Competition and educational quality: evidence from the Netherlands

Little evidence is available for the effect of competition on educational quality as only a few countries allow large-scale competition. In the Netherlands, free parental choice has been present since the beginning of the twentieth century and can be characterized as a full voucher program with 100 % funding. Based on micro panel data for the Netherlands, we show that there is a relation between competition and educational outcomes in secondary education, but that it is often negative and small, sometimes insignificant but never positive. This effect is larger for small and medium-sized schools and for schools that do not have a Protestant or Catholic denomination.     

Nominal rigidities and retail price dispersion in Canada over the twentieth century

Abstract We introduce a new data set on over 230,000 monthly prices for 10 goods in 50 Canadian cities over the 40‐year period from 1910 to 1950. This information, coupled with previously published price information from the late twentieth century, allows us to present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years. We find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price changes occurring in the 1920s and the 1970s. Additionally, the process of retail market integration has followed a U‐shaped trajectory with many domestic markets being better integrated – as measured by the average dispersion of retail prices – at mid‐century than in the 1990s. We also consider the linkages between nominal rigidities and price dispersion, finding results consistent with present‐day data.     

Patterns and determinants of intergenerational educational mobility: Evidence across countries

This study analyses the patterns and determinants of the intergenerational persistence of education attainment. Internationally comparable data are used by age cohort for parentsʼ and childrenʼs education levels for 30 countries. The intergenerational regression coefficients are estimated by explicitly considering the bias from the censored regressor, and they show that educational mobility has worsened over generations in most countries. However, the degree of change varies considerably across countries and over time. Country-cohort panel regressions are performed using the estimates of intergenerational educational mobility and covariates. The results show that intergenerational educational mobility tends to decrease with income inequality, inflation and credit constraints. However, it increases with per capita GDP and public expenditure on primary education relative to that on tertiary education.     

Does the law of one price hold in a high-inflation environment? A tale of two cities in Turkey

This study addresses the price convergence in two cities in Turkey (Istanbul and Ankara) using annual data over the three-quarters of the twentieth century (1922–1998), characterized by prevailing high inflation rates for most of the period. In contrast to the rest of the literature addressing convergence in price levels with a typical result of extremely slow convergence rates at best, we argue that convergence is much easier detected in growth rates rather than levels of prices. We suggest using the bounds testing procedure of Pesaran et al. (2001) for this purpose. We find a clear-cut evidence on the existence of a common driving force behind inflation dynamics in Istanbul and Ankara – a finding that is in contrast with the results typically reported in related literature.     

Immigrant earnings: age at immigration matters

A correlation between age at immigration and earnings is observed in Canadian census data. The evidence supports three underlying sources of the effect; first, work experience in the source country yields virtually no return in the host country; second, the return to education varies with age at immigration, and, finally, an 'acculturation' effect is observed for immigrants who are visible minorities or whose mother tongue is not English. Further, it is found that educational attainment, and relatedly earnings, vary systematically across age at immigration with those arriving around age 15 to 18 obtaining fewer years of education. JEL Classification: J61, J31     

The GDP Value of Twentieth‐Century Health Improvements in Developed Economies: Initial Estimates for England

Economists are aware that conventional measures of national income do not capture everything that is important to individuals. In particular, the value of huge improvements in health over the twentieth century has gone uncalculated. Usher and Nordhaus have emphasized the virtues of including mortality improvements in some form of extended national income measure. This article therefore sets out a methodology that can be used to calculate the value of mortality and morbidity improvements. The results for England indicate that the value of health improvements in developed economies have added at least 0.3 percent per annum to twentieth‐century GDP growth rates. The results demonstrate that those interested in understanding improvements in economic welfare need to pay much more attention to improvements in health.     

New evidence on the convergence of international income from a group of 29 countries

This paper updates and extends the time-series evidence on the convergence of international incomes using a set of 29 countries over the period 1900–2001. Time-series tests for stochastic convergence are supplemented with tests which provide evidence on the notion of “β-convergence” predicted by the Solow model. The evidence indicates that the relative income series of 21 countries are consistent with stochastic convergence, and that β-convergence has occurred in at least 16 countries at some point during the twentieth century. Further examination of the properties of the β-convergence test provides anecdotal evidence of conditional convergence in three additional countries for which the convergence hypothesis was initially rejected. Consideration of convergence clubs strengthens the evidence in favor of convergence. Analysis of the cross-country dispersion of incomes over time also suggests that convergence has occurred over the 1900–2001 period, particularly within certain clubs, with structural breaks associated with World War II in many countries causing a break in the convergence process.      

Veblen’s System of Conspicuous Waste

Abstract:

The touchstone by which Thorstein Veblen evaluated an expenditure was “whether it furthers the life process taken impersonally.” For Veblen, the economic problem involved the problem of social provisioning, the way a community provides for itself. To a large degree, social provisioning has been impeded by the system of conspicuous waste, a “scheme of properties, decencies, and standards of living, the economic motive of which is competitive spending.” The system of conspicuous waste represents a cultural unfolding of conspicuous waste, prompted by the introduction of continuous-mass production in the late nineteenth, early twentieth centuries. Conspicuous waste refers to the allocation of resources, time, and effort that detract from the life process. Veblen rejected the idea that the system of conspicuous waste benefits society. For Veblen, the standard of living refers to that level of consumption at which people are expected to consume. Products that prove serviceable, however, may also serve as symbols of invidiousness. Veblen used the system of conspicuous waste to compare the diverse cultural responses of England and Germany to the same technology in the early twentieth century. The system, however, plays a central role in absorbing increases in output and maintaining profits. Whether it can continue to do so remains questionable.     

Some Inflationary Aspects of Distributive Conflict:Reassessing Canadian Inflation,Part I

This is the first installment of a two-part article, in which we explore the empirical validity of the post-Keynesian “conflict inflation” theory for Canada. By documenting the numerous points of contact between Canadian inflation, on one hand, and institutional power and distributive conflict, on the other, we argue that inflation may be validly understood as a power process insofar as it feeds on social conflict and is systematically associated with the redistribution of income between different income groups. Over the past century, Canadian inflation has tended to redistribute income from capital to labor, from large to small firms, and from the upper to the lower income brackets. Given these facts, Canadian inflation must be understood as a political phenomenon.     

Resiliency or Change? The Contemporary Canada—US Border

The developed states of North America have not experienced transnational integration to the same degree as those of the European Union. Indeed, some scholars have argued that North American States and the border functions which define their territorial limits, are essentially unchanged in the face of globalisation, hardening rather than softening, and remaining unabashedly archaic and state-centred. This article suggests that although there has been considerable change in the border functions and geopolitical discourses which mediate transnationalism among the highly developed North American states – namely Canada and the United States – the nature and structure of transnational integration has remained more limited than that of the EU. It argues that the reasons for this more limited international integration agenda lie in the specific geopolitical discourses which sustain cross-border institutions and national identity before and after 11 September 2001 (‘9/11’). The Canadian state, for example, has demonstrated considerable resistance to greater levels of integration with the United States, at the same time that it has became increasingly open to cross-border trade under NAFTA. This resistance is based upon a national-identity discourse that relies upon distancing the Canadian state from its larger neighbours to the south. At the same time, however, the national security discourse which has emerged in the Canada and the United States following from 9/11, has failed to close borders to increasing levels of economic integration, and must accommodate the need for a degree of openness to the heightened levels of cross-border trade under NAFTA. As a result, there has been considerable reorganisation and reorientation of borders within North America. It is simply inaccurate to view the continent as a place where borders have remained unyielding to the broader forces of globalisation. If the role of borders in maintaining security while facilitating trade has resulted in an increased awareness of, and concern with the Canada-US border, the latter is not simply a continuation of ‘old-fashioned state-centred geopolitical concerns’ but is instead a newly-fashionedpost-9/11 response to the ramifications of globalised trade and terrorism.     

Organizational failures and wage determination: A historical case study

In large U.S. firms during the first half of the twentieth century, bureaucratic, centrally administered wage determination began to replace delegation of wage setting to lower-level managers. This transition was in part caused by internal organizational problems firms confronted as they attempted to manage the principal-agent problem inherent in delegating wage determination. A single-firm case study examines the events surrounding one firm's adoption of centrally administered wage setting and documents the increased cross-plant uniformity in wage rates and decreased wage-rate flexibility that were the result of the new system.     

Monetary regimes and money supply endogeneity

Quasi-longitudinal Canadian microdata was used to compare the movement of individuals between employers with job changes taking place within firms. Internal mobility is found to be much less common than job changing between firms. Workers changing jobs within a firm are more likely to be older and have higher wages and longer tenures in the jobs they leave than individuals employers. This provides some support for the job-matching hypothesis underlying recent research on the causes of individual mobility, although it is also clear that workers in large or unionized firms are more likely to have the opportunity for internal promotion. While wage gains obtained through internal mobility are smaller than those achieved through external mobility, wage levels are higher for individuals moving within the firm. It is argued that this observation is consistent with a dual labour markets interpretation of mobility patterns.     

中国乡村治理的层级及其变迁——兼论当前乡村体制的改革

本文对我国县以下乡村治理的层级及其变迁进行历史的考察,指出传统的帝国时代,县以下也存在多级组织与管理层级,王权通过这些组织对乡村保持一定的监控。传统的乡村治理的常态既非“自治”,也非“专制”,而是实行“官督绅办”的体制。这是一种节约成本的制度安排;二十世纪以来,国家权力不断向乡村基层延伸并最终实现乡村组织与管理的国家化、行政化和官僚化。这也是一种代价高昂的方式。二十世纪末的村民自治改革中,国家才开始从乡村一定程度地退出。无论在历史上还是未来乡村体制改革及基层组织设置过程中,国家对乡村社会的资源吸取能力、社会控制能力和公共服务能力都是基本的影响因素。当前人们争论乡镇政权是否退出乡村或者是“强化”还是“弱化”过于简单化和绝对化。从历史和现实来看,乡镇政权组织是必不可少的,关键在于如何组织与功能如何改革,哪些组织和功能应强化、哪些组织和功能必须弱化。     

Stabilizing consumer choice: the role of ‘true dynamic stability’ and related concepts in the history of consumer choice theory

Abstract

It is often argued that the inability of Arrow–Debreu general equilibrium theory to produce an adequate proof of the stability of the Walrasian price adjustment mechanism was one of the program's most significant failures. This paper will not question this standard interpretation of the history of general equilibrium theory, but makes the case that characterizing the ‘stability’ question in terms of market stability– in particular the stability of the equilibrium price vector in the Walrasian general equilibrium model – actually helped to stabilize the standard model of consumer choice in general equilibrium theory and elsewhere within microeconomics. The problem of the stability of ‘consumer's equilibrium’ was much discussed early in the twentieth century, and it has recently re-emerged in a different guise as the ‘endowment effects’ and ‘reference dependencies’ of contemporary behavioral economics, and yet it disappeared from mainstream discussion during the period 1950 to 1980. This paper argues that shifting the discussion from the intra-agent stability of the individual consumer to the inter-agent stability of the competitive market contributed – despite its ultimately negative impact on general equilibrium theory – to the long period of stable normal science consumer choice theory enjoyed during the middle of the twentieth century.     

Social class, family background, and intergenerational mobility

This research examines the various approaches taken by economists and sociologists for analyzing intergenerational mobility. Social mobility models based on social classes arising from an occupational classification scheme are analysed. A test for the statistical validity of classification schemes is proposed and tested using Danish sample survey data that was first collected in 1976 and augmented in 2000. This is referred to as a homogeneity test and is a likelihood ratio test of a set of linear restrictions which define social classes. For Denmark it is shown that this test fails for an Erikson-Goldthorpe classification system, raising doubts about the statistical validity of occupational classification systems in general. We also estimate regression models of occupational earnings, household earnings, and educational attainment using family background variables as covariates controlling for unobservables, measurement error, and simultaneous equation bias. In these models homogeneity tests are also rejected. We conclude from these results that the individual's family background has a small but significant impact on lifetime chances which is not captured by the Erikson-Goldthorpe classification scheme.     

The intergenerational transmission of education and equality of educational opportunity in East and West Germany

Socialist societies often emphasized the abolition of traditional social classes. To achieve this objective, educational opportunities were at times ‘actively managed’ and allocated to children of less educated parents. What happened to these patterns after the demise of socialist rule in Eastern Europe? We study the development of educational mobility after the fall of the iron curtain in East Germany and compare the relevance of parental educational background for secondary schooling in East and West Germany. Based on the data from the German Mikrozensus we find that educational mobility is lower in East than in West Germany and that it has been falling in East Germany after unification. While the educational advantage of girls declined over time, having many siblings presents a more substantial disadvantage in East than in West Germany.     

Evolution of the Corporation in the United States: Stabilized Scarcity and Vested Interests

The widening of markets beginning in the late nineteenth century in the United States involved changes in the financial and legal institutions supporting production for large-scale markets. The evolution of the corporation under these circumstances reflects the role of the legal system in formulation of formal rules which favor vested interests. As Thorstein Veblen said, “A constitutional government is a business government.”

This article examines the co-evolution of the legal system and the economic system as they relate to the merger movement at the turn of the twentieth century, the increased use of the corporate form, and the emphasis on pecuniary values over production to secure stabilized scarcity in the midst of cutthroat competition and deflation. The resultant financialization of the economy which continues today was reinforced by such legal rules as the Fourteenth Amendment’s protection of property, including intangible property, and the Rule of Reason accommodating some instances of monopolization. These stabilization policies have secured the rentiers’ return at the cost of the long term health of the national economy. John R. Commons’ observations on artificial selection and the use of law to make capitalism better offer a solution through laws regulating the detrimental aspects of financialization.     

Smith After Sen

This paper makes the claim that it is possible to distinguish two phases in the revival of classical theory during the twentieth century. The first phase was severely minimalist, and looked back to David Ricardo for inspiration, reinterpreting his work in terms of present day concepts and formal methods. The second phase, on the other hand, seeks an enriched present day classicism, and is appropriately inspired by the work of Adam Smith. It is argued that already, before the beginning of the new millenium, deeply significant work has been done which, once examined from the present point of view, can be seen to herald the arrival of elements of second stage classical theory. Thus certain contributions of Amartya Sen can be seen to cast new light on the work of Adam Smith, and to link up with the ideas of other theorists like Luigi Pasinetti whose work has had features characteristic of second phase classical theory.     

The Cambridge Tradition in Economics: An interview with G. C. Harcourt

Geoffrey Colin Harcourt has devoted a long and fruitful career to the development of themes associated with the Cambridge and Post-Keynesian traditions in economics. He is perhaps best known for his survey of the Cambridge capital theory debates (1972); but he has written widely on growth and investment, on effective demand, on pricing and distribution, and on the history of economics in the twentieth century. He has also written extensively on policy (2001a) and was a 'back room boy' for the Australian Labor Party for many years. During the Vietnam War, Harcourt was a leader of the anti-war movement in South Australia. The following interview focuses on the evolution of, and prospects for, the Cambridge tradition that stems from the work of John Maynard Keynes, Piero Sraffa, Joan Robinson, Richard Kahn, Nicholas Kaldor and Michal Kalecki. The interview took place in Professor Harcourt's rooms in Jesus College, Cambridge, on 5 September 2000.