pareto improving campaign finance policy this paper argues that campaign finance policy in the form of contribution limits and matching public financing can be pareto improving even under very optimistic assumptions concerning the role of campaign advertising and the rationality of voters the optimistic assumptions are that candidates use campaign contributions to convey truthful information to voters about their qualifications for office and that voters update their beliefs rationally on the basis of the information they have seen the argument also assumes that campaign contributions are provided by interest groups and that candidates can offer to provide policy favors to attract higher contributions

on selecting a measure of labour activity evidence from registered nurses 1981 and 1989 the purpose of this paper is to demonstrate the effects of the selection of measures of labour activity on the conclusions that are derived from the analysis of individual labour supply the results of the analysis using three commonly specified single measures annual hours worked hours worked per week and weeks worked per year as the dependent variable in tobit equations are compared with those obtained using a probit 2sls in which the individual labour supply is measured by hours worked per week and weeks worked per year the rhs variables are those that are used in earlier individual labour supply studies and are the same in all of the models analysed among the findings are 1 wage rate effects that are quite strong in single equation models and disappear when a multi equation approach is used 2 the effects of children on labour supply is more complex than in indicated in single equation results and 3 duration dependence is much stronger than indicated results using a single measure of indiv

the perceived returns to education and the demand for schooling economists emphasize the link between market returns to education and investments in schooling though many studies estimate these returns with earnings data it is the perceived returns that affect schooling decisions and these perceptions may be inaccurate using survey data for eighth grade boys in the dominican republic we find that the perceived returns to secondary school are extremely low despite high measured returns students at randomly selected schools given information on the higher measured returns completed on average 0 20 0 35 more years of school over the next four years than those who were not

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

rent seeking with bounded rationality an analysis of the all pay auction the winner take all nature of all pay auctions makes the outcome sensitive to decision errors which we introduce with a logit formulation the equilibrium bid distribution is a fixed point the belief distributions that determine expected payoffs equal the choice distributions determined by expected payoffs we prove existence uniqueness and symmetry properties in contrast to the nash equilibrium the comparative statics of the logit equilibrium are intuitive rent dissipation increases with the number of players and the bid cost overdissipation of rents is impossible under full rationality but is observed in laboratory experiments our model predicts this property

on intertemporal substitution and aggregate labor supply in this paper the author presents an econometric investigation of t he implications of the intertemporal substitution hypothesis for aggregate employment in the united states the tests are based on a version of the hypothesis with time separable preferences on the basis of the evidence produced the hypothesis is quite successful in explaining fluctuations in aggregate employment although almost totally unsuccessful in accounting for fluctuations in employee hours these findings suggest that the hypothesis might have an important role to play in macroeconomic modeling although they contradict attempts to account for aggregate fluctuations solely in terms of continuous competitive equilibrium in labor markets copyright 1987 by university of chicago press

the effect of pension design on employer costs and employee retirement choices evidence from oregon abstract we use administrative data from oregon s public employees retirement system pers to study the effect of pension design on employer costs and employee retirement timing decisions during our 1990 2003 sample period pers calculates each member s retirement benefit using up to three different formulas defined benefit db defined contribution dc and a combination of db and dc and pers pays the maximum benefit for which the member is eligible we show that this maximum benefit calculation results in average ex post retirement benefits that are 54 higher than if they had been calculated using only the db formula and that employees receiving dc benefits are significantly more likely than employees receiving db benefits to retire before the plan s normal retirement age monte carlo simulations verify that the higher costs could have been predicted at the start of our sample period exploiting exogenous plan changes we show that employees respond to within year variation in their retirement incentives and consistent with peer effects that they respond more strongly to these incentives when more of their coworkers face similar incentives finally consistent with the emerging literature on financial mistakes by households we show that a small but noteworthy fraction of retirees would have benefited from shifting their retirements by as little as one month

some talk money in politics a partial review of the literature the financing of political campaigns is an area of active scholarly study i review some of the recent literature and discuss important methodological issues that arise in empir ical research on campaign expenditures and campaign contributions the effects of campaign expenditures and advertising on candidate and ballot measure elections are summarized as are the impacts of contributions on contributors welfare many states have changed their campaign finance laws in the past few years and i describe work that exploits variations in these laws a discussion of the strategies used by interest groups to allocate their campaign contributions provides insights into contributors motives

bid costs and endogenous bid caps we study contests where several privately informed agents bid for a price all bidders bear a cost of bidding that is an increasing function of their bids and moreover bids may be capped we show that regardless of the number of bidders if agents have linear or concave cost functions then setting a bid cap is not profitable for a designer who wishes to maximize the average bid on the other hand if agents have convex cost functions i e an increasing marginal cost then affectively capping the bids is profitable for a designer facing a sufficiently large number of bidders

repeated lobbying by commercial lobbyists and special interests developing a lobbying model of repeated agency we explain previously unexplained features of the real world lobbying industry lobbying is divided between direct representation by special interests to policymakers and indirect representation where special interests employ professional intermediaries called commercial lobbyists to lobby policymakers on their behalf our analytical structure allows us to explain several trends in lobbying for example using the observation that in the united states over the last 20 years policymakers have spent an increasing amount of their time fundraising as opposed to legislating we are able to explain why the share of commercial lobbyist activity in total lobbying has risen dramatically and now constitutes over 60 of the total the key scarce resource in our analysis is policymakers time policymakers allocate this resource via implicit repeated agency contracts that are used to incent special interests and commercial lobbyists to provide a mix of financial contributions and information on policy proposals these implicit agency contracts solve both an information problem in the presence of unverifiable policy information and a contracting problem in the absence of legal enforcement these repeated relationships that are often described using the pejorative term cronyism in the popular press may in certain circumstances be welfare improving jel d72 d82 h1 p16

underpaid or overpaid wage analysis for nurses using job and worker attributes the nursing labor market presents an apparent puzzle hospitals report chronic shortages yet standard wage analysis shows that nursing wages have increased over time and greatly exceed those received by other college educated women this paper addresses this puzzle data from the current population survey cps are matched with detailed job content descriptors from the occupational information network o net nursing jobs require higher levels of skills and more difficult working conditions than do jobs for other college educated workers a standard cps only wage regression shows a registered nurse rn wage advantage of 22 log points compared to a pooled male female group of college educated workers control for o net job attributes reduces the rn gap to 08 while an arguably preferable nonparametric estimator produces a wage gap estimate close to zero we conclude that nurses receive compensation close to long run opportunity costs narrowing if not resolving the rn wage shortage puzzle

savings in times of demographic change lessons from the german experience pension reforms in many developed countries make individuals shoulder a bigger share of longevity and income risks the desired response is that individuals accumulate private assets for retirement whether this actually takes place is of paramount relevance for scientists and policy makers we take germany as an example twenty years of pension reform have transformed the monolithic german pension system into a multi pillar system formerly generous public pension benefits are gradually being reduced while substantial incentives are granted to occupational and private saving schemes has this transition worked out we survey the reform steps and household s reactions how did individuals adjust their labor market behavior how did private and occupational pension plans take off how do behavioral adjustments vary in the population most germans adapted to the new situation both actual and expected retirement decisions changedand the share of households without supplementary pensions decreased from 73 to 39 in little more than a decade this is a remarkable success nonetheless households with low education low income and less financial education did neither adjust their retirement behavior nor pick up supplementary pension plans and are thus likely to face difficulties in bridging the gap arising in future pension income

addressing nurse shortages what can policy makers learn from the econometric evidence on nurse labour supply this paper provides a detailed review of the international studies that have used formal econometric models to investigate the labour supply decision of registered nurses rns the main finding is that at least in the short run rn labour supply appears to be fairly unresponsive to wage changes consequently even large wage increases are unlikely to be successful in tackling current and predicted nurse shortages this finding points to the importance of non pecuniary job aspects in influencing labour supply however the paper concludes by arguing that these empirical findings should be viewed with some caution given both theoretical and econometric limitations

what has been learned about labor supply in the past twenty years the main advance in the study of labor supply in the past 20 years has come in recognizing and interpreting the variety of different labor supply functions that coexist in the empirical literature a crucial theoretical distinction with important empirical payoff is that between labor supply choices at the extensive margin i e labor force participation and employment choices and choices at the intensive margin i e choices about hours of work or weeks of work for workers another important distinction is the one between a descriptive labor supply function and a structural supply function that can be the basis for out of sample policy investigations concerning responses to tax and welfare programs and evaluations of welfare losses a full understanding of the participation hours dichotomy leads to an appreciation of the importance of the problem of selection bias what is the wage to impute to a nonworking person these distinctions are a legacy of the research conducted on labor supply over the past 20 years many important empirical questions have been addressed i how strong are the effects of taxes welfare and transfer programs on labor supply ii how important is intertemporal substitution can life cycle labor supply models explain business cycle labor supply behavior iii has the consensus view of the 1960 s of high labor supply elasticities for married women and low labor supply elasticities for married men held up all of the empirical evidence assembled on labor supply must be called into question in the light of important research on the basic quality of the data conducted by analysts at the university of michigan i discuss this evidence in a concluding section except for my discussion of measurement issues i focus only on the major discoveries about which a general consensus has emerged

side effects of campaign finance reform because campaign finance reform is usually motivated by the concern that existing legislation cannot effectively prevent campaign contributions to buy favors this article assumes that contributions influence political decisions but given that it is also widely recognized that interest groups achieve influence by providing political decision makers with policy relevant information we also assume that lobbies engage in non negligible informational lobbying we focus on a single political decision to be taken and offer a simple model in which the optimal influence strategy is a mixture of both lobbying instruments our main result is to show that campaign finance reform may have important side effects it may deter informational lobbying so that less policy relevant information is available and as a result political decisions become less efficient jel c72 d72

information access and contributions a signaling model of lobbying interest groups pay monetary contributions to gain access and provide information to a policymaker if their interests are aligned with those of the policymaker s constituency they have costless access and report their private information truthfully if their interests conflict they are forced to pay a strictly positive contribution in order to enhance the credibility of their reports the policymaker bases her policy decision on the competing reports and the size of the contributions accompanying these reports the interest groups contribution decisions are plagued by a free rider problem i derive the implications of this problem for the size and pattern of contributions and for the degree of information aggregation

new evidence on pensions social security and the timing of retirement using a unique dataset that links the economic and demographic information of households with the details of their pension formulas i estimate the combined effect of social security and pension benefits on the probability of retirement in a cross section of the population near retirement age the accrual rate of retirement wealth is shown to be a significant determinant of the probability of retirement simulations of extensions in pension coverage comparable to those that occurred in the early postwar period can account for one fourth of the contemporaneous decline in labor force participation rates 1998 elsevier science s a all rights reserved

policy influence and private returns from lobbying in the energy sector in this article i quantify the extent to which lobbying expenditures by firms affect policy enactment to achieve this end i construct a novel dataset containing all federal energy legislation and lobbying activities by the energy sector during the 110th congress i then develop and estimate a game theoretic model where heterogeneous players choose lobbying expenditures to affect the probability that a policy is enacted i find that the effect of lobbying expenditures on a policy s equilibrium enactment probability to be statistically significant but very small nonetheless the average returns from lobbying expenditures are estimated to be over 130

campaign spending with office seeking politicians rational voters and multiple lobbies abstract i introduce a microfounded model of campaign finance with office seeking politicians a continuum of voters and a large number of heterogeneous lobbies lobbies make contributions to politicians according to a common agency framework politicians use contributions to finance their electoral expenditures voters are not fooled by electoral expenditures they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians the model is used to i determine the relation between campaign spending and the deviation from the median voter s preferred policy ii show the informational value of lobbies contributions iii evaluate the welfare implications of restricting campaign spending and iv interpret the empirical finding that campaign expenditures have a very low effect on election outcome although in equilibrium advertising provides voters with useful information under reasonable parameter values a ban on campaign contributions makes the median voter better off journal of economic literature classification numbers d72 d82 m37

a simple model of the commercial lobbying industry in this paper we present a model of the behavior of commercial lobbying firms such as the so called k street lobbyists of washington d c in contrast to classical special interest groups commercial lobbying firms represent a variety of clients and are not directly affected by policy outcomes they are hired by citizens or groups of citizens to advocate on their behalf to policymakers in our analysis we address two basic questions why do commercial lobbying firms exist and what are the implications of their existence for social welfare we answer the first part of this question by proposing that commercial lobbying firms possess a verification technology that allows them to improve the quality of information concerning the social desirability of policy proposals this gives policymakers the incentive to allocate their scarce time to lobbying firms essentially it is this access to policymakers that lobbying firms sell to their clients to address the question of social welfare we construct a simple general equilibrium model that includes commercial lobbying firms and compare the equilibrium obtained under market provision of lobbying services to the first best optimum we find that the market level of lobbying services can be socially either too large or too small and characterize when each will be the case

political contribution caps and lobby formation theory and evidence abstract the perceived importance of special interest group money in election campaigns motivates widespread use of caps on allowable contributions we present a bargaining model in which the effect of a cap that is not too stringent on the amount a lobby can contribute improves its bargaining position relative to the politician it thus increases the payoff from lobbying which will therefore increase the equilibrium number of lobbies when lobby formation is endogenous caps may then also increase aggregate contributions from lobbies and increase politically motivated government spending we present empirical evidence from u s states that support various predictions of the model we find a positive effect on the number of pacs formed from enacting laws constraining pac contributions moreover the estimated effect is non linear as predicted by the theoretical model very stringent caps reduce the number of pacs but as the cap increases above a threshold level the effect becomes positive contribution caps in the majority of u s states are above this threshold

monopsony power in the market for nurses estimates are presented of the inverse elasticity of supply of nursing services to the individual hospital a quantity which is a natural measure of employer market power the estimates corresponding to employment changes taking place over one year are quite high in the neighborhood of 0 79 and even for changes taking place over three years are substantial in the neighborhood of 0 26 the estimates do not significantly differ for hospitals in major metropolitan areas and do not depend very sensitively on the assumed form of the oligopsony equilibrium this abstract was borrowed from another version of this item

planning and financial literacy how do women fare many older us households have done little or no planning for retirement and there is a substantial population that seems to undersave for retirement of particular concern is the relative position of older women who are more vulnerable to old age poverty due to their longer longevity this paper uses data from a special module we devised on planning and financial literacy in the 2004 health and retirement study it shows that women display much lower levels of financial literacy than the older population as a whole in addition women who are less financially literate are also less likely to plan for retirement and be successful planners these findings have important implications for policy and for programs aimed at fostering financial security at older ages

productivity crowding out in labor markets with motivated workers abstract when workers intrinsic motivation matters a wage increase has mixed consequences on applicants productivity and motivation as shown in public service healthcare education and politics in a simple theoretical framework where ability and motivation are workers private information we rationalize these differentiated responses and identify intuitive conditions for higher wages inducing self selection of more or less productive and motivated workers the selection patterns depend both on the statistical association between workers characteristics and on the difference between the incentivized returns to ability across sectors we emphasize a crowding out effect of wage on workers productivity that has not been analyzed in the theoretical literature before

waiting line auctions if prizes are to be awarded simultaneously at a specified time on a first come first served basis then individuals who queue for them will choose different waiting times through their arrivals at the queue this choice of arrival time at a queue is similar to the choice of a sealed tender in an auction an equilibrium for this waiting line auction is obtained here using methods for analyzing sealed tender auctions when individuals are risk neutral it is shown that several alternative waiting line allocation procedures result in the same transactions cost associated with waiting in line

do changes in pension incentives affect retirement a longitudinal study of subjective retirement expectations this paper investigates the responsiveness of individuals retirement decisions to forward looking measures of pension accumulations in contrast to previous research we use within person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations we confirm that individuals do respond as expected to pension incentives even when we control for individual fixed effects however the magnitude of these responses differs when estimated from models based on within person versus cross sectional variation the inclusion of fixed effects reduces the response by about half

the effects of financial education in the workplace evidence from a survey of households abstract we use a novel household survey to investigate the effects of employer based financial education on personal saving we explore cross sectional relations between the availability of employer based financial education and various measures of asset accumulation and we interpret these patterns in light of various potentially confounding factors our findings favor the hypothesis that employer based financial education stimulates saving both in general and for retirement

labor supply responses to marginal social security benefits evidence from discontinuities abstract a key question for social security reform is whether workers respond to the link on the margin between the social security taxes they pay and the social security benefits they will receive we estimate the effects of the marginal social security benefits that accrue with additional earnings on three measures of labor supply retirement age hours and labor earnings we develop a new approach to identifying these incentive effects by exploiting five provisions in the social security benefit rules that generate discontinuities in marginal benefits or non linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved we find that individuals approaching retirement age 52 and older respond to the social security tax benefit link on the extensive margin of their labor supply decisions we estimate that a 10 increase in the net of tax share reduces the two year retirement hazard by a statistically significant 2 0 percentage points from a base rate of 15 the evidence with regard to labor supply responses on the intensive margin is more mixed we estimate that the elasticity of hours with respect to the net of tax share is 0 42 and statistically significant but we do not find a statistically significant earnings elasticity though we lack statistical power to estimate results within subsamples precisely the retirement response is driven mostly by the female subsample while the hours response comes from the male subsample

campaign contributions and access an important and pervasive view of campaign contributions is that they are given to promote access to successful candidates under circumstances when such access would not ordinarily be given in this story access is valuable as it offers groups the opportunity to influence legislative decisions through the provision of policy relevant information under complete information regarding donors policy preferences i argue that this model predicts a negative relationship between contributions and the extent to which the groups and the recipient legislators preferences are similar however one of the more robust empirical findings in the literature is that this relationship is positive relaxing the informational assumption on donors preferences i reexamine the access story with a model in which campaign contributions can act as signals of policy preference and the informational value of access to any agent is endogenous

political reform and trade policy abstract the welfare effects of partial restrictions on political competition are investigated in a model in which two candidates receive campaign contributions from import competing industries in return for tariff protection ceilings on allowable contributions per industry may be welfare worsening particularly if the contributor elasticity is high because they induce candidates to seek additional contributors restrictions that reduce the number of industries allowed to contribute may also worsen welfare because candidates respond by increasing contributions and tariff protection for each active contributor the results suggest that the ability of candidates to circumvent partial restrictions may eliminate any potential benefits

job preferences of students and new graduates in nursing this article investigates the preferences of student and newly graduated nurses for pecuniary and nonpecuniary aspects of nursing jobs it is the first study applying methods based on discrete choice experiments to a developed country nursing workforce it is also the first to focus on the transition through university training and into work this is particularly important as junior nurses have the lowest retention levels in the profession we sample 526 individuals from nursing programmes in two australian universities flexible and newly developed models combining heteroscedasticity with unobserved heterogeneity in scale and preference weights are estimated overall salary remains the most important feature in increasing the probability that a job will be selected supportive management staff and quality of care follow as the most important attributes from a list of 11 nonpecuniary characteristics however the subset of new graduates rank supportive management staff above salary increases empha

the economic importance of financial literacy theory and evidence this paper undertakes an assessment of a rapidly growing body of economic research on financial literacy we start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population next we draw on recent surveys to establish how much or how little people know and identify the least financially savvy population subgroups this is followed by an examination of the impact of financial literacy on economic decision making in the united states and elsewhere while the literature is still young conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps a final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy jel a20 d14 g11 i20 j26

pension enhancements and the retention of public employees the authors use data from workers in the largest public sector occupation in the united states teaching to examine the effect of pension enhancements on employee retention specifically they study

the role of information for retirement behavior evidence based on the stepwise introduction of the social security statement abstract in 1995 the social security administration started sending out the annual social security statement it contains information about the worker s estimated benefits at the ages 62 65 and 70 i use this unique natural experiment to analyze the retirement and claiming decision making first i find that despite the previous availability of information the statement has a significant impact on workers knowledge about their benefits these findings are consistent with a model where workers need to gather costly information in order to improve their retirement decision second i use this exogenous variation in knowledge to analyze the optimality of workers decisions several findings suggest that workers do not change their retirement behavior i workers do not change their expected age of retirement after receiving the statement ii monthly claiming patterns do not show any change after the introduction of the social security statement iii workers do not become more sensitive to social security incentives after receiving the statement more research is needed to establish whether workers are already behaving optimally but the information contained in the statement is not sufficient to improve their retirement behavior

the role of financial literacy in determining retirement plans nber working paper seriesthe role of financial literacy in determining retirement plansrobert clarkmelinda sandler morrillsteven g allenworking paper 16612http www nber org papers w16612national bureau of economic research1050 massachusetts avenuecambridge ma 02138december 2010this research is funded in part by a grant from finra investor education foundation we wouldlike to thank jennifer maki mehtab randhawa and evan rogers for their research assistance theresearch could not have been accomplished without the cooperation of the companies that partneredwith us we would also like to thank nicholas horsewood annamaria lusardi olivia mitchell andtwo anonymous referees for useful comments all remaining errors are our own the views expressedherein are those of the authors and do not necessarily reflect the views of the national bureau of economicresearch finra investor education foundation or any of its affiliated companies 2010 by robert clark melinda sandler morrill and steven g allen all rights reserved shortsections of text not to exceed two paragraphs may be quoted without explicit permission providedthat full credit including notice is given to the source

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

baby boomer retirement security the roles of planning financial literacy and housing wealth abstract we compare wealth holdings across two cohorts of the health and retirement study the early baby boomers in 2004 and individuals in the same age group in 1992 levels and patterns of total net worth have changed relatively little over time though boomers rely more on housing equity than their predecessors most important planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non planners instrumental variables estimates show that planning behavior can explain the differences in savings and why some people arrive close to retirement with very little or no wealth

wages and participation during the last 25 years annual hours worked by prime aged men fell by the equivalent of six 40 hour workweeks the reduction was more pronounced among those younger than among mid age workers among black men than among white men and among those with less schooling thus hours worked not only fell but showed increased dispersion increases that paralleled the growth in wage dispersion that has become so familiar to students of trends in wages the argument advanced here is that the correspondence is not coincidental the changes in hours worked are simply the labor supply responses that follow the changes in the structure of wages

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

intertemporal preferences and labor supply in this paper the authors examine whether nonseparable preference structures ar e important in characterizing life cycle labor supply using longitud inal data on prime age males from the panel study of income dynamics they estimate a model of life cycle leisure and consumption under un certainty in which intertemporal preferences are allowed to be nonsep arable in leisure the model tests several alternative specifications considered in the literature they investigate the robustness of the ir findings to certain forms of population heterogeneity and types of model misspecification across alternative specifications the autho rs find that the standard assumption of intertemporally separable pre ferences for leisure is not consistent with the data copyright 1988 by the econometric society

negative campaigning in a probabilistic voting model this paper extends the small existing theoretical literature on negative campaigning building on work by harrington and hess games econ behav 17 209 229 1996 while their analysis explores the determinants of negative campaign spending using a classic spatial voting model this paper relies instead on a probabilistic voting model extending the use of this popular model to a new setting the main lesson of the analysis is that negative campaign spending is higher for the relatively more centrist candidate the more extreme candidate in the electoral contest devotes by contrast comparatively more of her funds to positive campaign spending this result which at first appears unrelated to the main findings of harrington and hess games econ behav 17 209 229 1996 and chakrabarti scottish j polit econ 54 136 149 2007 actually can be viewed as aligning with their conclusions although the underlying mechanics are very different the paper also offers an empirical test of this prediction

time inconsistency and delayed retirement decision the french pension bonus with the increase in life expectancy and demographic shocks several public policies in the last decades aim to encourage individuals to postpone retirement one of them the pension bonus gives a

the effect of income taxation on labor supply when deductions are endogenous this paper extends the standard static model of labor supply and taxation to the case where people are able to legally avoid taxes through the use of itemized deductions tax deductible expenditures are treated as a hicksian composite good with a price for those who decide to itemize proportional to one minus the marginal tax rate estimation of the commonly used linear labor supply model extended to incorporate the additional composite good on a cross section of prime aged married men suggests that tax deductible consumption is an uncompensated substitute for leisure and complement with labor the impact of taxes through the relative price of deductible expenditures appears to be much stronger than through the net wage copyright 1992 by mit press

monopsony power and relative wages in the labor market for nurses this paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets using data from the 1985 93 current population surveys measures of relative nurse non nurse wage rates for 252 labor markets are constructed contrary to predictions from the monopsony model no positive relationship exists between relative nursing wages and hospital density or market size nor is support found for the presence of monopsony power based on evidence on union wage premiums slopes of experience profiles or the mix of rn to total hospital employment

participation and investment decisions in a retirement plan the influence of colleagues choices abstract this paper investigates whether peer effects play an important role in retirement savings decisions we use individual data from employees of a large university to study whether individual decisions to enroll in a tax deferred account plan sponsored by the university and the choice of the mutual fund vendor for people who choose to enroll are affected by the decisions of other employees in the same department to overcome the identification problems we divide the departments into sub groups along gender status age and tenure lines and we instrument the average participation of each peer group by the salary or tenure structure in this group our results suggest that peer effects may be an important determinant of savings decisions

what you don t know can t help you pension knowledge and retirement decision making abstract this paper provides an answer to an important empirical puzzle in the retirement literature while most people know little about their own pension plans retirement behavior is strongly affected by pension incentives we combine administrative and self reported pension data to measure the retirement response to actual and perceived financial incentives and document an important role for self reported pension data in determining retirement behavior well informed individuals are far more responsive to pension incentives than the average individual ill informed individuals seem to respond systematically to their own misperceptions of pension incentives

pay to play politics informational lobbying and contribution limits when money buys access abstract we develop a game theoretic model of informational lobbying between two interest groups and a politician in which the politician can require political contributions in exchange for access the analysis considers three claims 1 the rich have better access to politicians than less wealthy groups 2 this access advantage makes the rich better off and skews policy in their favor and 3 contribution limits can reduce the rich group advantage and result in less skewed policy we show that the rich do have better access with the politician always offering access to the rich groups and only sometimes offering access to the less wealthy group this does not however mean that the rich group is better off or that policy is biased in its favor the politician sets access fees to extract the greatest amount of rent from the political process when only the rich group has access its expected benefit from gaining access is fully offset by its payment to the politician in this case the less wealthy interest group who is not targeted by the politician is better off contribution limits decrease the politician s ability to extract rent which improves the payoffs of rich interests and decreases politician payoffs finally the paper presents a novel benefit of contribution limits they can encourage the formation of lobby groups or the search for evidence which results in more evidence disclosure and better policy

nurses labor supply participation hours of work and discontinuities in the supply function this paper presents the results of a formal labor supply model for nurses in great britain it corrects for misspecification and sample selection bias which affected earlier research on women s labor supply generally in the united kingdom and tests for the existence of discontinuities in the supply curve of nurses estimates of labor market participation elasticities with respect to the wage rate non labor income and to the costs incurred through work are reported for nurses qualified and unqualified participation is found to be highly responsive to wage changes and some discontinuity is found in the supply function

a simultaneous equation model of labor supply fertility and earnings of married women the case of registered nurses a simultaneous equation model of labor supply fertility and earnings is developed and estimated for an important subset of the female population married registered nurses rns measures of variables specific to married nurses age 21 64 are developed by aggregating observations on individual nurses or their families into standard metropolitan statistical area smsa averages from the 1 in 100 public use sample of the 1970 census of population in the u s the sample was restricted in certain ways the grouped observations apply only to white rns who are married with husband present and live in smsas of over 250000 population in 1970 except honolulu the sample is further restricted so that each included observation representing an smsa average is based upon an underlying pool of at least 15 individual nurses this last restriction reduces the sample of smsas to 88 from 124 the coefficient on the nurse wage variable is positive and statistically significant with an implied wage elasticity of 40 at the means these estimates are consistent with those observed using the analogous microcensus data on rns rn fertility has the predicted negative effect on nurse labor supply but is statistically insignificant but the magnitude of the fertility coefficient is plausible a 10 increase in nurse fertility within an smsa number of children ever born 1000 nurses ever married within an smsa is associated with a reduction in the smsa nurse labor supply the estimated coefficients of the husband earnings and nonlabor income variables are negative but only the former is statistically significant at the 90 level or above the estimated effect of the nurses earnings opportunities on her fertility are statistically insignificant but the wage coefficient is negative as expected and implies an elasticity of nurse fertility with respect to the nurse wage rate of approximately 2 the coefficient on the labor supply variable is negative and statistically significant confirming the hypothesis that increased labor market activity increases the opportunity costs of children husbands earnings are not a significant determinant of rn fertility the estimates suggest that nurse labor supply and fertility decisions are relatively unimportant factors in determining the nurses market earnings

how does social security claiming respond to incentives considering husbands and wives benefits separately abstract most women receive some social security benefits based upon their husbands earnings history but husbands benefit claiming is inconsistent with maximizing lifetime benefits for the couple i show that husbands claiming behavior responds to the actuarial incentives from their retired worker benefits not responding to incentives from spouse and survivor formulas reduces wives lifetime benefits rule changes to the social security benefit calculation the age difference between spouses and the relative strength of the wife s labor force history creates variation in incentives segments of the population predicted to be more responsive to incentives provides similar results to the main specification

informational lobbying and political contributions abstract interest groups can potentially influence political decision makers by offering contributions and by providing relevant information that sways the decision in the group s favor what mix of these two instruments should an interest group choose and how does the use of one instrument affect the effectiveness of the other in this paper we identify an information externality that raises the cost of offering contributions and show that this indirect search cost reduces the group s incentive to gather information when contributions are allowed furthermore we analyze how competition among lobby groups as providers of information and contributions affect the choice and effectiveness of the instruments we show that the information externality rewards the group that can abstain from information search and focus its influence on contributions

the economic consequences of political donation limits the economic consequences of limits on political donations depend on the degree of political competition donors who are ideologically aligned with candidates decide how much to contribute to their own candidate they may benefit from rent seeking by their own candidate but dislike rent seeking by the opposition increased rent seeking by politicians thus generates campaign contributions for themselves but also mobilizes donations to the opposing candidate potentially to a greater extent this latter effect acts as a deterrent to rent seeking when contributions finance electoral campaigns and positively affect election chances when political competition is low incumbent donors outnumber opposition donors and limits reduce rent seeking when political competition is high donors are equalized and laissez faire reduces rent seeking consistent with these hypotheses data from the us states suggest that limits are associated with better policies and stronger growth performance at low levels of political competition whilst laissez faire is preferred when political competition is high

gender race pay and promotion in the british nursing profession estimation of a generalized ordered probit model we analyse job grading within the uk national health service nursing profession using 1994 survey data we start from the ordered probit model for which we develop and apply appropriate specification tests threshold constancy and covariate exogeneity are rejected with important consequences for estimates of the influence of gender ethnicity training and career interruptions we find little evidence of disadvantage for females relative to males but significant differences in speed of promotion between ethnic groups implying non negligible differences in lifetime earnings copyright 2000 john wiley sons ltd

nurses wanted is the job too harsh or is the wage too low when entering the job market nurses choose among different kind of jobs each of these jobs is characterized by wage sector primary care or hospital and shift daytime work or shift this paper estimates a multi sector job type random utility model of labor supply on data for norwegian registered nurses rns in 2000 the empirical model implies that labor supply is rather inelastic 10 increase in the wage rates for all nurses is estimated to yield 3 3 increase in overall labor supply this modest response shadows for much stronger inter job type responses our approach differs from previous studies in two ways first to our knowledge it is the first time that a model of labor supply for nurses is estimated taking explicitly into account the choices that rn s have regarding work place and type of job second it differs from previous studies with respect to the measurement of the compensations for different types of work so far it has been focused on wage differentials but there are more attributes of a job than the wage based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indifferent between types of jobs here between shift work and daytime work it turns out that norwegian nurses working shifts may be willing to work shift relative to daytime work for a lower wage than the current one

worker retirement responses to pension incentives do they respond to pension wealth abstract pension enhancements generate pension wealth spikes at the eligibility milestones i analyze two major enhancements that generated different gains in pension wealth for eligible workers the responsiveness of retirement behavior to these enhancements depends on how well workers understand their pension incentives to test the retirement response to pension wealth i use administrative data from missouri teachers and leverage variation in enhancement impacts on teacher pension wealth owing to differences in teachers entering ages i find that retirements respond strongly to pension enhancements but the strength of the response does not align with their pecuniary value my findings contribute to a growing body of research showing that workers have imperfect knowledge of their pension benefits and they use imprecise information to make retirement timing decisions

political competition with campaign contributions and informative advertising this paper presents a theory of political competition with campaign contributions and informative political advertising policy motivated parties compete by selecting candidates and interest groups provide contributions to enhance the electoral prospects of like minded candidates contributions are used to finance advertising campaigns that provide voters with information about candidates ideologies voters update their beliefs rationally given the information they have received the paper uses the theory to analyze the welfare economics of contribution limits such limits are shown to redistribute welfare from ordinary citizens to members of interest groups jel d72 h40

knowledge information and retirement saving decisions evidence from a large scale intervention in chile all over the world retirement income depends increasingly on individuals savings choices over their lifetime while government sponsored retirement schemes like the u s social security system provide a reasonable stream of resources for old age middle and high income workers are expected to make their own additional savings arrangements either through employer sponsored pension plans matching contribution schemes such as the 401 k plans in the united states or individual savings through tax favored investment vehicles 1to adequately plan for retirement individuals need information about their current situation the different choices available to them and some minimal mathematical and abstraction capabilities to properly process this information there is growing concern however regarding the low level of financial literacy among the general population the baby boomer generation does not seem to have accumulated sufficient financial wealth beyond housing with particularly low asset levels for female headed households 2 even if the lack of financial sophistication could be overcome by the use of retirement planning services the existing evidence suggests that these services are rarely sought and when they are it is mostly by individuals with initially higher levels of financial literacy 3 furthermore individuals with less exposure to financial planning tend to make wrong choices saving less than required in poorly diversified portfolios or not profiting from tax favored instruments 4in a defined contribution scheme the level of the benefit is not known beforehand and individuals face uncertainty about how their current savings will translate into future benefits in this setting one key piece of information that individuals need to make active decisions to improve their retirement wealth is the pension level they are expected to receive given their current financial wealth and their historical saving behavior assuming that individuals can reasonably form an expectation of the income level they would like to receive in old age the comparison between desired and projected income could induce them to save more transfer their wealth into more conservative or aggressive portfolios postpone retirement or seek retirement planning advice while it is always possible to make these adjustments the effectiveness of these choices depends on the time horizon until retirement while small changes when one is young can have a large impact on retirement individuals with low asset levels can do little to improve their situation as they approach retirement age except perhaps postpone their exit from the labor force in this article we exploit a large scale natural experiment to analyze the impact of a personalized pension projection ppp which was sent to practically all chilean active dependent workers in july 2005 on their retirement saving behavior the objective of this intervention was to simplify the information received by pension system members to help them make better decisions in essence we compare the saving behavior of individuals during the first twelve months after they received the ppp with that of comparable individuals who were not sent this statement due to some specific administrative rules we use this analysis to address two different issues first if individuals were well aware of their current financial stance receipt of this information should have no effect on their retirement related saving behavior our analysis serves as a test of the full information hypothesis second the large scope of the intervention allows us to look at different subgroups of the population as mentioned above the age dimension is particularly important since the possibility of correcting misalignments between expectations and projections depends crucially on the time horizon until retirement the gender dimension is also important for the chilean case as the actuarial nature of the chilean pension system tends to directly translate gender differences in the labor market into differences in their old age income chilean women tend to work less frequently receive lower wages for a comparable job retire earlier and live longer

campaign advertising and voter welfare this paper investigates the role of campaign advertising and the opportunity of legal restrictions on it an electoral race is modeled as a signalling game with three classes of players many voters two candidates and one interest group the group has non verifiable insider information on the candidates quality and on the basis of this information offers a contribution to each candidate in exchange for a favorable policy position candidates spend the contributions they receive on non directly informative advertising this paper shows that 1 a separating equilibrium exists in which the group contributes to a candidate only if the insider information about that candidate is positive 2 although voters are fully rational a ban on campaign advertising can be welfare improving and 3 split contributions may arise in equilibrium and if they arise too often they are detrimental to voters

nurses labour supply elasticities the importance of accounting for extensive margins abstract we estimate a multi sector model of nursing qualification holders labour supply in different occupations a structural approach allows us to model the labour force participation decision the occupational and shift type choice and the decision about hours worked as a joint outcome following from maximising a utility function disutility from work is allowed to vary by occupation and also by shift type in the utility function our results suggest that average wage elasticities might be higher than previous research has found this is mainly due to the effect of wages on the decision to enter or exit the profession which was not included in the previous literature rather than from its effect on increased working hours for those who already work in the profession

do labour supply and demand curves exist the objective of this paper is to show that circumstantial and empirical evidence for the existence of labour supply and demand curves is at best inconclusive and at worst casts doubt on their existence because virtually all orthodox models of labour markets simple and complex are built upon the foundation stones of labour supply and demand curves these models lack empirically supported foundations orthodox labour economists must therefore either provide stronger evidence or stop using labour supply and demand curves as the foundation stones of their models the conclusion discusses implications for future orthodox and heterodox labour economics

should we tax or cap political contributions a lobbying model with policy favors and access abstract this paper develops a model of political contributions in which a politician can either sell policy favors or sell access access allows interest groups to share hard information with the politician in support of their preferred policy here selling access maximizes policy utility while selling policy favors maximizes total contributions imposing a binding contribution limit makes it more likely that the politician sells access which can improve expected constituent welfare however a contribution limit distorts the signals associated with the contributions which tends to result in worse policy alternatively a tax on political contributions can ensure that the politician sells access without distorting his information therefore from the viewpoint of a representative constituent a tax on contributions is strictly preferred to a contribution limit or no reform the politician however may prefer regulation in the form of a contribution limit even when a tax is better for the constituent

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking

soft money and campaign finance reform we analyze special interest influence on policy when political contributions are capped but the regulation contains soft money loopholes the politician chooses between two policy options we define special interest influence as the probability the politician chooses the policy he would not have chosen in the absence of contributions any binding cap reduces special interest influence but the effect may be nonmonotonic a ban on contributions can result in greater special interest influence than a binding but nonzero cap the results may also have implications for the policy response to the 2010 supreme court ruling on citizens united v fec

the private net present value and private internal rate of return to becoming a nurse in great britain the private net present value and private internal rate of return to becoming a nurse in great britain is estimated the calculations are made using the standard equations inputted with data from the new earnings survey and the british household panel survey basic age earnings profiles are adjusted for mortality unemployment other causes of economic inactivity and discontinuation from training the conclusions are that 1 there is a high private internal rate of return to becoming a nurse in great britain relative to other occupations 2 using the internal rate of return criterion is inappropriate when there exists a crossover marginal time preference rate which is shown to be the case here and 3 using the net present value criterion there are net financial benefits to becoming a nurse in great britain for individuals with a marginal time preference rate of 8 13 or more