economics versus politics pitfalls of policy advice abstract the standard approach to policy making and advice in economics implicitly or explicitly ignores politics and political economy and maintains that if possible any market failure should be

rent seeking and the transformation of employment relationships the effect of corporate restructuring on wage patterns determinants and inequality a key debate in research on corporate restructuring is whether this widespread and extensive transformation process made contemporary employment relationships more open with firms relying largely o

the transition to the knowledge economy labor market institutions and income inequality in advanced democracies the transition from fordism to the knowledge economy in the world s advanced democracies was underpinned by the revolution in information and communications technology ict the introduction and rapid diffusion of ict pushed up wages for college educated workers with complementary skills and allowed top managers and ceos to reap greater rewards for their own talents despite these common pressures income inequality did not rise to the same extent everywhere income in the anglo saxon countries remains particularly unequally distributed to shed new light on this puzzle the authors carry out a panel data analysis of eighteen oecd countries between 1970 and 2007 their analysis stands apart from the existing empirical literature by taking a comparative perspective the article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions the authors find that the expansion of knowledge employment is positively associated with both the 90 10 wage ratio and the income share of the top 1 percent but that these effects are mitigated by the presence of strong labor market institutions such as coordinated wage bargaining strict employment protection legislation high union density and high collective bargaining coverage the authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy

the davis bacon act an appraisal of recent studies the intensified controversy in recent years over the davis bacon act which requires the payment of prevailing wages on federally funded construction projects has resulted in several new studies of the effects of that act this invited paper reviews the evidence presented in these recent studies on several aspects of the act including how davis bacon wage determinations compare to local construction wages as measured by sources other than the act s administrators the effects of lags in the act s data gathering process and the savings that would result from calculating the prevailing rate as the arithmetic mean of local wages instead of the current use of the modal rate in most cases the authors conclude that although the cost studies to date have been faulty in several respects it is reasonably clear that davis bacon is unattractive on grounds of economic efficiency alone the question remains however whether these efficiency costs are offset partially or wholly by the possible equity benefits o

skill biased technological change and rising wage inequality some problems and puzzles the recent rise in wage inequality is usually attributed to skill biased technical change sbtc associated with new computer technologies we review the evidence for this hypothesis focusing on the implications of sbtc for overall wage inequality and for changes in wage differentials between groups a key problem for the sbtc hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology sbtc also fails to explain the evolution of other dimensions of wage inequality including the gender and racial wage gaps and the age gradient in the return to education

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

a life course trajectory framework for understanding the intracohort pattern of wage inequality much research has been devoted to cross sectional and intercohort patterns of wage inequality but relatively little is known about the mechanisms for the intracohort pattern of wage inequality to fill this intellectual gap this article establishes a life course trajectory lct framework for understanding the intracohort pattern of wage inequality first the author proposes and conceptualizes three essential properties of the lct framework random variability trajectory heterogeneity and cumulative advantage that are used to establish a mathematical formalization of the lct framework both the conceptualization and the formalization imply that intracohort wage inequality will increase over the life course due to random variability trajectory heterogeneity and cumulative advantage finally the author combines the lct framework with the multilevel growth curve model then applies the model to data from the nlsy79 and finds support for the significance of random variability trajectory heterogenei

risky business the decline of defined benefit pensions and firms shifting of risk since the early 1980s employment in the united states has undergone significant transformation as the large corporations that once safeguarded employees with stable jobs and rewards for loyalty have replaced these employment relationships with ones based on cost containment and flexibility one important consequence of these developments is that firms have abdicated their role as a critical risk bearer in society although evidence suggests that firms have increasingly shifted market risks onto their workforce to date there have been few detailed analyses exploring what factors have driven this phenomenon this study adds to our understanding of why firms have transferred risk to their employees by examining the decline of a highly institutionalized practice wherein large u s firms used to bear retirement risk the defined benefit db pension plan through a detailed analysis i show that variance in the presence power and interests of shareholders and employees at the firm level differentially affect a firm s willingness to shift the risk of retirement onto its workers specifically i demonstrate empirically that different types of shareholders have differential effects on a firm s retirement practices suggesting that the changing equity ownership structure of large u s firms has played a key role in how risk is allocated between workers and firms declines in employee power have also played a role because firm levels of unionization positively affect rates of db participation for both unionized and nonunionized workers

the rise of the super rich power resources taxes financial markets and the dynamics of the top 1 percent 1949 to 2008 the income share of the super rich in the united states has grown rapidly since the early 1980s after a period of postwar stability what factors drove this change in this study we investigate the institutional policy and economic shifts that may explain rising income concentration we use single equation error correction models to estimate the long and short run effects of politics policy and economic factors on pretax top income shares between 1949 and 2008 we find that the rise of the super rich is the result of rightward shifts in congress the decline of labor unions lower tax rates on high incomes increased trade openness and asset bubbles in stock and real estate markets

evidencing the waste effect of product service systems psss this paper adopts a waste centric analysis of product service systems psss to demonstrate that they do not automatically contribute to a dematerialization of the economy a decoupling of production from material and energy consumption and thus a transition toward sustainability a qualitative analysis of various nordic fashion psss that uses a combination of tukker s 2004 classification of psss and the european waste hierarchy model demonstrates that the waste effect of a pss is independent of its being product oriented use oriented or result oriented rather the effect depends on how the business model of the pss organizes material flows at production distribution use and post consumption stages in relationship to prevailing waste regimes where the pss operates we suggest that if a pss is to reduce its waste effect and contribute to dematerialization its business model should design material flows that fit with the prevailing waste regimes within the area it operates and prioritize waste prevention before considering reuse recycling energy recovery and landfilling

quantitative easing and median income a state level analysis due to the great recession the federal reserve engaged in unconventional monetary policy qe to fight the effects of the economic downturn literature asserts that qe did have impacts on economic

immigration and inequality immigration is often viewed as a proximate cause of the rising wage gap between highand low skilled workers nevertheless there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect and over the precise magnitudes involved this paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality focusing on evidence from cross city comparisons in the u s while some researchers have claimed that a cross city research design is inherently flawed i argue that the evidence from cross city comparisons is remarkably consistent with recent findings based on aggregate time series data in particular cross city and aggregate time series comparisons provide support for three key conclusions 1 workers with below high school education are perfect substitutes for those with a high school education 2 high school equivalent and college equivalent workers are imperfect substitutes with an elasticity of substitution on the order of 2 3 within education groups immigrants and natives are imperfect substitutes together these results imply that the average impacts of recent immigrant inflows on the relative wages of u s natives are small the effects on overall wage inequality including natives and immigrants are larger reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives even so immigration accounts for a small share 5 of the increase in u s wage inequality between 1980 and 2000

what happened to long term employment the role of worker power and environmental turbulence in explaining declines in worker tenure recent declines in the average length of time that u s workers spend with a given employer represent an important change in the nature of the employment relationship yet it is one whose causes are poorly understood i explore those causes using current population survey data on the tenure of men aged 30 65 from the years 1979 2008 i argue that long term employment relationships primarily occur when workers pressure employers to close off employment from market competition reducing the attractiveness of external mobility relative to internal opportunities and increasing employment security i then explore how two changes in organizations environments a decline in union strength and increased turbulence from changes in technology and globalization might have affected workers ability to secure such closed employment relationships over the last 30 years my results support the argument that declines in tenure reflect the reduced power of workers to secure closed employment relationships recent declines in tenure have been concentrated in large organizations and many of those declines are explained by controlling for the changing levels of industry unionization i find little evidence that foreign competition or technological change affected mobility the results are robust to measures of changing industry growth rates and within industry reorganization supplementary analyses suggest that layoffs are associated with different industry pressures than tenure and that voluntary mobility may have played an important role in declines in tenure

collective labor rights and income inequality this article examines the relationship between income inequality and collective labor rights conceptualized as workers legal and practical ability to engage in collective activity although worker organization is central to explaining income inequality in industrialized democracies worldwide comparative studies have neglected the role of class based actors i argue that the repression of labor rights reduces the capacity of worker organizations to effectively challenge income inequality through market and political processes in capitalist societies labor rights however are unlikely to have uniform effects across regions this study uses unbalanced panel data for 100 developed and less developed countries from 1985 through 2002 random and fixed effects models find that strong labor rights are tightly linked to lower inequality across a large range of countries including in the global south interactions between regions and labor rights suggest that the broader context in which class based actors a

a note on the risk adjusted price concentration relationship in banking abstract price concentration studies in banking typically find a significant and negative relationship between consumer deposit rates i e prices and market concentration this implies highly concentrated banking markets are bad for depositors it also provides support for the structure conduct performance hypothesis and rejects the efficient structure hypothesis however these studies have focused almost exclusively on supply side control variables and neglected demand side variables when estimating the reduced form price concentration relationship for example previous studies have not included in their analysis bank specific risk variables as measures of cross sectional derived deposit demand we find that when bank specific risk variables are included in the analysis the magnitude of the relationship between deposit rates and market concentration decreases by over 50 we offer an explanation for these results based on the correlation between a bank s risk profile and the structure of the market in which it operates these results suggest that it may be necessary to reconsider the well established assumption that higher market concentration necessarily leads to anticompetitive deposit pricing behavior by commercial banks this has direct implications for the antitrust evaluations of bank merger and acquisition proposals by regulatory agencies and in a more general sense these results suggest that any structure conduct performance based study that does not explicitly consider the possibility of very different risk profiles of the firms analyzed may indeed miss a very important set of explanatory variables and thus the results from those studies may be spurious

nonunion wage rates and the threat of unionization i investigate how the threat of union organization affects the wage paid to nonunion workers i start by outlining the standard model of wage determination by a nonunion employer when faced with the threat of union organization the model suggests that the nonunion wage will be directly related and the union wage gap will be inversely related to the threat i use repeated cross section data from the cps from 1977 2002 to develop a measure of the threat as the predicted probability of union membership i use this measure to estimate earnings functions that use several sources of variation in the likelihood of union membership to identify the threat effect in a manner that reduces the likelihood of omitted variable bias finally i investigate two cases where there has arguably been a change in the likelihood of union organization that is not correlated with changes in the demand for labor these include the wage changes surrounding the introduction of rightto work rtw laws in two states during the period studied and wage changes surrounding deregulation of key industries in the late 1970s and early 1980s the results are mixed the preferred estimates from the analysis using predicted probability of unionization as the threat measure imply very little relationship between either nonunion wages or the union wage gap and the threat the estimates that rely on the introduction of rtw laws show a significant relationship between nonunion wages and the introduction of rtw laws in one of the two states stronger evidence of threat effects is found in the experience of deregulated industries where regulation was a central factor in union strength

union strength neoliberalism and inequality contingent political analyses of u s income differences since 1950 do historically contingent political accounts help explain the growth in family income inequality in the united states we use time series regressions based on 60 years to detect such relationships

union effects on nonunion wages evidence from panel data on industries and cities the authors test for threat and crowding effects of unions on non union wages at the industry and city levels using panel data on the percent organized and nonunion industry and city wage differentials constructed from current population surveys over the period 1973 89 at the industry level increases in the percent organized were associated with decreases in the nonunion industry wage differential suggesting that crowding effects were the predominant union effect on nonunion industry wage differentials in contrast at the city level increases in the percent organized were associated with increases in the nonunion city wage differential suggesting that threat effects predominated the authors also find evidence of negative cross occupation union effects on nonunion industry wage differentials supporting their hypothesis that the industry level results were partly driven by complementarity between union and nonunion labor

financialization and u s income inequality 1970 2008 focusing on u s nonfinance industries we examine the connection between financialization and rising income inequality we argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production strengthening owners and elite workers negotiating power relative to other workers the result was an incremental exclusion of the general workforce from revenue generating and compensation setting processes using time series cross section data at the industry level we find that increasing dependence on financial income in the long run is associated with reducing labor s share of income increasing top executives share of compensation and increasing earnings dispersion among workers net of conventional explanations such as deunionization globalization technological change and capital investment the effects of financialization on all three dimensions of income inequality are substantial our counterfactual analysis suggests that financial

what types of banks profit most from fees charged a cross country examination of bank specific and country level determinants abstract the perception that banks are exploiting customers through their fee charging practices in a bid to maximize profits has fuelled widespread public interest in identifying the banks that profit most heavily from fees using hierarchical cross country regression analyses this paper seeks to answer the question what types of banks profit most from fees charged it also highlights the country level factors that influence banks ability to profit from fees charged the factors at the country level distinguish between those that relate specifically to the financial services industry and broader macroeconomic indicators the paper also identifies three channels through which national culture impacts banks ability to make high profits from fees this paper uses the most comprehensive set of explanatory variables in studies of this nature it has also extended the spatial scope of previous studies on bank fees by including data on banks from 46 developed and developing countries in light of swelling public pressure on governments to do something about bank fees ill advised measures are highlighted

the politics of union decline the contingent determinants of union recognition elections and victories despite the close political regulation of union recognition disputes sociologists have paid little attention to recent political determinants of success in these contests a state centered political opportunity approach suggests that if conservative political officials can reduce the number of union recognition elections union organization will be blocked partly because many labor scholars claim there was a postwar departure in labor movement fortunes we attempt to detect and model a contingent break in the relationship between republican control of the presidency and these elections using interactive specifications our findings show that shortly after the conservative anti union reagan administration took office recognition elections and union victories in these elections fell sharply with macroeconomic and other determinants held constant other political conditions with explanatory power include congressional oversight committee ideology and conservative appointments to the key regulatory age

income inequality in the united states 1913 1998 this paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the united states using individual tax returns data top income and wages shares display a u shaped pattern over the century our series suggest that the large shocks that capital owners experienced during the great depression and world war ii have had a permanent effect on top capital incomes we argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks top wage shares were flat before world war ii dropped precipitously during the war and did not start to recover before the late 1960s but are now higher than before world war ii as a result the working rich have replaced the rentiers at the top of the income distribution

institutionalisation of sustainable consumption patterns based on shared use the product service system pss concept has been proposed as a way of dealing with unsustainable patterns of consumption in the business to consumer b2c domain existing alternatives to traditional consumption based on ownership such as car sharing communal washing centres and tool sharing schemes indicate that more sustainable patterns of consumption may be found for other household functions however the low profile of these examples in society and on the market calls for a query into factors that may facilitate or hinder broader acceptance of more sustainable alternatives in this study the aforementioned examples are analysed from institutional and product service system perspectives and it is suggested that the embodiment of alternative consumption patterns into every day routines depends on institutional arrangements regulatory and normative on how the product service systems are designed and applied in practice and oil the socio cultural background of the society the systems are implemented in c 2004 elsevier b v all rights reserved less

unions and nonunion wage dispersion previous research has found that union standard rate policies lower the dispersion of union wages and that unions indirectly raise nonunion wage levels as firms weigh the probability of unionizing and wage costs these two findings imply that unions lower the dispersion of nonunion wages since for a given payroll a nonunion firm can achieve the greatest reduction in the probability of unionism by giving raises to those who would benefit most from a union this hypothesis is confirmed on current population survey data taking into account the endogeneity of unionism ceteris paribus nonunion wage dispersion is lower in more highly unionized industries copyright 1987 by mit press

when unionization disappears state level unionization and working poverty in the united states although the working poor are a much larger population than the unemployed poor u s poverty research devotes much more attention to joblessness than to working poverty research that does exist o

unions norms and the rise in u s wage inequality from 1973 to 2007 private sector union membership in the united states declined from 34 to 8 percent for men and from 16 to 6 percent for women during this period inequality in hourly wages increased by over 40 percent we report a decomposition relating rising inequality to the union wage distribution s shrinking weight we argue that unions helped institutionalize norms of equity reducing the dispersion of nonunion wages in highly unionized regions and industries accounting for unions effect on union and nonunion wages suggests that the decline of organized labor explains a fifth to a third of the growth in inequality an effect comparable to the growing stratification of wages by education

this job is getting old measuring changes in job opportunities using occupational age structure high and low wage occupations are expanding rapidly relative to middle wage occupations in both the u s and the e u we study the reallocation of workers from middle skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations because occupations typically expand by hiring young workers and contract by curtailing such hiring we posit that growing occupations will get younger while shrinking occupations will get old after verifying this proposition we apply this observation to local labor markets in the u s to test whether markets that were specialized in middle skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years consistent with aggregate trends employment in initially middle skill intensive labor markets hollowed out between 1980 and 2005 employment losses among non college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower tail occupations for college workers employment losses at the middle were offset in roughly equal measures by gains in the upper and lower tails of the occupational skill distribution but gains at the upper tail were almost entirely limited to young college workers consequently older college workers are increasingly found in lower skill lower paying occupations this abstract was borrowed from another version of this item

the effect of unions on wage inequality in the u s labor market this study uses current population survey micro data for 1973 74 and 1993 to evaluate the effect of changing union membership on trends in male and female wage inequality unionization rates of men fell between the two sample periods with bigger declines among lower skill groups these trends account for 15 20 of the rise in male wage inequality union membership rates of low wage women also declined while unionization increased among higher wage women on balance shifting unionization accounts for very little of the rise in female wage inequality economy wide trends in unionization mask a sharp divergence between the private sector where unionism was declining and the public sector where it was rising comparisons across sectors suggest that unionization substantially slowed the growth in wage inequality in the public sector

energy efficiency fallacies revisited abstract a number of governments including that of the uk subscribe to the belief that a national program devoted to raising energy efficiency throughout the economy provides a costless indeed profitable route to meeting international environmental obligations this is a seductive policy it constitutes the proverbial free lunch not only avoiding politically unpopular measures like outlawing taxing or rationing offending fuels or expanding non carboniferous sources of energy like nuclear power but doing so with economic benefit the author of this contribution came to doubt the validity of this solution when it was offered as a way of mitigating the effect of the opec price hikes of the 1970 maintaining that economically justified improvement in energy efficiency led to higher levels of energy consumption at the economy wide level than in the absence of any efficiency response more fundamentally he argues that there is no case for preferentially singling out energy from among all the resources available to us for efficiency maximization the least damaging policy is to determine targets enact the restrictive measures needed to curb consumption and then leave it to consumers intermediate and final to reallocate all the resources available to them to best effect subject to the new enacted constraints and any others they might be experiencing there is no reason to suppose that it is right for all the economic adjustment following a new resource constraint to take the form of improvements in the productivity of that resource alone as many others have argued any action to impose resource constraint entails an inevitable economic cost in the shape of a reduction in production and consumption possibilities there would be no free lunch in the last few years debate about the validity of these contentions has blossomed especially under the influence of writers on the western side of the atlantic in this contribution the author outlines the original arguments for questioning whether raised efficiency leads to lower consumption reports more recent developments and offers some insights as food for further thought

technological progress and sustainable development what about the rebound effect abstract sustainability concepts that rest on the idea of resource or energy efficiency improvements due to technological progress tend to overestimate the potential saving effects because they frequently ignore the behavioral responses evoked by technological improvements efficiency improvements also affect the demand for resources and energy and often an increase in efficiency by 1 will cause a reduction in resource use that is far below 1 or sometimes it can even cause an increase in resource use this phenomenon is commonly labeled the rebound effect which is well known among energy economists but never attracted much attention in ecological economics the paper starts with the traditional neoclassical analysis of the rebound effect in a partial equilibrium framework that concentrates on the demand of one particular energy service such as mobility or room temperature it also provides an overview of some of the main empirical studies based on this model that mostly confirm the existence of the rebound effect but are controversial about its actual importance however we have to go beyond the neoclassical single service model in order to take care of the variety of possible feedback affecting energy use the paper presents two important expansions of the single service model in order to show the potential relevance of the rebound effect to ecological economics first it is shown that in a multi services model it proves to be difficult to make general statements about the relevance of the rebound effect in this case the overall effect of an increase in energy efficiency on total energy use depends on the on the assumptions about the substitutability between the services considered and the direction of the income effect second the paper also tries to take care of the fact that changes in resource use or energy use are frequently just side effects of other forms of technological progress especially technological change of a time saving nature can have a large influence on energy use as many time saving devices for example faster modes of transport require an increase in energy consumption that is frequently reinforced by a rebound effect with respect to time this effect will be especially strong when wages are high and at the same time energy prices are low as is currently the case in most industrialized countries consequently the paper also provides a strong argument for the introduction of energy taxes

union membership union organization and the dispersion of wages a variance components model explains wage dispersion with a specific version of generalized least squares the estimation preserves individual data while examining the influence of union penetration on dispersion in both the union and nonunion sectors controlling for both individual and industry characteristics and for the endogeneity of wages union penetration correlates strongly with reduced dispersion in the union sector but not in the nonunion sector a decomposition reveals the relative importance of the influences of union penetration and of union membership copyright 1990 by mit press

the transfer and application of product service systems from academia to uk manufacturing firms the servicisation of many advanced economies is thought by many commentators to provide opportunities to move society away from unsustainable patterns of production and consumption the concept of the product service system pss has been conceptualised in academic circles to assist in the attainment of such desirable futures this paper reports the findings of research conducted as part of the solid project which considered the transfer and application of the pss concept from academia to industry in the united kingdom it draws upon theories from evolutionary economics to provide a rationale for the transfer of the pss concept and the role of this in achieving desirable technological change the paper also identifies an appropriate methodology to transfer the pss concept from uk academic circles to industry and the factors which impact upon and importantly lead to the successful completion of this process the combination of theoretical insight with case study research is used to develop a framework that could help uk based intermediaries to complete the transfer of the pss concept this is seen as an integral part of public policies aimed at stimulating sustainable patterns of production and consumption

the role of public policy in advancement of product service systems this article discusses developments in the area of product service systems pss and the need to facilitate the proliferation of the pss approach through public policies the article argues that policies that establish the framework conditions for environmental improvement are preferable to detailed legislation as they favour environmentally superior pss however there is also a need for more specifically targeted policy measures that stimulate knowledge creation and dissemination in the pss area this article suggests that informative policy measures should be used by authorities and reviews the results from the functional programme of the swedish epa as an example of this type of policy c 2003 elsevier science ltd all rights reserved

exploring the link between products and services in low income markets evidence from solar home systems one of the key challenges of energy access in emerging markets and developing countries is how to reach households and communities that are unlikely to get a grid connection in the long term or those that are connected to the grid but suffer from regular blackouts or low voltage by surveying entrepreneurs selling solar home systems shss on a commercial basis in emerging and developing countries this study is one of the first attempts to quantify the key elements of four potential product service systems psss cash credit leasing and fee for service whereas the fee for service approach was found to be suitable only under certain conditions all psss share two key elements for successful market deployment one or more years of maintenance and customer support in financing these customers new asset moreover it appears that private sector companies are in principle able to deliver shss to households with incomes greater than usd 1000 per year the implications for policy makers and development aid agencies are first to include maintenance services into public programmes or public private partnerships and second to explicitly consider financial risks for entrepreneurs e g customer commitment and repayment conditions

the political economy of minimum wage legislation two questions are addressed in this paper a why do labor unions and certain employer organizations respectively promote and impede minimum wage legislation b do these groups have significant impacts on minimum wages question a is examined in the context of models that identify the economic self interest of unionized skilled workers and capitalists in legal wage floors question b is approached by a median legislator utility maximization model that leads to tobit estimation of the relationship between state minimum wage rates and measures of statewide organized labor and capital and average hourly earnings

on the estimation of union threat effects some researchers view unions primarily as functioning to increase earnings inequality among the working class while others see them as threatening employers so that they raise wages for unorganized workers and minimize working class inequality threat effects are defined as the tendency for nonunionized employers to respond to the threat of unionization by increasing the earnings and benefits of their workers this paper probes a contextual method for estimating the effects of unionization on the earnings of unorganized workers this method controls for structural characteristics that affect workers earnings and incorporates information about the organizational strength and vitality of specific unions using data from seven manufacturing industries in indianapolis the results suggest that 1 unionized workers earnings positively affect the earnings of unorganized workers in unionized plants 2 unionized workers earnings negatively affect nonunionized workers earnings in nonunionized plants and 3 when plant size is controlled unionized workers earnings have no significant effect on the earnings of nonunionized workers in nonunionized plants these results highlight the complexity and difficulty of estimating the effects of union threat and their importance for understanding earnings inequality in the workplace

the determinants of net interest income in the mexican banking system an integrated model abstract this paper analyzes net interest income in the mexican banking system over the period 1993 2005 taking as reference the seminal work by ho and saunders ho t saunders a 1981 the determinants of banks interest margins theory and empirical evidence journal of financial and quantitative analysis xvi 4 581 600 and subsequent extensions by other authors our study models the net interest margin simultaneously including operating costs and diversification and specialization as determinants of the margin the results referring to the mexican case show that its high margins can be explained mainly by average operating costs and by market power although non interest income has increased in recent years its economic impact is low

receptivity to the production of product service systems in the uk construction and manufacturing sectors a comparative analysis abstract trajectories of service innovations emanating from manufacturing sectors have been of particular interest to those wishing to improve resource productivity and promote sustainable development research has focused on product service systems psss which are a category of service innovations deliberately designed to offer superior environmental performance this paper draws on research which explored whether trajectories of pss can be induced on new uk housing developments to satisfy household demand and prevent household waste the research was undertaken with a uk speculative house builder and facilities management service providers from its supplier network qualitative data were collected via interviews and focus groups to enable rich accounts of the range of factors in these firms selection environments which affect receptivity to pss production to be developed these were compared with factors affecting receptivity to pss production identified in a study of uk manufacturers the results show that in contrast to the manufacturing study clear drivers for pss delivery on new housing developments are absent in external selection environments of participating firms and uncertainty associated with the potential of pss concepts to satisfy household demand inhibits development of requisite competence for pss delivery within these thus further research is needed to explore new pss supply arrangements involving a range of household service providers

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

occupations and the structure of wage inequality in the united states 1980s to 2000s occupations are central to the stratification systems of industrial countries but they have played little role in empirical attempts to explain the well documented increase in wage inequality that occurred in the united states in the 1980s and 1990s we address this deficiency by assessing occupation level effects on wage inequality using data from the current population survey for 1983 through 2008 we model the mean and variance of wages for each occupation controlling for education and demographic factors at the individual level to test three competing explanations for the increase in wage inequality 1 the growth of between occupation polarization 2 changes in education and labor force composition and 3 residual inequality unaccounted for by occupations and demographic characteristics after correcting for a problem with imputed data that biased kim and sakamoto s 2008 results we find that between occupation changes explain 66 percent of the increase in wage inequality from 1992 to 2008

sluggish institutions in a dynamic world can unions and industrial competition coexist during the 1930s and 1940s collective bargaining emerged as the workplace governance norm in much of the u s industrial sector following its peak in the 1950s union density in the u s private sector fell steadily to only 7 4 percent in 2006 governance shifted from a formalized union norm to one of constrained managerial discretion in competitive and dynamic economic environments a union tax on company earnings and slow response to economic shocks combine to produce poor performance by union companies two industries automotives and airlines are used to illustrate these points if worker based institutions are to flourish they must add value and permit companies to perform at levels similar to those obtained under evolving nonunion governance norms

performance pay and wage inequality an increasing fraction of jobs in the u s labor market explicitly pay workers for their performance using bonus pay commissions or piece rate contracts using data from the panel study of income dynamics we show that compensation in performance pay jobs is more closely tied to both observed and unobserved productive characteristics of workers than compensation in non performance pay jobs we also find that the return to these productive characteristics increased faster over time in performance pay than in non performance pay jobs we show that this finding is consistent with the view that underlying changes in returns to skill due for instance to technological change induce more firms to offer performance pay contracts and result in more wage inequality among workers who are paid for performance thus performance pay provides a channel through which underlying changes in returns to skill get translated into higher wage inequality we conclude that this channel accounts for 21 of the growth in the variance of male wages between the late 1970s and the early 1990s and for most of the increase in wage inequality above the eightieth percentile over the same period

integrative re use systems as innovative business models for devising sustainable product service systems re use implies recovering items from the waste stream to use them in identical or similar processes mostly at consumer level currently re use is restricted to niches but by 2020 the european commission wants to mainstream re use as a waste management option to increase resource efficiency ecologically oriented work integration social enterprises focussing on re use re use eco wises might help accomplish as they not only intend to re integrate marginalised people into the labour market but provide comprehensive re use services e g repair and thus constitute a novel kind of sustainable product service system spss this paper contributes to a scientific framework for re use eco wises by linking existing theoretical knowledge on spss to novel knowledge from three cases representing the variety of re use eco wises in austria for analysis we use the so called business model canvas adding a comprehensive stakeholder consideration results show that re use eco wises contribute to all three dimensions of sustainability by helping reduce waste and increasing resource productivity and by providing jobs and affordable goods for disadvantaged people full implementation however will need additional efforts from all stakeholders involved including the eco wises themselves but also public authorities and society at large

skill biased technological change and wage inequality evidence from a plant retooling1 one of the most popular explanations for the increased wage inequality that has occurred since the late 1970s is that technological change has resulted in a downward shift in the demand for low skill workers this pattern is also alleged to account for the growth in racial inequality in wages over the same period this article reports on a case study of the retooling of a food processing plant a unique longitudinal multimethod design reveals the nature of the technological change the changes in job requirements and the mechanisms by which the changes affect the wage distribution for hourly production workers this research finds that indeed the retooling resulted in greater wage dispersion and that the changes have also been associated with greater racial inequality in wages however contrary to the claims of advocates of the skill bias hypothesis organizational and human resources factors strongly mediated the impact of the changing technology absent these high road organizational choices th

nonmarital first births marriage and income inequality many aggregate level studies suggest a relationship between economic inequality and socio demographic outcomes such as family formation health and mortality but individual level evidence is lacking nor is there satisfactory evidence on the mechanisms by which inequality may have an effect we study the determinants of transitions to a nonmarital first birth as a single parent or as a cohabiting parent compared to transitions to marriage prior to a first birth among unmarried childless young adults in the national longitudinal survey of youth 1997 cohort from 1997 to 2011 we include measures of county group level household income inequality and of the availability of jobs typically held by high school graduates and which pay above poverty wages we find that greater income inequality is associated with a reduced likelihood of transitioning to marriage prior to a first birth for both women and men the association between levels of inequality and transitions to marriage can be partially accounted for by the availability of jobs of the type we measured some models also suggest that greater income inequality is associated with a reduced likelihood of transitioning to a first birth while cohabiting

the american jobs crisis and its implication for the future of employment policy a call for a new jobs compact the author proposes a new jobs compact to close the nation s jobs deficit to create sufficient high quality jobs to raise wages and end thirty years of wage stagnation and to update and strengthen labor and employment policies a set of market and institutional failures are identified as root causes of these problems and local innovations and policy proposals are suggested for overcoming them achieving these objectives will require a stronger voice in national policymaking as well as proactive efforts to mobilize and coordinate the constituencies that share an interest in and responsibility for employment policy and practice the author calls on the president and the secretary of labor to lead these efforts by mobilizing and engaging business labor women ethnic community and education leaders at regional and national levels

distributional national accounts methods and estimates for the united states this article combines tax survey and national accounts data to estimate the distribution of national income in the united states since 1913 our distributional national accounts capture 100 of national income allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth we estimate the distribution of both pretax and posttax income making it possible to provide a comprehensive view of how government redistribution affects inequality average pretax real national income per adult has increased 60 from 1980 to 2014 but we find that it has stagnated for the bottom 50 of the distribution at about 16 000 a year the pretax income of the middle class adults between the median and the 90th percentile has grown 40 since 1980 faster than what tax and survey data suggest due in particular to the rise of tax exempt fringe benefits income has boomed at the top the upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000 the government has offset only a small fraction of the increase in inequality the reduction of the gender gap in earnings has mitigated the increase in inequality among adults but the share of women falls steeply as one moves up the labor income distribution and is only 11 in the top 0 1 in 2014

demand pull government policies to support product service system activity the case of energy service companies escos in the uk product service systems psss constitute a family of service based business models designed to satisfy our societal needs in an economically and environmentally sustainable manner to date however pss application has remained niche due to a variety of critical barriers this paper explores how demand pull national government policies could support pss activity by addressing these barriers and cultivating market demand lessons are drawn from a case study of how regulatory economic incentive informative and procurement policies have supported energy service company esco activity in the uk a sub set of the pss family focused on energy service provision subsequently five policy recommendations are presented to support pss activity 1 balancing economic incentives and regulatory disincentives 2 promoting indirect policy support 3 redesigning existing market structures 4 promoting locally led pss activity and 5 creating stable policy frameworks the paper warns however that national government policy cannot easily address all pss barriers such as customer preferences international developments technological progress and inherent business model weaknesses pointing to the need for other complementary solutions furthermore other governance actors beside national government could also implement pss supporting policies

market discipline and deposit insurance cross country evidence presented in this paper suggests that explicit deposit insurance reduces required deposit interest rates while at the same time it lowers market discipline on bank risk taking internationally deposit insurance schemes vary widely in their coverage funding and management this reflects that there are widely differing views on how deposit insurance should optimally be structured to inform this debate we use a newly constructed data set of deposit insurance design features to examine how different design features affect deposit interest rates and market discipline

through the contested terrain implementation of downsizing announcements by large u s firms 1984 to 2005 since the 1980s leading u s firms have announced massive downsizing plans in the name of maximizing shareholder value but some observers are skeptical about how serious firms are in implementing

match bias in wage gap estimates due to earnings imputation about 30 of workers in the current population survey have earnings imputed wage gap estimates are biased toward zero when the attribute being studied e g union status is not a criterion used to match donors to nonrespondents an expression for match bias is derived in which attenuation equals the sum of match error rates attenuation can be approximated by the proportion with imputed earnings union wage gap estimates with match bias removed are presented for 1973 2001 estimates for recent years are biased downward 5 percentage points bias in gap estimates accompanying other non match criteria public sector industry etc is examined

why unions reduce wage inequality a theory of domino effects numerous empirical studies show that unions reduce wage differences i demonstrate that their motive might be a mix of fairness and strategy maximizing the use of union bargaining power in the presence of efficiency wages unions can push primarily for raising the lowest wages and still not sacrifice higher wages much if the employers themselves increase higher wages to protect efficiency enhancing wage differences if these domino effects are strong enough then an egalitarian wage policy might even increase the median wage

growing apart the changing firm size wage premium and its inequality consequences wage inequality in the united states has risen dramatically over the past few decades prompting scholars to develop a number of theoretical accounts for the upward trend this study argues that large firms have been a prominent labor market institution that mitigates inequality by compensating their low and middle wage employees with a greater premium than their higher wage counterparts large u s firms reduced overall wage dispersion yet broader changes to employment relations associated with the demise of internal labor markets and the emergence of alternative employment arrangements have undermined large firms role as an equalizing institution using data from the current population survey and the survey of income and program participation we find that in 1989 although all private sector workers benefited from a firm size wage premium the premium was significantly higher for individuals at the lower end and middle of the wage distribution compared to those at the higher end between 1989 and

the rise of finance and firm employment dynamics this article sheds light on the ongoing employment stagnation in the united states by investigating the links between the rise of finance and firm employment dynamics during the 1982 2005 period i argue that the rise of finance marginalized the role of labor in revenue generating and sharing processes which led to employment stagnation among the largest nonfinancial firms in the united states evidence suggests that increasing investment in financial assets depresses the workforce size the growing dependence on debt reprioritizes the order of distribution heightening the need for workforce reduction the increasing rewards for shareholders generate a downsize and distribute spiral in which labor expense becomes a primary target of cost cutting strategies further analysis indicates that production and service workers are more vulnerable to shifts associated with the rise of finance than managers and professionals

workplace compensation practices and the rise in benefit inequality this article aims to explain why inequality in fringe benefits has grown faster than wage inequality over the past four decades we depart from previous income inequality research by studying benef