intervention policy of the boj a unified approach intervening in the fx market implies a complex decision process for central banks monetary authorities have to decide whether to intervene or not and if so when and how since the successive steps of this procedure are likely to be highly interdependent we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision process our estimations based on japanese data from 1991 to 2004 indicate that the bank of japan i mainly reacted to deviations of the exchange rate with respect to fundamentals and ii tended to favour secrecy when its credibility was low we also provide new insights on the so called secrecy puzzle by modeling explicitly the risk for a secret intervention to be detected our results have important implications in terms of exchange rate policy such as the emergence of a trade off between intervention size communication policy and secrecy our results tend to provide some explanation for the observed persistence of ineffective intervention policy during some sub periods c 2008 elsevier b v all rights reserved

foreign exchange market intervention and reserve accumulation in emerging asia is there evidence of fear of appreciation abstract asian central banks react more strongly to currency appreciations than depreciations and more to nominal effective exchange rates neers than to bilateral us dollar rates this rationalizes the relative exchange rate stability and the sustained reserve accumulation in the region

the flow approach to labor markets the flow approach to labor markets builds up from the flows of workers and of jobs it is based on three essential components a specification of labor demand in terms of flows of job creation destruction a process of matching between workers and firms and a process of wage determination where wages depend on the labor market prospects of employed workers and firms we think that this approach gives the right basic picture of unemployment and unemployment dynamics and of the relation between wage movements and the state of the labor market the additional richness it naturally delivers also captures important implications of labor market mechanisms for macroeconomics finally its structure is realistic enough to allow for a productive interaction with and use of micro work and micro evidence in both labor and product markets this paper shows the structure of the approach and some of its implications the first section develops a barebone model the second adds the flesh this abstract was borrowed from another version of this item

foreign exchange market intervention and expectations the yen dollar exchange rate abstract using press reports and official statistics on central bank intervention in conjunction with options market data we find that central bank intervention had no statistically significant systematic impact on the mean or higher moments of the exchange rate during 1993 2000 we also find that japanese authorities appeared to intervene mainly in response to deviations of the exchange rate from some implicit target levels and to a rise in market uncertainty u s monetary authorities intervened only in cooperation with the japanese authorities

long run relationship between output capital labour and productivity in emerging market economies long run relationship between the variables involved in the production function is an issue that is important particularly in developing countries as the neoclassical production function is best suited for developed countries and its applicability to developing countries is questionable in various ways this motivates us to do this based on time series analysis taking indian textile industry as an example which is currently at its crucial stage as a critical industry in an emerging economy with the phasing out of multi fibre arrangement in 2005 this study documents existence of cointegration between capital and output negative impact of employment shocks on output changes substitutability between changes in capital and labour negative effect of shocks to changes in capital stock on productivity and negative effect of employment shocks on future productivity these results are in line with the general perceptions about this industry and with the standard neoclassical propositions as explained in t

productivity growth protection and plant entry in a deregulating economy the case of india in this paper we study the comparative performance of indian manufacturing industries during relatively recent periods of domestic regulation and de regulation of plant entry the period of de regulation is accompanied by largely unchanging levels of import competition and higher output growth the growth of labour and total factor productivity tfpg is observed to be higher during the deregulation period we use data on 42 three digit manufacturing industries our sample covers consumer intermediate and capital good industries we study the relationship between levels of effective protection and total factor productivity growth tfpg we found that increasing effective rates of protection was not associated with lower tfpg we test the hypothesis that higher degree of trade protection induces greater entry of plants this hypothesis is statistically supported our econometric estimates found a positive association between net entry and tfpg after controlling for inter industry differences in effective protection asset size of plants and demand growth our results support the proposition that competition positively contributes to tfpg during deregulation

the ins and outs of unemployment in canada 1976 2008 this paper studies the flows into and out of unemployment in canada at an aggregate and a number of disaggregated levels i find that inflows into unemployment are countercyclical and outflows are procyclical at an aggregate level changes in the rate at which individuals leave unemployment account for most of the changes in unemployment rates in canada between 1976 and 2008 however flows into unemployment matter more at some disaggregated levels there are also some differences in the contributions of flows into and out of unemployment to changes in unemployment rates across the 1981 82 and 1990 92 recessions ce texte etudie les entrees et sorties du chomage au canada au niveau agrege et a un certain nombre de niveaux de desagregation on decouvre que les entrees en chomage sont contre cycliques et les sorties pro cycliques au niveau agrege les changements dans le taux de sorties du chomage expliquent le gros des changements dans les taux de chomage au canada entre 1976 et 2008 cependant les flux a l entree sont plus importants a certains niveaux de desagregation on note aussi des differences dans la contribution des flux a l entree et a la sortie du chomage aux changements dans les taux de chomage au cours des recessions de 1981 82 et de 1990 92

learning about intervention target zones abstract this paper provides a framework for evaluating how market participants beliefs about foreign exchange target zones change as they learn about central bank intervention policy we generalize the standard target zone model to allow for intra marginal intervention intra marginal intervention implies that market participants beliefs about the target zone can be determined from their beliefs about the likelihood of intervention we then estimate a daily probability of intervention model for the period following the louvre accord we find that the market s views of intervention target zones would have varied quite a bit over time even over this relatively stable period

optimal unemployment insurance in ge a robust calibration approach abstract a simple monte carlo calibration approach is implemented in a ge model with uninsurable employment risk to quantitatively study the optimal replacement rate of a public unemployment insurance ui scheme the optimal ui sampling distribution is found to be bimodal

growth of factor productivity in the turkish manufacturing industry at provincial level karadag m onder a o and deliktas e 2005 growth of factor productivity in the turkish manufacturing industry at provincial level regional studies 39 213 223 this paper estimates the total factor productivity tfp change of the private and public sectors in the turkish manufacturing industry in the selected provinces for 1990 98 it uses data envelopment analysis to compute malmquist productivity indices decomposed into two components namely efficiency change and technical change the results show that many of the provinces show improvement in tfp on average for the public sector while in the private sector only half the provinces show growth in tfp overall evidence of catching up can be observed only in the private sector the results also reveal that technical progress plays the main role in productivity growth

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

asymmetric exchange rate intervention and international reserve accumulation in india abstract the empirical evidence derived from the ardl approach of pesaran et al pesaran m h shin y smith r j 1996 testing for the existence of a long run relationship dae working paper no 9622 department of applied economics university of cambridge suggests that volatility of external transactions has had a moderate impact on reserve demand in recent years instead asymmetric exchange rate intervention triggered perhaps by concerns about india s export competitiveness seems to have contributed to large stockpile of reserves

exports investment efficiency and economic growth in ldc an empirical investigation this study seeks to analyse the relationship between exports and growth for 19 less developed countries it utilizes multivariate causality analysis based on the error correction model to address several important hypotheses the results indicate that when exports have a causal influence in the development process that in general this is the result of their effect on both efficiency and accumulation in addition improvements in output and capital accumulation in an economy seem to have just as much of an influence on exports as exports have on output and capital accumulation finally the growth process in east asia seems to be quite different from that in southeast asia

the measurement of labor force dynamics with longitudinal data the labour market activity survey filter this article explores the measurement of labor force dynamics using longitudinal data focusing in particular on the canadian labour market activity survey lmas which represents a potential advance in longitudinal data collection because it measures aspects of dynamics not available in existing panel data such as the panel study of income dynamics and the national longitudinal survey we examine the implications of the lmas questionnaire structure the lmas filter for the study of labor market dynamics and undertake simulations to provide a quantitative assessment of the importance of this filter for labor force spells and transitions between labor force states

misclassification errors and the underestimation of the us unemployment rate using recent results in the measurement error literature we show that the official u s unemployment rates substantially underestimate the true levels of unemployment due to misclassification errors in labor force status in current population surveys our closed form identification of the misclassification probabilities relies on the key assumptions that the misreporting behaviors only depend on the true values and that the true labor force status dynamics satisfy a markov type property during the period of 1996 to 2009 the corrected monthly unemployment rates are 1 to 4 6 percentage points 25 to 45 higher than the official rates and are more sensitive to changes in business cycles labor force participation rates however are not affected by this correction we also provide results for various subgroups of the u s population defined by gender race and age

the adoption of new technology by the farmers in taiwan this study addresses the technologies the farmers adopted their reasons for adopting these technologies and the result of adopting these technologies the design and strategy used to collect the data needed are both qualitative and quantitative farmers who practised traditional farming methods and those who adopted the new technologies were both given survey questionnaires and were interviewed the result of the study shows that the technologies applied by the farmers are the use of tractors in tilling the ground the use of machinery in planting the practice of irrigation and the use of a combination of organic and commercial fertilizers the reasons for the adoption of the latter are the availability of chemicals and the convenience of their use and this is used to enhance the growth of plants the results of the new technology adoption are high yields of produce production of hybrid crops and the saving of labour thus increasing the income of the farmers

estimating labour market transitions and continuations using repeated cross sectional data abstract this paper proposes a population cohort approach for estimating labour market continuations or transitions using repeated cross sectional data this approach allows for the construction of consistent standard errors that account for the full variability of cross sectional data

the temporal pattern of trading rule returns and exchange rate intervention intervention does not generate technical trading profits abstract this paper characterizes the temporal pattern of trading rule returns and official intervention for australian german swiss and u s data to investigate whether intervention generates technical trading rule profits the data reject the hypothesis that intervention generates inefficiencies from which technical rules profit in particular high frequency data show that abnormally high trading rule returns precede german swiss and u s intervention australian intervention precedes high trading rule returns but trading intervention patterns make it implausible that intervention actually generates those returns rather intervention responds to exchange rate trends from which trading rules have recently profited

export response to trade liberalization in bangladesh a cointegration analysis this paper investigates the response of bangladesh s aggregate merchandise exports to a real exchange rate based trade liberalization programme during the period 1974 1995 the cointegration and error correction modelling approaches have been applied the empirical results suggest that there exists a unique long run or equilibrium relationship among real quantities of export relative export price and export weighted real effective exchange rate the short term dynamic behaviour of bangladesh s export supply has been investigated by estimating an error correction model in which the error correction term has been found to be correctly signed and statistically significant relative export price lagged two quarters real effective exchange rate predicted values of real gdp lagged one quarter and a dummy variable capturing the effects of trade liberalization programme have all emerged as important determinants of an aggregate export supply function for bangladesh the error correction model has also been

trade liberalization and productivity growth new evidence from the turkish rubber industry this paper empirically examines the effects of a change in foreign trade regime on productivity growth based on a generalized leontief factor demand function system total factor productivity growth tfpg rates are calculated for the turkish rubber industry during a substantial trade liberalization in the 1980s tfpg was significantly higher following trade liberalization technological change was the major contributor to this growth when a panel data estimation technique is used to explain technological change the effects of trade liberalization become clearer a one percentage point increase in the protection level led to more than a one percentage point 1 27 decline in the technological change rate

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

the determinants of foreign exchange intervention by central banks evidence from australia abstract intervention by the reserve bank of australia on foreign exchange markets from 1983 to 1997 is conjectured to have been determined by exchange rate trend correction exchange rate volatility smoothing the us and australian overnight interest rate differentials profitability and foreign currency reserve inventory considerations using probit and friction models we show that these factors were significant influences on intervention behavior consistent with the constraint of intervening only when a clear trend is apparent we find that above average measures of deviations from trend and of volatility muted the response of the reserve bank

what prompts japan to intervene in the forex market a new approach to a reaction function abstract this paper estimates and analyzes the reaction function of japanese intervention in the foreign exchange forex markets using daily japanese intervention data from april 1 1991 to december 31 2002 a theoretical friction model is adopted to describe the intervention as cost minimizing behavior an ordered probit model consistent with the theoretical model is employed to estimate authorities reaction function a noise to signal ratio is applied in selecting the optimal cutoff point in estimated ordered probit function major findings are as follows 1 a regime change in june 1995 from small scale frequent interventions to large scale infrequent interventions is detected 2 the optimum cutoff is higher in the first half than the second half

foreign exchange market intervention in two small open economies the canadian and australian experience abstract we examine intervention by the bank of canada and the reserve bank of australia for daily data from 1989 to 1998 both central banks intervene in response to excessive exchange rate volatility and uncertainty volatility is the implied volatility of foreign currency futures options uncertainty is the kurtosis of the implied risk neutral probability density functions we also examine the impact of inflation targets unlike other studies we also consider commodity futures prices these turn out to help explain the effectiveness of intervention central bank intervention was largely unsuccessful in both countries though volatility and kurtosis were modestly affected

unemployment benefits and labor market transitions a multinomial logit model with errors in classification this paper utilizes validation data on survey response error in the current population survey to generalize the standard multinomial logit model to allow for spurious events that result from classification error the authors basic approach could be used with other stochastic models of discrete events as well they illustrate their algorithm by studying the effect of unemployment insurance on transitions from unemployment to employment and on labor force withdrawal their results confirm earlier work suggesting that unemployment insurance lengthens unemployment spells and show that correcting for classification error strengthens the apparent effect of unemployment insurance on spell durations copyright 1995 by mit press

wages and employment in a segmented labor market this paper analyzes the impact of business cycle fluctuations on a labor market segmented into a unionized primary sector and a competitive secondary sector either permanent or temporary changes in real aggregate demand are shown to widen the intersectoral wage differential in recession and under reasonable specifications of key parameters to cause greater fluctuations of primary sector employment than secondary sector employment this pattern agrees with the stylized facts of the u s economy

quasi fixed inputs in u s and japanese manufacturing a generalized leontief restricted cost function approach in this paper a generalized leontief variable cost function is develope d which permits analytical derivation of steady state levels of quasi fixed inputs and capacity output and does not require specification of a numeraire input this framework is then used to evaluate the fa ctor demand patterns of japanese and u s manufacturing based on bot h one quasi fixed capital input and two quasi fixed capital and la bor input specifications and both static and dynamic optimization t he findings provide evidence of considerable flexibility of demand re sponses in japan which may have contributed to japan s relatively st rong economic performance in the volatile 1970s copyright 1988 by mit press

does the ilo definition capture all unemployment the labour market status of many non working persons is at the boundary between unemployment and inactivity like the unemployed they seek and are available for work unlike them their last search action was not recent enough to meet the ilo definition of unemployment in this paper we examine by non parametric tests how the transition probabilities of these out of the labour force job seekers differ from those of the unemployed as well as the other non participants first using data from the european community household panel we show that in most eu countries these job seekers constitute a distinct labour market state second we rely on information only available in the italian labour force survey to derive a measure of search intensity which we use to break down the out of the labour force job seekers on the basis of their transition probabilities the most active are indistinguishable from the unemployed

employers on line recruitment and screening practices i introduction at a relatively low cost the internet offers employers and job searchers access to detailed and up to date information about job searchers and job vacancies in different locations around the world as well as novel tools that improve the ease and speed of search 1 it is therefore not surprising that using the internet has become an integral part of employers and job searchers search practices 2 however research has to date revealed relatively little about the internet s role in matching job searchers to jobs about activities that employers and job searchers pursue on line and whether the internet benefits all employers and job searchers equally in this paper we use technology in a novel way in order to collect new data and assess how employers use services offered by on line job boards in an attempt to facilitate their search the data record descriptions of job vacancies that were posted on the on line job board monster com from 2004 to 2006 from each vacancy s description we can identify employers use of on line search tools offered free of charge by monster com that are designed to facilitate employers search we can also identify several vacancy and employer attributes after the data collection we tracked each vacancy for 16 weeks to identify the week a vacancy could no longer be accessed for viewing on the basis of this information we construct a measure of an employer s on line search outcome the duration of a vacancy s posting on monster com we use these insights for two purposes first we examine employers use of services that are offered by monster com the incidence of employers use of these services when posting job openings on line and attributes that can help to explain their use second we examine whether vacancy and employer characteristics can also help to explain how long it takes before employers withdraw postings of their job vacancies from the on line job board we find that not all employers choose to use on line search tools when posting their vacancies on monster com even though the tools can be used free of charge and are designed to facilitate employers search on line recruitment and screening tools are more likely to be used when employers indicate active engagement in search or have a better knowledge of the monster s online search technology due to having used it frequently a standard model of employer search suggests that vacancy characteristics should help to explain employers choice of on line search tools however we find that relatively small differences exist in the likelihood that the online search tools are used across different types of vacancies both vacancy and employer characteristics can help to explain differences in the duration of a vacancy s posting on monster com in a manner that is consistent with a model of employer search in his survey autor 2001 was the first to review potential implications of the internet for the functioning of the labor market at the time when the on line recruiting industry was in its infancy since then several papers have drawn on different data to examine the internet s role in the labor market our paper complements this literature in three respects first it is one of the first to document how employers use services offered by on line job boards to facilitate their recruitment efforts in this respect the paper by hadass 2004 is of some interest using data on the recruitment efforts of a single u s manufacturing firm in the second half of the 1990s hadass finds that new hires who were recruited via the internet experience shorter tenure than those recruited via informal channels but similar tenure to those recruited through newspaper ads or a hired recruitment agency in her analysis hadass can say much more about the internet s role in matching workers to jobs than this paper because the author observes the outcomes of job searchers who were recruited on line and can compare them to the outcomes of job searchers who were recruited through traditional search channels

the rise of the added worker effect we document that the added worker effect awe has increased over the last three decades we develop a search model with two earner households and we illustrate that the increase in the awe from the 1980s to the 2000s can be explained through i the narrowing of the gender pay gap ii changes in the frictions in the labor market and iii changes in the labor force participation costs of married women

household search and the aggregate labor market we develop a theoretical model with labour market frictions incomplete financial markets and with households which have two members households face unemployment risks but their members adjust their labour supplies to insure against unemployment we use the model to explain the cyclical properties of aggregate employment and participation as in the u s data the model predicts that the participation rate the fraction of individuals that want jobs is not strongly correlated with aggregate economic activity this property is in sharp contrast to the strongly procyclical participation predicted by both neoclassical models and models with search frictions when we assume bachelor households or households with infinitely many members complete markets in the two member household model and in the data primary earners are always in the labour force secondary earners have a mildly countercyclical participation rate and a mildly procyclical employment rate their behaviour insures the household against unemployment risks

a three state model of worker flows in general equilibrium abstract we develop a simple model featuring search frictions and a nondegenerate labor supply decision along the extensive margin the model is a standard version of the neoclassical growth model with indivisible labor and idiosyncratic productivity shocks and frictions characterized by employment loss and employment opportunity arrival shocks we argue that it is able to account for the key features of observed labor market flows for reasonable parameter values persistent idiosyncratic productivity shocks play a key role in allowing the model to match the persistence of the employment and out of the labor force states found in individual labor market histories

gender gaps in unemployment rates in oecd countries in some oecd countries the male and female unemployment rates are very similar but in others notably the mediterranean countries the female unemployment rate is much higher than the male explaining these cross country differences is the subject of this article we show that in countries where there is a large gender gap in unemployment rates there is a gender gap in both flows from employment into unemployment and from unemployment into employment we conclude that differences in human capital accumulation between men and women interacted with labor market institutions is an important part of the explanation

equilibrium search unemployment endogenous participation and labor market flows the sustainability of welfare states requires high employment and high participation to raise the tax base to analyze labor supply in a world with market frictions we propose and solve a macro model of the labor market with unemployment and labor force participation as endogenous and distinct states in our world workers decisions of participating are determined by an entry decision and an exit decision a calibration of the model improves the usual representations of labor markets since it quantitatively accounts for the observed flows between employment and nonparticipation the paper investigates also the effect of payroll taxes and unemployment benefits on participation decisions taxes reduce entries and increase exits whereas unemployment benefits at a given job finding rate raise entries and have ambiguous effects on exits jel j2 j6

is there evidence of fear of appreciation in china s foreign exchange market intervention abstractusing the data after the exchange rate regime reform in july 2005 this paper systematically studied the issue whether china has conducted fear of appreciation asymmetric intervention th

labor supply response to welfare programs a dynamic analysis previous static analyses of the work disincentive effects of welfare programs are extended to a dynamic context using a sample of continuous longitudinal labor market histories estimates are derived for welfare nonwelfare differences in labor market flows among the states of employment unemployment and nonparticipation the estimates are used to identify the main sources of the lower employment and labor force participation rates and higher unemployment rate of welfare recipients the findings indicate that welfare programs have substantial effects on virtually every labor market transition examined but that the primary source of the static work disincentive effect is slower entry into employment

fishing in different pools job search strategies and job finding success in canada in the early 1980s this article examines the job search methods of jobless workers and emphasizes sample selectivity in choice of job search strategies especially use of public employment agencies longitudinal data from the labour force survey of canada for 1981 1983 and 1986 indicate that job search methods change with the business cycle and that many people find jobs without any reported search the determinants of job search success also vary substantially over the business cycle implying a substantial social return to public employment agencies at the 1983 trough of the recession but no noticeable benefits when aggregate unemployment is relatively low

how local are labor markets evidence from a spatial job search model this paper models the optimal search strategies of the unemployed across space to characterize local labor markets our methodology allows for linkages between numerous areas while preserving tractability we estimate that labor markets are quite local as the attractiveness of jobs to applicants sharply decays with distance also workers are discouraged from searching in areas with strong job competition from other jobseekers however as labor markets overlap a local stimulus or transport improvements have modest effects on local outcomes because ripple effects in job applications dilute their impact across a series of overlapping markets

the maturation and growth of infant industries the case of korea abstract this paper first shows that contrary to evidence from most developing countries korean infant industries under protection have tended to mature it also shows that output grows faster in infant industries than in mature ones the paper then discusses probable factors that have made the maturation and growth of infant industries possible in korea overall the empirical evidence and its interpretation support the revisionist rather than neoclassical or market friendly view in the recent debate on east asian industrialization

why do central banks intervene abstract intervention by central banks in terms of buying and selling foreign currency has been a major activity in recent years this paper investigates the motivations for such policy and the evidence for its effectiveness we use high quality daily data on the dollar amounts of intervention by the central banks of the us and germany we also use information on agreed g7 target levels for the dm and yen nominal exchange rates daily nominal dollar exchange rate returns are well described as a martingale garch process and we find little evidence that the different types of intervention have had much effect on the conditional mean of exchange rate returns there is some evidence that intervention is associated with slight increases in the volatility of exchange rate returns while little evidence is found for the effectiveness of intervention the motivations are more clear in particular from the application of probit analysis we find that the probability of intervention is determined by the magnitude of the deviation of the nominal exchange rate from the agreed target level and to a lesser extent by the current volatility of exchange rates

search behaviour transitions to non participation and the duration of unemployment using longitudinal micro data on unemployed individuals for 1983 85 a structural job search model is estimated the model allows for transitions from unemployment to nonparticipation an extended version of the model deals with the influence of on the job search and prospective wage increases on search behavior of the unemployed the empirical results show that the probability of accepting a job offer is almost one for most unemployed individuals a large portion of unemployment spells ends in a transition out of the labor force the effects of changes in benefits on duration appear to be extremely small copyright 1990 by royal economic society

search frictions and labor market participation abstract cross country differences in labor market participation are often larger than differences in unemployment rates the same holds true across demographic groups within a given economy we argue that the interaction between labor force participation decisions and labor market frictions can help us understand these patterns this interaction highlights dynamic aspects of the participation decision in contrast to standard textbook treatments that emphasize static costs and benefits of participation we extend the standard labor market search problem to allow for a third state non participation and assumes that stochastic participation costs precipitate flows into and out of non participation we fully characterize the worker s decision problem and use numerical simulations to demonstrate how participation patterns vary with individual characteristics and with labor market conditions

earnings unemployment and the allocation of time over time since an individual s labour market history can be described by a markov chain in state space it is possible to calculate the steady states it is natural to interpret the steady state proportion in unemployment for a group of identical workers as the natural rate of unemployment for this group i e it is the expected proportion that would be employed if the environment were to remain constant it is shown how the natural rate of unemployment is different for different groups the model is estimated using data from a large u s income maintenance experiment the predictions of the model with some exceptions bear up well to confrontation by data the empirical findings also accord well with existing evidence on cross section studies of labour supply we find that labour force participation rates implied by the estimated models are positively related to earnings for all age sex and race groups as expected we demonstrate that the elasticities of the unemployment rates for all groups with respect to expected wage rates are negative and large in absolute value in the case of adults while the role of the wage in allocation of time is not novel the existing neoclassical labour literature uses static labour supply models to interpret participation rate studies

job search in thick markets abstract i analyze empirically the effects of urban and industrial agglomeration on both search behavior and the efficiency of matching the analysis is based on a unique panel data set from the italian labor force survey micro data covering 520 randomly drawn local labor market areas 66 of the total over the four quarters of 2002 i compute transition probabilities from non employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched i then test whether these are affected by market size industrial variety and or industry specialization the main results indicate that market size and industry specialization raise job seekers chances of finding employment conditional on having searched while industrial variety is not significantly different from zero finally the effect of agglomeration on non employed individuals search behavior cannot be significantly distinguished from zero

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

input substitution economies of scale and productivity growth in the us upholstered furniture industry cost factor demand and productivity growth are considered in the upholstered furniture industry over 1958 87 factors are divided into labour capital and materials it is found that all inputs are substitutes in production although substitution elasticities are small factor demand is price inelastic for all inputs the industry operates around minimum average cost productivity growth is small but significant the results indicate that labour will continue to be important in the industry however regional comparative advantage is not related to labour alone the results suggest that policies to attract or retain the industry must consider the low degree of factor substitution

policy designs in a dynamic model of infant industry protection abstract this paper takes the neoclassical infant industry model allows agents to respond to future expectations and reveals previously unexplained relationships between protection and outcome policy which projects to protect the industry until international competitiveness may not necessarily succeed consistent to the mixed empirical evaluations to guarantee success protection has to last longer however for success to be an equilibrium protection can last shorter decline after take off is also an equilibrium when adjustment speed is bounded increasing the protection rate is not isomorphic to decreasing its duration in policy design adjustment speed critical industry scale and policy duration are all relevant

a theory of dual labor markets with application to industrial policy discrimination and keynesian unemployment this paper develops a model of dual labor markets based on employers need to motivate workers in order to elicit effort from their workers employers may find it optimal to pay more than the going wage this changes fundamentally the character of labor markets the model is applied to a wide range of labor market phenomena it provides a coherent framework for understanding the claims of industrial policy advocates it also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces finally the model provides the basis for a theory of involuntary unemployment

the role for long run target values of the exchange rate in the bank of japan s policy reaction function this paper analyses whether the bank of japan boj had fundamental concepts in mind when carrying out interventions in the foreign exchange market we start by considering different long run fundamental target values based on a monetary exchange rate model and compare them with more ad hoc targets based on these findings we explain the intervention probability for the boj after 1991 based on an ordered probit model by accounting for subperiods and asymmetric effects it turns out that estimated fundamentally based values for the exchange rate provide additional information for the decision to intervene in particular after 1995 however short run ad hoc targets seem to be very important in particular from 1991 until 1995 while medium run ad hoc targets gain importance at the end of the 1990s overall we find a leaning against the wind strategy in the event of overvaluation relies on ad hoc targets while intervention in cases of undervaluation seems to be guided more strongly by deviations from fundamental values

defining unemployment in developing countries evidence from trinidad and tobago the international labour organisation ilo argues for relaxing the standard definition of unemployment in developing countries by eliminating the requirement that a person be actively searching for a job we examine whether such an extension of the standard definition is appropriate in the case of trinidad and tobago t t specifically we use the trinidad and tobago labour force survey to examine whether active job search is important in determining the labour market transitions of the non employed our results indicate that in trinidad and tobago males who under the standard criteria would be considered out of the labour force because they report willingness to work but are not currently searching for a job are appropriately classified as unemployed further evidence suggests that this may be because job search may not be as meaningful in rural as it is in urban areas c 2003 elsevier b v all rights reserved

are unemployment and out of the labor force behaviorally distinct labor force states abstract this paper uses the j test developed by mackinnon et al 1983 and us gross change data for six age sex demographic groups to test the hypothesis that unemployment and out of the labor force are behaviorally meaningless distinctions results obtained with these data and test confirm those obtained by flinn and heckman 1983 we found that for young ages 16 19 and young adult ages 20 24 males and females the two states are distinct whereas for prime age males and females ages 25 44 this distinction is meaningless

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

unemployment participation and worker flows over the life cycle we estimate and report life cycle transition probabilities between employment unemployment and inactivity for male workers using current population survey monthly files we assess the relative importance of each probability in explaining the life cycle profiles of participation and unemployment rates using a novel decomposition method a key robust finding is that most differences in participation and unemployment over the life cycle can be attributed to the probability of leaving employment and the probability of transiting from inactivity to unemployment while transitions from unemployment to employment the job finding probability play secondary roles we then show that a simple life cycle extension of a three state labor search model with leisure shocks can qualitatively replicate the empirical unemployment and participation life cycle profiles without introducing age or worker heterogeneity in market abilities we conclude that models that seek to explain life cycle work patterns should not ignore transitions to and from inactivity

the cyclical behavior of the beveridge curve in the housing market abstract this paper develops a business cycle model of the housing market with search frictions and entry of both buyers and sellers the housing market exhibits a well established cyclical component which features three stylized facts prices move in the same direction as sales and the number of houses for sale but opposite to the time it takes to sell a house these stylized facts imply that in the data housing vacancies and the number of buyers are positively correlated i e that the beveridge curve is upward sloping a baseline search and matching model of the housing market is unable to match these stylized facts because it inherently generates a downward sloping beveridge curve with free entry of both buyers and sellers our model reproduces the positive correlation between prices sales and vacancies and matches the stylized facts qualitatively and quantitatively

the limits of trade policy reform in developing countries trade reform is now raising some new issues this paper deals with three sets of questions first how can trade reform be sustained can governments convince business labor or consumers that trade reform will be lasting so as to forestall possible adverse reactions that would jeopardize the sustainability of the reform second what role should trade reform play when it is implemented in the context of macroeconomic instability are there potential conflicts between the standard desiderata for trade reform and the requirements of macro stability finally should we be worried about the consequences of trade reform in the imperfectly competitive market environments that characterize the developing economies

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

russia s commercial policy 2008 11 modernization crisis and the wto accession this paper examines the commercial policy of russia during 2008 11 a time of global financial crisis which coincided with an announced russian modernization programme in 2008 russia introduced a development strategy to limit its dependence on natural resources however the government relied heavily on this income for the planned modernization programme the falling price of oil in 2008 9 led to a tightened government budget constraint this situation induced russia towards wider use of more traditional instruments of trade policy such as tariff policy as well as an import substitution strategy the creation of the customs union and a pause in the wto accession process russia has been found by the global trade alert gta initiative to be one of the main users of protectionist policies since november 2008 with the oil price recovery from september 2010 russia had been back in the wto accession process on revised terms and conditions the wto ministerial conference in geneva approved the accession package of the russian federation on 16 december 2011 copyright 2012 oxford university press

canadian labour market performance in international perspective my objective is to assess canadian labour market outcomes in recent decades and to compare canada s performance with that experienced in other industrialized countries the focus is on three key dimensions employment unemployment and the structure of earnings although my main purpose in the paper is to examine the canadian record i also ask what we can learn from canada s experience about the causes of some of the salient economic developments in oecd countries the rise and persistence of unemployment in europe and the growth of income inequality in countries such as the united states the united kingdom canada and australia let s begin with the question how well has the canadian economy performed during the past three decades if our reference point is the 1950s and 1960s the answer is likely to be poorly indeed the first twenty five years following the second world war now appear as a golden era since that period real income growth has been slow earnings have become more unequally distributed and unemployment has trended upward reaching levels that would have been considered outside the range of plausibility in the 1960s however most of the advanced countries have experienced a sharp deterioration in their economic performance since the early 1970s the turbulent world economic environment has made it difficult to sustain the kind of outcomes ob

price cost margins exports and productivity growth with an application to canadian industries a model is estimated for oligopolistic industries producing multiple outputs in short run equilibrium outputs are sold domestically and exported while capital is treated as a quasi fixed factor the model is applied to the canadian non electrical machinery electrical products and chemical products industries the results show that there is significant oligopoly power in each of the industries and that the degree of this power differs between the domestic and export markets total factor productivity is decomposed price cost margins exert little influence but the rate of technological change returns to scale and the rate of capital adjustment determine productivity growth

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

does employee body weight affect employers behavior in this paper we study the possible segregation of overweight individuals already established in the labor market when firms make decisions on hiring firing and promoting most existing studies use wage equations to document wage differences but little is known about the reason for the differences and the sorting of workers using an equilibrium search model search frictions are taken into account additionally sorting is examined using a logit model we find that wage differences between workers who have a normal weight and workers who are overweight or obese can be explained by differential firm behavior with respect to both the job offer arrival rate and the probability of being promoted

screening unemployment in a dual labor market abstract equilibrium unemployment is shown to arise in a dual labor market when primary firms use status dependent hiring to screen heterogeneous labor characterization is given of equilibria with both complete and incomplete screening

detailed estimation of worklife expectancy for the measurement of human capital accounting for marriage and children abstract measuring an individual s human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history calculating such measures requires accurate estimates of worklife expectancy here worklife estimates for men and women in the usa categorized by educational attainment race marital status parental status and current labour force status are presented race has a much larger impact on the worklife expectancy of men than women education is associated with larger worklife differentials for women the association between marriage and worklife expectancy is significant but of opposite sign for men and women married women men have a lower higher worklife expectancy than single women men parenthood is associated with a reduction in the worklife expectancy of women the association is smaller and varies from positive for some education marital status groups to negative for others for men

the effect of employment protection and product market regulation on labour market performance substitution or complementarity this article provides new evidence on the linkages between various forms of market regulation and joblessness and its components unemployment and inactivity one crucial contribution of this article is the analysis of the interdependence across product market regulation pmr and labour markets regulation employment protection legislation epl with the help of a dynamic fixed effect model with an interaction term we estimate the marginal impact of epl and pmr at different levels of the other interacted variable to cope with problems related to the inclusion of time invariant institutional variables in fixed effect models we present results of regressions based on a new procedure specifically designed to treat slowly changing variables we build time series data to account for the annual evolution of epl and use new data for unemployment insurance net replacement rates among other results we find evidence of a positive negative effect of epl pmr on employment performance as well as of subst

long term unemployment and the great recession the role of composition duration dependence and nonparticipation we explore the role of composition duration dependence and labor force nonparticipation in accounting for the sharp increase in the incidence of long term unemployment ltu during the great recession we show that compositional shifts account for very little of the observed increase in ltu using panel data from the current population survey for 2002 7 we calibrate a matching model that allows for duration dependence in unemployment and transitions between employment unemployment and nonparticipation the calibrated model accounts for almost all of the increase in ltu and much of the observed outward shift in the beveridge curve between 2008 and 2013

substitution possibilities for unpriced natural resources restricted cost functions for the canadian metal mining industry a bstract the effects of resource depletion on economic growth depend critically on the elasticities of substitution between non renewable natural resources and reproducible inputs estimation of the elasticities of substitution for natural resources has been hindered by the absence of data on their prices which results from the prevalence of vertical integration in natural resource industries in this paper we use the theory of restricted cost functions to develop a general procedure for estimating substitution possibilities for unpriced inputs estimation of the model with data for the canadian metal mining industry indicates that the elasticities of substitution for the natural resource metallic ore are equal to unity

an equilibrium theory of learning search and wages we propose an equilibrium theory of learning from search in the labor market which addresses the search behavior of workers the creation of jobs and the determination of wages as functions of labor market histories in the model each worker has incomplete information about his job finding ability and learns about it from his search outcomes the theory formalizes a notion akin to discouragement over each uninterrupted unemployment spell unemployed workers update their beliefs about their job finding abilities downward and reduce their desired wages one contribution of the paper is to integrate learning from search into an equilibrium framework by inducing endogenous heterogeneity in workers beliefs learning from search provides a novel explanation for a set of related empirical observations about the labor market including unemployment duration dependence and wage dispersion another contribution is to apply lattice theoretic techniques to analyze learning from experience which is useful because learning generates convex value functions and in principle multiple solutions to a worker s optimization problem

the lot of the unemployed a time use perspective this paper provides new evidence on time use and subjective well being of employed and unemployed individuals in 14 countries we devote particular attention to characterizing and modeling job search intensity measured by the amount of time devoted to searching for a new job job search intensity varies considerably across countries and is higher in countries that have higher wage dispersion we also examine the relationship between unemployment benefits and job search