variable returns to scale in production and patterns of specialization this paper discusses some trade and welfare implications of the two sector model based on increasing returns to scale irs in one industry and decreasing returns to scale drs in the other it has been shown by horst herberg and murray kemp that given homothetic production functions with irs in one industry and drs in the other the production possibilities frontier ppf is strictly concave to the origin near the irs axis and strictly convex to the origin near the drs axis while this result constitutes an important finding and is contrary to the general impression among economists even twelve years after the publication of herberg and kemp s paper no attempt has been made to analyze its implications for welfare and patterns of specialization in this paper i consider a simple twocommodity model with irs in one industry and drs in the other and discuss some interesting implications of variable returns to scale vrs first i demonstrate that in this model if a small open economy specializes completely in production it will do so in the drs commodity and not in the irs commodity as is generally believed second if at a given price ratio an internal production equilibrium exists a welfaremaximizing small open economy will never specialize completely in production even though the ppf exhibits decreasing opportunity costs over a part of its range third given output generated economies and diseconomies of scale welfare maximization for a small country requires a permanent tax subsidy scheme encouraging expansion of the irs industry and contraction of the drs industry finally in a two country model with identical tastes and technology across the countries free trade equilibrium may result in incomplete specialization by the exporter of the irs commodity and complete specialization by the exporter of the drs commodity in the course of the analysis i argue that tinbergen s formulation of frank graham s case for protecting the irs industry is incorrect i then present a possible reformulation of it in section i the basic production model is introduced in section ii the model is analyzed and in section iii it is argued that all the results continue to hold in the multifactor case

efficient tariff financing of public goods abstract for some countries tariff generated revenues may be the main method available for financing public goods there is a trade off between the distortionary effects of a tariff and the benefits of the public good which it finances this paper employs the heckscher ohlin samuelson model to examine that trade off the result is an efficiency rule for provision of the public good that rule is compared to the atkinson and stern 1974 rule it is found that the ranking of the factor intensities of production is crucially important in determining the marginal cost of the public good

collective bargaining arrangements closed shops and relative pay this paper uses establishment level data to examine the impact on union nonunion pay differentials of the industrial relations setting in which bargaining takes place the pre entry closed shop is found to be of prime importance for the pay of both skilled and semiskilled manual workers for skilled workers and for semiskilled workers in larger establishments the differentials are found to be insignificantly different from zero in the absence of a pre entry closed shop copyright 1987 by royal economic society

occupational choice an application to the market for public school teachers most previous work on occupational choice does not satisfactorily treat the potentially important effects of future demand conditions in contrast this paper develops and estimates a rational expectations model in which agents look beyond expected starting salaries and take explicit account of future demand conditions the empirical results demonstrate that future demand conditions are important determinants of the decision to acquire secondary school certification but are not important for the decision to acquire elementary school certification the paper concludes with a comparison of the dynamic properties of the rational expectations model and a cobweb specification

optimal trade policies for a developing country under uncertainty abstract this paper investigates optimal trade policies for a developing small open economy which faces international price uncertainty trade taxes are used to finance provision of a public good which enters the utility function of consumers if demands for private goods are independent of the public good the optimal composite tariff dominates the optimal quota if the optimal state contingent tariff increases with the foreign price the optimal specific tariff also dominates the optimal quota regardless of risk aversion however the ranking of the optimal specific tariff and the optimal quota generally depends on risk attitudes as well as ordinal preferences

the wage impact of trade unions in the uk public and private sectors there is a growing gap in the union membership wage premium between public and private sector workers in the united kingdom using the labour force surveys of 1993 2006 the gap between the membership premium in the public and private sectors closes with the addition of three digit occupational controls although significant wage premia remain in both sectors however using the workplace employment relations survey of 2004 the public sector union membership wage premium remains roughly twice the size of the private sector membership premium having accounted for workplace fixed effects and workers occupations job characteristics qualifications and demographics

women and the union wage gap this paper uses the social change and economic life initiative 1986 data set to provide new estimates for the female union wage gap for britain the joint endogeneity of trade union and full time part time employment status is addressed within the econometric framework of a bivariate sample selection model the mean unconditional union mark up estimate for female full time workers is estimated at 14 6 percent with the comparable estimate for part time female workers estimated at 15 3 percent copyright 1992 by royal economic society

a note on the production possibility frontier with pure public intermediate goods some recent studies have shown that certain forms of production functions satisfy the convexity of the production set in the presence of pure public intermediate goods this note permits a broader form of the production functions to reach the same result and further investigates the condition for the production surface to contain a flat portion une note sur la frontiere des possibilites de production quand des biens intermediaires sont purement publics certaines etudes recentes ont montre qu il existe certaines formes de fonctions de production susceptibles d assurer la convexite du bloc des possibilites de production quand existent des biens intermediaires purement publics cette note developpe certaines conditions plus generales des fonctions de production qui assurent le meme resultat de plus les auteurs examinent a quelles conditions le bloc des possibilites de production va avoir une portion plate

union retreat and regional economic performance the uk experience monastiriotis v 2007 union retreat and regional economic performance the uk experience regional studies 41 1 14 a panel of regional data is used to investigate the impact the well documented decline in trade unionism in the uk had on the economic performance of its regions the analysis departs from the traditional firm level and cross sectional analyses and looks at the economy wide effects of unionism the findings provide evidence in line with theory that predicts that unions will increase wages and unemployment but they also indicate that unionism is positively related to productivity and incomes although in all cases the effects are non linear it is concluded that unionism is not necessarily a burden for the economy so long that the beneficial wage productivity effects outweigh the negative effects on employment monastiriotis v 2007 le declin syndical et la performance economique regionale etude de cas du r u regional studies 41 1 14 on emploie des donnees regionales provenant d un

the optimal revenue tariff for public input provision abstract the revenue motive has been important in most countries employment of tariffs many ldcs remain dependent on the tariff as a revenue source such revenue may fund economic development projects that enhance domestic production possibilities as such these projects are better described as public inputs rather than public goods this paper derives efficiency rules for public input provision when the tariff is the sole source of revenue the implications of both private and public sector production of the public input are investigated in the latter case deviation from production efficiency is potentially welfare improving

manual wage differentials collective bargaining and multi locational firms an analysis using northern ireland nes data harris r 1994 manual wage differentials collective bargaining and multilocational firms an analysis using northern ireland nes data reg studies 28 483 493 a number of studies have appeared in the literature which consider the impact on the wage distribution of for example gender and ethnic differences of union membership or coverage by collective agreements of firm size of belonging to the private vis a vis public sector of being self employed as opposed to an employee another potentially important determinant of wages is whether the firm employing an individual is locally owned or whether it is part of a multiregional or multinational organization which operates branches in various locations this paper sets out to investigate the size of this locational wage differential across all sectors for a region of the uk using a bivariate sample selectivity model where the choice of firm type i e locally owned or externally owned and union coverage are endogenous the results confirm that

determinants of college major choice identification using an information experiment this article studies the determinants of college major choice using an experimentally generated panel of beliefs obtained by providing students with information on the true population distribution of various major specific characteristics students logically revise their beliefs in response to the information and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability we estimate a rich model of college major choice using the panel of beliefs data while expected earnings and perceived ability are a significant determinant of major choice heterogeneous tastes are the dominant factor in the choice of major analyses that ignore the correlation in tastes with earnings expectations inflate the role of earnings in college major choices we conclude by computing the welfare gains from the information experiment and find positive average welfare gains

job creation process in a transition economy in many european countries sme policy is close to being a synonym for job creation most empirical research on the job generation potential of small firms over the last decade has been done in the stable and favorable economic conditions of market economies the paper investigates the role of small firms in more difficult circumstances on an empirical data set for slovenia the paper tries to show that small firms have been the most important employer during the transition period a finding that very likely can be extrapolated for other european transition economies over the last decade slovenia has transformed from a labor managed economic system to a market oriented economy if we compare the firm size structure in a socialist like economy to the firm size structure in a mature market economy close to equilibrium we notice a typical absence of small and medium sized firms with the exception of craft shops that was how slovenia appeared in the early nineties charac terized by the removal of administrative barriers transition encouraged a spontaneous entrepreneurial wave through an expanding small business sector the ensuing changes in employment distribution changed the firm size structure

job creation and job destruction in great britain in the 1980s using data from the workplace industrial relations surveys of 1980 1984 and 1990 the authors investigate processes of job creation and job destruction in britain they find that rates of employment growth job creation and job destruction were higher at the end of the 1980s than at the beginning bothjob creation and job destruction were extremely concentrated about 50 of each was accounted for by just 4 of continuing establishments employment growth was apparently more variable in manufacturing plants than in private service sector workplaces some variables negatively related to employment growth were unionization establishment size establishment age and location in the private manufacturing sector versus private service sector

production possibilities with a public intermediate good this paper considers the shape of the production possibility set with a public intermediate good of the atmos phere type the elements which tend to give rise to a concave product ion frontier are isolated from those which tend to generate a convex one by using the notion of the production surface the results from earlier models are both generalized and sharpened

forming wage expectations through learning evidence from college major choices abstract how do college students choose their majors and what role does the family play in their choices i use data from two major longitudinal surveys to develop and estimate a model in which students learn about earning opportunities associated with different majors through the wages of older siblings and parents the probability of a student choosing a major that corresponds to the occupation of a family member is strongly correlated with the family member s wage at the time the major choice is made this correlation remains strong after controlling for family correlated abilities or preferences and additional empirical evidence suggests that the observed correlation arises through a family based wage information channel

unions wages and productivity some evidence from uk engineering firms estimates of union wage and productivity effects are derived using primary micro level panel data for a sample of firms in the uk engineering industry union wage differentials of the order of 10 are suggested from the results whereas union productivity impacts appear to be non linear with respect to union density

jobs and the business life cycle in the uk there have been a number of statistical studies in recent years of the firm life cycle its effects on employment and the role of small firms in the job generation process they have all followed the changes which take place in a population of firms through time birch based his usa national analysis on the dun and bradstreet computer files for 5 6 million establishments covering 80 of all private sector employment and some of his findings were of a controversial nature most british studies to date have been limited to single regions looking at aspects of job generation in detail there is now a series of local studies for the regions of glasgow the midlands cleveland manchester and merseyside the dti ganguly 1982a has carried out an important national study based on vat data and a sectoral study macey 1982 of manufacturing the study described here used the data of dun and bradstreet uk the commercial credit rating market research and information company to estimate job generation pe

union wage differentials in the face of changes in the economic and legal environment this paper examines changes in union wage differentials in britain between 1980 and 1984 on the basis of two comparable establishment level data sets this period saw considerable economic and legislative change with potential effects on the outcomes of collective bargaining despite these changes the mean differential has little change between these two years and what there is is attributable to compositional changes such as the shift away from the manufacturing sector and the downward shift in the establishment size distribution the impact of the changes in unemployment and union coverage that took place is found to be minimal copyright 1991 by the london school of economics and political science

the influence of higher moments of earnings distributions on career decisions a model where choice of occupation is sequential is applied to college graduates from the national longitudinal study of the high school class of 1972 to investigate how higher moments of occupational earnings distributions influence initial field of work individual specific life cycle earnings projections that incorporate option values of occupational mobility are generated and the relationship between these pay measures and choice of initial occupation is explored within a multinomial logit framework the findings indicate a strong positive relationship between these earnings predictions and the likelihood that college graduates enter an occupation

some trade theorems with a public intermediate good this paper considers the implications for the stolper samuelson and rybczynski theorems of a pure public intermediate good necessary and sufficient conditions for the theorems to hold in their strong versions are derived they show a close formal resemblance to those known from the model with variable returns to scale internal to industries the dual nature of the two theorems is shown to be preserved lastly sufficiency conditions for either theorem to hold are presented

trade factor prices and the gains from trade with increasing returns to scale existing analyses seem to suggest that national increasing returns to scale are not a very useful tool for analysing trade owing to problems such as multiple equilibria and the tendency towards complete specialization the purpose of this paper is to construct a model in which there are in fact determinant relationships among country size the direction of trade the gains from trade and international factor price differences in the model differences in country size determine the direction of trade which in turn determines factor price differences and limits the possible distribution of the gains from trade commerce international prix des facteurs de production et les gains de l change dans un contexte de rendements croissants a l echelle les analyses conventionnelles semblent suggerer que les rendements croissants h l 6chelle au niveau national ne constituent pas une avenue prometteuse dans l analyse du commerce international parce que de tels rendements creent une presomption en faveur de la specialisation complete et conduisent a des situations d 6quilibres multiples le but de ce m6moire est de construire un mod le dans lequel il existe des rapports determinants entre la dimension du pays la direction des 6changes les gains de l echange et les differentiels internationaux entre les prix des facteurs de production dans ce mod le les differences entre les pays en termes de dimension d6terminent la direction du commerce international laquelle d6termine le differentiel entre les prix des facteurs de production et limite l eventail des r6partitions possibles des gains de l echange

the engineering labor market this paper develops a dynamic supply and demand model of occupational choice and applies it to the engineering profession the model is largely successful in understanding data in the u s engineering labor market the engineering market responds strongly to economic forces the demand for engineers responds to the price of engineering services and demand shifters more important supply and enrollment decisions are remarkably sensitive to career prospects in engineering also a rational model in which students use some forward looking elements to forecast future demand for engineers fits the data reasonably well these findings suggest that subsidies to build technical talent ahead of demand are misplaced unless public policy makers have better information on future market conditions than the market participants do

the employer size wage gap evidence for britain university of edinburgh and university of sussexfinal version received 5 may 1992 this paper presents estimates for the employer plant size wage gap for britain using anordered probit model selectivity corrected wage equations are estimated for three plant sizecategories in a comparison between plants with more than 500 workers and those with lessthan 100 a wage gap estimate of over 17 per cent is detected the wage effects of unionizationin plants with more than 500 workers is reported as insignificant in contrast to evidenceprovided by idson and feaster 1990 for the united states no evidence of non randomsorting of workers across plant size is detected

the relationship between union wage and profitability effects abstract this paper presents empirical evidence on the relationship between union effects on wages and on profitability as expected unions are found to increase wages albeit significantly in smaller firms only and to reduce profitability in a sample of british engineering firms over the period 1979 1982 the key question asked is whether the observed union effect on profitability is no more than a further manifestation of the observed wage effect estimates of profit equations normalised to take account of the union wage effect do not reject the hypothesis that it is

the impact of trade union membership on training in britain in order to measure the union non union training differential in britain a recursive model of training participation and union membership is estimated using data taken from the 1989 labour force survey the results show a positive and significant effect of union membership on training participation in small establishments this is consistent with the hypothesis that any negative impact on employer provided training that might have arisen from the union wage mark up is outweighed by a positive influence exerted by unions through the exercise of collective voice and or reductions in labour turnover by contrast in establishments with 25 or more workers unions have no significant impact on training

trade unions and employment change an analysis of british establishment data few explanations of the changing employment structures of industrialised countries have omitted some reference to the role of trade unions for some commentators it is the unions ability to raise wages above their natural market level that constitutes a brake on employment growth by increasing the employer s costs and making product prices uncompetitive for others it is the unions power to impose uneconomic working practices upon management that leads to decline or lack of growth of the organisation for a discussion see freeman and medoff 1984 mayhew 1983 empirical testing of these and other lines of explanation has been hampered in britain by lack of suitable datasets while employment data are detailed and widely available systematic and reliable information on the extent of trade union influence has been restricted to reported membership levels for broad industry groups see for example bain and price 1983 pencavel 1974 the coverage of collective bargaining derived from earnings surveys see for example mulvey 1976 layard metcalf and nickel1 1978 and the extent and frequency of strike action see for example smith et al 1978 j the availability of a new series of nationally representative surveys at the establishment level has enabled us to obtain new insights into the relationship between changes in employment and trade union organisation at the point where such relationships arguably occur the place of work the

public goods tax policies and unemployment in ldcs 1 introduction traditionally an analytically convenient and widely used assumption in the international trade and development economics literature has been that of lump sum distribution of direct e g income or indirect e g consumption tariff tax revenue when various policy implications of such instruments e g terms of trade or welfare effects were to be examined this analytical shortcut however hardly ever constitutes a real world practice either in rich developed or in poorer developing economies on the other hand another extensive branch of economics the public finance literature has adopted a more realistic approach regarding the economic activity of a government a government is viewed among other things as a provider of public collective consumption goods and or of public inputs that enhance the productive capacity of the private sector being so it can use revenues from nondistortionary e g lump sum taxes or distortionary e g consumption taxes to finance the provision of such goods and services within this public finance context a long standing proposition states that when nondistortionary taxes are used to finance the provision of a public good the first best efficiency rule requires that the sum of the marginal rates of substitution i e the social marginal benefit equal the marginal rate of transformation i e the social marginal cost e g see samuelson 1954 when distortionary taxes are used to finance the provision of the public good pigou 1947 argued that the social marginal cost exceeds the private marginal cost because of the induced indirect cost from raising tax revenue through distortionary taxation stiglitz and dasgupta 1971 atkinson and stem 1974 and wildasin 1984 among others demonstrate that in certain cases e g when the taxed and the public goods are complements in consumption pigou s argument fails to hold and the social cost may fall short of the private marginal cost because of its more realistic appeal this public finance approach to the use of tax revenue has been subsequently adopted by the relevant international trade and development economics literature recently the efficiency rule for public good provision has been examined in the context of a small open economy by among others feehan 1988 when tariff revenue finances the provision of the public good in an economy producing two traded goods and a nontraded public consumption good michael and hatzipanayotou 1995 examine the same issue and derive the formulae for the optimal tax rates on traded or nontraded goods in an economy producing many traded and nontraded goods and where consumption tax revenue finances the provision of the public good michael and hatzipanayotou 1997 demonstrate the failure of the first best efficiency rule when lump sum taxes are used to finance the provision of a public good in a small open economy in the presence of trade restrictions i e a tariff or a ver two features in the above reviewed studies of the international trade development economics and public finance literature motivate the present paper first all these studies derive the efficiency rule for public good provision in the context of a small open or closed economy with full employment unemployment however to a lesser or to a larger extent remains a structural feature of many developed or developing economies from an analytical standpoint the existence of such a distortion may alter both the optimal tax formulae and the efficiency rule for public good provision second the above reviewed literature considers the case where a government uses a single policy instrument e g lump sum taxes income taxes tariffs to finance the provision of the public good more than often however governments may have at their disposal several tax instruments that they can simultaneously use in order to raise revenue for financing the provision of public consumption goods

union organizing activity firm growth and the business cycle this paper analyzes the relationship between changes in unionization and firm growth average growth is significantly low er in manufacturing firms that experience successful union elections bu t these strong effects are largely illusory the authors find no evidence of a significant relationship between unionization and firm growth despite a strong cyclical pattern in election activity thei r results suggest that the significant negative effect of organizing activity on a firm s market value is not accompanied by any growth changes the authors therefore cannot reject the hypothesis that t he equity losses from union election activity represent a simple transf er of wealth from shareholders to workers copyright 1993 by american economic association

union competition and strikes the need for analysis at the sector level international comparative research has found that strike incidence is higher where two or more unions bargain with an employer multi unionism as is common in most european countries than where only one union does all else equal two proposed explanations for this relationship both invoking inter union rivalry as the main dynamic are that under multi unionism unions a make propagandistic use of strikes to attract members or b compete with each other by bidding up bargaining demands to date the evidence bearing on these hypotheses has been equivocal because the author argues researchers have focused on activity at the national level rather than at the lower levels that are more commonly the nexus for strike formation the author performs empirical tests using industry sector level data for seven european countries for the years 1990 2006 and finds evidence clearly favoring the competitive bargaining hypothesis over the propaganda hypothesis

risk and return trade offs in lifetime earnings this paper documents differences in lifetime earnings risk across occupations due to wage risk employment risk and midcareer occupation changes which can mitigate other shocks total lifetime ea

the optimal revenue tariff for public input provision a further result on feehan abstract feehan 1992 established some rules for public input provision in a model where the tariff revenue is utilized to fund public inputs according to these rules feehan discussed whether the public input would be produced at a larger amount than the level that maximizes the national income this note sharpens the result of feehan by using information regarding lagrangian multipliers

university choice the role of expected earnings nonpecuniary outcomes and financial constraints we investigate the determinants of students university choice in pakistan with a focus on monetary returns nonpecuniary factors enjoyed at school and financial constraints to mitigate the iden

international trade with a public intermediate good abstract the purpose of this paper is to investigate familiar trade theorems such as the stolper samuelson samuelson rybczynski heckscher ohlin and factor price equalization theorems when a public intermediate good is accommodated in the 2 2 general equilibrium trade model the public good which is introduced by the lindahl pricing rule is assumed to be of a semipublic kind then we present the circumstances where the positive results for all of the above theorems except the factor price equalization theorem hold as for factor price equalization we show that there is a tendency for trade to equalize prices

history dependent paths and trade gains in a small open economy with a public intermediate good this study reexamines mcmillan s international economic review 19 1978 665 78 analysis of a dynamic small open economy with a public intermediate good concerning the trade patterns of the open economy we find results that were overlooked in mcmillan s analysis among others if labor endowment is of intermediate size there are two saddle point steady states and the initial stock of the public good determines the long run trade pattern we also add a gains from trade analysis to mcmillan s model and demonstrate that if the economy has a comparative advantage in a good with productivity less sensitive to the public intermediate good the economy may lose from trade at the steady state

increasing returns public inputs and international trade governments often finance the development of new technologies such new technologies are public inputs whose simultaneous use by several industries imparts a kind of increasing returns to scale to the economy by means of an example incorporating such a government financed public input this note demonstrates that i differences in the absolute amounts of factor endowments alone can cause trade and ii such a trade can exhibit leontief s paradox consider an economy which uses its endowments of labor l and capital k to produce two tradable private goods x and x2 and a public input xo the public input is not traded internationally but is purchased by the government and made available to the private good industries their production functions are given by

unionism and employment behaviour although there exists a large literature on the effects of trade unions upon wages there is no published work that uses microeconomic data on establishments to examine the employment consequences of unionism this paper addresses this issue with a recent british data set and shows that even after the addition of a substantial set of control variables there is a strong association between poor employment performance and the presence of trade unions the union employment growth differential is estimated at approximately 3 percent per annum copyright 1991 by royal economic society

union density and varieties of coverage the anatomy of union wage effects in germany collective bargaining in germany takes place at either industry or firm level and bargaining coverage is much higher than union density the share of a firm s employees covered can vary between 0 and 100 suggesting that researchers should distinguish union density coverage at the firm level and coverage at the individual level using linked employer employee data the authors estimate ols and quantile regressions of wages on these dimensions of union influence they find that a higher share of employees in a firm covered by industrywide or firm specific contracts is associated with higher wages but find no clear cut effect on wage dispersion yet holding coverage at the firm level constant individual coverage is associated with lower wages and less wage dispersion higher union density reinforces the effects of coverage but for employees in firms without coverage density s effect is negative and thus compresses the wage distribution in firms without coverage

unions and the incidence of performance linked pay schemes in britain abstract this paper examines the relationship between trade unions and the incidence of share ownership profit sharing and value added schemes in britain the first two schemes are more common in the union sector whilst the third occurs more in non union establishments a distinction is made between weak and strong unions and it is found that performance linked pay schemes are in general less likely to be present if an establishment has a strong union rather than a weak one

further implications of variable returns to scale abstract among those trade theorists who have studied the implications of variable returns to scale it has been almost standard practice to suppose that the variability of returns in each industry is generated by technical intra industrial externalities in the present paper inter industrial as well as intra industrial externalities are admitted the topology of the set of production possibilities and of the locus of competitive outputs as well as the robustness of several standard trade theorems are examined

increasing returns public inputs and transformation curves this paper shows that despite the presence of increasing returns to scale caused by a public input the transformation curve of an economy will be concave to the origin if the market for the public input is marshall stable it also shows that when the public input is a natural friend to both labor and capital marshallian stability holds if and only if the relative price version of the stolper samuelson theorem holds

union membership collective bargaining coverage and the trade union mark up for britain abstract this paper estimates the union mark up using british general household survey data the wage gap is decomposed both for the mean and the variance of the earnings distribution the results indicate that the union mark up is larger than previously estimated and that structural effects account for a major part of the differences that are found in the earnings distributions of covered union members covered non unionists and uncovered non unionists

employment determination in british industry investigations using micro data this paper derives and then estimates a model of employment where unions and firms bargain over wages and possibly employment and efficiency wage considerations may be important it illustrates the difficulties associated in interpreting many existing attempts to discriminate between alternative models the results based on over 200 u k firms suggest that employment is negatively related to the firm s own wage and the change in the own wage relative to outside opportunities the latter may be an efficiency wage effect various financial factors are also seen to have a significant effect on employment

public investment optimal provision of hicksian public inputs a considerable portion of government spending is devoted to commodities that are not public goods but that directly affect production possibilities examples include public infrastructure like roads and dams educational facilities and research projects in basic science and some forms of information such commodities are public inputs in a small open economy context the focus of this paper is on those that are hicksian in nature an interesting decomposition of the beneficial impact of a hicksian public input is developed then first best and second best optimality conditions for public inputs that are comparable to those for collective consumption goods are derived

paying for public inputs with public consumption goods pareto optimality can be achieved in equilibrium through lindahl pricing this requires that each consumer pays a price proportional to his marginal utility from the public good the marginal cost of providing the good is then equated to the sum of the marginal benefits some public goods serve as inputs into production processes rather than as consumption goods the lighthouse is an example efficiency in an economy with public intermediate goods requires that the marginal cost of providing them equals the sum of their marginal benefits to firms by analogy with the case of public consumption goods it might seem that lindahl pricing can be extended to public intermediate goods by requiring that firms pay in proportion to the marginal contribution of these goods to profits agnar sandmo 1972 explicitly proposes this for convex technologies for nonconvex technologies that arise with an important class of production functions essentially those exhibiting atmosphere externalities in the phrase of james meade 1952 lindahl pricing for such public inputs is infeasible the principal result derived here is a sim

trade unions and training practices in british workplaces the authors use british establishment level data from the 1991 employers manpower and skills practices survey emsps and individual level data from the autumn 1993 quarterly labour force survey qlfs to investigate the links between training provision and workplace unionization both the probability of receiving training and the amount of training received are found to have been substantially higher in unionized than in nonunion workplaces the authors view these results as showing that trade unions can play an important role in developing and boosting skill formation in britain

corporatism run amok job stability and industrial policy in belgium and the united states corporatism jonathan s leonard and marc van audenrode in explaining high and persistent unemployment in western europe as compared to the united states this article shifts the emphasis away from the now familiar institutions and policies directly related to the labour market instead it focuses on the active and pervasive industrial policies which distinguish many european countries from the united states during the seventies and eighties a large share of european countries industrial policy has been directed towards schemes to help declining firms and industries using the example of belgium we show that this policy of supporting declining industries has actually contributed to higher unemployment through two channels first the subsidization of failing firms has imposed a tax on growing firms which has contributed to the freezing of the labour market and to low levels of job creation second by partially insuring against the threat of business failure the policy has contributed to the rapid growth of real wages

technology and public goods abstract this paper presents a theory of public goods based on production theory where public goods are viewed as inputs to the production process we examine the pure case of public inputs no private inputs as well as the mixed case private and public inputs we show how the case of public inputs is related to certain forms of nonjoint production and we characterize it in terms of variable profit and joint cost functions comparative statics results are derived graphically in the two by two case

general equilibrium effects of import constraints under variable labour supply public goods and income taxation we consider a general equilibrium trade model of a small open economy with a representative consumer where labour supply is variable where imports are restricted by a small tariff a quota or a voluntary export restraint ver and where alongside the production of two traded goods one imported and one exported a pure public good is produced and funded through an income tax within this framework we demonstrate among other things that under certain conditions while a small tariff or quota reduces employment and welfare a ver may increase them thus in the context of a small open economy contrary to standard results in certain cases vers may become the welfare and employment dominant instrument over the alternative import restrictions

predicted future earnings and choice of college major using data from the national longitudinal survey of young men the author of this paper examines the relationship between predicted future earnings for five broad fields of study and college students choice of major conditional logit models of major choice that incorporate alternative predicted earnings variables are specified and estimated the results indicate that holding family background characteristics constant individuals are likely to choose majors offering greater streams of future earnings rather than as some have argued majors with higher beginning earnings at the time of the choice it is also found that earnings profiles corrected for self selection bias have flattened for more recent graduates in business liberal arts and education the life cycle earnings in these disciplines appear to be more severely depressed than those in science and engineering

the demand for and return to education when education outcomes are uncertain this article treats education as a sequential choice that is made under uncertainty a simple model is used to explore the effects of ability high school preparation preferences for schooling the borrowing rate and ex post payoffs to college on the probability of various post secondary college outcomes and the ex ante return to starting college the model motivates an empirical method of accounting for uncertainty about educational outcomes and for nonlinearity in the relationship between years of education and earnings when estimating the expected return to the first year of college

on the economic effects of multiple unionism in a recent paper stephen machin mark b stewart and john van reenan 1993 using establishment level data for the united kingdom find that ceteris paribus plants with multiunionism and separate bargaining arrangements pay higher wages than either those in which different unions bargain jointly or those in which there is a single union in this paper the author offers a theoretical interpretation of this result within the framework of the henrik horn and asher wolinsky 1988 analysis of worker substitutability and patterns of unionization copyright 1995 by the editors of the scandinavian journal of economics

unions and the financial performance of british private sector establishments summary this paper considers the relationship between unions and financial performance using data from the 1980 and 1984 workplace industrial relations surveys a qualitative indicator of financial performance is utilized and ordered probit estimates presented these indicate that unionized establishments are characterized by lower performance levels than are non union concerns the interface between union effects and relative market power is also explored and the ability of unions to extract a share of the available rents is found to be greater if the plants in which they are located possess a higher market share

job matching and occupational choice this paper presents a model of job matching the generalizes the existing literature by allowing for different jobs types or occupations such differences affect the value of job specific experience inducing a career profile where certain types are sampled before others more specifically the analysis shows that it is optimal for the young and inexperienced to gravitate toward jobs exhibiting a certain kind of risk then after deriving the equilibrium job turnover rate for an economy in which people do not switch occupations panel data are used to estimate its underlying parameters the hypothesis that people do not switch occupations is rejected against the alternative that they do thus providing empirical support for the theoretical extension undertaken here

the growth of uk companies and their contribution to job generation 1985 1987 theories of firm growth are reviewed and various models examined the firm growth and job generation process in the uk over the period 1985 87 is examined empirically by using the very large data files of the dun and bradstreet credit rating organisation in the analysis four computer processes were carried out the sorting and matching of files the cleaning of the data the validation of the cleaned data and the scaling up the results the final adjusted data were grossed up to provide an overview of the growth and job generation potential of uk firms this is compared with past results for the periods 1971 81 and 1982 84 small firms performed well providing 48 of all new jobs although consisting of only 21 of all employment in 1985 the 1000 employee range provided only 13 of all new jobs over the period although consisting of 37 of all employment in 1985 an overall trend of positive performance in smaller firms and negative in larger firms was apparent the 20 49 employee cohort performed unusually poorly in firm and job creation against the expected pattern the effect of takeovers mergers and rationalisations on employment was examined as expected there was negligible restructuring of small firms but over 5 of employees in the largest 1000 cohort were involved in some form of reorganisation

institutions and short run macroeconomic performance abstract this paper reviews the growing interest in institutions it argues that the explanation for this interest is a fresh awareness of how institutions affect economic performance this connection arises because many economic interaction take the form of one or other of three classic games prisoners dilemma coordination and chicken and the outcome in these games and hence performance of the economy is influenced by the institutional context of these interactions the paper provides a detailed illustration of this argument with a survey of the literature which relates unemployment performances to the institutions of wage setting in oecd countries