competition under consumer loss aversion we address the effect of expectation based consumer loss aversion on firm strategy in imperfect competition consumers are fully informed about match value and price at the moment of purchase however some consumers are initially uninformed about their tastes and form a reference point consisting of an expected match value and price distribution whereas others are perfectly informed all the time we show that if firms have symmetric costs a larger share of informed consumers leads to a more competitive outcome the reverse holds if cost asymmetry in duopoly is sufficiently large

complementary approaches to discursive contestation on the effects of the ipr regime on technology transfer in the face of climate change the effects of intellectual property rights ipr on the transfer of environmentally sound technologies ests has resulted in discursive contestation on the one hand the ipr regime is regarded as a catalyst to ests transfer on the other hand the ipr regime itself is argued to work as a barrier to the transfer of ests to developing countries this contestation moved to another layer of discussion concerning what to do about the current ipr regime and the climate change regime that overlap on the subject matter of technology transfer the ipr as a catalyst approach prefers the ipr regime to remain as the status quo and that the climate change regime construct an enabling environment by lowering the transaction costs of technology transfer and enhancing the regulatory capacity of developing countries on the contrary skeptics of the role of the ipr regime in ests transfer prefer an active utilization of the flexible mechanisms of the ipr regime and more interventionist actions by the climate change regime for effective ipr sharing regarding this bi polar contestation this paper analyzes why and where this discursive contestation occurs based on the economic theories of market failure the benefits and difficulties of remedial institutional approaches to tackle market failures are explored then complementary institutional designs in compatibility with the ipr regime and in response to market failures are explored with exemplary cases under the climate change regime

migration under uncertainty about quality of locations abstract this paper develops a search theoretic framework for analyzing migration decisions of workers who can only observe the quality of a location by migrating to the location after accepting a job there after learning the location quality the worker can stay at the current job search locally at the same location or search for a job at another location leading to repeat migration this paper develops the properties of optimal search migration and repeat migration decisions and finds how revealed location quality influences the tradeoffs between local search and repeat migration the effects of search costs and better job opportunities on the reservation levels of wages and revealed quality levels are also determined

two faces effects of business groups on innovation in emerging economies this paper shows that business groups in emerging economies exert dual effects on innovation while groups facilitate innovation by providing institutional infrastructure groups also discourage innovation by creating entry barriers for nongroup firms and thereby inhibit the proliferation of new ideas this pattern reflects an evolutionary process in which the interplay of the availability of innovation infrastructure and variety of ideas influences the level of innovation in an industry we show that group market share has an inverted u impact on innovation in industrial sectors of both korea and taiwan during the 1981 1995 period institutional differences between korea and taiwan in terms of market structure and industrial policies lead to different innovation thresholds the point at which the marginal costs of increasing group share begin to dominate the marginal benefits in the two countries

a dynamic model of occupational choice abstract a dynamic model of occupational choice is developed where within an occupation the match at the current job may help forecast matches at future jobs an index policy is shown to be optimal each occupation is assigned an index and the occupation with the highest index is sampled when training costs are low and layoff risks are nonnegligible occupations in which job matching information is relatively occupation specific receive higher indices however this result is reversed when training costs are sufficiently high

discrete equilibrium price dispersion an explicit solution of an equilibrium model with price setting firms and searching customers makes possible a number of comparativestatics predictions about how cost differences among firms search costs of customers and taxes will affect the mean and variance of the distribution of market prices another implication of the model is that a firm s demand depends on the difference between its price and the average price in the market

open innovation for sustainability lessons from the greenxchange experience an ictsd policy brief the following policy brief discusses the natural experiment of greenxchange in the context of open innovation open innovation is a phrase popularized by berkeley professor henry chesbrough who argues that firms should externalize r d and other innovative activity for the sake of technological advancement and greenxchange was a web based program allowing for firms to share their intellectual property for the sake of sustainable innovation under the open innovation paradigm our research indicates that the mild success of greenxchange demonstrates a gap between academic ideas and their utilization in practice

the effects of firm optimizing behaviour in matching models this paper considers a matching model of which the search behaviour of jovanovic 1979 and albrecht and jovanovic 1984 are special cases the nature of the generality is that each unemployed worker has more information than firms about his average productivity this results in wage offers falling over the length of an unemployment spell because a long spell is a signal of lower than average productivity the results of the paper are similar to the scarring effect of heckman and borjas 1980 and greenwald 1986 and the discouraged worker effect of schweitzer and smith 1974

job matching and on the job training conventional analysis predicts that workers pay part of their on the job training costs by accepting a lower starting wage and subsequently realize a return to this investment in the form of greater wage growth missing from the conventional treatment of on the job training is a discussion of the process by which heterogeneous workers are matched to jobs requiring varying amounts of training this matching process constitutes a key feature of the on the job training model presented in this article and tested with a unique data set containing extensive information concerning on the job training employer search wages and wage and productivity growth

libertarian paternalism information production and financial decision making we develop a theoretical model to analyze the effects of libertarian paternalism on information production and financial decision making individuals in our model appreciate the information content of the recommendations made by a social planner this affects their incentive to gather information and in turn the speed at which information spreads across market participants via social learning or formal advice channels we characterize situations in which libertarian paternalism improves welfare and contrast them with scenarios in which this policy is suboptimal because of its negative impact on the production and propagation of information the author 2013 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

search intensity job advertising and efficiency this paper demonstrates that if both firms and workers search the other side of the market for job matches the equilibrium rate of unemployment is likely to be too high both sides ignore a positive externality of their search when they establish a job match they remove from the market a job searcher so they save society his search costs i show that there is no feasible wage rate that can internalize this externality under fairly weak restrictions on the technology of search

factor market search and the structure of simple general equilibrium models this paper presents a simple general equilibrium model in which unemployed workers search for jobs and vacant firms search for employees formally i develop a two sector constrained efficient version of the diamond mortensen pissarides matching model of trade coordination this approach to modeling factor market search appears promising since its algebraic development parallels jones s treatment of the two sector model of production and the latter framework underlies most applied general equilibrium analyses some illustrative short run and steady state results are presented concerning the behavior of open and closed economies that exhibit unemployment and vacancies

share green growth regional evaluation of green output performance in china abstract reducing carbon emissions is much more difficult than reducing other pollutants through current technology promoting the efficiency of energy use and developing clean energy are the only two economically feasible approaches for the future however without low carbon technology pursuing green growth could negatively affect production activities in this study we develop a directional distance function ddf model based on the slacks of the output oriented slack based measure along an endogenously determined directional vector we can calculate the efficiency scores by reducing the undesirable output and expanding desirable output simultaneously the global malmquist index is integrated with the ddf model to capture the dynamic change of output performance based on the output performance of green growth we use counterfactual thinking to evaluate gdp losses caused by limiting carbon emissions the empirical study using the provincial data of china shows that technological progress not efficiency change pushes green growth in china we also find that pursuing green growth in china would lead to a gdp loss of 7 8 furthermore a sub regional analysis shows that the eastern regions were almost immune to the strict carbon control policy while the midwestern regions were affected severely to alleviate the gdp loss we offer suggestion on setting up a green growth sharing mechanism among regions

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

concentration and dispersion in global industries remote electronic access and the location of economic activities we explore how the possibility of remote electronic access to markets resources and knowledge enabled by the new information and communication technologies icts might change the motivations of firms to locate activities internationally and in turn affect worldwide dispersion and concentration in an industry preliminary results from an exploratory analysis of the spatial distribution of firms in financial services suggest that the introduction of a business to business b2b trading network increases the global market participation of firms from peripheral countries but does not appear to reduce the importance of locational clusters a set of propositions is derived that provide guidance for more detailed research on the impact of icts on the strategy and structure of global industries

advertising information and product quality the case of butter this study examines the roles of cholesterol information and advertising in explaining consumption trends for fats and oils focusing on butter results suggest increased consumer awareness of the health effects of blood cholesterol has contributed to the secular decline in butter consumption in canada although consumers responses to negative information appear to outweigh their responses to positive information the industry advertising campaign launched in 1978 by the dairy bureau of canada has had a positive effect on butter demand

employer search training and vacancy duration we develop a model of optimal employer search strategy when information about match quality is endogenous the model is tested using four data sets two of which have not previously been used as theory predicts we find that when filling positions requiring more training employers search more intensively and extensively employers also search more extensively when hiring workers with more education and with prior experience these findings provide strong evidence of systematic variation in search strategies based on the characteristics of the positions and job applicants factors that influence employer search also affect the duration of a vacancy

the climate policy hold up green technologies intellectual property rights and the abatement incentives of international agreements the success of global climate policies over the coming decades depends on the diffusion of green technologies this requires that international environmental agreements ieas and trade related intellectual property rights trips interact productively using a simple and tractable model we highlight the strategic reduction in abatement commitments on account of a hold up effect in anticipation of rent extraction by the innovator signatories might abate less than non signatories turning the iea brown self enforcing ieas have fewer signatories and diffusion can reduce global abatement under trips countries hosting patent holders extract rents from trips but may be better off without them

job search with belated information and wage signalling the paper uses multi armed bandit methods to characterize the optimal policy of the job search problem with belated information that is if the non pecuniary aspect of the job is discerned only after the job has been tested for one period there is given a sufficient condition such that the reservation wage property of the optimal search policy remains preserved even if a job searcher believes in a positive resp negative correlation between the wage rate pecuniary aspect and the job quality non pecuniary aspect offered by a firm

on functions quality and timeliness of economic information economic decisions confront more uncertainty as they grow in scope and reach further into the future they are likely to do so increasingly in decentralized economies that expand and diversify the economic incentives to reduce uncertainty and improve predictions and decisions give rise to the demand for large amounts of diverse information this is not a new phenomenon of course but it is revealed more clearly than ever in the present era of great advances in informational technology for now the demand is to a large extent visibly satisfied the knowledge industries or services of inquiring comthe uncertainty about economic information increases with the probability of error in the underlying data and their processing and interpretation many errors cannot be promptly detected and eliminated but can be gradually reduced over time as attested by the revisions in economic statistics this paper presents substantial evidence on the accuracy of provisional estimates of quarterly and monthly changes in 18 important variables measures of several aspects of data quality and of average lags of data release and signal detection are provided for a collection of 110 widely used economic indicators these materials help identify the location of the more serious measurement errors by variables and period and they show that informational lags of 5 and more months are frequent this paper is part of the national bureau of economic research program on economic fluctuations it was presented at the first international symposium on forecasting in quebec city on may 27 1981 and at the ifo institute for economics research in munich on september 23 1981 financial support from the national science foundation and the aid of the graduate school of business of the university of chicago and nber are gratefully acknowledged i am indebted to louis lambros for helpful suggestions and efficient research and to john gould and geoffrey moore for useful comments 1 growth in the modem economy is motivated by the desire to accumulate human and physical resources capital in the most general sense and is accomplished by actions that necessarily have long term consequences the decisions to choose these particular courses of action strategies must therefore be based on similarly long expectations which are fallible as the risk is high so is the premium on any knowledge that might help the decision maker

job queues and wages this paper uses job applications data to investigate the relationship between job queues and wage differentials the main finding is that openings for jobs that pay the minimum wage attract more job applicants than jobs that pay either slightly more or slightly less than the minimum wage this spike in the job application rate distribution suggests that ex ante rents generated for employees by an above market level minimum wage are not completely dissipated by reductions in nonwage benefits in addition we find that highly unionized firms large firms and firms in high wage industries tend to receive relatively many job applicants for openings

the efficiency of search under competition and monopsony this paper compares monopsonistic and competitive search equilibria while the competitive equilibrium is efficient the monopsonistic equilibrium is not there is too much search and the employment rate is too low

equilibrium wage dispersion and interindustry wage differentials this paper develops a search theoretic explanation of interindustry wage differentials given coordination problems in the labor market the probability of filling a vacancy is an increasing function of the wage offered in equilibrium firms that find vacancies more costly will offer higher wages the model thus explains the persistence of interindustry wage differentials and their correlation with industry average capital labor ratio and profitability additionally the model predicts that high wage firms will receive more applications per job opening and that wages in the labor market will behave as strategic complements

appropriability mechanisms and the platform partnership decision evidence from enterprise software we examine whether ownership of intellectual property rights ipr or downstream capabilities is effective in encouraging entry into markets complementary to a proprietary platform by preventing the platform owner from expropriating rents from start ups we study this question in the context of the software industry an environment where evidence of the efficacy of ipr as a mechanism to appropriate the returns from innovation has been mixed entry in our context is measured by an independent software vendor s isv s decision to become certified by a platform owner and produce applications compatible with the platform we find that isvs with a greater stock of formal ipr such as patents and copyrights and those with stronger downstream capabilities as measured by trademarks and consulting services are more likely to join the platform suggesting that these mechanisms are effective in protecting isvs from the threat of expropriation we also find that the effects of ipr on the likelihood of partnership are greater when an isv has weak downstream capabilities or when the threat of imitation is greater such as when the markets served by the isv are growing quickly this paper was accepted by gerard p cachon information systems

a sequential study of migration and job search this paper designs a multiarmed bandit mab sequential model for the analysis of the migration job search process the implications either are compatible with well known migration behavior or when novel are also plausible for example regions with large wage variability attract migrants and regions with large nonpecuniary returns increase both in migration and out migration a major advantage of this approach is the relative ease with which martingale estimators can be derived from the martingale structure of the model these martingale methods are exemplified for the return migration phenomenon

information costs duration of search and turnover theory and applications this paper uses a formal model of search over multiattribute alternatives analyzed in a product market setting to investigate the theoretical foundations of the empirical literature on duration of search and turnover in product markets labor markets and marriage markets a number of specific empirical predictions are also derived in particular whether quality is a search attribute or an experience attribute is related to the cost of search the cost of inspection the price of the good and certain properties of the market distribution of price and quality

what works a meta analysis of recent active labor market program evaluations we summarize the estimates from over 200 recent studies of active labor market programs we classify the estimates by type of program and participant group and distinguish between three different post program time horizons using regression models for the estimated program effect for studies that model the probability of employment and for the sign and significance of the estimated effect for all the studies in our sample we conclude that 1 average impacts are close to zero in the short run but become more positive 2 3 years after completion of the program 2 the time profile of impacts varies by type of program with larger average gains for programs that emphasize human capital accumulation 3 there is systematic heterogeneity across participant groups with larger impacts for females and participants who enter from long term unemployment 4 active labor market programs are more likely to show positive impacts in a recession

evolution of subjective hurricane risk perceptions a bayesian approach abstract how do decision makers weight private and official information sources which are correlated and differ in accuracy and bias this paper studies how traders update subjective risk perceptions after receiving expert opinions using a unique data set from a prediction market the hurricane futures market hfm we derive a theoretical bayesian framework which predicts how traders update the probability of a hurricane making landfall in a certain range of coastline after receiving correlated track forecast information from official and unofficial sources our results suggest that traders behave in a way not inconsistent with bayesian updating but this behavior is based on the perceived quality of the information received official information sources are discounted when a perception of bias and credible alternatives exist

an evaluation of the swedish system of active labour market programmes in the 1990s we investigate the presence of short and long term effects from joining a swedish labor market program vis a vis more intense job search in open unemployment overall the impact of the program system is found to have been mixed joining a program has increased employment rates among participants a result robust to a misclassification problem in the data on the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits exhaustion

wages and job mobility of young workers this paper presents a discrete time version of jovanovic s model of worker firm matching descriptive evidence is presented that supports the notion that unobserved worker firm heterogeneity is an important component in the intertemporal structure of wages for young workers a structural econometric model of wage dynamics under worker firm sorting is developed and estimated finally a formal test of the matching model is carried out and the matching structure on intertemporal covariances of wages is not rejected my results indicate the necessity of jointly considering processes of turnover and wage growth when analyzing the labor market experiences of young workers

social value of public information re examined abstract as an extension of hirshleifer s horse race example into a competitive exchange market framework this paper quantitatively re examines the condition under which social value of public information can be positive for a prototype economy of two risk averse traders we prove that their discordance of beliefs makes the social value of a certain class of inconclusive information either positive or negative depending on whether their endowments are or are not predominantly associated with states they regard as more probable whereas it has been known that information acquisition is always socially wasteful under concordant beliefs

the global configuration of a speculative trading operation an empirical study of foreign exchange trading this paper proposes a theory of firm boundaries based on fore knowledge development and exploitation in speculative or informed trading foreign exchange trading provides this study s empirical context from research on information economics we suggest optimal speculative trading operations are multiunit and globally dispersed alternatively transaction cost economics suggests atomistic actors prevail in the market for fungible commodities like currencies we also develop competing hypotheses about information technology s effects on foreign exchange trading operations speculation arguments predict that the global scope of trading operations will expand after the introduction of generic information technologies transaction cost economics proposes that when atomistic actors do not prevail trading operations will contract after this introduction we test competing predictions with models of the expansion contraction and net change in a firm s global dispersion we estimate these models with data from the population of banks worldwide engaged in interbank foreign exchange currency fx trading from 1974 to 1993 our results uncover two types of firms those that approach the atomistic actor of transaction cost economics and those that resemble the globally dispersed multiunit configuration from our speculation discussion these results encourage reflection on how the theory of the firm differs when firms trade to produce versus speculate

the impact of environmentally friendly innovations on value added while recent literature has focused on explaining the determinants of green innovations it is not well understood how such innovations affect performance to analyse the relationship between green innovation and performance new industry level panel data were exploited these include 12 oecd countries the whole manufacturing sector and a period of 30 years the results show that green inventions are u shape related to performance however the turning point is quite high and hence only relevant for a few industries this indicates that given the current level of green promotion market incentives alone are not sufficient to allow the green invention activities of industries to rise considerably to verify these results and to get a better understanding of the mechanisms in the green market we finally made several interviews with multinational firms that have a good understanding of what happens on the global market of green innovation

what is the value of agricultural economics research the output of agricultural economics research is information much of it aimed at designing or improving institutions bayesian decision theory and economic surplus analysis have been suggested as possible approaches to evaluate that information this article takes a critical look at the strengths and weaknesses of combining those approaches for empirical evaluation of agricultural economics research it presents three case studies utilizing prior and posterior probabilities elicited from key decision makers direct application of the probabilities to a simple set of states and actions is best suited to situations involving a single policy making center or a consensus decision making process most economists feel their work has value but few can say how much economists have made significant contributions to our understanding of the value of technology oriented research but have devoted little attention to assessing the benefits of social science research ssr including agricultural economics research aer as accountability concerns have increased federal and state officials increasingly ask for evidence of research impacts many professional associations in the production sciences have drawn on quantitative estimates provided by economists to bolster their claims that research in their areas is a good investment social sciences make do with anecdotal evidence a nascent literature on evaluating social science research including agricultural economics includes studies by gardner

systematic search belated information and the gittins index abstract this paper uses multi armed bandit methods to characterize the optimal solution of a rather complicated search problem the job search is conducted systematically and there is belated information that is some aspect of the job is discerned only after the job has been tested for one period

extensive search intensive search and hiring costs new evidence on employer hiring activity this paper presents recent evidence on employer search to fill a position a 1982 employer survey sponsored by the national institute of education and the national center for research in vocational education provides the basis for analyzing employer search and hiring costs the paper examines the effects of such factors as employer size dismissal costs unionization on the job training adjustment costs capital and labor market conditions on intensive employer search extensive employer search and hiring costs intensive employer search is measured by the average number of hours the employer spends recruiting screening and interviewing per applicant extensive search is measured by the number of applicants seen per applicant interviewed and the number interviewed per employment

innovation and diffusion of clean green technology can patent commons help abstract this paper explores the characteristics of 238 patents on 90 inventions contributed by major multinational innovators to the eco patent commons which provides royalty free access to third parties to patented innovations on green technologies we compare the pledged patents to other patents in the same technologies or held by the same multinationals to investigate the motives of the contributing firms as well as the potential for such commons to encourage innovation and diffusion of climate change related technologies we find pledged patents to protect environmentally friendly technologies and to be of similar value as the average patent in a pledging firm s patent portfolio but of lower value than other patents in their class our analysis of the impact of the patent commons on diffusion of patented technologies suggests that making patents accessible royalty free did not result in any significant increase in diffusion as measured by citing patents this study therefore indirectly provides evidence on the role of patents in the development and diffusion of green technologies

regional discontinuities and the effectiveness of further training subsidies for low skilled employees the author analyzes the effects of further training subsidies for low skilled employees on individual labor market outcomes in germany using detailed administrative data the author exploits cross

consumer loss aversion product experimentation and tacit collusion abstract two firms compete to attract loss averse consumers that are uncertain about how well the goods on sale fit their needs to resolve valuation uncertainty firms can allow prospective customers to test experiment their products before purchase we investigate firms dynamic incentives to allow experimentation and analyze the resulting effects on the profitability and the stability of tacit collusion depending on the regulatory regime in place i e whether experimentation is forbidden mandated or simply allowed but not imposed laissez faire the degree of loss aversion has ambiguous effects both on the profits that firms can achieve through tacit collusion and on the stability of these agreements while in static environments consumer welfare is always maximized by a policy that forbids experimentation the opposite happens in a dynamic environment

driving effect of technology innovation on energy utilization efficiency in strategic emerging industries abstract under the policy of energy saving and emission reduction technological innovation has become the key power driver to improve energy utilization efficiency by using the panel data of 21 industrial segments between 2000 and 2015 this paper investigates the driving effect of technological innovation on energy utilization efficiency in strategic emerging industries and analyzes the critical factors influencing the driving effect of technological innovation by the stochastic frontier analysis method the empirical result shows that technological innovation between 2000 and 2015 has had a significant positive driving effect on the energy utilization efficiency of strategic emerging industries and exhibits a development trend of year by year steady state growth on the whole the greater the value of the development expenditure of new green products and the investment in environmental pollution treatment the greater the technological efficiency the greater the value of the transformation expenditure of energy saving technology the greater the technological inefficiency finally the paper proposes the countermeasures and suggestions for the driving effect of technological innovation on energy utilization efficiency in strategic emerging industries an empirical study is made to analyze the driving effect of technological innovation on energy utilization efficiency the positive and negative factors of technological innovation are forgotten strategic emerging industries can select optimal innovation behavior to improve quality and efficiency of energy utilization based on the results

matching turnover and unemployment this paper develops the view that workers move into and out of the labor market because of changes in the perceived value of their market opportunities a search model is combined with a matching model to yield movement of workers from job to job and into and out of employment

innovation performance and embeddedness in networks evidence from the ethiopian footwear cluster this study focuses on innovation in a cluster of informal shoemaking firms in ethiopia namely the mercato footwear cluster it examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity and how this heterogeneity affects their innovation performance business interactions with buyers suppliers and other producers are the major channels through which knowledge flows into the cluster these business networks are mainly built on trust and long term relationships and tend to be selective the study reveals that despite homogeneity in social background the firms in the cluster behave and perform differently based on econometric analysis we document a positive and strong effect of local network position and absorptive capacity on innovation performance

why do low educated workers invest less in further training several studies document that low educated workers participate less often in further training than high educated workers this article investigates two possible explanations low educated workers invest less in training because of 1 the lower economic returns to these investments or 2 their lower willingness to participate in training controlling for unobserved heterogeneity we find that the economic returns to training for low educated workers are positive and not significantly different from those for high educated workers however low educated workers are significantly less willing to participate in training we show that this lesser willingness to train is driven by economic preferences and personality traits

active labor market policy evaluations a meta analysis this article presents a meta analysis of recent microeconometric evaluations of active labour market policies we categorise 199 programme impacts from 97 studies conducted between 1995 and 2007 job search assistance programmes yield relatively favourable programme impacts whereas public sector employment programmes are less effective training programmes are associated with positive medium term impacts although in the short term they often appear ineffective we also find that the outcome variable used to measure programme impact matters but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate

testing some predictions of human capital theory new training evidence from britain we confront the predictions of various theories with new training data from the british household panel survey we find that employer financed training is associated with significantly higher wages at current and future firms with a larger impact in future firms this is consistent with human capital theory with credit constraints and with the new training literature assuming imperfectly competitive labor markets

search hiring strategies and labor market intermediaries labor market intermediaries play an important role in turnover in many labor markets this paper analyzes one class of such intermediaries namely search firms we first model the hiring decision of the firm in both succession and replacement planning we show that employers will in equilibrium use search firms to find new hires even where the search firms have no technological advantage in search this can be interpreted as being due to the search firms ability to diversify away sampling risk

on employer specific information and internal labor markets the human capital literature of which becker s 2 paper is the seminal work stresses the productivity enhancing effects of schooling and on the job training later work by spence 21 and others emphasizes the fact that it is difficult for employers to ascertain the productivity of potential employees and suggests that activities such as schooling may provide employers with signals as to workers productivities in the signalling literature it is assumed that information generated concerning an individual s abilities is general in that it is known to all potential employers yet the information that an employer gathers concerning his workers abilities is not likely to be completely transferable to other employers as a consequence as rosen 18 249 points out there are limitations on the ability of the price system to achieve efficient assignments if the price system is incomplete there is a role for entrepreneurial activity of assembling an optimal work force this paper analyzes the employment relations that arise when employers information concerning new workers abilities is incomplete until after a period of employment the acquisition of such employer specific information is shown to lead to what has been referred to in the literature as internal labor markets internal labor markets as identified by dunlop 5 32 are the complex of rules which determine the movement of workers among job classifications within administrative units these movements may be transfers promotions demotions or layoffs to the exterior labor markets doeringer and piore 3 emphasize skill specificity and on the job training as the key factors in the emergence of the internal labor market along similar lines williamson wachter and harris 22 point out that job idiosyncracy can result in employment relations with attributes like those of internal labor markets by way of contrast this paper emphasizes the role of employer specific information in generating internal labor markets the theory provides an explanation as to why employers dismiss current employees at the same time that new employees are hired evidence that dismissal rates are not insignificant is presented in section iv the theory also provides a new rationale for long term em

mobility costs frictional unemployment and efficiency with imperfect job information flows it is plausible that the distribution of job offerings becomes more attractive when there are more vacancies and more unemployed with word of mouth communication this condition is derived given this condition steady state equilibrium is not efficient with welfare increased by the introduction of unemployment compensation even though all agents are risk neutral in this way workers become more selective in the jobs they accept

young workers and quit behaviour a model is set up to explain the quit behaviour of new entrants to the labour market it uses an incentive opportunity approach to integrate existing relevant arguments from search and information theory and human capital analysis it also provides for impetuous quits the model is tested by an examination of a disaggregated data set concerning a single cohort of 16 year old school leavers in the first year after gaining full time work the theory received strong support for example in the main model seven out of the ten coefficients were highly significant interestingly even in a time of deepening recession the existence of the job shopper seemed to be apparent

the impact of an adult education voucher program evidence from a randomized field experiment abstract lifelong learning is often promoted in aging societies but little is known about its returns or governments ability to advance it this paper evaluates the effects of a large scale randomized field experiment issuing vouchers for adult education in switzerland we find no significant average effects of the voucher program on earnings employment and subsequent education 1 year after treatment but effects are heterogeneous low educated individuals are most likely to profit from adult education but least likely to use the voucher in addition the public voucher program appears to crowd out firm financed training the findings cast doubt on the effectiveness of untargeted voucher programs in promoting labor market outcomes through adult education

asymmetries and rigidities in wage adjustments by firms the authors use micro data from a survey of firms to test for labor market rigidities and asymmetries in response to demand shifts they analyze wage and employment adjustments to positive and negative shifts as measured by real sales growth the results show that wage adjustments are fairly small compared with employment adjustments they are also asymmetric with significant adjustments in response to positive shifts but not negative shifts these asymmetries are no more pronounced in large firms manufacturing heavily union or highly skilled industries than in other firms or industries in contrast employment adjustments show no consistent pattern of asymmetry copyright 1993 by mit press