Payday Loan Choices and Consequences

High‐cost consumer credit has proliferated in the past two decades, raising regulatory scrutiny. We match administrative data from a payday lender with nationally representative credit bureau files to examine the choices of payday loan applicants and assess whether payday loans help or harm borrowers. We find consumers apply for payday loans when they have limited access to mainstream credit. In addition, the weakness of payday applicants’ credit histories is severe and longstanding. Based on regression discontinuity estimates, we show that the effects of payday borrowing on credit scores and other measures of financial well‐being are close to zero. We test the robustness of these null effects to many factors, including features of the local market structure.     

AMERICAN SOCIETY FOR ENGINEERING EDUCATION

High technology investments are a rapidly growing segment of business capital expenditures. The questionnaire responses presented in this paper provide information on the capital investment decision processes currently being used for high technology projects. Respondents indicate that the capital evaluation techniques used to justify high technology investments are similar to those used for other types of capital projects and that high-tech projects must meet normal requirements for project acceptability. Respondents specified that a wide variety of factors, some quantified and some not quantified (such as quality control and reduced lead time), are included in their decision process. While there is general satisfaction with the procedures used for project justification, the relative newness of these investments suggests that there is a need to gather more detailed information about this type of capital decision.     

The Scottish Path to Capitalist Agriculture 1: From the Crisis of Feudalism to the Origins of Agrarian Transformation (1688–1746)

This is the first of a series of articles which attempt to remedy the lack of Marxist discussion about one of the most spectacularly successful transitions to capitalist agriculture in the historical record: that of Scotland. At the end of the seventeenth century, Scottish agriculture was remarkable only in one respect: the rural class structure within which it took place corresponded to the classic feudal model more closely than that of any other state west of Poland. The subsistence crisis of the 1690s exposed the productive limits of an agriculture based on feudal social relations, but also severely weakened any possible capitalist alternative. The Treaty of Union with England of 1707 brought the feudal powers of the Scottish lords into the new British state intact, but access to English and imperial markets encouraged a minority of them to experiment with the same forms of agricultural improvement which had produced such increases in landlord income south of the border. Although these attempts were not successful in the short term, they laid the basis for the transformation of Scottish agriculture in the changed circumstances after 1746, which is the subject of a subsequent article.     

The Scottish Path to Capitalist Agriculture 2: The Capitalist Offensive (1747–1815)

The first in this series of articles left Scotland on the verge of agrarian transformation. Although the nation geographically nearest to England, it remained in 1745 considerably more distant in social structure. England was the first state unambiguously to complete the transition from feudal to capitalist agriculture. Unlike England, however, those that followed did not have a period of several centuries in which to undertake the process. Lenin identified the alternatives that they faced as the Prussian 'reformist' and American 'revolutionary' paths. Scotland was to prefigure the Prussian path, where the feudal landowners themselves instigated the transition to capitalism in the countryside. After the final defeat of Jacobitism at Culloden in 1746, the Scottish feudal landowners were juridically stripped of the powers (military tenures, local jurisdictions) with which a section of them had threatened the British state. They were, however, allowed to retain most of their power over their tenants. With no remaining alternative but to adapt to the capitalist mode of production, they systematically used these powers to reorganize their estates along existing English lines. The speed and extent of the transformation that followed remains unprecedented in Western European history.     

Gender Differences in the Returns to and the Acquisition of On-the-Job Training

This article finds that gender differences in on-the-job training significantly affect the male/female wage gap. First, we find that previously trained workers exhibit larger cumulative wage gains during their current training. Thus, a substantial portion of the gender wage gap results from the fact that women have little prior training relative to men. Second, a significant amount of the observed male/female wage differential is explained by less female acquisition of current training. Gender differences in workplace promotion and training practices help explain why women accumulate less training than men. Both of these sources of gender differences have lessened from 1976 to 1985, which has led to a narrowing of the male/female wage gap.     

A Note on the Taxation of International Capital Income Flows

Seemingly persuasive arguments can be made to suggest that income from foreign-owned capital should be taxed by a small open economy and that it should not be taxed I show that the case for taxing foreign capital income as part of an 'optimal' tax scheme rests on the assumption that tax rates on other forms of income are not set optimally. In particular, if economic profit is not fully taxed, a tax on foreign capital income is desirable. If all tax rates are set optimally, foreign capital income should not be taxed by the capital-importing country.     

Executive Stock Options: Early Exercise Provisions and Risk-taking Incentives

Traditional executive stock option plans allow fixed numbers of options to vest peri‐odically, independent of stock price performance. Because such options may climb deep in‐the‐money long before the manager can exercise them, they can exacerbate risk aversion in project selection. Making the proportion of options that vest a gradually increasing function of the stock price can ensure that appropriate numbers of options are retained while they provide risk‐taking incentives, but are exercised once they have lost their convexity. “Progressive performance vesting” can allow the firm more efficiently to rebalance the manager's risk‐taking incentives.