tracking the new economy using growth theory to detect changes in trend productivity abstract the acceleration of productivity after 1995 prompted a debate over whether the economy s underlying growth rate would remain high in this paper we draw on growth theory to identify variables other than productivity namely consumption and labor compensation to help estimate trend productivity growth we treat that trend as a common factor with two regimes high and low growth our analysis picks up striking evidence of a return in 1997 to the high growth regime nearly 25 years after a switch from high to low growth we find that both the common factor and regime switching aspects of the model are important for identifying changes in trend productivity and also show that the trend breaks are more difficult to detect with per capita as opposed to per hour based data because of persistent labor supply shifts finally we argue that our methodology is effective in detecting changes in trend in real time in the case of the 1990s the methodology would have signaled the regime switch by 1999 or within roughly six quarters of when it occurred according to the full sample

diffusion of technical change and the decomposition of output into trend and cycle in this paper we argue that modelling the trend component in real gnp as a random walk is inconsistent with its interpretation as productivity growth as an alternative we specify the trend as an arima whose impulse response function follows an s shaped pattern reflecting the process of diffusion of technical change such an arima is employed to build and estimate an ucarima using usa postwar quarterly data we find that our model although more parsimonious fits the data equally well than the standard random walk plus ar 2 cycle moreover our model has a very low cycle trend variance ratio

compensating differentials and self selection an application to lawyers this paper models individual choice between two types of jobs as dependent on the difference in potential earnings and on preferences for nonpecuniary the model leads to simultaneous estimation of earnings and job choice functions in a manner that takes account of self selection of individuals into the sector of highest utility an application to lawyers choosing between private and public interest law casts doubt on the notion that public interest lawyers are accepting substantially lower earnings by virtue of their choice an impression derived from estimation of earnings functions without accounting for self selection the estimation technique also takes proper account of the choice based nature of the sample which appears to be important

revisions in utilization adjusted tfp and robust identification of news shocks this paper documents large revisions in a widely used series of utilization adjusted total factor productivity tfp by fernald 2014 and shows that these revisions can materially affect empirical

a dictionary for voting paradoxes abstract a sonnenschein mantel debreu kind of characterization is found for positional voting procedures namely for n 2 candidates once the voting procedures and a profile are specified the rankings of all possible subsets of candidates are uniquely determined by varying over all profiles one obtains a dictionary of all possible coordinated election outcomes this is done for all positional voting procedures as with excess demand functions anything can happen voting paradoxes can be very complicated only borda s method avoids many paradoxes use of this dictionary is illustrated by significantly extending several well known paradoxes and by obtaining new results about runoff and agenda elections strategic behavior etc

the dynamic effects of aggregate demand and supply disturbances we interpret fluctuations in gnp and unemployment as due to two types of disturbances disturbances that have a permanent effect on output and disturbances that do not we interpret the first as supply disturbances the second as demand disturbances demand disturbances have a hump shaped mirror image effect on output and unemployment the effect of supply disturbances on output increases steadily over time peaking after two years and reaching a plateau after five years

employer recruitment strategies and the labor market outcomes of new hires i introduction employers and job seekers are brought together for potential matches through their recruitment and job search activities employers may post help wanted signs run newspaper advertisements or seek referrals from private employment agencies job seekers may speak with friends and relatives solicit the aid of the state employment agency or simply walk in and apply these recruitment and search activities help both parties acquire information about each other and the more information they obtain prior to entering an employment agreement the higher the likelihood of a good employment match the crucial role of information in the labor market has been recognized since stigler 1962 but despite a voluminous literature on job matching and organizational behavior in labor markets we know far less about employers recruitment strategies than about job seekers search strategies as granovetter 1995 notes while people are finding jobs employers are finding people to fill them and their behaviors strategies and purposes play a central but often neglected role in the process of matching people to jobs this imbalance in research effort is explained more by a dearth of adequate data describing employer recruitment behavior than by lack of scholarly interest indeed labor economists sociologists psychologists and human resource management specialists have spent the last half century exploiting the meager existing data sets in efforts to learn about employer recruitment behavior in this article i address several empirical questions concerning employer recruitment using the multi city study of urban inequality mcsui a large cross sectional survey of employers in four metropolitan areas of the united states that has not been exploited for a detailed analysis of the relationships among recruitment strategies starting wages and vacancy duration despite the richness of the data set for this purpose the mcsui data contain detailed information on firm and job characteristics and most important for the purpose of this article indicators of the recruitment methods these employers used when hiring the most recently hired worker the data allow a number of interesting questions to be addressed concerning the link between employer recruitment choices and starting wages vacancy duration and the skill levels of new hires because there has been relatively little empirical research done by labor economists on employer recruitment this work with a relatively large representative sample of employers should enhance our understanding of a number of basic questions i consider three of these first i present evidence describing which recruitment methods employers use and how these vary by firm characteristics vacancy characteristics and the skill requirements of jobs i estimate a multivariate probit model with a separate equation for each of 10 recruitment choices in addition to providing information about the relationship of each recruitment method with each of the covariates this method has the attractive feature of allowing for an analysis of the relationships among the unobserved determinants of recruitment choice to my knowledge this methodology is new to the recruitment literature second i present regression evidence showing how vacancy duration varies by recruitment choices some recruitment methods can be expected to be faster than others in generating job applicants however an employer must invest time in screening the applicant pool so the recruitment methods that generate applicants quickly do not necessarily fill vacancies quickly therefore the link between recruitment methods and vacancy durations is an empirical question third i present evidence concerning the relationship between starting wages and recruitment methods in particular i augment standard log wage specifications based on the human capital model with recruitment choices and find that the recruitment variables have explanatory power even in the presence of all of the usual controls

promotions and incentives in nonprofit and for profit organizations using data from the 1992 95 multi city study of urban inequality an employer survey the authors document a new empirical finding that workers are less likely to receive promotions in nonprofit organizations than in for profit firms the study also uncovers evidence that wage increases associated with promotion were of comparable magnitudes in the two sectors as was the potential for within job wage growth nonprofits were less likely than for profits to base promotions on job performance or merit nonprofits were less likely to use output contingent incentive contracts to motivate workers and the observed difference in promotion rates between the nonprofit and for profit sectors was more pronounced for high skilled than for low skilled workers the authors also propose a theory that potentially explains the broad pattern of evidence they uncover based on the idea that nonprofit workers are more intrinsically motivated attracted to their work for reasons transcending material compensation than are f

would nonprofit workers accept to earn less evidence from france this article focuses on wage differentials between french nonprofit for profit and public sectors considering the public sector allows testing more extensively the labour donation theory preston 1989 the findings support this theory because nonprofit workers accept to earn significantly less than they would earn in the for profit and public sectors they also suggest differences in the motivations of workers in these sectors nonprofit workers are attracted to their work for reasons transcending material compensation

whither the nonprofit wage differential estimates from the 1990 census this article provides new estimates of the nonprofit for profit wage differential in the u s economy using observations on 4 1 million private sector employees from the 1990 census i find either zero or slightly positive economy wide wage differences between nonprofit and for profit employees in a standard earnings equation format significant wage differentials are found at the disaggregated occupation and industry level and provide a basis for testing hypotheses explaining nonprofit for profit wage differences

product innovation and the business cycle micreconomic data show two important facts about new products first some products are more important than others second it takes them years to penetrate the market significantly the authors calibrated model with these features overpredicts the autocovariance of u s gnp at long lags but underpredicts it at short lags the latter is not surprising since the model leaves out other obvious high frequency shocks the puzzle is why the u s gnp data do not show stronger autocorrelation at higher lags a surprising finding is that while the speed of diffusion has huge level effects it plays a minor role in shaping the business cycle copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

stochastic technical progress smooth trends and nearly distinct business cycles this paper studies a model of random technical progress where technology diffuses at realistically slow rates it fits smooth trends to the sum of gdp series generated by this model and series representing transitory or cyclical fluctuations detrended gdp is then largely unrelated to technical progress the detrending method proposed by rotemberg 1999 reconstructs cyclical variations somewhat more accurately than the hp filter with sufficiently slow diffusion it is also more accurate than a method based on vars fitted to hours and gdp growth consistent with the model s predictions permanent shocks initially depress both hours and output in these vars

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

the nonprofit firm a potential solution to inherent market failures this article analyzes the differences in products offered by nonprofit and for profit firms in a monopolistically competitive industry where goods are differentiated both by product attributes and by the degree to which benefits are public because nonprofit firms receive donations they provide a pareto improvement of the equilibrium product set nonprofit firms will be less biased against goods with a high social good component than will their for profit counterparts hi addition the optimal donations function which equates the nonprofit equilibrium product set to the set which maximizes societal welfare is derived

working in the for profit versus not for profit sector what difference does it make an inquiry on preferences of voluntary and involuntary movers we investigate the drivers of the for profit not for profit wage differential by comparing judgments of job characteristics of workers who voluntarily or involuntarily moved from the former to the latter sector we define voluntary movers as those who applied for a job in a not for profit organization and when successful resigned from a for profit position while involuntary movers have either been laid off by their company or resigned without already having a job offer in the not for profit sector we observe that a large share of voluntary movers do not end up with higher wages but surprisingly do have higher job satisfaction after the change the vast majority of voluntary movers find significantly higher time flexibility improved relationships with stakeholders and closer conformity to educational skills in their new jobs our findings support the forprofit not for profit compensating differential hypothesis and shed light on mechanisms that are beyond the job donation behavior of intrinsically motivated workers

real business cycle models and the forecastable movements in output hours and consumption the authors study the movements in output consumption and hours that are forecastable from a vector autoregression and analyze how they differ from those predicted by standard real business cycle models they show that actual forecastable movements in output have a variance about one hundred times larger than those predicted by the model the authors also find that forecastable changes in the three series are strongly positively correlated with each other on the other hand for parameters whose implications are plausible in other respects the model implies that output consumption and hours should not all be expected to move in the same direction copyright 1996 by american economic association

effects of property rights on labor costs of nonprofit firms an application to the day care industry this paper estimates differences in labor costs between nonprofit and for profit firms in the day care industry a theoretical model which draws on the property rights literature as well as recent theo ries of nonprofit labor markets predicts that the magnitude and sign of the nonprofit salary differential will depend on specific characteristics of the samples analyzed empirical results reveal that in th e most competitive segment of the day care industry the nonprofit salary differential is insignificant however in the less competitive government subsidized segment of the industry the nonprofit different ial is significantly positive it ranges from 5 percent to 10 percent copyright 1988 by blackwell publishing ltd

job mobility and the market for lawyers this paper studies the life cycle career choices of law school graduates using unique data from the university of michigan law school the model assumes that these graduates act according to the optimal solution of a dynamic optimization problem in which they sequentially choose among five employment sectors the employment sectors are differentiated by pecuniary and nonpecuniary returns promotion and dismissal probabilities and the extent of transferability of human capital the estimation of the model reveals a self selection mechanism based on unobserved heterogeneity in abilities and expected future returns which plays a critical role in reproducing the sector specific nonmonotonic separation hazards observed in the data the underlying self selection mechanism also has implications for policy interventions in the market for lawyers such as loan forgiveness programs

productivity wages and intrinsic motivations there is a long standing debate in labour economics on the impact of workers intrinsic motivations on equilibrium wages one direction in economic theory suggests that intrinsically motivated workers are willing to accept lower wages and donate work for example in terms of unpaid overtime the donative labour hypothesis in the other direction intrinsic motivations are expected to increase worker productivity and in turn wages the intrinsic motivation productivity hypothesis using a new database of a sample of workers in the cooperative non profit sector we find that consistently with the motivation productivity hypothesis more motivated workers earn significantly higher wages which signals higher productivity evidence supporting the donative labour hypothesis is weaker even though a generally positive connection between motivations and work donation is confirmed we interpret these findings by arguing that the impact of the donative labour effect is dominated by the intrinsic motivation productivity effect

public and private sector wages in the netherlands there is much debate in the netherlands about underpayment of public sector workers relative to private sector workers in this paper we analyze the wage structures in both sectors using an endogenous switching regression model unlike previous dutch studies we find that the earnings prospects of public sector workers are better in the public sector than in the private sector for private sector workers we find the exact opposite their earnings prospects are better in the private sector moreover the allocation over sectors points to comparative advantages

compensation in the nonprofit sector we investigate the determinants of pay in the nonprofit sector using data for 25 55 year olds from the 1994 88 current population survey outgoing rotation groups our results are consistent with the hypothesis that compensation is primarily determined in competitive markets without labor donations to nonprofit employers one implication is that nonprofit workers receive virtually the same wages as observationally equivalent employees in similar positions with profit seeking enterprises we cannot rule out the possibility of nonprofit penalties or premiums for selected groups however the differentials are generally small and competition appears to play a dominant role in nonprofit wage setting

managerial talent motivation and self selection into public management the quality of public management is a recurrent concern in many countries calls to attract the economy s best and brightest managers to the public sector abound this paper studies self selection into managerial and non managerial positions in the public and private sector using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation we find that if demand for public sector output is not too high the equilibrium return to managerial ability is always highest in the private sector as a result relatively many of the more able managers self select into the private sector since this outcome is efficient our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private sector levels is not cost efficient

nonprofit and proprietary sector behavior wage differentials among lawyers this paper focuses on earnings differentials in the for profit and private nonprofit sectors with specific reference to lawyers an earnings equation for private lawyers is estimated and is used to predict what the nonprofit sector public interest lawyers could earn in the private sector the finding is that the public interest lawyers are paid substantially less that they know this and that the financial sacrifice is permanent next a job choice equation is estimated which suggests that those lawyers who choose public interest work have different preferences from those who choose private law practices the difference may help to account for the willingness of the public interest lawyers to accept lower monetary rewards further research is needed to determine whether the differences found for lawyers in the two sectors are also found in other industries and whether such differences are found only at the level of management or at lower levels the goal is improved understanding of behavioral diff

innovative activity over the business cycle this paper examines cyclical patterns of innovative activity in the united kingdom over the period 1948 83 innovative activity turns out to have many of the properties of a random walk but does show a tendency to cluster during booms there is clear evidence of a long term secular relation between the level of innovative activity and the level of economic activity although this may have changed in the 1980s finally the data provide no reason for thinking that these clusters of innovation cause cyclic variations in economic activity but variations in economic activity do granger cause changes in innovative activity copyright 1995 by royal economic society

corporate culture in the nonprofit sector a comparison of fringe benefits with the for profit sector one explanation that may be given for why nonprofit organizations pay lower wages than do other organizations is that nonprofits are more pleasant places to work indeed some authors have proposed that nonprofit organizations should make an effort to promote a working environment that reflects the beliefs of the organization this paper uses several proxies for whether an organization is a pleasant place in which to work and tests for whether nonprofits are more likely to offer such pleasant working conditions analysis shows that nonprofits are not more likely to offer these conditions in many instances