learning and wage dynamics we develop a dynamic model of learning about worker ability in a competitive labor market the model produces three testable implications regarding wage dynamics 1 although the role of schooling in the labor market s inference process declines as performance observations accumulate the estimated effect of schooling on the level of wages is independent of labor market experience 2 timeinvariant variables correlated with ability but unobserved by employers such as certain test scores are increasingly correlated with wages as experience increases and 3 wage residuals are a martingale we present evidence from the nlsy that is broadly consistent with the model s predictions

inequality and mobility of household incomes in europe evidence from the echp in this article we want to shed light on two aspects of income mobility relative total income mobility using the estimator by fields and ok 1999 and equalization of long run incomes measured by the index of fields 2009 the cross country comparison shows a negative relationship between total relative mobility and long run income equalization this result is contrary to the intuition given by shorrocks 1978a who stated that higher relative mobility will cause higher equalization of incomes when the accounting period is extended

measuring movement of incomes we consider a small set of elementary properties for income movement measures and show that there is essentially only one measure that satisfies all of these properties the per capita aggregate change in log incomes we demonstrate next that this movement mobility measure has a number of appealing descriptive and normative properties and provide a formal generalization of our basic characterization theorem drawing from the related literature on poverty measurement finally we present here an empirical application in which we show by using our new measure that there has been a broad based increase in income movement in the united states between the 1970s and 1980s

partisan governments the international economy and macroeconomic policies in advanced nations 1960 93 this article examines the impact of parties domestic institutions and the international economy on the conduct of monetary and fiscal policies using time series cross section data from nineteen oecd countries for the years between 1960 and the mid 1990s the results are as follows partisan governments have affected alone and in interaction with the organization of labor markets the pattern of macroeconomic management still their impact has varied over time partly as a function of economic conditions but fundamentally as a function of the degree of financial liberalization and the exchange rate system in place after following broadly similar macroeconomic policies in the 1960s oecd governments pursued divergent monetary and fiscal policies in response to the economic slowdown of the 1970s even when they initially adopted countercyclical measures conservative governments quickly favored tight monetary policies and strove to achieve fiscal discipline by contrast taking advantage of generalized capital controls and floating exchange rates socialist cabinets embraced demand management policies in a systematic fashion mostly through budget deficits in corporatist countries and through both loose monetary and loose fiscal measures in noncorporatist settings as financial liberalization progressed in the early 1980s partisan and institution led differences in macroeconomic policies waned across countries

political business cycles 40 years after nordhaus the aim of this article is to survey the huge literature that has emerged in the last four decades following nordhaus s rev econ stud 42 2 169 190 1975 publication on political business cycles pbcs i first propose some developments in history of thought to examine the context in which this ground breaking contribution saw the light of the day i also present a simplified version of nordhaus s model to highlight his key results i detail some early critiques of this model and the fields of investigations to which they gave birth i then focus on the institutional context and examine its influence on pbcs the actual research agenda finally i derive some paths for future research

government spending cycles ideological or opportunistic this paper examines whether partisan and opportunistic motives affect government expenditure growth in the netherlands the time series analysis covering the period 1953 1993 allows for different types of government spending in general spending is inspired by ideological and opportunistic motives all government expenditure categories show an upward drift during election times and the partisan motives behind government spending are clearly revealed left wing cabinets attach greater importance to social security and health care than right wing cabinets and right wing cabinets value expenditure on infrastructure and defense more than left wing parties

educational inequality and intergenerational mobility in latin america a new database abstract the causes and consequences of the intergenerational persistence of inequality are a topic of great interest among various fields in economics however until now issues of data availability have restricted a broader and cross national perspective on the topic based on rich sets of harmonized household survey data we contribute to filling this gap by computing time series for several indexes of relative and absolute intergenerational education mobility for 18 latin american countries over 50 years and making them publicly available we find that intergenerational mobility is on average rising in latin america this pattern seems to be driven by the high upward mobility of children from low educated families at the same time there is substantial immobility at the top of the distribution significant cross country differences are observed and are associated with income inequality poverty economic growth public educational expenditures and assortative mating

the effect of discrimination and of industry segmentation on japanese wage differentials in relation to education abstract the paper investigates japanese wage differentials based on the concept of industrial division the labor market is examined for two sectors separately namely competitive sectors and non competitive sectors the effects of female male difference of human capital and of occupation also are examined and the cost of discrimination is estimated by applying several quantitative methods it was found that worker characteristics such as education length of service and age were treated differently by sector sex and occupation also wage differentials by sex were mostly rooted in differential treatment of worker characteristics while wage differentials by sector were explained largely by firm size component the above general results however are greatly modified by workers occupations and industrial divisions

welfare distributional change and the measurement of social mobility a new approach to the measurement of welfare distributional change and social mobility is developed the novel feature of this model is the use of price dependent measures of individual and social welfare in evaluating t he magnitude and direction of the movement in the distribution in addition the proposed indexes of mobility are decomposed into the sum of between group and w ithin group mobility each measure is implemented for the united states over the period 1947 1982 it is found that in each year society is upwardly mobile rela tive to the 1947 distribution copyright 1986 by mit press

an index of inequality with applications to horizontal equity and social mobility horizontal equity and social mobility are discussed in terms of a non utilitarian social welfare function which takes account of the process by which an ex ante distribution is mapped into an ex post distribution by the tax system for example an index of inequality is proposed which decomposes into two components corresponding to vertical and horizontal equity respectively a functional form for the social welfare function is derived for the purposes of empirical work and an application to data for 5895 uk households is presented the paper contains a theoretical application of the index to a model of optimal taxation it is conventional to assess the merits of alternative public policies in terms of a trade off between equity and efficiency in practice however a change in say the tax system involves three effects first it may have incentive or disincentive effects leading to efficiency gains or losses secondly it may alter the distribution of welfare levels thirdly it may alter the ranking of individuals or households within the distribution these three effects correspond to efficiency vertical equity and we shall argue certain aspects of horizontal equity respectively and any assessment of a tax change must take into account all three the principal assumption of this paper is that government is concerned about the trade off between these three effects a strict utilitarian is concerned only with the consequences of an action and in the evaluation of a particular reform a utilitarian measure of social welfare is defined over the vector of ex post utilities no account is taken of the process by which the vector of ex ante utilities is mapped into the ex post vector and no ethical status is awarded to the ex ante distribution one does not have to adopt an entitlement theory of justice to believe that the utilitarian approach may ignore some relevant considerations such as the fairness of the redistributive process a striking example of this arises in the model used by mirrlees 11 to examine optimal income taxation in that model individuals have identical preferences defined over consumption and leisure and differ only in respect of their potential wage rates or ability levels clearly in the absence of taxation individual utility is an increasing function of ability suppose the government uses redistributive lump sum taxes to achieve the first best optimum then as mirrlees 11 12 shows the first best optimum for a utilitarian social welfare

electoral cycles and budgetary growth in veterans benefit programs while many studies have generated negative findings regarding the general existence of electoral cycles in economic phenomena we have found an apparently robust electoral cycle in veterans benefits this pattern was found between 1961 and 1978 but has disappeared since then we use this case to investigate the possibility that electoral cycles might contribute to the growth of government spending using two different methods of inference we find no strong basis to conclude that such cycles cause increasing public sector growth

normative indices for measuring social mobility this paper introduces relative and absolute indices of social mobility to each index there corresponds a different social welfare function when the symmetric mean of order 1 social welfare function is employed the relative index becomes the king 1983 index of social mobility

bringing capital back in or social democracy reconsidered employer power cross class alliances and centralization of industrial relations in denmark and sweden the political domination of social democrats in denmark and sweden beginning in the 1930s was stabilized by the absence of intense opposition by capital to reformist programs aggressively opposed by business and the right elsewhere in the world this quiescence was not a symptom of weakness or dependency rather it was a product of a class intersecting cross class alliance behind institutions of centralized industrial relations that served mutual interests of sectoral groupings dominating both union and employer confederations well organized and militant and backed by social democrats employers in the two countries used offensive multi industry lockouts to force centralization on reluctant unions analysis of these cross class alliances and their pay distributional objectives is used to challenge a widely held view that centralization and social democratic electoral strength are sources of power against capital it also occasions a reassessment of conventional understandings of farmer labor coalitions and the decline of industrial conflict in scandinavia in the 1930s according to the alternative view presented here capital was included rather than excluded from these cross class alliances and industrial conflict subsided dramatically in part because employers achieved politically what they had previously tried to achieve with the lockout

organization and labor based party adaptation the transformation of argentine peronism in comparative perspective this article examines the capacity of latin american labor based parties to adapt to the challenges of economic liberalization and working class decline it presents an organizational approach to explaining party change highlighting the ways in which informal and weakly institutionalized structures may contribute to party adaptation it argues that loosely structured labor based parties such as many mass populist parties possess a distinctive advantage in adapting to environmental change though a source of inefficiency and even internal chaos populist legacies such as fluid internal structures nonbureaucratic hierarchies and centralized leaderships yield a high degree of strategic flexibility the argument is applied to the case of the argentine justicialista party pj a mass populist party that adapted with striking success to the socioeconomic changes of the 1980s and 1990s the weakly institutionalized nature of peronism s party union linkage facilitated the dismantling of traditional mechanisms of labor participation which resulted in the pj s rapid transformation from a labor based party into a predominantly patronage based party at the same time the pj s nonbureaucratic hierarchy and weakly institutionalized leadership bodies provided president carlos menem with substantial room for maneuver in developing and carrying out a radical neoliberal strategy that while at odds with peronism s traditional program was critical to its survival as a major political force the conclusion places the peronist case in comparative perspective by examining the cases of five other latin american labor based parties

partial ordering of unpredictable mobility with welfare implications we propose a partial ordering of unpredictable mobility in the spirit of blackwell s ordering of information structures the proposed ordering ranks mobility matrices according to the degree to which elements in a given set are likely to move from one state to another independently of their origin furthermore for an important class of transition structures our proposed ordering implies ordering thus carrying significant welfare implications moreover whenever it exists our partial ordering functions as a sufficient condition for a class of renowned mobility measures and thereby generates for a subset of transition matrices unanimous ranking among mobility indices that are not generally consistent with one another

income mobility profiles abstract an income mobility profile is a graphical tool to portray income mobility and identify the association between individual movements and initial status which despite its importance when assessing the social relevance of mobility is often discounted by aggregate mobility indices

authoritarian state building and the sources of regime competitiveness in the fourth wave the cases of belarus moldova russia and ukraine this article explores the sources of regime competitiveness in the post cold war era through a structured comparison of regime trajectories in belarus moldova russia and ukraine for the period 1992 2004 an examination of these cases suggests the need for a fundamental rethinking of the commonly held view of the transition process especially in countries that face relatively weak international democratizing pressures approaching these countries as unconsolidated autocracies rather than as simply emerging democracies draws attention to key sources of political competition that have largely been ignored in the literature on competitive regimes thus competitive politics in belarus moldova russia and ukraine were rooted less in robust civil societies strong democratic institutions or leadership than in the inability of incumbents to maintain power or concentrate political control by preserving elite unity controlling elections and or using force against opponents such pluralism by default has been the outgrowth of the strength of anti incumbent national identity and incumbent weakness as defined by a lack of know how ineffective incumbent organization and or the weakness of certain dimensions of state power

testing the satisficing version of the political business cycle 1905 1984 this paper develops a test of the satisficing version of the political business cycle previous tests have focused on maximizing models of political behavior and are not sufficiently general to test for satisficing behavior using annual u s data for the period 1905 to 1984 we find evidence supporting the satisficing version of the political business cycle model but we reject the maximizing version in accordance with the satisficing hypothesis we find that increasing inflation or unemployment and decreasing monetary base growth in the third year of a presidential term are followed typically by reversals during the election year

political business cycles and macroeconomic credibility a survey there is clear evidence that government popularity and election performance is affected in part by economic performance suggesting that governments may manipulate the economy to political advantage simple models incorporating adaptive expectations which allowed the government to exploit this relationship were developed in the 1970s but fell out of fashion with the advent of new classical economics however modern theories of the political business cycle which are closely related to the macroeconomic policy game literature assume rational expectations and lead to forms of political business cycle driven by the existence of uncertainty of one type or another the international evidence suggests that some aspects of the theories apply although definitive conclusions are as we might expect hard to come by

the gini multi decomposition and the role of gini s transvariation application to partial trade liberalization in the philippines this article proposes a unified technique of the gini decomposition the gini multi decomposition is a combination of the income source decomposition and the subgroup decomposition this technique is applied on reference situation and simulated scenarios for partial trade liberalisation in philippines and is extended to different orderings to capture a wide range of between group indicators we simulate variations in income source distributions for seven educational groups in the philippines in order to measure the inequality variations between a reference situation and a post simulation one with positive externalities due to public expenditures on the private sector productivity

labor earnings mobility and inequality in the united states and germany during the growth years of the 1980s recent years have witnessed increased interest in issues of inequality and mobility in the labor market using data from the panel study of income dynamics and the german socio economic panel we compare the labor earnings mobility of prime age men and women in the united states and germany during the growth years despite major differences in labor market institutions we find very similar patterns in the two countries our formal models of labor earnings dynamics suggest a great deal of persistence in both countries in the united states this may derive from permanent individual specific differences among men while in germany random shocks are found to persist longer for men women in germany and the united states have similar earnings dynamics copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the concept and measurement of horizontal inequity abstract this paper discusses the concept of horizontal equity and presents three formal principles as a basis for making comparisons of the extent of horizontal inequity produced by different redistributions a condition analogous to the lorenz criterion used for inequality comparisons is established under which the horizontal inequities of redistributions can be ranked without recourse to a cardinal measure of inequity ordinal comparisons are not possible in many cases the three principles suggest three properties that reasonable measures of horizontal inequity should possess a class of measures which satisfies the properties is proposed most other existing measures are found not to satisfy them

cross country income mobility comparisons under panel attrition the relevance of weighting schemes this article aims to present an assessment of the effects of panel attrition on income mobility comparisons for some eu countries by using the european community household panel echp there are different possibilities of correcting the attrition problem by means of alternative longitudinal weighting schemes the sensitivity of mobility estimates to these attrition correction procedures is tested in this article our results show that echp attrition is characterized by a certain degree of selectivity but only affecting some variables and countries different probability models corroborate the existence of a certain nonrandom attrition the model chosen to construct the longitudinal weights to correct attrition offers up rather different results than those obtained when eurostat s longitudinal weights are used although attrition does not seem to have a great effect on aggregated mobility indicators it does have a decisive effect on decomposition exercises our tests reveal certain sensitivity of income

the meaning and measurement of income mobility abstract income mobility may be seen as arising from two sources i the transfer of income among individuals with total income held constant and ii a change in the total amount of income available in this paper we propose several sensible properties defining the concept of income mobility and show that an easily applicable measure of mobility is uniquely implied by these properties we also show that the resulting measure is additively decomposable into the two sources listed above namely mobility due to the transfer of income within a given structure and mobility due to economic growth or contraction finally these results are compared and contrasted with other mobility concepts and measures in the literature journal of economic literature classification numbers d31 d63

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

intergenerational exchange mobility and economic welfare the concepts of exchange and structural mobility are introduced and their relationship with the notion of equality of opportunity discussed it is then shown that exchange mobility can have an impact on social welfare when the utility of any one generation is dependent on the consumption levels of overlapping generations whether such consumption interrelationships imply a preference for mobility or the reverse depends on whether the marginal utility of current consumption is raised or lowered by an increase in the consumption level of the associated generation the rest of this paper examines these two cases in the context of a simple two class family model the analysis is concerned with the description of the optimal intergenerational behaviour within this framework in order to be able to say anything substantial however it is necessary to impose some restrictions on the structure of the utility function one restriction which has some appeal and which yields plausible patterns of optimal policy is that intergenerational links through the utility function be not too strong in a sense that is made specific in the paper imposing this condition one can show how intra generational equity is affected both by intergenerational considerations and by the inherited past where intragenerational transfers involve efficiency losses a simple tax model is examined the circumstances under which starting with no taxes the tax rates converge are worked out in both the cases where the utility function has a pro as well as an anti mobility bias finally a specific utility function is taken in which the fathers utility depends not only on his own consumption but also on the average consumption of his son and himself in this case the utility function has a pro mobility bias and one can evaluate the response of the long run tax rate to parameters that measure mobility and equality using a similation model one can also assess the speed of convergence and the sensitivity of the tax rates to the parameters

measures of distributional change an axiomatic approach in recent years a number of interesting papers have appeared in the general field of the analysis of changes in a frequency distribution the most common applications of such analysis are in the areas of income and wealth re distribution and the contributions have usually focussed on a particular specialised issue such as mobility of individuals within a structure or of horizontal inequity as opposed to vertical inequality implicit in the comparison of two distributions a number of approaches to each of these problems have been suggested and indeed several specific practical indices of mobility or inequity have been proposed 1 whilst some of these can be shown to have very useful features in their application it is probably fair to say that most derive from an ad hoc approach to the particular aspect of the problem on which the author had focussed it is interesting to note that comparatively few papers attempt to exploit the similarities involved in each of these issues all this contrasts rather sharply with the state of play in an obviously closely related game that of the measurement of inequality much of the essential foundation of the problem of measuring inequality as we presently understand it seems to be more or less sorted out in a systematic fashion roughly speaking what may be done is as follows given

on the existence of a political monetary cycle this paper examines electoral influence on monetary policy as measured by ml money growth i find a significant four year electoral cycle in money growth even when controlling for the influence of interest rates income and budget deficits further the residual electoral cycle produces the income and inflation movements associated with the political business cycle when it is used in simulations of simple reduced form macro models the paper concludes by discussing the difficulties in rationalizing cyclical monetary policy with rational expectations

did the fed raise interest rates before elections the literature on political business cycles focuses on elected incumbents and neglects the incentives of appointed officials we present evidence of rate hikes before elections when the chair of the us federal reserve is from a different party than the incumbent president this finding contrasts with the traditional belief that an inappropriate policy rate bias implies a more expansive pre election policy stance we also find weak evidence that rates are lowered when the chair and president are from the same party the evidence that ideological preferences of the chair matter remains even when we control for career motives

labour supply and unemployment in japan abstract the paper investigated the relationship between labour supply and unemployment employment in japan the paper focused on the discouraged worker effect which specifies that a large number of workers in particular female labour forces retire from the labour market in a recession this lowers the rate of the published unemployment the paper estimated the labour supply function and presented the estimated figures of the modified or adjusted rate of unemployment finally the okun s coefficient was re estimated by using this modified rate of unemployment

cross national differences in the rise in earnings inequality market and institutional factors this paper uses data from the luxembourg income study to explore the role of differences in supply shifts in explaining cross national differences in the rise in earnings inequality changes in returns to age and education are estimated for eight countries using a common specification of earnings functions across years and countries we find that the small overall increase in earnings inequality in many countries reflects large but offsetting changes in returns to skill and changes in inequality within age education cells furthermore these differences in returns to skill can largely be explained by differences in supply shifts

unanticipated money and the political business cycle six different series of one period forecasts for money growth are generated for each year 1960 through 1984 the prediction errors are analyzed to see whet herthe authorities attempted to expand the economy in election years by unexpectedly raising money growth while there is no evidence of attempts to fool the public throughout the entire 1960 84 period such fooling may have been tried through 1974 it is speculated that the public discussion of expectations formation and of politicians motivations since then may have signaled officials that further attempts to mislead the public would be prohibitively costly copyright 1986 by ohio state university press

constructing the international foundations of e commerce the eu u s safe harbor arrangement much recent international relations scholarship has argued that states are unable to control e commerce so that private actors are coming to play a dominant role however this body of literature fails to account for emerging hybrid institutions in which states create general frameworks of rules which are then implemented by private actors this article examines a prominent example of such an institution the eu u s safe harbor arrangement in the field of privacy and sets out an alternative explanation of state private actor relations in the sphere of e commerce it shows how safe harbor had its origins in efforts by the european union eu and united states to mitigate problems of interdependence that threatened to undermine the principles of order on which their regulatory systems were based safe harbor reflects neither the eu nor u s approach but rather a novel blend of state and private regulation the article demonstrates the vital role of argument and persuasion in identifying safe harbor as a solution and in negotiating its particulars it finds that conventional game theoretic accounts of bargaining are unable to explain the negotiation of safe harbor and argues that constructivist approaches should pay more attention to how argument can disclose new possibilities of action

saving and the life cycle a cohort analysis abstract this paper examines the life cycle hypothesis with reference to japanese employees the study is based on panel data created from successive cross section data which is expected to give better results than past studies the sample was categorized by many elements one important result is that empirical testing of saving and the life cycle is crucially dependent upon the samples it is found that the majority of japanese employees have not accumulated wealth enough to assure consumption during retirement the paper however did not reject a hump shaped course of wealth accumulation under the assumption of myopic behavior

on the evaluation of economic mobility this paper presents a framework for the evaluation and measurement of reversal and origin independence as separate aspects of economic mobility we show how that evaluation depends on aversion to multi period inequality aversion to inter temporal fluctuations and aversion to future risk we construct extended atkinson indices that allow us to quantify the relative impact of reversal and origin independence on welfare we apply our approach to the comparison of income mobility in germany and in the united states when aversion to inequality is the only consideration the us gains more from mobility than germany this reflects similar gains from reversal in the two countries but greater gains in the us from origin independence the introduction of aversion to intertemporal fluctuations and aversion to future risk makes the impact of mobility in the two countries more similar

austrian and swedish social democrats in crisis party strategy and organization in corporatist regimes socialists and social democrats have probably nowhere been better entrenched than in austria and sweden yet in both countries they have suffered electoral defeats in the 1980s and early 1990s ju

consumption inequality and income uncertainty this paper places the debate over using consumption or income in studies of inequality growth in a formal intertemporal setting it highlights the importance of permanent and transitory income uncertainty in the evaluation of growth in consumption inequality we derive conditions under which the growth of variances and covariances of income and consumption can be used to separately identify the growth in the variance of permanent and transitory income shocks household data from britain for the period 1968 1992 are used to show a strong growth in transitory inequality toward the end of this period while younger cohorts are shown to face significantly higher levels of permanent inequality

the unemployment rate consequences of partisan monetary policies economists and political scientists have identified several ways in which political motivations and institutional arrangements can affect macroeconomic policymaking one way is described by the political business cycle model 42 37 in which vote seeking politicians manipulate the path of the economy to secure unsustainably favorable conditions at election times variants of this model have been widely tested with limited success a second channel for political impacts comes through partisan policy changes brought about by electoral turnover the pathbreaking work in this literature includes the contributions of hibbs 30 31 32 33 and beck 11 these works have focused on the empirical issue of how unemployment rates vary under democratic and republican presidents in the u s and have found strong support for the proposition that unemployment rates decline under democratic administrations a third phenomenon has been studied primarily by economists and concerns the credibility problem faced by a central bank selecting money growth rates models of the credibility problem 8 21 describe a setting in which the central bank and the public interact by respectively choosing actual and expected money growth rates in a variant of the prisoners dilemma this interaction can result in excessive inflation

does inequality of labor earnings emerge in young days or later abstract this paper examines the evolution of labor earnings inequality in an environment where individuals learn about their own ability productivity from wage realizations it is shown that innate ability heterogeneity and idiosyncratic income shock variance have distinct effects on the emergence of earnings inequality through changes in learning speed and effort decisions therefore given endogenous changes in individual perception we are able to explain different patterns of labor earnings inequality evolution in differently endowed societies actually observed in uk us germany and japan simulations illustrate inequality emergence patterns and earnings mobility in different environments

intergenerational mobility in britain in this paper we use longitudinal data on children and their parents to assess the extent of intergenerational mobility in britain based on data from the national child development survey a cohort of all individuals born in a week of march 1958 we find that the extent of intergenerational mobility is limited we report an intergenerational correlation of the order 40 to 60 for fathers and sons and 45 to 70 for fathers and daughters in terms of labour market earnings and years of schooling an examination of quartile transition matrices between parental and child earnings outcomes reveals a similar pattern finally it seems on the basis of these transition matrices that there is an important asymmetry in intergenerational earnings mobility with upward mobility from the bottom of the earnings distribution being more likely than downward mobility from the top

the eurotower strikes back crises adjustments and europe s austerity protests the 2008 global financial crisis came with fears and for some hopes that a new wave of public mobilization would emerge in industrialized countries especially throughout the european union eu the epicenter of the crisis large protests were expected yet the energy with which social groups mobilized against the proposed austerity measures quickly fizzled this article provides new evidence for why this was the case in line with neo keynesian theory we argue that the interest rate adjustments and political announcements of the european central bank ecb limited the potential for mass unrest in the member states of the economic and monetary union emu affected by the crisis we provide evidence for our argument with yearly panel data and a new original data set of monthly political protests between 2001 and 2013 our analyses support the hypothesis that the ecb was able to successfully assuage dissatisfaction with the limited reform options of the eurozone member states in the wake of the eurocrisis

welfare based income insecurity in the us and germany evidence from harmonized panel data this paper develops normative approaches for measuring individual level income insecurity using concepts derived from expected utility theory and prospect theory we build a suite of measures designed to capture various facets of psychologically distressing income risk we present an application for the us and germany from 1993 2013 employing conditionally heteroskedastic fixed effects models to generate predictive densities for future incomes our results reveal much higher levels of income risk in the us relative to germany which can be mostly attributed to a higher level of autonomous time invariant volatility state by state variations in liberal conservative political administrations partially explain our results and we find some evidence that trade exposure is a contributing factor in the us

politics and society political diversity and uniformity in households as a theoretical puzzle the authors resolve a theoretical puzzle that characterizes the political preferences of members of social groups by a demonstrating that political homogeneity is a variable to be explained b

three meanings of intergenerational mobility we axiomatize three different motivations for being concerned about intergenerational mobility mobility as a description of movement as an indication of equality of opportunity and as an indication of equality of life chances these three motivations are shown to be incompatible none of the existing measures is acceptable as an indicator of equality of opportunity or equality of life chances we propose two new measures of intergenerational mobility which more adequately reflect these concerns

an integrated test for electoral cycles in the u s economy this paper offers the first integrated test of the electoral model of business cycles the test begins with unrestricted estimates of presidential electoral patterns in u s economic outcomes real gnp unemployment and inflation and policies money growth and the adjusted budget surplus these estimates are then used to determine whether the estimated electoral patterns in macropolicy yield predicted electoral patterns for macro outcomes that are consistent with estimates of both actual electoral patterns in outcomes and voting behavior the results indicate that four year electoral cycles in macroeconomic outcomes and policies are strongly significant for the united states for the period 1951i to 1986ii copyright 1989 by mit press

partisan monetary policies presidential influence through the power of appointment we investigate the channels through which partisan influence from a presidential administration could affect monetary policy making influence could be a result of direct presidential pressure exerted on members of the federal open market committee fomc or it could be a result of partisan considerations in presidential appointments to the board of governors to investigate these two channels of influence we devise and apply a method for estimating parameters of monetary policy reaction functions that can vary across individual members of the fomc our results suggest that the appointments process is the primary mechanism by which partisan differences in monetary policies arise

centripetal and centrifugal incentives in electoral systems this paper investigates how electoral laws affect the position taking incentives of parties and candidates it seeks to extend the finding presented in the classical median voter theorem to a wide class of electoral systems or to show the limits of such extension the factors examined are the district magnitude the electoral formula the number of votes each voter is allowed to cast whether voters can cumulate their votes and whether voters can partially abstain i suggest a crude division of electoral systems into those producing predominantly centripetal incentives and those producing predominantly centrifugal incentives among the factors found to produce centripetal incentives at least in noncumulative systems are the following increases in the number of votes per voter outlawry of partial abstention and decreases in the district magnitude in systems allowing the cumulation of votes matters are a bit different

preferences for redistribution in the land of opportunities this paper explores how individual preferences for redistribution depend on future income prospects in addition to estimating the impact of individuals socioeconomic background and of their subjective perceptions of future mobility we employ panel data to construct dobjectivet measures of expected gains and losses from redistribution for different categories of individuals we find that such measures have considerable explanatory power and perform better than dgeneral mobilityt indexes we also find that preferences for redistribution respond to individual beliefs on what determines one s position in the social ladder ceteris paribus people who believe that the american society offers equal opportunities are more averse to redistribution d 2004 published by elsevier b v

political models of the business cycle should be revived political models of the business cycle have typically been ignored because they appear inconsistent with rational behavior and because empirical evidence is inconclusive this paper addresses the second issue demonstrating for u s real gnp unemployment and inflation that electoral cycles persistent patterns across electoral terms are significant but apparently only for republican incumbents and that partisan cycles persistent differences between parties are also significant these findings are consistent with the conjecture that a minority party is more constrained by electoral concerns whereas a majority party is freer to pursue partisan objectives

stochastic dominance in mobility analysis abstract this paper introduces a technique for mobility dominance and compares the degree of earnings mobility of men in the usa from 1970 to 1995 the highest mobility is found in the 1975 1980 or 1980 1985 periods

inequality adjusted income growth we introduce and characterize a new measure of aggregate income growth that allows us to give more weight to individuals with lower individual income growth our measure includes several important measures of directional mobility encountered in the literature the empirical application compares the measure of income growth between the usa and germany and finds that giving more weight to individuals with lower income growth reverses the ranking

presidential elections and federal reserve policy an empirical test traditional macro economic models of federal reserve fed behavior typically assume that the fed enjoys a well defined objective function based on social welfare and generally predict counter cyclical monetary policy the increasing observation of procyclical monetary policy has led many researchers to investigate new models of fed behavior several recent papers imply that procyclical fed behavior is due to a lack of political accountability friedman 7 toma 23 and shughart and tollison 21 all attribute considerable bureaucratic discretion to the fed and seek to explain monetary policy by examining typical bureaucratic objectives other papers such as pierce 19 20 weintraub 26 and kane 10 11 argue that the fed operates in an arena filled with political constraints that cause sub optimal monetary policy but these constraints are not modeled explicitly one possible political constraint on fed behavior is the incumbent president s desire for re election in the political business cycle pbc literature presidential re election opportunities are enhanced by the production of a precise set of inflation and unemployment outcomes leading up to the election thus to the extent that presidents desire cyclical macro economic outcomes there will be executive pressure on the fed to create or accommodate such outcomes the effect this pressure will have on fed policy is ultimately an empirical question but most models deal with it by assumption traditional macro modeling assumes a zero effect while the pbc models implicitly assume that a favorable election cycle is a primary goal of all economic policymakers this paper examines presidential influence on the federal reserve by testing for an election cycle in money growth the major result is the identification of a regular 16 quarter cycle in money growth corresponding with presidential elections this cyclical effect is found to be stable over time and significant under a wide range of model specifications further when the cyclical component of money growth is used to simulate a simple macro model it produces a classic political business cycle in inflation and real output growth

international income mobility abstract we perform a novel analysis of the international mobility of per capita gnp we find general but not unambiguous support for the notion that world income mobility increased between 1972 and 1992 counterpointing the increased inequality over this period

are experience and schooling complementary evidence from migrants assimilation in the bangkok labor market abstract this paper models the assimilation process of migrants and shows evidence of the complementarity between their destination experience and upon arrival human capital bayesian learning is assessed using panel data of wages from bangkok thailand it is found that i schooling returns are lower for migrants than for natives ii the accumulation of destination experience raises wages for migrants iii the experience effect is greater for more educated agents and iv the complementarity increases as destination experience accumulates the results imply that more educated migrants have higher learning efficiency and can perform tasks of greater complexity ultimately yielding higher wage growth in the destination market

elections and the fed is there a political monetary cycle to understand the political causes of macroeconomic policy it is necessary to examine the institutions that actually make such policy and the incentives those institutions face an explanation of the political causes of united states monetary policy must treat the various institutions that are influential in the monetary policy process which are at a minimum the federal reserve fed and the executive including the president the treasury department and other advisors in the executive office of the president the reelection motive has proven useful in modeling presidential incentives in this article i investigate whether electoral incentives associated with the theory of the political business cycle pbc can help to explain the behavior of the fed over the last quarter century the political business cycle has had a curious hold on modern political economy while the empirical evidence in favor of the cycle is far from overwhelming its theoretical importance leads to continuing empirical

ireland and switzerland the jagged edges of the great inflation abstract ireland and switzerland both had rising inflation during the early 1970s but their experiences diverged thereafter so that they form a rare example of two countries whose inflation rates are poorly correlated with one another over the great inflation period this paper proposes that the monetary policy neglect hypothesis can account for both countries experiences extensive archival evidence is considered for each country regarding the doctrines that guided 1970s policymaking this evidence establishes that switzerland s better record is accounted for by the competition between monetary and nonmonetary views of inflation being resolved earlier and more decisively in favor of the monetary view in ireland by contrast nonmonetary views of inflation dominated policymaking throughout the 1970s

earnings distribution and inequality over time education versus relative position and cohort this paper constructs a theoretical model for analyzing the earnings distribution over time and provides an estimation procedure for the inequality of earnings over time the theoretical model incorporates gibrat s so called law of proportionate effect galton s regression toward the mean and serial correlation of the error terms under the condition that the density function of earnings for each age cohort in japan is distributed as log logistic an emphasis is placed upon comparison of the influence of the relative position in the distribution with the influence of education on earnings finally the coefficients of variation over time are presented copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

economic security and value change confirming inglehart s prediction 1971 of an intergenerational shift toward postmaterialist values a time series analysis controlling for the joint effects of inflation and unemployment demonstrates that there is a statistically significant trend toward postmaterialism in all eight west european countries for which data are available over the past two decades evidence from the 1981 83 and 1990 91 world values surveys indicates that this value shift occurs in any society that has experienced sufficient economic growth in recent decades so that the preadult experiences of younger birth cohorts were significantly more secure than those of older cohorts large intergenerational differences tend to be found in societies that have experienced rapid growth in gross national product per capita and are negligible in societies that have had little or no growth accordingly postmaterialism increased in 18 of the 20 societies on five continents for which we have comparable data over the past decade

turnover activity in wealth portfolios we examine several subsets of the wealthiest individuals in the us and the uk that are compiled by forbes magazine and the sunday times since these are named subsets we can calculate the returns to wealth portfolios and calibrate a statistical equilibrium model of wealth distribution that accounts for the power law of wealth and the asymmetric laplace distribution of portfolio returns the model provides a relative measure of turnover activity that indicates how often changes in the composition of the wealthiest portfolios occur finally we investigate trends in equality mobility and turnover activity

deficits politics and money growth the authors examine the linkage between federal deficits and money growth by allowing the fed s resp onse to any given deficit to vary systematically according to how the deficit is generated and the party affiliation of the current presid ent in equations for m1 and monetary base growth the structural def icit is consistently significant and invariant across political chang es while the cyclical component of the deficit or a direct measure of the business cycle is significant only during the tenure of democ ratic presidents copyright 1987 by oxford university press

stochastic earnings functions risk and the rate of return to schooling it is generally accepted that there is a substantial degree of risk associated with investment in human capital when the decision to invest is made uncertainty arises for a variety of reasons an individual faces uncertainty about the length of life about the market conditions that will prevail during his or her lifetime and about the actual returns to investment over the life cycle one consequence of this uncertainty is that human capital investment will be affected not only by expected returns but also by the riskiness associated with the distribution of anticipated returns even though risk is deemed important empirical specifications of earnings functions typically found in cross section studies ignore the risk implications of the models 7 this is an important omission since failing to account for risk considerations may lead to biased estimates of the rate of return to education and may lead to inappropriate conclusions concerning wage discrimination the purpose of this paper is to investigate the impact of human capital investment on both expected earnings and the variance in earnings one measure of the riskiness of investment and to demonstrate the importance of risk and risk aversion in determining the rate of return to schooling the paper begins by showing that the standard stochastic specification of the earnings function is overly restrictive with respect to risk considerations in particular the traditional specification implies that the explanatory variables must have the same qualitative affect on both expected returns and risk thus the standard earnings function can not be used to examine the relation between human capital investment and risk in any meaningful way next we examine the risk implications of a more general stochastic earnings function the specification we use is based on the work of just and pope 3 and griffiths and anderson 2 it allows a variable to be either risk increasing or risk reducing independent of its impact on expected returns section iii contains the empirical results using data from the national longitudinal surveys we estimate the generalized earnings function we find that higher levels of general human capital as proxied by years of schooling experience and i q are positively correlated with the variance in earnings higher levels of specific human capital as proxied by job tenure are nega

opinion polls and political business cycles theory and evidence for the united states the paper shows that the frey schneider schultz hypothesis that there is a negative relation between the government s popularity and the government s incentives to engineer political business cycles is consistent with rational forward looking voting provided one makes appropriate assumptions about the incumbent s preferences the empirical part of the paper presents evidence favourable to the hypothesis using quarterly data on us money growth

measuring social mobility abstract the paper considers the ranking of mobility matrices in a simple markov model of social mobility the approach is the dynamic counterpart ot the static inequality ranking of income distributions by the lorenz curve the derived partial ordering is motivated by welfare considerations is shown to be equivalent to same intuitive mobility concepts and is used to screen some immobility indices the equivalence of the ranking with the permanent income lorenz ordering gives support to the claim that this approach is the natural extension of kolm s the optimal production of social justice in public economics j margolis and h guitton eds macmillan london 1969 atkinson s on the measurement of inequality j econ theory2 1970 244 263 and dasgupta sen and starrett s notes on the measurement of inequality j econ theory6 1973 180 187 approaches journal of economic literature classification numbers d31 d63 j62

measuring social mobility as unpredictability by associating mobility with the unpredictability of social states new measures of social mobility may be constructed we propose a family of three state by state and aggregate scalar predictability measures the first set of measures is based on the transition matrix the second uses a sampling approach and permits statistical testing of the hypothesis of perfect mobility providing a new justification for the use of the x2 statistic the third satisfies the demanding criterion of period consistency an empirical example demonstrates the usefulness of the new measures to complement existing ones in the literature

intergenerational health mobility an empirical approach based on the echp despite the importance of the study of health mobility few attempts have been made to measure intergenerational mobility not only in the european union but also in other countries such as united states this article is focused on the study of intergenerational health mobility using data from the european community household panel echp in particular the relationships between self assessed health of parents and their sons are analysed the evidence obtained suggests that in spain sons reported health depends significantly on the self assessed health of their fathers

a partisanship theory of fiscal and monetary regimes this paper indicates that income redistribution motivated by the distributive ideals of liberal political p arties create unanticipated disincentives for productive effort thi s suggests that newly elected liberal parties are likely to engage in monetary surprises in order to compensate for the adverse effects of these disincentives on real income estimated reaction from function s support these predictions a measure of income redistribution the change in the ratio of the social expenditures of government to gnp has a positive significant effect on money growth in addition when the presidency changes from conservative to liberal there is a posit ive and significant increase on money growth copyright 1987 by ohio state university press

monetary union and wage bargaining institutions in the eu extrapolating from some member state experiences this article considers the question of how monetary union in the eu is likely to impact the preferences of governments employers and unions regarding the organization of wage bargaining european monetary union involves a decentralization of wage bargaining centered at the national level in relation to monetary policy centralized at the european level drawing on recent literature and on the experience of two member states italy and spain which prior to emu underwent periods of intense bargaining fragmentation the author argues that the imposition of restrictive monetary policy in a fragmented wage bargaining context in which workers nonetheless have substantial bargaining rights tends to have perverse effects these effects ultimately led governments and bargaining actors in italy and spain to seek a reorganization of bargaining that gave national actors greater control over wage setting the article considers to what extent a similar dynamic might play out in the euro zone