a re evaluation of the relation between wages and unemployment in the united kingdom this paper examines the long run or equilibrium relationship between wages prices and the unemployment rate in the united kingdom using annual data covering the period 1860 1999 using johansen s maximum likelihood method of testing for cointegration two long run relations are found in a small system of four variables the first relation depicts the co movement of the level of real wages adjusted for productivity together with the unemployment rate and the rate of inflation the second relation shows the co movement between the rate of inflation and deviations of productivity from its trend growth

labour demand and job to job movement the relationship between labour demand and job to job movement is investigated both theoretically and empirically at the macro level it concentrates on the role of the employment regime hiring do nothing or firing and the hiring and firing costs the exact upper bounds of the marginal hiring costs of an employed worker are derived for which job mobility between two firms yields a positive aggregate relationship between job to job movement and employment the relationship is estimated as a cointegration model for the netherlands it appears that the inclusion of the job to job mobility rate may provide a substantial improvement of the estimated labour demand equation

relative earnings and individual union membership in the united kingdom considerable attention has been focused in recent years on the empirical analysis of the effect of trade unions on the structure of earnings such empirical investigation usually entails measurement of the union non union differential in wages or earnings at the level of the individual this involves comparison of the earnings of union members with estimates of what their earnings would be were they not union members or equivalently examination of differences in earnings between individuals comparable with regard to all other relevant characteristics who differ in their union membership alone in the united kingdom all previous attempts at estimation of this differential have used aggregate data at either the industry or occupation level 1 the conventional methodology involves regression of the logarithm of the average wage on either the proportion of workers who are union members or the proportion covered by a collective agreement together with a vector of industry characteristics that are deemed to determine the non union wage however several problems are immediately apparent with this methodology first the model ignores the possibility of variation in the differential across industries which has potentially serious consequences second the vector of other characteristics customarily used is somewhat limited and raises doubts concerning the adequacy of the standardization for what might loosely be termed labour quality third only a sub sample of industries is ever used owing to lack of data those industries excluded are generally smaller in terms of employment that those included if the differential varies with the size of the industry a further bias will be induced all of these problems are either removed or lessened by the use of individual level data for an analysis of their impact at the industry level see geroski and stewart 1981 2 as a result it is now widely accepted that the appropriate way to measure such differentials is to use micro data sets at the level of the individual worker until recently suitable data have not been available for the united kingdom and hence such analysis was not possible this paper presents the first estimates for the united kingdom based on individual level data if the value of the union non union differential were the same for all workers in the unionized sector analysis at the industry level and the individual level would produce similar results however the marshallian laws of derived demand suggest that this will not be the case despite this clear prediction of variation in the differential there has been little systematic investigation of the variation this paper also presents such an analysis since variation in the differential across industries results in aggregation bias in industry level studies such an analysis is of considerable relevance to the evaluation of the evidence from such studies as well as being of interest in its own right the paper is laid out as follows section i presents a method of estimating the union non union differential at the individual level while section ii

democracy and economic growth a meta analysis despite a sizeable theoretical and empirical literature no firm conclusions have been drawn regarding the impact of political democracy on economic growth this article challenges the consensus of an inconclusive relationship through a quantitative assessment of the democracy growth literature it applies meta regression analysis to the population of 483 estimates derived from 84 studies on democracy and growth using traditional meta analysis estimators the bootstrap and fixed and random effects meta regression models it derives several robust conclusions taking all the available published evidence together it concludes that democracy does not have a direct impact on economic growth however democracy has robust significant and positive indirect effects through higher human capital lower inflation lower political instability and higher levels of economic freedom democracies may also be associated with larger governments and less free international trade there also appear to be country and region specific democracy growth effects overall democracy s net effect on the economy does not seem to be detrimental

employers recruitment behaviour and vacancy duration an empirical analysis for the dutch labour market the functioning of labour markets from a demand side perspective is examined in particular the determinants of vacancy duration are studied in the context of a model of employers search behaviour a model for the choice of the recruitment strategy at the start of the search process and the corresponding recruitment duration is developed in which allowance is made for different patterns of duration dependence for each recruitment strategy this model is applied to data on employers search behaviour in the dutch labour market it is found that employers prefer advertisements as the first recruitment channel when applicants are required to have work experience moreover employers prefer to start searching via the labour exchange office when jobs in the secondary segment of the labour market have to be filled it is also found that when advertisements are used as the first recruitment strategy employers need some time to acquire a pool of applicants and to select candidates from this pool it is inte

imperfect competition multiple equilibria and unemployment policy this paper takes a simple imperfectly competitive macro model with increasing returns and shows how it can lead to nonexistence or multiplicity of equilibria the consequences for government policy toward unemployment are explored and shown to be very different from the traditional model it is argued that a multiple equilibrium model is an attractive possible explanation of the behavior of u k unemployment in the 1980s copyright 1990 by royal economic society

welfare reform and unemployment in new zealand in the early 1990s new zealand cut benefits and tightened eligibility criteria under its main social welfare programmes these benefit changes varied substantially across both time and demographic groups synthetic panel data are used econometrically to isolate the effects of these reforms on several dimensions of unemployment behaviour a simple theoretical model suggests that cutting benefits could either increase or decrease excess labour supply our results indicate that these reforms increased the official unemployment rate by nearly one quarter of a percentage point but significantly reduced broader measures of economic inactivity or the under utilization of labour in the new zealand economy

the determinants of equilibrium unemployment in britain a lot of energy is currently being expended in trying to understand what has been happening to unemployment in britain and the rest of the developed world in this paper we look at this question in the british context by trying to confront some possible explanations with the data since the data we use are quarterly over rather a short period we are setting the explanations a very hard test most explanations tend to be rather casual and the theories underpinning them ill developed thus for example the so called real wage argument is based on the idea that real wages affect labour demand and that the equilibrium real wage bears some relatively stable relationship to output per head but how stable is not clear thus whether or not we can expect a well defined stable ceteris paribus dynamic relationship between real product wages as a proportion of output per head and unemployment is equally unclear so if such a relationship does not show up in a quarterly regression model this may not be that serious for the theory nevertheless we must look for the relationship for how else are we ever to discriminate between a plethora of conflicting views the primary emphasis in this paper is on the secular factors affecting unemployment rather than the cyclical variables consequently we shall not be concerned with developing a coherent theory of cyclical fluctuations and in the empirical work we shall control for the cycle simply by making use of those exogenous or predetermined variables which other work in this field suggests are important 2 the remainder of the paper is set out as follows the next section is concerned with specifying a model which generates a definition of equilibrium unemployment the outline of this model is a pair of equations determining the flows into and out of unemployment and these are specified in section ii which looks closely at the possible variables involved section iii then deals with the results and presents some general conclusions

local pay determination theoretical models of local pay are reviewed ranging from neoclassical perspectives unemployment wage trade off models and segmented labor market approaches the empirical work on u s north south differentials is discussed for the u k studies of the extent of and trends in geographical pay differentials are considered as well as behavioral explanations focusing on the role of excess demand the issue of adjustment processes is then discussed both in theory and in relation to empirical work for the u s and u k this discussion focuses largely on geographical spillover effects in terms of origins evidence and issues of identification finally the impact of certain impediments in the adjustment process are considered specifically in relation to the u k these concern the role and influence of national wage bargaining as well as factors inhibiting labor migration stemming from the housing market and the climate of the national labor market copyright 1992 by blackwell publishers ltd

mismatch between unemployment and vacancies in the dutch labour market we analyse the importance of educational mismatch between vacancies and unemployment in the dutch labour market using unemployment and vacancy data by educational level we estimate a matching function which incorporates the effect of educational mismatch on the aggregate flow of filled vacancies using the estimated parameters we calculate how much of total unemployment can be attributed to educational mismatch the results indicate that educational mismatch is not an important determinant of unemployment in the netherlands moreover it shows a remarkable trend contrary to common belief the relative importance of mismatch appears to have strongly decreased since the end of the 1960s

wage inflation and unemployment in europe the regional dimension johnes g and hyclak t j 1989 wage inflation and unemployment in europe the regional dimension reg studies 23 19 26 in this paper a bargaining model of wage and unemployment determination is used to estimate regional phillips curves for britain italy and the federal republic of germany estimates of region specific non accelerating inflation rates of unemployment nairu are provided movements of these over time are examined the impact of inter regional differences in wage rigidity on unemployment change is analysed in the final section johnes g et hyclak t j 1989 l inflation par les salaires et le chomage en europe l optique regional reg studies 23 19 26 cet article se sert d un modele de la determination des salaires et de l emploi afin d estimer des courbes de phillips pour la grande bretagne l italie et la republique federale allemande on fournit des estimations des taux de chomage regionaux etant donne une inflation stable et on examine les mouvements de ces taux sur le temp

assumptions matter model uncertainty and the deterrent effect of capital punishment the effectiveness of capital punishment in deterring homicides has remained unclear despite the fact that the supreme court s mor atorium on capital punishment and the subsequent adoption of capital punishment by a subset of states combined with very different rates of execution across polities would appear to be an ideal environment for revealing deter rence effects using panel data methods one can find papers that argue that postmoratorium data reveal large deterrent effects dezhbakhsh rubin and shepherd 2003 drs hereafter zimmerman 2004 fail to provide evidence of a deterrent effect donohue and wolfers 2005 durlauf navarro and rivers 2010 dnr hereafter or provide a mixture of positive deter rence and negative deterrence brutalization effects depending on the frequency of execution shepherd 2005

reconciling the wage curve and the phillips curve the wage curve is the negative relationship that links wage levels to the unemployment rate it fits accurately with modern non competitive labour market models but goes against a phillips curve modelling because the latter ties wage growth to the unemployment rate in this article we present a comprehensive review of these non competitive models highlighting recent contributions that try to eliminate the possible gap that exists between the concepts of the wage curve on the one hand and the phillips curve on the other copyright blackwell publishers ltd 2005

successful employer search an empirical analysis of vacancy duration using micro data this paper provides the first estimates of the determinants of the duration of employer search in the uk we model duration until a vacancy is either successfully filled or withdrawn from the market the econometric techniques deal with multiple vacancies and unobserved heterogeneity dependent risks using flexible and parametric baseline hazards the hazards to filling and withdrawing exhibit negative and positive duration dependence respectively implying that the conditional probability of successful employer search decreases with duration we also find that nonmanual vacancies are less likely to fill consistent with there being skill shortages in the sample period

monetary co operation and economic growth in africa comparative evidence from the cfa zone countries this article compares economic growth performance of ten african countries all members of the cfa monetary zone with that of 23 non zone sub saharan african ssa countries our descriptive results suggest that overall african economies have experienced similar growth trends which are higher in the 1970s than the 1980s however contrary to previous studies disaggregated comparison of the cfa with the ssa indicate that no significant growth differences exist between these economies moreover our empirical findings suggest that monetary expansion and capital formation have positive impacts on output growth whereas inflation and government spending show negative effects in sum although participating in a monetary union has not necessarily resulted in faster output growth it has enabled the cfa countries to better control price fluctuations and monetary expansion

an introduction to the wage curve en conomists and policymakers are interested in understanding the forces that determine the level of unemployment and the level of wages this paper describes an empirical discovery made with the help of international microeconometric evidence covering more than a dozen nations about a link between these two variables the connection can be portrayed on a graph with the level of unemployment on the horizontal axis and the level of wages on the vertical axis then the wage curve as shown in figure 1 is a downwardsloping locus this relationship tells us that holding others things constant if a region has a rise in unemployment in a particular year those who live there will have a fall in their wages in that year what does this curve mean how in a field where fully controlled experiments are almost impossible could there be any convincing scientific basis for this wage curve what is the relationship between the wage curve and a phillips curve other than that the curve of figure 1 looks like a phillips curve with the vertical axis mislabeled how does the wage curve fit into existing economic knowledge and is the empirical finding consistent with competitive theory this paper sketches answers to these kinds of questions the discussion draws on our book the wage curve blanchflower and oswald 1994 where the points raised here are investigated more fully it also rests upon work done by other economists whose work is listed in the paper and the bibliography

mind the gap please the changing nature of entry jobs in britain we examine wages in jobs taken by those out of work entry jobs and the characteristics of the individuals who fill them there are large entry wage gaps relative to other jobs more importantly real entry wages have fallen by around 20 log points relative to all other jobs since 1979 one quarter of this decline is accounted for by differences in individual and job characteristics and around 40 from an unexplained fall in the position of entry jobs in the wage distribution that entry wages differ from the stock of all wages should be incorporated into labour supply modelling

an econometric analysis of reservation wages this paper describes an analysis of survey data on unemployed people who reported their asking wage and the wage they expected to earn we show that if agents behavior is described by the standard optimal job search model one can use these data to deduce structural parameters rather than estimate them and we report our deductions from two surveys 1 of british unemployed people

job matching and job competition are lower educated workers at the back of job queues abstract during the cyclical downturn of the 1980s unemployment in the netherlands increased substantially with unemployment rates of lower educated workers increasing more than those of higher educated workers a possible explanation of this phenomenon is job competition between workers with different levels of education another explanation of the diverging unemployment rates is that employers dismiss replaceable lower educated workers before irreplaceable higher educated workers in this paper we scrutinize the job competition explanation our results show that there only is job competition between unemployed workers with an academic and a higher vocational education there is no job competition at lower levels of education

toward a theory of vacancies we attempt to further characterize the search strategies of the employer in the article we discuss how characteristics of the employer or conditions that the employer faces affect the optimal search strategies and the probability of filling a vacancy in each period semiparametric and parametric methods are used to estimate hazard rates of filling vacancies the results suggest that for the given sample of vacancies the general form of the hazard function is nonmonotonic additionally the results suggest that those employers who have advance notice of the vacancy may search longer than those employers who do not

inflation and the uk labour market inflation is endemic in britain aside from the odd year inflation in britain has been higher than the average of the oecd countries for the last forty years this is as true for the anti inflationary 1980s as for the inflationary 1970s and the libertarian 1960s in the light of this fact we look at the problem of inflation both in general terms and in the british context furthermore we shall consider inflation from a particular point of view namely that of the labour market although it would perhaps be more apt to describe the viewpoint as the supply side

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

unemployment dynamics in britain we examine the inter related dynamics of the unemployment flows and stock our model allows them to be linked through the standard accounting identity but also through behavioural relationships we find that for the uk the bulk of the correlation between duration and the unemployment stock arises from the dependence of duration on unemployment taking careful account of the inter temporal identity outflow shocks have contributed little to the evolution of unemployment since the late 1960s given that the correlation of duration and unemployment arises from the behavioural relationship we show that unemployment dynamics arise mostly from shocks to the inflow unemployment remains one of europe s more pressing economic and social problems as highlighted in the eu s lisbon declaration of 2000 a dynamic approach to unemployment starts from the recognition that unemployment is a stock and changes through shocks to the outflow and inflow the research and policy focus has generally been on the outflow process or equivalently unemployment duration a glance at figure 1 shows why this might be so it reveals a very strong co movement of the unemployment rate and the proportion of the unemployed out of work for a year or more analysts have used data like this to argue that the source of unemployment fluctuations has been changes in the outflow process 1 possibly as a consequence of this most policies directed at reducing unemployment focus on improving the search effectiveness and employability of the currently unemployed the unemployment flows and stock are related in quite complex ways and in this paper we focus on these inter related dynamics the model we use allows them to be linked in two ways first there is the simple accounting relationship whereby shocks to the flows accumulate in the stock second search and matching models suggest behavioural relationships of the flows depending on unemployment the presence of the nonlinear accounting identity in the model makes the analysis of the joint system problematic so we proceed sequentially investigating first one link and then the other we find that for the uk the bulk of the correlation between duration and the unemployment stock displayed in figure 1 arises from the dependence of the former on the latter we find a strong dependence of the outflow rate on unemployment taking careful account of the inter temporal identity on the other hand outflow shocks have contributed little to the evolution of unem

selected works of michael wallerstein centralized bargaining and wage restraint the literature on corporatism has presented much evidence associating highly centralized systems of collective bargaining with wage restraint and relatively successful macroeconomic performance in addition centralized bargaining is associated with relatively small wage differentials this paper presents a model of the impact of centralized wage setting on both real wages and relative wages the central assumption is that the centralization of wage setting at the national level unites unions who are complements in production since a wage increase for one group of workers negatively affects the welfare of other workers who are complements in production centralized wage setters choose wages below the equilibrium of decentralized wage setting it is also shown that if the union confederation maximizes a utilitarian welfare function with equal weights centralized wage setting decreases wage dispersion while low paid workers clearly gain from centralized bargaining high paid workers may prefer that bargaining be decentralized

hourly wages and working time in the dutch market sector 1962 1995 this article analyses the joint behaviour of hourly wages and standard hours in the netherlands with respect to the development of full time hours to different hypotheses are suggested work sharing or productivity sharing under the work sharing hypothesis high unemployment would lead to reduced hours whereas under productivity sharing increased productivity leads to higher wages or reduced hours the evidence is in favour of the productivity hypothesis there is no direct impact of unemployment on the evolution of hours moreover although reduced hours tend to increase hourly wages in the short run this is not the case in the long run

testing steady state implications for the nairu estimates of the nairu are usually derived either from a phillips curve or from a wage curve this paper investigates the correspondence between the operational nairu concepts and the steady state of a dynamic wage price model we derive the parameter restrictions that secure that correspondence the full set of restrictions can be tested by econometric analysis of the wage price system and this method is demonstrated for norwegian data a set of necessary conditions can be tested from estimated wage curves alone existing international evidence from empirical wage equations are reinterpreted in light of these conditions

growth econometrics for agnostics and true believers abstract the issue of model uncertainty is central to the empirical study of economic growth many recent papers use bayesian model averaging to address model uncertainty but ciccone and jarocinski 2010 have questioned the approach on theoretical and empirical grounds they argue that a standard agnostic approach is too sensitive to small changes in the dependent variable such as those associated with different vintages of the penn world table pwt this paper revisits their theoretical arguments and empirical illustration drawing on more recent vintages of the pwt and introducing an approach that limits the degree of agnosticism

extensive search intensive search and hiring costs new evidence on employer hiring activity this paper presents recent evidence on employer search to fill a position a 1982 employer survey sponsored by the national institute of education and the national center for research in vocational education provides the basis for analyzing employer search and hiring costs the paper examines the effects of such factors as employer size dismissal costs unionization on the job training adjustment costs capital and labor market conditions on intensive employer search extensive employer search and hiring costs intensive employer search is measured by the average number of hours the employer spends recruiting screening and interviewing per applicant extensive search is measured by the number of applicants seen per applicant interviewed and the number interviewed per employment

relative prices and the demand for labour in british manufacturing the existence of an aggregate demand for labour schedule derived from profit maximization of the individual firm and giving a negative relationship between the labour capital ratio and the real wage is central to most traditional theoretical macroeconomics even though such a relationship is typically not embodied in macroeconomic models but beginning with the work of dunlop 1938 and tarshis 1939 the negative relationship could not be found in the data a more modern reference is bodkin 1969 this evidence led naturally to disequilibrium analysis notably that of barro and grossman 1971 more recently sargent 1978 has attempted with some success to rehabilitate the demand for labour schedule by showing that costly adjustment of the workforce obscures the current relationship between the wage and labour demand while leaving it essentially intact that paper and the related one by neftci 1978 was criticized by geary and kennan 1979 because it had used retail prices to represent output prices and they showed that for a number of countries employment could not be explained satisfactorily by the real product wage however geary and kennan failed to allow for the simultaneous effect of the real prices of raw materials and capital services in this paper we shall see that allowing for the effects of other relative prices notably the price of inputs relative to output and the real interest rate the real wage has a powerful but slow acting negative effect on the demand for labour the long run elasticity is about 2 and the mean lag is over 18 months we also find that the price of inputs has a long run elasticity of about 2 and that high values of the real interest rate have a powerful depressant effect on the level of employment in manufacturing the most striking implication for policy of our analysis is that measures of demand output money government spending do not have a significant influence on manufacturing employment controlling for the effects of relative prices thus government macroeconomic policy can affect the level of employment in manufacturing if and only if it can affect relative prices

monetary compensations in climate policy through the lens of a general equilibrium assessment the case of oil exporting countries this paper investigates the compensations that major oil producers have claimed for since the kyoto protocol in order to alleviate the adverse impacts of climate policy on their economies the amount of these adverse impacts is assessed through a general equilibrium model which endogenizes both the reduction of oil exportation revenues under international climate policy and the macroeconomic effect of carbon pricing on middle east s economy we show that compensating the drop of exportation revenues does not offset gdp and welfare losses because of the time profile of the general equilibrium effects when considering instead compensation based on gdp losses the effectiveness of monetary transfers proves to be drastically limited by general equilibrium effects in opened economies the main channels of this efficiency gap are investigated and its magnitude proves to be conditional upon strategic and policy choices of the middle east this leads us to suggest that other means than direct monetary compensating transfers should be discussed to engage the middle east in climate policies

an explorative empirical analysis of the influence of labour flows on wage formation this study presents an explorative econometric analysis of the influence of labour market flows on wage formation it applies the vector cointegration and common trends methodology of johansen likelihood based inference in cointegrated vector autoregresssive models oup oxford 1995 according to this approach a combination of the flow of layoffs flow from employment to unemployment and the flow of filled vacancies successful matches appears to be an adequate alternative to the unemployment rate as indicator of labour market tightness in the wage equation for the netherlands

the friction cost method for measuring indirect costs of disease a new approach for estimating the indirect costs of disease which explicitly considers economic circumstances that limit production losses due to disease is presented the friction cost method for the netherlands the short term friction costs in 1990 amount to 1 5 2 5 of net national income nni depending on the extent to which short term absence from work induces production loss and costs the medium term macro economic consequences of absence from work and disability reduce nni by an additional 0 8 these estimates are considerably lower than estimates based on the traditional human capital approach but they better reflect the economic impact of illness

information bilateral negotiations and worker recruitment this paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel in the market firms interact with several workers but do not have information about workers behavior in the past in the bilateral negotiations firms negotiate bilaterally with prospective workers and learn about workers performance in previous jobs we show that the interaction between social preferences the incompleteness of contracts and the existence of information about a worker s past performance provides an explanation for firms forgoing market opportunities and bilaterally negotiating with a worker we observe that approximately 30 of all job contracts were bilaterally negotiated when these contracts are incomplete as opposed to only 10 when contracts were complete the surplus from trade is higher when incomplete contracts can be bilaterally negotiated which can be attributed to the presence of information

the effects of age and unemployment percentage on the duration of unemployment evidence from aggregate data abstract in this paper models for the duration of unemployment are estimated using aggregate data on incomplete unemployment spells in particular the elasticities of the probability of leaving unemployment with respect to age and unemployment percentage are estimated special attention is paid to the time dependence of the re employment probability and to the effect of omitted regressors because models are fitted for male and female unemployed separately these groups can be compared we find that their position on the labour market is different

migration and imperfect labor markets theory and cross country evidence from denmark germany and the uk we investigate the labor market effects of immigration in denmark germany and the uk three countries which are characterized by considerable differences in labor market institutions and welfare states institutions such as collective bargaining minimum wages employment protection and unemployment benefits affect the way in which wages respond to labor supply shocks and hence the labor market effects of immigration we employ a wage setting approach which assumes that wages decline with the unemployment rate albeit imperfectly we find that the wage and employment effects of immigration depend on wage flexibility and the composition of the labor supply shock in germany immigration involves only moderate wage but large unemployment effects since immigrants are concentrated in labor market segments with low wage flexibility the reverse is true for the uk and denmark

wage rigidity and unemployment in oecd countries real wage rigidity is often blamed for causing unemployment in the wake of adverse real shocks like changes in productivity or the terms of trade likewise nominal wage rigidity is blamed for causing unemployment in the wake of adverse nominal shocks like falls in nominal demand 1 however there has been relatively little systematic discussion of how these concepts should be defined some authors e g sachs 1979 have defined real wage rigidity as the opposite of nominal wage rigidity with the us nominally rigid and europe really rigid 2 the rigidity of european real wages has then been used to explain why europe has experienced a greater increase in unemployment since 1973 than the us but in this discussion real wage rigidity has not been measured in a way which would in fact predict how much unemployment would result from a given real shock the discussion has focused on the degree of nominal inertia in the system but the unemployment cost of real shocks does not depend primarily on the degree of nominal inertia but rather on the effect of unemployment in the phillips curve

crime apprehension and clearance rates panel data evidence from canadian provinces the becker 1968 model of crime establishes the importance of the probability of apprehension as a key factor in a rational individual s decision to commit a crime in this respect most empirical studies based on us data have relied on variation in the number of police officers to estimate the impact of the probability of apprehension or capture we measure the probability of apprehension by clearance rates and study their effects on crime rates employing a panel of canadian provinces from 1986 to 2005 ols gmm gls and iv estimates yield statistically significant elasticities of clearance rates ranging from 0 2 to 0 4 for violent crimes and from 0 5 to 0 6 for property crimes these findings reflect the importance of police force crime solving productivity

the establishment level behavior of vacancies and hiring this paper is the first to study vacancies hires and vacancy yields at the establishment level in the job openings and labor turnover survey a large sample of u s employers to interpret the data we develop a simple model that identifies the flow of new vacancies and the job filling rate for vacant positions the job filling rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section it falls with employer size rises with worker turnover rates and varies by a factor of four across major industry groups we also develop evidence that the employer level hiring technology exhibits constant returns and that at the employer level and that employers rely heavily on other instruments in addition to vacancies as they vary hires we also develop evidence that effective recruiting intensity per vacancy varies over time accounting for about 41 of movements in aggregate hires in the 2007 to 2009 period our evidence and analysis provide useful inputs for assessing developing and calibrating theoretical models of search matching and hiring in the labor market

capital accumulation and unemployment a tale of two continents in contrast to much recent work regarding the causes of european unemployment in this paper we emphasize the importance of capital accumulation but unlike the few previous studies which have examined the relationship between capital accumulation and unemployment we argue that what matters for the evolution of employment and the unemployment rate is not the absolute growth rate of a country s capital stock but its evolution relative to other countries capital stock the empirical validity of the above statement is demonstrated for almost all oecd countries using quarterly time series data for the period 1961 1995 more detailed evidence is also presented for germany japan and the united kingdom

margins concentration unions and the business cycle theory and evidence for britain abstract a number of recent studies have examined the cyclical relationship between price cost margins concentration and unions u s data has concluded that unions reduce margins margins vary over the cycle and concentration unionisation and the cycle interact in their effect on margins however there is almost no theory to account for these results we propose a simple theory that assumes only that there is overhead labour present at the firm this produces theoretical predictions that can explain these results and discriminate between existing theories we present results of our own using u k panel data and show similar findings to the u s

wage setting and the tax system theory and evidence for the united kingdom abstract this paper analyses the effects of a non linear tax system on wage bargaining the main conclusions are an increase in the marginal income or payroll tax rate reduces the pre tax wage in the isoelastic case an increase in the average tax rate increases the pre tax wage by more than the tax increase and a measure of the progressivity of the tax system residual income progression is a sufficient measure of the effect of the tax system on wage pressure empirical evidence is presented to support these propositions and the predictions of the model regarding the effect of recent changes to the u k tax system on the distribution of earnings discussed

the efficient estimation of econometric models with rational expectations the efficient estimation of econometric models with rational expectations by the substitution method usually entails the use of a non linear simultaneous equations estimator and hence is not very attractive computationally it is shown that for a wide class of problems efficient estimates can also be obtained with standard estimation methods if instead an errors in variables approach is used for many other problems although not providing fully efficient estimates because rationality is not imposed the errors in variables method will still have a strong appeal because otherwise it uses all of the structural information in the model unlike the substitution method when an incomplete information set is used it guarantees consistent estimates and it is easy to compute

cyclical variation in vacancy durations and vacancy flows an empirical analysis abstract this paper presents an empirical analysis of vacancy durations and vacancy flows in the netherlands over the years 1980 1988 we distinguish vacancies according to required occupation and educational levels we derive estimates of average vacancy durations and we use these to derive estimates of vacancy flows we find that vacancy durations generally increase with the required educational level moreover vacancy flows tend to be more responsive to the business cycle at lower educational levels while vacancy durations are more responsive at higher educational levels the number of vacancies generated by employers has not decreased during the recession in the early 80s which points to a dominant role of the supply of applicants in explaining the cyclical pattern of vacancy durations

an investigation into the power of insiders in wage determination abstract this paper is concerned with the role of insider forces in wage determination various union and non union models of wage behaviour are considered and they imply that wages are a convex combination of internal and external factors certain union models also imply a degree of hysteresis data on fourteen british production industries reveal that i insider forces are important ii their importance is directly related to both union power and the degree of monopoly in the product market iii the state of the aggregate labour market is also important and iv hysteresis effects arising from insider power are only significant in a small minority of sectors