globalization and the great u turn income inequality trends in 16 oecd countries the debate on the resurgence of income inequality in some advanced industrial societies has often focused on the impact of an increasingly integrated world economy typified by growing capital mobility heightened international competition and an increase in migration this study represents one of the first systematic cross national examinations of the role of globalization in the inequality u turn results indicate on the one hand that total inequality variation is principally affected by the percentage of the labor force in agriculture followed by the institutional factors union density and decommodification and only then by globalization on the other hand longitudinal variation in inequality while still dominated by the percentage of the labor force in agriculture is also principally affected by aspects of globalization such as southern import penetration and direct investment outflow and to a lesser extent by migration in other words globalization explains the longitudinal trend of inc

skills in the city this paper documents the allocation of skills across cities and estimates the impact of agglomeration on the hedonic prices of worker skills we find that large cities are more skilled than are small cities but only to a modest degree we also show that the increase in productivity associated with agglomeration as measured by the urban wage premium is larger for workers with stronger cognitive and people skills in contrast motor skills and physical strength are not rewarded to a greater degree in large cities urbanization thus enhances thinking and social interaction rather than physical abilities these results are robust to a variety of estimation strategies including using nlsy variables that control for worker quality and a worker msa fixed effect specification

urban unemployment in the eu tertiary sector employment growth and urban size the paper uses regio data to study recent change in unemployment in major urban areas of europe previous results suggested a significant role for tertiarisation in employment and a systematic ass

cities matching and the productivity gains of agglomeration abstract the striking geographical concentration of economic activities suggests that there are substantial benefits to agglomeration however the nature of those benefits remains unclear in this paper we take advantage of a new data set to quantify the role of one of the main contenders the matching of workers and jobs we show that thicker urban labor markets are associated with more assortative matching in terms of worker and firm quality when we estimate establishment level production functions we also find evidence of complementarities between worker and firm quality putting together the production and matching relationships we show that production complementarity and assortative matching is an important source of the urban productivity premium

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

search sorting and urban agglomeration studies have suggested that urban agglomeration enhances productivity by facilitating the firm worker matching process this article develops a model that formalizes this notion and demonstrates that when firm capital and worker skill are complementary in production urban agglomeration will tend to generate more efficient yet segregated matches as a result not only will local market size be positively associated with average productivity it will also generate greater between skill group wage inequality and a higher expected return to skill acquisition recent data from the counties and metropolitan areas of the united states is consistent with each of these implications

worker heterogeneity job screening and firm size a model of job screening is developed in which firms make wage offers to workers based on an imperfect evaluation of their abilities if large firms have higher costs of acquiring information about workers they screen workers with less accuracy and choose a wage compensation scheme different from the one small firms choose this generates the often observed positive correlation between firm size and wages the model also predicts that wage structure and perhaps wage dispersion will differ by firm size and that individuals who acquire more schooling will also choose to work in a larger firm these hypotheses are tested and supported using data from the national longitudinal survey

wage premia in employment clusters how important is worker heterogeneity this article tests whether the correlation between wages and concentration of employment can be explained by unobserved worker productivity residential location is used as a proxy for unobserved productivity and average commute time to workplace is used to test whether location based productivity differences are compensated away by longer commutes analyses using confidential data from the 2000 decennial census find that estimates of agglomeration wage premia within metropolitan areas are robust to comparisons within residential location and that estimates do not persist after controlling for commuting costs suggesting that the productivity differences across locations are due to location not individual unobservables

corporate demography and income inequality we examine the relationship between income inequality and corporate demography in regional labor markets and specify two mechanisms through which the number and diversity of employers in a labor market affect wage dispersion vertical differentiation or variation in the ability of organizations of a particular kind to benefit from labor inputs amplifies inequality through quality sorting as the most productive employees in a particular domain pair with the most productive employers increasing horizontal differentiation variation in the kinds of organizations reduces inequality as individuals can more easily find firms interested in their distinctive attributes and talents our analysis of danish census data provides support for each thesis increased numbers of organizations operating within an industry in a region a proxy for vertical differentiation increases wage dispersion in that industry region variation in wages however declines with increased horizontal differentiation among employers th

human capital externalities effects for low educated workers and low skilled jobs broersma l edzes a j e and van dijk j human capital externalities effects for low educated workers and low skilled jobs regional studies investments in human capital are essential themes in many policy programmes besides the direct private returns of education there is evidence of positive human capital externalities at the level of regions and firms the results in this paper show that both production and consumption externalities have positive effects on wages production externalities are transmitted at the level of firms and not at the regional level for workers in low skilled jobs consumption externalities dominate production externalities workers on low skilled jobs earn higher wages when working in cooperation with workers in high skilled jobs while for low educated workers such cooperation with high educated workers is negative

intertemporal market effect on gender earnings differentials lawyers in canada 1970 80 the conventional methodology for decomposition of cross sectional earnings differentials is extended to include a market effect on intertemporal changes in earnings and to analyse the changes in gender differentials over time the integrated cross sectional and intertemporal methodology is illustrated by a decomposition of the change in the earnings differential that occurred during the 1970s between male and female lawyers in canada an unprecedented rate of growth in the supply of lawyers during the 1970s in canada was associated with changes in the gender earnings differential in the legal profession this rapid supply growth had an almost negligible net impact on female earnings but a negative impact of 15 on the male earnings this explains the narrowing of the earnings differential by almost 30 over the decade although three fifths of the gender differential in 1970 and half of the differential in 1980 were attributable to the differences in the characteristics of the two groups these chang

labor supply hours constraints and job mobility if hours can be freely varied within jobs the effect on hours of changes in preferences for those who do change jobs should be similar to the effect on hours for those who do not change jobs conversely if employers restrict hours choices then changes in preferences should affect hours more strongly when the job changes than when it does not change for a sample of married women we find that changes in many of the labor supply preference variables produce much larger effects on hours when the job changes

why do part time workers earn less the role of worker and job skills part time workers receive considerably lower hourly earnings than do full time workers using current population survey earnings files for september 1995 through december 2002 the author finds that measurable worker and job characteristics including occupational skill requirements account for much of the part time penalty longitudinal analysis of the data indicates that much of the remaining gap reflects worker heterogeneity evidenced by small wage gains and losses among workers switching between part time and full time jobs the lower skills of part time than full time workers result primarily from limited work experience and accumulation of human capital little evidence can be found of a large wage gap between part time and full time women a part time wage penalty is found for men but men account for less than one third of total part time employment

industrial reallocation across us cities 1977 1997 abstract between 1977 and 1997 us employment shifted dramatically in favor of industries that used skilled labor intensively during this same period some cities withered while others prospered this paper examines employment growth in 39 industries across 316 cities to evaluate the importance of learning by doing industry specific location fundamentals human capital externalities and hiring cost explanations in these geographic shifts growth in industries that used skill intensively was particularly sensitive to the presence of local human capital that growth was almost always negatively related to the initial size of the industry within the city implies a limited role for learning by doing and industry specific location fundamentals stories

the link between ability and specialization an explanation for observed correlations between wages and mobility rates wage levels and turnover rates are negatively correlated across types of employment and this fact is often interpreted as evidence that high wage jobs are rationed a simple training model illustrates however that this correlation may arise because able workers have an incentive to choose highly specialized jobs in any job the most able workers possess the most valuable stocks of specific skills and therefore face the highest mobility costs thus able workers may have a comparative advantage in specialized employments data from the national longitudinal survey of youth provide an opportunity to evaluate the merits of the training model developed here data on worker training and mobility provide support for several implications of the model the model also provides new ways to interpret existing results in the literature on interindustry wage differentials

technology and firm size wage differentials in colombia mexico and taiwan china in many economies studies have found large wage differentials not accounted for by workforce characteristics collective bargaining or market power researchers attribute these differentials to either unobserved worker quality or pay incentives designed to elicit worker effort this article finds empirical support for an alternative explanation these wage differentials result from firms technology generating activities using firm level data from colombia mexico and taiwan china the article compares the effects of research and development worker training and exports by employers on the wages of skilled and unskilled workers the results suggest that technology investments lead to large wage premiums for skilled workers but not for unskilled workers these wage premiums are primarily the result of investments in research and development and in training while exporting is relatively less important except in colombia

job search hours restrictions and desired hours of work a structural empirical job search model is presented that incorporates the labor supply decision of individuals the arrival of a job offer is modeled as a random draw from a wage hours offer distribution subjective information is used on desired working hours to identify optimal hours from offered hours policy simulations are performed to address several policy questions does a decrease in unemployment benefits lead to the acceptance of jobs with less preferred working hours how does a decrease in the length of the standard working week affect the job acceptance behavior of the unemployed

unemployment and female labour supply the definition of labour force participation in the standard labour supply model stands in sharp contrast to that used in compiling the labour force statistics in the labour supply models only those supplying positive hours of work are considered to be labour force participants on the other hand participation in the labour force statistics is often defined to include not only those supplying positive hours but also those actively searching for work this paper is an attempt to reconcile these concepts by allowing unemployed workers to enter a generalisation of the standard labour supply model this turns out to be a convenient way to enter demand side factors directly into the determination of an individual s labour market position the model is applied with some success to the working behaviour of married women in the uk family expenditure survey

social polarisation in global cities theory and evidence this paper examines the debate over social polarisation in global cities it focuses on the claims made by sassen that the processes of economic change in such cities are leading to a growing polar

wages employment structure and employer size wage premia their relationship to advanced technology usage at us manufacturing establishments a common theme in the labour econiomics literature is that use of advanced technology in production requires a skilled and educated workforce using a new survey of production processes at us manufacturing plants we ask whether plants that employ advanced technology require a skilled workforce we find that plants that use the most advanced technology pay the highest wages and employ the greatest fraction of non production workers who are generally regarded as more skilled than production workers the inclusion in standard wage regressions of variables that indicate the use of advanced technology reduces the size wage premia by as much as 60 for some size categories

work hour mismatch and job mobility adjustment channels and resolution rates this paper analyses the role of job changes in overcoming work hour constraints and the work hour mismatches resulting from these constraints i e differences between actual and desired work hours building on previous findings that job change increases the flexibility of actual work hours the study addresses two as yet neglected questions in the context i how do changes in desired work hours in addition to changes in actual work hours contribute to the resolution of these mismatches ii does the increased flexibility help actually to resolve work hour mismatches we exploit information about the magnitude of the prevailing mismatch to improve both the credibility and interpretation of the results we find that job change increases the probability of resolving work hour mismatches but far less than expected with free choice of hours across jobs instead large fractions of workers either stay or switch into overemployment we thoroughly investigate the robustness and heterogeneity of our results

match bias from earnings imputation in the current population survey the case of imperfect matching this article examines match bias arising from earnings imputation wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings the latter assigned earnings of donors regressions including attributes not used as imputation match criteria e g union are severely biased match bias also arises with attributes used as match criteria but matched imperfectly imperfect matching on schooling age flattens earnings profiles within education age groups and creates jumps across groups assuming conditional missing at random a general analytic expression correcting match bias is derived and compared to alternatives reweighting a respondent only sample proves an attractive approach

urban resurgence and the consumer city cities make it easier for humans to interact and one of the main advantages of dense urban areas is that they facilitate social interactions this paper provides evidence for the us suggesting th

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

social polarisation economic restructuring and welfare state regimes the central argument of this paper is that it is misconceived to view social polarisation of occupational structure and incomes in global cities as either inevitable or as a direct product of econo

human capital and information this paper examines the issue of the establishment size wage effect it analyzes a cross section for the year 1979 with information on 607 individuals and the 60 private sector establishments where they work it discusses four theories of the establishment size wage effect and uses empirical proxies to test them it shows that when a dummy variable on computer access in the establishment is introduced as a regressor the establishment size variable is an insignificant regressor this result and other evidence supports the contention that the establishment size coefficient captures the effect of unobserved human capital accumulation

job changes and hours changes understanding the path of labor supply adjustment we use british panel data to investigate single women s labor supply changes in response to three reforms that affected individuals work incentives we use these reforms to identify changes in labor supply there is evidence of small hours of work effects for two of such reforms a third reform in 1999 instead led to a significant increase in single mothers hours of work the mechanism by which the labor supply adjustments were made occurred largely through job changes rather than hours changes with the same employer this is little overall effect of the reforms on wages

does city structure affect job search and welfare we develop a model in which workers search efficiency is negatively affected by access to jobs workers location in a city is endogenous and reflects a trade off between commuting costs and the surplus associated with search different configurations emerge in equilibrium notably the unemployed workers may reside far away segregated city or close to jobs integrated city we prove that there exists a unique and stable market equilibrium in which both land and labor markets are solved for simultaneously we find that despite inefficient search in the segregated city equilibrium the welfare difference between the two equilibria is not so large due to differences in commuting costs we also show how a social planner can manipulate wages by subsidizing taxing the transport costs and can accordingly restore the efficiency

local labor force education new business characteristics and firm performance it is often asserted that a highly educated workforce is vital to improving the competitive position of american businesses especially by boosting entrepreneurship to examine this contention we use population census data and a new panel data of startup firms to examine how the education and skill level of the local labor force are related to the creation and success of new businesses this paper studies relationship between education entrepreneurship and businesses outcomes and considers simultaneously both the education of the entrepreneur and of the workforce where the entrepreneurs operate their businesses consistent with this simultaneous focus our initial results indicate that more educated entrepreneurs tend to be located in metropolitan areas with more educated workforces moreover highly educated areas have above average entrepreneurship rates finally the level of education of entrepreneurs is strongly related to positive business outcomes especially for college graduates compared to those with less than a four year degree

evolution of the gender earnings gap among canadian university graduates this paper reports the results of an empirical analysis of the gender earnings gap among recent canadian bachelor s level university graduates the overall gap as of two years leaving university narrowed significantly across successive cohorts of graduates but widened significantly from two to five years out for all groups differences in the explanatory variables explain account for between 40 and essentially the entire gap across the different periods this portion rising from two to five years out and across cohorts by the final group all of the gap is thus explained at the two year point in time and most of it is explained at the five year mark meaning that labour market returns measured in this manner are largely gender neutral for the last group of graduates hours of work is the single most important influence while past work experience job characteristics family status and province of residence and language have smaller and more mixed effects

working part time by choice or by constraint the selection of workers into part time jobs and the wages they earn are analysed using the 1989 labour market activity survey we focus on the distinction between voluntary and involuntary part time workers since involuntary part time workers earn substantially lower wages than other workers we find that the selection of individuals into involuntary part time work is more closely tied to job characteristics than personal or human capital characteristics the lower wage earned by involuntary part time workers is largely due to differences in returns and selection effects rather than differences in endowments

productivity and city size a critique of the evidence a critique of two leading articles in the productivity and city size literature results in revised estimates of the productivity advantages of large cities in particular extant estimates of the elasticity of productivity with city size are revised downward by over 100 percent for the manufacturing sector and about 25 percent for the entire urban economy after revision productivity advantages of larger cities are found to be much larger for the nonmanufacturing sector than for the manufacturing sector hence revitalization policies for large cities should be focused on nonmanufacturing sectors

post industrialisation job opportunities and ethnocentrism a comparison of twenty two dutch urban economies this article assesses the consequences of the transition to a post industrial urban economy for labour demand and ethnocentrism in the 22 dutch urban agglomerations using municipal level data as well as surveys it is shown that the labour market of the least post industrial cities yields low labour demand for lower educated urbanites upgrading professionalisation thesis while the labour market of the most post industrial cities yields high labour demand for lower educated urbanites polarisation thesis it is furthermore found that lower educated natives in the former are more ethnocentric than in the latter however contrary to what is often claimed in urban studies and the social sciences at large this proves not to be driven by job scarcity in the least post industrial cities the article concludes with suggestions on what might be responsible for this finding

different firm size effects on wages for supervisors and workers abstract we find that i the plant size effect for supervisors is at least double that of non supervisors ii the difference is statistically significant and iii the firm size effect for supervisors is not explained by differential returns on standard variables

urban development excessive entry of firms and wage inequality in developing countries this paper examines the short and long term effects of urbanisation via favourable urban development policies on income distribution and social welfare for a developing country in which the urban manufacturing sector is characterised by imperfect competition and free entry urbanisation shifts rural workers to the highly productive urban sector while causing production in urban firms to expand because of scale economies however urbanisation may worsen wage inequality between skilled and unskilled labour in the short term in the long term urbanisation can attract new firms to the urban sector and favourable urban development policies may result in excessive entry of firms which can amplify wage inequality in the economy this entry amplifying effect is confirmed empirically especially for low and lower middle income countries if the entry effect is not considered the impact of urbanisation on wage inequality could be understated by 13 for low and lower middle income countries

after work shopping employment effects of a deregulation of shop opening hours in the german retail sector abstract this study investigates the impact of a deregulation of shop opening laws on employment in the german retail sector exploiting the gradual change in the opening times of shops across states and using data from the german socio economic panel difference in differences estimates indicate an average increase in the employment probability driven by a rise in the likelihood of working marginal part time hours workers in small firms are likely to experience a reduction of their propensity to work for individuals facing high family related supply side constraints the change in shop opening hours has opposing effects on employment positive on lower and negative on upper parts of the hours distribution overall the deregulation is estimated to have raised the likelihood of working fewer hours than desired by the workers

discrete hours labour supply modelling specification estimation and simulation the assumption behind discrete hours labour supply modelling is that utility maximising individuals choose from a relatively small number of hours levels rather than being able to vary hours worked continuously such models are becoming widely used in view of their substantial advantages compared with a continuous hours approach when estimating and their role in tax policy microsimulation this paper provides an introduction to the basic analytics of discrete hours labour supply modelling special attention is given to model specification maximum likelihood estimation and microsimulation of tax reforms the analysis is at each stage illustrated by the use of numerical examples at the end an empirical example of a hypothetical policy change to the social security system is given to illustrate the role of discrete hours microsimulation in the analysis of tax and transfer policy changes

job search in thick markets abstract i analyze empirically the effects of urban and industrial agglomeration on both search behavior and the efficiency of matching the analysis is based on a unique panel data set from the italian labor force survey micro data covering 520 randomly drawn local labor market areas 66 of the total over the four quarters of 2002 i compute transition probabilities from non employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched i then test whether these are affected by market size industrial variety and or industry specialization the main results indicate that market size and industry specialization raise job seekers chances of finding employment conditional on having searched while industrial variety is not significantly different from zero finally the effect of agglomeration on non employed individuals search behavior cannot be significantly distinguished from zero

constrained by hours and restricted in wages the quality of matches in the labor market this paper examines the explicit loss born by workers who face constraints in their working hours by analyzing differences in actual and desired hours and wages men tend to be underemployed while women are evenly split between over and underemployment losses in surplus are generally small but 10 of underemployed men and women experience losses of more than 34 or 50 of surplus respectively the loss measure is also an important determinant in predicting labor market transitions meaning increases in surplus losses generate a higher probability of changing from workers present jobs or changing the number of hours jel j22 j41

city structure search and workers job acceptance behavior abstract this paper develops a stochastic search model having a monocentric city structure and investigates how city structure affects workers job acceptance behavior and a labor market in the model workers reside in a city and commute to the central business district cbd to work when employed and to be interviewed when unemployed when a job searcher contacts a firm having a vacant job he she observes the level of training costs necessary for employment and decides whether to accept the job it is shown that there exists a unique market equilibrium in which the employed live close to the cbd and the unemployed reside far away from the cbd analysis shows that 1 improvement of commuting technology induces job searchers to accept more costly jobs and lowers the unemployment rate in the city 2 growth of the city makes job searchers less tolerant of training and raises the unemployment rate and 3 as job searchers search more intensively they become choosier if commuting costs are sufficiently small efficiency properties of the equilibrium are also explored

new firm survival new results using a hazard function a limitation of audretsch s 1991 study of new firm survival was the level of aggregation to industries this precluded linking establishment specific characteristics such as organizational structure and size to post entry performance the purpose of this paper is to relate the post entry performance of individual establishments not only to their technological and market structure environments but also to establishment specific characteristics we do this by estimating a hazard duration function for more than 12 000 individual establishments in u s manufacturing started in 1976 by tracking their subsequent performance over a ten year period we conclude that establishment specific characteristics which audretsch was not able to capture in his earlier study play an important role in shaping the exposure to risk confronting new establishments copyright 1995 by mit press

cities and the growth of wages among young workers evidence from the nlsy abstract human capital based theories of cities suggest that large economically diverse urban agglomerations increase worker productivity by increasing the rate at which individuals acquire skills one largely unexplored implication of this theory is that workers in big cities should see faster growth in their earnings over time than comparable workers in smaller markets this paper examines this implication using data on a sample of young male workers drawn from the national longitudinal survey of youth 1979 cohort the results suggest that earnings growth does tend to be faster in large economically diverse local labor markets defined as counties and metropolitan areas than in smaller more specialized markets yet when examined in greater detail i also find that this association tends to be the product of faster wage growth due to job changes rather than faster wage growth experienced while on a particular job this result is consistent with the idea that cities enhance worker productivity through a job search and matching process and thus that an important aspect of learning in cities may involve individuals learning about what they do well

the division of labor coordination costs and knowledge this paper considers specialization and the division of labor a more extensive division of labor raises productivity because returns to the time spent on tasks are usually greater to workers who concentrate on a narrower range of skills the traditional discussion of the division of labor emphasizes the limitations to specialization imposed by the extent of the market we claim that the degree of specialization is more often determined by other considerations especially emphasized are various costs of coordinating specialized workers who perform complementary tasks and the amount of general knowledge available

cultural amenities and unemployment in dutch cities disentangling a consumerist and productivist explanation for less educated urbanites varying unemployment levels across urban economies previous studies on the advanced economies have shown that unemployment levels of the less educated are low in cities with high employment shares in the advanced producer services scholars have consistently interpreted this finding according to sassen s polarisation thesis this article confronts this production based interpretation with a competing consumption based explanation which focuses on the role of cultural amenities analysing data on 22 dutch metropolitan agglomerations between 1996 and 2008 it is shown that in line with consumerists notions of richard florida advanced producer services settle in cities that are rich in cultural amenities instead of the other way around as classical labour follows capital explanations imply yet only advanced producer services prove to reduce the unemployment levels of the less educated meaning that the polarisation thesis and not the theory on cultural amenities is a valid explanation for the low level of unemployment in post industrial cities

low pay and income in urban and rural areas evidence from the british household panel survey this paper examines the extent of urban rural differences in low pay and the link between low pay and low incomes using data on urban and rural residents from the british household panel survey for 1991 98 the results suggest that overall urban wages were significantly less than accessible rural but significantly more than remote rural wages even after adjustments were made for differences in observed characteristics a lower percentage of urban workers who experienced low pay were also resident in low income households lower urban in employment and in self employment poverty were found relative to poor remote rural households even after differences in the characteristics across the different samples were controlled for

the attenuation of human capital spillovers abstract this paper uses 2000 census data to estimate the relationship of agglomeration and proximity to human capital to wages the paper takes a geographic approach and focuses on the attenuation of agglomeration and human capital effects differencing and instrumental variable methods are employed to address endogeneity in the wage agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables three key results are obtained first the spatial concentration of employment within five miles is positively related to wage second the benefits of spatial concentration are driven by proximity to college educated workers an instance of human capital spillovers third these effects attenuate sharply with distance

compensating differentials for shift work a model analyzing the choice of shift is developed and estimated using data from two supplements to the current population survey the findings show a positive wage premium for shift work that varies with personal characteristics and there is strong evidence showing the importance of self selection as workers with low potential daytime earnings are more likely to choose night work and supplement their earnings the findings demonstrate that cross section estimates of wage premiums for union membership and firm size are biased upward because they pick up some of the compensating differential for shift work

unemployment questions and some answers in more or less every country in the oecd unemployment was lower in the decades following the second world war than in any other period of comparable length either before or since for example in britain unemployment has exceeded 5 in every peacetime decade from 1850 onwards except for the 1950s and 1960s alternatively as we can see in table 1 p 779 average unemployment in the 1980s and 90s is higher generally much higher than in the 1960s in every country considered why this is so is one of the questions which underlies this paper a second question which is also illustrated in the unemployment numbers presented in table 1 p 779 concerns the causes of the enormous variation in unemployment rates across the oecd countries as we shall see these are difficult questions the first in particular is one for which we do not have a complete answer by this i do not mean that we do not have theories which are broadly consistent with these numbers in fact we have theories consistent with more or less any numbers what we lack is a satisfactory empirical explanation of the time series pattern of oecd unemployment in what follows we remain focused on these two questions first considering the theoretical background and then looking at some possible answers we finish with some speculative conjectures on the first question

survival of the fittest in cities urbanisation and inequality we develop a framework that integrates natural advantage agglomeration economies and firm selection to explain why large cities are both more productive and more unequal than small towns our model highlights complementarities among those factors and matches a number of key stylised facts about cities a larger city size increases productivity via selection and higher urban productivity provides incentives for rural urban migration tougher selection increases the returns to skills and earnings inequality in cities we illustrate a multi city version of the model numerically and explore the formation of new cities the growth of existing cities and changes in income inequality

regional unemployment disparities and their dynamics martin r 1997 regional unemployment disparities and their dynamics reg studies 31 237 252 unemployment in the united kingdom has doubled every decade since the 1960s regional unemployment trends during this period are shown to have been characterized by a high degree of synchronicity and regional unemployment disparities by a remarkable persistence this persistence or stability of the regional unemployment structure or what can be termed co integration of the regional labour market system is argued to be an equilibrium phenomenon although the unusual recession of the early 1990s appears to have disturbed this stable pattern of regional disparities whether this change represents a temporary shock or marks a shift to a new equilibrium geography of unemployment is as yet unclear martin r 1997 les ecarts du chomage regional et leur dynamique reg studies 31 237 252 au royaume uni le chomage a doubletoutes les decennies depuis les annees 60 pendant cette periode ce qui caracterise les

unravelling the global city debate on social inequality a firm level analysis of wage inequality in amsterdam and rotterdam in this article an assessment is made of the consequences of globalisation for urban wage inequality using data on employers in the dutch cities of amsterdam and rotterdam it is shown that simpl

urban effects on participation and wages are there gender differences abstract this paper estimates participation and wage equations using panel data from the united kingdom to explore gender differences in urban wage and participation premiums the results suggest a small but economically significant urban participation premium for women but none for men results from the wage estimations suggest that after controlling for sample selectivity observed and unobserved heterogeneity the urban premium is larger for women this wage premium is also larger for married or cohabiting women relative to others there is also evidence of higher urban returns to experience for men and lower urban wage depreciation for both men and women

the dutch creative class and how it fosters urban employment growth this paper examines richard florida s creative capital theory in comparison with the human capital theory using a cross section of dutch cities and towns as the sample a class of dutch creative people has been devised with creative and innovative occupations containing 19 per cent of the total dutch labour force employment growth in dutch cities and towns can be predicted both from local education levels and from the presence of a large creative class but especially from the latter this is largely due to employment growth in commercial and financial services and to newly started companies it is concluded that in theory creativity is not very different from human capital nevertheless florida s creative class is a better standard to measure human capital than are education levels

an empirical index for labor market density we derive a structural index for labor market density based on the ellison glaeser index for industry concentration the labor market density index serves as a proxy for the number of workers that are potentially available for jobs in a particular area the index is based on observed home work location patterns it is particularly useful for testing theories where the scale of the market matters we apply this index to a standard wage equation and find that it explains almost half of the cross region wage variance

post industrialisation immigration and unemployment how and why the impact of immigration on unemployment differs between dutch cities studies on the substitution thesis in advanced economies show scattered results the impact of immigration on the wages and likelihood of unemployment of the less educated varies strongly both studies on the substitution thesis itself and studies on the unequal post industrial development of urban economies suggest that this is because the substitution thesis is conditional on the type of urban economy the empirical validity of this suggestion is tested by comparing the impact of immigration on the employment level of the less educated among 22 dutch metropolitan areas the findings corroborate the central hypothesis in strong service oriented urban economies the impact of immigration on unemployment levels is mitigated because of high labour demand for the less educated

is bigger still better the decline of the wage premium at large firms author affiliation william e even evenwe muohio edudavid a macpherson david macpherson trinity edu acknowledgment we thank daniel becker christopher bollinger and barry hirsch for helpful comments 1 introductionlarge firms pay higher wages than small firms this fact was first documented nearly 100 years ago and has been confirmed by myriad studies since then considerable effort has been directed toward testing different theoretical explanations for the size premium these include the fact that larger firms employ a more skilled work force and provide them with more and better capital pay efficiency wages to deal with greater monitoring costs pay compensating differences for less pleasant working conditions or greater risk that results from the type of human capital that is acquired or share rents with workers because of union threats or monopoly profits while there has been extensive research attempting to determine the importance of these different explanations of the size premium a recent trend has gone unnoticed namely the firm size premium has fallen substantially over the past 20 years for example we show that workers in firms with over 500 workers earned 55 more than workers in firms with fewer than 25 workers in the early 1990s our most recent data indicate that the size premium dropped by 15 percentage points over the past 20 years we also show that the size premium fell much more rapidly among less educated workers for example among workers with less than a high school degree the size premium fell by 30 percentage points this study documents the trends in the size premium and explores some possible explanations for the trends section 2 provides an overview of the theoretical explanations and empirical evidence on the size premium in section 3 we discuss our data and review the evidence on trends in the size premium empirical analysis of the trends is provided in section 4 our main conclusions are as follows first the size premium dropped over the past 20 years for two primary reasons i the type of worker employed by large and small firms has become more similar over time and ii large and small firms have become more similar in terms of the ways in which they reward workers holding observed characteristics constant in addition while the size premium has diminished over time it remains quantitatively significant particularly among highly educated workers 2 backgroundoi and idson 1999 provide a wide ranging summary of the extant research on the size premium their review points out that the size premium was first documented nearly 100 years ago among female workers at textile firms their summary of empirical studies shows that the largest firms e g firms with 500 or more employees pay wages that are 30 50 higher than those of the smallest firms e g firms with fewer than 25 employees numerous theories for the size premium have been proposed and no single theory is capable of providing an empirical explanation for the entire size premium the more prominent theories for the size premium are based upon size related differences in monitoring costs capital technology working conditions monopoly power or union effects the monitoring costs explanation for the size premium first proposed by oi 1983 argues that greater monitoring costs at large firms cause them to hire more able workers to conserve on monitoring costs because larger firms hire more able workers wages increase with firm size in addition because of greater monitoring costs large firms may be more likely to pay efficiency wages or deferred pay to reduce monitoring problems and utilize higher capital labor ratios to conserve on the number of workers empirical evidence indicates that the greater use of advanced technology by large firms explains part of the size premium dunne and schmitz 1995 reilly 1995 tan and batra 1997 troske 1999 yu et al

search in cities the aim of this paper is to expose the recent developments of urban search models which incorporate a land market into a search matching framework using these models we will be able to explain why unemployment rates vary within a city how city structure affects workers labor market outcomes how unemployment benefits and the job destruction rate affect the growth of cities and why workers living far away from job centers search less intensively and experience higher unemployment rates than those residing closer to jobs we are also able to explain why as compared to whites black workers spend more time commuting to work but travel less miles and search for jobs over a smaller area

worker turnover industry localization and producer size abstract empirically large employers have been shown to devote greater resources to filling vacancies than small employers following this evidence this paper offers a theory of producer size based on labor market search whereby a key factor in the determination of a producer s total employment is the ease with which workers can be found to fill jobs that are periodically vacated since the geographic localization of industry has long been conjectured to facilitate the search process the model provides an explanation for the observed positive association between average producer size and the magnitude of an industry s presence within local labor markets

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

testing the predictive value of subjective labour supply data empirical implementation of labour supply theories is usually based on realized labour market behaviour this requires strong assumptions about the impact of labour demand a possibility to avoid these assumptions is to make use of subjective data on desired labour supply in this paper we investigate whether respondents answers to survey questions on the desired number of working hours contain additional information on the preferences of the individuals using panel data for the netherlands we analyze whether deviations between desired hours and actual hours of work help to predict future job changes or changes in hours worked we use parametric and recently developed nonparametric tests the results suggest that subjective information on desired working hours are helpful in explaining female labour supply for males the evidence is mixed

heterogeneous firms and the organization of production firms in the same industry exhibit systematic differences in the organization of production and the structure of employment entrepreneurial ability is the specific scarce input that limits the size of a firm this input must be allocated to two activities coordinating production and monitoring workers able entrepreneurs can convert calendar time into larger supplies of coordinating effort that enable them to assemble large firms greater ability implies a higher shadow price of time which increases the implicit costs of monitoring a dispersion of entrepreneurial abilities generates an equilibrium size distribution of firms differences in monitoring costs affect the choice of worker productivities the design of products and the organization of production the monitoring cost hypothesis advanced in this paper goes a long way in explaining the equilibrium of an industry containing heterogeneous firms that differ in size and behavior

growing apart the changing firm size wage premium and its inequality consequences wage inequality in the united states has risen dramatically over the past few decades prompting scholars to develop a number of theoretical accounts for the upward trend this study argues that large firms have been a prominent labor market institution that mitigates inequality by compensating their low and middle wage employees with a greater premium than their higher wage counterparts large u s firms reduced overall wage dispersion yet broader changes to employment relations associated with the demise of internal labor markets and the emergence of alternative employment arrangements have undermined large firms role as an equalizing institution using data from the current population survey and the survey of income and program participation we find that in 1989 although all private sector workers benefited from a firm size wage premium the premium was significantly higher for individuals at the lower end and middle of the wage distribution compared to those at the higher end between 1989 and

hours restrictions and labor supply the authors estimate a labor supply model that permits hours restrictions of a simple but general form each individual chooses from among a finite set of jobs drawn at random f rom a market distribution each offering a fixed quantity of hours the polar cases of no constraints on hours worked and exogenous hours ar e nested within the general case the authors results are consistent with a substantial amount of rationing in the work hours of a sample of low income men most of whom are working less than they would like copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

estimation of a labour supply model with censoring due to unemployment and underemployment this study proposes and implements a method of labour supply estimation which is appropriate when the sample contains unemployed and underemployed workers the estimation method consists of excluding unemployed and underemployed workers from the sample and then using to avoid selection bias an extension of heckman s approach to the case where two correlated selection rules generate the sample hausman s specification test is then used to determine whether ignoring constrained workers has led to biases in traditional labour supply estimates and the empirical results suggest that previous estimates of several important parameters are biased since the biases go in the direction that would be predicted by the hypothesis that the unemployed and underemployed are constrained the results support this hypothesis

female labour supply flexibility of working hours and job mobility traditional labour supply models do not address to what extent working hours are constrained withinjobs and to what extent working hours can be adjusted by means of changing employer this paper measures the flexibility of working hours within and between jobs by relating subjective information on individual preferences to adjustments in working hours empirical analysis based on a sample of employed women in the dutch socio economic panel 1987 9 shows that the flexibility of working hours withinjobs is low the empirical literature on labour supply traditionally assumes that workers can choose their working hours freely and without costs up to a maximum level equal to the time endowment the potential invalidity of this assumption is acknowledged but the assumption is still often made for the tractability of the empirical model in response several models incorporating restrictions on working hours have been developed the first generation of these models extended the traditional censored regression model by allowing for censoring due to over and under employment and involuntary unemployment moffitt 1982 ham 1982 blundell et al 1987 the second generation of models extended the structural labour supply model by introducing job offers concerning hours of work van soest et al 1990 dickens and lundberg 1993 a conclusion stemming from all of these studies is that incorporating restrictions on working hours significantly improves the empirical fit of the model a peculiar component of the models discussed above is that they are static as a result they are not able to distinguish between the ingredients required for the existence of hours restrictions within the labour market first there needs to be restrictions on the possibilities to adjust working hours with the same employer for example within a job this alone does not necessarily imply that individuals are not on their labour supply curve as they might switch to an employer that offers them their preferred working hours a second necessary ingredient for the existence of hours restrictions within the labour market is therefore mobility costs although one cannot doubt the existence of hours restrictions in the labour market an open question is how tight these restrictions actually are altonji and paxson 1986 1992 study adjustments of working hours over time and distinguish between those individuals who stay in their job and those who change job change employer based on the us panel study of income dynamics they conclude that working hours of married women are two to four