can falling supply explain the rising return to college for younger men a cohort based analysis although the college high school wage gap for younger u s men has doubled over the past 30 years the gap for older men has remained nearly constant in the united kingdom and canada the college high school wage gap also increased for younger relative to older men using a model with imperfect substitution between similarly educated workers in different age groups we argue that these shifts reflect changes in the relative supply of highly educated workers across age groups the driving force behind these changes is the slowdown in the rate of growth of educational attainment that began with cohorts born in the early 1950s in all three countries

changes in labor force composition and male earnings a production approach models of aggregate production are estimated and used to investigate the effects of changes in labor force composition on the recently observed decline in the earnings of college graduates relative to other workers and on the fall in the earnings of younger workers relative to older workers changes in labor force composition explain substantial proportions of these observed earnings changes the most important compositional change appears to have been the rapid increase in the number of young male college graduates projections outside the sample are consistent with depressed earnings throughout the lifetimes of the large baby boom cohorts especially among college graduates but do not suggest that depressed college graduate earnings are a permanent phenomenon for all birth cohorts

explaining cross cohort differences in life cycle earnings abstract college educated workers entering the labor market in 1940 experienced a 4 fold increase in their labor earnings between the ages of 25 and 55 in contrast the increase was 2 6 fold for those entering the market in 1980 for workers without a college education these figures are 3 6 fold and 1 5 fold respectively why are earnings profiles flatter for recent cohorts we build a parsimonious model of schooling and human capital accumulation on the job and calibrate it to earnings statistics of workers from the 1940 cohort the model accounts for 99 of the flattening of earnings profiles for workers with a college education between the 1940 and the 1980 cohorts 52 for workers without a college education the flattening in our model results from a single exogenous factor the increasing price of skills the higher skill price induces i higher college enrollment for recent cohorts and thus a change in the educational composition of workers and ii higher human capital at the start of work life for college educated workers in the recent cohorts which implies lower earnings growth over the life cycle

measuring human capital in the labor market the supply of experience in 8 oecd countries abstract to investigate the evolution of the supply side of the labor market i derive a methodology to measure an important component of the human capital level of the workforce the experience of the labor market based on the perpetual inventory method a stock of experience is estimated for eight oecd countries it appears that during the last three decades the oecd labor markets have faced a decline in the supply of experience by the labor market participants with a minimum in the early 1980s for most countries and a recovery in the 1990s some implications regarding relative wages relative unemployment and schooling are discussed

demand curves for stocks do slope down new evidence from an index weights adjustment weights in the toronto stock exchange 300 index are determined by the market values of the included stocks public floats in november 1996 the exchange implemented a previously announced revision of its definition of the public float this revision which increased the floats and the index weights of 31 stocks conveyed no information and had no effect on the legal duties of shareholders affected stocks experienced statistically significant excess returns of 2 3 percent during the event week and no price reversal occurred as trading volume returned to normal levels these findings support downward sloping demand curves for stocks an obvious event with which to examine the slope of demand curves for stocks is one that changes supply in the absence of new information a shift in supply should not affect stock prices if demand curves for stocks are flat scholes 1972 using a sample of secondary equity distributions asks whether stocks are unique works of art or merely abstract claims to residual cash flows with many close substitutes as is assumed in much of finance theory scholes finds that the negative price impact of secondary offerings depends on the seller s identity implying the revelation of unfavorable informationand rules out a pure supply effect mikkelson and partch 1985 also using a sample of registered and unregistered secondary offerings find weak evidence of downward sloping demand curves but are unable to cleanly distinguish this explanation from the alternative explanation based on unfavorable information a different class of events additions to widely followed stock market indexes ostensibly provides a setting where information effects should not be present shleifer 1986 documents a permanent price increase for stocks

input demand elasticities for heterogeneous labor firm level estimates and an investigation into the effects of aggregation labor economists have paid increasing attention to the estimation of demand elasticities for heterogeneous labor the majority of these studies investigate the effect on wage rates resulting from exogenous changes in factor quantities i e the measurement of elasticities of complementarity examples of these studies abound borjas for example investigates the impact of differences in labor market representation on the earnings of racial groups 8 in another paper borjas defines immigrants as a separate labor group and is able to determine the impact of immigration on the wages earned by natives 9 berger defines labor inputs along education and gender lines thereby allowing for the investigation of changes in the age education composition of the work force on wage rates 5 and grant and hamermesh study the effect of increasing female labor force participation on the wages earned by youth and adults 17 less attention has been paid to the study of the responsiveness of employment to exogenous changes in wage rates i e the measurement of elasticities of substitution less attention has been focused on this issue because the data requirements are more stringent since in order to presume that wage rates are exogenously determined the unit of observation must be small ideally establishmentor firm level data would be used the relative inaccessibility of these type of data has led researchers to use more aggregated figures such as smsa level or industry level data to address microissues as long as wage rates are determined exogenously the unit of observation chosen is appropriate there are real concerns however about the adequacy of more aggregated units to describe the behavior of firms 2 this study addresses the issue of whether micro level data are in fact needed to accurately measure elasticities of substitution among labor groups a firm level data set that includes input

labor market competition among youths white women and others we estimate substitution possibilities among a set of age race sex groups in the labor force the estimates are based on cross section data from smsas in 1969 and they allow us to consider how substitutable adult women are for young women or young men the estimates are used along with assumptions about the extent of wage rigidity and elasticities of labor supply to simulate the direct and indirect effects of the growth of the female labor force on job opportunities for youth assuming rigid wages for young workers and on the wage rates of adult males assuming these wages are flexible this abstract was borrowed from another version of this item

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

firm size wage gaps job responsibility and hierarchical matching i present the fact that wage gaps due to firm size increase with job responsibility i use swedish data to determine whether wage gaps increase with a direct measure of job responsibility to compare the age patterns of the wage gaps for blue and white collar workers and to compare wages by job responsibility and spans of control with u s data i compare supervisory to nonsupervisory occupations and find that wage gaps increase with job responsibility for most occupational ladders this fact is consistent with hierarchical matching models in which the larger number of subordinates amplifies managerial talent

the translog approximate function substitution among inputs in manufacturing evaluated at sample means abstract this paper shows the translog function can approximate any first degree homogeneous function around any expansion point estimates for 1987 manufacturing confirm no weak separability of labor from capital but do not confirm lower production than non production worker substitution with capital

the effect of cohort size on earnings growth a reexamination of the evidence this study reexamines the effect of cohort size on earnings growth finis welch finds that individuals in larger cohorts experience depressed earnings conditions on entry into the labor market but that their earnings grow at faster rates than in smaller cohorts thus a large portion of the cohort size effect on earnings dissipates after a few years however using data almost identical to those of welch but estimating less restrictive models it is found here that cohort size not only depresses earnings at entry but also seems to slow down early career earnings growth the evidence suggests that earnings ini larger cohorts do not approach normal levels after at brief period in the labor force rather the negative cohort size effect on earnings appears to worsen with experience

schooling choices and demographic cycles this paper examines the effect of demographic cycles on schooling choices and the timing of school completion utilizing data from the u s national longitudinal surveys of labor market experience and from the panel study of income dynamics we find that men and women born during the upswing of a demographic cycle obtain more schooling and take longer to finish a year of schooling than comparable individuals born during the downswing of a demographic cycle the patterns that we document are more complex than would be predicted by any of the theoretical models of educational responses to demographic cycles that have been presented in the literature excerpt

valuing urban lakeview amenities using implicit and contingent markets amenities influence individual location decisions and affect overall social well being this comparative study focuses on the potential complementarity of implicit and contingent market approaches

the price of experience we identify a key role of factor supply driven by demographic changes in shaping several empirical regularities that are a focus of active research in macro and labor economics in particular demographic changes alone can account for the large movements of the return to experience over the last four decades for the differential dynamics of the age premium across education groups emphasized by katz and murphy 1992 for the differential dynamics of the college premium across age groups emphasized by card and lemieux 2001 and for the changes in cross sectional and cohort based life cycle profiles emphasized by kambourov and manovskii 2005 jel d91 e24 i23 j11 j24 j31

an introduction to the law and economics of intellectual property although economists have written on topics of intellectual property for a long time the impact of economics on public policy in this area has been slight especially as compared to the influence of professional writings in areas such as antitrust and taxation we believe that too few of the profession s resources have been devoted to these issues and that of those resources that have been employed too few have been devoted to empirical analyses we hope that this introductory essay and the three papers that follow will stimulate interest in this subject this introductory essay first describes some of the basic economic tradeoffs involved in intellectual property law and then describes the framework of the law in the six areas described above patent copyright semiconductor protection trademark trade secret and misappropriation it is intended both to provide thumbnail descriptions of the various intellectual property regimes to economists working in this area and to indicate where additional economic research might be useful

distributive implications of an aging society abstract the paper reviews recent research on the impact of an aging population on the distribution of income after briefly discussing the demographic conditions responsible for population aging a short account is given of demographic trends in the industrialized world in order to disentangle the many potential channels by which an aging society affects the dispersion of income several levels of aggregation are distinguished the paper differentiates between intra and intergenerational issues between direct and indirect demographic inequality effects and between the distribution of current and lifetime income it emphasizes the critical role of age related redistributive tax transfer systems like public pension schemes and health care systems sources of distributional policy conflicts are identified at both the cross section level and the lifetime level of income inequality the institutional design of intergenerational burden sharing individual disincentive reactions shifts in age income profiles related to cohort size and politico economic repercussions are shown to drive the relation between population aging and income distribution in distinct and partially opposite ways

the retirement wealth of the baby boom generation abstract the paper compares the well being of the baby boom generation ages 40 55 in 2001 with the same age group in 1983 i find little evidence that their relative position deteriorated over the period by some indicators this generation has seen an improvement in terms of income the 40 55 age group was at about the same relative position in 2001 as in 1983 in terms of conventional wealth there was some slippage over the period in terms of mean augmented wealth net worth plus pension and social security wealth their relative position improved somewhat but in terms of median augmented wealth there was again some slippage

early career work experience and gender wage differentials we estimate a wage model that includes an array of variables measuring the fraction of time worked during each year of the career this array fully characterizes past employment experience regardless of how sporadic it has been our model yields substantially higher estimated returns to experience and lower returns to tenure than do models that measure experience cumulatively and use the standard quadratic functional form we find that the data reject the standard model but fail to reject our model furthermore we find that 12 of the male female wage gap is due to differences in the timing of work experience

the demographic cycle and optimal schooling choices a model is developed that enables the authors to estimate the effects of demographic cycles on both earnings and schooling the model is tested using data from the 1991 korean occupational wage survey the results indicate that cohorts following large birth cohorts in the cycle choose relatively less formal schooling compared to pre peak cohorts and that post peak cohorts also have lower incomes this result concerning south korea is consistent with findings from previous studies concerning the united states annotation

the effects of differential income replacement and mortality on u s social security redistribution we study redistribution via the u s social security retirement system for cohorts of men born during the second half of the 20th century our focus is on redistribution across race and education groups the cohorts we study are younger than cohorts studied in previous similar research and thus more exposed to recent increases in earnings inequality all else equal this should increase the degree of progressivity of social security redistribution due to the structure of the benefit formula however we find that redistribution is only modestly progressive for individuals born as late as 1980 differential mortality rates across race and education groups are the primary explanation while black white mortality gaps have narrowed some in recent years they remain large and dull progressivity mortality gaps by education level are also large and unlike the gaps by race they are widening which puts additional regressive pressure on social security redistribution

why does trend growth affect equilibrium employment a new explanation of an old puzzle that the employment rate appears to respond to changes in trend growth is an enduring macroeconomic puzzle this paper shows that in the presence of a return to experience a slowdown in productivity growth raises reservation wages thereby lowering aggregate employment the paper develops new evidence that shows this mechanism is important for ex

the baby boom housing and loanable funds this paper examines baby boom effects in a simple three period overlapping generations model in which equilibrium must be maintained in the housing market as well as in the loanable funds market all agents must buy a house financed by an adjustable rate mortgage in the first period expectations regarding the path of interest rates and the price of housing play a crucial role in determining effects of the population bulge under static expectations the rate of interest falls sharply at the appearance of the baby boom while the price of housing increases behavior in the market for loanable funds explains this surprising result when rational expectations are assumed however the rate of interest rises prior to and during the appearance of the baby boom and the price of housing increases as well welfare and long term effects in the two scenarios do not differ markedly

demographic change and income distribution this paper examines the interactions between demographic change and income distribution especially in the context of government starting from a simple descriptive life cycle model of individual income this paper established an explicit link between the age composition of a population and the personal distribution of incomes demographic effects on income inequality are derived next 2 income maintenance programs are introduced a redistributive tax transfer scheme and a pay as you go financed state pension system the resulting government budget constraints entail interrelations between fiscal and demographic variables causing an additional indirect demographic impact on the distribution this is shown not only to change but in some cases even to reverse the distributional incidence of demographic trends the superimposition of different age structures on populations of otherwise identical characteristics is non neutral with respect to income distribution disregarding state interventions population aging increases income inequality this result may no longer generally hold if redistribution policies are taken into account the paper provides an example of how indirect demographic effects may lead to a reversal of sign in the absence of any government program a higher ratio of pensioners to active workers raises income inequality in the presence of a redistributive tax transfer scheme and pay as you go financed state pension system a higher dependency ratio decreases income dispersion the restoration of government budget equilibrium induces unintended distributional effects which put the incidence of demographic shifts in a different light varying important aging indicator with realistic forecast bounds leads to inequality fluctuations up to 35 this illustrates the quantitative scale and hence the political importance of demographically caused inequality distortions

two views of inequality over the life cycle data on the life cycle profiles of inequality in wages earnings hours worked and consumption contain precious information for answering questions about the ability of households to insure labor market risk and about the sources of this risk this paper demonstrates that the choice of whether to control for cohort effects or for time effects has a drastic impact on the estimated age profiles for inequality and thus on the answers to those questions it also shows that time effects are required to account of the observed trends in inequality in 30 years of u s data whereas there is no evidence that cohort effects have been important jel c13 d31 d91 j22 j31

pro poor agricultural biotechnology can the international research system deliver the goods abstract while global investment in agricultural research by the private sector is increasing with growth in developing country markets and the emergence of new technologies complementary public sector investment is stagnating or declining in many developing countries this review argues that the changing roles of the public and private sectors in generating new scientific knowledge may adversely affect the diffusion of explicitly pro poor technologies technologies that are simultaneously yield enhancing and poverty reducing comparing historical evidence from the green revolution with recent evidence from the emerging era of agricultural biotechnology this review argues that a more pluralistic international system for agricultural research will be more responsive to poverty only if the strategic leadership role of the public sector is strengthened certain research functions are reallocated to the private sector and new policy and organizational mechanisms are used to stimulate pro poor research in and for developing country agriculture

the substitutability of black hispanic and white labor this paper analyzes the extent of labor market competition among blacks hispanics and whites in the united states the specification of a generalized leontief production function leads to an empirically tractable system of input demand functions the estimation of the demand system using the 1976 survey of income and education reveals that a blacks and hispanics are complementary inputs b hispanics and whites may also be complements and c blacks and whites are not complements and may be substitutes

the effects of demographic change on the distribution of wages 1967 1990 a multiple skills model was used to examine the impact of changes in labor force composition on the wage distribution of workers by age sex education and race in the us from 1967 through 1990 the model provided for a higher level of specification than previous studies of wage distribution changes in previous investigations workers were grouped into arbitrary and a priori categories and workers in each category were assumed to be perfectly interchangeable in contrast the multiple skills model assumed that each worker had multiple skills that each skill had a productive value and that each skill was an imperfect substitute for other skills the model further assumed that changes in labor force composition would alter the distribution of skills in the labor force which in turn would produce changes in relative wages analysis revealed that wages of young college educated white and nonwhite males relative to the wages of older college educated white and nonwhite males declined since 1967 and were expected to decline throughout the 1980s in contrast the wages of young high school educated white and nonwhite males relative to the wages of older high school educated white and nonwhite males did not decline since 1967 and were not expected to decline during the 1980s the wages of white females of all ages and of all educational levels relative to the wages of males of all ages and of all educational levels declined throughout the period and were expected to decline in the future nonwhite workers made greater gains in wages since 1967 than white males and this trend was expected to continue through the 1980s however the wages of nonwhite males remained absolutely lower than those of white males by 1985 the wages of nonwhite females were expected to surpass those of white females these findings were similar to those observed in other studies except that other studies failed to detect the differential impact on the wages of high school and college educated males

black white earnings ratios the role of cohort size effects abstract while black white earning ratios have been rising over time across cohorts there is some evidence that they have been dropping over time within cohorts of recent entrants to the labor market this has coincided with the entry of the large baby boom cohorts into the labor market this paper examines the role of race differences in cohort size effects on black white earnings ratios for male high school graduates using current population survey data in larger cohorts the black white earnings ratio is lower at entry and falls as the cohort progresses through the career consistent with recent evidence

why the gender gap in wages narrowed in the 1980s since 1976 the gender gap in wages on average declined by about 1 per year this article focuses on identifying the factors underlying this trend three data sets are analyzed the current population survey the panel study of income dynamics and the national longitudinal survey we find that convergence in measurable work related characteristics schooling and work experience explains one third to one half the narrowing the remainder is attributable to a relative increase in women s returns to experience as well as to declining wages in blue collar work and other factors

understanding the evolution of the us wage distribution a theoretical analysis in this paper we propose an analytically tractable overlapping generations model of human capital accumulation and study its implications for the evolution of the us wage distribution from 1970 to 2000 the key feature of the model and the only source of heterogeneity is that individuals differ in theirabilitytoaccumulatehumancapital therefore wageinequalityresultsonlyfromdifferencesin human capital accumulation we examine the response of this model to skill biased technical change sbtc theoretically we show that in response to sbtc the model generates behavior consistent with some prominent trends observed in the us data including i a rise in overall wage inequality both in the short run and long run ii an initial fall in the education premium followed by a strong recovery leading to a higher premium in the long run iii the fact that most of this fall and rise takes place among younger workers iv a rise in within group inequality v stagnation in median wage growth and a slowdown in aggregate labor productivity and vi a rise in consumption inequality that is much smaller than the rise in wage inequality these results suggest that the heterogeneity in the ability to accumulate human capital is an important feature for understanding the effects of sbtc and interpreting the transformation of the us labor markets since the 1970s jel e21 e24 j24 j31

beauty productivity and discrimination lawyers looks and lucre we propose models with an ascriptive characteristic generating earnings differentials and causing sectoral sorting allowing us to distinguish among sources producing such differentials we use longitudinal data on a large sample of graduates from one law school and measure beauty by rating matriculation photographs 1 betterlooking attorneys who graduated in the 1970s earned more than others after 5 years of practice an effect that grew with experience 2 attorneys in the private sector are better looking than those in the public sector differences that rise with age these results support theories of dynamic sorting and customer behavior

dollars and dreams a reduced middle class alternative explanations we decompose annual earnings into hours of work and hourly earnings and analyze male female differences in earnings inequality using canadian data our results indicate that the larger female inequality in earnings is due to a greater inequality in the

the overeducated canadian changes in the relationship among earnings education and age for canadian men 1971 81 individual data from six surveys of consumer finances are used to assess recent changes in the earnings profiles of canadian males with particular emphasis upon the role of cohort size the data reveal a marked compression of earnings differences across levels of education at most ages the slope of age earnings profiles did not change systematically regression analysis confirms that cohort size has a negative impact on earnings that diminishes with age however the estimated effects of cohort size do not explain the observed decline in earnings differences across levels of education le canadien trop instruit a propos des changements dans les rapports entre gains age et niveau d instruction pour les hommes canadiens 1971 81 l auteur analyse les changements recents dans les profils de revenus des hommes canadiens en s attachant en particulier a examiner l impact de la taille de la cohorte a l aide des donnees individuelles tirees de six enqu es sur les finances des consommateurs les donnees revelent une compression marquee de la fourchette de revenus pour divers niveaux d instruction et ce pour la plupart des ages la pente du profil age revenus ne change pas systematiquement l analyse de regression montre que la taille de la cohorte a un impact negatif sur le revenu mais un impact qui diminue avec l age cependant les effets calibres de la taille de la cohorte n expliquent pas la chute observee dans les differentiels de revenus pour des canadiens ayant des niveaux d instruction differents

educational attainment and cohort size we argue that the postwar baby boom caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades if substitutability between young and old workers diminishes with education the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers reducing incentives for educational attainment the opposite is true for pre and postboom cohorts the diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers

the importance of bundling in a gorman lancaster model of earnings the idea that the labor market of individuals can be decomposed into payments to separate productive attributes has an enduring appeal in economics assuming that demographic groups differ only in their endowments of productive characteristics it is possible to rationalize observed demographic earnings differentials without invoking the arguments that characteristics specific to a particular demographic group are direct objects of employer demand by aggregating skills over all demographic groups it is possible to produce a theory of the market determination of the prices of skills held in different amounts by different demographic groups this paper considers conditions under which characteristics are uniformly priced across sectors of a multisector economy the paper presents empirical evidence that rejects uniform pricing of characteristics as a description of the us labor market bundling may account for this evudence but other hypotheses do as well authors

minimum wages and the demand for labor i formulate measures of the effective minimum wage based on broad definitions of the labor costs that face employers and use these measures in reestimating some simple equations relating the relative employment of youths and adults to the u s minimum wage using aggregate data for 1954 78 i then ground the model more closely in the theory of factor demand first by adding the relative wages of youths and adults to the equation describing their relative employment and then by specifying a complete system of demand equations for these two types of labor teen employment responds quite robustly to changes in the effective minimum in these specifications with an elasticity of 0 1 a translog cost function defined over young workers adults and capital shows that the effective minimum wage reduces employers ability to substitute other factors for young workers using both sets of results i find that a subminimum wage for youths would have increased their employment with at most a small loss of jobs among adults this abstract was borrowed from another version of this item

the long run educational cost of world war ii an important component of the long run cost of a war is the loss of human capital suffered by school age children who receive less education austrian and german individuals who were 10 years old during the conflict or were more directly involved through their parents received less education than comparable individuals from nonwar countries such as switzerland and sweden we also show that these individuals experienced a sizable earnings loss some 40 years after the war which can be attributed to the educational loss caused by the conflict the implied consequences in terms of gross domestic product loss are calculated

welfare impacts of cross country spillovers in agricultural research the welfare implications of intellectual property protection ipp for private sector agricultural research are analyzed focusing on the realistic cases where countries provide different ipp levels technology spills over across countries and the public sector is involved in research a model is developed to determine who benefits from and who should pay for the associated research the article contains some interesting results on the implications of a harmonization of ipp policies through multilateral agreements or via technology that allows research firms to prevent the copying of plants and animals that express traits that have emerged from their research

new evidence on stock price effects associated with changes in the s p 500 index since october 1989 standard and poor s has when possible announced changes in the composition of the s p 500 index one week in advance because index funds hold s p 500 stocks to minimize tracking error index composition changes since this date provide an opportunity to examine the market reaction to an anticipated change in the demand for a stock using post october 1989 data the authors document significantly positive negative postannouncement abnormal returns that are only partially reversed following additions deletions these results indicate the existence of temporary price pressing and downward sloping long run demand curves for stocks and represent a violation of market efficiency copyright 1997 by university of chicago press

functional separability and elasticities of complementarity this paper presents an alternative characterization of separability based on elasticities of complementarity earlier studies have formulated separability restrictions in terms of the allen elasticities of substitution the hicks and antonelli elasticities of complementarity are presented to examine separability of production utility and distance functions whereas the allen elasticities of substitution are valid under homothetic separability the hicks elasticities of complementarity are a universally relevant measure of separability for the production utility function separability of meat commodities is tested using the antonelli elasticities with the consumer s preferences specified with the distance function

income and wealth inequality and the life cycle a non parametric analysis for china this paper uses the techniques of non parametric density and regression estimation to estimate the chinese age income and age wealth distributions using survey data relating to 1987 although there is evidence of a clear life cycle profile of income earning and wealth accumulation the results suggest that only a small part of observed inequality can be explained by life cycle factors this finding contradicts the results of some other researchers

labor force participation work experience and the pay gap between men and women previous research on the relationship between women s educational attainment and the timing of entry into parenthood has produced conflicting results although studies have consistently found that educational attainment has a delaying effect on entry

declining labor turnover and turbulence abstract the rate of job loss has been on a secular decline for the last four decades or longer changes in demographics or industry composition do not account for the trend this paper seeks to identify the possible sources of the decline using a simple search and matching model with two types of workers experienced and inexperienced where the former type faces a risk of skill loss during unemployment the calibrated model suggests that a higher risk of skill loss during unemployment results in a lower job separation rate because workers accept lower wages in exchange for job security various other potential hypotheses are also examined

empirical age earnings profiles the human capital earnings function in which earnings are expressed as a quadratic in potential experience is probably the most widely accepted empirical specification in economics in spite of its widespread acceptance the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience the standard formulation understates early career earnings growth by about 30 50 and overstates midcareer growth by 20 50 however simple alternative specifications that fit the data are available

the labor force participation of older workers this study examines the decision to participate in the labor force made by persons over 54 years of age through the use of a set of pooled time series cross section observations from the current population survey over the years 1974 80 the analysis emphasizes the effect of two factors on this decision cohort crowding and supplemental security income ssi the empirical results reveal that pressures arising from the relative growth in the youth population led to increased labor market activity by older women that retirement incentives in the form of ssi and social security had a negative effect on female as well as male labor force behavior though the effects were considerably stronger for men and that the differential between men s and women s participation rates was largely a result of the female response to marital status and retirement incentives

cnild labors child schooling and their interaction with adult labor using data from peru and pakistan this article tests two hypotheses there is a positive association between hours of child labor and poverty and there is a negative association between child schooling and poverty both of these hypotheses are confirmed by the pakistani data but not by the peruvian data the reduction in poverty rates due to income from children s labor is greater in pakistan than in peru the nature of interaction between adult and child labor markets varies with the gender of the child and the adult in peru rising men s wages significantly reduce the labor hours of girls whereas in pakistan there is a strong complementarity between women s and girls labor markets both data sets agree on the positive role that increasing adult education can play in improving child welfare

trends in quality adjusted skill premia in the united states 1960 2000 this paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000 resulting in a decrease of 8 percentage points in the college premium the standard demand and supply framework katz and murphy 1992 card and lemieux 2001 can qualitatively account for the trend in the college and age premia over this period but the quantitative adjustments that need to be made to account for changes in quality are substantial furthermore the standard interpretation of the supply effect can be misleading if the quality of college workers is not controlled for to illustrate the importance of these adjustments we reanalyze the problem studied in card and lemieux 2001 who observe that the rise in the college premium in the 1980s occurred mainly for young workers and attribute this to the differential behavior of the supply of skill between the young and the old our results show that changes in quality are as important as changes in prices to explain the phenomenon they document

substitution between production labor and other inputs in unionized and nonunionized manufacturing comment age points of the productivity decline after correcting faulty calculations in deriving a new price deflator errors in measuring the left hand side account for another 7 5 percentage points together they account for 56 5 of the observed decline this is a more modest accomplishment than the 92 claim of my earlier paper but still a substantial one in light of earlier research efforts such as stokes 1981 which could not explain any of the observed decline

demand and supply and their relationship to liquidity evidence from the s p 500 change to free float in the context of the switch to free float weighting in the s p 500 index this study of the effect of the availability of shares on liquidity in the medium term found cross sectional differences in liquidity and price impact measures that gradually narrowed following each phase of the free float adjustment

life cycle earnings cohort size effects and social security a quantitative exploration one of the features of the large overlapping generations model pioneered by auerbach and kotlikoff 1987 dynamic fiscal policy is that individuals with different experience levels are perfect substitutes in production this paper replaces this assumption with a labor market characterized by imperfect substitutability between less and more experienced workers by comparing the quantitative properties of both cases in a calibrated model for spain it is found that in the model economy with imperfect substitution the effects of aging on the financial viability of the pension system are less severe than in the standard model economy with perfect substitution

an option perspective on generating and maintaining plant variety rights in china notwithstanding the ambiguous research and productivity promoting effects of plant variety protections pvps even in developed countries many developing countries have adopted pvps in the past few years in part to comply with their trade related aspects of intellectual property rights trips obligations seeking and maintaining pvps reserves options to an expected revenue stream from the future sale of protected varieties the value of which varies for a host of reasons in this article we empirically examine the pattern of pvp applications in china since its pvp laws were first introduced in 1997 we place those pvp rights in the context of china s present and likely future seed markets to identify the economic incentives and institutional influences on decisions to develop and apply for varietal rights

the sensitivity of labor demand functions to choice of dependent variable this paper investigates whether the parameters of labor demand functions are sensitive to alternative methods of estimation the assumption that the production technology is of the generalized leontief type implies that the demand system can be estimated by analyzing cross section differences in earnings across labor markets by studying longitudinal changes in earnings within a labor market or by investigating cross section differences in labor force participation rates across labor markets the estimation of these models on the 1970 and 1980 public use samples from the u s census reveals that the estimates of labor demand functions are indeed quite robust to major specification changes this abstract was borrowed from another version of this item

intellectual property rights and the world trade organization retrospect and prospects this paper analyzes the main economic issues of intellectual property rights iprs protection in the context of the world trade organization wto a retrospective view on the establishment of the trips trade related aspects of intellectual property rights agreement a still controversial accomplishment of the uruguay round of trade liberalization is provided the paper reviews the economic rationale for the harmonization of iprs drawing both on economic theory considerations as well as emerging empirical evidence the logic of linking ipr protection and trade in the context of the wto is also re examined some specific attention is devoted to the implications of trips for agricultural and biotechnology innovations the impact that ipr protection can have in promoting growth and development and the relation of iprs with other economic policies is discussed the paper concludes with an analysis of the prospects for more or less iprs related consensus in the current round of wto negotiations

the unemployment rates of men and women a transition probability analysis women s unemployment rates were considerably higher than men s for many years but during the 1980s this difference has virtually disappeared this study is the first to examine that change through an analysis of trends in the probabilities of labor force transitions movements between employment unemployment and nonparticipation in the labor force using bls data the authors find that about half of the narrowing of the unemployment rate differential during the 1968 85 period was due to the increasing labor force attachment of women and the decreasing attachment of men the other half reflects changes in men s and women s tendencies to move between employment and unemployment which the authors attribute primarily to the secular decline of male dominated industries

a framework for analyzing the impact of cohort size on education and labor earning the paper analyzes three models of labor demand solving for the change in wages of a given labor group due to a change in the size of a birth cohort when the production function includes age schooling groups as separate factors an increase in the size of one birth cohort changes the size of several labor market groups also in this case the demand effect of changing factor size is joined by a supply effect of changing schooling proportions ignoring the supply effect may cause us to overestimate the effect of a large birth cohort on wages of young skilled workers

cohort effects and the returns to education in west germany using a mincer type wage function we estimate cohort effects in the returns to education for west german workers born between 1925 and 1974 the main problem to be tackled in the specification is to separately identify cohort experience and possibly also age effects in the returns for women we find a large and robust decline in schooling premia in the private sector the returns to a further year of post compulsory education fell from twelve per cent for the 1945 49 cohort to about seven per cent for those born in the early 1970s cohort effects in men s returns to education are less obvious but we do find evidence that they too have declined we conclude by identifying possible reasons for the decline

schooling work experience and wage trends when members of the baby boom generation began entering the work force in substantial numbers during the 1970s the resulting crowding reduced their earnings in comparison with earlier cohorts of the same age and wage premiums for schooling also declined these developments raised questions about how well members of the babyboom generation might fare during their working lives compared with smaller neighboring cohorts finis welch 1979 mark berger 1985 when wage premiums for schooling increased sharply during the 1980s however it became apparent that workers levels of schooling were more important determinants of their lifetime earnings than the size of their birth cohort the small decline in schooling wage premiums during the 1970s now appears to have been only a temporary interruption of a trend toward higher economic rewards for schooling since schooling and work experience account for about half of the variation in earnings wage trends of the work force as a whole have been influenced by changes in its composition since the late 1960s in addition to these compositional changes relative wages have also changed dramatically as the number of entrants into the labor force with high schooling levels surged during the 1970s and receded during the 1980s the purpose of this paper is to describe the relationship between changes in the schooling and work experience composition of the labor force and changes in relative wages during the past fifteen years

subsidies for higher education who should pay the resource costs of higher education this paper investigates a simple model of the general equilibrium of the labor market with three skill levels those in the population with the lower level of intelligence and or sophistication can only become low skilled workers but the brighter segment of the population can become either high or medium skilled workers given the tax structure the welfare of each group is maximized by a unique subsidy rate on the cost of training high skilled workers under several circumstances the lower iq group wants a higher subsidy rate than will the group that benefits directly from the training

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

supplying crop biotechnology to the poor opportunities and constraints abstract unlike the public sector research that launched the green revolution private firms based in industrialised countries have done the majority of agricultural biotechnology research and almost all commercialisation of genetically modified gm crops this paper examines consequences of the emergence of a few large companies as leaders in the commercialisation of biotechnology by addressing issues of access to technology costs of conducting research and distribution of economic benefits to provide context we first review the status of crop biotechnology research globally who is benefiting from the technology we then analyse the role of intellectual property rights market access and industry concentration public sector research and gm crop biosafety regulations in determining observed r d by firms the paper recommends policy measures that allow transfer of current technology to the poor and generate more biotechnology research focused on problems of the poor

does a higher minimum wage enhance the effectiveness of the earned income tax credit the authors estimate the effects of the interactions between the earned income tax credit eitc and minimum wages on labor market outcomes they use information on policy variation from the depart

swimming upstream trends in the gender wage differential in the 1980s using michigan panel study of income dynamics data for 1979 and 1988 we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low wage workers the decrease is traced to gender specific factors which more than counterbalanced changes in measured and unmeasured prices working against women supply shifts net of demand were unfavorable for women generally and hurt high skilled more than middle and low skilled women by analyzing wages we find support for the notion of a gender twist in supply and demand having its largest negative effect on high skilled women

child labor child schooling and their interaction with adult labor empirical evidence for peru and pakistan using data from peru and pakistan this article tests two hypotheses there is a positive association between hours of child labor and poverty and there is a negative association between child schooling and poverty both of these hypotheses are confirmed by the pakistani data but not by the peruvian data the reduction in poverty rates due to income from children s labor is greater in pakistan than in peru the nature of interaction between adult and child labor markets varies with the gender of the child and the adult in peru rising men s wages significantly reduce the labor hours of girls whereas in pakistan there is a strong complementarity between women s and girls labor markets both data sets agree on the positive role that increasing adult education can play in improving child welfare

a note on aggregation of skills and labor quality we use a unique new data set that combines data on individual workers and their employers to estimate marginal productivity differentials among different types of workers we then compare these to estimated relative wages leading to new evidence on

separability of capital and labor in us manufacturing abstract this paper investigates the separability of capital and six labor skill groups in u s manufacturing it is found that no pair of inputs is even weakly separable this result suggests that blackboard production functions with two inputs should be used primarily for exposition

the response of aggregate production to fertility induced changes in population age distribution with a particular focus upon long term supply effects the authors explored the implications of different population age distributions for the productive capacity of an economy a multilevel aggregate production process was specified plausible values assigned to its parameters and steady state solutions obtained under a range of alternative fertility assumptions the theoretical model was calibrated to conform with canadian data and published estimates of age sex substitution elasticities the study found productive capacity to be related to age distribution although the output effects exceed 8 regardless of the structure of the economy only when total fertility rate is less than 1 6 or well above 3 0 within the range of variation productive capacity and output per capita are lower for both younger and older populations altering the elasticity of substitution between different tasks has negligible effects upon the sensitivity of the economy to changes in age distribution altering the elasticity of substitution between different age sex groups for a given task has a markedly greater effect introducing either increasing or decreasing returns to scale has only a minor effect upon the sensitivity of the economy to changes in age distribution and marginal products are quite sensitive to changes in age distribution for both younger and older workers but far less sensitive for middle aged workers

long term wage fluctuations with industry specific human capital exploiting long term interindustry demand shifts this article provides evidence that 1 industry level wages do not respond to industry demand conditions 2 at the industry level the employment of young workers responds more to demand shifts than does the employment of experienced workers and 3 the postdisplacement wages of displaced workers are strongly affected by demand in their predisplacement industries these findings are consistent with a model in which worker s investments in industry specific skills pose a barrier to interindustry labor mobility and wages do not respond to spot labor market conditions

the expansion of college education in the united states is there evidence of declining cohort quality i introduction in 1940 approximately 5 of men aged 20 64 were college graduates by 1990 the fraction with a college degree had more than quadrupled to 22 6 conversely more than 70 of men aged 20 64 had not finished high school in 1940 by 1990 the fraction of the male population who were high school dropouts had dipped below 20 these changes imply that there has been an enormous increase in the supply of skilled workers in the u s economy over the past five decades the magnitude of these changes also suggests that the composition of these groups in terms of their underlying ability and talents have also changed making it difficult to compare these groups over time in this article we focus on the expansion of college education we ask whether the increase in the number of college graduates over time lead to a decline in the average ability of college graduates following becker 1967 we introduce a simple model of human capital accumulation with individuals who differ in ability and borrowing costs under the assumption that the ability distribution is fixed and the more able attend college we examine the conditions under which a rising share of college graduates leads to a decline in the average ability of the college educated group the relationship between the expansion of higher education and the average ability of college attendees was explored by taubman and wales 1972 in their well known study putting together evidence from a variety of test score studies they reported that the average aptitude of those who attended college actually rose relative to those who did not attend college we take an alternative more aggregate approach in examining the expansion of college education and average ability in this article using the 1940 90 census we compare across cohorts with different levels of educational attainment we ask whether college graduates from more educated cohorts receive a smaller college premium even controlling for the relative supply effect thus we do not observe changes in ability directly but infer changes in ability through changes in relative wages there are several reasons why we view this alternative approach as useful first the test score studies are based on different tests administered in different states which raises questions about the comparability of the results over time second the test scores are often available only for those who finished high school because the selection of high school graduates is also changing it is difficult to infer changes in ability of college graduates third test scores typically have little explanatory power in earnings regressions suggesting that other dimensions of ability are important for earnings determination finally many of these studies refer to the first half of the twentieth century whereas we extend the analysis to the more recent period a number of recent papers murphy and welch 1992 katz and murphy 1992 topel 1997 autor et al 1998 have argued that the rapid increase in the share college graduates depressed college premiums in the 1970s welch 1979 berger 1985 and card and eemieux 2000 show that these declines in college premiums were particularly associated with the baby boom cohorts who entered college in record numbers in this article we examine to what extent these cohort effects may reflect a decline in quality associated with an accelerated pace of college attendance to preview our results we find a small and marginally significant cohort quality effect that suggests that a 10 increase in the cohort specific college share leads to a 0 6 decline in the college premium holding everything else constant these results suggest that changes in cohort quality played a minimal role in the recent period with relative supply and demand shocks accounting for most 87 of the variation in relative wages these small relative wage effects related to changes in ability are in line with evidence from test scores reported in murnane et al

predicted future earnings and choice of college major using data from the national longitudinal survey of young men the author of this paper examines the relationship between predicted future earnings for five broad fields of study and college students choice of major conditional logit models of major choice that incorporate alternative predicted earnings variables are specified and estimated the results indicate that holding family background characteristics constant individuals are likely to choose majors offering greater streams of future earnings rather than as some have argued majors with higher beginning earnings at the time of the choice it is also found that earnings profiles corrected for self selection bias have flattened for more recent graduates in business liberal arts and education the life cycle earnings in these disciplines appear to be more severely depressed than those in science and engineering

factor proportions and relative wages the supply side determinants of wage inequality supply side factors may contribute to rising wage inequality first certain changes in the supply of skills allegedly exacerbate wage inequality women s increased labor force participation and increased immigration are the leading candidates both allegedly reduce the wages of less skilled men however immigration s impact on wage inequality has been minor and the effects of women s participation is inconclusive second in evaluating the likelihood that human capital investment will mitigate future inequality evidence suggests that rising returns to education have increased the proportion of young people attending college limiting the growth of inequality among high wage workers

how do you capture liquidity a review of the literature on low frequency stock liquidity researchers have various ways to measure liquidity but most of them come with both merits and demerits this study provides a literature review of low frequency liquidity measures with a primary focus on liquidity measurement as well as its implication on asset pricing based on the dimension it captures a range of existing low frequency measures are divided into four categories of liquidity proxies including transaction cost volume price impact and multidimension based measures we review some well established liquidity proxies a new bid ask spread estimator and price impact ratios proposed recently finally we discuss how good low frequency liquidity measures are at capturing standard liquidity benchmarks which are constructed from high frequency intraday data

union membership determination and industry characteristics recent literature on the economics of unionism has expanded beyond its customary focus on the wage and nonwage effects of collective bargaining and given increased attention to the determinants of union membership previous union membership studies have been couched primarily within an individual choice framework whereby utility maximizing individuals choose either to join or not to join a union empirical work typically treats membership as a function of some vector of personal characteristics 1 2 10 11 21 it is our contention that such studies can best be interpreted as explaining the determination of the union status of jobs and that several industry and firm characteristics in addition to personal characteristics can be expected to affect significantly union membership in this paper theory and evidence relating to the effects of firm and industry characteristics on union membership are presented industry level data are bridged with a large microdata set containing individual characteristics in order to examine the determinants of unionism among workers in manufacturing utilizing a simultaneous model and controlling for sample selection bias we find that product market concentration capital intensity establishment size and job risk significantly affect the likelihood of union membership

south north trade intellectual property jurisdictions and freedom to operate in agricultural research on staple crops international food policy research institute washington d c center for the application of molecular biology to international agriculture canberra university of california berkeley the authors are listed alphabetically philip pardey is a senior research fellow and patricia zambrano a senior research assistant at the international food policy research institute carol nottenburg is director of intellectual property at the center for the application of molecular biology to international agriculture and brian wright is a professor and eran binenbaum a ph d student in the department of agricultural and resource economics university of california berkeley stephen stohs bonwoo koo and yuan liang provided excellent research assistance and agapi somwaru usda ers collaborated with us in compiling the trade data richard jefferson provided invaluable comments on earlier drafts research for this paper was made possible in part by a grant from the swedish international development agency sida

the substitutability of occupational groups using firm level data abstract labor demand elasticity estimates are presented for a model in which labor groups are defined by occupation while most studies construct labor groups according to non productive characteristics such as race or gender the results corroborate much of the existing research

recent developments in intellectual property and power in the private sector related to food and agriculture the legal protection of intellectual property ip has allowed private persons and enterprises to assert exclusive rights in relation to certain agricultural innovations whether through the protection of breeding innovations under plant variety rights protection laws or through the patenting of genes and gene fragments the increasing involvement of iprs in agriculture has effected a shift of agricultural research from public to private institutions this article examines the changes in the international ip landscape which has facilitated these developments and looks at the impacts of modern ip developments upon agricultural research and farmers it concludes with a consideration of ip liability issues arising from the development of gm agriculture