human capital and institutional determinants of information technology compensation modeling multilevel and cross level interactions compensation is critical in attracting and retaining information technology it professionals however there has been very little research on it compensation juxtaposing theories of compensation that focus on human capital endowments and labor market segmentation we hypothesize multilevel and cross level determinants of compensation we use hierarchical linear modeling to analyze archival salary data for 1 576 it professionals across 39 institutions results indicate that compensation is directly determined by human capital endowments of education and experience institutional differentials do not directly drive compensation but instead moderate the relationship of human capital endowments to compensation large institutions pay more than small institutions to it professionals with more education while small institutions pay more than large institutions to it professionals with less education not for profit institutions pay more than for profits to it professionals with more or it specific education further information intensive institutions pay more than non information intensive institutions to it professionals with more or it specific education we interpret these results in the context of institutional rigidity core competencies and labor shortages in the it labor market

a panel analysis of job changes and unemployment abstract this paper tests for state dependence in histories of unemployment and job mobility from the first six waves of the german socio economic panel soep transitions between states of employment and unemployment are modelled as outcomes of binomial probit processes which are first and higher order markov the use of simulation estimation allows quite general intertemporal covariance structures in order to capture individual heterogeneity it is investigated how differences in human capital and other personal characteristics and macro or industry determinants such as regional unemployment growth and immigration pressure affect labour mobility

uncertainty in the theory of renewable resource markets the natural growth rate of most renewable resource stocks is in part stochastic this paper examines the implications of such ecological uncertainty for competitive equilibrium in a market with property rights we show that stochastic fluctuations add a risk premium to the rate of return required to keep a unit of stock in situ and we examine the effects of fluctuations on resource rent examples are used to show that extraction can increase decrease or be left unchanged as the variance of the fluctuations increases depending on the extent of market self correction regulatory implications are also discussed renewable resource economics has traditionally been concerned with the study of dynamically optimal harvesting policies given a deterministic function for the natural growth of the resource stock issues have included the existence and characteristics of steady state equilibria for the optimally managed resource the need for and design of regulatory policies to prevent over exploitation and conditions under which as a social optimum or otherwise the resource will be exploited to extinction 1 much of this work has been based on the assumption of a fixed and exogenous price for the harvested resource typically resulting in bang bang solutions for the harvesting policy however some recent papers make price endogenous and thereby describe how the extraction rate and the rate of return and asset value of the resource behave in a competitive market with property rights 2

micro data heterogeneity and the evaluation of public policy nobel lecture this paper summarizes the contributions of microeconometrics to economic knowledge four main themes are developed 1 microeconometricians developed new tools to respond to econometric problems raised by the analysis of the new sources of micro data produced after the second world war 2 microeconometrics improved on aggregate time series methods by building models that linked economic models for individuals to data on individual behavior 3 an important empirical regularity detected by the field is the diversity and heterogeneity of behavior this heterogeneity has profound consequences for economic theory and for econometric practice 4 microeconometrics has contributed substantially to the scientific evaluation of public policy

spatial evolution of social norms in a common pool resource game we study the conditions for the emergence of cooperation in a spatial common pool resource cpr game we consider three types of agents cooperators defectors and enforcers the role of enforcers is to punish defectors for overharvesting the resource agents are located on a circle and they only observe the actions of their two nearest neighbors their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest average payoffs on average using theoretical and numerical analysis we find a large diversity of equilibria to be the outcome of the game in particular we find conditions for the occurrence of equilibria in which the three strategies coexist we also derive the stability of these equilibria finally we show that introducing resource dynamics in the system favors the occurrence of cooperative equilibria

unemployment persistence is there evidence for stigma effects we present evidence for a highly significant interaction between state dependence in individual unemployment risk and the business cycle the disadvantage from having been unemployed in the previous period is smaller in times of relatively high unemployment and larger in times of low unemployment this is consistent with the existence of stigma effects in the sense that unemployed individuals face difficulties finding a new job because employers interpret unemployment as a negative signal and do so especially when it is easier to find jobs i e when unemployment is low

complementarity impatience and the resilience of natural resource dependent economies we study how society s preferences affect the resilience of economies that depend on more than one type of natural resource in particular we analyze whether the degree of complementarity of natural resources in consumer preferences may give rise to multiple steady states and path dependence even when resources are managed optimally we find that for a given social discount rate society tends to be less willing to buffer exogenous shocks if resource good are complements in consumption than if they are substitutes the stronger the complementarity between the various types of natural resources the less resilient the economy is and even more so the higher is the social discount rate

why do big firms pay higher wages evidence from an international database abstract bigger firms pay higher wages this note reports tests of the hypothesis that this big firm premium bfp occurs because workers in big firms are more skilled we use the international adult literacy survey which gives richer skill measures than those typically available in labor market surveys to measure the bfp in nine countries with and without controls for worker skill the results show that the bfp is not as universal as is often suggested but in countries where it exists controlling for skills does little to reduce the size of the bfp

an evolutionary approach to norms iorms provide a powerful mechanism for regulating conflict in groups even when there are more than two people and no central authority this paper investigates the emergence and stability of behavioral norms in the context of a game played by people of limited rationality the dynamics of this new norms game are analyzed with a computer simulation based upon the evolutionary principle that strategies shown to be relatively effective will be used more in the future than less effective strategies the results show the conditions under which norms can evolve and prove stable one interesting possibility is the employment of metanorms the willingness to punish someone who did not enforce a norm many historical examples of domestic and international norms are used to illustrate the wide variety of mechanisms that can support norms including metanorms dominance internalization deterrence social proof membership in groups law and reputation

local common property exploitation with rewards this paper analyzes coalition formation in a livestock pasture system where livestock are privately owned and the pasture is a common property while standard models predict rather low prospects of cooperation this paper introduces a cost advantage of cooperation based on saami reindeer herding that may explain higher coalition participation in contrast to the existing fishery literature on coalition formation all players are assumed ex ante homogenous but may differ ex post due to the cost advantage a stable equilibrium with cooperation can be reached and a moderate exploitation level can be sustained compared to the tragedy of the commons outcome

the british low wage sector and the employment prospects of the unemployed abstractare low wages a way for the unemployed to switch to higher paying jobs using data from the british household panel survey the labour market dynamics of unemployed low paid and higher paid employed men are analysed moreover the respective un employment duration and occupational skill level are accounted for results show that in general low wages significantly reduce the risk of future unemployment and increase the chances of ascending the salary ladder especially in the case of long term unemployment 360 days furthermore the occupational skill level has a substantial influence on the upward mobility of low paid jobs individuals working in the initial period in a low paid and higher skilled occupation have on average an 11 percentage points higher probability of entering higher pay compared to when working in a low paid and low skilled occupation

is there a glass ceiling over europe exploring the gender pay gap across the wages distribution using harmonised data from the european union household panel we analyse gender pay gaps by sector across the wages distribution for ten countries we find that the mean gender pay gap in the raw data typically hides large variations in the gap across the wages distribution we use quantile regression qr techniques to control for the effects of individual and job characteristics at different points of the distribution and calculate the part of the gap attributable to differing returns between men and women we find that first gender pay gaps are typically bigger at the top of the wage distribution a finding that is consistent with the existence of glass ceilings for some countries gender pay gaps are also bigger at the bottom of the wage distribution a finding that is consistent with sticky floors third the gender pay gap is typically higher at the top than the bottom end of the wage distribution suggesting that glass ceilings are more prevalent than sticky floors and that these prevail in the majority of our countries fourth the gender pay gap differs significantly across the public and the private sector wages distribution for each of our eu countries

industrial specialization and the returns to labor comparative advantage and the division of labor make geographic concentration of production within a nation profitable and cause many cities to be specialized in one or a few main industries specialized cities however suffer greater unemployment risk the theory of compensating wage differentials predicts that individuals living in more specialized cities will be compensated in the form of higher wage rates we study the effects of specialization on wages and unemployment in the united states we find evidence of compensating wage differentials that firms choose to locate in more specialized higher wage cities is indirect evidence of the gains to specialization

regional pay the public private sector pay differential abstractregional pay the public private sector pay differential regional studies this paper extends the debate on making public sector wages more responsive to those in the private sector the way in which the public private sector wage differential is calculated dramatically alters conclusions and far from there being substantial regional disparity in wages offered to public sector workers any differences are predominantly concentrated in london and the south east where public sector workers are significantly disadvantaged relative to private sector workers this has implications for staff recruitment and retention such findings question the need for regional market facing pay but highlight the necessity to revisit the london weighting offered to public sector workers

the transmission of sustainable harvesting norms when agents are conditionally cooperative experimental and observational studies have highlighted the importance of agents being conditionally cooperative when facing a social dilemma we formalize this mechanism in a theoretical model that portrays a small community having joint access to a common pool resource the diffusion of norms of cooperation takes place via interpersonal relations while individual agents face the temptation of higher profits by overexploiting the resource agents remain conditionally cooperative unless other individuals are misbehaving already we can observe a bubble of conditional cooperators slowly building up followed by a sudden burst which means that a transition from a cooperative social norm to non cooperation occurs interestingly in some parameter regions alternative stable states and limit cycles arise the latter implies that the same community goes through such a transition repeatedly over long time spans history thus repeats itself in the form of the creation and erosion of social capital

low pay dynamics and transition probabilities this paper models low pay transitions in britain using a bivariate probit model with endogenous selection to address the initial conditions problem and parental variables as instruments the exogeneity of the initial state is strongly rejected and results in considerable overstatement of the effects of explanatory factors the probability of being low paid depends strongly on low pay in the previous year restricting attention to those who remain employees results in an overstatement of the probability of the low paid moving up the earnings distribution but is not found to have much effect on the estimated effects of explanatory variables

subject of degree and the gender wage differential evidence from the uk and germany abstract we show that controlling for subject of degree explains a significant part of the male female gender wage differential amongst graduates using data from the labour force surveys of the united kingdom and germany we find similar results in these two countries subject of degree explains about 2 4 higher wages of male over female graduates after controlling for age industry region part time and public sector employment this is a significant part between 8 and 20 of the overall male female gender wage gap and an even larger amount of the part explained by factors entered into wage equations at around 24 30 of the explained component

simple solutions to the initial conditions problem in dynamic nonlinear panel data models with unobserved heterogeneity i study a simple widely applicable approach to handling the initial conditions problem in dynamic nonlinear unobserved effects models rather than attempting to obtain the joint distribution of all outcomes of the endogenous variables i propose finding the distribution conditional on the initial value and the observed history of strictly exogenous explanatory variables the approach is flexible and results in simple estimation strategies for at least three leading dynamic nonlinear models probit tobit and poisson regression i treat the general problem of estimating average partial effects and show that simple estimators exist for important special cases copyright 2005 john wiley sons ltd

good jobs versus bad jobs this article develops a model of noncompetitive labor markets in which high wage good and low wage bad jobs coexist minimum wages and unemployment benefits shift the composition of employment toward high wage jobs because the composition of jobs in the laissez faire equilibrium is inefficiently biased toward low wage jobs these labor market regulations increase average labor productivity and may improve welfare

buffalo hunt international trade and the virtual extinction of the north american bison in the sixteenth century north america contained 25 to 30 million buffalo by the late nineteenth century fewer than 100 remained while removing the buffalo east of the mississippi took over 100 years the remaining 10 to 15 million buffalo on the great plains were killed in a punctuated slaughter lasting little more than ten years i employ theory international trade statistics and first person accounts to argue the slaughter was initiated by a foreign made innovation and fueled by a foreign demand for industrial leather european demand and american policy failure are jointly responsible for the slaughter on the plains jel f14 n51 n71 q57

do employers use unemployment as a sorting criterion when hiring evidence from a field experiment the stigma associated with long term unemployment spells could create large inefficiencies in labor markets while the existing literature points toward large stigma effects it has proven difficult to estimate causal relationships using data from a field experiment we find that long term unemployment spells in the past do not matter for employers hiring decisions suggesting that subsequent work experience eliminates this negative signal nor do employers treat contemporary short term unemployment spells differently suggesting that they understand that worker firm matching takes time however employers attach a negative value to contemporary unemployment spells lasting at least nine months providing evidence of stigma effects

technology driven inequality leads to poverty and resource depletion the rapid rise in inequality is often seen to go in hand with resource overuse examples include water extraction in pakistan land degradation in bangladesh forest harvesting in sub saharan africa and industrial fishing in lake victoria while access to ecosystem services provided by common pool resources mitigates poverty exclusive access to technology by wealthy individuals may fuel excessive resource extraction and deplete the resource thus widening the wealth gap we use a stylised social ecological model to illustrate how a positive feedback between wealth and technology may fuel local inequality the resulting rise in local inequality can lead to resource degradation and critical transitions such as ecological resource collapse and unexpected increase in poverty further we find that societies may evolve towards a stable state of few wealthy and many poor individuals where the distribution of wealth depends on how access to technology is distributed overall our results illustrate how access to technology may be a mechanism that fuels resource degradation and consequently pushes most vulnerable members of society into a poverty trap

job search stigma effect and escape rate from unemployment this article formulates job search models incorporating certain types of the stigma effect of unemployment it is assumed that the probability of getting a job offer given the unemployment individual contacts the firm is influenced by the duration of unemployment and is justified in a signaling context the optimal search is analyzed for one sector as well as across several independent labor market segments it is shown that there are reasonably general conditions on the search environments for which both the individual reservation wage and escape rate are negative duration dependent a fact observed in empirical studies

a theory of signalling during job search employment efficiency and stigmatised jobs this paper discusses why redundant skilled workers may be reluctant to accept interim unskilled jobs if skilled work is more satisfying or less arduous for highly productive workers then such workers invest more in moving quickly between skilled jobs thus high productivity workers tend to search on the job and if unemployed will specialise in job search rather than take an interim position if individual differences in productivity are known to the worker but not the potential employer then search strategy may be used as a productivity signal with more than the efficient proportion of workers searching on the job and too few accepting interim unskilled jobs optimal policy requires a subsidy on interim unskilled jobs

the gap between male and female pay in the spanish tourism industry abstract this paper analyzes wage differentials between male and female workers in the spanish tourism industry using a large administratively matched employer employee data set obtained from a representative sample of companies this allows us to control for unobserved firm specific factors likely to affect the magnitude of the gender wage gap our findings indicate that male workers earn on average 6 7 higher monthly wages than their socially comparable female counterparts in particular the type of contract held the qualifications required for the job and the specific sub sector of employment are very important variables in explaining this gender wage difference we also find that only around 12 of the mean wage difference in the tourism industry cannot be explained by differences in observable characteristics which is well below the average for the rest of the industries in spain 87 our interpretation is that minimum wage legislation provides a particularly effective protection to women in the tourism industry which is characterized by a large number of low wage earners

dissecting the tragedy a spatial model of behavior in the commons abstract much of the discussion of the tragedy of the commons focuses on aggregate impacts often in data poor developing country settings few non experimental empirical studies shed light on contextual circumstances driving the extent of rent dissipation and overexploitation we utilize a high resolution data set to estimate a behavioral model of fishermen s spatial choices a unique policy setting allows us to measure the degree to which individual fishermen s choices appear aimed at mitigating the tragedy of the commons in a small numbers setting we find evidence of partial mitigation in excess of what we would expect under pure self interest but short of what would occur under group maximizing behavior we also examine how contextual factors in the fishery shape the degree of cooperation within the fishing season and find evidence that competition for the common pool resource distorts fishermen s implicit cost of distance creating a form of common property inertia

employer size and on the job training decisions the effect of employer size on labor market outcomes have been the subject of extensive although relatively recent research by economists it has been widely demonstrated that large and small firms exhibit a number of differential characteristics with regard to their employment relationships 29 42 employees at large firms have higher wages and fringe benefits 16 10 15 22 32 35 higher levels of job mobility within the firm 19 greater job stability 44 a greater tendency to have mandatory overtime rules 23 higher education levels 8 a more structured work environment 20 26 46 and higher levels of investments by the firm both in the form of search costs 4 5 and direct on the job training 6 10 while numerous theories exist that account for many of these relationships such as monitoring and on the job training models no single explanation has been able to account definitively for the observed empirical patterns clearly size of employer is a significant factor in the dynamics of labor markets that still requires much investigation the focus of this paper is on one particular aspect of employer size effects the observed higher training investments in large firms we propose and test a model in the human capital tradition of viewing on the job training ojt as an investment 9 36 38 39 42 which not only explains the greater investment in on the job training by larger firms but additionally generates predictions with regard to the allocation of the firm s resources across investment in people with different demographic characteristics these latter implications of the model facilitate empirical comparisons to alternative explanations our central hypothesis is that large employers exhibit different behavior from small employers with regard to the risk component of the investments in their employees other training decision models that have addressed firm behavior under uncertainty have done so in the context of monitoring difficulties introduced by either the higher opportunity cost of managers time 43 or diseconomies of scale in monitoring 16 in larger firms although both of these approaches

the employer size wage gap evidence for britain university of edinburgh and university of sussexfinal version received 5 may 1992 this paper presents estimates for the employer plant size wage gap for britain using anordered probit model selectivity corrected wage equations are estimated for three plant sizecategories in a comparison between plants with more than 500 workers and those with lessthan 100 a wage gap estimate of over 17 per cent is detected the wage effects of unionizationin plants with more than 500 workers is reported as insignificant in contrast to evidenceprovided by idson and feaster 1990 for the united states no evidence of non randomsorting of workers across plant size is detected

linking common property resource management to human capital outcomes in regions where common pool resources provide significant support to their surrounding communities any climate change related shock could produce multiple livelihood repercussions in this paper a model explores how the health of common pool resources could impact upon human capital outcomes for communities that struggle to find alternate livelihood options when traditional means such as agriculture become unsustainable the management of common pool resources is modeled as a strategic interaction process between two heterogeneous communities that are directly or indirectly dependent upon it an unconstrained harvesting of common resources such as forestry not only depletes its stocks but it also indirectly affects crop output through soil degradation a number of situations are constructed where communities are able to successfully finance human capital accumulation through proper management of their common pool resources however results also warn that communities that are faced with limited opportunities towards accumulating human capital must plan ahead to prevent the depletion of their common resources below critical levels when non linear feedbacks to soil degradation emanate from low levels of common pool stocks human capital outcomes as well as future livelihoods of such communities are threatened

premiums to employment in larger establishments evidence from peru abstract examination of the employer size wage effect for males in urban peru suggests the following higher wages in larger establishments do not merely compensate for higher worker quality or inferior working conditions size differences in the use of rising wage tenure profiles cannot provide a market clearing explanation for the employer size wage effect unless workers are extremely impatient thus larger employers appear to pay premiums unionization explains none of the premiums and minimum wage compliance explains at best a small fraction shirking based efficiency wage explanations for premiums are implausible because peruvian job security legislation greatly inhibits dismissals in larger establishments explanations meriting further research involve the use of high wages to reduce turnover and to improve productivity enhancing morale

job duration seniority and earnings an important stylized fact about labor markets is that workers with longer seniority with their current employer have higher earnings than other workers with the same total labor market experience this study shows that workers in longer jobs earn more throughout than workers in a series of shorter jobs and that the measured positive cross sectional return seniority is largely a statistical artifact due to the correlation of seniority with an omitted variable representing the quality of the worker the job or the worker employer match the implication is tha t earnings do not in fact rise very much with seniority copyright 1987 by american economic association

the crash of ʼ87 was it expected the evidence from options markets transactions prices of s p 500 futures options over 1985 1987 are examined for evidence of expectations prior to october 1987 of an impending stock market crash first it is shown that out of the money puts became unusually expensive during the year preceding the crash second a model is derived for pricing american options on jump diffusion processes with systematic jump risk the jump diffusion parameters implicit in options prices indicate that a crash was expected and that implicit distributions were negatively skewed during october 1986 to august 1987 both approaches indicate no strong crash fears during the 2 months immediately preceding the crash attempts to explain what caused the stock market crashes around the world in october 1987 have suffered from the paucity of major economic developments occurring around that time that could have triggered the crashes shifting expectations regarding monetary policy foreign investors fears of a dollar decline increasing riskiness of assets none of these appeared major enough if present at all to explain the magnitude of the crashes and although portfolio insurance strategies could conceivably magnify the effects of a jump in fundamentals the initiating jump in fundamentals appears to be lacking

participation and earnings of older people in argentina nice work if you can get it abstract the article explores the potential contribution of better labour market participation among older people in argentina to address old age poverty and vulnerability the acute financial crisis in 2001 led to a steep rise in poverty and renewed concerns over the deterioration of old age support broadly two main strategies took shape to strengthen pension provision for poorer and vulnerable older people and to improve their labour market participation using data from a dedicated survey of older people the article tests the feasibility and effectiveness of the second strategy through a detailed analysis of the labour market participation and earnings of older people in argentina

evolutionary stability of pure strategy equilibria in finite games abstract sufficient conditions for pure strategy nash equilibria of finite games to be lyapunov stable under a large class of evolutionary dynamics the regular monotonic selection dynamics are discussed in particular it is shown that in almost all finite extensive form games all the pure strategy equilibria are stable in such games all mixed strategy equilibria close to pure strategy equilibria are also stable journal of economic literature classification numbers c70 c72

a dynamic approach to forest regimes in developing economies abstract in the developing economies optimal forest regimes should incorporate the socio economic characteristics of the user groups and since socio economic factors will change with time optimal forest regimes will also follow a dynamic path the two most important socio economic factors are the heterogeneity of the user group with respect to forest management and the direct dependence of the user group on forest normally the heterogeneity will increase and dependence will decrease with economic growth of user group an optimal control model is used to integrate the dynamics of natural system such as joint product of forests and its growth function and the dynamics of the two socio economic factors heterogeneity and dependence the model demonstrates that the dynamics of optimal forest regimes will depend upon the change in natural factors socio economic factors and on the interactions between natural and socio economic factors hence optimal forest management strategies would require a continuous refinement in forest management regimes instead of static state regimes as local communities in developing economies pass through different phases of economic growth

why do smaller firms pay less this paper uses data from the national longitudinal survey of young men and the current population survey for 1983 to examine the relationships among wages firm size and plant size we reach three key findings first plant size has little independent effect on wages once we have controlled for firm size for firms with fewer than 1 000 employees second we find evidence of sorting on observed and unobserved ability characteristics across firm sizes better educated and more stable workers are in larger firms third results from a first difference estimator indicate that about 60 percent of the wage size effect is due to unobserved heterogeneity when all firms are considered and about 100 percent when firms with 25 or more employees are considered

a selectivity model of employer size wage differentials this article investigates wage differentials for employees of different size firms utilizing an econometric methodology that allows the size of employer to be treated as endogenous in the context of discrete ordered employer size data as a result we are able to estimate i employer size wage gaps which are corrected for selectivity bias and ii the magnitude and direction of the selection bias decompositions of the resulting wage differentials are computed with comparisons of the conditional on sorting across employer size and unconditional wage gaps

the interrelated dynamics of unemployment and low wage employment this paper examines the extent of state dependence in unemployment and the role played in this by intervening low wage employment a range of dynamic random and fixed effects estimators are compared low wage employment is found to have almost as large an adverse effect as unemployment on future prospects and the difference in their effects is found to be insignificant evidence is presented that low wage jobs act as the main conduit for repeat unemployment and considerably increases its probability obtaining a higher wage job reduces the increased risk of repeat unemployment to insignificance

information externalities in the labour market and the duration of unemployment a matching model is analysed in which firms imperfectly test workers prior to hiring them if some firms hire only workers who pass the test there is an informational externality unemployment duration is a signal of productivity in equilibrium if it is profitable for a firm to test it is also profitable for it to condition its hiring decision on duration hiring those whose duration is less than a critical value this testing equilibrium is inefficient with too much testing and too low a critical duration value sensitivity analysis of the latter suggests explanations for the dependence of re employment probabilities on duration and the instability of the u v curve

evolutionary stability and media of exchange abstract the kiyotaki and wright model 1989 of money as a medium of exchange is analyzed within an evolutionary framework it is shown that fundamental speculative and polymorphic states can all be stable and that there may exist a multiplicity of stable states stringent assumptions regarding information and rationality are therefore unnecessary in order to explain the use of money as a medium of exchange even when the existence of a stable medium requires some individuals to trade their production good for one with a higher storage cost or when otherwise identical individuals must adopt different exchange strategies

duration dependence and labor market conditions evidence from a field experiment this article studies the role of employer behavior in generating negative duration dependence the adverse effect of a longer unemployment spell by sending fictitious resumes to real job postings in 100 u s cities our results indicate that the likelihood of receiving a callback for an interview significantly decreases with the length of a worker s unemployment spell with the majority of this decline occurring during the first eight months we explore how this effect varies with local labor market conditions and find that duration de pendence is stronger when the local labor market is tighter this result is consistent with the prediction of a broad class of screening models in which employers use the unemployment spell length as a signal of unobserved productivity and recognize that this signal is less informative in weak labor markets jel code j64

heterogeneity in unemployment state dependence by applying a heterogeneous slope model this paper shows that unemployment state dependence varies across workers assuming a homogeneous effect of past unemployment on the risk of staying unemployed underestimates the scarring effect of unemployment in the majority of countries analyzed

outside offers and the gender pay gap empirical evidence from the uk academic labour market using a unique data source on academic economist labour market experiences we explore gender pay and promotions in addition to earnings and productivity measures we have information on outside offers and perceptions of discrimination we find both a gender promotions gap and a within rank gender pay gap a driving factor may be outside offers men receive more outside offers than women of comparable characteristics and gain higher pay increases in response this may arise due to discrimination we find that perceptions of discrimination and also outside job applications correlate with an individual receiving earnings below that expected given their characteristics

collective action for local commons management in rural yunnan china empirical evidence and hypotheses using evolutionary game theory this paper presents hypotheses regarding collective actions for irrigation management with the help of evolutionary game theory data for the analysis were collected by the author from the irrigation system of rural yunnan china an econometric analysis reveals that collective action will be forthcoming in rural communities where few nonfarm job opportunities are provided the degree of income disparity is quite small and resource restrictions are moderately problematic the finding that communities without local government intervention outperform those with intervention supports the proverbial view that external agencies should delegate significant parts of the control rights of common pool resources to immediate stakeholders

contagious cooperation temptation and ecosystem collapse real world observations suggest that social norms o f cooperation can be effective in overcoming social dilemmas such as the joint management of a c ommon pool resource but also that they can be subject to slow erosion and sudden collapse we show that these patterns of erosion and 15 collapse emerge endogenously in a model of a closed community harvesting a renewable natural resource in which individual agents face the tempta tion to overexploit the resource while a cooperative harvesting norm spreads through the community via interpersonal relations we analyze under what circumstances small changes in key parameters including the size of the community and the rate of technological progress trigger catastrophic transitions from 20 relatively high levels of cooperation to widespread norm violation causing the social ecological system to collapse

does firm size matter anymore the new economy and firm size wage effects researchers have long known that large firms pay higher wages than small firms for workers with similar measured characteristics however an agreed upon explanation for this firm size wage effect fswe has not been reached recent changes in the economy provide new leverage for testing competing theories for the effect while questions about the existence and nature of the new economy provide new motivation for exploring this topic this study uses the 1988 2003 current population survey and finds that the fswe has declined by about one third over the study period examining the competing explanations for the fswe this study finds that while the sorting of workers by traits unions and industry factors all contribute to some portion of the effect in cross section they fail to explain why it has declined over time market power explanations also fail to find support shifts in organizational structures particularly a decline of internal labor markets appear to best fit the results these findings

on the uniqueness of equilibrium in cournot oligopoly and other games abstract in an average surplus sharing game such as a cournot oligopoly a group of agents share a production process each contributes an amount of input to the process and output is divided in proportion to the amount of input contributed uniqueness of the equilibrium is needed for any type of comparative static analysis however general uniqueness results for concave games have restrictive assumptions on preferences and technology specifically the conditions needed for uniqueness become more difficult to meet as the number of players increases a new theorem for uniqueness with easily interpretable conditions is given which is independent of the number of players journal of economic literature classification numbers c70 c72 d43

technological change and the tragedy of the commons the lofoten fishery over 130 years we analyze the effect of technological change on labor and total factor productivity in the lofoten fishery using detailed data for 130 years our findings support the important role of natural resources in productivity and improvements in welfare in natural resource based industries the total factor productivity has risen faster than labor productivity in the fishery indicating that the considerable technological progress in this industry has to some extent been neutralized by the decline in the fish stock open access to the fish resource most probably led to this situation

profit fluctuations signal eroding resilience of natural resources abstract a common pattern of environmental crises is a vicious cycle between environmental degradation and socio economic disturbances here we show that while such feedbacks may give rise to critical transitions in social ecological systems at the same time they can offer novel opportunities for anticipating them we model a community that has joint access to the harvest grounds of a resource that is prone to collapse individuals are tempted to overexploit the resource while a cooperative harvesting norm spreads through the community via interpersonal relations both social and ecological collapses can be induced by environmental or socio economic driving forces regardless of the type and cause of collapse we find that upcoming transitions may be detected using simple socio economic response variables such as individual profits our findings suggest that such alternative sources of information can be used to detect upcoming critical transitions in social ecological systems however we also find that robust detection of critical transitions may be confounded by recovery attempts undertaken by resource users in the vicinity of an upcoming collapse which may be falsely interpreted as a stabilization of the social ecological system

longitudinal analyses of the effects of trade unions but union members are different from nonmembers in unobserved ways biasing your estimates y ou should make a selectivity bias correction simultaneously determine union status and economic outcomes develop an unobservables model use longitudinal data archetypical comment on virtually any study of the economic effects of umomsm or suitably modified on any other empirical subject

nonlinear behavior of the socio economic dynamics for lake eutrophication control abstract to succeed in combating lake eutrophication cooperation of local inhabitants small factories and farmers in reducing phosphorus discharge is very important but the willingness of each player to cooperate would depend on the cooperation of other players and on the level of environmental concern of the society in general here we study the integrated dynamics of people s choice of behavior and the magnitude of eutrophication assumptions are there are a number of players who choose between alternative options a cooperative and environment oriented option is more costly than the other the decision of each player is affected by social pressure as well as by economical cost of the options the lake pollution increases with the total phosphorus released and a high pollution level in the lake would enhance the social pressure the model includes a positive and a negative feedback loops which create diverse dynamical behavior the model often shows bistability having an equilibrium with a high level of cooperation among people and clean water and the other equilibrium with low cooperation and polluted water which are simultaneously stable the model also shows fluctuation between a high and a low levels of cooperation in alternating years cycle with a longer periodicity or chaotic fluctuation conservatism of people stabilizes the system and sometimes helps maintaining cooperation the system may show unexpected parameter dependence the improved phosphorus removing efficiency might make water more polluted if it causes the decline in the environmental concern and cooperation among people

sushi or fish fingers seafood diversity collapsing fish stocks and multispecies fishery management we present a model of a multispecies fishery and we show the following i consumer preferences for seafood diversity can trigger a sequential collapse of fish stocks under open access fishery ii the stronger the preferences are for diversity the higher is the need for coordinated multispecies regulation iii second best optimal management of only one or a few species is less strict than socially optimal management of the same species iv myopic regulation of one species ignoring spillovers to other species can cause depletion of other stocks that would not be depleted under open access

harvesting and conserving a species when numbers are low population viability and gambler s ruin in bioeconomic models abstract in bioeconomic models of renewable resources population viability is either ignored entirely or the minimum viable population mvp is considered a crisp threshold below which a species is driven to extinction neither is consistent with ecological science the purpose in this paper is firstly to enhance ecological realism in economic models by incorporating insights regarding population viability from conservation biology we consider the effects of chance on optimal management and briefly discuss key results regarding population viability as derived by biologists second as a means to balance interests and morality we suggest a fuzzy compromise between the economist s and the biologist s preferred stock sizes

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

stigma effects of nonemployment i introduction it is well known that longer durations of past nonemployment are associated with longer durations of future nonemployment 1 two explanations have been offered in the literature to interpret this phenomenon heterogeneity and the effect of workers employment histories the heterogeneity explanation argues that individuals differ in certain observed and unobserved characteristics and that these differences affect the duration of their periods of nonemployment however these individuals are unaffected by the mere experience of nonemployment because individuals with longer spells of nonemployment in the past are more likely to have characteristics that make them remain nonemployed they are likely to experience longer spells of nonemployment than others in the future the work history explanation argues that the mere experience of longer spells of nonemployment in the past raises the chance of longer spells of nonemployment in the future two theoretical explanations have been offered to explain this structural relationship human capital decay and stigma human capital decay suggests that nonemployed workers lose vital work experience and on the job training or suffer from human capital decay that reduces their future employability stigma suggests that potential employers infer the unobserved components of the workers quality from their history of employment and nonemployment in particular past nonemployment sends a negative signal to potential employers that lowers the probability of future reemployment 2 the ability to distinguish between heterogeneity and the effect of work history is a crucially important policy issue if the observed correlation between the duration of successive nonemployment spells reflects heterogeneity across individuals then a given individual enjoys the same chance of reemployment no matter how long or short his periods of past nonemployment have been in this case chronic nonemployment is a problem of a population subgroup and traditional training programs targeted toward the chronically nonemployed would be an appropriate policy tool moreover the programs could be targeted at individuals with the characteristics associated with a high risk of chronic nonemployment however if the observed correlation reflects the effect of work history anyone who happens to have experienced long periods of nonemployment in the past has a high probability of experiencing long periods of nonemployment in the future thus phelps 1972 argues that short term macroeconomic policies that alleviate unemployment will also lower aggregate unemployment rates in the long run 3 i argue however that an appropriate policy depends on the cause of the work history effect if the effect reflects human capital decay then short term macroeconomic policies to alleviate unemployment and traditional government training programs to help the unemployed restore lost skills are appropriate if the effect reflects stigma active short term macroeconomic policies may not be necessary to lower aggregate unemployment rates in the long run because stigma effects are likely to be weaker when nonemployment is experienced during a severe recession than when it is experienced during a moderate recession an appropriate policy would aim at aiding the flow of accurate information on the quality of stigmatized workers in the private sector for instance the government might subsidize potential private sector employers costs of screening job applicants who established poor work histories during a period of moderate recession alternatively it might sponsor private sector internship and training programs for such workers 4 although both the duration and frequency of nonemployment determine the individual s nonemployment rate the duration is empirically far more important than the frequency 5 because an understanding of the determinants of the duration of nonemployment is crucial to both economic theory and policymaking an enormous number of empirical studies have addressed the issue

the trade off between supervision and wages evidence of efficiency wages from the nlsy standard efficiency wage models suggest that workers employed in places with lower probabilities of identifying shirking will earn more as will workers who have better alternative opportunities this paper provides new empirical evidence in support of efficiency wage theory using the national longitudinal surveys of youth data the empirical results support the prediction of the model that workers employed in larger work groups are paid more a finding consistent with a supervision wage trade off additional evidence supports the prediction that workers with better alternative opportunities earn more the classical competitive theories of wage determination predict that workers will be paid the value of their marginal product these theories suggest that after accounting for differences in working conditions there should be no variation in wages among homogeneous workers recent findings that industry affiliation and firm size affect wages suggest that part of the explanation of wage structure is missing these results call into question the view that industry wage differentials can plausibly be rationalized with textbook competitive models krueger and summers 1988 p 280 this paper follows the efficiency wage literature by assuming that one important determinant of wage differences is variation in employers ability to monitor workers efforts 2 this paper provides new empirical evidence in support of efficiency wage theory using data from the national longitudinal surveys of youth nlsy a data set that is noticeably absent from the efficiency wage literature efficiency wage models attempt to complete the explanation of wage structure by focusing

the trade off between supervision cost and performance based pay does gender matter the study adds to the literature by providing new empirical evidence consistent with efficiency wage theory and by providing estimates of the average cost of supervising a worker by industry this research uses the 1996 wave of the nlsy and incorporates estimates of supervision cost computed from industry classifications we further detect presence of no gender differences neither in risk averseness nor in productivity gains associated with cost of supervision and performance based pay while the findings imply that employers should consider the incentive effects of supervision and performance based pay when constructing pay schemes there is no need for employers to devote resources to constructing gender specific payment mechanisms our evidence suggests that profit maximizing firms should treat males and females equally and develop gender neutral pay schemes

nonemployment stigma as rational herding a field experiment abstract long spells of unemployment are known to reduce the likelihood of re employment but it is difficult to discern the reasons for this observation using an experimental method that controls for search intensity and possible discouragement of job applicants i document that job market opportunities for the nonemployed diminish rapidly over time in this experiment duration dependence is solely due to firm perceptions why do firms view long spells of nonemployment as negative signals rational herding is one important factor managers believe that unemployed applicants were previously interviewed and if the applicants were productive they would have been hired

ranking unemployment duration and wages it explores the implication of one central assumption when firms receive multiple acceptable applications they hire the worker who has been unemployed for the least amount of time this assumption ranking is contrasted with the assumption of random hiring no ranking by embodying this assumption in a model of the labour market with job creation destruction and matching the joint behaviour of unemployment the distribution of unemployment durations and wages are characterized the implication that the re employment prospects of employed workers were they to become unemployed are better than those of the currently unemployed appears to have been an important feature of european unemployment experience in the 1980 s this paper examines the effects of the composition of unemployment on wage determination it explores one central assumption when firms receive multiple acceptable applications they hire the worker who has been unemployed for the least amount of time we refer to this assumption as ranking and contrast it throughout to the assumption of random hiring or no ranking by embodying this assumption in a model of the labour market with job creation destruction and matching we characterize the joint behaviour of unemployment the distribution of unemployment durations and wages ranking has a number of important implications first in addition to the obvious result that the exit rate from unemployment is a decreasing function of duration we show that the effect of duration is stronger the higher the rate of unemployment second with the wage depending on the distributions of prospective unemployment durations the presence of long term unemployed per se has little effect on wages third looking at the relation between the wage and the aggregate level of unemployment and comparing ranking to the case of no ranking the wage moves less with the level of unemployment but more with the change in unemployment put simply ranking and no ranking models show exactly the same aggregate unemployment slightly different long run responses of wages to unemployment and sharply different wage dynamics the paper is organized as follows section i characterizes the matching process and derives a matching function based on an urn ball process with vacancies as urns and applications by unemployed workers as balls thus the distribution of applications per vacancy depends on aggregate unemployment and vacancies vacancies with at least one acceptable application are filled when a vacancy receives more than one acceptable application firms use a rule to choose among applicants thus the rule determines who is hired but does not affect the number of hires section ii uses this matching function in a model of the labour market with continual job creation and destruction and characterizes the equilibrium values of unemployment vacancies and hires

corporate tournaments human capital acquisition and the firm size wage relation this paper provides a possible explanation for the empirically observed size wage effect and inter industry wage differences it develops a model in which incentives for workers to accumulate general human capital are provided by corporate tournaments where workers with the highest level of general human capital win promotions given that the prizes in such tournaments are determined by outside market conditions the investment and the equilibrium wages depend on firm and industry characteristics the model implies that workers in bigger firms and in more technology intensive and profitable firms and industries acquire more human capital and receive higher wages and benefits

the dynamic efficiency costs of common pool resource exploitation we conduct the first empirical investigation of common pool resource users dynamic and strategic behavior at the micro level using real world data fishermen s strategies in a fully dynamic game account for latent resource dynamics and other players actions revealing the profit structure of the fishery we compare the fishermen s actual and socially optimal exploitation paths under a time specific vessel allocation policy and find a sizable dynamic externality individual fishermen respond to other users by exerting effort above the optimal level early in the season congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies jel d24 q21 q22

tenure unions and the relationship between employer size and wages the unionization rate in a worker s industry and the worker s tenure are interacted with employer size in wage regressions using current population survey data the results provide insight into the relatively small size wage relationship in the union sector nonunion tenure profiles steepen sharply with establishment size while union profiles flatten also the effect of industry unionization increases with firm size in the nonunion sector a pattern indicative of threat effects a separate analysis of nonunion wages indicates that size wage relationships are stronger in occupations associated with high monitoring costs

do smaller firms pay less in the caribbean the case of trinidad and tobago this article constitutes the first study of the employer size wage effect for a caribbean country namely the republic of trinidad and tobago using a rich micro level data set we estimate the firm size wage premium in an empirical model of wage determination despite exploring a variety of theories samples estimation techniques and tests we find that consistent with the empirical literature larger firms in trinidad and tobago pay higher wages than smaller firms for equally productive workers

unemployment risk and wage differentials workers in less secure jobs are often paid less than identical looking workers in more secure jobs we show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms differ only in job security i e the probability that the worker is not sent into unemployment in a setting where workers search for new positions both on and off the job the worker s marginal willingness to pay for job security is endogenous increasing with the rent received by a worker in his job and depending on the behavior of all firms in the labor market we solve for the labor market equilibrium and find that wages increase with job security for at least all firms in the risky tail of the distribution of firm level unemployment risk unemployment becomes persistent for low wage and unemployed workers a seeming pattern of unemployment scarring created entirely by firm heterogeneity higher in the wage distribution workers can take wage cuts to move to more stable employment

plant size and the decline of unionism abstract declining plant size is shown to explain a significant portion of the recent decline in unionism particularly in manufacturing the paper also shows how to use the probit model to decompose the change in unionism into explained and unexplained components

firm size earnings and displacement risk rudolf winter ebmer analogous to the well documented firm size wage differential there also exists a differential in layoff risk according to firm size using austrian data i discuss several reasons for this puzzle including on the job training and workers heterogeneity if less stable and also less able workers select themselves into small unstable and low paying firms predicted layoff risk of workers can be used as a proxy for heterogeneity of workers and therefore be included in wage regressions doing this one half of the size earnings premium can be explained jel j31 j63 i introduction large employers pay more numerous empirical studies have documented this relationship 1 but they have not been able to explain it in a very careful study brown and medoff 1989 1056 look at ten possible reasons for this puzzle only to conclude our bottom line is that the size wage differential appears to be both sizable and omnipresent our analysis leaves us uncomfortably unable to explain it or at least the part of it that is not explained by observable indicators of labor quality neither compensating differentials for working conditions nor product market power or the threat of unionization were able to explain the size premium brown and medoff 1989 also found size effects for piece rate workers for unionized workers 2 and in longitudinal samples 3 where they controlled by first differencing for unobserved heterogeneity of the individuals given this wide interest in the effects of employer size on earnings very little research has been done concerning size differentials in turnover are the jobs in big firms not only higher paid but also more stable this would reinforce the puzzle of firm size once more anderson and meyer 1994 look at separation rates without distinguishing between quit and layoff and find highly decreasing turnover rates with firm size for permanent separations but no size effect on temporary separations 4 brown and medoff 1989 as well as others find quit rates to decline with firm size which speaks against compensating wage differentials arguments idson 1996 explicitly looks at the issue of long term employment relationships in large establishments which may be possibly due to the greater capacity of large employers to provide job mobility within the enterprise and the lower probability of business failure facing larger firms rebitzer 1986 argues that the observed higher job tenure in large plants is in a ccordance with labor market segmentation theory the aim of this article is to provide further evidence for a size layoff relationship using austrian data i try to consider several explanations for this regularity especially on the job training and the hypothesis of selective recruitment of workers into large and small firms following one hypothesis small employers attract less stable and capable employees a pattern that would cause only a spurious size layoff relationship on the other hand if workers with a relatively low stock of human capital sort themselves into relatively inefficient firms with unstable employment prospects then the size wage effect itself may be upwardly biased which was noted by mayo and murray 1991 the plan of the article is as follows section ii presents institutional details on wage bargaining and employment protection legislation in austria the data for the empirical study are discussed in section iii results for size wage and size layoff relationships are presented in section iv section v looks at the interaction between firm size layoff risk and wage determination section vi concludes ii wage bargaining institutions and job security legislation in austria wage bargaining in austria is very centralized even though only about 60 of workers are organized in unions bargaining outcomes are extended to all workers unionized or not a works council has to be established under the austrian labor law in all establishments employing at least five adult workers but usually the actual existence of a works council is positively determined by both firm size and firm age

ownership of stocks and mutual funds a panel data analysis this paper analyzes the ownership dynamics of stocks and mutual funds using representative household panel data the dutch center savings survey 1993 1998 a bivariate dynamic binary choice model is introduced allowing for interactions between the two types of assets we find that unobserved heterogeneity and state dependence play a large role for both types of assets the positive relation between ownership of one type in one period and the other type in the next period is explained by correlated unobserved heterogeneity a negative state dependence effect of lagged ownership of stocks on ownership of mutual funds is found which can be explained by the costs of shifting funds across the two forms of stockholding

the evolution of social norms in common property resource use the problem of extracting commonly owned renewable resources is examined within an evolutionary game theoretic framework it is shown that cooperative behavior guided by norms of restraint and punishment may be stable in a well defined sense against invasion by narrowly self interested behavior the resource stock dynamics are integrated with the evolutionary game dynamics effects of changes in prices technology and social cohesion on extraction behavior and the long run stock are analyzed when threshold values of the parameters are crossed social norms can break down leading generally to the lowering of the long run stock and possibly to its extinction copyright 1996 by american economic association

worker heterogeneity job screening and firm size a model of job screening is developed in which firms make wage offers to workers based on an imperfect evaluation of their abilities if large firms have higher costs of acquiring information about workers they screen workers with less accuracy and choose a wage compensation scheme different from the one small firms choose this generates the often observed positive correlation between firm size and wages the model also predicts that wage structure and perhaps wage dispersion will differ by firm size and that individuals who acquire more schooling will also choose to work in a larger firm these hypotheses are tested and supported using data from the national longitudinal survey