Wage and employment effects of a wage norm

Most transition countries used tax‐supported wage norms in the early 1990s, as a part of their market liberalization programmes. This article analyses how a firm‐level tax (or subsidy) on deviations from a pre‐set wage norm may promote employment by rotating the labour demand curve perceived by the workers’ union around the value of the norm. We derive the conditions under which it yields a positive employment effect. We test the effect of the norm on the wages on a sample of Polish firms in 1990 and 1991. The data support the role of the wage norm on the position of the perceived labour demand curve and the role of the tax rate on its slope.     

Voting on Pensions: A Survey

Abstract. The paper presents a nonexhaustive survey of the literature designed to explain emergence, size and political sustainability of pay‐as‐you‐go pension systems. It proposes a simple framework of analysis (a small, open, two overlapping generation economy model), around which some variants are displayed. Dictatorship of the median voter is assumed. The text is organized to answer the following questions: (i) Do political equilibria with PAYG pension schemes exist? (ii) Why do they emerge? (iii) What are the conditions for the participation constraint of the pension game to be verified?, and finally, (iv) What is the size of the pension system chosen by the median voter and how is this size influenced by an exogenous (e.g. demographic) shock?     

Effect of Stress on Later-Life Health: Evidence from the Vietnam War Draft

This article contributes to the literature examining how stress during the early stages of life impacts later-life health using a novel proxy for stress: risk of military induction during the Vietnam War. The article estimates that an increase in induction risk in young adulthood is associated with higher rates of obesity, endocrine disease, and hypertension later in life. These findings do not appear to be cohort effects; these associations exist only for men who did not serve in the war, not for same-aged women. These results suggest stress experienced during early adulthood can have adverse health consequences later in life.     

How does the impact of an HIV/AIDS information campaign vary with educational attainment? Evidence from rural Uganda

The responsiveness to information is thought to be one channel through which education affects health outcomes. This paper tests this hypothesis by examining the effectiveness of an information campaign that aims at preventing the HIV/AIDS epidemic in Uganda. It uses individual level data from a cohort study following and testing the general population of a cluster of villages in rural Uganda over 12 years and shows that, after more than a decade of prevention campaigns about the dangers of the epidemic, there has been a substantial evolution in the HIV/education gradient. Early in the epidemic, in 1990, there was no robust relation between HIV/AIDS and education. In 2000, among young females, education is associated with a lower risk of being HIV positive. Results on HIV incidence in a duration framework confirm that finding by establishing that, for young women, education reduces the probability of seroconversion. These findings reveal that educated women have been more responsive to the HIV/AIDS information campaigns. The analysis of sexual behavior reinforces that conclusion: condom use is associated positively with schooling levels.     

Price Shocks in General Equilibrium: Alternative Specifications

Smets and Wouters (2003) find that at short- and medium-termhorizons stochastic variations in the goods market mark-up arethe most important source of inflation variability in the euroarea. This article shows that an empirically plausible alternativeinterpretation is that the estimated price mark-up shocks representrelative price (e.g. productivity) shocks in a flexible-pricesector. Such an interpretation is consistent with recent microfindings that prices are very flexible in some sectors suchas the food and energy sector, while they are very sticky inother sectors such as services. (JEL codes: E1, E2, E3)     

Heterogeneous Dynasties and the Political Economy of Public Debt

We consider a small open overlapping generations economy with descending altruism. Heterogeneity is introduced by assuming that each parent procreates a fixed proportion of selfish children. Altruistic parents can recognize the type of each child. There is no Ricardian equivalence and an active public intergenerational transfer policy is attractive to altruistic dynasty members, although there may be no unanimity among them. We display reasonable conditions for indirect preferences to be single-peaked and we apply the median voter theorem. We then describe political equilibrium paths and discuss their compatibility with the steady path of an underlying closed economy with autonomous labor productivity growth.
JEL classification : D 31; D 64; D 72; D 91; H 63