wealth concentration over the path of development sweden 1873 2006 we study wealth concentration in sweden over 130 years from the beginning of industrialization until the present day our series are based on new evidence from estate and wealth tax data foreign and domestic family firm wealth and pension wealth estimates we find that swedish wealth concentration was high in the agrarian state and changed little during early industrialization from world war i until about 1950 the richest percentile lost ground to high income earners in the rest of the top wealth decile this equalization continued postwar the entire top decile lost out relative to the rest of the population around 1980 wealth compression stopped and inequality increased we approximate the effects of international flows and find that the recent increase in wealth inequality is probably larger than what official estimates suggest

changing inequality in markets for workplace amenities among u s industries where earnings rose relatively from 1979 1995 injury rates declined relatively obversely during the 1960s narrowing interindustry wage differentials were associated with an increase in the relative risk of injury in high wage industries evidence from the nlsy suggests similar results among full time workers between 1988 and 1996 between 1973 and 1991 the disamenity of evening night work was increasingly borne by low wage male workers changing earnings inequality has understated changing inequality in the returns to work assuming skill neutral changes in the cost of reducing these disamenities estimates of the implied income elasticities of demand for amenities are well above unity

agenda restrictions in multi issue bargaining abstract we study a bilateral multi issue bargaining procedure with complete information and endogenous agenda in the procedure proposals must be made on only one issue at a time although the proposer can choose which issue to bring to the table when bargaining frictions are small there is a large multiplicity of equilibrium agreements including ones with delay however equilibrium payoffs cannot be made arbitrarily small perpetual disagreement cannot be supported in equilibrium this multiplicity contrasts with the uniqueness found in the literature for a procedure where offers can be made in any subset of remaining issues

monetary policy and uncertainty in an empirical small open economy model this paper explores optimal policy design in an estimated model of three small open economies australia canada and new zealand within a class of generalized taylor rules we show that to stabilize a weighted objective of output consumer price in ation and nominal interest variation optimal policy does not respond to the nominal exchange this is despite the presence of local currency pricing and due in large part to observed exchange rate disconnect in these economies optimal policies that account for the uncertainty of model estimates as captured by the parameters posterior distrbution similarly exhibit a lack of exchange rate response in contrast to brainard 1967 the presence of parameter uncertainty can lead to more or less aggressive policy responses depending on the model at hand

changes in labor force composition and male earnings a production approach models of aggregate production are estimated and used to investigate the effects of changes in labor force composition on the recently observed decline in the earnings of college graduates relative to other workers and on the fall in the earnings of younger workers relative to older workers changes in labor force composition explain substantial proportions of these observed earnings changes the most important compositional change appears to have been the rapid increase in the number of young male college graduates projections outside the sample are consistent with depressed earnings throughout the lifetimes of the large baby boom cohorts especially among college graduates but do not suggest that depressed college graduate earnings are a permanent phenomenon for all birth cohorts

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

contractual solutions to the hold up problem this paper considers a general version of the hold up problem where n agents first make relation specific investments and then must agree on some collective action it is shown that first best solutions exist under a variety of different assumptions about the nature of information asymmetries

does public insurance crowd out private insurance the cost of expanding public sector health programs depends critically on the extent to which public eligibility will cover just the uninsured or will crowd out existing private insurance coverage we estimate the extent of crowd out arising from the expansions of medicaid to pregnant women and children over the 1987 1992 period we estimate that approximately 50 percent of the increase in medicaid coverage was associated with a reduction in private insurance coverage this occurred largely because employees took up employer based insurance less frequently there is also some evidence that employers contributed less for insurance and that workers dropped coverage of dependents

the effect of cohort size on earnings growth a reexamination of the evidence this study reexamines the effect of cohort size on earnings growth finis welch finds that individuals in larger cohorts experience depressed earnings conditions on entry into the labor market but that their earnings grow at faster rates than in smaller cohorts thus a large portion of the cohort size effect on earnings dissipates after a few years however using data almost identical to those of welch but estimating less restrictive models it is found here that cohort size not only depresses earnings at entry but also seems to slow down early career earnings growth the evidence suggests that earnings ini larger cohorts do not approach normal levels after at brief period in the labor force rather the negative cohort size effect on earnings appears to worsen with experience

nondiscrimination rules and the distribution of fringe benefits this article considers the impact of nondiscrimination nd rules in the federal tax code nondiscrimination rules limit within firm inequality in the provision on nonwage benefits but they place no corresponding limit on within firm inequality in wages firms can skirt nd rules by moving workers with unusual benefits into part time and seasonal positions because workers in such positions are excluded from some nd compliance calculations we examine these issues empirically and find relationships consistent with the hypothesis that nd rules provide a binding constrain on within firms benefits inequality

from the fringe to the fore labor unions and employee compensation conventional wisdom suggests that labor unions raise worker wages while the newer empirical literature finds only negligible earnings effects i reconcile this apparent contradiction by arguing th

the value of fiscal discipline for oil exporting countries abstract the value of fiscal discipline is assessed by analyzing the role of fiscal policy as a transmission mechanism of oil price shocks in oil exporting small open economies fiscal policy is an important propagation channel taking policy as given by the data the model can successfully explain the responses of key macroeconomic variables but it is unable to explain these responses under counterfactual fiscal frameworks interestingly fiscal policy also seems capable of regulating the size of pass through furthermore fiscal policies that insulate the economy from oil price shocks seem to be welfare improving over procyclical ones

why did male pension coverage decline in the 1980s this analysis of 1979 and 1988 may current population survey data suggests explanations for why male pension coverage declined during the 1980s and why the decline was particularly pronounced among young workers during the 1980s employment shifted toward jobs with lower pension coverage and this shift was more pronounced among young workers than among older workers more important than the reduction in the percentage of workers offered pensions however was reduced participation in pension plans one factor contributing importantly to declining participation rates was the growing share of pensions that were 401 k plans under such plans participation is more voluntary than it is under other plans and young workers are more likely than older workers to decline to participate

interpreting the macroeconomic time series facts the effects of monetary policy existing theory and evidence on the effects of monetary policy are reviewed substantial room for disagreement among economists remains new evidence based on multivariate time series studies of several countries is presented while certain patterns in the data consistent with effective monetary policy are strikingly similar across countries others particularly the tendency of interest rate increases to predict high inflation are harder to reconcile with effective monetary policy

the retirement wealth of the baby boom generation abstract the paper compares the well being of the baby boom generation ages 40 55 in 2001 with the same age group in 1983 i find little evidence that their relative position deteriorated over the period by some indicators this generation has seen an improvement in terms of income the 40 55 age group was at about the same relative position in 2001 as in 1983 in terms of conventional wealth there was some slippage over the period in terms of mean augmented wealth net worth plus pension and social security wealth their relative position improved somewhat but in terms of median augmented wealth there was again some slippage

cohort size and the earnings growth of young workers this study used data from the 1968 75 current population surveys cps and the national longitudinal survey of young men nls to examine the effect of cohort size on earnings profiles in the us the elasticity of earnings growth with respect to cohort size was negative in each of the regressions analyzed indicating flatter earnings profiles and slower earnings growth for large cohorts a larger proportion of workers in large cohorts appear to choose occupations with less training content and flatter earnings profiles than workers in small cohorts in addition workers in large cohorts may find it advantageous to reduce their investments in training the negative effect of cohort size generally carried over to other schooling and gender groups only for the 2 lowest male schooling groups in the cps samples were the cohort size elasticities positive the cohort size elasticity displayed a larger negative effect for college graduates than for high school graduates or those with some college education the predicted earnings growth of college graduates is 11 6 less than that of high school graduates using the male cps parameter estimates 25 3 less with the female cps estimates and 6 less with the nls estimates these estimates are consistent with freemans finding that the longitudinal earnings profiles of college graduates have flattened relative to those of high school graduates in recent years since the initial earnings depression caused by cohort size widens with age as larger cohorts move along flatter earnings profiles the baby boom cohorts earnings levels may remain depressed throughout their careers on the other hand the smaller cohorts entering the labor market during the 1980s are likely to experience more favorable labor market conditions and faster earnings growth

bargaining piecemeal or all at once perfect information rubinstein style bargaining models are used to explore questions about multiple issue bargaining is it ever sensible to offer on only a subset of the issues being bargained what is the effect of limiting offers so that they must cover all issues we conclude that in realistic settings the answer to the first question is yes and that restricting offers to those covering all issues may be harmful to one or both parties

vector autoregressions and reduced form representations of dsge models abstract the performance of dynamic stochastic general equilibrium models is often tested against estimated vars this requires that the data generating process consistent with the dsge theoretical model has a finite order var representation this paper discusses the assumptions needed for a finite order var p representation of a dsge model to exist when a var p is only an approximation to the exact infinite order var the truncated var p may return largely incorrect estimates of the impulse response function the results do not hinge on small sample bias or on incorrect identification assumptions but the bias introduced by truncation can lead to bias in the identification of the structural shocks identification strategies that work in the exact var representation perform poorly in the truncated var

bargaining and reputation the paper develops a reputation based theory of bargaining the idea is to investigate and highlight the influence of bargaining postures on bargaining outcomes a complete information bargaining model a la rubinstein is amended to accommodate irrational types who are obstinate and indeed for tractability assumed to be completely inflexible in their offers and demands a strong independence of procedures result is derived after initial postures have been adopted the bargaining outcome is independent of the fine details of the bargaining protocol so long as both players have the opportunity to make offers frequently the latter analysis yields a unique continuous time limit with a war of attrition structure in the continuous time game equilibrium is unique and entails delay consequently inefficiency the equilibrium outcome reflects the combined influence of the rates of time preference of the players and the ex ante probabilities of different irrational types as the probability of irrationality goes to zero delay and inefficiency disappear furthermore if there is a rich set of types for both agents the limit equilibrium payoffs are inversely proportional to their rates of time preference

taxation depletion and welfare a simulation study of the u s petroleum resource abstract exhaustible resources in the united states are subject to taxes on property value production and corporate income as applied in practice each tax can cause high grading the elimination of incentives to explore develop and produce marginal resources and each can tilt the time path of production toward the present or the future the potential for such tax induced distortions has been shown in the theoretical literature due to the dynamic nature of resource exploitation and the resulting complexity of models developed to study it however purely theoretical exercises have been unable to provide detailed results of a sort that could help guide tax policy the present paper develops a simulation model of the u s petroleum resource and uses it to study the effects of taxation on exploration and production the model is partial equilibrium in scope and views the industry as a present value maximizing representative firm given expectations on the future time path of price and a function that relates reserve additions to exploratory effort the industry chooses time paths for exploration and production parameters of relevant functions are estimated with data for u s petroleum operations in the onshore region of the lower 48 states the simulated outcomes indicate that property and production severance taxes cause substantial deadweight losses a tax on corporate income from extraction imposes a very small deadweight loss and the property tax significantly biases utilization of the resource away from the future and toward the present

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

new evidence on cyclical variation in average labor costs in the united states we provide new evidence on the cyclicality of employers real labor costs using bls establishment job data for the 1982 2018 period average straight time wages have become countercyclical since th

new evidence on pensions social security and the timing of retirement using a unique dataset that links the economic and demographic information of households with the details of their pension formulas i estimate the combined effect of social security and pension benefits on the probability of retirement in a cross section of the population near retirement age the accrual rate of retirement wealth is shown to be a significant determinant of the probability of retirement simulations of extensions in pension coverage comparable to those that occurred in the early postwar period can account for one fourth of the contemporaneous decline in labor force participation rates 1998 elsevier science s a all rights reserved

multi issue bargaining with endogenous agenda abstract the first part of this paper shows that in a noncooperative bargaining model with alternating offers and time preferences the timing of issues the agenda matters even if players become arbitrarily patient this result raises the question of which agenda should come up endogenously when agents bargain over a set of unrelated issues it is found that simultaneous bargaining over packages should be a prevailing phenomenon but we also point to the possibility of multiple equilibria involving even considerable delay journal of economic literature classification number c78

the importance of the agenda in bargaining abstract this paper discusses a multi issue bargaining game in which the players set up an agenda and negotiate on the issues sequentially according to this agenda we demonstrate that the agenda might play an important role in the bargaining and discuss the relationship between the agenda and the final outcome of the bargaining game assuming that players have conflicting evaluations regarding the importance of the issues under negotiation we identify the type of agenda each player prefers we also show that in such cases the outcome of the bargaining game need not to be efficient by demonstrating the strategic use of the agenda the paper explains the phenomenon of bargaining on the agenda

the taxation of exhaustible resources the efficiency and equity effects of unit yield property and windfall profits taxes upon nonrenewable resources are compared the yield tax is the most efficient and unit and property taxes are the least efficient of current taxes if the base price of the windfall profits tax is set close to extraction cost the windfall profits tax can be even more efficient than the yield tax all the tax burdens fall primarily upon owners in fact with the property and windfall profits taxes consumers can even be made better off 4 references 7 tables

the effect of unions on the receipt of unemployment insurance benefits using national longitudinal survey of youth data for 1979 91 the authors analyze the effect of union representation on the likelihood that individuals eligible for unemployment insurance ui bene

do 401 k contributions crowd out other personal saving during the late 1980s contributions to 401 k plans eclipsed contributions to individual retirement accounts iras as the leading form of tax deferred individual retirement saving in the united states in this paper we describe patterns of participation in 401 k plans contrast these patterns with ira participation and evaluate the net impact of 401 k contributions on personal saving we find that 401 k participation conditional on eligibility exceeds 60 at all income levels in contrast ira participation at the height of that program rose sharply with income we use two methods to evaluate the net saving effect of 401 k contributions on personal saving we compare the financial assets of families who are eligible for 401 k saving with the assets of those who are not eligible and we consider the change over time in the assets of like groups of savers we find little evidence that 401 k contributions substitute for other forms of personal saving including ira contributions

imperfect competition and the effects of energy price increases on economic activity the authors show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil plausibly parameterized models of this type are able to mimic the response of output and real wages in the united states the responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output copyright 1996 by ohio state university press

the current account and precautionary savings for exporters of exhaustible resources abstract exporters of exhaustible resources have historically exhibited higher income volatility than other economies suggesting a heightened role for precautionary savings this paper uses a parameterized small open economy model to quantify the role of precautionary savings for exporters of exhaustible resources when the only source of uncertainty is the price of the exhaustible resource the parameterized model fares moderately well at capturing current account balances in both cross section and time series data the results show that the precautionary motive can generate sizable external sector savings the more so the greater the weight of exhaustible resource revenues in future income

delays and partial agreements in multi issue bargaining abstract we model a situation in which two players bargain over two pies one of which can only be consumed starting at a future date suppose the players value the pies asymmetrically one player values the existing pie more than the future one while the other player has the opposite valuation we show that players may consume only a fraction of the existing pie in the first period and then consume the remainder of it along with the second pie at the date at which the second pie becomes available thus our model features a special form of bargaining delay in which agreements take place in multiple stages such partial agreements arise when players are patient enough when they expect the second pie to become available soon and when the asymmetry in their valuations is large enough

exploration and scarcity noting that a suggested measure of natural resource scarcity resource rent is unobservable we show that rent is linked to observable marginal exploration cost a two period model of extraction and exploration reveals that rent is equal to this cost when discovery is certain under risky exploration cost data can be used to bound rent the model also indicates how exploration uncertainty affects the competitive firm s extraction and exploration decisions finally the behavior of u s oil and gas exploration costs suggests that these costs were rising in the postwar era which has different implications for scarcity than indicated by other measures of scarcity

bargaining in a long term relationship with endogenous termination abstract this paper studies a dynamic game of perfect information in which two players start bargaining over the partition of a new cake each time agreement is struck over the partition of an existing cake negotiations over the partition of each cake take place according to rubinstein s alternating offers model the parameters of the model are the players rates of time preference the time interval between two consecutive offers and the lag time between the end of one set of negotiations and the start of the next we characterize the unique stationary perfect equilibrium and investigate the possible existence of non stationary equilibria journal of economic literature classification numbers c73 c78

tax incentives and the decision to purchase health insurance evidence from the self employed the tax reform act of 1986 introduced a new tax subsidy for health insurance purchases by the self employed we analyze the changing patterns of insurance demand before and after tax reform to generate new estimates of how the after tax price of insurance affects the discrete choice of whether to buy insurance we employ both traditional regression models and difference in difference methods that compare changes in insurance coverage across groups around tra86 the results from our most carefully controlled comparison suggest that a 1 percent increase in the cost of insurance coverage reduces the probability that a self employed single person will be insured by 1 8 percentage points

agenda restrictions in multi issue bargaining ii unrestricted agendas we study a bilateral multi issue bargaining procedure with complete information and endogenous unrestricted agenda in which offers can be made in any subset of outstanding issues we find necessary and sufficient conditions for this procedure to have a unique subgame perfect equilibrium agreement

commodity price volatility with endogenous natural resources abstract natural resource reserves are exogenous in models of small commodity exporters changes in the stock of reserves play no role in the macroeconomy including in business cycle volatility trade dynamics or exchange rate volatility we consider richer supply dynamics and model exploration and depletion we show that an endogenous supply of reserves is important for capturing the stylised facts associated with commodity price shocks including a commodity currency the crowding out of non commodity activity dutch disease and a volatile business cycle we also consider how exploration and depletion affect the ranking of optimal monetary and taxation policies when natural resource reserves are held fixed monetary policy is an efficient tool for stabilising the effects of commodity price shocks however when exploration and depletion are accounted for using interest rates to stabilise the effects of commodity price changes becomes inefficient using taxes on the resource sector specifically an ad valorem royalty remains efficient

gender differences in pensions the causes of gender differences in pensions are examined for retirees and employees using the 1982 newly entitled beneficiary survey and the 1979 and 1988 may current population surveys for both retirees and the employed population much of the gender gap in coverage is accounted for by gender differences in labor market characteristics while children and marriage have a negative effect on female coverage among retirees even after controlling for labor market characteristics the negative effect is not observed among more recent groups of female employees finally recent convergence of male and female labor market characteristics contributed to a decline in the coverage gap during the 1980s

the role of pensions in the labor market a survey of the literature because employer sponsored group pension plans entail agreements between workers and their employers explicitly linking future payment and employment they offer an unusual window into long term employment relationships this review of recent research on pensions explores how pensions influence employee compensation retirement turnover and other matters central to the determination of labor s price and quantity over time the authors also outline some unanswered questions and difficult to reconcile findings because the pension promise involves an explicit and relatively well documented set of statements regarding future contingent payment and employment an examination of the design and operation of employersponsored group pension plans can yield important insights into the long term employment relationship specifically pension research illuminates some important labor market questions in two ways it offers insight into an important element of compensation in its own right and it furthers our understanding of labor markets in which long term

severance taxes and market structure in an exhaustible resource industry abstract this paper compares the effects of a severance tax on profit maximizing competitive and monopolistic firms which explore and produce an exhaustible resource the producers response to the tax are studied and the deadweight losses from the tax are calculated time paths of exploratory effort extraction and price are computed severance taxes lead both producers to reduce production and exploration and cause a shift in the time path for prices the deadweight losses from the tax are low especially in competition the losses in the monopoly case are relatively higher with the tax burden falling mainly on the monopolistic producer

too much coal too little oil abstract our main message is that it is optimal to use less coal and more oil once one takes account of coal being a backstop which emits much more co2 than oil the way of achieving this is to have a steeply rising carbon tax during the initial oil only phase a less steeply rising carbon tax during the intermediate phase where oil and coal are used alongside each other and the following coal only phase and a flat carbon tax during the final renewables only phase the laissez faire outcome uses coal forever or starts with oil until it is no longer cost effective to do so and then switches to coal we also analyze the effects on the optimal transition times and carbon tax of a carbon free albeit expensive backstop solar or wind energy subsidizing renewables to just below the cost of coal does not affect the oil only phase the gain in green welfare dominates the welfare cost of the subsidy if the subsidy gap is small and the global warming challenge is acute without a carbon tax a prohibitive coal tax leads to less oil left in situ and substantially delays introduction of renewables but curbs global warming substantially as coal is never used finally we characterize under general conditions what the optimal sequencing oil and coal looks like

waiting to persuade i analyze a sequential bargaining model in which players are optimistic about their bargaining power measured as the probability of making offers but learn as they play the game i show that there exists a uniquely predetermined settlement date such that in equilibrium the players always reach an agreement at that date but never reach one before it given any discount rate if the learning is sufficiently slow the players agree immediately i show that for any speed of learning the agreement is delayed arbitrarily long provided that the players are sufficiently patient therefore although excessive optimism alone cannot cause delay it can cause long delays if the players are expected to learn

wages and participation during the last 25 years annual hours worked by prime aged men fell by the equivalent of six 40 hour workweeks the reduction was more pronounced among those younger than among mid age workers among black men than among white men and among those with less schooling thus hours worked not only fell but showed increased dispersion increases that paralleled the growth in wage dispersion that has become so familiar to students of trends in wages the argument advanced here is that the correspondence is not coincidental the changes in hours worked are simply the labor supply responses that follow the changes in the structure of wages

commodity currencies and the real exchange rate abstract this paper examines whether the real exchange rates of commodity exporting countries and the real prices of their commodity exports move together over time using international monetary fund imf data on the world prices of 44 commodities and national commodity export shares we construct new monthly indices of national commodity export prices for 58 commodity exporting countries over 1980 2002 evidence of a long run relationship between national real exchange rate and real commodity prices is found for about one third of the commodity exporting countries the long run real exchange rate of these commodity currencies is not constant as would be implied by purchasing power parity based models but is time varying being dependent on movements in the real price of commodity exports

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

unionization and profitability evidence from the capital market this paper examines the effect of unionization on the profitability of firms abnormal monthly common stock returns for a sample of 253 nyse listed firms are estimated for the month in which the union petitions for an election and for the month in which the national labor relations board certifies the election outcome the results suggest that unionization on average is associated with a reduction in equity value when unions win an election the average loss associated with the unionization drive is 3 8 percent of equity value when unions lose an election there is an average net reduction of 1 3 percent in the equity value of the firm

fringe benefits and inequality in the labor market 1 introduction wage inequality has been the topic of much recent empirical research similarly inequality in the distribution of fringe benefits has also been studied 1 on the whole the vast majority of research on inequality has examined wages and fringe benefits separately even though the cross sectional relationship between the two has been emphasized and analyzed in terms of the theory of equalizing differences rosen 1986 states the equalizing difference model is built upon the simple and intuitively compelling idea that it is the combination of wages and job attributes that constitute the relevant price of labor for market analysis of jobs thus inequality analysis based on either wages or fringe benefits alone can overlook the interaction between them and be misleading given equal productivity workers would trade fringe benefits for higher wages and vice versa however across different levels of productivity skilled workers will demand more fringe benefits simply because the benefits are normal goods moreover fringe benefits unlike wages are not taxed and skilled workers who face higher marginal tax rates are likely to demand more fringe benefits overtime one can expect the discrepancy between wages and compensation to grow because wages represent a smaller fraction of compensation 2 a few studies show potential biases in measured inequality when wages are used instead of compensation 3 however the inequality of fringe benefits at the level of the individual workers can be analyzed by focusing on the coverage rate of health insurance and pensions without knowing the monetary value of them due to data availability 4 moreover even though compensation inequality can be analyzed when the monetary values of fringe benefits are available it can be analyzed only at the level of the industry or job not at the level of the individual worker this research is different in that it uses individual level data with imputed monetary values for fringe benefits to analyze inequality in the labor market at a point in time and its growth over time deeper investigation has been conducted within the distribution to ascertain how each group is affected when fringe benefits are accounted for several alternative explanations of the observed discrepancies between wage inequality and compensation inequality are further assessed the remainder of this article is organized as follows section ii describes in detail the data used in this study section iii supplies the empirical results possible explanations for which are explored in section iv section v provides a conclusion ii data the lack of suitable data has precluded analysis of compensation inequality despite widespread interest in the topic until now no data set has contained information on both the demographic characteristics of workers and the monetary value of fringe benefits however such a data set has been created by merging individual level data from the current population survey cps and industry level data from the chamber of commerce s employee benefits survey bbs the march supplement of the cps for 1988 to 1995 supplies information on age gender years of schooling occupation of employment industry of employment wages weeks worked health insurance and pension coverage and imputed monetary value of health insurance for the year preceding the march survey year this annual survey is the largest source of information on fringe benefits and first included questions on health insurance and pension coverage in 1980 although the questionnaire items regarding health insurance were changed twice in survey years 1988 and 1995 i mitigate the problem by restricting the sample to workers ages 25 to 54 the group that the census bureau reports is the least likely to be affected gruber and poterba 1994 and by restricting the survey years to 1988 onward to focus on employer provided own health insurance coverage which is also less likely to be affected by the changes in the cps questionnaire on health insurance coverage

ownership risk investment and the use of natural resources the effect of insecure ownership on ordinary investment and natural resource use is examined insecure ownership is postulated to depend on the type of government regime in power and the prevalence of political violence or instability the political determinants of economy wide investment are estimated from cross country data and the results are used to form an index of ownership security when introduced into empirical models of natural resource use this index has a significant and quantitatively important effect on the use of forests and petroleum contrary to conventional wisdom ownership risk slows resource use in some circumstances

the impact of new unionization on wages and working conditions this study investigates the impact of union organization on the wages and labor practices of establishments newly organized in the 1980s it uses a research design in which establishments are paired with their closest nonunion competitor it finds that unionism had only a modest effect on wages in the newly organized plants which contrasts sharply with the huge union wage impact found in cross section comparisons of union and nonunion individuals but unionism substantially alters several personnel practices creating grievance systems greater seniority protection and job bidding and posting that newly organized establishments adopt union working conditions but grant only modest wage increases suggests that collective voice rather than monopoly wage gains is the key to understanding new unionism

unobservable investment and the hold up problem we study a two person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining we show that if all offers are made by the seller and the time between offers is small then the buyer invests efficiently and the seller extracts all of the surplus hence bargaining with frequently repeated offers remedies the hold up problem even when the agent who makes the relation specific investment has no bargaining power and contracting is not possible we consider alternative formulations with uncertain gains from trade or two sided investment

exogenous oil supply shocks how big are they and how much do they matter for the u s economy abstract the paper proposes a new measure of exogenous oil supply shocks the timing the magnitude and the sign of this measure may differ greatly from current state of the art estimates it is shown that only a small fraction of the observed oil price increases during oil crisis periods can be attributed to exogenous oil production disruptions exogenous oil supply shocks cause a sharp drop of u s real gdp growth after five quarters rather than an immediate and sustained reduction in economic growth and a spike in cpi inflation after three quarters overall exogenous oil supply shocks made remarkably little difference for the evolution of the u s economy since the 1970s although they did matter for some historical episodes

international risk sharing and commodity prices cole and obstfeld 1991 exposited a classic result where equilibrium movements in the terms of trade could make ex ante risk sharing arrangements unnecessary a unity elasticity of substitution across goods and production specialization this paper extends their model to n countries and m commodities n m here the terms of trade provides insurance against commodity specific shocks not country specific shocks using commodity level production data at the national level and world commodity prices we document significant terms of trade variability and positive responses of nation specific production to terms of trade improvements the endogenous terms of trade insurance mechanism highlighted in co is virtually non existent cole et obstfeld 1991 ont developpe un resultat classique montrant que les mouvements d equilibre dans les termes d echange pouvaient faire l economie d arrangements ex ante pour le partage du risque une elasticite de substitution unitaire entre biens et specialisations dans la production ce texte developpe leur modele pour n pays et m biens n m les termes d echange fournissent l assurance contre les chocs specifiques a certains biens mais non contre les chocs en provenance de certains pays utilisant des donnees de production au niveau des biens au plan national et des prix des biens au niveau mondial on observe une variabilite significative des termes d echange et des reponses positives de la production specifiquement nationale aux ameliorations dans les termes d echange le mecanisme endogene d assurance via les termes d echange mis en lumiere par co est virtuellement non existant

extraction costs and the economics of nonrenewable resources the study questions the fundamental assumption of the standard aggregate exploration extraction model of nonrenewable resources that extraction costs and the level of reserves are inversely related it also raises questions about the model s conclusions regarding exploration incentives and the valuation of reserves an empirically tested disaggregate model is presented that suggests that exploration activity occurs from firms attempting to balance marginal extraction plus user costs at the intensive and extensive margins exploration is carried out until the marginal discovery cost of a deposit equals its present asset value and a u shaped price path is indicated

the impact of pension benefits on the distribution of earned income using standard measures of income inequality and detailed pension benefit information on participants in the 1983 survey of consumer finances scf the authors investigate how pension benefits affected the distribution of earned income the results suggest that private pensions increased annual income inequality relative to inequality observed in the distribution of wage income by only about 2 among all employed individuals but by 21 among unionized workers further analysis indicates that private pensions raised annual income inequality primarily by increasing the rate of return to tenure possibly through pension backloading setting accruals to grow when earnings rise near retirement and the increasing incidence of pensions with age private pensions had little effect on estimates of the distribution of expected lifetime income but the addition to the analysis of social security benefits public pensions strongly reduced inequality in that distribution a renewed interest in the distribution of income has developed recently as new evidence suggests that income inequality has worsened over the past twenty years researchers suggest several reasons for rising inequality including an increase in the incomes of well educated men relative to other groups for example juhn murphy and pierce 1993 demographic changes resulting from the entrance of the baby boom generation into the work force lawrence 1982 and a sectoral shift away from manufacturing and toward the ser

the implications of job matching for retirement health insurance and leave benefits this paper focuses on potential reasons for variations in benefit packages in particular variations in the availability of retirement health insurance and leave an important feature of our analysis is that we do not start with heterogeneity in workforces to explain fringe benefit differences across employers it would be straightforward to say that differences across employers in fringe benefit packages simply represent differences in the preferences of their workforces rather we focus on heterogeneity across employers as an important source of differences in fringe benefit packages preliminary evidence is found supportive of the predicted differences in the likelihood of such fringe benefits as retirement health insurance and leave based upon two variables the extent of on the job training offered by the employer and the size of the employers we also examine the implied links between these fringe benefits and such variables as average tenture and the proportion of the workforce that is female

health insurance and income inequality health insurance and other in kind forms of compensation and government benefits are typically not included in measures of income and analyses of inequality this omission is important given the large and growing cost of health care in the united states and the presence of large government health insurance programs such as medicaid and medicare it is crucial to understand how health insurance and related public policies contribute to measured economic well being and inequality our paper assesses the effect on inequality of the primary government programs that affect health insurance

bargaining frictions bargaining procedures and implied costs in multiple issue bargaining the paper explores how bargaining frictions and bargaining procedures interact to determine players bargaining costs in multiple issue bargaining settings when bargaining frictions take the form of discounting and agreements are implemented as they are reached issue by issue negotiation can generate bargaining costs different from those that occur if all issues are bargained simultaneously these cost differences result in differences in allocations across bargaining procedures such that players disagree on the desired method of bargaining similar results hold for certain fixed cost bargaining friction specifications this analysis provides a potential explanation of both agenda bargaining and incomplete contracts

taxes fringe benefits and faculty the growth of employee benefits in academe has closely paralleled their economy wide growth this study estimates a complete system describing the demand for benefits and wages using panel data on 1477 institutions of higher learning the demand for benefits is very responsive to changes in real income and the tax price of benefits these conclusions are robust with respect to varying definitions of the tax price treating it as endogenous and accounting for unmeasured individual effects on demand simulations suggest that the tax reform act of 1986 sharply reduced the demand for benefits extrapolating the impact to the entire economy the annual flow of compensation shifted away from benefits by at least 15 billion copyright 1992 by mit press

the economics of exploration for non renewable resources abstract the literature on exploration for non renewable resources is surveyed following a brief synopsis in section 2 section 3 focuses on issues related to the world market for resources section 4 considers more microeconomic supply related issues linked to the exploration of the small region or play section 5 turns to the small but growing literature on exploration as a learning process related to r d the latter sections pay particular attention to empirical and policy aspects

monetary policy response to oil price shocks how should monetary authorities react to an oil price shock this paper shows that in a noncompetitive economy policies that perfectly stabilize prices entail large welfare costs hence explaining the reluctance of policymakers to enforce them the policy trade off is nontrivial because oil energy is an input to both production and consumption as welfare maximizing policies are hard to implement and communicate i derive a simple interest rate rule that depends only on observables but mimics the optimal plan in all dimensions the optimal rule is hard on core inflation but accommodates oil price changes

boom or gloom examining the dutch disease in two speed economies traditional studies of the dutch disease do not account for productivity spillovers between the booming resource sector and other domestic sectors we put forward a simple theory model that allows for such spillovers we then identify and quantify these spillovers using a bayesian dynamic factor model the model allows for resource movements and spending effects through a large panel of variables while also identifying disturbances to other shocks using australia and norway as representative cases studies we find that a booming resource sector has substantial productivity spillovers on non resource sectors effects that have not been captured in previous analysis

plant size and the decline of unionism abstract declining plant size is shown to explain a significant portion of the recent decline in unionism particularly in manufacturing the paper also shows how to use the probit model to decompose the change in unionism into explained and unexplained components