growth and unemployment this paper analyses the effects of growth on long run unemployment using a search model of equilibrium unemployment where growth arises explicitly from the introduction of new technologies that require labour reallocation for their implementation the analysis uncovers and compares between two competing effects of growth on unemployment the first is a capitalisation effect whereby an increase in growth raises the capitalised returns from creating jobs and consequently reduces the equilibrium rate of unemployment the second is a creative destruction effect whereby an increase in growth reduces the duration of a job match thereby raising the equilibrium level of unemployment both directly by raising the job separation rate and indirectly by discouraging the creation of job vacancies this paper asks the question of how the rate of economic growth affects unemployment in the long run the main consideration that leads us to think that this is an interesting question has to do with the re allocative aspect of growth in the long run faster economic growth must come from a faster increase in knowledge to the extent that the advancement of knowledge is embodied in industrial innovations it is likely to raise the job destruction rate through automation skill obsolescence and the bankruptcy associated with the process of creative destruction in short increased growth is likely to produce an increased rate of job turnover and the search theories of lucas and prescott 1974 and pissarides 1990 imply that an increased rate of job turnover will result in a higher natural rate of unemployment this conclusion is also consistent with the empirical results of davis and haltiwanger 1990 which show that periods of high unemployment tend to be periods of high job turnover at the establishment level it suggests the possibility of a positive longrun tradeoff between growth and unemployment at least over some range there has been relatively little attention paid to our question in the literature on longrun determinants of unemployment for example the recent empirical examination by layard nickell and jackman 1991 of unemployment rates among oecd countries did not even consider the rate of economic growth as a possible explanatory variable this is consistent with the seminal theoretical work of phelps 1968 which implies that the natural rate of unemployment is independent of the rate of productivity growth the only

income dispersion and counter cyclical markups recent advances in measuring cyclical changes in the income distribution raise new questions how might these distributional changes affect the business cycle itself we show how counter cyclical income dispersion can generate counter cyclical markups in the goods market without any preference shocks or price setting frictions in recessions idiosyncratic labor productivity shocks raise income dispersion lower the price elasticity of demand and increase imperfectly competitive firms optimal markups the calibrated model explains not only many cyclical features of markups but also cyclical and long run patterns of standard business cycle aggregates

human capital inequality and economic growth some new evidence this paper provides new measures of human capital inequality for a broad panel of countries taking attainment levels from barro and lee 2001 we compute gini coefficients and the distribution of education by quintiles for 108 countries over five year intervals from 1960 to 2000 using this new cross country data on human capital inequality two main conclusions are obtained first most countries in the world have tended to reduce the inequality in human capital distribution second human capital inequality measures provide more robust results than income inequality measures in the estimation of standard growth and investment equations

the low skill trap recently it has become popular to argue that certain workers have fallen into a trap in which they have poor skills few job opportunities and a low return on training while others have not this paper demonstrates how such a trap can occur within a simple matching model with rent sharing rent sharing diminishes the worker s incentive to acquire skills however since firms also benefit from training rent sharing likewise induces job creation the subsequent improved matching prospects may offset the initial disincentive to invest however for this mechanism to be effective firms and workers must coordinate their actions if they do not the trap occurs

green goals and full employment are they compatible abstract two empirical correlations are studied one between economic growth and environmental impacts and the other between the lack of economic growth and unemployment it is demonstrated that at a global level economic growth is strongly correlated with environmental impacts and barriers to fast decoupling are large and numerous on the other hand low or negative growth is highly correlated with increasing unemployment in most market economies and strategies to change this lead to difficult questions and tradeoffs the coexistence of these two correlations which have rarely been studied together in the literature on green growth degrowth and a growth justifies ambivalence about growth to make key environmental goals compatible with full employment the decoupling of environmental impacts from economic output has to be accompanied by a reduction of dependence on growth in particular strategies to tackle unemployment without the need for growth several of which are studied in this article need much more attention in research and policy

the effects of immigration in frictional labor markets theory and empirical evidence from eu countries immigrants are new comers in a labor market as a consequence they lack of social networks and other country specific and not directly productive valuable assets affecting their relative bargaining position against employers we introduce this simple observation into a matching model of the labor market and show that immigrants increase employment prospects of competing natives to test the predictions of our model we exploit yearly vari ations between 1998 and 2004 in the share of immigrants within occupations of 12 european countries we identify the causal impact of immigrants on natives employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin countries we find that natives employment rate increases in oc cupations and sectors receiving more immigrants moreover we highlight the heterogeneity of this impact across groups of immigrants and host countries along dimensions that affect immigrants natives relative reservation wages

natural disasters and human capital accumulation the empirical literature on the relationship between natural disaster risk and investment in education is inconclusive model averaging methods in a framework of cross country and panel regressions show an extremely robust negative partial correlation between secondary school enrollment and natural disaster risk this result is driven exclusively by geologic disasters exposure to natural disaster risk is a robust determinant of differences in secondary school enrollment between countries but not necessarily within countries natural disasters human capital education school enrollment bayesian model averaging

unemployment and productivity in the long run the role of macroeconomic volatility abstract this paper presents a new empirical regularity between the volatility of productivity growth and long run unemployment for a given level of long run productivity growth a theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding the model tends to fit u s long run unemployment better than a specification based on long run productivity growth only especially during the great moderation and the great recession

exchange market pressure in paraguay 1963 88 monetary disequilibrium versus global and regional dependency the relevance of the monetary approach to exchange market pressure for paraguay s small open economy is compared to that of two competing keynesian structural approaches which emphasize respectively global and regional dependency effects estimation results for the three models including formal comparisons using nonnested hypothesis tests and forecast accuracy staistics suggest that the explanatory power of the monetary model is dominated by that of the regional dependency model with the global dependency model having an intermediate degree of applicability this result is intuitive given the extreme dependency of the paraguayan economy on argentina and brazil

fiscal policy composition of intergenerational transfers and income distribution abstract in this paper we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long run distribution of these two variables in a model with indivisible investment in education we analyze how the initial distribution of income determines the posterior intergenerational mobility in human capital and the evolution of intragenerational income inequality this analysis enables us in turn to characterize the effects of fiscal policy on future income distribution and mobility when the composition of intergenerational transfers is endogenous to this end we consider the following government interventions a pay as you go social security system a tax on inheritance a tax on capital income a tax on labor income and a subsidy on education investment

firm wage premia industrial relations and rent sharing in germany the authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in germany first ordinary least squares ols regressions for the firm effects from

testing rent sharing using individualized measures of rent evidence from domestic helpers wing suen the market for resident domestic helpers offers a rare opportunity where the surplus from employment relationship can be quantitatively measured for each individual employee using the difference between employer s cost of time and employee s wage as a measure of rent it is found that wages for domestic helpers are positively related to rent however the apparent sharing of rent is better explained by matching than by efficiency wage models rent sharing is observed even in households where monitoring or turnover costs are low rent sharing is not observed among newly arrived foreign domestic helpers whose ability remains to be revealed jel j41 i introduction this article studies the pattern of wages for resident domestic helpers in hong kong no one would lure economists into paying attention to this arcane labor market were it not for one feature of the market for housework a measure of employment rent can be plausibly assigned to each individual employee having an individualized measure of rent at the worker level instead of a general measure at the firm level will shed considerable light on the large and growing literature of rent sharing in wage determination since 1975 the hong kong government has allowed the importation of foreign domestic helpers into the territory because of large wage differences between hong kong and some of its asian neighbors the program is highly popular the census and statistics department 1995 estimates that 92 700 households or 5 6 of all domestic households in hong kong employed domestic helpers in 1993 the figure is even more dramatic for high income households 44 of households with monthly income of over hk 50 000 had one or more domestic helpers 1 one consequence of the availability of market procured housework is that women who employ helpers have more time for market work in suen 1994 i estimate that the probability of labor force participation among married women who had domestic helpers is 22 percentage points higher than that for women without domestic help other things equal if hiring a helper enables a married woman to engage in market work then a plausible measure for the rent or surplus from this employment relationship is the difference between the woman s wage and her helper s wage if a woman with a domestic helper decides to stay home nonetheless the size of the surplus can be measured by the difference between the shadow value of leisure and the helper s wage wage information is readily available from census data and shadow wages can be estimated using standard techniques this article utilizes this rare opportunity to impute a measure of rent for each employer employee pair studying how the wages of domestic helpers vary wi th the magnitude of rent will provide direct evidence for rent sharing in the labor market there is a large literature which documents the fact that the characteristics of the employer such as industry affiliation and firm size are significantly correlated with the employees wages krueger and summers 19881 brown and medoff 1989 groshen 1991 helwege 1992 and many others offer convincing evidence that inter industry wage differentials and employer wage effects exist rent sharing is often invoked to account for such wage patterns however few studies in the literature offer a plausible account for the existence of or a measure for the size of the rent that is supposedly shared 2 at the industry level dickens and katz 1987 use variables such as concentration ratio capital labor ratio research and development expenditures and average rate of return on capital as covariates in wage equations these variables provide at best an indirect and error prone measure of employment rent campbell 1993 makes use of firm level characteristics instead of industry characteristics but t here is no information on profits in his firm level data

the creation and capture of rents wages and innovation in a panel of u k companies this paper examines the impact of technological innovation on wages using a panel of british firms a head count measure of major innovations between 1945 and 1983 is combined with share price and accounting information innovating firms are found to have higher average wages but rival innovation tends to depress own wages this appears consistent with a model where wages are partly determined by a sharing in the rents generated by innovation in other words innovation may be a good instrument for proxies for rents such as profitability quasi rents or tobin s average q instrumental variable estimates of the elasticity between wages and quasi rents are about 0 29

wage compression within the firm evidence from an indexation scheme we revisit the role of labour market institutions by showing how they affect the sharing of firm specific rents between employers and employees we look at an italian wage indexation mechanism scala mobile that compressed the distribution of wages imposing real wage increases at the bottom of the distribution after developing a simplified version of a search model with intra firm bargaining and on the job search we document that skilled workers received lower wage adjustments when employed at firms with many unskilled workers and they tended to move towards more skill intensive firms moreover the system drove the least skill intensive firms out of the market

technology shocks and job flows we consider a version of the solow growth model where technological progress can be investment specific or investment neutral the labour market is subject to search frictions and the existing productive units may fail to adopt the most recent technological advances technological progress can lead to the destruction of technologically obsolete jobs and cause unemployment we calibrate the model to replicate the high persistence that characterizes the dynamics of firms neutral technology and the frequency of firms capital adjustment we find that neutral technological advances increase job destruction and job reallocation and reduce aggregate employment investment specific technological advances reduce job destruction have mild effects on job creation and are expansionary hence neutral technological progress prompts schumpeterian creative destruction while investment specific technological progress operates essentially as in the standard neoclassical growth model using structural var models we provide support to the key dynamic implications of the model copyright 2007 wiley blackwell

the dynamics of technological unemployment this article compares the short and long run effects of technological progress on employment it presents a simple model of frictional unemployment capturing the negative creative destruction effects of technological change on employment in the long run faster technological change accelerates job obsolescence which reduces the equilibrium level of employment but it is also shown to have short run positive and potentially important effects on employment this tends to partially reconcile the schumpeterian view of the effects of technological change on labor markets with facts such as the response of most oecd unemployment rates to the 1970s productivity slowdown

why does trend growth affect equilibrium employment a new explanation of an old puzzle that the employment rate appears to respond to changes in trend growth is an enduring macroeconomic puzzle this paper shows that in the presence of a return to experience a slowdown in productivity growth raises reservation wages thereby lowering aggregate employment the paper develops new evidence that shows this mechanism is important for ex

does schooling cause growth a number of economists find that growth and schooling are highly correlated across countries a model is examined in which the ability to build on the human capital of one s elders plays an important role in linking growth to schooling the model is calibrated to quantify the strength of the effect of schooling on growth by using evidence from the labor literature on mincerian returns to education the upshot is that the impact of schooling on growth explains less than one third of the empirical cross country relationship the ability of reverse causality to explain this empirical relationship is also investigated

wealth distribution and output fluctuations we explore the link between wealth inequality and output fluctuations in a general two sector neoclassical growth model with endogenous labor and heterogeneous agents when agents have homogeneous crra preferences and individual wealth is pareto distributed a sufficiently large rise in the gini index typically leads to an increase in endogenous fluctuations of output for general economies we show that under plausible conditions on the fundamentals wealth inequality is still a destabilizing factor

a search model of unemployment and inflation in this paper i introduce money in the standard labor matching model mortensen and pissarides 1999 pissarides 2000 a double coincidence problemmakes fiat money necessary as a medium of exchange in the long run a rise inthe rate of money growth leads to higher inflation and higher unemployment sothe long run phillips curve is not vertical the optimal monetary growth ratedecreases with the workers bargaining power the level of unemploymentbenefits and the payroll tax rate

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

technology policy interaction in frictional labour markets does capital embodied technological change play an important role in shaping labour market outcomes to address this question we develop a model with vintage capital and search matching frictions where irreversible investment in new vintages of capital creates heterogeneity in productivity among firms matched as well as vacant we demonstrate that capital embodied technological change reduces labour demand and raises equilibrium unemployment and unemployment durations in addition the presence of labour market regulations unemployment benefits payroll taxes and firing costs exacerbates these effects thus the model is qualitatively consistent with some key features of the european labour market experience relative to that of the u s it features a sharper rise in unemployment and a sharper fall in the vacancy rate and the labour share a calibrated version of our model suggests that this technology policy interaction could explain a sizeable fraction of the observed differences between the u s and europe copyright 2007 wiley blackwell

the role of shocks and institutions in the rise of european unemployment the aggregate evidence two key facts about european unemployment must be explained the rise in unemployment since the 1960s and the heterogeneity of individual country experiences while adverse shocks can potentially explain much of the rise in unemployment there is insufficient heterogeneity in these shocks to explain cross country differences alternatively while explanations focusing on labour market institutions explain current heterogeneity well many of these institutions pre date the rise in unemployment based on a panel of institutions and shocks for 20 oecd nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts

the euro area wage curve abstract we use longitudinal micro data to examine the wage curve for the euro area over the period 1994 2001 the overall unemployment elasticity in the euro area is 0 14 the elasticity varies across groups of workers and along the wage distribution

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

sluggish us employment recovery after the great recession cyclical or structural factors this paper aims at investigating the causes of the observed departure of employment path from the gdp movements occurred in us in the late of 2008 onwards starting from a production function approach and assuming that the tfp growth is explained by variables linked to the business cycle we are able to formulate an extended version of okun s law based on cyclical factors out of sample forecasting for the period 2008 onward shows that predicted us employment is on average 1 7 above the observed one meaning that this gap cannot be attributed to identified cyclical factors

growth wealth and the natural rate is europe s jobs crisis a growth crisis abstract the effect of faster technical progress is studied in our labour turnover model of the natual rate of unemployment in its closed economy version the model implies that in the limit as the steady growth rate is approached the increase in the rate of progress is neutral for the natural unemployment rate its effects are completely offset by the equal increase in the rate of interest it induces however of two small open economies having the same technology level at some date the one where technical progress has always been and always will be faster will have the lower wealth relative to its wage and a lower wage rate relative to future wage rates both effects operate to reduce the natural rate of unemployment whether this theory based hypothesis will be confirmed empirically is a question needing extensive study but a quick comparison of the g7 countries confirms that the proportionate increase of the unemployment rate in recent decades tended to be greater the more pronounced the productivity slowdown

worker heterogeneity the job finding rate and technical change we examine the implications of changes in the skill distribution on the equilibrium matching process and the job finding rate using a directed search approach worker abilities are selected from a distribution while firms face heterogeneous entry costs and direct their job offers to workers we identify conditions under which technical progress increases or decreases the job finding rate allowing for entry and the effects of technical changes on heterogeneity we find that the effects of skill neutral technical progress on job finding rates are unambiguously non negative but the effects of skill biased changes depend on the elasticity of vacancy costs however both skill neutral and skill biased technical changes are pareto improving ex ante if all agents are risk neutral c 2014 elsevier b v all rights reserved

educational expansion and schooling inequality international evidence and some implications fairly recent data for about 100 countries indicate that as the average level of schooling increases educational inequality first increases and after reaching a peak starts declining in later phases of educational expansion the turning point occurs when average schooling is about seven years the observed empirical generalization which seems quite robust appears to have important implications for educational and distributional policies and for research on the linkage between education and income inequality

external shocks and fiscal deficits in a monetary model of international reserve determination honduras 1960 83 results from single equation estimation of a standard monetary model suggest that central bank credit growth in excess of growth of money demand was the main source of international reserve losses in honduras during the 1960 83 period further 3 sls estimates suggest that increases in central bank credit growth were largely in response to rising external interest rates and decreases in the income terms of trade in addition income growth hence growth of money demand shows a strong positive response to the income terms of trade the fiscal deficit is found to have an insignificant impact on central bank credit growth

unemployment and hours of work the north atlantic divide revisited i examine the dynamic evolutions of unemployment hours of work and the service share since the war in the united states and europe the theoretical model brings together all three and emphasizes technological growth computations show that the very low unemployment in europe in the 1960s was due to the high productivity growth associated with technological catch up productivity also played a role in the dynamics of hours but a full explanation for the fast rise of service employment and the big fall in aggregate hours needs further research taxation has played a role but results are mixed

investment in education do economic volatility and credit constraints matter abstract recent research has focused on the effects of economic volatility on the investment in physical capital this paper shows that economic volatility and the lack of financial markets have a negative effect also on the accumulation of human capital our evidence drawn from cross country and panel regressions is that average secondary enrollment in the period 1970 1972 is negatively affected by the lack of financial markets income or employment volatility and income inequality our results are robust to different specifications of volatility the inclusion of public expenditure in education country specific effects and different sets of regressors

exchange market pressure in postwar brazil an application of the girton roper monetary model this study applies lance girton and don roper s hereafter g r monetary model of exchange market pressure to the postwar brazilian monetary experience the model was designed specifically for the canadian managed float during the period 1952 62 the object of their model is to explain what they term exchange market pressure that is the pressure on foreign exchange reserves and the exchange rate when there exists an excess of domestic money supply over money demand in a managed floating exchange rate regime the basic theoretical proposition is that any such excess supply of money can be relieved by an exchange depreciation a loss in foreign reserves or in the context of a managed float by some combination of the two in this sense the g r managed float model used here is firmly rooted in the modern monetary approach to exchange rates and the balance of payments brazil provides a particularly good example for testing this approach not only because it is in many senses a unique example of a postwar managed float system but also because it can be treated as a small open economy in the sense that world prices and monetary conditions faced by brazil are taken as given this particularly suits the purpose of most modern monetary models which make this assumption and obviates the problems of monetary dependence and neutralization dealt with in the pioneering g r paper specifically the small country assumption permits us to devise a simple one country equation of managed floating which depends upon four essential ingredients 1 money demand 2 money supply 3 purchasing power parity and 4 monetary equilibrium 2 furthermore in brazil a much greater proportion of exchange market pressure was absorbed by exchange rate depreciation than in the canadian case where changes in reserves were large relative to exchange rate movements in short postwar brazil provides a singularly good opportunity to test the monetary model of exchange market pressure section i briefly states the essential elements of the monetary model and derives the equation to be tested for the brazilian experience from 1955 to 1975 section ii reports empirical results for the exchange market pressure model and section iii examines the applicability of the relative version of purchasing power parity for the time period considered section iv summarizes the results and discusses the merits of the monetary approach in light of the brazilian experience

the impact of tfp growth on steady state unemployment theoretical predictions of the impact of total factor productivity tfp growth on unemployment are ambiguous and depend on the extent to which new technology is embodied in new jobs we evaluate a model with embodied and disembodied technology capitalization and creative destruction effects in econometric estimates with a panel of industrial countries we find a large negative impact of tfp growth on unemployment which implies that embodied technology and creative destruction play no role in the steady state dynamics of unemployment capitalization effects explain some of the estimated impact but a part remains unexplained

can productivity growth explain the nairu long run evidence from britain 1871 1999 this paper investigates the effect of productivity growth on the non accelerating inflation rate of unemployment nairu over the long run using historically consistent time series for the uk from 1871 to 1999 a two equation model of unemployment and wage setting that incorporates productivity effects is estimated over the whole period allowing for shifts associated with changes in labour market institutions the results indicate that faster productivity growth reduces the nairu but that this goes only part of the way towards explaining wide swings in average unemployment across the decades

productivity growth on the job search and unemployment abstract the impact of long run productivity growth on unemployment is studied we incorporate disembodied technological progress and on the job search into the endogenous job separation model of mortensen and pissarides 1994 because we include on the job search faster growth reduces unemployment by decreasing job separation and inducing job creation the incorporation of on the job search substantially improves the ability of the mortensen and pissarides model to explain the effect of growth on labor market variables specifically our model generates not only an empirically consistent sign of the effect but also a larger impact of growth on unemployment than the standard matching model

asset bubbles labour market frictions and r d based growth employing an overlapping generations model of research and development r d based growth with labor market frictions this paper examines how employment changes induced by labor market frictions influence asset bubbles and long run economic growth asset bubbles can cannot exist when the employment rate is high low which leads to higher lower economic growth through labor market efficiency we also explore the steady state and transitional dynamics of bubbles economic growth and employment furthermore we show that policy or parameter changes that have a negative influence on the labor market can lead to a bubble burst

risk and the distribution of human capital abstract we developed a model in which aggregate production risk determines the average level of education and its distribution greater risk is associated with greater educational inequality and a lower average attainment an empirical test using panel data supports this conclusion

unemployment insurance and cultural transmission theory and application to european unemployment this paper emphasizes the two way causality between the provision of unemployment insurance and the cultural transmission of work ethic values affect the size of the moral hazard problem and hence the policy to be implemented conversely when parents rationally choose how much effort to exert to raise their children to work hard they form expectations on the policy that will be implemented by the next generation in this context we show that the different cultural traits are complementary and that there is some cultural heterogeneity in all steady state equilibria the model could generate a lag between the introduction of unemployment insurance and a deterioration of the work ethic relying on a calibration we argue that it can account for a substantial fraction of the history of european unemployment since world war ii as our explanation is compatible with the co existence of generous unemployment insurance and low unemployment in the 1950s and 1960s it could be seen as an alternative to the dominant story that relies on the occurrence of large shocks since the 1970s supportive empirical evidence is provided

the personal and the factor distributions of income in a cross section of countries abstract the shares of capital and labour in national income vary substantially both over time and across countries this paper shows that the factor distribution of income is an essential determinant of the personal distribution of income we use cross country and panel data for a group of developed and developing countries to show that a larger labour share is associated with a lower gini coefficient of personal incomes this effect is not only statistically significant but also economically important an increase in the labour share in mexico to that observed in the us would reduce the gini coefficient of the former by between two and five points

the political economy of technological innovation and employment building on the varieties of capitalism thesis of comparative advantages in technological innovation the authors theorize the effect of sociopolitical coordination from a dynamic perspective and then apply the dynamic theories to the political economy of employment in comparison to the existing employment literature situated in a constant technology context based on cross sectional survey as well as pooled time series aggregate data the authors argue that new technologies not only increase productivity through process innovation but also generate rents through product innovation by preventing opportunistic behavior between firms sociopolitical coordination intensifies reciprocal sharing of innovation which increases productivity returns but dilutes rents leading to comparative advantage in process over product innovation because process innovation is labor saving but product innovation is employment friendly interfirm coordination further leads to comparative disadvantage in job creation from in

bargaining sorting and the gender wage gap quantifying the impact of firms on the relative pay of women there is growing evidence that rm specic pay premiums are an important source of wage inequality these premiums will contribute to the gender wage gap if women are less likely to work at high paying rms or if women negotiate worse wage bargains with their employers than men using longitudinal data on the hourly wages of portuguese workers matched with balance sheet information for rms we show that the wages of both men and women contain rm specic premiums that are strongly correlated with employer productivity we then show how the impact of these rm specic pay dierentials on the gender wage gap can be decomposed into a combination of bargaining and sorting eects consistent with the bargaining literature we nd that women receive only 90 of the rm specic pay premiums earned by men notably we obtain very similar estimates of the relative bargaining power ratio from our analysis of between rm wage premiums and from analyzing changes in

wage structure as implicit insurance on human capital in developed versus underdeveloped countries abstract this paper explores the role of wage structure as implicit insurance on human capital it illustrates how smaller wage differentials in the developed world can be welfare enhancing by acting as implicit insurance while larger wage differentials in underdeveloped countries make investments in human capital riskier in other words with smaller wage differentials the students in a developed country are insured against poor educational outcomes through the existence of well paid alternative employments which are not present in the economy of a less developed country this result arises as multiple equilibria in a general equilibrium model when there are no insurance markets for human capital

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association