can falling supply explain the rising return to college for younger men a cohort based analysis although the college high school wage gap for younger u s men has doubled over the past 30 years the gap for older men has remained nearly constant in the united kingdom and canada the college high school wage gap also increased for younger relative to older men using a model with imperfect substitution between similarly educated workers in different age groups we argue that these shifts reflect changes in the relative supply of highly educated workers across age groups the driving force behind these changes is the slowdown in the rate of growth of educational attainment that began with cohorts born in the early 1950s in all three countries

cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

equilibrium unemployment dynamics the global dynamics of pissarides 1990 equilibrium model of aggregate unemployment are studied in the case of increasing returns to scale in production and constant returns to scale in the matching process an equilibrium is a dynamic path for the aggregate number of matches generated by best response search and recruiting investment decisions under rational expectations necessary and sufficient conditions for multiple equilibria including limit cycles are derived and illustrative examples are computed the application of saddle loop bifurcation theory is a novel feature of the analysis since one equilibrium pareto dominates all the others a macroeconomic coordination problem exists

the impact of minimum wages on employment in a low income country a quasi natural experiment in indonesia the extensive literature on the employment impact of minimum wages has focused heavily on industrialized nations and very little on the developing world despite the importance of minimum wages in many low income countries one such country indo nesia was the setting for an unusual quasi natural experiment not only did minimum wages in indonesia increase sharply between 1990 and 1996 but the resultant increment in average wages varied markedly across different areas in greater jakarta the authors use household level labor market data to determine the extent of compliance with the legislation then estimate the employment impact in the clothing textiles footwear and leather industries based on a census of all large and medium sized establishments the evidence suggests that there was no negative employment impact for large establish ments either foreign or domestic but that workers in smaller domestic establishments may have suffered job losses as a result of minimum wage increases

competitive search equilibrium in this paper i construct an equilibrium for markets with frictions which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters i show that the equilibrium allocation is socially optimal i also show how the competitive search equilibrium can be achieved if employers with vacancies can advertise publicly the wages they pay

how to measure labour market effects of immigration a review abstract this paper surveys available empirical evidence on labour market effects of immigration many different approaches have been used already to try to find out whether immigration hurts the labour market opportunities of natives no doubt new approaches will follow in the future as globalization will keep the migration issue on the agenda this literature review discusses the different approaches concentrating on both the methodology and the results at the end it tries to summarize available evidence

income shocks and suicides causal evidence from indonesia we examine how income shocks affect the suicide rate in indonesia we use a difference in differences approach exploiting the cash transfer s nationwide rollout and corroborate the findings using

horizontal concentration and european merger policy in the second section of this policy paper the main theoretical arguments concerning the costs and benefits of horizontal mergers as a way of modifying market conditions are identified as well as the exploration of some indicators that could be used to evaluate the probability of these costs and benefits in a european context

markets with search friction and the dmp model dale t mortensen delivered his prize lecture on 8 december 2010 at aula magna stockholm university this abstract was borrowed from another version of this item

competition cooperation and mergers economic and policy issues abstract this paper contrasts two types of european community competition policies with respect to joint ventures namely concentrative joint ventures ccjv which fall under the merger control regulation and cooperative joint ventures cpjv which fall under article 85 1 the contrast occurs at different levels procedural jurisdictional and substantive it provides firms with bargains and trade off opportunities for the choice of the more convenient jurisdiction for their transactions the paper presents a model illustrating how these bargains and trade offs can operate in the context of an endogenous choice between a ccjv and a cpjv

reevaluating agricultural productivity gaps with longitudinal microdata recent research has pointed to large gaps in labor productivity between the agricultural and nonagricultural sectors in low income countries as well as between workers in rural and urban areas most estimates are based on national accounts or repeated cross sections of micro survey data and as a result typically struggle to account for individual selection between sectors this paper contributes to this literature using long run individual level panel data from two low income countries indonesiaand kenya accounting for individual fixed effects leads to much smaller estimated productivity gains from moving into the non agricultural sector or urban areas reducing estimated gaps by over80 percent per capita consumption gaps between non agricultural and agricultural sectors as well as between urban and rural areas are also close to zero once individual fixed effects are included estimated productivity gaps do not emerge up to five years after a move between sectors nor are they larger in big cities we evaluate whether these findings imply a re assessment of the currentconventional wisdom regarding sectoral gaps discuss how to reconcile them with existing crosssectional estimates and consider implications for the desirability of sectoral reallocation of labor

merger policy in open economies abstract we extend farrell and shapiro s 1990 analysis of horizontal mergers to the case of an open economy we show how the rules for approving a merger ought to be adapted to account for the fact that the regulator is only concerned with domestic welfare that is ignores the effect of the merger on foreign firms and consumers we also explore the consequences of this externality in a model of a single market which includes consumers and producers of different countries in particular we provide conditions under which a decentralized process of evaluating merger proposals a la farrell shapiro can survive the externality mentioned above

looking behind the curtain effects from modernization of european union competition policy abstract the european commission issued a proposal for reform of some aspects of communitary competition policy in particular proposes a shift from ex ante control notification system to an ex post control regime of agreements or decisions conflicting with article 81 ex article 85 we highlight the expected effects of this shift on the type of agreements that firms will implement the type of agreements has been taken as exogenous in most analysis of the reform proposal we contend that significant economic effects may result from recognizing the endogeneity of agreements we predict that the proposed reform will result in general in firms implementing less restrictive agreements

the effect of weather induced internal migration on local labor markets evidence from uganda relying on census data collected in 2002 and historical weather data for uganda this paper estimates the impact of weather induced internal migration on the probability for non migrants living in the destination regions to be employed consistent with the prediction of a simple theoretical model the results reveal a larger negative impact than the one documented for developed countries they further show that this negative impact is significantly stronger in ugandan regions with lower road density and therefore less conducive to capital mobility a 10 percentage points increase in the net in migration rate in these areas decreases the probability of being employed of non migrants by more than 10 percentage points

labour market responses to immigration evidence from internal migration driven by weather shocks we study the labour market impact of internal migration in indonesia by instrumenting migrant flows with rainfall shocks at the origin area estimates reveal that a one percentage point increase in the share of migrants decreases income by 0 97 and reduces employment by 0 24 percentage points these effects are different across sectors employment reductions are concentrated in the formal sector while income reduction occurs in the informal sector negative consequences are most pronounced for low skilled natives even though migrants are systematically highly skilled we suggest that the two sector nature of the labour market may explain this pattern

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the effect of internal migration on local labor markets american cities during the great depression the great depression offers a unique laboratory to investigate the causal impact of migration on local labor markets we use variation in the generosity of new deal programs and extreme weather events to instrument for migrant flows to and from u s cities in migration had little effect on the hourly earnings of existing residents instead in migration prompted some residents to move away and others to lose weeks of work or access to relief jobs for every 10 arrivals we estimate that 1 9 residents moved out 2 1 were prevented from finding a relief job and 1 9 shifted from full time to part time work

can minimum wages cause a big push evidence from indonesia big push models suggest that local product demand can create multiple labor market equilibria one featuring high wages formalization and high demand and one with low wages informality and low demand i demonstrate that minimum wages may coordinate development at the high wage equilibrium using data from 1990s indonesia where minimum wages increased in a varied way i develop a difference in spatial differences estimator which weakens the common trend assumption of difference in differences estimation reveals strong trends in support of a big push formal employment increases and informal employment decreases in response to the minimum wage local product demand also increases and this formalization occurs only in the non tradable industrializable industries suggested by the model while employment in tradable and non industrializable industries also conforms to model predictions

under the weather health schooling and economic consequences of early life rainfall life in rural areas of developing countries is prone to many kinds of risk such as illness or mortality of household members crop or other income loss due to natural phenomena weather insect infestations or fire for example and civil conflict in addition to their contemporaneous effects the effects of certain types of shocks may still be felt many years or even decades later from a public policy standpoint it is particularly important to identify shocks that have large long run effects moreover the mechanics underlying the persistence of shocks may be of con siderable interest for example a health shock may have a long run effect simply because the health shock itself persists over time alternately the health shock may not directly affect long run outcomes but it could affect some other outcome such as educational attainment that helps determine long run well being in this paper we focus on shocks that occur at the very beginning of life we ask how sensi tive long run individual well being is to environmental conditions around the time of birth in particular we examine the effect of weather shocks around the time of birth on the adult health education and socioeconomic outcomes of indonesian women and men born between 1953 and 1974 in addition we attempt to shed light on the intervening pathways connecting early life rainfall to adult outcomes illuminating the roles of health and educational attainment in deter mining adult socioeconomic status this investigation has considerable data requirements it necessitates information on weather shocks experienced by individuals several decades earlier as well as detailed current informa tion on adult outcomes we use information in the indonesian family life surveys ifls on an individual s year and location of birth and link each individual in that survey to locality specific rainfall data for their birth year for individuals born in rural areas on whom we focus rainfall variation across space and time should generate corresponding variation in agricultural output and thus household income to deal with measurement error in the rainfall data we run instrumental variables regressions where variables for rainfall measured at slightly more distant rainfall stations serve as instruments for rainfall in the individual s birthplace and birth year we examine the impact of early life rainfall on a range of adult outcomes observed in 2000 we find that higher early life rainfall leads to improved health schooling and socioeconomic status for women women with 20 percent higher rainfall relative to normal local rainfall in their year and location of birth are 3 8 percentage points less likely to self report poor or very poor health they attain 0 57 centimeters greater height attain 0 22 more completed grades of