Downward Nominal Rigidity in West German Earnings, 1975–95

If downward nominal wage rigidity exists, it should affect the distribution of earnings changes. We present a common analytical framework for three distinct and previously unconnected approaches to the analysis of downward nominal rigidity, the skewness–location approach, the symmetry approach and the histogram–location approach. We modify them by dropping the assumption of time-invariant rigidity and apply them to earnings data from the IAB-Beschftigtenstichprobe (IABS). We find that the distribution of West German log earnings changes is indeed affected by downward nominal rigidity. Our modification of the approaches also allows us to find that the degree of nominal rigidity depends on business cycle conditions, with weaker rigidity in times of rising unemployment. Our findings support the critics of very low inflation targets.     

Structural Change, Competition, and Job Turnover in Swedish Manufacturing, 1964–96

The rate of interindustry job turnover in Swedish manufacturing seems to be driven by the dispersion of profit changes among industries. Shifts in international competitiveness among industries played a central role for explaining this pattern. The rate of intraindustry job turnover among plants has been higher in industries with many small plants, low profit margins, and high import penetration.     

URBAN POVERTY IN CHINA AND ITS CONTRIBUTING FACTORS, 1986–2000

Food price increases and the introduction of radical social welfare and enterprise reforms during the 1990s generated significant changes in the lives of urban households in China. During this period urban poverty increased considerably. This paper uses household level data from 1986 to 2000 to examine what determines whether households fall below the poverty line over this period and investigates how the impact of these determinants has changed through time. We find that large households and households with more nonworking members are more likely to be poor, suggesting that perhaps the change from the old implicit price subsidies, based on household size, to an explicit income subsidy, based on employment, has worsened the position of large families. Further investigation into regional poverty variation indicates that over the 1986–93 period food price increases were also a major contributing factor. Between 1994 and 2000 the worsening of the economic situation of state sector employees contributed to the poverty increase.     

THE TREND IN URBAN INCOME INEQUALITY IN TWO CHINESE PROVINCES, 1986–90

This paper discusses to what extent the economic growth in China in the 1980's has improved the economic well-being in urban regions of the provinces Sichuan and Liaoning and whether or not the economic growth has been attained at the cost of increased inequality. The study is based on individual household data from the State Statistical Bureau's Urban Household Survey during the 1986–90 period.     

Pension coverage and retirement savings of young and prime-aged workers in Canada, 1986–1997

In this paper, we assemble data from several household surveys to document how pension coverage of young and prime‐aged workers has evolved in Canada between the mid‐1980s and the mid‐1990s. We show that between 1986 and 1997 pension coverage has fallen significantly for men, has dropped slightly for young women, and has increased for prime‐aged women. The decline in union density and employment shifts towards low‐coverage industries explain most of the decline in pension coverage of men and young women. In contrast, most of the increase in coverage of prime‐aged women remains unexplained. While pension coverage has fallen for men and young women, their real average contributions to registered retirement savings plan (RRSPs) have increased substantially. As a result, the sum of the amounts they contributed to registered pension plans (RPPs) and RRSPs has increased markedly. JEL Classification: J26, J32 Couverture des régimes de rentes et épargnes pour la retraite des travailleurs jeunes et de ceux dans la force de l'âge au Canada (1986–1997). Dans ce mémoire, les auteurs assemblent des données de plusieurs enquêtes sur les ménages pour documenter l'évolution de la couverture des régimes de rentes des travailleurs jeunes et dans la force de l'âge entre le milieu des années 80 et le milieu des années 90. On montre que cette couverture a chuté de manière significative pour les hommes, a décliné légèrement pour les femmes, et s'est accrue pour les femmes dans la force de l'âge. La chute du taux de syndicalisation et les déplacements de l'emploi vers des secteurs où la couverture est plus faible expliquent le gros du déclin de couverture pour les hommes et les jeunes femmes. Quant à l'accroissement de la couverture pour les femmes dans la force de l'âge, il demeure inexpliqué. Alors que la couverture des deux premiers groupes a décliné, leurs contributions aux régimes enregistrés d'épargne retraite (REER) ont augmenté substantiellement. En conséquence, le total des sommes qu'ils ont contribuées aux régimes de rentes enregistrés et aux REER ont augmenté de manière importante.     

Overeducation and Undereducation and their Effect on Earnings: Evidence from Hong Kong, 1986–1996

The expansion of the higher education sector and the structural changes in the Hong Kong economy in the late 1980s raise the issue of the incidence of overeducation in the Hong Kong labor market. Using the 1991 Hong Kong Census, and the 1986 and 1996 Hong Kong By‐census data, the present study finds that the incidence of overeducation in Hong Kong is only a temporary phenomenon. The rate of return to education increased, while the premium to overeducation decreased, between 1986 and 1996. It also finds that there is a tradeoff relation between education and experience.     

The Employment Effects of Gender Discrimination in Australia 1994–95

Interpreting the unexplained component of the gender wage gap as indicative of discrimination, the empirical literature to date has tended to ignore the potential impact wage discrimination may have on employment. Clearly, employment effects will arise if discrimination lowers the female offered wage and the labour supply curve is upward sloping. The empirical analysis employs the ABS Income Distribution Survey 1994–95 and finds evidence of both wage and associated employment effects. The analysis is replicated for the earlier period 1989–90. A comparison across time is of interest given the substantial deregulation of the Australian labour market over the period.     

FBT: How to Structure Remuneration Packages for 1986–87

The purpose of this article is to determine the optimal structure of remuneration packages in the new fringe benefits tax (FBT) environment. We will describe precisely how the optimal structure of remuneration packages depends upon the (marginal) rates of FBT, personal income tax and corporate tax. The fundamental decision rule for employers and employees to optimise the value of remuneration packages is quite simple. First substitute the FBT rate, f, and the employer's marginal tax rate, t, into I = f(1 + f - t)^-1. Then if the employee's marginal tax rate i is greater than I the employer should provide any benefits until i falls to the value I. At or below this point the employee would be better off to provide all subsequent benefits.     

POLITICS AND LENGTH OF TIME TO BANK FAILURE: 1986–1990

This paper extends research on the savings and loan (S&L) industry to the banking industry in order to determine whether political influence affects the length of time from initial undercapitalization until ultimate bank failure. Results suggest that undercapitalized banks with representation on the House banking committee were allowed to remain open longer than were other undercapitalized banks. These results provide evidence that membership on relevant House committees matters.     

Sunspot Fluctuations in Asset Prices and Business Cycles in Japan Over 1986–1999

If individuals receive utility directly from the value of their wealth, equilibrium may be indeterminate so that sunspot equilibria may exist. In such an equilibrium, the price of an asset may fluctuate stochastically, as a result of spontaneous revisions of agents' expectations. A neoclassical growth model with such a utility function is used to show that those fluctuations in asset prices can generate co-movement among output, consumption and investment, even without assuming non-convex technology. In particular, numerical results show that the model can replicate well the business cycles in Japan over the period 1986–1999.     

The Evolution of Individual Male Earnings in Great Britain: 1975–95

I study the dynamic structure of male wages in Great Britain using the New Earnings Survey Panel from 1975–95. Computing auto-covariances of individual wages by cohort I find evidence of a permanent component of earnings that increases over the life cycle and a highly persistent, serially correlated transitory component. In addition, the estimated variances of both these components have risen over this period, each explaining about half the rise in inequality. Using individual's occupation at age 22, I split the sample into four skill groups. I find some differences across these groups, with the rise in the permanent variance most important for the manual groups.     

An Elizabethan Age for Pure Trade Theory: 1925–55

Developing science does depend on special individuals. But it is the cooperative and competitive interplay of many contributors that makes the whole greater than the sum of its parts. Also understanding grows temporally in fits and starts. The 1750–1848 Age of Hume–Torrens–Ricardo–J. S. Mill was stellar for trade theory. Later came the Marshall–Edgeworth–Mangoldt–Pareto Age. My generation's luck was to learn from great teachers in the Taussig–Heckscher–Cassel–Pigou–Keynes–Ohlin–Viner–Graham–Haberler age. Blessed was it to be able to bring new trends of math and graphics to crack the open questions that masters left unsolved. By 1930 the time had been over‐ripe to go beyond labor‐only Ricardo comparative advantage. The baton was carried forward by Lerner–Leontief–Harrod–Meade–M. Samuelson–Stolper–Samuelson–Jones–Kemp. What fun for all! What unsolved issues for post‐Johnson students to gnaw at!     

Adverse Selection and the Decline in Private Health Insurance Coverage in Australia: 1989–95

The decline in private health insurance coverage over the period 1989–95 is analysed using the ABS National Health Surveys. Individuals' health status and health risk behaviours are found to be significant determinants of their decision to purchase private health insurance. At a point in time, the pool of the insured is very heterogeneous, with a mix of both good and bad health risks. It is found that the decline in insurance coverage over the period 1989–95 coincided with an increase in the degree of 'adverse selection' within the insured population.     

THE STOCK OF CONSUMER DURABLES IN THE UNITED KINGDOM: NEW ESTIMATES 1948–95

A modified version of the perpetual inventory model is applied to new data on consumers' expenditure in the United Kingdom to establish estimates of that part of personal sector wealth represented by the stock of consumer durables. Current and constant price estimates are provided at an aggregate and disaggregate level for the gross and net stock and for the imputed consumption income over the period 1948–95. The accuracy and consistency of the estimates are evaluated in the context of other approaches.     

RE-ESTIMATING FEMALE DOMESTIC WORK: BASED ON THE BRITISH SURVEY EVIDENCE FROM 1986–7

Jenkins and O'Leary (SJPE, 1997) estimated unpaid work using some of the variables collected in the 1986–7 SCEL Initiative. However, the discovery of low filial effects should be attributed to the specification of their model, especially to the inclusion of proxies for contemporaneous paid work aiming to capture population heterogeneity. It seems that the two researchers could have utilised other data from people's past work histories (which were also solicited in the survey) to construct alternative paid‐work proxies and avoid the simultaneity problem altogether. The introduction of such proxies preserves the structure of the Jenkins/O'Leary model, and yields both lower full‐time and part‐time employment effects on unpaid work, and higher children‐effects. In fact the children‐effects remain pronounced even if one drops all paid work regressors or introduces a non‐selection hazard from the probit on paid work participation, instead.