language and the earnings of immigrants several studies most of them employing straightforward regression analysis have concluded that immigrants proficiency in the language of their adopted country is correlated with their productivity as measured by earnings two weaknesses of these studies are potential unobserved heterogeneity which could result in over estimated effects if overall ability is linked with language acquisition and potential measurement error in the language proficiency measures which would probably result in under estimation of language effects the present study which uses panel data for a 10 year period in germany yields evidence that the latter bias tends to be much larger than the former implying that language proficiency is far more important than suggested by the existing literature

a nonparametric cost approach to scale efficiency starting with farrell fieldhouse 1962 a host of notiparametric models have been developed for calculation of scale efficiency a common property of these models is that they are specified in terms of input output data duality theory has taught us that technological characteristics may be analyzed from either the primal or the dual cost side the purpose of this paper is to introduce a nonparametric dual method of calculating scale efficiency

investigating the cost performance of uk credit unions using radial and non radial efficiency measures abstract this paper examines the relative efficiency of uk credit unions radial and non radial measures of input cost efficiency plus associated scale efficiency measures are computed for a selection of input output specifications both measures highlighted that uk credit unions have considerable scope for efficiency gains it was mooted that the documented high levels of inefficiency may be indicative of the fact that credit unions based on clearly defined and non overlapping common bonds are not in competition with each other for market share credit unions were also highlighted as suffering from a considerable degree of scale inefficiency with the majority of scale inefficient credit unions subject to decreasing returns to scale the latter aspect highlights that the uk government s goal of larger credit unions must be accompanied by greater regulatory freedom if inefficiency is to be avoided one of the advantages of computing non radial measures is that an insight into potential over or under expenditure on specific inputs can be obtained through a comparison of the non radial measure of efficiency with the associated radial measure two interesting findings emerged the first that uk credit unions over spend on dividend payments and the second that they under spend on labour costs

oppositional identities and employment for ethnic minorities evidence from england where a community or group is socially excluded from a dominant group some individuals of that group may identify with the dominant culture and others may reject that culture the aim of this article is to investigate this issue by empirically analysing the potential trade off for ethnic minorities between sticking to their own roots and labour market success we find that the social environment of individuals and attachments to culture of origin has a strong association with identity choice our results also suggest that those non whites who have preferences that accord with being oppositional do experience an employment penalty

gender differences in overeducation a test of the theory of differential overqualification there is little question that substantial labormarket differences exist between men and women among the most researched difference is the male female wage gap many different theories are used to explain why men earn more than women one possible reason is based on the limited geographic mobility of married women robert frank 1978 family mobility is a joint decision in which the needs of the husband and wife are balanced to maximize family welfare job motivated relocations are generally made to benefit the primary earner in the family this leads to a constrained job search for the secondary earner as he or she must search for a job in a limited geographic area since the husband is still the primary wage earner in many families the job search of the wife may suffer individuals who are tied to a certain area are labeled tied stayers while secondary earners who move for the benefit of the family are labeled tied movers jacob mincer 1978 the wages of a tied stayer or tied mover may not be substantially lower if the family lives in or moves to a large city if a large labor market has more vacancies the wife may locate a wage offer near the maximum she would find with a nationwide job search however being a tied stayer or tied mover can lower the wife s wage if the family lives in or moves to a small community a small labor market will reduce the likelihood of her finding a job that utilizes her skills as a result she may accept a job for which she is overqualified and thus earn a lower wage this hypothesized relationship between the likelihood of being overqualified and smsa size is termed differential overqualification frank 1978 and haim ofek and yesook merrill 1994 provide support for the theory of differential overqualification by finding that the malefemale wage gap is greater in smaller smsa s while the results are consistent with the existence of differential overqualification they may also result from other situations as well firms in small labor markets may use their monopsony power to keep wages down 2 local demand shocks are found to be a major source of wage variation both across and within local labor markets robert topel 1986 since large labor markets are generally more diversified a demand shock can have a substantial impact on immobile workers in small labor markets another reason for examining differential overqualification involves the assumption that there are more vacancies in large labor markets while there is little doubt that more vacancies exist in large labor markets there are also likely to be more people searching for jobs in large labor markets if the greater number of vacancies is offset by the larger number of searchers it is unclear whether women will be more likely to be overqualified in small labor markets instead of relying on wages to determine if differential overqualification exists we consider an explicit form of overqualification based on education

when strong ties are strong networks and youth labour market entry the conditions under which young workers find their first real post graduation jobs are important for their future careers and insufficiently documented given their potential importance for young workers welfare to study these conditions and in particular the role played by social ties we use a swedish population wide linked employer employee data set of graduates from all levels of schooling that includes detailed information on family ties neighbourhoods schools class composition and parents and children s employers over a period covering years with both high and low unemployment together with measures of firm performance we find that strong social ties parents are an important determinant for where young workers find their first job the effects are larger if the graduate s position is weak low education bad grades during high unemployment years and when information on potential openings are likely to be scarce on the hiring side by contrast the effects are larger if the parent s position is strong long tenure high wage and if the parent s plant is more productive the youths appear to benefit from the use of strong social ties through faster access to jobs and by better labour market outcomes as measured a few years after entry in particular workers finding their entry jobs through strong social ties are considerably more likely to remain in this job while experiencing better wage growth than other entrants in the same plant firms also appear to benefit from these wage costs relative to comparable entrants starting at a lower base they also benefit on the parents side parents wage growth drops dramatically exactly at the entry of one of their children in the plant although this is a moment when firm profits tend to be growing indeed the firm side benefits appear large enough for at least small firms to increase job creation at the entry level in years when a child of one of their employees graduates

a hybrid algorithm for simultaneous scheduling of production and distribution in multi echelon structures this paper presents a dynamic programming algorithm for simultaneous determination of production batch sizes in an assembly network and distribution batch sizes in a conjoined distribution arborescent network the objective is to minimize average cost per period over an infinite horizon costs consist of processing costs at each node and linear holding costs for inventory final product demand rates may vary among the retail nodes but at each retail node the demand rate is assumed to be known constant and continuous all demand must be met backorders are not permitted the model can be used for a single product or for several products that are temporarily combined for distribution or for scheduling production in a system where several end products are produced from the same intermediate product as in some biochemical manufacturing processes

an economic theory of a credit union the majority of research to date on cus has been empirical cf cargill 1 and kidwell and peterson 7 yet there is serious need to develop a theoretical framework of cu behavior that incorporates their unique characteristics a cu is essentially a financial intermediation cooperative however the standard theoretical treatments of financial intermediaries cf meyer 8 and cooperative enterprises cannot be directly applied to model credit union behavior there are two principal characteristics of cus that prevent this first in a cu and cooperatives in general the members are both the owners of the organization and the consumers of its output or suppliers of its input one cannot simply assume that the members seek to maximize the profit generated by their transactions with the cu irrespective of the price and quantities of those same transactions thus models of a financial firm based on profit maximization cannot be directly translated to a cu environment second in a cu the membership provides both the demand for and supply of loanable funds the cu then intermediates between its member savers and member borrowers this heterogeneity is an inherent source of conflict between members clearly a cu cannot simultaneously maximize its dividend rate for savers and minimize its loan rate for borrowers since most theoretical models of cooperative enterprises assume a homogeneous member objective they are not generally applicable to cus there are two basic requirements for a framework to model cu behavior first the specification of the objective function should focus on the value of cu participation to the members this value should include the prices and quantities of transactions as well as any profit that results second the analysis should explicitly consider the possibility of conflict among members and the resolution of that conflict being a preference to either the borrowers or savers the existing literature on cus contains a wide variety of objective functions hempel and yawitz 5 ignore the owners are consumers issue and simply contend that cus like other financial intermediaries should maximize profit most writers however recognize that profit maximization would be a somewhat incongruous objective for an organization that typically labels itself not for profit murray and white 9 use cost minimization subject to an output constraint keating 6 employs the managerial discretion approach by maximizing the manager s utility function subject to minimum member benefit constraints taylor 11 12 suggests that the cu should minimize the difference between its average loan rate and savings rate paid smith 10 argues that the cu should

the dominance of inefficiencies over scale and product mix economies in banking abstract this study measures and analyzes inefficiencies for all u s banks in 1984 inefficiencies are measured relative to a thick frontier cost function and are found to dominate measured scale and product mix economies most inefficiencies are operational in nature involving the overuse of physical inputs rather than financial involving overpayment of interest also technical inefficiencies proportionate overuse of all inputs dominate allocative inefficiencies improper mix of inputs these results suggest that competitive pressures in banking from deregulation will be focused primarily on banks that do not control costs rather than on those of a particular size or product mix

94 effective policies for a two stage serial inventory system with stochastic demand a two stage inventory system is considered where poisson demand occurs at stage 1 and stage 1 replenishes its inventory from stage 2 which in turn orders from an outside supplier with unlimited stock each shipment either to stage 2 or to stage 1 incurs a fixed setup cost under the assumption that the supply leadtime at stage 2 is zero we characterize a simple heuristic policy whose long run average cost is guaranteed to be within 6 of optimality i e a 94 effective policy the paper also provides heuristic policies for more general inventory systems and reports computational results

meeting strangers and friends of friends how random are social networks we present a dynamic model of network formation where nodes find other nodes with whom to form links in two ways some are found uniformly at random while others are found by searching locally through the current structure of the network e g meeting friends of friends this combination of meeting processes results in a spectrum of features exhibited by large social networks including the presence of more high and low degree nodes than when links are formed independently at random having low distances between nodes in the network and having high clustering of links on a local level we fit the model to data from six networks and impute the relative ratio of random to network based meetings in link formation which turns out to vary dramatically across applications we show that as the random network based meeting ratio varies the resulting degree distributions can be ordered in the sense of stochastic dominance which allows us to infer how the formation process affects average utility in the network

density social networks and job search methods theory and application to egypt we first develop a theoretical model in which individuals are embedded within a network of social relationships we show that conditional on being employed the probability to find a job through social networks relative to other search methods increases and is concave with the size of the network the effects are stronger for the uneducated there is however a critical size of the network above which this probability decreases we then test empirically these theoretical findings for egypt using the 1998 labor market survey the empirical evidence supports the predictions of our theoretical model

matchmaker matchmaker the effect of old boy networks on job match quality earnings and tenure firms often view job applicant referrals from current employees as more informative than direct applications or referrals through formal labor market intermediaries such as placement firms we argue that old boy networks reduce employers uncertainty about worker productivity using jovanovic s job matching model we show that workers hired through the old boy network should 1 earn higher initial salaries 2 experience lower subsequent wage growth on the job and 3 stay on the job longer than otherwise comparable workers hired from outside the network we find considerable support for this theory using data from the 1972 survey of natural and social scientists and engineers

a theoretic framework for the analysis of credit union decision making this paper presents a formal theoretic framework to analyze credit union interest rates on loans and savings deposits the unique motivational and institutional features of a credit union in particular its structure as a financial service cooperative are used to develop the objective function this is based on a comparison of the credit union s rates to alternatively available market rates and includes parameters to recognize the possibility of borrower saver conflict the principal result is that the optimal rates and reactions to exogenous changes depend critically on the preference of the organization toward financial gain to the borrowing and saving members

social contacts and occupational choice social contacts help workers to find jobs but those jobs need not be in the occupations where workers are most productive hence social contacts can generate mismatch between a worker s occupational choice and his comparative productive advantage thus economies with dense social networks can exhibit apparently low labor force quality and as a result low returns to firms investment and depressed aggregate productivity we employ us and european data for the 1990 s to test the key prediction that social contacts distort workers occupational choices in a direction that reduces their apparent productivity we find that the use of social contacts helps find jobs one to two months sooner but leads to individual wage discounts of 5 to 7 and produces negative externalities on aggregate productivity

paired difference analysis of size economies in uk credit unions this study utilizes a paired difference approach to investigate for the existence of scale economies in uk credit unions the analysis is conducted for both credit unions in aggregate as well as a number of sub groups with the latter defined in terms of the trade organization to which credit unions are affiliated this decomposition was viewed as particularly important in that the respective umbrella organizations have different growth strategies the analysis revealed that significant efficiency gains are available through credit unions adopting a policy of asset growth this finding held good irrespective of the umbrella organization to which credit unions belong although the analysis also revealed that the opportunity for efficiency gains was not so pronounced for the members of one of the trade organizations the national federation of credit unions this finding was due to the nfcu s much more overt emphasis on self help and community development particularly in areas of economic disadvantage

job search methods and their success a comparison of immigrants and natives in the uk a major issue in the immigration debate concerns whether immigrants take jobs away from natives in this article we present new evidence on the job search methods used by immigrants and their relative success in gaining employment in the uk we find that 1 immigrant job search is less successful than that of natives 2 immigrants are as likely to gain employment through informal methods as via verifiable routes 3 the probability of success increases with years since migration the finding that immigrants do not effectively compete for jobs may help explain why immigration has little impact on native employment

do friends and relatives really help in getting a good job informal contacts are extensively used by both firms and workers to find jobs and fill vacancies the common wisdom in the economic literature is that jobs created through this channel are of better quality and pay higher wages than jobs created through formal methods this paper explores the empirical evidence for european countries using the european community household panel echp and discovers a large cross country as well as cross industry variation in the wage differentials between jobs found through informal and formal methods across countries and industries wage premiums and wage penalties to finding jobs through personal contacts are equally frequent this paper argues that such variation can be explained by looking at firms recruitment strategies in labour markets where employers invest largely in formal recruitment activities matches created through this channel are likely to be of average better quality than those created through informal networks a simple theoretical model is used to show that employers invest more in recruitment for high productivity jobs and for positions that require considerable training the empirical predictions of the theory are successfully tested using industry level data on recruitment costs

new evidence on the fed s productivity in providing payments services abstract as the dominant provider of payments services the efficiency with which the federal reserve provides such services is an important public policy issue this paper examines the productivity of federal reserve check processing offices during 1980 1999 using non parametric estimation methods and newly developed methods for non parametric inference and hypothesis testing the results support prior studies that found little initial improvement in the fed s efficiency with the imposition of pricing for federal reserve services in 1982 however we find that median productivity improved substantially during the 1990s and the dispersion of productivity across fed offices declined

a better job thanks to personal networks an evaluation for migrants who arrived in france before age 18 it is more difficult for migrants than natives to find a job in their host country so many of them have to accept at least temporarily a job that is below their level of qualification this repr

98 effective integer ratio lot sizing for one warehouse multi retailer systems a warehouse supplies n retailers constant external demand occurs at each retailer and shortages are not allowed there are linear holding costs and fixed costs for ordering at the warehouse and at each retailer the goal is to minimize the long run average cost over an infinite time horizon we define a new class of policies for this problem whose simple structure facilitates both computation and implementation the cost of a policy that is optimal within this class is shown to be within 2 of the cost of an optimal policy for the original problem in the worst case such a policy can be computed in on log n time

power of two single warehouse multi buyer inventory coordination with private information abstract this paper considers the problem of coordinating a single warehouse multi buyer inventory system with private information where the objective is to find a replenishment policy for each facility in the system such that the total average ordering and inventory related cost of the entire system is minimized it is assumed that the objective function and setup and inventory holding cost parameters of each facility are regarded as private information that no other facilities in the system have access to moreover each facility is responsible to specify its own replenishment policy for a given demand power of two inventory theory is used to develop a heuristic for coordinating the inventory system given complete information in turn the heuristic is modified to solve the problem under private information both heuristics are applicable to systems where the cost functions are convex in addition the proposed heuristics are 94 effective if all the facilities adopt the classical eoq assumptions

economies of diversification in the banking industry abstract this paper defines a new measure economies of diversification to examine the cost effect of product line expansion this measure is a special case of expansion path subadditivity and contains economies of scope as a special case a nonparametric frontier technique which isolates the effects of inefficiency and scale is used to measure economies of diversification applied to a set of 468 u s depository institutions operating in 1984 we find slight diseconomies of diversification diseconomies of diversification and inefficiency due to the overutilization of resources are found to be more important determinants of bank costs than is the failure to operate at optimal scale

evaluating the performance of us credit unions credit unions are small cooperative not for profit institutions which distinguishes them from other financial intermediaries in this study we conduct a performance evaluation of credit unions the criteria respect the unique organizational and institutional features of credit unions without losing sight of the fact that they must compete with other financial intermediaries we use nonparametric nonstochastic techniques to measure performance and we use parametric stochastic techniques to attribute performance variation to features of credit unions and their operating environment our sample consists of two thirds of all active credit unions in 1990

frontier estimation and firm specific inefficiency measures in the presence of heteroscedasticity the purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers a heteroscedastic cost frontier model is developed and estimated using bank cost data similar to that used by ferrier and lovell our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process we find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one sided error term

the impact of surplus schooling on earnings some additional findings this paper examines the impact of overeducation or surplus schooling on earnings overeducated workers are defined as those with educational attainments substantially above the mean for their specific occupations two models are estimated using data from the 1980 census though our models data and measure of overeducation are different from those used by rumberger 1987 our results are similar our results show that overeducated workers often earn less than their adequately educated and undereducated counterparts

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

credit unions and low income communities since the late 1980s the number of community based credit unions in britain has grown steadily these are financial co operatives based on low income neighbourhoods owned and controlled by local residents which aim to provide savings and low cost credit facilities to their members although located in economically disadvantaged communities credit unions are not exclusively used by the poor while better off groups save and borrow more a greater proportion of low income users would not have purchased goods and services in the absence of a credit union credit unions are making useful but marginal contributions to the credit and debt problems of low income families they could probably achieve more with additional resources but any intervention by external agencies should be sensitive and avoid damaging the strong mutual aid foundations upon which credit unions are based

job search and network composition implications of the strength of weak ties hypothesis workers find jobs through personal contacts weak and strong ties and formal sources alternative formulations of the strength of weak ties hypothesis suggest 1 weak ties relay job offers more frequently than strong ties or 2 weak tie offers are drawn from a better distribution a formal model shows that both formulations imply a correlation between network composition and a job seeker s minimum acceptable wage however the use of a weak tie is never associated with higher expected wages under the firstformulation and is only sometimes associated with higher expected wages under the secondformulation these results suggest that researchers shouldfocus on job seekers network structures

deposit insurance and risk taking behavior in the credit union industry abstract this paper examines the relationship between deposit insurance and risk taking behavior within the credit union industry time series tests employing industry average financial ratios for federal and state credit unions did not support the increased risk taking hypothesis although federal credit union capital declined immediately following the adoption of deposit insurance this was most likely the result of reduced capital requirements not deposit insurance liquidity and loan delinquency ratios had a negative time trend coefficient implying a decline in risk taking behavior during the post insurance period cross sectional test results employing iowa state chartered credit union data indicated that insured credit unions were better capitalized and more liquid than their uninsured counterparts overall there was no evidence that the adoption of deposit insurance increased the risk taking behavior of credit unions

overeducation undereducation and the british labour market this paper addresses the issue of overeducation and undereducation using for the first time a british dataset which contains explicit information on the level of required education to enter a job across the generality of occupations three key issues within the overeducation literature are addressed first what determines the existence of over and undereducation and to what extent are over and undereducation substitutes for experience tenure and training second to what extent are over and undereducation temporary or permanent phenomena third what are the returns to over and undereducation and do certain stylized facts discovered for the us and a number of european countries hold for britain

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

mismanagement or mismeasurement pitfalls and protocols for dea studies in the financial services sector abstract dyson et al dyson r g allen r camanho a s podinovski v v sarrico c s shale e a 2001 pitfalls and protocols in dea european journal of operational research 132 245 259 suggest that the application of dea presents a range of problems and they suggest that the systematic collection and reporting of these problems would significantly enhance dea practice it is widely accepted that dea studies may be compromised by the problem of data heterogeneity while this problem is expected in studies that cross national boundaries it may also arise in studies for a single country there can for example be significant market and regulatory differences between regions within a single country using a sample of australian credit unions this paper demonstrates the pitfalls and protocols of using dea it is intended that the guidelines provided in this study will enhance dea practice in the financial services sector

dynamic version of the economic lot size model this article originally appeared in management science october 1958 volume 5 number 1 pp 89 96 published by the institute of management sciences a forward algorithm for a solution to the following dynamic version of the economic lot size model is given allowing the possibility of demands for a single item inventory holding charges and setup costs to vary over n periods we desire a minimum total cost inventory management scheme which satisfies known demand in every period disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full n periods

a serial supply chain of newsvendor problem with safety stocks under complete and partial information sharing abstract we consider a supply chain where multiple members are serially connected the decision is to determine the ordering quantity of a member to the next upstream member in the supply chain the basic cost model is similar to the newsvendor problem with additional consideration to safety stock this paper presents optimal approaches for coordination of the supply chain under both complete and partial information sharing in order to maximize the total expected benefit for complete information sharing we develop an optimal coordination algorithm for partial information sharing we propose an optimal coordination algorithm based on the alternating direction method and the diagonal quadratic approximation method a numerical example is discussed to show the optimal convergence of ordering quantities and discuss the properties of the proposed algorithms

some contacts are more equal than others informal networks job tenure and wages the explanation typically given for longer tenure among workers who use informal contacts to find jobs is that relatives and friends reduce uncertainty about the quality of the match between worker and employer an alternative explanation is that workers rely on informal information sources as a last resort such workers remain at their current jobs mainly because they have few alternative choices rather than because of better match quality this article shows that the two different explanations are simultaneously valid for different types of contacts and can account for differences in the wage effects of job contacts

channel coordination and quantity discounts this paper presents a model for analyzing the impact of joint decision policies on channel coordination in a system consisting of a supplier and a group of homogeneous buyers the joint decision policy characterized by the unit selling price and the order quantity is coordinated through quantity discounts and franchise fees both the annual demand rate and the operating cost including the purchase ordering and inventory holding costs depend on the joint decision policy employed this paper contributes by integrating work addressing quantity discounts on inventory and ordering policies and work focusing on the control mechanism provided by quantity discounts in channel coordination it is shown that the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in achieving channel coordination furthermore it is shown that quantity discounts alone are not sufficient to guarantee joint profit maximization the analyses of the general models are illustrated by specific analytical results obtained for a given demand function