where do markets come from production markets have two sides producers are a fully connected clique transacting with buyers as a separate but aggregated clique each producer is a distinctive firm with a distinctive product each side continually monitors reactions of the other through the medium of a joint social construction the schedule of terms of trade each producer is guided in choice of volume by the tangible outcomes of other producers not by speculation on hypothetical reactions of buyers to its actions each producer acts purely on self interest based on observed actions of all others summarized through a feedback process the summary is the terms of trade schedule which reduces to constant price only in limiting cases the market emerges as a structure of roles with a differentiated niche for each firm explicit formulae both for firms and for market aggregates are obtained by comparative statics methods for one family of assumptions about cost structures and about buyers evaluations of differentiated products not just any set of firms can sustain terms of trade with any set of buyers there prove to be three main kinds of markets and three sorts of market failure within a parameter space that is specified in detail one sort of market paradox has a madison avenue flavor another is more conventional grind and a third crowded is a new form not included in any existing theory of markets current american industrial markets are drawn on for 20 illustrations of which three are presented in some detail inequality in firms market shares measured by gini coefficients is discussed

gender sorting and the glass ceiling in high tech firms with few exceptions studies have conceived of the glass ceiling as reflecting internal promotion biases in this article the authors argue that glass ceiling patterns can also be the result of external recruitment and hiring processes using data on people applying by means of the internet for jobs at 441 small and medium sized high tech firms they find evidence that the glass ceiling is produced by both internal and external hiring processes on the supply side females are sorted into lower level job queues than males on the demand side screening biases against women also are evident but a series of what if simulations suggest that demand side screening processes play a comparatively minor role in producing the glass ceiling pattern these results suggest that bias remediation policies designed to equalize gender differences in hiring chances are likely to be less effective than recruitment and outreach policies designed to improve gender disparities in candidate pools

inflation stabilization the experience of israel argentina brazil bolivia and mexico rampant inflation is a major economic problem in many of the less developed countries two out of three attempts to stabilize these economies fail inflation stabilization provides a valuable description and a critical analysis of the disinflation programs introduced in argentina bolivia brazil and israel in 1985 86 and discusses the possibility of such a program in mexico it documents the initial steps in stabilization as well as the reasons for failure as architects of the programs several of the authors are in key positions to assess which aspects were critical in getting the programs accepted and where to look for difficulties and failures in israel inflation was halted without recession the challenge to policy makers today is in shifting from stabilization to the revival of sustained growth this experience is described fully by michael bruno and sylvia piterman who examine the critical issue of exchange rates and by alex cukierman who uses modeling to analyze the interaction of money wages prices and activity under rational expectations that take the government s policy objectives into account endemic inflation and a sudden increase in external debt burden argentina s economy raising the wider issues of high inflation economies and stabilization that are discussed in the chapter by jose luis machinea and that by guido di tella and alfredo canavese eduardo modiano and mario simonsen take up issues of wages in brazil particularly the problem of finding an equitable way to deal with a wage freeze simonsen develops an ambitious game theoretic rationalization of incomes policy as a coordinating device for imperfectly competitive economies bolivia did reach hyperinflation price increases of more than 50 percent each month before stabilizing juan antonio morales shows how stabilizing the exchange rate in an economy where all pricing was already geared to the dollar achieved stabilization without a wage or price freeze and francisco gil diaz asks whether an incomes policy based program could work to control ever increasing inflation in mexico michael bruno is governor of the bank of israel guido di tella is a fellow of st anthony s college a professor at the di tella institute in buenos aires and a member of parliament in argentina stanley fischer is vice president of development economics and chief economist at the world bank rudiger dornbusch is ford international professor of economics at mit

public versus private governance a study of incentives and operational performance abstract this study explores incentives and performance in organizations governed by publicly elected boards of directors and subsidized by taxes such organizations are likely to underpay chief executive officers ceos resulting in selection and incentive problems and hence poor operating performance we compare municipal district hospitals to private nonprofit hospitals ceo compensation in district hospitals is significantly lower than in the nonprofits operating margins in district hospitals are lower and deteriorate more rapidly over time we rule out a number of other factors that could explain differences in performance we conclude that the weak governance structure hampers district hospitals

the tortoise versus the hare progress and business viability differences between conventional and leisure based founders social science researchers have long pursued answers to the puzzle of why some people achieve certain milestones more quickly than others and whether rate of progress matters for long run outcomes this tortoise versus hare puzzle raises the question of whether speed is a valid indicator of viability in an undertaking are those with slower rates of progress any less off in terms of long run achievement when compared to their faster counterparts we investigate this tortoise and hare puzzle in the context of business formation an activity pursued by millions in the united states our analysis of a nationally representative survey of u s business founders revealed that leisure based founders were slower to make progress initially but after a certain time threshold their progress was no different than other conventional types of founders more importantly leisure based founders showed more favorable initial economic and non economic outcomes as these founders were more likely to consistently report early sales and profitability and were more committed to investing time into their ventures our study findings have both theoretical and practical implications for the evaluation of venture performance when the rate of progress is considered to be a leading indicator of new business viability

predicting exchange rate crises mexico revisited abstract this paper predicts ex ante probabilities of currency crises and sizes of expected devaluations month by month for mexico between 1980 and 1986 the forces contributing to speculative attacks on the mexican peso include domestic fiscal and monetary shocks external credit shocks and relative price shocks reducing domestic credit growth increasing the uncertainty surrounding this growth and reducing the size and perhaps increasing the frequency of currency realignments might have greatly reduced the amount of currency speculation against the peso between 1980 and 1986 anticipated external credit supply shocks played a relatively minor role during mexico s balance of payments crises

credibility of policies versus credibility of policymakers standard models of policy credibility defined as the expectation that an announced policy will be carried out emphasize the preferences of the policymaker and the role of tough policies in signaling toughness and raising credibility whether a policy is carried out however will also reflect the state of the economy we present a model in which a policymaker maintains a fixed parity in good times but devalues if the unemployment rate gets too high our main conclusion is that if there is persistence in unemployment observing a tough policy in a given period may lower rather than raise the credibility of a no devaluation pledge in subsequent periods we test this implication on ems interest rates and find support for our hypothesis

gender difference in promotions new evidence from the internal labor market in china gender differences in the labor market have attracted significant attention from economists who focus on gender differences not only in wages but also in promotions however the research on gende

internal labor markets too many theories too few facts that firms employ internal labor markets in which wages and careers are partly shielded from the vagaries of external labor markets seems well accepted yet peter doeringer and michael piore s 1985 seminal work on internal labor markets has had a rather limited impact on the economics profession in contrast to textbooks on human resource management which have adopted their paradigm wholeheartedly labor economics texts tend to pay only cursory attention to internal labor markets the competitive model in which wages reflect an individual s marginal product remains the paradigm of choice there are many reasons for this lackluster reception including intellectual convenience a more acceptable excuse is that while doeringer and piore s study which was based on interviews with 75 companies identified several key regularities ports of entry career ladders etc that have come to shape our perception of internal labor markets the book never presented a theory to explain these findings with the advent of information economics and contract theory models of internal labor markets or at least selected features of these markets have begun to emerge the objective of these theories is to show that internal labor market outcomes can be construed as second best solutions to contracting problems under incomplete information for instance tournament theory edward lazear and sherwin rosen 1981 sees the attachment of wages to jobs as part of an efficient incentive scheme michael waldman 1984 explains the same phenomenon as an insurance arrangement against variations in individual productivity seniority rules in promotion and wagesetting can be understood as responses to problems of collusion or influence activities paul milgrom and john roberts 1988 the list could be extended at this point there is hardly any feature of internal labor markets that cannot be given some logical explanation using the right combination of uncertainty asymmetric information and opportunism doeringer and piore 1985 in the preface to the second printing of their book take exception with this line of theoretical research they believe that internal labor markets are inherently a social group phenomenon and that something fundamental is missed by pursuing individualistic models be that as it may we think there is another more serious problem with the direction that this research has taken too much of it relies on the old empirical stereotype the original study was done 25 years ago and focused almost exclusively on blue collar male unionized manufacturing workers one might rightly wonder how relevant these findings are in today s environment and whether they extend to white collar work as most discussions seem to assume before proceeding with the theory it is prudent to ask do we have the facts right in this paper we report on two recent case studies of individual firms that use personnel records to analyze wage and career paths of managerial workers lazear 1992 and baker et al 1994a b 1 person

an economic approach to influence activities in organizations members of organizations spend considerable time effort and ingenuity attempting to influence decision makers such influence activities may bring benefits to the organization but they also involve real costs this essay offers an economic rationale for such influence activity as representing rational self interested behavior in the presence of informational asymmetries and an analysis of how the design of the organization s structure and policies should respond to the incentives for attempting influence it is posited that information valuable for the organization s decision making is directly available only to members of the organization who have some personal stake in the decisions these individuals may then have an incentive to try to manipulate the information they develop and provide in order to influence the resulting decisions to their benefits this can be costly both in degrading the quality of decision making and in diverting the attention and effort of the organization s members from more productive activities the organization has three different methods it can employ to discourage excessive influence activities and to encourage more directly productive uses of time and effort it can limit access to decision makers and participation in decision making it can alter its decision making criteria to favor those performing well in productive activities and it can provide direct financial incentives to encourage the desired allocation of effort it is shown that an efficiently designed organization will use such financial incentives only as a last resort instead it will always first alter its decision participation policies and decisionmaking criteria

the fall and rise of the petty bourgeoisie changing patterns of self employment in the postwar united states this article explores the historical trajectory of the self employed segment of the labor force in the united states particularly since 1940 self employment declined in the united states almost steadily from the 19th century to the early 1970s since then it has risen every year explaining this reversal in the historical fortunes of the petty bourgeoisie is the central task of this article we reach four basic conclusions first the reversal in the decline of the self employed is statistically significant and robust across a range of definitions of self employment rates second this reversal is not a simple countercyclical response to the increase in unemployment since the middle 1970s third part of the resurgence of self employment result from the expansion of various postindustrial services that tend to have higher levels of self employment within them within postindustrial sectors however there has not generally been any increase in self employment fourth a significant part of the expansio

institutional labor economics the new personnel economics and internal labor markets a reconsideration the author illustrates the utility of institutional labor economics and makes a case for a reconsideration of it two recent developments motivate this effort the rise of new personnel economics npe as a significant subfield of labor economics and the substantial shifts in work organization that have taken place since the 1990s understanding how and why firms have reorganized work opens the door for a renewed interest in institutional approaches the author explains that the rules of institutional labor markets ilms emerge from the competition between organizational interest groups unions personnel professionals and the government and competing views of firms objectives resulting in the rise of ilms the slow diffusion of high performance work systems strategies used to obtain a high level of commitment from workers the use of contingent employees and the spread of new promotion rules in response to equal employment opportunity pressures as such the role of power and influence in establishing work rules is of central concern though more conventional npe considerations also remain important

making it underground comparative material on the informal sector in western market economies this paper examines the informal economy and its relationship to commonly held theories of industrial development although these theories stem from very different intellectual traditions their general assumption has been that widespread informal economic activities are primarily a feature of third world economies in which they function as a refuge from destitution such activities are presumably destined to desappear with the advance of modern industry led growth evidence is presented that indicates that these assumptions including the identification of informality with conditions in the less developed countries are wrong alternative interpretations of the resilience of these activities in third world countries despite rapid industrialization and their continuity and apparent revival in the advanced economies and discussed

hedging your bets explaining executives market labeling strategies in nanotechnology executives use market labels to position their firms within market categories yet this activity has been given scarce attention in the extant literature that widely assumes that market labels are simple prescribed classification brackets that accurately represent firms characteristics by examining how and why executives use the nanotechnology label we uncover three strategies claiming disassociating and hedging comparing these strategies to firms technological capabilities we find that capabilities alone do not explain executives label use instead the data show that these strategies are driven by executives aspiration to symbolically influence their firms market categorization in particular executives perception of the label s ambiguity their avoidance of perceived credibility gaps and their assessment of the label s signaling value shape their labeling strategies in contrast to extant research which suggests that executives should aim for coherence we find that many executives hedge their affiliation with a nascent market label thus our study shows that in ambiguous contexts noncommitment to a market category may be a particularly prevalent strategy

the structure of disadvantage individual and occupational determinants of the black white wage gap this study is motivated by the idea that the racial gap in earnings is generated not only by individual differences but also by systematic variation in the occupational structure that attenuates or exacerbates the effects of race using data from the 1990 census and the dictionary of occupational titles a hierarchical linear modeling approach is employed that allows the simultaneous exploration of the mechanisms of income inequality operating both within and between occupations among private sector employees striking evidence shows that racial disparities increase in both absolute and percentage terms as one moves up the occupational earnings hierarchy the association between average occupational earnings and within occupation racial disadvantage reveals an overlooked source of racial earnings inequality which constrains the opportunities available to upwardly mobile black men in the private sector this association cannot be explained by measured individual characteristics or by the status demographic composition or skill demands of occupations in the public sector on the other hand racial inequality in earnings is not systematically associated with average occupational earnings and is instead more closely tied to individual human capital and occupational placement the implications of these results are considered and directions for future research are suggested

public sector deficits and macroeconomic performance in the 1980s chronic public sector deficits forced countries to undertake fiscal adjustment the need to face hard choices continues in the 1990s but the problem is not a simple and easily diagnosed one with an obvious solution rather public sector deficits have had widely differing consequences high inflation in some countries low inflation but also low investment and growth in others and in still others no evident short term macroeconomic spillovers this book presents the findings of a world bank research project designed to shed light on the complex dynamics of public sector deficits it includes an in depth examination of eight countries argentina chile colombia cote d ivoire ghana morocco pakistan and zimbabwe these cases are analyzed within a comprehensive theoretical framework elaborated for the study and in conjunction with cross country data from a larger set the book draws the following conclusions the ways chosen to finance deficits money creation debt or arrears go far to explain medium term financial and macroeconomic imbalances but in the short term these relations are blurred deficits tend to be bad for growth they increase financial and price instability and crowd out private investment public saving typically reduces private saving only slightly increasing public saving is a very effective policy instrument for raising national saving fiscal adjustment typically leads to a lower trade deficit and a moredepreciated real exchange rate finally the blame for large systemic public deficits must be placed not on bad luck but on unwise policy choices and conversely sound fiscal policies can set a country on a path leading to stability and growth

on crises contagion and confusion abstract since the tequila crisis of 1994 1995 the asian flu of 1997 and the russian virus of 1998 economists have been busy producing research on the subject of contagion yet few studies have examined empirically through which channels the disturbances are transmitted if there are indeed fundamental reasons for the spillovers we observe we attempt to fill this gap by analyzing how both trade links and the largely ignored financial sector links influence the pattern of fundamentals based contagion we examine the role of international bank lending the potential for cross market hedging and bilateral and third party trade in the propagation of crises

seigniorage and inflation the case of argentina this paper studies the relation between seigniorage and inflation in argentina for the period 1979 1989 we estimate a money demand function and derive the laffer curve for several sub periods with different monetary exchange rate regimes we find that for most of the period the argentine economy remained on the efficient side of the laffer curve the long run revenue maximizing rate of inflation has been around 20 percent per month for the tablita 1979 1981 and post austral 1985 1988 periods and around 30 percent per month for the pre austral period 1982 1985 the long run maximum level of seigniorage has been above 6 percent of gdp our results imply that the hyperinflation experienced by argentina in 1989 can be interpreted as an unstable phenomenon that resulted from the need to collect a level of seigniorage that exceeded the maximum warranted by the demand for money copyright 1995 by ohio state university press

tourism as a mixed industry differences between private public and not for profit festivals this paper discusses important policy and management implications of tourism as a mixed industry in which public not for profit and private organisations such as festivals both compete and collaborate in creating the tourist product to illustrate four samples of festivals from the uk australia norway and sweden are systematically compared in terms of their ownership governance structure and content although the festivals offered a similar product and had similar mandates they differed considerably in terms of revenue sources cost structure use of volunteers corporate sponsorship and decision making these differences are potentially important to destinations that view festivals as attractions and use them in place marketing implications are drawn for festival management and tourism policy and recommendations are made for extending this line of inquiry to the tourism industry as a whole

managerial rewards and the behavior of for profit governmental and nonprofit organizations evidence from the hospital industry abstract studies of mixed industries frequently focus on differential behavior between for profit and either nonprofit or governmental producers substantially less is known about differences among governmental religious nonprofit and secular nonprofit organizations we examine the compensation of hospital ceos to assess the extent to which these three organizational forms pursue similar objectives compensation levels the use of salaries versus bonuses as proxies for weak versus strong incentives and the criteria organizations use to determine bonuses are analyzed we conclude that the ceo incentive contracts at religious nonprofit secular nonprofit and governmental hospitals imply substantive differences in the behavior of these organizations

the provision of incentives in firms i ncentives are the essence of economics despite many wide ranging claims about their supposed importance there has been little empirical assessment of incentive provision for workers the purpose of this paper is to critically overview existing work on the provision of incentives since the interests of workers and their employers are not always aligned a large theoretical literature has emphasized how firms design compensation contracts to induce employees to operate in the firm s interest this literature has reached into many areas of compensation and has pointed to a multitude of different mechanisms that can be used to induce workers to act in the interests of their employers these include piece rates options discretionary bonuses promotions profit sharing efficiency wages deferred compensation and so on my objective here is to evaluate this literature in the light of a growing empirical literature on compensation where possible i will address the literature from two perspectives first an underlying assumption of this literature is that individuals respond to contracts that reward performance accordingly i consider whether agents behave in this way and whether these responses are always in the firm s interest second i address whether firms write contracts with these responses in mind in other words do contracts look like the predictions of the theory incentives are provided to workers

reconsidering institutional labor economics the author illustrates the utility of institutional labor economics and makes a case for a reconsideration of it two recent developments motivate this effort the rise of new personnel economics npe as a significant subfield of labor economics and the substantial shifts in work organization that have taken place since the 1990s understanding how and why firms have reorganized work opens the door for a renewed interest in institutional approaches the author explains that the rules of institutional labor markets ilms emerge from the competition between organizational interest groups unions personnel professionals and the government and competing views of firms objectives resulting in the rise of ilms the slow diffusion of high performance work systems strategies used to obtain a high level of commitment from workers the use of contingent employees and the spread of new promotion rules in response to equal employment opportunity pressures as such the role of power and influence in establishing work rules is of central concern though more conventional npe considerations also remain important

why do contractors contract the experience of highly skilled technical professionals in a contingent labor market this study examines 52 highly skilled technical contractors explanations in 1998 of why they entered the contingent labor force and how their subsequent experiences altered their viewpoint the authors report three general implications of their examination of the little studied high skill side of contingent labor first current depictions of contingent work are inaccurate for example contrary to the pessimistic employment relations perspective most of these interviewees found contracting better paying than permanent employment and contrary to optimistic free agent views many reported feeling anxiety and estrangement second occupational networks arose to satisfy needs such as training and wage setting that employing organizations satisfy for non contingent workers third regarding their place in the labor market high skilled and well paid technical contractors cannot be called as contingent workers usually are secondary sector workers and their market is not dyadic with individuals s

the internal economics of the firm evidence from personnel data we analyze twenty years of personnel data from one firm the hierarchical structure is quite simple and stable career movements suggest that the employee s rate of learning and the firm s learning about ability are important there are promotion fast tracks exit rates vary little with tenure or salary the firm has personnel policies like those described in the internal labor markets literature although several theoretical preconditions for ilms such as ports of entry and exit are lacking job levels are important to compensation but there is also substantial individual variation in pay within levels our companion paper in this issue explores the wage policy of this firm

on the merit of equal pay performance manipulation and incentive setting abstract work performance is often difficult to assess thus leaving room for manipulation of commonly used metrics we created a laboratory workplace in which we can precisely assess both work performance along with manipulation activities using two independent experiments we show that whenever pay for performance is used manipulation is pervasive leading to both a waste of organizational resources and a weakening of incentives by contrast paying organizational members equally effectively deters manipulation attempts leading to higher organizational production

stretchwork managing the career progression paradox in external labor markets changes in employment relationships have diminished the degree to which internal labor markets shape careers using comparative field studies we examine how contract workers try to achieve career

arbitraging a discriminatory labor market black workers at the ford motor company 1918 1947 the 1918 47 employee records of the ford motor company provide a rare opportunity to study a firm willing to hire black workers when similar firms would not the evidence suggests that ford did profit from discrimination elsewhere but not by paying blacks less than whites an apparent wage equity constraint prevailed resulting in virtually no racial variation in wages inside ford an implication was that blacks quit ford jobs less often than whites holding working conditions constant arbitrage profit came from exploiting this nonwage margin as ford placed blacks in hot dangerous foundry jobs where quit rates were generally high

rethinking internal labor markets new insights from a comparative perspective internal labor markets take different forms in the capitalist and the socialistfirm as the distinctive organizational problems in each economic system produce differing but comparable institutional solutions analysis of systemic uncertainties and the organizational responses of workers and managers yields a comparative model of mirrored opposition in economies in which the firm operates in a market environment systemic uncertainties regarding labor are reduced through internal bureaucratic rules operating according to a classificatory logic in the socialist economy by contrast where systemic uncertainties are produced by a bureaucratic environment the firm responds through internal market transactions based on affiliative ties the market like character of these internal mechanisms is brought into even sharper relief in an analysis of the recent establishment in hungary of semi autonomous subcontracting units inside the enterprise

nonprofit organizations revised theory and new evidence it is apparent that comprehensive analysis requires at least some application of elementary axioms from the economics of politics or public choice one of these implies that because of asymmetric costs of political participation some suppliers of goods and services usually do better for themselves out of lobbying and organization than do others moreover for the same reason dispersed consumers would appear to do worst of all legislation and policy on nonprofit organization seems to be one of many examples of this phenomenon in this case however the supply side lobbyists are aided by an ancient and deep seated popular prejudice against profit making the man in the street has apparently not yet fully grasped the point that so long as competition is possible the profit inducement acts as a continued incentive to minimize costs constantly and indiscriminately to condone pejorative language against profits is to create a climate that results in legislation giving unprecedented new profit opportunities via not for profit organizations and such increased rewards can result in social harm rather than social gain granted there may be cases that justify nonprofits in some circumstances preston 1988 the fact remains that the costs of separating and monitoring these cases at least at federal level would appear to be overwhelming the nonprofit system that is usually advocated calls for a federal general tax exemption yet the value of this advantage is the same to all nonprofit firms whereas we need to know the extent of the particular social benefits generated in each particular case so as to give tailor made government assistance and since in very many instances the social benefits are negative the government s shotgun approach appears highly questionable

financial policy and speculative runs with a crawling peg argentina 1979 1981 abstract in this paper we present a model of a balance of payments crisis and examine the argentine experiment with a crawling peg between december 1978 and february 1981 the approach taken allows us to examine the evolution of a crisis when a collapse is not perfectly foreseen and yields plausible estimates of one month ahead probabilities of a collapse of the crawling peg the results suggest that the viability of an exchange rate regime depends on the consistency of exchange rate policy with domestic credit policy if the two are not consistent confidence in exchange rate policy is undermined

gone fishing reported sickness absenteeism and the weather i introduction the principal agent problem of contracting employee work effort that is imperfectly monitored arises in a number of areas of economic theory including models of remuneration by seniority lazear 1979 involuntary unemployment e g shapiro and stiglitz 1984 performance based pay macleod and malcomson 1998 and labor hoarding depken redmount and snow 2001 given the importance of this mechanism in the theoretical work the empirical research on the agency problem is remarkably scant in part this reflects the limited availability of personnel data as baker and holmstrom argue in their review article internal labour markets too many theories too few facts 1995 but more fundamentally it reflects the inherent difficulty of empirically capturing the employee effort levels that underlie the models using direct measures of employee or firm level productivity is unquestionably the preferred approach but these measures are notoriously problematic and the studies that use them tend to be case studies introducing external validity issues it is also unlikely to isolate the type of malfeasant shirking behavior that concerns variants of the models where the employee effort decision entails disciplinary risk to inform employee incentives to engage in malfeasant behavior economists have relied on two measures employee disciplinary rates e g cappelli and chauvin 1991 ichino and maggi 2000 and absenteeism rates e g arai and thoursie 2005 bradley green and leeves 2007 ichino and riphahn 2005 the difficulty is that disciplinary rates capture only shirking activity that is identified by employers not that which goes undetected while reported absenteeism particularly sickness absenteeism rates may be entirely legitimate one can therefore never be sure whether differences in these rates across workers facing different shirking costs reflect actual shirking activity as opposed to differences in employers willingness or ability to detect and punish shirkers or differences in employee health that may be correlated with these costs in this paper we identify a different type of shirking activity that potentially addresses both of these shortcomings employees misreporting health in order to exploit weather conditions favorable to high utility outdoor recreation 1 we begin by considering a shirking model of sickness absenteeism in which employees marginal utility of outdoor leisure is increasing in the interaction of two state dependent parameters health and outdoor weather quality the intuition being that ideal weather conditions for engaging in outdoor recreation are valued more when one is physically and perhaps also mentally healthy this assumption leads to two main propositions first increases in sickness absenteeism associated with marginal improvements in weather quality reflect the decisions of the inframarginal workers those workers who in the absence of the weather improvement would be present at work who are the healthiest implying an increase in absenteeism that is unambiguously illegitimate second comparing across workers marginal weather improvements should have the largest impact on sickness absenteeism where shirking costs are highest the reason is that where existing incentives to misreport health are the weakest such as where sick pay is not offered or job protection is weak existing sickness absenteeism levels will be lowest and the inframarginal workers will be the healthiest thereby benefitting most from the weather improvement we examine the empirical relevance of these propositions using a two step approach first we construct an index of weather preferences by linking temperature relative humidity precipitation wind speed and cloud cover data to time use data identifying the weekend and weekday evening outdoor recreational activities of employees with regular daytime work schedules we then examine the empirical relation between the resulting index of the recreational quality of the weather hereafter referred to simply as weather quality and the incidence of short term spells of sickness absenteeism reported in survey data comparing the magnitude of this relation across workers facing different levels of sick pay job protection and job finding rates

the impact of hierarchies on wages abstract hierarchical production theory has only one consistent prediction that wages increase with level in a hierarchy theoretical disagreement exists as to what causes this wage premium and how it might be affected by the number of levels of superiors above an employee by empirically analyzing these issues we find that i level one supervisors receive a premium due to some unobserved characteristic ii higher level supervisors receive a premium through higher rates of return on human capital and iii the marginal effect on wages of increasing the level of an employee declines with the number of levels above the employee

history and career in a bureaucratic labor market this paper present a synthesis of theoretical statements on the determinants of socioeconimic achievement with bureaucratic internal labor markets and an empirical examination of the reultant predictions the study focuses on careers in the u s civil service from 1963 to 1977 using official personnel records on a 1 sample of whitecollar federal employees along with secondary survey data the career is viewed as an outcome not only of individual attributes but also of both organizational and historical contexts the empirical strategy used to disentangle the individual organizational and historical effects is cohort analysis five successive entering cohorts are differentiated and for each a model of socioeconomic achievement is estimated which corporates key characteristics of bureaucratic labor markets not heretofore considered in such models the considerable power of the model to account for variations in occupational prestige and salary supports a weberian view of bureaucratic labor markets a

exchange market mayhem the antecedents and aftermath of speculative attacks exchange market mayhem the antecedents and aftermath of speculative attacks this paper evaluates the causes and consequences of episodes of turbulence in foreign exchange markets using data from 1959 through 1993 for twenty oecd countries we consider the antecedents and aftermath of devaluations and revaluations flotations fixings and speculative attacks which may not be successful we find that realignments of fixed exchange rates are alike devaluations are preceded by political instability budget and current account deficits and fast growth of money and prices revaluations are mirror images of devaluations speculative attacks resemble devaluations but money growth and inflation are more endemic and there is no last minute attempt to tighten monetary policy in contrast few consistent correlations link regime transitions like flotations or fixings to macroeconomic or political variables transitions between exchange rate regimes are largely idiosyncratic and are neither consistently provoked ex ante by systematic imbalances nor typically justified ex post by subsequent changes in policy we conclude that there are no clear early warning signals of many speculative attacks and no easy solutions for policy makers barry eichengreen andrew k rose and charles wyplosz

cumulative gender disadvantage in contract employment women s wages do not grow with experience or tenure as much as men s do many accounts of this cumulative gender disadvantage attribute it to women s underinvestment in firm specific skills yet if that were true this disadvantage would not exist where firm specific skills are not rewarded by the labor market this article investigates this argument in the context of contract employment where demand for firm specificity is minimal contrary to expectations men still receive higher rewards than women over time drawing on quantitative evidence and qualitative fieldwork using job histories of high skill contractors affiliated with a staffing firm the author finds support for two sources of women s disadvantage lower rates of movement across clients on the supply side and unmeasured demand side factors by which similar levels of tenure and client transitions accrue lower rewards to women implications for research on gender stratification and career advancement in nonformalized labor markets are discussed

short term projects and emergent careers evidence from hollywood the hollywood film industry is considered as a system of recurrent ties among the various major participants who usually work under short term contracts for single films this form of project based organization in seen as a response to uncertainty and risk in the film industry the paper examines the ways in which independent contractors producers directors cinematographers and actors organize and operate to reduce uncertainty and risk and to increase profits the analysis of data from 2 430 films made in the period 1965 80 establishes patterns of recurrent ties among participants who are at comparable levels of cumulative productivity with respect to earnings oscars oscar nominations and number of previous films the paper also considers the degree to which film earnings are influenced by the past productivity of the major participants

internal labor markets firm specific human capital and heterogeneity antecedents of employee idiosyncratic deal requests a field study of 615 managers in 11 korean manufacturing firms extends theory regarding labor contracting to the study of idiosyncratic deals i deals despite i deals potential to benefit both employees and employers economic theory asserts that employers attempt to reduce individual contracting by use of internal labor markets ilms this study identifies limits to that assertion by identifying conditions under which i deals are sought despite employee participation in ilms furthermore we develop and test theory reconciling the roles of ilms and firm specific human capital in employee requests for i deals employee reports of ilm practices are negatively related to i deal requests whereas firm specific human capital is positively related to these requests in addition we find an interaction between the two such that the suppressive effects of ilm reports on i deal requests hold largely for workers with low firm specific human capital individuals with high firm specific human capital tend to seek i deals despite reported ilm practices i deal requests also increase with group level heterogeneity in firm specific human capital in all our findings suggest that ilms function as economic theory asserts for workers with limited firm specific human capital but they are less able to reduce i deal requests among workers with higher firm specific human capital

the transformation of the american class structure 1960 1980 this study explores a series of predictions concerning the likely changes in the american class structure in the 1970s made by wright and singelmann in their work on proletarianization they argued that in a period of economic stagnation such as occurred in the 1970s there should be an acceleration of the process of proletarianization and a decline in the expansion of managerial and semiautonomous employee or expert locations in the class structure these changes should occur both because of an intensification of proletarianization within economic sectors and because of decline in the shift of employment into the relatively less proletarianized sectors such as the state on the basis of the data used in this study none of these predictions is supported indeed the evidence indicates a decisive acceleration of the growth of managerial class locations in the 1970s and a clear deproletarianization within and across economic sectors these findings are interpreted as a result of two principal factors t

thirty years of currency crises in argentina external shocks or domestic fragility participation has been quite volatile in the early 1800s in the midst of the lending boom fueled by the end of the napoleonic wars argentina and many other countries in latin america were able to issue bonds in london to finance their wars of independence and the civil wars that followed this lending boom ended in the summer of 1825 when the bank of england raised the discount rate to stop the drain in its reserves the tightening of liquidity was followed by stock market crashes banking problems and recessions in england and on the continent within months the crisis also spread to latin america argentina defaulted in 1827 in the midst of what is known as the first latin american debt crisis only resuming payments in 1857 similar international capital flow booms to emerging markets occurred in 1867 72 1880 90 1893 1913 and 1920 29 fueled by an easing monetary stance in the financial centers of those times and by the financial needs of railway expansion urbanization and development of the banking sector of countries in the periphery while argentina was heavily involved in all these capital flow bonanzas its participation was quite volatile with financial crises often following booms 1