TRADE UNIONS, EFFICIENCY WAGES, AND SHIRKING

Efficiency wage models typically study the determination ofwages and effort levels in the context of a labour market wherethe supply side is competitive. In this paper we examine theeffects of unionisation on wages and effort. In addition tothe monitoring technology where a noisy signal of each workersperformance is received, we propose and investigate a spot-checkmonitoring technology where the effort of a fraction of workersis measured exactly. We examine models where the union can bargainover wages alone, and over wages and effort. In all cases weshow that the popular wisdom that unions reduce effort is generallyfalse.     

BANK CAPITAL FORBEARANCE AND PUBLIC POLICY

Recently, the bank regulatory agencies have adopted capital forbearance programs to permit some troubled agriculture and energy banks to operate temporarily with capital levels below the regulatory minimum requirement. In a world with federal deposit insurance and a lender of last resort, bank capital is no longer viewed by all depositors as the primary protector of their funds. Thus, they reduce their market discipline. Bank owners/ managers are likely to respond by increasing their risk exposure in an attempt to regain profitability. If they win, they keep all the gains; if they lose, the losses are passed on to the Federal Deposit Insurance Corporation (FDIC). A preferred policy is to require these banks to raise additional capital at this time or to be sold. Capital forbearance is forbearance of incumbent bank management/owners, not of bank customers.     

INSOLVENCY AND RISK-TAKING IN THE THRIFT INDUSTRY: IMPLICATIONS FOR THE FUTURE

This paper puts the current problems facing the thrift industry, Federal Home Loan Bank Board, and Federal Savings and Loan Insurance Corporation into historical perspective. It discusses the development of federal deposit insurance and regulation of depository institutions. The paper discusses causes of the recent financial difficulties faced by thrift institutions and the policy responses to those problems. It then examines the effect of the recent 511 thrift failures on the risk-taking behavior of institutions and the Bank Board's policy responses to risk-taking. Finally, the paper suggests possible responses to the large and growing number of insolvent institutions that have an economic incentive to pursue extremely risky portfolio opportunities.     

Investigating the Valuation Effects of Announcements of Voluntary Corporate Selloffs

While there has been an abundance of empirical research on the subject of mergers and acquisitions, little research exists on a closely related topic—voluntary corporate selloffs. This study examines the effect on shareholder wealth of the announcement by management of an investment decision to voluntarily sell part of its operations to another firm. Positive abnormal returns are found to occur on the announcement date. However, it is found that such selloffs generally occur after a period of abnormally negative returns, suggesting the announcement is preceded by the release of negative information about the firm.     

Poverty among the elderly in late Victorian England1

Despite rapid increases in manual workers' wages, poverty rates among the elderly remained high in late Victorian England, although they varied significantly across Poor Law Unions. This paper begins by examining the ability of workers to provide for their old age. A data set is constructed, consisting of all English Poor Law Unions in 1891–2, and regression equations are estimated in order to explain variations across unions in pauperism rates. This is followed by the testing of several conjectures made by contemporaries, and repeated by historians, regarding the deterrent effect of workhouse relief, the effects of wages and of the industrial character of Poor Law Unions on pauperism rates, and regional differences in workers' reliance on the poor law. The paper then examines the implications of these results for the debate over national old age pensions in the decades before the adoption of the Old Age Pension Act.     

Materialism and Life Satisfaction: The Role of Stress and Religiosity

Materialism has been a topic of interest to consumer researchers for decades. This article explores the effect of materialism on individuals' life satisfaction using a large sample from Malaysia, a country with cultural diversity within a collectivist mainstream culture. The results suggest that the effects of materialism on life satisfaction could be indirect, mediated by stress and moderated by religiosity. The study helps to explain the mechanisms that account for the negative relationship between materialism and life satisfaction reported in previous studies conducted in many countries; it provides a blueprint and directions for further research.