trade taxes and debt repayment in sri lanka the purpose of this article is to estimate the cost of taxing the export import or domestic sectors of sri lanka for the purpose of reducing the national debt a simple gnp model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing the results show that a tax on the import sector generates the largest net savings on trade balance and that the savings from not importing can be substantial however for the period 1977 87 a 10 0 per cent tax on the import sector caused a decline in the growth of the economy by 3 0 per cent the burden of the tax falls heavily on the domestic sector in terms of lost production and increased unemployment

wider share ownership and economic performance in the uk today almost one in every five adults directly own shares on the stock market compared with a figure of 5 as recently as 1983 this has been a remarkable change engineered by the conservative administration the government have argued that the policy is aimed at creating an enterprise culture nothing less than a fundamental change in attitudes to wealth creation in the economy while we would not disagree with this laudible objective it is clearly difficult to assess both in terms of attainment and consequences one would be happier if the justification for the policy could be grounded in more direct economic terms and the purpose of this paper is to attempt to provide an analysis of some economic aspects of wider share ownership as a policy objective we will attempt to provide a general theoretical analysis although this will inevitably be biased towards aspects of relevance to the uk experience

designing monetary policy when unemployment persists this paper investigates how unemployment persistence affects the optimal delegation of monetary policy to an independent central banker cb two opposing forces are shown to be at work with more persistence the government s incentive to stabilize the economy is greater but if the cb is forward looking its incentive to create inflation surprises is also greater we show that owing to the second effect the government may wish not to delegate at all unlike the case where there is no persistence in the event that the government does delegate the paper identifies conditions under which either effect dominates in the government s choice of conservatism of the cb we compare delegation to discretion and precommitment using a diagrammatic approach that may be of independent interest we also present some preliminary empirical evidence on the cross country relationship between unemployment persistence and inflation that appears consistent with the model s predictions

wage determination in the uk this paper offers a sysnthesis of a number of important complementary theories of wage determination the model is estimated and tested with respect to its long run and dynamic properties applying johansen s 1998 fiml estimation procedure the maximum eigenvalue and the trace tests suggested two cointegrating vectors and estimated and another the underlying theoritical model we combined both vectors and estimated in a second step an error correction model which was satisfactory with regard to its in sample and out of sample performance none of the assumptions for ols estimation were violated and the recursive estimation revealed model stability additionally the forecasting ability of the model was satisfactory the main feauture of this model is that conflict elements are of parmount in the uk wage determination

union wage setting and unemployment in the netherlands 1965 1987 this paper presents an empirical model of union wage setting and employment the stackelberg equilibrium unemployment rate is shown to be a function of taxes the replacement ratio the gap between consumer and producer prices productivity effects and the rate of long term unemployment the model is estimated with aggregate data from the private sector in the netherlands 1965 1987 the results suggest that the equilibrium unemployment rate is pushed upwards by taxes the replacement ratio and by the gap between consumer and producer prices and is reduced by productivity effects insider outsider effects appear insignificant

employee bargaining power inter firm competition and equity based compensation abstract we develop a model to illustrate that equity based compensation for non executive employees and product market decisions are related when the product market is competitive and employees have low bargaining power the unique equilibrium is for each firm s owners to offer equity based compensation to their employees in this setting equity based compensation leads to a lower wage rate which makes each firm more competitive with its rival however this unique equilibrium is a prisoner s dilemma for the firms original owners our results are consistent with several empirical regularities and provide predictions on when firms will offer equity based compensation to their employees

do immigrants affect firm specific wages we propose and test a novel effect of immigration on wages existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market we argue that if labour markets are not fully competitive immigrants might also affect wage formation at the most disaggregate level the workplace using linked employer employee data we find that an increased use of low skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables

unions power collective bargaining and optimal monetary policy we study ramsey policies and optimal monetary policy rules in a model with sticky prices and unionized labour markets collective wage bargaining and unions monopoly power dampen wage uctuations and amplify employment uctuations relatively to a dnk model the optimal

wage determiniation in the uk further empirical results using conintegraion the present paper examines the long run behaviour of two types of wage models for the uk over the preiod 1996 1 1989 2 these models differing in their theoretical construction are estimated and explored using various tests for cointegration the hall 1986 1989 model is based on saragan s 1964 wage specification while the arestis and skott 1993 and arestis and biefang frisancho mariscal 1993 model is concerned with distributional and wage efficeincy theortical effects both models exhibit at least one economically sensible long run relationship for wage determination with significant and correctly signed parameters and show expected proportionality between wages and productivity further the arestis and skott 1993 model shows the effects of effciency wage elements on effort

challenges facing natural rate theory abstract this paper attempts to test the natural rate hypothesis by looking at historical unemployment data for france the uk and the us we find that the unemployment series can be described as stationary around an infrequently changing mean moreover that the speed of convergence towards mean unemployment is slower when unemployment is high and differs across the three countries the two european countries having more persistence we do not find any evidence that the persistence of a change in unemployment is a function of the size of the change we conclude that the data are consistent with multiple equilibria models where large shocks bring the economy from one equilibrium to another and also with models with a moving natural rate

do turnover costs protect insiders the ability of insiders to extract rents associated with exogenous turnover costs is addressed in a dynamic model the higher these rents the higher is the incentives for outsiders to obtain future insider status and thus to underbid current insiders as a consequence there is a lower limit to the number of insiders that can avoid entrance of outsiders and the insiders cannot in each period obtain a rent equal to the turnover costs the insider model never explains a lower but may result in a higher employment level than in the case where all workers are wage takers copyright 1994 by royal economic society

habitual entrepreneurs in the making how labour market rigidity and employment affects entrepreneurial re entry we investigate the impact of country level labour market regulations on the re entry decision of experienced entrepreneurs whereby they become habitual entrepreneurs multilevel logit models on entry decisions among 15 709 individuals in 29 european countries show that labour market regulations have a positive influence on the decision to re enter into entrepreneurship this positive impact is stronger among individuals holding wage jobs at the time of re entry compared to those that do not our results indicate that novice and habitual entrepreneurs may respond very differently to labour market rigidity we discuss and provide tentative explanations for these differences and outline potential policy implications

labor market integration in urban ethiopia 1994 2004 abstractan analysis of panel data on individuals in a random selection of urban households in ethiopia reveals large sustained and unexplained earnings gaps between public and private and formal and informal sectors over 1994 2004 at the same time we find first that the rate of mobility increased in the two pairs of sectors sample transitions rates grew across survey waves while state dependence in sector choice decreased second the correlation between sector choice and earnings gaps increased over the same period in particular the correlation between comparative earnings and selection into the informal sector was high throughout the survey decade and increased in magnitude over the second half of the period these results suggest that ethiopia s urban labor markets might be integrating

reform support in times of crisis the role of family ties we argue that an important determinant of voters support for economic reform is the strength of family ties while the crisis hypothesis predicts that crises facilitate reform we show in a political economy model that this relation can break down and even reverse when agents take into account the effect of reform on their family members applied to southern european countries with strong family ties the model rationalizes why the extremely high youth unemployment following the great recession has not led to more substantial labor market reforms in such countries austerity might block rather than foster additional structural reforms

insider power unemployment dynamics and multiple inflation equilibria this paper incorporates employment dynamics due to insider power into the barro gordon theory of inflation unlike in the static barro gordon case and even though our infinitehorizon model is linear quadratic there can be two markov perfect equilibria so that the same unemployment may correspond to either low or high inflation both equilibrium inflation rates measured per unit of the gap between the insiders and government s employment targets are higher than the corresponding rate in the static case the low inflation equilibrium has intuitive comparative statics properties in that inflation is increasing in insider power and the discount factor but the high inflation equilibrium behaves in the opposite way the highinflation equilibrium can be eliminated by a future precommitment to a fixed inflation regime e g erm but only if this precommitment can be made with certainty contrary to the static model inflation may be lower when the union puts a positive weight on a wage target than when it cares only about employment even when this wage target is consistent with a lower employment level than the employment target

the macroeconomics of specificity specific quasi rents arise in a variety of economic relationships and are exposed to opportunism unless fully protected by contract rent appropriation has important macroeconomic consequences resources are underutilized factor markets are segmented production suffers from technological sclerosis job creation and destruction are unbalanced recessions are excessively sharp and expansions run into bottlenecks while depending on the shock expansions may require reinforcement or stabilization recessions should typically be softened in the long run institutions may evolve to alleviate the problem by balancing appropriation technology choice will also be affected with the appropriated factor partially excluding the other from production to reduce appropriation

monetary policy cooperation and multiple equilibria abstract we consider international monetary policy regimes in a world of two identical economies characterized by unemployment persistence in the non cooperative regime markov perfect nash equilibrium policies are generally not unique furthermore policies may be asymmetric in this otherwise symmetric model monetary policy cooperation also exhibits multiple equilibria but these are fewer and always symmetric cooperation may be counterproductive or beneficial for either country depending upon the initial non cooperative and resulting cooperative outcome

price responsiveness efficiency and the impact of structural adjustment on egyptian crop producers abstract this paper examines the role of prices and the impact of the structural adjustment reforms undertaken by the government of egypt in 1986 on the producers of five major crops the results indicate that the program had a positive net impact on the welfare of individual crop producers evaluated as a gain in production efficiency crop profitability was also found to be highly responsive to input and output prices the results highlight the importance of market based prices in agricultural development

the laissez faire approach to international labor migration the case of the arab middle east the weaknesses of laissez faire theories and policies on international labor migration are examined by reviewing contemporary labor migration in the middle east estimates of the number of arab migrant workers in the arab region in 1975 are presented and three types of problems that labor migration creates for sending countries are identified 1 uncertainty for both economic and political reasons about the continuation or expansion of the current flows 2 micro effects of remittance spending and labor migration and 3 the selectivity of migration and its impact on certain key sectors it is argued that although individual migrants and employers benefit from laissez faire migration policies the impacts on sending societies as a whole are ambiguous excerpt

some dynamic aspects of food standards food standards have existed since the beginning of trade and exchange but have increased and expanded in recent years affecting global and local value chains this has triggered vigorous debates on the impacts on trade and development standards may simultaneously enhance economic efficiency and redistribute rents complicating policy analysis and implying that the economics and the politics of standards are often hard to separate while substantial research has contributed important insights dynamic aspects of standards have not received much attention i present a framework to illustrate some dynamic economic and political aspects of standards in closed and open economies this framework integrates changes over time in preferences implementation costs and protectionist pressures as determinants of standards and suggests explanations for persistent differences in food standards across countries hysteresis in standards can persist due to protectionist motives even if the initial standards were not introduced for protectionist reasons i use some historical cases to document both the persistence and adjustment of standards over time and with international integration

estimating farm level input demand and wheat supply in the indian punjab using a translog profit function application of the translog profit function to farm level data from punjab india allowed a more disaggregated analysis of the farm production structure compared to the case of cobb douglas formulation the flexibility afforded by translog formulation permitted measurement of the different impacts that exogenous variables have within and across input demand and output supply functions policy relevant elasticity estimates with respect to variable inputs and output prices fixed inputs a few soil related state of nature variables measured by soil analysis and education which are usually considered constraints to farm production were obtained and two examples of policy applications were developed

the nature of occupational unemployment rates in the united states hysteresis or structural this article provides new evidence on the nature of occupational differences in unemployment dynamics which is relevant for the debate between the structural or hysteresis hypotheses we develop a procedure that permits us to test for the presence of a structural break at unknown date our approach allows the investigation of a broader range of persistence than the 0 1 paradigm about the order of integration usually implemented for testing the hypothesis of hysteresis in occupational unemployment in almost all occupations we find support for both the structuralist and the hysteresis hypotheses but stress the importance of estimating the degree of persistence of seasonal shocks along with the degree of long run persistence on raw data without applying seasonal filters indeed hysteresis appears to be underestimated when data are initially adjusted using traditional seasonal filters

insiders and outsiders in wage determination a firm starts with a group of insiders or seasoned workers there is also a large pool of outsiders who are initially less productive but are transformed into insiders after one period of employment the firm gains from having a large pool of insiders some of whom may be laid off in bad years insiders gain from keeping their numbers small if the insiders set their wage unilaterally they will choose a path that in this extreme case prevents employment of outsiders even if future employment prospects are good if the wage path is set by bilateral bargaining the extra advantage to the firm permits employment of some outsiders in some situations

competition and the capital labor conflict abstract this paper analyzes the distributional effects of changes in the intensity of product market competition the focus is on the interaction between imperfect competition in product markets and bargaining in the labor market the main result is that while a uniform intensification of product market competition increases employment it may cause real wages to fall in the short run as well as in the long run this is especially likely if labor market regulations are favorable to workers therefore product market and labor market regulations tend to reinforce each other politically and compensatory fiscal transfers may be needed in order to enact employment enhancing deregulation policies

unions in a frictional labor market abstract a labor market with search and matching frictions where wage setting is controlled by a monopoly union that follows a norm of wage solidarity is found vulnerable to substantial distortions associated with holdup with full commitment to future wages the union achieves efficient hiring in the long run but hikes up wages in the short run to appropriate rents from firms without commitment in a markov perfect equilibrium hiring is too low both in the short and the long run the quantitative impact is demonstrated in an extended model with partial union coverage and multiperiod union contracting

the role of employer employee interactions in labor market cycles evidence from the self employed self employed workers are less likely to be affected by implicit contracts efficiency wages and other forces that mute wage cyclicality and exacerbate employment cyclicality this observation motivates our comparison of the cyclical experience of the self employed with wage and salary workers who clearly have an employer we find negligible or small differences in annual hours cyclicality between the two groups but hourly wages and annual earnings are much more cyclical for the self employed these results are consistent with efficient contracting models where employers smooth workers income without causing inefficiencies in hours of work

interindustry wage differentials and efficiency wages some canadian evidence using the 1986 labour market activity survey as their major source of data the authors estimate interindustry wage differentials in canada at the one and two digit levels of industry aggregation for various types of workers the major findings are that substantial interindustry wage differentials exist and are relatively stable over time that the pattern of interindustry wage differentials is very similar for different kinds of workers and that these differentials cannot be explained easily by compensating factors the differentials seem to be consistent with the rent sharing explanations of the labor market such as those based on the notion of efficiency wages

the clash of central bankers with labour market insiders and the persistence of inflation and unemployment this paper analyses the implications of monetary policy for the dynamic behaviour of inflation in a natural rate model characterized by endogenous unemployment persistence we present evidence for the main industrial economies that suggests that inflation displays persistence which is of the same order of magnitude as the persistence of deviations of unemployment from its natural rate we provide a theoretical explanation of this fact based on a model of the dynamic interactions between central bankers and labour market insiders the clash in the objectives of central bankers and labour market insiders is what causes both inflation and unemployment to display the same persistence in this model the analysis suggests that inflation persistence could be addressed in a welfare improving way if central banks adopted monetary policy rules that targeted unanticipated changes in unemployment rates instead of deviations of unemployment from its natural rate

food price changes and household welfare what do we learn from two different approaches the use of a marginal approach can significantly distort the predicted effects of large price variations on monetary welfare over the medium to longer term this paper aims at shedding some light

pathways of representation a causal analysis of public opinion policy linkages theory altemative theories of the linkage process between mass policy preferences and public policies are tested empirically hypotheses opinion policy linkage may arise because mass preferences drive the policy process elite preferences drive the process or because of a shared preferences reciprocal influence process policy linkage may also be facilitated by higher voter mobilization and party competition methods a multiple equation model of the opinion policy process in the united states is tested with two stage least squares regression results the state policy process is best explained by an opinion sharing reciprocal influence model shared partisanship party competition and voter mobilization enhance the linkage process in theoretically anticipated ways

seniority rules and productivity an empirical test the primary purpose of this paper is to test empirically the effect of labor quality on short run manufacturing productivity in doing so the study makes major advances in two areas for the first time a job tenure function is estimated and a time series of job tenure in manufacturing is developed this estimated tenure series empirically verifies the use of seniority rules in the firm worker employment relationship having generated a tenure series the authors then test whether tenure enhances productivity in manufacturing the results clearly indicate that seniority rules have a statistically significant positive impact on productivity and the pattern of the seniority rules is reminiscent of a model where human capital has a specific component copyright 1989 by the london school of economics and political science

wage setting and unemployment persistence in europe japan and the usa the persistence of high unemployment in the main european economies is one of the most puzzling economic developments of the past fifteen years average japanese unemployment has risen slightly since the mid seventies whereas unemployment in the united states still exhibits cyclical fluctuations around a gently rising level in marked contrast average unemployment in france germany and the united kingdom rose to a higher plateau during the latter part of the seventies shot up again in the early eighties and has remained persistently high identification of the causes of such unemployment persistence is crucial before one makes policy recommendations three possible causes spring to mind first persistence in the determinants of equilibrium and disequilibrium unemployment second excessive power of insiders in wage setting combined with high correlation between employment status and insider status and finally a high degree of state dependence sluggishness in labour demand although in general one expects all three causes to have played a role in the persistence of high european unemployment there is still a need to identify their relative importance the first set of factors has been assessed empirically in recent papers by among others sachs 1983 bruno and sachs 19x5 bruno 1986 layard and nickel1 1985 bean layard and nickel1 1986 newell and symons 1985 and others many of these papers have also allowed for sluggishness in labour demand although they did not particularly focus on it the second set of factors has been investigated by blanchard and summers 1986 who concluded that there is evidence of much higher correlation between employment status and insider status in the three largest european economies than in the united states

rice technology farmer rationality and agricultural policy in egypt estimates of a homothetic translog cost function show that egyptian rice farmers are economically rational and responsive to input price changes own price and cross price elasticities of input demand based on the cost function estimates provide insight into policies currently being pursued or considered by the egyptian government the analysis indicates a reduction in fertilizer trade restrictions could substantially reduce fertilizer prices and increase fertilizer use labor and mechanical power are not strong substitutes indicating that subsidization of machinery is not an appropriate policy to reduce agricultural labor shortages

theoretical foundations for sticky wages abstract the paper compares three different types of theoretical explanation of sticky wages they are implicit contracts efficiency wage models and insider outsider models it then reconsiders keynes rationale for sticky wages which focuses on relative wage issues finally the paper considers possible directions for future research

egypt s multiproduct agricultural technology and agricultural policy based on the hypothesis that egyptian farmers maximise economic profits the multiproduct translog profit function is used to estimate input demand and output supply functions for corn rice and cotton crops grown in egypt s nile delta elasticity estimates indicate a generally high degree of price responsiveness the estimates are used to evaluate egyptian agricultural policies concerning labour mechanisation and output prices the results show that egypt s agricultural policies of taxing output and subsidising certain inputs have hada substantial negative impact on agricultural productivity

firm and product specific technical efficiencies in a multiproduct cycle system measures of technical efficiency were estimated using stochastic translog production frontiers for a sample of farmers operating in a rainfed area in india these estimates were farm specific as opposed to being based on deviation from an average sample efficiency in contrast to other studies farm specific efficiency estimates were obtained for farmers growing multiple outputs in which the production levels were interrelated and each product was competing for the farm s inputs the results of the study show that on average sample participants can increase their farm output by about 30 per cent 35 per cent 28 per cent and 32 per cent respectively in the production of rice corn and rice by efficient use of existing inputs rather than by incurring any additional expenditures on inputs the empirical results imply that the potential for increasing farm outputs varies widely across farms

does centralized collective bargaining promote wage restraint the case of israel this study examines whether centralized collective bargaining promoted wage restraint in israel in the period 1968 84 wage determination in israel appears to be highly centralized and the author shows that wage increases under central settlements during the period studied were almost invariably consistent with the goal of preserving competitiveness except in periods when there was consensus among major interest groups that sacrifice was necessary however wage drift tended to render the central federation s exercise of restraint ineffective these results the author concludes support the view that consensus and not the structure of collective bargaining per se is the key to success in corporatist economies

the effect of outsiders on union contracts abstract a recent proposal for incorporating the insider outsider distinction into the static monopoly union model results in implausible comparative static properties this paper presents an alternative formulation that rehabilitates the monopoly union model

the causes of unemployment in finland 1970 82 some further empirical evidence this study presents an aggregate labour market model of the finnish economy the model is consistent with the finnish institutional features wage determination by collective negotiations and the division of the economy into a supply oriented open sector and a demand oriented closed sector estimated labour market model suggests that the rise in the steady state unemployment rate can be accounted for by the following factors the rise in employer s tax rate the rise in the availability of benefits while out of work increased union strength increased labour force participation and import price shocks

inter industry and occupational wage differentials in italy the vast literture on wage determination in the post war era extensively documents the existence of large and persistent wage differentials among industries and workers of comparable skills this paper addresses the issue of wage dispersion in the context of the italian economy the stability over time of industry relative wages confirme previous results obtained for the other countries a wide class of earings equations is estimated using microdata for the italian manufacturing industry the results provide little evidence in support of the view that wage dispersion can be explained by either unmeasured workers charcteristics or by compensating wage differentials conversely the estimated pattern of industry occupation wage differentials is consistent with the existence of rent sharing mechanisms and fairness considerations

common elements of efficiency wage theories what relevance for developing countries conventional labour economics argues that wages are determined by supply and demand and that the typical firm is a wage taker efficiency wage theories state that wages are endogenous to a firm s own optimising behaviour and that the wage rate determines the labour productivity these theories raise questions regarding the effectiveness of expenditure reducing and expenditure switching adjustment policies this article reviews the theoretical and empirical literature on efficiency wages it examines alternative models highlights the emphasis of empirical research towards industrial countries and points out the need for a test based on the major implications of the theory

asymmetry in the effects of monetary and government spending shocks contrasting evidence and implications magda kandil 1 introduction recent research on business cycles has produced evidence that demonstrates the asymmetric effects of monetary shocks on economic variables 1 specifically the effect of expansionary monetary shocks on economic variables may be different from that of contractionary shocks the empirical evidence has stimulated efforts to provide an adequate theoretical explanation to the observed asymmetry sources of asymmetry have varied sharply in the theoretical literature primary explanations may be classified into supply side and demand side sources of asymmetry a strand of the theoretical literature has viewed asymmetry of economic fluctuations to be a supply side phenomenon demand shifts along a kinked supply curve are likely to produce varying effects on the economy as to the explanation of the kinked shape of the supply curve competing models offer explanations in one direction some have explained the asymmetric shape of the supply curve by conditions in the labor market this possibility arises in the context of models that advocate the contractual nominal wage rigidity explanation of business cycles the stipulation of wage contracts may allow for asymmetric wage indexation for example if wages are more responsive to expansionary demand shocks compared to contractionary shocks asymmetric wage indexation is consistent with a kinked supply curve in labor and output markets consequently expansionary demand shocks are likely to move the economy along a steeper supply curve 2 alternatively supply side asymmetry may be attributed to conditions in the p roduct market that differentiate price adjustment in the upward and downward directions faced with menu costs firms may be inclined for more frequent and larger adjustments of prices in the upward compared to the downward direction this possibility also is consistent with a steeper supply curve in the face of positive demand shocks compared to negative shocks 3 another line of the theoretical explanations of asymmetric economic fluctuations has emphasized possible asymmetry on the demand side of the economy conditions in the money and or goods markets may differentiate the response of aggregate demand to positive and negative shocks 4 this possibility differentiates the size of aggregate demand shifts in the face of expansionary and contractionary shocks in the absence of supply side asymmetry demand side asymmetry differentiates the severity of economic fluctuations in the face of positive and negative shocks the primary difference between demand side and supply side explanations concerns the output and inflationary effects in response to asymmetry supply side asymmetry produces a trade off between the asymmetric effects of demand shocks on output and their inflationary effects on wages and or prices the response of output growth is larger in the face of demand contraction compared to expansion concurrently the inflationary effect of demand shifts exceeds the deflationary effect on nominal wage and or price in contrast demand side asymmetry produces a positive correlation between the asymmetric effects of demand shocks on real output growth and nominal wage and price inflation that is larger output contraction relative to expansion correlates with smaller inflation relative to deflation of the nominal wage and price in the face of demand shocks the purpose of this investigation is to contrast asymmetry on the demand and supply sides in the face of two specific demand shocks monetary and government spending shocks demand and or supply conditions may differentiate the expansionary and contractionary effects of monetary and fiscal policies the article s analysis will highlight the specifics of this asymmetry the empirical evidence sheds some light on potential explanations of this asymmetry as follows conditions in the credit market and the behavior of ricardian consumers may differentiate the effects of expansionary and contractionary government spending shocks on aggregate demand

unemployment and macroeconomics this paper discusses some issues in the theory of unemployment proposes a framework for the analysis of unemployment and applies the framework to the analysis of the rise in unemployment in britain after 1979 the framework is based on bilateral monopoly in the labor market and the explanation for the rise in unemployment in britain rests primarily with a demand side shock which caused the rise in 1980 81 and supply side persistence which has kept unemployment up since then copyright 1989 by the london school of economics and political science

profit sharing and european unemployment abstract this paper uses three criteria to evaluate profit sharing as a policy to help improve europe s economic performance a reduction of the real wage b expansion of firms profits and c restraint of the wage demand given an expansionary demand stimulus it is shown that under the alternative market structure of perfect competition monopoly and cournot nash oligopoly real wage tends generally to decline with sharing there also exists a positive share parameter such that firms profits will rise lastly if an expansionary demand policy is adopted the union will tend to demand a smaller wage increase under a share system this paper suggests that profit sharing may possess useful important properties that are relevant to the european problem

the response of wages to protective labor legislation evidence from canada using micro data from the 1986 87 canadian labour market activity survey the author examines the wage effect of laws requiring advance notice of layoffs and in some cases also requiring severance payments to laid off workers the results suggest that incumbent workers protected by advance notice and severance pay laws were able to extract higher wages than were incumbent workers unprotected by such laws there is evidence however that the ultimate wage effect differed by workers union status starting wages of nonunion workers appear to have fallen to offset the subsequent wage increase indicating that nonunion workers may pay for advance notice and severance pay laws whereas union workers who were protected by such laws seem to have been able to exploit their bargaining position to increase their lifetime earnings

profit sharing as a cure for unemployment some doubts abstract in this paper we argue that given that a wage system is preferred to profit sharing in an insider outsider model tax incentives to encourage profit sharing could be dissipated by the use of cosmetic schemes the same may also be true in models in which unions care about employment hence we should be cautious about accepting weitzman s claim that profit sharing will reduce unemployment

an investigation into the power of insiders in wage determination abstract this paper is concerned with the role of insider forces in wage determination various union and non union models of wage behaviour are considered and they imply that wages are a convex combination of internal and external factors certain union models also imply a degree of hysteresis data on fourteen british production industries reveal that i insider forces are important ii their importance is directly related to both union power and the degree of monopoly in the product market iii the state of the aggregate labour market is also important and iv hysteresis effects arising from insider power are only significant in a small minority of sectors

the decision to double crop an application of expected utility theory using stein s theorem a nonlinear single equation acreage allocation model derived from expected utility theory using stein s theorem for covariance decomposition is developed this decomposition allows the covariance of utility parameters and revenues to be expressed in terms of measurable variables the model is applied to state level data to estimate the relative importance of various economic factors in determining the pattern of double cropping wheat and soybeans in the southeastern united states the hypothesis that the riskiness of returns is important in the aggregate is rejected for some of the states although the constrained expected utility model without the effect of risk performs better than a standard wheat acreage response model