does employment protection create its own political support this paper investigates the ability of employment protection to generate its own political support a version of the mortensen pissarides model is used for this purpose if wages are set through nash bargaining workers value employment protection because it strengthens their hand in wage negotiations workers in high productivity matches benefit most from higher wages as they expect to stay employed for longer by reducing turnover employment protection shifts the distribution of match specific productivity toward lower values thus stringent protection in the past actually reduces support for employment protection today introducing involuntary separations reverses this conclusion now workers value employment protection because it delays involuntary dismissals workers in low productivity matches gain most since they face the highest risk of dismissal the downward shift in the productivity distribution is now a shift towards supporters

a review of the recent empirical literature on displaced workers this article reviews the empirical literature on job displacement job displacement is widespread and strongly countercyclical tending to peak during economic downturns but concentrated in indus

frictionless commerce a comparison of internet and conventional retailers there have been many claims that the internet represents a new nearly frictionless market our research empirically analyzes the characteristics of the internet as a channel for two categories of homogeneous products books and cds using a data set of over 8 500 price observations collected over a period of 15 months we compare pricing behavior at 41 internet and conventional retail outlets we find that prices on the internet are 9 16 lower than prices in conventional outlets depending on whether taxes shipping and shopping costs are included in the price additionally we find that internet retailers price adjustments over time are up to 100 times smaller than conventional retailers price adjustments presumably reflecting lower menu costs in internet channels we also find that levels of price dispersion depend importantly on the measures employed when we compare the prices posted by different internet retailers we find substantial dispersion internet retailer prices differ by an average of 33 for books and 25 for cds however when we weight these prices by proxies for market share we find dispersion is lower in internet channels than in conventional channels reflecting the dominance of certain heavily branded retailers we conclude that while there is lower friction in many dimensions of internet competition branding awareness and trust remain important sources of heterogeneity among internet retailers

what happens to wages after displacement faced with limited resources policymakers need to know when and where to target support for displaced workers the academic literature offers little support presenting wide ranging results with no consistent explanation for the observed differences in wages after workers are displaced in this paper we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions the results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement

production economics and process quality a taguchi perspective abstract although several studies have analyzed the interaction between the economics of production and process quality most of them view quality from a very traditional perspective reject when outside specified limits or else accept recent views on quality have shown that such a definition greatly underestimates the costs of poor quality and leads to sub optimal decisions the primary intent in this paper is to revisit this interaction of the economics of production with process quality from a non traditional yet more realistic taguchi quality cost perspective specifically we investigate the possibility of investing in a process to decrease its variance although such an investment reduces the proportion of defects and when large enough the taguchi s loss it also increases the cost of holding inventory our model determines the optimal levels of inventory and the production lot size that minimizes the sum of inventory and quality related costs

credible spatial preemption it is often argued that incumbent firms may deter entry by preemptive investment in new goods we show that these conclusions are reversed when multiproduct incumbentfirms may exit in response to entry once entrants are in an industry an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods such a reaction makes entry more attractive to a potential entrant the equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes as exit costs are low and as the competition between producers of the same good is more intense

competitor see competitor do incumbent entry in new market niches the ability to keep up with changing technology is critical for a company s long term survival however companies have to balance the risk of rushing into new areas and potentially cannibalizing their existing business against the risk of missing the emerging market this paper investigates when incumbents enter into new market niches created by technological innovation we argue that market conditions and company specific characteristics do not suffice to explain incumbents entry timing but that entry is a contagious process our results demonstrate that incumbents are more likely to respond to innovations in their industry when their counterparts do so in particular we show that incumbents are affected by the entry of firms that are similar in size and resources when a highly similar company enters the new market it raises the probability that the company enters itself beyond levels based solely on the attractiveness of the market

prices and price dispersion on the web evidence from the online book industry using data collected between august 1999 and january 2000 covering 399 books we examine pricing by thirty two online united states based bookstores at the aggregate level we find that both advertising and competitive structure had the predicted effects more competition led to lower prices and to lower price dispersion holding competitive structure constant more widely advertised items also had lower prices at the firm level we observe considerable heterogeneity in behavior firms had differentiated or attempted to differentiate on dimensions such as brand price and selection

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

measuring the effect of subsidized training programs on movements in and out of employment despite over two decades of u s experience in operating large scale subsidized training programs for low income and unemployed workers the effects of these programs are still highly controversial the controversy arises from the difficulty of specifying the model of participant outcomes in the absence of training that is necessary in any nonexperimental program evaluation in this paper we suggest that some of these difficulties may be overcome by focusing on a very simple measure of outcomes namely the probability of employment we present a variety of estimates of the effect of training on the probability of employment for the 1976 cohort of adult male participants in the comprehensive employment and training act ceta program our methods range from a simple comparison of pre and post training employment probabilities between trainees and nonparticipants to a fully specified first order markov model of employment probabilities with individual heterogeneity there is consistent evidence across methods that ceta participation increased the probability of employment in the three years after training by from 2 to 5 percentage points classroom training programs appear to have had significantly larger effects than on the job programs although the estimated effects of both kinds of programs are positive we also find that movements in and out of employment for trainees and nonparticipants are reasonably well described by a first order process conditional on individual heterogeneity in the context of this model ceta participation appears to have increased both the probability of moving into employment and the probability of continuing employment

the gender gap in early career wage growth in the uk the gender pay gap on entry to the labour market is approximately zero but ten years after labour market entry there is a gender wage gap of almost 25 log points this article explores the reason for this gender gap in early career wage growth considering three main hypotheses human capital job shopping and psychological theories human capital factors can explain about 11 log points job shopping about 1 5 log points and the psychological theories up to 4 5 log points depending on the specification but a substantial unexplained gap remains women who have continuous full time employment have had no children and express no desire to have them earn about 8 log points less than equivalent men after 10 years in the labour market

economic conditions and alcohol problems this study investigates the relationship between macroeconomic conditions and two alcohol related outcomes liquor consumption and highway vehicle fatalities fixed effect models are estimated for the 48 contiguous states over the 1975 1988 time period alcohol consumption and traffic deaths vary procyclically with a major portion of the effect of economic downturns attributed to reductions in incomes rather than employment the intake of hard liquor is the most sensitive to the state of the macroeconomy there is no evidence however that fluctuations in economic conditions have a disproportionate impact on the drunk driving of young adults

locational choice of afdc recipients within california a conditional logit analysis abstract this paper examines factors that influence migration of afdc recipients within california a county level conditional logit model is used to analyze the impact of cost adjusted benefits on intrastate moves during recipients first year of welfare participation costs of living particularly housing costs differ considerably across counties of california yet the welfare benefit is set at the state level this creates the potential for variation in the purchasing power of the welfare benefit if a family chooses to move variation in cost of living is shown to have a significant effect on migration patterns of afdc recipients estimates suggest that a 150 decrease in fair market rent results in 15 more migration to the county recipients migration is more responsive to cost of living than migration of the general population

game theoretical perspectives on dual channel supply chain competition with price discounts and pricing schemes abstract this paper evaluates the impact of price discount contracts and pricing schemes on the dual channel supply chain competition channel conflict occurs when the supplier enters the online direct channel traditional contracts normally require tedious administrational participation full information of the cost structures and other factors the introduction of simple price discount contracts aims at providing easy implementation and effective coordination results from supplier stackelberg retailer stackelberg and nash game theoretic perspectives we show that the scenarios with price discount contracts can outperform the non contract scenarios in addition we show consistent pricing scheme can reduce the channel conflict by inducing more profit to the retailer the leader in the games might but is not guaranteed to have advantages

a structural model of us aggregate job flows this paper contributes to the analysis of jobs flows dynamics through the explicit modelling of job creations and job destructions we propose a simple matching model extended for endogenous separation and tractable heterogeneity the parameters of the model are estimated using a simulation based estimation method we then test the ability of trade externalities generated by the matching process to i propagate reallocation and aggregate disturbances in the whole labor market and ii generate the observed distribution of aggregate job flows the results clearly indicate that the model is able to match the dynamics of us aggregate job flows copyright 2002 john wiley sons ltd

exploratory evidence on the behavior of quality costs this study examines the time series behavior of quality costs reported by 49 manufacturing units of 21 companies analyses using both pooled annual data and plant specific quarterly data indicate that the majority of units in the sample achieved ongoing reductions in nonconformance costs while maintaining or reducing reported prevention and appraisal costs these findings are consistent with recent quality based learning and continuous improvement models which suggest that once an effective quality program is established companies can reduce nonconformance costs over time with little or no subsequent increase in conformance expenditures

earnings losses of displaced workers revisited recent literature reviews conclude that job displacement results in sustained earnings losses bruce c fallick 1996 lori g kletzer 1998 and that estimates of the size of those reductions vary with the type of data used in the analysis the industry within which displacement occurs and business cycle conditions the largest estimated losses were obtained using administrative data from pennsylvania during the 1970s and 1980s louis s jacobson robert j lalonde and daniel g sullivan 1993a the data covered a period of high unemployment in a heavily indus trialized state characterized by disproportionate job losses in manufacturing thus the ability to generalize those results to more favorable economic times and states with a greater reliance on service sector employment has been questioned to address these issues administrative data are used to similarly examine the impact of job displacement on earnings losses of workers in connecticut from 1993 to 2004 the work of jacobson lalonde and sullivan jls also provided important methodologi cal advancement by adapting analytical techniques developed for program evaluation james j heckman and v joseph hotz 1989 to the context of job displacement the same techniques fixed effects and time trend estimators as those used in the original jls publication are initially employed here then the methods are extended to include matching estimators developed since their publication both nearest neighbor estimators of average treatment on the treated att and differenced average treatment on the treated datt are adapted to the context of this study heckman hidehiko ichimura and petra todd 1997 heckman et al 1998 and rajeev h dehejia and sadek wahba 1999 2002 the results presented here for connecticut differ in some ways from those found in the work of jls using data from pennsylvania in the period immediately following job loss regardless of the technique employed earnings reductions for workers displaced through mass layoff range from 32 percent to 33 percent jls reported immediate losses of more than 40 percent six years later using the same estimators as jls earnings reductions in connecticut range from 13 percent to 15 percent they report sustained losses in pennsylvania of 25 percent the smaller long term impacts in connecticut demonstrate that under more ordinary economic times esti mated losses from administrative data lie within the range observed using other data sources this finding resolves a long standing conflict among the results of high quality studies that have used differing data sources to study earnings reductions following job loss 1 using two different matching estimators earnings losses six years after mass layoff are 12 percent the matching estimators compare those who experienced mass layoff to compari sons with the same ex ante probability of the event these smaller losses are consistent with the

job displacement s long run effect on access to employer provided health insurance and other fringe benefits abstract this paper investigates the effect of job displacement on access to employer provided fringe benefits we find that displacement is associated with lost access to all seven employer provided benefits investigated these losses increase the cost of displacement by 10 per year

an economic production quantity model with flexibility and reliability considerations abstract the classical economic production quantity epq model assumes that items are produced by a perfectly reliable production process with a fixed set up cost while the reliability of the production process cannot be perfect without a price its set up cost can be reduced with investment in flexibility improvement an epq model with a flexible and imperfect production process is proposed in this paper this inventory optimization problem is then formulated as a geometric program gp and solved to obtain closed form optimal solutions after the theoretical treatment a numerical example is provided to illustrate how the gp theories are applied to solve a given problem finally some aspects of post optimality sensitivity analysis based on the gp approach are discussed

a dynamic analysis of educational attainment occupational choices and job search this article examines career choices using a dynamic structural model that nests a job search model within a human capital model of occupational and educational choices wage growth occurs in the model because workers move between firms and occupations as they search for suitable job matches and because workers endogenously accumulate firm and occupation specific human capital simulations performed using the estimated model reveal that both self selection in occupational choices and mobility between firms account for a much larger share of total earnings and utility than the combined effects of firm and occupation specific human capital

state dependence individual heterogeneity and the choice of employment status evidence from korea abstractfocusing on the individual heterogeneity this article examines the causes of an individual s employment status choice and the extent of state dependence in the korean labour market we estimate a dynamic multinomial logit model using the panel data drawn from the first to fifteenth wave of the korean labour and income panel study the results suggest the presence of state dependence individual characteristics and growth background have a significant effect on the choice of employment status gender is still an important employment factor males are more likely to be employed and this gender effect is highest for regular employment re one s educational attainment and age operate in opposite directions that is educational attainment age has a positive negative impact on the choice of a regular job and a negative positive impact on the choice of a non regular job contrary to our expectations a wealthy family background reduces the probability of individuals being wage workers and rais

selection and network effects migration flows into oecd countries 1990 2000 abstract this paper presents empirical evidence on immigration flows into the oecd countries during the period 1990 2000 our results indicate that network effects are strong but vary between different groups of welfare states and between countries according to the type of immigration policy being applied network effects seem to be less important in the nordic countries which also seem to attract immigrants from the lowest income level source countries we do not find clear evidence that selection effects measured by migration flows being sensitive to differences in public social expenditures have had a major influence on the observed migration patterns until now this may partly be explained by restrictive migration policies which may have dampened the potential selection effects

mail versus mall a strategic analysis of competition between direct marketers and conventional retailers consumers now purchase several offerings from direct sellers including catalog and internet marketers these direct channels exist in parallel with the conventional retail stores the availability of multiple channels has significant implications for the performance of consumer markets the literature in marketing and economics has however been dominated by a focus on the conventional retail sector this paper is an effort toward modeling competition in the multiple channel environment from a strategic viewpoint at the outset a parsimonious model that accommodates the following consumer and market characteristics is introduced first the relative attractiveness of retail shopping varies across consumers second the fit with the direct channel varies across product categories third the strength of existing retail presence in local markets moderates competition fourth in contrast with the fixed location of the retail store that anchors its localized market power the location of the direct marketer is irrelevant to the competitive outcome the model is first applied in a setting where consumers have complete knowledge of product availability and prices in all channels in the resulting equilibrium the direct marketer acts as a competitive wedge between retail stores the direct presence is so strong that each retailer competes against the remotely located direct marketer rather than against neighboring retailers this outcome has implications for the marketing mix of retailers which has traditionally been tuned to attract consumers choosing between retail stores in the context of market entry conditions under which a direct channel can access a local market in retail entry equilibrium are derived our analysis suggests that the traditional focus on retail entry equilibria may not yield informative or relevant findings when direct channels are a strong presence next the role of information in multiple channel markets is modeled this issue is particularly relevant in the context of direct marketing where the seller can typically control the level of information in the marketplace sometimes on a customer by customer basis e g by deciding on the mailing list for a catalog campaign when a certain fraction of consumers does not receive information from the direct marketer the retailers compete with each other for that fraction of the market the retailer s marketing mix has to be tuned in this case to jointly address direct and neighboring retail competition the level of information disseminated by the direct marketer is shown to have strategic implications and the use of market coverage as a lever to control competition is described even with zero information costs providing information to all consumers may not be optimal under some circumstances in particular when the product is not well adapted to the direct channel the level of market information about the direct option should ideally be lowered the only way to compete with retailers on a larger scale with a poorly adapted product is by lowering direct prices which lowers profits lowering market information levels and allowing retailers to compete more with each other facilitates a higher equilibrium retail price in turn this allows a higher direct price to be charged and improves overall direct profit on the other hand when the product is well adapted increasing direct market presence and engaging in greater competition with the retail sector yields higher returns the finding that high market coverage may depress profits raises some issues for further exploration first implementing the optimal coverage is straightforward when the seller controls the information mechanism as in the case of catalog marketing the internet in contrast is an efficient mechanism to transmit information but does not provide the sellers with such control over the level of market information a key reason is that the initiative to gather information on the internet lies largely with consumers the design and implementation of mechanisms to control aggregate information levels in electronic markets can therefore be an important theme for research and managerial interest second direct marketers have traditionally relied on the statistical analysis of customer records to decide on contact policies the analysis in this paper reveals that these policies can have significant strategic implications as well research that integrates the statistical and strategic aspects could make a valuable contribution the paper concludes with a discussion of issues for future research in multiple channel markets including avenues to model competition in settings with multiple direct marketers

when and how is the internet likely to decrease price competition conventional wisdom seems to claim that by lowering the cost of distribution and by making search easier for consumer the introduction of the internet is likely to intensify price competition this paper intends to challenge this view by asking when and how is the internet likely to decrease the level of price competition between firms to answer this question we develop an analytic model with the following characteristics on the demand side consumers need to gather information on two types of product attributes digital attributes which can be communicated on the web at very low cost and nondigital attributes for which physical inspection of the product is necessary consumers choose between two brands but are familiar with the nondigital attributes of only the brand purchased on the last purchase occasion on the supply side firms use traditional stores and the internet to inform consumers about their products attributes and to sell their products in this setup we show that the impact of the internet on competition will be radically different depending on the relative importance of parameters describing the relevant shopping and distribution context specifically we find that the introduction of the internet might lead to monopoly pricing when 1 the proportion of internet users is high enough 2 when nondigital attributes are relevant but not overwhelming 3 when consumers have a more favorable prior about the brand they currently own and 4 when the purchase situation can be characterized by destination shopping more surprising we also show that in such cases the use of the internet not only leads to higher prices but can also discourage consumers from engaging in search as such an important message of the paper is that under some conditions the internet might represent an opportunity for firms to leverage their brand loyalty and increase their profits the intuition behind our results is the following the internet allows consumers to evaluate digital attributes easily i e without visiting the stores however nondigital attributes can only be evaluated through physical presence as such for goods where both types of attributes are important the introduction of the net changes the effective cost of search for consumers without the internet the cost of search is the cost of visiting more than one store with the introduction of the net however nonsearching consumers do not have to undertake the shopping trip at all because they can order products on the net thus in the presence of the internet the cost of search is related to the cost of undertaking the entire shopping trip in the case of destination shopping i e when the fixed cost of undertaking the shopping trip is higher than the cost of visiting an additional store the presence of the internet creates higher effective search costs for consumers given this shift of paradigm in search costs due to the internet consumers may not take the risk of searching for products with better nondigital attributes but instead remain with the product they are familiar with this results in increased consumer loyalty which induces firms to increase their prices our results have important managerial implications first they provide guidelines for firms on when i e for which product categories they should consider expanding their distribution network to the internet in this respect an important additional insight of the paper is that the internet can lower price competition and lead to reduced consumer search even if it is more expensive than the traditional distribution channel this can easily be the case if distribution through the internet represents additional costs such as the costs associated with shipping and handling and return policies second the paper also provides guidelines on how to plan the firm s internet strategy interestingly the results suggest that with the general availability of the internet the role of stores might actually become more important while we do not explicitly model a dynamic market our findings together with klemperer s 1987 results suggest that stores might have a key role in consumer acquisition while the internet can help leverage the acquired customer base through demand fulfillment this might imply that for certain product categories firms should actually allocate additional resources to improve their in store environment when considering the internet as a complementary distribution channel

how destructive is creative destruction effects of job loss on job mobility withdrawal and income we analyze short and long term effects of worker displacement our sample consists of male workers displaced from norwegian manufacturing plants we find that displacement increases the probability of leaving the labor force by 31 the drop out rate from the labor force is particularly high in the first years following displacement the average earnings effects for those who remain in the labor force are moderate a 3 loss relative to non displaced workers after seven years splitting displaced workers on within and between firm movers we find that the estimated earnings loss is entirely driven by between firm movers who experience a 3 6 loss transfers to other plants within multi plant firms upon displacement are quite common our results support the view that human capital is partly firm specific and partly industry specific we find no evidence suggesting that human capital is plant specific

menu costs posted prices and multiproduct retailers we use a unique store level data set to directly measure menu costs and to study the price change process at a large u s drugstore chain we compare and contrast the magnitude of these measures with similar measures from four large u s supermarket chains we find that 1 the actual magnitude of menu costs as a share of revenues 2 menu costs per price change 3 the frequent use of promotional pricing and 4 the use of weekly pricing rules are similar across both retail formats given that the main common features of these two types of retail formats are that i they both use posted prices and ii both are multiproduct retailers selling a large number of products our findings suggest that the magnitude of the menu cost components we measure and the price change practices we document may be generalizable across retail formats with these two features

involuntary layoffs in a model with asymmetric information concerning worker ability this paper examines the contract between a risk neutral firm and its risk averse employees assuming that worker ability is privately learned by the firm after a period of employment employers in an external spot labour market attempt to infer worker quality from the observable actions taken by the firm such as the number of workers it lays off the threat of spot market raids distorts the optimal contract layoffs may be involuntary and can exceed efficient levels a seniority layoff rule may be included in the contract to avoid the adverse selection problems that arise if layoffs are conducted on the basis of ability

optimal unemployment insurance with human capital depreciation and duration dependence this paper studies the effect of human capital depreciation and duration dependence on the design of an optimal unemployment insurance ui scheme our results partially confirm those obtained in most previous studies benefits should decrease with unemployment duration the optimal program also generates two main novel features which are not present in stationary models first if human capital depreciates rapidly enough during unemployment ui transfers are bounded below by a minimal assistance level that arises endogenously in the efficient program second we study the optimality of imposing a history contingent wage tax after reemployment our numerical simulations based on the spanish and us economies show that the wage tax should decrease with the length of worker s previous unemployment spell and become a wage subsidy for long term unemployed workers as a by product of our study we develop a systematic approach suitable for studying recursively a wide range of dynamic moral hazard problems and other models with similar characteristics

when showrooming increases retailer profit abstractshowrooming the phenomenon of consumers visiting a brick and mortar b m store to learn about products but then buying online to obtain lower prices is attracting increased attention both in business practice and in academic literature it is considered a major threat to the b m retailers and determining how to fight it seems to be the only consideration however the manufacturer s need for retail informational services has always been one of the essential reasons for retailers to exist and is a means for retailers to achieve profitability the popular arguments about the threat of showrooming ignore the strategic role of the manufacturer in the distribution channel this article analytically shows that when the manufacturer s decisions are considered i e when the manufacturer retailer contract is endogenous consumers ability to engage in showrooming may lead to increased rather than decreased profitability for b m retailer s thus retail efforts to restrict showrooming behavior m

eating your own lunch protection through preemption recent discussions of management practices among successful high technology companies suggest that one key strategy for success is to eat your own lunch before someone else does the implication is that in intensely competitive or hypercompetitive markets firms with a leading position should aggressively cannibalize their own current advantages with next generation advantages before competitors step in to steal the market given the pace of technological and other types of change such strategy often requires creating next generation advantages while the current advantages are still profitable that is trading current profits for future market leadership we capture the tradeoff between a market leader s willingness to reap profits with its current set of advantages and its desire to maintain market leadership by investing in the next generation using a competitive model that determines the equilibrium launch time of a next generation advantage we find that in absence of lower launch costs for an

an empirical model of sectoral movements by unemployed workers using canadian data i investigate the relationships among sectoral mobility unemployment spells and total unemployment recent north american evidence suggests that incidence shifts toward high wage high tenure workers may increase equilibrium unemployment through decreasing sectoral mobility and increasing spells using a multiple spell transition model i find that while shifts toward such workers may have these effects composition changes that lead to higher mobility can also increase unemployment a further investigation into the relative roles of mobility and spell lengths in driving total unemployment indicates that the influence of the former is comparatively small

when should a manufacturer set its direct price and wholesale price in dual channel supply chains abstract applying an observable delay game framework developed in noncooperative game theory we investigate the timing problem concerning when a manufacturer managing dual channel supply chains consisting of a retail channel and a direct channel should post its wholesale price and direct price conventionally operational research models describing dual channel supply chains examine price competition where the retailer and the manufacturer simultaneously determine the retail and direct prices respectively in contrast to this conventional setting our model demonstrates that such simultaneous price competition never arises if the manufacturer and retailer can choose not only the level of the price but also the timing of pricing if the manufacturer sets the direct price after setting the wholesale price to the retailer the retailer accelerates the timing of retail pricing prior to the direct price setting by the manufacturer our findings suggest that the manufacturer should post the direct price before or upon but not after setting the wholesale price for the retailer this upfront posting of the direct price not only constitutes the subgame perfect nash equilibrium of the noncooperative game between channel members but also maximizes the profits for a manufacturer employing multichannel sales strategies

declining labor turnover and turbulence abstract the rate of job loss has been on a secular decline for the last four decades or longer changes in demographics or industry composition do not account for the trend this paper seeks to identify the possible sources of the decline using a simple search and matching model with two types of workers experienced and inexperienced where the former type faces a risk of skill loss during unemployment the calibrated model suggests that a higher risk of skill loss during unemployment results in a lower job separation rate because workers accept lower wages in exchange for job security various other potential hypotheses are also examined

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

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

the magnitude of menu costs direct evidence from large u s supermarket chains we use store level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains we show that changing prices in these establishments is a complex process requiring dozens of steps and a nontrivial amount of resources the menu costs average 105 887 year per store comprising 0 70 percent of revenues 35 2 percent of net margins and 0 52 price change these menu costs may be forming a barrier to price changes specifically 1 a supermarket chain facing higher menu costs due to item pricing laws that require a separate price tag on each item changes prices two and one half times less frequently than the other four chains 2 within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law in principle fixed costs of changing prices can be observed and measured in practice such costs take disparate forms in different firms and we have no data on their magnitude so the theory can be tested at best indirectly at worst not at all alan blinder 1991 p 90

the cost of job loss this article identifies an equilibrium theory of wage formation and endogenous quit turnover in a labour market with on the job search where risk averse workers accumulate human capital through learning by doing and lose skills while unemployed optimal contracting implies the wage paid increases with experience and tenure indirect inference using german data determines the deep parameters of the model the estimated model not only reproduces the large and persistent fall in wages and earnings following job loss a new structural decomposition finds foregone human capital accumulation while unemployed is the worker s major cost of job loss

is unemployment insurance addictive evidence from the benefit durations of repeat users the author finds evidence that the past occurrence of a spell of insured unemployment lengthens the duration of future spells descriptive statistics from canadian administrative data covering mid 1971 to early 1990 suggest that unemployment insurance ui claimants tend to spend a longer and longer time collecting benefits with each additional claim they make this finding contradicts the implication of static neoclassical models that successive ui spells should be of the same length the author hypothesizes that the stigma attached to receiving unemployment benefits erodes with each new ui claim an individual files

penalized or protected gender and the consequences of nonstandard and mismatched employment histories millions of workers are employed in positions that deviate from the full time standard employment relationship or work in jobs that are mismatched with their skills education or experience yet little is known about how employers evaluate workers who have experienced these employment arrangements limiting our knowledge about how part time work temporary agency employment and skills underutilization affect workers labor market opportunities drawing on original field and survey experiment data i examine three questions 1 what are the consequences of having a nonstandard or mismatched employment history for workers labor market opportunities 2 are the effects of nonstandard or mismatched employment histories different for men and women and 3 what are the mechanisms linking nonstandard or mismatched employment histories to labor market outcomes the field experiment shows that skills underutilization is as scarring for workers as a year of unemployment but that there are limited penalties for workers with histories of temporary agency employment additionally although men are penalized for part time employment histories women face no penalty for part time work the survey experiment reveals that employers perceptions of workers competence and commitment mediate these effects these findings shed light on the consequences of changing employment relations for the distribution of labor market opportunities in the new economy

the long run consumption effects of earnings shocks although prior studies of job displacement and disability have measured the impact of these shocks in terms of lost earnings no previous research has linked these permanent earnings shocks to the

the mobility of immigrants and natives evidence from internal migration following job displacement boman a the mobility of immigrants and natives evidence from internal migration following job displacement regional studies in times of change in the labour market differences in migratory behaviour between groups affect the labour market outcome of these groups one important group in society is that of immigrants for which human capital migration theory presents two potentially conflicting hypotheses one is based on immigrants having less location specific human capital increasing their probability of migration the other is based on ethnicity immigrants living in ethnic enclaves have higher costs of leaving the enclave reducing their probability of migration this paper disentangles and finds support for both hypotheses using high quality data on a wide range of variables for essentially all individuals involuntarily displaced due to closures or substantial cutbacks of swedish workplaces in 1987 and 1988 boman a la mobilite des immigres et de la population autochtone des preuves provenant

unemployment and subsequent earnings estimating scarring among british men 1984 94 this paper estimates the impact of unemployment on earnings following re employment for a large and representative sample of british men 1984 94 unemployment incidence is found to have only a temporary effect an average earnings setback of 10 on initial re engagement largely eroding over two years the effect of unemployment duration by contrast is permanent a one year spell adding a further penalty of 10 percentage points these wage penalties are least for young men and the low paid those most at risk of unemployment and greatest for prime age and highly paid men

note on self restraint as an online entry deterrence strategy we develop a game theoretical model to show that in the markets where price consistency across channels is critical an incumbent brick and mortar retailer can deter the online entry of a pure play e tailer by strategically refraining from entering online in the markets where price consistency is not a constraint we find that the incumbent can deter the e tailer s entry only if it enters online and credibly operates the online channel as an independent profit center in other words the incumbent must be willing to cannibalize its own brick and mortar business by charging a low online price we also discuss some social welfare implications of retail online entry and the managerial insights of our analysis

do past unemployment spells affect the duration of current unemployment abstract on the basis of monthly labor force histories of respondents constructed from the panel study of income dynamics this paper finds no occurrence dependence in unemployment spells positive occurrence dependence in unemployment insurance spells and substantial heterogeneity in occurrence dependence

product line rivalry with brand differentiation competition with product rivalry is examined in a model where products are differentiated by both quality and brand name with no commitment firms produce a full product line when firms can commit to restrict their product offerings firms specialize if the degree of brand specific differentiation is small and they produce a full product line if brand specific differentiation is large relative to intrafirm differentiation firms may crowd a product space when all competitors would be better off with specialization brand proliferation is a credible entry deterring strategy if the degree of brand specific differentiation is not too large copyright 1993 by blackwell publishing ltd

the effects of unemployment and underemployment on employment opportunities results from a correspondence audit of the labor market for college graduates the authors use data from a resume audit to estimate the impact of unemployment and underemployment on the employment prospects of recent college graduates they find no statistical evidence linking unemployment spells of different durations to employment opportunities by contrast college graduates who are underemployed have callback rates that are 30 lower than those of applicants who are adequately employed the null effects associated with unemployment and the adverse effects associated with underemployment are robust across cities with relatively tight and loose labor market conditions internship experience obtained while completing one s degree substantially reduces the negative effects of underemployment the data support the proposition that employers view underemployment as a strong signal of lower expected productivity

on the strategic choice of spatial price policy the strategic incentives with respect to the choice of price policy in spatial competition are analyzed in a duopoly model price discrimination emerges as the unique equilibriu m outcome in games with either simultaneous choice of policy and pric e or sequential choice where firms may commit first to uniform mill p ricing before the actual market stage nevertheless profits may be h igher with uniform pricing the authors models are applied to analyz e some common business practices that arise in geographical pricing like the basing point system and in the pricing of varieties or opti ons from a base product in a product differentiation context copyright 1988 by american economic association

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

are workers permanently scarred by job displacements this paper investigates whether workers suffer lasting scars following job displacements using david t ellwood s 1982 terminology scars represent persistent effects whereas blemishes are transitory adjustments which dissipate over time more precisely dislocated individuals are defined as scarred if they continue to earn less or to be unemployed more than their nondisplaced counterparts even after the conclusion of a several year adjustment period