geographic mobility race and wage differentials abstract this paper analyzes the relationship between geographic mobility and earnings we present an equilibrium search model that yields differences between the reservation wages of mobile and immobile workers the expected wages of mobile workers exceed those of immobile workers due to partial sorting across high and low paying firms an extension to visibly distinct groups with different immobile proportions yields statistical discrimination against immobile group members using combined displaced workers files we find that mobility positively affects earnings and partially explains racial and ethnic earnings differentials to test for statistical discrimination we estimate separate earnings functions for union and nonunion workers

equilibrium price dispersion with sequential search abstract the paper studies equilibrium pricing in a product market for an indivisible good where buyers search for sellers buyers search sequentially for sellers but do not meet every seller with the same probability specifically a fraction of the buyers meetings lead to one particular large seller while the remaining meetings lead to one of a continuum of small sellers in this environment the small sellers would like to set a price that makes the buyers indifferent between purchasing the good and searching for another seller the large seller would like to price the small sellers out of the market by posting a price that is low enough to induce buyers not to purchase from the small sellers these incentives give rise to a game of cat and mouse whose only equilibrium involves mixed strategies for both the large and the small sellers the fact that the small sellers play mixed strategies implies that there is price dispersion the fact that the large seller plays mixed strategies implies that prices and allocations vary over time we show that the fraction of the gains from trade accruing to the buyers is positive and nonmonotonic in the degree of market power of the large seller as long as the large seller has some positive but incomplete market power the fraction of the gains from trade accruing to the buyers depends in a natural way on the extent of search frictions

entrepreneurship human capital and labor demand a story of signaling and matching in contrast to employee qualifications there is no clear evidence that entrepreneurs qualifications positively affect their income in this study we propose that entrepreneurs can benefit from using their qualification as a signal during the process of recruiting employees this is assumed to follow a process of matching equals among equals we confirm a matching of qualification levels for highly skilled employees in denmark and an indication of this in germany partial support for matching among medium skilled employees was only found in germany with no consistent evidence of matching for low skilled employees in neither country this suggests that as skill levels of employees decrease their probabilities of working for different founders converge founders qualifications are the most reliable predictor of recruitment choices over time our findings are robust to numerous control variables as well as across industries and firm age

wage and technology dispersion this paper explains why firms with identical opportunities may use different technologies and offer different wages our key assumption is that workers must engage in costly search in order to gather information about jobs stigler 1961 in equilibrium some firms adopt high fixed cost high productivity technologies offer high wages and fill job openings quickly other firms adopt less capital intensive technologies and offer low wages hiring mostly uninformed workers in equilibrium the amount of wage dispersion leaves workers indifferent about whether to gather information and the fraction of informed workers leaves firms indifferent about their wage and technology choice we show that worker search which would appear to be a rent seeking activity in partial equilibrium may be efficiency enhancing in general equilibrium

job search with bidder memories this paper revisits the no recall assumption in job search models with take it or leave it offers workers who can recall previously encountered potential employers in order to engage them in bertrand bidding have a distinct advantage over workers without such attachments firms account for this difference when hiring a worker when a worker first meets a firm the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future the pair share the gains to trade in this case the diamond paradox no longer holds

the effects of firm optimizing behaviour in matching models this paper considers a matching model of which the search behaviour of jovanovic 1979 and albrecht and jovanovic 1984 are special cases the nature of the generality is that each unemployed worker has more information than firms about his average productivity this results in wage offers falling over the length of an unemployment spell because a long spell is a signal of lower than average productivity the results of the paper are similar to the scarring effect of heckman and borjas 1980 and greenwald 1986 and the discouraged worker effect of schweitzer and smith 1974

real government size automatic feedback rules and the measured effectiveness of fiscal policy this paper argues that as intervention fiscal policy means more than simply any change in government spending and this requires of fiscal analysis a measure that separates the allocative from the counter cyclical activities of government defining intervention as an optimal policy rule that responds automatically to privately unanticipated variations in output a general equilibrium model is built to separate the supply side effects of desired changes in the size of government from demand side interventions designed to stimulate aggregate demand the model is tested using the results of a public choice investigation of the real size of government ferris and west 1996 that exercise produces a measure of desired size and through its residual an implicit measure of intervention the paper tests the prediction that increases in desired size increase aggregate supply and that ex post measures of fiscal intervention can be recovered and tested for their effect on aggregate output the test uses citibase

specific capital in equilibrium search models abstract this paper develops an equilibrium search model that allows firms to invest in specific capital i show that firms that pay higher wages invest more in specific capital because high paid workers quit at a lower rate also wage offer density has a thin right tail

search theory the 2010 nobel memorial prize in economic sciences this paper surveys search theory with an emphasis on the contributions of the 2010 laureates for the nobel memorial prize in economic sciences peter diamond dale mortensen and christopher pissarides

wage posting evidence from job ads recent studies of search theory examine how employers use a wage setting mechanism either by bargaining or through the posting of a non negotiable wage offer in a job ad to facilitate search we contribute to this literature by examining wage posting in job ads in the us the uk and slovenia despite considerable differences in the incidence of wage posting employers in all three markets are less likely to post a wage offer when searching for skilled workers the decision on whether or not to post a wage offer is only weakly related to the outcomes of employers search des etudes recentes de la theorie de la recherche d employes examinent comment les employeurs utilisent le mecanisme de determination des salaires soit par marchandage soit en mentionnant une offre de salaire non negociable dans l annonce de l offre d emploi pour faciliter le processus de recherche on examine les salaires mentionnes dans les annonces d offre d emplois aux etats unis au royaume uni et en slovenie malgre des differences considerables dans l incidence de l annonce du salaire les employeurs dans ces trois marches sont moins susceptibles d annoncer un salaire quand ils cherchent des travailleurs qualifies la decision d annoncer un salaire ou non est seulement faiblement reliee aux resultats de la recherche des employeurs

do benefit cuts boost job finding swedish evidence from the 1990s in june 1995 the swedish parliament decided to cut the replacement rate in unemployment insurance from 80 percent to 75 percent a change that took effect on january 1 1996 this paper examines h

cross sectional efficiency and labour hoarding in a matching model of unemployment we study positive and normative aspects of steady state equilibrium in a market where firms of endogenous size experience idiosyncratic shocks and undergo a costly search process to hire their workers the stylized model we propose highlights interactions between job security provisions and sectoral shocks in determining the natural rate of unemployment the allocation of labour and the extent of labour hoarding and rationalizes cross sectional asymmetries of gross employment flows at the firm level in our model where productivity and search costs are dynamically heterogeneous across firms decentralized wage bargains imply important cross sectional inefficiencies which overshadow the static search inefficiencies on which simpler models focus

an equilibrium model of search unemployment this paper develops a simple general equilibrium model with sequential search in which a nondegenerate wage offer distribution is endogenously determined we use this model to analyze the comparati

sticky prices a new monetarist approach why do some sellers set nominal prices that apparently do not respond to changes in the aggregate price level in many models prices are sticky by assumption here it is a result we use search theory with two consequences prices are set in dollars since money is the medium of exchange and equilibrium implies a nondegenerate price distribution when the money supply increases some sellers may keep prices constant earning less per unit but making it up on volume so profit stays constant the calibrated model matches price change data well but in contrast to typical sticky price models money is neutral jel e52 e31 e42

search unemployment in an overlapping generations setting this paper constructs an overlapping generations model in which the steady state equilibrium is characterized by the existence of search unemployment this dynamic general equilibrium model captures the possible existence of search unemployment in the long run despite the absence of exogenous shocks furthermore it allows for the wage offers distribution to be determined endogenously the effect of partial revelation of information on the existence of search unemployment in the long run is examined it is shown that search unemployment may be eliminated in the long run despite the persistence of the state of imperfect information this paper develops an overlapping generations model in which the steady state equilibrium is characterized by search unemployment 2 unemployment is created via a rational rejection of available wage offers in favor of further search for potentially more attractive offers the proposed dynamic general equilibrium model allows for the existence of long run search unemployment despite the absence of exogenous shocks and permits the presence of an endogenously determined nondegenerate wage offer distribution 3 the paper analyzes the trade off between revelation of information and the level of search unemployment in the long run in the absence of external disturbances the level of search unemployment would be expected to decrease as information becomes available in particular if information is fully revealed search unemployment is naturally eliminated exploring the likelihood of the existence of long run search unemployment in a deterministic world this study provides an example of partial revelation of information which eliminates search unemployment in the long run despite the persistence of the state of imperfect information 4 the proposed model presents a discrete infinite time horizon world where economic activity is conducted under imperfect information in every period a single homogeneous good is produced using two factors capital and labor in the production process the aggregate endowment of labor is exogenously given in

frictional wage dispersion in search models a quantitative assessment we propose a new measure of frictional wage dispersion the mean min wage ratio for a large class of search models we show that this measure is independent of the wage offer distribution but depends on statistics of labor market turnover and on preferences under plausible preference parameterizations observed magnitudes for worker flows imply that in the basic search model and in most of its extensions frictional wage dispersion is very small notable exceptions are some of the most recent models of on the job search our new measure allows us to rationalize the diverse empirical findings in the large literature estimating structural search models

an equilibrium search model of synchronized sales we demonstrate the existence of periodic nonstationary equilibria with self generating cycles in a simple model of random search our results provide a theory of synchronized sales based on product market search by heterogeneous consumers that is our model explains how it can be optimal for all sellers to follow a repeated pattern of posting a high price for several periods and then posting a low price for one period

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

an empirical equilibrium model of a decentralized asset market i estimate a search and bargaining model of a decentralized market to quantify the effects of trading frictions on asset allocations and asset prices and to quantify the effects of intermediaries that facilitate trade using business aircraft data i find that relative to the walrasian benchmark 12 4 percent of the assets are misallocated and prices are approximately 27 3 percent lower dealers play an important role in reducing frictions in a market with no dealers 15 7 percent of the assets would be misallocated perhaps surprisingly in a market with no dealers prices would increase by 2 8 percent because sellers outside options improve relative to buyers thus counteracting the effects of higher search costs and slower trade on asset prices

the effects of unemployment compensation in general equilibrium with search unemployment it is shown that when the effects of an increase in unemployment subsidies are studied in a general equilibrium framework unemployment increases far less than in a partial partial model in fact the result may very well be a decrease in unemployment if the general equilibrium forces are strong enough in the model used in this paper an increase in unemployment compensation unambiguously decreases the rate of unemployment copyright 1990 by the editors of the scandinavian journal of economics

on the multiplicity of monetary equilibria green zhou meets lagos wright abstract green and zhou relax the assumption made in early search based models of monetary exchange of indivisible money their paper and various extensions make much technical progress and derive some interesting substantive results in particular they show there is an indeterminacy of steady state monetary equilibria we reconsider this result in the framework of lagos and wright which is more tractable we show that a similar multiplicity arises and is much easier to derive and understand we also compare the results to those in related nonmonetary models and discuss how they depend on details including the number of agents and the timing

job and wage mobility with minimum wages and imperfect compliance we propose a job search model with minimum wage regulations and imperfect compliance to explain the doubling of the mean and variance of hourly earnings of white males during the first 18 years of labor market experience the model encompasses job mobility and on the job wage growth as sources of wage dynamics and is estimated by simulated generalized method of moments using data from the national longitudinal survey of youths 1979 our estimates provide a good fit for the observed levels and trends of the main job and wage mobility data and for the increase in the mean and variance of wages over the life cycle as well as for the fall in the fraction of workers paid below the minimum wage job mobility explains 40 50 of the observed wage growth increases in the minimum wage and or compliance deliver small effects on the wage distribution and the nonemployment rate

estimation of equilibrium wage distributions with heterogeneity summary equilibrium search models generalize the one sided models used earlier by endogenizing the wage offer distribution attempts to estimate versions of these equilibrium n search models have been unsuccessful ironically because the predicted wage distribution did not fit the wage data in this paper we extend the applicability of search models by introducing firm heterogeneity to account for the shape of the wage density the resulting estimation problem is difficult but we propose a solution and illustrate its feasibility and performance with a monte carlo study and an application to us labour market data

multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies it is often argued that a mandatory minimum wage is binding only if the wage density displays a spike at it in this article we analyze a model with search frictions and heterogeneous production technologies in which imposition of a minimum wage affects wages even though after imposition the lowest wage in the market exceeds the minimum wage the model has multiple equilibria as a result of the fact that the reservation wage of the unemployed and the lowest production technology in use affect each other imposition of a minimum wage may improve social welfare

sentiment and art prices we hypothesize the existence of a slow moving fad component in art prices using unique panel survey data on art market participants confidence levels in the outlook for a set of artists we find that sentiment indeed predicts short term returns

measuring the equilibrium effects of unemployment benefits dispersion we analyze the impact of unemployment benefits and minimum wagesusing an equilibrium search model which allows for dispersion ofbenefits and productivity levels job to job transitions andstructural and frictional unemployment the estimation method usesreadily available aggregate data on marginal distributions ofunemployment durations as well as wages and benefit levels different causes of structural and frictional unemployment areinvestigated we investigate the efficiency of the imposition of asingle benefit level for all household types and the introductionof an earned income tax credit

reservation wage analysis of unemployed youths in australia this paper focuses on the analysis and structural estimation of the reservation wage function from a job search model using modified 2sls and maximum likelihood procedures with selectivity bias adj

information bilateral negotiations and worker recruitment this paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel in the market firms interact with several workers but do not have information about workers behavior in the past in the bilateral negotiations firms negotiate bilaterally with prospective workers and learn about workers performance in previous jobs we show that the interaction between social preferences the incompleteness of contracts and the existence of information about a worker s past performance provides an explanation for firms forgoing market opportunities and bilaterally negotiating with a worker we observe that approximately 30 of all job contracts were bilaterally negotiated when these contracts are incomplete as opposed to only 10 when contracts were complete the surplus from trade is higher when incomplete contracts can be bilaterally negotiated which can be attributed to the presence of information

wage tenure contracts with heterogeneous firms abstract this paper investigates equilibria where firms post wage tenure contracts and risk averse workers search for new job opportunities whether employed or unemployed we generalize previous work by assuming firms have different productivities equilibrium implies more productive firms always offer more desirable contracts thus workers never quit from more productive firms for less productive firms nevertheless turnover is inefficient as employees with long tenures at low productivity firms may reject outside job offers from more productive firms a worker who quits to a more productive firm may accept a wage cut such wage cuts are compensated by faster promotion rates to higher wage levels in the future we also generalize previous arguments by showing equilibria exist where the distribution of offers contains interior mass points and find equilibrium wage tenure contracts need not be smooth

long term partnership formation marriage and employment of course marriage and employment are different nevertheless a worker looking for a job a rm looking for worker or a single person looking for a marriage partner face similar problems as all are seeking a long term partner indeed forming long term partnerships is a common occurrence in life there are many other examples business people search for other business people to form a pro table relationship bridge players seek to nd a suitable partners students search for a good university we would all like to nd a good friend etc the problem becomes signi cant if there are substantial differences in the return obtained from forming a partnership with different partners for example employers differ in the wages they offer or in the work environment they provide in such a situation a worker may reject some job offers similarly as many have learned to their cost some make better marriage partners than others the problem is two sided while a worker is evaluating a potential employer the employer is also evaluating the worker it is this two sided aspect of the problem that generates a signi cant interest a worker s willingness to accept employment at a rm depends not only on the characteristics of the rm but also the other possible options open to the worker the better an individual s opportunities elsewhere the more selective he or she will be in evaluating a potential partnership an academic who believes harvard may make an offer in the near future will be more selective in evaluating offers from lesser universities in this way expectations play a role if a single man believes that few if any women will nd him an acceptable marriage partner then he may accept the rst opportunity that presents itself partnership formation typically does not comply with a classic market situation where all participants know everything and all trades take place at zero cost finding a job nding a husband or wife or nding a business partner is a time consuming activity where opportunities typically arrive over time at uncertain intervals of time of course we can act in ways that in uence the arrival rate of potential partner workers go to employment agencies or read help wanted advertisements in newspapers singles of a certain age go to discos or join tennis clubs the literature on search and matching sm see mortensen 1982 and pissarides 1990 for early examples 1 provides an excellent framework for the economic journal 109 june f307 f334 royal economic society 1999 published by blackwell publishers 108 cowley road oxford ox4 1jf uk and 350 main street malden ma 02148 usa

search costs and efficiency do unemployed workers search enough many labor market policies affect the marginal benefits and costs of job search the impact and desirability of such policies depend on the distribution of search costs in this paper we provide an equilibrium framework for identifying the distribution of search costs and we apply it to the dutch labor market in our model the wage distribution job search intensities and firm entry are simultaneously determined in market equilibrium given the distribution of search intensities which we directly observe we calibrate the search cost distribution and the flow value of non market time these values are then used to derive the socially optimal firm entry rates and distribution of job search intensities from a social point of view some unemployed workers search too little due to a hold up problem while other unemployed workers search too much due to coordination frictions and rent seeking behavior our results indicate that jointly increasing unemployment benefits and the sanctions for unemployed workers who do not search at all can be welfare improving

unemployment insurance and capital accumulation abstract in this paper i examine a model economy with production search and unemployment insurance the introduction of capital into the economy of wang and williamson j monetary econom 49 7 2001 1337 generates the result that optimal replacement ratios are always zero the result arises from the decline in aggregate activity caused by unemployment insurance both capital and labor inputs to production fall when benefits rise unlike most of the literature i compute explicitly the cost of the transition path agents are made better off by switching to a steady state with no unemployment insurance but the welfare gain is approximately cut in half only the very poor and unemployed suffer welfare losses along the transition path i then briefly investigate the implications of negative replacement ratios

equilibrium search and tax credit reform an empirical equilibrium job search model with wage posting is developed to analyze the labor market impact of uk tax reforms the model allows for a rich characterization of the labor market with hours responses accurate representations of the tax and transfer system and both worker and firm heterogeneity the model is estimated with pre reform longitudinal survey data using a semi parametric estimation technique and the impact of actual tax reform policies is simulated the model predicts that the british working families tax credit and contemporaneous reforms increased employment with equilibrium effects found to play a relatively minor role

understanding energy systems change in canada 1 decomposition of total energy intensity abstract between 1995 and 2010 the total energy intensity e gdp pj gross domestic product in 2002 of the canadian economy declined by 23 or 2 64 mj to understand why the logarithmic mean divisia index lmd i method was used to decompose a large body of government statistical data supporting the observed e gdp decline the analysis shows that a 48 1 27 mj of the decline was associated with an inter sector structural change in the economy i e an increased contribution to the total gdp of the low energy using commercial and institutional sector compared with the high energy using manufacturing and heavy industry sectors b 24 0 62 mj was attributed to the impact of the canadian gdp growing faster than population c 22 0 58 mj of the decline was associated with an overall decrease in business energy intensity a deeper analysis of business sectors shows a positive impact of 0 4 mj from increased energy intensity in the oil and gas sector offset by a 0 98 mj decline due to energy intensity declines in the other business sectors d 6 3 0 17 mj of the decline was associated with an improvement in the energy intensity of households mostly from residential energy use rather than personal transportation energy use these results provide insights for policy makers regarding those aspects of the canadian economy that contribute to or work against efforts to transform energy systems toward sustainability

self confirming price dispersion in monetary economies abstract in a monetary economy we show that price dispersion arises as an equilibrium outcome without the need for costly simultaneous search or any heterogeneity in preferences production costs or search technologies a distribution of money holdings among buyers makes sellers indifferent across a set of posted prices leading to a non degenerate price distribution this price distribution in turn makes buyers indifferent across a range of money balances rationalizing the non degenerate distribution of money holdings we completely characterize the distribution of posted prices and money holdings in any equilibrium equilibria with price dispersion admit higher maximum prices than observed in any single price equilibrium and feature an increasing density of prices in contrast to existing theories price dispersion reduces welfare by creating mismatch between posted prices and money balances inflation exacerbates this welfare loss by shifting the distribution towards higher prices

revolutionary effects of new information technologies in markets with imperfect information and heterogeneity the information technology affects the rate at which agents meet which affects the distribution of production technologies across firms multiple equilibria may arise because the reservation utility and the lowest production technology in use affect each other the adoption of novel information technologies may then entail a revolution in the sense of a move from an inefficient to equilibrium inefficient production technologies are swiftly moved even in sectors where the new information technology has only recently been introduced the results apply to consumer products labour intermediates and institutions royal economic society 2006

price setting price dispersion and the value of money or the law of two prices abstract we study models combining search money price posting and preference shocks we show how these features interact to influence the price level and price dispersion first price posting equilibria exist with valued fiat currency second although both are possible price dispersion is more common than a single price third we prove that generically there cannot be more than two prices we provide intuition for this law of two prices show it also holds in some nonmonetary search models and discuss variations of the assumptions under which it may not hold

the distributional impacts of minimum wage increases when both labor supply and labor demand are endogenous we develop and estimate a one shot search model with endogenous firm entry and therefore zero expected profits and endogenous labor supply positive employment effects from a minimum wage increase can result as the employment level depends upon both the numbers of searching firms and workers welfare implications are similar to the classical analysis workers who most want the minimum wage jobs are hurt by the minimum wage hike with workers marginally interested in minimum wage jobs benefiting we estimate the model using cps data on teenagers and show that small changes in the employment level are masking large changes in labor supply and demand teenagers from well educated families see increases in their employment probabilities and push out their less privileged counterparts from the labor market this article has supplementary material online

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

wages and the value of nonemployment nonemployment is often posited as a worker s outside option in wage setting models such as bargaining and wage posting the value of nonemployment is therefore a key determinant of wages we measure the wage effect of changes in the value of nonemployment among initially employed workers our quasi experimental variation in the value of nonemployment arises from four large reforms of unemployment insurance ui benefit levels in austria we document that wages are insensitive to ui benefit changes point estimates imply a wage response of less than 0 01 per 1 00 ui benefit increase and we can reject sensitivities larger than 0 03 the insensitivity holds even among workers with low wages and high predicted unemployment duration and among job switchers and recently unemployed workers the insensitivity of wages to the nonemployment value presents a puzzle to the widely used nash bargaining model which predicts a sensitivity of 0 24 0 48 our evidence supports wage setting models that insulate wages from the value of nonemployment

it s about time implications of the period length in an equilibrium search model empirical evidence suggests that transitions between employment states are highly clustered around the first day of each workweek or month i analyze the effect of this phenomenon by presenting an equilibrium search model in which the period length is a parameter determining the degree of clustering infinitesimally short periods result in a continuous time model with bilateral meetings whereas longer time periods introduce the possibility of recall or simultaneity of job offers in this environment i show that the period length has a profound effect on equilibrium outcomes including the unemployment rate unemployment duration and the cross sectional wage distribution

endogenous unemployment insurance in a monopoly union model when job search matters abstract the aim of the paper is to derive an optimal unemployment insurance policy for a utilitarian trade union when job search matters it is shown that the well known result from the theory of insurance concerning the optimal risk sharing between risk averse agents changes essentially if the search behavior is allowed to affect the performance of the labor market we assume that labor market mismatch decreases with search effort which in turn decreases with the benefit the resulting equilibrium benefit is shown to be a decreasing function of the trade union s share of the costs of the insurance fund the model is also extended to the case where the benefit is made conditional on monitored search effort

unemployment benefit duration and incentives in britain how robust is the evidence abstract recent years have seen considerable advances in the econometric treatment of micro data in models of unemployment duration this paper examines the evidence from such models concerning the effects of unemployment benefits on incentives to work in britain widely accepted results of a small but significant benefit effect are reproduced using a sample of 1 231 unemployed men however these results are only found when benefit receipt is assumed to follow a hypothetical pattern which is shown to be unrealistic and over generous when more realistic calculations of benefits are used no benefit effect is found the paper also argues that search theory is of little help in determining the choice between competing functional forms and explanatory variables results concerning benefits are shown to be sensitive to the latter