geographic mobility race and wage differentials abstract this paper analyzes the relationship between geographic mobility and earnings we present an equilibrium search model that yields differences between the reservation wages of mobile and immobile workers the expected wages of mobile workers exceed those of immobile workers due to partial sorting across high and low paying firms an extension to visibly distinct groups with different immobile proportions yields statistical discrimination against immobile group members using combined displaced workers files we find that mobility positively affects earnings and partially explains racial and ethnic earnings differentials to test for statistical discrimination we estimate separate earnings functions for union and nonunion workers

do faculty salaries rise with job seniority abstract previous research suggests that academic salaries fall with greater job seniority using a 1988 national survey we find that the return to seniority is positive over a lengthy employment period tenure status and academic rank also affect the return to seniority

uncertain neighborhood effects and restrictive covenants abstract this paper provides a theoretical model and empirical analysis of private land use contracts in an urban housing market one contribution of our analysis lies in the explicit treatment of neighborhood externalities as uncertain processes the potential resident views the contractual obligation established by deed restrictions as credible commitment by unknown future neighbors to utilize their own property within the defined bounds thereby reducing the uncertainty or riskiness of future externality effects following this view we present a hedonic valuation model for deed restrictions and neighborhood covenants to tie housing consumption risk theory to the empirical hedonic method we then use a unique land use contracts data set to test the model implications

internalizing neighborhood externalities the effect of subdivision size and zoning on residential lot prices abstract though land development regulations potentially control neighborhood externalities the developer of a residential subdivision contributes to that control by developing a larger parcel of land this paper reports estimates of the effect of parcel size on the sale price of developed building lots the results indicate that adding an acre to the median development increases lot prices by about 3 amenities appear to be income normal and the return to parcel size is greater in unincorporated areas perhaps due to less intensive governmental control over externalities

labor s share the firm s market power and total factor productivity we investigate the relationship between labor s share firm s market power and the elasticity of output with respect to labor input using an approach based on an unobserved components model the approach yields time varying estimates of market power and the elasticity evidence on the market power of firms which we find to be rising since 2000 gives a deeper understanding of movements in labor s share and the labor wedge the generated values of the elasticity yield revised estimates of total factor productivity growth which is informative about the extent of the downward bias inherent in traditional estimates which use labor s share as a proxy for the elasticity jel o47 c32 e25

sources of intra industry wage dispersion how much do employers matter observed human capital explains less than half of wage variation in bls industry wage surveys establishment based wage differentials controlling for occupation account for 20 70 percent of intra industry wage variation this corresponds to a standard deviation in wages of 14 percent of the mean almost as large as interindustry wage variation investigation suggests that establishment wage differentials are not random variations or returns to usual measures of human capital

the consequences of minimum wage laws some new theoretical ideas economists generally agree that the effect of a binding minimum wage law is to move firms backward along the demand curve for low skill workers however this prediction of worker displacement depends critically on the assumption that the productivity of firms labor is not dependent on the wage in this paper we show that in a conventional efficiency wage model a minimum wage may increase the level of employment in low wage jobs the formal logic of our model is similar to the case of labor demand under monopsony but arises in a model with a large number of employers

competition wages and teacher sorting lessons learned from a voucher reform this paper studies how local school competition affects teacher wages at markets where wages are set via individual wage bargaining using regional variation in private school entry generated by a swedish reform which allowed private schools to enter freely and a comprehensive matched employer employee data covering all high school teachers in sweden over 16 years i analyze the effects of competition on wages as well as labor flows the results suggest that competition translates into higher wages also for teachers in public schools while the average increases are modest new teachers gain 2 percent and high ability teachers in math and science receive 4 percent higher wages in the most competitive areas compared to areas without any competition from private schools several robustness checks support a causal interpretation of the results which together highlight the potential gains from school competition through a more differentiated wage setting of teachers

the role of fees in patent systems theory and evidence this paper reviews the economic literature on the role of fees in patent systems two main research questions are usually addressed the impact of patent fees on the behavior of applicants and the question of optimal fees studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good studies in the latter group provide grounds for both low and high application or pre grant fees and renewal or post grant fees depending on the structural context and policy objectives the paper also presents new stylized facts on patent fees of 30 patent offices worldwide it is shown that application fees are generally lower than renewal fees and renewal fees increase more than proportionally with patent age 2012 john wiley sons ltd

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

nash equilibrium efficiency wage distributions this paper extends the shirking model of efficiency wages by introducing worker heterogeneity with respect to the disutility of effort heterogeneity leads to a problem of adverse selection in addition to the moral hazard problem that is present in the original model as a result of adverse selection an equilibrium in which all firms offer the same efficiency wage cannot exist rather a continuously differentiable distribution of wages will be offered in equilibrium we demonstrate this equilibrium by construction and derive it explicitly in the case of a uniform distribution of the effort aversion parameter

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

neighborhood externality risk and the homeownership status of properties in contrast to corporate and institutional investors single owner occupiers cannot adequately diversify housing investment risk consequently homeownership should be relatively less likely in places with higher housing investment risk using the american housing survey it is documented that neighborhood externality risk a major component of housing investment risk substantially reduces the probability that a housing unit is owner occupied even when controlling for housing type and numerous location and household specific characteristics the effects are quantitatively meaningful and change in change estimates suggest that the effects are causal

labor market monopsony there has been a renewed interest in monopsony in labor markets in recent years that includes both the traditional static approach to monopsony ably reviewed by boal and ransom 1997 and the new approach to monopsony with more attention paid to dynamic issues developed in detail by manning 2003 the articles presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of monopsony power may be important the first use of the term monopsony in economics is widely attributed to robinson 1969 robinson conceived of monopsony as analogous to monopoly whereas monopoly refers to the case of a single seller confronted in a market by many buyers monopsony refers to the case of a single buyer confronted in a market by many sellers just as the monopolist faces a downward sloping demand curve for his product and

oligopsony and the distribution of wages we propose a simple model of wage dispersion arising from oligopsonistic competition in the labor market our model has workers who are equally able but who have heterogeneous preferences for non wage characteristics while employers have heterogeneous productivity characteristics we completely and explicitly solve for the equilibrium wage distribution and show that inside and outside forces interact in wage determination this interaction generates spillover effects of minimum wages in a manner which is consistent with the empirical evidence

firm reputation and incentives to milk pending patents abstract in this paper we develop a theory of patenting in which a firm preserves its reputation by only applying for a patent whenever a truly patentable idea has been generated firms have a short run incentive to deviate and receive additional rents from unworthy pending patents as well as potential rents from pto mistakes in granting patents we provide conditions for reputation to be preserved in equilibrium and analyze which market environments are favorable for such an equilibrium to exist in particular we analyze the merits of different patent systems

supply analysis in an oligopsony model primary agricultural markets are often characterized by oligopsony this paper investigates the effect of an agricultural product supply shift on the equilibrium prices and quantities of farm products purchased by food processors and on profits of food processors the principal comparative static result indicates that under oligopsony qualitative implications of a disturbance in the supply of raw input differ from that under perfect competition and monopsony effects of other disturbances are identical in sign to the perfectly competitive case although magnitudes may differ implications for supply estimation and agricultural policy analysis are briefly discussed

unobserved ability efficiency wages and interindustry wage differentials interindustry wage differentials in wage regressions estimated for individuals have been interpreted as evidence consistent with efficiency wage models a principal competing explanation is that these differentials are generated by differences across workers in unobserved ability this paper tests the unobserved ability hypothesis by incorporating test scores into standard wage regressions as error ridden indicators of unobserved ability the results indicate that differences in unobserved ability explain relatively little of interindustry or interoccupation wage differentials this abstract was borrowed from another version of this item

sex discrimination and competition in product and labour markets theoritical explanations for wage discrimination collapse in the long run because competition should drive discriminations firms out of the market in product markets with imperfect competition em

a market for institutions assessing the impact of restrictive covenants on housing residential community associations rcas are quick becoming a common but controversial feature of the housing market supporters of rcas point to the rapid growth as a clear sign of their success in improving upon market failures rcas provide additional restrictions that can limit neighborhood externalities and reduce future consumption risk however critics contend that rcas create additional conflicts and push problems into other neighborhoods previous published empirical work on the impact of rca zoning has been limited in institutional detail and has not corrected for spatial autocorrelation this paper uses 1 487 single family sales in 2000 from greeley colorado and a unique dataset that includes information on rcas various use restrictions building restrictions and voting rules to investigate the impact of private zoning on the housing market a spatially corrected semi log hedonic model is employed to estimate the marginal price impacts the main model of interest finds that building restrictions no impact on prices while use restrictions increase prices furthermore the optimal voting decision rule is at an 80 percent supermajority but voting rights to first mortgage holders significantly reduces prices

a stochastic monopsony theory of the business cycle two distinct regimes contractions and expansions are generated in a model in which goods markets clear and all individuals are optimizing strict wage and price takers have fully rational expectations and are heterogeneous in both preferences and resource endowments involuntary unemployment asymmetric monetary policy effectiveness and a changing relationship between real wages and employment over the business cycle are the result of optimizing behavior by monopsonistic wage setting and price taking firms faced with price uncertainty an upward sloped supply of employees and efficiency wage behavior disequilibrium and involuntary unemployment can occur at the level of the individual firm s labor market jel e32 e52 j41 j42 i introduction for many economists three stylized facts are central to any plausible theory of the business cycle 1 friedman and schwartz 1963 and romer and romer 1994 concluded that monetary shocks have output employment and unemployment effects at least some of the time and such effects are asymmetric with respect to the state of the economy 2 unemployment is subject to fluctuations associated with recessions and expansions and in some recessions has been very high 1 3 the relationship between real wages and employment appears to be time period sensitive as reported by abraham and haltiwanger 1995 although first proposed by keynes modern economists such as benassy 2002 argue that at least some unemployment is best characterized as involuntary and indicates a state of disequilibrium in this article we consider a plausible alternative to disequilibrium explanations of these elements of the business cycle based on goods market imperfections such as those by benassy 2002 and dixon and rankin 1995 who considered monopoly power by firms in the goods market and benassy 1995 who assumed monopoly power by unions in the labor market we assume that the goods market is characterized by competitive market clearing but firms have some monopsony power as reflected in an upward sloped or bounded supply of labor to the firm and the ability to set the optimal wage before knowing the price they will receive for their output which is assumed to be stochastic and making their employment decision these modifications are embedded in an otherwise conventional general equilibrium model in which all agents firms and consumers workers capitalists are fully optimizing and form totally rational expectations and labor may exhibit efficiency wage behavior 2 this is not a representative agent model and cannot be reduced to such individuals are heterogeneous in both their endowments and preferences firms may be heterogeneous with respect to their production technology and the interests of firm owners are distinct from those of their employees the latter is essential to generate the changing regimes that produce predictions that correspond to the stylized facts monetary shocks affect output prices employment and unemployment in an asymmetrical manner consistent with the traditional business cycle the key to understanding these effects is the labor market if the expected quantity of money is generated then the competitive market clearing real wage will result lower than expected quantities of money generate a deficiency of aggregate demand lower than expected output prices and real wages above the competitive wage real wages above the competitive wage are associated with excess supply of labor and involuntary unemployment independent of that associated with efficiency wage behavior this contractionary regime will persist as long as the low quantities of money persist even though all agents have fully rational expectations are optimizing and the goods market clears in this regime increases in the quantity of money increase prices employment and output and employment varies negatively with the real wage efficiency wage behavior may decrease effort as the real wage rate is decreased

measuring the price impact of municipal incorporation on homeowner associations this paper investigates the impact of municipal formation and subsequent change in land use restrictions on existing deed restricted subdivisions drss using a unique case in the suburbs of saint louis county the city of wildwood incorporated in 1995 even though a majority of houses were already in a homeowner association data was collected on single family housing sales from 1990 through 2000 and on characteristics of 830 drss using a hedonic model the surrounding 10 municipalities and unincorporated area results show a decline in drs premiums after incorporation however the decline seems to have been concentrated in lots larger than 1 acre

patent office in innovation policy nobody s perfect abstract the number of patent applications and bad patents issued has been rising rapidly in recent years based on this trend we study the overload problem within the patent office and its consequences on the firms r d incentives we assume that the examination process of patent applications is imperfect and that its quality is poorer under congestion depending on policy instruments such as submission fees and the toughness of the non obviousness requirement the system may result in a high r d equilibrium in which firms self select in their patent applications or in an equilibrium with low r d opportunistic patent applications and the issuance of bad patents multiple equilibria often co exist which deeply undermines the effectiveness of policy instruments we investigate the robustness of our conclusions as to how the value of patent protection is formalized taking into consideration the introduction of a penalty system for rejected patent applications as well as the role of commitment to a given patent protection policy

a survey of the economics of patent systems and procedures the last several decades have seen increases in patenting activity worldwide as well as growing issues related to patent quality in response to these quality issues a recent patent literature has emerged that investigates the behavior and incentives of patent examiners applicants and third parties in this paper we provide an overview of patent procedures patent systems and a survey of the new economic literature on patent systems both theoretical and empirical papers are considered policy implications coming from this literature are presented

social comparisons in oligopsony abstract a large body of evidence suggests that social comparisons matter for workers valuation of the wage they receive the consequences of social comparisons in imperfectly competitive labor markets are less well understood we analyze an oligopsonistic model of the labor market where workers derive dis utility from comparing their own wage with wages paid at other firms as social comparisons become more prevalent all workers are paid higher wages the wage distribution becomes more equal and employment shifts to high productivity firms moreover the total wage bill and output increase while aggregate profits decline overall welfare rises our theoretical results have implications for estimating the elasticity of the labor supply curve facing a firm

anti poaching agreements in labor markets we analyze competition for experienced workers among wage setting firms the firms can design poaching offers with higher wages to workers who switch from rivals relative to wages paid to their own existing employees we evaluate the profit and welfare effects of anti poaching agreements that eliminate poaching offers as a recruiting method anti poaching agreements increase industry profits whereas workers are made worse off we show that the effects of anti poaching agreements on total welfare are determined by the magnitude of workers switching costs and the productivity change associated with switching employers jel l41 l40 j42

monopsony power in the market for nurses estimates are presented of the inverse elasticity of supply of nursing services to the individual hospital a quantity which is a natural measure of employer market power the estimates corresponding to employment changes taking place over one year are quite high in the neighborhood of 0 79 and even for changes taking place over three years are substantial in the neighborhood of 0 26 the estimates do not significantly differ for hospitals in major metropolitan areas and do not depend very sensitively on the assumed form of the oligopsony equilibrium this abstract was borrowed from another version of this item

monopsony in the low wage labor market evidence from minimum nurse staffing regulations this paper provides direct evidence on the extent of monopsony power in the low wage labor market by estimating the firm level elasticity of labor supply for nurse aides in the long term care nursing home industry using exogenous variation in hiring induced by the passage of a state minimum nurse staffing law i find that facilities initially out of compliance with the new law did not have to raise their wage offers relative to their competitors in order to hire more nurses while this is consistent with perfect competition in simple monopsony models of the labor market i discuss how the results may be more ambiguous in more complicated models

wages profits and rent sharing the paper suggests a new test for rent sharing in the u s labor market using an unbalanced panel from the manufacturing sector it shows that a rise in a sector s profitability leads after some years to an increase in the long run level of wages in that sector the paper controls for workers characteristics for industry fixed effects and for unionism lester s range of wages is estimated for rent sharing reasons alone at approximately 24 per cent of the mean wage

monopsony mobility and sex differences in pay missouri school teachers we examine the sex differences in the pay of school teachers in missouri in missouri school districts pay is determined by a salary schedule that maps teaching experience and education level of an individual to a salary level in spite of this apparently mechanical rule for determining pay female teachers earn less than male teachers after controlling for experience and education we explore how such a difference could arise from differential job mobility and find some evidence to support this idea however within district differences in pay are a more important source of differences in pay between men and women

the elasticity of labor supply at the establishment level monopsonistic wage setting power requires that the supply of labor directed toward individual establishments is upward sloping this study utilizes institutional features to identify the supply curve the elasticity of labor supply is estimated using data for the norwegian teacher labor market in a period where the only variation in the wage level was determined centrally and with information on whether there is excess demand or not at the school level in fixed effects models the supply elasticity faced by individual schools is estimated to about 1 4 and is in the range 1 0 1 9 in different model specification

multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies it is often argued that a mandatory minimum wage is binding only if the wage density displays a spike at it in this article we analyze a model with search frictions and heterogeneous production technologies in which imposition of a minimum wage affects wages even though after imposition the lowest wage in the market exceeds the minimum wage the model has multiple equilibria as a result of the fact that the reservation wage of the unemployed and the lowest production technology in use affect each other imposition of a minimum wage may improve social welfare

are you hiring johnny football or johnny doe uncertain labour quality and the measurement of monopsony in college football i assess monopsony in the college football labour market as it relates to both typical and elite performers while also accounting for the uncertain performance quality of prospective players who a

does raiding explain the negative returns to faculty seniority i introduction economists have studied various aspects of faculty mobility research shows that turnover is greater among nonunion faculty rees 1994 female faculty average slightly more employers than male faculty barbezat and hughes 2001 ginther and kahn 2004 1 the responsiveness of turnover to relative pay diminishes with rank ehrenberg kasper and rees 1991 and research productivity enhances prospects for upward mobility ault rutman and stevenson 1979 1982 coupe smeets and warzynski 2005 still questions remain unanswered where do faculty go when they leave a university how does faculty turnover vary with time at a university what percentage of faculty move upward and what percentage move downward because of tenure denials or the prospect of being turned down for tenure the present article contributes to our understanding of these issues but its primary objective was to use data on faculty mobility to provide insights on another issue returns to academic seniority the negative returns to seniority that many studies find are commonly attributed to one of two factors 2 the first view is that negative returns reflect monopsony power on the part of universities faculty with high mobility costs acquire high seniority and because they are unlikely to move they are paid less than equally productive faculty that employers view as more likely to leave a competing explanation is that highly productive faculty are raided according to this story returns to seniority are biased negatively because faculty with high seniority tend to have low unmeasured productivity the best faculty are bid away moving on to better jobs those who remain are the faculty without outside offers and the negative returns estimated for senior faculty actually reflect a penalty for low unmeasured productivity rather than a true penalty for seniority the raiding story has several implications first estimated returns to seniority should become less negative the more fully the productivity is measured second estimated returns should be less negative once we control for faculty who are bid away finally and of particular importance estimated returns to seniority should not be negative for faculty who are bid away the faculty for whom unmeasured productivity is presumably high with the right data set these hypotheses can be tested rejection of the raiding hypothesis would provide tacit evidence of monoposony in academic markets 3 this article contributes to the literature in several ways it is the first research to directly test the raiding hypothesis it provides a detailed look at faculty mobility in one segment of the academic labor market it extends and improves bratsberg ragan and warren 2003 in the following ways it expands the sample to cover three decades of faculty pay records it includes additional controls for productivity number and types of books recent and prospective articles and so forth resulting in the most complete specification of research productivity to date and it allows for heterogeneity in the seniority penalty via phd pedigree and direction of move finally it tests for the possibility that the academic job market does a better job of matching faculty and universities in recent years as might be expected because of the information revolution the sample consists of five public phd granting universities in the midwest we track all tenure track economics faculty employed in these universities over a 30 yr period we measure their productivity their pay and their mobility as such the study provides a rich and detailed investigation of one subset of economics programs it is possible that mobility may be greater in urban areas where faculty can more readily obtain alternative employment without relocating and prior research indicates that pay structures depend on the university s stature and its relative emphasis on research and teaching

dealing with monopsony power employment subsidies vs minimum wages abstract we show in a monopsony model that accounting for changes in hours a minimum wage has ambiguous effects on employment and welfare when all workers have the same preference ordering over leisure and consumption employment subsidies unambiguously improve welfare many countries have minimum wages and also tax minimum wage workers

efficiency wages and wage dispersion the efficiency wage hypothesis has normally been used to generate an equilibrium level of unemployment the authors use it instead to generate an equilibrium wage distribution this paper starts by generalizing the previous work of r m solow in this area they then use their results on effort wage elasticities to derive a model of wage dispersion the wage rate is shown to be an increasing function of the damage potential of workers that is workers with the highest damage potential receive the highest wage the analysis of the equilibrium of the wage distribution provides interesting qualitative insights into the nature of actual wage differentials copyright 1991 by the london school of economics and political science

classic or new monopsony searching for evidence in nursing labor markets the market for registered nurses rns is often offered as an example of classic monopsony while a new monopsony literature emphasizes that firm labor supply is upward sloping independent of market structure using data from multiple sources we explore the relationship between nursing wages in hospitals and measures of classic and new monopsony wage level analysis fails to provide support for classic monopsony the relative wages of rns in 240 u s labor markets being largely uncorrelated with hospital system concentration longitudinal analysis shows nursing wages declining with increases in hospital concentration we interpret these results as providing support for classic monopsony effects in the short run but question whether wage effects are sustained in the long run no relationship is found between nursing wages and a new monopsony measure of mobility but support for new monopsony is found for women elsewhere in the labor market rns display greater interemployer mobility than do women or men in general two conclusions follow first upward sloping labor supply need not imply monopsonistic outcomes second absent more compelling evidence nursing should not be held up as a prototypical example of monopsony classic or new

inequality neighbourhoods and welfare of the poor abstract this paper investigates how neighbourhood effects interacting with income inequality affect poor people s ability to access basic facilities like health care services schooling and so on we model this interaction by integrating consumers income distribution with the spatial distribution of their location and explore the consequences of an increase in income inequality or variations in the neighbourhood characteristics on the welfare of the rich and poor in general and their access to market in particular we find that in general the impact will be non monotonic owing to an interesting trade off between the provision effect and the price effect on the one hand there is the positive provision effect higher valuation of the rich attracts the supplier to enter into the neighbourhood allowing the poor who live sufficiently close by to access the service on the other hand there is the negative price effect the service provider charges a higher price higher is the income or larger is the proportion of the rich in the neighbourhood in the extreme there exists the possibility of complete exclusion of poor from the market the service provider caters only to the rich and the poor has absolutely no market access we have identified the higher income gap between rich and poor as the key factor that exposes the poor to this complete exclusion possibility

on the optimality of the patent renewal system the patent system is mainly a renewal system the patent life is chosen by the patentee in return for fees i ask whether such a system can be justified by asymmetric information on costs and benefits of research in such a model i show that renewal mechanisms possibly with subsidies are equivalent to direct revelation mechanisms and therefore cannot be improved on regardless of the objective function under plausible circumstances patents should have a uniform life rather than varying in length as typically occurs under a renewal system

the quality factor in patent systems this article develops a methodology to compare the quality of examination services in three major patent systems quality is defined as the extent to which patent systems comply with the patentability conditions in a transparent way the methodology consists of a two layer analytical framework encompassing legal standards ls and their operational design od which includes several interdependent components that affect the stringency and transparency of the filtering process the comparison of patent systems in europe japan and the united states shows that their operational designs differ substantially the european system provides higher quality and more expensive examination services than the united states one while the japanese patent system is in an intermediate position the results illustrate that different system designs lead to different outcomes in terms of backlogs patent propensity and the number of dubious patent rights in force in this respect these findings i provide an empirical validation of the conjecture of a vicious cycle linking the quality of examination and demand for patents and ii highlight the need for a multifaceted convergence of patent systems before mutual recognition is put in place the author 2011 published by oxford university press on behalf of associazione icc all rights reserved

dynamic labor market competition and wage seniority abstract we design an overlapping generations model of the labor market experienced workers bear costs of switching employers whereas the segment for junior workers is horizontally differentiated the literature typically explains wage seniority premia with reference to productivity gains generated by the accumulation of worker experience or mechanisms associated with incomplete information in contrast this paper characterizes how the wage seniority premium depends on the relative intensities of competition in the markets for junior and senior workers in particular we show that a wage seniority premium may prevail even under circumstances where senior workers are less productive than junior workers

competition and teacher pay i introduction recent policy initiatives are increasing the degree of competition in primary and secondary education the number of charter schools is growing at an astounding rate vouchers are available to eligible children in florida utah and a number of cities including washington d c kafer 2005 school districts throughout the country are experimenting with subcontracting campuses to private firms the increasing popularity of policies that foster school competition dovetails with a burgeoning literature on the effects of educational competition researchers have examined the effects of educational competition on academic outcomes average public school spending and school district efficiency l this research has largely ignored the effects of increased competition on teacher pay yet reductions in the market power of school districts could have a significant impact on teacher earnings if school districts behave as typical monopsonists or oligopsonists when hiring then a lack of competition suppresses wages and policies that are designed to enhance competition among schools could lead to higher teacher salaries ceteris paribus 2 alternatively if a school district s position as a monopolistic provider of education services generates economic rents there are few parties to whom those rents might be dissipated besides school district personnel if teachers have been able to appropriate a share of the economic rents generated by the market power of school districts then increased competition could lower teacher salaries 3 this study uses individual data on more than 335 000 teachers from 670 texas school districts to explore the empirical relationship between competition and teacher pay the analysis suggests that a lack of competition in the public school system has led to significant market power for texas school districts resulting in lower wages for most texas teachers but higher wages for teachers in relatively concentrated markets ii theoretical models the elementary and secondary education industry in the united states is often highly concentrated more than 30 of u s educational markets are served by a single public school district and there are many more that are served by only a handful of educational providers 4 the concentrated nature of education markets suggests two alternative models of teacher wage determination the first is a classic oligopsony model and the second is a rent sharing model an oligopsony model of teacher wage determination boal and ransom 1997 lay out a classic cournot model of oligopsony that can be directly applied to the educational labor market 5 firms school districts choose an employment level l sub i to maximize the firm s revenue function r sub i given the employment level of all other firms in the market l sub i 1 r sub i l sub i w l sub i l sub i l sub i the market wage is determined by the total employment of all firms the first order condition for each firm implies that it chooses l sub i such that 2 mrp sub i w w l sub i l epsilon sup 1 in this model the gap between the marginal revenue product of firm i mrp sub i and the wage rate w depends on the firm s employment share l sub i l and the inverse wage elasticity of labor supply for the market epsilon sup 1 6 assuming that firms have different marginal revenue products the employment weighted average across all the firms in the market is 3 summation over i mrp sub i w l sub i wl epsilon sup 1 summation over i l sub i l sup 2 the last term on the right hand side is the familiar herfindahl index of market concentration thus wages are a function of market concentration h the employment weighted average marginal revenue profit per worker bar

a theory of dual labor markets with application to industrial policy discrimination and keynesian unemployment this paper develops a model of dual labor markets based on employers need to motivate workers in order to elicit effort from their workers employers may find it optimal to pay more than the going wage this changes fundamentally the character of labor markets the model is applied to a wide range of labor market phenomena it provides a coherent framework for understanding the claims of industrial policy advocates it also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces finally the model provides the basis for a theory of involuntary unemployment

insider forces and wage determination this paper investigates the relative importance of firm specific factors i e insider forces in wage determination using firm level data on 219 u k companies over 1974 82 it finds that a 1 percent rise in a firm s prices or productivity relative to the aggregate economy leads to a rise in relative wages of 0 1 0 2 percent as a corollary to this outside factors like the aggregate wage and the unemployment rate also play an important role there is evidence for insider based hysteresis effects but these are inversely related to the extent to which firms take national agreements into account copyright 1990 by royal economic society

attaching workers through in kind payments theory and evidence from russia external shocks may cause a decline in the productivity of fixed capital in certain regions of an economy exogenous obstacles to migration make it hard for workers in those regions to reallocate to more prosperous regions in addition firms may devise attachment strategies to keep workers from moving out of a local labor market when workers are compensated in kind they find it difficult to raise the cash needed for migration this endogenous obstacle to migration has not yet been considered in the literature the article shows that the feasibility of attachment depends on the inherited structure of local labor markets attachment can exist in equilibrium only if the labor market is sufficiently concentrated attachment is beneficial for both employers and employees but hurts the unemployed and the self employed an analysis of matched household firm data from the russian federation corroborates the theory

is there monopsony in the labor market evidence from a natural experiment recent theoretical and empirical advances have renewed interest in monopsonistic models of the labor market however there is little direct empirical support for these models we use an exogenous change in wages at department of veterans affairs va hospitals as a natural experiment to investigate the extent of monopsony in the nurse labor market we estimate that labor supply to individual hospitals is quite inelastic with short run elasticity around 0 1 we also find that non va hospitals responded to the va wage change by changing their own wages

monopsony power and relative wages in the labor market for nurses this paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets using data from the 1985 93 current population surveys measures of relative nurse non nurse wage rates for 252 labor markets are constructed contrary to predictions from the monopsony model no positive relationship exists between relative nursing wages and hospital density or market size nor is support found for the presence of monopsony power based on evidence on union wage premiums slopes of experience profiles or the mix of rn to total hospital employment

differences in labor supply to monopsonistic firms and the gender pay gap an empirical analysis using linked employer employee data from germany this article investigates women s and men s labor supply to the firm within a semistructural approach based on a dynamic model of new monopsony using methods of survival analysis and a large linked employer employee data set for germany we find that labor supply elasticities are small 1 9 3 7 and that women s labor supply to the firm is less elastic than men s which is the reverse of gender differences in labor supply usually found at the level of the market our results imply that at least one third of the gender pay gap might be wage discrimination by profit maximizing monopsonistic employers

does unmeasured ability explain inter industry wage differentials this paper provides empirical assessments of the two leading explanations of measured inter industry wage differentials 1 true wage differentials exist across industries and 2 the measured differentials simply reflect unmeasured differences in workers productive abilities first we summarize the existing evidence on the unmeasured ability explanation second we construct a simple model which shows that if matching is important then endogenous job change decisions can create important self selection biases even in first differenced estimates of industry wage differentials third we analyze a sample that approximates the experiment of exogenous job loss we find that i the wage change experienced by a typical industry switcher closely resembles the difference in the relevant industry differentials estimated in a cross section and ii pre displacement industry affiliation plays an important role in post displacement wage determination

effectiveness of rca institutions to limit local externalities using foreclosure data to test covenant effectiveness residential community associations rcas are said to be an efficient institutional agreement to limit local spillovers while several studies have identified a positive marginal effect of rca rules none have explicitly measured the effectiveness of these institutions to limit local externalities this study measures this effectiveness by estimating how the direct and spillover price impacts caused by foreclosure differ by rca status using a spatial hedonic model that controls for selection bias using propensity score methods and coarsened exact matching we find that foreclosed rca properties experience smaller direct foreclosure discounts and produce smaller spill over effects than their non rca counterparts

monopsony and the lifetime relation between wages and productivity we consider the relation between wages and productivity by means of a model based on the following assumptions workers live for 2 periods firms live forever senior workers differ nontrivially from junior seniority enhances workers expected second period earnings both firms and workers recognize the prospect of promotion and the senior junior wage differential at the time of hiring and firms have monopsony power in hiring junior workers we show that senior wages are equal to the senior marginal product but junior wages are set below the junior marginal product by an amount that depends on the elasticity of the firm s labor supply

this old house historical restoration as a neighborhood amenity property markets do not fully price the public s value for historic homes to correct the intergenerational externality associated with historical preservation while preservation for future generations often provides the primary motivation for pigovian subsidies historical preservation or restoration policies may also have significant contemporary amenity effects this study exploits unique data on the use of rehabilitative tax credits rtcs in virginia to estimate the extent to which historic property investment generates market externalities for nearby nonhistoric properties using a difference in differences approach the results indicate that homes in close proximity to rtcs sell at a premium with only modest liquidity effects

minimum wages for ronald mcdonald monopsonies a theory of monopsonistic competition recent empirical work on the effects of minimum wages has called into question the conventional wisdom that minimum wages invariably reduce employment we develop a model of monopsonistic competition with free entry to analyse the effects of minimum wages and our predictions fit the empirical results closely under monopsonistic competition we find that a rise in the minimum wage raises employment per firm causes firm exit and may increase or reduce industry employment minimum wages increase welfare if they raise industry employment but welfare effects are ambiguous if employment falls

oligopsony and monopsonistic competition in labor markets we argue that models of oligopsony or monopsonistic competition provide insights and explanation for many empirical phenomena in labor markets using a simple model with job differentiation and preference heterogeneity we illustrate how such models can be employed to explain the existence of wage dispersion the persistence of labor market discrimination market failures in the provision of training and the anomalous employment effects of minimum wages

the formal sector wage premium and firm size abstract we show theoretically that when larger firms pay higher wages and are more likely to be caught defaulting on labor taxes then large high wage firms will be in the formal and small low wage firms will be in the informal sector the formal sector wage premium is thus just a firm size wage differential using data from ecuador we illustrate that firm size is indeed the key variable determining whether a formal sector premium exists

the union impact on hospital wages and fringe benefits this paper uses 1977 data from a national probability sample of 1 200 hospitals to estimate the effect of unions on wages and fringe benefits in four occupations registered nurses practical nurses secretaries and housekeepers the results show that unionization has a significant impact on wages that increases with the length of time collective bargaining has been in effect at the individual hospital the overall wage effect of unions is about 8 percent for both types of nurses and 11 to 12 percent for secretaries and housekeepers employed in hospitals the authors also estimate an equation for hospital wide fringe benefits which shows that such benefits are positively related to the percent of full time employees in the four occupations covered by union contracts

the effects of minimum bargained wages on earnings evidence from spain abstract this paper provides an empirical evaluation of the effects of spanish sectoral collective bargaining on wages for this purpose we use a sample of workers for whom bargained wage rates and earnings are available using a variant of the meyer and wise approach we are able to estimate wage gains due to minimum bargained wages and their employment effects the most relevant conclusion is that there is evidence of a sword of justice effect by unions but this is limited by non compliance among unskilled workers and the non binding nature of bargained wages for skilled workers

seniority and monopsony in the academic labor market workers with high seniority usually have higher wages than workers with low seniority and the same total labor marke t experience in contrast the results of this paper indicate that higher seniority is associated with lower salaries for university professors the author documents this finding for national surveys a nd individual institutions and explains it as due to monopsonistic discrimination by employers copyright 1993 by american economic association

monopsony in the labor market this paper surveys recent theoretical and empirical research on monopsony in labor markets broadly defined as upward sloping labor supply to an employer we compare older monopsony models based on small numbers of employers with newer models based on labor market frictions such as moving costs and search we also compare older econometric approaches that focus on static wage concentration relationships with newer approaches that focus on dynamics our review of empirical estimates suggests that monopsony power based on small numbers of employers is probably rare but occasionally large while monopsony power based on frictions is probably widespread but small on average

does equal pay legislation reduce labour market inequality this paper considers a labour market model of monopsonistic competition with taste based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality when the taste for discrimination is small or competition is weak the policy removes job segregation and the wage gap completely however with a bigger taste for discrimination or stronger competition equal pay legislation leads to more job segregation and sometimes minority workers end up earning less than before profits of discriminating firms might increase and discrimination can persist in the long run although it would have disappeared without the policy

an estimate of the rent generated by a premium college football player the national collegiate athletic association limits the payments athletes can receive for their services colleges are effectively monosony employers so players will not be paid their marginal revenue product therefore colleges capture an economic rent from players this paper measures these rents by estimating the marginal revenue product of a top college football player the empirical results suggest that a premium college player generates over 500 000 in annual revenues for his team

a model of the natural rate of unemployment since the publication of edmund phelps volume the new macroeconomics has treated the labor market as a dynamic process of rational search by unemployed workers for available vacancies wages are viewed as at least potentially flexible though free contracting between workers and firms may lead to fixed wages in the short run imperfect information is a crucial element of the theory for it implies both a need for contracting and a need for rational search rather than simple market clearing in each period a positive rate of frictional unemployment may exist in equilibrium denoted as the natural rate this unemployment is due to the frictions in the search process and imperfections in information rather than to any deficiency in aggregate demand milton friedman defined the natural rate as the level that would be ground out by the walrasian system of general equilibrium equations provided there is embedded in them the actual structural characteristics of the labor and commodity markets including market imperfections stochastic variability in demands and supplies the cost of gathering information about job vacancies and labor availabilities the costs of mobility and so on p 8 this paper reexamines the micro foundations of the natural rate in a model of labor market equilibrium in which turnover flows and imperfect information are explicitly considered workers may quit their current jobs to enter the unemployment pool in order to search among available vacancies for a more preferred position firms economize on turnover by an appropriate wage policy

wage bargaining and monopsony this paper identifies three possible outcomes of higher relative firm bargaining power in a unionized firm facing an upward sloping labor supply curve the conventional regime with reduced wage and higher employment corresponds to firm bargaining power below a certain critical value a supply constrained regime where increased firm bargaining power reduces both wages and employment occurs when the bargaining power is above another critical level a novel result is that we identify a third regime with firm bargaining power between these critical levels where changes in relative bargaining power does not affect wages and employment

the impact of the minimum wage on other wages in this paper i explore how changes in the minimum wage affect various occupational wages i postulate that other wages increase for two reasons first firms try to mitigate the deterioration in a worker s relative wage which would cause him to reduce his work effort and second there is an increase in the demand for nonminimum wage workers wage adjustment patterns are examined to ascertain whether wage comparisons play a role in the adjustment process the empirical work shows a short run wage compression among white collar occupations which is consistent with the wage comparison model however large standard errors make inferences weak

dynamic monopsony evidence from a french establishment panel this paper uses a panel of about 6000 french establishments to test some implications of the modern theory of dynamic monopsony or upward sloping labour supply curves for average firm wages panel estimates provide strong evidence of a much larger long run employer size wage effect eswe than found previously while controlling for worker quality and compensating differentials with lagged wages and for profitability rent sharing employment expansion also has a positive effect on wages providing further evidence for upward sloping labour supply as distinct from the effect of shocks in a perfectly competitive labour market

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

equilibrium wage distributions the observation that different firms charge different prices for what appears to be the same commodity or pay different wages for what appears to be equivalent labour has long been explained in economics by a reference to imperfect information this paper is concerned with characterising market equilibrium with imperfect information we do not present a general theory rather we develop in some detail an example of importance in its own right imperfect information in the labour market several properties of our example in particular the existence of equilibria with price wage dispersion unemployment excess supply of labour positive profits multiple equilibria and the nonoptimality or some of all of the equilibria are of more general validity other results may not be this paper is concerned with two kinds of imperfect information a individuals may not know the wage paid in any particular firm or whether there is a vacancy in any particular firm until they apply for a job 1 b there are several characteristics besides the wage rate associated with a job which are important to the individual some like the normal length of a work week become known when the individual applies for the job information about other characteristics e g personalities of colleagues is acquired only gradually there is one important difference between the two kinds of imperfect in

the effect of a gated community on property and beach amenity valuation we examine how location in a gated community affects the value of a single family home and the valuation of a beach using data on 2 358 sales on barrier islands near charleston south carolina the empirical results indicate that homeowners pay a premium of 18 6 for a property in a gated community the value of location near a beach is greater in gated than nongated communities