does marriage really make men more productive this paper presents new descriptive evidence regarding marital pay premiums earned by white males longitudinal data indicate that wages rise after marriage and that cross sectional marriage premiums appear to result from a steepening of the earnings profile data from a company personnelfile that includes information on job grades and supervisor performance ratings reveal large marital status pay differences within a narrow range of occupations managers and professionals and environments a single firm married workers tend to be located in higher paying job grades there are very small pay differentials within grades married men receive higher performance ratings than single men as a result they are much more likely to be promoted controlling for rated performance however eliminates the promotion differential sanders korenman is an assistant professor of economics and public affairs at princeton university and is a faculty associate of the office of population research at princeton university and a research affiliate of the national bureau of economic research nber david neumark is an assistant professor of economics at the university of pennsylvania and a research affiliate of the nber korenman wishes to acknowledge the hewlett foundation and the harvard university center for population studies for financial support the authors are grateful to james medofffor making available an extract from the company personnelfile questions regarding data availability should be directed to professor james

excess capacity as a barrier to entry an empirical appraisal this paper examines excess capacity barriers to entry and investment dynamics in a sample of thirty eight chemical product industries logit and log linear models of investment behavior are estimated and specific case examples are considered the results show that incumbents rarely built excess capacity pre emptively in an effort to deter entry in general entrants and incumbents exhibited similar investment behavior

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

capacity signals and entry deterrence abstract if potential entrant firms are well informed they will generally not believe incumbent s threats to expand output when experiencing entry but this expectation underlies most excess capacity models we demonstrate an asymmetric information equilibrium in which potential entrants rationally fear output expansion by oligopolists with excess capacity less effective collusive oligopolies may be destabilized expanding output upon entry one symptom of less effective collusion is excess capacity hence excess capacity becomes a signal of the potential for output expansion in a rational expectations equilibrium this signal may also be mimicked by oligopolies which would not otherwise carry excess capacity

the dynamics of health in the british household panel survey this paper considers the dynamics of a categorical indicator of self assessed health using eight waves 1991 1998 of the british household panel survey bhps our analysis has three focal points the relative contributions of state dependence and heterogeneity in explaining the dynamics of health the existence and consequences of health related sample attrition and the investigation of the effects of measures of socioeconomic status with a particular focus on educational attainment and income to investigate these issues we use dynamic panel ordered probit models there is clear evidence of health related attrition in the data but this does not distort the estimates of state dependence and of the socioeconomic gradient in health the models show strong positive state dependence and heterogeneity accounts for around 30 of the unexplained variation in health copyright 2004 john wiley sons ltd

preying for time the recent antitrust policy literature which seeks to define predatory pricing contains a flood of proposals which have pervasively transformed an entire body of law 1 one theme of this literature is that a readily anticipatable standard should be established so that firms will not fear being sued for normal competitive responses another is that since predation is presumed to be rare the standard should be lax so as to minimize the possibility of stifling competition in the overwhelming majority of more competitive markets perhaps the most striking feature of these arguments is the omission of any analysis of predatory behavior when business firms are sophisticated and rational mcgee i980 pp 295 6 for example points out that predation only pays if the present discounted value of future high prices exceeds the costs of suffering today s low prices but if this is so for the monopolist then why not for the competitor

state dependence serial correlation and heterogeneity in intertemporal labor force participation of married women a dynamic search framework is developed to analyze the intertemporal labor force participation behavior of married women using longitudinal data to allow for a rich dynamic structure the sensitivity to alternative distributional assumptions is evaluated using linear probability and probit models the dynamic probit models are estimated using maximum simulated likelihood msl estimation to overcome the computational difficulties inherent in maximum likelihood estimation of models with nontrivial error structures the results find that participation decisions are characterized by significant state dependence unobserved heterogeneity and negative serial correlation in the error component the hypothesis that fertility decisions are exogenous to women s participation decisions is rejected when dynamics are ignored however there is no evidence against this hypothesis in dynamic model specifications women s participation response is stronger to permanent than current nonlabor income reflecting unobserved taste factors

excess capacity as a barrier to entry in the us titanium industry abstract the purpose of this paper is to construct and empirically test a model designed to determine the impact if any of expected excess capacity on the probability of entry the analysis is conducted within the context of a single oligopoly specifically the us titanium metal industry using time series data an empirical model is developed and estimated in order to determine expected values of the components of excess capacity capacity and production by disentangling the components of excess capacity and estimating them separately it is possible to separate any incumbent actions that may preempt entry from the effects of underlying cycles in demand and production these predicted values are utilized in a logit model generating results which indicate that expected levels of capacity expansion appear to diminish the probability of firm entry into the titanium industry

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

strategic entry deterrence in analyzing deterrence of large scale entry two classes of entry barriers may be distinguished an innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization in contrast a strategic entry barrier is purposely erected to reduce the possibility of entry two types of innocent barriers may also be distinguished a postentry absolute advantage has the property that if entry did occur the established firm would be at a profit advantage over the entrant examples are superior technology or product design patents and lower input prices a preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant before the entrant makes his entry decision the established firm has already committed resources this prior existence gives first move advantages the preentry asymmetry is independent of symmetry or asymmetry in the rules the equilibrium concept of the postentry game that might ensue even if the postentry game will be played according to nash cournot or entrant as leader rules the preentry leadership

a model of dynamic limit pricing with an application to the airline industry we develop a dynamic limit pricing model where an incumbent repeatedly signals information relevant to a potential entrant s expected profitability the model is tractable with a unique equilibriu

collusion and predation under almost free entry abstract this study investigates the degree of cooperation that firms can support in the absence of significant barriers to entry a free entry subgame perfect equilibrium is defined by q n where q is the collusive output rate and n is the number of active firms such that there is no incentive for an active firm to deviate output from q and there is no incentive for a potential entrant to enter the industry it is shown that for all n 1 if the discount factor is sufficiently high there exists a free entry equilibrium in which active firms sustain a non trivial degree of cooperation cooperation is supported by active firms credibly threatening to respond to entry with a period of aggressive competition

the impact of employer provided health insurance on dynamic employment transitions we estimate the impact of employer provided health insurance ephi on the job mobility of males over time using a dynamic empirical model that accounts for unobserved heterogeneity previous studies of job lock reach different conclusions about possible distortions in labor mobility stemming from an employment based health insurance system a few authors find no evidence of job lock although most find reductions in the mobility of insured workers of between 20 and 40 percent we use data from the national longitudinal survey of youth which includes variables describing the health insurance an individual holds as well as whether he is offered insurance by his employer this additional information allows us to model the latent individual characteristics that are correlated with the offer of ephi the acceptance of ephi and employment transitions our results provide an estimate of job lock unbiased through correlation with positive job characteristics and individual specific turnover propensity we find no evidence of job lock among married males and produce small estimates of job lock among unmarried males of between 10 and 15 percent

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

employment based health insurance and job mobility is there evidence of job lock the majority of privately insured americans obtain their health insurance through their own or a family member s employment the rationale for employers to provide health insurance is straightforward by pooling the risks of individuals employers can reduce adverse selection and lower administrative expenses in addition they benefit from tax laws allowing businesses to deduct their health insurance costs these advantages of employer provision however must be weighed against the distortions they may generate in individual labor market decisions in particular health insurance may distort job mobility if employees decide to keep jobs they would rather leave for fear of losing coverage for preexisting conditions a possibility that has been termed job lock this paper attempts to quantify the effect of employer provided health insurance on the labor market mobility of individuals the link between employer provided health insurance and

the role of multiple potential entrants sequential entry in noncooperative entry deterrence a number of authors have recently considered whether the free rider problem is exhibited in models characterized by multiple potential entrants sequential entry bernheim 1984 and eaton and ware 1987 find that the free rider problem is not an important factor while mclean and riordan 1989 find that it is in this article i identify a general property whose presence is important for whether a model of noncooperative entry deterrence exhibits a free rider problem and in this way help clarify why the above mentioned authors reach these diverse conclusions the article also demonstrates that quite plausible changes in the specifications of both bernheim and eaton and ware lead to incumbent firms underinvesting in entry deterrence

a sectoral explanation of per capita income convergence and divergence estimating verdoorn s law for countries at different stages of development this paper estimates the verdoorn law the relationship between productivity and output growth for manufacturing industries for 70 developed and developing countries it tests the hypothesis that the various manufacturing industries exhibit different values of the verdoorn coefficient and hence different degrees of increasing returns broadly defined the paper analyses especially whether or not these estimates vary according to the level of a country s economic development controlling for such factors as human capital and the level of technology it is found that this is the case countries in the early stages of development would benefit from specialising in low tech manufacturing and consumption goods as these industries have larger verdoorn coefficients than in the more developed countries however as countries reach higher stages of development it is advantageous for them to specialize in the high tech manufacturing industries and the capital goods industries these have relatively high values of the verdoorn coefficient compared with the less developed countries it is concluded that the composition of industries that leads to the fastest growth of manufacturing productivity differs depending upon the level of economic development

two separated effects of employer provided health insurance on job mobility we estimate the effect of employer provided health insurance ephi on job mobility via a dynamic model of joint employment and health insurance decision in the presence of uncertainty about wage rate and health status transitions the model is based on a markov decision process in which a hedonic wage approach provides an economic rationale for the different choices and health insurance serves as an input to the health production process including health transitions in the model helps us to understand how the availability of ephi positive job characteristic and holding ephi the wage health insurance trade off enter into the individuals decisions the model is estimated using the 1999 2000 medical expenditure panel survey panel 4 and the results show that the pure effects of holding ephi are negligible the full effects of ephi are significant and the degrees of the inefficiency vary between 14 and 25 across different states

excess capacity and limit pricing an empirical test entry may be inhibited by expectations that incumbents have lower marginal costs incumbents may be able to use limit pricing or excess capacity to further this expectation we construct an empirical model of oligopoly capacity and pricing decisions and of entrant responses the results support the hypothesis that both lower prices and greater excess capacity inhibit entry they further support limit pricing but provide no evidence that oligopolies deliberately install excess capacity to deter entry the results suggest however that limit pricing firms may exploit the entry inhibiting effects of unintended excess capacity by raising their limit prices

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

an equilibrium model of health insurance provision and wage determination we investigate the effect of employer provided health insurance on job mobility rates and economic welfare using a search matching and bargaining framework in our model health insurance coverage decisions are made in a cooperative manner that recognizes the productivity effects of health insurance as well as its nonpecuniary value to the employee the resulting equilibrium is one in which not all employment matches are covered by health insurance wages at jobs providing health insurance are larger in a stochastic sense than those at jobs without health insurance and workers at jobs with health insurance are less likely to leave those jobs even after conditioning on the wage rate we estimate the model using the 1996 panel of the survey of income and program participation and find that the employer provided health insurance system does not lead to any serious inefficiencies in mobility decisions

goodwin cycles and the bopc growth paradigm a macrodynamic model of growth and fluctuations abstract the paper builds a non linear macrodynamic model to study the relation between the functional distribution of income technological progress and economic growth in the short term the interaction between the productivity regime the demand regime and the distributive conflict generates cyclical paths a la goodwin in the long term output growth rate is constrained by the balance of payments a la thirlwall in which the elasticities of foreign trade are modeled as a function of the complex relation between the wage share and the innovation capabilities of theeconomy

optimal oligopoly pricing and the threat of entry in earlier work we tested stochastic dynamic limit pricing using u s data we replicate these tests using canadian data the results are weak but consistent with the earlier tests along the way we deal with several methodological problems how does the new rational limit pricing relate to the test how might oligopoly influences be integrated into limit pricing how should existing concentration affect entrant behavior might factors which suppress industry profitability not ceteris paribus deter entry what might one do with correlated proxy variables should weak results be interpreted the same in a replication test as in a de novo test

kaldor s technical progress function and verdoorn s law revisited kaldor put forward his technical progress function as an alternative to the neoclassical aggregate production function it is shown that verdoorn s law is its empirical counterpart although allowing for increasing returns to scale however both may be derived from an aggregate cobb douglas production function but aggregation problems and the cambridge capital theory controversies have shown theoretically that aggregate production functions in all probability do not exist moreover the only reason that estimations of aggregate production functions give good results is the existence of an accounting identity this article reconsiders the technical progress function and verdoorn s law especially in the light of these problems nevertheless it is shown that estimates of the law do in fact provide insights into the growth process very similar to those of kaldor but viewed from another perspective