testing for market efficiency in gambling markets when the errors are non normal and heteroskedastic an application of the wild bootstrap abstract by employing the wild bootstrap we calculate the correct size of the relevant test statistics for the test of the null hypothesis of efficiency in betting markets our findings are that the overall conclusion of the rejection of the null hypothesis is still valid

earnings rents and competition in the airline labor market transformation of the airline labor market continues long after deregulation airline wages changed little immediately following deregulation implying either the absence of regulatory rents or maintenance of product market power and union strength analysis for 1973 1997 however indicates that prior to recent gains the relative earnings of air transport workers decreased markedly during the latter half of the 1980s and early 1990s some of the earnings advantage of airline workers represents returns to occupational skills and worker specific quality labor rents are attributable largely to union bargaining power which in turn is constrained by the financial health of carriers

pricing of electricity tariffs in competitive markets in many countries electricity supply business has been opened for competition in this paper we analyze the problem of pricing of electricity tariffs in these open markets when both the customers electricity consumption and the market price are stochastic processes specifically we focus on regular tariff contracts which do not have explicit amounts of consumption units defined in the contracts therefore the valuation process of these contracts differs from the valuation of electricity futures and options the results show that the more there is uncertainty about the customer s consumption the higher the fixed charge of the tariff contract should be finally we analyze the indication of our results to the different methods for estimating the customer s consumption in the competitive markets since the consumption uncertainties enter into the tariff prices the analysis indicates that the deterministic standard load curves do not provide efficient methods for evaluating the customers consumption in competitive markets

accuracy of response in labor market surveys evidence and implications this paper examines the extent of response errors in labor market survey data and explores the implications of such errors for economic analysis explicitly examined are responses to questions on industry occupation union status hours worked and wages analyses are based on two sources 1 a special supplement to the january 1977 current population survey that obtained data from workers and their employers and 2 an exact match of workers and their employers interviewed in the employment opportunity pilot project survey the dual nature of these surveys provides a basis for analyzing the effect of response error on a variety of economic analyses including the trade off between wages and risk the wage impact of unionism and the sensitivity of wage determination models to alternative responses to earnings questions

unions and wage inequality the roles of gender skill and public sector employment we examine the changing relationship between unionization and wage inequality in canada and the united states our study is motivated by profound recent changes in the composition of the unionized workforce historically union jobs were concentrated among low skilled men in private sector industries with the steady decline in private sector unionization and rising influence in the public sector half of unionized workers are now in the public sector accompanying these changes was a remarkable rise in the share of women among unionized workers currently approximately half of unionized employees in north america are women while early studies of unions and inequality focused on males recent studies find that unions reduce wage inequality among men but not among women in both countries we find striking differences between the private and public sectors in the effects of unionization on wage inequality at present unions reduce economy wide wage inequality by less than 10 however union impacts on wage inequality are much larger in the public sector once we disaggregate by sector the effects of unions on male and female wage inequality no longer differ the key differences in union impacts are between the public and private sectors not between males and females syndicats et inegalites salariales importance du genre des habiletes et de l emploi dans le secteur public dans cet article nous examinons l evolution de la relation entre syndicalisation et inegalites salariales au canada et aux etats unis notre etude se fonde sur les changements recents et profonds de la composition de la main d uvre syndiquee historiquement les emplois syndiques etaient occupes par des hommes peu qualifies travaillant dans les industries du secteur prive avec le declin regulier de la syndicalisation au sein du secteur prive et son influence croissante au sein du secteur public la moitie des travailleurs syndiques fait desormais partie du secteur public ces changements ont ete accompagnes d une hausse spectaculaire du pourcentage de femmes parmi les travailleurs syndiques actuellement pres de la moitie des employes syndiques en amerique du nord sont des femmes tandis que les premieres etudes sur les syndicats et les inegalites portaient sur les hommes certaines plus recentes ont montre que les syndicats permettaient de reduire les inegalites salariales entre les hommes mais pas entre les femmes dans les deux pays nous avons decouvert des differences frappantes entre secteur prive et secteur public relativement aux effets de la syndicalisation sur les inegalites salariales aujourd hui les syndicats permettent de reduire les inegalites salariales de moins de 10 dans l ensemble de l economie neanmoins l influence des syndicats sur les inegalites salariale est bien plus forte dans le secteur public en decomposant les donnees par secteur les effets des syndicats sur les inegalites salariales entre hommes et femmes sont les memes en matiere d influence des syndicats les differences fondamentales se situent entre le secteur prive et le secteur public et non entre les hommes et les femmes

organized labor and racial wage inequality in the united states why have african american private sector unionization rates surpassed those of white workers for decades and how has private sector union decline exacerbated black white wage inequality using data from the current population survey 1973 2007 the authors show that african americans join unions for protection against discriminatory treatment in nonunion sectors a model predicted wage series also shows that among women black white weekly wage gaps would be between 13 and 30 lower if union representation remained at high levels the effect of deunionization on racial wage inequality for men is less substantial but without deunionization weekly wages for black men would be an estimated 49 higher the results recast organized labor as an institution vital for its economic inclusion of african american men and women this study points to the need to move beyond class based analyses of union decline to an understanding of the gendered role unions once played in mitigating racial inequality

the effect of unions on the structure of wages a longitudinal analysis this paper studies the effects of unions on the structure of wages using an estimation technique that explicitly accounts for misclassification errors in reported union status and potential correlations between union status and unobserved productivity the econometric model is estimated separately for five skill groups using a large panel data set formed from the u s current population survey the results suggest that unions raise wages more for workers with lower levels of observed skills in addition the patterns of selection bias differ by skill group among workers with lower levels of observed skill unionized workers are positively selected whereas union workers are negatively selected from among those with higher levels of observed skill despite a large and sophisticated literature there is still substantial disagreement over the extent to which differences in the structure of wages between union and nonunion workers represent an effect of trade unions rather than a consequence of the nonrandom selection of unionized workers over the past decade several alternative approaches have been developed to control for unobserved heterogeneity between union and nonunion workers 2 one method that has been successfully applied in other areas of applied microeconometrics is the use of longitudinal data to measure the wage gains or losses of workers who change union status unfortunately longitudinal estimators are highly sensitive to measurement error even a small fraction of misclassified union status changes can lead to significant biases if the true rate of mobility between union and nonunion jobs is low this sensitivity led lewis 1986 to essentially dismiss the longitudinal evidence in his landmark survey of union wage effects in this paper i present some new evidence on the union wage effect based on a longitudinal estimator that explicitly accounts for misclassification errors in reported union status the estimator uses external information on union status misclassification rates along with the reduced form coefficients from a multi variate regression of wages on the observed sequence of union status indicators to isolate the causal effect of unions from any selection biases introduced by a correlation between union status and the permanent component of unobserved wage heterogeneity recognizing that unions may raise wages more or less for

credible research designs for minimum wage studies a response to neumark salas and wascher the authors assess the critique by neumark salas and wascher 2014 of minimum wage studies that found small effects on teen employment data from 1979 to 2014 contradict nsw the authors show th

the effects of collective bargaining rights on public employee compensation evidence from teachers firefighters and police widespread public sector unionism emerged only in the 1960s as individual states opened the door to collective bargaining for state and municipal workers in this study the author exploits differences in timing of legislative reforms across states to construct estimates of the causal effects of public sector collective bargaining rights on pay benefits and employment for teachers firefighters and police perhaps surprisingly estimates that allow for state fixed effects and state specific trends show little effect on teachers pay benefits or employment despite significantly increasing union presence among teachers for firefighters the results show a substantial positive effect on wages for police the wage effect was more modest but the workweek was significantly shortened

trouble in the tails what we know about earnings nonresponse thirty years after lillard smith and welch earnings nonresponse in household surveys is widespread yet there is limited knowledge of how nonresponse biases earnings measures we examine the consequences of nonresponse on earnings gaps and

overwork and the slow convergence in the gender gap in wages despite rapid changes in women s educational attainment and continuous labor force experience convergence in the gender gap in wages slowed in the 1990s and stalled in the 2000s using cps data fr

real time pricing when some consumers resist in saving electricity successful real time electricity pricing depends firstly upon consumers willingness to subscribe to such terms and secondly on their ability to curb consumption levels the present paper addresses both issues by considering consumers differentiated by their electricity saving costs half of whom resist saving electricity we demonstrate that when consumers are free to adopt real time prices producers prefer charging inefficient prices and in so doing discriminate against that portion of the consumer population which faces no saving costs we also find that efficient marginal cost pricing is feasible but is incompatible with mass adoption of real time prices

wage rigidity and job creation recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations we use worker level data from the cps to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions the wage of new hires unlike the aggregate wage is volatile and responds almost one to one to changes in labor productivity we conclude that there is little evidence for wage rigidity in the data

underpaid or overpaid wage analysis for nurses using job and worker attributes the nursing labor market presents an apparent puzzle hospitals report chronic shortages yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college educated women this paper addresses this puzzle data from the current population survey cps are matched with detailed job content descriptors from the occupational information network o net nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers a standard cps only wage regression shows a registered nurse rn wage advantage of 22 log points compared to a pooled male female group of college educated workers control for o net job attributes reduces the rn gap to 08 while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero we conclude that nurses receive compensation close to long run opportunity costs narrowing if not resolving the rn wage shortage puzzle

outsourcing and unionization a tale of misallocated resistance resources while many believe the growth in outsourcing contributed to the decline in u s unionization up to the 1990s this argument has never been investigated systematically in this article we analyze the effect of outsourcing on unionization between 1973 and 1993 instrumental variables estimation shows outsourcing contributes to higher quasirents and industry productivity we find the union wage premium increases with the extent of outsourcing both for workers that are substitutable by outsourcing services and workers in jobs that are not substitutes of the tasks being outsourced finally we find no support for the claim that outsourcing reduces unionization jel j5 l2 l6

the care economy gender economic restructuring and job polarization in the u s labor market the u s job structure became increasingly polarized at the turn of the twenty first century as high and low wage jobs grew strongly and many middle wage jobs declined prior research on the sourc

why do part time workers earn less the role of worker and job skills part time workers receive considerably lower hourly earnings than do full time workers using current population survey earnings files for september 1995 through december 2002 the author finds that measurable worker and job characteristics including occupational skill requirements account for much of the part time penalty longitudinal analysis of the data indicates that much of the remaining gap reflects worker heterogeneity evidenced by small wage gains and losses among workers switching between part time and full time jobs the lower skills of part time than full time workers result primarily from limited work experience and accumulation of human capital little evidence can be found of a large wage gap between part time and full time women a part time wage penalty is found for men but men account for less than one third of total part time employment

imports unionization and racial age discrimination in the us past studies of the relationship between competition and racial wages find that domestic competition reduces racial wage discrimination of nonunion workers this article examines the effects of foreign competition on racial wages of union and nonunion workers utilizing an empirical model which allows for cluster adjusted ses by industry such a procedure allows independence of observations across industries but not within industries thereby not overstating the significance of industry invariant controls in this analysis clustered ses prevent the overstatement of the significance of imports as a means to reduce earnings discrimination we find evidence of a wage premium for nonunion white workers in concentrated industries however imports cause the wages of nonunion whites to converge towards market rates in contrast for union workers in concentrated industries wage standardization provides a sanctuary from market power initiated discrimination such that imports play a limited role in reducing disc

atypical work and pay author affiliation john t addison department of economics moore school of business university of south carolina 1705 college street columbia sc 29208 usa ecceaddi moore sc edu corresponding authorchristopher j surfield department of economics college of business and management saginaw valley state university 7400 bay road university center mi 48710 usa csurfiel svsu edu acknowledgment the authors are more than usually indebted to two referees for their particularly helpful comments on earlier drafts of this paper and to our co editor for her perseverance 1 introductioneven as the economy continues to recover the u s is increasingly becoming a nation of part timers and free lancers of temps and independent contractors this disposable labor force is the most important trend in business today and it is fundamentally changing the relationship between americans and their jobs for companies large and small the phenomenon provides a way to remain globally competitive while avoiding the vagaries of market cycles but for workers it can mean an end to security and sense of significance that come from being a loyal employee one by one the tangible bonds that once defined work in america are giving way castro 1993 p 43 the frequency of alternative work arrangements such as temporary employment on call work and independent contracting nonstandard forms of employment commonly referred to as atypical work has steadily increased in recent decades see for example segal and sullivan 1997 research on atypical work alternative work arrangements we shall use the two terms interchangeably has tended to focus on the nature and extent of these arrangements and their impact on a worker s employment history e g addison and surfield 2006 although compensation levels have been accorded less attention the thrust of much of the earnings literature is pessimistic compared with regular or open ended employment alternative work arrangements often appear to offer inferior remuneration the public perception remains that workers in these alternative work arrangements constitute a disposable workforce characterized by low paying and precarious or unstable jobs abstracting for the moment from the complications introduced by the diversity of alternative work arrangements there are a number of reasons why their incumbents might earn less than regular workers for example wage differentials between atypical workers and those in open ended employment can arise from supply side differences among heterogeneous workers and employer preferences on the supply side a subset of workers may favor nonstandard work forms over regular employment and be prepared to accept lower pay one example would be adults who are heavily involved in household production and another is older workers who have moved out of career jobs but supply side differences alone are insufficient to sustain a permanent ceteris paribus differential in favor of regular workers in addition atypical workers and regular workers must not be fully fungible and employers must not be indifferent between them negative wage gaps for atypical work are not the only possibility admitted by the competitive model atypical workers may earn higher wages than their counterparts in regular employment if the aggregate demand for these nonstandard arrangements is greater than the number of individuals seeking such employment thus to adapt hirsch s 2005 p 527 argument in respect of part timers if firms use atypical work as low cost means of adjusting to variable and uncertain demand the relatively large supply of atypical workers required may run up against mobility or substitution constraints across labor markets delineated by geography occupation and industry and give rise to positive equilibrium wage gaps for atypical workers negative wage gaps may of course also be more apparent than real

gender and ethnicity married immigrants in britain in this paper we investigate the economic activity of married or cohabiting female immigrants in britain we distinguish between two immigrant groups foreign born females who belong to an ethnic minority group and their husbands and foreign born white females and their husbands we compare these to native born white women and their husbands our analysis deviates from the usual mean analysis and investigates employment hours worked and earnings for males and females as well as their combined family earnings along the distribution of husbands economic potential we analyse the extent to which economic disadvantage may be reinforced at the household level and investigate the extent to which it can be explained by differences in observable characteristics we find that white female immigrants and their husbands have an overall advantage in earnings over white native born both individually and at the household level minority immigrants do less well in particular at the lower end of the husbands economic potential distribution this is mainly due to the low employment of both genders which leads to a disadvantage in earnings intensified at the household level only part of this differential can be explained by observable characteristics

optional time of use prices for electricity econometric analysis of surplus and pareto impacts we estimate a model of time of use tou consumption and choice among optional tou tariffs in which the customer s choice among tariffs is based on its demand parameters which vary in the population we simulate the impact on consumption consumer surplus and profit of several optional tou rates that were offered experimentally in northern california the analysis suggests that with one possible exception the offering of these optional rates did not constitute a pareto improvement however total surplus excluding measurement costs is estimated to have risen by 1 41 to 2 55 per month per customer who chose the tou rates

what do we really know about wages the importance of nonreporting and census imputation in the most frequently used microdata sets over a quarter of all respondents now refuse to answer some questions about their incomes the census bureau has dealt with this problem which has been increasing in severity over time by imputing incomes of non respondents their imputation procedure called the hot deck essentially matches nonrespondents with demographically similar donors in this paper we evaluate the census imputation methodology and raise some questions first the census procedure is tied to commonality of events in the population rather than the more appropriate informational content of regressors clearly the census procedure severely understates income in certain occupations because it is based on the apparently invalid assumption that income does not affect reporting propensities it most likely understates average incomes as well

wage gaps large and small author affiliation barry t hirsch barry t hirsch is the w j usery chair of the american workplace department of economics andrew young school of policy studies georgia state university atlanta ga 30302 3992 and research fellow iza bonn germany bhirsch gsu eduthis presidential address was presented at the annual meeting of the southern economic association new orleans la on november 20 2007 acknowledgment i thank the many economists with whom i have interacted or coauthored over the years in particular john addison chris bollinger bill breit bill johnson dave macpherson and ed schumacher barry t hirsch w j usery chair of the american workplace department of economics andrew young school of policy studies georgia state university 2007 president of the southern economic association figure omitted see article image 1 introductionin the wealth of nations adam smith posited theory and institutional explanations for why wages differ modern labor economics has retained a focus on wage differentials although much of the literature is unabashedly empirical it is informed by theory neoclassical economics including human capital theory remains the principal approach although labor economists recognize the role played by human nature workplace incentives institutions and public policy in wage determination in this address i highlight several topics i have studied all involving wage gaps 1 these include census imputation methods union premiums product market regulation wages in male and female jobs the wage effects of military service and interarea wages and cost of living the purpose is not to trumpet my work although it may appear as such but to draw broader conclusions about labor economists understanding of wage determination 2 equalizing differentials and the law of one wagethe theory of equalizing differentials states that in competitive labor markets workers with similar skills working in similarly attractive jobs and locations should receive similar compensation long run wage differentials are explained by differences in skill and job disamenities with a single price wage conditional on worker and job attributes 2 the law of one wage equal compensation for equivalent workers and jobs follows naturally from competitive theory empirical studies attempt to test the law of one price in product markets industrial organization economists focus on a narrow set of homogeneous goods in markets with low cost information and similar transportation costs i e purchases of electronics and books at internet sites international economists test for purchasing power parity for homogeneous goods i e big mac prices across countries for a recent paper see parsley and wei 2007 even in these markets there is considerable deviation from the law of one price one does not see an equivalent literature in labor economics yes there is a vast literature on wage gaps but authors rarely characterize such work as a test of a law of one wage because there is little expectation that there should be wage equality even conditional on controls why not first as emphasized in personnel economics pay schemes that maximize profits often involve wages deviating from spot marginal products thus creating competitive wage differences across similar workers in similar jobs lazear and oyer 2007 second unions or other institutions can affect wages third there are rigidities in labor markets owing to imperfect mobility say from information and search costs firm specific training personal job attachment or tied household decisions regarding jobs location and housing manning 2003 mortensen 2003 fourth are problems of measurement leading to apparent variation in wages even when there is none and fifth even if data are error free we cannot hope to measure all the multitude of worker and job attributes that influence wages

purchasing power parity as a long run relation dickey fuller and stock watson tests of purchasing power parity ppp as a long run proposition are provided within the cointegration framework proposed by granger since different countries use different weights to construct price indices the traditional constraint that the coefficients on the price indices should be unity in the log linear ppp relation is relaxed the absence of a general ppp relation cannot be rejected at most a ppp relation is indicated in five out of fifteen country pairs that are examined even if a long run ppp relation exists it is not found to be useful in predicting future nominal exchange rates which is consistent with efficient speculative markets

testing for purchasing power parity correcting for non normality using the wild bootstrap we test for purchasing power parity ppp in the g7 area for the post bretton woods period unlike previous studies we correct the critical values of the standard unit root test using a wild bootstrap technique our findings reject ppp thus enhancing the contribution of the recent non linear ppp literature

wage mobility of foreign born workers in the united states this paper presents new evidence on whether foreign born workers assimilate while the existing literature focuses on the convergence divergence of average wages this study extends the analysis to the distribution of wages by looking at wage mobility we measure the foreign native gap in year to year transition probabilities from one decile group to another of a wage distribution where the deciles are determined by native samples our results based on the current population survey for 1996 2008 suggest that immigrants in middle and bottom decile groups who are the majority of immigrants tend to fall behind relative to natives in the same decile groups

compensation for state and local government workers are state and local government workers overcompensated this question has re state and local government workers overcompensated this question has taken on considerable heat in the last year or two as many states and localitaken on considerable heat in the last year or two as many states and localities face budgetary stress in this paper we step back from the highly charged ties face budgetary stress in this paper we step back from the highly charged rhetoric and address this question with the two primary data sources for looking at rhetoric and address this question with the two primary data sources for looking at compensation of state and local government workers the current population survey compensation of state and local government workers the current population survey cps conducted by the bureau of the census for the bureau of labor statistics cps conducted by the bureau of the census for the bureau of labor statistics and the employer costs for employee compensation ecec microdata collected as and the employer costs for employee compensation ecec microdata collected as part of the national compensation survey ncs of the bureau of labor statistics part of the national compensation survey ncs of the bureau of labor statistics the fundamental difference between these two sources of data is that the cps is the fundamental difference between these two sources of data is that the cps is a household survey while the ecec is a survey of employers data from the ncs a household survey while the ecec is a survey of employers data from the ncs have been used in studies of union nonunion interindustry and occupational wage have been used in studies of union nonunion interindustry and occupational wage differentials gittleman and pierce 2007 2011 levenson and zoghi 2011 and in differentials gittleman and pierce 2007 2011 levenson and zoghi 2011 and in studies of compensation inequality pierce 2001 2010 however while ncs publistudies of compensation inequality pierce 2001 2010 however while ncs publications regularly present tabulations separately for the private sector on the one cations regularly present tabulations separately for the private sector on the one hand and state and local government on the other the microdata from the ncs hand and state and local government on the other the microdata from the ncs have not been previously used to compare compensation in the private sector to that have not been previously used to compare compensation in the private sector to that in the state and local government sectors in the state and local government sectors we begin by presenting some tabulations on pay differences across sectors we begin by presenting some tabulations on pay differences across sectors from these two data series both raw pay differences between public and private from these two data series both raw pay differences between public and private sectors and also some breakdowns by education level of workers for the current sectors and also some breakdowns by education level of workers for the current population survey and skill level of the job for the employer costs for employee population survey and skill level of the job for the employer costs for employee

understanding the wage patterns of canadian less skilled workers the role of implicit contracts understanding the wage patterns of canadian less skilled workers we examine the wage patterns of canadian less skilled male workers over the last quarter century by organizing workers into job entry cohorts we find entry wages for successive cohorts declined until 1997 and then began to recover wage profiles steepened for cohorts entering after 1997 but not for cohorts entering in the 1980s a period when startwageswere relatively high we argue that these patterns are consistent with a model of implicit contracts with recontracting inwhich aworker s currentwage is determined by the best labour market conditions experienced during the current job spell comprendre les patterns de salaires des travailleurs canadiens moins qualifi es le r ole des contrats implicites on examine les patterns de salaires des travailleurs masculins moins qualifi es au cours du dernier quart de si ecle en d epartageant les travailleurs en cohortes diff erentes selon le moment d entr ee dans le monde du travail on d ecouvre que les salaires a l entr ee des cohortes successives ont d eclin e jusqu en 1997 et qu ensuite ils ont commenc e a cro itre les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apr es 1997 mais pas pour les cohortes qui sont entr ees dans le monde du travail dans les ann ees 1980 une p eriode o u les salaires de d epart etaient relativement elev es on sugg ere que ces patterns sont consistants avec un mod ele de contrats implicites de ren egociation qui implique que le salaire courant des travailleurs est d etermin e par les meilleures conditions du march e du travail dont on a fait l exp erience dans la p eriode r ecente de travail

match bias from earnings imputation in the current population survey the case of imperfect matching this article examines match bias arising from earnings imputation wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings the latter assigned earnings of donors regressions including attributes not used as imputation match criteria e g union are severely biased match bias also arises with attributes used as match criteria but matched imperfectly imperfect matching on schooling age flattens earnings profiles within education age groups and creates jumps across groups assuming conditional missing at random a general analytic expression correcting match bias is derived and compared to alternatives reweighting a respondent only sample proves an attractive approach

is earnings nonresponse ignorable abstract earnings nonresponse in the current population survey is roughly 30 in the monthly surveys and 20 in the march survey if nonresponse is ignorable unbiased estimates can be achieved by omitting nonrespondents little is known about whether cps nonresponse is ignorable using sample frame measures to identify selection we find clear cut evidence among men but limited evidence among women for negative selection into response wage equation slope coefficients are affected little by selection but because of intercept shifts wages for men and to a lesser extent women are understated as are gender gaps selection is least severe among household heads

financial literacy and its consequences evidence from russia during the financial crisis the ability of consumers to make informed financial decisions improves their ability to develop sound personal finance this paper uses a panel data set from russia an economy in which household debt has grown at an astounding rate to examine the importance of financial literacy and its effects on behavior the paper studies both the financial and real consequences of financial illiteracy even though consumer borrowing increased very rapidly in russia only 41 of respondents demonstrate an understanding of interest compounding and only 46 can answer a simple question about inflation financial literacy is positively related to participation in financial markets and negatively related to the use of informal sources of borrowing moreover individuals with higher financial literacy are significantly less likely to report experiencing a negative income shock during 2009 and have greater availability of unspent income and higher spending capacity the relationship between financial literacy and availability of unspent income is higher in 2009 suggesting that financial literacy may better equip individuals to deal with macroeconomic shocks

on hourly wages and weekly earnings in the current population survey abstract this paper examines hourly wages and weekly earnings in the outgoing rotation group org and the march supplement of current population survey cps from 1998 to 2004 the findings suggest that the org contains less errors than the march cps and that weekly earnings contain less errors than hourly wages the paper further finds that earnings differ systematically in the org and in the march cps by gender and education levels

unions norms and the rise in u s wage inequality from 1973 to 2007 private sector union membership in the united states declined from 34 to 8 percent for men and from 16 to 6 percent for women during this period inequality in hourly wages increased by over 40 percent we report a decomposition relating rising inequality to the union wage distribution s shrinking weight we argue that unions helped institutionalize norms of equity reducing the dispersion of nonunion wages in highly unionized regions and industries accounting for unions effect on union and nonunion wages suggests that the decline of organized labor explains a fifth to a third of the growth in inequality an effect comparable to the growing stratification of wages by education

bias corrected estimates of ged returns using three sources of data this article examines the direct economic return to general educational development ged certification for both native and immigrant high school dropouts one data source the current population survey cps is plagued by nonresponse and allocation bias from the hot deck procedure that biases the estimated return to the ged upward correcting for allocation bias and ability bias there is no direct economic return to ged certification an apparent return to ged certification with age found in the raw cps data is due to dropouts becoming more skilled over time these results apply to both native born and immigrant populations

market rationality tests based on cross equation restrictions abstract the information used by researchers in cross equation tests of rational expectations may be a small subset of the information available to the market such tests produce consistent estimates but have low power we develop a mechanism for dealing with this problem and use the procedure to perform cross equation tests on predictions from the football betting market the tests fail to reject rationality we provide evidence that market predictions from betting markets are not formed rationally it appears therefore that cross equation tests have low power even if the information sets used by the researcher and the market are approximately the same

long run purchasing power parity is it for real in this paper we re examine the purchasing power parity concept using data from the recent experience with floating exchange rates in particular we utilise the recently developed multivariate cointegration methodology to test for a long run relationship between exchange rates and relative prices and also to test for the proportionality of the exchange rate with respect to relative prices in contrast to much other research we demonstrate that there is a long run relationship between a number of bilateral u s dollar exchange rates and their corresponding relative prices the proportionality of the exchange rate to relative prices does not however receive support from the data this finding may be attributable to the use of measured price series rather than the true series

classic or new monopsony searching for evidence in nursing labor markets the market for registered nurses rns is often offered as an example of classic monopsony while a new monopsony literature emphasizes that firm labor supply is upward sloping independent of market structure using data from multiple sources we explore the relationship between nursing wages in hospitals and measures of classic and new monopsony wage level analysis fails to provide support for classic monopsony the relative wages of rns in 240 u s labor markets being largely uncorrelated with hospital system concentration longitudinal analysis shows nursing wages declining with increases in hospital concentration we interpret these results as providing support for classic monopsony effects in the short run but question whether wage effects are sustained in the long run no relationship is found between nursing wages and a new monopsony measure of mobility but support for new monopsony is found for women elsewhere in the labor market rns display greater interemployer mobility than do women or men in general two conclusions follow first upward sloping labor supply need not imply monopsonistic outcomes second absent more compelling evidence nursing should not be held up as a prototypical example of monopsony classic or new

optimal tariff design under consumer self selection abstract this paper considers the design of electricity tariffs to guide an individual consumer to select the tariff designed for his her consumption pattern in our model the utility maximizes the weighted sum of individual consumers benefits of electricity consumption subject to the utility s revenue requirement constraints the consumers free choice of tariffs is ensured with the so called self selection constraints we analyze the relationship between the consumers optimal choice of tariffs and the weights in the aggregated consumers benefit function if such weights exist then they will guarantee the consumers optimal choice of tariffs and the efficient consumption patterns we also analyze the welfare effects by using demand parameters estimated from a finnish dynamic pricing experiment the results indicate that it is possible to design an efficient tariff menu with the welfare losses caused by the self selection constraints being small compared with the costs created when some consumers choose tariffs other than those assigned for them

understanding the wage patterns of canadian less skilled workers the role of implicit contracts we examine the wage patterns of canadian less skilled male workers over the last quarter century by organizing workers into job entry cohorts we find entry wages for successive cohorts declined until 1997 and then began to recover wage profiles steepened for cohorts entering after 1997 but not for cohorts entering in the 1980s a period when start wages were relatively high we argue that these patterns are consistent with a model of implicit contracts with recontracting in which a worker s current wage is determined by the best labour market conditions experienced during the current job spell on examine les patterns de salaires des travailleurs masculins moins qualifies au cours du dernier quart de siecle en departageant les travailleurs en cohortes differentes selon le moment d entree dans le monde du travail on decouvre que les salaires a l entree des cohortes successives ont decline jusqu en 1997 et qu ensuite ils ont commencea croitre les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apres 1997 mais pas pour les cohortes qui sont entrees dans le monde du travail dans les annees 1980 une periode ou les salaires de depart etaient relativement eleves on suggere que ces patterns sont consistants avec un modele de contrats implicites de renegociation qui implique que le salaire courant des travailleurs est determine par les meilleures conditions du marche du travail dont on a fait l experience dans la periode recente de travail

racial and ethnic differences in wealth in the health and retirement study this paper examines wealth data in the health and retirement study hrs in comparison with asset data in other major surveys the quality of hrs asset data is high missing asset data does remain a problem however to which future hrs analysts must remain sensitive evidence is presented showing that it is no accident that asset data are missing and solutions for imputing missing data are developed finally racial and ethnic wealth disparities are large these minority wealth disparities are due in part to differential inheritances and desired bequests as inequities perpetuate themselves across generations the disparities are also due to lower minority incomes poorer health and an excessively narrow definition of wealth that excludes social security and employer pensions authors

the new closed shop the economic and structural effects of occupational licensure during the past few decades licensure a state enforced mechanism for regulating occupational entry quickly became the most prevalent form of occupational closure broad consensus among researchers holds that licensure creates wage premiums by establishing economic monopolies this article demonstrates that contrary to established wisdom licensure does not limit competition nor does it increase wages results are based on a new occupational dataset covering 30 years that exploits interstate variability in licensure across the 300 census identified occupations i argue that licensure instead of increasing wages creates a set of institutional mechanisms that enhance entry into the occupation particularly for historically disadvantaged groups while simultaneously stagnating quality

an adjustment scheme for nonlinear pricing problem with two buyers we examine a contracting problem with asymmetric information in a monopoly pricing setting traditionally the problem is modeled as a one period bayesian game where the incomplete information about the buyers preferences is handled with some subjective probability distribution here we suggest an iterative online method to solve the problem we show that when the buyers behave myopically the seller can learn the optimal tariff by selling the product repeatedly in a practical modification of the method the seller offers linear tariffs and adjusts them until optimality is reached the adjustment can be seen as gradient adjustment and it can be done with limited information and so that it benefits both the seller and the buyers our method uses special features of the problem and it is easily implementable

arima and cointegration tests of ppp under fixed and flexible exchange rate regimes real exchange rates between the united states and its major trading partners were calculated for the bretton woods and flexible exchange rate periods unit root tests indicate that purchasing power parity performed poorly in both periods tests for cointegration reveal limited instances in which it is possible to estimate the deviations from ppp as an error correcting model the estimated error correcting models indicate that foreign but not u s prices responded to deviations from ppp frenkel s 1981b finding that purchasing power parity ppp worked better during the 1920s than the 1970s caused considerable controversy for example davutyan and pippenger 1985 contend that the socalled collapse of ppp is a result of an increase in the relative importance of real versus monetary shocks they argue that the 1970s as opposed to the 1920s was characterized by real supply shocks and the international coordination of monetary policies the argument is that ppp did not fail rather there was an increase in the volatility of those factors giving rise to deviations from ppp hakkio 1984 reestimated ppp over the 1920s and 1970s using cross country tests i e sure estimates to improve the efficiency of his estimates he was able to support the hypothesis that ppp worked better in the 1970s than in the 1920s on the other hand papers by adler and lehman 1983 dornbusch 1980 frenkel 1981a junge 1985 and krugman 1978 report findings contrary to the ppp hypothesis moreover kenen and rodrik 1986 find that the volatility of real exchange rates has increased throughout the flexible rate period this paper tries to shed some light on the importance and persistence of the observed deviations from purchasing power parity under alternative exchange rate systems while it is interesting to compare ppp in the 1920s versus the 1970s it is equally useful to compare the 1960s versus the 1970s and 1980s if real supply shocks and lack of monetary coordination are characteristic of the latter period ppp should perform better in the 1960s to illustrate the issues involved consider the following econometric model of relative purchasing power

non linearity versus non normality in real exchange rate dynamics we distinguish non normality from non linearity in g7 real exchange rate dynamics by correcting the critical values of the kapetanios et al kapetanios g shin y snell a 2003 testing for a unit root in the non linear star framework journal of econometrics 112 359 379 test for non normality using the wild bootstrap our findings validate non linear purchasing power parity net of non normality effects

unions wages and skills studies uniformly conclude that union wage effects are largest for workers with low measured skills longitudinal analysis using 1989 90 1994 95 cps matched panels produces union premium estimates equivalent across skill groups following appropriate sample restrictions and control for worker specific skills nlsy evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization union organizing where skills are homogeneous and unionized employers reluctance to hire the most as well as least able workers

does unmeasured ability explain inter industry wage differentials this paper provides empirical assessments of the two leading explanations of measured inter industry wage differentials 1 true wage differentials exist across industries and 2 the measured differentials simply reflect unmeasured differences in workers productive abilities first we summarize the existing evidence on the unmeasured ability explanation second we construct a simple model which shows that if matching is important then endogenous job change decisions can create important self selection biases even in first differenced estimates of industry wage differentials third we analyze a sample that approximates the experiment of exogenous job loss we find that i the wage change experienced by a typical industry switcher closely resembles the difference in the relevant industry differentials estimated in a cross section and ii pre displacement industry affiliation plays an important role in post displacement wage determination

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

occupations and the structure of wage inequality in the united states 1980s to 2000s occupations are central to the stratification systems of industrial countries but they have played little role in empirical attempts to explain the well documented increase in wage inequality that occurred in the united states in the 1980s and 1990s we address this deficiency by assessing occupation level effects on wage inequality using data from the current population survey for 1983 through 2008 we model the mean and variance of wages for each occupation controlling for education and demographic factors at the individual level to test three competing explanations for the increase in wage inequality 1 the growth of between occupation polarization 2 changes in education and labor force composition and 3 residual inequality unaccounted for by occupations and demographic characteristics after correcting for a problem with imputed data that biased kim and sakamoto s 2008 results we find that between occupation changes explain 66 percent of the increase in wage inequality from 1992 to 2008

sluggish institutions in a dynamic world can unions and industrial competition coexist during the 1930s and 1940s collective bargaining emerged as the workplace governance norm in much of the u s industrial sector following its peak in the 1950s union density in the u s private sector fell steadily to only 7 4 percent in 2006 governance shifted from a formalized union norm to one of constrained managerial discretion in competitive and dynamic economic environments a union tax on company earnings and slow response to economic shocks combine to produce poor performance by union companies two industries automotives and airlines are used to illustrate these points if worker based institutions are to flourish they must add value and permit companies to perform at levels similar to those obtained under evolving nonunion governance norms

pareto optimal electricity tariff rates in the republic of armenia abstract the economic impact of electricity tariff rates on the residential sector of yerevan armenia is examined the effect of tariff design on revenue generation and equity measures is considered and the combination of energy pricing and compensatory social policies which provides the best mix of efficiency and protection for poor households is examined an equity measure is defined in terms of a cumulative distribution function which describes the percent of the population that spends x or less of their income on electricity consumption an optimal pareto efficient tariff is designed based on the analysis of survey data and an econometric model and the armenian tariff rate effective 1 january 1997 to 15 september 1997 is shown to be non optimal relative to this rate

longitudinal analyses of the effects of trade unions but union members are different from nonmembers in unobserved ways biasing your estimates y ou should make a selectivity bias correction simultaneously determine union status and economic outcomes develop an unobservables model use longitudinal data archetypical comment on virtually any study of the economic effects of umomsm or suitably modified on any other empirical subject

estimates of year to year volatility in earnings and in household incomes from administrative survey and matched data abstract we document trends in the volatility in earnings and household incomes between 1985 and 2005 in three different data sources administrative earnings records the survey of income and program participation sipp matched to administrative earnings records and sipp survey data in all data sources we find a substantial amount of year to year volatility in workers earnings and household incomes in the data sources that contain administrative earnings we find that volatility has been roughly constant and has even declined slightly since the mid 1980s these findings differ from what is found using survey data and what has been reported in previous studies

does membership payoff for covered workers a distributional analysis of the free rider problem this paper examines the union membership wage premium among private sector employees covered by collective bargaining agreements using current population survey data for 2000 2003 the author not only estimates the conditional mean wage premium the metric on which most previous research has focused but also employs recently developed instrumental quantile regression techniques to estimate the wage effect of membership across the wage distribution members enjoyed on average a wage premium of 9 over comparable covered nonmembers further analyses find no evidence that this mean premium is explained either by unobserved differences or by measurement error the author also finds that a narrow focus on the mean impact partially masks heterogeneity in the impact across the distribution notably membership wage effects were considerably more pronounced for low wage earners than for high wage earners

more power to the pill the impact of contraceptive freedom on women s life cycle labor supply the release of enovid in 1960 the first birth control pill afforded u s women unprecedented freedom to plan childbearing and their careers this paper uses plausibly exogenous variation in state consent laws to evaluate the causal impact of the pill on the timing of first births and extent and intensity of women s labor force participation the results suggest that legal access to the pill before age 21 significantly reduced the likelihood of a first birth before age 22 increased the number of women in the paid labor force and raised the number of annual hours worked

state collective bargaining laws and public sector pay using the public use microdata sample from the 2005 to 2015 american community survey the authors provide new evidence on how state collective bargaining laws affect public sector wages to isolat

central bank intervention exchange rate regime and the purchasing power parity motivated by the argument that central bank intervention leads to non linear exchange rate adjustment processes we examine purchase power parity ppp by applying quantile unit root tests to the exchange rates of the new taiwan dollar ntd vis a vis seven asian currencies we show that exchange rate regime matters in determining whether ppp holds while ppp holds overwhelmingly during the period when the ntd is under the fixed exchange rate regime it is present only for some exchange rates during the managed floating rate regime for exchange rates exhibiting mean reversion the reversion occurs mainly when the shocks are large in contrast to conclusion in the literature our test results show little evidence of asymmetric mean reversion between positive and negative shocks

human capital prices productivity and growth separate identification of the price and quantity of human capital has important implications for understanding key issues in labor economics and macroeconomics price and quantity series are derived and subjected to robustness checks the human capital price series associated with dierent education levels are highly correlated and exhibit a strong secular trend three result

economic status measures in the health and retirement study variables measuring economic status represent a straightforward but crucial part of round 1 of the health and retirement study hrs in addition to studies focusing directly on the economic well being of this cohort of the population the economic status variables are likely to be inputs into other analyses that focus on retirement and savings behavior on variations in health status on intrafamily transfers and support and on poverty status as a first look at these data this paper has several modest goals to offer a flavor for the major economic status variables on the hrs to indicate some preliminary analysis of the quality of the data and to take a preliminary look at the interrelationships among economic status measures like income and wealth and other important variables such as health status pension rights and health insurance coverage

reinterpreting industry premiums match specific productivity this article builds a simple model of worker sorting and matchspecific productivity to explain interindustry wage differentials high skilled workers sort themselves into the industries offering more jobs that are better matched to them and those industries pay higher wages on average in job transition following an exogenous job separation the likelihood of industry switching is higher among marginal workers low high skilled workers in high low wage industry empirical findings from a sample of exogenous job separations created from the displaced worker surveys are generally consistent with the implications of the model

match bias in wage gap estimates due to earnings imputation about 30 of workers in the current population survey have earnings imputed wage gap estimates are biased toward zero when the attribute being studied e g union status is not a criterion used to match donors to nonrespondents an expression for match bias is derived in which attenuation equals the sum of match error rates attenuation can be approximated by the proportion with imputed earnings union wage gap estimates with match bias removed are presented for 1973 2001 estimates for recent years are biased downward 5 percentage points bias in gap estimates accompanying other non match criteria public sector industry etc is examined

the effect of minimum wages on low wage jobs we estimate the eect of minimum wages on low wage jobs using 138 prominent state level minimum wage changes between 1979 and 2016 in the u s using a dierence in dierences approach we first estimate the eect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution we then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment eect we find that the overall number of low wage jobs remained essentially unchanged over the five years following the increase at the same time the direct eect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution our estimates by detailed demographic groups show that the lack of job loss is not explained by labor labor substitution at the bottom of the wage distribution we also find no evidence of disemployment when we consider higher levels of minimum wages however we do find some evidence of reduced employment in tradable sectors we also show how decomposing the overall employment eect by wage bins allows a transparent way of assessing the plausibility of estimates

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

an empirical examination of long run purchasing power parity using cointegration techniques this paper presents an empirical analysis of long run purchasing power parity ppp for five major exchange rates using recently developed econometric techniques on the cointegration of economic time series our empirical results are extremely unfavourable to the ppp hypothesis as a long run equilibrium condition even with an allowance made for measurement error and or tranportation costs in particular we are unable to reject the hypothesis of non cointegration of the exchange rate and relative prices for any of the countries concerned far from finding a stable long run proportionality between exchange rates and relative prices our results therefore suggest that they tend to drift apart without bound

sectoral shifts and interindustry wage differentials the observed differences in wages across industries may arise from a lack of worker mobility particularly among experienced workers allowing the effects of industry shocks to persist for some time although young workers arbitrage wage shocks they will have little effect on the dispersion of experienced workers wages if young and old workers are poor substitutes in production this explanation is investigated using the five censuses of population between 1940 and 1980 the evidence strongly suggests that differences in pay are not temporary phenomena the data provide some support for the role of human capital and ability

compensation unionization and deregulation in the motor carrier industry abstract previous research on the deregulation of the motor carrier industry has concluded that firms have become more efficient under deregulation and that costs have fallen largely at the expense of labor most studies that examine the effects on labor use current population survey data and find that wage premiums to union labor have fallen as a result of deregulation this study uses firm data and finds that deregulation had a very small effect on the average compensation paid by surviving union firms for nonunion firms the impact of deregulation is much larger these results suggest that the compensation premium for the labor of surviving union firms has increased but this increase applies only to surviving union labor in the paper we also point to and note a major exodus of union firms with the result that union labor levels have fallen and fallen dramatically