evidence on nonlinear error correction in money demand the case of taiwan this paper proposes a nonlinear error correction model based upon smooth transition regression methodology the model is specified such that the short run adjustment toward long run equilibrium is nonlinear and that the error correction is a smooth function of long run deviation empirical results obtained from estimating m2 money demand in taiwan support the hypothesis of a nonlinear error correction process and provide better interpretation of change in the demand for money

trigger target rules need not be optimal with fixed adjustment costs a simple comment on optimal money holding under uncertainty literature concerning the transactions theory of demand for money often contains the assumption that simple trigger target rules are optimal when each financial transaction is accompanied by a fixed cost the validity of this assumption is examined in this paper using a simple example it is shown that the optimal money rule in discrete time models of money demand may be much more complicated than the simple rules assumed to be optimal in the literature however when considering continuous time models of money demand or when adjustment of the money stock is allowed in one direction only simple trigger target rules are in fact optimal copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the illusory effects of saving incentives on saving the authors evaluate research on how tax based saving incentives iras and 401 k s affect saving previous research overstates the impact of the incentives on saving by failing to account for several issues households with saving incentives have stronger tastes for saving than others saving incentives have interacted with debt nonfinancial assets financial markets and pensions and saving incentives represent pretax balances whereas taxable accounts represent posttax balances accounting for these issues essentially eliminates the impact of saving incentives on saving the authors conclude that little if any of the contributions to existing saving incentives have raised saving

do pensions increase the labor supply of older men this paper investigates the relationship between pension coverage and the retirement behavior of older men pensions are associated with higher work involvement for males in their late fifties and early sixties but with lower rates of job holding for those aged 65 69 age of entry into pension employment is shown to be positively correlated with future labor supply when combined with evidence on age specific changes in labor force participation rates this pattern casts doubt on the hypothesis that broadened pension coverage explains a substantial portion of the trend towards earlier male retirement

costly employment contract renegotiation and the labor mobility of young men the distinction of quits and permanent layoffs remains a contentious issue in the labor economics literature basically there appear two contrasting views of such turnover while both interpretations of turnover are derived from job matching models that assume wealth maximizing behavior of workers and firms each involves different assumptions about the feasibility of individual labor contract negotiations following hire on the one hand application of the coase theorem to employment contracts implies that turnover will occur only when the value of the worker s product in some alternative employment exceeds current job productivity since the actual division of the job match rent is assumed costlessly renegotiable only the presence of a truly more productive job assignment would prevent the renegotiation of the current rent sharing contract to the mutual benefit of both worker and firm the likelihood of a job change is thus directly related to the level of total match productivity irregardless of whether the worker in response to some later survey question characterizes the separation as a quit or permanent layoff according to this formulation of worker and firm attachments quits and permanent layoffs are at least in any sense relevant to actual resource allocation indistinguishable an implication of this model is of course that mobility enhances productivity see gary becker elisabeth landes and robert michael 1977 counter to this view stand models of job matching that suggest that the presence of transactions costs in the form of costly contract renegotiations preclude any easy application of the coase theorem to employment contracts most forcefully advocated by masanori hashimoto 1981 these models of job matching imply that quits and permanent layoffs are different the difference results from the fact that with costly contract renegotiation mobility is to a large extent determined by the actual rent sharing agreement formulated at the beginning of employment according to this view then the total value of the match does not exclusively determine job change and thus not all mobility is productivity augmenting this paper offers a model of job matching with costly post hire negotiations in some aspects similar to that of hashimoto but with particular relevance to the population of young workers only beginning their labor force participation while hashimoto s discussion concentrates on longer term firmspecific training decisions the current model focuses on the period immediately following hire when worker productivity is to a large extent governed by endowed capabilities rather than determined by learning on the job the theoretical focus on inexperienced workers as well as the corresponding youthful composition of the empirical sample are motivated to control for unobserved factors such as firm specific human capital stocks as much as possible in further contrast to hashimoto s emphasis the model yields empirical implications concerning the role of wages in the determination of mobility that contrast to the implications of an otherwise similar zero negotiations cost model of job matching derivation of the empirical implications concerning the relationship of wages to quits and layoffs represents the primary contribution of this paper finally empirical results are presented that at least for a sample of very young men over a short period of time department of economics university of houston houston tx 77004 i thank finis welch dan mitchell and the referee for comments on an earlier version of this paper

long run money demand revisited evidence from a non linear approach abstract in this paper we argue that employing the conventional linear cointegration approach in examining long run money demand may not be appropriate after taking into account the existence of transaction costs we provide evidence to show that deviations from equilibrium money demand follow an exponential smooth transition autoregressive process that is mean reverting outside a given range and has a unit root inside the range our findings also provide an alternative explanation for the failure of much of the existing literature to support a long run money demand function

what are corporate pension liabilities analyses of corporate pension plans often make unstated assumptions about an implicit labor contract an example of the effect of such an assumption is that many mistakenly believe that if a worker s benefits are tied to final salary he is protected against inflation until retirement also the value of a worker s claims is often considered to be independent of the status of the firm s pension fund these implicit contract assumptions are examined and questioned the implications of analyzed pension liabilities in a manner consistent with the analysis of other corporate liabilities are explored

a study of wages and reliability this article studies the role of reliability on the wage rate reliability is defined in the sense of showing up for scheduled work over an extended period just as reliability is an important determinant of product prices a worker s reliability ought to be an important determinant of his or her wage moreover while workers are not conveniently packaged by brand name firms form expectations about reliability across identifiable groups of workers and thus effectively attach brand names to workers based on their observable characteristics a worker s wage depends on his own track record and the reputation for reliability of his identifiable group using robust measures of reliability i find that observed reliability and expected reliability substantially affect the wage rate and that about half of the gender wage gap can be explained by differences in expected reliability between men and women in the workforce

opportunistic behavior by firms in implicit pension contracts several studies have established that under the most common form of pension coverage benefits accrue disproportionately near the end of a worker s career such backloading establishes a penalty for early quitting but may also create an incentive for opportunistic firm behavior because benefits generally are a function of highest earnings when nominal earnings are expected to rise an employer can reduce pension liabilities by discharging workers prior to retirement this paper uses the national longitudinal survey of mature men to test whether such actions by employers are systematic we estimate that pension covered workers with mean losses are less likely to be discharged unexpected increases in pension losses due to increases in inflation however raise the risk of discharge we find no evidence that the minimum vesting standards of the employees retirement income security act reduces the likelihood of discharge for older workers who previously were not vested these results are consistent with an implicit pension contract under which employer compliance is enforced by reputation

gender differences in pensions the causes of gender differences in pensions are examined for retirees and employees using the 1982 newly entitled beneficiary survey and the 1979 and 1988 may current population surveys for both retirees and the employed population much of the gender gap in coverage is accounted for by gender differences in labor market characteristics while children and marriage have a negative effect on female coverage among retirees even after controlling for labor market characteristics the negative effect is not observed among more recent groups of female employees finally recent convergence of male and female labor market characteristics contributed to a decline in the coverage gap during the 1980s

fringe benefits and labor mobility interindustry factor mobility is a crucial determinant of the income distribution effects of exogenous changes in relative commodity prices this examination of interindustry variation in wages and profits using data from manufacturing industries from

stability and non linear dynamics in the broad demand for money in spain in this article we estimate a money demand function for broad money in spain in the period 1978 1998 stability tests indicate the existence of a stable money demand function in the long but not in the short run using recent non linear techniques we find that such instabilities are caused by a non linear adjustment of real balances towards a stable long run equilibrium

trigger target rules and the dynamics of aggregate money holdings abstract aggregate money holdings under trigger target rules or most transactions models exhibit complex dynamics milbourne buckholtz and wasan 1983 review of economic studies 50 531 541 and greene 1997 mimeo university of missouri st louis mo show the static expectation of holdings will be a weighted average of lagged holdings and the long run mean with weights depending on the level of lrd this paper studies the behavior of these weights in transitions between tighter and looser money management functional approximations are developed which force weights to vary with levels and rates of change in lrd these functions are nearly free of lags linear models prove to be extremely poor approximations of aggregate dynamics

long run money demand in taiwan revisited evidence from a cointegrating str approach previous studies on the nonlinearity of the money demand function focus only on short run dynamics and assume that the long run cointegrated relationship is linear which according to economic theory need not be the case thus this article focuses on the variables that make up the long run money demand function in taiwan and their determinants by using the cointegrating smoothing transition regression cstr test developed by choi and saikkonen 2004 this model is more general than the previous str model in that it may contain several transition functions and has more than a single transition variable we demonstrate our empirical results for robustness and adopt two models to ascertain whether or not the stock price should be added as a determinant of the demand for money our empirical results show the existence of a stationary long run relationship among real money demand functions for the period from 1976q1 to 2005q1 and the robustness test covers the 1980q1 2005q1 period in taiwan by comparing

pensions and wage premia i introduction despite the widespread acceptance of the theory of compensating differences empirical efforts to estimate the magnitude of these differences have met with only mixed success 1 with the exception of fatal risks economists have not been able to consistently find a significant relationship between wages and other job characteristics the failure to find consistent evidence on compensating differentials has been attributed to either poor measures of non wage characteristics or inadequate controls for worker productivity 2 studies by gunderson hyatt and pesando 1992 montgomery shaw and benedict 1992 and moore 1987 which have been able to explicitly address these issues have had greater success in finding significant compensating differentials in this paper we focus on an alternative explanation for the variation in estimated compensating differentials that the magnitude of the compensating differential varies systematically across different sectors in the labor market the theory of compensating differentials predicts that the implicit price or cost of providing a job attribute such as pensions will be a function of firm or industry technological differences and that the value attached to that attribute will also vary across workers depending on their tastes if workers and firms are not randomly assigned to sectors this will lead to systematic variations in the size of the estimated compensating differential across sectors or markets the result of this variation is that studies using different subsamples of the labor force will yield very different estimates of the size of the compensating differential the few studies that have addressed sources of heterogeneity in compensating differentials have concentrated on testing for individual differences in tastes for risk 3 in contrast our emphasis is on firm side differences in technologies or market power we estimate the compensating differential between annual pension accruals and wage rates and let this tradeoff vary by firm size and union status with corrections for selectivity bias the implicit cost of pensions and hence the size of the compensating differential may vary by finn size or union status for a number of reasons greater ability to spread fixed administrative costs across a large work force more difficulty monitoring worker effort or the presence of market power thus the cost of fringe benefits to the firm may be lower in large or unionized firms than in small nonunion firms we find empirical evidence supporting this view the estimated wage pension compensating differentials are smaller in unionized and large firms than in small nonunion firms the results from this paper are significant for several reasons 1 they provide evidence that compensating differentials vary across markets this evidence could account for some of the differences in estimates of tradeoffs across studies that have used different nonrandom samples 4 more importantly these sectoral differences serve as a reminder that the labor market is in fact a multitude of markets and that technological differences that vary across markets should be considered when addressing issues ranging from estimating the returns to human capital investment to the impact of the minimum wage 5 2 these results also deepen our knowledge of the relationship between pensions and wages a relationship that has important implications for the shape of workers wage earnings profiles or for the mechanisms for motivating workers and for the returns to human capital and for the distribution of income regarding the latter pensions are a large component of compensation and work by even and macpherson 1990 mccarthy and turner 1983 and moore 1987 suggests that coverage rates and returns are smaller for women and blacks our analysis suggests that an element of the differences could be sectoral choices

a theoretical derivation of the functional form of short run money holdings this paper considers the short run adjustment of money holdings towards their desired levels a rationale for short run money holdings is given which allows for uncertainty in cash flows and it is shown how the adjustment to desired money balances will occur following a change in some of the economic variables the model generates a particular form for the short run demand for money function which is shown to be econometrically superior to the standard ad hoc formulation the chief theoretical novelty is the derivation of the appropriate transient probability density of money holdings

nonlinear equilibrium correction in u s real money balances 1869 1997 several theoretical models of money demand imply nonlinear functional forms for the aggregate demand for money characterized by smooth adjustment toward long run equilibrium in this paper we propose a nonlinear equilibrium correction model of u s money demand that is shown to be stable over the sample period from 1869 to 1997

pensions and household wealth accumulation abstract economists have long suggested that higher private pension benefits crowd out other sources of household wealth accumulation we exploit detailed information on pensions and lifetime earnings for older workers in the 1992 wave of the health and retirement study and employ an instrumental variable iv identification strategy to estimate crowd out the iv estimates suggest statistically significant crowd out each dollar of pension wealth is associated with a 53 67 cent decline in nonpension wealth with less precision we use an instrumental variable quantile regression estimator and find that most of the effect is concentrated in the upper quantiles of the wealth distribution

the labor contract and true economic pension liabilities most pension covered workers in the united states are covered solely or primarily by defined benefit plans in these plans workers are typically promised a pension that is proportional to their years of service in the firm and their final wage depending upon how workers pay for it the existence of a pension in the labor contract may play either an important role or no role at all in the worker firm relationship this paper addresses the issue how workers pay for the cumulating pension benefit over their tenure cycle in the firm and derives several economic implications for the worker firm contract while the theory itself has ambiguous implications the data confirm the longstanding presumption that pensions offer strong incentives for the worker to complete the normal tenure cycle in the firm not to quit early but if this intuitive notion is accepted it is shown that a perhaps less intuitive notion is also true firms make workers longterm bondholders in the firm the same flow of worker pension savings that tie workers to the firm are not accounted for in the pension trust fund pension plans are significantly underfunded in a true economic sense this is a peculiar characteristic of the labor contract which raises several unanswered questions the paper also shows that the nature of the pension contract can play an important role in determining the wage service profile and the capitalized value of the firm recent contributions to the literature pose an interesting and unconventional view of pensions one which leads to the conclusion that pensions play a relatively minor role in the worker firm contract the argument has been implicitly made by burt barnow and ronald ehrenberg 1979 and william sharpe 1976 but has recently been stated more directly by jeremy bulow 1982 2 in essence their views rest on a legal interpretation of pension liabilities namely since the firm can legally terminate its pension plan anytime the firm s pension liabilities cannot exceed the present value of the nominal pension promises it would owe workers if the firm terminated the plan immediately if workers believe the firm will exercise its legal right it is intuitively apparent and easy to show that workers will deposit only that amount of compensation into the pension plan that they expect to receive upon immediate termination using this interpretation of pension plan liabilities pensions have no influence on whether the worker leaves or remains in the firm moreover it will be shown that if the pension contract is written in nominal terms reflecting the legal view workers are not bondholders in the firm pension plans are excessively overfunded an alternative view is that the pension plan is an implicit contract between the worker and the firm see for example jack treynor 1977 an implicit contract theory implies that workers anticipating careers with a firm will consider the package of wage and pension benefits they expect to collect over their life cycle it is shown that these expectations lead quite directly to several implications that the pension contract is written in real terms that firms intend to meet their pension promises and that the firm will re u s department of labor s 4521 washington d c 20210 the views expressed in this paper are my own and do not necessarily represent the views of the department of labor the paper has substantially benefited from the comments of pauline ippolito and discussions with jeremy bulow i am also indebted to robert clark gary fields alan gustman olivia mitchell james pesando john turner michael ward and participants at the labor relations workshop at cornell university and the law and economics workshop at the university of chicago for comments see my 1985a book 2 the argument is also implicit in other related papers see for example martin feldstein and randall morck 1982

employment tenure and earnings profiles in japan and the united states comments the relationship between job tenure and annual earnings in japan has received considerable attention from social scientists examining employment contracts and the japanese compensation system in their widely cited article masanori hashimoto and john raisian 1985 using data for 1980 showed that japanese men have greater job tenure than comparable workers in the united states and that the earnings of japanese men rise more rapidly with increased tenure they found that an additional year of tenure increases earnings in both small and large firms in japan more than does an additional year of general market experience their results for the united states indicate that general market experience increases earnings more than an additional year of job tenure the 1970 s and 1980 s were a period of substantial change in japanese labor markets due to the rapid aging of the population and the restructuring of the economy following the oil crisis the present analysis extends the work of hashimoto and raisian by estimating earnings equations for japanese men for the years 1971 1976 1981 and 1986 specifically we wish to investigate whether hashimoto and raisian s findings have been stable over time or whether changes in the labor market have altered the importance of tenure relative to total labor market experience in the japanese labor market i changes in the labor market

the importance of lifetime jobs in the u s economy though the u s labor market is justly notorious for high turnover and consequent high unemployment it also provides stable near lifetime employment to an important fraction of the labor force this paper investigates patterns of job duration by age race and sex with the following major conclusions 1 the typical worker today is holding a job which has lasted or will last about eight years over a quarter of all workers are holding jobs which will last twenty years or more sixty percent hold jobs which will last five years or more 2 the jobs held by middle aged workers with more than ten years of tenure are extremely stable over the span of a decade only twenty to thirty percent come to an end 3 among workers aged thirty and above about forty percent are currently working in jobs which eventually will last twenty years or more three quarters are in jobs which will last five years or more 4 the duration of employment among blacks is just as long as among whites even though the jobs held by blacks are worse in almost every other dimension they are no more unstable than those held by whites 5 women s jobs are substantially shorter than men s on the average only about a quarter of all women over the age of thirty are employed in jobs which will last over twenty years whereas over half of men over thirty are holding these near lifetime jobs this abstract was borrowed from another version of this item

the effects of employer provided health insurance on worker mobility the authors use data from the 1984 survey of income and program participation sipp to investigate whether employer provided health insurance reduced worker mobility a phenomenon termed job lock the sipp provides information on variables particularly pension receipt job tenure and spouse job change that were omitted from previous studies and are the authors argue key to the estimation of welldefined mobility models for dual earner married men and women the authors estimate a model that accounts for the interaction between husbands and wives job change decisions for both married and single individuals the results provide fairly strong evidence ofjob lock among women but only weak indications of job lock among men the authors speculate that this finding reflects higher health care use by women than by men

simple optimal policy for cash management the average balance requirement case this paper treats a problem of stochastic cash management under an average compensating balance requirement it develops a dynamic programming formulation of the problem in which the relevant state is a unidimensional quantity equivalent to the forecasted average balance at the end of the averaging period under usably broad conditions it establishes the optimality of a transient policy of simple type similar to the two sided inventory type policy familiar from certain earlier studies of stationary cash balance problems having absolute balance requirements the results apply to cases in which the transactions costs contain both fixed and proportional components the paper discusses also a numerical example drawn from the literature of the cash balance problem and shows by simulation of the optimal and simply modified forms of the optimal policy that good protection is afforded against negative balances even though the model does not explicitly constrain the negative balance probabilities

the impact of pension benefits on the distribution of earned income using standard measures of income inequality and detailed pension benefit information on participants in the 1983 survey of consumer finances scf the authors investigate how pension benefits affected the distribution of earned income the results suggest that private pensions increased annual income inequality relative to inequality observed in the distribution of wage income by only about 2 among all employed individuals but by 21 among unionized workers further analysis indicates that private pensions raised annual income inequality primarily by increasing the rate of return to tenure possibly through pension backloading setting accruals to grow when earnings rise near retirement and the increasing incidence of pensions with age private pensions had little effect on estimates of the distribution of expected lifetime income but the addition to the analysis of social security benefits public pensions strongly reduced inequality in that distribution a renewed interest in the distribution of income has developed recently as new evidence suggests that income inequality has worsened over the past twenty years researchers suggest several reasons for rising inequality including an increase in the incomes of well educated men relative to other groups for example juhn murphy and pierce 1993 demographic changes resulting from the entrance of the baby boom generation into the work force lawrence 1982 and a sectoral shift away from manufacturing and toward the ser

currency substitution and nonlinear error correction in taiwan s demand for broad money we modify the conventional money demand function by including a real exchange rate variable to reflect the effect of currency substitution empirical evidence indicates that the variable is crucial to the long run stability of taiwan s money demand after finding the failure of a linear error correction model ecm in describing the dynamics of taiwan s money demand we apply a nonlinear ecm to examine its dynamics and support the appropriateness of the nonlinear model empirically

pensions and indenture premia the implicit pension contract has provided a theoretical basis for the observed relation between pensions less quitting and earlier retirement but it also has encountered difficulty explaining why wages seem too high in pension firms this anomaly has been taken by some to imply that efficiency wages not pension capital losses explain why quitting is abnormally low in defined benefit pensions in this paper i pursue an alternative explanation that the implicit contract model is oversimplified because it ignores supply conditions facing long tenure firms i show that once an allowance is made for compensation required by workers for entering long term labor contracts numerous anomalous empirical observations in the pension market are explicable

smooth adjustment econometrics and inventory theoretic money management abstract a growing number of empirical papers use miller orr s s money management as economic motivation for application of non linear smooth adjustment models this paper shows such models are not implied by the miller orr economy instead the miller orr economy implies non standard smooth adjustment as derived in the neglected and misinterpreted work of milbourne et al 1983 remarkably this function includes a varying weight on the lagged dependent variable capturing static not dynamic effects interpretations of these apparent dynamics are presented some of which may be useful in non monetary s s contexts results imply a new agenda for applied smooth adjustment modeling of money

a closer look at long run u s money demand linear or nonlinear error correction with m0 m1 or m2 i introduction the stability of money demand has been a long standing issue 1 lucas 1988 informally analyzes the stability of a log linear m1 money demand function and concludes that real money demand is a stable function and he supports earlier findings of meltzer 1963 with an income or wealth elasticity of around unity 2 with the development of cointegration methods engle and granger 1987 numerous empirical studies have applied these techniques to long run u s money demand examples are baba hendry and starr 1992 haferand jansen 1991 hoffman and rasche 1991 and miller 1991 who find support for a cointegrated money demand model with either m1 or m2 3 king et al 1991 also find support for cointegration with m2 and a short term interest rate in contrast to these studies others have argued against a stable u s money demand function in the postwar period for example friedman and kuttner 1992 do not find support for cointegration particularly when the period march 1970 to april 1990 is considered similarly miyao 1996 studies the behavior of the m2 money demand function over the period from 1959 to 1993 with quarterly data and various interest rates in levels and in logs miyao concludes that m2 is not a useful intermediate target for monetary policy in the 1990s 4 however carlson et al 2000 reach the conclusion that m2 does have predictive content for nominal economic activity and that the real m2 money demand function is stable but only after accounting for financial innovation in the first half of the 1990s two recent papers ball 2001 and stock and watson 1993 focus on especially long data sets for the united states and m1 stock and watson 1993 analyze various estimation methods for cointegrating relationships and illustrate their performance for money demand functions with annual data from 1900 to 1987 they pay particular attention to the postwar period and use monthly data in addition to annual data for this period they employ a semi log linear real m1 money demand model with real net national product and the level of the 6 mo commercial paper rate for the postwar period they also consider the 90 day treasury bill rate and the 10 yr treasury bond rate they compare and contrast their results to those of various others they also carry out recursive estimations to check their results for stability stock and watson 1993 conclude that a long span of data is needed to estimate long run money demand functions precisely their overall evidence is in favor of a stable long run money demand function with an income elasticity near one and an interest rate semielasticity near 0 10 however the postwar data are found to be not very informative a lack of low frequency variation in the postwar data as suggested by lucas 1988 does not allow a disentangling of the effects of output and interest rates on money demand for this time period estimates are imprecise and sensitive to subsample specifications due to substantial colinearity ball 2001 revisits the m1 money demand model of stock and watson 1993 using the same data set but extended through 1996 he applies the same array of estimation techniques as stock and watson did ball obtains precise estimates over the postwar period for his extended data set an income elasticity of approximately 0 5 and a semielasticity of 0 05 for the interest rate he does not find support for a velocity specification the m1 model is not stable over the period 1900 1996 lutkepohl terasvirta and wolters 1999 apply a nonlinear error correction model with smooth transition adjustment to capture instabilities in the linear cointegration model the long run equilibrium is described by a linear cointegrating relation and the adjustment to this long run equilibrium is nonlinear they analyze german m1 money demand granger and terisvirta 1993 terasvirta 1998 and van dijk terasvirta and franses 2002 provide details on the econometric theory for estimating and testing such nonlinear models

pensions bonding and lifetime jobs a well known if underappreciated finding in the mobility literature is that turnover is much lower in jobs covered by pensions than in other jobs this could result from capital losses for job changes created by most benefit formulas the tendency of turnover prone individuals to avoid jobs covered by pensions or higher overall compensation levels in such jobs a switching bivariate probit model of pension coverage and turnover is developed to estimate the effect of each of these factors the results show that capital losses are the main factor responsible for lower turnover in jobs covered by pensions but self selection and compensation levels also play an important role this is the first direct evidence that bonding is important for understanding long term employment relationships

the effects of pension funds on markets performance a review the worldwide reforming process of pension systems triggered by the demographic transition and globalization has led several countries to implement multi pillar pension systems and enhance pension funds for this reason the studies on the effects that pension funds exert on markets performance have been flourishing in the last decades in this paper we provide an updated review of the empirical advances in this field of study with particular focus on the effects that pension funds produce on labour markets financial markets and economic growth

attention discrimination theory and field experiments with monitoring information acquisition we link two important ideas attention is scarce and lack of information about an individual drives discrimination in selection decisions our model of allocation of costly attention implies that applicants from negatively stereotyped groups face attention discrimination less attention in highly selective cherry picking markets where more attention helps applicants and more attention in lemon dropping markets where it harms them to test the prediction we integrate tools to monitor information acquisition into correspondence field experiments in both countries we study we find that unfavorable signals minority names or unemployment systematically reduce employers efforts to inspect resumes also consistent with the model in the rental housing market which is much less selective than labor markets we find landlords acquire more information about minority relative to majority applicants we discuss implications of endogenous attention for magnitude and persistence of discrimination in selection decisions returns to human capital and potentially for policy