preferences and biases in educational choices and labour market expectations shrinking the black box of gender standard observed characteristics explain only part of the differences between men and women in education choices and labor market trajectories using an experiment to derive students levels of overconfidence and preferences for competitiveness and risk this paper investigates whether these behavioral biases and preferences explain gender differences in college major choices and expected future earnings in a sample of high ability undergraduates we find that competitiveness and overconfidence but not risk aversion is systematically related with expectations about future earnings individuals who are overconfident and overly competitive have significantly higher earnings expectations moreover gender differences in overconfidence and competitiveness explain about 18 of the gender gap in earnings expectations these experimental measures explain as much of the gender gap in earnings expectations as a rich set of control variables including test scores and family background and they are poorly proxied by these same control variables underscoring that they represent independent variation while expected earnings are related to college major choices the experimental measures are not related with college major choice

truthfulness with value maximizing bidders on the limits of approximation in combinatorial markets abstract in some markets bidders want to maximize value subject to a budget constraint rather than payoff this is different to the quasilinear utility functions typically assumed in auction theory and leads to different strategies and outcomes we refer to bidders who maximize value as value bidders while simple single object auction formats are truthful standard multi object auction formats allow for manipulation it is straightforward to show that there cannot be a truthful and revenue maximizing deterministic auction mechanism with value bidders and general valuations approximation has been used as remedy to achieve truthfulness on other mechanism design problems and we study which approximation ratios we can get from truthful mechanisms we show that the approximation ratio that can be achieved with a deterministic and truthful approximation mechanism with n bidders cannot be higher than 1 n for general valuations for randomized approximation mechanisms there is a framework with a ratio that is tight

parenthood and the gender gap in pay we compare the income and wage trajectories of women to those of their male partners before and after parenthood focusing on the within couple gap allows us to control for both observed and unobserved attributes of the spouse and to estimate both short and long term effects of entering parenthood we find that 15 years after the first child has been born the male female gender gaps in income and wages have increased by 32 and 10 percentage points respectively in line with a collective labor supply model the magnitude of these effects depends on counterfactual relative incomes or wages within the family

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centralized versus decentralized provision of local public goods a political economy approach abstract this paper takes a fresh look at the trade off between centralized and decentralized provision of local public goods it argues that the sharing of the costs of local public spending in a centralized system will create a conflict of interest between citizens in different jurisdictions when spending decisions are made by a legislature of locally elected representatives this conflict of interest will play out in the legislature depending on precisely how the legislature behaves the result may be excessive public spending or allocations of public goods characterized by uncertainty and misallocation across districts the extent of the conflict of interest between districts is affected by spillovers and differences in tastes for public spending thus the relative performance of centralized and decentralized systems depends upon spillovers and differences in tastes for public spending but for different reasons than suggested in the existing literature

a generalized quantity discount pricing model to increase supplier s profits in this paper the joint problem of ordering and offering price discount by a supplier to his sole major buyer is analyzed the objective is to induce the buyer to alter his order schedule and size so that the supplier can benefit from lower set up ordering and inventory holding costs we generalize the quantity discount pricing model of monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci 30 6 720 726 to 1 explicitly incorporate constraints imposed on the amount of discount that can be offered and 2 relax the implicit assumption of a lot for lot or order for order policy adopted by the supplier an algorithm is developed to solve the supplier s joint ordering and price discount problem

the career costs of children this paper analyzes the life cycle career costs associated with child rearing and decomposes their eects into unearned wages as women drop out of the labor market loss of human capital and selection into more child friendly occupations we estimate a dynamic life cycle model of fertility occupational choice and labor supply using detailed survey and administrative data for germany for numerous birth cohorts across dierent regions we use this model to analyze both the male female wage gap as it evolves from labor market entry onward and the eect of pro fertility policies we show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long run eect of policies encouraging fertility are considerably lower than the short run eects typically estimated in the literature

decentralization and political career concerns abstract politicians career paths often start at some subnational governments and end at the national one allocation of authorities among national and subnational governments affects i how tempting the prospects of taking national offices are and hence how strong bureaucrats political career concerns are and ii whether the incentives generated by these political career concerns can be put into productive use at subnational governments we illustrate this tradeoff in determining the optimal degree of decentralization using china as a case study we also compare the equilibrium degree of decentralization in autocracy and in democracy

think locally act locally spillovers spillbacks and efficient decentralized policymaking we analyze models with interjurisdictional spillovers among heterogeneous jurisdictions such as co 2 emissions that affect the global environment each jurisdiction s emissions depend upon the local stock of capital which is interjurisdictionally mobile and subject to local taxation in important cases decentralized policymaking leads to efficient resource allocation even in the complete absence of corrective interventions by higher level governments or coordination of policy through coasian bargaining in particular even when the preferences and production technologies differ among the agents the decentralized system can result in globally efficient allocation

renegotiation design with unverifiable information this paper considers a buyer seller relationship with observable but unverifiable investments and or random utility parameters in such situations it is known that contract renegotiation may prevent the implementation of first best outcomes in this paper we show however that efficient investments and optimal risk sharing can typically be achieved provided the initial contract is able to monitor the ex post renegotiation process specifically we focus on the following two features of renegotiation design first default options in case renegotiation breaks down second the allocation of all bargaining power to either contracting party moreover we show that these two features can be obtained in standard rubinstein bargaining games through contractual provisions such as specific performance clauses and penalties for delay or equivalently financial hostages refundable without interest

communication in federal politics universalism policy uniformity and the optimal allocation of fiscal authority the paper presents a positive model of policy formation in federal legislatures when delegates engage in the strategic exchange of policy relevant information depending on the type of policy under consideration communication between delegates generally suffers from a bias that makes truthful communication difficult and sometimes impossible this generates inefficient federal policy choices that are often endogenously characterized by overspending universalism and uniformity building on these findings i develop a theory of fiscal de centralization which revisits the work of oates in a world of incomplete information and strategic communication empirical results from a cross section of us municipalities are consistent with the predicted pattern of spending

compact bid languages and core pricing in large multi item auctions we introduce an auction design framework for large markets with hundreds of items and complex bidder preferences such markets typically lead to computationally hard allocation problems our new framework consists of compact bid languages for sealed bid auctions and methods to compute second price rules such as the vickrey clarke groves or bidder optimal core selecting payment rules when the optimality of the allocation problem cannot be guaranteed to demonstrate the efficacy of the approach for a specific complex market we introduce a compact bidding language for tv advertising markets and investigate the resulting winner determination problem and the computation of core payments for realistic instances of the respective winner determination problems very good solutions with a small integrality gap can be found quickly although closing the integrality gap to find marginally better solutions or prove optimality can take a prohibitively large amount of time our subsequent adaptation of a constraint

from sick man of europe to economic superstar germany s resurgent economy in the late 1990s and into the early 2000s germany was often called the sick man of europe indeed germany s economic growth averaged only about 1 2 percent per year from 1998 to 2005 including a recession in 2003 and unemployment rates rose from 9 2 percent in 1998 to 11 1 percent in 2005 today after the great recession germany is described as an economic superstar in contrast to most of its european neighbors and the united states germany experienced almost no increase in unemployment during the great recession despite a sharp decline in gdp in 2008 and 2009 germany s exports reached an all time record of 1 738 trillion in 2011 which is roughly equal to half of germany s gdp or 7 7 percent of world exports even the euro crisis seems not to have been able to stop germany s strengthening economy and employment how did germany with the fourth largest gdp in the world transform itself from the sick man of europe to an economic superstar in less than a decade we present evidence that the specific governance structure of the german labor market institutions allowed them to react flexibly in a time of extraordinary economic circumstances and that this distinctive characteristic of its labor market institutions has been the main reason for germany s economic success over the last decade

the selection of high skilled emigrants we measure selection among high skilled emigrants from germany using predicted earnings migrants to less equal countries are positively selected relative to nonmigrants while migrants to more equal countries are negatively selected consistent with the prediction in borjas 1987 positive selection to less equal countries reflects university quality and grades and negative selection to more equal countries reflects university subject and gender migrants to the united states are highly positively selected and concentrated in stem fields our results highlight the relevance of the borjas model for high skilled individuals when credit constraints and other migration barriers are unlikely to be binding

cooperative investments and the value of contracting recent articles have shown that contracts can support the efficient outcome for bilateral trade even in the face of specific investments and incomplete contracting these studies typically considered selfish investments that benefit the investor e g the seller s investment reduces her production costs the authors find very different results for cooperative investments that directly benefit the investor s partner e g the seller s investment improves the buyer s value of the good most importantly if committing not to renegotiate the contract is impossible then contracting has no value i e the parties cannot do better than to abandon contracting altogether in favor of ex post negotiation

valuing alternative work arrangements abstract we employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to tr

a smart market for industrial procurement with capacity constraints we address the problem of designing multi item procurement auctions for a monopsonistic buyer in capacity constrained environments using insights from classical auction theory we construct an optimization based auction mechanism smart market relying on the dynamic resolution of a linear program minimizing the buyer s cost under the suppliers capacity constraints suppliers can modify their offers in response to the optimal allocation corresponding to each set of bids giving rise to a dynamic competitive bidding process to assist suppliers we also develop a bidding suggestion device based on a myopic best response mbr calculation that solves an associated optimization problem assuming linear costs for the suppliers we study within a game theoretic framework the sequence of bids arising in this smart market under a weak behavioral assumption and some symmetry requirements an explicit upper bound for the winning bids is established we then formulate a complete behavioral model and solution methodology based on the mbr rationale and show that the bounds derived earlier continue to hold we analytically derive some structural and convergence properties of the mbr dynamics in the simplest nontrivial market environment which suggests further possible design improvements and investigate bidding dynamics and incentive compatibility issues via numerical simulations

central governance or subsidiarity a property rights approach to federalism abstract we consider a model where one region in a federation can realize a public project after undertaking value increasing investments while negotiations on the federal level ensure that an efficient project size is implemented in equilibrium non contractibility of investments causes the overall outcome to differ across regimes if the region bears the entire implementation costs of its policies underinvestment prevails and subsidiarity centralized governance is superior when spillovers are weak strong conversely if linear cost sharing arrangements are feasible decentralized authority often admits a socially optimal outcome while centralized authority with majority or unanimity rule does not

government versus private ownership of public goods there has been a dramatic change in the division of responsibility between the state and the private sector for the delivery of public goods and services in recent years with an increasing trend toward contracting out to the private sector and public private partnerships this paper analyzes how ownership matters in public good provision we show that if contracts are incomplete then the ownership of a public good should lie with a party that values the beneets generated by it relatively more this is true regardless of whether this party is also the key investor or other aspects of the technology

the impressive contribution of canadian economists to fiscal federalism theory and policy the study of fiscal federalism has been central to the research of canadian economists since the rowell sirois report to mark the 50th anniversary of the founding of the canadian economics association it is fitting to take stock of their contributions we focus on the period since 1982 and emphasize the main scholarly publications of an inclusive array of canadian economists and economists in canadian universities our attention is devoted to applications in the context of federal and provincial governments setting aside related issues in municipal government finance we briefly discuss instances where the fiscal federalism literature has informed policy debates including through policy research institutes government commissions and international organizations la contribution impressionnante des economistes canadiens a la theorie et a la politique du federalisme fiscal l etude du federalisme fiscal a ete un element central de la recherche des economistes canadiens depuis la commission rowell sirois au moment de celebrer le 50eme anniversaire de la fondation de l association canadienne d economique le moment est approprie pour prendre la mesure de leurs contributions on se concentre sur la periode apres 1982 et on souligne les principales publications savantes d un ensemble inclusif d economistes canadiens et d economistes dans les universites canadiennes une attention particuliere est portee aux applications dans le contexte federal et provincial mettant de cote les enjeux relies a la finance municipale on discute brievement des instances ou la litterature sur le federalisme fiscal a eclaire les debats de politiques publiques y compris a travers les instituts de recherche sur les politiques publiques les commissions gouvernementales et les organisations internationales

a sticky floors model of promotion pay and gender abstract according to raw data from the british household panel survey full time women are more likely than men to be promoted controlling for observed and unobserved individual heterogeneity we find that women are promoted at roughly the same rate as men but may receive smaller wage increases consequent upon promotion to help explain these phenomena we construct a new sticky floors model of pay and promotion in our model women are just as likely as men to be promoted but find themselves stuck at the bottom of the wage scale for the new grade

frontiers in spectrum auction design abstract spectrum auction design has seen number innovations in the recent years regulators have used various types of combinatorial auction formats including simple ascending combinatorial clock auctions and first price sealed bid combinatorial auctions the simultaneous multi round auction smra and the two stage combinatorial clock auction cca are the most wide spread auction formats for spectrum sales to date we provide an accessible overview of strategic problems in these auction formats and summarize research challenges in this field for a broader audience of readers in industrial organization

estimating a dynamic adverse selection model labour force experience and the changing gender earnings gap 1968 1997 this paper addresses two questions what accounts for the gender gap in labour market outcomes what are the driving forces behind the changes in the gender labour market outcomes over the period 1968 1997 it formulates a dynamic general equilibrium model of labour supply occupational sorting and human capital accumulation in which gender discrimination and an earnings gap arise endogenously it uses this model to quantify the driving forces behind the decline in the gender earnings gap and the increase in female labour force participation the proportion of women working in professional occupations and hours worked it finds that labour market experience is the most important factor explaining the gender earnings gap in addition statistical discrimination accounts for a large fraction of the observed gender earnings gap and its decline it also finds that a large increase in aggregate productivity in professional occupations plays a major role in the increase in female labourforce participation number of hours worked and the proportion of females working in professional occupations although of less importance demographic changes account for a substantial part of the increase in female labour force participation and hours worked whereas home production technology shocks do not

vendor selection with price breaks abstract we study the problem of vendor selection where a buyer must choose order quantities to place with vendors in a multiple sourcing network the selection process is influenced by the price delivery and quality objectives of the buyer as well as by the production or rationing constraints of the vendors vendors are assumed to offer price breaks which depend on the sizes of the order quantities each proce break schedule is characterized by two attributes it represents either quantity discounts or surcharges and is either cumulative all units or noncumulative incremental we present linear and mixed binary integer programming models that provide unifying frameworks for models of vendor performance measures from the purchasing literature and models of price breaks from the operations research literature we argue that our models offer viable approaches to vendor selection with price breaks because of the availability of commercial software packages for personal computers that provide flexible and efficient computational tools for solving the models this implies that vendor selection with price breaks can be performed at the fingertips of purchasing managers

early gender gaps among university graduates abstract we use data from six cohorts of university graduates in germany to assess the extent of gender gaps in college and labor market performance twelve to eighteen months after graduation men and women enter college in roughly equal numbers but more women than men complete their degrees women enter college with slightly better high school grades but women leave university with slightly lower marks immediately following university completion male and female full timers work a very similar number of hours per week but men earn more than women across the pay distribution with an unadjusted gender gap in full time monthly earnings of about 20 log points on average including a large set of controls reduces the gap to 5 10 log points the single most important proximate factor that explains the gap is field of study at university

pay differences among the highly paid the male female earnings gap in lawyers salaries this article uses very detailed information on graduates of the university of michigan law school to examine male female pay differences in that population men and women in this population have virtually identical human capital on graduation from law school allowing us to examine carefully the different impact of children and work history on men s and women s careers and earnings taking time from work in order to care for children reduces wages significantly but a rich set of controls including childcare work history school performance and job setting measures still leave one fourth to one third of the earnings gap unexplained

federal mandates by popular demand this paper proposes a new framework for studying federal mandates regarding public policies in areas such as environmental quality public health highway safety and the provision of local public goods voters have single peaked preferences along a single policy dimension there are two levels of government federal and local the federal level can constrain local policy by mandating a minimum or maximum policy localities are free to adopt any policy satisfying the constraint imposed by the federal mandate we show that voters choose federal mandates that are too strict which leads to excessively severe mandates we show that similar results can obtain when federal provision of the public provided good is more efficient than local provision

coordination in split award auctions we analyze split award procurement auctions in which a buyer divides full production between two suppliers or awards all production to a single supplier and suppliers have private cost information an intriguing feature of split awards is that the equilibrium bids are implicitly coordinated because a split award price is the sum of offered split prices each supplier can unilaterally veto a split award by bidding very high for the split the need to coordinate is reflected in a split price that does not vary with private information we also explore conditions under which split award auctions may be preferred to winner take all auctions

gender differences in educational attainment evidence on the role of tracking from a finnish quasi experiment this paper studies the relationship between the timing of tracking of pupils into vocational and academic secondary education and gender differences in educational attainment and income we argue that in a system that streams students into vocational and academic tracks relatively late age 15 16 girls are more likely to choose the academic track than boys because of gender differences in the timing of puberty we exploit the finnish comprehensive school reform of the 1970 s to analyze this hypothesis this reform postponed the tracking of students from the age of 10 11 to 15 16 and was adopted gradually by municipalities so that we can observe members of the same cohorts in both systems we find that the postponement of the tracking age increased gender differences in the probability of choosing the academic secondary education and in the probability of continuing into academic tertiary education the reform had particularily negative effects on boys from non academic family backgrounds finally the reform decreased the gender wage gap in adult income by four percentage points

externalities vs internalities a model of political integration abstract decentralized government leads to inter regional externalities whereas an integrated jurisdiction solves the externality problem centralized government entails other costs in particular a neglect for minority interests the paper models formally the trade off between these two forces in determining the optimum as well as the equilibrium design of jurisdictions both the relative size of regions and the distribution of tastes are shown to be important parameters of the problem

can decentralization be beneficial abstract a conventional justification for government hierarchy in the fiscal federalism literature is based upon asymmetry in policy tools or in information access that is available to different levels of government this paper demonstrates that even if these asymmetries are eliminated addition of local regional governments to a one tier central government can be strictly welfare improving

finite mixture estimation of multiproduct cost functions this paper presents a technique of cost function estimation based on the theory of finite mixture distributions which allows for the simultaneous existence of multiple technologies of production when the researcher does not know which observations correspond to which technologies the finite mixture technique provides estimates of the proportions of firms using the various technologies facilitates comparisons between technologies and preserves the traditional interpretations of cost estimation after describing the mixture procedure the technique is illustrated on a large sample of savings and loan associations and it is concluded that this industry exhibits multiple technologies of production copyright 1991 by mit press

redistribution fiscal competition and the politics of economic integration the paper examines the consequences of the economic integration of factor markets in a model with two countries that redistribute income among their residents the social benefits in each country are financed by a source based tax on capital which is democratically chosen by its inhabitants if either capital or labour is internationally mobile the countries engage in fiscal competition and the partial integration of capital or labour markets is detrimental to the countries redistributive ability a move from partial to full integration however may alleviate rather than intensify fiscal competition particularly if the two countries face sufficiently similar economic and political conditions in such a situation for example tax competition for mobile capital is softened as the labour market becomes more integrated and even vanishes if both factors are fully mobile as a result there is more redistribution in equilibrium and a majority of the population in each country is strictly better off copyright 2002 wiley blackwell

accountability and decentralisation in government an incomplete contracts model this paper approaches the question of the appropriate level of decentralisation of power in government as a problem in the allocation of control rights under incomplete contracts the model of the paper compares allocations of power to local central and regional government as alternative means of motivating governments to act in the interests of citizens centralisation allows benefits from policy coordination but has costs in terms of diminished accountability which can be precisely defined as the reduced probability that the welfare of a given region can determine the re election of the government the model is extended to allow for conflicts of interest within regions and externalities between central and local governments in a federation it is also applied to determining levels of fiscal transfer between localities and to circumstances where governments may act as leviathans appropriating resources for their own use

gender competitiveness and career choices gender differences in competitiveness have been hypothesized as a potential explanation for gender differences in education and labor market outcomes we examine the predictive power of a standard laboratory experimental measure of competitiveness for the later important choice of academic track of secondary school students in the netherlands although boys and girls display similar levels of academic ability boys choose substantially more prestigious academic tracks where more prestigious tracks are more math and science intensive our experimental measure shows that boys are also substantially more competitive than girls we find that competitiveness is strongly positively correlated with choosing more prestigious academic tracks even conditional on academic ability most important we find that the gender difference in competitiveness accounts for a substantial portion about 20 of the gender difference in track choice

centralized fiscal spending by supranational unions we study fiscal spending by supranational unions where participation is voluntary and countries bargain over contributions to and the allocation of a central budget since decisions are made by unanimity bargaining power over the allocation becomes a function of contributions which generically causes inefficiency in the presence of income asymmetry between member nations this link between the budget allocation and contributions explains patterns of inefficient spending in the eu e g why resources are diverted to low productivity projects in high income countries the option of veto creates a trade off between efficiency on the contributions margin and efficiency on the allocation margin

harmonization and side payments in political cooperation for two districts or countries that try to internalize externalities i analyze a bargaining game under private information i derive conditions for when it is efficient with uniform policies across regions with and without side payments and when it is efficient to prohibit side payments in the negotiations while policy differentiation and side payments allow the policy to better reflect local conditions they create conflicts between the regions and thus delay the results also describe when political centralization outperforms decentralized cooperation and they provide a theoretical foundation for the controversial uniformity assumption traditionally used by the fiscal federalism literature

compact bidding languages and supplier selection for markets with economies of scale and scope preference elicitation is a fundamental problem in single unit combinatorial auctions but it becomes prohibitive even for small instances of multi unit combinatorial auctions the bidders cannot express their preferences exactly as this would take a huge number of bids typically leading to inefficient allocations hence markets with economies of scale and scope require more compact and yet expressive bidding languages in this thesis we propose an expressive bidding language allowing bidders to describe the characteristics of their cost functions bidders in these auctions can specify various discounts and markups and specify pricing rules as logical functions finding the optimal allocation given these pricing rules is a strongly np hard optimization problem and we propose a mixed integer program to solve it based on field data we introduce a multi item cost function and provide extensive computational experiments to explore the computational burden and the impact of different language features on the computational effort and total spend of the auctioneer in addition we explore characteristics of the knowledge representation of the bidding language

on the number and size of nations this paper studies the equilibrium determination of the number of countries in different political regimes and in different economic environments with more or less economic integration we focus on the trade off between the benefits of large jurisdictions and the costs of heterogeneity of large and diverse populations our model implies that i democratization leads to secessions ii in equilibrium one generally observes an inefficiently large number of countries iii the equilibrium number of countries is increasing in the amount of economic integration

male female wage differentials in job ladders much of the male female wage differential exists because men and women are assigned to different jobs within narrow job categories there is no male female differential only a tortured taste theory of discrimination can reconcile these facts we argue that differential movement along job ladders entails comparative advantage so the ability standard for promotion is higher for women this implies that more able women will be passed over in favor of less able men women assumed to have the same ability distribution as men earn less the differential reflects females lower promotion probability not within job discrimination

auctions for split award contracts the buyer of a homogeneous input divides his input requirements into two contracts that are awarded to different suppliers he uses a sequential second price auction to award a primary and a secondary contract with a fixed number of suppliers the buyer pays a higher expected price than with a sole source auction the premium paid to the winner of the secondary contract must also be paid to the winner of the primary contract as an opportunity cost when entry is endogenous we identify the conditions under which a secondary contract can increase the number of suppliers and lower the expected price

explaining women s success technological change and the skill content of women s work the closing of the gender wage gap is an ongoing phenomenon in industrialized countries however research has been limited in its ability to understand the causes of these changes due in part to an inability to directly compare the work of women to that of men in this study we use a new approach for analyzing changes in the gender pay gap that uses direct measures of job tasks and gives a comprehensive characterization of how work for men and women has changed in recent decades using data from west germany we find that women have witnessed relative increases in non routine analytic tasks and non routine interactive tasks which are associated with higher skill levels the most notable difference between the genders is however the pronounced relative decline in routine task inputs among women with little change for men these relative task changes explain a substantial fraction of the closing of the gender wage gap our evidence suggests that these task changes are driven at least in part by technological change we also show that these task changes are related to the recent polarization of employment between low and high skilled occupations that we observed in the 1990s

transitions career and family life cycles of the educational elite among life s most vital transitions are those concerning family and career we decide when and whom to marry how many children to have whether to further our education and which occupations and jobs to pursue fundamental aspects of these transitions began to change around the early 1970s for the college educated generally and for women in particular the median age at first marriage among college graduate women which had been stable at about 22 5 years old from the 1950s to the early 1970s for birth cohorts from the 1930s to about 1950 increased by 2 5 years between 1972 and 1979 for birth cohorts from about 1950 to 1955 the fraction of women not having a first birth by around 40 years old increased from 20 percent for those graduating in the early 1960s to 28 percent for those graduating in the 1970s college graduate women greatly increased their education in professional schools the fraction female among first year law and medical school students for example was 10 percent in 1970 but rose to 40 percent by 1990

distributive politics and the costs of centralization this paper studies the choice between centralization and decentralization of fiscal policy in a political economy setting with centralization regional delegates vote over agendas comprising sets of region specific projects the outcome is inefficient because the choice of projects is insufficiently sensitive to within region benefits the number of projects funded may be non monotonic in the strength of project externalities the efficiency gains from decentralization and the performance of constitutional rules such as majority voting which may be used to choose between decentralization and centralization are then discussed in this framework weaker externalities and more heterogeneity between regions need not increase the efficiency gain from decentralization

expansions in maternity leave coverage and mothers labor market outcomes after childbirth this article analyzes the impact of five major expansions in maternity leave coverage in germany on mothers labor market outcomes after childbirth to identify the causal impact of the reforms we use a difference in difference design that compares labor market outcomes of mothers who give birth shortly before and shortly after a change in maternity leave legislation in years of policy changes and years when no changes have taken place each expansion in leave coverage reduced mothers postbirth employment rates in the short run the longer run effects of the expansions on mothers postbirth labor market outcomes are however small

the architecture of federations constitutions bargaining and moral hazard abstract the paper studies a federal system where a a region provides non contractible inputs into the social benefits from a public policy project with spillovers to other regions and b where political bargaining between different levels of government may ensure efficient decision making ex post allowing intergovernmental grants to be designed optimally we ask whether project authority should rest with the region or with the central government centralization is shown to dominate when governments are benevolent with regionally biased governments both centralization and decentralization yield inefficiencies and the second best institution depends on parameter values if political bargaining is prohibited when bargaining is feasible however the first best can often be achieved under decentralization but not under centralization at the root of this dichotomy is the alignment of decision making over essential inputs and project size under decentralized governance and their misalignment under centralization

revenue deficiency under second price auctions in a supply chain setting consider a firm called the buyer that satisfies its demand over two periods by assigning both demands to a supplier via a second price procurement auction call this the standard auction in the hope of lowering its purchase cost the firm is considering an alternative procedure in which it will also allow bids on each period individually where there can be either one or two winners covering the two demands call this the multiple winner auction choosing the multiple winner auction over the standard auction can in fact result in a higher cost to the buyer we provide a bound on how much greater the buyer s cost can be in the multiple winner auction and show that this bound is tight we then sharpen this bound for two scenarios that can arise when the buyer announces his demands close to the beginning of the demand horizon under a monotonicity condition we achieve a further sharpening of the bound in one of the scenarios finally this monotonicity condition allows us to generalize this bound to the t period case in which bids are allowed on any subset of period demands

field of study earnings and self selection why do individuals choose different types of post secondary education and what are the labor market consequences of those choices we show that answering these questions is difficult because individuals choose between several unordered alternatives even with a valid instrument for every type of education instrumental variables estimation of the payoffs require information about individuals ranking of education types or strong additional assumptions like constant effects or restrictive preferences these identification results motivate and guide our empirical analysis of the choice of and payoff to field of study our context is norway s post secondary education system where a centralized admission process covers almost all universities and colleges this process creates credible instruments from discontinuities which effectively randomize applicants near unpredictable admission cutoffs into different fields of study at the same time it provides us with strategy proof measures of individuals ranking of fields taken together this allows us to estimate the payoffs to different fields while correcting for selection bias and keeping the next best alternatives as measured at the time of application fixed we find that different fields have widely different payoffs even after accounting for institutional differences and quality of peer groups for many fields the payoffs rival the college wage premiums suggesting the choice of field is potentially as important as the decision to enroll in college the estimated payoffs are consistent with individuals choosing fields in which they have comparative advantage we also test and reject assumptions of constant effects or restrictive preferences suggesting that information on next best alternatives is essential to identify payoffs to field of study