endogenous discounting the world saving glut and the u s current account abstract we study the evolution of the u s current account in a two country dynamic stochastic endowment model in which a single non state contingent bond is the only internationally traded asset the paper focuses on the world saving glut as the primary cause of continual deterioration in the current account and departs from the standard framework by introducing a three parameter model of the subjective discount factor that depends on societal per capita variables that are external to household choices when agents in the model are presented with u s and rest of world endowment data as the realization of the exogenous state vector endogenously driven short run international differences in subjective discounting that display increasing relative u s impatience create saving and current account imbalances that matches patterns observed in the data

the gender earnings differential in the russian transition economy using data from the russia longitudinal monitoring survey rlms the first nationally representative household survey in the russian federation the author examines the gender earnings differentia

the north south divide questions of existence and stability this paper investigates the relationship between regional earnings and unemployment by use of information primarily from the general household surveys of 1975 and 1982 conventional earnings functions are augmented to capture the effects of the level and duration of unemployment and of regional differences in living costs in common with previous studies the authors find personal characteristics and the occupation or industry of employment to be important in earnings determination in this paper however they generally find that although higher unemployment is associated with reduced regional earnings ceteris paribus long term unemployment has little influence in regional earnings determination copyright 1990 by royal economic society

the use of quantile regressions in estimating gender wage differentials a case study of the philippines quantile regressions are used to analyse the size components and nature of the gender earnings differentials as well as the returns to education by gender in the philippines over the entire conditional distribution of earnings using data from the 1999 apis survey this approach allows more focused conclusions about the nature of gender earnings differentials incorporating the quantile regression approach to the oaxaca blinder decomposition allows the localization of gender discrimination to particular quantiles of the earnings distribution and permits more targeted policy intervention

state lotteries and consumer behavior abstract this paper investigates two central issues regarding state lotteries first analyses of multiple sources of micro level data demonstrate that household lottery spending is financed primarily by a reduction in non gambling expenditures not by a reduction in expenditures on other forms of gambling the introduction of a state lottery is associated with an average decline of 46 per month or 2 4 percent in household non gambling expenditures low income households reduce non gambling household expenditures by 2 5 percent on average 3 1 percent when the state lottery includes instant games these households experience statistically significant declines in expenditures on food and on rent mortgage and other bills second consumer demand for lottery products responds positively to the expected value of the gamble controlling for other statistical moments and product characteristics including the nominal top prize amount this finding is consistent with informed choice among consumers of lottery products although other forms of irrational or misinformed choice cannot be ruled out

a reanalyis of marital stability in the seattle denver income maintenance experiment this paper challenges the widely cited finding of groeneveld hannan and tuma that the seattle denver income maintenance experiment provides evidence that guaranteed income plans for poor husband wife families will increase marital dissolution relative to the existing program aid to families with dependent children the reanalysis of the experimental data distinguishes between the experimental treatment in the form of the pure negative income tax and the treatment plans that involved an experimental training program all the time periods of the experiment are used with allowance for the timing of the marital dissolution in the inferences and with allowance for attrition the conclusion of this paper is that the plans specifically the negative income tax plans in the experiment had no effect on the rate of marital dissolutions among the treatment couples relative to the control couples

modeling the earnings and productivity of agricultural economists discussion data from the 1981 82 registry of agricultural economists sponsored by the illinois department of labor and the american agricultural economics association are used by strauss and tarr to estimate earnings and productivity parameters for agricultural economists a short run predictive model is employed to compare the earnings of agricultural economists among different employer types including educational institutions federal government state and local government private business and miscellaneous international government inferences are drawn from the different types of employers large and small educational institutions women and blacks versus whites in a 1971 paper strauss referred to a crisis caused by the failure to find the most desirable position upon entry in the market by new ph d s such a situation is occurring in the early 1980s helmberger studied the market for agricultural economists in the early 1970s concluding that an excess supply would exist throughout the 1970s and into the 1980s boulding gave attention to the need for increasing the supply of black economists generally during this period suggesting that the economics profession is culture bound boulding suggests a subculture among economists which may explain the racial sexual structure and characteristics strauss and tarr revisit the market for economists considering some market and nonmarket factors

adjustment to labor productivity an application to the economics of discrimination although issues of uncertainty and insurance often have been applied to the labor market few researchers have employed these approaches to the economics of discrimination the discrimination literature is essentially concerned with quantification of wage or employment differences that can be ascribed to either employer or employee distaste for minority or female workers generally wage or employment differences are dichotomized so as to represent respectively productivity and discrimination components following mincer 21 studies usually estimate personal and labor force determined hedonic earnings functions in order to apply chow tests to the separate sets of black white or malefemale coefficients significant differences in the coefficients are a priori evidence of discrimination

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

on decomposing the wage gap a critical comment on blinder s method many studies have found that the impact of schooling on earnings is greater for females than for males despite the fact that females tend to earn less both absolutely and controlling for personal characteristics this study investigates possible

estimating the effect of income on health and mortality using lottery prizes as an exogenous source of variation in income a vast literature has established a strong positive relation between income and health status and a negative relation with mortality this paper studies the effects of income on health and mortality using only the part of income variation due to a truly exogenous factor monetary lottery prizes of individuals the findings are that higher income causally generates good health and that this effect is of a similar magnitude as when traditional estimation techniques are used a 10 percent income increase improves health by about 4 5 percent of a standard deviation

unequal assignment and unequal promotion in job ladders in this study gender differentials in professional status attainment are analyzed in the theoretical literature unequal treatment of females is often rationalized by their higher probability of quitting to test this hypothesis empirically we use data from the austrian microcensus and find that neither the risk of childbearing nor different productive characteristics can explain the crowding of females in lower hierarchical positions females have to fulfill higher ability standards to be promoted work experience is not rewarded in the same manner as it is for men

estimating wage discrimination in the labor market if labor supply curves are not perfectly inelastic wage discrimination induces some minority workers to leave the labor force studies of discrimination that focus only on wage differentials overlook these disincentive effects on minority employment

bootstrapping statistical inferences of decomposition methods for gender earnings differentials applying the standard bootstrapping technique with corrections for heteroskedasticity for a sample of the 1997 urban household survey in china the present article attempts to test 1 whether the commonly used decomposition methods for gender earnings differentials give significantly different results and 2 whether the explained component is significantly different from the unexplained component which is commonly referred to as discrimination within each decomposition method based on a national data set the empirical results indicated some significant differences in both tests the implication of the results is that the proposed bootstrapping technique can be regarded as a guideline on applying which approach to decompose gender earnings differentials among different methods without losing important information and on evaluating the relative importance of the decomposition components for any chosen method

a bayesian approach to decomposing wage differentials abstract we decompose wage differentials using a bayesian monte carlo markov chain method this method makes it easy to obtain the posterior distributions of the characteristics and coefficients effects used to test the significance of the two effects

detecting and removing discrimination under equal opportunities policies abstract this paper surveys part of the recent voluminous literature on the economics of discrimination focusing on two key questions first how should discrimination be measured and can in fact unambiguous estimates be derived as the basis for detecting where discrimination is present and setting in train measures to eliminate it second to what extent has the implementation of equal opportunities legislation improved the relative standing of women and minority workers in the labour force this section includes a discussion of the likely effects of recent changes in the law such as the equal value amendment in the uk or the introduction of comparable worth in the usa the survey concludes that our ability to detect discrimination at all precisely is still rudimentary and consequently policy measures are likely to be inefficient for this reason

when it rains it pours under what circumstances does job loss lead to divorce much of the previous research that has examined the effect of job loss on the probability of divorce either rely on data from the 1970s 80s data from european countries or focus on aggregate divorce rates this study uses u s micro data from 2000 to 2012 thus including effects of the great recession to examine how displacement i e exogenous job loss affects the probability of divorce the author finds displacement significantly increases the probability of divorce but only if the husband is the spouse that is displaced and his earnings represented approximately half or less of the household s earnings prior to displacement similarly results show that the probability of divorce increases if the wife is employed and as her earnings increase while the mechanism behind these asymmetric results remains unclear these results are consistent with recent research that finds a destabilizing effect on marriages when a wife earns more than her husband

intertemporal market effect on gender earnings differentials lawyers in canada 1970 80 the conventional methodology for decomposition of cross sectional earnings differentials is extended to include a market effect on intertemporal changes in earnings and to analyse the changes in gender differentials over time the integrated cross sectional and intertemporal methodology is illustrated by a decomposition of the change in the earnings differential that occurred during the 1970s between male and female lawyers in canada an unprecedented rate of growth in the supply of lawyers during the 1970s in canada was associated with changes in the gender earnings differential in the legal profession this rapid supply growth had an almost negligible net impact on female earnings but a negative impact of 15 on the male earnings this explains the narrowing of the earnings differential by almost 30 over the decade although three fifths of the gender differential in 1970 and half of the differential in 1980 were attributable to the differences in the characteristics of the two groups these chang

productivity and the role of college in narrowing the male female wage differential in the usa in 1980 this study analyses the impact that productivity factors and the particular role of college have upon the inequality in male and female wages using the 1980 1 100 public use sample the findings herein suggest that whereas both black and white females and black males who entered the labour force in 1975 or later possess productivity characteristics that are superior to their elder counterparts the productivity characteristics of white males entering the labour force over this period are significantly inferior to those possessed by older white males also in sharp contrast to a voluminous literature that concludes that college widens the wage gap between the sexes this analysis shows that college played a paramount role among the productivity characteristics in narrowing the gender wage differential in 1980

house prices and marital stability we investigate the effect of house price changes on divorce using data for 1991 2010 from the current population survey and the federal housing finance agency our findings suggest that changing house prices significantly affect the share of a cohort that is divorced and that these effects are asymmetric with respect to housing gains versus losses in addition we find differential effects for groups that are more likely to be homeowners versus renters some of this evidence is consistent with homeowners being locked into their homes and hence marriages by increased transactions costs in down markets

an analysis of the effects of higher education on wage differentials between blacks and whites by gender in the united states previous analyses that have examined the effect to higher education on the wage differences between blacks and whites have largely been focussed on males and failed to provide quantitative estimates of the impact that higher education has on discrimination and the black white wage differential for both genders in 1980 in particular we find that equalizing the years of college completed by black and white males reduces the wage differential by 14 conversely equalizing the years of college completed by black and white females exacerbates wage inequality by increasing the wage advantage accruing to black females by nearly 24 hence the egalitarian policy mission of higher education in narrowing wage inequality between blacks and whites is complicated by the issue of gender

indeterminacy and sunspots with constant returns recently there has been a renewed interest in the possibility of indeterminacy and sunspots or alternatively put in the existence of a continuum of equilibria that arises in dynamic economies with some market imperfections much of the research in this area has been concerned with the empirical plausibility of indeterminacy in markets with external effects or with monopolistic competition and which exhibit some degree of increasing returns while the early results on indeterminacy relied on relatively large increasing returns and high markups more recently benhabib and farmer 1996a showed that indeterminacy can also occur in two sector models with small sector specific external effects and very mild increasing returns

a decomposition method on employment and wage discrimination and its application in urban china 2002 2013 abstract labor market discrimination is an important issue in developing countries where path dependent institutions have been dominant while effective institutional arrangements and policies have been hidden by local customs and culture however the existing applications of classical blinder oaxaca decomposition face criticism for their imprecise understanding of the factors affecting institutional discrimination in labor markets as well as for their lack of power in formulating well targeted anti discrimination policies following oaxaca 1973 we propose a new method to decompose the total discrimination index tdi to analyze employment and wage discrimination in the labor markets of developing countries the tdi is decomposed into the employment discrimination index edi and the wage discrimination index wdi then into the underpayment index to majorities upi and the overpayment index to minorities opi we apply this method to the institutional discrimination against rural migrants in china s urban areas using national representative data from 2002 to 2013 we have found that 1 the tdi increased quickly after china entered the wto then dropped after anti discrimination policies were implemented 2 the tdi is mainly determined by the upi while the tdi s fluctuation is mainly determined by the wdi our method provides insights into the changing composition of employment and wage discrimination and their respective labor market outcomes in developing countries as a result appropriate policy measures may be developed accordingly

markets for medical care and medical education an integrated long run structural approach this paper investigates the relationship between the market for medical care and the market for medical education within a standard supply and demand framework the capacity of medical schools is considered as an endogenous element within a complete structural system of the market for physicians services the parameters of the model are estimated using data from the postwar period the estimated system is then simulated both to compare it to alternative time series forecasting approaches and to examine the nature of earnings cycles in medicine the results of this exercise support the applicability of traditional economics to this sector of the economy

estimating the effect of unearned income on labor supply earnings savings and consumption evidence from a survey of lottery players this paper provides empirical evidence about the effect of unearned income on earnings consumption and savings using an original survey of people playing the lottery in massachusetts in the mid 1980 s the effects of the magnitude of lottery prizes on economic behavior are analyzed the critical assumption is that among lottery winners the magnitude of the prize is randomly assigned it is found that unearned income reduces labor earnings with a marginal propensity to consume leisure of approximately 11 percent with larger effects for individuals between 55 and 65 years old after receiving about half their prize individuals saved about 16 percent

the gender pay gap fringe benefits and occupational crowding using data from the 1991 national longitudinal survey of youth the authors estimate earnings equations for each of seven occupational categories and the aggregate sample when fringe benefits are excluded from the compensation measure a gender coefficient is statistically significant that is women are found to have received significantly lower compensation than men within six of the seven occupational categories the exception being the most female dominated category when an index of compensation that includes fringe benefits is used however a gender coefficient is significant in only one category which contains relatively heterogeneous jobs gender specific regressions are used to estimate what part of the earnings gap between men and women is due to differences in traits the results indicate that occupational assignment is the primary determinant of the pay gap a result that is consistent with a crowding explanation of that gap

market imperfections and the instability of open economies in the presence of small market imperfections the transitional dynamics of an open economy can become indeterminate in that there exist an infinite number of equilibrium paths converging to a unique steady state in contrast to closed economy models in the open economy such indeterminacy can arise independently of the curvature of the utility function in consumption the results suggest that with market imperfections open economies can be subject to fluctuations caused by randomness unrelated to the economy s fundamentals

opec s oil exporting strategy and macroeconomic in stability aguiar conraria and wen 2008 argued that dependence on foreign oil raises the like lihood of equilibrium indeterminacy economic instability for oil importing countries we argue that this relation is more subtle the endogenous choices of prices and quantities by a cartel of oil exporters such as the opec can aect the directions of the changes in the likelihood of equilibrium indeterminacy we show that uctuations driven by self ful lling expectations under oil shocks are easier to occur if the cartel sets the price of oil but the re sult is reversed if the cartel sets the quantity of production these results oer a potentially interesting explanation for the decline in economic volatility i e the great moderation in oil importing countries since the mid 1980s when the opec cartel changed its market strategies from setting prices to setting quantities despite the fact that oil prices are far more volatile today than they were 30 years ago

wage discrimination against handicapped men and women the extent of discrimination against handicapped men and women is estimated in this paper observed wage differentials are corrected for selectivity bias the results indicate that almost one third of the wage differential for men and close to one half for women can be attributed to discrimination interestingly handicapped women are also subjected to sex discrimination

discrimination fact or fiction an examination using an alternative approach women earn less than men blacks earn less than whites these facts are blatantly observable in the economy with the proliferation of civil rights legislation in the last two decades social scientists have become increasingly concerned with the determination of the wage gap attributable to discrimination because workers have different productivities statistical methods have been used to isolate the discrimination effect from wage differences justified by differences in productivity the primary method estimates an equation with wages expressed as a function of productivity and sex or race since productivity cannot be directly observed a number of proxies for productivity have been used such as education tenure and experience statisticians 11 have shown that the necessity of using proxies results in statistical biases which may tend to overestimate discrimination they have shown that mismeasuring any independent variable can impart a bias on each regression coefficient thereby causing a severe misestimate of discrimination these errors are proportional to the degree of mismeasurement the relative degree of error variance in the independent variables as well as to the amount of intercorrelation between each variable and race or

union certification success under voting versus card check procedures evidence from british columbia 1978 1998 the author estimates the impact of compulsory election laws on certification success using data on over 6 500 private sector certifications from british columbia over the years 1978 98 a unique quasi experimental design is used by exploiting two changes in the union recognition law first in 1984 the introduction of mandatory elections and second in 1993 the repeal of elections and their replacement by the original card check procedure the author also estimates the effectiveness of management opposition tactics across union recognition regimes success rates declined by an average of 19 percentage points during the voting regime and then increased by about the same amount when card checks were re instituted the results indicate that the mandatory election law can account for virtually the entire decline in addition the findings suggest that management opposition was twice as effective under elections as under card checks

black white earnings ratios the role of cohort size effects abstract while black white earning ratios have been rising over time across cohorts there is some evidence that they have been dropping over time within cohorts of recent entrants to the labor market this has coincided with the entry of the large baby boom cohorts into the labor market this paper examines the role of race differences in cohort size effects on black white earnings ratios for male high school graduates using current population survey data in larger cohorts the black white earnings ratio is lower at entry and falls as the cohort progresses through the career consistent with recent evidence

the effect of wealth on individual and household labor supply evidence from swedish lotteries abstract we study the effect of wealth on labor supply using the randomized assignment of monetary prizes in a large sample of swedish lottery players winning a lottery prize modestly reduces earnings with the reduction being immediate persistent and quite similar by age education and sex a calibrated dynamic model implies lifetime marginal propensities to earn out of unearned income from 0 17 at age 20 to 0 04 at age 60 and labor supply elasticities in the lower range of previously reported estimates the earnings response is stronger for winners than their spouses which is inconsistent with unitary household labor supply models jel d14 j22 j31

the human capital approach to black white earnings inequality some unsettled questions the persistence of earnings differences between blacks and whites in the united states has been a topic that has received a substantial amount of attention in both theoretical and empirical research in economics the differential in earnings typically is tied to racial differences in human capital accumulation this paper advances a systematic critique of the human capital approach to black white inequality inadequacies are identified in human capital theory as a general theory of inequality as well as a specific theory of racial inequality the critique suggests that a serious analysis of the black white earnings gap will require an entirely new approach to the study of racial income inequality

scholarships citations and salaries economic rewards in economics while substantial attention has been paid to the determinants of academics earnings 5 7 8 14 15 this literature has by implication suggested that the mere fact of having spent more time in the profession and the publication of more scholarly articles and books are the major determinants of salary differences our purpose here is to introduce a new determinant the quality of one s scholarly research measured by the frequency of references to that work as an additional objective measure of productivity we expect that this proxy for the extent of a scholar s influence on the work of other researchers is rewarded by the market in addition to giving a more complete picture of the determination of salaries in academic labor markets our approach should be useful in establishing a better framework for the evaluation of issues of discrimination in such markets than has been presented before 2 9

indeterminacy and increasing returns abstract we investigate properties of the one sector growth model with increasing returns under two organizational structures capable of reconciling the existence of aggregate increasing returns with competitive behavior by firms the first involves input externalities the second involves monopolistic competition we show for parameters in close accord with recent literature on real business cycles that the model displays an indeterminate steady state that can be exploited to generate a model of business fluctuations driven by self fulfilling beliefs in our first class of models growth is generated by exogenous increases in factor productivity in the second class the marginal product of capital is large enough for endogenous growth journal of economic literature classification numbers e00 e3 o40

match quality new information and marital dissolution this article investigates the role of surprises in marital dissolution surprises consists of changes in the predicted earning capacity of either spouse data from the national longitudinal study of the high school class of 1972 is used we find that an unexpected increase in the husband s earning capacity reduces the divorce hazard while an unexpected increase in the wife s earning capacity raises the divorce hazard couples sort into marriage according to characteristics that are likely to enhance the stability of the marriage the divorce hazard is initially increasing with the duration of marriage and the presence of children and high levels of property stabilizes the marriage

measuring direct discrimination in labor markets using a frontier approach evidence from cps female earnings data numerous studies of earnings differentials have attempted to measure discrimination against females or minorities by decomposing the total differential between males and females or whites and non whites into an explained and unexplained portion typically these studies follow the work of oaxaca 8 however a number of criticisms can be raised with these techniques 9 5 4 of which two are particularly important that the reduced form wage equations for the two groups will not be identical in every case and that there may be large and unobservable differences between the characteristics of the two groups for which the wage equations cannot account either of these problems are sufficient to make it impossible to use residual analysis to measure discrimination attempts to address these problems and obtain reliable and consistent estimates of the extent of discrimination are important for policy purposes low and villegas 7 address the first of these problems by suggesting the use of hedonic wage equations which contain only human capital characteristics or proxies and characteristics which directly affect the hedonic parameters in this framework perfect substitution between the workers is assumed their work however leaves the second problem unresolved in this paper a stochastic earnings frontier with a discrimination discount is used to estimate discrimination against women an earnings frontier for females that depends upon marginal productivity as measured by human capital and labor market characteristics of females is estimated discrimination is assumed to be the amount female earnings are removed from the frontier less any labor market inefficiency since these estimates will depend solely on female data they do not depend upon an assumption of similarity between males and females this procedure allows

evolution of the gender earnings gap among canadian university graduates this paper reports the results of an empirical analysis of the gender earnings gap among recent canadian bachelor s level university graduates the overall gap as of two years leaving university narrowed significantly across successive cohorts of graduates but widened significantly from two to five years out for all groups differences in the explanatory variables explain account for between 40 and essentially the entire gap across the different periods this portion rising from two to five years out and across cohorts by the final group all of the gap is thus explained at the two year point in time and most of it is explained at the five year mark meaning that labour market returns measured in this manner are largely gender neutral for the last group of graduates hours of work is the single most important influence while past work experience job characteristics family status and province of residence and language have smaller and more mixed effects

working part time by choice or by constraint the selection of workers into part time jobs and the wages they earn are analysed using the 1989 labour market activity survey we focus on the distinction between voluntary and involuntary part time workers since involuntary part time workers earn substantially lower wages than other workers we find that the selection of individuals into involuntary part time work is more closely tied to job characteristics than personal or human capital characteristics the lower wage earned by involuntary part time workers is largely due to differences in returns and selection effects rather than differences in endowments

wage determination of registered nurses in proprietary and nonprofit nursing homes this study explores why registered nurses employed in nonprofit nursing homes earn higher wages than those employed in proprietary facilities previous studies have explained this finding in a property rights context where higher wages were posited to result from the weaker incentives for cost minimization accompanying nonprofit status this paper tests an alternative explanation of sectoral wage differences which is predicated on the reason for the coexistence offor profit and nonprofit firms in a given industry informational constraints concerning the quality of care are posited to cause the long term health care market to fail to provide care at the upper levels of a quality of care continuum nonprofits are viewed as a response to this form of market failure acting to fulfill customers demand for higher quality and higher cost long term care with attendant demand for higher quality nurses than in for profit homes both the observed sectoral pattern in selectivity and wage decompositions based on selectivity corrected wage regressions call into question the property right explanation yet are consistent with an asymmetric information explanation

lucky in life unlucky in love the effect of random income shocks on marriage and divorce abstract economists have long been interested in the extent to which economic resources affect decisions to marry and divorce however this issue has been difficult to address empirically due to a lack of exogenous income shocks we overcome this problem by exploiting the randomness of the florida lottery and comparing recipients of large prizes to those of small prizes results indicate that while positive income shocks of 25 000 to 50 000 do not cause statistically significant or economically meaningful changes in divorce rates single women are less likely to marry as a result of the additional income

preferences endogenous discount rate and indeterminacy in a small open economy model abstract this paper characterizes indeterminacy conditions for a small open economy business cycle model the preferences are the utility function commonly used in closed economy models in the literature coupled with an endogenously determined discount rate it shows that indeterminacy can occur under arbitrarily small external effects independently of the intertemporal elasticities in consumption and labor supply

are estimates of sex discrimination by employers robust the use of never marrieds current decomposition estimates of sex discrimination by employers are not robust many unobservables like motivation and attitudes toward work are left unmeasured we estimate sex discrimination with two plausible methods of controlling for a major unobservable acceptance of male and female traditional roles in the household the methods offer enormously different estimates of sex discrimination one estimates sex discrimination at over 61 percent of the female wage the other finds little sex discrimination and possibly favoritism toward women the range in estimates is so large that point estimates of sex discrimination by employers are of little use to policymakers

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

disentangling the effect of arthritis on earnings a simultaneous estimate of wage rates and hours worked poor health affects both wage rates and hours of work here we develop a procedure for examining the separate impact of a specific chronic disease arthritis on wages and hours worked and then translate these results into earnings our methodology provides a consistent approach for measuring how a specific chronic disease affects total earnings as well as its component parts we find that arthritis affects wage rates and hours worked differently and the pattern of these effects differs considerably between men and women

black agricultural economists discussion the authors of these three papers have performed a valuable service by reviewing and analyzing the status of blacks who have chosen agricultural economics as their profession occupation the estimated number of black agricultural economists continues to be small relative to the total number 32 in 1970 41 in 1981 and 56 in 1983 during this period the estimated number of blacks holding ph d degrees has risen slightly from 17 54 in 1970 to 18 44 in 1981 and then to 25 45 in 1983 however the percentage of blacks with ph d degrees remains lower than the percentage for all agricultural economists which has exceeded 60 since 1976 strauss and tarr apparently data on the number of black female economists were not tabulated

is there a daily discount rate evidence from the food stamp nutrition cycle abstract quasi hyperbolic discounting predicts impatience over short run tradeoffs i present a direct non laboratory test of this implication using data on the nutritional intake of food stamp recipients caloric intake declines by 10 to 15 percent over the food stamp month implying a significant preference for immediate consumption these findings constitute a rejection of the permanent income hypothesis and are extremely difficult to reconcile with exponential discounting the data support an explanation based on time preference and reject several alternative explanations including highly elastic intertemporal substitution i explore implications for the optimal timing of transfer payments under alternative assumptions about preferences

employers discriminatory behavior and the estimation of wage discrimination this paper considers the linkage of empirical estimates of wage discrimination between two groups introduced by oaxaca 1973 to a theoretical model of employers discriminatory behavior it is shown that conditional on different assumptions about employers discriminatory tastes oaxaca s estimators of wage discrimination can be derived that the approach is more generally useful is demonstrated by deriving an alternative estimator of wage discrimination based on the assumption that within each type of labor e g unskilled skilled the utility function capturing employers discriminatory tastes is homogeneous of degree zero with respect to labor inputs from each of the two groups the estimators are compared empirically in an application to male female wage differentials

wealth health and child development evidence from administrative data on swedish lottery players we use administrative data on swedish lottery players to estimate the causal impact of substantial wealth shocks on players own health and their children s health and developmental outcomes our estimation sample is large virtually free of attrition and allows us to control for the factors conditional on which the prizes were randomly assigned in adults we find no evidence that wealth impacts mortality or health care utilization with the possible exception of a small reduction in the consumption of mental health drugs our estimates allow us to rule out effects on 10 year mortality one sixth as large as the crosssectional wealth mortality gradient in our intergenerational analyses we find that wealth increases children s health care utilization in the years following the lottery and may also reduce obesity risk the effects on most other child outcomes including drug consumption scholastic performance and skills can usually be bounded to a tight interval around zero overall our findings suggest that in affluent countries with extensive social safety nets causal effects of wealth are not a major source of the wealth mortality gradients nor of the observed relationships between child developmental outcomes and household income jel codes i10 i14 j24

balanced budget consumption taxes and aggregate stability in a small open economy in a small open economy facing a perfect world capital market this paper shows that if the government follows a balanced budget fiscal policy based on endogenous consumption tax rates then the steady state is saddle path stable and hence beliefs driven aggregate instability can be ruled out this result is in contrast to those obtained in some closed economy models and it suggests that unrestricted world capital mobility can help stabilize the economy under the balanced budget fiscal policy based on consumption taxation

salary patterns of agricultural economists in the early 1980s systematic explanation of wages in the service sector typically has been hampered by the absence of information on physical productivity of service workers frequently the analyst must rely on input information and make strong assumptions about the transformation of inputs and cost into outputs to model the long run pattern of wages in the service sector it may be sufficient to look primarily at relative wages and long term demand factors such as income and population a number of professions in the service sector have been successfully modeled using the familiar cobweb formulation for example hansen et al report the results of estimating a multiequation model of the long run supply and demand for economists generally and conclude among other things that the real salary of new ph d s will fall throughout this decade short run analysis of academic wages usually focuses on various sorts of earnings functions in which the natural log of earnings is regressed against a variety of human capital variables there is an extensive literature on the determinants of general economists salaries and on the determinants of salaries for agricultural economists on salary determinants see for example boddy hansen weisbrod and strauss strauss tolles and melichar and tuckman gapinski and hagemann among others which have examined various aspects of the general market for economists for agricultural economists salaries see for example broder and ziemer 1980 1982 fuller helmberger lane lee lundeen and clausen melichar peck and babb schotzko schrimper ziemer broder and spurlock and redman the more recent literature has emphasized the importance of using actual productivity measures such as publications in explaining variations in earnings along with human capital variables a deficiency in some of this second type of research involves the absence of a welldefined theoretical justification for particular statistical specifications and the reliance on single equation models the objective of this study is to take advantage of a new relatively underutilized data source on agricultural economists in order to examine the general characteristics of agricultural economists and to examine the determinants of their salaries in the early 1980s in particular we examine the 1981 registry of agricultural economists maintained by the american agricultural economics association and the illinois department of labor the registry when examined in conjunction with melichar and unpublished 1976 tabulations of the association s membership list indicate that it is broadly representative of the profession the plan of the paper is as follows the next section describes the data base and provides some general characteristics of agricultural economists in the early 1980s then we examine salary patterns of agricultural economists in various types of employment and focus in more detail on the salaries of academicians especially those who are from and at educational institutions with doctoral programs which have been ranked in terms of the quality of their faculty and in terms of the quality of their graduate programs special attention is paid to the salaries of female agricultural economists and differences in salaries attributable to the race ethnicity of agricultural economists we conclude with a prospectus on outstanding research issues robert p strauss is a professor of economics and public policy school of urban and public affairs carnegie mellon university michael j tarr is a student at cornell university the authors wish to express their gratitude to the aaea and dr emanuel melichar for making unpublished data available for this study and to farm foundation for financial support responsibility for the views and any errors in this paper rests solely with the authors

the effects of college education on the male female wage differential researchers disagree on the reasons for the observed wage differential between males and females in the united states while some researchers attribute much of the wage differential to differences in endowments of productivity characteristics between the sexes others attribute it to discrimination in the labor market most researchers who believe that differences in endowments of productivity characteristics explain a large part of the wage gap between the sexes do not completely discount the existence of discrimination in the labor market even though there is a general agreement that discrimination accounts for part of the male female wage differential the proportion of wage differential found to be attributable to discrimination in research work depends upon the method of decomposing the wage differential and whether the researcher controls for occupational and industrial differences most estimates of the male female wage differential have used the decomposition analysis popularized by oaxaca 11 and blinder 2 this approach to decomposing the male female wage differential assumes that in the absence of discrimination the equilibrium wage equals either the male wage rate or the female wage rate depending on whether the male or female wage structure is used as the basis for decomposition of the wage differential unless this is true the discrimination component of oaxaca s approach to the decomposition of the wage differential is not consistent with becker s 1 competitive market discrimination coefficient for labor of different productivities defined as the difference between the observed wage ratio and the wage ratio that would prevail in the absence of discrimination if females are paid less than the value of their marginal product and males are paid more than the value of their marginal product as a result of discrimination elimination of discrimination will result in an equilibrium wage that is likely to be less than the male wage and greater than the female wage any decomposition analysis that uses either the female wage or the male wage as the reference wage will over or underestimate the effects of discrimination in explaining the male female wage differential this has led butler 3 to argue that it is impossible to

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

psychological traits and earnings differentials among men a study of second generation immigrants in sweden the purpose of this study is to analyse the impact of psychological traits on earnings differentials between second generation immigrants and individuals with native born parents the study is base

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

marriage and economic incentives evidence from a welfare experiment can economic incentives be used to affect marriage behavior and slow the growth of single parent families this paper provides new evidence on the effects of welfare benefit levels on the marital decisions of poor women exogenous variation in welfare benefit incentives arises from a randomized experiment carried out in california that allows me to measure responses beyond simple year to year changes in benefit levels i find that a regime of lower benefits and stronger work incentives encourages married aid recipients to stay married but has little effect on the probability that single parent aid recipients marry the effects on married recipients become larger over time suggesting that long run effects may exist

balanced budget income taxes and aggregate stability in a small open economy abstract in a closed economy a balanced budget fiscal policy rule with endogenous income tax rates can generate aggregate instability due to self fulfilling expectations e g schmitt grohe and uribe 1997 this paper shows both analytically and numerically that beliefs driven aggregate instability associated with such a balanced budget rule is less of a problem in a small open economy integrated in the world asset and goods markets this is because cross border capital flows and endogenous international price adjustments produce income effects that reduce the likelihood of sunspot equilibria from a policy perspective our results relieve possible concerns that balanced budget rules and reliance on income taxes to achieve budget objective could have destabilizing effects on the economy

earnings differentials and market structure theoretical models suggest that market structure may influence the magnitude of earnings differentials and or discrimination observed in the marketplace empirical results with regard to wage differentials and labor force participation patterns have been mixed most wage differential studies have focused on males due to difficulty in obtaining reliable data for women and to the sample selection problem of women s labor force participation decisions this paper characterizes market structure by four categories regulated nonprofit government and nonregulated industries within these structural categories earnings differentials are examined for men and women adjusting for race occupational stratification and sample selection bias

an alternative approach to the analysis of wage differentials a key question in many studies of male female or black white wage differentials is how much of the differential can be explained by economic factors and how much remains unexplained the unexplained portion is then ascribed to discrimination since oaxaca 17 first formalized this decomposition the residual difference methodology has been the dominant methodology utilized in empirical studies of wage differentials 4 7 8 10 15 18 but recently the validity of the assumptions underlying the residual difference methodology have been called into question by butler 5 6 in this paper the theoretical underpinnings of the residual difference methodology are reexamined and an alternative theoretical framework for this methodology is suggested the new framework overcomes the shortcomings inherent in oaxaca s specification of the model and therefore provides a sound theoretical foundation for the residual difference decomposition

politicians luck of the draw evidence from the spanish christmas lottery incumbent politicians tend to receive more votes when economic conditions are good in this paper we explore the source of this correlation exploiting the exceptional evidence provided by the spanish christmas lottery because winning tickets are typically sold by one lottery outlet winners tend to be geographically clustered this allows us to study the impact of exogenous good economic conditions on voting behavior we find that incumbents receive significantly more votes in winning provinces the evidence is consistent with a temporary increase in happiness making voters more lenient toward the incumbent or with a stronger preference for the status quo

the effect of incomes wages and afdc benefits on marital disruption this paper uses a choice based model to estimate the effects of a broad set of economic factors including afdc benefit levels husband s earnings and a woman s wage rate on the probability of marital dissolution we find that the probability of divorce is lower for marriages in which the husband s labor income is higher we also find that while afdc income has a substantial effect on welfare receipt by a divorced woman it has a relatively small effect on the probability that a married woman will become divorced finally we find no support for the hypothesis that rising wages for women have increased marital instability

job displacement disability and divorce earnings shocks should affect divorce probability by changing a couple s expected gains from marriage we find that the divorce hazard rises after a spouse s job displacement but does not change after a spousal disability this difference casts doubt on a purely pecuniary motivation for divorce following earnings shocks since both types of shocks exhibit similar long run economic consequences furthermore the increase in divorce is found only for layoffs and not for plant closings suggesting that information conveyed about a partner s noneconomic suitability as a mate due to a job loss may be more important than financial losses in precipitating divorce

trade structure and belief driven fluctuations in a global economy abstract this paper constructs a dynamic two country model with country specific production externalities and inspects the presence of equilibrium indeterminacy under alternative trade structures it is shown that the presence of belief driven economic fluctuations caused by equilibrium indeterminacy is closely related to the specified trade structure if investment goods are not internationally traded and international lending and borrowing are allowed then indeterminacy arises in a wider set of parameter space than in the corresponding closed economy by contrast either if both consumption and investment goods are traded in the absence of international lending and borrowing or if only investment goods are traded with financial transactions then the indeterminacy conditions are the same as those for the closed economy counterpart

schooling and changes in the inequality in male and female earnings in the united states over the 1970s ref jnl au fn j s sn akin eau au fn i sn garfinkel eau chti the quality of education and cohort variation in black white earnings ditferentials comment title american economic review vol 70 year 1980 fp 186 lp 191 ejnl bk au fn g sn becker eau title the economics of discrimination pub name university of chicago press cty chicago year 1957 epub ebk jnl au fn a h sn beller eau chti the impact of equal opportunity policy on sex differentials in earnings and occupations title american economic review vol 72 year 1982a fp 171 lp 175 ejnl jnl au fn a h sn beller eau chti occupational segregation by sex determinants and changes title journal of human resource vol 17 year 1982b fp 371 lp 192 ejnl jnl au fn b r sn bergmann eau chti the effect on white income of discrimination in employment title journal of political economy vol 6 year 1971 fp 294 lp 313 ejnl jnl au fn a s sn blinder eau chti wage discri

on the decomposition of wage differentials the often used method for decomposing wage differentials into human capital and discrimination components is reformulated so that both t he disadvantage or cost discrimination it imposes on a black or minority wage earner and the advantage or benefit it bestows on a white or majority wage earner can be estimated copyright 1988 by mit press

labor supply and marital separation panel data are used to estimate the effect of marital separation on labor supply female labor supply increases substantially and male labor supply declines marginally lending support to the theory of specialization within the household the most interesting finding is that women began to increase their labor supply well before the actualsplit occurs suggesting either that shocks to labor supply change divorce probabilities or that women with a higher likelihood of divorcework more this argument is pursued by constructing and estimating a simultaneous model of labor supply and divorce risk copyright 1986 by american economic association

racial wage gaps and differences in human capital this paper uses the cotton neumark decomposition methodology and 1990 cps data to investigate the relative importance of labour market structure and human capital in explaining the white male asian white male black white male hispanic wage gaps we find that labour market structure is more important than human capital in explaining the white minority wage gaps moreover most of the labour market structural effects are due to differential returns to white structural characteristics our result is robust to the specification of human capital our results contradict the results of research that indicate that the white minority wage gaps can be explained solely by differences in the endowment of human capital our results have implications for narrowing the wage gaps between whites and racial minorities

school quality and black white relative earnings a direct assessment the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on pupil teacher ratios annual teacher pay and term length for black and white schools in the eighteen segregated states from 1915 to 1966 these data are linked to estimated returns to education for southern born men from different cohorts and states in 1960 1970 and 1980 improvements in the relative quality of black schools explain 20 percent of the narrowing of the black white earnings gap between 1960 and 1980

indeterminacy in a small open economy ramsey growth model abstract this paper presents a small open economy version of the j benhabib and r e a farmer 1996 j monet econ 37 421 443 two sector optimal growth model with production externalities it is shown that indeterminacy is considerably easier to obtain under a regime of perfect world capital markets than in the closed economy variant furthermore the result is not dependent on a high labor supply elasticity since that input is fixed the paper also examines a variant which takes into account external borrowing constraints and it is shown that the qualitative results on indeterminacy remain basically unaffected by this extension journal of economic literature classification numbers e32 f12

a new look at the causes of the improved economic status of black workers the wage differential between black and white men fell from 40 percent in 1960 to 25 percent in 1980 it has been argued that this convergence reflects improvements in the relative quality of black schools to test this hypothesis we assembled data on

the economics of medicare equilibrium within the medical community this paper partially fills a theoretical void by developing an integrated model of the various branches of the medical community a consistent and general framework is adopted to analyze equilibrium within the market for medical services under a stylized form of socialized medicine without invoking demand shifting the optimization problem faced by each agent is specified and the equilibrium is defined the effect of various parameter changes on the market for medical services is analyzed the predictions are not contradicted by the stylized facts

3rd of tha month do social security recipients smooth consumption between checks this paper examines the response of consumption expenditures to the monthly receipt of social security checks since the amount and arrival date of these checks are known to the recipients the basic life cycle permanent income hypothesis lcpih predicts that consumption should not respond to the receipt of these checks using daily diary data from the consumer expenditure survey this paper finds evidence that both the dollar amount and probability of expenditures increase immediately following the receipt of this check most relevant to testing the lcpih categories of instantaneous consumption expenditure such as food away from home increase on the check arrival date the response is found primarily amongst households for whom social security is the primary source of income however the magnitude of the estimated responses are relatively small and do not suggest that the utility losses are large from this non smoothing behavior this abstract was borrowed from another version of this item

rationality and the decision to invest in economics in the study reported here we develop a theoretical model of occupational choice which is then specifically tailored to fit the market for economists over time economists typically assume that the world is relatively free of informational barriers and that agents carefully process vast amounts of information in making decisions this study reveals whether economists own occupational decisions are consistent with this world of rational calculating agents results suggest that tests for the internal consistency of rational expectations and our model of occupational choice cannot be rejected while the model provides a better explanation of the observed pattern of enrollments than does an alternative that assumes agents naively base decisions only on current wage conditions