the low skill trap recently it has become popular to argue that certain workers have fallen into a trap in which they have poor skills few job opportunities and a low return on training while others have not this paper demonstrates how such a trap can occur within a simple matching model with rent sharing rent sharing diminishes the worker s incentive to acquire skills however since firms also benefit from training rent sharing likewise induces job creation the subsequent improved matching prospects may offset the initial disincentive to invest however for this mechanism to be effective firms and workers must coordinate their actions if they do not the trap occurs

nonstationarity in job search theory generally structural job search models are taken to be stationary in this paper models are examined in which every exogenous variable can cause nonstationarity for instance because its value is dependent on unemployment duration a general differential equation that describes the evolution of the reservation wage over time is derived as an empirical illustration a nonstationary structural model is estimated that focuses on the consequences of a downward shift in the level of benefits it appears that the elasticity of duration with respect to the level of benefits after the shift is much larger than the elasticity with respect to the level before the shift this paper examines the movement of a job seeking individual s reservation wage over time in a general nonstationary job search model also results concerning comparative dynamics of the reservation wage and the distribution of the duration of unemployment are derived as an empirical illustration a nonstationary structural model is estimated the nonstationarity originates from the decrease in the level of benefits when unemployment duration equals two years from the results some detailed policy recommendations can be deduced as one is able to distinguish the effect of a change in the level of benefits in the first two years of unemployment from the effect of a change in the level after that period recently the use of job search models for the analysis of unemployment duration has become widespread the reduced form approach in empirical studies see e g lancaster 1979 in which only the hazard of the duration distribution is estimated is gradually being replaced by a more structural approach the latter way of modelling is characterized by the explicit use in empirical analysis of the reservation wage equation as stated by the theory e g yoon 1981 lancaster and chesher 1983 lynch 1983 narendranathan and nickell 1985 and van den berg 1988 use the complete theoretical framework of job search theory to make inferences about search behaviour however the structural models used in these studies are stationary this implies that variables like unemployment benefits or the rate of arrival of job offers are assumed to be constant over the spell of unemployment which is often at variance with reality what is more various reduced form empirical studies indicate a significant durationdependence of the re employment probability which is generally interpreted as evidence in favour of the presence of nonstationarity see e g blau and robins 1986 kooreman and ridder 1983 lancaster 1979 and narendranathan nickell and stern 1985 consequently there is a need to model reservation wage movements over time based on a nonstationary theoretical framework

who are the unemployed evidence from the united kingdom using the uk labour force survey 2005 2012 we analyse heterogeneity among non employment subgroups in future employment hazards based on the results we propose alternative measures of unemployment that include out of the labour force subgroups with similar or higher hazards to the officially unemployed

the added worker effect the term added worker effect usually refers to a temporary increase in the labor supply of married women whose husbands have become unemployed this paper presents a new approach to the empirical study of the added worker effect which emphasizes the role of employment uncertainty and credit constraints in generating short run participation and employment patterns the estimates are based on employment transition probabilities rather than static measures of labor supply and are used in a dynamic simulation of changes in the employment and participation rates of wives following an exogenous increase in unemployment among their husbands the results show a small but significant added worker effect at least for white families and suggest that the apparent disagreement among previous studies may stem from different approaches to measuring responses to a transitory event such as an unemployment spell

gender differences in rent sharing and its implications for the gender wage gap evidence from sweden abstract this study using matched employer employee data analyses gender differences in rent sharing results indicate significantly smaller remuneration from firm profits for women a difference that increases along the wage distribution gender differences in rent sharing explain less than 2 of mean gender wage differentials as differences are found in remuneration from firm profit and not in the mean profit levels of employing firms

optimal incentive contracts under inequity aversion we analyze the classic moral hazard problem with the additional assumption that agents are inequity averse the presence of inequity aversion alters the structure of optimal contracts when the concern for equity becomes more important there is convergence towards linear sharing rules the sufficient statistics result is violated depending on the environment contracts may be either overdetermined i e include non informative performance measures or incomplete i e neglect informative performance measures finally our model delivers a simple rationale for team based incentives implying wage compression 2010 elsevier inc

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

are unemployment and out of the labor force behaviorally distinct labor force states this paper tests the hypothesis that the classifications unemployed and out of the labor force are behaviorally meaningless distinctions this hypothesis is rejected distinct behavioral equations govern transitions from out of the labor force to employment and from unemployment to employment the evidence reported in this paper is broadly consistent with versions of search theory in which unemployment is a state that facilitates the job search process in an appendix we demonstrate that log concavity of the wage offer distribution implies that the exit rate from unemployment is an increasing function of the rate of arrival of job offers

wages profits and capital intensity evidence from matched worker firm data swedish data on workers matched with firms balance sheet reports are used to examine the relation between wages and firms ability to pay results indicate that experienced and highly educated workers are sorted into profitable firms wages are positively correlated with profits and the capital labor ratio after controlling for worker quality degree of effort supervision job characteristics local unemployment firms employment history and employer size lester s range of pay due to rent sharing is around 12 24 of the mean wage in sweden which is close to the estimates for the united states and united kingdom

an empirical equilibrium job search model with search on the job and heterogeneous workers and firms in this article we present and estimate a synthesis of previous equilibrium search models allowing for continuous distributions of workers opportunity costs of employment as well as firms productivities the model allows for on the job search and we assume that job offer arrival rates for workers are independent of their labor market state we derive the theoretical implications of these assumptions we provide simulations and we develop a semiparametric estimation procedure that we apply to a dataset of individual labor market histories

behavioral innovations the missing capital in sustainable development abstract many scholars argue that environmental issues can be addressed through technological innovation a proposal which echoes a lasting debate between environmental and ecological economics about the substitution rate between natural and manufactured capital in addition to these two established types of capital this paper introduces the idea of behavioral capital we define behavioral capital as the latent potential of behavioral change to affect improvement in environmental quality our contribution argues that technological and traditional regulatory innovations serve as insufficient tools for addressing modern environmental issues and ensuring sustainable development without discarding these solutions we contend that because human behavior is a significant contributor to environmental problems it should be regarded as a key component of continued solutions we suggest that the dual interest theory can serve as an integrative framework for behavioral innovations related to environmental issues in suggesting this we assume that behavioral innovations can both overcome some of the limitations of technological innovations and offer new solutions our main insight is to suggest that some depletion of natural capital but not all can be offset by behavioral changes without decreasing or even increasing subjective well being

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

unemployment and nonemployment heterogeneities in labor market states abstract the determination of how to distinguish between unemployment and nonparticipation is important and controversial the conventional approach employs a priori reasoning together with self reported current behavior this paper employs an evidence based classification of labor force status using information about the consequences of the behavior of the nonemployed we find that marginal attachment defined as desiring work although not searching is a distinct labor market state lying between those who do not desire work and the unemployed furthermore important heterogeneities exist within these nonemployment states two subsets of nonparticipants both engaged in waiting display behavior similar to the unemployed

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

do immigrants affect firm specific wages we propose and test a novel effect of immigration on wages existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market we argue that if labour markets are not fully competitive immigrants might also affect wage formation at the most disaggregate level the workplace using linked employer employee data we find that an increased use of low skilled immigrant workers has a significantly negative effect on the wages of native workers at the workplace also when controlling for potential endogeneity of the immigrant share using both fixed effects and instrumental variables

equilibrium search with continuous productivity dispersion theory and nonparametric estimation in this article we develop an equilibrium search model with a continuous distribution of firm productivity types within a given labor market we characterize equilibrium derive expressions for the endogenous equilibrium wage distributions and characterize the set of wage distributions that can be generated by the model we develop a structural nonparametric estimation method for the productivity distribution we estimate the model using french longitudinal survey data on labor supply and we compare the results with those from a french panel data set of firms the results are informative on the degree to which firms exploit search frictions

inflation and the dispersion of real wages the eects of inflation on real wage dispersion and welfare are studied in a cash in advance economy with a walrasian goods market but a labor market with search friction in which firms enjoy monopsony power in the labor market firms post wages and both the employed and the unemployed workers search among the posted wages in equilibrium a higher inflation rate reduces the dispersion in real wages this result is consistent with both the observed trends in wage dispersion and the inflation rate witnessed in the 1980 s and the 1990 s in the u s and the empirical literature linking reduced inflation to greater wage dispersion while higher inflation always lowers consumption output and employment the optimal inflation rate exceeds the friedman rule

rent sharing holdup and wages evidence from matched panel data rent sharing by workers can reduce the incentives for investment if some of the returns to sunk capital are captured in higher wages we propose a simple measure of this holdup effect based on the size of the wage offset for firm specific capital accumulation using social security earnings records for workers in the veneto region of italy linked to detailed financial data for their employers we find strong evidence of rent sharing with an elasticity of wages with respect to potential rents per worker of around 4 arising mainly at larger firms with higher price cost margins on the other hand we find little evidence that bargaining lowers the return on investment instead firm level bargaining appears to split the rents after deducting the full cost of capital

estimating a structural search model the transition from school to work this paper presents a finite horizon search model that is econometrically implemented using all of the restrictions impli ed by the theory following a sample of male high school graduates fr om the youth cohort of the national longitudinal surveys from graduat ion to employment search parameters are estimated reservation wages and offer probabilities are estimated to be quite low simulations a re performed of the impact of changing the parameters on the expected duration of unemployment copyright 1987 by the econometric society

rent sharing and collective wage contracts evidence from german establishment level data using german establishment level data this article analyses whether wages respond to firm specific profitability conditions particular emphasis is given to the question of whether the extent of rent sharing varies with collective bargaining coverage in this context two conflicting hypotheses are tested the first one asserts that unions exploit their bargaining power at the firm level and appropriate a larger share of rents than the bargaining parties in uncovered firms the second one states that unions favour a compressed intra industry wage structure and suppress the responsiveness of wages to firm specific profitability conditions the empirical analysis provides strong support for the second hypothesis while pooled ordinary least squares pols estimates yield positive estimates of the rent sharing coefficient in covered establishments dynamic panel data estimates accounting for unobserved heterogeneity and the endogeneity of rents point to a rent sharing coefficient of zero

a structural dynamic analysis of job turnover and the costs associated with moving to another job this paper provides an empirical analysis of the labor market behavior of employed individuals using a structural on the job search model the costs associated with moving to another job are allowed to be nonzero and may depend on the wage level it is shown that under certain conditions the optimal strategy has the reservation wage property the model is estimated using data on job durations and subjective responses concerning the search strategy the results reveal some strong sources of inflexibility of the labor market copyright 1992 by royal economic society

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

unemployment behaviour evidence from the cps work experience survey this chapter is empirical and descriptive rather than theoretical it examines the cps unemployment experience data which gives the number of weeks of unemployment and the number of spells of unemployment experienced by a sample of people in a year this chapter focuses on both the entry rate or frequency probability of entering and the exit rate or duration probability of exiting of unemployment spells for it is on both the entry and exit rates that the level and distribution of unemployment depends the conclusion is that entry rates and differences in entry rates across people are of primary importance in explaining unemployment experience

rent sharing and wages evidence from company and establishment panels a central question in labor economics and macroeconomics is whether the textbook competitive model provides an adequate representation of the labor market using longitudinal data on companies and establishments this article suggests that it may not as predicted by rent sharing models of the labor market changes in profitability are shown to feed through into long run changes in wages these are not temporary wage effects and are not driven by the unionized workplaces in the data the article s estimates imply that for rent sharing reasons alone lester s range of wages is approximately 16

estimating worldwide life satisfaction abstract whilst studies of life satisfaction are becoming more common place their global coverage is far from complete this paper develops a new database of life satisfaction scores for 178 countries bringing together subjective well being data from four surveys and using stepwise regression to estimate scores for nations where no subjective data are available in doing so we explore various factors that predict between nation variation in subjective life satisfaction building on vemuri and costanza s vemuri a w costanza r 2006 the role of human social built and natural capital in explaining life satisfaction at the country level toward a national well being index nwi ecological economics 58 119 133 four capitals model the main regression model explains 76 of variation in existing subjective scores importantly this includes poorer nations that had proven problematic in vemuri and costanza s vemuri a w costanza r 2006 the role of human social built and natural capital in explaining life satisfaction at the country level toward a national well being index nwi ecological economics 58 119 133 study natural human and socio political capitals are all found to be strong predictors of life satisfaction built capital operationalised as gdp did not enter our regression model being overshadowed by the human capital and socio political capital factors that it inter correlates with the final database presents a stop gap resource that until robust surveys are carried out worldwide allows comparisons of subjective life satisfaction between nations to be made with reasonable confidence

microdata evidence on rent sharing we examine the effect of firm profits on wages for individual workers while focusing on the empirical complications associated with estimating the extent of rent sharing controlling for worker and firm fixed effects and using several instruments to deal with the endogeneity of profits we report results indicating that ordinary least square ols estimates strongly underestimate the effects of profits on wages moreover the effect of profits on wages are estimated separately for firms with increasing and decreasing profits within a given time period we find a positive and stable effect only in firms with increasing profits this is in line with the idea that falling profits do not lead to wage cuts while increasing profits imply higher wages

cooperatives and happiness cross country evidence on the role of relational capital why is the share of happy people higher in some countries than in their equally developed neighbours we conjecture that the apparent contradiction might depend on a country s endowment of relation

australia s genuine progress indicator revisited 1962 2013 abstract the genuine progress indicator gpi has been proposed as an alternative to gdp as an indicator of national progress gpi includes 26 components that adjust gdp for inequality include household and volunteer work and subtract a number of social and environmental costs best seen as negatives the gpi has been estimated for over 20 countries and many states and territories this paper updates australia s gpi to determine whether australia as a nation has progressed overall since the 1960s and compares two alternative approaches that differ in some important details we find that despite these differing approaches we find that gpi remained largely stagnant from the 1960s through to the 1990s and only at the turn of the century has gpi started to increase despite increasing negative environmental costs while gpi is well placed to serve as an improved australian and global measure of national progress further work is needed to measure national well being and support its integration into political decision making and to include the full range of subjective and objective indicators ultimately this paper argues that while gpi is well placed to serve as a new australian and global measure of well being we stress the need for an alternative indicator like gpi to supplement gdp and to better inform policy decisions

wages and profits in manufacturing firms matched panel evidence from brazil we provide evidence about the determinants of the wage structures of developing countries by examining the case of brazil our specific question is whether brazil s dramatic income and wage dierentials can be explained by the division of rents between firms and their employees unlike in competitive labour markets using detailed individual level matched panel data covering a large share of manufacturing firms and more than 30 million workers between 1997 and 2002 we consider the endogeneity of profits by adopting dierent measures of profits and dierent instruments and by controlling for spell fixed eects our results robust to dierent specifications and tests indicate no evidence of rent sharing this conclusion contrasts with findings for most developed countries even those with flexible labour markets possible explanations for the lack of rent sharing include the weakness of labour market institutions the high levels of worker turnover and the macroeconomic instability faced by the country

rent sharing and collective bargaining coverage evidence from linked employer employee data using a linked employer employee data set this paper analyses the relationship between firm profitability and wages particular emphasis is given to the question of whether the sensitivity of wages to firm specific rents varies with collective bargaining coverage to address this issue we distinguish sector specific wage agreements firm specific wage agreements and wage determination without any bargaining coverage our findings indicate that individual wages are positively related to firm specific rents in the non union sector and under firm specific contracts industry wide wage contracts however seem to suppress firm level rent sharing while pooled ols estimates yield a positive correlation between wages and quasi rents under centralised contracts estimates accounting for unobserved individual and establishment heterogeneity point to a coefficient of zero differenced gmm estimates accounting for the endogeneity of our profitability measure even point to a negative relationship under centralised contracts

benefit duration unemployment duration and job match quality a regression discontinuity approach summary we use a sharp discontinuity in the maximum duration of benefit entitlement to identify the effect of extended benefit duration on unemployment duration and post unemployment outcomes employment stability and re employment wages we address dynamic selection which may arise even under an initially random assignment to treatment estimating a bivariate discrete time hazard model jointly with a wage equation and correlated unobservables owing to the non stationarity of job search behavior we find heterogeneous effects of extended benefit duration on the re employment hazard and on job match quality our results suggest that the unemployed who find a job close to and after benefit exhaustion experience less stable employment patterns and receive lower re employment wages compared to their counterparts who receive extended benefits and exit unemployment in the same period these results are found to be significant for men but not for women copyright 2012 john wiley sons ltd

micro foundations for wage flexibility wage insurance at the firm level to what extent do firms insulate their workers wages from fluctuations in product markets which firm and worker attributes are associated with wage flexibility at the micro level we first rely on guiso pistaferri and schivardi 2005 to estimate dynamic models of sales and wages finding that in portugal workers wages respond to permanent shocks on firm performance as opposed to transitory shocks we then explore the factors associated with wage flexibility finding that collective bargaining and minimum wages are associated with higher wage insurance by the firm while the threat of firm bankruptcy reduces it managers receive less protection against permanent shocks than other workers

shareholder wealth and wages evidence for white collar workers we present empirical evidence on the relationship between individual wages conditional on worker characteristics and equity returns using a unique survey from the bureau of labor statistics equity returns affect the wages only of workers with three or more years of tenure a 4 percent increase in a firm s market value raises pay by 0 3 percent within three years our estimates suggest that each 10 increase in shareholder wealth raises the present value of a firm s wage bill by 1 the elasticity of white collar wages with respect to equity returns is one third smaller than the ceo salary elasticities in our sample

estimation of price cost margins and union bargaining power for belgian manufacturing abstract this paper extends hall s 1988 hall r e 1988 the relationship between price and marginal cost in us industry journal of political economy 96 921 947 methodology to analyze imperfections in both the product and the labor market for firms in the belgian manufacturing industry over the period 1988 1995 we investigate the heterogeneity in price cost mark up and workers bargaining power parameters among 18 sectors within the manufacturing industry as well as the relationship between both parameters using a sample of more than 7000 firms our gmm results indicate that ignoring imperfection in the labor market leads to an underestimation of the price cost margin evaluated at perfect competition in the labor market these findings are confirmed in the sectoral analysis sectors with higher workers bargaining power typically show higher price cost margins

insurance within the firm we evaluate the allocation of risk between firms and their workers using matched employer employee panel data unlike previous contributions this paper focuses on idiosyncratic shocks to the firm which are the correct empirical counterpart of the theoretical notion of diversifiable risk we allow for both temporary and permanent shocks to output and find that firms absorb temporary fluctuations fully but insure workers against permanent shocks only partially risk sharing considerations can account for about 15 percent of overall earnings variability the remainder originating from idiosyncratic shocks to individual workers our welfare calculations indicate that firms are an important vehicle of insurance provision

ramsey monetary policy with labor market frictions abstract traditional new keynesian models prescribe that optimal monetary policy should aim at price stability in the absence of a labor market frictions the monetary authority faces no unemployment inflation trade off the design of optimal monetary policy is analyzed here for a framework with sticky prices and matching frictions in the labor market optimal policy features deviations from price stability in response to both productivity and government expenditure shocks when the hosios 1990 on the efficiency of matching and related models of search and unemployment review of economic studies 57 2 279 298 condition is not met search externalities make the flexible price allocation unfeasible optimal deviations from price stability increase with workers bargaining power as firms incentives to post vacancies fall and unemployment fluctuates above the pareto efficient one

measuring the equilibrium effects of unemployment benefits dispersion we analyze the impact of unemployment benefits and minimum wagesusing an equilibrium search model which allows for dispersion ofbenefits and productivity levels job to job transitions andstructural and frictional unemployment the estimation method usesreadily available aggregate data on marginal distributions ofunemployment durations as well as wages and benefit levels different causes of structural and frictional unemployment areinvestigated we investigate the efficiency of the imposition of asingle benefit level for all household types and the introductionof an earned income tax credit

rent sharing as a driver of the glass ceiling effect in this paper we show that rent sharing plays a role in explaining the glass ceiling effect we make use of a unique employer employee panel database for italy from 1996 to 2003 which allows controlling for observed individual and firm heterogeneity and for collective bargaining moreover by means of iv quantile fixed effects estimates we can cope with unobserved heterogeneity and endogeneity a discussion of different explanations is provided

in work benefits in the united states the earned income tax credit the earned income tax credit eitc is or soon will be the largest cash or nearcash benefit provided to low income households in the united states the eitc is a credit on the federal income tax available to working poor families with children in i994 the credit equals 26 3 of earned income wages salaries self employment income and farm income for taxpayers with one child up to an earned income of 7 750 hence the maximum benefit is 2 038 for families with one child because benefits increase with earned income up to a certain point the eitc seems to encourage work and therefore is a popular antipoverty programme taxpayers with one child and incomes above 7 750 but below i i ooo receive the maximum benefit taxpayers with one child whose incomes exceed i i ooo are in the phase out range of the credit their 2 038 credit is reduced by i5 98 cents for every dollar of income earned over and above i i ooo taxpayers with two or more children are entitled to a slightly larger credit 2 528 or 30o0 0 of 8 425 which is phased out at a i 7p68 0 rate a small credit of at most 306 was available to childless taxpayers betnween the ages of 25 and 64 for the first time in i 994 unlike most credits and deductions in the federal individual income tax system the eitc is refundable that is if the amount of the credit exceeds what the taxpayer owes he or she receives a payment from the us treasury for the difference the eitc was adopted in i975 and was originally promoted as a way to relieve the burden of the social security payroll tax on low wage working parents 2 the original eitc equaled io 0 of earnings up to a maximum credit of 400 for taxpayers with children and was phased out at a rate of io cents per dollar of earnings or adjusted gross income whichever was higher for incomes between 4 ooo and 8 ooo the eitc has been increased many times since i975 though the largest changes occurred in i990 and i993 in i996 when the i993 legislative changes are fully phased in the credit rate will be 40 0 of earnings for families with two or more children and 34 0 for families

looking through the dataquadrate characterizing the human environment relationship through economic hedonic ecological and demographic measures abstract this paper introduces the concept of plotting four dimensional data in two dimensions without loss of information namely the dataquadrate concept here objects are represented as quadrates instead of points in a practical 4 axis cartesian coordinate system this procedure helps us imagine and analyze complex relations where four different non negative variables influence processes this tool is of high utility for analyzing specific human environment issues here we analyze a monetary measure gross domestic product gdp a hedonic measure subjective wellbeing a limiting measure ecological footprint and a demographic measure human population our system adds new insights to the de growth debate discussed in a journal of cleaner production special issue vol 18 2010 and systematically illuminates lots of confusing paradoxes such as the downward sloping part of the environmental kuznets curve the jevons paradox and the easterlin paradox in this paper all these phenomena are analyzed for the usa and for china in 1990 and in 2007 by utilizing such methodology when mitigating environmental problems we are not limited to negative restrictive messages but are enabled to create new strategic ways of problem solving about how to optimize the human celestial footprint the ratio of human wellbeing to human environmental load

good jobs bad jobs and redistribution we analyse the question of optimal taxation in a dual economy when the policy maker is concerned about the distribution of labour income income inequality is caused by the presence of sunk capital investments which creates a good jobs sector due to the capture of quasi rents by trade unions with strong unions and high planner preference for income equality the optimal policy is a combination of investment subsidies and progressive income taxation if unions are weaker the policy maker may instead choose to tax investment

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

firms rents workers bargaining power and the union wage premium this article identifies the wage premium associated with firm level union recognition in france an average premium of 2 is found despite the fact that most workers are already covered by industry level agreements to explore the origin of the premium i construct a simple bargaining model from which i derive three predictions which are tested empirically using matched employer employee data the main prediction is that if intra firm bargaining is behind the union wage premium the latter increases with the amount of quasi rents available in the firms that unions organise this prediction is validated empirically when firms market shares are used as a proxy for their rents

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

coastal disasters from the perspective of ecological economics natural hazards are recurrent events that frequently result in high death tolls and large economic losses because of their large impact they have concerned the international community for a long time in spite of the efforts the impact of natural hazards has increased oftentimes the role of natural ecosystems and the ecosystem services they provide to human societies are not considered in risk reduction programs how relevant are ecosystems what are the consequences of the depletion of natural ecosystems and the loss of ecosystem services provided by them would the alternative vision of ecological economics in which development and economy are seen as the whole the ecosystem daly h e and farley j 2004 ecological economics principles and applications island press washington dc 454 pp be helpful in reducing disaster risk in this paper we are set to test whether a holistic approach from the perspective of ecological economics is helpful to clarify and reduce the impact of natural hazards we focused on hurricanes because they are the most frequently reported events of all natural disasters hewitt k 1997 regions of risk longman edinburgh gate 389 pp we analyze the relationship between the components of human built social and natural capitals with the damage caused by hurricanes in terms of mortality rate we then generate a conceptual model to help envision the complexity of the system a stepwise back and forth steps linear regression analysis revealed that mortality rate was significantly and positively affected by hurricane frequency p 0 01 while area covered by semi altered ecosystems a mosaic of natural and human altered ecosystems p 0 01 and gdp p 0 05 negatively affected mortality rate r2 0 81 the proportion of natural altered ecosystems yielding the best protection results needs to be determined yet natural capital alone does not decrease number of deaths rather its complex interactions with the other capitals and the many feedback loops that are involved need to be considered to achieve effective disaster risk reduction no single capital is enough to reduce the impact and intensity of natural hazard a balance between human built social and natural capitals and an increasing awareness of the consequences of different development decisions will help human societies to live with rather than cope with coastal hazards

beyond gdp measuring and achieving global genuine progress article i nfo while global gross domestic product gdp has increased more than three fold since 1950 economic wel fare as estimated by the genuine progress indicator gpi has actually decreased since 1978 we synthesized estimates of gpi over the 1950 2003 time period for 17 countries for which gpi has been estimated these 17 countries contain 53 of the global population and 59 of the global gdp we compared gpi with gross domestic product gdp human development index hdi ecological footprint biocapacity gini coefficient and life satisfaction scores results show a significant variation among these countries but some major trends we also estimated a global gpi capita over the 1950 2003 period global gpi capita peaked in 1978 about the same time that global ecological footprint exceeded global biocapacity life satisfaction in almost all countries has also not improved significantly since 1975 globally gpi capita does not increase beyond a gdp capita of around 7000 capita if we distributed income more equitably around the planet the current world gdp 67 trillion yr could support 9 6 billion people at 7000 capita while gpi is not the perfect economic welfare indicator it is a far better approximation than gdp development policies need to shift to better account for real welfare and not merely gdp growth

unemployment duration and the restart effect some experimental evidence in this paper we analyse the effect of ihe restart programme in the united kingdom this programme consisis of an interview of tbe long term unemployed to counsel them on effective job search failure to attend the interview carries the threat of the cessation of unemployment benefits the results using experimental data indicate that the programme has a significant effect of reducing unemployment duration estimation of an independent competing risks model distinguishing between exits from unemployment to a job a training placement or to signing off unemployment benefit shows that the channels through which restart works differs according to exit type

new evidence on whether unemployment and out of the labor force are distinct states this paper focuses on the question of whether people who are out of the labor force olf should be included in unemployment measures if people who are olf can obtain jobs as often as the people who are unemployed then there is no real distinction between the two states of nonemployment surprisingly there has been very little effort surrounding this issue in the past clark and summers 1982 conclude that for teenagers unemployment and olf are not distinct states while flinn and heckman 1982a find the opposite for white male high school graduates the methodology adopted in this paper enables one to use incomplete transition data on unemployment and olf and to obtain estimates of the full transition matrix between three labor force states that are not possible with standard methods new evidence for high school graduates is presented by gender and it is found that while for young women the two states are distinct for young men they are not

optimal unemployment insurance this paper considers the design of an optimal unemployment insurance system the problem is modeled as a repeated principalagent problem involving a risk averse agent the unemployed worker and a risk neutral principal which cannot monitor the agent s search effort the optimal long term contract subject to the associated incentive constraints is characterized this contract involves a replacement ratio that decreases throughout the unemployment spell and a wage tax after reemployment that under some mild regularity conditions increases with the lenght of the unemployment spell some numerical results are presented that suggest that the gains from switching to this optimal unemployment insurance scheme could be quite large the performance of this optimal contract is also compared to alternative liquidity provision mechanisms

inequality incomplete contracts and the size distribution of business firms this article analyzes the effects of intrafirm bargaining on the formation of firms in an economy with imperfect capital markets and contracting constraints in equilibrium wealth inequality induces a heterogeneous distribution of firm sizes allowing for firms both too small and too large in terms of technical efficiency the findings connect well to empirical facts such as the missing middle of firm size distributions in developing countries the model can encompass a nonmonotonic relationship between aggregate output and inequality it turns out that an inflow of capital may indeed decrease output in absolute terms

two birds with one stone female labor supply fertility and market childcare abstract the correlation between the female labor force participation rate fpr and the total fertility rate tfr has switched from negative to positive in some developed countries in this paper we show how increasing the substitutability between maternal time and market childcare can raise both fpr and tfr and provide an explanation for the change in the tfr fpr correlation simulations of a life cycle model of married women s work and fertility decisions indicate that the fpr increases whereas the tfr is u shaped with regard to substitutability the dynamic relationship depends on the relative strength of behavioral and composition effects greater substitutability allows working women to have more children but it also attracts less productive women to enter the labor force who trade childbirths for labor supply the findings imply that raising substitutability to a sufficiently high level can achieve the two seemingly conflicting goals increasing female labor force participation and fertility rates

structural and frictional unemployment in an equilibrium search model with heterogeneous agents we specify and estimate an equilibrium search model with between market heterogeneity in the productivity levels the model allows for two types of unemployment unemployment due to search frictions and unemployment due to wage floors wage floors may exist because of large unemployment benefits or a binding mandatory minimum wage using data on labour market histories for a sample of dutch workers we decompose the total unemployment rate in a structural and frictional unemployment rate we also discuss the effect of changes in the minimum wage

the role of human social built and natural capital in explaining life satisfaction at the country level toward a national well being index nwi this paper investigates the contributions to life satisfaction of four basic types of capital human social built and natural life satisfaction data were available for respondents from fifty seven countries from the world values survey over the decade of the 1990s data on proxies for human social built and natural capital were available for 171 countries using data from the 1998 united nations human development report united nations development programme 1998 human development report 1998 oxford university press new york freedom house 1999 freedom house 1999 news of the century press freedom 1999 freedom house http freedomhouse org pfs99 pfs99 pdf september 30 2003 and sutton and costanza 2002 sutton p costanza r 2002 global estimates of market and non market values derived from nighttime satellite imagery land cover and ecosystem service valuation ecol econ 41 509 527 regression models show that both the un human development index hdi which includes proxies for both built and human capital and an index of the value of ecosystem services per km 2 as a proxy for natural capital are important factors in explaining life satisfaction at the country level and together can explain 72 of the variation in life satisfaction we did not find a proxy for social capital that was a significant predictor in the regression models this was due to the inadequacy of available proxy variables for social capital at the national scale and intercorrelation with other variables we discuss data limitations and a range of other problems with the existing limited data along with methods to overcome some of these limitations to improve future analyses we propose a national well being index nwi based on our findings and describe a path to improve it over time d 2005 elsevier b v all rights reserved

trade liberalization and the inter industry wage premia the missingf role of productivity the literature concerning the effect of tariffs on the inter industry wage premium has not addressed the role of total factor productivity tfp in determining both the wage premium and tariffs this omission not only overlooks an important determinant of wage premium but also invalidates the use of the pre reform tariff level as an instrument for the change in tariffs based on an analysis of colombian data i find that including tfp in the estimated model of the effects of tariffs on the wage premium leads to a 41 decrease in the effect of tariffs on the inter industry wage premium relative to the model that omits tfp more specifically a 10 percentage point decrease in tariffs reduces the wage premium by 1 01 whereas a 10 increase in tfp raise wage premium by 1 6 this finding suggests the importance of using policies that boost productivity to offset the effect of tariffs on the wage premium

are workers willing to pay to join a better team using data from the major league baseball free agent market this study is the first to show that the productivity expected of the team a worker will join produces a significant negative compensating wage differential the younger workers in the sample drive this result trading 25 of their wages to join teams with an expected productivity one standard deviation higher this investment can be recouped if a reasonable increase in human capital occurs these results are robust to contract length wage simultaneity and indicate that investment in human capital motivates the observed tradeoff suggesting a new pathway through which human capital accumulation can affect wages reliable measures of workers own past productivity and the productivity expected of a worker s future team provide key advantages to identifying these effects jel j31 j24 m54

increasing consumer well being risk as potential driver of happiness abstractthis article investigates the relation between risk and individual well being we propose a theoretical model of happiness that makes a distinction between ex ante evaluations of happiness and ex post assessments the main assumptions of the model are tested through three studies based on anchoring vignettes we show that even if ex ante consumers fear high risk and do not associate it to a high level of happiness their ex post evaluation of well being is generally higher when identical consequences result from a high risk situation than from a low risk situation control over risk taking reinforces the gap between ex ante and ex post measures of happiness thus our article provides empirical evidence about a positive relation between risk and individual well being suggesting that risky experiences have the potential to increase consumer well being

on the robustness of alternative unemployment measures abstract the unemployment rate is one of the most important economic indices this article extends the work of feng and hu 2013 and examines the effects of potential misclassifications in labor force statuses on the different bureau of labor statistics bls unemployment measures compared to the official us unemployment rate u 3 the broader measure u 6 is more robust to such classification errors in the survey data that are used to calculate unemployment rates if one prefers the definitions of u 3 then we offer an approach to use reported unemployment measures to proxy for the unobserved true u 3

stigma effects of nonemployment i introduction it is well known that longer durations of past nonemployment are associated with longer durations of future nonemployment 1 two explanations have been offered in the literature to interpret this phenomenon heterogeneity and the effect of workers employment histories the heterogeneity explanation argues that individuals differ in certain observed and unobserved characteristics and that these differences affect the duration of their periods of nonemployment however these individuals are unaffected by the mere experience of nonemployment because individuals with longer spells of nonemployment in the past are more likely to have characteristics that make them remain nonemployed they are likely to experience longer spells of nonemployment than others in the future the work history explanation argues that the mere experience of longer spells of nonemployment in the past raises the chance of longer spells of nonemployment in the future two theoretical explanations have been offered to explain this structural relationship human capital decay and stigma human capital decay suggests that nonemployed workers lose vital work experience and on the job training or suffer from human capital decay that reduces their future employability stigma suggests that potential employers infer the unobserved components of the workers quality from their history of employment and nonemployment in particular past nonemployment sends a negative signal to potential employers that lowers the probability of future reemployment 2 the ability to distinguish between heterogeneity and the effect of work history is a crucially important policy issue if the observed correlation between the duration of successive nonemployment spells reflects heterogeneity across individuals then a given individual enjoys the same chance of reemployment no matter how long or short his periods of past nonemployment have been in this case chronic nonemployment is a problem of a population subgroup and traditional training programs targeted toward the chronically nonemployed would be an appropriate policy tool moreover the programs could be targeted at individuals with the characteristics associated with a high risk of chronic nonemployment however if the observed correlation reflects the effect of work history anyone who happens to have experienced long periods of nonemployment in the past has a high probability of experiencing long periods of nonemployment in the future thus phelps 1972 argues that short term macroeconomic policies that alleviate unemployment will also lower aggregate unemployment rates in the long run 3 i argue however that an appropriate policy depends on the cause of the work history effect if the effect reflects human capital decay then short term macroeconomic policies to alleviate unemployment and traditional government training programs to help the unemployed restore lost skills are appropriate if the effect reflects stigma active short term macroeconomic policies may not be necessary to lower aggregate unemployment rates in the long run because stigma effects are likely to be weaker when nonemployment is experienced during a severe recession than when it is experienced during a moderate recession an appropriate policy would aim at aiding the flow of accurate information on the quality of stigmatized workers in the private sector for instance the government might subsidize potential private sector employers costs of screening job applicants who established poor work histories during a period of moderate recession alternatively it might sponsor private sector internship and training programs for such workers 4 although both the duration and frequency of nonemployment determine the individual s nonemployment rate the duration is empirically far more important than the frequency 5 because an understanding of the determinants of the duration of nonemployment is crucial to both economic theory and policymaking an enormous number of empirical studies have addressed the issue

do r d tax incentives lead to higher wages for r d workers evidence from the netherlands this paper examines the impact of the dutch r d tax incentive scheme on the wages of r d workers we construct firm specific r d tax credit rates that vary over time following variations in the dutch r d tax incentive program using instrumental variables we estimate a wage sharing model with an unbalanced firm level panel data covering the period 1997 2004 the elasticity of the r d wage with respect to the fraction of the wage supported by the fiscal incentives scheme is estimated at 0 2 in the short run and 0 24 in the long run

the measurement of unemployment an empirical approach although the unemployment rate is one of the most widely cited and closely monitored economic statistics the definition and measurement of unemployment remain controversial an important issue is whether non employed persons who display a marginal attachment to the labor force for example those who are available for and desire work but are not searching for work should be classified as unemployed or non participants although this issue has been extensively debated it has never been tested empirically this paper carries out empirical tests of this and related hypotheses using a unique longitudinal data set from canada we find within the marginally attached a waiting group whose behavior indicates that they would be more appropriately classified as unemployed rather than out of the labor force the remainder of the marginally attached exhibit behavior between that of the unemployed and the balance of non participants suggesting that the desire for work among non searchers conveys substantial information about labor force attachment and future employment status our methods also apply to heterogeneity within the unemployed and we investigate behavioral variation linked to differences in job search methods and reasons for entry into unemployment although those using passive job search do exhibit behavior somewhat distinct from active searchers our results reject the practice of classifying passive job searchers as out of the labor force overall our results indicate that the non employed are very heterogeneous so that any single division into unemployment and out of the labor force is unlikely to fully capture the variety of degrees of labor force attachment this abstract was borrowed from another version of this item

an empirical equilibrium search model of the labor market in structural empirical models of labor market search the distribution of wage offers is usually assumed to be exogenous however because in setting their wages profit maximizing firms should consider the reservation wages of job seekers the wage offer distribution is essentially endogenous we investigate whether a proposed equilibrium search model in which the wage offer distribution is endogenous is able to describe observed labor market histories we find that the distributions of job and unemployment spells are consistent with the data and that the qualitative predictions of the model for the wages set by employers are confirmed by wage regressions the model is estimated using panel data on unemployed and employed individuals we distinguish between separate segments of the labor market and we show that productivity heterogeneity is important to obtain an acceptable fit to the data the results are used to estimate the degree of monopsony power of firms further the effects of changes in the mandatory minimum wage are examined

signalling ability to pay and rent sharing dynamics abstract it is often argued that competitive and rent sharing models of wage determination should be distinguished by their long run properties in general rent sharing models predict the existence of a long run relationship between wages and firm specific ability to pay but the competitive model does not i present a two period counter example which demonstrates that rent sharing can be merely a short run phenomenon in the separating equilibria the firm signals ability to pay through first but not second period wage offers the model also has pooling equilibria in which the firm pays rents in the long run

linking daly s proposition to policymaking for sustainable development indicators and pathways abstract the statement that in the full world increasing the ultimate efficiency expressed as service throughput is the necessary condition for humanity to achieve high levels of well being within ecological limits is honoured as daly s proposition in this paper the purpose of this paper is to make daly s proposition effective guidance for policymaking related to sustainable development for this aim this paper puts forward the indicator ecological well being performance which is composed of the human development index and the ecological footprint to measure the ultimate efficiency furthermore by means of matrix analysis and factor decomposition analysis the respective pathways for countries at different stages of development to make the sustainable development transition were discussed the g20 countries were taken as the cases to conduct the research the empirical results show that improvements in well being and increases in throughput level are not necessarily positively related the relationship between the two depends on how countries control throughput levels and improve the ecological well being performance which also explains different performances on the sustainable development transition in a simple way this contribution provides new methods and criteria to track and evaluate national performance on sustainable development by referring to daly s original theories

a structural explanation of recent changes in life cycle labor supply and fertility behavior of married women in the united states abstract this study documents and explains important changes in the life cycle labor supply and fertility behavior of married women in the united states from the 1950s to more recent cohorts the younger cohorts relative to the 1950s supply more labor at earlier stages of the life cycle delay motherhood to later stages without reducing the fertility rate and upon childbearing show a greater tendency to stay out of the labor force in a life cycle model for married couples in which a household makes decisions on fertility as well as labor supply consumption and savings all the behavioral changes are jointly and quantitatively explained by a combination of changes in various labor supply fertility determinants with the increased returns penalties to work non work experience being the dominant contributor the results survive a series of robustness tests including endogenizing education choice and assortative marriage

bridging the energy divide and securing higher collective well being in a climate constrained world abstract despite the impressive gains in available energy over the last 200 years the associated benefits remain unevenly distributed bridging this divide only adds to the already daunting challenge of securing climate stabilization in fact efforts towards the former are more likely to conflict with the latter to be able to address this dilemma the relationship between energy consumption and human well being beyond its economic dimension needs to be better understood this paper aims to contribute to the emerging knowledge base by examining this relationship using a proxy for human well being that also considers its environmental and social dimensions the ultimate goal of this paper is to investigate the potential incompatibility between efforts towards the achievement of higher collective well being and those associated with climate stabilization to this end it provides estimates of the additional energy needed and its associated carbon emissions under different climate scenarios and compares them with existing carbon budgets results indicate that even if new climate policies were adopted emissions associated with higher well being in all regions where improvements are needed could still reach up to one and a half times estimated 2 c budgets and even more so for lower temperature increase targets

a multisectorial matching model of unions abstract we develop an equilibrium matching model where unions have an important institutional presence monopolistic competition characterizes the goods market where only some sectors are unionized thus the model can vary the coverage of collective bargaining it can vary the degree of coordination between unions and alternatively consider national and sectorial unions calibration to the union premium implies a workers rent extraction parameter much lower than assumed in the matching literature we introduce unemployment insurance to study the interactions of policies with unions and find that unions only push for more generous benefits if this does not entail higher payroll taxes

rent sharing before and after the wage bill many biases plague the analysis of whether employers share rents with their employees unlike what is predicted by the competitive labour market model using a portuguese matched employer employee panel this article is one of the first to address these biases in three complementary ways 1 controlling directly for the fact that firms that share more rents will ceteris paribus have lower net of wages profits 2 instrumenting profits via interactions between the exchange rate and the share of exports in firm s total sales 3 considering firm or firm worker spell fixed effects and highlighting the role of downward wage rigidity these approaches clarify conflicting findings in the literature and result in our preferred specifications in significant evidence of rent sharing a lester range of pay dispersion of 56 also shown to be robust to a number of competitive interpretations

wages and the value of nonemployment nonemployment is often posited as a worker s outside option in wage setting models such as bargaining and wage posting the value of nonemployment is therefore a key determinant of wages we measure the wage effect of changes in the value of nonemployment among initially employed workers our quasi experimental variation in the value of nonemployment arises from four large reforms of unemployment insurance ui benefit levels in austria we document that wages are insensitive to ui benefit changes point estimates imply a wage response of less than 0 01 per 1 00 ui benefit increase and we can reject sensitivities larger than 0 03 the insensitivity holds even among workers with low wages and high predicted unemployment duration and among job switchers and recently unemployed workers the insensitivity of wages to the nonemployment value presents a puzzle to the widely used nash bargaining model which predicts a sensitivity of 0 24 0 48 our evidence supports wage setting models that insulate wages from the value of nonemployment

global estimates of market and non market values derived from nighttime satellite imagery land cover and ecosystem service valuation we estimated global marketed and non marketed economic value from two classified satellite images with global coverage at 1 km2 resolution gdp a measure of marketed economic output is correlated with the amount of light energy le emitted by that nation as measured by nighttime satellite images le emitted is more spatially explicit than whole country gdp may for some nations or regions be a more accurate indicator of economic activity than gdp itself can be directly observed and can be easily updated on an annual basis as far as we know this is the first global map of estimated economic activity produced at this high spatial resolution 1 km2 ecosystem services product esp is an important type of non marketed value esp at 1 km2 resolution was estimated using the igbp land cover dataset and unit ecosystem service values estimated by costanza et al valuing ecosystem services with efficiency fairness and sustainability as goals nature s services island press washington dc pp 49 70 the sum of these two gdp esp sep is a measure of the subtotal ecological economic product marketed plus a significant portion of the non marketed the ratio esp sep 100 esp is a measure of proportion of the sep from ecosystem services both sep and esp were calculated and mapped for each 1 km2 pixel on the earth s surface and aggregated by country results show the detailed spatial patterns of gdp esp and sep also available at http www du edu psutton esiindexisee ecoleconesi htm globally while gdp is concentrated in the northern industrialized countries esp is concentrated in tropical regions and in wetlands and other coastal systems esp ranges from 1 for belgium and luxembourg to 3 for the netherlands 18 for india 22 for the united states 49 for costa rica 57 for chile 73 for brazil and 92 for russia while gdp per capita has the usual northern industrialized countries at the top of the list sep per capita shows a quite different picture with a mixture of countries with either high gdp capita high esp capita or a combination near the top of the list finally we compare our results with two other indices 1 the 2001 environmental sustainability index esi derived as an initiative of the global leaders of tomorrow environment task force world economic forum and 2 ecological footprints of nations how much nature do they use how much nature do they have developed by mathis wackernagel and others while both of these indices purport to measure sustainability the esi is actually mainly a measure of economic activity and is correlated with gdp while the eco footprint index is a measure of environmental impact the related eco deficit national ecological capacity minus national footprint correlates well with esp