the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

public pensions unemployment insurance and growth abstract we develop an overlapping generations model that highlights the interaction between an unfunded pension program and an unemployment insurance program in the presence of a labor market with union wage setting both programs are financed by earmarked proportional wage taxes levied on firms and their employees the equilibrium path entails endogenous growth and involuntary unemployment the presence of spillovers between pension programs and unemployment insurance programs has striking implications for growth policy efficiency issues and the transition to a fully funded pension system

an analysis of life satisfaction in albania an heteroscedastic ordered probit model approach this paper uses the nationally representative albanian living standards measurement study survey from 2005 to investigate the determinants of life satisfaction in common with much of the existing empirical literature that models life satisfaction or subjective well being this paper exploits an ordered probit model in contrast to the existing literature however the current study places an important emphasis on regression model evaluation diagnostic testing revealed a number of econometric model deficiencies but the explicit incorporation of a variance function into the ordered probit model resolved all detected problems the tenor of the key findings generally reflects that found in the literature on the determinants of life satisfaction for both advanced capitalist and transitional economies however a number of additional themes with a strong albanian dimension were interrogated in particular our study revealed evidence of long memories among albanian respondents with respect to the collapse of that country s notorious pyramid schemes and the scarring effects of the episode continue to impact on life satisfaction even with the passage of almost eight years a sizeable effect for communal level criminal activity on life satisfaction was also detected in addition our econometric estimates also provided some empirical insights on the monetary value of friendship and the costs of children

miners wages in post war britain an application of a model of trade union behavior the paper studies the determination of wages in the british coal industry a utility maximising model of a trade union is used to represent the behaviour of the national union of mineworkers a non linear structural model is derived and is estimated by full information maximum likelihood the results are quite encouraging there is support for a neo classical demand curve for miners labour and a significant estimate of workers relative risk aversion

union characteristics and bargaining outcomes this paper investigates the impact of union militancy size centralization and democracy on wages fringe benefits and other bargaining outcomes using data on bargaining outcomes at the bargaining unit level in conjunction with data on comparative union characteristics the authors find strong evidence that union characteristics affect bargaining outcomes determining the exact nature of those effects is complicated by several problems notably the difficulty of distinguishing effects on outcomes from effects on goals the possibility of reverse causality and complex interactions between such organizational characteristics as democracy and centralization the findings do suggest however that organizational complexity reduces union bargaining effectiveness whereas democracy and centralization tend to change the shape of outcomes as opposed to their size

the tradeoff between wages and employment in trade union objectives this paper demonstrates that contrary to a widely held opinion the determination of the goals of unions is fully amenable to empirical analysis a characterization of the wage and employment setting process in unionized markets is adopted and its qualitative implications examined the first order condition for this model is fitted to time series data on the newspaper industry from ten cities the international typographical union s objective function reveals very restricted opportunities for substituting wages for employment in response to a change in the slope of the employer s labor demand function larger union locals place greater emphasis on wages versus employment than smaller union locals

what do unions maximise evidence from survey data highly formalised models of union behaviour have been developed and are widely used within neoclassical economics this approach is justified by the argument that most goals pursued by unions can be reduced to a wage or wage equivalent employment trade off however the strong assumptions made about union goals and preferences how these are determined and the range of issues over which a union will seek to bargain with a firm are not supported by extensive empirical evidence this paper explores these issues through a survey of union leaders to ascertain the range of union goals and their preferences and the types of issues over which unions bargain with employers the results of the survey present convincing evidence that standard neoclassical models do not adequately capture union bargaining behaviour or union goals and preferences the findings presented here also throw open but do not resolve the question of whether unions are rational maximisers the most inter esting result not widely found within the economics or industrial relations literature concerns the nature of union bargaining preferences union bargaining over employment appears to be asymmetric around current levels of employment in that unions appear to care more about the employment implications of their bargain ing strategies when they are likely to result in employment decreases

industrial relations performance economic performance and qwl programs an interplant analysis this study analyzes the relationship among plant level measures of industrial relations performance economic performance and quality of working life programs the analysis employs pooled time series and cross section data from 18 plants within a division of general motors for the years 1970 79 the empirical results show strong associations between industrial relations and economic performance measures and limited support for the hypothesis that quality of working life efforts improve both kinds of performance

sales location among semi subsistence cassava farmers in benin a heteroskedastic double selection model in much of rural africa high transaction costs limit farmers market participation and thus their potential for income growth transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate or at a market if production behavior is related to a chosen sales location then analysis of interventions can be improved by explicit consideration of the decision of where to sell this article develops a double selection model that explains consumption and production decisions by semi subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off farm location before deciding on production and consumption the study tests the validity of this dual criteria model against a single criterion model in which a grower first decides to be a seller and then decides production consumption and sales location simultaneously the results suggest that the dual criteria model provides more information than the single criterion model using a sample of cassava producer in benin

trade unions and regional development abstract we focus on the role that labour unions play in the context of a two region dual economy we show that unskilled unions will increase the wage of unskilled workers and depress growth in both the backward and the advanced regions the growth effects will be felt more strongly in the relatively poor region if skilled workers are allowed to migrate and unions recognize that a more aggressive wage setting policy may foster migration unions will moderate their wage requests however regional unions would then have a strong incentive to coordinate their wage demands across regions this would further raise the unskilled wage and more so in the backward region we conclude that labour market policies designed to foster regional convergence should seek both to discourage centralized wage setting and favour skilled labour mobility

wages and employment under trade unionism microeconomic models and macroeconomic applications the first part of this paper is a critical survey of microeconomic research into behavioural models of trade unionism although certain formulations of union objectives and models of wage and employment determination in unionized markets have found favor with economists unfortunately only a little is known about their empirical relevance the second part of this paper deals with the daunting problems of applying these models at the macroeconomic level one such model is estimated with data from sweden s mining and manufacturing sector from 1968 to 1982

privatization liberalization wages and employment theory and evidence for the uk most agency based privatization models are of the owner manager relation and ignore the labour market yet in the 1980s there were profound changes in public sector and privatized firms to wages and employment we develop a bargaining model of the manager workforce relation that explains employment and wages when firms are privatized government objectives become more commercial and markets are liberalised using data on 14 uk companies 1972 1988 that were publicly owned in 1972 we find a employment fell following the change to more commercial objectives b wages were only slightly affected by this but fell if the firm lost market power

trade union objectives and the cyclical variability of wages and employment the purpose of this paper is to investigate whether a simple monopoly union model of wage and employment determination is consistent with the cyclical movements of wages and employment observed in the finnish manufacturing and mining sector estimation of the two equation model implies that considerably less weight is placed on the variability of employment relative to that of wages in the union s objective function the findings are consistent with the observed cyclical inflexibility of real wages relative to employment however because the data fail to accept certain parameter restrictions embodied in the different model specifications the study raises doubts about the adequacy of the simple monopoly union model to explain the data generation process copyright 1990 by the editors of the scandinavian journal of economics

information power and war ultimatum bargaining models of international interactions suggest that when conflict is costly and the actors are fully informed the probability of conflict goes to zero however conflict occurs with some positive probability when the challenger is uncertain about the defender s reservation value i employ a simple ultimatum game of bargaining to evaluate two traditional power centric theories of world politics balance of power and power transition theory the formal and empirical analyses demonstrate that as states approach power parity information asymmetries are greatest thus enhancing the probability of militarized conflict uncertainty is a central cause of conflict emergence and is correlated with the distribution of observable capabilities recognizing the relationship between the distribution of power and the uncertainty offers a more sophisticated interpretation of power centric explanations of world politics

wage and employment determination in a unionized industry the iwa and the british columbia wood products industry two non nested models of union wage and employment determination are estimated using data on the international woodworkers of america iwa and the british columbia wood products industry one model predicts wage and employment outcomes on the labordemand function while the other predicts efficient outcomes on the contract curve the models provide empirical estimates of the union s preferences the production technology and the comparative statics of the models an attempt is made to choose the true model for this industry unfortunately non nested hypothesis tests and other criteria for model discrimination cannot reject one model in favor of the other

cross country differences in unemployment fiscal policy unions and household preferences in general equilibrium we develop a five period overlapping generations model with individuals who differ by ability and with an imperfect labour market union wage setting for the individuals of lower ability the model explains human capital formation hours worked and unemployment within one coherent framework its predictions match the differences in the unemployment rate across 12 oecd countries remarkably well a shapley decomposition of these differences reveals an almost equal role for fiscal policy variables and union preferences as to fiscal policy differences in unemployment benefits play a much more important role than tax differences differences in households taste for leisure are unimportant

unions power collective bargaining and optimal monetary policy we study ramsey policies and optimal monetary policy rules in a model with sticky prices and unionized labour markets collective wage bargaining and unions monopoly power dampen wage uctuations and amplify employment uctuations relatively to a dnk model the optimal

an expressive voting theory of strikes i introduction economists usually make the realistic assumption that individuals commonly choose to further their material interests other things equal they will choose the higher paying job make the investment with a higher expected return for a given risk and so on recent work however has pointed out that individuals do not always pursue their immediate selfish interests evolutionary pressures for example may promote emotional outbursts which have little immediate benefit social pressures may lead to behavior which is not pareto optimal but which is individually rational in short recent work has shown that behavior which at first looks irrational need not be for further discussion see akerlof 1984 chs 4 and 9 etzioni 1988 frank 1988 simon 1990 this paper considers emotional behavior which cannot be explained by its long term benefits it instead focuses on behavior which is not costly when practiced by one person but is when practiced by many unlike other works i do not require that individuals usually act emotionally or that they do so at significant cost to themselves i only require that when the cost of emotional behavior is sufficiently small individuals will pursue it indeed in my model individuals rationally calculate when to behave emotionally in particular under some circumstances the action of any one individual has negligible effects on his wealth though the similar actions of numerous persons will have significant effects individuals may then free ride letting emotional motives guide their activity this paper presents one important application of such behavior the decision of a union member to vote for a strike indeed it has long been recognized that though union members may vote for strikes to increase wages emotional considerations can also be important in 1921 hansen claimed that strike decisions are motivated primarily by a sense of grievance about wages ashenfelter and johnson 1969 37 write that union leaders may prefer to call a strike because under strike conditions the leadership may at least appear as adversaries against management in a crusade which may even raise their political stock and will unify the workers newspapers tell of strikes that appear to have little economic rationale for example the wall street journal march 17 1989 reported that with the eastern airlines walkout now nearly two weeks old what boils to the surface is an intense highly personal anger a feeling that their self respect honor and dignity have been undercut by a management obsessed with pinching pennies the new york times april 23 1989 reported that four years after the end of a strike against united airlines union pilots were harassing non union pilots the harassment ranged from verbal abuse and refusal to shake hands to more serious breaches like not advising a pilot that he is approaching an altitude assigned by air traffic controllers work by getman goldberg and herman 1976 suggests that a worker in union representation elections is more likely to favor unionization the more effectively the company threatened the loss of jobs following unionization this view of non instrumental union behavior is also consistent with a large body of evidence which finds that union members are less likely to ratify a contract the worse the relations between management and labor indeed cappelli and sterling 1988 find that the state of labor relations in a plant is the strongest predictor of union voting outcomes similarly kaufman and martinez vazquez 1988 find that union members are least likely to vote in favor of wage concessions in plants with adversarial labor relations though much evidence is consistent with the hypothesis that strike votes are not based solely on economic considerations the approach suffers from two faults as a basis for an economic theory first intuition suggests that the emotional gain from a strike is likely to be far smaller than the monetary cost of a strike a strike may cost a worker over 1 000 a week in lost wages 1 yet we rarely find people wasting that much money in emotional outbursts

efficient contracts with costly adjustment short run employment determination for airline mechanics this paper presents an empirical analysis of firm specific employment and wage outcomes for mechanics in the domestic airlines industry a dynamic contracting model is presented that incorporates both costly employment adjustment and potential gaps between contract wage rates and the opportunity value of workers time the model gives a useful description of the employment output linkage in the data but is less successful in capturing the dynamic relation between employment contract wage rates and wage rates outside the airline industry copyright 1986 by american economic association

economic integration and mass politics market liberalization and public attitudes in the european union theory theories of how domestic politics influence international economic policy differ fundamentally in their treatment of the mass public a central issue in this controversy is whether members of the mass public form attitudes about international economics that reflect their economic interests this article examines this assumption using international economic theory to identify variation in economic interests regarding international economic policy hypotheses citizens of the european union eu form attitudes toward eu membership an international economic policy that are consistent with their occupation based economic interests methods individual level heteroskedastic ordered probit analysis of eurobarometer survey data and oecd economic statistics from 1975 to 1992 results while controlling for a variety of potentially confounding factors the likelihood of positive evaluations of eu membership is positively related to intraoccupational differences in economic benefits from eu membership

trade unions investment and employment the implications of long term wage contracts and investment in capital on non cooperative wage bargaining between a firm and a union are analysed the union maximises a utilitarian utility function and the firm faces a neoclassical investment problem with internal adjustment costs the monopoly union outcomes with binding contracts is time inconsistent because the union has an incentive to renege on announced low wage strategies once the capital stock has been accumulated the monopoly union outcome without binding contracts leads to credible strategies which correspond to higher wages and lower levels of employment investment and the capital stock efficient contracts give rise to higher employment than monopoly union outcomes whether with or without long term wage contracts the results are illustrated with a numerical example finally when the game between the union and firm is repeated reputational equilibira provide a solution to the problem of time inconsistency

on union preferences and labour market models insiders and outsiders this paper constructs a model of trade union behavior in which there is a distinction between insiders and outsiders this is used to examine one of the most troublesome issues in macroeconomic theory namely the extent to which a rise in aggregate demand might generate wage increases rather than growth in employment a generalization of the most widely used union utility function is presented the analysis reveals the conditions under which insiders will agree to let outsiders into employment derives two step wage preferences and proves a new result on wage rigidity copyright 1987 by royal economic society

an analysis of the probability of default on federally guranteed student loans federally insured student loans constitute an area that is almost completely unexplored by researchers despite intense scrutiny that federally insured loans are receiving after the savings and loan collapse based on a probit model of default for two thousand guaranteed student loans the authors find that individual characteristics including parents income presence of two parents at home student s graduation and student s race have a significant impact on default rates while institutional characteristics four year vs two year college private vs public school size and individual school dummies have little significant effect the results imply that proposals to penalize colleges with high default rates are premature copyright 1992 by mit press

the impact of deregulation on the employment and wages of airline mechanics this paper describes the effects of deregulation on negotiated wage rates and employment levels of aircraft mechanics in the scheduled airline industry between 1978 and 1984 a firm by firm analysi

american ambivalence towards abortion policy development of a heteroskedastic probit model of competing values theory using elaboration likelihood models and insights from the recent core beliefs literature we show that conflicting core beliefs lead to ambivalence about policy choices hypotheses policy choices about abortion are heterogeneous this heterogeneity across individuals is a function of the underlying conflict in their beliefs about the role of women and the sanctity of human life methods a heteroskedastic probit model is developed to test the hypotheses results heterogeneity is observed for six of seven abortion policy choices when core values conflict respondents are more ambivalent in their policy responses and more difficult for our standard models to predict

plant level concession bargaining the author investigates the reasons for the diversity in concession bargaining experience among plants in the meatpacking and tire industries in 1981 negotiations about one third of the plants in each industry engaged in concession bargaining and the others did not the author hypothesizes that this pattern resulted from interplant differences in the likelihood of layoffs or shutdowns measured by factors such as plant age and size relative wage level and nature of product regression analysis of the data from union and employer sources supports the author s hypothesis

how unions affect productivity in manufacturing plants this study investigates several hypotheses as to how unions may affect productivity analysis of data from 46 manufacturing plants for 1982 indicates a negative union impact on productivity the author finds evidence suggesting that unions reduce the effectiveness of some managerial practices undertaken to increase productivity and that a poor labor management relations climate also reduces productivity these two factors account for almost 50 percent of the negative union impact

what floats your boat preference revelation from lotteries over complex goods abstract we examine a type of lottery used to distribute some publicly held resource access rights the lottery provides participants with the opportunity to choose among a set of simple gambles over multi attribute goods participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning when lottery winnings are multi attribute goods lottery outcomes provide sufficient information to estimate hedonic prices marginal utility and marginal rates of substitution among attributes we develop a model for characterizing preferences from this information set we apply our model to idaho s four rivers whitewater recreation lottery which allows applicants to apply for one permit among a large set of alternative river day combinations that provide varying river and weather characteristics this lottery structure shows promise as a foundation for economic experiments for preference revelation

union bargaining decisions and contract ratifications the 1982 and 1984 auto agreements the authors of this study investigate the determinants of union contract ratification votes by analyzing plant level data relevant to the 1982 and 1984 auto industry agreements with the uaw the results strongly suggest that the more vulnerable workers are to layoff the more likely they are to vote for ratification of proposed agreements the results also show however that workers tend to vote against ratification in plants in which other things equal the labor relations climate is poor in addition comparisons across contracts indicate how voting patterns associated with various plant and worker characteristics change when contract proposals shift toward greater job security and away from wage increases

optimal monetary policy in economies with dual labor markets abstract we present a dynamic stochastic general equilibrium dsge new keynesian model with indivisible labor and a dual labor market a walrasian one where wages are fully flexible and a unionized one characterized by real wage rigidity we show that the negative effect of a productivity shock on inflation and the positive effect of a cost push shock are crucially determined by the proportion of firms that belong to the unionized sector the larger this number the larger are these effects consequently the larger the union coverage the larger should be the optimal response of the nominal interest rate to exogenous productivity and cost push shocks the optimal inflation and output gap volatility increases as the number of the unionized firms in the economy increases

change over tenure voting variance and decision making on the u s courts of appeals existing scholarship on the voting behavior of u s courts of appeals judges finds that their decisions are best understood as a function of law policy preferences and factors relating to the institutional context of the circuit court what previous studies have failed to consider however is that the ability to predict circuit judge decisions can vary in substantively important ways and that judges in different stages of their careers may behave distinctively this article develops a theoretical framework which conceptualizes career stage to account for variability in voting by circuit judges and tests hypotheses by modeling the error variance in a vote choice model the findings indicate that judges are more predictable in their voting during their early and late career stages case characteristics and institutional features of the circuit also affect voting consistency

employee voice human resource practices and quit rates evidence from the telecommunications industry the authors draw on strategic human resource and industrial relations theories to identify the sets of employee voice mechanisms and human resource practices that are likely to predict firm level quit rates then empirically evaluate the predictive power of these variables using data from a 1998 establishmentlevel survey in the telecommunications industry with respect to alternative voice mechanisms they find that union representation predicts lower quit rates even after they control for compensation and a wide range of other human resource practices that may be affected by collective bargaining also predicting lower quit rates is employee participation in offline problem solving groups and in self directed teams no apparent association is found between quit rates and the availability of nonunion dispute resolution procedures regarding human resource practices higher relative wages and internal promotion policies predict lower quit rates and contingent staffing electronic monitoring and variable pay predict higher rates

union leaders as experts wage bargaining and strikes with union wide ballot requirements to avoid strikes and to curb labour militancy some governments have introduced legislation stating that union leadership as well as wage offers should be decided through union wide ballots this paper shows that members still have incentives to appoint militant union leaders if these leaders have access to information critical for the members voting decisions furthermore conflicts may arise in equilibrium even though the contract zone is never empty and there is an option to resolve any incomplete information ballot requirements hence preclude neither militant union bosses nor inefficient conflicts

lottery rationed public access under alternative tariff arrangements changes in quality quantity and expected utility abstract a recent phenomenon is the emergence of quotas restricting individual access to public resources as regulators commonly ration access opportunities by lottery this paper extends the traditional open access destination choice framework for non market demand and welfare analysis conceptual results for one and two part tariff lotteries indicate that individuals may sustain welfare losses from improvements in quality or increases in the quota if aggregate demand is sufficiently responsive relative to individual utility nested random expected utility models reums are estimated with a panel dataset of individual choices of lottery rationed harvest rights for wild game empirical results indicate that the types and timing of tariff payments affect participation choices over rationed and open access alternatives and the benefits derived from changes in the quality and quantity of the lottery rationed access opportunities

the effects of grievance activity on productivity this study develops and tests a production function that includes a plant s grievance filing rate as a determinant of productivity application of that function to data on nine unionized paper mill

risk preferences over simple and compound public lotteries abstract lottery choice experiments with monetary payoffs have a long tradition for eliciting risk preferences this note demonstrates how risk preferences over multi attribute public lotteries may be estimated consistent with experimental findings results from simple and compound lottery choice models indicate significant differences in the degree of risk aversion between male and female applicants

supersized votes ballot length uncertainty and choice in direct legislation elections voters in polities that make heavy use of direct democracy are frequently confronted with ballots that contain a multitude of propositions claims that direct legislation elections overwhelm voters with choices they are not competent to make should particularly apply to such demanding settings yet evidence on the effects of lengthy ballots on voting behavior is scant this study reviews theories of decision making under uncertainty and tests their predictions in a mixed heteroscedastic model of vote choice that is fitted to a unique collection of survey and contextual data on swiss referendums increasing ballot length is demonstrated to interfere with the voters ability to translate their political preferences into consistent policy choices

migration selectivity and the effects of public programs abstract a model of the spatial distribution of mobile heterogeneous agents is formulated to assess how a price change or program subsidy that is location specific affects the composition of local residents via selective migration and thus biases evaluations of the effectiveness of the program based on its local consequences longitudinal data from colombia are used to test the implications of migration selectivity the findings confirm the existence of selective migration suggesting that local subsidies to human capital attract high income but within income groups low fertility households and those with low human capital endowments these migration patterns are shown to be consistent with the dominance of endowment over tastes heterogeneity in the population under plausible behavioral assumptions

margins concentration unions and the business cycle theory and evidence for britain abstract a number of recent studies have examined the cyclical relationship between price cost margins concentration and unions u s data has concluded that unions reduce margins margins vary over the cycle and concentration unionisation and the cycle interact in their effect on margins however there is almost no theory to account for these results we propose a simple theory that assumes only that there is overhead labour present at the firm this produces theoretical predictions that can explain these results and discriminate between existing theories we present results of our own using u k panel data and show similar findings to the u s

immigration unemployment and pensions this paper examines the impact of immigration on a host country with welfare state arrangements that support both the unemployed and the elderly it is shown that low skilled immigration increases the unemployment rate furthermore it harms the low skilled native population and benefits the high skilled natives and pensioners nevertheless as under competitive labor markets immigration generates an unambiguous gain for the native population as a whole howe er in contrast to the findings under full employment this gain can be dampened by an expansion of the pension system

the effect of wage bargains on the stock market value of the firm the author estimates the change in the value of common stock resulting from an unexpected change in collectively bargained labor costs using bargaining unit wage data and nyse stock returns he estimates a dollar for dollar trade off between these variables this result is consistent with stock valuations based on present value maximizing managerial decisions that is the results are consistent with hotelling s lemma the author also finds support for the hypothesis that collective bargains maximize the sum of shareholder and union member wealth that is the results are consistent with strong efficiency in the contracting environment copyright 1989 by american economic association

union effects on productivity profits and growth has the long run arrived this article interprets literature examining union effects on economic performance production function studies indicate small overall union impacts on productivity positive effects where they exist appear to result from management response to decreased profit expectations and from a natural selection process lower profitability among unionized firms is well established more interesting is the possibility that unions appropriate quasi rents deriving from long lived tangible and intangible capital the connection between unions investment behavior and productivity growth emerges as a particularly fruitful line of empirical inquiry although it does not encourage a sanguine view of unionism s long run impact

predicting the outcome of a contract ratification vote this study examined the role of employee assessments of psychological and material factors in predicting the outcome of a contract ratification vote the results show that both the material aspects of the contract settlement at hand and how members feel about their union and their jobs have an important impact on the ratification outcome