lay offs as signals the canadian evidence in r gibbons and l f katz 1991 the signaling content of layoffs and the resulting costs to the displaced workers are investigated evidence of this signaling effect is found among displaced workers in the united states in this paper a similar exercise is conducted using canadian data which are better in several respects they provide information on union status search activity and more accurate measures of postdisplacement salaries and displacement length results show evidence of a signaling effect in white collar occupations but not in blue collar jobs regardless of union status also signaling effects persist for the first three years in the postdisplacement job

sheepskin effects in the returns to education some previous discussions have dismissed screening theories of education partly on the ground that diploma years of education do not confer especially large earnings gains similarly most empirical research on earnings functions has assumed an absence of sheepskin effects we report evidence however of substantial and statistically significant sheepskin effects although this suggests that the previous dismissals of the screening hypothesis were premature our evidence of sheepskin effects is amenable to nonscreening interpretations also according to screening theories of education individuals with more schooling tend to earn more not because or at least not solely because schooling makes them more productive but rather because it credentiates them as more productive a frequently cited article by layard and psacharopoulos 1974 however dismissed the importance of the screening hypothesis on the grounds that several of its refutable predictions were not supported by available evidence one of these was the sheepskin prediction that wages will rise faster with extra years of education when the extra year also conveys a certificate after surveying a number of studies layard and psacharopoulous henceforth lp concluded that rates of return to dropouts are as high as to those who complete a course which refutes the sheepskin version of the screening hypothesis since publication of the lp paper an undergraduate labor economics textbook has cited lp s analysis of sheepskin effects as telling criticism of the screening hypothesis a prominent proponent of the screening hypothesis riley 1979 has accepted lp s summary of the empirical evidence but responded that some versions of the screening hypothesis do not imply sheepskin effects in the meantime the ongoing flood of empirical research on earnings functions typically has continued to treat the natural logarithm of the wage rate as a linear or occasionally quadratic function of years of education with no allowance for discontinuities in diploma years 2 the estimated rates of return used by lp were based on data that did not disaggregate dropouts earnings by how many years of school they had completed lp acknowledged we would have preferred to show the earnings gain associated with each year of the course including the year when it was successfully completed this note presents a reanalysis of sheepskin effects based on the type of data lp wished they had the results contain very strong evidence of sheepskin effects after all the next section describes our analysis and the following section summarizes and discusses our

the effect of social security contributions on coverage and wages a gender perspective using a natural experiment from colombia author affiliation andres j vargas andres vargas ttu edu acknowledgment i would like to thank steve trejo dan hamermesh gerald oettinger jacqueline angel dan slesnick adriana kugler stefano farne two anonymous referees and seminar participants at the university of texas at austin the second conference on aging in the americas and texas tech university for their insightful and valuable comments i am also grateful to cesar caballero and alejandra corchuelo from the colombian national department of statistics dane for providing me with the data all remaining errors are mine 1 introductiontheoretically social security contributions are considered a benefit linked payroll tax because of the connection between the taxes paid by or on behalf of each worker and that individual s expected benefits hence with the presence of tax benefits linkages workers receive a higher compensation and the contributions are analogous to a price paid for a privately supplied commodity summers 1989 a general payroll tax on the other hand has no linkage to benefits for the individual taxpayer and therefore carries efficiency costs the benefit linkages of social security contributions depend on the extent to which workers perceive that they are getting the contributions back as benefits and on how much the individual values those benefits this depends in turn on the quality of the services offered by the entities financed by the tax if they are perceived as good employees will consider the contributions as a deferred compensation or insurance program and will accept a reduction in the net wage with no employment effects if they are perceived as bad the contributions will be considered as a pure tax with the corresponding effects on employment kesselman 1997 the objective of this article is to investigate from a gender and marital status perspective the effects of pension and health care contributions on the employment and wages of workers covered by social security regulations it is interesting to study colombia because the country implemented a large social security reform in 1993 that allows the identification the labor market effects of these contributions furthermore payments for pension and health care provisions amount to a quarter of the wage bill there this in conjunction with an 11 average contribution for other payroll taxes positions colombia as the country with the highest payroll tax rate in latin america the end of the 1980s and early 1990s was a period of deep structural transformations in latin america these reforms were part of efforts to liberalize economies and increase the participation of the market in the production and allocation of goods and services and were the product of the collapse most economies in the region experienced during the 1980s due to their mounting fiscal and monetary imbalances heckman and pages 2004 these large exogenous shifts in policy regimes offer very good case studies of the interaction between institutions and labor market outcomes the main reforms in colombia during this period included the approval of a new constitution key reforms to the labor market a major trade reform and liberalization in direct foreign investment more than two years after these reforms were put in place colombia implemented a social security reorganization that transformed the institutional framework for pension funds and health care provision law 100 of december 1993 regarding the health care regime the social security reform replaced the existing discretionary affiliation system that covered only the worker with a mandatory one that features a stricter prepayment system and covers also the family of the worker on the subject of pensions the reform introduced a fully funded social security system and gave the workers the choice between this new scheme of individual capitalization of public funds and the existing pay as you go system

mandate based health reform and the labor market evidence from the massachusetts reform we model the labor market impact of the key provisions of the national and massachusetts mandate based health reforms individual mandates employer mandates and subsidies we characterize the compensating differential for employer sponsored health insurance eshi and the welfare impact of reform in terms of sufficient statistics we compare welfare under mandate based reform to welfare in a counterfactual world where individuals do not value eshi relying on the massachusetts reform we find that jobs with eshi pay 2812 less annually somewhat less than the cost of eshi to employers accordingly the deadweight loss of mandate based health reform was approximately 8 percent of its potential size

wage loss following displacement the role of union coverage using two canadian data sets the authors explore the role of union coverage in displaced workers wage losses while only 32 of the workers had unionized jobs prior to displacement the wage loss suffered by these workers represented about 80 of the wages lost by all displaced workers in both samples losing union status was associated with large losses whether or not a worker switched industries after displacement extrapolating the results to the united states the authors estimate that one third to one half of u s displaced workers wage losses may be due purely to the loss of union coverage

pension reform and gender gaps in latin america what are the policy options abstract several latin american countries have implemented structural reforms in their social security pension systems these reforms have modified the traditional public pay as you go defined benefit payg db schemes introducing multipillar systems where fully funded defined contribution ff dc schemes play an important role gender gaps in coverage and benefits under pagy db and ff dc schemes have been one of the policy issues missing in most of the reforms in part because it has been certainly underresearched in the literature this paper studies the sources of pension gender gaps and provides the pros and cons of a set of policy options that may contribute to overcoming the gaps found in both schemes these policies are divided on the one hand into specific policies that directly affect the determination of pension benefits by modifying formula design or eligibility conditions and on the other hand policies that indirectly affect the level of benefits and the likelihood of being entitled to them by changing incentives in labor market conditions

unemployment persistence is there evidence for stigma effects we present evidence for a highly significant interaction between state dependence in individual unemployment risk and the business cycle the disadvantage from having been unemployed in the previous period is smaller in times of relatively high unemployment and larger in times of low unemployment this is consistent with the existence of stigma effects in the sense that unemployed individuals face difficulties finding a new job because employers interpret unemployment as a negative signal and do so especially when it is easier to find jobs i e when unemployment is low

the effects of firm specific taxes and government mandates with an application to the u s unemployment insurance program abstract we examine the common but unexamined case of a tax or government mandate whose cost differs across firms within the same labor market our theoretical model shows that this variation can lead to employment reallocation across firms and dead weight losses even if there is no aggregate employment effect using firm level unemployment insurance tax data we find that while the market level tax is mostly born by the worker individual firms can only pass on a small share of the within market differences thus in some cases differences in taxes across firms can lead to large dead weight losses

state intervention and the microcredit market the role of business development services we analyze in this paper how various forms of state intervention can impact microfinance institutions lending behavior using a simple model where entrepreneurs receive individual uncollateralized loans we show that not surprisingly state intervention through the loan guarantee increases the number of entrepreneurs receiving a loan however after modeling business development services bds provided by the microfinance institution we show that the loan guarantee can have a counterproductive effect by reducing the number of entrepreneurs benefiting from such services we therefore analyze an alternative policy bds subsidization we show that if bds are efficient enough and are targeted toward less performing borrowers then for fixed government expenditures such subsidies do better in terms of financial inclusion than the loan guarantee moreover we argue that under similar conditions bds subsidization alone does better in terms of financial inclusion than a mix of policies

consumer information and competition between nonprofit and for profit nursing homes this paper develops implications of arrow s hypothesis that nonprofit organizations are prevalent in health care because of quality uncertainty the model analyzes the ability of nonprofits to mitigate market failures created by asymmetric information in an environment characterized by potential competition from both explicitly for profit firms and for profits in disguise profit motivated firms who obtain nonprofit status in order to exploit the perceived trustworthiness of the nonprofit sector under certain conditions it is shown that nonprofit status can serve as a credible signal of quality and that nonprofits can decrease the underprovision of quality both by providing high quality services and indirectly via a spillover effect on quality in the for profit sector applicability to long term care and implications for empirical research and policy towards nonprofits in health care are discussed

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

are those paid more really more productive the case of experience this study uses computerized personnel microdata on the white male managerial and professional employees at a major u s corporation to address the following question can the additional earnings which are associated with more labor market experience at a point in time really be explained by higher productivity at the same point in time our answer to this question based on both cross sectional and longitudinal information is that performance plays a substantially smaller role in explaining cross sectional experience earnings differentials and earnings growth than is claimed by those who have adopted the human capital explanation of the experience earnings profile this response depends critically on our assumption that the performance ratings which supervisors give to their white male managerial and professional subordinates adequately reflect the subordinates relative productivity in the year of assessment we present a great deal of evidence which strongly supports this assumption

counteroffers and efficiency in labor markets with asymmetric information this article considers the effect of offer matching on labor market outcomes when the current employer has better information about his worker s productivity than potential employers previous research found that when current employers have better information than potential employers the latter use job assignment to infer an employed worker s qualifications as a result assignment of workers to jobs is inefficient i find that when current employers can match outside offers the equilibrium outcome may be efficient i analyze the effect of the asymmetric information on investment in human capital made by employers and workers and find these investment levels to be first best

learning from coarse information biased contests and career profiles an organization s promotion decision between two workers is modelled as a problem of boundedly rational learning about ability the decision maker can bias noisy rank order contests sequentially thereby changing the information they convey the optimal final period bias favours the leader reinforcing his likely ability advantage when optimally biased rank order information is a sufficient statistic for cardinal information the leader is favoured in every period in other environments bias in early periods may i favour the early loser ii be optimal even when the workers are equally rated and iii reduce the favoured worker s promotion chances this paper presents a model of boundedly rational learning by an organization the aims are to represent in a simple form the costs of gathering processing or transmitting information and to analyse their implications for the procedures selected to handle information as well as for the decisions actually made like other recent work on the internal organization of firms this work explores to what extent organizational structure and behaviour as well as organizational performance can be explained by adaptation to the costs associated with information in the learning model we formulate the decision maker not only selects a rule specifying what action to take as a function of his observations but also chooses sequentially the information partitions generating those observations this general problem is interpreted in the context of an organization which needs to make an important promotion decision and which attempts to maximize the value of the information generated during the observation periods that precede the decision one of the motivations for this analysis was the finding by organizational sociologists that earnings and promotions in the later stages of a worker s career are strongly correlated with earnings and promotions in the early stages kanter 1977 rosenbaum 1984 later success is positively associated with early success even when one controls for the effect of observable characteristics likely to affect performance such as education one obvious source of this correlation is differences in ability that persist over time and that are not captured by the observable covariates in this paper we focus on differences in ability which are initially unobservable by organizations and their workers as well as by researchers we present a simple model of an organization trying to learn about differences in ability and show

the consequences of the growth of health insurance premiums in the united states two thirds of the nonelderly population is covered by employerprovided health insurance ehi according to a kaiser family foundation national survey 2003 the cost of ehi has increased by over 59 percent since 2000 with no accompanying increase in the scale or scope of benefits these increases in health insurance premiums may have significant effects on labor markets including changes in the number of jobs hours worked per employee wages and compensation packages indeed it is possible that a significant portion of the increase in the uninsured population may be a consequence of employers shedding this benefit as health insurance premiums rise understanding how labor market characteristics affect adjustments to increased health insurance costs is of vital policy importance some proposals to cover the uninsured rely on employer mandates requiring employers to cover eligible workers other proposals provide tax credits for the purchase of non employer health insurance the effects of these proposals on employment wages and health insurance coverage will be driven by the elasticities of labor supply and demand institutional constraints on wages and compensation packages and how much workers value the increase in health insurance costs since employers provide such coverage voluntarily if workers fully value these benefits and are able to sort between firms based on their preferences then in the absence of other institutional constraints they will bear the cost of the increase via reduced wages with no accompanying change in employment employment costs or employee utility there are many reasons to believe however that firms are limited in their ability to offset increases in the price of health insurance premiums through lower compensation so that increases in the cost of providing health insurance may affect both employment and the structure of work identifying the magnitude of these effects empirically is difficult both because of data availability and because of multiple avenues for causality in this paper we uncover the causal effect of increases in the cost of benefits on labor market outcomes by exploiting an exogenous source of variation in the cost of providing health insurance the recent medical malpractice crisis in which malpractice costs for physicians grew dramatically in some states but not in others the growth in malpractice payments affects malpractice insurance premiums and health insurance premiums but it should not affect other aspects of employment see baicker and chandra 2005b using this source of variation we examine the effect of increases in health insurance premiums on employment patterns earnings and health insurance coverage we find that the cost of increases in health insurance premiums is borne in large part by workers through increased unemployment and also through decreased hours for those workers moved from full time jobs with benefits to parttime jobs without these results have strong implications for the distributional impact of health care reforms both authors economics department dartmouth college 6106 rockefeller hall hanover nh 03755 dartmouth medical school and national bureau of economic research e mails kbaicker dartmouth edu achandra dartmouth edu we thank alan garber seth seabury jonathan skinner and douglas staiger for helpful conversations that have influenced this research program and derek neal aaron yelowitz and conference participants at the berger conference for very insightful comments we are grateful for funding from nia p01 ag19783 02 the opinions in this paper are those of the authors and should not be attributed to the nia or nber 1 based on tabulations of population under age 65 from the march current population survey for 1988 2003 2 there is a wide literature estimating the wage fringe trade off a 1 increase in the value of fringes may be offset by a 1 reduction in wages or a 1 1 tax rate reduction for tax favored benefits for example jonathan gruber 1994 demonstrates that the passage of the pregnancy discrimination act in 1978 resulted in employers shifting the entire cost of the mandate onto employees

the labor market effects of rising health insurance premiums we estimate the effect of rising health insurance premiums on wages employment and the distribution of part time and full time work using variation in medical malpractice payments driven by the recent medical malpractice crisis we estimate that a 10 increase in health insurance premiums reduces the aggregate probability of being employed by 1 2 percentage points reduces hours worked by 2 4 and increases the likelihood that a worker is employed only part time by 1 9 percentage points for workers covered by employer provided health insurance this increase in premiums results in an offsetting decrease in wages of 2 3

personnel policies at the union bank of australia evidence from the 1888 1900 entry cohorts this article uses personnel payroll and other records from the union bank of australia to examine internal labor markets it is shown that employment was characterized by limited ports of entry impersonal rules for pay and promotion well defined career ladders shielding from the external labor market and a long term employment relationship in addition tenure within the bank was rewarded considerably more than experience elsewhere and compensation increased considerably after 25 30 years tenure these facts are partially consistent with the human capital matching and contract theory models but cannot be fully explained by any one model

the labor market effects of employer recruitment choice abstract i analyze employer recruitment decisions using a dynamic discrete choice structural model that i estimate on a sample of clerical workers from the mcsui a large cross section of establishments in four metropolitan areas of the us in the model employers choose either informal recruitment methods which generate a small but select applicant pool from which the employer can hire quickly or formal methods which create a large but less select applicant pool which the employer must screen intensively delaying hiring times i study the effects of three counterfactual simulations on recruitment strategies starting wages and vacancy durations a wage subsidy a policy designed to improve information about prospective matches and an increase in the heterogeneity of prospective matches i show that the effects of exogenous policy or environmental changes can be decomposed into pure wage effects that affect the wage offers employers post holding constant their recruitment strategies and recruitment wage effects that involve changes in recruitment methods the results show that changes in recruitment strategies represent an important channel through which changes in the economic environment affect the starting wages and vacancy duration for new hires

bankruptcy as implicit health insurance this paper examines the implicit health insurance that households receive from the ability to declare bankruptcy exploiting multiple sources of variation in asset exemption law i show that uninsured households with a greater financial cost of bankruptcy make higher out of pocket medical payments conditional on the amount of care received in turn i find that households with greater wealth at risk are more likely to hold health insurance the implicit insurance from bankruptcy distorts the insurance coverage decision using a microsimulation model i calculate that the optimal pigovian penalties are three quarters as large as the average penalties under the affordable care act

unintended consequences of maternity leave legislation the case of colombia abstract we estimate the impact on female labor outcomes of the extension in maternity leave period from 12 to 14 weeks an amendment to the colombian labor law in 2011 to identify this impact we compare labor market outcomes of different groups of individuals with women of child bearing age first we compared two groups of women with different fertility rates low elasticity of substitution finding that as result of the extension women in the high fertility age group experience an increase in inactivity informality and self employment when comparing high fertility age women with men in the same age group high elasticity of substitution we find that the extension increases the probability of unemployment informality and self employment and decreases wages of women compared with men

uncertain medical expenses and precautionary saving near the end of the life cycle this paper introduces a dynamic structural model of household consumption decisions in which elderly families consider the effects of uncertain future medical expenses when deciding current levels of consumption the model with uncertain medical expenses implies a potentially important role for precautionary saving incentives to explain slow rates of dissaving among elderly americans during retirement rather than just simulating the stochastic dynamic model preference parameters are estimated using panel data on health wealth and expenditures for retired families the health uncertainty model predicts consumption levels closer to observed expenditures than a life cycle model with uncertain longevity however elderly families typically dissave their financial assets more slowly than even the baseline health uncertainty model predicts is optimal

the economic consequences of parental leave mandates lessons from europe this study investigates the economic consequences of rights to paid parental leave in nine european countries over the 1969 through 1993 period since women use virtually all parental leave in most nations men constitute a reasonable comparison group and most of the analysis examines how changes in paid leave affect the gap between female and male labor market outcomes the employment to populations ratios of women in their prime childbearing years are also compared with those of corresponding aged men and older females parental leave is associated with increases in women s employment but with reductions in their relative wages at extended durations

up or out contracts a signaling perspective a firm will typically gather information concerning its own workers that is not available to other potential employers while other firms will attempt to reduce this information asymmetry by observing the actions of the initial employer i argue that this process can be important in environments characterized by up or out contracts in that the retention decision can serve as a signal of productivity the article investigates this argument in an environment where up or out contracts are employed because they provide workers with an incentive to accumulate general human capital and where learning takes place in a diffuse fashion

consumer durables and the real interest rate one important channel through which real interest rates affect aggregate demand is consumer expenditure on durable goods this paper examines empirically the link between interest rates and consumer durables solving for the decision rule relating income and interest rates to consumer demand is an intractable task this paper avoids this problem by examining the first order conditions necessary for maximization by the representative consumer structural parameters of there presentative utility function are thus recovered the estimated model suggests that expenditure on consumer durables is far more sensitive to changes in the interest rate than is expenditure on nondurables and services this abstract was borrowed from another version of this item

who pays for public employee health costs abstract we analyze the incidence of public employee health benefits because these benefits are negotiated through the political process relevant labor market institutions deviate significantly from the competitive private sector benchmark empirically we find that roughly 15 percent of the cost of recent benefit growth was passed onto school district employees through reductions in wages and salaries strong teachers unions were associated with relatively strong linkages between benefit growth and growth in total compensation our analysis is consistent with the view that the costs of public workers benefits are difficult to monitor contributing to benefit oriented and often under funded compensation schemes

workers should want to pay more for social security i introduction although economic theory cannot resolve all the controversies concerning social security simple supply and demand analysis can helpfully change the terms of the debate concerned with how the social security tax is divided between employers and workers defenders of the existing system typically argue that workers pay only half the tax 6 2 because as required by law the other half is paid by employers opponents of the existing system typically argue that workers pay all of the social security tax because their compensation is reduced by employers to offset their portion of the tax for example former house majority leader dick armey 2005 states that social security alone takes 12 4 percent of workers incomes that s more than most workers pay in income taxes in a reply to armey marilyn scheiner 2005 states that armey should have said that social security alone takes 6 2 percent of workers income the employer matches the employee s contribution for a total of 12 4 percent going into the social security coffers 1 the first thing economic analysis tells us about this debate is that both sides are wrong on the facts barring unlikely conditions the second and more interesting insight is that each side of the debate is making a claim that supports the position of the other side any student in an economic principles course should know that the distribution of a payroll tax burden depends on the relative elasticities of the labor demand and supply curves if the labor supply curve is very inelastic relative to the labor demand curve then most of the burden of a payroll tax will fall on the workers on the other hand if the labor demand curve is very inelastic relative to the labor supply curve most of the burden will fall on the employer so the debate over who bears most of the cost of the social security tax has to consider the relative elasticities of labor supply and demand what the social security legislation states about the distribution of the tax burden is completely irrelevant 2 this may seem to suggest that the opponents supporters of social security should argue that labor supply is less more elastic than labor demand because this implies that less most of the tax burden is borne by the employer but why should the desirability of social security depend on the distribution of the tax burden supposedly there are benefits from social security so its desirability should depend on how those benefits compare to the tax and how the net benefits are distributed even though labor supply and demand elasticities are relevant to the distribution of gains or losses from social security we shall see that the desirability of social security as measured by its net value and its benefits to workers is completely independent of those elasticities once we take into consideration the benefits of social security we find that when advocates and opponents argue over the incidence of the tax they have their arguments completely backward the strongest argument in favor of social security is that workers are paying more than its cost on the other hand the strongest argument against social security is that the burden of financing it falls mostly on employers if employers are paying most of the cost of social security then for the sake of workers it should be scrapped immediately ii social security and shifts in the labor supply and demand curves our argument is based on straightforward implications of labor supply and demand curves shifts in response to the costs and benefits of social security 3 we begin in figure 1 with labor supply curve s and labor demand curve d assumed relevant without before social security the vertical axis represents the monetary wage and the horizontal axis represents the quantity of labor the equilibrium wage and labor quantity are given by w sub b and l sub b respectively

balancing incentives in the compensation contracts of nonprofit hospital ceos abstract given the considerable insight into corporate governance achieved through studies of executive compensation in proprietary firms it is surprising that executive contracting in nonprofit organizations remains largely unexplored in this paper we use the multitask principal agent model of holmstrom and milgrom the journal of law economics and organization 7 1991 suppl 24 to argue that nonprofit hospitals represent an optimal response to information asymmetries between managers and boards for a board with multidimensional objectives the agency problem is getting top executives to distribute their efforts across all dimensions of the hospital s mission the nonprofit form is preferred because the absence of high powered incentives such as share ownership reduces executives incentives to place undue emphasis on improving financial performance at the expense of important but less observable tasks using newly available compensation data we test the model by comparing the conditional distributions of earnings for industrial and nonprofit hospital ceos in ontario our best estimates are that ceos in publicly traded firms earn twice as much on average as those in similarly sized nonprofit hospitals but bear roughly eight times the income variance estimates of the associated degree of risk aversion are well within conventional bounds and are consistent with the trade off between insurance and incentives predicted by the theory

the signaling role of promotions further theory and empirical evidence an extensive theoretical literature investigates the role of promotions as a signal of worker ability we extend the theory by focusing on how the signaling role of promotion varies with education and then investigate the resulting predictions using a longitudinal data set that contains detailed information concerning the internal labor market history of a medium sized firm in the financial services industry our results support signaling being important for understanding the differences between promotion practices concerning bachelor s and master s degree holders while the evidence concerning the importance of signaling for high school graduates and phds is mixed

does aid matter measuring the effect of student aid on college attendance and completion does student aid increase college attendance or simply subsidize costs for infra marginal students settling the question empirically is a challenge because aid is correlated with many characteristics that influence educational investment decisions a shift in financial aid policy that affects some youth but not others can provide an identifying source of variation in aid in 1982 congress eliminated the social security student benefit program which at its peak provided grants totaling 3 7 billion a year to one out of ten college students using the death of a parent as a proxy for social security beneficiary status i find that offering 1 000 1998 of grant aid increases educational attainment by about 0 16 years and the probability of attending college by four percentage points the elasticities of attendance and completed years of college with respect to schooling costs are 0 7 to 0 8 the evidence suggests that aid has a threshold effect a student who has crossed the hurdle of college entry with the assistance of aid is more likely to continue schooling later in life than one who has never attempted college this is consistent with a model in which there are fixed costs of college entry finally a cost benefit analysis indicates that the aid program examined by this paper was a cost effective use of government resources this abstract was borrowed from another version of this item

a theory of wage and promotion dynamics inside firms we show that a framework that integrates job assignment human capital acquisition and learning captures several empirical findings concerning wage and promotion dynamics inside firms including the following first real wage decreases are not rare but demotions are second wage increases are serially correlated third promotions are associated with large wage increases fourth wage increases at promotion are small relative to the difference between average wages across levels of the job ladder fifth workers who receive large wage increases early in their stay at one level of the job ladder are promoted quickly to the next

testing for asymmetric employer learning recent evidence suggests that employers acquire more precise information about a worker s productivity the more time he or she spends in the labor market the following question arises is learning symmetric that is do all employers have the same information about workers productivity or is learning asymmetric that is does the current employer have superior information about workers productivity this article develops a learning model with endogenous mobility that nests both learning hypotheses it then proposes new tests for asymmetric employer learning overall learning appears to be mostly symmetric except possibly when the employees involved are college graduates

nondisclosure as a contract remedy explaining the advance notice puzzle prior theoretical work predicts an underprovision of advance notice contracts stemming from their enforcement costs in the present model it is rather the fundamental inability of workers to alienate their right to quit taken in conjunction with parameters central to job separation decisions that jointly determine the mix of notice and no notice contracts observed in equilibrium not all equilibrium contracts are efficient but there is no underprovision of notice mandating notice cannot improve on joint value and indeed may reduce it furthermore although a mandate can be merely redistributive there are cases in which it harms all parties

the family gap for young women in the united states and britain can maternity leave make a difference in the united states and britain there is a family gap between the wages of mothers and other women differential returns to marital and parental status explain 40 50 of the gender gap another 30 40 is explained by women s lower levels of work experience and lower returns to experience taking advantage of quasi experiments in job protected maternity leave in the united states and britain this article finds that women who had leave coverage and returned to work after childbirth received a wage premium that offset the negative wage effects of children

worker allocation hierarchies and the wage distribution economists have traditionally viewed the allocation of workers among jobs through the concept of comparative advantage this paper investigates hierarchical production models which display an absence of comparative advantage in order to demonstrate that for hierarchical production there is a second allocating factor which plays an important role two results are found first the allocation of workers among jobs tends to match high ability workers with positions which value ability highly second despite the fact that the models display an absence of comparative advantage i e the standard theoretical explanation for why wage distributions might be skewed the models wage distributions are skewed to the right relative to the underlying ability distributions

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

the changing role of government in financing health care an international perspective this paper explores the changing role of government involvement in health care financing policy outside the united states it provides a review of the economics literature in this area to elucidate the implications of recent policy changes on efficiency costs and quality our review reveals that there has been some convergence in policies adopted across countries to improve financing incentives and encourage efficient use of health services in the case of risk pooling all countries with competing pools experience similar difficulties with selection and are adopting more sophisticated forms of risk adjustment in the case of hospital competition the key drivers of success appear to be what is competed on and measurable rather than whether the system is public or private in the case of both the success of performance related pay for providers and issues resulting from wait times evidence differs within and across jurisdictions however the evidence does suggest that some governments have effectively reduced wait times when they have chosen explicitly to focus on achieving this goal many countries are exploring new ways of generating revenues for health care to enable them to cope with significant cost growth but there is little evidence to suggest that collection mechanisms alone are effective in managing the cost or quality of care jel h51 i11 i18

infertility insurance mandates and fertility infertility is considered by the medical community to be a disease of the reproductive system it currently affects over 6 million individuals and one in ten couples cannot conceive without medical assistance the psychological effects of infertility have been compared to the effects of other diseases such as cancer and heart disease e g anne t fidler and judith bernstein 1999 and the financial costs of treatment can be quite large however only 25 percent of all health plan sponsors provide coverage for infertility services in response to a perceived need for coverage legislation was introduced at the federal level in 2003 that would require health plans to provide infertility benefits as the fraction of the population affected by infertility continues to rise there are likely to be continued efforts to mandate coverage understanding the costs and benefits of these policies thus becomes increasingly important the first component of a full analysis is to determine whether these mandates will actually have an effect on fertility by reducing the price of infertility treatment one might expect to see an increase in utilization of treatments this could be true if the mandate expands access to individuals who previously could not afford treatment or if individuals who were previously receiving treatment now choose to consume higher quantities or a higher quality of treatment however it is also possible that these mandates have no effect on access or on treatment consumed but simply provide windfall gains to those individuals who would have purchased treatment in the absence of insurance coverage finally mandates may also have dynamic effects on the timing of births individuals could seek treatment earlier which is beneficial from a medical perspective alternatively individuals could further delay childbearing with the knowledge that they will ultimately be covered in this paper i ask the first order question of whether the mandated insurance coverage of infertility treatment has affected birth rates as of 2003 15 states have enacted some form of infertility insurance mandate using a differencein differences approach i exploit variation in the enactment of mandates both across states and over time and identify control groups that should not have been affected by infertility coverage my results suggest that the mandates increase firstbirth rates for women over age 35 by 32 percent

reimbursing health plans and health providers efficiency in production versus selection the tradeoff between an insurer s or medical provider s incentives to select good risks and to produce efficiently is governed by the supply price analog to the demand price tradeoff between moral hazard and risk aversion under a variety of models the optimum supply price is a mixture of capitation and fee for service payments empirical literature shows that pure capitation payment leaves strong incentives for selection that are acted upon the presence of contracting costs in a rothschild stiglitz model means a limited pooling equilibrium can exist and that poor risks will not be at their preferred outcome

job assignments signalling and efficiency this article analyzes a model in which information about a worker s ability is only directly revealed to the firm employing the worker other firms however use the worker s job assignment as a signal of ability three results recur throughout the analysis first wage rates tend to be more closely associated with jobs than with ability levels second there is frequently an inefficient assignment of workers to jobs i e even when a firm has complete information about a worker s output third the severity of this inefficiency tends to be negatively correlated with the level of firm specific human capital in the economy

imperfections in labor markets and the scope of the firm abstract results are derived showing how the interaction of adverse selection and worker uncertainty about job preferences creates incentives for firms to offer a wider array of jobs or integrate the equilibrium wage structure is characterized non integrated firms make retention wage offers increasing in ability while integrated firms do not a generalization in which costs to integration are relevant is then suggested results indicate that it is the interaction between adverse selection and uncertain preferences that leads to a second period allocation of workers across jobs that is not first best but is second best they also show why the presence of adverse selection and uncertain preferences create a tendency toward a scope of integration broader than the first best outcome

the costs of wrongful discharge laws we estimate the effects on employment and wages of wrongful discharge protections adopted by u s state courts during the last three decades we find robust evidence that one wrongful discharge doctrine the implied contract exception reduced state employment rates by 0 8 to 1 7 the initial impact is largest for female and less educated workers those who change jobs frequently while the longer term effect is greater for older and more educated workers those most likely to litigate by contrast we find no robust employment or wage effects of two other widely recognized wrongful discharge laws the public policy and good faith exceptions i introduction w hat is the price of protection this paper estimates the social costs in possibly lower employment and wages of common law protections designed to protect american workers from wrongful discharge economic the ory suggests that employment protection is a double edged sword it provides employment security to incumbent work ers but makes employers reluctant to hire leading to a less flexible labor market with potentially lower employment and wages it is frequently argued that the stagnant employment performance of many european economies during the 1980s and 1990s eurosclerosis can be attributed in part to the significant employment protection given european workers see lazear 1990 and blanchard and wolfers 1999 krueger and pischke 1998 provide a contrasting view among the obstacles to testing this hypothesis is the difficulty of making reliable inferences using cross country comparisons in this paper we study the effects of employment protec tion in the united states numerous scholars have examined the effects of american federal employment laws on em ployment and unemployment acemoglu and angrist 2001 deleire 2000 and jolls and prescott 2004 present evidence that the americans with disabilities act ada decreased employment of disabled persons oyer and schaefer 2000 2002 conclude that the federal civil rights act of 1991 increased the frequency of mass layoffs and raised the returns to experience for workers who have a downward sloping age litigation profile hahn todd and van der klaauw 2001 also evaluate the costs of federal antidiscrimination laws a major hurdle for each of these studies is that these federal statutes apply all at once to the entire country this makes it difficult to separate the effects of the statute from all other changes occurring simulta neously cf donohue 1998 donohue and heckman

mitigating principal agent problems in base of the pyramid markets an identity spillover perspective the potential for profitably distributing products to previously underserved base of the pyramid bop markets as a means of poverty alleviation has received growing interest within the management field however such business models often struggle with the agency costs that arise between the firm and local sales agents as the institutions and infrastructure in bop markets make traditional contractual and monitoring mechanisms difficult and expensive to employ we present the results of two complementary studies which were both conducted with salespeople in rural guatemala the first study employed a quasi experimental field study combined with in depth interviews while the second study was a laboratory experiment the results of the studies suggest that identity based mechanisms can potentially mitigate agency costs through a positive identity spillover effect in multiproduct settings abstract from author

labour market signalling and unemployment duration an empirical analysis using employer employee data we test the signalling hypothesis using detailed flow based employer employee data from denmark our main findings are the signalling value is proportional to the proportion of employees dismissed from the workplace and the signal is uniform across occupation groups

the other side of the trade off the impact of risk on executive compensation the principal agent model of executive compensation is of central importance to the modern theory of the firm and corporate governance yet the exiting empirical evidence supporting it is quite wea

classic promotion tournaments versus market based tournaments as initially formulated in the seminal analysis of lazear and rosen 1981 an important perspective for understanding the role of promotions in firms is the tournament perspective that is a promotion and in particular the wage increase associated with a promotion is a prize that serves as an incentive for workers to exert effort and take other actions beneficial to the firm such as the accumulation of human capital in this paper i consider whether the best way to model promotion tournaments is by having firms commit to prizes ex ante as in lazear and rosen s initial formulation or whether promotion prizes should be modeled as arising from the signaling role of promotions and the competition between firms for promoted workers

the impact of protective measures for female workers policies designed to protect female workers have controversial effects on labor market outcomes both in theory and in practice the analysis uses repeated cross sections of household survey data for taiwan to estimate the impact of working hours restrictions and maternity benefits differential coverage across industrial sectors and demographic groups provides a unique opportunity to identify the impact of both policies in a single natural experiment framework while working hours restrictions have a negative impact on women s actual hours worked and employment maternity benefits increase these labor inputs implying that women value the opportunity to return to jobs they might otherwise have to leave

agency problems and unrelated business income of non profit organizations an empirical analysis nonprofit organizations are traditionally assumed to dislike commercial activities in the usa they are however allowed to engage in commercial activities but the income they derive from these activities is then subject to the so called unrelated business income tax if npos do indeed dislike commercial income then why do they engage in these activities using a data set of 2103 us npos this study suggests that the presence of agency problems inside the organization can at least provide an explanation for the occurrence of unrelated business income

who pays the high health costs of older workers evidence from prostate cancer screening mandates between 1992 and 2009 30 us states adopted laws mandating that health insurance plans cover screenings for prostate cancer because prostate cancer screenings are used almost exclusively by men over age 50 these mandates raise the cost of insuring older men relative to other groups this article uses a triple difference empirical strategy to take advantage of this quasi random natural experiment in raising the cost of employing older workers using integrated public use microdata series data from the march supplement of the current population survey i find that the increased cost of insuring older workers results in their receiving 2 8 lower hourly wages being 2 less likely to be employed and being 0 7 less likely to have employer sponsored health insurance

state mandated benefits and employer provided health insurance abstract one popular explanation for the low rate of employee health insurance coverage is the presence of numerous state regulations which mandate that group health insurance plans must include certain benefits by raising the minimum cost of providing any health insurance coverage these mandated benefits make it impossible for firms which would have desired to offer minimal health insurance at a low cost to do so i use data on insurance coverage among employees in small firms to investigate whether this problem is an important cause of employee non insurance i find that mandates have little effect on the rate of insurance coverage this finding is robust to a variety of specifications of the regulations i also find that this lack of an effect may be because mandates are not binding since most firms appear to offer these benefits even in the absence of regulation

evidence on adverse selection and establishment size in the labor market a commonly suggested explanation for the finding that laid off workers have greater mean post displacement earnings losses than workers who lose theirjobs through plant closings is that the former are of lower quality than the latter but there is also an alternative explanation for this result laid off workers suffer larger earnings losses because as a group they have more to lose in the first place having been displaced from larger higher wage establishments an analysis of data from the national longitudinal survey of youth confirms this hypothesis accounting for establishment size removes virtually all of the difference in wage losses for the two groups of displaced workers an adverse selection framework has been employed by many authors to explain various phenomena in the labor market spence 1973 harris and holmstrom 1982 greenwald 1986 recently several authors gibbons and katz 1991 doiron 1995 grund 1997 have investigated whether the postjob loss experiences of two different types of displaced workers those who are laid off from their jobs and those who are displaced by a plant closing reflect adverse selection specifically do laid off workers exhibit larger post job loss wage

employment effects of payroll taxes an empirical test for germany this study tests to what degree the incidence of payroll taxes in germany is on employment and whether in consequence payroll taxes in particular social insurance contributions are the culprit behind the growing unemployment problem using industry level data for 18 years 1977 1994 a system of five dynamic factor demand equations is estimated various simulations indicate that the employment effects of payroll taxes are minimal

how does future income affect current consumption this paper tests a straightforward implication of the basic life cycle model of consumption that current consumption depends on expected lifetime income the paper projects future income for a panel of households and finds that consumption is closely related to projected current income but unrelated to predictable changes in income however future income uncertainty has an important effect consumers facing greater income uncertainty consume less the results are consistent with buffer stock models of consumption like those of deaton 1991 or carroll 1992a 1992b where precautionary motives greatly reduce the willingness of prudent consumers to consume out of uncertain future income

the incidence of mandated maternity benefits i consider the labor market effects of mandates which raise the costs of employing a demographically identifiable group the efficiency of these policies will be largely dependent on the extent to which their costs are shifted to group specific wages i study several state and federal mandates which stipulated that childbirth be covered comprehensively in health insurance plans raising the relative cost of insuring women of childbearing age i find substantial shifting of the costs of these mandates to the wages of the targeted group correspondingly i find little effect on total labor input for that group jel 118 j32 h51 in an era of tight fiscal budget constraints mandating employer provision of workplace benefits to employees is an attractive means for a government to finance its policy agenda consequently in recent years there has been a growth of interest in mandated benefits as a tool of social policy for example the centerpiece of president bill clinton s health care proposal is mandated employer provision of health insurance and more than 20 states have man

labor market effects of employer provided health insurance i introduction increasing health insurance coverage is arguably an important policy goal the congressional budget office 2003 estimates that in 1998 20 30 million americans had no health insurance for the entire year approximately 40 million were uninsured at a specific point in time in the year and nearly 60 million were without coverage some time during the year most individuals who have health insurance in the united states obtain it through their employer in 1999 65 8 of nonelderly americans had employer provided insurance also called group insurance or employer sponsored insurance either through their own employer or through the employer of another household member see gruber 2001 employer provided insurance plans generally have lower premiums and offer more benefits than individual insurance plans health insurance providers can offer cheaper and better plans to company employees for at least two reasons first the average administrative cost of such plans is lower than individual plans second employment based plans are typically subject to less adverse selection than individual plans particularly so for large employers furthermore the tax subsidy afforded employment based health insurance renders the effective consumer price substantially lower than the cost see pauly 1986 and gruber 2001 together these various factors give a strong incentive for employers to offer and employees to accept coverage as part of their employment contract as employer provided insurance is by far the most prevalent form of coverage in the private sector policy makers look for further expansion of this base as a way to insure the uninsured while avoiding direct public financing as a way to increase employer based health insurance coverage some states either have or are considering government mandates that require employers to provide insurance to certain types of workers 1 the state of hawaii requires private sector employers to offer health insurance to all workers who work for more than 20 h a week and requires these workers to have insurance the state of california is currently considering a similar mandate there is a considerable interest from policy makers on the effects of such mandates on labor market outcomes in this study we report on an experiment that was designed to provide some insights about possible effects of alternative health insurance regulations on the competitive labor market with a particular focus on mandates since we only considered a competitive market setting with complete contracts and no wage rigidities our results may not be directly applicable to all labor market situations 2 however the study provides useful insights about the interaction of health insurance benefit provision wages and employment structure for labor markets where the competitive wage setting and the complete contracts assumptions are reasonable with these limitations in mind our results can be also generalized to other types of employer provided fringe benefits such as paid vacations or pension plans as any government intervention health insurance regulation may affect the labor market theory predicts that in perfectly competitive labor markets health insurance creates no distortionary effects on the labor market equilibrium as long as the coverage is not mandated and there are no wage rigidities 3 all workers who value insurance above its cost of provision are offered insurance and accept it the wages are adjusted downward see rosen 1986 and gruber 2000 summers 1989 used a simple supply and demand analysis to show that the effect of increases in premiums on equilibrium labor hours and wage depends both on the elasticity of labor demand and labor supply and on how fully workers value changes in the cost of health insurance if the demand or the supply of labor is completely inelastic or if workers fully value the insurance then an increase in the premium would result in an equal decrease shift in wages

empirical determinants of intertemporal choice abstract we provide new evidence on the empirical determinants of intertemporal financial decisions we use an exogenously imposed choice affecting nearly all croatian retirees to study characteristics associated with choosing a larger deferred stream of payments over a smaller more immediate payment individuals are more willing to defer if they have higher incomes and are not liquidity constrained have a longer time horizon because of better health and longer life expectancy and have stronger bequest motives individuals who expect currency devaluation or political risk to reduce the value of future income are more likely to take the earlier income stream

job discrimination market forces and the invisibility hypothesis the invisibility hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers but that promotion enhances visibility and alleviates this problem then at a competitive labor market equilibrium firms profit by hiding talented disadvantaged workers in low level jobs consequently those workers are paid less on average and promoted less often than others with the same education and ability as a result of the inefficient and discriminatory wage and promotion policies disadvantaged workers experience lower returns to investments in human capital than other workers

the incidence of payroll taxation evidence from chile i provide new evidence on the incidence of payroll taxation by examining the experience of chile before and after the privatization of its social security system this policy change led to a sharp exogenous reduction in the payroll tax burden on chilean firms on average payroll tax rates fell by 25 over 6 years using data from a census of manufacturing firms i estimate that the incidence of payroll taxation is fully on wages with no effect on employment this finding is robust to a variety of empirical approaches to the problem of measurement error in firm level measures of taxes worker

rethinking legal taxonomies for the gig economy both tax law and employment law incentivize engagers of labour to structure their workforce as a crowd of self employed micro entrepreneurs recent technological change and the rise of the gig economy have made it easier for agents to respond to these incentives contributing to an increase in self employment in this article we review the evidence on the rise of the gig economy in the uk and lay out a set of key principles to guide the reform of tax and employment law to better enable policy to meet its underlying objectives

promotion turnover earnings and firm sponsored training i develop a model in which different technological conditions lead to distinct equilibria with different patterns in labor mobility promotion earning distribution and provision of firm sponsored training key is the asymmetric learning of workers characteristics because of the information that is conveyed to the market by promotion firms have incentives to adopt strategic promotion policies which result in different patterns in the use of internal labor market the theory explains well the differences between the japanese and the united states labor markets

heterogeneity and the effect of mental health parity mandates on the labor market health insurance benefit mandates are believed to have adverse effects on the labor market but efforts to document such effects for mental health parity mandates have had limited success i show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress accounting for this heterogeneity i find adverse labor market effects for non distressed individuals but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member on net i conclude that the mandates are welfare increasing for moderately distressed workers and their families but may be welfare decreasing for non distressed individuals

consumption and the timing of income risk abstract when formulating a plan for savings does the timing of income risks matter should one be concerned with whether uncertainty in income is in the near term or the distant future of course and the impact of the timing of income risk is the subject of this article using a three period framework we provide approximate solutions for optimal consumption choices for preferences that display constant relative risk aversion and derive the relationship between innovations to income and innovations to consumption growth these results are contrasted with those for quadratic preferences and preferences that display constant absolute risk aversion we analyze consumption saving plans for several different situations of near term and distant future income risk and different kinds of preferences we conclude with a demonstration of the high degree of accuracy of our consumption approximations by comparing them to exact values computed by stochastic simulation

technology growth and expenditure growth in health care in the united states health care technology has contributed to rising survival rates yet health care spending relative to gdp has also grown more rapidly than in any other country we develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth we show that health care productivity depends on the heterogeneity of treatment effects across patients the shape of the health production function and the cost structure of procedures such as mris with high fixed costs and low marginal costs the model implies a typology of medical technology productivity i highly cost effective home run innovations with little chance of overuse such as anti retroviral therapy for hiv ii treatments highly effective for some but not for all e g stents and iii gray area treatments with uncertain clinical value such as icu days among chronically ill patients not surprisingly countries adopting category i and effective category ii treatments gain the greatest health improvements while countries adopting ineffective category ii and category iii treatments experience the most rapid cost growth ultimately economic and political resistance in the u s to ever rising tax rates will slow cost growth with uncertain effects on technology growth

stigma effects of layoffs abstract based on a signaling model of gibbons and katz 1991 journal of labor economics 9 351 380 this paper compares the development of the wages of dismissed employees to those who lost their job because of plant closings in contrast to the us and canada there is no evidence for a stigma effect of layoffs in germany some explanations of the divergent results are pointed out

labor market consequences of state health insurance regulation this study based mainly on the 1989 98 march current population surveys finds that state mandated health insurance benefits and small group health insurance reform had no statistically significant effects on labor market outcomes such as the quantity of work wages and whether an employee worked for a small or large firm the number and type of state mandated health insurance benefits were unrelated to weeks of work wages and the prevalence of private insurance coverage but positively associated with weekly work hours extensive small group health insurance reform was associated with a slight decline in the prevalence of private insurance coverage in small firms and this reform affected both full and part time employees less extensive reforms were not generally related to the prevalence of private insurance coverage overall the authors do not find strong evidence that insurance regulations affected labor market outcomes although they appear to cause a small decrease in private coverage

the response of wages to protective labor legislation evidence from canada using micro data from the 1986 87 canadian labour market activity survey the author examines the wage effect of laws requiring advance notice of layoffs and in some cases also requiring severance payments to laid off workers the results suggest that incumbent workers protected by advance notice and severance pay laws were able to extract higher wages than were incumbent workers unprotected by such laws there is evidence however that the ultimate wage effect differed by workers union status starting wages of nonunion workers appear to have fallen to offset the subsequent wage increase indicating that nonunion workers may pay for advance notice and severance pay laws whereas union workers who were protected by such laws seem to have been able to exploit their bargaining position to increase their lifetime earnings

who pays for obesity evidence from health insurance benefit mandates is there an obesity externality in the late 1990s and early 2000s many state governments began requiring health insurance plans to cover treatments for diabetes using difference in difference analysis of restricted geocode data from the 1979 national longitudinal survey of youth to compare wages across states with and without diabetes mandates i find that obese people pay for all of their own increased health costs in the form of lower wages rather than passing them on to employers insurers and co workers

adverse selection and an individual mandate when theory meets practice we develop a model of selection that incorporates a key element of recent health reforms an individual mandate using data from massachusetts we estimate the parameters of the model in the individual market for health insurance we find that premiums and average costs decreased significantly in response to the individual mandate we find an annual welfare gain of 4 1 per person or 51 1 million annually in massachusetts as a result of the reduction in adverse selection we also find smaller post reform markups

the effects of expanding the generosity of the statutory sickness insurance system summary this article evaluates an expansion of employer mandated sick leave from 80 to 100 of forgone gross wages in germany we employ and compare parametric difference in difference did matching did and mixed approaches overall workplace absences increased by at least 10 or 1 day per worker per year we show that taking partial compliance into account increases coefficient estimates further heterogeneity in response behavior was of great importance there is no evidence that the increase in sick leave improved employee health a finding that supports a shirking explanation finally we provide evidence on potential labor market adjustments to the reform copyright 2013 john wiley sons ltd

health insurance market reform and employee compensation the case of pure community rating in new york abstract pure community rating which was enacted to improve access to health insurance in new york s small group market in 1993 prevents carriers from charging different premiums based on the ages of a firm s workers if small firms were adjusting compensation packages prior to reform to offset higher health care costs of older workers then community rating could lead to greater relative wages for older workers post reform and not necessarily induce adverse selection that results in changes in who is insured i present evidence showing that relative wages of older workers in small firms increased in comparison with other states and with large firms within new york following reform

are workers permanently scarred by job displacements this paper investigates whether workers suffer lasting scars following job displacements using david t ellwood s 1982 terminology scars represent persistent effects whereas blemishes are transitory adjustments which dissipate over time more precisely dislocated individuals are defined as scarred if they continue to earn less or to be unemployed more than their nondisplaced counterparts even after the conclusion of a several year adjustment period