barriers to trade and the import vulnerability of us manufacturing industries while it is widely recognized that imports can discipline markets the strength of that disciplinary power surely varies across industries the determinants and extent of this interindustry variation in the disciplinary force for foreign trade flows is however relatively unexplored this article investigates the microeconomic determinants of changing import shares at the industry level for u s manufacturing industries based upon this investigation the authors are able to create an index that measures the relative vulnerability of the various manufacturing industries to foreign competition and test a number of hypotheses concerning the underlying causes of observed variations in import vulnerability copyright 1990 by blackwell publishing ltd

union wages and union decline evidence from the construction industry two well documented empirical findings are that unionized employees typically receive substantially higher compensation than their non union counterparts and that union representation in the united states has declined over time some observers have hypothesized a causal link between these two phenomena the achievement of a union wage premium they argue hastened union decline both by reducing union firms economic competitiveness and by inducing employers to adopt various union avoidance strategies using data from the current population survey and the census bureau s census of construction the authors test this hypothesis for the construction industry even in estimations that allow for a lagged response and incorporate a variety of controls they find no evidence that high union nonunion wage ratios in construction in the 1970s or 1980s resulted in lower union membership in 2000

organized labor and racial wage inequality in the united states why have african american private sector unionization rates surpassed those of white workers for decades and how has private sector union decline exacerbated black white wage inequality using data from the current population survey 1973 2007 the authors show that african americans join unions for protection against discriminatory treatment in nonunion sectors a model predicted wage series also shows that among women black white weekly wage gaps would be between 13 and 30 lower if union representation remained at high levels the effect of deunionization on racial wage inequality for men is less substantial but without deunionization weekly wages for black men would be an estimated 49 higher the results recast organized labor as an institution vital for its economic inclusion of african american men and women this study points to the need to move beyond class based analyses of union decline to an understanding of the gendered role unions once played in mitigating racial inequality

the effect of unions on the structure of wages a longitudinal analysis this paper studies the effects of unions on the structure of wages using an estimation technique that explicitly accounts for misclassification errors in reported union status and potential correlations between union status and unobserved productivity the econometric model is estimated separately for five skill groups using a large panel data set formed from the u s current population survey the results suggest that unions raise wages more for workers with lower levels of observed skills in addition the patterns of selection bias differ by skill group among workers with lower levels of observed skill unionized workers are positively selected whereas union workers are negatively selected from among those with higher levels of observed skill despite a large and sophisticated literature there is still substantial disagreement over the extent to which differences in the structure of wages between union and nonunion workers represent an effect of trade unions rather than a consequence of the nonrandom selection of unionized workers over the past decade several alternative approaches have been developed to control for unobserved heterogeneity between union and nonunion workers 2 one method that has been successfully applied in other areas of applied microeconometrics is the use of longitudinal data to measure the wage gains or losses of workers who change union status unfortunately longitudinal estimators are highly sensitive to measurement error even a small fraction of misclassified union status changes can lead to significant biases if the true rate of mobility between union and nonunion jobs is low this sensitivity led lewis 1986 to essentially dismiss the longitudinal evidence in his landmark survey of union wage effects in this paper i present some new evidence on the union wage effect based on a longitudinal estimator that explicitly accounts for misclassification errors in reported union status the estimator uses external information on union status misclassification rates along with the reduced form coefficients from a multi variate regression of wages on the observed sequence of union status indicators to isolate the causal effect of unions from any selection biases introduced by a correlation between union status and the permanent component of unobserved wage heterogeneity recognizing that unions may raise wages more or less for

do unionized firms hire better workers i introduction many economists firmly believe that union firms offset higher union wages by hiring better workers the contrasting view that union employers react to higher union wages by hiring poorer quality workers is regarded as impossible 1 yet this contrasting view is highly plausible in the context of standard economic modeling and with what is known about labor markets there is evidence supporting this view the standard story for unionized firms hiring better workers goes like this a union raises wages and the firm foils the union by hiring better quality workers the problem with this myopic story is that it ignores what happens in the future it assumes that unions will sit idly by and let union firms whittle away any union wage differential by hiring better quality workers i would argue that it is more likely that unions would respond to better quality workers by raising wages even more employers anticipating this may respond by hiring lower quality workers this article is the first to consider how unionized firms choose worker quality when they anticipate the future consequences of quality on wages under reasonable conditions these consequences cause employers to hire lower quality workers while i do not contend this always occurs i do argue that there are reasonable grounds for rejecting the better quality proposition in addition there is evidence that unionization often does result in lower quality workers the results presented here suggest that economists should look again at how unions affect wages productivity equality and society this is not the first paper to suggest unions lead to lower quality workers it is however the first to suggest this result is due to employers making profit maximizing decisions when they anticipate the future consequences of their actions there are two other articles that also suggest unions can lead to lower quality workers first robinson 1989 assumes that unionized employers do want higher quality workers but do not hire them because nonunion firms pay them more as the nonunion firms are assumed to have better monitoring technology and a more flexible reward system second bronars and lott 1989 show that unions that seek the maximum dues will want poorer quality workers while these models focus on factors that may prove to be important the model presented here is theoretically more forceful first it is based upon standard economic modeling second using ochkam s razor it assumes the least added factors and finally its central assumption that people anticipate the future has a large body of economic evidence behind it by demonstrating that the better quality proposition is not supported by conventional economic analysis this article shows the better quality proposition should not be given a greater weight in the priors of economists having done this these other models then should and hopefully will be examined more closely ii the case for unions leading to better quality workers in discussing the wage gap between union and nonunion workers h gregg lewis 1986 46 concisely presents the case that union firms select better workers i have strong priors on the direction of the selectivity bias let a union through collective bargaining impose on an employer higher wages for his workers than he otherwise would pay them with worker quality not tightly specified in the collective bargaining agreement the higher wages will lengthen the queue of the applicants for the unionized jobs including some applicants of greater productiveness than otherwise would have applied the employer has an incentive to evade the increase in his labor costs by employing workers of greater quality the evasion will take time and will be impeded by the cost of screening workers imperfect substitution in production among worker quality and employment constraints in the collective bargaining agreements

what explains wage differences between union members and covered nonmembers an individual covered by a collective bargaining agreement but who is not a union member is estimated to earn about 13 lower wages than a union member sectors with relatively few covered nonmembers are associated with a large coverage differential while sectors with high proportions of covered nonmembers are associated with small differentials this suggests freeriders either weaken the bargaining position of the union or weak bargaining positions increase the incentive to freeride only a modest amount of this differential is accounted for by unmeasured ability the probationary period associated with newly hired union workers or union status misclassification

bonuses and promotion tournaments theory and evidence standard models of promotion tournaments do not distinguish between wages and bonuses and thus cannot explain variation in the use of bonuses we combine classic and market based tournament theories to develop a model in which wages and bonuses serve distinctly different roles we use this model to derive testable predictions which we test employing both a single firm data set and a data set encompassing a large segment of the finnish economy our empirical analysis supports the testable predictions and shows that our theoretical approach better matches the data than alternative theories of bonus determination based on arguments already in the literature

the union membership wage premium for employees covered by collective bargaining agreements using current population survey data for 1983 93 this article analyzes whether there is a union membership wage premium among full time private sector employees covered by union contracts ordinary least squares estimates of the membership wage premium are 12 14 and allowing membership to be endogenous yields larger estimates differences in job tenure unobservable characteristics and measurement error cannot fully explain the estimated premium significant differences in this premium as well as in membership rates conditional upon coverage across various demographic subgroups are also documented in general free riders do not appear to be free riding

the joint determination of union status and union wage effects some tests of alternative models the problems of estimation and interpretation of union wage differentials are examined the properties of cross section and longitudinal estimators are compared estimates are presented and those in the literature summarized conflicting results are obtained longitudinal estimators typically produce results smaller than those of ols while cross section methods instrumental variables or inverse mills ratio raise the estimate the paper offers a reconciliation of these results it supports a more optimistic conclusion than that reached in reviews by freeman and lewis who argued that little has been learned from attempts to deal with the endogeneity issue comparisons between estimators are used to throw light on the process governing union status and to suggest interpretations of union differentials consistent with the current evidence

estimating taste changes impacts of the u s soybean embargo on the japanese demand for meat two distinct specifications of taste changes are known in the literature of demand analysis one assumes that taste is an endogenous variable while the other specification involves changes exogenous to the socio economic system 11 375 many studies have been predicated on endogenous changes in tastes 11 the specification of exogenous taste changes involves dummy variables or time trends but is seldom attempted on grounds that the procedures have no theoretical standing 9 97 in this paper we hypothesize such an exogenous taste change predicated on the theory of threshold sensitivity 2 then assuming the modified stone geary utility function under a modified linear expenditure system mles we will test the taste change hypothesis by using the likelihood ratio test with the japanese consumption data of four categories of meat beef pork fish and chicken 3 a particular reference will be made in this connection to the u s soybean embargo in 1973

estimation of a composite food demand system for the united states this study develops statistical procedures for computing the parameters of a complete demand system a constrained maximum likelihood method has been applied and parametric restrictions derived from classical demand theory are introduced by a substitution approach the procedures are then applied to u s data for estimating a composite food demand system covering 12 food categories and one nonfood sector

new estimates of union wage effects in the u s abstract we present new estimates for union wage effects using a unique dataset with information on job skill requirements we find the union wage premium to be smaller at higher skill levels consistent with the view that unions work to decrease skill differentials

worker sorting compensating differentials and health insurance evidence from displaced workers this article introduces an empirical strategy to the compensating differentials literature that i allows both individual observed and unobserved characteristics to be rewarded differently in firms based on health insurance provision and ii selection to jobs that provide benefits to operate on both sides of the labor market estimates of this model are used to directly test empirical assumptions that are made with popular econometric strategies in the health economics literature our estimates reject the assumptions underlying numerous cross sectional and longitudinal estimators we find that the provision of health insurance has influenced wage inequality finally our results suggest there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the past two decades we discuss the implications of our findings for the compensating differentials literature

foreign trade elasticities and import discipline this paper provides new evidence on the trade as discipline7rsquo hypothesis by considering the determination of price cost margins with a panel of 41 four digit us food manufacturing industries from 1972 to 1987 following the empirical specification suggested by competitive fringe oligopoly models we include estimated domestic demand elasticities and cross price elasticities of import demand as explanatory variables and the empirical results confirm the importance of these variables in assessing the hypothesis

welfare comparison under exact aggregation new econometric model of aggregate consumer behavior in the united states and to apply this model to the analysis of impacts of alternative economic policies on the welfare of individual consuming units the model incorporates time series data on quantities consumed prices the level and distribution of income and demographic characteristics of the population it also incorporates cross section data on the allocation of consumer expenditures for households with different demographic characteristics our econometric model is based on the theory of exact aggregation developed by lau 1977a c this theory makes it possible to dispense with the notion of a representative consumer in constructing models of aggregate consumer behavior one of the most remarkable implications of lau s theory of exact aggregation is that systems of demand functions for individuals with common demographic characteristics can be recovered uniquely from the system of aggregate demand functions using the individual demand functions we can analyze the impact of economic policy on consumer welfare

union endogeneity and self selection the nature of union endogeneity is examined in the light of recently proposed estimators for union wage differentials the instrumental variable iv approach adopted by duncan and leigh is shown to yield little information on the precise nature of the endogenous process in particular it cannot be used to sign the direction of selection into the union and nonunion sectors since by construction the iv estimates impose opposite signs on the selection terms

inter industry variations in the effect of trade on industry performance this paper develops an empirical model to measure the strength of import discipline across industries allowing it to vary sys tematically with various features of industry market structure the m odel is applied to a panel of data for eighty two belgian three digit industries for the period 1973 78 and the results suggest that the parameters of the structural model are stable over time that the ext ent of discipline is endogenous and that about 70 percent of the ind ustries in the sample experience significant trade induced competitiv e discipline copyright 1988 by blackwell publishing ltd

an empirical analysis of intertemporal and demographic variations in consumer preferences analysis of consumer demand behavior typically focusses on either the cross sectional dimension or takes a time series approach the former ignores intertemporal changes in preferences and the latter ignores differences in preferences among different groups of consumers in this study two identically defined cross sections of expenditure data are used to estimate a nonhomothetic demand system for food at home for three demographic groups the results indicate that both demographic and intertemporal differences in preferences are significant and that the method of incorporating demographic variables into the estimation is also important

critical import supply elasticities and the imports as market discipline hypothesis abstract this paper formally examines the factors underlying how responsive imports must be to domestic prices the import supply elasticity in order to thwart an anticompetitive domestic price increase stemming from a merger an issue that frequently arises in many antitrust reviews domestic firms face a fringe comprised of foreign firms who import their products into the domestic market in the eyes of domestic consumers these imports are viewed as imperfect substitutes in demand to the output produced by the domestic firms the model is solved in terms of the critical import supply elasticity that can then be used evaluate the ability of imports to constrain an anticompetitive price increase post merger numerical simulations are conducted to consider the magnitude of perturbations in the model s exogenous parameters potential empirical extensions of the model are also considered

union incidence in the public and private sectors union density in the public sector is approximately twice the level of that in the private sector in both canada and the united states canadian data are particularly useful for analysing differences between the public and private sectors because of several industries that have a substantial overlap of ownership between sectors sectors therefore may be compared while holding the industry constant evidence is presented suggesting that union cost factors as related to the size of the plants are important in explaining the high density in the public sector employee characteristics appear to play no role the connection between wage differentials and public sector unionism is also addressed

the discipline of imports the case of sweden in examining the constraints that imports competition imposes on the price cost margins in swedish manufacturing industries the paper addresses two questions whether the free trade agreement between the ec and efta has reinforced the disciplinary effect of imports and whether there are differences between imports of different origins my findings support intensified competition from the free trade agreement even though the disciplinary effect of imports originating from ldcs japan and the asian nics is larger than the effect of imports from other developed countries

potential foreign competition in us manufacturing abstract trade barriers are falling and firms are competing in increasingly open international markets the data reveal considerable heterogeneity across industries in the intertemporal path of import shares against this backdrop we focus on an issue that is increasingly important for competition policy analysis potential foreign competition inadequate attention to this aspect could result in a biased picture of total competition leading to misguided antitrust decisions drawing on the conceptual framework outlined by landes and posner harvard law review 94 1981 937 we measure potential foreign competition by the intertemporal response of industry import share to industry specific and aggregate economic factors and our estimates indicate wide variation across industries in this dimension a particularly striking finding is that highly concentrated industries which are more likely to be subject to antitrust scrutiny have a greater degree of potential foreign competition than industries with low concentration even though the extent of actual foreign competition is similar across these groups of industries

the variability of inflation rates across household types it is well known that the consumer price index cpi measures the changing cost of the fixed market basket of an average consumer it is an aggregate economic indicator of changes in retail prices and in the process of averaging across individuals subsumes the variability in consumption patterns inherent in a modetn economy it is thus evident that the use of a single index in adjusting the incomes of broad groups of individuals has an automatic distributional impact individuals whose own price index rises more slowly than the index used to adjust their incomes experience a windfall benefit while those whose price index rises more rapidly experience a relative loss such variability in actual price experience relative to the average measured change in prices is soon to be of great importance to taxpayers throughout the income distribution the economic recovery tax act of 1981 calls for adjustments in tax tables so that inflation will not result in tax increases beginning not later than december 15 1984 12 public law 97 34 calls for using the official consumer price index for all urban con

pensions and wage premia i introduction despite the widespread acceptance of the theory of compensating differences empirical efforts to estimate the magnitude of these differences have met with only mixed success 1 with the exception of fatal risks economists have not been able to consistently find a significant relationship between wages and other job characteristics the failure to find consistent evidence on compensating differentials has been attributed to either poor measures of non wage characteristics or inadequate controls for worker productivity 2 studies by gunderson hyatt and pesando 1992 montgomery shaw and benedict 1992 and moore 1987 which have been able to explicitly address these issues have had greater success in finding significant compensating differentials in this paper we focus on an alternative explanation for the variation in estimated compensating differentials that the magnitude of the compensating differential varies systematically across different sectors in the labor market the theory of compensating differentials predicts that the implicit price or cost of providing a job attribute such as pensions will be a function of firm or industry technological differences and that the value attached to that attribute will also vary across workers depending on their tastes if workers and firms are not randomly assigned to sectors this will lead to systematic variations in the size of the estimated compensating differential across sectors or markets the result of this variation is that studies using different subsamples of the labor force will yield very different estimates of the size of the compensating differential the few studies that have addressed sources of heterogeneity in compensating differentials have concentrated on testing for individual differences in tastes for risk 3 in contrast our emphasis is on firm side differences in technologies or market power we estimate the compensating differential between annual pension accruals and wage rates and let this tradeoff vary by firm size and union status with corrections for selectivity bias the implicit cost of pensions and hence the size of the compensating differential may vary by finn size or union status for a number of reasons greater ability to spread fixed administrative costs across a large work force more difficulty monitoring worker effort or the presence of market power thus the cost of fringe benefits to the firm may be lower in large or unionized firms than in small nonunion firms we find empirical evidence supporting this view the estimated wage pension compensating differentials are smaller in unionized and large firms than in small nonunion firms the results from this paper are significant for several reasons 1 they provide evidence that compensating differentials vary across markets this evidence could account for some of the differences in estimates of tradeoffs across studies that have used different nonrandom samples 4 more importantly these sectoral differences serve as a reminder that the labor market is in fact a multitude of markets and that technological differences that vary across markets should be considered when addressing issues ranging from estimating the returns to human capital investment to the impact of the minimum wage 5 2 these results also deepen our knowledge of the relationship between pensions and wages a relationship that has important implications for the shape of workers wage earnings profiles or for the mechanisms for motivating workers and for the returns to human capital and for the distribution of income regarding the latter pensions are a large component of compensation and work by even and macpherson 1990 mccarthy and turner 1983 and moore 1987 suggests that coverage rates and returns are smaller for women and blacks our analysis suggests that an element of the differences could be sectoral choices

explaining armington what determines substitutability between home and foreign goods for decades trade economists have modeled imperfect substitution between home and foreign goods in consumption often called the armington assumption with little analysis of what explains the wide variation in these substitution elasticities across sectors using a varying coefficients model the authors estimate armington elasticities between u s domestic and foreign goods across over one hundred industrial sectors from 1980 to 1988 and examine the role of product industry political and home bias factors as determinants they find strong support that the presence of foreign owned affiliates affects armington elasticities in important ways and some support that entry barriers and union presence have an effect

unions wages and skills studies uniformly conclude that union wage effects are largest for workers with low measured skills longitudinal analysis using 1989 90 1994 95 cps matched panels produces union premium estimates equivalent across skill groups following appropriate sample restrictions and control for worker specific skills nlsy evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization union organizing where skills are homogeneous and unionized employers reluctance to hire the most as well as least able workers

the union wage effect and ability bias evidence from ireland we use longitudinal data from an irish household survey to measure the union wage premium a subsample in which the worker s payslip was seen by the interviewer is unlikely to have measurement error for the union variable the results support the finding that measurement error leads to a large downward bias in fixed effects estimates of the union effect but indicate that ability bias has a small effect on the average union wage premium

problems in the measurement of consumer cost of living indexes three empirical issues in the use of cost of living indexes are examined a substitution bias b differences across demographic groups and c the importance of the reference indifference curve for true indexes when preferences are nonhomothetic using the estimated parameters of a demand system for food commodities from two microdata cross sections both true parametric and laspeyres price indexes for food are compared across both demographic groups and cross sectional cohorts

demographic effects in demand analysis estimation of the quadratic expenditure system using microdata the purpose of this paper is to estimate a complete theoretically plausible system of demand equations on microdata using the rich detail of these data to investigate the impact of demographic variables on demand behavior the system which we estimate is the quadratic expenditure system qes introduced by howe pollak and wales we evaluate four methods for incorporating demographic variables into the demand system three of these procedures imply parameter restrictions while the fourth does not tests on the restrictions imply that for our data unrestricted estimation yields significantly greater explanatory power

unions without rents the curious economics of faculty unions we show that canadian faculty unions have had no effect on university revenues only a small positive effect on earnings a negative effect on research output and lead to earnings redistributions across disciplines and ranks we argue that faculty unions have a negligible positive and often negative effect on average faculty wages because a union that promotes the median faculty member s welfare negotiates wage redistributions and more onerous teaching conditions despite the negative impact these changes have on research output average wages may rise but only because non unionized universities trade off wages against the non pecuniary benefits from research and teaching jel classification i20 j51 j54 syndicats sans rentes l economie singuliere des syndicats de professeurs d universite les auteurs montrent que les syndicats canadiens de professeurs d universite n ont pas eu d effet sur les revenus des universites ont eu seulement un petit effet positif sur les gains un effet negatif sur la production de recherche et qu ils ont entraine une redistribution des gains entre disciplines et entre les professeurs de divers rangs on suggere que les syndicats de professeurs ont eu un effet negligeable positif mais souvent negatif sur le salaire moyen des professeurs parce qu un syndicat qui s attache a promouvoir le mieux etre du professeur median negocie des redistributions de salaires et des t ches d enseignement plus lourdes meme si ces changements ont un effet negatif sur la production de resultats de recherche les salaires moyens peuvent croitre mais seulement parce que les universites non syndiquees negocient des avantages non pecuniaires portant sur la recherche et l enseignement en compensation pour des salaires moindres

treatment effects with unobserved heterogeneity a set identification approach we propose the sharp identifiable bounds of the potential outcome distributions using panel data we allow for the possibility that statistical randomization of treatment assignments is not achieved until unobserved heterogeneity is properly controlled for we use certain stationarity assumptions to obtain the sharp bounds our approach allows for dynamic treatment decisions where the current treatment decisions may depend on the past treatments or the past observed outcomes as an empirical illustration we study the effect of smoking during pregnancy on infant birthweight we find that for the group of switchers the infant birthweight of a smoking mother is first order stochastically dominated by that of a nonsmoking mother

union density and varieties of coverage the anatomy of union wage effects in germany collective bargaining in germany takes place at either industry or firm level and bargaining coverage is much higher than union density the share of a firm s employees covered can vary between 0 and 100 suggesting that researchers should distinguish union density coverage at the firm level and coverage at the individual level using linked employer employee data the authors estimate ols and quantile regressions of wages on these dimensions of union influence they find that a higher share of employees in a firm covered by industrywide or firm specific contracts is associated with higher wages but find no clear cut effect on wage dispersion yet holding coverage at the firm level constant individual coverage is associated with lower wages and less wage dispersion higher union density reinforces the effects of coverage but for employees in firms without coverage density s effect is negative and thus compresses the wage distribution in firms without coverage

property tax capitalization in a model with tax deferred assets standard deductions and the taxation of nominal interest previous property tax capitalization studies assume that families itemize that they save in taxable assets and that real interest income is taxed however many families do not itemize many families invest in tax deferred assets and nominal interest income is taxed as a consequence prior studies likely misspecify the property tax capitalization equation for roughly ninety percent of their samples taking federal tax provisions into account increases the precision of our estimated capitalization rate in addition our results suggest that biases in prior studies likely contribute to the variety of capitalization estimates in the literature

the influence of increased foreign competition on industrial concentration and profitability abstract this paper uses the chilean manufacturing censuses of 1967 and 1979 to examine the effects of the chilean reforms in the mid 1970s on market structure and performance the reforms substantially increased the concentration in industry and substantially reduced profitability these outcomes are interpreted in the light of hypotheses about the effect of potential entrants on market structure and on the pricing behavior of incumbents next a cross sectoral simultaneous equations model of structure and performance is estimated to isolate the contribution of import and export shares to cross sectoral variations in concentration and profitability and to test for structural change between the two censuses the analysis confirms that the liberalization of trade changed the way import and export shares determined profitability and supports the import discipline hypothesis

the mixing problem in programme evaluation a common concern of evaluation studies is to learn the distribution of outcomes when a specified treatment policy or assignment rule determines the treatment received by each member of a specified population recent studies have emphasized evaluation of policies providing the same treatment to all members of the population in particular experiments with randomized treatments have this objective policies mandating homogenous treatment of the population are of interest but so are ones that permit treatment to vary across the population this paper examines the use of empirical evidence on programs with homogenous treatments to infer the outcomes that would occur if treatment were to vary across the population experimental evidence from the perry preschool project is used to illustrate the inferential problem and the main findings of the analysis

the long term effects of youth unemployment using nlsy data we examine the long term effects of youth unemployment on later labor market outcomes involuntary unemployment may yield suboptimal investments in human capital in the short run a theoretical model of dynamic human capital investment predicts a rational catch up response using semiparametric techniques to control for the endogeneity of prior behavior our estimates provide strong evidence of this response we also find evidence of persistence in unemployment combining our semiparametric estimates with a dynamic approximation to the lifecycle we find that unemployment experienced as long ago as ten years continues to affect earnings adversely despite the catch up response

wage effects of unionization and occupational licensing coverage in the united states recent estimates in standard models of wage determination for both unionization and occupational licensing have shown wage effects that are similar across the two institutions these cross sectional estimates use specialized data sets with small sample sizes for the period 2006 to 2008 the authors analysis examines the impact of unions and licensing coverage on wage determination using new data collected on licensing statutes that are then linked to longitudinal data from the national longitudinal survey of youth nlsy79 from 1979 to 2010 they develop several approaches using both cross sectional and longitudinal analyses to measure the impact of these two labor market institutions on wage determination the estimates of the economic returns to union coverage are greater than those for licensing statutes

estimation of complete demand systems from household budget data the linear and quadratic expenditure systems in this paper we explore two issues in empirical demand analysis the estimation of complete systems of demand equations using household budget data section i and the incorporation of demographic characteristics into such systems section ii although there are numerous studies which use time series data to estimate complete demand systems and many which estimate engel curves from household budget data there are virtually none which combine budget data from different periods to estimate complete systems since each budget study corresponds to a single price situation one might conjecture that estimation of complete systems would not be possible unless budget studies were available from a large number of periods this is incorrect in section i we argue that interesting complete demand systems can be estimated from a small number of budget studies despite the limited price variability represented in such data to demonstrate this we use budget study data for two periods to estimate a pair of related demand systems the familiar linear expenditure system les and a quadratic expenditure system qes a generalization of les in which the demand equations are quadratic in total expenditure the inclusion of demographic variables in the analysis of household consumption patterns is desirable because there are likely to be systematic differences in the consumption behavior of households with different demographic characteristics but the effects of demographic characteristics have seldom been studied within the framework of complete demand systems in section ii we propose translating as a general method for incorporating demographic variables into complete systems of demand equations this method has not previously been discussed as a general technique for bringing demographic variables into demand systems although it has been employed in several studies to improve the estimates of the les and the qes presented in section i we reestimate these two systems using translating to incorporate family size

can volunteer work help explain the male female earnings gap using the 1987 survey of volunteer activity in canada we examine whether differential returns to volunteer work in the paid labour market can explain part of the male female earnings gap male volunteers earn on average about 11 higher incomes than their non volunteering counterparts as a result of their volunteer experience whereas comparable female volunteers and non volunteers earn similar incomes this differential return across the sexes may be partially explained by the type of volunteer activity undertaken our results indicate that as much as one third of the male female earnings gap may be attributable to the fact that the labour market rewards male and female volunteers differently

response error and the union wage differential broad variation in estimates of the union wage gap has perplexed labor economists one specification error that is consistent with the observed variation is measurement error in reported union status this article applies results of bollinger 1996 to estimate a range for the union wage gap both a cross sectional model and a fixed effects model are estimated in order for the true coefficient in the fixed effects model to be bounded below the true coefficient in the cross sectional estimates measurement error would have to be less than 0 8 the difference between the fixed effects estimates and the cross sectional estimates is primarily due to measurement error rather than to unobserved heterogeneity an examination of differences in returns to union membership by industry occupation and educational level shows that these differences are largely robust to measurement error many of these differences would be found even if error rates were as high as 10 or more an array of empirical estimates for the union wage differential has resulted from the variety of approaches to estimation lewis 1986 reviews the vast literature that attempts to estimate the union wage effect two extremes are represented by mincer 1983 who estimates the wage differential to be 0 01 while farber 1990 reports an estimate of 0 26 clearly specification error is the root cause of these differences the literature has focused upon unobserved heterogeneity in worker status as the main specification error frequently estimation approaches based on within estimators applied to fixed effects models using panel data are used to account for the possibility of unobserved heterogeneity as would be predicted by unobserved heterogeneity lewis 1986 p 94 reports that the panel wage gap estimates surveyed in the chapter on the average are roughly half as large as the corresponding cross section estimates this is often taken as evidence for bias in the cross section estimates due to the presence of fixed effects however these results are also consistent with measurement error in the report of the union status indeed chapter 5 in lewis 1986 focuses upon this possibility the difference might be the result of union status measurement error p 94 this article applies results of bollinger 1996 to compare the effect of measurement error on cross sectional estimates and panel estimates of the union wage differential bollinger 1996 establishes bounds for the slope coefficients of a linear regression when a binary regressor is thought to have measurement error the results here do not identify a point estimate of the union wage differential they relax many of the assumptions that are required to obtain the point estimates these bounds serve the purpose of sensitivity analysis as called for by leamer 1985