male interracial wage differentials competing explanations persistent interracial wage differentials present a challenge for neoclassical models of discrimination which claim that long rung competition is not consistent with persistent discrimination this study provides an empirical examination of the missing variable and job competition models of interracial wage inequality the results argue strongly against the missing variables approach and strongly in favor of the job competition model specifically this study finds that about one half of the male african american white and latino white interracial wage differentials are due to market discrimination against african americans and latinos in addition the positive and significant coefficients on the race gender employment density variables strongly affirm the job competition model s contention that access to white especially male dominated jobs increases an individual s wage rate regardless of race racial job segregation then is an important explanatory variable for racial wage discrimination copyright 1999 by oxford university press

states and the business cycle abstract we model the us business cycle using a dynamic factor model that identifies common factors underlying fluctuations in state level income and employment growth we find three such common factors each of which is associated with a set of factor loadings that indicate the extent to which each state s economy is related to the national business cycle according to the factor loadings there is a great deal of heterogeneity in the nature of the links between state and national economies in addition to exhibiting geographic patterns the closeness of state economies to the national business cycle is related not only to differences in industry mix but also to non industry variables such as agglomeration and neighbor effects finally we find that the common factors tend to explain large proportions of the total variability in state level business cycles although again there is a great deal of cross state heterogeneity

similarities and convergence in g 7 cycles this paper examines the properties of g 7 cycles using a multicountry bayesian panel var model with time variations unit specific dynamics and cross country interdependences we demonstrate the presence of a significant world cycle and show that country specific indicators play a much smaller role we detect di erences across business cycle phases but apart from an increase in synchronicity in the late 1990s find little evidence of major structural changes we also find no evidence of the existence of an euro area specific cycle or of its emergence in the 1990s

asymmetric shocks and monetary policy in a currency union we analyze the conduct of monetary policy in a currency union in the face of asymmetric shocks in particular we compare the stabilization properties of a currency union versus alternative exchange rate arrangements the relative performance of a currency union is shown to depend on the extent of economic integration in patterns of consumption and production and on the relative weights placed on price stability versus employment stability in the monetary authority s objective function jel classification f33 f40

stabilization policy in a currency union abstract we show that the monetary authority of a currency union chooses to do nothing in the face of an asymmetric shock generating inefficiently high inflation and employment fluctuations in the member countries moreover adjustment is equivalent to that under a mckinnon rule

risk sharing by households within and across regions and industries abstract cochrane 1991 journal of political economy 99 957 976 and mace 1991 journal of political economy 99 928 956 test if risk sharing across households is complete in the sense that household consumption moves one for one with aggregate consumption in their studies the source of income risk is idiosyncratic and agents can share risk across the entire economy using a sample of households from the panel study on income dynamics psid we explore whether households share the risk associated with their industries and regions across households in other regions and industries we find that a large fraction of risk faced by households is not shared across regions and industries

central bank preferences and macroeconomic equilibrium abstract we investigate the behavior of an optimizing monetary authority in an economy described by a simple as ad model we develop a simple methodology for deriving the optimal policy and the associated model solution for various forms of the authority s objectives in our empirical work we focus on one of these specifications in which the authority cares about both the rate of inflation and the level of price innovations which boost real output in our model along the lines of barro and gordon 1983b estimating the model on post war us data we find that the revealed weight on price surprises is significant but only around a third of that on inflation the estimated elasticity of output with respect to price surprises is around one quarter but statistically insignificant

the correlation of productivity growth across regions and industries in the united states abstract this paper shows that productivity growth is more strongly correlated across u s regions than across the g7 countries cross region correlations of productivity growth within a given industry are typically stronger than cross sector correlations of productivity growth within the same region

tastes and technology in a two country model of the business cycle explaining international trade on international financial markets allows people to insure country specific risk and smooth consumption intertemporally equilibrium models of business cycles with trade on global financial markets typically yield international consumption correlations near one and excessive volatility of investment the authors incorporate nontraded goods in the model and find that the implications for aggregate consumption investment and the trade balance are consistent with business cycle properties of industrialized countries however the model driven by technology shocks alone yields counterfactual implications for comovements between consumption and prices at the sectoral level taste shocks produce price quantity relationships more consistent with the data copyright 1995 by american economic association

the propagation of regional recessions this paper develops a framework for inferring common markov switching components in a panel data set with large cross section and time series dimensions we apply the framework to studying similarities and dierences across u s states in the timing of business cycles we hypothesize that there exists a small number of cluster designations with individual states in a given cluster sharing certain business cycle characteristics we nd that although oil producing and agricultural states can sometimes experience a separate recession from the rest of the united states for the most part dierences across states appear to be a matter of timing with some states entering recession or recovering before others jel c11 c32 e32

racial disparities in job finding and offered wages abstractthe extent to which discrimination can explain racial wage gaps is one of the most divisive issues in the social sciences using a newly available data set this paper develops a simple empirical test that under plausible but not innocuous conditions provides a lower bound on the extent of discrimination in the labor market taken at face value our estimates imply that differential treatment accounts for at least one third of the black white wage gap we argue that the patterns in our data are most naturally rationalized through a search matching model in which employers statistically discriminate on the basis of race when hiring unemployed workers but learn about their marginal product over time

racial discrimination in the labor market theory and empirics we review theories of race discrimination in the labor market taste based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread but no existing model explains the unemployment rate differential models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment at their current state of development models of statistical discrimination based on rational stereotypes have little empirical content it is plausible that models combining elements of the search models with statistical discrimination could fit the data we suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy jel j15 j31 j64 j71

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

racial and ethnic economic inequality the international record international racial and ethnic economic inequality is examined the international record shows disparity across nations and regions between racial and ethnic groups within countries and within groups in the same country subalternate racial and ethnic populations whether in the majority or minority suffer remarkably similar economic outcomes across the globe institutional racism and cultural discrimination affect subcultures and different classes in multiple ways in every country those who get the short stick continue to face poor prospects for economic inclusion and justice

labor economics problems in analyzing labor markets introduction i unemployment 1 keynes cambridge and the new keynesian economics m s lawlor 2 labor economics and unemployment an historian s perspective a keyssar ii how labor markets really work 3 the impact of formal on the job training on unemployment and the influence of gender race and working life cycle position on accessibility to on the job training a j field a h goldsmith 4 empirical tests of labor market equilibrium an evaluation j heckman t macurdy 5 labor market segmentation theory reconsidering the evidence w t dickens k lang iii race discrimination and competition 6 labor markets and racial inequality j cotton 7 racial inequality and racial conflict recent developments in radical theory r williams iv culture ethnicity and poverty 8 culture and human capital theory and evidence or theory versus evidence s a woodbury 9 labor economics and public policy dominance of constraints on preferences m foster index

nominal wage flexibility wage indexation and monetary union membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non membership this counteracts the stabilisation policy cost of giving up monetary independence but more wage flexibility is only an imperfect substitute for an individual monetary policy it is possible that an increase in wage flexibility is welfare decreasing because of the accompanying rise in price variability the interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full indexation equilibrium

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

labor market effects of september 11th on arab and muslim residents of the united states we investigated whether the september 11 2001 terrorists attacks had any effect on employment earnings and residential mobility of first and second generation arab and muslim men in the united states we find that september 11th did not significantly affect employment and hours of work of arab and muslim men but was associated with a 9 11 percent decline in their real wage and weekly earnings with some evidence that this decline was temporary the adverse earnings effects were strongly linked to hate crime incidence estimates also suggest that the terrorists attacks reduced intrastate migration of arab and muslim men

intergroup disparity economic theory and social science evidence consider a hypothetical community where two groups are distinguished by an ascriptive characteristic or a set of ascriptive characteristics that are understood as separating markers by the members of each of the groups indeed the distinguishing characteristics may be recognized by others external to the two groups or external to the community furthermore these separating markers are associated with the social categories of race or ethnicity credible surveys taken by researchers reveal that on average the members of the two groups experience widely distinct economic outcomes members of group a are found to have significantly lower earnings a higher incidence of unemployment less prestigious occupations lower levels of total income and substantially lower levels of wealth than members of group b conventional economics offers two major explanations for the observed disparity between groups a and b first average productivity linked endowments or a human capital gap correlate strongly with membership in each of these ascriptively bounded groups producing the differences in outcome the origins of these background differences have been attributed to a variety of causes the four most prominent reasons offered for the wedge in human capital acquisition have been i an unequal allocation of social resources across the two groups ii the intergenerational transmission of past disadvantage or advantage across the groups iii somewhat invidiously cultural differences between the groups and iv most invidiously genetic differences between the groups that generate not only the ascriptive distinctions but also differences in intelligence and motivation second at any moment members of each group with given productivity linked characteristics can be confronted with differential treatment of those characteristics in markets especially labor markets in short conventional theory suggests that the observed gap in outcomes could be due to discrimination against group a and nepotism on behalf of group b

european economic governance the berlin washington consensus this paper argues that the european union has gone farther than any other country or institution in internalizing the prescriptions of the washington consensus embedding neo liberal principles in the treaties defining its governance the eu has enshrined a peculiar doctrine within its constitution we further argue that this berlin washinghton consensus has serious empirical and theoretical flaws as its reliance on pareto optimality leads to neglect the crucial links between current and potential growth we show by means of a simple model that the call for structural reforms as an engine for growth may be controversial once current and potential output are related we claim that adherence to the consensus may go a long way in explaining the poor growth performance of the european economy in the past two decades because of the constraints that it imposed on fiscal and monetary policies the same constraints have deepened the eurozone crisis that started in 2007 putting unwarranted emphasis on austerity and reform challenging the consensus becomes a precondition for avoiding the implosion of the euro and recovering growth

women and affirmative action abstract this paper reviews evidence indicating that as it has been enforced so far affirmative action has contributed negligibly to women s progress in the workplace affirmative action can be modeled as a tax on employers whose female employment growth falls below a certain rate clearly if labor supply shifts result in female employment growth greater than the regulatory standard the tax constraint will not be binding as we shall see this may help explain an affirmative action program that is generally ineffective for women although it has been effective for minorities federal anti bias policies in general and the system of affirmative action goals in particular have been accused of instituting employment quotas this paper reviews evidence on the homogenization of the workplace predicted by the quota theory as well as considering more direct evidence on whether affirmative action goals are really quotas in lambs clothing i shall also review the slim evidence on the most fundamental and co

channels of interstate risk sharing united states 1963 1990 we develop a framework for quantifying the amount of risk sharing among states in the united states and construct data that allow us to decompose the cross sectional variance in gross state product into several components which we refer to as levels of smoothing we find that 39 percent of shocks to gross state product are smoothed by capital markets 13 percent are smoothed by the federal government and 23 percent are smoothed by credit markets the remaining 25 percent are not smoothed we also decompose the federal government smoothing into subcategories taxes transfers and grants to states

the impact of psychological and human capital on wages historically economists have taken the position that psychological capital is either unobservable or immeasurable thus heretofore little evidence has been available on the contribution of psychological capital to wages using data drawn from two different waves of the national longitudinal survey of youth we offer evidence that psychological capital has both a direct effect via self esteem and an indirect effect through locus of control on an individual s real wage we find a person s wage is more sensitive to changes in self esteem than to comparable alterations in human capital both relative wages and human capital contribute to self esteem

the mirage of fixed exchange rates this paper discusses the profound difficulties of maintaining fixed exchange rates in a world of expanding global capital markets contrary to popular wisdom industrialized country monetary authorities easily have the resources to defend exchange parities against virtually any private speculative attack but if their commitment to use those resources lacks credibility with markets the costs to the broader economy of defending an exchange rate peg can be very high the dynamic interplay between credibility and commitment is illustrated by the 1992 swedish and british crises and the 1994 95 mexican collapse we also discuss the small number of successful fixers

discontinuity of output convergence within the united states why has the course changed has the progress of output convergence changed within the united states this article examines the output convergence among u s states for the last five decades by making several improvements over the extant literature by applying a battery of convergence tests designed to capture nonlinear transitional dynamics to real output per worker data i e nominal values deflated by state level price we find that output convergence has not been a feature of the continental united states since the 1970s instead output convergence has proceeded among four subgroups within which constituent states have certain characteristics in common our regression analysis suggests that state level characteristics related to technology and human capital play a crucial role in accounting for the formation and composition of convergence clubs in agreement with the recent theoretical models of growth and development e g aghion et al 2009 gennaioli et al 2013b the level of technology proxied by patents turns out to be a consistently significant determinant even after controlling for endogeneity suggesting that frictions in the diffusion of technology and human capital may have led to clustering of states with different levels of productivity our results therefore cast doubt on the common view that diffusion of knowledge and technology across state borders is frictionless jel o47 o51

employment fluctuations in u s regions and industries the roles of national region specific and industry specific shocks this study quantifies the roles of national region specific and industry specific shocks in aggregate employment fluctuations in u s regions and industries variation among the growth rates of major regions and industries is decomposed into unobserved national region and industry specific components the results reject the view that any heterogeneity in regional fluctuations is attributable to differences in industry composition after controlling for industry mix effects roughly 40 of the variance of the cyclical innovation in any region s growth rate is particular to that region in addition region specific shocks appear to propagate across regions over time

accounting for the racial gap in afqt scores comment on nan l maxwell the effect on black white wage differences of differences in the quantity and quality of education comment on nan l maxwell the effect on black white wage differences of differences in the quantity and quality of education industrial and labor relations review vol 47 no 2 january 1994 author s abstract

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

intranational business cycles in the united states abstract we established a comprehensive set of stylized facts for intranational business cycles across states and regions in the u s notable findings are that the cross correlations of our consumption measure is much less than that for output and the volatility of the real exchange rate between states is much less than that for output these findings are contrasted with the quantity and price anomalies found in international business cycle data additional results for labour and non labour earnings suggest that the observed amount of intratemporal risk sharing is quite limited as compared to that for intertemporal risk sharing

international risk sharing and european monetary unification abstract we explore income and consumption smoothing patterns among european community ec countries and among oecd countries during the period 1966 90 we find that for oecd as well as for ec countries about 40 percent of shocks to gdp are smoothed at the one year frequency with about half the smoothing achieved through national government budget deficits and half by corporate saving at the three year differencing frequency only 25 percent of shocks to gdp are smoothed mainly via government lending and borrowing in the absence of alternative income and consumption smoothing mechanisms the restrictions on budget deficits imposed by the maastricht treaty should be relaxed to allow governments to run large temporary deficits in response to output shocks

experience tenure and the perceptions of employers this paper examines how group based assessments concerning employee ability impact employee compensation the employer learns about worker ability through bayesian updating creating an additional channel for wage growth that is not available to those workers with only general labor market experience consistent with the model s predictions results from national longitudinal survey of youth nlsy indicate that black workers fare much better relative to white workers in returns to tenure than in returns to experience finally parameter estimates in the structural model suggest that employers initially undervalue black males but that their wages rise with learning by employers over time on average black males earn lower wages than white males just as average wages differ across many groups this paper examines one explanation for this wage gap the possibility that employers underestimate the ability of workers in one or more groups in particular this paper proposes a model that provides explicit predictions about the affect of employer s perceptions on workers returns to general experience and tenure on the job we then examine the wage growth of young males to see whether patterns are consistent with the model economic theory provides many other explanations for differences in wages across groups

race competition and differential wages this paper develops a competitive model of racial wage and employment discrimination discrimination is a persistent outcome of the interaction of two phenomena the first is the adverse effect of racial conflict on the organisational strength of workers which in turn affects the formation of wage differentials this is a class struggle effect the second is the negative correlation between the interracial employment ratio and the wage differential within occupations arid across all capitals this is a racial exclusion effect the interaction of the class struggle and racial exclusion effects implies persistent discrimination

gender differences in the cost of displacement an empirical test of discrimination in the labor market there are two competing explanations of why women workers earn less than men with equivalent education work experience and job tenure the human capital explanation and the discrimination explanation the human capital explanation argues that sex differences in human capital investment which arise from sex differences in expectations surrounding labor force participation account for the wage differential women workers are expected to invest less in jobspecific human capital than otherwise comparable men workers because women expect to spend less time on the job furthermore even for men and women workers with equal ex post levels of job tenure and or work experience women have invested less in onthe job training because their a priori expectations of job tenure and or work experience were less than those of men who now have the same tenure and or experience therefore in this view women workers earn less than comparable men because they have invested less in specific human capital women earn less because they are less productive the sex wage differential is economically efficient the discrimination explanation argues that sex differences in labor market opportunities that is sex discrimination in the labor market account for the sex wage differential in this view women workers earn less than comparable men because they are the victims of sex discrimination in the labor market women do not earn less because they are less productive the sex wage differential is economically inefficient while the economic implications of these two explanations of the sex wage differential are enormously different both explanations are consistent with empirical studies simply because both resort to nonmeasurables to explain the sex wage differential empirical studies cannot measure directly either discrimination or job specific human capital therefore the problem with these two competing explanations of the sex wage differential is that neither has been empirically sorted from the other both explanations are consistent with data which show a wage differential by sex after controlling for education work experience and job tenure newly available data on displaced workers provide an opportunity to empirically disentangle these two competing explanations of the sex wage differential displaced workers are workers who have lost their jobs either because their workplaces have closed or because they were permanently laid off due to slack demand for the outputs of their firms displaced workers represent a special case of worker mobility unlike voluntary job movers that is workers who have voluntarily quit their prior jobs the job mobility of displaced workers is not the result of their own expectations that better jobs are available a worker who voluntarily changes jobs does so because there is another job which offers higher wages or other improvements in the conditions of employment the worker moves precisely because his or her productivity and wages is higher on the subsequent job the wage change is endogenous unlike workers who are fired or involuntarily laid off because their personal productivity is lower than that of other tdiscussants rebecca blank princeton university elyce rotella indiana university

ethnicity and credit in african manufacturing abstract this paper investigates whether market interaction can by itself perpetuate the lack of ethnic diversity that is observed in the business communities of many developing countries using case study data on manufacturing firms in kenya and zimbabwe we find no evidence that blacks or women are disadvantaged in the attribution of bank credit once we control for firm size and other observable characteristics in contrast an ethnic and gender bias is noticeable in the attribution of supplier credit although we cannot rule out the presence of discrimination the bulk of the evidence indicates that network effects play an important role in explaining this bias

borders and nominal exchange rates in risk sharing models of risk sharing predict that relative consumption growth rates are positively related to changes in real exchange rates we investigate this hypothesis using a new multicountry and multiregional data set within countries we find evidence for risk sharing episodes of high relative regional consumption growth are associated with regional real exchange rate depreciation across countries however the association is reversed relative consumption and real exchange rates are negatively correlated we define this reversal as a border effect we find the border effect and show that it accounts for over half of the deviations from full risk sharing since cross border real exchange rates involve different currencies it is natural to ask how much of the border effect is accounted for by movements in exchange rates our measures indicate that a large part of the border effect comes from nominal exchange rate fluctuations we develop a simple open economy model that is consistent with the importance of nominal exchange rate variability in accounting for deviations from cross country risk sharing

understanding the backus smith puzzle it s the nominal exchange rate stupid backus kehoe and kydland bkk 1992 showed that if international capital markets are complete consumption growth correlations across countries should be higher than their corresponding output growth correlations in stark contrast to the theory however in actual data the consumption growth correlation is lower than the output growth correlation by assuming trade imperfections due to non traded goods backus and smith 1993 showed that there is an additional impediment that works to lower the consumption growth correlation while backus and smith s argument was successful in partially explaining the low growth correlation puzzle it contributed to generating another puzzle because the data forcefully showed that consumption growth is negatively correlated with the real exchange rate which is a violation of the theory in this paper by decomposing the real exchange rate growth of the oecd countries into the nominal exchange rate growth and the inflation differential we find that nominal exchange rate movements are the main source for the backus smith puzzle we find that the nominal exchange rate moves counter cyclically with consumption movements which is a violation of the risk sharing theory with non traded goods we also find that the violations are more pronounced when nominal exchange rate changes are larger in absolute value in contrast the negative of bilateral inflation differentials is positively correlated with bilateral consumption movements the latter finding is in accordance with the theory furthermore using intranational data for the united states where the nominal exchange rate is constant the backus smith puzzle disappears although complete risk sharing is rejected

separate and unequal in the labor market human capital and the jim crow wage gap competing explanations for the long standing gap between black and white earnings attribute different weight to wage discrimination and human capital differences using new data on local school quality we find that human capital played a predominant role in determining 1940 wage and occupational status gaps in the south despite entrenched racial discrimination in civic life and the lack of federal employment protections the resulting wage gap coincides with the higher end of the range of estimates from the post civil rights era we estimate that truly separate but equal schools would have reduced wage inequality by 29 48

dynamic risksharing in the united states and europe abstract we use a panel var model to improve upon the existing methodologies to analyze interregional risksharing and consumption smoothing channels first we endogenize the output process within a more general multi equation framework capturing the dynamic feedback between output and various smoothing channels second in line with dynamic general equilibrium open economy models of risksharing we exploit impulse response functions to trace the role of each smoothing channel over time in the presence of different structural shocks temporary vs permanent and output vs smoothing channels in the application to the us and oecd countries we find different dynamic properties of different smoothing channels we compare our results with the predictions of standard risksharing and consumption theories and tackle some of the puzzles in the literature such as the international risksharing puzzle and the consumption output correlation puzzle we are also able to address such policy issues as whether fiscal stabilizers have been substitutes or complements for financial market diversification activities and whether further financial market integration is likely to provide countries with more shock absorption tools a key result is the strong substitutability between capital and credit smoothing in the us and between fiscal and credit smoothing in the oecd

intergroup economic inequality in south africa the post apartheid era one of the most pressing challenges facing the south african government is how to expand the overall opportunity set for nonwhites who have been historically disadvantaged by apartheid this is perhaps best accomplished by expanding employment opportunities within the economy general employment expansion mnust be accomplished keeping in mind the urgent need to radically expand nonwhite employment employment and unemployment statistics are difficult to interpret but there is a general sense that the unemployment situation especially for nonwhites is extremely bad in dealing with employment issues two concerns must be faced both are legacies of the apartheid era the first is related to differences in educational attainment across racial groups during apartheid the bantu education policy was designed to suppress the educational attainment of africans blacks relative to whites however educational opportunities for coloureds mixed race and asians primarily indian were also depressed relative to whites the second concern is that labor market discrimination could be used either to exclude nonwhites for employment consideration or to limit their wages and opportunities once they are employed for policy reasons it is imperative to understand the extent to which premarket or market factors operate to limit opportunities for nonwhites given the institutionalized nature of apartheid segregation one can imagine three scenarios earnings differences could be the result entirely of premarket factors such as education differences alternatively earnings differences could be the result of labor market practices that limit one group s eamings relative to another s a third scenario a synthesis of the former two would find earnings differences to be the result of a combination of premarket differentials and in market discrimination to address premarket discrimination policy would focus entirely on leveling funding and increasing access to educational opportunities for historically disadvantaged groups however legislative forms such as affirmative action would be required to remedy exclusively labormarket discrimination a combination of these policies would be required to deal with the third scenario understanding the relative importance of these factors is important when resource allocation is considered this paper concerns itself with measuring income losses to nonwhites from labor market discrimination to evaluate the extent of labor market discrimination ordinary least squares ols estimates of earnings equations are evaluated for males in each population group observed wage differentials are decomposed into a component attributable to human capital differences while a residual is attributed to labor markelt discrimination these findings are then contrasted to those of others to give a sense of the trend in market discrimination in south africa

international and intranational business cycles this paper surveys and analyzes the international real business cycle literature we re explore two international business cycle anomalies emphasized by backus kehoe and kydland 1995 as well as establishing the pattern of productivity growth between industries and countries we then compare these findings for the international business cycle to those obtained for data between regions within a country the so called intranational business cycle importantly the intranational business cycle is a natural environment for thinking about the interactions between economies when there are no trade frictions and when there are not multiple currencies we summarize our findings with a comparison between the stylized facts for international and intranational business cycles and draw some policy conclusions copyright 1997 by oxford university press

the effect on black white wage differences of differences in the quantity and quality of education using data from the national longitudinal survey of youth for the years 1979 88 the author examines the extent to which black white differences in educational attainment educational quality and unmeasured individual ability can explain black white wage differences an analysis that corrects for both selectivity and ability biases inherent in estimating the education wage relationship shows that the main source of the black white wage differential is the racial difference in the quality rather than quantity of schooling in fact the author concludes closing the racial gap in the basic skills learned in school could reduce the wage differential by two thirds

evidence on discrimination in employment codes of color codes of gender there is substantial racial and gender disparity in the american economy as we will demonstrate discriminatory treatment within the labor market is a major cause of this inequality the evidence is ubiquitous careful research studies that estimate wage and employment regressions help wanted advertisements audit and correspondence studies and discrimination suits that are often reported by the news media yet there appear to have been periods of substantial reductions in economic disparity and discrimination for example donohue and heckman provide evidence that racial discrimination declined during 1965 1975 1 gottschalk has produced statistical estimates that indicate that discrimination against black males dropped most sharply between 1965 and 1975 and that discrimination against women declined during the interval 1973 1994 2 but some unanswered questions remain why did the movement toward racial equality stagnate and eventually decline after the mid 1970s what factors are most responsible for the remaining gender inequality what is the role of the competitive process in the elimination or reproduction of discrimination in employment

asymmetric shocks among u s states abstract the paper applies a factor model to the study of risk sharing among u s states the factor model makes it possible to disentangle movements in output and consumption due to national regional or state specific business cycles from those due to measurement error the results of the paper suggest that some findings of the previous literature which indicate a substantial amount of inter state risk sharing may be due to the presence of measurement error in output when measurement error is properly taken into account the evidence points towards a lack of inter state smoothing

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

sex discrimination in restaurant hiring an audit study in an audit study of sex discrimination in hiring comparably matched pairs of men and women applied for jobs as waiters and waitresses at restaurants in philadelphia in high price restaurants where earnings are higher job applications from women had an estimated probability of receiving a job offer that was lower by about 0 4 and an estimated probability of receiving an interview that was lower by about 0 35 both estimated differentials are statistically significant additional evidence suggests that customer discrimination partly underlies the hiring discrimination

one money for europe lessons from the us currency union currency union barry eichengreen the creation of a monetary union in europe is often justified by the desire to reap the full benefits of economic integration the complete removal of capital controls raises a large number of issues the case for free capital mobility is strong but not overwhelming it hinges on issues of technology transport costs market structure and labour mobility and in the end is an empirical matter for which us experience may provide useful information policy making institutions differ in important respects however the us tradition of fiscal federalism for example has no ec wide counterpart yet its functions seem a desirable feature of a monetary union in particular it is shown to play an important role in absorbing regional disturbances mostly via the tax system us experience also suggests that a currency union creates pressure for fiscal policy harmonization affecting both taxes and spending although a currency union fundamentally alters the balance of payments adjustment process the potential problem of depressed regions remains a serious one given the increased tightness of the external constraint the limited extent of labour mobility and other features of european labour markets solutions based on us experience include extensive swap facilities and a european version of fiscal federalism

do employer preferences contribute to sticky floors the authors investigate the importance of employer preferences in explaining sticky floors the pattern in which women are less likely as compared to men to start to climb the job ladder the authors perform a randomized field experiment in the belgian labor market and test whether hiring discrimination based on gender is heterogeneous by whether jobs imply a promotion compared to the applicants current position the findings show that women receive 33 fewer interview invitations when they apply for jobs that imply a first promotion at the functional level by contrast the results show that their hiring chances are not significantly affected by the authority level of the job

an inquiry into the sources of macroeconomic fluctuations abstract this paper attempts to decompose the sources of fluctuations in quarterly employment by industry and region into 1 an aggregate national shock 2 region specific shocks 3 industry specific shocks and 4 idiosyncratic factors the empirical analysis is motivated by a dynamic theory of the business cycle the empirical methodology is the engle watson dynamic mimic model implemented via the em algorithm the work is motivated as an attempt to compare empirically aggregate single factor theories of the cycle with real business cycle theories emphasizing industrial or regional shocks

networks in labor markets wage and employment dynamics and inequality we present a model of labor markets that accounts for the social network through which agents hear about jobs we show that both wages and employment are positively associated a strong form of correlation across time and agents we also analyze the decisions of agents regarding staying in the labor market or dropping out if there are costs to staying in the labor market then networks of agents that start with a worse wage status will have higher drop out rates and there will be a persistent differences in wages between groups according to the starting states of their networks

the caste ethnic bases of poverty dynamics a longitudinal analysis of chronic and structural poverty in nepal this paper examines poverty dynamics and their socioeconomic determinants between 1996 and 2011 in nepal with chronic and structural poverty headcount ratios of around 17 per cent poverty is mostly transient and stochastic affecting up to four fifths of the population descriptively indigenous janajatis and lower caste hindus exhibit the highest rates of chronic and structural poverty panel data models suggest significant roles of human capital and household assets in determining poverty however with the evidence of caste ethnic penalty limited mostly to janajatis findings provide important insights into the structure and determinants of poverty dynamics helping to rethink policies to address them

how common is housing discrimination improving on traditional measures abstract fair housing audits are an important tool for measuring the incidence of racial and ethnic discrimination in housing markets traditional measures of incidence calculate the proportion of cases in which the white auditor is favored gross adverse treatment or the difference between the proportion of white favored and minority favored audits net adverse treatment the gross measure may overstate discrimination because treatment differences sometimes arise from differences in circumstances across auditor visits on the other hand the net measure understates discrimination because audits in which the minority auditor is favored for systematic reasons are incorrectly subtracted this paper presents a model of agent behavior that more fully accounts for the audit design and employs the estimated parameters to calculate bounds on the incidence of discrimination this approach leads to a lower bound for the incidence of discrimination that is often substantially higher than the simple net measure and to an upper bound that is close to and sometimes above the simple gross measure

the migration of young adults from non metropolitan counties this article examines young adult migration from non metropolitan counties to either different non metropolitan counties or to metropolitan areas the results show that expected gains in initial earnings provide young entrants to the labor force with a marked incentive to migrate from their non metropolitan counties of origin initial earnings gains stem in part from higher returns to schooling in both metropolitan areas and other non metropolitan counties the propensity to migrate is also sensitive to the costs of migration which in turn are correlated with paternal education and the local presence of extended family copyright 2001 oxford university press

exchange rate management and macroeconomic policy a national perspective this paper reviews the literature on alternative exchange rate arrangements for a small economy it discusses exchange rate management for short run stabilization purposes and the choice of exchange rate regimes to foster policy discipline recent research has emphasized that the appropriate degree of exchange rate flexibility depends on the nature of disturbances exchange rate movements provide information about shocks and can serve as a basis for intervention rules empirically operational guidelines have not yet been provided floating rates are said to be desirable because they allow policy makers greater autonomy recent research has questioned the implicit assumption that autonomy is always useful rules that prevent discretionary policy may be preferable what role if any the exchange rate should play in such rules has not yet been resolved

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

does equal pay legislation reduce labour market inequality this paper considers a labour market model of monopsonistic competition with taste based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality when the taste for discrimination is small or competition is weak the policy removes job segregation and the wage gap completely however with a bigger taste for discrimination or stronger competition equal pay legislation leads to more job segregation and sometimes minority workers end up earning less than before profits of discriminating firms might increase and discrimination can persist in the long run although it would have disappeared without the policy

the role of human capital in earnings differences between black and white men d uring the past 50 years the earnings of black men have increased substantially both in absolute terms and relative to those of white men as shown in figure 1 in 1940 the black white weekly earnings ratio among men ages 25 34 was 49 percent by 1980 it had increased to 79 percent during the 1980s however the overall black white earnings gap did not narrow and at younger ages the gap actually widened although the 1980s is not the first decade since 1940 in which black men made little or no gains in relative earnings the 1950s was another the lack of progress in the 1980s is nevertheless puzzling and a source of concern this article examines the factors underlying the differential in earnings between black men and white men with a focus on the role of human capital since 1940 successive generations of black men entering the labor force have been increasingly more educated relative to white men both in terms of years of school completed and in the quality of schooling obtained as the education and income levels of black parents increased racial differences in the transmission of human capital in the home were also likely to have narrowed this convergence in educational differences combined with the migration of blacks out of the south contributed to the narrowing in the racial gap in earnings over the 1940 80 period particularly in the first half of the period but human capital factors education and migration were not the only source of convergence in black white differences in earnings the patterns of change in the earnings gap support the contention that declining labor market discrimination against blacks has also contributed to the rise in the black white earnings ratio moreover the acquisition of human capital itself has been strongly affected by societal and governmental discrimination since blacks were long provided with greatly inferior schooling resources

peddlers forever culture competition and discrimination contemporary economic theory has all but completed the burial of the idea that market discrimination explains racial wage differentials or differences in general pecuniary accomplishments across ethnic groups under competitive conditions we need only await the eulogy interment began with the failure of the model premised on employers taste for discrimination the preferences of employers for members of one group over another could not sustain wage differentials under competition if the individuals from each group were equally able although the initial argument was made under the assumptions of neoclassical perfect competition it was beaten back by the austrian process view of competition see israel kirzner 1973 a latent reservoir of alert entrepreneurs presumably would seize the profit opportunities generated by the discriminatory wage gap drive discriminating employers from the market and erode the wage differentials valiant efforts emerged subsequently to raise from the dead the idea that competition might eliminate market discrimination these efforts involved the development of market discrimination models under the states of affairs characteristic of neoclassical imperfect competition or so called statistical discrimination neither case precluded the possibility of ingenious entrepreneurship nor the entrepreneurial capacity to smell profits kirzner p 229 as a result in neither case could the existence of wage or earnings differentials be maintained by employer decisions in the first case the inventive entrepreneur could circumvent or bring down the barrier that was the source of the imperfection similarly in the second case the clever entrepreneur could devise new procedures for overcoming existing informational discrepancies that might exist about the abilities of the members of each of the ascriptively distinct groups see darity 1982 the application of the austrian process view of competition to the problem of racial and ethnic wage differences stripped market discrimination of its analytic significance however the empirical persistence of such wage differentials in the u s economy is well established the demise of the theory of market discrimination under competitive conditions has led to increasing use of the human capital explanation for differences in economic achievement across ascriptively distinct groups after many years and scores of statistical studies that revealed that convergence in observable human capital characteristics especially years of formal education did not lead to the anticipated abolition of black white wage gaps see williams 1984 there is now a shift underway that identifies the source of the alleged human capital differences as unobservable cultural differences between ascriptively distinct groups cultural variation is accorded primacy in explaining ethnic and racial differences in economic achievement in light of the death of the market discrimination explanation the culturalogical explanation is given added force by the observation that certain ethnic groups japanese and jewish americans to name but two have managed to succeed despite discrimination see barry chiswick 1983a b the themes of culture and competition thus are the focus of this essay we first provide substantive and historical critiques of the new cultural variant of the human capital theory second we argue that the existence of ongoing market discrimination can be revived by employing an alternative university of north carolina chapel hill nc 27514 and university of texas austin tx 78712 respectively we are grateful to art goldsmith bobbie horn steve steib and david swinton for helpful comments research support was provided by the southern center for public policy studies at clark college in atlanta

volatility and development why is gdp growth so much more volatile in poor countries than in rich ones we identify four possible reasons i poor countries specialize in more volatile sectors ii poor countries specialize in fewer sectors iii poor countries experience more frequent and more severe aggregate shocks e g from macroeconomic policy and iv poor countries macroeconomic fluctuations are more highly correlated with the shocks of the sectors they specialize in we show how to decompose volatility into these four sources quantify their contribution to aggregate volatility and study how they relate to the stage of development we document the following regularities first as countries develop their productive structure moves from more volatile to less volatile sectors second the level of specialization declines with development at early stages and slowly increases at later stages of development third the volatility of country specific macroeconomic shocks falls with development fourth the covariance between sector specific and country specific shocks does not vary systematically with the level of development we argue that many theories linking volatility and development are not consistent with these findings and suggest new directions for future theoretical work

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

gender discrimination in job ads evidence from china we study explicit gender discrimination in a population of ads on a chinese internet job board gender targeted job ads are common favor women as often as men and are much less common in jobs requiring higher levels of skill employers relative preferences for female versus male workers on the other hand are more strongly related to the preferred age height and beauty of the worker than to job skill levels almost two thirds of the variation in advertised gender preferences occurs within firms and one third occurs within firmoccupation cells overall these patterns are not well explained by a firm level animus model by a glass ceiling model or by models in which broad occupational categories are consistently gendered across firms instead the patterns suggest a model in which firms have idiosyncratic preferences for particular job gender matches which are overridden in skilled positions by factors such as thinner labor markets or a greater incentive to search broadly for the most qualified candidate jel codes j16 j63 j71 copyright 2013 oxford university press

the wage earnings impact of historically black colleges and universities author affiliation elton mykerezi department of applied economics university of minnesota twin cities 231 classroom office building 1994 buford avenue st paul mn 55108 6040 usa e mail myker001 umn edu corresponding author bradford f mills department of agricultural and applied economics virginia polytechnic and state university 314 hutcheson hall blacksburg va 24060 usa e mail bfmills vt edu acknowledgment the authors thank george norton julie hotchkiss and two anonymous referees for helpful comments and suggestions funding from the national research initiative competitive grants program usda cress grant number 2003 35401 12915 is also gratefully acknowledged 1 introductionhistorically black colleges and universities hbcus were originally founded to provide postsecondary educational opportunities to blacks since the end of de jure segregation in public education under the supreme court brown v the board of education of topeka 1954 ruling the hbcu mandate has become the subject of considerable debate the supreme court ruling in united states v fordice 1992 may be interpreted to indicate that continued state and federal support of hbcus as racially distinct institutions must be justified by educational benefits beyond the provision of a low cost educational alternative moore 2000 differential post college labor market success is an important indicator of the value of unique hbcu benefits and thus is of considerable interest in terms of postsecondary education policy previous studies by ehrenberg and rothstein 1994 and constantine 1995 1998 use data from the national longitudinal study of the high school class of 1972 to examine the impact of hbcu attendance relative to attendance of other colleges on the wages of blacks however the findings of these studies are somewhat conflicting ehrenberg and rothstein 1994 find a 0 12 wage loss for hbcu attendees relative to their counterparts who attended other four year colleges or universities constantine 1995 on the other hand finds that hbcu attendees realize 38 higher wages than black college attendees at other four year institutions constantine 1998 finds that black males who attend hbcus realize 7 higher wages than black attendees at other four year colleges and universities and that wages would be 25 higher for the general college attendee population of black males with hbcu attendance black females who attend an hbcu show 15 higher wages relative to black females who attended other four year colleges but there are no significant wage gains from hbcu attendance for the general population of black females the conflicting findings in these studies potentially arise from changes in the differential return on hbcu education with post college experience in the labor market as the median age in the ehrenberg and rothstein 1994 sample is 25 years compared to 32 years in the constantine 1995 1998 sample this paper augments the existing literature on the wage earnings impact of blacks hbcu attendance in two important ways first the age earnings profiles of hbcu attendees and other college educated blacks are examined using data from a more recent cohort of blacks in the 1979 national longitudinal survey of youth specifically the current study examines the impact of hbcu attendance on the initial post college wage on the most recent survey wage observation and on the average annual growth rate in wages measuring labor market success by the age earnings profiles of individuals over time provides more complete information about patterns of labor market success than does a wage observation at a single point in time second the study explicitly accounts for the impact of location of hbcus of particular note the distance from one s residence at age 14 years to the nearest hbcu and to other colleges and universities is controlled for in the college selection decision as are the local economic conditions for the individual s place of residence at age 14

an empirical study of age discrimination in norway and germany using a questionnaire and a sample of students and personnel managers we establish the existence of age discrimination in the hiring process in germany and norway as expected age discrimination is more prominent in germany where the hiring probability of equally qualified applicants is reduced by about 22 percentage points due to an age differential of 14 years as opposed to only 12 percentage points in norway within both countries the tendency to discriminate does not differ between students and personnel managers and does not depend on the age of the decision maker the phenomenon of unemployment among older workers is characterized less by the risk of becoming unemployed than by the problem of remaining unemployed and failing to find new work frerichs and naegele 1998 p 59

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite

measuring racial discrimination with fair housing audits caught in the act a survey technique called a fair housing audit provides a direct measure of racial discrimination in housing this paper examines the econometric issues raised by audit data measures the discrimination uncovered by a 1981 boston study and tests hypotheses about the causes of discrimination the estimated level of discrimination is high black housing seekers are told about 30 percent fewer available housing units than are whites the hypothesis tests indicate that the primary cause of this discrimination is that housing agents illegally promote their economic interests by catering to the racial prejudice of their current or potential white customers

a multi level panel star model for us manufacturing sectors we introduce a multi level smooth transition model for a panel of time series which can be used to examine the presence of common nonlinear business cycle features across many variables the model is positioned in between a fully pooled model which imposes such common features and a fully heterogeneous model which allows for unrestricted nonlinearity we introduce a second stage model linking the parameters that determine the timing of the switches between business cycle regimes to observable explanatory variables thereby allowing for lead lag relationships across panel members we discuss representation estimation by concentrated simulated maximum likelihood and inference we illustrate our model using quarterly industrial production in 19 us manufacturing sectors and document that there are subtle differences across sectors in leads and lags for switches between business cycle recessions and expansions copyright 2005 john wiley sons ltd

does a foot in the door matter white nonwhite differences in the wage return to tenure and prior workplace experience author affiliation arthur h goldsmith department of economics washington and lee university lexington va 24450 usa goldsmitha wlu edu corresponding authordarrick hamilton milano the new school of management and urban policy 72 fifth avenue new york ny 10011 usa hamiltod newschool eduwilliam darity jr department of economics university of north carolina at chapel hill chapel hill nc 27514 usa darity unc edu this work is supported by grant 0213838 from the national science foundation acknowledgment we are grateful for suggestions provided by barry hirsch and seminar participants at bond university gold coast australia in addition we are grateful for comments from julie hotchkiss co editor for this journal and two anonymous referees this paper was presented at the 2004 southern economic association meetings 1 overviewthere is an extensive literature documenting the lower wages of black and latino workers relative to white workers in the united states the explanations for these racial and ethnic wage disparities have ranged from differential accumulation of human capital to labor market discrimination 1 farmer and terrell 1996 and more recently lewis and terrell 2001 extend this literature by advancing a hypothesis which we summarize as the theory of ability misperception this hypothesis explains how group membership may differentially influence the gains associated with workplace experience and hence the relative wages of black and latino workers over the course of their working lifecycle their basic idea is twofold first employers believe nonwhite employees acquired fewer skills on prior jobs than white workers thus employers will reward additional experience with prior employers to a greater extent for white workers than for nonwhite workers we refer to this hypothesis as proposition 1 this first proposition falls under the umbrella of statistical discrimination which explains wage inequality as a result of employers offering nonwhite workers lower wages as a result of employer reliance on their perception that the distribution of skills for nonwhite workers is worse than that of white workers second as employers directly observe nonwhite workers on the job they come to realize that their perceptions concerning the distribution of skills for nonwhite workers were incorrect and consequently they have underrated the ability of nonwhite employees this learning leads employers to update their assessment of the relative productivity of nonwhite workers therefore racial ethnic differences in the return to additional tenure or seniority with the current employer will be smaller than the racial ethnic difference in the return to prior experience when proposition 1 holds this prediction constitutes proposition 2 of the theory of ability misperception in addition we introduce a third proposition or a strong form of proposition 2 which suggests that the returns to additional tenure for nonwhite employees will actually exceed that of white employees thus proposition 2 requires that the difference in returns to additional tenure with the current employer between nonwhite and white workers be smaller than the difference in returns to prior experience while proposition 3 requires that nonwhite workers actually receive a higher return for tenure the purpose of this paper is to advance the existing empirical literature aimed at evaluating the validity of the propositions central to the theory of ability misperception using data drawn from the multi city study of urban inequality mcsui if farmer and terrell 1996 and lewis and terrell 2001 are correct that employers underestimate the skills of nonwhite workers before directly observing them at the worksite then many capable nonwhite applicants will be denied work and if employed will suffer undue economic losses

market incompleteness and the equity premium puzzle evidence from state level data abstract this paper investigates the importance of market incompleteness by comparing the rates of risk aversion estimated from complete and incomplete markets environments for the incomplete markets case we use consumption data for the 50 us states we find that the rate of risk aversion under the incomplete markets setup is much lower furthermore including the second and third moments of the cross sectional distribution of consumption growth in the pricing kernel lowers the estimate of risk aversion these findings suggest that market incompleteness ought to be seen as an important component of solutions to the equity premium puzzle