prospects for economics this paper discusses the curent state of economics and ruminates about its future course conjectures are offered about developments in economics research and also about the evolution of the profession the discipline will become increasingly diverse both in its subject matter and in its analytical approaches much of the advance in economics science will come from those fusing theory with data yet there are powerful forces attracting economists away from this central ground and toward the wings of pure theory and pure data analysis copyright 1991 by royal economic society

testing for the long run relationship between nominal interest rates and inflation using cointegration techniques 1989 testing for the long run relationship between nominal interest rates and inflation using cointegration techniques applied economics vol 21 no 4 pp 439 447

automation and labor force participation in advanced economies macro and micro evidence abstract technological advances raise productivity and growth but are also likely to reshape labor markets we examine the impact of automation on aggregate labor force participation rates and individuals attachment to the workforce in advanced economies cross country analysis which leverages the variation in the routinizability of occupations and occupational composition points to significant negative effects of automation on the participation rates of prime age men and women individual level analysis confirms that workers previously employed in routinizable occupations are more likely to drop out of the labor force encouragingly higher spending on active labor market programs and education are however associated with smaller negative effects of technological change on participation

wage and employment growth in america s drug epidemic is all growth created equal the rise in drug overdose deaths in the united states since the turn of the millennium has been extraordinary a popular narrative paints a picture whereby opioid overdoses among white male less educated rural workers have been caused by reduced economic opportunities borne by such people in this article we causally test the validity of this theory by using bartik type variables to explore the relationship between local economic conditions and county opioid overdose death rates we add to the literature by exploring how both employment and wage growth in different types of industries are related to opioid overdose deaths for the population as a whole as well as for rural vs urban male vs female and white vs black populations we find mixed evidence our results confirm that wage and employment growth in industries more likely to employ low skill workers are important protective factors for rural white males however we also find evidence that economic improvements in low skill industries are just as important in protecting blacks and women against opioid overdoses and for workers in metro counties we also find evidence that employment growth in high paying industries has led to increases in opioid overdoes rates

lasting or latent scars swedish evidence on the long term effects of job displacement recently improved swedish register data have made it possible to remedy many weaknesses of previous research on displaced workers using linked employer employee data we identify all workers displaced in 1987 due to an establishment closure and follow them over both a predisplacement period of 4 years and a postdisplacement period stretching until 1999 we find that the displaced workers suffer both earnings losses and worsened labor market position not only during a transitory period of adjustment but also in the longer run these longer run effects seem to be driven by an increased sensitivity to subsequent macroeconomic shocks

the fisher effect and the term structure of interest rates tests of cointegration the literature on the fisher effect has ignored the potential relationship between inflation and long term interest rates using an expectations model of the term structure of interest rates the authors establish the conditions under which innovations in short term inflation will be transmitted to long term as well as short term interest rates cointegration tests find support for both the fisher effect and the expectations theory of the term structure copyright 1993 by mit press

the effect of job displacement on couples fertility decisions this paper analyzes the effects of job displacement on fertility using finnish longitudinal register data we focus on couples where one spouse has lost a job due to a plant closure and follow them for several years before and following the job loss the results show that female job loss decreases fertility for every 100 displaced females there are three fewer children born male job loss has no impact on fertility despite resulting in a stronger decrease in family income than female job loss this indicates that the income effect is not the mechanism through which job displacement influences fertility

does retirement age impact mortality the relationship between retirement and mortality is studied with a unique administrative data set covering the full population of norway a series of retirement policy changes in norway reduced the retirement age for a group of workers but not for others difference in differences estimation based on monthly birth cohorts and treatment group status show that the early retirement programme significantly reduced the retirement age this holds true also when we account for programme substitution for example into the disability pension instrumental variables estimation results show no effect on mortality of retirement age neither do estimation results from a hazard rate model

inflation uncertainty and interest rates is the fisher relation universal this paper tests the validity of the fisher hypothesis which establishes a positive relation between interest rates and expected inflation for the g7 countries and 45 developing economies for this purpose we estimate a version of the garch specification of the hypothesis for all countries included in the sample we also test the augmented fisher relation by including the inflation uncertainty in the equation the simple fisher relation holds in all g7 countries but in only 23 developing countries there is a positive and statistically significant relationship between interest rates and inflation uncertainty for six of the g7 and 18 of the developing countries and this relationship is negative for seven developing countries

the effects of aggregate and gender specific labor demand shocks on child health we estimate the relationship between local labor market opportunities and child health using state unemployment rates and demand induced changes in mothers and fathers employment opportunities in contrast with studies of adult health we find little evidence that aggregate economic conditions are correlated contemporaneously with children s health however we find important patterns by gender in particular improvements in women s employment opportunities are consistently associated with worse child health while better labor market conditions for men have positive effects these patterns suggest that both family income and maternal time are important inputs to child health abstract from author

does the fisher effect apply in australia the fisher hypothesis claims that changes in the expected inflation rate will be fully reflected in nominal interest rates and hence that real interest rates will remain constant over time evidence with australian data from 1965 to 1990 suggests that the fisher effect does not hold in the long run analysis is performed using recently developed econometric techniques which take account of possible nonstationarity in the date attention is also given to the effects of financial market deregulation on interest rates

monitoring job offer decisions punishments exit to work and job quality unemployment insurance systems include the monitoring of unemployed workers and punitive sanctions if job search requirements are violated we analyze the causal effect of sanctions on the ensuing job quality notably on wages and occupational level we use swedish data and estimate duration models dealing with selection on unobservables we also develop a theoretical job search model that monitors job offer rejection versus job search effort the empirical results show that after a sanction the wage rate is lower and individuals move more often to a part time job and a lower occupational level incurring human capital losses

a note on the effect of unemployment on mortality in this note we test if unemployment has an effect on mortality using a large individual level data set of nearly 30 000 individuals in sweden aged 20 64 years followed up for 10 17 years we follow individuals over time that are initially in the same health state but differ with respect to whether they are employed or unemployed controlling also for a number of individual characteristics that may affect the depreciation of health over time unemployment significantly increases the risk of being dead at the end of follow up by nearly 50 from 5 36 to 7 83 in an analysis of cause specific mortality we find that unemployment significantly increases the risk of suicides and the risk of dying from other diseases all diseases except cancer and cardiovascular but has no significant effect on cancer mortality cardiovascular mortality or deaths due to other external causes motor vehicle accidents accidents and homicides

the mortality effects of retirement evidence from social security eligibility at age 62 abstract social security eligibility begins at age 62 and approximately one third of americans immediately claim at that age we examine whether age 62 is associated with a discontinuous change in aggregate mortality a key measure of population health using mortality data that covers the entire u s population and includes exact dates of birth and death we document a robust two percent increase in male mortality immediately after age 62 the change in female mortality is smaller and imprecisely estimated additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes

aggregation and the estimated effects of economic conditions on health this paper considers the relationship between economic conditions and health with a focus on different approaches to geographic aggregation after reviewing the tradeoffs associated with more and less disaggregated analyses i update earlier state level analyses of mortality and infant health and then consider how the estimated effects vary when the analysis is conducted at differing levels of geographic aggregation this analysis reveals that the results are sensitive to the level of geographic aggregation with more disaggregated analyses particularly county level analyses routinely producing estimates that are smaller in magnitude further analyses suggest this is due to spillover effects of economic conditions on health outcomes across counties

the role of economic shocks on health evidence from german reunification sudden economic shocks impact the everyday lives of people from one day to the next a number of studies have examined the association between economic fluctuations and health however no consensus on the nature of this relationship has been established by exploiting the dramatic economic fluctuations following the german reunification of 1990 which included a sudden change from a socialist to a capitalist system in east germany this study examines the association between broad negative economic shocks and health the article finds that increases in state unemployment rates are associated with large and statistically significant declines in health outcomes estimates are stronger for people who became unemployed shortly after reunification for low income individuals and for east germans a group confronted with larger economic fluctuations when examining potential mechanisms that could explain the observed health deteriorations the study finds significant reductions in exercise frequency and increases in economic uncertainty and overall stress

mortality and the business cycle evidence from individual and aggregated data there has been much interest recently in the relationship between economic conditions and mortality with some studies showing that mortality is pro cyclical while others find the opposite some suggest that the aggregation level of analysis e g individual vs regional matters we use both individual and aggregated data on a sample of 20 64 year old swedish men from 1993 to 2007 our results show that the association between the business cycle and mortality does not depend on the level of analysis the sign and magnitude of the parameter estimates are similar at the individual level and the aggregate county level both showing pro cyclical mortality

displacement and immigrant workers responsiveness to regional labour market opportunities evidence from norway roed m and schone p displacement and immigrant workers responsiveness to regional labour market opportunities evidence from norway regional studies this paper answers two main questions first are immigrants more mobile than natives following job displacement the results show that immigrants are indeed more mobile than natives following job displacement however the difference is fully explained by a compositional effect immigrants have much shorter potential work experience in norway than natives second are immigrants more responsive than natives to differences in regional labour market opportunities following job displacement the results show that displaced western immigrants are more responsive to differences in regional labour market opportunities compared with both non western immigrants and natives the greasing effects are limited to immigrants with low mobility costs

income receipt and mortality evidence from swedish public sector employees in this paper we study the short run effect of salary receipt on mortality among swedish public sector employees by exploiting variation in paydays across work places we completely control for mortality patterns related to for example public holidays and other special days or events coinciding with paydays and for general within month and within week mortality patterns we find a dramatic increase in mortality on the day that salaries arrive the increase is especially pronounced for younger workers and for deaths due to activity related causes such as heart conditions and strokes the effect is entirely driven by an increase in mortality among low income individuals who are more likely to experience liquidity constraints all things considered our results suggest that an increase in general economic activity on salary receipt is an important cause of the excess mortality

explaining social policy preferences evidence from the great recession to what extent do personal circumstances as compared to ideological dispositions drive voters preferences on welfare policy addressing this question is difficult because a person s ideological position can be an outcome of material interest rather than an independent source of preferences the article deals with this empirical challenge using an original panel study carried out over four years tracking the labor market experiences and the political attitudes of a national sample of americans before and after the eruption of the financial crisis the analysis shows that the personal experience of economic hardship particularly the loss of a job had a major effect on increasing support for welfare spending this effect was appreciably larger among republicans than among democrats a result that was not simply due to a ceiling effect however the large attitudinal shift was short lived dissipating as individuals employment situations improved the results indicate that the personal experience of an economic shock has a sizable yet overall transient effect on voters social policy preferences

just another niche in the wall how specialization is changing the face of mainstream economics there is considerable discussion on so called mainstream pluralism that is on the co presence of a variety of research programmes in today s mainstream economics that 1 significantly deviate from the neoclassical core 2 are pursued by different often separate communities of researchers and 3 have their origins outside economics the literature tends to regard mainstream pluralism as a transitory state towards a new post neoclassical mainstream this paper advances a new interpretation it suggests that the changing and fragmented state of mainstream economics is likely to persist over time under the impact of specialization as a self reinforcing mechanism and the creation of new specialties and approaches also through collaboration with researchers from other disciplines

unemployment insurance and cigarette smoking abstract we provide evidence for the causal relationship between unemployment insurance ui and individuals smoking behavior using the 1995 2011 current population survey tobacco use supplement data our identification relies on the exploitation of the exogenous variations of the maximum ui weekly benefits across states and over years instead of focusing on all unemployed people we concentrate on those who are eligible for ui benefits we find that when the maximum ui weekly benefit level increases by 100 smoking cessation increases by approximately 2 9 percentage points among the ui eligible unemployed the results are robust to various model specifications we also explore the mechanism and find suggestive evidence that the increase in the maximum ui weekly benefit leads to a decrease in the probability of over work of the respective spouse moreover the unemployed who are less educated are more responsive to the increasing ui benefits

does job loss shorten life this paper examines the impact of job loss on overall and cause specific mortality using linked employer employee data we identified the workers displaced due to all establishment closures in sweden in 1987 and 1988 hence we have extended the case study approach which has dominated the plant closure literature the overall mortality risk among men increased by 44 percent during the first four years following job loss while there was no impact on either female overall mortality or in the longer run for both sexes however there was an about twofold short run increase in suicides and alcohol related mortality

the survival and growth of new establishments in sweden 1987 1995 the aim of the study is to examine the survival of new establishments and to identify factors affecting their survival probability and their employment growth this study uses a unique data set on all new establishments that were created in sweden 1987 and 1988 with the exception of the construction industry the results show among others that i new establishments face a high risk of closing down ii the probability of establishment survival increases with the age and size of the establishment iii variables that are assumed to measure access to resources being a part of a multi unit firm and being new due to merger or dispersal have a positive effect on survival iv the number of employees at the start up year has a negative effect on the employment growth and v demographic and educational factors are important in explaining survival and growth

losing heart the effect of job displacement on health job reallocation is considered a key characteristic of well functioning labor markets as more productive firms grow and less productive ones contract or close despite its potential benefits for t

job loss firm level heterogeneity and mortality evidence from administrative data this paper estimates the effect of job loss on mortality for older male workers with a strong labor force attachment using dutch administrative data we find that job loss due to firm closure increased the probability of death within five years by a sizable 0 60 percentage points importantly this effect is estimated using a model that controls for firm level worker characteristics such as lagged firm level annual average mortality rates on the mechanism driving the effect of job loss on mortality we provide evidence for an effect running through stress and changes in life style

pro cyclical mortality across socioeconomic groups and health status abstract using variation across geographic regions a number of studies from the u s and other developed countries have found more deaths in economic upturns and less deaths in economic downturns we use data from regions in norway for 1977 2008 and find the same pro cyclical patterns using individual level register data for the identical population we find that disadvantaged socioeconomic groups are not hit harder by pro cyclical mortality than advantaged groups we also find that other indicators of deteriorated health than death like becoming disabled are pro cyclical overall our analysis suggests that pro cyclical mortality is rather related to deaths of people already in deteriorated health than to people of low socioeconomic status

the strategic choice of union oligopoly bargaining agenda abstract this article analyzes the optimal choice of union oligopoly bargaining agenda i e right to manage versus efficient bargaining under possible market entry it is shown that agreement by both the union and the incumbent firm about efficient bargaining emerges as equilibrium in nash strategies even more so under non blockaded entry for deterrence motives this is consistent with the common empirical findings that unionized firms do not behave according to the prediction of the right to manage model that employment will be on the labor demand curve the entry deterrence effect highlighted in this paper also suggests that labor market organization should not be overlooked as a component of the welfare analysis of product market competition

caution men not at work gender specific labor market conditions and child maltreatment abstract this paper examines the effect of labor market conditions measured through unemployment mass layoffs and predicted employment on child maltreatment using county level data from california using these indicators we separately estimate the effects of overall and gender specific economic shocks we find only modest evidence of a link between overall economic conditions and child maltreatment however analysis by gender reveals robust evidence that maltreatment decreases with indicators for male employment and increases with indicators for female employment these opposite signed effects are consistent with a theoretical framework that builds on household time use models and is supported by an analysis of time use data though we discuss other mechanisms that may also play important roles

fisher hypothesis in japan analysis of long term interest rates under different monetary policy regimes this paper investigates the validity of the fisher hypothesis in japanese long term interest rates two three four five seven and ten years using non stationary time series models initially the entire sample period october 1987 june 2006 is investigated then the samples divided into three segments depending on each period s monetary policy regimes are investigated thus the asymmetric impacts of inflation expectation on japanese long term interest rates can be investigated the first period examined is from october 1987 june 1991 the second period is from july 1991 july 2000 the third period is from march 2001 june 2006 in the first period monetary policy is tightening but in the second and third periods it is easing thus it is concluded that the fisher hypothesis is valid only in all maturities of long term interest rates in the first period however it does not hold in any of the maturities in the entire sample period or in the second and third periods

evidence of the fisher effect from u k indexed bonds newly available data from the u k market for indexed securities are used to test the fisher hypothesis for monthly observations of interest rates at 14 maturities the hypothesis that the after tax nominal interest rate is a constant plus anticipated inflation proves to be a reasonable approximation of reality for longer maturities the coefficients on the expected rate of inflation are approximately equal to one the mundell tobin effect is in evidence for shorter maturities the inverted fisher effect is in evidence for shorter maturities the inverted fisher effect is decisively rejected the evidence suggests that past difficulties encountered in trying to prove the fisher effect have been due to the lack of a direct measure of inflation expectations and real interest rates copyright 1992 by mit press