information on strikes and union settlements patterns of coverage in a newspaper of record the authors investigate whether the new york times coverage of strikes and non strike wage settlements in large bargaining units changed during the 1980s a time when a transformation of industrial relations is said to have taken place although the total number of new york times articles on such events declined during the 1980s the authors find that when appropriate control variables are included in the analysis the apparent drop in coverage disappears important variables determining the extent of news coverage were occurrence of a strike strike duration number of workers involved occurrence of federal intervention key industry status that is whether the affected industry was among those industries identified as exceptionally important for wage setting and proximity to new york city they speculate that the reduced number of articles may simply reflect a decreased incidence of strikes

is education always reducing fertility evidence from compulsory schooling reforms we study the relationship between education and fertility exploiting compulsory schooling reforms in england and continental europe implemented between 1936 and 1975 we assess the causal effect of education on the number of biological children and the incidence of childlessness while we find a negative relationship between education and fertility in england this result can not be confirmed for continental europe the additional education generated by schooling expansions on the continent did not lead to a decrease in the number of biological children nor to an increase in childlessness these findings are robust to a number of sensitivity and falsification checks author s abstract

nonparametric estimation of sample selection models sample selection models provide an important way of accounting for economic decisions that combine discrete and continuous choices and of correcting for nonrandom sampling nonparametric estimators for these models are developed in this paper these can be used for estimating shapes and important economic quantities as in standard nonparametnc regression endogeneity of regressors of interest is allowed for series estimators for these models are developed which are useful for imposing additivity restnctions that arise from selection corrections convergence rates and asymptotic normality results are derived an application to returns to schooling among australian young females is given

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

evolution of the infant health production function michael grossman s seminal publication on the demand for health and health production grossman 1972 has spawned a substantial body of research focusing on the production of infant health this article provides a systematic review of the published literature to date on infant health production and how it has evolved over the past 3 4 decades as data have become more available computing has improved and econometric methods have become more sophisticated while empirical research in most fields has expanded in corresponding ways the infant health production research has become an important part of the broader and inherently multidisciplinary literature on intergenerational health the strongest and most robust findings are that policies matter for infant health particularly those affecting access to health care and that prenatal smoking and other chemical exposures substantially compromise infant health promising directions for future research include elucidating relevant pathways reconciling the largely inconsistent estimated effects of nutrition and education and exploring the roles of preconceptional and lifetime health care paternal factors social support housing complementarity and substitutability of inputs factors that modify effects of inputs and evolving medical technologies

cyclical fluctuations in strike activity using a set of data on contracts and strikes for the period 1970 81 the author distinguishes among the roles of aggregate business conditions labor market conditions and product market conditions in the determination of strike incidence and duration strike incidence is found to be highest in industries that are depressed relative to the rest of the economy but in regions with low unemployment this finding is consistent with the theory that the cost of a strike to a firm increases with the demand for its product and the cost of a strike to the union increases with unemployment another finding however is that strikes are longest in industries that are booming relative to the rest of the economy

bargaining over reform abstract this paper models the delay in a macroeconomic stabilization as the outcome of a bargaining game between two parties who must reach an agreement over how the stabilization cost is to be shared the paper modifies alesina and drazen s 1991 american economic review 81 1170 1189 war of attrition model by endogenizing the distribution of the stabilization costs through a bargaining game using this bargaining framework the paper analyzes the role of crises and foreign assistance in bringing about a settlement to the distributional conflict in the bargaining game a crisis that increases the welfare loss from not stabilizing the economy will lower the probability of delay in contrast foreign aid that is used to reduce the stabilization costs will further increase the delay in reaching an agreement between the two parties

keynesian models of deflation and depression revisited abstract this paper extends tobin s tobin j 1975 keynesian models of recession and depression american economic review 65 195 202 keynesian analysis of deflation to include a range of additional channels through which deflation exacerbates keynesian unemployment the paper provides further theoretical reasons why downward price level adjustment may not solve the keynesian problem these arguments challenge the received wisdom that keynes general theory is a special case resting on downwardly rigid prices and nominal wages this conventional wisdom has led many economists to recommend policies promoting downward flexibility these policies have created an environment in which deflation is more likely giving new relevance to keynesian analysis of deflation

empirical test of a separating equilibrium in national football league contract negotiations i empirically test for a separating equilibrium in the bargaining contract of national football league nfl contract negotiations the separating equilibrium predicts that a player who delays contractual agreement signs a more lucrative contract and has positive private information on his ability level at the time of contract negotiations these predictions are tested using data on 1 873 players selected in the 1986 through 1991 nfl drafts the empirical results support the implications of the separating equilibrium

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

the effect of female education on fertility and infant health evidence from school entry policies using exact date of birth this paper uses age at school entry policies to identify the effect of female education on fertility and infant health we focus on sharp contrasts in schooling fertility and infant health between women born just before and after the school entry date school entry policies affect female education and the quality of a woman s mate and have generally small but possibly heterogeneous effects on fertility and infant health we argue that school entry policies manipulate primarily the education of young women at risk of dropping out of school

is strike behavior cyclical we examine cyclicality of strike frequency and incidence using canadian data on strikes and contracts total strike frequency exhibits significant procyclicality to which within contract strikes contribute appreciably evidence is weaker for procyclical behavior of contract expiry strikes both in total and disaggregated by issue strike incidence is also procyclical particularly in manufacturing though the procyclicality here is confined to strikes over nonwage issues these results mirror those obtained by analyzing the frequency of strikes in the contract data industry specific cyclical variables positively affect strike incidence in manufacturing but region specific variables have no effect

nutrition information and household behavior experimental evidence from malawi incorrect knowledge of the health production function may lead to inefficient household choices and thereby to the production of suboptimal levels of health this paper studies the effects of a randomized intervention in rural malawi that over a six month period provided mothers of young infants with information on child nutrition without supplying any monetary or in kind resources a simple model first investigates theoretically how nutrition and other household choices including labor supply may change in response to the improved nutrition knowledge observed in the intervention areas we then show empirically that the intervention improved child nutrition household food consumption and consequently health we find evidence that labor supply increased which might have contributed to partially fund the increase in food consumption this paper is the first to study whether non health choices particularly parental labor supply might be affected by parents knowledge of the child health production function

an empirical study of the adverse selection model of strikes problems with existing empirical studies of the asymmetric information theory of strikes are 1 industry level data are used as proxies for firm level variables 2 studies using firm level data potentially suffer from simultaneity bias and 3 one of the key predictions of the theory is not tested the present paper addresses these issues while estimating a probit model of strike incidence using data comprising 2 459 contracts from canadian industry for 1964 85 that are merged with firm specific data under a number of alternative specifications results support the main predictions of the asymmetric information theory of strikes

does increasing women s schooling raise the schooling of the next generation the positive cross sectional relationship between the schooling of mothers and their children is substantially biased upward due to correlations between schooling and heritable ability as well as assortative mating an increase in the schooling of women would not have beneficial effects in terms of the schooling of children increased maternal schooling leads to reduced home time for mothers anticipating the consequences of investing in women s schooling requires attention to the role that schooling plays in the marriage market as well as to opportunities in the labor market for women

the empirical relations between employers striker replacement strategies and strike duration this analysis of general accounting office survey data on strikes in 1985 and 1989 shows that employers permanent replacement of striking workers was associated with longer strikes than would otherwise have occurred furthermore the authors find that simply announcing the intent to replace strikers was also associated with longer strikes finally when employers permanently replaced strikers the probability of settlement fell approximately 30 these findings are consistent with models focusing on the joint costs of a strike and on private information in the bargaining process t o the firm that seeks to operate during a strike a major obstacle is securing a work force to do the work normally performed by members of the striking bargaining unit of the four possible strategies for securing such a work force reassigning struck work to non bargaining unit employees utilizing members of the bargaining unit who return to work during the strike hiring temporary replacement employees and hiring permanent replacement employees the strategy of hiring permanent replacements for strikers has become the most controversial before the passage of new deal labor legislation u s employers regularly exercised their common law right to replace striking workers the wagner act of 1935 protected employees right to strike but did not explicitly grant employers the right to replace strikers the supreme court however upheld the legality of permanently replacing strikers in its 1938 decision nlrb v mackay radio

health behavior health knowledge and schooling the positive correlation between schooling and good health is well documented one explanation is that schooling helps people choose healthier life styles by improving their knowledge of the relationship between health behaviors and health outcomes that is schooling improves the household s allocative efficiency in producing health this empirical study uses direct measures of health knowledge to test this explanation part of the relationship between schooling and the consumption of cigarettes alcohol and exercise is explained by differences in health knowledge however most of schooling s effects on health behavior remain after differences in knowledge are controlled for

demographic growth harrodian in stability and the supermultiplier a basic kaleckian model is enriched by three simple intuitive assumptions first there is a redistributive system of the wage bill between employed and unemployed workers the latter receiving subsistence income second only individuals with an income above the subsistence level build savings the combination of these two assumptions gives rise to an autonomous consumption component whose rate of growth depends on population growth consequently the rate of capital accumulation spontaneously converges towards the rate of population growth the supermultiplier effect a dynamic that offers a solution to one of the two harrodian instability problems the third assumption corresponds to entrepreneurs attempts to adjust investments to restore the normal rate of capacity utilisation although this assumption usually generates knife edge instability we show here that the stabilising properties of the supermultiplier provided that the accelerator effect is not overly strong help overcome this instability and realise the normal rate of capacity utilisation therefore the model may offer a simple simultaneous solution to the two harrodian instability problems

the effect of schooling on cognitive skills how schooling a ects cognitive skills is a fundamental question forstudies of human capital and labor markets while scores on cognitive ability testsare positively associated with schooling it ha

the costs of low birth weight birth weight has emerged as the leading indicator of infant health and welfare and the central focus of infant health policy this is because low birth weight lbw infants experience severe health and developmental difficulties that can impose enormous costs on society but would the prevention of lbw generate equally sizable cost savings and health improvements estimates of the return to lbwprevention from cross sectional associations may be biased by omitted variables that cannot be influenced by policy such as genetic factors to address this we compare the hospital costs health at birth and infant mortality rates between heavier and lighter infants from all twin pairs born in the united states we also examine the effect of maternal smoking during pregnancy the leading risk factor for lbw in the united states on health among singleton births after controlling for detailed background characteristics both analyses imply substantially smaller effects of lbw than previously thought suggesting two possibilities 1 existing estimates overstate the true costs and consequences of lbw by at least a factor of four and by as much as a factor of 20 or 2 different lbw preventing interventions have different health and cost consequences implying that policy efforts that presume a single return to reducing lbw will necessarily be suboptimal

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

the effect of education on adult mortality and health evidence from britain there is a strong positive and well documented correlation between education and health outcomes in this paper we attempt to understand to what extent this relationship is causal our approach exploits two changes to british compulsory schooling laws that generated sharp across cohort differences in educational attainment using regression discontinuity methods we find the reforms did not affect health although the reforms impacted educational attainment and wages our results suggest caution as to the likely health returns to educational interventions focused on increasing educational attainment among those at risk of dropping out of high school a target of recent health policy efforts jel h52 i12 i21 i28

the intergenerational effects of compulsory schooling this article attempts to improve our understanding of the causal processes that contribute to intergenerational immobility by exploiting historical changes in compulsory schooling laws that affected the educational attainment of parents without affecting their innate abilities or endowments we examine the influence of parental compulsory schooling on children s grade for age using the 1960 1970 and 1980 u s censuses our estimates indicate that a 1 year increase in the education of either parent reduces the probability that a child repeats a grade by between 2 and 4 percentage points

logit estimates of strike incidence from canadian contract data logit estimates of strike incidence are made based on a unique and comprehensive data set of 2 437 collective agreements the appropriate level of aggregation since that is where bargaining occurs the results are interpreted through a theoretical framework emphasizing that strikes are more likely when the joint costs of using the strike mechanism are low relative to the cost of alternative mechanisms for achieving the same purposes such functions of strikes are to generate information elicit truth telling establish reputations provide catharsis and solve intraorganizational conflict

bargaining with incomplete information an infinite horizon model with two sided uncertainty the resolution of any bargaining conflict depends crucially on the relative urgency of the agents to reach agreement and the information each agent has about the others preferences this paper explores within the context of an infinite horizon bargaining model with two sided uncertainty how timing and information affect the rational behaviour of agents when commitment is not possible since the bargainers are uncertain about whether trade is desirable they must communicate some of their private information before an agreement can be reached this need for learning due to incomplete information about preferences results in bargaining inefficiencies trade often occurs after costly delay thus the model provides an explanation for the inefficient bargaining behaviour that appears to occur often in practice

lowering standards to wed spouse quality marriage and labor market responses to the gender wage gap this paper examines the effect of the female to male wage ratio relative wage on women s spouse quality marriage and labor supply over three decades exploiting task based demand shifts as a

demand led growth and accommodating supply we model of demand led growth with endogenous adjustment of labour supply and productivity an approach that reconciles harrod s warranted rate of demand growth with supply the model delivers a range of growth paths and unemployment rates rather than a single natural rate theoretically the steady state growth path may be dynamically stable or unstable but empirical calibration favours stability we show analytically that if demand dynamics are stable supply will converge to the demand determined growth path while a minimum unemployment rate ultimately imposes a supply constraint on growth empirical results show that a wide range of growth rates are feasible across different demand regimes the results explain how economies can become trapped with low growth due to weak demand or fiscal austerity and suggest policy responses to stagnant demand

early late or never when does parental education impact child outcomes we estimate the causal effect of parents education on their children s education and examine the timing of the impact we identify the causal effect by exploiting the exogenous shift in parents education levels induced by the 1972 minimum school leaving age reform in england increasing parental education has a positive causal effect on children s outcomes that is evident in preschool assessments at age 4 and continues to be visible up to and including high stakes examinations taken at age 16 children of parents affected by the reform attain results around 0 1 standard deviations higher than those whose parents were not impacted

cyclical fluctuations in strike durations canadian data on strikes between 1946 and 1983 are used to estimate linear regression models for the logarithm of completed duration a thorough investigation of the influence of the business cycle reveals strong support for the hypothesis that strike durations are countercyclical the cyclical effect is shown to be robust to both the choice of cyclical variable and the econometric specification and the magnitude of the effect is quite substantial experimentation with different representations of the cycle reveals that it is difficult to improve on a simple formulation involving a single continuous variable

mother s education and the intergenerational transmission of human capital evidence from college openings we examine the effect of maternal education on birth outcomes using vital statistics natality data from 1970 to 1999 we also assess the importance of four channels through which maternal education may improve birth outcomes use of prenatal care smoking marriage and fertility in an effort to account for the endogeneity of education attainment we use data about the availability of colleges in the womans country in her 17th year as an instrument for maternal education we find that higher maternal education improves infant health as measured by birth weight and gestational age it also increases the probability that a new mother is married reduces parity increases use of prenatal care and reduces smoking suggesting that may be important pathways for the ultimate effect on health our results add to the growing body of literature which suggests that estimates of the returns to education which focus only on increases in wages understate the total return

the causes of bargaining failure evidence from major league baseball abstract final offer arbitration in major league baseball provides an ideal setting for examining the empirical regularities that are associated with bargaining failure since final offers salaries and player statistics which provide the fundamental facts for the case are all readily available using data for players eligible for arbitration for 1990 93 we conduct a wide variety of empirical tests regarding the relationship between aggressive offers and arbitration outcomes we find that aggressive offers by players trigger arbitration and that more aggressive offers are associated with inferior financial outcomes in arbitration overall clubs appear to outperform players in arbitration unexpectedly high or low offers are less common for players who have previously been through arbitration which suggests that learning occurs our results are inconsistent with simple one sided asymmetric information models of arbitration the results are more consistent with an optimism model or a model in which so

a neo kaleckian goodwin model of capitalist economic growth monopoly power managerial pay and labour market conflict this paper presents a neo kaleckian goodwin model of growth and distribution the key innovation is the introduction of managerial pay kaleckian monopoly power determines the functional distribution of income and goodwin labour bargaining power determines the wage bill division the model helps explain slower us growth over the past 30 years for much of that period the functional distribution of income was relatively constant but growth slowed because income inequality increased owing to a wage bill shift from workers to managers the wage bill division effect explains why economies can display wage led and profit led characteristics economies can be profit led regarding functional income distribution and wage led regarding wage bill distribution

the causal effect of education on body mass evidence from europe we adopt a multi country setup to show that years of schooling have a causal protective effect on the body mass index of females living in nine european countries no such effect is found for males the protective effect for european females is not negligible but is smaller than one recently found for the united states and stronger among overweight females we discuss possible mechanisms justifying both the protective role of education and the gender difference in this role we argue that the effects of additional schooling on income the probability of employment and the frequency of vigorous physical activities both on and off the job may help explain our results

an empirical model of wage indexation provisions in union contracts this paper describes the responses of index linked wage rates to concurrent price increases for a sample of canadian union contracts and then analyzes theseresponses in terms of a simple model of indexation to the aggregate price level the model highlights the importance of aggregate price movements in conveying information about industry specific prices the empirical analysis confirms that industry specific correlations between input and output prices and the consumer price index are important determinants of the flexibility of wages to prices across indexed contracts

education hiv and early fertility experimental evidence from kenya a seven year randomized evaluation suggests education subsidies reduce adolescent girls dropout pregnancy and marriage but not sexually transmitted infection sti the government s hiv curriculum which stresses abstinence until marriage does not reduce pregnancy or sti both programs combined reduce sti more but cut dropout and pregnancy less than education subsidies alone these results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and sti are determined by one factor unprotected sex but consistent with a two factor model in which choices between committed and casual relationships also affect these outcomes

inequality at birth some causes and consequences recent research shows that health at birth is affected by many factors including maternal education behaviors and participation in social programs in turn endowments at birth are predictive of adult outcomes and of the outcomes of future generations exposure to environmental pollution is one potential determinant of health at birth that has received increasing attention a large literature outside of economics advocates for environmental justice and argues that poor and minority families are disproportionately exposed to environmental hazards i provide new evidence on this question showing that children born to less educated and minority mothers are more likely to be exposed to pollution in utero and that white college educated mothers are particularly responsive to changes in environmental amenities i estimate that differences in exposure to toxic releases may explain 6 of the gap in incidence of low birth weight between infants of white college educated mothers and infants of black high school dropout mothers this abstract was borrowed from another version of this item

women s schooling and fertility under low female labor force participation evidence from mobility restrictions in israel this paper studies the effect of mothers education on fertility in a mostly muslim population with very low female labor force participation we first show that a removal of travel restrictions on israeli arabs had raised female education and had almost no effect on male education next we show that it lowered fertility rates among exposed women which we interpret as an effect of female education on fertility we rule out labor force participation age at marriage marriage and divorce rates and spousal labor force participation and earnings as confounding factors or as mechanisms but find that spousal education and children quality play a role in the fertility decline we provide a variety of robustness tests that rule out other channels by which the removal of the travel restrictions could have affected fertility directly these results are particularly interesting and important for the context of many muslim countries with low rates of female labor force participation

multidimensional separating equilibria and moral hazard an empirical study of national football league contract negotiations this paper empirically tests for a multidimensional separating equilibrium in contract negotiations and tests for evidence of the moral hazard inherent in many contracts using contract and performance data on players drafted into the national football league from 1986 through 1991 we find evidence that players use delay to agreement and incentive clauses to reveal their private information during contract negotiations in addition our empirical tests of the moral hazard issue indicate that a player s effort level is influenced by the structure of his contract

global banking global crises the role of the bank balance sheet channel for the transmission of financial crises abstract we examine whether shocks to leveraged creditors with cross border holdings have an incidence on debtor countries risk of suffering financial turmoil we construct a new proxy of shocks to international banks balance sheets using credit ratings and the structure of their international assets this allows us investigating the effect of foreign bank balance sheet shocks on domestic financial turmoil in a large sample of 146 developed and emerging economies from 1984 to 2011 our proxies of shocks towards bank balance sheets are strong predictors of systemic banking crises in their debtor countries confirming these results bilateral bank flows significantly decrease when creditor banks assets are hit by negative shocks as measured by credit rating downgrades from third party countries short term liabilities towards global banks appear to increase roll over and funding risks thereby amplifying the impact of shocks to foreign lenders balance sheets domestic banking sectors vulnerabilities such as illiquid assets and a low deposit asset ratio are found to increase crisis contagion risk in contrast a high level of global liquidity attenuates the transmission of shocks to international banks assets to debtor countries

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

dynamic bargaining with action dependent valuations abstract an infinite horizon dynamic bargaining model is presented in which actions affect the expected future value of the buyer seller match because actions directly affect the future surplus to be bargained over the model is unlike other models that tie the dynamic process to nature alone focusing on a subset of weak markov equilibria several results come about that are not found in static bargaining models using similar bargaining protocols in particular optimal price demands can be lower higher than the buyer s lowest highest possible valuation and several empirical features concerning wage settlements and strike incidence from labor union contract negotiations can be explained

cost of living escalators in major union contracts this paper analyzes the price indexation provisions of a sample of major canadian collective bargaining agreements concluded between 1968 and 1975 under these contracts escalated wage increases comprised about one third of total wage increases and represented a major source of erosion in the relative wages of skilled workers the author argues that indexation provisions are usefully characterized by the marginal elasticity of the contractual wage rate to increases in prices measures of this responsiveness indicate that on average contractual wage rates are only slightly less than unit elastic with respect to price increases there is considerable variation across industries however in the extent to which wages respond to price changes

tackling the instability of growth a kaleckian harrodian model with an autonomous expenditure component this article presents a basic kaleckian model enriched by the simultaneous addition of an harrodian investment function and an autonomous expenditure component that grows at an exogenous rate the model shows that the usual short run properties wage led growth are only transient since the long run growth rate converges towards that of autonomous expenditures however the impact on the level of variables output capital stock labour etc is permanent the model also provides a conditional solution to the second harrod knife edge problem the destabilising behaviour of firms as they adjust their investment decisions to the discrepancy between the actual and the normal rates of capacity utilisation is now required to achieve the normal rate of capacity utilisation

repeated bargaining with persistent private information the paper analyses repeated contract negotiations involving the same buyer and seller where the contracts are linked because the buyer has persistent but not fully permanent private information the size of the surplus being divided is specified as a two state markov chain with transitions that are synchronized with contract negotiation dates equilibrium involves information cycles triggered by the success or failure of aggressive demands made by the seller because there is persistence in the markov chain generating the surplus a successful demand induces the seller to make another aggressive demand in the next negotiation since the buyer s acceptance reveals that the current surplus is large rejection of an aggressive demand on the other hand leads the seller to be pessimistic about the size of the surplus in the next contract so the seller makes a soft offer that is sure to be accepted then after several such offers have been accepted the seller is optimistic enough to again make an aggressive demand creating an information cycle an interesting feature of this cycle is that the soft price is not constant but declines as the cycle continues so as to offset the buyer s option value of re starting the cycle when the current state is bad an explicit mapping is given for the relationship between the basic parameters and the equilibrium prices and quantities in particular there is a closed form solution for the threshold belief that makes the seller indifferent between hard and soft offers

intergenerational transmission of human capital is it a one way street studies on the intergenerational transmission of human capital usually assume a one way spillover from parents to children however children may also affect their parents human capital using exogenous variation in education arising from a swedish compulsory schooling reform in the 1950s and 1960s we address this question by studying the causal effect of children s schooling on their parents longevity we first replicate previous findings of a positive and significant cross sectional relationship between children s education and their parents longevity our instrumental variables estimates are not statistically different from zero however they hide substantial heterogeneity by the gender of the child and the parent female schooling is found to affect longevity of fathers and especially those from low socio economic background taken together our results point to the importance of daughters schooling for parental health and to the importance of considering heterogeneous impacts

free primary education fertility and women s access to the labor market evidence from ethiopia this article investigates the causal relationship between women s schooling and fertility by exploiting variation generated by the removal of school fees in ethiopia the increase in schooling caused by the reform is identified using both geographic variation in the intensity of its impact and temporal variation generated by the timing of the implementation the model finds that the removal of school fees led to an increase in schooling for ethiopian women and that each additional year of schooling led to a reduction in fertility an investigation of the underlying mechanisms linking schooling and fertility finds that the decline in fertility is associated with an increase in labor market opportunity and a reduction in women s ideal number of children

heaping induced bias in regression discontinuity designs heaping induced bias in rd designs this study uses monte carlo simulations to demonstrate that regression discontinuity designs arrive at biased estimates when attributes related to outcomes predict heaping in the running variable after showing that our usual diagnostics may not be well suited to identifying this type of problem we provide alternatives and then discuss the usefulness of different approaches to addressing the bias we then consider these issues in multiple non simulated environments

schooling information and nonmarket productivity contraceptive use and its effectiveness information from two u s fertility surveys on couples knowledge about and use of specific contraceptives are used to estimate the technology of human reproduction in order to examine the association between schooling and productivity in the household sector the results indicate that more schooled couples have a wider knowledge of contraceptive methods use more efficiently those contraceptive methods for which there is little information and large scope for misuse and are better able to mitigate the effects of their biological constraints fecundity on their fertility compared to less schooled couples excerpt

the persistence of early childhood maturity international evidence of long run age effects a continuum of ages exists within each starting class due to the use of a single school cut off date making the oldest children approximately twenty percent older than the youngest children at school entry we provide substantial evidence that these initial maturity differences have long lasting effects on student performance across oecd countries in particular the youngest members of each cohort score 4 12 percentiles lower than the oldest members in grade four and 2 9 percentiles lower in grade eight depending upon the country in fact data from canada and the united states shows that the youngest members of a cohort are even less likely to enroll in pre university academic track courses and high end academic universities taken together these findings point to important early relative maturity effects that propagate themselves into adulthood through the structure of education systems

distribution aggregate demand and productivity growth theory and empirical results for six oecd countries based on a post kaleckian model empirical research based on the bhaduri marglin variant of the kaleckian model has recently shown that aggregate demand in many medium sized and large open economies tends to be wage led in the medium to long run even in a period of increasing globalisation in this paper we extend this type of analysis and integrate the effects on productivity growth theoretically and empirically productivity growth is introduced into the theoretical model making use of the verdoorn effect or of kaldor s technical progress function and hence of a positive relationship between gdp or capital stock growth and productivity growth further on a cost push or marx hicks effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account in the empirical part we estimate productivity growth equations for six countries introducing these two effects finally economic policy conclusions are drawn

returns to women s education using optimal iv selection this paper investigates returns to women s education by applying an optimal iv selection approach post lasso iv estimation which improves the first stage predictive relationship between an endoge

strategic bargaining models and interpretation of strike data attrition screening and signalling models of strategic bargaining are characterized in terms of their predictions about the incidence mean duration and settlement rates of strikes and the terms of wage settlements these predictions are compared with the general features observed in empirical studies of strikes in canada and the united states conclusions are drawn about the types of models capable of generating these features and about the conformity of the models to the evidence methods are described for computing the numerical examples used to illustrate the models

an empirical test of an asymmetric information model of strikes recent developments in the theory of strategic bargaining demonstrate how informational asymmetries can lead to prolonged and costly bargaining these models can be applied to contract negotiations yielding an economic theory of strikes to date however few empirical tests of these models have been carried out in this paper a set of predictions concerning the incidence and unconditional duration of strikes is derived from a simple bargaining model in which the union is uncertain about the firm s future profitability these predictions are then tested on a micro data set of major u s contract negotiations that took place from 1973 to 1977

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

dynamic contractual enforcement a model of strikes this paper provides a theory of strikes as part of a constrained efficient enforcement mechanism for an implicit contractual agreement a firm possessing contemporaneously private information about demand engages in an enduring relationship with its workforce if the information becomes perfectly observable subsequently then modulo discounting the first best is implementable but strikes are always off the equilibrium path if the observations of the workforce are imperfect strikes occur in equilibrium the dynamic contracting problem is modeled as a repeated game with imperfect monitoring the equilibrium exhibits production inefficiency and incomplete insurance to mitigate the inefficiencies caused by strikes

the relationship between unemployment spells and reservation wages as a test of search theory the theory of stationary job search predicts that controlling for other factors that affect the probability of leaving unemployment duration and reservation wages are likely to be positively associated the paper tests this prediction for british cross sectional data from 1982 using an estimating equation implied by search theory simultaneity is crucial in the evaluation of this prediction with single equation and instrumental variable estimates differing markedly perhaps surprisingly given the extreme paucity of both job interviews and offers in the sample the main finding is that reservation wages play a significant role in the determination of duration

inventories and strikes this paper analyses a dynamic model of bargaining and strikes in which the reservation wage of union members in each period is private information the model endogenizes the firm s decision to accumulate inventories of finished goods in order to enhance its bargaining position with higher inventories the firm makes a lower wage offer thereby accepting an increased probability of a strike the model can help explain empirical results that have found a positive correlation between wages and inventory accumulation it also shows that unless inventories are controlled for strike incidence will exhibit a spurious negative state dependence

history versus equilibrium and the theory of economic growth a model of cumulative causation is developed and the limits of this model as a characterization of historical rather than equilibrium long run growth outcomes are discussed an extension of the model which postulates that cumulative causation occurs in the context of technological and institutional regimes is proposed outcomes in the extended model are shown to be more influenced by history than those in the original model the extended model also addresses a number of recent criticisms of cumulative causation copyright 1997 by oxford university press

growth theory and economic structure new growth theory endogenises growth but neglects aggregate demand and distributional shifts in output and employment a model incorporating demand and structural change is introduced to assess the effects of greater integration of the ec the analysis shows that i the new growth model overstates the long run implications of integration and ii identical effects on productivity growth can be achieved by reducing unemployment it is argued that the benefits of lower unemployment are more certain of achievement than those expected from reduced barriers to trade and resource movement and that stronger demand is a pre requisite for realization of the latter with the rise of the new growth theory romer 1986 many economists foresee the end of the long dominance of neoclassical growth theory new growth theorists make the general point that within their framework the rates of growth of productivity and per capita income and changes in these growth rates are endogenously explained their main criticism of neoclassical growth theory is that it attributes these growth rates to exogenous determinants and that this is not an explanation new growth theory is to be commended for its efforts to endogenize growth but it none the less retains two shortcomings in common with neoclassical growth theory it neglects the effects of 1 distributional shifts in output and employment and 2 aggregate demand in this paper we argue that these must be included in order to develop a research strategy that permits reasonable measures of the impact of policy on growth rates to support this view we first outline the way in which neoclassical and new growth theory analyse and quantify the effects of increased competition and market size using in illustration the 1992 programme for greater economic integration of the ec we then introduce a model that is free of the defects of both approaches and use it to provide a clearer view of the static and dynamic effects of the 1992 changes these are then compared with the effect of policies to reduce unemployment the results show that 1 the new growth model overstates the long run implications of the 1992 measures and 2 identical effects on productivity growth can be achieved by a programme to reduce unemployment we conclude by arguing that the benefits of lower unemploy ment are more certain of achievement that those expected to flow from reduced barriers to trade and resource movement and that stronger demand is a pre requisite if the latter are to be realized we do not attempt to make quantitative estimates of the economic gains from 1992 or from reduced unemployment whether for the short medium or long run rather our paper can be seen as outlining a research strategy for

cluster sample methods in applied econometrics inference methods that recognize the clustering of individual observations have been available for more than 25 years brent moulton 1990 caught the attention of economists when he demonstrated the serious biases that can result in estimating the effects of aggregate explanatory variables on individual specific response variables the source of the downward bias in the usual ordinary least squares ols standard errors is the presence of an unobserved state level effect in the error term more recently john pepper 2002 showed how accounting for multi level clustering can have dramatic effects on t statistics while adjusting for clustering is much more common than it was 10 years ago inference methods robust to cluster correlation are not used routinely across all relevant settings in this paper i provide an overview of applications of cluster sample methods both to cluster samples and to panel data sets

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

green returns to education does schooling contribute to pro environmental behaviours evidence from thailand we investigate whether there are green returns to education where formal education encourages pro environmental behaviours using nationally representative surveys on environmental issues in thailand to establish the causal relationship between education and green behaviours we exploit the instrumental variables strategy using the supply of state primary schooling i e the corresponding number of teachers per 1000 children which varies over time and across regions as the instrument while controlling for regional cohort and income effects we find that more years of schooling lead to a greater probability of taking knowledge based environmentally friendly actions a great deal but not cost saving pro environmental actions in addition the paper finds no significant impact of formal education on concern about global warming nor the willingness to pay for environmental tax

schumpeter meeting keynes a policy friendly model of endogenous growth and business cycles this paper studies an agent based model that bridges keynesian theories of demandgeneration and schumpeterian theories of technology fueled economic growth we employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply demand and the fundamentals of the economy we find profound complementarities between factors influencing aggregate demand and drivers of technological change that affect both short run fluctuations and longterm growth patterns from a normative point of view simulations show a corresponding complementarity between keynesian and schumpeterian policies in sustaining long run growth paths characterized by milder fluctuations and relatively lower unemployment levels the matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct regimes of growth or absence thereof characterized by different short run fluctuations and unemployment levels

strikes and wages a test of an asymmetric information model this paper describes a simple model of labor disputes based on the hypothesis that unions use strikes to infer the profitability of the firm the model posits the existence of a negatively sloped resistance curve between wages and strike duration in addition it offer a series of predictions relating wage and strike outcomes to changes in the expected profitability of the firm and changes in the alternative opportunities of striking workers these implications are tested using data on wage outcomes strike probabilities and strike durations for a large sample of collective bargaining agreements

preschoolers enrolled and mothers at work the effects of universal prekindergarten three states recently introduced universal prekindergarten programs offering free preschool to all age eligible children policy makers in many other states are promoting similar programs using restricted access data from the census together with birthday based eligibility cutoffs i employ a regression discontinuity framework to estimate the effects of universal pre k availability on overall preschool enrollment and maternal labor supply universal pre k availability increases statewide preschool enrollment by about 14 but has little effect on the labor supply of most women

the effects of education on fertility evidence from taiwan this study investigates the impact of women s education on fertility for identification we use the 1968 compulsory education law change in taiwan which generated a regression discontinuity design rdd setting we use the whole population of women from the 1980 and 2010 population censuses results of our rdd estimation using the exact date of birth suggest that the law change was effective in boosting women s education but it did not have any impact on fertility this is in stark contrast to most previous studies using only the birth year as the running variable or using it to construct instruments which find that women s education depresses fertility this study demonstrates that using a discrete running variable in rdd may generate a false discontinuity for an otherwise continuous regression function jel j13 c21 i2

fertility transitions along the extensive and intensive margins this paper examines the fertility transition through a new lens the extensive margin parents with high levels of children might substitute quality for quantity as the constraints on quality relax or those on quantity tighten however along the extensive margin the quantity quality trade off cannot operate at low levels of fertility we expect quality and quantity to be essential complements we apply these insights to a large school construction program in the american south during the early 20th century the rosenwald rural schools initiative we find that increased schooling opportunities lead to reductions in fertility among women with high fertility levels while at the same time inducing higher levels of fertility among women with low levels of fertility the magnitude of the fertility changes induced in the parent generation is however small compared to the changes in fertility induced by the rosenwald intervention among women that were themselves treated by the intervention the evidence from the rosenwald intervention therefore suggests that changes in female opportunity costs induced by increased educational attainment might be among the most important driving forces of the fertility transition

endogenous economic growth a new approach this new approach incorporates on the demand side the problem of effective demand and unemployment while rejecting on the supply side the oversimplistic use of a production function with or without capital labour substitution the focus on the adoption and diffusion of labour productivity growth permits viewing supply as being driven endogenously by inter class conflict over distribution as well as inter class conflict among rival firms over market shares the result is a race between growth rates in labour productivity and in the real wage rate which drives demand and productivity growth on the one hand while making wage share reasonably constant on the other the existence and stability properties of the steady state are also examined copyright 2006 oxford university press

heaping induced bias in regression discontinuity designs this study uses monte carlo simulations to demonstrate that regression discontinuity designs arrive at biased estimates when attributes related to outcomes predict heaping in the running variable after showing that our usual diagnostics may not be well suited to identifying this type of problem we provide alternatives and then discuss the usefulness of different approaches to addressing the bias we then consider these issues in multiple non simulated environments jel c21 c14 i12

a multistage model of bargaining this paper presents a simple multistage model of bargaining wherein a seller makes an offer that can be either accepted or refused if rejected the process continues how the seller s ability to make commitments affects bargaining outcomes is analysed by comparing the commitment equilibria to those arising when commitment is impossible the effects of increasing uncertainty about preferences and varying the length of the bargaining horizon are analysed the ways in which the bargaining environment can be changed to improve outcomes are discussed

an investigation into the determinants of u s strike activity this paper outlines the steps involved in constructing a new panel dataset of u s contract negotiations and strike activity this data set has a much broader coverage of firms and unions than micro data sets analyzed to date key findings include the discovery that the variability and not the level of firm profitability affects the probability of a strike personal characteristics of the union workforce also emerge as key determinants of strike activity finally strikes are found to be more likely when the local labor market is tight but less likely when the industry labor market is tight copyright 1986 by american economic association

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

school entry policies and skill accumulation across directly and indirectly affected individuals during the past half century there has been a trend toward increasing the minimum age a child must reach before entering school in the united states states have accomplished this by moving the school entry cutoff date earlier in the school year the evidence presented in this paper shows that these law changes increased human capital accumulation and hence adult wages backing up the cutoff by one month increases average male hourly earnings by approximately 0 6 percent the evidence also suggests that the majority of the cohort benefits from backing up the cutoff not just those who must delay entry

how women s rights affect fertility evidence from nigeria using data from the demographic and health surveys dhs this paper estimates the effect on fertility of a legal reform in nigeria in 1999 that lowered the value of women s testimony in court i find that the yearly probability of giving birth of women exposed to the reform did not change in general for women exposed to the enforced reform this probability increased by at least 0 04 using stated preferences on fertility i find that fertility increased among women who want fewer children than their husband does but decreased among women who want more children than their husband does i examine the hypothesis that the reform increased for women the value of being married and hence decreased their intra household bargaining power consequently shifting fertility decisions in the direction of husbands preferences jel j13 j18 k10

the effects of public policy on strike duration hazard function estimates are utilized to analyze the effect of numerous public policy variables on strike duration based on 7 546 strikes in canada between 1967 and 1985 we find that only the mandatory strike vote substantially reduced conditional duration however the policy variables generally had a more favorable effect on reducing strike incidence so that on net they tended to reduce unconditional duration incidence times conditional duration specifically reduced unconditional duration was associated with the existence of conciliation and the requirement of a mandatory strike vote but the prohibition on replacement workers had a perverse effect

union wage determination in canadian and u s manufacturing 1964 1990 a comparative analysis the author analyzes nominal and real wage changes in unionized manufacturing firms in canada and the united states over the years 1964 90 he finds more differences between the countries patterns of wage determination in the years 1964 79 than have commonly been recognized in the 1980s the nominal wage determination structure changed more sharply in the united states than in canada real wage determination changed little in the united states before 1986 while after 1986 observed real wage growth was significantly smaller than what would have been predicted based on patterns of bargaining in earlier years in canada real wages in the 1980s were significantly higher than they would have been if the previous patterns of wage determination had persisted both the nominal and real wage change results suggest that unions in u s manufacturing fared poorly in wage bargaining in the 1980s by comparison with their canadian counterparts