disentangling the college wage premium estimating a model with endogenous education choices this article proposes and empirically implements a structural model of education choices and wage determination to quantitatively evaluate the contributions of productivity enhancement and ability signaling in the college wage premium the model is estimated under various distributional parameterizations using 1990 u s census 5 public use micro sample under these parameterizations i find that college education enhances attendees productivity by about 40 and productivity enhancement accounts for close to two thirds of the college wage premium

labor market segmentation a cluster analysis of job groupings and barriers to entry real expenditures on public assistance programs have increased substantially in the past two decades as has real per capita income investments in a variety of education programs have risen and a number of jobs programs have been tried although there have been some gains for example a decline in the percentage of the population in poverty 31 474 a number of disparities persist unemployment remains at record levels and the prospect for sizable reductions in the unemployment rate seems quite small there are persistent differences between the mean household incomes of blacks and whites that have not narrowed at all during the past two decades 15 there is also a widespread perception that a disadvantaged segment of the u s population has no effective access to good jobs and if such persons get them they do not stay employed for long this means that many such adults are caught in a cycle of unemployment welfare dependency bad jobs and intermittent employment whereas there is nearly universal agreement that the persistent disparities in well being are undesirable there is considerable disagreement on what to do about this in part the disagreement stems from ignorance about the facts for example rigorous operational definitions of good and bad jobs have not been developed the notion that some persons do not have access to the good jobs is primarily based on anecdotes fortunately longitudinal data bases are now available that permit more rigorous empirical analysis of such issues

inflation and currency depreciation in germany 1920 1923 a dynamic model of prices and the exchange rate this paper presents a dynamic model of the german hyperinflation explaining prices the exchange rate and the money supply in the model estimated simultaneously the nominal exchange rate is allowed to diverge from purchasing power parity in the short run the monetary approach to exchange rate determination and the quantity theory of money are assumed to be valid in the long run the dynamic adjustment of prices and the exchange rate to monetary disturbances is made explicit and currency substitution between domestic and foreign currency is introduced explicitly the problem of the autocorrelation of the residuals of the money demand function found in previous studies is resolved the fit of inflation and exchange rate changes is very satisfactory and the speed of adjustment of the exchange rate to monetary disturbances is found to be much higher than for prices copyright 1995 by ohio state university press

using employer hiring behavior to test the educational signaling hypothesis this paper presents a test of the educational signaling hypothesis if employers use education as a signal in the hiring process they will rely more on education when less is otherwise known about applicants we nd that employers are more likely to lower educational standards when an informal more informative recruitment channel is used so we conclude that education is used as a signal in the hiring process

entrepreneurship human capital and labor demand a story of signaling and matching in contrast to employee qualifications there is no clear evidence that entrepreneurs qualifications positively affect their income in this study we propose that entrepreneurs can benefit from using their qualification as a signal during the process of recruiting employees this is assumed to follow a process of matching equals among equals we confirm a matching of qualification levels for highly skilled employees in denmark and an indication of this in germany partial support for matching among medium skilled employees was only found in germany with no consistent evidence of matching for low skilled employees in neither country this suggests that as skill levels of employees decrease their probabilities of working for different founders converge founders qualifications are the most reliable predictor of recruitment choices over time our findings are robust to numerous control variables as well as across industries and firm age

signalling or human capital evidence from the finnish polytechnic school reform we use data from the finnish polytechnic reform to distinguish between human capital and signalling theories of the value of education we find that the reform increased the earnings of polytechnic graduates compared with those graduating from the same schools before the reform as predicted by both the human capital and the signalling models however we also find that the relative earnings of vocational college graduates decrease after polytechnic graduates start entering the labour market this finding is inconsistent with the pure human capital model and can be interpreted as evidence that supports the signalling model

job market signaling and returns to education we compare two partially separating equilibria in a job market signaling model with unproductive education we find that in one of the two equilibria the fraction of the population with a threshold education level is higher even though the cost of education is higher moreover compared to the other equilibrium the population faces a higher threshold education level yet the educated attain lower wages the reason for this result is that the gross return to education can be higher despite the higher cost of education and a higher threshold

short term load forecasting based on a semi parametric additive model short term load forecasting is an essential instrument in power system planning operation and control many operating decisions are based on load forecasts such as dispatch scheduling of generating capacity reliability analysis and maintenance planning for the generators overestimation of electricity demand will cause a conservative operation which leads to the start up of too many units or excessive energy purchase thereby supplying an unnecessary level of reserve on the other hand underestimation may result in a risky operation with insufficient preparation of spinning reserve causing the system to operate in a vulnerable region to the disturbance in this paper semi parametric additive models are proposed to estimate the relationships between demand and the driver variables specifically the inputs for these models are calendar variables lagged actual demand observations and historical and forecast temperature traces for one or more sites in the target power system in addition to point forecasts prediction intervals are also estimated using a modified bootstrap method suitable for the complex seasonality seen in electricity demand data the proposed methodology has been used to forecast the half hourly electricity demand for up to seven days ahead for power systems in the australian national electricity market the performance of the methodology is validated via out of sample experiments with real data from the power system as well as through on site implementation by the system operator

pareto improving minimum wage laws by increasing the expected wage in low skill jobs a minimum wage law can reduce the incentive for low skill workers to imitate high skill workers in the signalling process the gain from reduced investment in the signal can more than offset the loss from unemployment among low skill workers so that total output increases moreover with an appropriate poll tax on workers to compensate owners of capital the law can make all workers and owners of capital better off

are there civic returns to education abstract the hypothesized effects of educational attainment on adult civic engagement and attitudes provide some of the most important justifications for government intervention in the market for education in this study i present evidence on whether these externalities exist i assess and implement two strategies for identifying the effects of educational attainment one is based on the availability of junior and community colleges the other on changes in teen exposure to child labor laws the results suggest that educational attainment has large and statistically significant effects on subsequent voter participation and support for free speech i also find that additional schooling appears to increase the quality of civic knowledge as measured by the frequency of newspaper readership

forecasting quantiles of day ahead electricity load accurate load forecasting plays a crucial role in the decision making process of many market participants but probably is most important for the dispatch planning of an electricity market operator despite the competitive forecast accuracy achieved by existing point forecast models point forecasts can only provide limited information relating to the expected level of future load to account for the uncertainty of future load and provide a more complete picture of the future load conditions for dispatch planning purposes quantile forecasts can be useful this paper proposes a computationally efficient approach to forecasting the quantiles of electricity load which is then applied to forecasting in the national electricity market of australia the proposed model performs competitively in comparison with one industry standard and two recently proposed quantile forecasting methods one of the main advantages of the proposed approach is the ease with the number of covariates can be expanded this is a particularly important feature in the context of load forecasting where large numbers of important drivers are usually necessary to provide accurate load forecasts

probabilistic forecasts of the magnitude and timing of peak electricity demand adequate capacity planning requires accurate forecasts of the future magnitude and timing of peak electricity demand electricity demand is affected by the day of the week seasonal variations holiday periods feast days and the weather a model that provides probabilistic forecasts of both magnitude and timing for lead times of one year is presented this model is capable of capturing the main sources of variation in demand and uses simulated weather time series including temperature wind speed and luminosity for producing probabilistic forecasts of future peak demand having access to such probabilistic forecasts provides a means of assessing the uncertainty in the forecasts and can lead to improved decision making and better risk management

the endogeneity of money during the german hyperinflation a reappraisal this paper provides evidence that casts doubt on the conclusioon of several studies of the german hyperinflation that since government raised most of its revenue from money creation the money supply process was endogenous this conclusion in the literature is based on the assumption that the money supply and the price level can be described by linear arima models it is shown here that the linearity assumption is violated by the data and that relaxing this assumption reverses the earlier results the paper provides additional evidence in support of the finding that the money supply process may be exogenous

minimum wages and the gender wage gap estimates are made of the effect of minimum wages on the size and composition of the gender wage gap in canada in 1986 it is found that minimum wages close the wage gap substantially for young workers and less so for adults the reduction in the gap is most attributable to the adverse employment effects of minimum wages the results also indicate that most of the reduction in the gap is realized through a fall in the discriminatory component

human capital versus sorting the effects of compulsory attendance laws under the educational sorting hypothesis a state compulsory school attendance law will increase the educational attainment of high ability workers who are not directly affected hy the law under the human capital hypothesis such laws affect only those individuals whose hehavior is directly constrained we find that compulsory attendance laws do increase enrollment rates in age groups they do not affect directly thus our results contradict the human capital hypothesis and are consistent with the sorting hypothesis i introduction the last decade has seen considerable debate between supporters of the human capital and sorting models of education the former assert that the effect of education on wages reflects increased productivity the latter maintain that it reflects at least in part correlation between education and unobserved ability workers use education to signal their ability while employers use education to screen workers despite the importance of the debate no fully convincing tests of the hypotheses have been developed in fact many members of the profession maintain at least privately that these hypotheses cannot be tested against each other and that the debate must therefore be relegated to the realm of ideology in this paper we show that the models can be tested against each other by examining the effects of state compulsory school attendance laws we show that under the human capital hypotheis such laws will affect the educational attainment only of those who in the absence of the law would have left school prior to the minimum school leaving age on the other hand under the sorting hypothesis the effects of the law will percolate through the system increasing educational attainment even among workers not directly constrained by the law our results are consistent with the predictions of the sorting model

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

educational screening by certificates an empirical test this paper argues that the relevant test of wage screening effects should be based on educational certificates rather than years of schooling this is because information conveyed to firms about individual productivity through years of schooling is not sufficiently refined for making individual wage offer decisions although it may be useful for making hiring decisions

the effect of human capital on earnings evidence from a reform at colombia s top university abstract in this paper i test whether the return to college education is the result of human capital accumulation or instead reflects the fact that attending college signals higher ability to employers i exploit a reform at universidad de los andes which in 2006 reduced the amount of coursework required to earn degrees in economics and business by 20 and 14 respectively but did not change the quality of incoming or graduating students the size of the entering class their average high school exit exam scores and graduation rates were not affected by the reform indicating that selection of students into the degrees remained the same using administrative data on wages and college attendance i estimate that wages fell by approximately 16 in economics and 13 in business these results suggest that human capital plays an important role in the determination of wages and reject a pure signaling model surveying employers i find that the reduction in wages may have resulted from a decline in performance during the recruitment process which led students to be placed in lower quality firms using data from the recruitment process for economists at the central bank of colombia i find that the reform reduced the probability of los andes graduates being hired by 17 percentage points

the signaling role of promotions further theory and empirical evidence an extensive theoretical literature investigates the role of promotions as a signal of worker ability we extend the theory by focusing on how the signaling role of promotion varies with education and then investigate the resulting predictions using a longitudinal data set that contains detailed information concerning the internal labor market history of a medium sized firm in the financial services industry our results support signaling being important for understanding the differences between promotion practices concerning bachelor s and master s degree holders while the evidence concerning the importance of signaling for high school graduates and phds is mixed

short term load forecasting methods an evaluation based on european data this paper uses intraday electricity demand data from ten european countries as the basis of an empirical comparison of univariate methods for prediction up to a day ahead a notable feature of the time series is the presence of both an in traweek and an intraday seasonal cycle the forecasting methods considered in the study include arima modeling periodic ar modeling an extension for double seasonality of holt winters exponential smoothing a recently proposed alternative exponential smoothing formulation and a method based on the principal component analysis pca of the daily demand profiles our results show a similar ranking of methods across the 10 load series the results were disappointing for the new alternative exponential smoothing method and for the periodic ar model the arima and pca methods performed well but the method that consistently performed the best was the double seasonal holt winters exponential smoothing method

estimating the labor market signaling value of the ged this paper tests the labor market signaling hypothesis for the general educational development ged equivalency credential using a unique data set containing ged test scores and social security administration ssa earnings data we exploit variation in ged status generated by differential state ged passing standards to identify the signaling value of the ged net of human capital effects our results indicate that the ged signal increases the earnings of young white dropouts by 10 to 19 percent we find no statistically significant effects for minority dropouts

labour market segmentation a local labour market analysis using alternative approaches earlier studies have generally attempted to establish the presence or otherwise of labour market segmentation using a single technique using data drawn form the british social and economic life initiative sceli for six local labour markets this paper tests for segmentation using four different methods of analysis a simple career non career model cluster analysis and switching regressions the results in general suggest that explanatory power is not improved by analysing the labour market in different segments but this simple career model points to higher rewards for given characteristics in the career sector and the results of the switching regression model are consistent with duality in one of the six markets

do dropouts drop out too soon wealth health and happiness from compulsory schooling abstract this paper uses compulsory schooling laws to evaluate high school dropout decisions the main empirical result is that lifetime wealth increases by about 15 with an extra year of compulsory schooling students compelled to stay in school are also less likely to report being in poor health unemployed and unhappy the main conclusion is that high school aversion alone is unlikely to explain why dropouts forgo substantial gains to lifetime wealth the results are more consistent with the possibility that adolescents ignore or heavily discount future consequences when deciding to drop out of school if teenagers are myopic making school compulsory or offering incentives to stay in school may help improve lifetime outcomes

signaling in higher education the effect of access to elite colleges on choice of major i introduction it is a well established fact that more educated individuals earn higher wages there are two primary theories for the source of this education wage premium the first is the human capital accumulation or full information model in which education directly enhances productivity and thereby increases an individual s wages the second is the signaling model of the labor market first proposed by spence 1973 wherein the monetary returns to schooling are partially explained by information asymmetries between individuals and employers these two models lead to strikingly similar labor market predictions which has made testing between them difficult i provide a new test of the signaling model against the full information model using individuals choices of college major this test is novel in that it focuses on the quality of an individual s education as a potential signal rather than the quantity of education furthermore while other tests have focused on high school students or other specific groups e g general education diploma takers in tyler et al 2000 and mba students in hussey 2012 this test sheds light onto the decision making process of college going students in a full information model productivity is costlessly observed by both the individual and the employer each individual chooses her optimal level of education to improve productivity and wages given her ability and the marginal cost of schooling in the signaling framework information is asymmetric such that employers cannot perfectly observe individual ability or true productivity employers use education levels to infer expected productivity while each individual chooses her level of schooling to signal a higher innate ability and potential productivity to employers the equilibrium result in both models is that higher ability individuals obtain more education and accordingly earn higher wages while the equilibria in both models appear similar the extent to which individuals sort on ability depends on the amount of information asymmetry in the labor market under the signaling model the individual s social and private returns to education do not necessarily coincide the private return is a combined effect of the social return from increased productivity and the signaling effect of being identified perhaps falsely as a high ability individual this disparity between private and social returns could lead to an inefficient allocation of schooling in the competitive labor market the implication that investment in schooling might lead to a deadweight loss for society has prompted many attempts to distinguish between these two theories bedard 2001 hussey 2012 lang and kropp 1986 riley 1979 wolpin 1977 and to measure what portion of the returns to schooling is attributable to signaling effects altonji and pierret 1997 2001 clark and martorell 2014 fang 2006 tyler et al 2000 however the empirical evidence differentiating the two models has been fairly limited and testing between the full information and signaling models of education has proven difficult i propose a new model applying the signaling framework of spence 1973 to the postsecondary environment in this model major field of study can be used by individuals to signal unobserved ability and productivity to employers i show that this leads to a prediction that geographic areas with high access to elite colleges result in fewer science technology engineering and mathematics stem majors among lower ability students at nonelite colleges this is distinct from the prediction of a full information model where the level of access to elite schools should only affect those high ability individuals who are eligible to attend an elite school using data from the national center for education statistics baccalaureate beyond survey and the geographic variation in access to elite schools across the united states i find evidence that is consistent with the signaling model prediction

pension design with a large informal labor market evidence from chile this article investigates the fiscal and welfare trade offs involved in designing a pension system when workers can avoid contributing by working informally using a life cycle model of labor supply and saving decisions i structurally estimate preferences and earnings opportunities in the formal and informal sectors using data on chilean households i find limited support for formal jobs rationing instead mandatory pension contributions significantly encourage informality policy experiments show that chile could lower minimum pension spending by 23 while guaranteeing the same income to retirees if the minimum pension s implicit tax rate was increased to 60

labor market integration in urban ethiopia 1994 2004 abstractan analysis of panel data on individuals in a random selection of urban households in ethiopia reveals large sustained and unexplained earnings gaps between public and private and formal and informal sectors over 1994 2004 at the same time we find first that the rate of mobility increased in the two pairs of sectors sample transitions rates grew across survey waves while state dependence in sector choice decreased second the correlation between sector choice and earnings gaps increased over the same period in particular the correlation between comparative earnings and selection into the informal sector was high throughout the survey decade and increased in magnitude over the second half of the period these results suggest that ethiopia s urban labor markets might be integrating

hyperinflation the exchange rate and endogenous money post world war i germany revisited abstract we re examine the interaction of domestic and external factors in the german hyperinflation by extending frenkel s monetary model of the exchange rate to incorporate 1 endogeneity of the money supply with respect to government debt expected inflation and money wages 2 the direct impact of exchange rate depreciation on the domestic price level and 3 endogenous wage determination four equation estimates support each extension of the monetary model it appears that government deficit finance the collapse of the exchange rate and the monetary transmission of the wage price spiral were all crucial contributors to the price explosion

compulsory education and the benefits of schooling causal estimates of the benefits of increased schooling using u s state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts differential changes across states during this period such as relative school quality improvements suggest that this assumption may fail to hold across a number of outcomes including wages unemployment and divorce we find that statistically significant causal estimates become insignificant and in many instances wrong signed when allowing year of birth effects to vary across regions

a spillover based theory of credentialism i propose a model in which credentials such as diplomas are instrumentally valuable to workers the model avoids an important criticism of standard job market signalling models by tying a worker s wage to their output a worker s productivity is influenced by the skills of their co workers where such skills arise from an ability augmenting investment that is made prior to matching with co workers credentials allow workers to demonstrate their investment to the labour market thereby allowing them to match with high skill co workers in equilibrium despite the positive externality associated with a worker s investment i show how overinvestment is pervasive in equilibrium

asymmetric labor market reforms effects on wage growth and conversion probability of fixed term contracts the authors investigate the impact of a change in employment protection laws in portugal that increased the maximum legal duration of fixed term contracts they find that this reform led to a reduction in the probability that a worker on a fixed term contract would be converted to a permanent contract in addition those workers who had their contracts converted experienced a significantly higher hourly wage growth at the time of conversion and faced a lower reduction in wage growth during the years in which the changed legislation was in force consequently the implementation of this law led to a 27 increase in the wage growth differential between the two contracts the findings are based on an endogenous regime switching model using rich administrative linked employer employee data

long run purchasing power parity in the 1920s abstract this paper presents an empirical analysis of long run purchasing power parity ppp during the 1920s float using recently developed methodology on the cointegration of economic time series our results are generally supportive of ppp as a long run equilibrium condition on which exchange rates tended to converge over the period for dollar sterling however there is some evidence of a non stationary drift away from fundamentals during the last year or so before britain s return to the gold standard perhaps due to speculation our results also appear to reconcile some apparently conflicting evidence in the literature

higher education elite institutions and inequality abstract we develop a model of higher education to analyze the effects of elite institutions on individual educational decisions and aggregate labor market outcomes elite institutions allow the most talented of a given population to separate themselves from the larger pool of agents enrolled in higher education and to earn the associated wage premium in the labor market as elite institutions engage in cream skimming the returns to publicly accessible education decrease and enrollment in public higher education declines the resulting effect on income inequality is ambiguous since elite education increases income dispersion at the top of the income distribution and decreases income dispersion at the bottom

the economics of financing higher education different arguments exist pro and contra tax financed subsidies in higher education it has been argued that private incentives to study are sufficiently high while the financing of those subsidies can be deemed regressive as they are co financed by relatively poorer non students alternatively several arguments have been put forward why higher tax financed subsidies are desirable such as externalities and credit constraints this study scrutinizes these different arguments and discusses the implications for the different ways in which higher education can be financed calculations of private returns across the oecd confirm that private incentives to invest in higher education are high however economic theory poses that it is the marginal social return that must guide policy which will reflect both equity and efficiency considerations we assess the potential regressivity of higher education subsidies using different perspectives and assess the different efficiency arguments for government intervention in higher education tax financed subsidies turn out to be regressive in most cases but depending on the perspective and the country under examination discussion of the efficiency arguments is focused on those that are most relevant in light of the empirical evidence and their relevance for the different financing modes externalities uninsurable risk credit constraints and misprediction we conclude that to deal with the more credible failures in higher education tax financed subsidies are blunt instruments for a large share of the countries under consideration shifting towards income contingent loans or graduate taxes appears more appropriate when taking into account both efficiency and equity considerations

a review of the decomposition methodology for extracting and identifying the fluctuation characteristics in electricity demand forecasting abstract electricity consumption data is regarded as nonlinear non stationary series and is often made up by a superposition of several distinct frequencies thus most of the conventional approaches currently employed for the modeling and forecasting involve great complexity and uncertainty recently fluctuation characteristic analysis has increasingly become essential step in the application of electricity demand forecasting yet the implementation of this analysis is an inherently difficult task to obtain reasonable accuracy and stability in the modeling there has been the tendency to accommodate multidimensional attributes of the consumption demands with decomposition based approach in terms of more advanced and hybrid form and the decomposition can be achieved through utilization of two different procedures namely component model based and frequency domain analysis based decomposition consequently a comprehensive review and summarization of decomposition based approach for the prediction is conducted in this paper more specifically the issues of demand forecasting classification the dependency between the electricity demand and external indicators features of various decomposition approach as well as the unique fluctuation characteristic of electricity demand at different time scales are discussed in addition future research directions of the decomposition based prediction approach are outlined

is work special justice and the distribution of employment i investigate from an egalitarian welfarist standpoint the issue of whether state guaranteed employment should be offered as a matter of right to able bodied poor citizens who suffer chronic or persistent unemployment an affirmative answer is defended one consideration supporting this right to work is that provision of transfer aid in the form of jobs rather than cash screens nonneedy bohemians from the class of beneficiaries the main conclusion of the essay is defended from one objection based on efficiency wage models of the labor market and from another based on the alleged impossibility of maintaining the self respect and self esteem of able bodied individuals who fail to earn their own keep independently in a market economy

human capital job matching and earnings growth between jobs an empirical analysis the process of job matching is complementary to human capital investment in determining earnings growth over the individual job history change in earnings associated with moving between jobs is portrayed as a result of matching in this paper the idea of job matching is refined to distinguish between job matching within firms and job matching across firms the derived hypotheses are supported by empirical results of a causal model which controls for human capital and personal endowment variables

the compelling effects of compulsory schooling evidence from canada abstract compulsory school laws have existed for more than a hundred years and policies to mandate further education continue to be discussed the implications of these laws however are not well understood historical changes to compulsory schooling in canada permit an examination of their effects on would be dropouts under very different circumstances than those during changes in other countries mandating education substantially increased adult income and substantially decreased the likelihood of being below the low income cut off unemployed and in a manual occupation these findings suggest significant gains from this legislation which seem unlikely offset by the costs incurred while having to remain in school jel classification i20 i28

temperature and seasonality influences on spanish electricity load abstract deregulation of the spanish electricity market in 1998 and the possible listing of electricity or weather derivative contracts have encouraged the study of the relationship between electricity demand and weather in spain in this paper a transfer function intervention model is developed for forecasting daily electricity load from cooling and heating degree days the influence of weather and seasonality is proved and is significant even when the autoregressive effects and the dynamic specification of the temperature are taken into account the estimated general model shows a high predictive power the results and information presented in this paper could be of interest for current users and potential traders in the deregulated spanish electricity market

segmented labor markets new evidence from a study of four race gender groups using data from a supplement to the 1983 current population survey the author tests hypotheses of segmented labor market theory two labor market sectors a primary sector and secondary sector are identified on the basis of occupational segmentation as inferred from workers answers to the question of whether specific skills or prior training were conditions for their employment the results show significant unexplained earnings differentials across sectors for each of four groups black men black women white men and white women other segmented labor market hypotheses are also generally supported by the results but distinct variations are found across the four groups

a test of dual labor market theory despite substantial differences in their views of the appropriate policy response to the existence of poverty neither the proponents of dual market theory nor its critics have proposed potentially conclusive tests of the dual market hypothesis this paper presents a test of the two central propositions of dual market theory 1 the existence of two distinct labor markets with different wage setting mechanisms and 2 the existence of barriers to mobility between the labor markets we find considerable support for both hypothesis estimation of a switching model of wage determination with unknown regimes yields two distinct wage equations the one which most workers are associated with closely resembles the standard human capital regression with significant returns to education and experience the other equation is flat with no returns to human capital these two equations resemble the predictions of dual market theory for the primary and secondary markets respectively further we present evidence that at least some non white workers are involuntarily confined to the secondary market this crowding of minority workers into the low wage labor market accounts for a substantial portion of white non white wage differences we interpret these results as providing empirical support for the dual market hypothesis and for recent theoretical work on efficiency wagemodels in addition combining the efficiency wage argument with the observation that much of the white non white wage difference is explained by the exclusion of non whites from the primary sector suggests an explanation for the persistance of wage differences this abstract was borrowed from another version of this item

does education raise productivity or just reflect it education has an important effect on wages but it not clear whether this is because education raises productivity or because education is simply a signal of ability we implement a number of existing tests for discriminating between these two explanations and find that they do not support the signalling hypothesis however we have severe reservations about these results and we propose an alternative test based on changes in education incentives caused by changes in the minimum school leaving age in the 1970s using this idea we find that uk data appear to strongly support the human capital explanation an important issue in the economics of education is that an individual s education has an effect on wages paid in the labour market for example blundell et al 2003 uses detailed education and subsequent earnings information for a cohort of male individuals born in 1958 to estimate that the returns to a uk degree typically of 3 year duration relative to graduating from high school at 18 with 2 a level qualifications a necessary but not sufficient condition for admission to university is a 24 wage premium human capital explanations pioneered by becker 1962 and schultz 1963 suggest that the correlation between education and wages is due to education enhancing productivity however earnings may rise in response to education not because of any effect on productivity but simply because education may act as a signal of productivity employers believing that education is correlated with productivity will screen workers for their education and pay higher wages to the more educated the employers beliefs will be confirmed by their experience if it is the case that high productivity individuals signal this by choosing high levels of education it will be optimal for individuals to behave in this way if the cost of acquiring education is less for high productivity individuals than it is for low productivity individuals thus under reasonable conditions the market will be characterised by a separating equilibrium where higher productivity individuals choose higher levels of education than lower productivity workers and earn correspondingly higher wages the theory is largely due to spence 1973 1979 and the subsequent empirical literature was reviewed by groot and oosterbeek 1994 riley 2001 provides an excellent modern survey chevalier harmon and walker are fellows of iza in bonn and are affiliated with the institute for the study of social change issc in dublin this paper is part of the issc policy evaluation programme chevalier and walker are also affiliated with the centre for the economics of education at the london school of economics lse the support of all of these bodies for facilitating our collaboration is acknowledged harmon is grateful to university college london for their hospitality during his nuffield foundation new career development fellowship in the social sciences comments from steve machin and three anonymous referees greatly improved the exposition of this paper we are also grateful to richard blundell and to seminar participants at the lse and the tinbergen institute in amsterdam for their comments and to vincent o sullivan for excellent research assistance the usual disclaimer applies

a procedure for testing the signalling hypothesis abstract this paper develops a procedure for testing the signalling hypothesis as advanced by spence et al the approach used is to examine directly the question of whether employers use education for purely informational purposes in their hiring decisions an application of the method to a recruitment by the swedish auto manufacturer volvo is presented

incentive compatible long term contracts and job rationing this article presents a model in which markets for long term contractual employment coexist with spot markets for labor assuming the absence of third party enforcement wage contracts are required to be incentive compatible as a consequence contract wages yield higher expected utility to the worker than spot market wages so that in equilibrium contractual long term jobs are rationed

forecasting next day electricity prices by time series models in the framework of competitive electricity markets power producers and consumers need accurate price forecasting tools price forecasts embody crucial information for producers and consumers when planning bidding strategies in order to maximize their benefits and utilities respectively this paper provides two highly accurate yet efficient price forecasting tools based on time series analysis dynamic regression and transfer function models these techniques are explained and checked against each other results and discussions from real world case studies based on the electricity markets of mainland spain and california are presented

the effect of education on crime evidence from prison inmates arrests and self reports we estimate the effect of high school graduation on participation in criminal activity accounting for endogeneity of schooling we begin by analyzing the effect of high school graduation on incarceration using census data instrumental variable estimates using changes in state compulsory attendance laws as an instrument for high school graduation uncover a significant reduction in incarceration for both blacks and whites when estimating the impact of high school graduation only ols and iv estimators estimate different weighted sums of the impact of each schooling progression on the probability of incarceration we clarify the relationship between ols and iv estimates and show that the weights placed on the impact of each schooling progression can explain differences in the estimates overall the estimates suggest that completing high school reduces the probability of incarceration by about 76 percentage points for whites and 3 4 percentage points for blacks we corroborate these findings using fbi data on arrests that distinguish among different types of crimes the biggest impacts of graduation are associated with murder assault and motor vehicle theft we also examine the effect of drop out on self reported crime in the nlsy and find that our estimates for imprisonment and arrest are caused by changes in criminal behavior and not educational differences in the probability of arrest or incarceration conditional on crime we estimate that the externality of education is about 14 26 of the private return to schooling suggesting that a significant part of the social return to education comes in the form of externalities from crime reduction

changes in compulsory schooling education and the distribution of wages in europe using data from 12 european countries and the variation across countries and over time in the changes of minimum school leaving age we study the effects of the quantity of education on the distribution of earnings we find that compulsory school reforms significantly affect educational attainment especially among individuals belonging to the lowest quantiles of the distribution of ability there is also evidence that additional education reduces conditional wage inequality and that education and ability are substitutes in the earnings function

human capital vs signalling explanations of wages increases wages by directly increasing the worker s productivity this learning explanation is usually associated with human capital theory however it seems unlikely that learning explains all the wage differences associated with schooling and work history better educated workers are not a random sample of workers they have lower propensities to quit or to be absent are less likely to smoke drink or use illicit drugs and are generally healthier it is unlikely that employers make full use of differences in propensities to quit or to be absent or sick when hiring workers these characteristics are often not directly observed and the americans with disabilities act precludes firms from using either poor health or the likelihood of future sickness as a hiring criterion unless it is directly related to job performance however if low levels of education are associated with these unfavorable employee characteristics and employers are allowed to take education into account when hiring workers we would expect employers to favor better educated workers as a means of reducing their costs of sickness and job turnover in turn students will take these hiring criteria into account when deciding how long to stay in school students will choose a length of schooling to signal their ability to employers and employers will demand a minimum level of schooling

educational reform ability and family background in this paper we evaluate the impact of a major school reform that took place in the 1950s in sweden on educational attainment and earnings the reform which has many common elements with reforms in other european countries including the uk consisted of increasing compulsor schooling imposing a national curriculum and abolishing selection by ability into academic and non academic streams at the age of 12 comprehensive school reform our data combines survey data with administrative sources we find that the reform increased both the educational attainment and the earnings of children whose fathers had just compulsory education however the earnings of those with educated parents declined possibly because of a dilution of quality at the top end of the education levels the overall effect of the reform was however positive

modeling and short term forecasting of new south wales electricity system load this article employs bayesian semiparametric regression methodology to model intraday electricity load data and obtain short term load forecasts the role of such forecasts in the new south wales wholesale electricity market is discussed and the method applied to new south wales system load data the semiparametric regression model used identifies daily periodic weekly periodic and temperature sensitive components of load each component is decomposed as a linear combination of basis functions with a nonzero probability mass that the corresponding coefficients are exactly zero three possible models for the errors are also considered including independent autoregressive and first differenced autoregressive models a moving window of data is used to overcome the slow time varying nature of the temperature and periodic effects the entire model is estimated using a bayesian markov chain monte carlo approach and forecasts are obtained using a monte carlo sample from the joint predictive distribution o

the screening hypothesis an application of the wiles test according to wiles 1974 the screening and human capital theories of the return to education may be discriminated between by determining whether qualified individuals earn more by working in areas where their skills are relevant than they earn in other areas failure to do so is presumed to constitute evidence against human capital theory this paper applies the wiles test to a census of recent economics and science graduates from australian universities only for male science graduates is any evidence found in favour of human capital theory

minimum wage legislation in a dual labor market the paper studies the equilibrium effects of minimum wage legislation in an economy with coexisting primary and secondary labor markets owing to difficulties in monitoring relative wages and the threat of job loss play a functional role in eliciting effort from primary sector workers minimum wage laws hence affect the primary wage and employment level even if the law only binds in the secondary labor market furthermore interaction between the two sectors can also alter the secondary outcome relative to the standard analysis and has implications for participation decisions and for the level of unemployment

density forecasting for long term peak electricity demand long term electricity demand forecasting plays an important role in planning for future generation facilities and transmission augmentation in a long term context planners must adopt a probabilistic view of potential peak demand levels therefore density forecasts providing estimates of the full probability distributions of the possible future values of the demand are more helpful than point forecasts and are necessary for utilities to evaluate and hedge the financial risk accrued by demand variability and forecasting uncertainty this paper proposes a new methodology to forecast the density of long term peak electricity demand peak electricity demand in a given season is subject to a range of uncertainties including underlying population growth changing technology economic conditions prevailing weather conditions and the timing of those conditions as well as the general randomness inherent in individual usage it is also subject to some known calendar effects due to the time of day day of week time of year and public holidays a comprehensive forecasting solution is described in this paper first semi parametric additive models are used to estimate the relationships between demand and the driver variables including temperatures calendar effects and some demographic and economic variables then the demand distributions are forecasted by using a mixture of temperature simulation assumed future economic scenarios and residual bootstrapping the temperature simulation is implemented through a new seasonal bootstrapping method with variable blocks the proposed methodology has been used to forecast the probability distribution of annual and weekly peak electricity demand for south australia since 2007 the performance of the methodology is evaluated by comparing the forecast results with the actual demand of the summer 2007 2008

segmented labour markets in australia the concept and measurement of segmented labour markets has received little attention in australia here a method for establishing a taxonomy of occupaions according to characteristics associated with the segmented labour market hypothesis is presented using this taxonomy the distribution of workers in australia according to gender migrant status and trade union membershipis examined

vive la revolution long term educational returns of 1968 to the angry students the famous events of may 1968 starting with student riots threw france into a state of turmoil as a result normal examination procedures were abandoned and the pass rate for various qualifications increased enormously the lowering of thresholds at critical stages of the education system enabled a proportion of students to pursue more years of higher education than would otherwise have been possible for those on the margin of passing their examinations additional years of higher education increased future wages and occupational levels interestingly the effect is also transmitted across generations and is reflected in the educational performance of children

high school completion and future youth unemployment new evidence from high school and beyond in this paper i provide new evidence from high school and beyond hsb on the effects of compulsory attendance on high school completion and future youth unemployment i develop bayesian estimation approaches to the simultaneous equation model with ordered probit and two limit censored regression and the bivariate duration model accounting for the heterogeneity in returns to education and the nonlinearity in the effects of compulsory attendance i find substantial variability in returns to education across schools and evidence of diminishing marginal effects of compulsory attendance on high school completion the simulation results suggest that increasing the compulsory attendance age raises the probability of completing high school and reduces the proportion of time the individuals are unemployed these effects are much more pronounced for disadvantaged students but less pronounced for advantaged students suggesting the potential effects of compulsory attendance on reducing the inequality in education and employment copyright 2005 john wiley sons ltd

undocumented mexico u s migration and the returns to households in rural mexico this paper presents estimates of net income gains to a sample of households in rural mexico from sending migrants illegally to the united states correcting for sample selectivity bias and it examines the role of expected income gains in driving illegal mexico u s migration there is no evidence that people who migrate illegally to the united states are above average contributors to household income either as workers in mexico or as mexico u s migrants however other things being equal villagers who are in the best position to contribute to household income as workers in mexico are positively selected not to migrate to the united states