intertemporal labor supply and human capital accumulation we solve and estimate a dynamic model that allows agents to optimally choose their labor hours and consumption and that allows for both human capital accumulation and savings estimation results and simulation exercises indicate that the intertemporal elasticity of substitution is much higher than the conventional estimates and the downward bias comes from the omission of the human capital accumulation effect the human capital accumulation effect renders the life cycle path of the shadow wage relatively flat even though wages increase with age hence a rather flat life cycle labor supply path can be reconciled with a high intertemporal elasticity of substitution

private food standards regulatory gaps and plantation agriculture social and environmental ir responsibility in the philippine export banana industry the expansion of retailer led food production standards over recent years has seen certification against such standards become a de facto condition of access to numerous supply chains globalg a p standards in particular have extended the traditional focus of retailer led standards beyond food safety to include compliance points addressing environmental protection and labour welfare this has stimulated considerable research on the implications of standards compliance for small producers however little attention has been paid either to the relationships between so called private standards and state based regulatory regimes or to the implications of standards compliance for corporate farms their employees and neighbouring communities this paper examines these relationships and implications in the context of plantation banana production in the philippines focussing in particular on gaps that emerge between the ideals of social and environmental responsibility embodied in private standards and actual practices of regulation it finds that while compliance with private standards is associated with comparatively favourable treatment of labour deference to poorly enforced national legislation conceals ongoing human rights and environmental concerns

can redistributive reform be achieved via market based voluntary land transfer schemes evidence and lessons from the philippines this article examines market led agrarian reform mlar and its variants in the form of voluntary land transfer schemes under the comprehensive agrarian reform program carp in the philippines analysis of mlar variants in the philippines offers a preview of what is likely to happen when the mlar model currently being pushed by the world bank is implemented in the real world not only do mlar and mlar like schemes fail to promote redistributive reform they also undermine potentially redistributive state led land reform policies

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor 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

bounds on elasticities with optimization frictions a synthesis of micro and macro evidence on labor supply how can price elasticities be identified when agents face optimization frictions such as adjustment costs or inattention i derive bounds on structural price elasticities that are a function of the observed effect of a price change on demand the size of the price change and the degree of frictions the degree of frictions is measured by the utility losses agents tolerate to deviate from the frictionless optimum the bounds imply that frictions affect intensive margin elasticities much more than extensive margin elasticities i apply these bounds to the literature on labor supply the utility costs of ignoring the tax changes used to identify intensive margin labor supply elasticities are typically less than 1 of earnings as a result small frictions can explain the differences between micro and macro elasticities extensive and intensive margin elasticities and other disparate findings pooling estimates from existing studies i estimate a hicksian labor supply elasticity of 0 33 on the intensive margin and 0 25 on the extensive margin after accounting for frictions

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

micro and macro labor supply elasticities a reassessment of conventional wisdom the response of aggregate labor supply to various changes in the economic environ ment is central to many economic issues especially the optimal design of tax policies conventional wisdom based on studies in the 1980s and 1990s has long held that the analysis of micro data leads one to conclude that aggregate labor supply elasticities are quite small in this paper we argue that this conventional wisdom does not hold up to empirically reasonable and relevant extensions of simple life cycle models that served as the basis for these conclusions in particular we show that several pieces of conventional wisdom fail in the presence of human capital accumulation or labor supply decisions that allow for adjustment along both the extensive and intensive margin we conclude that previous estimates of small labor supply elasticities based on micro data are fully consistent with large aggregate labor supply elasticities jel d91 e24 j22

nobel lecture the transformation of macroeconomic policy and research what i am going to describe for you is a revolution in macroeconomics a transformation in methodology that has reshaped how we conduct our science prior to the transformation macroeconomics was largely separate from the rest of economics indeed some considered the study of macroeconomics fundamentally different and thought there was no hope of integrating macroeconomics with the rest of economics that is with neoclassical economics others held the view that neoclassical foundations for the empirically determined macro relations would in time be developed neither view proved correct finn kydland and i have been lucky to be a part of this revolution and my address will focus heavily on our role in advancing this transformation now all stories about transformation have three essential parts the time prior to the key change the transformative era and the new period that has been affected by the change and that is the story i am going to tell how macroeconomic policy and research changed as a result of the transformation of macroeconomics from constructing a system of equations of the national accounts to an investigation of dynamic stochastic model economies

land reforms poverty reduction and economic growth evidence from india recognition of the importance of institutions that provide security of property rights and relatively equal access to economic resources to a broad cross section of society has renewed interest in the potential of asset redistribution including land reforms empirical analysis of the impact of such policies is however scant and often contradictory this paper uses panel household data from india together with state level variation in the implementation of land reform to address some of the deficiencies of earlier studies the results suggest that land reform had a significant and positive impact on income growth and accumulation of human and physical capital the paper draws policy implications especially from the fact that the observed impact of land reform seems to have declined over time

eliminating race differences in school attainment and labor market success in this article we provide quantitative evidence on the effects of monetary incentive schemes designed to reduce racial differences in school attainment and earnings our analysis is based on the structural estimation of a dynamic model of schooling work and occupational choice decisions over the life cycle we consider two recent proposals that although not specifically targeted to blacks can be expected to have differential racial impacts one proposal suggested by robert reich provides a high school graduation bonus to youths from lower income families the other suggested by edmund phelps provides wage subsidies to low wage workers

state sponsored violence as a tragedy of the commons england s privateering wars with france and spain 1625 1630 the tragedy of the commons is the familiar problem that open access to a common property resource leads to overexploitation and to zero profits a commons model is applied to an example of state sponsored private violence the practice of privateering or licensed piracy it is predicted that the presence of uncertainty about the value of the prey will reduce the amount of exploitation effort and that industry profits may be positive due to both uncertainty and heterogeneous exploiters using data from england s wars with france and spain between 1625 and 1630 the model suggests that the commons represented by enemy merchant shipping was not overexploited and that privateering profits were positive the dynamic paths of privateering effort ships seized and individual firm profits were however consistent with the normal expectation that commons exploitation will peak and fall as competition drives down returns through entry

a life cycle consistent empirical model of family labour supply using cross section data this paper estimates a utility maximising model of the joint determination of male and female labour supplies using a sample of married couples from the u k family expenditure survey the emphasis is on the estimation of within period preferences that are consistent with intertemporal two stage budgeting under uncertainty however the approach we adopt provides an alternative method of estimating certain aspects of life cycle behaviour to the fixed effects constant approach of heckman and macurdy 1980 macurdy 1981 and browning deaton and irish 1985 moreover it relaxes some of the underlying restrictions that are implicit in these constant models under uncertainty

dis accords the politics of market assisted land reforms in chiapas mexico abstract in spring 2003 the world bank published a major statement on land reform policy reflecting powerful new institutional support for market assisted land reforms this article uses the case of land conflicts in chiapas mexico and their resolution through market assisted agrarian accords to critically examine this new policy current using fine grained case studies and ethnography rather than the national crossnational studies typically used to assess market assisted land reform this article finds no grounds for the foundational claim that decentralized market assisted land reforms are inherently less politicized than state led land reforms despite claims to the contrary proponents of the new policy deploy one dimensional understandings of politics and the political construction of markets that gloss the ways community and markets are highly politicized sites where actors play out multiple territorial projects

household returns to land transfers in south africa a q squared analysis abstract the south african land reform programme has been widely criticised for its slow pace as well as its apparent lack of contribution to poverty reduction however there is little systematic evidence of the impact of land transfers on their beneficiaries due to data scarcity this paper combines econometric evidence based on official household surveys with qualitative data collected specifically to triangulate and complement the econometric analysis the qualitative data analysis confirms the plausibility of the econometric finding that on average beneficiaries do not gain from participation and suggests that the main reason for the disappointing impact of participation is the incompatibility of consultant led land use plans to land grantees skills

the role of labor and marriage markets preference heterogeneity and the welfare system in the life cycle decisions of black hispanic and white women using data from the nlsy79 we structurally estimate a dynamic model of the life cycle decisions of young women the women make sequential joint decisions about school attendance work marriage fertility and welfare participation we use the model to perform counterfactual simulations designed to shed light on three questions 1 how much of observed minority majority differences in behavior can be attributed to differences in labor market opportunities marriage market opportunities and preference heterogeneity 2 how does the welfare system interact with these factors to augment those differences 3 how can new cohorts that grow up under the new welfare system temporary aid for needy families be expected to behave compared to older cohorts

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

making land rights accessible social movements and political legal innovation in the rural philippines abstract in recent years rule of law and legal reform has grown to be a major concern of national governments international financial institutions development agencies and donor organisations part of this concern has focused on expanding access to justice for the poor however little effort has gone into understanding the role of justice sector institutions in shaping the opportunities and limits of redistributive justice little attention has been paid to the actual workings of obstacles entrenched within the justice sector to land reform for example instead pro market scholars cite difficult legal problems as a reason to turn away from state led land reform and toward market oriented land policies yet as this paper shows a closer look at the details of dynamics around land reform in the philippines suggests that political legal problems associated with implementation of the agrarian reform law can be overcome under certain conditions it is argued that for rural poor claimants it is important

land reform as commenced business the evidence against stopping abstract in the new paradigm institutions are long term endogenous thus the aims of land reform must be compatible with replace or substitute for initial incentives and power structures many reforms e g compulsory collectives are not redefinition of land reform is therefore needed yet the case for private land redistribution with ceilings remains the inverse relationship rests firmly on lower cost labor transactions in small farms though large but competitive transport or processing firms which enjoy lower cost capital transactions may be needed crucial is the impact of the postreform structure on livelihoods especially for the growing rural majority near landless workers new style market based reforms have potential probably best combined with old style ceilings substantial compensation with urban taxpayers sharing costs alternative off farm prospects and progressive taxes on large landholdings or bequests

the elasticity of taxable income with respect to marginal tax rates a critical review this paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data first we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis we discuss what other parameters should be estimated when the elasticity is not a sufficient statistic second we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the united states to illustrate those issues third we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out finally we discuss avenues for future research jel h24 h31 j22

risk averse behavior in generalized matching pennies games in experimental studies of behavior in 2 2 games with unique mixed strategy equilibria observed choice frequencies are systematically different from mixed strategy nash predictions this paper examines experimental results for a variety of such games and shows that a structural econometric model which incorporates risk aversion into a quantal response equilibrium explains the data very well moreover risk aversion estimates are stable across the different games and are close to those obtained from laboratory and field auction data as well as from individual lottery choice experiments

commercial fisheries under price uncertainty abstract the deterministic models applied in economics of fisheries are extended to comprise price uncertainty and risk aversion among the fishing units it is proved that in the open access fishery both the total fishing effort and the number of fishing units are reduced as the variance of the price increases that the total fishing effort may be smaller in the open access fishery than in the optimal fishery at a high variance that only a fixed producer price system can create a first best optimum and that a tax on revenue is more efficient than both fishing unit quotas or tax on catch

effects of permanent and transitory tax changes in a life cycle labor supply model with human capital i examine effects of labor income taxation in life cycle models with human capital accumulation in this case the opportunity cost of time equals the wage plus returns to work experience this has several interesting consequences first the data appear consistent with larger labor supply elasticities than prior work suggests second contrary to conventional wisdom permanent tax changes can have larger effects on current labor supply than temporary changes third human capital dampens responses of young workers to transitory tax changes fourth labor supply elasticities increase with age fifth human capital amplifies the effect of permanent tax changes in the long run

life cycle labor supply with human capital accumulation a dynamic model of labor supply under uncertainty with endogenous human capital accumulation is developed and estimated using 1968 81 panel study of income dynamics male panel data given a learning by doing technology for human capital investment and a translog utility function structural parameters for preferences and technology are estimated from the orthogonality conditions implied by the euler equations assuming rational expectations the parameter estimates conform to economic theory simulations of the model suggest that the intertemporal labor supply elasticity with endogenous wages will rise over the lifecycle producing different policy implications than typical models with exogenous wages and constant intertemporal elasticities copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

environmental entitlements dynamics and institutions in community based natural resource management abstract while community based natural resource management cbnrm now attracts widespread international attention its practical implementation frequently falls short of expectations this paper contributes to emerging critiques by focusing on the implications of intracommunity dynamics and ecological heterogeneity it builds a conceptual framework highlighting the central role of institutions regularized patterns of behavior between individuals and groups in society in mediating environment society relationships grounded in an extended form of entitlements analysis the framework explores how differently positioned social actors command environmental goods and services that are instrumental to their well being further insights are drawn from analyses of social difference new dynamic ecology new institutional economics structuration theory and landscape history the theoretical argument is illustrated with case material from india south africa and ghana

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

intertemporal substitution in labor supply evidence from micro data the sensitivity of the supply of labor to intertemporal variation in the wage is an important issue in macroeconomics the analysis of social security and pensions and the study of life cycle patterns of work this paper explores two approaches to the measurement of intertemporal substitution that have appeared in the literature the first approach is to use consumption to control for wealth and unobserved expectations about future wages in the labor supply equation the second approach is to estimate a first difference equation for hours in which labor supply from the previous period serves as a control for wealth and wage expectations the results indicate that intertemporal substitution elasticity for married men is positive but small

life cycle labour supply with human capital econometric and behavioural implications i examine econometric and behavioural implications of including human capital in the life cycle labour supply model with human capital the wage is no longer the price of time which is instead the wage plus returns to work experience this has important implications first labour supply elasticities become functions of both preference and wage process parameters one cannot estimate them separately second the data appear consistent with larger elasticities than prior work suggests third contrary to conventional wisdom permanent tax changes can have larger effects on current labour supply than temporary changes fourth effects of permanent tax changes grow over time

harvest uncertainty and the tragedy of the commons abstract this paper demonstrates that a fixed number of risk averse firms faced with harvest uncertainty owing to resource stock uncertainty will typically reduce their exploitation of a commons in addition the total exploitation of the industry will decrease when entry is permitted and uncertainty is compared with certainty this result holds for perfectly competitive output markets and also characterizes imperfectly competitive output markets with linear market demand and risk neutral firms in the latter case the socially optimum number of firms is determined based upon the degree of uncertainty the price elasticity of market demand and the elasticity of input productivity

optimal taxation prudence and risk sharing abstract this paper analyses optimal income taxation as a trade off between the incentive effects of increased uncertainty and the welfare benefits of social insurance greater prudence increases labour supply because of precautionary incentive effects which reduce the progressivity of the optimal income tax schedule increased uncertainty increases progressivity of the income tax schedule because of a greater value of social insurance optimal tax progressivity depends on the ratio of prudence to risk aversion when this ratio is high incentive effects dominate the social insurance effect leading to declining optimal income tax rates

the effects of health wealth and wages on labour supply and retirement behaviour this paper estimates a life cycle model of labour supply retirement and savings behaviour in which future health status and wages are uncertain individuals face a fixed cost of work and cannot borrow against future labour pension or social security income the method of simulated moments is used to match the life cycle profiles of labour force participation hours worked and assets that are estimated from the data to those that are generated by the model the model establishes that the tax structure of the social security system and pensions are key determinants of the high observed job exit rates at ages 62 and 65 removing the tax wedge embedded in the social security earnings test for individuals aged 65 and older would delay job exit by almost one year by contrast social security benefit levels health and borrowing constraints are less important determinants of job exit at older ages for example reducing social security benefits by 20 would cause workers to delay exit from the labour force by only three months

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

making negotiated land reform work initial experience from colombia brazil and south africa abstract the paper describes background initial experience and future challenges associated with a new negotiated approach to land reform this approach has emerged as following the end of the cold war and broad macroeconomic adjustment many countries face a second generation of reforms to address deep rooted structural problems and provide the basis for sustainable poverty reduction and economic growth it reviews possible theoretical links through credit market or political channels between asset ownership and economic performance program characteristics in each country as well as lessons for implementation and implications for monitoring and impact assessment are discussed

labour supply the roles of human capital and the extensive margin we specify and estimate a life cycle labour supply model that expands on earlier work by simultaneously including human capital accumulation saving and bequests an active extensive margin a realistic specification of the progressive tax structure and the social security system and an accounting for private pensions and health expenditures by incorporating all these features we develop new insights into how taxes affect life cycle labour supply for instance we find that labour supply elasticities vary in important ways with age education and the tax structure itself we also show how human capital affects elasticities differently on the intensive versus extensive margins

corrigendum on a life cycle model of female labour supply in the empirical work in our article on the intertemporal substitution of leisure time for married women heckman and macurdy 1980 we inadvertently constrained the estimated intertemporal substitution elasticity to be too high since this parameter plays a prominent role in discussions of equilibrium models of the business cycle and since our empirical work has been cited in discussions on this topic e g hall 1980 we would like to present a corrected set of empirical results for our model the period t utility function adopted in this note is in the notation of our original paper equation 15