reassessing the gender wage gap in madagascar does labor force attachment really matter abstract in the labor economics literature it has been argued that differences in labor force attachment across gender are important to explain the extent of the gender wage gap however measures of women s work experience are particularly prone to errors given discontinuity in labor market participation using proxy measures such as potential experience may lead to biased estimates of the returns to human capital such biases cannot be ignored since these returns are used in the standard decomposition techniques to measure the extent of gender based wage discrimination by matching two original surveys conducted in madagascar in 1998 a labor force survey and a biographical survey we built a unique data set that enabled us to combine the original information gathered from each of them particularly the earnings from current employment and the entire professional trajectories our results lead to a reassessment of the returns to human capital as potential experience always exceeds actual experience for b

recent changes in the social rented sector in the netherlands the netherlands has a large and differentiated stock of social rented dwellings forming more than 40 per cent of the total housing stock housing associations are by far the largest providers of housing services in this sector traditionally these associations were subsidised heavily but since 1995 dutch government has no longer directly subsidised these associations this paper deals with changes in dutch housing associations in a period 1988 95 characterised by government austerity deregulation market conformity privatisation and promotion of home ownership it is explained how the housing associations were able to survive and even maintain prospects for a promising future in a political climate that threatened the social rented sector it is clear that housing associations can now operate more independently than in the past this is seen as a positive development but the government is now discovering the drawbacks of complete privatisation a firmer embedding in a public framework is considered

interrupted work careers depreciation and restoration of human capital the quantitative effects and even the existence of a human capital depreciation phenomenon have been a subject of controversy in the recent literature prior work however was largely cross sectional and the longitudinal dimension if any was retrospective using longitudinal panel data on married women in nls we have now established that real wages at reentry are indeed lower than at the point of labor force withdrawal and the decline in wages is greater the longer the interruption another striking finding is a relatively rapid growth in wages after the return to work this rapid growth appears to reflect the restoration or repair of previously eroded human capital the phenomenon of depreciation and restoration is also visible in data for immigrants to the united states however while immigrants eventually catch up with and often surpass natives returnees from the nonmarket do not fully restore their earnings potential

panel estimates of male female earnings functions this paper applies single and simultaneous equation fixed effects fe and random effects re panel data estimation techniques to obtain male and female earnings function parameters using the panel study of income dynamics psid the paperfinds that earnings appreciation with experience and depreciation with labor market intermittency are comparable for men and women further skill atrophy rates increase not decrease once one controls for heterogeneity and endogeneity finally the unexplained male female wage differential declines from 40 percent to 20 percent when one adjusts for heterogeneity adjusting for endogeneity depends very much on the choice of instruments however when adjusting for endogeneity the gender earnings gap falls and approaches zero percent these results hold for two separate subsamples so that the estimates appear robust independent of sample selectivity

a longitudinal analysis of white women s wages according to human capital theory women s work participation decisions will strongly affect their wages and wage growth we test human capital predictions about how labor force withdrawals both past and prospective part time work experience and working in male rather than in female jobs affect wages and wage growth for white women we do this by estimating a wage change model for the years 1967 1979 for a national sample of white women we find that wages drop immediately following withdrawals but that this is followed by a rapid wage growth so that the net loss in wages from dropping out of the labor force is small we further find that wage growth is not significantly lower in female than in male jobs but that part time work experience does not lead to significant wage growth in either male or female jobs

over identification tests in earnings functions with fixed effects the fixed effects model for panel data imposes restrictions on coefficients from regressions of all leads and lags of the dependent variable on all leads and lags of right side variables in the standard fixed effects model the omnibus goodness of fit statistic is shown to simplify to the degrees of freedom times the rz from a regression of analysis of covariance residuals on all leads and lags of right side variables this result is applied to test models for the union wage effect using data from the national longitudinal survey of youth nlsy identification and estimation of the return to schooling in models with fixed effects is also discussed although schooling is often treated as time invariant schooling increases over a five year period for nearly 20 of continuously employed men in the nlsy the analysis of covariance estimate of the returns to schooling is precisely estimated and roughly twice as large as the ordinary least squares estimate unlike in the union wage effects equation however

the career costs of children this paper analyzes the life cycle career costs associated with child rearing and decomposes their eects into unearned wages as women drop out of the labor market loss of human capital and selection into more child friendly occupations we estimate a dynamic life cycle model of fertility occupational choice and labor supply using detailed survey and administrative data for germany for numerous birth cohorts across dierent regions we use this model to analyze both the male female wage gap as it evolves from labor market entry onward and the eect of pro fertility policies we show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long run eect of policies encouraging fertility are considerably lower than the short run eects typically estimated in the literature

negotiation under possible third party resolution abstractthe effect of a possible third party resolution on negotiation behavior is studied in an economic bargaining experiment the bargaining phase is preceded by a production phase that allows for different fairness principles to guide the division of the total production value the experimental results show that a possible third party resolution lowers the dispute costs by reducing the number of rounds of alternating offers in the presence of a third party negotiators make first offers that are more strongly related to their production which reduces the number of bargaining rounds the production phase has an effect on the distributional property of the agreements in negotiations in which third party resolution is an option the negotiation outcome shifts toward a more unequal outcome more in line with each person s contribution

discrimination fact or fiction an examination using an alternative approach women earn less than men blacks earn less than whites these facts are blatantly observable in the economy with the proliferation of civil rights legislation in the last two decades social scientists have become increasingly concerned with the determination of the wage gap attributable to discrimination because workers have different productivities statistical methods have been used to isolate the discrimination effect from wage differences justified by differences in productivity the primary method estimates an equation with wages expressed as a function of productivity and sex or race since productivity cannot be directly observed a number of proxies for productivity have been used such as education tenure and experience statisticians 11 have shown that the necessity of using proxies results in statistical biases which may tend to overestimate discrimination they have shown that mismeasuring any independent variable can impart a bias on each regression coefficient thereby causing a severe misestimate of discrimination these errors are proportional to the degree of mismeasurement the relative degree of error variance in the independent variables as well as to the amount of intercorrelation between each variable and race or

trends in the male female wage gap the 1980s compared with the 1970s 1 introduction an interesting pattern emerges when contrasting men s and women s wage growth in the 1970s and 1980s from 1979 to 1989 female wages grew 1 7 per annum faster than male wages this wage growth in the 1980s resulted in a 17 narrowing of the gender wage gap on the other hand from 1969 to 1979 female wages grew at a rate only 0 39 per year faster than male wages resulting in very little narrowing of the gender wage gap blau 1998 as noted by smith and ward 1989 these contrasting trends puzzled many because it is well known that female work behavior shot up more dramatically in the 1970s than in the 1980s if female wage growth is related to increasing labor force activity one would have expected the male female wage gap to narrow more in the 1970s than in the 1980s the purpose of this paper is to identify some of the reasons why the male female wage gap narrowed more quickly in the 1980s than in the 1970s despite a deceleration of the growth in female labor force activity in the 1980s what appears to be the case is that predominantly younger and less experienced females entered the labor force in the 1970s the entry of women with relatively little human capital brought down the growth in women s average human capital o neill 1985 so that despite the upsurge of women s labor force participation in the 1970s women s average human capital relative to men s increased more slowly in the 1970s than in the 1980s this relatively slower growth in women s human capital appears to have played itself out in the 1980s both because the number of women joining the labor force slowed and because women s labor force attachment as measured by the proportion of potential work years actually worked increased blau 1998 with these trends average female human capital increased in the 1980s resulting in greater overall wage gains because of the stark differences between the 1970s and 1980s this paper concentrates on distinguishing the factors that contribute to men s and women s wage growth in the two decades despite the substantial literature on the male female wage gap the interdecade difference in the trend has not been adequately examined in what follows this paper uses the panel study of income dynamics psid to illustrate the effects of the demographic changes alluded to above 1 first it presents wage trends for the 1970s and 1980s second it provides direct measures of changes in human capital growth within each decade third to illustrate the importance of these demographic trends especially how new young labor market entrants bring down wages it shows that the higher relative female wage growth in the 1980s is reduced and the relatively slower female wage growth in the 1970s is enhanced when one controls for individual human capital characteristics these effects are illustrated first by including actual experience type variables in a regression whose coefficients measure wage growth and second by eliminating new entrants from 1970s and 1980s regression analysis the paper shows that with these controls increases in female average growth in both the 1970s and 1980s were more comparable than previously thought 2 recent literature on trends in the male female wage gap this is not the first paper to recognize the trend in male female wage convergence o neill 1985 blau and beller 1988 smith and ward 1989 goldin 1990 katz and murphy 1992 wellington 1993 o neill and polachek 1993 blau and kahn 1997 and blau 1998 all note that women s wages have risen relative to men smith and ward 1989 find that female relative wages rose between 1920 and 1980 when adjusting for worker skills goldin 1990 piecing together various data sources finds a similar long term narrowing according to her the ratio of female to male earnings in the economy as a whole rose from 0 46 to 0 56 during the period 1890 to 1930 but was virtually stable from 1950 to around 1980 p

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

unsecured debt with public insurance from bad to worse abstract in u s data income interruptions the receipt of public insurance and the incidence of personal bankruptcy are all closely related the central contribution of this paper is to evaluate bankruptcy protection and public insurance in a unified setting where each program alters incentives in the other our analysis delivers two striking conclusions first we find that u s personal bankruptcy law is an important barrier that prevents the public insurance system from improving welfare second contrary to popular belief we find that increases in the generosity of public insurance will lead to more not less bankruptcy

regulatory and organisational responses to restructured housing association finance in england and wales risk was shifted from government to housing associations during the late 1980s producing a very different operating environment for associations based around competition critical in this has been an increased emphasis on financial management the paper explores the impacts of these changes through an examination of the welsh regulator s housing for wales responses and through changing management and organisation within associations the policy responses by housing for wales indicate an increasing emphasis on social policy regulatory objectives though within a very interventionist framework which works to limit the ability of associations financially to plan their future innovations in housing associations are also examined to highlight organisational responses to the new environment these innovations have focused on the often uncritical importation of private sector management practices including telephone based housing management services demonstration projects and moves towards core periphery

specific investments holdup and the outside option principle according to the outside option principle the holdup problem can be solved when the non investor has a binding outside option the investor then becomes residual claimant creating efficient investment incentives this paper reports about an experiment designed to test this we find that when the outside option is binding investment levels fall short of the efficient level but holdup is less of a problem than predicted when the outside option is non binding

the racial wage gap the importance of labor force attachment differences across black mexican and white men labor market attachment differs significantly across young black mexican and white men although it has long been agreed that potential experience is a poor proxy for actual experience for women many view it as an acceptable approximation for men using the nlsy this paper documents the substantial difference between potential and actual experience for both black and mexican men we show that the fraction of the black white and mexican white wage gaps that are explained by differences in potential experience are quite different from the fraction of the racial wage gaps that are explained by actual real experience differences

women s earnings reexamined since a discussion of details may obscure important general issues we start by restating what we consider to be the two major contributions of our 1974 study 5 1 the methodological contribution lies in the specification of an earnings function when human capital investment occurs at different rates including zero over various segments of the life cycle such specifications are appropriate for persons when market work does not continue throughout the usual working age or for analyses of continuous work histories segmented by some relevant criteria such as job change and occupational or geographic mobility applied work on these subjects continues 1 and specifications are undergoing refinement in retrospect the model we used to analyze earnings of women is not the best but it is serviceable which permits us to refrain from injecting new matters into the present discussion 2 the substantive interest in our study of earnings of women focuses on several propositions a even with identical current characteristics women whose past experience was shorter have currently lower wages as their total job investments were smaller b total investments are smaller not only because they are spread over fewer years of work experience but also because persons who spend less time in market work invest less per year worked than persons with longer work experience c if work experience is interrupted for any significant length of time job skills tend to erode so the human capital stock is reduced by depreciation or atrophy the relevance of these propositions to the analysis of the sexual wage gap is obvious in part women s wages are lower than men s because their labor force attachment is shorter and often discontinuous also the gap widens over the life cycle since initial differences in experience are necessarily small

strategic asset management in the social rented sector approaches of dutch and english housing associations in england and the netherlands in response to changes in housing policy and the market there is widespread enthusiasm for asset management in the social rented sector a key issue in both countries is the development of a strategic approach towards the formulation of asset management plans the paper examines this issue in relation to the current practice of housing associations in both countries drawing on case studies in england and the netherlands it is concluded that in both countries practice varies widely between housing associations some of the approaches adopted by front runners can be seen as models for other associations yet to develop a strategic approach towards asset management lessons can also be learnt across national boundaries though necessarily mediated by differences between the two housing systems

a comparison of conventional final offer and combined arbitration for dispute resolution two widely used forms of arbitration are conventional arbitration in which the arbitrator makes an unconstrained settlement choice and final offer arbitration in which the arbitrator must choose between disputants final offers under an innovative as yet unused approach called combined arbitration if the arbitrator s notion of a fair settlement lies between the disputants final offers final offer arbitration rules are used otherwise conventional arbitration rules are used theoretically by combining the risks that the two standard forms of arbitration pose for disputants who do not voluntarily settle combined arbitration should generate convergent final offers the results of this controlled laboratory study show however that dispute rates are highest in combined arbitration and lowest in conventional arbitration these results challenge the theoretical predictions for combined arbitration as well as claims that final offer arbitration should reduce disputes compared to conventional arbitration the results are however consistent with a simple theory of disputant optimism

the gender pay gap beyond human capital heterogeneity in noncognitive skills and in labor market tastes abstract focused on human capital economists typically explain about half of the gender earnings gap for a national sample of mbas we account for 82 percent of the gap by incorporating noncognitive skills for example confidence and assertiveness and preferences regarding family career and jobs those two sources of gender heterogeneity account for a quarter of the explained pay gap with half due to human capital variables and the other quarter due to hours worked and current job characteristics female mbas appear to pay a penalty for good citizen behavior choosing jobs that contribute to society and characteristics higher ethical standards

the pernicious role of asymmetric history in negotiations the role of history in negotiations is a double edged sword although parties can develop trust over time there are also countless examples of protracted feuds that developed as a result of conflicting interpretations and invocations of history we propose that due to biased invocations of the past history is likely to play a pernicious role in negotiations particularly when given an asymmetric history in which one party benefited at the expense of the other we test this prediction in two two stage experiments we find that asymmetric history in a first stage leads to increased impasses in a second stage but that this effect holds only when the second stage pairs the same two parties who shared the asymmetric history in the first

on the relation between asset ownership and specific investments experimental results are presented for a simplified version of hart s 1995 theory of the firm theory predicts that investment levels remain constant when investors no trade pay offs increase if these pay offs are threat points while they may decrease when no trade pay offs are outside options our results support these predictions in a relative sense average investment levels exceed the predicted level actual investment behaviour is consistent with the outcomes of the bargaining stage the play of the game is supported by a reciprocity mechanism in which non investors consider higher investment levels as fair behaviour which deserves a reward investors anticipate this

reinterpreting arbitration s narcotic effect an experimental study of learning in repeated bargaining field evidence suggests that arbitration increases negotiation dispute rates we study repeated bargaining in a laboratory to understand the reasons why our results represent a reinterpretation of an explanation known as the narcotic effect the standard interpretation assumes that the probability of dispute without arbitration is constant across negotiations but field evidence suggests that experienced bargainers have fewer disputes to properly assess arbitration s impact we compare bargainer learning with and without arbitration under otherwise comparable laboratory conditions and develop a model to measure learning we find strong evidence that learning occurs in both cases but is slower with arbitration journal of economic literature classification numbers c78 c92 d77 j52 q 1998 academic press

the relative earnings of young mexican black and white women this analysis of data from the national longitudinal survey of youth indicates that young mexican women and young black women earned respectively 9 5 and 13 2 less than young white women in 1994 differences in education appear to be the most important explanation for the mexican white wage gap whereas differences in labor force attachment are the most important determinant of the black white wage gap the authors show that accounting for actual labor market experience rather than simply imputing experience based on years since leaving school is crucially important in such analyses recent research has renewed interest in the relatively poor labor market performance of mexican men trejo 1997 1998 reimers 1994 chavez 1991 chapa 1990 trejo 1997 found that lower levels of education english deficiencies and the relative youth of mexican men explain 75 of the gap between mexican and white wages in contrast these factors explain less than 30 of the wage gap between black and white men despite the flurry of recent research exploring the poor performance of mexican men we are aware of

collective risk taking in the commons abstract the management of natural commons is typically subject to threshold effects if individuals are risk averse some of the recent economic literature holds that uncertainty on the threshold may have a positive impact by lowering incentives to over consume the paper shows that this intuitive result may unravel when uncertainty is modeled as a discrete or multimodal distribution using a variant of the nash demand game with two thresholds two types of nash equilibria typically coexist cautious respectively dangerous equilibria in which agents coordinate on the low threshold resp the high threshold when both types of equilibria coexist the symmetric dangerous equilibrium is always pareto dominated by the symmetric cautious equilibrium and the latter is always pareto efficient we use an experimental setting to assess the severity of the coordination and equilibrium selection problem while cautious resp dangerous play is decreasing resp increasing in the probability that the threshold is high coordination failures are salient for intermediate probabilities where the likelihood of coexistence of both type of equilibria is high we find that there is a u shaped relationship between overall coordination and the probability that the threshold is high

gender differences in displacement cost evidence and implications this paper uses a unique and newly available data set on displaced workers to estimate differences in the wage costs of displacement between women and men while predisplacement wages rise at about the same rate with tenure for women as men in this data set women lose more from displacement than men and the magnitude of this loss increases with tenure overall we interpret our results as not supportive of the specific capital hypothesis that women accumulate less firmspecific human capital than men and we suggest that future attempts to explain our result focus on gender differences in the process of search for a new job

spatial dynamics and heterogeneity in the cyclicality of real wages neither the issue of how local and aggregate labor markets interact over time nor the issue of how heterogeneity by education race and other factors interacts with these spatial dynamics has prev

an experimental comparison of dispute rates in alternative arbitration systems this paper reports the results of a systematic experimental comparison of the effect of alternative arbitration systems on dispute rates the key to our experimental design is the use of a common underlying distribution of arbitrator fair awards in the different arbitration systems this allows us to compare dispute rates across different arbitration procedures where we hold fixed the amount of objective underlying uncertainty about the arbitration awards there are three main findings first dispute rates are inversely related to the monetary costs of disputes dispute rates were much lower in cases where arbitration was not available so that the entire pie was lost in the event of a dispute this confirms the empirical importance of the so called chilling effect on bargaining that has been conjectured is produced by the adoption of arbitration systems second the dispute rate in a final offer arbitration system is at least as high as the dispute rate in a comparable conventional arbitration system contrary to the usual argument we find no evidence that final offer arbitration eliminates the chilling effect third dispute rates are inversely related to the uncertainty costs of disputes dispute rates were lower in conventional arbitration treatments where the variance of the arbitration award was higher and imposed greater costs on risk averse negotiators our results can also be interpreted as providing tentative evidence that the negotiators were risk averse on average finally we find general agreement between the dispute rates in our experiment and dispute rates found in the field in comparable settings

female earnings and the divorce rate a simultaneous equations model economists have contributed a great deal of research both theoretical and empirical to the study of marital formation and dissolution many empirical examinations of marriage and divorce rates exist based on becker s seminal contributions to the literature all of these divorce studies are single equation models with female earnings assumed exogenous as discussed by becker 1981 however causality may run in the opposite direction as well the divorce rate may influence female earnings this paper estimates a simultaneous equations model in which divorce rates and female earnings are the jointly endogenous variables data are by state for 1960 1970 1980 and 1990 the state wide divorce rate equation is an extension of waters and ressler 1999 and the specification of a state wide earnings equation follows standard human capital theory the specification of joint endogeneity between female earnings and the divorce rate allows valid inferences to be made regarding the effect of female earnings on

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