a review of the recent empirical literature on displaced workers this article reviews the empirical literature on job displacement job displacement is widespread and strongly countercyclical tending to peak during economic downturns but concentrated in indus

one man one bid abstract we compare two mechanisms to implement a simple binary choice e g adopt one of two proposals we show that when neither alternative is ex ante preferred simple majority voting cannot implement the first best outcome we introduce a simple bidding mechanism where votes can be bought at a quadratic cost and voters receive rebates equal to the average of others payments this mechanism is budget balanced individually rational and fully efficient in the limit moreover the mechanism redistributes from those that gain from the outcome to those that lose and everyone is better off under bidding compared to voting we test the two mechanisms in the lab using an environment with moderate and extremist voters the observed efficiency losses under voting are close to theoretical predictions and significantly larger than under bidding because of redistribution the efficiency gain from bidding benefits mostly the moderate voters

educational attainment industrial structure and male earnings through the 1980s between 1979 and 1989 men s average earnings declined and the percentage of men with low earnings increased much of the decline in mean earnings and the increased incidence of low earnings can be accounted for by changes in the returns to education experience and industry of employment changes that we attribute to demand side factors such as changes in technology shifts in industrial employment patterns had a relatively small effect on mean earnings and low earnings rates however their effects were larger among blacks than among whites and hispanics we also find that educational upgrading over the decade kept mean earnings from falling even further and helped to hold down the growth of low earnings especially among blacks

what happens to wages after displacement faced with limited resources policymakers need to know when and where to target support for displaced workers the academic literature offers little support presenting wide ranging results with no consistent explanation for the observed differences in wages after workers are displaced in this paper we demonstrate that the heterogeneity found in the literature is consistent with varying market conditions the results suggest that support for displaced workers can be more efficiently allocated by considering the timing and location of displacement

accuracy of response in labor market surveys evidence and implications this paper examines the extent of response errors in labor market survey data and explores the implications of such errors for economic analysis explicitly examined are responses to questions on industry occupation union status hours worked and wages analyses are based on two sources 1 a special supplement to the january 1977 current population survey that obtained data from workers and their employers and 2 an exact match of workers and their employers interviewed in the employment opportunity pilot project survey the dual nature of these surveys provides a basis for analyzing the effect of response error on a variety of economic analyses including the trade off between wages and risk the wage impact of unionism and the sensitivity of wage determination models to alternative responses to earnings questions

effects of industry growth and decline on gender and education wage gaps in the 1980s the w e upjohn institute for employment research the uc institute for labor and employment

unemployment risk and precautionary wealth evidence from households balance sheets this paper examines precautionary behavior by relating job loss risk to household net worth we use existing best practice and some new strategies to deal with some problematic issues inherent in this literature regarding proxying uncertainty instrumentation and incorporating theoretical restrictions we do not find precautionary variation in the wealth holdings of households with low permanent income but do find precautionary effects for moderate and higher income households when the dependent variable is total net worth these findings are robust to several alternative specifications but we do not find precautionary responses in subaggregates of wealth that exclude home equity

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

what went wrong the erosion of relative earnings and employment among young black men in the 1980s this paper shows a widening in black white earnings and employment gaps among young men from the mid 1970s through the 1980s earnings gaps increased most among college graduates and in the midwest while gaps in employment population rates grew most among dropouts we attribute the differential widening to shifts in demand for subgroups due to shifting industry and regional employment the falling real minimum wage and deunionization the growing supply of black to white workers that was marked among college graduates and to increased crime among dropouts the different factors affecting subgroups highlight the economic diversity of black americans

the effect of advance notification of plant closings on unemployment using data from the 1984 displaced worker survey the authors model the determinants of time without work following job displacement for a large sample of workers laid off because of plant shutdowns between 1979 and 1984 the major focus of the paper is on the role of advance notification in mitigating unemployment the estimating procedure accommodates right censored observations stemming from continuing or open ended spells of unemployment advance notification is found to have significantly reduced the duration of unemployment of those notified workers who did not draw unemployment insurance benefits and in particular of those who left the plant prior to termination advance notice had much less effect on the time without work of notified workers whose spell length of unemployment was long enough for them to collect unemployment insurance benefits

jobless spells and re employment wages many studies of job loss attribute the earnings losses associated with layoffs to the loss of job occupation and industry specific human capital this paper estimates the effect of jobless spells on post layoff wages using data from the 1984 panel of survey on income participation for a sample of adult white male workers who were permanently laid off between 1974 and 1984 the estimated impact of jobless spells on starting wages and survey date wages several years after re employment are controlled for separations layoffs and quits and for individual and job characteristics the estimates show that jobless spell durations reduce starting wages wage growth in the new job is lower for workers who experience long spell durations a result that suggests acceptance of jobs which are poor matches compared to other workers who spend less time out of work following a layoff the findings support labour force policies which minimize the amount of time a person is out of work

industry specific human capital occupation and firm size evidence from taiwan this paper investigates the importance of various types of human capital and highlights the role played by industry tenure in determining wages in taiwan it also aims to offer possible explanations as to why industry specific human capital is much less significant than it is in the united states empirically it is found that other things being equal accumulating industry tenure decreases earnings for both the least skilled workers and those employed in mid sized firms industry specific skills are not yet deeply implemented in most occupations and firms of all sizes this might also account for the remarkable level of labor reallocation among industries that is observed in taiwan furthermore the capital stock accumulated through education is found to be the most crucial in determining wages in all estimations and a factor considered the engine of growth during the miraculous development of taiwan s economy however the importance of other types of human capital on earnings namely general labor market experience and firm specific human capital varies substantially across groups

advertising learning and consumer choice in experience good markets an empirical examination this article empirically analyzes different effects of advertising in a nondurable experience good market a dynamic learning model of consumer behavior is presented in which i allow both informative effects of advertising and prestige or image effects of advertising this learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time empirical results suggest that in this market advertising s primary effect was that of informing consumers the estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime

wage losses for displaced workers many studies have shown that displaced workers experience substantial wage reductions that are strongly related to their predisplacement job tenure and experience this paper is an assessment of whether firm closures or downturns in more broadly defined labor markets drive the extreme wage losses of high tenure high experience displaced workers i show that the relatively high wage losses of high experience displaced workers are primarily due to their heightened sensitivity to downturns in their state industry and occupation however the large wage losses of high tenure displaced workers are not explained by their sensitivity to these local downturns one interpretation of these facts is that firm specialization is linked primarily to firm specific experience but not to general labor market experience

the role of bounded rationality and imperfect information in subgame perfect implementation an empirical investigation in this paper we conduct a laboratory experiment to test the extent to which moore and repullo s subgame perfect implementation mechanism induces truth telling in practice both in a setting with perfect information and in a setting where buyers and sellers face a small amount of uncertainty regarding the good s value we nd that moore repullo mechanisms fail to implement truth telling in a substantial number of cases even under perfect information about the valuation of the good this failure to implement truthtelling is due to beliefs about the irrationality of one s trading partner therefore although the mechanism should in theory provide incentives for truth telling many buyers in fact believe that they can increase their expected monetary payo by lying the deviations from truth telling become signicantly more frequent and more persistent when agents face small amounts of uncertainty regarding the good s value our results thus suggest that both beliefs about irrational play and small amounts of uncertainty about valuations may constitute important reasons for the absence of moore repullo mechanisms in practice

on decomposing the wage gap a critical comment on blinder s method many studies have found that the impact of schooling on earnings is greater for females than for males despite the fact that females tend to earn less both absolutely and controlling for personal characteristics this study investigates possible

welfare payments and other economic determinants of female migration this article investigates the effects of welfare payments wages and unemployment on women s probability of interstate migration in the united states it also investigates if the income attraction of locations varies with recency of labor market experience welfare gains increase the probability of interstate migration welfare effects are largest for single mothers with small children and stronger among women with no recent labor market experience the welfare effects albeit small are larger than the wage effects the wage effects are weaker among women with no recent work experience ethnic specific analyses suggest differences in migration behavior among anglos african americans and puerto ricans

that s news to me information revelation in professional certification markets i introduction market economies devote substantial resources to certify product quality educational testing services ets offers sat tests for college applicants u s news world report ranks universities underwriters laboratories certifies consumer and industrial products moody s reports bond ratings and accounting companies audit financial reports for public corporations in theory if one party of the trade possesses superior information about product quality a professional certificate can alleviate the information asymmetry and therefore attenuate the lemons problem and facilitate trade akerlof 1970 1 the informational role of professional certification has profound implications for markets yet little is known empirically how professional certifiers behave and compete indeed while theories have advanced to making welfare comparisons across market structures franzoni 1999 lizzeri 1999 and regulators express concerns about the market power of certifiers u s securities and exchange commission sec 2003 little is known about the primitive facts on market structure and certifier performance for example what information does a monopoly certifier provide who obtains useful information from such a certificate how do subsequent entrants compete with the incumbent and whether and to what extent entrants provide information to the market are all fundamental questions to which we have limited insights the lack of clean empirical evidence is not surprising since observational data alone might confound criteria differences and sorting effects rendering field data suggestive but not entirely compelling indeed even when field data circumvent these problems too many theoretically relevant factors change simultaneously to allow a clean comparative static test the goal of this paper is to use two controlled field experiments to provide empirical insights on these basic questions using sportscard grading as an example we employ an approach field experiments that might prove useful for future scholars studying related phenomena for decades a popular tool in the literature to answer such questions has been an event study event studies infer information content by comparing for example market prices before and after the release of bond ratings or analysts earnings report assuming market price is a sufficient statistic of the information available to the market the event study approach has two caveats it is difficult to control simultaneous information flow and it is difficult to pin down the exact timing of the arrival of the certificate rumors may spread before the official announcement we overcome these difficulties by collecting data from one natural field experiment and one framed field experiment see harrison and list 2004 for a detailed discussion of natural versus framed field experiments both experiments are undertaken in naturally occurring settings where the key theoretical factors are identifiable and arise endogenously our chosen market the sportscard grading industry is attractive in this regard for several reasons first there is a generally agreed upon set of traits for grading sportscards and quality is a major determinant of price second the industry is relatively young and thus far has been unregulated third there has been little change in the grading technology but the industry has evolved dramatically over the last 20 yr specifically the first grading service professional sports authenticators psa began operating in 1987 and now belongs to a publicly traded company due to institutional reasons detailed below psa has not changed its grading system since its inception in 1999 the market expanded and two competitors entered the market sportscard guaranty llc sgc entered in early 1999 and beckett grading services bgs entered later in 1999 all three services continue operating today and at least 14 other fringe grading companies have joined the market since 1999

competitive threats constraint and contagion in the multiunit firm do unexpected events experienced by one line of business adversely affect other lines of business in diversified firms we use fine grained data on the film industry in the united states to show that such contagion frequently occurs when a distributor opens a film in theaters and concurrently releases an older title to home video being exposed to a competitive threat a period of unexpected volatility in the theatrical market at the time of a film opening leads the distributor to suffer a loss in sales on the concurrent home video release further analysis revealed that managers responded to these competitive threats by intensifying the advertising and promotion of their films in theaters suggesting that they diverted resources and attention away from home video our results therefore suggest that the effects of unexpected events do spread across lines of businesses within firms and consequently that resource constraints may limit the ability of firms to engage effectively in multiple markets

information and the skewness of music sales this paper studies the role of product discovery in the demand for recorded music we show that releasing a new album causes a substantial and permanent increase in sales of the artist s old albums especially if the new release is a hit patterns in these backward spillovers suggest that they result from consumers discovering the artist upon hearing the new release to explore the implications of consumers incomplete information we estimate a simple learning based model of market demand our results imply that the distribution of sales is substantially more skewed than it would be if consumers were more fully informed

an empirical study of observational learning this article provides an empirical examination of observational learning using data from an online market for music i find that observational learning benefits consumers producers of high quality music and the online platform i also study the role of pricing as a friction to the learning process by comparing outcomes under demand based pricing to counterfactual pricing schemes i find that employing a fixed price the industry standard can hamper learning by reducing the incentive to experiment resulting in less consumer surplus but more expected revenue for the platform

learning dynamics for mechanism design an experimental comparison of public goods mechanisms in a repeated interaction public goods economy incomplete information and dynamic behavior may affect the realized outcomes of mechanisms known to be efficient in a complete information oneshot game an experimental test of five public goods mechanisms indicates that subjects with private information appear to best respond to recent observations this provides predictions about which mechanisms will generate convergence to their efficient equilibrium allocations these predictions match the experimental result that globally stable efficient mechanisms realize the highest efficiency in practice the simplicity of the suggested best response model makes it useful in predicting stability of mechanisms not yet tested

industry specific capital and the wage profile evidence from the national longitudinal survey of youth and the panel study of income dynamics using data from the national longitudinal survey of youth 1979 96 and the panel study of income dynamics 1981 91 i seek to determine whether there is any net positive return to tenure with the current employer once we control for industry specific capital including total experience in the industry as an additional explanatory variable i show that the return to seniority is markedly reduced using gls while it virtually disappears using iv gls at both the one digit and three digit levels therefore it seems that what matters most for the wage profile in terms of human capital is industry specificity not firm specificity

presidential coattails versus the median voter senator selection in us elections abstract we show that senators elected in presidential elections are more ideologically extreme than senators elected in midterm elections this finding is in contrast to the literature suggesting that voters in presidential elections are more ideologically moderate than voters in midterm elections to explain this incongruence we propose a theory of spillover effects in which party labels enable voters to update their beliefs about candidates across contemporaneous races for office unexpected support for a candidate in one race carries marginal candidates from the same party in other races our theory implies that presidential coattails may skew representative government away from the median voter ideal

financial slack strategy and competition in movie distribution organizations that enjoy some slack are believed to make good use of it in their strategic decisions using panel data on firms in the u s film distribution industry between 1985 and 2007 this article examines how financial slack affects the volume of new product introductions the competitive strategies for those releases and their economic performance unexpectedly successful sleeper films are exploited as a source of exogenous financial slack in the econometric analysis the results suggest that unexpected financial slack leads to more product introductions less marketing support for the new products and no improvement in performance these findings are consistent with an attribution process in which managers attempt to replicate extraordinary success even if it is largely random providing real world evidence of a mechanism recently developed in theory and laboratory research

exploring the scope of neurometrically informed mechanism design a basic goal in mechanism design is to construct mechanisms that simultaneously satisfy efficiency voluntary participation and dominant strategy incentive compatibility previous work has shown that this is impossible unless the agents and planner have sufficient information about each other and common knowledge these results have remained largely theoretical because the required information is generally not available in practical applications however recent work has shown that these limitations can be overcome in simple settings using neurometric technologies that provide noisy signals of subjects preferences that can be used in the mechanism design problem here we build on this work by carrying out two new experiments designed to test the extent to which these neurometrically informed mechanisms nims can be applied to more complicated and realistic environments we find robustness to large type and action space and to the degrees of loss and risk aversion observed in most of our sample

mean reversion in investment decisions the case of hollywood one explanation for the comparatively lower quality of movie sequels is selection bias known in personnel economics as the peter principle only abnormally successful movies are selected for a sequel another explanation is a deterministic depreciation in quality due to the decline in the novelty of the sequel s characters and storyline both explanations predict that relative to the original the sequel s performance will revert towards the mean we develop a structural model to decompose the two explanations and estimate its parameters using detailed data on 306 franchise films and 2 823 non franchise films between 1995 and 2014 parameter estimates provide evidence of selection bias for action adventure and horror movies and evidence of a deterministic decline in quality for comedies

labor market conditions and the reemployment of displaced workers the authors of this study use data from the january 1984 current population survey to examine the impact of local labor market conditions on the financial losses of displaced manufacturing workers they find that strong overall growth in the local economy reduced the economic losses of white collar workers whose industry of displacement was declining but not of blue collar workers in the same situation most older poorly educated blue collar workers with long tenure at their pre layoff job suffered large financial losses even when displaced in a growing local economy all workers including those who were young and well educated suffered large financial losses when located in a depressed local economy

secure implementation experiments do strategy proof mechanisms really work strategy proofness requiring that truth telling is a dominant strategy is a standard concept used in social choice theory saijo et al 2003 argue that this concept has serious drawbacks in particular announcing one s true preference may not be a unique dominant strategy and almost all strategy proof mechanisms have a continuum of nash equilibria for only a subset of strategy proof mechanisms do the set of nash equilibria and the set of dominant strategy equilibria coincide for example this double coincidence occurs in the groves mechanism when preferences are single peaked we report experiments using two strategy proof mechanisms where one of them has a large number of nash equilibria but the other has a unique nash equilibrium we found clear differences in the rate of dominant strategy play between the two

do wages rise with job seniority a reassessment the authors provide new estimates of the return to job seniority using a dataset similar to that employed in joseph altonji and robert shakotko do wages rise with job seniority review of economic studies 1987 and robert topel specific capital mobility and wages journal of political economy 1991 they consider the strengths and weaknesses of these studies treatment of economy wide trends their dating conventions for tenure and wages their handling of wage observations that might span multiple jobs and their estimation approaches re estimation points to an effect often years of tenure on the log wage equal to 11 which is above the preferred estimate of altonji and shakotko but far below that of topel changes in earnings distributions and in the employment relationship motivate the examination of more recent data perhaps surprisingly the return to tenure has probably increased over time

unemployment through the filter of memory this paper uses data from the annual work experience survey to construct a new unemployment series based on respondents recollection of unemployment over the previous year it is argued that the ratio of this new series to the official series computed from the monthly current population survey provides an index of the salience or painfulness of unemployment over the past two decades this ratio has declined secularly about 30 percent of this decrease is due to shifts in the composition of unemployment toward demographic groups with low ratios of remembered to currently reported unemployment the remainder is due to a secular decline in salience for younger and older people

relative performance of two simple incentive mechanisms in a public goods experiment we compare the performance of two incentive mechanisms in public goods experiments one mechanism the falkinger mechanism rewards and penalizes agents for deviations from the average contributions to the public good falkinger mechanism the other the compensation mechanism allows agents to subsidize the other agents contributions compensation mechanism it is found that both mechanisms lead to an increase in the level of contributions to the public goods however the falkinger mechanism predicts the average level of contributions more reliably than the compensation mechanism

earnings losses of displaced workers revisited recent literature reviews conclude that job displacement results in sustained earnings losses bruce c fallick 1996 lori g kletzer 1998 and that estimates of the size of those reductions vary with the type of data used in the analysis the industry within which displacement occurs and business cycle conditions the largest estimated losses were obtained using administrative data from pennsylvania during the 1970s and 1980s louis s jacobson robert j lalonde and daniel g sullivan 1993a the data covered a period of high unemployment in a heavily indus trialized state characterized by disproportionate job losses in manufacturing thus the ability to generalize those results to more favorable economic times and states with a greater reliance on service sector employment has been questioned to address these issues administrative data are used to similarly examine the impact of job displacement on earnings losses of workers in connecticut from 1993 to 2004 the work of jacobson lalonde and sullivan jls also provided important methodologi cal advancement by adapting analytical techniques developed for program evaluation james j heckman and v joseph hotz 1989 to the context of job displacement the same techniques fixed effects and time trend estimators as those used in the original jls publication are initially employed here then the methods are extended to include matching estimators developed since their publication both nearest neighbor estimators of average treatment on the treated att and differenced average treatment on the treated datt are adapted to the context of this study heckman hidehiko ichimura and petra todd 1997 heckman et al 1998 and rajeev h dehejia and sadek wahba 1999 2002 the results presented here for connecticut differ in some ways from those found in the work of jls using data from pennsylvania in the period immediately following job loss regardless of the technique employed earnings reductions for workers displaced through mass layoff range from 32 percent to 33 percent jls reported immediate losses of more than 40 percent six years later using the same estimators as jls earnings reductions in connecticut range from 13 percent to 15 percent they report sustained losses in pennsylvania of 25 percent the smaller long term impacts in connecticut demonstrate that under more ordinary economic times esti mated losses from administrative data lie within the range observed using other data sources this finding resolves a long standing conflict among the results of high quality studies that have used differing data sources to study earnings reductions following job loss 1 using two different matching estimators earnings losses six years after mass layoff are 12 percent the matching estimators compare those who experienced mass layoff to compari sons with the same ex ante probability of the event these smaller losses are consistent with the

the costs of worker displacement this study identifies part of the social loss attendant upon displacement as the remaining value of the assets specific to the severed employment relationship a bargaining model is used to link wage tenure profiles to the amount of information firms and workers possess about the duration of that relationship if information is good the profile will flatten as displacement approaches using psid data for workers separated between 1977 and 1981 wage tenure profiles are found not to change this suggests that either workers or both firms and workers are surprised by the displacement the present value of that part of the social loss attributable to the worker s share of firm specific capital is around 7 000 1980 dollars

industrial shifts skills levels and the labor market for white and black males in this paper we estimate the effects of industrial shifts in the 1970s and 1980s on the wages and employment of black and white males we use micro census data for 52 msa s and estimate effects separately by age and education group the results show that industrial shifts did reduce demand for blacks and for less skilled males in the 1970s and 1980s demand shifts away from manufacturing in particular reduced employment and wages for black and white males while the magnitudes of these effects are fairly small for many groups they can account for one third to one half of the employment decline for less educated young blacks in the 1970s these results imply fairly large effects on the earnings of less skilled males in the 1980s as well authors

scar effects of unemployment an assessment of institutional complementarities this article uses panel data from the survey of income and program participation sipp and the european community household panel echp for a comparative analysis of workers post unemployment earnings trajectories in the united states and 12 western european countries across the study sample of industrialized countries results of difference in difference propensity score matching show post unemployment earnings losses to be largely permanent and particularly significant for high wage and older workers as well as for women the analyses also show that negative effects of unemployment on workers subsequent earnings are mitigated through either generous unemployment benefit systems or strict labor market regulation these effects stem partly from favorable behavioral responses that prevent downward occupational and industrial mobility and partly from changes in the overall structure of labor markets favoring the transferability of worker skills between jobs these positive effects materialize despite t

the groves ledyard mechanism an experimental study of institutional design the groves ledyard mechanism theoretically can solve the free rider problem in public good provision in certain environments two questions are of overriding importance in implementing the mechanism the first is related to the actual performance of the mechanism in general the second is the choice of a punishment parameter which is the only parameter that is available for those who may want to actually use the mechanism thus the determination of the role of this variable on mechanism performance is fundamental for any advances along the lines of actual implementation in studying the groves ledyard mechanism we show that the punishment parameter plays a crucial role in the performance of the mechanism by using 1 and 100 we show that under the higher punishment parameter the groves ledyard equilibrium is chosen much more frequently a higher level of the public good is provided and efficiency is higher by examining two behavioral models we show that a higher leads to an increase in the probability of an individual choosing a best response predicted by the model the parameter alone explains nearly 70 of the data in both the cournot and the carlson auster behavioral model we also found that convergence to cournot behavior is faster and more stable under a high than under a low

invited paper learning models an assessment of progress challenges and new developments learning models extend the traditional discrete choice framework by postulating that consumers have incomplete information about product attributes and that they learn about these attributes over time in this survey we describe the literature on learning models that has developed over the past 20 years using the model of erdem and keane as a unifying framework erdem t keane m 1996 decision making under uncertainty capturing dynamic brand choice processes in turbulent consumer goods markets marketing sci 15 1 1 20 we describe how subsequent work has extended their modeling framework and applied learning models to a wide range of different products and markets we argue that learning models have contributed greatly to our understanding of consumer behavior in particular in enhancing our understanding of brand loyalty and long run advertising effects we also discuss the limitations of existing learning models and potential extensions one key challenge is to disentangle learning as a source of

the effect of information on product quality evidence from restaurant hygiene grade cards this study examines the effect of an increase in product quality information to consumers on e rms choices of product quality in 1998 los angeles county introduced hygiene quality grade cards to be displayed in restaurant windows we show that the grade cards cause i restaurant health inspection scores to increase ii consumer demand to become sensitive to changes in restaurants hygiene quality and iii the number of foodborne illness hospitalizations to decrease we also provide evidence that this improvement in health outcomes is not fully explained by consumers substituting from poor hygiene restaurants to good hygiene restaurants these results imply that the grade cards cause restaurants to make hygiene quality improvements

risk of labor displacement and cross industry labor mobility a well supported conclusion of previous research is that displacement entails large and persistent costs for workers it therefore seems reasonable to expect workers to try to anticipate and respond to the risk of displacement using 1983 93 data from the panel survey of income dynamics and the displaced workers supplement to the current population survey the author investigates whether industry specific measures of job loss risk are correlated with workers propensity to cross industry lines for new jobs she finds that a one standard deviation increase in the risk of job loss an 86 increase from the mean level increased the probability of inter sectoral mobility by 10 5 in a sample of white men three factors that appreciably increased the likelihood of inter sectoral mobility in response to job insecurity were voluntary separation from the previous job high educational attainment and being currently employed as opposed to temporarily laid off

valuing new goods in a model with complementarity online newspapers many important economic questions hinge on the extent to which new goods either crowd out or complement consumption of existing products recent methods for studying new goods rule out complementarity by assumption so their applicability to these questions has been limited i develop a new model that relaxes this restriction and use it to study competition between print and online newspapers using new micro data from washington dc i estimate the relationship between the print and online papers in demand the welfare impact of the online paper s introduction and the expected impact of charging positive online prices

french unemployment a transatlantic perspective french unemployment why france and the usa are alike the paper compares the french and us labour markets it shows that differences in unemployment rates are especially acute for young and old workers but appear to be negligible for middle aged workers all french workers however experience job flows that are quite distinct from their american counterparts as they are exposed to long spells of infrequent unemployment which is the opposite to the us case critical differences across ages and skills regarding the patterns of exit from and entry into employment are also displayed the paper dispels the view that these differences originate from the behaviour of the unemployed or the set of institutions that guide their decisions and that this is new to the french labour market daniel cohen arnaud lefranc and gilles saint paul

inter industry mobility and the cyclical upgrading of labor we investigate whether a market clearing model is consistent with industry employment and wage patterns related to the cyclical upgrading of labor we demonstrate that roy s 1951 market clearing

the impact of schooling and industrial restructuring on recent trends in wage inequality in the united states sufficient evidence now exists to confirm a strong rising trend in wage inequality in the united states since at least the mid 1970s still elusive is a definitive explanation for this tendency in the pursuit of one researchers have now begun to turn their attention to two factors 1 on the supply side an apparent rapid growth in the rates of return to education and 2 on the demand side an acceleration in industrial restructuring in particular the shift in employment from goods production to services in this connection the decline in unionization and the expanded exposure of the manufacturing sector to international competition have received renewed consideration this paper contends that it is precisely the increasing returns to schooling in both goods and services in combination with the shift in employment between the two that is responsible for the recent growth in wage dispersion

an experiment in the demand revealing process the principal findings of this experiment are it is somewhat time consuming but not otherwise difficult to employ the demand revealing process in groups of 10 to 60 the ability of the demand revealing process to take account of intensities of preferences is appreciated by many of the persons who have used the process but the departure from one man one vote is strongly resisted by others the outcomes reached by demand revealing differed from majority rule in about one tenth of the cases the improvement in efficiency associated with these reversals of majority rule was 2 25 percent of the net benefit of making the efficient decisions the clarke taxes which would decline in percentage terms as group size increased were 3 04 percent of the net value of efficient decisions for the decisions studied

inter industry wage premiums and industry specific productivity in taiwan by using taiwan s manpower utilization survey data for the 1978 2000 period different inter industry wage premiums in taiwan are observed and the impact of workers industry specific productivity on the wage explored the empirical results show that industry specific skills result in industry stayers having higher wages than industry switchers through their reservation wages it is also found that the pre displacement industry affiliations that are associated with the post displacement wages are explained by the workers unobserved abilities furthermore by comparing the different residual means between industry switchers and stayers based on each industry s wage equation it is found that the switchers are low wage workers who tend to be located in the high wage industries the high wage industry leavers are also found to have higher post displacement wage residuals than the low wage industry leavers these results suggest that the differences in industry wage premiums may be explained by the industry

modeling earnings dynamics in this paper we use indirect inference to estimate a joint model of earnings employment job changes wage rates and work hours over a career we use the model to address a number of important questions in labor economics including the source of the experience profile of wages the response of job changes to outside wage offers and the effects of seniority on job changes we also study the dynamic response of wage rates hours and earnings to various shocks and measure the relative contributions of the shocks to the variance of earnings in a given year and over a lifetime we find that human capital accounts for most of the growth of earnings over a career although job seniority and job mobility also play significant roles unemployment shocks have a large impact on earnings in the short run as well as a substantial long term effect that operates through the wage rate shocks associated with job changes and unemployment make a large contribution to the variance of career earnings and operate mostly through the job specific error components of wages and hours

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

brand extension as informational leverage the marketing literature refers to the concept of brand capital and provides empirical evidence that firms with a large stock of well established brands have an advantage in introducing new products this paper develops a theory of brand extension as a mechanism for informational leverage in which a firm leverages off a good s reputation in one market to alleviate the problem of informational asymmetry encountered in other markets it is shown that brand extension helps a multi product monopolist introduce a new experience good with less price distortion thus the paper provides a theoretical foundation for the concept of brand capital

implementation via approval mechanisms abstract we focus on the single peaked domain and study the class of generalized approval mechanisms g a m s first players simultaneously select subsets of the outcome space and scores are assigned to each alternative and then a given quantile of the induced score distribution is implemented our main finding is that essentially for every nash implementable welfare optimum including the condorcet winner alternative there exists a gam that nash implements it importantly the gam that nash implements the condorcet winner alternative is the first simple simultaneous game with this feature in the literature

experiments with the pivot process for providing public goods interest in demand revealing mechanisms for providing public goods has both waned and then renewed over the past two decades the possibility of using such mechanisms in different venues than originally anticipated sparked the research reported here the specific motivation for this paper is to conduct a series of simple direct tests of one version of the class of mechanisms failure of demand revelation was much more expensive than we had expected even when compared to previous research with related mechanisms the reason for this remains an open question

an analysis of sample attrition in panel data the michigan panel study of income dynamics by 1989 the michigan panel study on income dynamics psid had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership we study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the estimates of several sets of regression coefficients we provide a statistical framework for conducting tests for attrition bias that draws a sharp distinction between selection on unobservables and on observables and that shows that weighted least squares can generate consistent parameter estimates when selection is based on observables even when they are endogenous our empirical analysis shows that attrition is highly selective and is concentrated among lower socioeconomic status individuals we also show that attrition is concentrated among those with more unstable earnings marriage and migration histories nevertheless we find that these variables explain very little of the attrition in the sample and that the selection that occurs is moderated by regression to the mean effects from selection on transitory components that fade over time consequently despite the large amount of attrition we find no strong evidence that attrition has seriously distorted the representativeness of the psid through 1989 and considerable evidence that its cross sectional representativeness has remained roughly intact

umbrella branding as a signal of new product quality an example of signalling by posting a bond i present a signalling model in which a multiproduct firm can use its reputation as a bond for quality by using a brand name for an established product when it introduces a new experience good as out of equilibrium beliefs are specified a false signal may be taken to imply that both the established and the new product are of low quality in contrast the absence of a signal leaves open the possibility that one of the two products is of high quality hence the signal can be credible without excessive sunk costs as long as the bond posted is sufficiently large

the income losses of displaced workers abstract we use a new matched worker firm dataset for the united kingdom to estimate the income loss resulting from firm closure and mass layoffs we track workers for up to nine years after the displacement event and the availability of predisplacement characteristics allows us to implement difference in differences estimators using propensity score matching methods income losses during the first five years after the displacement event are in the range 18 35 percent per year for workers whose firm closes down and 14 25 percent for workers who exit a firm which suffers a mass layoff these losses are largely due to periods of nonemployment which is consistent with previous work from europe but contrasts with that from the united states

long term wage fluctuations with industry specific human capital exploiting long term interindustry demand shifts this article provides evidence that 1 industry level wages do not respond to industry demand conditions 2 at the industry level the employment of young workers responds more to demand shifts than does the employment of experienced workers and 3 the postdisplacement wages of displaced workers are strongly affected by demand in their predisplacement industries these findings are consistent with a model in which worker s investments in industry specific skills pose a barrier to interindustry labor mobility and wages do not respond to spot labor market conditions

quadratic voting and the public good introduction this introduction to the public choice special issue on quadratic voting qv and the public good provides an opinionated narrative summary of the contents and surveys the broader literature related to qv qv is a voting rule proposed by one of us weyl quadratic vote buying http goo gl 8yeo73 2012 lalley and weyl quadratic voting https papers ssrn com sol3 papers cfm abstract id 2003531 2016 building off earlier work by groves and ledyard econometrica 45 4 783 810 1977a hylland and zeckhauser a mechanism for selecting public goods when preferences must be elicited kennedy school of government discussion paper d 70 1980 where individuals buy as many votes as they wish by paying the square of the votes they buy using some currency an appreciation of the history of research in the field suggests that qv is uniquely practically relevant compared to the other approximately pareto efficient mechanisms economists have proposed for collective decisions on public goods however it faces a number of sociological and ethical concerns regarding how a political system organized around qv would achieve the efficiency aims stated in abstract theory and whether the pure aggregate income maximizing definition of efficiency qv optimizes in its simplest form is desirable the papers in this volume flesh out and formalize these concerns but also provide important responses in two ways by suggesting domains where they are unlikely to be applicable primarily related to survey research of various kinds and versions of qv using an artificial currency that maintain many of qv s benefits while diffusing the most important critiques together this work suggests both a practical path for applying qv in the near term and a series of research questions that would have to be addressed to broaden its application

do employers provide insurance against low frequency shocks industry employment and industry wages i use panel data to examine whether long term changes in industry wages are positively related to long term changes in industry employment previous research using repeated cross sectional data found no systematic relationship between these variables using standard fixed effects models to deal with individual heterogeneity i find a robust positive relationship between changes in composition constant industry wages and industry employment this suggests that growing industries attract less skilled individuals in a manner that biases down the estimated relationship between industry employment and wages in repeated cross sectional data the results imply that supply curves facing industries are elastic but upward sloping

swimming upstream trends in the gender wage differential in the 1980s using michigan panel study of income dynamics data for 1979 and 1988 we analyze how a falling gender wage gap occurred despite changes in wage structure unfavorable to low wage workers the decrease is traced to gender specific factors which more than counterbalanced changes in measured and unmeasured prices working against women supply shifts net of demand were unfavorable for women generally and hurt high skilled more than middle and low skilled women by analyzing wages we find support for the notion of a gender twist in supply and demand having its largest negative effect on high skilled women

unemployment history and frictional wage dispersion abstract recent evidence shows that baseline search models struggle to match the observed levels of wage dispersion this paper studies a random matching search model with human capital losses during unemployment wage dispersion increases as workers accept lower wages to avoid long unemployment spells the model explains between a third and half of the observed residual wage dispersion when adding on the job search the model accounts for all of the residual wage dispersion and generates substantial dispersion even for high values of non market time the paper thus addresses the trade off between explaining frictional wage dispersion and the cyclical behavior of unemployment