the persistence of female labor supply empirical evidence and implications previous research has shown that female hours of work are very persistent over women s lifetimes that women tend to be either workers or nonworkers this paper uses psid data from 1967 to 1987 to examine changes in persistence over time the overall finding is that there is little change in persistence because as women entered the labor force in greater numbers they tended to become continuous workers replacing continuous nonworkers among older women spells of reduced hours are now less prolonged holding constant a fixed effect among young women the persistence of hours has increased slightly over time and patterns of employment now appear to develop prior to marriage and continue into the married years

the new economics of teachers and education rapidly growing costs of elementary and secondary education are studied in the context of the rising value of women s time the dramatic increase in direct costs of education per student in the past 3 decades is empirically linked to increasing demand and utilization of teacher and staff inputs attributable to growing market opportunities for women and changes in the structure of families on the supply side the flexibility option that female teachers who take temporary leaves do not suffer subsequent wage loss upon reentry is shown to be an important attraction of the teaching profession to women

labor market returns to two and four year college the paper examines labor market returns to a two and four year college education analysis of the 1972 national longitudinal survey of youth observation that the average person who attended a two year college earned about 10 percent more than those without any college education comparison with the wages of those who attended a four year college education

do labor markets provide enough short hour jobs an analysis of work hours and work incentives i introduction female labor force participation has increased dramatically over the past three decades much of this change is due to the increased participation of married women and women with children 1 in households where both adults participate in the labor force or where there is a single working parent individuals will often have greater demands on their time at home and may therefore desire patterns of work hours that differ from other workers given the gender based division of labor in most american households many of the women entering the labor force may prefer shorter and perhaps more flexible work weeks 2 furthermore as sex roles adjust to accommodate the changing work and career aspirations of women it is reasonable to expect that increasing numbers of men will also prefer shorter work weeks the prospects for equality of economic opportunity between men and women rest in large measure on how well and how rapidly labor markets accommodate the hours preferences of workers who desire this flexibility in this paper we ask whether labor markets will provide the optimal number of short hour jobs in response to an increase in demand for short hours on the part of employees according to the simple textbook model of the determinants of work hours the answer to this question is clearly yes firms have an incentive to elicit information about their hours preferences because this allows them to offer labor contracts that minimize cost similarly workers have an incentive to reveal their preferences to finns because this information is used to construct wage and hours packages in which workers are asked to work the utility maximizing number of hours at the market clearing wage labor market outcomes may be considerably more complex however in a setting where firms rely on work incentives to regulate the effort exerted by employees 3 we find that in a simple efficiency wage model along the lines of shapiro and stiglitz 1984 and bowles 1985 but with a heterogeneous work force workers hours preferences may provide an indicator of their responsiveness to the work incentives in this setting employers will in general not be able to elicit accurate information about hours preferences from employees we show that this market failure may lead in turn to labor market equilibria that are characterized by an underprovision of short hour jobs we find further that the shortage of short hour jobs most likely occurs in high wage labor markets our model suggests that the simple textbook analysis of hours determination relies upon the wrong market metaphor the conventional approach presumes that the determination of work hours is similar to the determination of car colors workers have an incentive to reveal their true hours preferences and employers have anincentive to solicit these preferences for the same reason that consumers have an incentive to reveal their color preferences and car makers have an incentive to solicit these preferences in our view a more appropriate market metaphor for hours determination is the market for health insurance employees have an incentive to portray themselves as desiring long hours for the same reasons that purchasers of health insurance will want to portray themselves as having no health problems insurance providers must be concerned about the unobservable characteristics of individuals who are attracted to the various insurance contracts they offer we suggest that employers face similar concerns when offering wage and hours packages the paper proceeds as follows in the next section section ii we analyze the determination of wages and work hours when finns use dismissal threats to motivate a homogeneous group of workers section iii examines the case where workers have heterogeneous preferences with respect to hours of work in section iv we discuss the empirical plausibility of our model section v provides concluding remarks

on selecting a measure of labour activity evidence from registered nurses 1981 and 1989 the purpose of this paper is to demonstrate the effects of the selection of measures of labour activity on the conclusions that are derived from the analysis of individual labour supply the results of the analysis using three commonly specified single measures annual hours worked hours worked per week and weeks worked per year as the dependent variable in tobit equations are compared with those obtained using a probit 2sls in which the individual labour supply is measured by hours worked per week and weeks worked per year the rhs variables are those that are used in earlier individual labour supply studies and are the same in all of the models analysed among the findings are 1 wage rate effects that are quite strong in single equation models and disappear when a multi equation approach is used 2 the effects of children on labour supply is more complex than in indicated in single equation results and 3 duration dependence is much stronger than indicated results using a single measure of indiv

sex segregation within occupations do the paychecks and career prospects of men and women differ because of rational optimizing decisions made by men and women given their respective skills experiences home responsibilities and intentions regarding future work and family activities the human capital model coherent logical and internally consistent has a certain elegance to it nevertheless empirically it cannot explain the sex composition of jobs in lines of work pursued by both men and women the results reported below are more consistent with the notion that employers statistically discriminate that is they reserve some jobs for men and others for women based on their perceptions of the average traits of the two groups however our results also call into question the assumption that statistical discrimination is merely an optimal decisionmaking strategy under conditions of uncertainty we summarize below our recent research on determinants of the sex composition of jobs in mixed occupations that research is based on data on staffing patterns job requirements and personnel policies collected by the u s employment service in over 400 california establishments between 1959 and 1979 details on sample representativeness procedures of data collection and the like can be found in our 1984 and 1986 papers

endogenous formation of cooperation structures abstract i consider a cooperation formation game in which players choose independently with whom they wish to cooperate in a given coalitional game and players payoffs follow a solution imposed on the coalitional game i study the resulting equilibrium cooperation structure and how cooperation evolves under best response and fictitious play learning processes journal of economic literatureclassification numbers c71 c72

tax policy and aggregate demand management under catching up with the joneses this paper examines the role for tax policies in productivity shock driven economies with catching up with the joneses utility functions the optimal tax policy is shown to affect the economy countercyclically via procyclical taxes i e cooling down the economy with higher taxes when it is overheating in booms and stimulating the economy with lower taxes in recessions to keep consumption up thus models with catching up with the joneses utility functions call for traditional keynesian demand management policies but for rather unorthodox reasons

female labor supply following displacement a split population model of labor force participation and job search following permanent layoffs most women search for new jobs but some withdraw from the labor force we develop a joint model of the choice to undertake postdisplacement job search and unemployment durations for searchers and estimate it using data from the 1988 displaced worker survey maximum likelihood estimates of this split population model show that labor force withdrawal is an important factor explaining the distribution of postdisplacement jobless spells the model also allows us to distinguish the effect of any covariate on the decision to engage in postdisplacement search from its effect on search duration single population models obscure this distinction

work experience earnings and participation evidence from the women and employment survey this paper presents a probit model of labour force participation and a set of earnings equations estimated using data from the 1980 women and employment survey the results of the participation model compare with previous findings and the earnings models give typical results of human capital and job characteristics variables exclusion of the sample selection effect appears to be of importance and a linear piecewise experience variable outperforms the quadratic specification

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

a theory of interregional tax competition a general equilibrium model is constructed to study tax competition where local governments compete for capital by holding down property tax rates and public expenditure levels an exact definition of tax competition is provided and both the existence and nonexistence of tax competition are shown to be theoretically possible it is argued however that tax competition must occur under empirically reasonable conditions inefficiency in public production is also explicitly modeled the amount of capital used to produce a given level of public service output is shown to be greater than that which is required to minimize costs evaluated at the prices facing private firms

why do schooling returns differ screening private schools and labor markets in the philippines and thailand abstract this article examines returns to schooling in the philippines and thailand using recent employee surveys in manufacturing industries empirical results show that i schooling returns steadily increase as education attainment increases in thailand but the returns increase only at university level in the philippines and that ii private school premiums are higher in the philippines than thailand the latter finding is consistent with the dominance of private institutions in the philippine education system the premiums from private schooling investments in the philippines are however found to be spurious in the sense that private schools screen high ability students which augments wage therefore the productivity gain from private schooling is small

altruism jealousy and the theory of optimal non linear taxation abstract this paper studies optimal non linear taxes in a world in which there is altruism and jealousy a formula for optimal marginal tax rates is derived which turns out to be a simple and intuitively appealing extension of a result due to mirrlees the paper shows that in this sort of economy all of optimal tax theory s general results either no longer hold or need not hold and it sets out appropriate modifications to standard tax rules

status effects public goods provision and excess burden abstract most studies of the optimal provision of public goods or the excess burden from taxation assume that individual utility is independent of other individuals consumption this paper investigates public good provision and excess burden in a model that allows for interdependence in consumption in the form of status relative consumption effects in the presence of such effects consumption and labor taxes no longer are pure distortionary taxes but have a corrective tax element that addresses an externality from consumption as a result the marginal excess burden of consumption taxes is lower than in the absence of status effects and will be negative if the consumption tax rate is below the pigouvian rate correspondingly when consumption or labor tax rates are below the pigouvian rate the second best level of public goods provision is above the first best level contrary to findings from models without status effects for plausible functional forms and parameters relating to status effects the marginal excess burden from existing u s labor taxes is substantially lower than in most prior studies and is negative in some cases

are part time women paid less a model with firm specific effects this paper uses data from a survey of child care establishments to compare part and full time wages within two narrow occupations one high skill and one low skill unlike previous studies it controls for firm specific effects we find that when firm specific effects are accounted for only the low skill workers in our sample receive lower wages for working part time on the other hand when compensation is defined to include prorated fringe benefits establishments appear to compensate both high and low skill part timers at a lower hourly rate

factors affecting levels and growth rates in the wage rates of women evidence from nursing using data from two surveys of nurses 1981 and 1989 the study examines the factors affecting the levels and growth rates in the wage rates paid to women especially married women who were licensed as registered nurses our results indicate that the influence of such household characteristics as marital status age and number of children and spouse s characteristic tended to diminish over the 1980s the evidence further suggests that the penalties for frequent switches in employment state were larger at the end of the decade than at the beginning further wages paid to nurses with baccalaureates were statistically the same as those paid to nurses with lesser formal education the return to the baccalaureate appears to be in the form of the higher wages and salaries earned by those who obtain post baccalaureate degrees

returns to nursing education 1970 84 using four large micro data sets this paper examines the returns to investments in education by registered nurses during the period 1970 84 wage models are estimated by a maximum likelihood technique that accounts for selection bias no wage difference existed between associate and diploma degree nurses modest hourly wage premiums were found for baccalaureate bs compared with associate degree nurses returns to positions of responsibility were substantial however when career patterns of promotion were examined in a multinomial logit model and although statistically significant differences existed in favor of the baccalaureate nurses the differences were small blacks made substantial gains over the period while males consistently earned large wage premiums

housework wages and the division of housework time for employed spouses while the popular press may have declared housework passe with the advent of the two income household see housework is obsolescent by barbara ehrenreich 1993 for one such example the facts indicate that housework continues to consume a substantial amount of time particularly for women while estimates vary widely depending on the sample examined and the methods used to generate the information representative values of housework time range around 6 14 hours per week for men and 20 30 hours for women since wages are likely to be influenced both directly and indirectly by the time and effort devoted to other activities and since gender differences in household responsibilities are significant and often assumed to be a driving force behind gender earnings differentials decisions regarding the overall amount of time spent on housework and the division of that time within the household are important ones the goal of this paper is to shed some light on these allocation decisions we begin by discussing the various methods by which time and effort spent on housework may affect wages and summarize the available empirical evidence overall the empirical evidence indicates that time spent on housework has a negative effect on wages an effect which is most pronounced for women we next examine the amount of time spent on housework and the division of that time between working spouses to do so we draw upon the human capital literature and the bargaining literature to construct simple regression equations for time spent on housework by each spouse as well as the share of housework time contributed by the husband the results indicate that husbands do less housework than their wives as their relative earnings and hours spent in the labor market increase

litigation costs and returns to experience we develop a model linking maximum damage awards available to plaintiffs in wrongful termination lawsuits workers propensity to sue as a function of experience and returns to experience using equal employment opportunity commission data on protected worker discrimination complaints and labor market data from the current population survey we examine how returns to experience among protected workers changed around the passage of the civil rights act of 1991 we show that employers reactions to employment protections may induce redistributive effects furthermore these effects operate not merely across groups of differing protected status but also within groups of identical protected status

are positional concerns stronger in some domains than in others for more than one hundred years economists have discussed the concept of positional goods that the utility conferred by many perhaps even most goods depends not only on the amount the individual consumes but also on the amount others consume e g thorstein veblen 1899 james duesenberry 1949 john k galbraith 1958 robert frank 1985 while economic interest in positional goods is increasing e g mark pingle and mike mitchell 2002 kenneth arrow et al 2004 ed hopkins and tatiana kornienko 2004 the literature remains largely theoretical rather than empirical if status concerns affect all items in the utility function equally leisure as well as goods the positional effect would operate like a lump sum tax reducing well being without changing the allocation of time or money arrow et al 2004 however if positional concerns are stronger for some things than for others then in order to understand how people can become better off in well being not simply in wealth we must investigate how interpersonal competition interacts with material gains frank 1997 evidence about what goods are more positional than others is essential for correct policy recommendations gregory besharov 2002 but little is actually known about the relative positional rankings of items in the typical consumer s utility function four hypotheses proposed in the literature are

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

creating low skilled jobs by subsidizing market contracted household work the paper analyses the determinants of household work contracted in the german shadow economy the german socio economic household panel which enumerates casual domestic employment is used to estimate the demand for such household work the regressors include regional wage rates household income and several control variables for household composition it is found that the demand for household work in the shadow economy is very income elastic this suggests that targeted wage subsidies linked to household work agencies would be very effective in raising the legal demand for domestic help a wage subsidy of 50 of wage costs could thus establish up to 500 000 new jobs for previously unemployed or non working low skilled workers the net fiscal costs of such a scheme are about 6 200 euro per full time job in addition society benefits from more law enforcement and from a raised female labour supply especially by highly qualified mothers

are ols estimates of the return to schooling biased downward another look the authors examine evidence on bias in ols estimates of the economic return to schooling to study omitted ability bias they use test scores available in the national longitudinal survey of youth as proxies for ability allowing for measurement error in these test scores the authors also explore biases from the endogeneity of schooling or experience or measurement error in these variables in their data ols estimation including test scores appears to be appropriate and indicates an upward bias of roughly 40 percent in the ols estimate ignoring ability this contrasts with evidence from other recent research using different statistical experiments to purge schooling of its correlation with the wage equation error copyright 1995 by mit press

social comparisons and optimal taxation in a small open economy in this paper we analyze how international capital mobility affects the optimal labor and capital income tax policy in a small open economy when consumers care about relative consumption the main

optimal taxation when consumers have endogenous benchmark levels of consumption i examine optimal taxes in an overlapping generations economy in which each consumer s utility depends on consumption relative to a weighted average of consumption by others the benchmark level of consumption as well as on the level of the consumer s own consumption the socially optimal balanced growth path is characterized by the modi ed golden rule and by a condition on the intergenerational allocation of consumption in each period a competitive economy can be induced to attain the social optimum by a lump sum pay as you go social security system and a tax on capital income

tax policy and present biased preferences paternalism under international capital mobility this paper deals with tax policy responses to quasi hyperbolic discounting earlier research on optimal paternalism typically abstracts from capital mobility if capital is mobile between countries it may no longer be possible for national governments to control domestic savings via capital taxation as in a closed economy in this paper we take a broad perspective on public policy responses to self control problems by showing how these responses vary i between closed and open economies ii between small open and large open economies and iii depending on whether or not both source based and residence based capital taxes can be used

intertemporal labor supply and the distribution of family income the earnings of married women have a more equalizing effect on the distribution of lifetime family earnings or the expected present value of earnings than on the distribution of annual family earnings using panel study of income dynamics longitudinal data the intertemporal variability of wives labor supply causes the correlation between the lifetime earnings of husbands and wives to weaken relative to the correlation between their annual incomes resulting in lower lifetime inequality the inequality of potential income full employment earnings is found to be much greater for lifetime earnings than average annual earnings based on alternative endogenous wage hours models copyright 1989 by mit press

the role of preferences and opportunity costs in determining the time allocated to housework the time devoted to housework in couple households is substantial research on intrahousehold time allocations has generally assumed that housework is a necessary evil and that the partner with the lower opportunity cost of time in the market will devote more time to home production in reality households individuals are likely motivated to maximize happiness and preferences regarding even mundane household chores differ considerably we use information on preferences opportunity costs and time use from the 2000 2001 united kingdom time use survey to examine the time partners spend doing laundry ironing cleaning and food shopping while compared with other household chores such as gardening and do it yourself repairs the selected activities are generally less enjoyable preferences do vary across the population and are correlated with reported time use joint multivariate analysis of his and her time on weekend and weekday days as well as maid service reveals that her opportunity cost of time matters substantially more than his but that his preferences play a greater role than hers

dynamics of female labour force participation in france abstractthis article formulates and estimates a structural intertemporal model of labour force participation relying on theoretical characterizations derived from an economic model of lifetime behaviour we estimate a dynamic probit model with correlated random effects using longitudinal data to allow for a dynamic structure the model is applied to a panel of married women drawn from the 1997 2002 french labour force surveys in order to represent their participation behaviour it is estimated by maximum simulated likelihood our results show that women s decisions to go out to work are characterized by significant state dependence unobserved heterogeneity and negative serial correlation in the transitory error component in addition we find that the presence of young children in a woman s household reduces her labour participation but unequally according to their age and number as expected educational level has a positive impact on women s participation last a rise in the husband s wage is found

optimum taxation with errors in administration abstract the paper compares the welfare levels which can be achieved by two distinct tax regimes lump sum taxation where one attempts to identify individuals and allocate transfers or subsidies on the basis of characteristics and income taxation where characteristics are not observed but personal incomes are measured and taxed where there are no errors in classifying individuals lump sum taxation is superior but where mistakes are made in the allocation of lump sum grants or subsidies income taxation may be more attractive the level of errors where the regimes are equally desirable in terms of social welfare is computed in simple models following that of feldstein 1973 where there is strong aversion to inequality then income taxation becomes preferable at quite small errors in analysing income taxation it is shown that in the feldstein model with endogenous wages the marginal tax rate in optimum income taxation on the more skilled is negative and that on the less skilled is positive in contrast to the standard results see seade 1977 with exogenous wages

sources of bias in women s wage equations results using sibling data we use data on sisters to jointly address heterogeneity bias and endogeneity bias in estimates of wage equations for women this analysis yields evidence of biases in ols estimates of wage equations for white and black women some of which are detected only when the two sources of bias are addressed simultaneously for both white and black women there is evidence of upward bias in the estimated returns to schooling bias corrected estimates of the effect of marriage on wages for white women suggest a positive marriage premium we also use the sibling data to identify our models and test a number of other commonly used identifying assumptions as overidentifying restrictions

simultaneously modeling the supply of weeks and hours of work among female household heads this paper explores the differential nature of labor supply decisions regarding weeks of work per year and hours of work per week among female household heads a model of labor supply that separates the weeks hours decision is presented and estimated allowing for simultaneity in the weeks hours decision as well as for the presence of either fixed costs or weeks and hours constraints the results indicate that not only are weeks and hours decisions separate from the labormarket participation decision but they are also quite different from each other although they appear to be simultaneously determined

wage determination of registered nurses in proprietary and nonprofit nursing homes this study explores why registered nurses employed in nonprofit nursing homes earn higher wages than those employed in proprietary facilities previous studies have explained this finding in a property rights context where higher wages were posited to result from the weaker incentives for cost minimization accompanying nonprofit status this paper tests an alternative explanation of sectoral wage differences which is predicated on the reason for the coexistence offor profit and nonprofit firms in a given industry informational constraints concerning the quality of care are posited to cause the long term health care market to fail to provide care at the upper levels of a quality of care continuum nonprofits are viewed as a response to this form of market failure acting to fulfill customers demand for higher quality and higher cost long term care with attendant demand for higher quality nurses than in for profit homes both the observed sectoral pattern in selectivity and wage decompositions based on selectivity corrected wage regressions call into question the property right explanation yet are consistent with an asymmetric information explanation

recovering hicksian consumer surplus within a collective model hausman s method for the household the purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non marketed environmental resources after demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished the paper demonstrates how the framework can be used to recover hicksian consumer surplus an algebraic example is used to illustrate how the framework can be used in valuing environmental resources

the life cycle labor supply of married women and its implications for household income inequality i introduction there has been an abundance of papers on female labor supply over the years but most do not rigorously test the life cycle model of labor supply and none focus on the potentially important role of nonlabor income in shaping labor supply 1 their primary focus is on the wage elasticity and most recently on the intertemporal wage elasticity the intertemporal wage elasticity or the change in labor supply as wages change over the woman s life cycle is economically cleaner to interpret because it contains only a substitution effect the income effect is constant over the life cycle but this advantage comes at a cost we learn nothing about why labor supply varies across women such variability is extremely important for policy purposes because for example it has implications for income inequality the popular press often creates the impression that income inequality is worsening as upper income men marry upper income women the implication is that the rising labor force participation rate of women is increasing family income inequality on the other hand it is possible that the income of wealthy husbands exerts a negative income effect on their wives labor supply so income inequality is little changed or declines as participation rates of wives rise the objectives of this paper are twofold to estimate a life cycle labor supply model with panel data that emphasizes the husband s income effect on the wife s hours of work and to draw implications for family income inequality i provide new estimates of the income elasticity that nest the life cycle hypothesis of labor supply with the current income hypothesis the life cycle model suggests that it is the permanent income of the husband that matters not his current income yet nearly all models of female labor supply include only current income the exception is jakubson 1988 i include both and add a varying parameters specification for changes in tastes the implications for income inequality arise as an application of the life cycle labor supply model a summary of the empirical results is contained in the conclusion this paper is unusual in that it covers two relatively disparate topics though their linkage is important and demands their integration in one paper ii specification of the labor supply model following the standard life cycle labor supply model assume that an individual maximizes lifetime utility v where utility is separable over time and separable between consumption and leisure 2 mathematical expression omitted where c and l are consumption and hours of leisure for individual i rho is the rate of time preference gamma sub it reflects consumers tastes for home production leisure etc and omega is less than 1 is fixed across individuals the lifetime budget constraint is mathematical expression omitted for interest rate r wage rate w sub it hours of work h sub it and the present value of nonlabor income a sub i for an interior solution the leisure equation is 2 ln l sub it 1 omega 1 ln lambda sub i ln gamma sub it ln omega ln 1 r sup t 1 rho sup t ln w sub it where lambda sub i is the marginal utility of lifetime wealth the marginal utility of wealth lambda sub i is a fixed effect that captures all the permanent income effects that influence labor supply including expected lifetime potential wages and lifetime nonlabor income for the labor supply of a married woman the largest wealth effect is likely to be her husband s income as it enters through lambda an increase in the husband s lifetime earnings will decrease the marginal utility of lifetime wealth and decrease the wife s labor supply 3 incorporating this relationship in the parameterization of lambda mathematical expression omitted where mathematical expression omitted is the husband s lifetime income education e

asymmetric and non atmospheric consumption externalities and efficient consumption taxation abstract we analyze the effects of a generalized class of negative consumption externalities asymmetric and non atmospheric on the structure of efficient commodity tax programs households are not only concerned about consumption reference levels that is they gain utility from keeping up with the joneses but they also exhibit altruism two sets of efficient tax regimes are compared based on a welfarist and a non welfarist optimality criterion respectively altruism turns out not to be at odds with the consumption externalities rather altruism implicates a bound on efficient utility allocations a non welfarist government tolerates less inequality than a welfarist one in the welfarist non welfarist case first best personalized commodity tax rates respond highly sensitively barely to whether or not a consumption externality is asymmetric or non atmospheric if personalized commodity tax rates are not available second best case the tax rate on a non positional good is typically different from zero for corrective reasons for plausible functional forms and parameter values numerical simulations suggest that second best tax rates are rather insensitive with respect to both the optimality criterion and the nature of the consumption externality

compensating differentials and unmeasured ability in the labor market for nurses why do hospitals pay more nurses employed in hospitals realize a large wage advantage relative to nurses employed elsewhere this paper examines alternative sources of the hospital premium a topic of some interest given the current shifting of medical care out of hospitals whereas cross sectional estimates indicate a hospital rn wage advantage of roughly 20 percent longitudinal analysis suggests that a third to a half of the advantage is due to unmeasured worker ability the remainder is likely to reflect compensating differentials for hospital disamenities we further probe possible sources of the rn hospital premium by examining the receipt of fringe benefits differences in cognitive ability as measured by afqt test scores differences in the quality of experience the role of labor unions and rents earnings on second jobs and the magnitude of wage differentials associated with work shift

relativity inequality and optimal nonlinear income taxation how does concern for consumption relative to others relativity affect the structure of optimal nonlinear income taxation our article provides three sets of answers to this general question first it supports the conclusion in the literature that relativity leads to higher marginal tax rates in doing so it both generalizes some of the conditions under which this result is obtained in the literature and fleshes out the detailed structure for optimal marginal tax rates for specific functional forms for distribution utility function and social welfare function second the article goes beyond the literature and examines the impact of relativity on the progression of optimal marginal tax rates by and large we find support for greater progressivity defined as the steepness of the rise of the marginal tax rate schedule as relativity concern increases third none of the papers in the literature to our knowledge examines the interplay of relativity and inequality in determining the optimal structure of income taxes our special analytical cases and more general numerical calculations support the conclusion that higher inequality dampens the positive impact of greater relativity on the level and the progression of marginal tax rates more work is needed to further explore this interaction between relativity and inequality that our analysis has uncovered

semiparametric bayesian inference for dynamic tobit panel data models with unobserved heterogeneity summary this paper develops semiparametric bayesian methods for inference of dynamic tobit panel data models our approach requires that the conditional mean dependence of the unobserved heterogeneity on the initial conditions and the strictly exogenous variables be specified important quantities of economic interest such as the average partial effect and average transition probabilities can be readily obtained as a by product of the markov chain monte carlo run we apply our method to study female labor supply using a panel data set from the national longitudinal survey of youth 1979 copyright 2008 john wiley sons ltd

gender time use and public policy over the life cycle patricia apps and ray rees compare gender differences in the allocation of time to market work domestic work child care and leisure over the life cycle using survey data for three countries australia the uk and germany they discuss the extent to which gender differences and life cycle variation in time use can be explained by public policy focusing on the tax treatment of the female partner and on access to high quality affordable child care

maids appliances and couples housework the demand for inputs to domestic production maids household appliances and housework time are key inputs to domestic production this study uses data from the uk and france to estimate the effects of resource prices on the demand for these inputs we conclude that higher opportunity costs of time increase the likelihood of having maid services and appliances women s time costs are also positively related to his housework time and negatively related to hers finally maid service appears to be a closer substitute for housework time on weekend days than weekdays suggesting smaller labour supply effects than anticipated by earlier literature abstract from author

jealousy and equilibrium overconsumption the idea that the happiness of an individual depends upon the consumption of others is widely viewed as an important feature of our shared social existence recent research in finance has used this idea through consumption externalities to explore asset pricing anomalies consumption externalities potentially break the link between pareto optimality and competitive equilibria and open the door for beneficial government intervention e g lars ljungqvist and harald uhlig 2000 in this paper we delineate two effects that a consumption externality may have an increase in aggregate consumption may a raise the marginal utility of individual consumption relative to leisure and or b lower an individual s utility level we refer to a as keeping up with the joneses henceforth kuj following jordi gali 1994 and we refer to b as jealousy jealousy is a distinct concept from kuj under kuj an individual derives greater utility from additional own consumption relative to leisure when others consume more at the same time higher per capita consumption holding fixed individual consumption can trigger either jealousy so that individual utility falls or admiration so that individual utility rises in section i of this paper we show that jealousy implies that the laissez faire equilibrium consumption level is greater than the optimal level whether preferences exhibit kuj is not necessary for this main result intuitively in the presence of jealousy consumption is similar to pollution overpollution exists because individuals do not take into account the cost of polluting on others not because an increase in economywide pollution makes the return to individual polluting higher similarly overconsumption exists because individuals do not take into account the negative effect of own consumption on jealous others things go in the opposite direction when individuals are admiring in section ii we consider a functional form that encompasses several existing models we show that jealousy determines the optimal tax to correct overconsumption and that kuj is mainly important for asset pricing

measuring future grandparents preferences for equality and relative standing individuals aversion to risk and inequality and their concern for relative standing are measured through experimental choices between hypothetical societies it is found that on average individuals are both fairly inequality averse and have a strong concern for relative income the results are used to illustrate welfare consequences based on a utilitarian swf and a modified crra utility function it is shown that the social marginal utility of income may then become negative even at income levels that are far from extreme

predicting female labor supply this study examines the empirical associations between female labor supply and child status and marital status using 1970 and 1980 u s census data and 1971 and 1981 canadian census data when the data are used in a purely cross sectional manner without controlling for previous labor supply we find as others have that female labor supply is negatively related to the number of children a woman has had however this relationship changes when we condition on weeks of work in the previous year this study makes use of longitudinal information in the canadian and u s census data that has been largely ignored the paper also explores certain econometric issues raised by the nature of the empirical results

does housework lower wages evidence for britain this paper uses the british household panel survey to present the first estimates of the housework wage relationship in britain controlling for permanent unobserved heterogeneity we find that housework has a negative impact on the wages of men and women both married and single who work full time among women working part time only single women suffer a housework penalty the housework penalty is uniform across occupations within full time jobs but some part time jobs appear to be more compatible with housework than others we find tentative evidence that the housework penalty is larger when there are children present

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

registered nurses and the value of bilingualism recent research indicates that markets do not value bilingual skills these results however are not robust across all labor markets and one notable counter instance is the market for registered

monopsony power and relative wages in the labor market for nurses this paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets using data from the 1985 93 current population surveys measures of relative nurse non nurse wage rates for 252 labor markets are constructed contrary to predictions from the monopsony model no positive relationship exists between relative nursing wages and hospital density or market size nor is support found for the presence of monopsony power based on evidence on union wage premiums slopes of experience profiles or the mix of rn to total hospital employment

pigou tiebout property taxation and the underprovision of local public goods abstract pigou s proposition that the use of distorting taxes rather than neutral head taxes reduces public service levels is examined in this paper a simple model with a national system of competing local governments is utilized to demonstrate that the use of a distorting property tax on mobile capital decreases the level of residential public services the case where public services are an intermediate producer good is also considered

labour supply and commuting abstract we examine the effect of commuting distance on workers labour supply patterns distinguishing between weekly labour supply number of workdays per week and daily labour supply we account for endogeneity of distance by using employer induced changes in distance in germany distance has a slight positive effect on daily and weekly labour supply but no effect on the number of workdays the effect of distance on labour supply patterns is stronger for female workers but it is still small

information learning and wage rates in low income rural areas in this essay we present evidence that employers in rural areas of developing countries have imperfect information with regard to the productivity of heterogeneous workers in addition to obtaining direct measures of the completeness of employer information we consider the implications of information asymmetries for the structure of casual labor markets we then evaluate the extent to which casual labor markets do in fact exhibit these attributes we find that 1 there is adverse selection out of the time rate labor market 2 employers discriminate statistically given two workers with different observed characteristics but the same actual productivity the worker from the group with the higher average productivity will have a higher wage 3 employers exhibit learning over time the extent of employer ignorance is negatively related to labor market exposure on the part of the workers and 4 calorie consumption affects productivity but is not rewarded in the time rate labor market in concluding we argue that an analysis of wage and employment patterns and the implications of these patterns for human capital investment in rural areas of developing countries that ignored the role of information problems could yield misleading conclusions

schooling information and nonmarket productivity contraceptive use and its effectiveness information from two u s fertility surveys on couples knowledge about and use of specific contraceptives are used to estimate the technology of human reproduction in order to examine the association between schooling and productivity in the household sector the results indicate that more schooled couples have a wider knowledge of contraceptive methods use more efficiently those contraceptive methods for which there is little information and large scope for misuse and are better able to mitigate the effects of their biological constraints fecundity on their fertility compared to less schooled couples excerpt

a simultaneous equation model of labor supply fertility and earnings of married women the case of registered nurses a simultaneous equation model of labor supply fertility and earnings is developed and estimated for an important subset of the female population married registered nurses rns measures of variables specific to married nurses age 21 64 are developed by aggregating observations on individual nurses or their families into standard metropolitan statistical area smsa averages from the 1 in 100 public use sample of the 1970 census of population in the u s the sample was restricted in certain ways the grouped observations apply only to white rns who are married with husband present and live in smsas of over 250000 population in 1970 except honolulu the sample is further restricted so that each included observation representing an smsa average is based upon an underlying pool of at least 15 individual nurses this last restriction reduces the sample of smsas to 88 from 124 the coefficient on the nurse wage variable is positive and statistically significant with an implied wage elasticity of 40 at the means these estimates are consistent with those observed using the analogous microcensus data on rns rn fertility has the predicted negative effect on nurse labor supply but is statistically insignificant but the magnitude of the fertility coefficient is plausible a 10 increase in nurse fertility within an smsa number of children ever born 1000 nurses ever married within an smsa is associated with a reduction in the smsa nurse labor supply the estimated coefficients of the husband earnings and nonlabor income variables are negative but only the former is statistically significant at the 90 level or above the estimated effect of the nurses earnings opportunities on her fertility are statistically insignificant but the wage coefficient is negative as expected and implies an elasticity of nurse fertility with respect to the nurse wage rate of approximately 2 the coefficient on the labor supply variable is negative and statistically significant confirming the hypothesis that increased labor market activity increases the opportunity costs of children husbands earnings are not a significant determinant of rn fertility the estimates suggest that nurse labor supply and fertility decisions are relatively unimportant factors in determining the nurses market earnings

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

the work employment distinction among new mothers cps data for 1979 to 1988 are used to examine the determinants of employment actual work and maternity leave for women in the year following childbirth women with better market skills higher expected wages older more education are more likely than other new mothers to have a job and to work among employed women paid leave is also positively related to market skills work responds to childbirth more than employment does with the greatest differences in the first three months following childbirth therefore most women working when their child was one year old had returned to work within three months of childbirth

heterogeneity in returns to schooling econometric evidence from ethiopia this paper investigates whether returns to schooling in ethiopia vary across the wage distribution of individuals to do so it adopts an instrumental variables quantile regression framework that allows for both endogeneity of schooling resulting from unmeasured ability and possible heterogeneity in the impact of schooling the empirical estimates indicate that education contributes more to the earnings of individuals at a lower end of the income distribution

the rise and fall of customary wage differentials among nursing personnel in us hospitals 1956 1985 between 1956 and 1985 the employment of registered nurses rns relative to other nursing personnel rose despite constant relative wages among rns licensed practical nurses and nurses aides over this thirty year period hospital management proclaimed chronic shortages of rns economists have used monopsonistic models to explain the persistence of these shortages as an alternative to the monopsonistic model this paper presents an institutional argument for why hospital management sought to maintain relative wages among classes of nursing personnel while at the same time successfully raising the relative use of rns through a variety of nonwage inducements and manipulations of rn supply c 1995 academic press inc copyright 1995 by oxford university press

a strategic model of social and economic networks we study the stability and efficiency of social and economic networks when self interested individuals can form or sever links first for two stylized models we characterize the stable and efficient networks there does not always exist a stable network that is efficient next we show that this tension persists generally to assure that there exists a stable network that is efficient one is forced to allocate resources to nodes that are not responsible for any of the production we characterize one such allocation rule the equal split rule and another rule that arises naturally from bargaining of the players

endowments and the allocation of schooling in the family and in the marriage market the twins experiment 03 we show how comparisons between the within twin correlations of human capital outcomes across identical and nonidentical twins can be used to identify the variability in the individual specific component of endowments and the responsiveness of schooling to individual specific endowments in the family and in the marriage market even when schooling is measured with error estimates from two twins samples indicate that 27 42 percent of the variance in log earnings obesity is due to variability in individual specific endowments allocations of schooling reinforce specific endowments and individual specific earnings endowments of men and their wives schooling are negatively associated

tax competition and tax coordination in an optimum income tax model abstract the paper uses the self selection approach of stiglitz 1982 to study tax competition and tax coordination in a many country optimum income tax model in the model the government can impose a non linear tax schedule on wage income and a source based tax on mobile capital in an uncoordinated equilibrium it turns out that countries can use the capital tax instrument to weaken the self selection constraint the paper presents examples where positive and negative capital taxes are optimal from a single country perspective if the production function is weakly separable between labor and capital it can be shown that the optimal capital tax is zero the paper also shows that contrary to the standard tax competition model the uncoordinated equilibrium can be efficient if the wealth distribution the endowments with capital among individuals is egalitarian a coordination of capital taxes does not affect welfare for non egalitarian wealth distributions a coordinated increase in capital taxes can raise or lower welfare depending on the redistributive impact of a higher capital tax

who compares to whom the anatomy of income comparisons in europe this article provides unprecedented direct evidence from large scale survey data on both the intensity how much and direction to whom of income comparisons income comparisons are considered to be at least somewhat important by three quarters of europeans they are associated with both lower levels of subjective well being and a greater demand for income redistribution the rich compare less and are happier than average when they do which latter is consistent with relative income theory with respect to the direction of comparisons colleagues are the most frequently cited reference group those who compare to colleagues are happier than those who compare to other benchmarks

information sharing and tax competition among governments abstract the residence based principle has been proposed as a second best measure to the full international coordination of capital tax policies this system requires that tax authorities have full information about the foreign investments of their residents however the degree of information transmission among governments can be considered as a strategic variable we show that under some features of the tax system there will not be any information sharing while there are institutional arrangements under which governments may transmit partial information for strategic purposes we also show that full information sharing is not necessarily a pareto optimum

trends in the well being of american women 1970 1995 this paper examines the trends in the well being of american women over the last 25 years a time of significant changes in the relative economic status of women and in the labor market as a whole a broad range of indicators are considered to capture changes in women s well being in the family as well as in the labor market for virtually all age and education groups substantial evidence is obtained of rising gender equality in labor market outcomes notably labor force participation wages and occupational distributions broad evidence is also found of greater gender parity within married couple families as the housework time of husbands increased relative to wives and the relative wages of wives rose compared to their husbands however parallel to the recent evidence of the declining labor market position of lower skilled men there has been a similar deterioration in the economic status of less educated women especially high school dropouts their labor force participation rates and wages have risen at a much slower pace than those of more highly educated women while their incidence of single headship has increased much more rapidly these findings for less educated women serve to underscore the widening gap between more and less skilled americans of both sexes as well as to emphasize its broad dimensions

labor supply the family and poverty the s shaped labor supply curve abstract the canonical model of labor supply is extended to account for subsistence needs and a frequently rigid division of labor within families gender various theories that have been put forward are thus reconciled in particular with respect to the distinct work choices of the poor the model predicts negative labor supply elasticities for secondary workers at low wage rates and positive ones at higher rates but near 0 for primary workers at all levels detailed time allocation data of the rural philippines support these conclusions as well as evidence from other studies including of industrialized countries policy implications are briefly discussed

detailed estimation of worklife expectancy for the measurement of human capital accounting for marriage and children abstract measuring an individual s human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history calculating such measures requires accurate estimates of worklife expectancy here worklife estimates for men and women in the usa categorized by educational attainment race marital status parental status and current labour force status are presented race has a much larger impact on the worklife expectancy of men than women education is associated with larger worklife differentials for women the association between marriage and worklife expectancy is significant but of opposite sign for men and women married women men have a lower higher worklife expectancy than single women men parenthood is associated with a reduction in the worklife expectancy of women the association is smaller and varies from positive for some education marital status groups to negative for others for men

commuting and labour supply revisited according to theory road pricing may reduce welfare when labour supply is negatively distorted by an income tax this effect particularly occurs when commuting costs reduce labour supply we examine the hypothesis that commuting costs reduce labour supply in the short run in particular we estimate the effect of commuting time on labour supply in the uk we account for endogeneity of commuting time by employing exogenous changes in commuting time resulting from firm relocations and changes in infrastructure our results cast doubt on the idea that increases in commuting cost reduce labour supply at least in the short run more precisely we find that females labour supply reacts positively to or is unaffected by increases in commuting time whereas males labour supply is unaffected

self selection and pareto efficient taxation abstract this paper analyses the set of pareto efficient tax structures the formulation of the problem as one of self selection not only shows more clearly the similarity between this problem and a number of other problems such as the optimal pricing of a monopolist which have recently been the subject of extensive research but also allows the derivation of a number of new results we establish i under fairly weak conditions randomization of tax structures is desirable ii if different individuals are not perfect substitutes for one another in production then the general equilibrium effects until now largely ignored in the literature of changes in the tax structure may be dominant in determining the optimal tax structure in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor the optimal tax structure entails a negative marginal tax rate on the high ability individuals and a positive marginal tax rate on the low ability individuals the marnitude of which depends on the elasticity of substitution iii if individuals differ in their preferences pareto efficient taxation may entail negative marginal tax rates for high incomes while iv if wage income is stochastic the marginal tax rate at the upper end may be 100 our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic