence suggests that there is no single dominant economic cause of obesity a wide variety of factors may contribute a modest amount to the risk there is consistent evidence regarding the economic consequences of obesity which are lower wages and higher medical care costs that impose negative externalities through health insurance studies of economic approaches to preventing obesity such as menu labeling taxes on energy dense foods and financial rewards for weight loss find only modest effects on weight and thus a range of policies may be necessary to have a substantial effect on the prevalence of obesity

the effect of job tenure on wage offers a wage offer can be either acceptable or unacceptable to a worker but in cross sectional and panel data only acceptable wage offers are observed an ols wage equation will not reveal how job tenure affects wage offers but rather will reveal how tenure affects acceptable wage offers by jointly modeling the firm s determination of the wage offer and the worker s decision to accept or reject the offer we are able to estimate the effect of job tenure on wage offers consistently in contrast to the usual ols results we find that job tenure has no statistically significant effect on wage offers

the causes of childhood obesity a survey childhood obesity rates are rapidly rising in many countries since it is highly likely that obesity will persist into adulthood current rates undermine the health and future of people in developed as well as developing countries this public health epidemic carries significant economic social as well as individual level consequences and has become a research topic of significant interest for various disciplines including economics we survey the literature in economics and related disciplines associated with the causes of childhood obesity and synthesize the results to provide a better understanding of the explanations for the rising childhood obesity rates this is an important step in crafting effective policies to combat global childhood obesity trends

worker flows job flows and unemployment in a matching model abstract standard matching models of unemployment generate far too little volatility in unemployment and vacancies relative to the variation in the shock variables shimer 2005 showed that in us data the vacancy to unemployment ratio is about 26 times more volatile than the standard model predicts he identified the flexibility of wages as the key issue and triggered a heated debate on possible improvements of the core model to accommodate these empirical facts in this paper we first document shimer s facts for the uk and find them to be qualitatively similar to us facts we then develop and calibrate a model based on the mortensen and pissarides approach that increases the volatility of the v u ratio 20 fold compared to the standard framework the key features of our model relate to the job creation decision by firms and the search options of workers we allow these to search whilst employed and firms to re advertise jobs that have been quit from this leads us to use a different job creation process whereby potential vacancies or job ideas arise at a finite rate per period over a range of idiosyncratic productivities calibrating the model to uk data we show that it delivers volatility in unemployment and vacancies much closer to though still not as large as that observed for the uk whilst retaining the standard wage determination process

an equilibrium model of health insurance provision and wage determination we investigate the effect of employer provided health insurance on job mobility rates and economic welfare using a search matching and bargaining framework in our model health insurance coverage decisions are made in a cooperative manner that recognizes the productivity effects of health insurance as well as its nonpecuniary value to the employee the resulting equilibrium is one in which not all employment matches are covered by health insurance wages at jobs providing health insurance are larger in a stochastic sense than those at jobs without health insurance and workers at jobs with health insurance are less likely to leave those jobs even after conditioning on the wage rate we estimate the model using the 1996 panel of the survey of income and program participation and find that the employer provided health insurance system does not lead to any serious inefficiencies in mobility decisions

the causal link between financial incentives and weight loss an evidence based survey of the literature obesity and overweight are linked to diseases that cost society a significant amount of resources while behavior modification can reduce the problem instigating such lifestyle changes is an uneasy task one potential way to reduce the problem is through the use of financial incentives in this survey we review the available evidence properly emphasizing studies that credibly yield meaningful estimates of the effect of financial incentives on weight loss we find that the scientific literature on the subject has not yet satisfactorily settled whether such a mechanism is effective at eliciting the desired behavioral and health outcomes we therefore advocate a rigorous large scale randomized experiment to provide reliable estimates of the effect

the earnings of immigrant men in canada job tenure cohort and macroeconomic conditions using eleven cross sectional surveys spanning 1981 92 the authors compare the earnings of immigrant and native born men in canada apparently recent immigrant cohorts have suffered no decline in earnings job tenure is found to be a strongly significant determinant of earnings previous estimates of immigrant earnings differentials which have not incorporated job tenure information may partly reflect differences in tenure between immigrants and the native born when the sample is restricted to pairs of surveys that are close to the census survey years the estimates of cohort effects are sensitive to the choice of survey years one possible explanation for that sensitivity is suggested by the finding that macroeconomic conditions are a statistically significant determinant of the rate of assimilation of recent immigrants

inflation and the distribution of relative prices the role of productivity and money supply shocks this paper examines the role of aggregate productivity and money supply shocks in determining the relationship between inflation and the distribution of relative commodity prices i estimate a restricted var that includes aggregate variables and individual commodity prices and compute the cross sectional distribution of the dynamic responses of commodity prices to these aggregate shocks the findings indicate that both shocks lead to positive correlation between inflation and the dispersion of relative prices and that the response of prices across commodities is not uniform even in the long run

identification of search models using record statistics this paper shows how record value theory a branch of statistics that deals with the timing and magnitude of extreme values in sequences of random variables can be used to recover features of the wage offer distribution in conventional search models using national longitudinal survey of youth nlsy wage data i show that the data are not compatible with specifications for the offer distribution characterized by extreme negative skewness in addition i show that my approach can be used to construct a bound on the returns to job seniority my results suggest that job seniority plays only a minor role in the wage growth of the workers surveyed in the nlsy copyright 2008 wiley blackwell

tenure business cycle and the wage setting process abstract we analyze the interaction between job tenure and external labor market conditions in wage determination first we introduce a model that combines job matching with business cycle effects as the employment relationship progresses the worker appropriates a portion of the value of the match specific human capital she accumulates gradually becoming shielded from the cyclical variations in external labor market conditions the employment relationship is progressively internalized then we present empirical evidence supporting this prediction the elasticity of wages to the unemployment rate decreases with tenure this finding is robust to different specifications that allow for job heterogeneity and it contributes to the interpretation of recent evidence of changes in the effect of the business cycle on wages

unemployment and subsequent earnings estimating scarring among british men 1984 94 this paper estimates the impact of unemployment on earnings following re employment for a large and representative sample of british men 1984 94 unemployment incidence is found to have only a temporary effect an average earnings setback of 10 on initial re engagement largely eroding over two years the effect of unemployment duration by contrast is permanent a one year spell adding a further penalty of 10 percentage points these wage penalties are least for young men and the low paid those most at risk of unemployment and greatest for prime age and highly paid men

how well do theories of job matching explain variations in job satisfaction across education levels evidence for uk graduates using ordered probit estimation technique this paper examines the job satisfaction of recent uk graduates focussing primarily on explaining job satisfaction in terms of individuals matching to jobs with the match depending on reservation returns information sets and job offer rates only limited support can be found for the argument that job matching explains higher job satisfaction in addition stylizing graduates as a peer group who form satisfaction levels based on their rankings relative to each other we examine whether or not education quality which raises peer group status and increases the job offer rate is systematically related to job satisfaction the results broadly support the hypothesis that job satisfaction is neutral across graduates of different education qualities however our specification tests indicate that ordered probit estimation may not be fully appropriate for identifying the characteristics of those with high job satisfaction

unemployment insurance and quits in canada in two recent policy changes the canadian government acted to limit the eligibility of job quitters and those dismissed for cause for unemployment insurance ui we study the effects of these policy changes on separation behaviour we find no evidence that these policy changes induced a relabelling of separations towards ui eligible reasons but we do find quite different responses across demographic groups women and young men are inhibited from quitting their jobs by the new quit penalties but prime age males seem unaffected by the large increase in the cost of quitting imposed by the changes

welfare enhancing technological change and the growth of obesity the theory explores how technological change can produce obesity as an unintended consequence of economic development which reduces food prices and the strenuousness of work the empirical analysis presents a specific example of how food price declines can improve health and well being even in a developed country

who pays for obesity evidence from health insurance benefit mandates is there an obesity externality in the late 1990s and early 2000s many state governments began requiring health insurance plans to cover treatments for diabetes using difference in difference analysis of restricted geocode data from the 1979 national longitudinal survey of youth to compare wages across states with and without diabetes mandates i find that obese people pay for all of their own increased health costs in the form of lower wages rather than passing them on to employers insurers and co workers

on the job search productivity shocks and the individual earnings process individual labor earnings observed in worker panel data have complex highly persistent dynamics we investigate the capacity of a structural job search model with i i d productivity shocks to replicate salient properties of these dynamics such as the covariance structure of earnings the evolution of individual earnings mean and variance with the duration of uninterrupted employment or the distribution of year to year earnings changes specifically we show within an otherwise standard job search model how the combined assumptions of on the job search and wage renegotiation by mutual consent act as a quantitatively plausible internal propagation mechanism of i i d productivity shocks into persistent wage shocks the model suggests that wage dynamics should be thought of as the outcome of a specific acceptance rejection scheme of i i d productivity shocks this offers an alternative to the conventional linear arma type approach to modelling earnings dynamics structural estimation of our model on a 12 year panel of highly educated british workers shows that our simple framework produces a dynamic earnings structure which is remarkably consistent with the data