learning to believe in sunspots a number of authors have shown that competitive economies may possess sunspot equilibria that is rational expectations equilibria in which purely extrinsic uncertainty affects equilibrium prices and allocations 2 such results demonstrate that it does not require a lack of faith in the rationality of market participants to believe that competitive markets may be subject to purely speculative fluctuations driven solely by expectations 3 the mere existence of sunspot equilibria as solutions to a system of marketclearing conditions however might not be judged sufficient to indicate that competitive markets with rational participants could ever be subject to speculative instability the sunspot equilibria represent states of affairs in which agents act differently in the case of different realizations of the sunspot variable and it is rational for each agent to do so but it might be thought unlikely that the beliefs of all the participants in the market could ever come to be coordinated so as to bring about an equilibrium of that kind it is rational to believe that sunspots convey information about future states of affairs once the economy is in a sunspot equilibrium but why would rational agents ever begin to believe in such a thing so as to create the conditions under which the belief is rational in order to address such a question one must go beyond the mere statement of the conditions for equilibrium and discussion of what states of affairs satisfy them one must specify an explicit dynamic process according to which the beliefs of agents adjust when out of equilibrium any exercise of this kind is necessarily unsatisfactory as there is no univocal meaning for the postulate of rational behavior outside of an equilibrium it may well be the case that

social assistance and labour supply the longitudinal 1988 89 lmas makes it possible to study the interaction between social assistance and labour supply while allowing for substantial time dependence tobit equations for hours worked on and off social assistance which allow for endogenous selection of social assistance status are estimated by using fiml small but statistically significant effects for a social assistance benefit variable are obtained particularly for females a claw back variable is not consistently useful the wage rate has a consistently negative coefficient in the selection equations and is important in the tobit equations in this paper an attempt is made to reconcile results found in earlier literature jel classification i38 j22 aide sociale et offre de travail l etude longitudinale de l enquete de 1988 89 sur la population active rend possible l etude de l interaction entre l aide sociale et l offre de travail tout en permettant la prise en compte de l effet d inertie herite du passe on calibre des equations tobit pour les heures travaillees separement pour les personnes qui recoivent et ne recoivent pas d aide sociale et une equation probit qui permet une selection endogene du statut d assiste social en utilisant la methode du maximum de vraisemblance avec pleine information on obtient des impacts faibles mais statistiquement significatifs des prestations d aide sociale sur l offre de travail pour les femmes une variable qui tente de capturer les effets de recouvrement fiscal des prestations n est pas uniformement utile comme source d explication le taux de salaire a un coefficient negatif de maniere generale dans les equations de selection et est important dans les equations tobit le memoire tente de reconcilier ces resultats avec ceux que contiennent les etudes anterieures

an experimental examination of labor supply and work intensities estimated negative substitution effects on work hours question the empirical validity of the classical labor supply model estimates are reconciled by allowing a dual choice of hours and effort for piecerate workers in such a model these negative substitution effects result from substituting on and off the job leisure we test our model using controlled experimentation on human subjects these experiments while not naturally occurring environments represent real economic choices and can generate data unavailable elsewhere e g effort data the results support our model and they have implications both for labor management and for empirical research focusing only on the hours choice the classical static model of the labor leisure choice offers positive compensated wage effects on hours of work as its main testable implication previous attempts to test this hypothesis with field data have cast doubt on the empirical validity of the static labor supply model due to the frequency of negative estimated compensated wage elasticities a limitation of the model is that it views the choice of hours of work as the only

on the existence of sunspot equilibria in an overlapping generations model abstract the existence of sunspot equilibria is shown in a one commodity overlapping generations model without stationarity assumptions on preferences endowments or nominal taxes the essential assumption is that there is a continuum of perfect foresight equilibria the technique is also useful for constructing stationary sunspot equilibria when they exist consumption in a sunspot equilibrium is shown to lie within the range consistent with perfect foresight

the ex dividend day behavior of canadian stock prices tax changes and clientele effects with some simple assumptions the ex dividend day price drop and the associated dividend can be used to measure the market s marginal tax rate previous research has estimated the implied tax rate for the u s this paper extends the analysis to canada where the tax treatment of dividends and capital gains is completely different from that in the u s the paper also presents estimates from 1970 80 to include four distinct periods when the tax treatment was different hence we include an implied test of market efficiency as well as those for the relevance of taxes and the existence of tax based dividend clienteles

the effect of scale on the response to reform by chinese state owned construction units abstract using firm level data on large and medium state owned construction units a production function approach evaluates the effect of scale on the response of chinese state enterprises to reform large state units have greater economies of scale but are less productive and less input price efficient as investment increases in nonproductive fixed assets large unit profits are declining fastest and a comparison of coastal interior and ministry level units contradicts the hypothesis that competition is the primary source of this decline instead falling profits are explained by the increased autonomy which allows these units to be more inefficient

the effect of child support payments on the labor supply of female family heads an econometric analysis recent census bureau statistics show that women who receive child support payments have higher earnings and work longer hours than women who do not does this suggest that child support unlike all other nonwage income does not deter work effort or are women who receive it simply different we use 1979 1982 cps data on divorced or separated women to estimate the determinants of hours worked when afdc participation and child support are endogenous we find evidence of unobservable differences between women who receive child support and those who do not controlling for these both child support and other nonwage income appear to reduce hours worked but the deterrent effect of child support is considerably less

labour supply of married women in canada 1980 this study uses recently released data from the 1981 census to reex amine the labor supply behavior of married women in canada using j j heckman s procedure to correct for selectivity bias and incorporating the influence of income taxes this study finds small wage and income effects on canadian wives labor supply the estimat es are similar in magnitude to those reported by a n akamura and m nakamura 1981 in their study of data from the 1971 census and t o t he estimates reported in a more recent canadian study by c robinson and n tomes 1985 who used data drawn from the 1979 quality of life survey

labour supply estimation and public policy abstract economists devote considerable energies towards refining their econometric techniques to overcome difficulties connected with conducting empirical research despite advances in technique it is not clear whether further refinement in this direction is worthwhile for policy purposes it may be that no further amount of statistical adjustment of inadequate data will increase understanding and that better data is simply necessary to add to our knowledge but rarely is sufficient credit paid to new forms of data in short econometric technique is emphasized to the neglect of data innovation as if new data were merely lying about waiting for an ingenious suggestion for use this paper surveys advances of the last twenty five years in estimating labour supply for policy purposes with a view towards appreciating the relative contribution of both improvements in econometric technique as well as developments of new data after briefly detailing the key parameters which economists have sought to estimate we describe the early first generation research circa 1970 which is plagued by problems of unobservable variables measurement errors truncation and selectivity bias and non linear budget constraints second generation research constitute attempts to resolve one or more of these difficulties and the respective contribution of econometric technique and new data is acknowledged and assessed including the contribution of data generated by large scale social experiments in which participants are randomly assigned to different guaranteed income plans and their labour supply behaviour measured

the incidence and allocation effects of a tax on corporate distributions abstract to study the effects of double taxation first at the corporation level then at the shareholder level this paper analyzes a model with a tax on all corporate distributions to equity owners and no other taxes contrary to the common view the tax is shown to have no subtitution effect and in particular no effect on the corporate choice between debt and equity via retained earnings finance the analysis opens to question certain arguments commonly used to support integration of corporation and individual income taxes via dividend relief

family time use leisure home production market work and work related travel this study analyzes the two person gronau type neoclassical model of the household where time use for each person is divided into three basic activities market work home production and pure leisure plus work related travel time the latter is treated as predetermined one contribution of this paper is that the economics of the gronau model is made clear and a complete comparative static analysis is provided a second contribution is that the model is subjected to a rigorous empirical test using data that permits the division of time into its four primary components most data sets do not permit this our empirical results do not accord well with the model s predictions or with previous findings by gronau in addition our results suggest that work related travel has an important influence on family time use

takeovers and other influences on economic performance a plant level analysis the results of an empirical investigation into the effects of takeovers and other variables on corporate performance is reported our sample of 972 establishments is taken from the workplace industrial relations survey 1984in which the plant is the unit of investigation and the assessment of performance is made by mangers using logit analysis we find that the main determinansts of relative financial performance are avoidance of takeover and strength of market position the main determinants of growth of sales are profitability change of ownership smaller size and lack of market dominance in these results we find support at the plant level for views on the effects of mergers market dominance and the determinants of growth that have traditionally been demonstrated at the level of the firm

wage returns to ownership and fee responses to physician supply the labor and entrepreneurial components of reported physician net income are separated in an analysis of input and output market performance a wage equation corrected for selectivity bias is estimated for employee physicians and the results indicate that the performance of the labor market for primary care physicians is consistent with competitive theory the parameters are used to predict opportunity wage rates for self employed physicians differences between net income per hour and the predictions indicate that 16 percent of net income from practice is attributable to entrepreneurship evidence of negative selectivity into employee status is also found copyright 1990 by mit press

the effects of derivatives on firm risk and value using a large sample of nonfinancial firms from 47 countries we examine the effect of derivative use on firm risk and value we control for endogeneity by matching users and nonusers on the basis of their propensity to use derivatives we also use a new technique to estimate the effect of omitted variable bias on our inferences we find strong evidence that the use of financial derivatives reduces both total risk and systematic risk the effect of derivative use on firm value is positive but more sensitive to endogeneity and omitted variable concerns however using derivatives is associated with significantly higher value abnormal returns and larger profits during the economic downturn in 2001 2002 suggesting that firms are hedging downside risk

on the firm s production capital structure and demand for debt some economists have ignored corporate financing decisions on the assumption that they do not affect the investment and production decisions of firms yet even if this extreme position is accepted firms must still make financing decisions which in turn have impacts on other sectors of the economy since interest payments on corporate debt are tax deductible the reliance of firms on debt as opposed to equity financing directly affects the revenue the federal government collects through taxation of corporate profits the corporate presence in bond markets and corporate borrowing from banks can be expected to affect both interest rates and the demand for money thus any large macro model must somehow account for the borrowing behavior of firms yet in assessing this portion of the 1965 brookings quarterly econometric model of the united states de leeuw 1965 p 506 writes that the regressions for business borrowing are the least successful of the model in this paper we derive an equation for the long term debt ratio capital structure of a firm which can be estimated using available data unlike some recent qualitative studies on the aggregate corporate debt ratio as related to inflation and taxation over time our primary aim is to explain differences in the debt behavior among individual firms tobit estimation results explicitly allowing for the fact that some firms have no long term debt are presented for both u s and japanese firms our theoretical model implies that the long term debt ratio which maximizes the present value of the existing stockholder s equity depends positively on the cost of equity and negatively on the cost of debt capital productivity and retained earnings our estimation results are generally in agreement with these expectations in particular we find that capital productivity which has not been included as an explanatory variable in most previous studies 2 and the cost of equity capital are both important determinants of the firm s capital structure our empirical results also support the view put forward by komiya3 that debt ratios for japanese firms are higher than those for u s firms in part because the cost of equity has been historically higher in japan than in the united states in relation to the cost of debt other important attempts to explain the debt ratio as a behavioral function of the price of debt and other variables include the studies of de leeuw 1965 and goldfeld 1969 4 certain conceptual problems mar these studies however short term and long term debt are not distinguished despite the fact that long term debt is usually used to finance capital spending while short term debt is used to finance inventory and

how valuable is a good reputation a sample selection model of internet auctions on the online auction site ebay by convention sellers do not ship goods to winning bidders until after they have received payment so there is an opportunity for sellers to take advantage of bidders trust realizing this the designers of ebay created a system that relies on self enforcement using reputation several recent studies have found that bidders give little or no reward to sellers who have better reputations i show that in fact sellers are strongly rewarded for the first few reports that they have behaved honestly but marginal returns to additional reports are severely decreasing

evidence on the volunteer labor supply of married women 1 introduction in this paper i investigate the volunteer labor supply of married women there are dozens of studies that examine the labor supply of married women and a smaller number that investigate the supply of volunteer labor in general as far as i know there are none that have focused on the supply of volunteer labor by married women i analyze time diary data for the 1970s to consider one main question and three subsidiary questions i what was the direct effect of economic variables after tax wage rate and other income on married women s volunteering both participation and hours ii does the number of children in the family influence the volunteering of married women to the extent that rising wages may induce smaller family size is this an indirect channel that reduces volunteering if one of the motivations for volunteering is to increase the quantity or quality of activities for one s own children the 1970s is an especially interesting time period to examine in the united states as that was the decade that saw the first large increases in married women s labor force participation rates iii are time and donations substitutes or complements for married women iv do the data support the brown and lankford 1992 modeling conjecture concerning a sequence of time allocation decisions as opposed to the gronau model of household time allocation where such decisions are made simultaneously gronau 1986 i find that i the volunteer labor supply for married women is positively sloped and inelastic with an estimated wage elasticity of 0 64 rises in the net wage have a small negative effect on married women s participation in volunteer activities a 25 rise in the net wage is associated with a 1 drop in the probability of volunteering there is a small negative other income from assets and husband s earnings elasticity of volunteer labor supply 0 09 so other sources of income mattered for married women s volunteering in the 1970s the effect of other income on married women s volunteer participation is positive ii having more children increases the probability of volunteering but reduces the number of hours volunteered iii donations of time and money appear to be substitutes overall the elasticity of married women s volunteer hours with respect to the tax price of giving is greater than two the participation effect is again negative this result is tentative because the data are not based on tax return information and i lack good information on cash donations iv there is mixed support for the brown and lankford conjecture the finding of a positive wage elasticity of volunteer labor supply is at odds with the opportunity cost of time interpretation of the wage especially as the finding for other income is also negative implying that volunteer hours are an inferior good substitution and income effects would therefore both be in a negative direction as the net wage rises the results with the sequential specification are sensible and easily interpreted but the key parameter estimate does not quite meet conventional standards of statistical significance increased hours of work decrease married women s participation and hours an added test of the sequential model is less favorable the wage findings suggest that rising wages for women caused a reduced incidence of volunteering among married women but if anything increased the hours of volunteering one possible vehicle for this would be the entry of women into professional careers where volunteering is a normal part of the career another possible explanation is that married women with a loose attachment to volunteering stopped volunteering and those married women with greater attachment to volunteering increased their hours commitments to offset the participation effect the link between children and volunteering is important as an indicator of how much selfinterest is involved in volunteering for example school volunteering may be a way of providing enhanced investment in one s own children where the benefit to others is a by product

dividend taxation and equity value the canadian tax changes of 1986 the 1986 canadian federal budget which increased the tax rate on dividends vis a vis capital gains provides a natural experiment for examining the relationship between taxation and asset values the authors employ a stock market event study to investigate the differential impact of this tax change on high and low dividend securities to control for other new information contained in the budget they focus on companies that issue both preferred high dividend stocks and common low dividend stocks the authors find that abnormal returns are negatively related to dividend yields which provides support for the hypothesis that taxes affect stock prices

strategic complementarity in business formation aggregate fluctuations and sunspot equilibria the extent to which changes in beliefs can be important factors in initiating economic fluctuations has been a prominent area of investigation for macroeconomists the notion that beliefs about the future influence current decisions is a property of almost all dynamic economic systems the more challenging task is identifying economic environments in which changes in beliefs alone influence current choices in such a way that the variations in beliefs are self fulfilling because the resulting fluctuations arise in the absence of variations in fundamental variables such as preferences and technology they are often termed sunspot equilibria apart from suggesting that instability of expectations may be a distinct source of cyclical volatility sunspot equilibria may also explain why apparently small disturbances in fundamentals lead to large change in macroeconomic aggregates in this study we demonstrate the possibility of sunspot equilibria in an overlappinggenerations economy characterized by a plausible form of strategic complementarity as more agents enter as producers in any particular sector of the economy they create an incentive for agents to enter as producers into other sectors as well 2 the basis for this

female income and the divorce decision evidence from micro data escalating divorce rates during the 1960s and 1970s led to large numbers of academic investigations into the causes of divorce most of these studies concentrated on a significant increase in female income that resulted from rising female labour force participation rates the difficulty with quantifying these arguments is that it is possible to observe the income of married females or it is possible to observe the income of divorced females but it is not possible to observe both outcomes simultaneously this research attempts to resolve these difficulties by using sample selection techniques to correct for possible bias from simple observation of the income of married and divorced females

the effect of taxation on labour supply the case of moonlighting the authors provide a simple test of supply side economics by estimating the responsiveness of moonlighting labour supply to changes in the marginal tax rate and the wage rate while standard theory teachers that changes in taxes and wage should have opposite and equal effects on labour supply taxes affect the entire asset position of the household in the short run an adjustment of hours in the second job may be the only option available to an individual in responding to a tax change thus analyses based on after tax wages may understate supply side effects to estimate these effects a tobit procedure is employed the empirical results suggest a backward bending supply curve over thet range of moonlighting hours data consist of a subsample of male blue collar workers from the 1978 cross section of the panel study of income dynamics

income tax policy and lifetime labor supply abstract a progressive income tax structure provides incentives for individuals to alter their rate of work and their age of retirement compared to a zero tax or proportional tax equilibrium progressive taxation induces individuals to take less leisure in the form of retirement in exchange for more leisure during the worklife especially at high wage levels the imposition of a special pension tax provision on top of a progressive tax structure offsets the distortion on leisure alternatives imposed by progressivity indeed the pension tax deferral provision can neutralize the impact of tax progressivity on the work profile over life the magnitude of these tax inducements in the u s tax structure are non trivial and therefore are expected to alter labor supply decisions over the lifetime the model finds empirical support using data from the social security newly entitled beneficiaries survey

capital gains tax and equity values empirical test of stock price reaction to the introduction and reduction of capital gains tax exemption abstract this paper evaluates the differential effect on stock prices of the introduction in canada of 500 000 capital gains tax exemption and the reduction of this limit to 100 000 two years later using the seemingly unrelated regression methodology and controlling for thin trading and heteroscedasticity the empirical evidence indicates that the changes in capital gains tax laws had a differential effect on low dividend yield and high dividend yield stocks on both occasions while the evidence indicates that the stock market anticipated the 1985 capital gains tax law changes the significant market reaction to the 1987 reduction of the exemption occurred a day before and after the reading of the tax reform proposals in parliament thus it can be inferred from the results that despite the presence of tax sheltering opportunities in canada changes in capital gains tax laws affect equity values

starting even job mobility and the wage gap between young single males and females standard econometric analysis of male female earnings differentials ignores job mobility despite its vital role in theories of discrimination and its demonstrated importance in explaining the earnings of young men this paper develops a model of male and female earnings and job mobility and estimates it for young single men and women in canada using the 1981 survey of work history the results corrected for sample selection bias arising from job mobility suggest that male and female earnings determination differs considerably by job mobility status returns to mobility are much greater for males than for females the results also show significantly different mobility behaviour for men and women but if anything females are more mobile than males faced with the same earnings opportunities thus differential job mobility behaviour does not appear to account for any portion of the male female earnings gap

female labor supply in japan implications of the informal sector for labor force participation and hours of work this paper extends previous work on labor supply in japan by treating the simultaneous labor force participation and hours of work decisions for japanese wives both employees and family workers it estimates a trichotomous participation model for a sample from the tokyo metropolitan area and then estimates hours and wage equations and aggregate labor supply elasticities the empirical results generally confirm the economic model s theoretical predictions although the estimated aggregate wage and income elasticities for employees are somewhat higher than previous estimates for the u s they are of the same order of magnitude however the level of the husband s income has an unexpected positive effect on the annual hours that employees work and the elasticities estimated for family workers are usually large

comparing public and private schools the puzzling role of selectivity bias recent articles using the same data and variants of the same estimation technique report conflicting estimates of the relative quality of education provided by public and catholic schools this article explains the reasons for the conflict in so doing the article clarifies the assumptions underlying the increasingly popular two step methods for controlling selectivity bias and highlights the hazards of using these methods when the assumptions are not satisfied the article also illustrates an alternative method for detecting the presence of selectivity bias

time and uncertainty in overlapping generations economies this paper shows the general reversibility of every perfect foresight equilibrium of an overlapping generations economy it then shows and characterizes the exist ence of reversible sunspot equilibria in these economies as well which seems to be at odds with our intuition about the irreversibility of a tree of events although the paper establishes also that such reversible stochastic equilibria constitute a negligible subset of all the equilibria of their class their mere existence may be considered somewhat puzzling for this intuition

glass ceiling and double disadvantage effects women in the us labour market gender pay issues in the us labour market are examined using 1990 and 2000 us census data for three groups the native born immigrants from english speaking countries and immigrants from non english speaking countries quantile regression estimates reveal different patterns of wage effects across the wage distribution females have lower rates of pay across the entire wage scale there is minimal evidence of glass ceiling effects immigrant women from non english speaking countries are argued to experience a double disadvantage effect

new evidence that taxes affect the valuation of dividends this paper uses british data to examine the effects of dividend taxes on investors relative valuation of dividends and capital gains british data offer great potential to illuminate the dividends and taxes question since there have been two radical changes and several minor reforms in british dividend tax policy during the last 30 years studying the relationship between dividends and stock price movements during different tax regimes offers an ideal controlled experiment for assessing the effects of taxes on investors valuation of dividends using daily data on a small sample of firms and monthly data on a much broader sample we find clear evidence that taxes affect the equilibrium relationship between dividend yields and market returns these findings suggest that taxes are important determinants of security market equilibrium and deepen the puzzle of why firms pay dividends financial economists have long been puzzled by corporate dividend behavior many individual investors should value a dollar of corporate dividends less than a dollar of corporate retentions because the former gives rise to greater tax liabilities corporations however face equal costs of paying out dividends and retaining earnings miller and modigliani 31 demonstrated that in the absence of taxes dividend policy should have no effect on share valuation if dividends are tax penalized however a value maximizing firm should pay no dividends widespread dividend payments to taxable investors are therefore surprising in 1981 dividend tax revenues in the united states were estimated to exceed 20 billion dollars indeed some have interpreted the large volume of dividends paid as evidence against the rational behavior postulates typically used by economists the dividend question has stimulated a large theoretical and empirical literature concerned with the qluestion of investors valuation of dividends in particular the question of how taxes affect the market valuation of dividends has generated considerable controversy numerous studies including auerbach 2 litzenberger and ramaswamy 24 26 morgan 34 and rosenberg and marathe

bank capital structure regulatory capital and securities innovations since late 1993 nonfinancial corporations have used financial instruments that permit them to treat preferred stock dividends as tax deductible interest bank holding companies bhcs however did not issue these trust preferred securities tps until 1996 when the federal reserve qualified them as tier 1 capital we delineate and test five not mutually exclusive hypotheses by 1 analyzing the stock market s reaction to the fed s ruling and to tps filings and 2 comparing bhcs that issued tps with those that did not we find that regulatory capital requirements tax savings and uninsured sources of funds had significant positive effects on bhcs demand for capital and that the market responded favorably to tps filings our event study findings are contrary to prior empirical results in that we find a positive market reaction to equity offerings

stationary monetary equilibria in overlapping generations models with incomplete markets abstract the objective of this paper is to study the stationary monetary equilibria of a stochastic overlapping generations model with a general incomplete asset structure it is proved that a stationary equilibrium with a nonzero price of money generically exists and is locally isolated when there is outside money for an open set of economies there is an equilibrium with positive money prices in all states the equilibrium is also given a neat characterisation in terms of the properties of the underlying state prices with only inside money there will instead be a continuum of equilibria journal of economic literature classification numbers d52 d90 e40

sufficient conditions for the existence of sunspot equilibria abstract this paper reports on conditions on agents preferences and endowments sufficient to guarantee the existence of sunspot equilibria in a simple overlapping generations model of pure exchange sunspot equilibria are those in which uncertainty extrinsic to the economy operates through expectations to yield a fulfilled expectations competitive equilibrium in which the extrinsic randomness has real effects on prices and allocations the paper also provides necessary and sufficient conditions for these equilibria to have agents trading in a fixed stock of valued fiat money the condition derived can be interpreted as requiring that intertemporal income effects appropriately dominate substitution effects

r d and subsidies at the firm level an application of parametric and semi parametric two step selection models this paper analyzes the effects of public r d subsidies on r d expenditure in the german manufacturing sector the focus is on the question whether public r d funding stimulates or crowds out private investment cross sectional data at the firm level is used by apllying parametric and semiparametric selection models it turns out that public funding increases firms r d expenditure altough the magnitude of the treatment effect depends on the assumpions imposed by the particular selection model

equilibria and efficiency in bilingual labour markets abstract we consider a labour market where two languages are commonly in use and each individual may make a costly investment to learn the language which is not his or her mother tongue language skills are productive in a human capital sense and can also be used to signal unobservable traits to employers due to the informational asymmetry between workers and employees the equilibrium rate of bilingualism in the economy may exceed the socially efficient level on the other hand the spillovers associated with second language acquisition may imply there is not enough bilingualism relative to the social optimum we consider the circumstances under which either the signalling or the network welfare effects dominate in equilibrium depending on the parameter values of the model policies of either encouraging or discouraging the investment in language skills may be welfare enhancing

using aggregate data to estimate the part time and full time work behavior of japanese women this paper analyzes the interdependencies among the labor force participation decisions of married women in japan these decisions are working part time working full time being unemployed in the labor market but unable to find work and not participating we focus on the interdependency between the decision to work part time and the decision to work full time we obtain positive own wage elasticities for full time and part time participation with part time labor force participation of japanese married women being substantially more elastic than that of their full time counterparts we also find that the elasticity of full time participation in response to the part time wage is greater than the elasticity of part time participation in response to the full time wage

a panel study of labour supply and taxes in denmark the labour supply of danish married couples is estimated on a longitudinal sample of about 3000 danish couples observed over the period 1980 86 the influence of the progressive tax system and the effect of the unemployment insurance system are evaluated the definition of unemployment in labour supply functions is discussed and two separate models are estimated where unemployment is considered either completely voluntary or completely involuntary the wage elasticity and the supply effects of tax reduction are estimated to be positive but numerically small for both men and women

existence and local uniqueness of functional rational expectations equilibria in dynamic economic models abstract this paper established the existence and local uniqueness of stationary functional rational expectations equilibria for an open set of multi good multi agent pure exchange overlapping generations models in which agents endowments are random such equilibria are given by prices which are functions of one period lagged prices and endowments and of current endowments

labour supply estimates for low income female heads of household using mincome data in this paper we present labour supply estimates for low income female heads of households using data generated by the 1974 baseline survey of the manitoba basic annual income experiment mincome a simultaneous equations model of the labour market is specified and estimated by a procedure that accounts for the simultaneous equations nature of the model and for the possibility of sample selection bias the major empirical findings are that wages net of child care costs rather than gross wages determine the supply of hours total unearned income and for married women the husband s gross wage have a negative influence on hours supplied the presence of young children also has a negative influence but children between six and fifteen years of age apparently do not formal education is found to be an important determinant of the wage offer available to women mesures de l offre de travail desfemmes a bas revenu qui sont chefs defamille a partir des resultats de l enquete mincome ce memoire presente des mesures de l offre de travail des femmes a bas revenu qui sont chefs de famille a partir des resultats de l enquete de 1974 manitoba basic annual income experimenit mincome les auteurs developpent un modele du marche du travail a l aide d un systeme d equations simultanees et le calibrent a l aide d une procedure qui prend en compte a la fois le caractere simultane du modele et la possibilite de biais de selection dans l echantillonnage les principaux resultats empiriques sont les suivants ce sont les salaires nets decantes des cofits de la garde des enfants plut6t que les salaires bruts qui determinent le nombre d heures de travail le revenu total non gagne et pour les femmes mariees le salaire brut du mari ont une influence negative sur le nombre d heures de travail an earlier version of this paper was extensively criticized in a most constructive way by one of the referees for which we are very grateful the structure of the current version owes a great deal to this referee in addition we would like to thank jenny arnott and karen harris for excellent research assistance and lloyd spitzig for programming assistance canadian journal of economics revue canadienne d economique xix no i february fevrier 1986 printed in canada imprime au canada 0008 4085 86 134 141 1 50 canadian economics association this content downloaded from 157 55 39 112 on wed 07 sep 2016 04 53 19 utc all use subject to http about jstor org terms labour supply estimates 135 fournies la presence de jeunes enfants a aussi le meme effet encore que la presence d enfants entre six et quinze ans ne semble pas avoir cet impact le degre d instruction formelle semble aussi etre un e1lment determinant du salaire offert aux femmes

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

a monetarist model of inflation abstract we consider an overlapping generations model with new money introduced via autocorrelated lump sum transfers hence the own rate of return on money is fixed implying that dynamic neutrality may fail due to inflation tax effects we derive a condition less restrictive than serial independence of monetary growth rates which is necessary as well as sufficient for neutrality we determine whether various properties of the joint distribution of monetary growth rates and inflation rates which are weaker than neutrality for example positive correlation between the two can be expected to obtain in general settings

the employer size wage gap evidence for britain university of edinburgh and university of sussexfinal version received 5 may 1992 this paper presents estimates for the employer plant size wage gap for britain using anordered probit model selectivity corrected wage equations are estimated for three plant sizecategories in a comparison between plants with more than 500 workers and those with lessthan 100 a wage gap estimate of over 17 per cent is detected the wage effects of unionizationin plants with more than 500 workers is reported as insignificant in contrast to evidenceprovided by idson and feaster 1990 for the united states no evidence of non randomsorting of workers across plant size is detected

pension wealth and household savings tests of robustness abstract a substantial literature exists on the impact of pension schemes both public and private on the level of household saving yet there is no clear consensus on the impact of pensions on private saving in this paper we show how beliefs about this displacement effect are modified by prior beliefs both about variables which might be relevant in an equation for private savings and about the magnitude of the displacement effect using data for 8279 canadian households and estimates of pension wealth both private and social security which we construct for each household in the sample the estimated displacement effects are found to be relatively robust with respect to both types of prior belief

male female earnings differentials and the role of language in canada ontario and quebec 1970 recent studies by robb 1978 and gunderson 1979a have analysed malefemale earnings differentials in ontario and canada respectively both authors first estimated sex specific earnings functions and then employed the estimated coefficients to decompose the observed or gross earnings differential into a portion attributable to differences in mean characteristics or endowments and a portion attributable to discrimination i discrimination is measured both by differential returns to the same productivity generating characteristics the estimated coefficients of the characteristics and by other forms of discrimination which do not appear explicitly in the earnings equation the estimated intercepts the purpose of this note is to report the results obtained from performing a similar decomposition analysis for quebec and to compare our results with those of robb and gunderson given the comparative nature of our study we have chosen to use the same data base sample characteristics model specifications and control variables as did robb and gunderson 2 the major difference between our study and those of robb and gunderson is the treatment of language robb did not include language variables in her earnings functions for ontario while gunderson employed what we term a narrow definition of language for canada in his earnings equations gunderson measured language skills by the ability to communicate in canada s official

the canadian tax reform and its effect on stock prices a note the effect of personal taxation on stock prices remains controversial while some researchers have found evidence of a tax effect in the stock market others have found evidence to the contrary this paper provides additional empirical evidence on the effect of the differential taxation of dividends and capital gains on stock prices by analyzing stock price changes around the 1971 canadian tax reform and its subsequent amendments in 1977 the results show that changes in the taxation of cash dividends and capital gains affected high yield and lowyield stocks listed on the toronto stock exchange tse differently section i of the paper describes the tax changes the method used to analyze the tax effect is described in section ii section iii reports the results and conclusions are presented in section iv

do efficiency wages explain dismissals this study modifies rebitzer s 1987 model of efficiency wages to predict dismissal from employment using a sample selection method and data from australian workplaces the analysis supports the predictions that both very high and very low levels of required effort loose labour markets and high dismissals costs are associated with fewer dismissals among other results we find extensive internal labour markets and active unions reduce dismissals the evidence suggests that large employers rely more heavily on dismissals to motivate employees although such employers screen more effectively and so exhibit lower dismissal rates jel j24 j41 j42

the impact of late nineteenth century unions on labor earnings and hours iowa in 1894 this paper presents an analysis of data on male workers taken from an 1894 survey of the iowa labor market consistent with the results of earlier research by paul douglas the author finds evidence of a statistically significant and economically important union earnings premium the analysis also shows that late nineteenth century unionism like unionism in the twentieth century tended to reduce wage dispersion on the other hand the author finds no evidence that late nineteenth century unions reduced the length of the workday for union members compared to nonunion workers

sample selection and biases in local house value indices abstract analysis of cross sectional or intertemporal variations in house values among localities requires reliable house value indices however prior studies applying the hedonic method to transaction data have reported price series that may be biased our paper investigates a possible cause of bias and uses a censored regression technique extended to an intertemporal model to derive an unbiased index we apply our method to 1971 1991 data from the miami florida msa and find evidence in time varying amounts of bias our results suggest that prior studies using the hedonic method and samples consisting only of sold houses have understated the intertemporal variability of house prices

why is the labour force participation of women declining in india summary this paper explores the recent fall in female labour force participation and its socio economic determinants in india the major contribution of this paper is to explore both micro and macro level factors which determine female labour force participation rate lfpr to examine the u shape female lfpr by examining the likely income and substitution effects of the real wage increase to identify the sub sectors within manufacturing and service sectors that could create jobs for new female job aspirants and those older women displaced from agriculture in recent years and thus to understand the conditions under which female lfpr could be raised using both macro level and household survey nss data we find that the recent fillip in the process of structural transformation has pushed a large number of females out of agriculture the growing mechanization in agriculture and rising capital intensity in manufacturing sectors together have limited the opportunity for females because of their low education and skill and due to other cultural constraints we also found that the rise in real wages in rural areas and the consequent improvement in the standard of living has produced a strong negative income effect which outweighs the positive substitution effect and as a result female lfpr has declined substantially however with the massive increase in female enrollment in secondary and higher levels of education it could be expected that the substitution effect of the increase in real wage would become stronger if appropriate measures are taken by the government which are suggested

job mobility wage determination and market segmentation in the presence of sample selection bias this paper tests the hypothesis that mobility between jobs is an important determinant of individual wages and that econometric estimates of wage determination should correct for sample selectivity bias in job mobility we also test the hypothesis that different patterns of job mobility produce different appropriate corrections for sample selectivity bias in different segments of the labour market we conclude that labour market segments do differ and in particular that one can identify a marginal or low wage sector with mobility patterns and pay packages which differ from the pattern one can discern in the labour market as a whole mobilite entre emplois determination des salaires et segmentation du marche quand il y a biais de selection dans l ehantillonnage ce memoire verifie l hypothese que la mobilite entre emplois est un element determinant des salaires des individus et la proposition que les calibrations econometriques du processus de determination des salaires doivent etre corrigees pour tenir compte d un biais de selection dans l echantillonnage de mouvements entre emplois les auteurs verifient aussi l hypothese que differents patterns de mobilite entre emplois commandent des corrections appropriees differentes dans differents segments du marche du travail les auteurs en arrivent a la conclusion que les divers segments du marche du travail sont differents et qu en particulier on peut reperer un secteur marginal ou de bas salaires ofu les patterns de mobilite entre emplois et les remunerations different remarquablement de ce qui se passe dans le marche du travail dans son ensemble

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

the impact of unionization on male female earnings differences in canada the impact of unionization on male female earnings differences in canada is analyzed using data spanning 1981 to 1988 a period in which the male female unionization gap narrowed considerably gender differences in union density union wages and nonunion wages are decomposed into characteristics related and discriminatory components we find that the drop in the gender unionization gap prevented an increase of 7 percent in the overall wage differential between men and women also male female earnings differences in the nonunion sector make a substantially larger contribution to the gender earnings gap than do those in the union sector

the temporal nature of growth determinants in new bank foundings implications for new venture research design abstract several authors have suggested the founding period as a critical time in the development of a firm arguing that the resource and decision choices made at this point have a substantive impact on the firm s future yet historically most studies have measured new venture choices considerably after the founding period we suggest that the uniqueness of the founding event is important and test its validity through the examination of two implicit assertions these implicit assertions are those of temporal stability and temporal locus of growth determinants

does the labour supply of wives respond to husbands wages canadian evidence from micro data and grouped data using micro data and grouped data we assess the extent to which canadian wives adjusted their labour supply in response to changes in husbands wages during the period 1980 2000 grouped data parameters based on weighted least squares and the unbiased error in variables estimator developed by devereux 2004 2007a b yield cross wage elasticities that are substantially higher in absolute value than those derived from ols regressions run on micro data both grouping estimators indicate that the labour supply of canadian wives responded strongly to changes in husbands wages during the 1980s for the 1990s our estimates of wives cross wage elasticity display greater dispersion a l aide de micro donnees et de donnees groupees on etablit jusqu a quel point les epouses canadiennes ont ajuste leur offre de travail en reponse aux changements dans les salaires de leurs epoux au cours de la periode 1980 2000 les parametres pour les donnees groupees derives par la methode des moindres carres ponderes et de l estimateur developpe par devereux 2004 2007a b engendrent des elasticites croisees qui sont substantiellement plus grandes en termes absolus que ceux derives par la methode des moindres carres ordinaires en utilisant des micro donnees les deux estimations montrent que l offre de travail des epouses canadiennes a repondu fortement aux changements dans les salaires des epoux au cours des annees 80 pour les annees 90 les evaluations des elasticites croisees des salaires montrent une plus grande dispersion

gender differences in observed and offered wages in canada 1980 according to the 1981 census of canada the female rate of pay is 30 percent less than the male rate the average female wage offer however is only around one half of that received by males other things being equal slightly more than one half of the difference in observed wages can be explained by diffe rences in wage related characteristics between males and females two fifths of the disparity between wage offers can be explained by the same set of factors analysis of the distribution of wage offers indicates greater wage inequality in the canadian labor market than suggested by study of observed wages

family labour supply and fertility a two regime model the central hypothesis of the new micro economics of fertility was examined i e because children are female time intensive fertility is inversely related to the mothers wage a theoretical model of lifetime family labor supply and completed fertility which forms the basis for the subsequent empirical investigation is presented empirical estimates of the model are provided using 1971 canadian census data the 1 period model of completed family size and lifetime labor supply indicates that fertility and labor supply behavior of families where the wife participates in the labor market will differ from that of families with never participating wives the systematic differences arise because families with nonworking wives face the additional binding constraint of an inflexible supply of wifes time to the home a comparison of these 2 regimes allows inferences concerning the female time intensity of children and the substitutability of husbands and wifes time in the context of the 1 period model the relevant criterion for separating families into the 2 regimes is the lifetime rather than current participation status the evidence suggests that when this procedure is followed much doubt is cast on the conventional wisdom that children are female time intensive the usual inverse relation found between wifes wage or education and completed family size appears to be the result of a complex interaction between wage rates lifetime labor force participation and fertility some support is found for complementarity between the home time of the husband and wife but the evidence is not totally consistent results of the female participation equation strongly suggest complementarity proxies for the husbands lifetime labor supply suggest weak or zero complementarity when the sample is split by current participation of the wife rather than lifetime participation then the results support conventional wisdom concerning the female time intensity of children and replicate kneisners finding of complementarity between husband and wifes time reconciling these differences within the framework of the 1 period model is difficult since it yields no predictions concerning current variables yet since the wifes lifetime participation is the correct criterion for allocating families to the 2 regimes under the 1 period model doubt must remain concerning the female time intensity of children until the current lifetime results are reconciled

income taxes and the labor supply of married women in quebec in recent years a substantial literature has developed for the most part in the u s concerning labor supply behavior of particular interest is the labor force behavior of married women since this raises a set of interesting theoretical and empirical issues despite the extensive research in both the u s and the u k there has been relatively little empirical investigation in canada this is surprising given the increasing importance of women in the canadian labor force and the concern expressed by policy makers 2 this study presents some empirical results on the labor supply behavior of married women in quebec using data on 2439 husband wife families for 1979 in estimating labor supply responses of married women we take into account the effect of income taxes and address the question of tax perception 3 the impact of taxes on labor supply is particularly important in the quebec context since quebec marginal tax rates are the highest in canada and it appears in north america the study also compares the results of alternative methods of estimation married women s labor supply functions are estimated using standard ols techniques a procedure suggested by heckman 12 13 which corrects for selectivity bias a two stage gls technique which also corrects for selectivity bias and a gls method applied to a system of equations the conceptual framework of labor supply determination is briefly reviewed in section ii section iii describes the data the empirical specification and the estimation strategy

sunpsots and cycles reconsidered abstract we develop a sufficient condition for the existence of stationary sunspot equilibria in a one good olg economy this condition is of a global nature unlike the usual local indeterminacy condition and lets us prove existence even for independent sunspot processes we use this result to show that the assumption that second period consumption is a normal good is essential to obtaining two of the results in azariadis and guesnerie azariadis and guesnerie 1986 rev economic studies 53 725 737 namely that a whenever sunspot equilibria with two states of nature exist cycles of period two also exist and that b for a given economy the set of matrices generating two state stationary sunspot equilibria is a connected set

a comparison of the labor force behavior of married women in the united states and canada with special attention to the impact of income taxes estimation results are presented for the probability of working the hourly wage rate and the annual hours of work for wives in seven different age groups in both the u s and canada federal and state or provincial taxes are incorporated into the analysis an iterative estimation method is employed to circumvent the statistical problems resulting from the dependence of the hours of work on the tax rate and the dependence of the tax rate on the hours of work authors

the definition of part time employment a switching regression model with unknown sample selection rejecting the standard less than thirty five hours per week categorization of part time workers this paper offers an empirically justified definition of the part time employed the definition is based on the distinction through wage payments that employers make between a high hours full time and a low hours part time group of workers a switching regression model of wage equations with deterministic but unknown sample selection is estimated resulting in a significant split between high hours and low hours workers that is higher than the standard definition wage differentials are calculated and decomposed and estimates from the structural choice model are presented copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

two period cycles in a three period overlapping generations model abstract we study the properties of two period monetary cycles in simple pure exchange overlapping generations economies in which the households live for three periods we demonstrate that these economies can support cycles under a much broader and arguably more plausible range of assumptions than the analogous two period economies we show that economies that fail the well known grandmont econometrica 53 1985 995 condition can have cycles and that economies that satisfy the condition can fail to have cycles in addition we show that economies can have monetary cycles when they do not have conventional monetary steady states and when aggregate demand for assets is not decreasing in the real return rate at a gross real rate of unity

on the choice of incentives in firms abstract simple models of individual and group incentives under uncertainty are compared and comparative performance is shown to depend upon various exogenous parameters the incentive effects of profit sharing will thus vary with organizational and other characteristics that may be difficult to observe and attempts to quantify productivity effects that neglect selection bias are likely to be misspecified significant selection effects are found in previously used firm level data and productivity effects of existing profit sharing are found to be much larger than potential effects in firms without sharing arrangements this throws doubt on policies to encourage sharing in isolation

on the stability of nonsunspot equilibria abstract this paper analyzes the stability of the pareto efficient nonsunspot equilibria as a function of the constraints faced by consumers in their ability to transfer wealth between states of nature equilibria that are stable for the certainty economy define nonsunspot equilibria that are stable in the following two polar cases 1 all consumers are unconstrained 2 all consumers are fully constrained furthermore the stable certainty equilibria with small trade vectors define nonsunspot equilibria that are also stable independently of the constraint levels instability can develop only at intermediate constraint levels and for nonsunspot equilibria that feature sufficiently large trade vectors

canadian contributions to family economics canadian scholars have made substantial contributions to the relatively new field of family economics these include new models of how men and women match in marriage markets and of how decisions are made in multi person households several were early contributors to the literature on married women s labour supply and labour supply in a family context and helped to develop empirical methods in this area a particular focus has been on the impacts of policy relevant parameters such childcare costs on family labour supply and child well being new work on child development the impact of early life conditions and the processes of intergenerational transmission also highlight the importance of family context in determining economic well being

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

the welfare cost of unemployment in quebec harberger s triangle meets okun s gap using duality theory under rationing the authors derive a measure of the aggr egate welfare cost of cyclical unemployment which takes into account the value of additional nonmarket activities promoted by unemploymen t this measure is then applied to the quebec economy using benchmar k general equilibrium data for 1980 comparisons are made between the results obtained from the author s welfare measure and from the redu ction in gnp as measured by okun gap according to their simulations the overestimating bias of the cost of cyclical unemployment in que bec as measured by okun gap varies between 3 and 20 percent depend ing on the assumptions used the bias is more important however whe n a permanent increase in the unemployment rate is simulated

arthritis and the earnings of men an analysis incorporating selection bias abstract arthritis is a chronic and crippling disease which affects the work effort and earnings of more than 14 million working age victims this paper examines the effects of arthritis on the earnings of men aged 18 to 64 arthritis has large and significant effects on earnings most models incorporating selection bias have examined groups with lower labor force participation rates than prime age males but significant selection bias is found here when selection bias is considered the estimated absolute effects of arthritis are increased and the percentage of the gap between arthritic and non arthritic males explained by arthritis as opposed to other factors increases this study is unusual in identifying the effects of a single disease on earnings

does risk matter the case of wage labour allocation by owner cultivators this study analyses the impact of revenue risk on the hiring out behaviour of owner cultivators since hiring out is not certain labour market risk is also allowed for a large sample of owner cultivators residing in semi arid regions in india and hence subject to high production and labour market risks is used for this purpose it is found that possibly because production risks carry forward into the local labour market households are unable to use the labour market as a hedge against production risk we also find that labour force participation is positively affected by increases in the real wage rate a result that is contrary to the findings of earlier studies using data from less developed agriculture several other insights also result

female labour supply in australia another example of a backward bending labour supply curve abstract hours worked by employed married females in australia are analysed using techniques to correct for sample selection bias consistent with the conclusions of the study of female labour supply in the u s and canada by nakamura and nakamura 1981 working wives work fewer hours per week when paid higher hourly wage rates

endowments and the allocation of schooling in the family and in the marriage market the twins experiment 03 we show how comparisons between the within twin correlations of human capital outcomes across identical and nonidentical twins can be used to identify the variability in the individual specific component of endowments and the responsiveness of schooling to individual specific endowments in the family and in the marriage market even when schooling is measured with error estimates from two twins samples indicate that 27 42 percent of the variance in log earnings obesity is due to variability in individual specific endowments allocations of schooling reinforce specific endowments and individual specific earnings endowments of men and their wives schooling are negatively associated

child support welfare dependency and poverty female headed families have among the highest poverty rates of any major demographic group in the united states the purpose of this paperis to investigate empirically the effectiveness of current child support enforcement policies and to determine their role in reducing poverty and welfare dependency a special supplement to the april 1982 current population survey provides the data for the analysis the results indicate that child support enforce ment may represent an effective means for re ducing welfare program costs but isunlikely to have a dramatic effect on either welfare de pendency or poverty copyright 1986 by american economic association

more on the labour supply of canadian women the traditional consensus on female labour supply is that the wage elasticity is large and positive in contrast to a small and generally negative elasticity for males this consensus has recently been challenged in a series of important papers by alice and masao nakamura who find a backward bending supply curve for females similar to that for males this result has been challenged on a variety of grounds the present paper tests the hypothesis advanced by the nakamuras on data that have several advantages over the census type in their papers the results offer strong support for the nakamuras conclusions

new estimates of labour supply elasticities for married women in canada 1996 2005 in this article we estimate income and substitution labour supply and participation elasticities for canadian married women using data from the survey of labour and income dynamics 1996 2005 we use the canadian tax and credit simulator ctacs and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual we then use these marginal tax rates to compute net own wage spouse wage and nonlabour income we show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure and quantify biases caused by using average tax rates instead of marginal tax rates finally because marginal tax rates vary significantly over the sample we use quantile regressions to compare elasticities at different points of the hours distribution overall our results show that public policies now have on average less scope for influencing hours of work than 10 years ago howev

is it retirement or unemployment induced retirement and constrained labour supply among older workers this paper uses the 1986 labour market activity survey of statistics canada to examine the importance of labour demand for hours of work and labour force participation among older workers it tests a model of constrained labour supply against a nested unconstrained alternative and concludes that constraints on weeks of work are empirically significant for older workers a significant fraction of retirement decisions are also influenced by the belief that there are no jobs available

housing purchases and transitory income a study with panel data in this paper we explore the role of transitory income in the housing purchase decision because of moral hazard considerations banks typically require downpayments to be financed internally hence transitory income is potentially important in overcoming the downpayment constraint using a novel approach to the measurement of permanent and transitory income we estimate a two stage model in which households decide whether to purchase housing in the first stage and the quantity to be purchased in the second the results indicate a significant role for transitory income in both decision stages

sectoral labour supply choice restrictions and functional form this is the authors submitted article version which is the pre peer reviewed version of the article the article changed title in the peer reviewing process from analyzing labor supply behavior with latent job opportunity sets and institutional choice constraints later published as discussion paper no 399 http brage bibsys no ssb handle urn nbn no bibsys brage 21006