when today s rewards are tomorrow s endowments the effects of inequality on social competition abstract in this paper we study the role of inequality in a model of repeated social competition where endowments the resources used in the competition and rewards the resources obtained as prizes are connected because the rewards of today s competition determine the endowments of tomorrow s competition we find that the harshness of social competition is maximal for an intermediate level of inequality and that increasing or decreasing inequality beyond that level monotonically mitigates social competition up to completely eliminating it at the extremes if social competition is wasteful utilitarian welfare is maximized in case of equality a greater uncertainty about the connection between today s rewards and tomorrow s endowments mitigates social competition finally there emerge concerns for others resources that are downward and not upward with the value of high social standing which changes non monotonically in the resources of those with lower standing

long run welfare under externalities in consumption leisure and production a case for happy degrowth vs unhappy growth in this paper we contribute to the debate on the relationship between growth and well being by examining an endogenous growth model where we allow for externalities in consumption leisure and production we analyze three regimes a decentralized economy where each household makes isolated choices without considering their external effects a planned economy where a myopic planner fails to recognize both leisure and consumption externalities but recognizes production externalities and a planned economy with a fully informed planner we first compare the balanced growth paths under the three regimes and then we numerically investigate the transition to the optimal balanced growth path we provide a number of findings first in a decentralized economy growth or labor or both are greater than in the regime with a fully informed planner and hence are sub optimal from a welfare standpoint second a myopic intervention which overlooks consumption and leisure externalities leads to more growth and labor than in both the decentralized and the fully informed regime third we provide a case for happy degrowth a transition to the optimal balanced growth path that is associated with downscaling of production a reduction in private consumption and an ongoing increase in leisure and well being

street crime and street culture a model shows how reputation concerns can support widespread street crime a street culture where the direct incentives for such behavior are weak there are social benefits to street reputations but those benefits are dominated when reputation concerns draw into crime those who obtain no direct gain from it the model matches facts about violent crime that a standard model cannot easily explain including low monetary returns disproportionate victimization of the young and poor and high variance in rates across small distances the model generates novel implications for policy and social science including a negative effect of social capital

trickle down consumption financial deregulation inequality and indebtedness over the last thirty years the u s experienced a surge in income inequality coupled with increasing levels of borrowing we model an olg economy populated by two types of household that care about how their consumption compares to that of their peers in this framework individual debt to income ratios decrease with income increases in consumption of rich households lead to increases in consumption of the rest and aggregate borrowing increases with income inequality we calibrate our model to evaluate the welfare implications of the process of nancial liberalization that began in the 1980s our analysis suggests that some of the nancial developments that lead to the recent expansion of credit may have decreased rather than increased welfare

belief based refinements in signalling games abstract there are many economic problems which when modelled as games of incomplete information give rise to many sequential equilibria severely limiting the usefulness of the model there has recently been a large literature devoted to refining the set of equilibria in order to reduce this multiplicity by restricting the set of admissible disequilibrium beliefs this paper argues that the logical foundations of some refinements and the equilibria they focus on are problematic and further proposes an alternative refinement that avoids the difficulties we also provide an existence theorem covering a broad class of signalling games often studied in economics journal of economic literature classification numbers c72 c70 d82

a theory of tolerance abstract we propose a theory of tolerance where endogenous lifestyles and exogenous traits are invested with symbolic value by people value systems chosen by parents for their children affect the esteem enjoyed by individuals in society intolerant individuals attach all symbolic value to a small number of attributes and are irrespectful of people with different ones tolerant people have diversified values and respect social alterity we study the formation of values attached to various types of attributes and identify circumstances under which tolerance spontaneously arises policy may affect the evolution of tolerance in distinctive ways and there may be efficiency as well as equity reasons to promote tolerance an empirical investigation of tolerance of homosexuality demonstrates that our theory helps to shed light on survey data of endorsed values

status intertemporal choice and risk taking this paper takes the position that an individual s concern for relative status is expressed in her preferences we embed this hypothesis in an otherwise conventional model of economic growth and examine its consequences the model generates two kinds of equilibrium in the first all individuals always follow a deterministic consumption and investment strategy such a strategy must be linear in output is independent of payo s and technology and only depends on the discount factor this sort of equilibrium exists when the individual cares only about status and the individual production function is convex in investment in contrast the other kind of equilibrium involves convergence to a steady state in which there is persistent and endogenously generated gambling this kind of equilibrium exists in more plausible circumstances the individual has a utility function that may depend on consumption per se as well as implied status and individual production functions are concave we characterize the unique steady state in such a situation and prove that any dynamic equilibrium path must converge to it risk taking arises not from the presumption of a utility function with strictly convex segments as in friedman savage but naturally from a view of utility as depending on relative status our steady state is broadly consistent with the stylized facts that individuals both insure downside risk and to gamble over upside risk and generates similar patterns of risk taking and avoidance across environments with quite di erent overall wealth levels finally in contrast to friedman 1953 endogenous risk taking here is generally pareto ine cient

merit approbation and the evolution of social structure in this paper we study a society in which individuals gain utility from income and from social approbation income is correlated with class approbation is given to an unobservable trait which must be signalled through the agent s social mobility i e class change mobility is driven by a simple mechanism involving inheritance effort and ability thus social structure class composition is affected by individuals quest for approbation and we study how that affects the emergence and multiplicity of long run social organizations including hybrid forms of dynasties and meritocracies specifically we observe that even though social mobility is driven purely by a meritocratic mechanism pure dynasties can emerge we then introduce a feedback between the size of the upper class and its income value so that effort levels and social structure are jointly endogenous we derive results on equilibrium effort levels and stationary when they exist social structures social organization can converge to a unique steady state multiple long run equilibria or cycles

status seeking and material affluence evaluating the hirsch hypothesis abstract when individuals hold a preference for high relative consumption competition to achieve social status can lead to inefficiently high levels of production and consumption contributing to natural resource depletion and environmental degradation in the 1970s fred hirsch argued that an increasing portion of expenditure is allocated to status seeking as average income rises this paper critiques this hypothesis from two points of view first we note examples from the historical and anthropological literatures suggesting that status seeking is often important in societies with relatively low incomes second we consider a set of analytical models that focus on the economic consequences of status seeking when social status is defined in terms of the algebraic difference between an individual s consumption of a status good and the average consumption level in society hirsch s hypothesis holds true and growth in the level of productivity and output can lead to declines in human welfare if on the other hand status is linked to the ratio of individual and average consumption hirsch s hypothesis is valid only if social status and non status goods are poor substitutes the paper also considers two cases in which social status is defined in terms of the amount of time people devote to status oriented activities under this assumption productivity growth leaves time use unchanged though the value of time devoted to status signaling increases in proportion to total expenditure

macroeconomic implications of conspicuous consumption a sombartian dynamic model this chapter presents a dynamic general equilibrium model in which consumers have status preference i investigate the manner in which capital accumulation is impeded by conspicuous consumption a la corneo and jeanne j public econ 66 55 71 1997a following the literature social norms are given as either bandwagon type or snob type i then show that when the economy is characterized by a bandwagon type social norm capital accumulation exhibits interesting patterns those patterns include for example an oscillating convergence path the rise of the economy feeds its decay through conspicuous consumption and that decay suppresses conspicuous consumption and engenders prosperity as predicted by sombart liebe luxus und kapitalismus reprinted 1967 deutscher taschenbuch verlag munchen 1912

optimal income tax in the presence of status effects abstract the existence of distortions from individuals competing to attain social status by using consumption signals justifies some measure of income tax as a counter acting distortion the question posed here is whether it also constitutes a reason for a more progressive income tax schedule the answer is found to be broadly negative if progressiveness is interpreted as a more convex tax schedule unless the rich are more concerned with status seeking than the poor on the other hand status seeking makes the optimal tax schedule steeper so that redistribution is increased essentially the analysis of status seeking based on a signaling approach confirms and strengthens the existing view of an optimal tax schedule and can be incorporated into the diamond american economic review 88 1998 83 95 approach

the labor market returns to community college degrees diplomas and certificates this article provides one of the first rigorous estimations of the labor market returns to community college certificates and diplomas as well as estimations of the returns to the more commonly studied associate s degrees using administrative data from kentucky we estimate panel data models that control for differences among students in precollege earnings and educational aspirations associate s degrees and diplomas have quarterly earnings returns of nearly 2 400 for women and 1 500 for men compared with much smaller returns for certificates there is substantial heterogeneity in returns across fields of study degrees diplomas and for women certificates correspond with higher levels of employment

social status in economic theory social distinction or status is an important motivation of human behaviour this paper provides a selective survey of recent advances in the economic analysis of the origins and consequences of social status concerns first a selection of empirical research from a variety of scientific disciplines is discussed to underpin the further theoretical analysis i then consider the origins and determinants of tastes for status discuss the endogenous derivation of such preferences for relative standing and assess the different formalizations of these preferences subsequently the consequences of preferences for status are studied for a variety of problems and settings the last section discusses a number of implications of status concerns for normative economics and public policy

unfolding social hierarchies abstract consider a large population of finitely lived agents organized into n different hierarchical levels every period all those placed at each level are randomly matched to play a given symmetric game based on the resulting outcome a fraction of agents who within their own level attain the highest payoffs are promoted upwards on the other hand newcomers replacing those who die every period enter at the lowest level and choose irreversibly the strategy to be played for the rest of their life this choice is made with some noise by imitating one of the strategies adopted at the highest level in this setup the unique long run behavior of the system is fully characterized for the whole class of 2 2 coordination games and two alternative variations of the model the results crucially depend on the key institutional parameters and n in particular it is shown that inefficient behavior prevails in the long run even when risk dominated if promotion is only mildly selective high and the social system is quite hierarchical large n in a stylized manner these parameter conditions may be viewed as reflecting a sort of institutional deficiency that impairs economic performance journal of economic literature classification numbers c70 c72 c73 d72

employer recruitment strategies and the labor market outcomes of new hires i introduction employers and job seekers are brought together for potential matches through their recruitment and job search activities employers may post help wanted signs run newspaper advertisements or seek referrals from private employment agencies job seekers may speak with friends and relatives solicit the aid of the state employment agency or simply walk in and apply these recruitment and search activities help both parties acquire information about each other and the more information they obtain prior to entering an employment agreement the higher the likelihood of a good employment match the crucial role of information in the labor market has been recognized since stigler 1962 but despite a voluminous literature on job matching and organizational behavior in labor markets we know far less about employers recruitment strategies than about job seekers search strategies as granovetter 1995 notes while people are finding jobs employers are finding people to fill them and their behaviors strategies and purposes play a central but often neglected role in the process of matching people to jobs this imbalance in research effort is explained more by a dearth of adequate data describing employer recruitment behavior than by lack of scholarly interest indeed labor economists sociologists psychologists and human resource management specialists have spent the last half century exploiting the meager existing data sets in efforts to learn about employer recruitment behavior in this article i address several empirical questions concerning employer recruitment using the multi city study of urban inequality mcsui a large cross sectional survey of employers in four metropolitan areas of the united states that has not been exploited for a detailed analysis of the relationships among recruitment strategies starting wages and vacancy duration despite the richness of the data set for this purpose the mcsui data contain detailed information on firm and job characteristics and most important for the purpose of this article indicators of the recruitment methods these employers used when hiring the most recently hired worker the data allow a number of interesting questions to be addressed concerning the link between employer recruitment choices and starting wages vacancy duration and the skill levels of new hires because there has been relatively little empirical research done by labor economists on employer recruitment this work with a relatively large representative sample of employers should enhance our understanding of a number of basic questions i consider three of these first i present evidence describing which recruitment methods employers use and how these vary by firm characteristics vacancy characteristics and the skill requirements of jobs i estimate a multivariate probit model with a separate equation for each of 10 recruitment choices in addition to providing information about the relationship of each recruitment method with each of the covariates this method has the attractive feature of allowing for an analysis of the relationships among the unobserved determinants of recruitment choice to my knowledge this methodology is new to the recruitment literature second i present regression evidence showing how vacancy duration varies by recruitment choices some recruitment methods can be expected to be faster than others in generating job applicants however an employer must invest time in screening the applicant pool so the recruitment methods that generate applicants quickly do not necessarily fill vacancies quickly therefore the link between recruitment methods and vacancy durations is an empirical question third i present evidence concerning the relationship between starting wages and recruitment methods in particular i augment standard log wage specifications based on the human capital model with recruitment choices and find that the recruitment variables have explanatory power even in the presence of all of the usual controls

employer search training and vacancy duration we develop a model of optimal employer search strategy when information about match quality is endogenous the model is tested using four data sets two of which have not previously been used as theory predicts we find that when filling positions requiring more training employers search more intensively and extensively employers also search more extensively when hiring workers with more education and with prior experience these findings provide strong evidence of systematic variation in search strategies based on the characteristics of the positions and job applicants factors that influence employer search also affect the duration of a vacancy

social organization status and savings behavior abstract we develop a model of status seeking in the presence of incomplete information and derive its implications for aggregate savings status seeking endogenously takes the form of conspicuous consumption its impact on savings depends on the scheduling of the contests for status over the life cycle if individuals engage in conspicuous consumption when old aggregate savings are increased we also study the role of social segmentation while social segmentation reduces the inequality across status seekers and fuels social rivalry under complete information we show that under incomplete information social segmentation weakens the incentive to strive for greater status

employers on line recruitment and screening practices i introduction at a relatively low cost the internet offers employers and job searchers access to detailed and up to date information about job searchers and job vacancies in different locations around the world as well as novel tools that improve the ease and speed of search 1 it is therefore not surprising that using the internet has become an integral part of employers and job searchers search practices 2 however research has to date revealed relatively little about the internet s role in matching job searchers to jobs about activities that employers and job searchers pursue on line and whether the internet benefits all employers and job searchers equally in this paper we use technology in a novel way in order to collect new data and assess how employers use services offered by on line job boards in an attempt to facilitate their search the data record descriptions of job vacancies that were posted on the on line job board monster com from 2004 to 2006 from each vacancy s description we can identify employers use of on line search tools offered free of charge by monster com that are designed to facilitate employers search we can also identify several vacancy and employer attributes after the data collection we tracked each vacancy for 16 weeks to identify the week a vacancy could no longer be accessed for viewing on the basis of this information we construct a measure of an employer s on line search outcome the duration of a vacancy s posting on monster com we use these insights for two purposes first we examine employers use of services that are offered by monster com the incidence of employers use of these services when posting job openings on line and attributes that can help to explain their use second we examine whether vacancy and employer characteristics can also help to explain how long it takes before employers withdraw postings of their job vacancies from the on line job board we find that not all employers choose to use on line search tools when posting their vacancies on monster com even though the tools can be used free of charge and are designed to facilitate employers search on line recruitment and screening tools are more likely to be used when employers indicate active engagement in search or have a better knowledge of the monster s online search technology due to having used it frequently a standard model of employer search suggests that vacancy characteristics should help to explain employers choice of on line search tools however we find that relatively small differences exist in the likelihood that the online search tools are used across different types of vacancies both vacancy and employer characteristics can help to explain differences in the duration of a vacancy s posting on monster com in a manner that is consistent with a model of employer search in his survey autor 2001 was the first to review potential implications of the internet for the functioning of the labor market at the time when the on line recruiting industry was in its infancy since then several papers have drawn on different data to examine the internet s role in the labor market our paper complements this literature in three respects first it is one of the first to document how employers use services offered by on line job boards to facilitate their recruitment efforts in this respect the paper by hadass 2004 is of some interest using data on the recruitment efforts of a single u s manufacturing firm in the second half of the 1990s hadass finds that new hires who were recruited via the internet experience shorter tenure than those recruited via informal channels but similar tenure to those recruited through newspaper ads or a hired recruitment agency in her analysis hadass can say much more about the internet s role in matching workers to jobs than this paper because the author observes the outcomes of job searchers who were recruited on line and can compare them to the outcomes of job searchers who were recruited through traditional search channels

how important are fixed effects and time trends in estimating returns to schooling evidence from a replication of jacobson lalonde and sullivan 2005 a substantial and rapidly growing literature has developed around estimating earnings gains from 2 year college degrees using administrative data these papers almost universally employ a person level fixed effects strategy to estimate earnings premia net of fixed attributes we note that the seminal piece on which these papers build jacobson lalonde sullivan journal of econometrics 2005 125 1 2 271 304 provides theoretical and empirical evidence for the importance of additionally differencing out individual time trends the subsequent literature has not followed suit through replication we ask whether this matters we show that it does and further that these person level time trends need not be computationally burdensome in large administrative data we recommend them as a unifying econometric standard for future work

inequality and growth in the presence of competition for status abstract we investigate a simple endogenous growth model where agents care about their social status as greater equality tends to provide greater incentives to differentiate oneself redistribution may increase wasteful competitive consumption and lead to lower growth

conspicuous consumption and political regimes evidence from east and west germany abstract this paper investigates the influence of political regimes on the relative importance of conspicuous consumption we use the division of germany into the communist gdr and the democratic frg and its reunification in 1990 as a natural experiment relying on household data that are representative for germany our empirical results strongly indicate that conspicuous consumption is relatively more important in east germany significantly although we find some convergence a considerable gap in conspicuous consumption expenditures remains even 18 years after the german reunification

wealth seeking reconsidered abstract if individuals are interested in their relative wealth position they engage in contests for wealth this leads to a steady state with overaccumulation in a simple growth model it is shown that if some individuals are engaged in wealth seeking activity but others are not the latter might benefit however wealth seeking is not welfare enhancing under usual assumptions concerning production technology the steady state equilibrium is characterized by a marginal productivity of capital that is below the steady state rate of time preference and by emergence of a class structure

toward a theory of vacancies we attempt to further characterize the search strategies of the employer in the article we discuss how characteristics of the employer or conditions that the employer faces affect the optimal search strategies and the probability of filling a vacancy in each period semiparametric and parametric methods are used to estimate hazard rates of filling vacancies the results suggest that for the given sample of vacancies the general form of the hazard function is nonmonotonic additionally the results suggest that those employers who have advance notice of the vacancy may search longer than those employers who do not

conspicuous consumption and race evidence from south africa abstract a century ago thorstein veblen introduced socially contingent consumption into the economic literature this paper complements the scarce empirical literature by testing his conjecture on south african household data and finds that black and coloured households spend relatively more on visible consumption than comparable white households following the approach of charles et al 2009 this paper explores whether the differences in visible expenditures can be explained with a signaling model of status seeking moreover it is assessed to which extent positional concerns motivate conspicuous consumption although the socially contingent share in visible consumption increases with income different incentives to consume conspicuously seem to explain that at every level of income black households spend relatively more on visible consumption than comparable white households in contrast to the findings of charles et al 2009 where differential spending on conspicuous consumption can be found also within each group separately the model s core hypothesis fails to hold within the group of white south africans

social status education and growth this paper investigates the implications of social rewards on the allocation of talent in society and consequently on the process of economic growth we consider two sources of heterogeneity among workers nonwage income and innate ability a greater emphasis on status may induce the wrong individuals that is those with low ability and high wealth to acquire schooling causing workers with high ability and low wealth to leave the growth enhancing industries this crowding out effect taken alone discourages growth growth may be enhanced by a more egalitarian distribution of wealth which reduces the demand for status

conspicuous consumption and race using nationally representative data on consumption we show that blacks and hispanics devote larger shares of their expenditure bundles to visible goods clothing jewelry and cars than do comparable whites these differences exist among virtually all subpopulations are relatively constant over time and are economically large although racial differences in utility preference parameters might account for a portion of these consumption differences we emphasize instead a model of status seeking in which conspicuous consumption is used as a costly indicator of a household s economic position using merged data on race and state level income we demonstrate that a key prediction of the status signaling model that visible consumption should be declining in reference group income is strongly borne out in the data for each racial group moreover we show that accounting for differences in reference group income characteristics explains most of the racial difference in visible consumption

finding the right employee online determinants of internet recruitment in spanish firms this paper analyses the variation of recruitment strategies in spanish firms with special emphasis on the internet using data from the spanish labour trends survey for the period 2001 2011 we study the factors influencing the decision to use online recruitment and explore the differences between internet and eight traditional recruitment channels our results show that the adoption of the internet monotonically increases over the sample period when internet becomes more universal and even in periods with excess of applicants large firms operating in information intensive activities and located in regions more developed and with better infrastructures are more likely to search for new employees online we also find that internet and traditional recruitment methods follow different patterns especially when using personal referrals and public employment services our results suggest the presence of network externalities derived from the increase number of compatible online job seekers

on limiting the market for status signals abstract in many societies individuals care how others view them in their efforts to impress such individuals engage in consumption signals which attempt to establish higher levels of status than their true status type this leads to an inefficiency which offers the possibility of a pareto improving tax policy the impacts of tax policy and benefits on the signalling equilibrium are considered

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

the relative income hypothesis abstract despite its theoretical dominance the empirical case in favor of the permanent income hypothesis is weak contrary to one of its basic implications a growing body of evidence suggests that rich households save a higher proportion of their permanent income than poor households we propose an overlapping generations economy where households care about relative consumption as a result an individual s consumption is driven by the comparison of his lifetime income and the lifetime income of his reference group a permanent income version of duesenberry s 1949 relative income hypothesis across households the savings rate increases with income while aggregate savings are independent of the income distribution

aspirations health and the cost of inequality how does inequality motivate people and at what cost in a model of perpetual youth people have heterogeneous upward looking aspirations they value their consumption relative to the conditional mean of those above them in the distribution their survival depends on health capital produced from time investment and health goods higher fundamental inequality working through the aspirations gap motivates people to work and save more economic outcomes improve but income and consumption inequality worsen because the poor have less capacity to respond on the labor market by diverting resources from health production aspirations also worsen mortality especially for the poor though relative income has a strong negative effect on personal health inequality has a weak effect on population health explaining an empirical puzzle on the relative income and health gradient

internet job search and unemployment durations after decades of stability the technologies used by workers to locate new jobs began to change rapidly with the diffusion of internet access in the late 1990 s which types of persons incorporated the internet into their job search strategy and did searching for work on line help these workers find new jobs faster we address these questions using measures of internet job search derived from the december 1998 and august 2000 cps computer and internet supplements matched with job search outcomes from subsequent cps files we find that internet searchers are positively selected on observables but negatively selected on unobservables a beneficial unemployment duration reducing causal effect of internet job search is consistent with our estimates only if negative selection on unobservables is especially strong in other words only if the population of on line resumes is strongly adversely selected

heterogeneity social esteem and feasibility of collective action abstract in the presence of individual heterogeneity a major problem with egalitarian partnership such as complete income pooling is that individuals of comparatively high ability are induced to exit the arrangement this is nevertheless ignoring the possible impact of social esteem considerations based on a comparison of members performances in this paper drawing inspiration from pooling experiences in a japanese fishery we show that the exit problem can be surmounted if sensitivity to social esteem is neither too strong nor too weak if it is too strong the lower ability agents will exit out of social shame whereas if it is too weak the higher ability agents will not consider it worthwhile to transfer income to their partners when the arrangement is sustainable the lower ability people strive towards limiting the income gap

way station or launching pad unpacking the returns to adult technical education abstract we estimate returns to diplomas and certificates awarded to adult students by public technology centers a niche sector of higher education that elevates occupational and competency based education over transferable credits and traditional degrees technology centers cater to nontraditional students particularly adults seeking part time training in specific skills sub associate credentials arising from tennessee colleges of applied technology increase access to new industries particularly health and industrial mobility explains half of the employment returns to postsecondary diplomas and at least three quarters of the earnings returns to certificates tcat diploma completers earn 707 1034 in additional quarterly earnings over non completers similar to the returns from community college diplomas benefits extend beyond the signal value of completion students who leave without a credential fare significantly better than matched non students with a similar history of earnings

conspicuous consumption snobbism and conformism abstract we develop a model in which consumers purchase a conspicuous good in order to signal high income and thereby achieve greater social status in equilibrium the signalling value of conspicuous consumption depends in an identifiable way on the number of consumers and consumer behaviour is characterized by either snobbism or conformism the market demand curve for the conspicuous good may exhibit a positive slope if consumers are conformist we derive some unconventional policy implications concerning the taxation of luxuries and the voluntary provision of public goods

the measurement of unemployment an empirical approach although the unemployment rate is one of the most widely cited and closely monitored economic statistics the definition and measurement of unemployment remain controversial an important issue is whether non employed persons who display a marginal attachment to the labor force for example those who are available for and desire work but are not searching for work should be classified as unemployed or non participants although this issue has been extensively debated it has never been tested empirically this paper carries out empirical tests of this and related hypotheses using a unique longitudinal data set from canada we find within the marginally attached a waiting group whose behavior indicates that they would be more appropriately classified as unemployed rather than out of the labor force the remainder of the marginally attached exhibit behavior between that of the unemployed and the balance of non participants suggesting that the desire for work among non searchers conveys substantial information about labor force attachment and future employment status our methods also apply to heterogeneity within the unemployed and we investigate behavioral variation linked to differences in job search methods and reasons for entry into unemployment although those using passive job search do exhibit behavior somewhat distinct from active searchers our results reject the practice of classifying passive job searchers as out of the labor force overall our results indicate that the non employed are very heterogeneous so that any single division into unemployment and out of the labor force is unlikely to fully capture the variety of degrees of labor force attachment this abstract was borrowed from another version of this item

the spirit of capitalism and stock market prices in existing theory wealth is no more valuable than its implied consumption rewards in reality investors acquire wealth not just for its implied consumption but for the resulting social status max m weber 1958 refers to this desire for wealth as the spirit of capitalism the authors examine both analytically and empirically implications of weber s hypothesis for consumption savings and stock prices when investors care about relative social status propensity to consume and risk taking behavior will depend on social standards and stock prices will be volatile the spirit of capitalism seems to be a driving force behind stock market volatility and economic growth copyright 1996 by american economic association

social organization in an endogenous growth model we develop an endogenous growth model in which individuals form matches in order to consume goods that are not explicitly traded the matching process endogenously generates a concern for relative wealth and is thereby beneficial for capital accumulation and economic growth we then study how social segmentation in the matching process affects economic growth under strong segmentation social competition over mates occurs inside homogeneous groups this homogeneity increases the severity of the rat race of wealth accumulation and fosters economic growth

veblen effects in a theory of conspicuous consumption the authors examine conditions under which veblen effects arise from the desire to achieve social status by signaling wealth through conspicuous consumption while veblen effects cannot ordinarily arise when preferences satisfy a single crossing property they may emerge when this property fails in that case budget brands are priced at marginal cost while luxury brands though not intrinsically superior are sold at higher prices to consumers seeking to advertise wealth luxury brands earn strictly positive profits under conditions that would with standard formulations of preferences yield marginal cost pricing the authors explore factors that induce veblen effects and they investigate policy implications copyright 1996 by american economic association

cognitive dissonance status and growth of the underclass we present a model of cognitive adaptation to examine the growth and behaviours of the underclass in the model individuals experiencing cognitive dissonance between status seeking and social recognition adapt their attitudes regarding what is deemed status worthy this yields the endogenous formation of an underclass in which non pecuniary social returns counteract the effect of traditional incentives i e wages in motivating behaviour by gaining insight into the process of psychological adaptation of those living in poverty the paper sheds light on economic policies that mitigate the disenfranchisement and hence the growth of the underclass

individual well being in a dynamic perspective this paper explores the determinants of individual well being as measured by self reported levels of satisfaction with income making full use of the panel data nature of the german socio economic panel we provide empirical evidence for well being depending on absolute and on relative levels of income in a dynamic framework this finding holds after controlling for other influential factors in a multivariate setting the main novelty of the paper is the consideration of dynamic aspects individual s own history as well as the relative income performance with respect to the others living in the society under analysis do play a major role in the assessment of well being