institutional determinants of labor reallocation in transition the transition process differed in the countries of the former soviet union fsu and those of central and eastern europe cee in terms of reallocation of labor real wage employment and output adjustment we sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that they can be explained by the fact that the cee countries adopted social policies that upheld wages at the bottom of the distribution forcing the old sector to restructure or collapse while the fsu countries allowed wages to free fall not forcing the hand of the old sector

rural urban poverty differences in transition countries summary this paper uses new poverty data based on household level surveys to analyze changes in rural poverty and rural urban poverty differences in 23 transition countries of central and eastern europe and the former soviet union the paper presents a series of hypotheses to explain differences across countries and changes over time

sheepskin effects in the returns to education some previous discussions have dismissed screening theories of education partly on the ground that diploma years of education do not confer especially large earnings gains similarly most empirical research on earnings functions has assumed an absence of sheepskin effects we report evidence however of substantial and statistically significant sheepskin effects although this suggests that the previous dismissals of the screening hypothesis were premature our evidence of sheepskin effects is amenable to nonscreening interpretations also according to screening theories of education individuals with more schooling tend to earn more not because or at least not solely because schooling makes them more productive but rather because it credentiates them as more productive a frequently cited article by layard and psacharopoulos 1974 however dismissed the importance of the screening hypothesis on the grounds that several of its refutable predictions were not supported by available evidence one of these was the sheepskin prediction that wages will rise faster with extra years of education when the extra year also conveys a certificate after surveying a number of studies layard and psacharopoulous henceforth lp concluded that rates of return to dropouts are as high as to those who complete a course which refutes the sheepskin version of the screening hypothesis since publication of the lp paper an undergraduate labor economics textbook has cited lp s analysis of sheepskin effects as telling criticism of the screening hypothesis a prominent proponent of the screening hypothesis riley 1979 has accepted lp s summary of the empirical evidence but responded that some versions of the screening hypothesis do not imply sheepskin effects in the meantime the ongoing flood of empirical research on earnings functions typically has continued to treat the natural logarithm of the wage rate as a linear or occasionally quadratic function of years of education with no allowance for discontinuities in diploma years 2 the estimated rates of return used by lp were based on data that did not disaggregate dropouts earnings by how many years of school they had completed lp acknowledged we would have preferred to show the earnings gain associated with each year of the course including the year when it was successfully completed this note presents a reanalysis of sheepskin effects based on the type of data lp wished they had the results contain very strong evidence of sheepskin effects after all the next section describes our analysis and the following section summarizes and discusses our

interrupted work careers depreciation and restoration of human capital the quantitative effects and even the existence of a human capital depreciation phenomenon have been a subject of controversy in the recent literature prior work however was largely cross sectional and the longitudinal dimension if any was retrospective using longitudinal panel data on married women in nls we have now established that real wages at reentry are indeed lower than at the point of labor force withdrawal and the decline in wages is greater the longer the interruption another striking finding is a relatively rapid growth in wages after the return to work this rapid growth appears to reflect the restoration or repair of previously eroded human capital the phenomenon of depreciation and restoration is also visible in data for immigrants to the united states however while immigrants eventually catch up with and often surpass natives returnees from the nonmarket do not fully restore their earnings potential

the economic integration of post wall germany it would be hard to devise a better controlled experiment for comparing different economic systems than the experience provided by east germany and west germany two nations that formerly were one occupied by people of the same background the same culture and the same genetic inheritance torn apart by the accident of war on one side of the berlin wall is a relatively free economic system on the other side a collectivist society milton friedman in w breit and r w spencer 1986 p 89

detecting abnormal credit union performance abstract credit unions are an important financial intermediary but little credit union research is done a primary reason for the lack of research is the cooperative nature of the industry making traditional methods of detecting abnormal performance inappropriate this paper proposes two methods of detecting abnormal performance one parametric the other non parametric instead of testing the efficiency of the institution this paper proposes testing the return vector as indicated in the theoretical objective function of the member simulations demonstrate that both methods are correctly specified and powerful

education and propaganda tradeoffs to public education provision in nondemocracies abstract nondemocratic regimes face a tradeoff when investing in public education education promotes human capital acquisition expanding the tax base yet it also enhances political sophistication and participation at a cost to nondemocratic regimes to relax this tradeoff a regime can disseminate propaganda through its education system i show that even bayesian citizens can be influenced by propaganda by deterring political opposition propaganda can induce nondemocracies to invest in education when they otherwise would not improving social welfare when propaganda is too strong however it can generate a backlash using cross country and survey data i find evidence consistent with the predictions

measuring the impacts of teachers ii teacher value added and student outcomes in adulthood abstract are teachers impacts on students test scores value added a good measure of their quality this question has sparked debate partly because of a lack of evidence on whether high value ad

types and patterns an experimental east west german comparison of cooperation and solidarity abstract in a study of public good and solidarity experiments conducted in eastern and western germany we found in both games that eastern subjects behave in a significantly more selfish manner than do western subjects besides that we found that many qualitative results of both data sets are similar since our experiments were conducted in two parts of one nation we present an unusually well controlled cross cultural study by avoiding difficulties that usually arise in multinational settings we conclude that cooperation and solidarity behavior seem to depend strongly on different culture specific norms resulting from opposing economic and social histories in the two parts of germany

can socioeconomic heritage produce a lost generation with regard to entrepreneurship a considerable amount of literature deals with the influence of institutions on entrepreneurship but for all that little is known about the interplay between institutions and personal determinants of entrepreneurship in this paper the empirical evidence that older people in transition economies have low engagement in entrepreneurial activity is the starting point for analyzing how institutions moderate the relationship between individual characteristics and entrepreneurial choice the results show that the socioeconomic heritage of being exposed to socialism deters entrepreneurship an effect that is more pronounced for high impact entrepreneurship detailed analyses reveal that the effect is driven by devaluation of socialist work experience and the influence of socialism on mindset

staunching emigration from east germany age and the determinants of migration following the unification of germany in 1990 eastern wages and unemployment both rose rapidly i demonstrate that rising wages reduced eastern emigration greatly while rising unemployment had little effect this reflects the behavior of the young who are very sensitive to source region wages and relatively insensitive to source unemployment i show that most of the effect of source unemployment comes from the contemporaneous effect on those laid off who are more likely to be older i find that compared to stayers young emigrants are much more skilled older emigrants are slightly more skilled and commuters are not more skilled as measured by education and pre move wages my conclusions are based on a comparison of results from aggregate inter state migration data and individual data from the eastern sample of the german socio economic panel for 1990 2000 jel j61 p23

bank commercial loan markets and the role of market structure evidence from surveys of commercial lending abstract this paper seeks to test two tenets that underlie the current practice of antitrust analysis in banking the first is the view that bank commercial loan markets are local in nature and the second is the view that banks in more concentrated markets are more likely to engage in some form of noncompetitive behavior tests of both of these tenets are conducted using an extensive set of loan specific survey information not previously employed to address these issues results consistent with the existence of local banking markets and the dominance of competitive differences as an explanation for observed differences in loan rates are found

an introduction to the wage curve en conomists and policymakers are interested in understanding the forces that determine the level of unemployment and the level of wages this paper describes an empirical discovery made with the help of international microeconometric evidence covering more than a dozen nations about a link between these two variables the connection can be portrayed on a graph with the level of unemployment on the horizontal axis and the level of wages on the vertical axis then the wage curve as shown in figure 1 is a downwardsloping locus this relationship tells us that holding others things constant if a region has a rise in unemployment in a particular year those who live there will have a fall in their wages in that year what does this curve mean how in a field where fully controlled experiments are almost impossible could there be any convincing scientific basis for this wage curve what is the relationship between the wage curve and a phillips curve other than that the curve of figure 1 looks like a phillips curve with the vertical axis mislabeled how does the wage curve fit into existing economic knowledge and is the empirical finding consistent with competitive theory this paper sketches answers to these kinds of questions the discussion draws on our book the wage curve blanchflower and oswald 1994 where the points raised here are investigated more fully it also rests upon work done by other economists whose work is listed in the paper and the bibliography

innovation in china innovation has been increasingly recognized as a critical force in national economic growth not only in developed countries but also in emerging countries such as china and india this paper provides a critical review of the literature related to china s innovation capability first i evaluate the current status of china s innovation capability as measured not only by the level of human capital and output of academic research but also by patents products and services that directly benefit economic growth i then review the development pathway of china s national innovation system since the economic reforms including policies the role of the government and the engagement of different actors in the national innovation system following that i examine theories and empirical evidence that help to explain the evolution of china s innovation capability finally using china s experience i analyze the relationship between innovation capability and economic development and highlight how the uneven spatial distribution of innovation capability may affect china s regional economic development

training wages and sample selection estimating sharp bounds on treatment effects this paper empirically assesses the wage effects of the job corps program one of the largest federally funded job training programs in the u s even with the aid of a randomized experiment the impact of a training program on wages is difficult to study because of sample selection a pervasive problem in applied microeconometric research wage rates are only observed for those who are employed and employment status itself may be affected by the training program this paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection in contrast to existing methods the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest identification results estimators and their asymptotic distribution are presented the bounds suggest that the program raised wages consistent with the notion that the job corps raises earnings by increasing human capital rather than solely through encouraging work the estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection attrition copyright wiley blackwell

comparing innovation systems a framework and application to china s transitional context abstract this paper proposes a generic framework for analyzing innovation systems anchored around five fundamental activities r d implementation end use education linkage and focused on the performance implications of a system s structure and dynamics rather than simply describing the role and performance of particular actors institutions and policies this approach focuses on system level characteristics including the distribution of these activities within the system the organizational boundaries around them coordination mechanisms evolutionary processes and the effectiveness of the system in introducing diffusing and exploiting technological innovations the framework is applied to a comparison of china s national innovation system under central planning and since reforms revealing the evolving structure and dynamics of this system and current inconsistencies and perverse incentives that policymakers must address to realize their development goals more generally it provides a basis for addressing the implicit assumptions of organizational types roles and convergence among innovation systems emerging in very different contexts whether national regional or industrial

good bye lenin or not the effect of communism on people s preferences preferences for redistribution as well as the generosities of welfare states differ significantly across countries in this paper we test whether there exists a feedback process of the economic regime on individual preferences we exploit the experiment of german separation and reunification to establish exogeneity of the economic system from 1945 to 1990 east germans lived under a communist regime with heavy state intervention and extensive redistribution we find that after german reunification east germans are more in favor of redistribution and state intervention than west germans even after controlling for economic incentives this effect is especially strong for older cohorts who lived under communism for a longer time period we further find that east germans preferences converge towards those of west germans we calculate that it will take one to two generations for preferences to converge completely

the diversification and financial performance of us credit unions abstract for us credit unions revenue from non interest sources has increased significantly in recent years we investigate the impact of revenue diversification on financial performance for the period 1993 2004 the impact of a change in strategy that alters the share of non interest income is decomposed into a direct exposure effect reflecting the difference between interest and non interest bearing activities and an indirect exposure effect which reflects the effect of the institution s own degree of diversification on both risk adjusted and unadjusted returns measures a positive direct exposure effect is outweighed by a negative indirect exposure effect for all but the largest credit unions this may imply that similar diversification strategies are not appropriate for large and small credit unions small credit unions should eschew diversification and continue to operate as simple savings and loan institutions while large credit unions should be encouraged to exploit new product opportunities around their core expertise

endogenous indoctrination occupational choices the evolution of beliefs and the political economy of reforms i analyse a model where workers self select in the educational occupation in a way which is correlated with their beliefs about the working of the market economy teachers have a disproportionate effect on the transmission of beliefs therefore they generate a bias which makes it harder for the population to learn the true parameters of the economy if these are favourable to the market economy two parameters determine this bias social entropy defines how predictable one s occupation is as a function of one s beliefs heritability is the weight of the family s beliefs in the determination of the priors of a new generation both heritability and social entropy reduce the bias and make it easier to learn that the market economy is good under the assumption that it is

resource partitioning and the organizational dynamics of fringe banking we examine the emergence and proliferation of payday lenders fringe businesses that provide small short term but high cost loans we link the organizational dynamics of these businesses to two trends in consumer lending in the united states the continuing consolidation of mainstream financial institutions and the expansion of such institutions in the provision of financial services regarded as similar to payday loans we explain the coexistence in mature industries of large scale organizations in the market center and smaller specialists in the periphery by testing and extending the organizational model of resource partitioning our focus is on two under examined aspects of the model the dynamic underlying the partitioning process and the conditions under which the market remains partitioned the empirical analysis covers payday lenders banks and credit unions operating in wisconsin between 1994 and 2008

earnings schooling and economic reform econometric evidence from hungary 1986 2004 how does the relationship between earnings and schooling change with the introduction of comprehensive economic reform this article sheds light on this question using a unique data set and procedure to reduce sample selection bias the evidence is from consistently coded nonretrospective data for about 4 million hungarian wage earners returns to skill increased 75 percent from 1986 to 2004 that is during the period stretching from communism to full membership in the european union the winners were those with a college or university education and those employed in the services sector which here excludes those in public services the reform losers were those in construction and agriculture those with only a primary or vocational education who experienced a decline in returns to their education and younger workers who acquired most of their education after the main reforms were in place

ownership and firm innovation in a transition economy evidence from china we examine innovation performance of firms in a transition economy from an ownership perspective we focus specifically on the relationship between ownership structures and firm innovation performance drawing on data from 548 chinese firms we find volume of patent registration to be most strongly influenced by foreign ownership in the firm along with firm affiliation within a business group the influence of state and institutional ownership on innovation performance is positive but lagged contrary to expectations insider ownership leads to lower innovation performance and concentrated ownership has no significant impact our study has two principal contributions firstly we utilize a comprehensive treatment of ownership characteristics overcoming weakness in previous studies that have used a more narrow focus on ownership type secondly we contribute to understanding of how firms in transition economies build indigenous capabilities for innovation by drawing attention to the interplay of foreign and domestic control of agents innovation

winners and losers in transition returns to education experience and gender in slovenia the authors identify winners and losers in slovenia s economic transition by tracing changes in returns to education experience and gender and changes in wage inequality from 1987 to 1991 they find the following relative wages and employment rose for the most educated and fell for the least educated in all industries relative wages and employment rose with years of work experience until pensionable age at pensionable age relative wages increased very rapidly and relative employment was greatly reduced using pension policies to encourage early retirement drastically reduced the supply of very experienced workers either the policy caused firms to bid up wages for workers of pensionable age to keep them from retiring or it caused a selection process in which only the highest paid workers remained in the workforce regardless the pension policy has proved to be costly and early retirements did not make room for the youngest workers but for those just under pensionable age women gained relative to men in both wages and employment primarily because they occupy education and industry groups less adversely affected by the transition not because of economywide reductions in discrimination against women increasing returns to education and experience contributed to wage inequality but the variance in wages also increased for individuals with identical skills big changes in relative wages should signal future reallocation of labor toward more productive higher paying sectors setting minimum wages fixing ranges of pay and indexing wages to inflation did not prevent increases in wage variation from occuring wage minimums did not appear to have an effect presumably because inflation reduced real minimum wages so quickly that most workers were paid above the minimums in slovenia policy changes are reflected in labor market outcomes disabling the tax transfer policy from relatively profitable to relatively unprofitable firms and eliminating worker referendums on wage scales removed mechanisms that tended to compress wage variation greater demand for skilled workers also reflected both the economywide need to cope with uncertainty and such industry specific factors as reduced labor demand especially in less skill intensive industries the results in slovenia contrast sharply with those in eastern germany eastern german workers have had decreasing returns to education and experience but it is not clear how relevant the eastern german experience is to other transitional economies because of western germany s efforts to alleviate problems more similar to the authors findings are the results of flanagan 1993 on the czech republic which show increasing returns to education but decreasing returns to experience in some respects slovenia is atypical because it is richer and more western in orientation than other transitional economies however economies could learn from the experience in slovenia because slovenia also had social ownership full employment coupled with substantial hidden unemployment and an egalitarian wage structure and slovenia has introduced labor market reform and experienced social dislocations similar to those in other transitional european economies

economic reforms and human development evidence from transition economies do market oriented economic reforms result in higher levels of human well being this article studies the impact of macro level institutional and infrastructure reforms on the economic educational and health dimensions of human well being among 25 transition economies we use panel data econometrics based on the lsdvc technique to analyse the effects of market oriented reforms on the human development index hdi as a measure of human well being from 1992 to 2007 the results show the complexity of reform impacts in transition countries they show that institutional and economic reforms led to positive economic effect and significant impacts on other dimensions of human development we find some positive economic impacts from infrastructure sectors reforms however not every reform measure appears to generate positive impacts large scale privatizations show negative effects in health and economic outcomes the overall results show the importance of the interaction among different reform measures and the combined effect of these on human development

value of human capital in transition to market evidence from slovenia abstract the paper summarizes existing hard evidence concerning the changing value of human capital in slovenia s transition to a market system it investigates changes in patterns of job mobility via estimating multinomial logit and hazard models and changes in the structure of wages via earnings functions associated with education experience gender and ethnicity data are drawn from unusually rich administrative data sets that include personal characteristics work history and earnings for virtually all labor force participants all evidence points to rapidly increasing marginal returns to human capital in transition economies

editorial does good marketing cause bad unemployment questionable methods for increasing nominal wages reduce real wages i e buying power by creating inflation shortages lower quality and long term unemployment to increase real wages i e the ability to buy more economic principles prescribe increasing productivity i e greater output from less input in contrast marketing principles prescribes increasing the value of output i e greater customer benefits through innovation beyond increasing real wages innovation spawns new occupations better matching individuals with skills and providing greater nonmonetary benefits i e job satisfaction unfortunately threatened entrenched incumbents often solicit protectionist legislation claiming negative externalities e g short term unemployment lower wages and burdens on society innovation does require labor to move from inferior to superior organizations i e unemployment however protectionism only delays and dramatically aggravates the inevitable trauma associated with progress as worker skills firm practices and buyer welfare fall further behind recent attacks demonizing wal mart e g the dubious vlasic pickle claim epitomize this situation they are archaic vanilla protectionism menacing both imperiled consumers and every consumer driven business

does medicare save lives health insurance characteristics shift at age 65 as most people become eligible for medicare we measure the impacts of these changes on patients who are admitted to hospitals through emergency departments for conditions with similar admission rates on weekdays and weekends the age profiles of admissions and comorbidities for these patients are smooth at age 65 suggesting that the severity of illness is similar on either side of the medicare threshold in contrast the number of procedures performed in hospitals and total list charges exhibit small but statistically significant discontinuities implying that patients over 65 receive more services we estimate a nearly 1 percentage point drop in 7 day mortality for patients at age 65 equivalent to a 20 reduction in deaths for this severely ill patient group the mortality gap persists for at least 9 months after admission

banks responses to deregulation profits technology and efficiency the deregulation of interest rates in the early 1980s raised bank funding costs and lowered profits in response banks raised fees for deposit services reduced branch operating costs and shifted to higher earning assets rates of return did not regain their prederegulation levels until the early 1990s our goal is to decompose the change in bank profits following deregulation into i intemal bank initiated adjustments to the new regulatory structure and ii external contemporaneous changes in banks business environment this decomposition will depend in part on the assumed competitive structure of the banking industry with perfect competition output and input prices are part of the external environment and banks responses are limited to changes in output and input quantities an alternative approach assumes imperfect competition where banks have some control over output prices deposit fees minimum balance requirements and interest rates on certain loans and output quantities and input prices comprise the external environment the altemative model is supported by the data using this model large banks but not smaller banks are found to have relied primarily on changing output prices and input use to mitigate and reverse the negative effects of deregulation on profits the adjustment to deregulation was essentially complete after four years following this additional changes in bank profitability during the late 1980s were primarily due to changes in banks business environment

long lasting effects of socialist education abstract political regimes influence the content of education and criteria used to select and evaluate students we study the impact of a socialist education on the likelihood of obtaining a college degree and on several labor market outcomes by exploiting the reorganization of the school system in east germany after reunification our identification strategy uses cutoff birth dates for school enrollment that lead to variation in the length of exposure to the socialist education system within the same birth cohort an additional year of socialist education decreases the probability of obtaining a college degree and affects longer term labor market outcomes for men

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

firm networking and bribery in china assessing some potential negative consequences of firm openness economic openness both in terms of increased international trade exposure and enhanced inter firm networking has been a key element of china s economic emergence since the implementation of market reforms and the opening up policy over 30 years ago unfortunately these changes have also coincided with the increased incidence of bribery and corruption both in general and in the specific context of china research on the relationship between a firm s tendency toward openness and its propensity to engage in bribery is scarce this study seeks to fill this gap based on empirical evidence provided by a large sample of chinese firms the findings of the study reveal that firms increased networking and openness tend to occur contemporaneously with greater bribery and corruption we suggest that this may be due to the misuse of guanxi based networks that coincide with the presence of firms open network strategies heightened by the potential loss of resource and capability heterogeneity and hence reduced competitive advantages in the context of openness we further find that firms paying bribes do so as an attempt to overcome unnecessary bureaucratic processes and ineffective institutional support that might tend to hinder their development

changes in the structure of earnings during the polish transition abstract we document changes in the structure of earnings during the economic transition in poland we find that inequality in labor earnings increased substantially from 1988 to 1996 a common view is that the reallocation of workers from a public sector with a compressed wage distribution to a private sector with much higher wage inequality accounts for the bulk of increased earnings inequality during transition see e g the models of aghion and commander 1999 aghion philippe commander simon 1999 on the dynamics of inequality in the transition economics of transition 7 275 2898 and commander and tolstopiatenko 1998 commander simon tolstopiatenko andrei 1998 the role of unemployment and restructuring in the transition in commander simon ed enterprise restructuring and unemployment in models of transition the world bank washington pp 169 192 however our decomposition of the sources of the increase in inequality suggests that this compositional effect accounts for only 39 of the increase fully 52 of the increase is due to the increase in the variance of wages within sectors that is earnings inequality within both the private and public sectors grew substantially and by similar amounts this is consistent with prior work suggesting that even state owned enterprises in poland moved towards competitive wage setting as they restructured see e g pinto et al 1993 pinto brian belka marek krajewski stefan 1993 transforming state enterprises in poland evidence on adjustment by manufacturing firms brookings papers on economic activity 213 70 commander and dhar 1998 commander simon dhar sumana 1998 enterprises in the polish transition in simon commander ed enterprise restructuring and unemployment in models of transition the world bank washington pp 109 142 a substantial part of the increase in earnings inequality was between group due largely to increased education premiums however changes in inequality within education experience gender groups account for about 60 percent of the increase in overall earnings inequality the increases in within group inequality were very different across skill groups with much larger increases for highly educated workers these patterns hold in both the private and public sectors although increases in education premiums were somewhat greater in the private sector

the political economy of educational content and development lessons from history beyond years of schooling educational content can play an important role in the process of economic development individuals choices of educational content are often shaped by the political economy of government policies that determine the incentives to acquire various skills we first present a model in which differences in human capital investments emerge as an equilibrium outcome of private decisions and government policy choices we then illustrate these dynamics in two historical circumstances in medieval europe states and the church found individuals trained in roman law valuable and eventually supported productive investments in this new form of human capital in late 19th century china elites were threatened by the introduction of western science and engineering and continued to select civil servants who enjoyed substantial rents based on their knowledge of the confucian classics as a result investments in productive modern human capital were not made

the long term costs of government surveillance insights from stasi spying in east germany we investigate the long run effects of government surveillance on civic capital and economic performance studying the case of the stasi in east germany exploiting regional variation in the number of spies and administrative features of the system we combine a border discontinuity design with an instrumental variables strategy to estimate the long term post reunification effect of government surveillance we find that a higher spying density led to persistently lower levels of interpersonal and institutional trust in post reunification germany we also find substantial and long lasting economic effects of stasi surveillance resulting in lower income higher exposure to unemployment and lower self employment

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

wage effects of the move toward free markets in east germany this analysis of data from the german socio economic panel soep for the years 1989 91 illuminates important changes in the structure of wages that were occurring in the former east germany during its transition toward a capitalist economy and changes that are probably occurring in other countries in eastern europe as well under the new capitalist wage regime workers realized significant returns to schooling gained under socialism but no significant returns to work experience because work experience is the largest element in the human capital of older workers their wages fell under the new system and the results suggest that their wages will continue to fall relative to those of younger workers generous transfer payments from western germany may prevent an absolute decline in living standards of these workers older workers in other eastern countries however will have no such social assistance and their living standards will probably fall

post unification wage growth in east germany following monetary union with west germany in 1990 the real wage of east german workers rose 83 i use the german socio economic panel data to investigate the determinants of wage growth and assess whether they are consistent with efficient restructuring although job changing rates were initially high the share of wage growth that accrued to movers was little higher than in the west suggesting that the incentives to move were too low for 1990 to 1991 the biggest gainers were low wage workers generally and women and the less educated specifically for 1991 to 1996 the biggest gainers were women and the better educated

determinants of democracy a panel study of over 100 countries from 1960 to 1995 finds that improvements in the standard of living predict increase in democracy as measured by a subjective indicator of electoral rights the propensity for democracy rises with per capita gdp primary schooling and a smaller gap between male and female primary attainment for a given standard of living democaracy tends to fall with urbnization and with a greater reliance on natrual resources democracy has little relation to country size but rises with the middle class share of income the apparently strong relation of democracy to colonial heritage mostly disappears when the economic variables are held constant similarly the allowance for these economic variables weakens the interplay between democracy and religious affiliation however negative effects from muslim and non religious affiliations remain intact

women in transition changes in gender wage differentials in eastern europe and the former soviet union under state socialism women fared relatively well in the labor market female male wage differentials were similar to those in the west and female labor force participation rates were among the h

national innovation systems and the intermediary role of industry associations in building institutional capacities for innovation in developing countries a critical review of the literature abstract developed over the past three decades the national innovation system concept nis has been widely used by both scholars and policy makers to explain how interactions between a set of distinct nationally bounded institutions supports and facilitates technological change and the emergence and diffusion of new innovations this concept provides a framework by which developing countries can adopt for purposes of catching up initially conceived on structures and interactions identified in economically advanced countries the application of the nis concept to developing countries has been gradual and has coincided in the nis literature with a move away from overly macro interpretations to an emphasis on micro level interactions and processes with much of this work questioning the nation state as the most appropriate level of analysis as well as the emergence of certain intermediary actors thought to facilitate knowledge exchange between actors and institutions this paper reviews the nis literature chronologically showing how this shift in emphasis has diminished somewhat the importance of both institutions particularly governments and the political processes of institutional capacity building in doing so the paper suggests that more recent literature on intermediaries such as industry associations may offer valuable insights to how institutional capacity building occurs and how it might be directed particularly in the context of developing countries where governance capacities are often lacking contributing to less effective innovation systems stagnant economies and unequal development

life cycle effects of age at school start in sweden children typically start school the year they turn seven we combine this school entry cutoff with individuals birthdates to estimate effects of school starting age ssa on educational attainment and long run labour market outcomes we find that school entry age raises educational attainment and show that postponing tracking until age 16 reduces the effect of ssa on educational attainment on average ssa only affects the allocation of labour supply over the life cycle and leaves prime age earnings unaffected but for individuals with low educated parents we find that prime age earnings increase in response to age at school start

the competitive role of credit unions in small local financial services markets although there is a considerable literature on the role of market structure in banking markets no attention has been given to the impact of the competitive discipline provided by credit unions on consumer credit rates offered by banks after presenting a theoretical framework for understanding the impact credit unions should be expected to have this article analyzes a pooled cross sectional time series sample with roughly 1 000 observations on relatively small united states markets with the focus on explaining bank rates for two types of consumer loans results confirm the previously observed role of market structure and suggest a significant role for credit unions in disciplining the exercise of market power by banks

inequality transfers and growth new evidence from the economic transition in poland this paper analyzes the evolution of inequality in poland during the economic transition that began in 1989 1990 using microdata from the household budget surveys we find that after a brief spik

the persistence of early childhood maturity international evidence of long run age effects a continuum of ages exists within each starting class due to the use of a single school cut off date making the oldest children approximately twenty percent older than the youngest children at school entry we provide substantial evidence that these initial maturity differences have long lasting effects on student performance across oecd countries in particular the youngest members of each cohort score 4 12 percentiles lower than the oldest members in grade four and 2 9 percentiles lower in grade eight depending upon the country in fact data from canada and the united states shows that the youngest members of a cohort are even less likely to enroll in pre university academic track courses and high end academic universities taken together these findings point to important early relative maturity effects that propagate themselves into adulthood through the structure of education systems

which countries have state religions among 188 countries 72 had no state religion in 2000 1970 and 1900 58 had a state religion throughout and 58 had 1 or 2 transitions we use a hotelling spatial competition model to analyze the likelihood that the religion market would be monopolized similar forces influence a government s decision to establish a state religion consistent with the model the probability of state religion in 1970 and 2000 is increasing with the adherence rate to the main religion has a nonlinear relation with population and has little relation with per capita gdp the probability of state religion decreases sharply under communism but lagged communism has only a weak effect with costly adjustment for institutions the probability of state religion in 1970 or 2000 depends substantially on the status in 1900 this persistence is much stronger for countries with no major regime change than for countries with such a change

economic reforms and gender inequality in urban china abstractthis study jointly examines the gender earnings gap and employment rate in urban china using a longitudinal data set that covers the period of 1989 2004 consistent with previous studies we find that gender earnings gap increased by 5 percentage points between 1989 and 1997 since then its changes have become much more moderate actually after controlling for observed characteristics the size of the earnings gap in 2004 is almost the same as it was in 1997 the widening earnings gap in the 1989 1997 period was accompanied by a rising employment gap between men and women particularly among those aged 45 and older the stability in the gender earnings gap in the later years co occurred with a decline in the employment of less educated women

coping with change international differences in the returns to skills international data from the piaac survey allow estimation of comparable labor market returns to skills for 32 countries returns to skills are larger in faster growing economies consistent with the hypothesis that skills are particularly important for adaptation to economic change

the dynamics of chinese rural households participation in labor markets the work is devoted to the dynamics of labor market participation of chinese rural households based on a theoretical farm household framework the choice between four distinct labor market participation states is empirically analyzed using household data over the period 1995 2002 from the province zhejiang we apply a discrete time hazard approach to analyze households labor market participation histories in particular we investigate the movements between autarky and participation in general and more specifically the shifts between part time and full time farming estimation results suggest significant duration dependence more precisely a decreasing risk of moving from one state to another with an increasing time a household occupies one of these states further the likelihoods of starting any participation in labor markets and to start part time farming are considerably higher than to end participation or to return to full time farming in addition we find that labor market participation decisions are significantly related to several household and farm characteristics

china s innovation system reform and growing industry and science linkages abstract in this paper linkages of s t activities between industry and science are statistically investigated based on a firm level dataset from an s t survey by the national bureau of statistics nbs of the prc of about 22 000 manufacturing firms during the transition period of china s innovation system from 1996 to 2002 firms s t outsourcing activities increased significantly econometrics analysis reveals that 1 absorptive capacity for s t outsourcing becomes important over time 2 innovation system reforms for more market based competition work for better incentive scheme for innovation though s t linkage activities and 3 government funding of s t induces more s t linkages

credit union loan rate determinants in the united states credit union participation in the consumer lending market continues to grow as an increasing number of consumers and small businesses become members and open accounts this study investigates the d

zero returns to compulsory schooling in germany evidence and interpretation abstract we estimate the impact of compulsory schooling on earnings using changes in compulsory schooling laws in west germany after world war ii most estimates in the literature indicate returns in the range of 10 to 15 while our research design is very similar to studies for various other countries we find a zero return we find no evidence that this is due to labor market institutions or the apprenticeship training system in germany the result might be due to the fact that the basic skills most relevant for the labor market are learned earlier in germany than in other countries

the effect of education on crime evidence from prison inmates arrests and self reports we estimate the effect of high school graduation on participation in criminal activity accounting for endogeneity of schooling we begin by analyzing the effect of high school graduation on incarceration using census data instrumental variable estimates using changes in state compulsory attendance laws as an instrument for high school graduation uncover a significant reduction in incarceration for both blacks and whites when estimating the impact of high school graduation only ols and iv estimators estimate different weighted sums of the impact of each schooling progression on the probability of incarceration we clarify the relationship between ols and iv estimates and show that the weights placed on the impact of each schooling progression can explain differences in the estimates overall the estimates suggest that completing high school reduces the probability of incarceration by about 76 percentage points for whites and 3 4 percentage points for blacks we corroborate these findings using fbi data on arrests that distinguish among different types of crimes the biggest impacts of graduation are associated with murder assault and motor vehicle theft we also examine the effect of drop out on self reported crime in the nlsy and find that our estimates for imprisonment and arrest are caused by changes in criminal behavior and not educational differences in the probability of arrest or incarceration conditional on crime we estimate that the externality of education is about 14 26 of the private return to schooling suggesting that a significant part of the social return to education comes in the form of externalities from crime reduction

general education versus vocational training evidence from an economy in transition abstract this paper examines the relative benefits of general education and vocational training during romania s transition to a market economy we examine a 1973 educational reform that shifted a large proportion of students from vocational training to general education using census and household survey data we analyze the effect of this policy with a regression discontinuity design we find that men affected by the policy are significantly less likely to work in manual or craft related occupations but have similar levels of labor market participation and earnings compared to their counterparts unaffected by the policy we conclude that differences in labor market returns between graduates of vocational and general schools are largely driven by selection

non separable time preferences novelty consumption and body weight theory and evidence from the east german transition to capitalism abstract this paper develops a dynamic model to illustrate how diet and body weight change when novel food products become available to consumers we propose a microfounded test to empirically discriminate between habit and taste formation in intertemporal preferences moreover we show that novelty consumption and endogenous preferences can explain the persistent correlation between economic development and obesity by empirically studying the german reunification we find that east germans consumed more novel western food and gained more weight than west germans when a larger variety of food products became readily accessible after the fall of the wall the observed consumption patterns suggest that food consumption features habit formation

wage inequalities a result of different levels and fields of tertiary education in this article we examine the impact of tertiary education on the amounts of wages in slovenia for 2011 we use micro data from the statistical survey structure of earnings statistics and micro data from the survey of graduates from tertiary education we found out that there are significant differences in the amounts of wages as regards the level and field of education region and activity of the company where the person is employed also plays an important role in wage determination also the effects of gender and public private sector are statistically significant using the average wage per hour as dependent variable gives similar results as the average annual wages

data watch research data from transition economies ten years into the transition from communism in the countries of the former soviet union and central and eastern europe a cursory search of the econlit database turns up hundreds of empirical studies published in refereed journals that deal with various issues in transition economies even so we suspect that many economists are prevented from making full use of the possibilities offered by the transition by the difficulties of obtaining and interpreting data from the region the purpose of this brief essay is to indicate some possible sources for data that can be used for economic analysis as well as some cautions regarding the use of these data

the determinants of bank rates in local consumer lending markets comparing market and institution level results 1 introductionwith the exception of a few very recent studies the sizeable literature on the impact of market structure in banking markets1 has ignored the potential competitive role played by credit unions this is surprising since the continuing consolidation of the financial services industry in recent years has naturally raised concerns about competitive effects and credit unions would seem to be a likely source of market discipline 2 this paper explores these issues using both market and firm data using a variety of approaches economists have started paying some attention to the interaction between banks and credit unions emmons and schmid 2000 using county level data examine twoway intertemporal linkages between credit union participation rates and market concentration of the commercial banking sector to support the view that the two types of institutions compete in the market for consumer deposits similarly feinberg and rahman 2001 find that credit union and bank rates for two consumer loan products can each be shown to be influenced by the other tokle and tokle 2000 found a competitive influence of credit unions on bank certificate of deposit cd rates offered in idaho and montana while feinberg 2001 explored their impact on consumer loan rates in a broader sample of relatively small local markets3 over the 1992 1997 period the latter article found that both unsecured and new vehicle loan rates offered by banks in these markets were affected in a significant manner by the market share held by the two leading banks implying a competitive role for smaller financial institutions generally and for new vehicle loan rates alone by the share of credit unions in those markets whether these results would generalize to larger metropolitan areas is unclear and is the topic of what follows i focus on the same two loan products 24 month unsecured non credit card loans and 48 month new vehicle loans both of which seem likely to be provided in a local market and empirically explain the determinants of bank loan rates in a sample of 56 markets both large and small for the period 1992 1998 an innovative aspect of this paper is that i analyze both market level data and institution level data for 81 banks in those 56 markets and consider as well the role of multimarket linkages affecting these banks 2 theoretical frameworkvirtually all models of imperfect competition imply that increasing entry and supply from fringe suppliers will lower prices this clearly suggests that an increasing credit union presence should discipline prices in local financial services markets to formalize i employ a modified version of the dominant firm price leadership model the modification involves the notion that while credit unions may generally be thought of as fringe suppliers not all banks and savings and loans sl ii as cu increases the li declines iii as epsilon sub cu increases the li declines and not quite as obvious but easy to derive iv the declines in ii and iii are larger in absolute value as cr2 is larger

markets for communist human capital returns to education and experience in the czech republic and slovakia this research examines how the earnings structure in the czech republic and slovakia changed after the collapse of those countries communist governments tests of four similar micro data sets show that returns to education rose significantly with the transition to non communist governments for example returns to education rose from 2 4 to 5 2 for czech men between 1984 and 1993 though women had in general higher returns to education than men did returns for men increased more with the regime change among both sexes those with academic secondary education experienced particularly large earnings increases returns to experience on the other hand fell earnings structure changes appear to have been larger in the czech republic than in slovakia probably because transition occurred more rapidly and deeply in the former

the transition in east germany when is a ten point fall in the gender wage gap bad news the gender wage gap in east germany has narrowed by 10 percentage points in transition but women have experienced much more severe employment difficulties than men using the german socio economic panel for 1990 94 i show that on balance women have lost relative to men almost half the relative wage gain is due to exits from employment of the low skilled who are disproportionately women the female employment decline is not primarily voluntary more than half the gender gap in the hazard rate from employment reflects a general fall in demand for low skilled workers reduced child care plays no role

returns to human capital under the communist wage grid and during the transition to a market economy we estimate returns to human capital during communism and the transition using data on 2 284 men in the czech republic we show a extremely low and constant rates of return to education under the communist wage grid and dramatic increases in transition which do not differ by firm ownership b radical changes in returns to several fields of study and sheepskin effects in both regimes c identical wage experience profile in both regimes d similar 1996 returns to human capital obtained in communism and in transition and e changes in the interindustry wage structure a decomposition of the variance of wages finds individuals unobservable effects from communism to persist into transition but most of the variance is due to unobservable effects introduced in the transition

the price concentration relationship in banking the commonly observed positive correlation between market concentration and profitability may be explained by noncompetitive pricing behavior as argued by the structure performance hypothesis or by the greater efficiency of firms with dominant market shares as argued by the efficient structure hypothesis by examining the price concentration relationship instead of the profit concentration relationship this paper tests the structure performance hypothesis in a manner that excludes the efficient structure hypothesis as an alternative explanation of the results the results strongly support the structure performance hypothesis and are robust with respect to model specification measurement of concentration and econometric technique copyright 1989 by mit press

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded