the highs and lows of the minimum wage effect a time series cross section study of the canadian law we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low frequency variation in the data at high frequencies the elasticity is positive and insignificant the difference in the elasticity across the bandwidth has implications for the interpretation of employment dynamics as a result of minimum wage policy and experimental design in minimum wage studies it also provides a simple reconciliation of the new minimum wage research which reports very small negative or positive elasticities

price pass through and the minimum wage this paper tests a textbook consequence of competitive markets that an industry wide increase in the price of labor is passed on to consumers through an increase in prices using several data sources on restaurant prices i explore the price impact of minimum wage hikes in canada and the united states particular attention is paid to the timing of these price responses to gauge the stickiness of minimum wage cost shocks i find that restaurant prices generally rise with changes in the wage bill and that this response is concentrated in the quarter surrounding the month during which the legislation is enacted

u s presidential elections 1968 80 a spatial analysis a methodology is presented for empirical estimation of spatial models of voting in mass elections the basic choice model posits utility functions that depend on spatial distance and a random error term the parameters of the utility functions are estimated by a polytomous logit model which is applied to spatial maps of voters and candidates for all presidential elections since 1968 these maps indicate that presidential candidates take positions at the periphery of the distribution of voters results based on these maps support the hypothesis of sincere spatial voting in two candidate elections in three candidate elections the coefficients of the voter utility function adjust to proxy for the lesser viability of the minor party candidate in contrast to choice turnout shows only weak spatial effects the data are inconsistent with the proposition that turnout is low because voters are not offered distinct alternatives while the utility function used by voters appears stable through time and candidate and voter positions appear stable in the last few months prior to an election voter and candidate positions exhibit substantial change over longer time periods

the minimum wage restaurant prices and labor market structure using store level and aggregated consumer price index data we show that restaurant prices rise in response to minimum wage increases under several sources of identifying variation we introduce a general model of employment determination that implies minimum wage hikes cause prices to rise in competitive labor markets but potentially fall in monopsonistic environments furthermore the model implies employment and prices are always negatively related therefore our empirical results provide evidence against the importance of monopsony power for understanding small observed employment responses to minimum wage changes our estimated price responses challenge other explanations of the small employment response too

who pays for the minimum wage this paper analyzes the eects of a large 60 and persistent increase in the minimum wage instituted in hungary in 2001 we propose a new approach to estimating the employment eects of a minimum wage increase that exploits information on the distribution of wages before and after the policy change we infer the number of jobs destroyed by comparing the number of pre reform jobs below the new minimum wage to the excess number of jobs paying at and above the new minimum wage our estimates imply that the higher minimum wage had at most a small negative eect on employment and so the main eect was pushing up wages we then use data on a large panel of firms to evaluate the economic incidence of the minimum wage increase contrary to theoretical models that attribute the small employment eects of minimum wage changes to monopsonistic wage setting we find no evidence that the rise in the minimum wage led to lower profitability among low wage employers instead we find that the costs of the minimum wage were largely passed through to consumers

minimum wage effects on labor market outcomes under search matching and endogenous contact rates building upon a continuous time model of search with nash bargaining in a stationary environment we analyze the effect of changes in minimum wages on labor market outcomes and welfare although minimum wage increases may or may not lead to increases in unemployment in our model they can be welfare improving to labor market participants on both the supply and demand sides of the labor market we discuss identification of the model using current population survey data on accepted wages and unemployment durations and show that by incorporating a limited amount of information from the demand side of the market it is possible to obtain credible and precise estimates of all primitive parameters we show that the optimal minimum wage in 1996 depends critically on whether or not contact rates can be considered to be exogenous and we note that the limited variation in minimum wages makes testing this assumption problematic

the banzhaf fallacy according to a frequently published argument which i will label the banzhaf argument there is an intrinsic large state advantage in presidential elections proportional to the square root of the relative size of the state if the argument were empirically meaningful as its proponents have always implied and usually asserted then a voter in california would enjoy about twice the voting power of a voter in virginia reflecting the roughly fourfold ratio in population this advantage moreover is presented as an intrinsic mathematical property of the electoral college scheme not something deduced from demography voting patterns or some other appeal to empirical observations the earliest versions of the argument are banzhaf 1968 and riker and shapley 1968 subsequent variants of the argument can be found among other places in brams and davis 1974 owen 1975 and lake 1979 with the obvious exception of arrow s impossibility theorem there cannot be many mathematical arguments more often cited by nonmathematical political scientists however when mathematical analysis produces a counterintuitive result it is prudent to allow for the possibility that what needs to be corrected is the mathematics brian barry has made this point in a recent discussion of indices of voting power barry 1980 as it happens the particular voting power index we are considering here provides a very striking illustration of barry s message a preliminary point of the discussion that follows is that the banzhaf argument depends on a treatment of elections for purpose of calculating a power index as if they were like experiments in coin tossing each voter tossing a coin to decide whether to vote democratic or republican of itself the unrealism of the coin tossing model does not make the banzhaf result a fallacy because all models use some more or less unrealistic simplifying assumptions even in the natural sciences and even extremely artificial assumptions occasionally produce adequate approximations of real situations

models of energy use putty putty versus putty clay energy use is inelastic in time series data but elastic in international cross section data two models of energy use reproduce these elasticities a putty putty model with adjustment costs developed by pindyck and rotemberg 1983 and a putty clay model in the pindyck rotemberg model capital and energy are highly complementary in both the short run and the long run in the putty clay model capital and energy are complementary in the short run but substitutable in the long run we highlight the differences in the cross section implications of the models by considering the effect of an energy tax on output in both models in the putty putty model an energy tax that doubles the price of energy leads to a fall in output in the long run of 33 in contrast the same tax in the putty clay model leads to a fall in output of only 5 3

industry dynamics and the minimum wage a putty clay approach we document two new findings about the industry level response to minimum wage hikes first restaurant exit and entry both rise following a hike second there is no change in employment among continuing restaurants we develop a model of industry dynamics based on putty clay technology that is consistent with these findings in the model continuing restaurants cannot change employment and thus industry level adjustment occurs gradually through exit of labor intensive restaurants and entry of capital intensive restaurants interestingly the putty clay model matches the small estimated short run disemployment effect of the minimum wage found in other studies but produces a larger long run disemployment effect

wage shocks and the technological substitution of low wage jobs we extend the task based empirical framework used in the job polarization literature to analyze the susceptibility of low wage employment to technological substitution we nd that increases in the cost of low wage labor via minimum wage hikes lead to relative employment declines at cognitively routine occupations but not manuallyroutine or non routine low wage occupations this suggests that low wage routine cognitive tasks are susceptible to technological substitution while the short run em

the power of the states in u s presidential elections the electoral college is a uniquely american political institution yet its impact on both the power of the american states and the relative power of citizens living in different states is not well understood game theorists have broached the state power problem exclusively in terms of the size of each of the states empirical investigators have been less systematic basing their analyses solely on which states have been close in a single election in this paper we present a model of state power which combines the idea of the pivotal player from game theory with an empirical model of state voting in doing so we provide a theoretically derived and empirically meaningful assessment of state power in presidential elections we then trace the implications of the power of the states for the relative power of individual voters finding large disparities between voters from different states

proportional versus winner take all electoral vote allocations this paper considers how the welfare of voters is affected under an electoral college system when some state elects to award electoral votes in proportion to the number of votes received by each candidate rather than awarding all electoral votes to the winner of the state i show that a majority of voters in that state is made worse off as a result of the change i also give conditions under which voters in other states are made better or worse off as a result of the change

legislative bargaining under weighted voting organizations often distribute resources through weighted voting we analyze this setting using a non cooperative bargaining game based on the baron ferejohn 1989 model unlike analyses derived from cooperative game theory we find that each voter s expected payoff is proportional to her voting weight an exception occurs when many high weight voters exist as low weight voters may expect disproportionately high payoffs due to proposal power the model also predicts that ex post the coalition formateur the party chosen to form a coalition will receive a disproportionately high payoff using data from coalition governments from 1946 to 2001 we find strong evidence ofsuch formateur effects

the banzhaf index in representative systems with multiple political parties abstract the proposed modification of the banzhaf index is used to evaluate voter power in representative multiple party i e more than two systems the modified index shows that a voter s ability to affect the outcome of legislative decisions increases asymptotically as the inverse of the square root of the district s population the square root effect thus holds even in cases involving more than two parties journal of economic literature classification numbers c71 d72

effects of the minimum wage on employment dynamics the voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment we argue that the minimum wage will impact employment over time through changes in growth rather than an immediate drop in relative employment levels we show that commonly used specifications in this literature especially those that include state specific time trends will not accurately capture these effects using three separate state panels of administrative employment data we find that the minimum wage reduces job growth over a period of several years this finding is supported using several empirical specifications

pivotal states in the electoral college 1880 to 2004 this paper presents an empirical measure of pivoting in the electoral college from 1880 to 2004 the measure derives from established theoretical concepts of power and pivoting first introduced by shapley and shubik am political sci rev 84 787 792 1954 pivotal states identified by this approach generally conform to popular interpretations ohio in 2004 florida in 2000 and so forth but historically pivotal states are also frequently small or medium sized states also pivotal states by this approach are not necessarily competitive states in general whether or not a state is pivotal is mainly a function of its size and bellwether tendency i e its tendency to mirror the national voting trend a state s pivot position is also an excellent predictor of how presidential candidates allocated time and money across states in the general elections of 2000 and 2004 controlling for a state s pivot position size and electoral competitiveness have little effect on the allocation of campaign resources

the spending and debt response to minimum wage hikes abstract immediately following a minimum wage hike household income rises on average by about 250 per quarter and spending by roughly 700 per quarter for households with minimum wage workers most of the spending response is caused by a small number of households who purchase vehicles furthermore we find that the high spending levels are financed through increases in collateralized debt our results are consistent with a model where households can borrow against durables and face costs of adjusting their durables stock jel d12 d14 d91 j38

putty clay technology and stock market volatility abstract firms first order conditions imply that stock returns equal investment returns from the production technology much applied work uses the adjustment cost technology which implies that the realized return is high when the investment capital ratio is high this paper derives for an arbitrary stochastic discount factor the investment return implied by the putty clay technology the combination of capital heterogeneity and irreversibility creates a novel channel for return volatility the investment return is high when the ratio of investment to gross job creation is low empirically the putty clay feature helps account for u s stock market data

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

the un predictability of primaries with many candidates simulation evidence it is common to describe the dynamic processes that generateoutcomes in u s primaries as unstable or unpredictable in fact the way we choose candidates may amount to alottery this paper uses a simulation approach assuming10 000 voters who vote according to a naive deterministicproximity rule but who choose party affiliationprobabilistically the voters of each party then must choose between twosets of ten randomly chosen candidates in closed primaries finally the winners of the two nominations compete in thegeneral election in which independent voters also participate the key result of the simulations reported here isthe complete unpredictability of the outcomes of a sequence ofprimaries the winner of the primary or the party s nominee varied as much as two standard deviations from the medianpartisan voter the reason is that the median or any othermeasure of the center of the distribution of voters isof little value in predicting the outcome of multicandidateelections these results suggest that who runs may havemore to do with who wins than any other consideration if more than two parties or candidates are expected then thevote maximizing position is not close to your opponents butwell away from them tullock 1967 55

the impact of minimum wages on labour market transitions we investigate dierences in labour market transition rates in high versus low minimum wage regimes using canadian data spanning 1979 to 2008 the data include consistent questions on job tenure and reason for job separation for the whole period over the same time frame there were over 140 minimum wage changes in canada we nd that higher minimum wages are associated with lower hiring rates but also with lower job separation rates importantly the reduced separation rates are due mainly to reductions in layos occur in the rst 6 months of a job and are present for unskilled workers of all ages our estimates imply that a 10 increase in the minimum wage generates a 3 9 reduction in the layo rate we present a search and matching model that ts with these patterns and test its implications overall our results imply

minimum wage shocks employment flows and labor market frictions we provide the first estimates of the effects of minimum wages on employment flows in the u s labor market identifying the impact using policy discontinuities at state borders we find that minimum wages have a sizable negative effect on employment flows but not stocks separations and accessions fall among affected workers we interpret our findings using a job ladder model in which minimum wage increases can reduce job to job transitions we find that a standard calibration of the model generates predicted relative magnitudes of the employment stock and flow elasticities that are very close to our reduced form estimates