the screening hypothesis and the marginal productivity theory abstract using micro level data from an indian private sector company hierarchy and earnings functions for each schooling group are estimated the results support the weak as well as the strong versions of the screening hypothesis besides establishing the diminishing marginal productivity theory

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

spatial competition with free entry chamberlinian tangencies and social efficiency abstract free entry in loschian spatial competition leads to a tangency between each firm s negatively sloped average revenue and the downsloping portion of average costs as in chamberlin s monopolistic competition it is generally concluded that this equilibrium involves too many inefficiently small firms however this conclusion is incorrect the difference between price and firm marginal production costs in spatial equilibrium is just sufficient to cover the additional marginal cost of output resulting from availability of multiple locations this chamberlinian tangency does not imply inefficiency because it does not include all the social costs and benefits resulting from spatial competition

the wage effects of high performance work organization in manufacturing an unresolved question about now widespread innovative work systems such as teams and quality programs is whether they influence wage determination this study examines that possible association in manufacturing the author uses data from the 1997 national establishment survey that allow examination of how new work systems affected not only employees who were directly involved in them but other workers as well the key finding is that for core blue collar manufacturing employees higher wages were associated with high performance work organization hpwo systems while higher skill levels and computer based technologies were associated with higher wages the key mechanism appears to have been productivity gains independent of skill and technology that were shared via various across the board wage payment systems hpwo systems appear to have increased managers wages as well although through different channels the author finds no evidence that hpwo related wage gains led to greater wage inequality amon

the price effects of spatial competition a recent paper by capozza and van order cvo 1977 proposed a generalization of the greenhut hwang ohta gho 1975 analysis of pricing under three alternative types of spatial competition the gho analysis was based on a short run model in which the locations of firms are assumed to be fixed cvo accordingly proposed relaxation of this rigid assumption to examine if the gho results also apply to the long run zero profit industry equilibrium they confirmed the gho results which however they also contended require certain particular modifications as well in the light of their own models the cvo contribution lies in their simple model analysis of long run industry equilibrium conditions a generalization of the gho analysis however they failed to recognize that the gho analysis is based on another restrictive assumption regarding the form of the demand function moreover they assumed even more restrictive demand conditions and misled themselves to a conclusion that l6schian competition never results in a lower price than spatial monopoly their conclusion is invalid since loschian competition can be shown to result in a lower not higher mill price if only the demand function is assumed to be sufficiently convex to the origin ohta 1980 this calls for a more general examination of conditions under which the firm s f o b mill price may rise or fall due to spatial entry of rival firms the present paper presents selected results of such examination section 2 briefly reviews the theory of spatial monopoly initially some fundamental assumptions are set forth this is followed by derivation of the market demand function for the spatial monopolist the market demand in turn is shown to be more or less elastic than the assumed basic demand function depending on the curvature of the latter curve we also comment on the so called paradox of spatial monopoly which we claim is a misnomer the analytical framework of section 2 is employed in section 3 as we generalize previous analyses and present a concise cataloguing of comparative static results of spatial competition 1 again the basic demand characteristics in combination with alternative types of spatial competition are shown to play an important role in yielding the distinct elasticity results and for that matter competitive equilibrium prices in the process a counter example to cvo s aforementioned argument on l6schian pricing is presented also discussed is the conceptual distinction between perceived and realized elasticities of demand under spatial competition which cvo also failed to recognize as a result they erred in speculating that equilibrium mill prices would be the same under alternative types of spatial competition given the size of the market area we will show that they in fact are not section 4 concludes the paper by summarizing the basic results of our analysis

institutional labor economics the new personnel economics and internal labor markets a reconsideration the author illustrates the utility of institutional labor economics and makes a case for a reconsideration of it two recent developments motivate this effort the rise of new personnel economics npe as a significant subfield of labor economics and the substantial shifts in work organization that have taken place since the 1990s understanding how and why firms have reorganized work opens the door for a renewed interest in institutional approaches the author explains that the rules of institutional labor markets ilms emerge from the competition between organizational interest groups unions personnel professionals and the government and competing views of firms objectives resulting in the rise of ilms the slow diffusion of high performance work systems strategies used to obtain a high level of commitment from workers the use of contingent employees and the spread of new promotion rules in response to equal employment opportunity pressures as such the role of power and influence in establishing work rules is of central concern though more conventional npe considerations also remain important

rates of return in the indian private sector abstract using micro level data from an indian private sector company we obtain a clearcut pattern of diminishing rates of return to schooling well in keeping with conventional human capital theory

modes of theorizing in strategic human resource management tests of universalistic contingency and configurational performance predictions the field of strategic human resource management shrm has been criticized for lacking a solid theoretical foundation this article documents that contrary to this criticism the shrm literature

high performance work practices and core employee wages evidence from italian manufacturing plants past research has provided mixed evidence on the relationship between high performance work practices hpwps and wages drawing from more than 1 800 interviews with the hr managers in a stratified

who benefits most from employee involvement firms or workers employee involvement ei programs are the leading edge form of personnel and labor relations in the united states while many managers believe that these programs raise productivity and profits the statistical evidence that ei improves the performance of firms is equivocal the coefficients on measures of ei in production functions are usually positive but often insignificant or small commission on the future of worker management relations 1994 ch 2 peter cappelli and david neumark 1999 or contingent on other factors sandra e black and lisa m lynch 1997 casey ichniowski et al 1997 a detailed case study of ei has further confirmed these small effects that were found in large data sets kleiner et al 1999 if ei programs do not greatly affect productivity why does business think so highly of them in this study we argue that the main beneficiaries of ei are workers and managers we estimate the effects of ei on productivity using panel data on firms and the effects of ei on workers using a survey of employees and find that ei barely affects firm productivity but substantially improves worker well being we offer two explanations for this result

comparative performance of spatial models of economic markets with linear household demand a fundamental precept of the traditional theory of economic markets holds that price competition among firms within the model of perfect competition maximizes economic welfare it follows that the establishment of monopolies or oligopolies will result in reduced economic welfare when compared with a perfectly competitive equilibrium however with scattered buyers and positive transportation cost paid by these buyers the demand curve facing each individual firm is necessarily downward sloping and perfect competition is no longer viable 2 furthermore these circumstances in combination with declining average cost warrant the use of spatial models of economic markets it is the purpose of this paper to examine various spatial models and to compare their impact on economic welfare bringing into question the robustness of traditional economic theory holahan 11 concludes that in the spatial context a multiplant monopolistic equilibrium is superior to a competitive equilibrium in high density areas the spatial competitive model employed by holahan has been widely accepted as the standard spatial representation of competitive behavior this model developed by l6sch 13 and further refined by mills and lay 14 and beckmann 1 2 is based on the assumption that in the short run each firm s market area is fixed the implication of this assumption is that all price changes are undertaken uniformly across all firms within the market presumably price changes are undertaken in unison due either to collusion or price leadership the competitive nature of the l6schian model is evident only in the long run as free entry is assumed to prevail capozza and van order 5 have demonstrated that the loschian model is just one particular type of a class of spatial models compatible with free entry each of these

organisational change technology employment and skills an empirical study of french manufacturing this paper analyses the correlations between technological change organisational change and skill change using a survey on organisational change in manufacturing firms conducted in 1993 considerable diversity is allowed for in terms of the measure of technological and organisational change and the analysis shows a positive correlation between technological change and reorganisations whatever their types the paper then analyses the relationships between these changes and the employment behaviour of firms it shows that changes in the required skills and in the occupational structure of firms are more closely connected to organisational than to technological change although organisational change affects the work content and skill requirements of blue collar workers it is mainly indirect workers that are affected in terms of the number employed finally the analysis shows that technology tends to stabilise the workforce whereas the move towards the model of flexible enterprise favours its renewal copyright 2003 oxford university press

opening the box information technology work practices and wages using 1994 95 survey data on customer service representatives in 303 u s bank branches the authors investigate the effects on wages of information technology it of work practices and of those two factors in combination offline high involvement practices measured by the presence of quality circles were related positively to wages as was more extensive use of it that supports sales efforts where it was used more extensively to automate routine processes wages were lower in branches that did not have high involvement work practices the effects are partially explained by higher education requirements and more extensive introductory training in higher wage jobs

human resource management and performance in european firms we develop a theoretical framework to examine three hypotheses on the relationship between human resource management hrm practices and organisational performance in european firms the first is that collaborative forms of hrm practice are more strongly associated with superior firm performance than calculative forms the second is that these associations are strongest where national institutional and normative settings support them the third is that employer employee consultative committees and collective payment methods are also associated with superior firm performance the first two propositions are strongly empirically supported as is the third albeit more weakly the implications of the findings for european policy and varieties of capitalism theory are discussed

hotelling models a general equilibrium approach economic models wherein consumers are spatially separated from production and distribution outlets have captivated the attention of economists at least since the seminal work of harold hotelling 8 under standard assumptions of uniformity there exist apparent tradeoffs between such variables as firm size number of firms and distance between firms which must be resolved if the economy is to perform efficiently that is as the number of firms increase the average transport distance decreases and transport costs must be balanced with scale effects in production when analyzed in the context of standard models of market structure allocative problems associated with monopolistic competition and conjectural variation seem to preclude an efficient competitive equilibrium this general conclusion may be drawn from models developed by smithies 11 losch 9 greenhut and ohta 4 benson 1 and ohta 10 the specific features and conclusions of these works have been well summarized by capozza and van order 2 and by villegas 12 although these models differ with regard to behavioral assumptions attributed to individual firms the imperfectly competitive equilibria are invariably characterized by prices in excess of marginal cost welfare losses and excess capacity for reasons discussed below partial equilibrium analysis cannot adequately address this problem because land markets are fundamental to the functioning of a spatial economy therefore the purpose of this paper is to reexamine the functioning of a hotelling type spatial economy in the context of a general equilibrium model which addresses the interactive effects of a product market a land market and a factor market the model includes a more general form of the firm s production function as well as a general representation of transport costs the major conclusions of the paper are 1 the optimality conditions reveal that a two part pricing structure must prevail if a decentralized economy is to allocate its resources efficiently 2 a market equilibrium that appears to be monopolistically competitive but is actually purely competitive is consistent with pareto optimality even though firms have some control over prices and operate under increasing returns to scale in production

mill pricing versus spatial price discrimination under bertrand and cournot spatial competition this paper asks two questions about spatial competition first does spatial price discrimination lead to lower prices and higher welfare than mill pricing if firms hold the bertrand conjecture the answer is yes for most values of fixed cost but for the cournot conjecture the opposite is true second does the introduction of space into the oligopoly models of bertrand and cournot change their results the answer is generally no however spatial bertrand prices exceed marginal cost unlike their spaceless counterparts these answers are obtained using models of spatial competition of which the cournot mill pricing models are new in spatial competition significant transport costs and economies of scale bestow market power upon firms this paper addresses two questions about spatial competition first does spatial price discrimination yield lower prices and higher social welfare producer plus consumer surplus than fo b mill pricing under spatial price discrimination differences in the delivered prices charged by a firm bear no necessary relationship to differences in transport costs in contrast a mill pricing firm sets a single price at its plant and customers bear the cost of transport this paper answers this question for the cases in which firms adopt the bertrand or cournot conjectures concerning how rivals will react to price and output changes this question is important because of the superficial appeal of mill pricing which stems from its imitation of the spatial structure of marginal costs the presence of spatial price discrimination by contrast is often considered to be evidence of the presence of market power at least in part for these reasons the us robinson patman antitrust act and great britain s price commission favor mill pricing nevertheless spatial price discrimination remains ubiquitous in the us europe and japan greenhut 1981 the second question is how does the introduction of space into the original oligopoly models of cournot and bertrand change their results cournot

explaining wage inequality in telecommunications services customer segmentation human resource practices and union decline this study examines factors related to within occupation wage inequality among service and sales workers in the telecommunications industry the author draws on a 1998 survey of a nationally representative sample of 354 service and sales centers in the industry to examine the importance of management practices and union institutions in shaping wage variation the results strongly indicate that business strategies of customer segmentation and human resource practices explain variation in wages over and above that explained by the human capital of the work force in addition despite extensive deregulation and de unionization of the industry the union wage premium is 22

reconsidering institutional labor economics the author illustrates the utility of institutional labor economics and makes a case for a reconsideration of it two recent developments motivate this effort the rise of new personnel economics npe as a significant subfield of labor economics and the substantial shifts in work organization that have taken place since the 1990s understanding how and why firms have reorganized work opens the door for a renewed interest in institutional approaches the author explains that the rules of institutional labor markets ilms emerge from the competition between organizational interest groups unions personnel professionals and the government and competing views of firms objectives resulting in the rise of ilms the slow diffusion of high performance work systems strategies used to obtain a high level of commitment from workers the use of contingent employees and the spread of new promotion rules in response to equal employment opportunity pressures as such the role of power and influence in establishing work rules is of central concern though more conventional npe considerations also remain important

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded