Spousal Complementarity in Home Production

A bstract .   Economists have increasingly recognized the growing role of married women in the labor market by treating the labor supply decisions of married couples as joint decisions. However, they have yet to apply the same reasoning to home production. We build a more complete model of household time allocation that consists of a system of simultaneous equations estimating hours of labor supply and home production. Using data on white couples from Wave XXV of the Panel Study of Income Dynamics, we find that working wives act as if their husbands are substitutes for home production while other wives do not. Husbands' responses to their wives' behavior depends upon whether children are present.     

Economic Developments in the West Bank and Gaza Since Oslo

The performance of the Palestinian economy in 1994–2000 was uneven, but for the period as a whole, real per capita income declined despite the mobilisation of substantial amounts of foreign aid and despite considerable progress in establishing a basic institutional framework. This paper argues that economic growth and private investment, in particular, have been adversely affected by closures, by uncertainties about political developments and the direction of policies and policy reforms, by problems of governance, and by the excessive transportation and transaction costs related to the intensification of the permits system.     

Risk Aversion and Wages: Evidence from the Baseball Labor Market

We develop a bargaining model to assess how workers and employers might allocate wages inter-temporally in order to cope with risk. We then apply this model to 106 long-term contracts for major league baseball players’ services. Most of these agreements not only smooth employee compensation over time but suggest greater relative risk aversion for teams than players. Compared to the wages they might pay to retain these players on a succession of one-year contracts, teams often pay a premium on longer-term agreements to protect against market volatility and potential inability to replace a key player on the open market.