minimum wages and training revisited theory predicts that minimum wages will reduce employer provided on the job training designed to improve workers skills on the current job but it is ambiguous regarding training that workers obtain to qualify for a job we estimate the effects of minimum wages on both types of training received by young workers exploiting cross state variation in minimum wage increases much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job but there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs

industrial policy and firm heterogeneity our concern in this paper is with firm specific industrial policy when r d subsidies or taxes are differentiated among firms the question arises as to which firms in an industry should receive such support we analyze a situation where firms differ in their r d technologies in two distinct ways in the costs of performing r d activities and in the output obtained from such activities we find that the optimal firm specific industrial policy is affected differently by the two sources of firm heterogeneity furthermore a change in a firm s r d productivity has an ambiguous effect on the optimal policy towards the firm jel classification o31 l52 f13

trade policy mix ipr protection and r d subsidies this paper analyses strategic r d policy under circumstances where intellectual property rights protection resulting from firms r d investment is not perfect by examining policy choices wherein a government chooses both r d subsidies and ipr protection levels simultaneously we show that it is optimal for a government to adopt sufficiently weak ipr protection and to subsidize r d investments of domestic firms inducing r d investment of foreign rival firms will increase the profits of domestic firms ce memoire analyse une politique strategique de r d quand la protection des droits de propriete intellectuelle dpi qui decoulent d investissements en r d par les entreprises est imparfaite en examinant les choix de politiques par lesquels un gouvernement definit simultanement les niveaux de subventions pour la r d et de protection de la propriete intellectuelle on montre qu il est optimal pour un gouvernement d adopter une protection des dpi suffisamment faible et de subventionner les investissements en r d des entreprises nationales susciter un accroissement des investissements en r d des entreprises etrangeres rivales devrait augmenter les profits des entreprises nationales

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

r d policies trade and process innovation we set up a simple trade model with two countries hosting one firm each the firms invest in cost reducing r d and each government may grant r d subsidies to the domestic firm we show that it is optimal for a government to provide higher r d subsidies the lower the level of trade costs even if the firms are independent monopolies if firms produce imperfect substitutes policy competition may become so fierce that only one of the firms survives international policy harmonization eliminates policy competition and ensures a symmetric outcome however it is shown that harmonization is not necessarily welfare maximizing the optimal coordinated policies may imply an asymmetric outcome with r d subsidies to only one of the firms

has excessive public debt slowed world growth this paper contends that worldwide fiscal excess as embodied in heightened public debt levels is central to understanding why global growth has been sub optimal since the transatlantic crisis it notes that in the five years before the 2009 10 financial crisis average world economic growth was close to 5 per cent per year but has since averaged only 3 per cent the author states that government expenditure spiked notably more in advanced economies in response to the crisis and remains around 9 percent higher as a share of gdp in g20 advanced economies on average than in emerging economies the paper explores recent literature which focused explicitly on the crowding out effects of fiscal stimulus in contrast to the keynesian orthodox view attention is focussed on the impact of beneficial austerity on growth and also notes that additional government spending on infrastructure without regard to its productivity is risky

the real wage cyclicality of newly hired and incumbent workers in germany several recent macroeconomic models assume that real wages are rigid the wage rigidity of newly hired workers assumes a crucial role in these models as the decision of whether to open a vacancy is primarily influenced by real hiring wages this article analyses the cyclical behaviour of real wages in germany it considers recent concerns that not controlling for cyclical job up and downgrading leads to biased results the results indicate that wages are not rigid neither for all workers nor for newly hired workers but instead respond considerably to business cycle conditions

unequal treatment of identical agents in cournot equilibrium oligopoly models where prior actions by firms affect subsequent marginal costs have been useful in illuminating policy debates in areas such as antitrust regulation environmental protection and international competition we discuss properties of such models when a cournot equilibrium occurs at the second stage aggregate production costs strictly decline with no change in gross revenue or gross consumer surplus if the prior actions strictly increase the variance of marginal costs without changing the marginal cost sum therefore unless the cost of inducing second stage asymmetry more than offsets this reduction in production costs the private and social optima are asymmetric

imports as competitive discipline the role of the productivity gap abstract this paper addresses the impact of foreign competition on the competitive advantage of domestic firms and the role of trade policy in an endogenous growth framework it shows that the impact of foreign competition on r d and productivity depends on the industry s relative position trade liberalization promotes innovation and enhances welfare in mature industries but hinders growth and leads to market exit in infant industries with a large productivity gap in the latter case temporary protection promotes the survival of the firm and increases welfare at the margin hence we integrate the old argument for the temporary protection of infant industries with the notion that foreign competition fosters innovation and productivity

antidumping protection and r d competition in recent years antidumping protection has spread throughout the world evidence shows that antidumping often targets r d intensive sectors raising a con cern that it may adversely affect worldwide investments in r d we investigate this issue in a model of reciprocal dumping extended to a two stage game in which two firms first choose r d levels and then compete in prices we find that when a single government institutes antidumping law the protected firm decreases investment in r d while the constrained firm invests more when both governments engage in antidumping actions both firms invest more in r d than under free trade jel classification f12 f13

is the wto passe the wto has delivered policy outcomes that are very different from those likely to emerge out of the recent wave of preferential trade agreements ptas should economists see this as an efficient institutional hand off where the wto has carried trade liberalization as far as it can manage and is now passing the baton to ptas to finish the job this paper surveys a growing economics literature on international trade agreements and argues on this basis that the wto is not passe rather and subject to some caveats this survey of research to date suggests that the wto warrants strong support while a more cautious view of ptas seems appropriate

an empirical test of the asymmetric models on innovative activity who invests more into r d the incumbent or the challenger the theoretical discussion concerning the question whether the incumbent or the potential entrant invests more into r d has attracted considerable interest this paper reports the results of an empirical study on this question using data of about 3500 german firms over the years 1992 to 1995 the survey explicitly asks the firms for their motives to undertake innovative activity it is thus possible to take account of intended not just completed market entry it turns out that the challenger invests more into r d in order to enter a new market than the incumbent thus the patent racing model by reinganum and others seems to characterize innovative activity more accurately than the competing auction model of gilbert and newbery we use a heteroscedastic tobit as well as a tobit model with selectivity in order to deal with the econometric problems of double censoring

intra firm wage compression and coverage of training costs evidence from linked employer employee data the author uses german linked employer employee data to estimate the impact of intra firm wage dispersion on the probability that establishments pay for further training about half of all establishments in the estimation sample cover all direct and indirect training costs which contradicts the standard human capital approach with perfect labor markets the main finding of cross section panel and instrumental variable probit estimations is that establishments with larger intra firm wage compression are more likely to cover all direct and indirect training costs which is consistent with theoretical considerations of the new training literature about imperfect labor markets

from sick man of europe to economic superstar germany s resurgent economy in the late 1990s and into the early 2000s germany was often called the sick man of europe indeed germany s economic growth averaged only about 1 2 percent per year from 1998 to 2005 including a recession in 2003 and unemployment rates rose from 9 2 percent in 1998 to 11 1 percent in 2005 today after the great recession germany is described as an economic superstar in contrast to most of its european neighbors and the united states germany experienced almost no increase in unemployment during the great recession despite a sharp decline in gdp in 2008 and 2009 germany s exports reached an all time record of 1 738 trillion in 2011 which is roughly equal to half of germany s gdp or 7 7 percent of world exports even the euro crisis seems not to have been able to stop germany s strengthening economy and employment how did germany with the fourth largest gdp in the world transform itself from the sick man of europe to an economic superstar in less than a decade we present evidence that the specific governance structure of the german labor market institutions allowed them to react flexibly in a time of extraordinary economic circumstances and that this distinctive characteristic of its labor market institutions has been the main reason for germany s economic success over the last decade

cost manipulation games in oligopoly with costs of manipulating we analyze a class of two stage games where rival firms incur real resource costs in manipulating their marginal costs so as to influence the outcome of the game they want to play in stage two marginal costs may be manipulated by various means such as redistribution of productive assets choice of location or creation of an internal input market a general formulation of the game is provided and several applications are analyzed we show that the optimal allocation of resources within an oligopoly can be asymmetric even for ex ante symmetric firms this is an additional explanation of heterogeneity in oligopoly

minimum wages on the job training and wage growth using data from the employment opportunities pilot project we examine the relationships between minimum wages wage growth and on the job training we find that minimum wage jobs exhibit less wage growth than other jobs particularly for men we find no evidence however of a unique minimum wage effect on training opportunities we conclude that indirect methods of proxying training with wage growth can be misleading as they fail to distinguish whether the reduced wage growth of workers on minimum wage jobs results from their receiving less training than other workers or whether it is strictly a result of the wage determination process

testing for asymmetric employer learning recent evidence suggests that employers acquire more precise information about a worker s productivity the more time he or she spends in the labor market the following question arises is learning symmetric that is do all employers have the same information about workers productivity or is learning asymmetric that is does the current employer have superior information about workers productivity this article develops a learning model with endogenous mobility that nests both learning hypotheses it then proposes new tests for asymmetric employer learning overall learning appears to be mostly symmetric except possibly when the employees involved are college graduates

does delegation increase worker training we model a principal firm offering training to its agent worker under two alternative organizational structures integration where the principal retains authority to overrule the investment project recommended by the worker and delegation where the principal cannot overrule the worker s preferred investment project we assume that training reduces the worker s effort cost of assembling information about alternative projects payoffs and identify the conditions under which delegation increases the profit maximizing intensity of training empirical estimates from matched employer employee data show that workplaces delegating authority do provide more worker training this result persists in two cross sections in panel fixed effect estimates and critically in an instrumental variable exercise that also controls for establishment fixed effects jel d21 d22 d23 m53 m54

strategic incentives for innovations and market competition abstract we consider a principal agent model to provide a general analysis of how risk affects incentives of firms who invest in cost reducing r d and compete in the product market we specify the conditions under which higher risk reduces incentives of all firms we also examine the conditions under which an increase in risk may trigger opposite responses of rivals in the same industry some firms will strengthen while other firms will weaken the incentives provided to their agents this result holds regardless of the mode of competition in the product market cournot or bertrand as long as the rivals r d decisions are strategic substitutes it can generate new empirical implications and can provide an explanation for the lack of strong empirical support in the literature for a negative relationship between risk and incentives we also discuss policy implications regarding the effect of risk on the incentives to innovate and welfare

activist fiscal policy during and after the great recession that began in december 2007 the u s federal government enacted several rounds of activist fiscal policy in this paper we review the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use their efficacy remains controversial we review the debate about the traditional types of fiscal policy interventions such as broad based tax cuts and spending increases as well as more targeted policies while there have been improvements in estimates of the effects of broad based policies much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions such as the credit market disruptions and very low interest rates that were central features of the great recession the eclectic and innovative interventions by the federal reserve and other central banks during this period highlight the imprecise divisions between monetary and fiscal policy and the many channels through which fiscal policies can be implemented

is a minimum wage an appropriate instrument for redistribution textabstractwe analyze the redistributional dis advantages of a minimum wage over income taxation in competitive labor markets without imposing assumptions on the in efficiency of labor rationing compared to a distributionally equivalent tax change a minimum wage increase raises involuntary unemployment but also raises skill formation as some individuals avoid unemployment a minimum wage is an appropriate instrument for redistribution if and only if the public revenue gains from additional skill formation outweigh both the public revenue losses from additional unemployment and the utility losses of inefficient labor rationing we show that this critically depends on how labor rationing is distributed among workers a necessary condition for the desirability of a minimum wage increase is that the public revenue gains from higher skill formation outweigh the revenue losses from higher unemployment we write this condition in terms of measurable sufficient statistics our empirical analysis suggests that a minimum wage increase is undesirable in nearly all oecd countries a reduction in the minimum wage along with tax adjustments that keep net incomes constant would yield a pareto improvement

migration unemployment and skill downgrading in this paper we analyze the labor market impacts of immigration under flexible and rigid labor market regimes a general equilibrium framework is developed accounting for skill heterogeneity and labor market frictions where unemployed medium skilled manufacturing workers are downgraded into low skilled service jobs while low skilled service workers might end up unemployed the analytical analysis shows that medium skill immigration decreases low skilled unemployment under the flexible regime indicating a complementarity effect while the rigid regime induces a substitution effect leading to low skilled unemployment moreover it leads to wage polarization in a numerical analysis the economic effects of different migration scenarios are quantified

trade unions and economic efficiency in this paper i shall investigate a role for trade unions in increasing economic efficiency this role is enabling an improvement in the allocation of riskbearing between a firm and its employees the essential idea is straightforward if employers and employees are both risk averse the optimal wage contract will not leave one party bearing all the risk if state contingent contracts are possible grossman and hart 1981 give several reasons for firms being risk averse that firms are indeed risk averse would seem to follow from the fact that employees bear substantial risks few firms offer a job for life at a guaranteed real wage employees bear the risks of layoff redundancy and changes in the real value of their earnings with transactions costs in finding and moving to another job which may be substantial in periods of high unemployment these are real risks yet the states of the world in which these eventualities are to occur are rarely specified in any legally enforceable form indeed it is hard to imagine that they ever could be both because of the problem of envisaging all the relevant states of the world the bounded rationality of simon 1979 and because of the problem of defining those states in such a way that the courts could in the event of a dispute decide which state had occurred in the absence of legal enforceability of state contingent contracts the analysis depends on whether or not decisions about production must be made before a firm knows which state has occurred if they do not have to be then it is not essential to negotiate any contract before the firm knows the state but it may still be desirable from a risk sharing point of view to have a long term contract covering different possible states for that case hall and lilien 1979 and grossman and hart 1981 have argued that some degree of state contingency may be achieved by negotiating a contract which allows the firm in the light of the state which occurs to choose between limited combinations of employment and wages the firm may for example be permitted to reduce wages under the contract but only at the expense of reducing employment so that it is only in its interest to do so if marginal productivity is low this can overcome some of the moral hazard problems arising when states are observed only by firms but as grossman and hart show only at the cost of pareto inefficiency in the employment contract at an empirical level it may explain provisions for compulsory overtime at premium rates this type of contract will work only in the case in which the firm observes the state of the world before making employment decisions but given that

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

taxation and welfare in an oligopoly with strategic commitment this paper establishes comparative statics results for an oligopoly model with strategic commitment firms compete in two stages in the first stage firms decide on strategic cost reducing r d investment whereas they choose output in the second stage taking an excise tax subsidy as a shift parameter in the second stage game the short run as well as long run effects on output cost reducing r d investment and second best welfare will be examined the crucial role played by the strategic substitutability of outputs as well as cost reducing r d investments is clarified and a variant of the le chatelier samuelson principle in the authors game theoretic model is obtained copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

economic impacts of new unionization on private sector employers 1984 2001 economic impacts of unionization on employers are difficult to estimate in the absence of large representative data on establishments with union status information estimates are also confounded by selection bias because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages using multiple establishment level data sets that represent establishments that faced organizing drives in the united states during 1984 1999 this paper uses a regression discontinuity design to estimate the impact of unionization on business survival employment output productivity and wages essentially outcomes for employers where unions barely won the election e g by one vote are compared with those where the unions barely lost the analysis finds small impacts on all outcomes that we examine estimates for wages are close to zero the evidence suggests that at least in recent decades the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers because unions have been somewhat unsuccessful at securing significant wage gains

why do firms train theory and evidence this paper offers a theory of training whereby workers do not pay for the general training they receive the superior information of the current employer regarding its employees abilities relative to other firms creates ex post monopsony power and encourages this employer to provide and pay for training even if these skills are general the model can lead to multiple equlibria in one equilibrium quits are endogenously high and as a result employers have limited monopsony power and provide little training while in another equilibrium quits are low and training is high using microdata on german apprentices we show that the predictions of our model receive some support from the data

estimating the effects of unions on wage inequality in a panel data model with comparative advantage and nonrandom selection this article considers the estimation of the structure of wages in union and nonunion sectors it proposes an estimator that extends standard panel data techniques to the case in which the return to the permanent component of the error term is differently rewarded in the two sectors the econometric model is used to estimate the effect of unions on both the level and the variance of wages in canada the findings indicate that unions increase the average wage of workers and compress the returns to observable measures of skill and to a time invariant unobservable measure of skill

enforcement of implicit employment contracts through unionization in a world in which employment contracts are incomplete it is costly for a firm to establish credibility for honoring implicit terms of employment agreements by monitoring the employment relationships between the firm and its workers the labor union may provide the workforce with valuable information regarding the firm s adherence to these implicit agreements thus the union provides a signaling mechanism that allows workers to coordinate their actions in order to discipline the firm for a breach of the implicit contract this mechanism enhances the firm s credibility when forming employment contracts and facilitates increased employment levels

optimal trade and technology policies dynamic linkages this paper examines the dynamic linkages between technology policy on the one hand and tra de and industrial policies on the other when any of the latter polic ies affects the incentives of firms to innovate there is an independ ent argument for or against such a policy in addition to those obtain ed from the usual analysis of international oligopoly the adoption o f an r d policy involves a dynamic tradeoff in welfare the pattern o f which depends on whether an r d subsidy or tax is optimal noncoope rative r d subsidies may lead to pareto superior outcomes in the pres ence of international technological diffusion copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

in the right place at the wrong time the role of firms and luck in young workers careers we examine administrative data on young german workers and their employers to study the long term effects of an early career job loss to account for nonrandom sorting of workers into firms with different turnover rates and for selective job mobility we use changes over time in firm and age specific labor demand as an instrument for displacement we find that wage losses of young job losers are initially 15 percent but drop to zero within five years only workers leaving very large establishments suffer persistent losses a comparison of estimators implies that initial sorting negative selection and voluntary job mobility biases ordinary least squares estimates toward finding permanent negative effects of early displacements

wage growth and job mobility in the united kingdom and germany using data from the british household panel survey for 1991 99 and the german socio economic panel for 1984 99 the authors investigate job mobility and estimate the returns to tenure and experience job mobility was higher in the united kingdom than in germany returns to experience also seem to have been substantially higher in the united kingdom where the wage gain associated with ten years of labor market experience was around 80 compared to 35 in germany the low returns to labor market experience in germany appear to have been accountable to one group of workers those with apprenticeship training who tended to receive fairly high starting wages but to experience relatively low wage growth thereafter wage growth due to labor market experience was similar between the two countries for the other skill groups returns to tenure were close to zero in both countries

strategic r d policy and appropriability abstract the spencer brander argument for strategic rd journal of international economics 1994 36 133 150 that r d subsidies are an optimal policy in the presence of uncertainty

strategic r d policy under vertically differentiated oligopoly in this paper strategic rd and the high tech firm s government always gains in the r d policy game in contrast to the standard prison

training and the new minimum wage using the british household panel survey we estimate the impact of the national minimum wage introduced in april 1999 on the work related training of low wage workers we use two treatment groups those workers who explicitly stated they were affected by the new minimum and those workers whose derived 1998 wages were below the minimum using difference in differences techniques for the period 1998 to 2000 we find no evidence that the introduction of the minimum wage reduced the training of affected workers and some evidence that it increased it

the sensitivity of strategic and corrective r d policy in oligopolistic industries abstract we evaluate the case for r d subsidies in export sectors when the outcome of r d is uncertain and the product market is oligopolistic when r d reduces expected costs in the particular sense of first order stochastic dominance a national strategic basis for r d subsidies exists whether firms choose prices or quantities this must be balanced against a corrective incentive to tax r d whenever the number of domestic firms exceeds one however when r d increases the riskiness of the cost distribution as well the results may switch there emerges a strategic incentive to tax and a corrective incentive to subsidize r d

endogenous protection foreign direct investment and protection building trade abstract we introduce the possibility of foreign direct investment fdi in a strategic oligopolistic setting with endogenous protection and find that a number of unique subgame perfect equilibria may arise including a new result we call protection building trade this phenomenon occurs in our model when foreign firms locating production in the home country try to increase protectionist pressures in the home country through increased exports to provide larger barriers against other foreign competitors in future periods we discuss how the foreign firm behavior surrounding significant u s protectionist actions including the vers on japanese automobiles may be consistent with protection building trade behavior

what are the effects of fiscal policy shocks we propose and apply a new approach for analyzing the effects of fiscal policy using vector autoregressions specifically we use sign restrictions to identify a government revenue shock as well as a government spending shock while controlling for a generic business cycle shock and a monetary policy shock we explicitly allow for the possibility of announcement effects i e that a current fiscal policy shock changes fiscal policy variables in the future but not at present we construct the impulse responses to three linear combinations of these fiscal shocks corresponding to the three scenarios of deficit spending deficit financed tax cuts and a balanced budget spending expansion we apply the method to us quarterly data from 1955 to 2000 we find that deficit financed tax cuts work best among these three scenarios to improve gdp with a maximal present value multiplier of five dollars of total additional gdp per each dollar of the total cut in government revenue 5 years after the shock copyright 2009 john wiley sons ltd

vertical coordination antitrust law and international trade this paper demonstrates that vertically aligned private or public organizations are capable of generating strategic trade advantage similar to that acquired through direct government export subsidization the model considers two forms of vertical coordination that lead to advantageous trade positions in international markets upstream vertical restraint and downstream equity sharing such practices are commonly employed both by state trading agencies and by private firms in nations with lenient antitrust laws the finding has important implications under new world trade organization wto rules intended to reduce government intervention in international transactions recent reforms in the wto favor nations that sanction highly refined vertical linkages between firms while nations with stringent antitrust legislation have an incentive to negotiate for greater harmonization of international laws

why do temporary help firms provide free general skills training the majority of u s temporary help supply ths firms offer nominally free unrestricted computer skills training a practice inconsistent with the competitive model of training i propose and test a model in which firms offer general training to induce self selection and perform screening of worker ability the model implies and the data confirm that firms providing training attract higher ability workers yet pay them lower wages after training thus beyond providing spot market labor ths firms sell information about worker quality to their clients the rapid growth of ths employment suggests that demand for worker screening is rising

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

training and union wages abstract this paper investigates whether unions through imposing wage floors that lead to wage compression increase on the job training our analysis focuses on germany based on a model of unions and firm financed training we derive empirical implications regarding apprenticeship training intensity layoffs wage cuts and wage compression in unionized and nonunionized firms we test these implications using firm panel data matched with administrative employee data we find support for the hypothesis that union recognition via imposing minimum wages and wage compression increases training in apprenticeship programs

technology policy and the organization of r d abstract in this study we examine how technology policy in the form of r d subsidies and encouragement of research joint ventures rjvs affects the investment incentives of firms in various types of imperfectly competitive markets we find that joint ventures yield lower research intensities in the absence of subsidies in the presence of optimal subsidy policy higher expected welfare is obtained with rjvs but the optimal policy may also involve a more costly subsidy program the analysis also identifies possible difficulties in implementing socially optimal policies arising from private incentives conflicting with the public interest

trade unions and training practices in british workplaces the authors use british establishment level data from the 1991 employers manpower and skills practices survey emsps and individual level data from the autumn 1993 quarterly labour force survey qlfs to investigate the links between training provision and workplace unionization both the probability of receiving training and the amount of training received are found to have been substantially higher in unionized than in nonunion workplaces the authors view these results as showing that trade unions can play an important role in developing and boosting skill formation in britain

the sensitivity of strategic and corrective r d policy in battles for monopoly the authors characterize the role for r d subsidies in export markets where r d is an uncertain process and the winner of the r d competition monopolizes the market investments are assumed to induce either first order or mean preserving second order shifts in the distribution of a firm s costs or reinterpreting the model as a patent race a firm s discovery dates the authors show that regardless of which form the uncertainty takes a national strategic incentive to subsidize r d exists but must be balanced against a national corrective incentive to tax r d whenever a country has multiple firms involved in the r d competition copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

monopsony power pay structure and training although interest in monopsonistic influences on labor market outcomes has revived in recent years only a few empirical studies provide direct evidence on this topic in this article the authors analyze the effect of monopsony power on pay structure using a direct measure of labor market thinness the authors find evidence of monopsony power as firms facing fewer local competitors offer lower wages to skilled labor and trainees but not to unskilled labor the findings have important implications for the economic theory of training as most recent models assume monopsonistic pay setting for skilled labor but not for trainees

international r d rivalry and industrial strategy this paper presents a theory of government intervention which provides an explanation for industrial strategy policies such as r d or export subsidies in imperfectly competitive international markets domestic net welfare is improved by the capture of a greater share of the output of rent earning industries although the subsidy ridden noncooperative international equilibrium is jointly suboptimal behaviour of governments and firms is modelled as a three stage subgame perfect nash equilibrium the assumption that the government is the first player in this game allows it to influence equilibrium outcomes by altering the set of credible actions open to firms

unions and efficient training the paper examines the optimal level of training investment when trained workers are mobile wage contracts are time consistent and training comprises both specific and general skills the firm has ex post monopsonistic power that drives trained workers wages below the social optimum the emergence of a trade union bargaining at the firm level can increase social welfare by counterbalancing the firm s ex post monopsonistic power in wage determination local union firm wage bargaining ensures that the post training wage is set sufficiently high to deter at least some quits so that the number of workers the firm trains is nearer the social optimum