nonstationarity in job search theory generally structural job search models are taken to be stationary in this paper models are examined in which every exogenous variable can cause nonstationarity for instance because its value is dependent on unemployment duration a general differential equation that describes the evolution of the reservation wage over time is derived as an empirical illustration a nonstationary structural model is estimated that focuses on the consequences of a downward shift in the level of benefits it appears that the elasticity of duration with respect to the level of benefits after the shift is much larger than the elasticity with respect to the level before the shift this paper examines the movement of a job seeking individual s reservation wage over time in a general nonstationary job search model also results concerning comparative dynamics of the reservation wage and the distribution of the duration of unemployment are derived as an empirical illustration a nonstationary structural model is estimated the nonstationarity originates from the decrease in the level of benefits when unemployment duration equals two years from the results some detailed policy recommendations can be deduced as one is able to distinguish the effect of a change in the level of benefits in the first two years of unemployment from the effect of a change in the level after that period recently the use of job search models for the analysis of unemployment duration has become widespread the reduced form approach in empirical studies see e g lancaster 1979 in which only the hazard of the duration distribution is estimated is gradually being replaced by a more structural approach the latter way of modelling is characterized by the explicit use in empirical analysis of the reservation wage equation as stated by the theory e g yoon 1981 lancaster and chesher 1983 lynch 1983 narendranathan and nickell 1985 and van den berg 1988 use the complete theoretical framework of job search theory to make inferences about search behaviour however the structural models used in these studies are stationary this implies that variables like unemployment benefits or the rate of arrival of job offers are assumed to be constant over the spell of unemployment which is often at variance with reality what is more various reduced form empirical studies indicate a significant durationdependence of the re employment probability which is generally interpreted as evidence in favour of the presence of nonstationarity see e g blau and robins 1986 kooreman and ridder 1983 lancaster 1979 and narendranathan nickell and stern 1985 consequently there is a need to model reservation wage movements over time based on a nonstationary theoretical framework

el salvador s agricultural sector macroeconomic policy agrarian change and the environment abstract this paper argues that current agricultural policy in el salvador is failing to further the goals of macroeconomic growth and stability sustainable livelihood security and environmental sustainability macroeconomic policy has turned relative prices sharply against agriculture the plight of the rural poor has been exacerbated by continuing inequities in the agrarian structure the breakdown in rural livelihoods and limited access to land and other assets is accelerating environmental degradation suggested alternative policies such as more favorable price policies agrarian reform and environmental restoration would promote sustainable development by capitalizing on the complementarity among growth poverty reduction and consolidation of peace

the economic effects of unemployment insurance in canada an empirical analysis of ui disentitlement this article provides an overview of the canadian unemployment insurance ui program including its evolution salient features relative size and knowledge about its labor market impacts understanding of these impacts is limited and we conclude that an event study approach is a promising way to further this knowledge we examine the effects of the 1976 ui disentitlement of the elderly on their labor force behavior and find evidence of significant adverse selection effects interactions with the public pension system suggest that poverty among the elderly could be best addressed through changes in programs other than ui

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

resource allocation and use under collective rights and labour management in peruvian coastal agriculture a critical issue in the evaluation of labour management as a development policy is its impact on production in an effort to contribute to that evaluation and to the economics of labour management this study analyses production data collected from cooperative firms established by the peruvian agrarian reform the data present an unusual opportunity for careful microeconomic analysis of the reform itself as well as an opportunity to confront and refine existing propositions about the effects of the collective property rights of labour management on production property rights may affect production because of their effort on incentives for conventional resource allocation decisions they may also affect intrafirm principal agent decisions which determine the intensity with which given resources are utilised beginning with ward s i 958 paper a number of theoretical studies have compared labour managed and capitalist resource allocation and an approximate consensus has emerged about conditions under which differences occur in this study measures of the allocative behaviour of peruvian firms are estimated and compared with the theoretically expected behaviour of both capitalist and peasant agricultural producers the impact of collective ownership on the intensity of resource utilisation i e technical efficiency of the observable production function arouses greater theoretical dispute than the resource allocation question a collective assignment of property rights may weaken supervisory authority which can control free rider externality problems within the production process on the other hand participation of labour in management may foster cooperative attitudes and other social control devices which can fulfill the same functions as hierarchical supervision existing literature offers the competing hypotheses that labour management leads either to a breakdown in intrafirm coordination and the observable technical efficiency of production as jensen and meckling i 979 claim or to an improvement as vanek i 969 claims the results of the present paper do not unequivocably support either view instead they portray a diversity in labour managed production performance and suggest the importance of policy and institutional factors which condition the impact of labour management on production the results also provide a

how do retirement tests affect the labour supply of older men abstract we analyze the sequential elimination of retirement earnings tests from canada s public pension plans our empirical framework potentially overcomes the obstacles encountered analyzing the tests within the context of a national social security system our results indicate that the removal of the tests were associated with relatively large shifts from part year full time to full year full time work we are unable to reconcile these results within the context of a traditional labour supply model instead they are consistent with a model which incorporates fixed costs of work or labour market rigidities which preclude continuous reductions in labour supply around retirement

strategic work interactions and the kibbutz kolkhoz paradox the authors develop a model of strategic work interactions in collective enterprises explaining the following observation the israeli kibbutz in which net collective output is distributed equally has been an economic success while the soviet kolkhoz in which net output traditionally was divided according to relative work input has been a failure in contrast the conventional cournot nash theory of collective enterprises predicts superoptimal output in the kolkhoz while in the kibbutz the free fider problem is predicted to lead to suboptimal effort their theory predicts pareto optimal work effort in the kibbutz and suboptimal effort in the kolkhoz copyright 1989 by royal economic society

rent dissipation through electricity prices of publicly owned utilities a public choice model is presented in order to explain the fact that publicly owned electricity utilities rarely price at marginal cost in practice it is shown that if i government revenues are raised through proportional taxes ii median income is less than mean income and iii the share of a consumer s spending on electricity decreases with income then the price resulting from a majority rule and universal voting is below marginal cost the determination of a fixed subscription fee is also considered empirical evidence of our results is obtained from pricing and consumption data for hydro qu6bec

bridge jobs and partial retirement the job stopping process of older workers often includes some combination of postcareer bridge employment partial retirement and reverse retirement fewer than two fifths of household heads retire directly from career jobs over half partially retire at some point in their working lives and a quarter reenter the labor force after initially retiring in addition postcareer employment is frequently located outside the industry and occupation of the career job and there are important differences in postcareer labor force experiences by gender permanent income and career job pension status

unemployment insurance and male unemployment duration in canada a model of unemployment duration is estimated with weekly micro data on canadian men entitlement provisions in the unemployment insurance program and demand conditions are found to have a significant effect on the probability of leaving unemployment the probability of a worker leaving unemployment declines with the duration of unemployment holding unemployment insurance entitlement constant when entitlement is allowed to vary the probability of leaving first falls and then generally rises with unemployment duration these results are robust with respect to allowing for person specific unobserved heterogeneity and alternative specifications of duration dependence

shirking and the choice of technology a theory of production inefficiency with an empirical application abstract we develop a model of shirking and technology choice and show that organizations exercising less effective direct control over shirking adopt technologies that underutilize the workforce to a greater degree relative to neoclassical counterparts in order to control shirking indirectly thus technical inefficiency arises endogenously as a rational response to allocative inefficiency caused by shirking an empirical analysis of data from a sample of collective and private farms operating in jewish palestine reveals the presence of shirking and supports the prediction that farms with less effective direct control over shirking exhibit greater labor hoarding as a manifestation of technical inefficiency

residential energy demand an integrated two levels approach abstract previous studies of residential energy demand in canada have relied on the top down or two levels approach at the first level total energy demand measured in thermal units is made a function of its relative price real income and other explanatory variables at the second level energy market shares depend on energy sources relative prices the aggregate energy price is the link between the two levels the measurement of energy consumption in terms of energy equivalence introduces systematic biases in aggregate energy price and income elasticities in this paper we adopt the two levels approach but abandon measurement of energy use in terms of energy equivalence the presence of an explanatory variable other than energy sources prices in the energy unit cost function brings the integration of the two levels at the estimation stage wood is included as a separate fuel along with electricity oil and natural gas the model is applied to quebec residential sector the main results are as follows first quebec aggregate residential energy demand is found to be price and income inelastic second electricity and oil own price elasticities are less than one however they are above one for natural gas and wood third gross substitution prevails among the four energy sources and fourth the expansion of the national gas distribution network contributed to a lower aggregate energy price

labor market adjustment to political conflict changes in the labor market in el salvador during the 1980s abstract i use household survey data for the 1980s to examine changes in the labor market of el salvador the findings suggest that the labor market does adjust to conflict there have been significant effects of conflict on the regional distribution of employment on international migration on internal migration in the areas directly affected other indicators such as labor force participation and self employment rates show outcomes are lower in the areas that were affected by conflict but were lower even before the conflict began and for earnings the level of real hourly earnings has fallen substantially in all areas in the 1980s

an empirical analysis of employed and unemployed job search behavior this paper analyzes the job search activities of employed and unemployed job seekers using self reported data from a 1980 survey one novel finding from reduced form equations is that many searchers both employed and unemployed rejected at least one offer before accepting a job the reduced form results are used to estimate reservation wages based on a fairly standard model of job search most of the job searchers accepted a job offer with a wage below the estimated reservation wage suggesting that the model does not fit the data well

the determinants of black white differences in early employment careers search layoffs quits and endogenous wage growth this paper studies the transition from school to full time employment and subsequent labor mobility during the first five postschooling years for several recent cohorts of black and white male terminal high school graduates using unique data from the 1979 youth cohort of the national longitudinal surveys of labor market experience a constrained optimization model of labor force dynamics is implemented empirically integrating features of models previously described in the literature the estimates of the model provide quantitative evidence on underlying structural differences in labor market constraints faced by blacks and whites for example while blacks have overall a substantially smaller wage return to work experience and face a less disperse wage offer distribution blacks face a higher probability of receiving job offers

estimating a structural search model the transition from school to work this paper presents a finite horizon search model that is econometrically implemented using all of the restrictions impli ed by the theory following a sample of male high school graduates fr om the youth cohort of the national longitudinal surveys from graduat ion to employment search parameters are estimated reservation wages and offer probabilities are estimated to be quite low simulations a re performed of the impact of changing the parameters on the expected duration of unemployment copyright 1987 by the econometric society

unemployment insurance eligibility and the scholl to work transition in canada and the united states to study how the design of unemployment insurance ui affects people leaving school to find jobs a model of job search in the presence of ui is developed and estimated for the united states and canada the level of ui benefits depends on previous earnings which creates opposing incentives for unemployed people not receiving benefits which of these opposing incentives dominates the other is found to differ across demographic groups within each country changes in ui policy therefore can have very different effects on different individuals the major differences found in the transition from school to work in canada and the united states are a lower rate of job offer arrivals and a lower rate of offer rejections in canada within each country offer arrival rates differ across individuals much more than offer rejection rates

supply side hysteresis the case of the canadian unemployment insurance system abstract this paper presents results from a 1971 natural experiment carried out by the canadian government on the unemployment insurance system at that time the generosity of the ui system was increased dramatically we find some evidence that the propensity to collect ui increases with a first time exposure to the new ui system hence as more individuals experience unemployment their lifetime use of the system increases this supply side hysteresis effect may explain why unemployment has steadily increased over the 1972 1992 period even though the generosity of unemployment insurance did not

employment spells and unemployment insurance eligibility requirements in this paper we examine whether the requirements that workers must satisfy to qualify for unemployment insurance ui benefits in any succeeding period of joblessness affect the duration of employment spells this behavioral consequence of a ui system has been neglected in empirical research which has instead focused on the effects of ui parameters on the actions of the unemployed the effect is identified by a unique change in the eligibility requirements of the canadian ui system in 1990 which increased the weeks of employment required to establish ui eligibility we provide a variety of estimates of this behavioral effect in our preferred set of results we find a significant increase in the employment hazard in the week that an individual satisfies the eligibility requirement in many regions of the country in the spirit of feldstein s 1976 study of temporary layoffs the results provide new evidence of the impact of ui system parameters on the actions of employers and workers

unemployment insurance and job durations seasonal and non seasonal jobs the authors use regional and individual variation in unemployment insurance ui parameters to estimate the impact of ui incentives on job durations in doing so they distinguish between seasonal and nonseasonal jobs the authors find evidence of substantial tailoring of job durations to ui incentives in seasonal but not in nonseasonal jobs even for seasonal jobs adjusting ui parameters has small impacts on average job duration except in high unemployment regions increasing the ui entrance requirement leads to some job lengthening but also to the creation of more very short jobs

recent trends in insured and uninsured unemployment is there an explanation this paper explores the recent decline in the fraction of unemployed workers who receive unemployment insurance benefits using march current population surveys we compare the fraction who are potentially eligible for benefits with the fraction who receive them the decline in insured unemployment is almost entirely due to a decline in the early 1980s in the takeup rate for benefits we analyze the determinants of the takeup rate using both aggregated state level data and micro data at least half the decline is due to an increasing share of unemployment in states with lower takeup rates

dynamic labor force participation decisions of males in the presence of layoffs and uncertain job offers this paper presents a utility maximization model of workers who make decisions to work or not over a lifetime the objective is to maximize the presented discounted value of utility arising from the participation decisions in addition to duration dependence introduced through time variant job offer and layoff probabilities state dependence enters the model by the existence of a different risk while working namely the dismissal risk than the one while not working namely the possibility of no job offers a dynamic programming algorithm is solved and estimated within a maximum likelihood routine with data from the national longitudinal surveys youth cohort

the performance of private and cooperative socialist organization postwar yugoslav agriculture socialist enterprises in yugoslav agriculture show higher levels of productivity than private producers the author examines the sources of these differences with total factor productivity estimates based on sectoral aggregate cobb douglas production functions which permit separation of environmental policy and organizational effects the results support the following conclusions cooperative socialist enterprises are not inherently inefficient and can even outperform private producers both types of producers were responding to their environment and their differential rates of technological change reflect the different constraints they faced and socialist enterprises exhibited technology adoption behavior similar to nonsocialist enterprises elsewhere copyright 1987 by mit press

effort technology and the efficiency of agricultural cooperatives abstract the inefficiency of cooperative agriculture relative to private farms is often attributed to difficulties in monitoring or poor incentives we develop a model to show that in technologies with numerous sequential steps even small shortfalls in worker effort can result in large output declines using data on cooperative and private farms in el salvador we find greater shortfalls in efficiency between cooperatives and private farms as well as among cooperatives for coffee a crop requiring numerous steps in its cultivation than for maize and sugar which require fewer steps thus the undersupply of effort in cooperatives may be less than differences in productivity suggest and cooperative agriculture is most likely to be successful where production does not involve many sequential steps

is private farming more efficient than socialized agriculture this paper examines the technical efficiency of state and private farms in poland for the period 1960 74 we find that the average technical efficiency of the two types of farms does not differ although the dispersion of efficiency levels is greater among state farms than among private ones we do find clear evidence of allocative inefficiency with state farms oversupplied with fertilizer and machinery

mobility and labor market segmentation the urban labor market in el salvador there is now a large literature examining the hypothesis that there are barriers to mobility between sectors of the labor market in developing countries though there are many explanations for barriers to mobility most versions of the segmented labor market hypothesis are based on restricted access to a higher wage primary or formal sector and free access to a lower wage secondary or informal sector the testable predictions of the hypothesis are the implications of the assumption of excess supply to the primary sector most studies have found results consistent with these predictions including different structures of wages between sectors lower returns to human capital in the secondary sector and lower job tenure by sectors for some demographic groups but as several authors have recently noted it is difficult to distinguish this hypothesis from other competitive explanations for these patterns the competitive model is also consistent with the testable predictions of the segmented labor market hypothesis though the competitive model is consistent with the observed patterns the observed patterns do put restrictions on the version of the competitive model that is appropriate for developing countries for example the finding that earnings tend to be lower in the informal sector is consistent with compensating differentials but this applies only to compensating differentials that are based on formal sector employment as being less desirable such as job flexibility similarly the finding of lower returns to human capital in the informal sector is consistent with life cycle models of investment in human capital but only models in which there is lower labor market attachment of those employed in an informal sector and thus less time to recuperate investments in on the job training but most of the necessary assumptions are reasonable and as a result tests of the segmented labor market hypothesis cannot distinguish among competing explanations

quantity constrained household responses to ui reform this paper explores the consequences of adopting a household perspective when evaluating proposals for the reform of the canadian unemployment insurance system a model of joint behavior that allows demand side constraints to limit labor supply choices is estimated quantity constraints faced by one spouse are thus important determinants of the other s behavior predicted household responses to unemployment insurance reform proposals are negligible and differ from those that would be obtained using a model of unconstrained individual behavior copyright 1990 by royal economic society

the politics of regulation in the turkish electricity market abstract turkey began reforming the electricity market in 2001 the regulatory reform aimed to liberalize the market however the institutional and political structure was not ready for creating an efficiently working competition the independent regulator did not have both experience and will to direct the industry to a more competitive environment currently the reform has slowed down and political preferences drive the industry this paper studies the reasons for the slowdown in the reform efforts by focusing on the relationships between the government judiciary and the independent regulator we conclude that strategic behaviors of players in the market including the judiciary the government and the regulator have made the introduction of competition to the market more costly

unemployment insurance and unemployment dynamics one of the puzzling features of the recent behavior of the canadian unemployment rate is its persistence in the presence of a sustained expansion in real national income neither deficient aggregate demand nor a once for all supply side induced increase in the natural rate provides a convincing explanation of this phenomenon this paper presents a model that explains how aspects of unemployment insurance in canada will cause persistence unemployment will be highly serially correlated even if output is not the authors document the increased persistence of the unemployment rate since 1977 and show that the model accounts for much of this phenomenon

collectivization and china s agricultural crisis in 1959 1961 the agricultural crisis in china in 1959 61 after the initial success of the collectivization movement resulted in 30 million extra deaths in this paper a game theory hypothesis proposes the main cause of this catastrophe i argue that because of the difficulty in supervising agricultural work the success of an agricultural collective depends on a self enforcing contract in which each one promises to discipline oneself a self enforcing contract however can be sustained only in a repeated game in the fall of 1958 the right to withdraw from a collective was deprived the nature of the collectivization was thus changed from a repeated game to a one time game as a result the self enforcing contract could not be sustained and agricultural productivity collapsed the empirical evidence is consistent with this hypothesis

estimating incentive and welfare effects of nonstationary unemployment benefits the distribution of unemployment duration in our equilibrium matching model with spell dependent unemployment benefits displays time varying exit rates building on semi markov processes we translate these rates into an expression for the aggregate unemployment rate structural estimation using german microdata allows us to discuss the effects of an unemployment benefit reform hartz iv the reform reduced unemployment by less than 0 1 percentage points contrary to general beliefs the net wage for most skill and regional groups increased taking the insurance effect of unemployment benefits into account however the reform is welfare reducing for 76 of workers

the redistributive roles of unemployment insurance and the dynamics of voting abstract public unemployment insurance is analyzed as the majority voting equilibrium policy of a dynamic stochastic economy abstracting from incentive effects we focus on redistribution some results are because of the distribution of heterogeneous employment opportunities public insurance may be democratically chosen even if complete private markets exist and because of the dynamics even when agents are intrinsically homogeneous the equilibrium benefit level or duration benefit schedule deviates from what has been described as optimal in the literature the effects of differences in the average frequency or duration of unemployment on equilibrium taxes and benefits are investigated with some unanticipated results

cross border trade in electricity this paper develops a novel economic theory of two way trade in a homogenous good electricity in this model of reciprocal load smoothing international trade provides insurance as electricity demand is stochastic and correlated across jurisdictions electric utilities can reduce their cost during peak periods by importing cheaper off peak electricity from neighbouring jurisdictions two way trade emerges in the presence of strongly convex marginal costs observed trade between canadian provinces and us states strongly supports the theoretical model reciprocal load smoothing provides an economic rationale for integrating north america s fragmented interconnections into a continental supergrid if technological progress in long distance bulk transmission continues to reduce costs

unemployment insurance and unemployment spells this paper tests the effects of the level and length of unemployment insurance benefits on unemployment durations the paper particularly studies individual behavior during the weeks just prior to when benefits lapse higher unemployment insurance benefits are found to have a strong negative effect on the probability of leaving unemployment however the probability of leaving unemployment rises dramatically just prior to when benefits lapse individual data are used with accurate information of spell durations and the level and length of benefits the semiparametric estimation techniques used in the paper yield more plausible estimates than conventional approaches and provide useful diagnostics copyright 1990 by the econometric society

job search and academic achievement abstract the paper develops a structural model for the labor market behavior of students entering the labor market we explicitly model the trade off between devoting effort to studying and to job search furthermore we allow for on the job search the model is estimated using a unique data set of individuals who completed undergraduate education in the netherlands between 1995 and 2001 our estimation results show that labor market returns of high grades are low wage increases between jobs are explained by labor market friction rather than returns of early work experience our results indicate that a 1 percentage point decrease in the unemployment rate increases wage offers on average by 3 percent but that the amount of job search effort is not very sensitive to business cycle fluctuations policy simulations show that study effort and hence academic achievement are much more sensitive to financial incentives than job search effort and labor market outcomes

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

the 1983 social security reforms and labor supply adjustments of older individuals in the long run a structural life cycle retirement model with an improved specification over previous models is used to analyze and compare the long run effects on the labor supply of older workers of the 1983 social security reforms the effects of separate provisions from the 1983 amendments are examined these include the raising of the normal retirement age to 67 the increase in the delayed retirement credit to 8 and the lowering of the reduction rate for earnings over the test amount to 1 00 for every 3 00 of earnings

explaining and forecasting results of the self sufficiency project this paper studies the self sufficiency project ssp a controlled randomized experiment concerning welfare by estimating a model of endogenous skill accumulation multidimensional job opportunities and time varying opportunity costs of labour market time methods for estimating dynamic programming models with unobserved heterogeneity are extended to account for unexpected policy interventions and endogenous sample selection and initial conditions parameters are identified and consistently estimated by imposing optimal responses to the exact form of the ssp earnings supplement and the experimental program which induces exogenous variation between treatment groups and within groups as treatment progresses the estimated model tracks primary outcomes well in and out of sample except for underestimating trends in the sample of new welfare applicants predictions from counterfactual experiments run counter to non structural results reported elsewhere and they suggest that details of the ssp s design are critical for interpretation of results the separate ssp plus treatment may have longer lasting and more generalized impacts than the in sample impacts suggest copyright oxford university press

unemployment benefit duration and incentives in britain how robust is the evidence abstract recent years have seen considerable advances in the econometric treatment of micro data in models of unemployment duration this paper examines the evidence from such models concerning the effects of unemployment benefits on incentives to work in britain widely accepted results of a small but significant benefit effect are reproduced using a sample of 1 231 unemployed men however these results are only found when benefit receipt is assumed to follow a hypothetical pattern which is shown to be unrealistic and over generous when more realistic calculations of benefits are used no benefit effect is found the paper also argues that search theory is of little help in determining the choice between competing functional forms and explanatory variables results concerning benefits are shown to be sensitive to the latter