A measurement of the extent of market imperfections between markets and applications

This study estimates the size and value of unpaid family caretaking activities at a European level. While at a country level several studies are available, a comprehensive evaluation for Europe as a whole was missing so far, mainly due to data limitations. This article fills this gap using a method that merges the information of the European Survey of Income and Living Conditions (EU-SILC) with the Harmonised European Time Use Surveys (HETUS). Monetary values of unpaid family domestic work and unpaid family childcare work are obtained applying both the opportunity cost and the market replacement approaches. For Europe as a whole, the total value of these activities ranges between 17% and 31.6% of the EU Gross Domestic Product (GDP), depending on the applied methodology. The national values of these activities are discussed and an interpretation of the country and gender differentials in family caretaking costs is given in terms of differences in culture, economic development and welfare state.     

SHOULD A MANDATORY SUBORDINATED DEBT POLICY BE INTRODUCED IN THE UNITED KINGDOM? EVIDENCE FROM THE ISSUANCE ACTIVITY OF BANKS AND BUILDING SOCIETIES

Current research is beginning to question the role and effectiveness of traditional rules‐based bank regulatory oversight in favor of incentive‐compatible regulatory design and market discipline and, in particular, mandatory subordinated debt market discipline. However, research on the suitability of a mandatory subordinated debt policy (MSNDP) has focused primarily on the United States. The primary aims of this article, therefore, are to examine the market for subordinated debt (SND) issued by UK credit institutions and to assess the suitability of introducing an MSNDP into UK banking regulation. A further contribution of this article is that it explores SND issuance and its characteristics at a bank level and, uniquely, considers them in relation to regulatory, structural, and economic events that either are specific to the UK or otherwise affect international banks. The article compares the UK findings with research on SND markets in the United States and Europe and, in so doing, raises concerns over whether an MSNDP for the largest global credit institutions would be feasible. Although the focus of this study is the UK banking industry, the country‐focused bank‐level approach provides conclusions that might be relevant to other countries considering the implementation of an MSNDP.(JEL G18, G28)     

COMPARATIVE ESTIMATES OF THE VALUE OF HOUSEHOLD WORK IN THE UNITED STATES FOR 1976*

This paper uses five valuation methods to derive aggregate and per person estimates of the value of household work in the United States. Two general questions are posed: (1) what is the relationship between the aggregate estimates and the valuation method used, and (2) how do per person estimates vary by sex and earnings? The main observations of the paper are as follows: First, the aggregate value of household work is sizable regardless of the valuation method used. Second, aggregate estimates are extremely sensitive to the method of valuation. For example, the highest estimate is $475 billion greater than the lowest estimate. Third, contrary to earlier findings, opportunity cost valuation methods generally produce significantly higher estimates than market cost valuation methods. Fourth, per person estimates vary significantly by sex and level of earnings across valuation methods. Generally, market cost estimates.     

FAMILIES, TIME AND MONEY IN CANADA, GERMANY, SWEDEN, THE UNITED KINGDOM AND THE UNITED STATES

Using microdata from the Luxembourg Income Study, we assess "time crunch" for families with children in Canada, Germany, Sweden, the U.K. and the U.S. Both theory and empirical evidence suggest that both time and money are important inputs to the well-being of parents and children. We present cross-country comparisons of "total available adult hours" under different assumptions about the varying time needs of families of different size. We also present estimates of "time shortages." In all cases, we provide separate estimates for families located at different points in the country income distributions, since being short of both time and money is likely to be particularly problematic. Although paid work hours are highest for high-income families, we nonetheless find significant numbers of lower-income families in which parents work very long hours in the paid labor market; this is particularly the case in the U.S.     

HOUSEWORK VS. MARKETWORK: SOME EVIDENCE HOW THE DECISION IS MADE

Empirical research using the opportunity cost approach to estimating the value of non-market work of women tends to focus on the value of actual or potential output produced at home and expected or actual earnings, and assume that a rational decision involves choosing the higher one. Evidence derived from data on young married women suggests that full-time homemakers frequently are unable to provide estimates either of their potential earnings or of the lowest wage they would accept to enter the labor market, and that such estimates as they do provide are not soundly based. We also found that using wages of women in the labor market to estimate the value of the home time of full-time homemakers involves upward bias. We conclude that there are good reasons for caution in using the opportunity cost approach.     

THE VALUE O F NONMARKET HOUSEHOLD PRODUCTION: OPPORTUNITY COST VERSUS MARKET COST ESTIMATES

This paper discusses the problem of valuing the time spent on household production and presents estimates of that production for the United States in 1960 and 1970. The estimates are derived by using both opportunity cost and market cost valuations of household time. A comparative analysis of these estimates concludes first that opportunity cost estimates exceeded market cost estimates by 1.0 to 3.0 percent of the GNP. Second, the ratio of household production to the GNP, although declining slightly between 1960 and 1970, may in the long run tend to be relatively stable. These conclusions do not support the popular views that over time household production will decline in relative magnitude, or that the opportunity cost method of valuing household time, relative to the market cost method, is significantly upward biased.     

PROBLEMS OF A CENSUS OF NATIONAL WEALTH

This paper is essentially a summary of the book Measuring the Nation's Wealth (Volume 29, Studies in Income and Wealth, New York: National Bureau of Economic Research, 1964), which is the report of study directed by the author. The purpose o f the study was to assess the problems and possibilities of conducting a national census of real wealth as a basis for continuing wealth and balance sheet estimates for the U.S. economy, by major sector.
It is stressed that the balance sheets and wealth estimates should be designed as a consistent part of an integrated system of national income accounts. Thus, valuation (at market prices and/or depreciated replacement costs), sectoring, and type-of-asset detail in the basic data and derived estimates should be compatible with the flow estimates contained in the economic accounts. Consistency of stock and flow estimates facilitates analysis of inter-relationships, and is helpful in the estimation process.
It is recommended that in the U.S. asset data by broad categories be collected as part of the recurring economic censuses and other reporting systems, but that detail on fixed reproducible assets (construction and equipment) at cost, by year or period of acquisition, be obtained from a small sample of respondents in each industry. The detail would be useful in its own right, and also permit revaluation of the assets by use of price indexes and depreciation rates to a current depreciated replacement cost basis. Where feasible, respondent estimates of market values would also be obtained.
The proposal is thus a compromise between the Japanese 1955 sample survey of assets, and the detailed wealth inventory of the U.S.S.R. which was begun in 1959. Preliminary work is now underway in the U.S. federal statistical agencies to expand collection of asset data, and to prepare comprehensive wealth estimates in the framework of the national income accounts.     

Labour market institutions and wage setting: evidence for OECD countries

The main channel through which labour market institutions are supposed to work in affecting unemployment is through their effects on the key parameters of the wage curve. In particular, labour market institutions may have both a direct wage push (or level) effect, i.e. change the level of the real wage for any given level of the unemployment rate and productivity, and an indirect slope effect, i.e. change the responsiveness of the real wage to the unemployment rate. The question this article addresses is whether there is any evidence that these transmission mechanisms were at work in a group of 20 Organization for Economic Co-operation and Development (OECD) countries over the period 1960 to 1999. The analysis is accomplished in two steps. Pooled Mean Group (PMG) estimates of a wage equation including unemployment, productivity and a set of wage push institutions are first obtained, allowing only a subset of institutional coefficient to be homogeneous, while leaving the unemployment and other coefficients free to differ across countries. The country specific estimates of the unemployment coefficients are then used to investigate whether and to what extent cross-country heterogeneity in the estimated wage response to unemployment is related to institutional differences. The results support the existence of significant wage push effects of union density and benefit replacement rates, and of significant slope effects of benefit replacement rates, benefit duration and employment protection. A more generous unemployment benefit structure is found to lower the wage responsiveness to unemployment, while higher employment protection, contrary to what one expects, is found to enhance it. No significant level and slope effects are found for the tax wedge and bargaining coordination.     

高绩效工作系统、知识共享 与员工创造力关系的实证研究

如今，中国企业越来越难以依赖规模化和低成本立足于竞争市场，需要更多地借助于创新这一利器以获取持续的竞争优势。员工创造力是企业创新能力的核心构成部分，是企业不断发展壮大的源泉。本文运用战略性人力资源管理理论、创造力成分理论以及组织学习理论，探究高绩效工作系统、知识共享及员工创造力三者间的关系。实证研究结论表明，我国企业的高绩效工作系统对员工创造力有显著的正向作用，知识共享在两者的关系中发挥了中介作用。     

Monetary Expressions of Labour Time and Market Prices: Theory and Evidence from China,Japan and Korea

This article presents estimates of labour values and prices of production following two approaches: the first is based on the classical and Marxian theory of value and distribution; the second on the so-called ‘new solution’ to the ‘transformation problem’ and its variant, the Temporary Single-System Interpretation (TSSI). The major advantage of the latter approach is its simplicity, along with the relatively low data requirements. Our empirical findings from the economies of China, Japan and South Korea suggest that both approaches give estimates of labour values and prices of production which are extremely close to each other as well as to actual market prices. On further examination, however, we conclude that our empirical findings are absolutely consistent with the theoretical requirements of the classical approach and contradict those of the TSSI.     

The determinants of the location of USA direct foreign investment

This article estimates a model of the location of USA direct foreign investment (DFI) in manufacturing that accounts for sociopolitical factors as well as host country demand and cost conditions. The results indicate that all three sets of factors play a significant role in shaping the geography of USA DFI. The results further indicate that the exclusion of sociopolitical factors from a model of DFI location not only limits the model's explanatory power, it leads to a misassessment of the influence of labour cost, tax rates, market size and other economic factors.     

TOWARDS A DEFINITION OF NON-MARKET ACTIVITIES*

Recent attempts to measure value of household work and other non-market activities have been based on a simplistic interpretation of Opportunity Cost of Time Theory; this paper attempts to refine this and develop practical definitions from basic Utility Theory. First a distinction is made between economic and other activities, the former being the only ones subject to dollar-measurement; we recognize economic activities can occur outside the market and focus our analysis upon these latter. In the framework of Becker-Lancaster a Household-Production Function is posited which produces jointly such non-market economic activities-called indirect utility-and welfare or satisfaction- called utility. A criterion for identifying the indirect utility activities (Third-Person Criterion) is outlined, and related to time-use survey data. Finally, four practical estimation methods are outlined: simple opportunity cost of time; gross replacement cost; individual function replacement cost; and the full production function approach. This latter, which includes evaluation of capital contributions, is deemed theoretically most valid but for present purposes least practical because of lack of data on domestic capital stock. The paper concludes that there exists both a theoretical basis for valuing non-market activities, and the necessary data to apply the formulas developed.     

A cost of living index incorporating a network effect

This paper constructs a cost of living index (COLI) that incorporates a network effect. While in this instance the application is to the telecommunications sector, the COLI are applicable more generally to network industries. The COLI permit valid welfare comparisons to be made by individual, region and country. Illustrative COLI estimates are provided for selected OECD member country telecommunications market data.     

A comparative study of environmental amenity valuations

The paper reports on a comparative study of direct and indirect approaches to valuing environmental amenities (i.e., public goods), specifically, air quality in terms of its human health effects. The application of three indirect valuation methods (via market goods) is reported here: the health production method, a consumer preferences (for nonmarket goods) model, and the cost of illness method. The first and second methods are (economic) behavior-based approaches where willingness to pay for an environmental good is derived by exploiting relationships in consumption between the public good and market good(s). The third method is based on a physical relationship—a dose-response function—between the environmental good and health. The direct valuation approach encompassed three contingent valuation elicitation formats: open-ended, modified iterative bidding game, and referenda-style binary choice. The application of all four methods was based on data from a survey of a large, stratified sample of households from the Haifa metropolitan area in northern Israel. The estimates of welfare change derived by the various methods are discussed and compared.     

Estimated annual and lifetime labor productivity in the United States, 2016: implications for economic evaluations

Abstract

Background: Human-capital based lifetime productivity estimates are frequently used in cost-of-illness (COI) analyses and, less commonly, in cost-effectiveness analyses (CEAs). Previous US estimates assumed that labor productivity and real earnings both grow by 1% per year.

Objectives: This study presents estimates of annual and lifetime productivity for 2016 using data from the American Community Survey, the American Time Use Survey, and the Current Population Survey, and with varying assumptions about real earnings growth.

Methods: The sum of market productivity (gross annual personal labor earnings adjusted for employer-paid benefits) and the imputed value of non-market time spent in household, caring, and volunteer services was estimated. The present value of lifetime productivity at various ages was calculated for synthetic cohorts using annual productivity estimates, life tables, discount rates, and assumptions about future earnings growth rates.

Results: Mean annual productivity was $57,324 for US adults in 2016, including $36,935 in market and $20,389 in non-market productivity. Lifetime productivity at birth, using a 3% discount rate, is roughly $1.5 million if earnings grow by 1% per year and $1.2 million if future earnings growth averages 0.5% per year.

Conclusions: Inclusion of avoidable productivity losses in societal-perspective CEAs of health interventions is recommended in new US cost-effectiveness guidelines. However, estimates vary depending on whether analysts choose to estimate total productivity or just market productivity, and on assumptions made about growth in future productivity and earnings.     

Using Revealed Preferences to Infer Environmental Benefits:Evidence from Recreational Fishing Licenses

We develop and apply a new method for estimating the economic benefits of an environmental amenity. The method is based upon the notion of estimating the derived demand for a privately traded option to utilize an open access good. In particular, the demand for state fishing licenses is used to infer the benefits of recreational fishing. Using panel data on state fishing license sales and prices for the continental United States over a 15-year period, combined with data on substitute prices and demographic variables, a license demand function is estimated with instrumental variable procedures to allow for the potential endogeneity of administered prices. The econometric results lead to estimates of the benefits of a fishing license, and subsequently to the expected benefits of a recreational fishing day. In contrast with previous studies, which have utilized travel cost or hypothetical market methods, our approach provides estimates that are directly comparable across geographic areas. Our findings show substantial variation in the value of a recreational fishing day across geographic areas in the United States. This suggests that current practice of using benefits estimates from one part of the country in national or regional analyses may lead to substantial bias in benefits estimates.Financial support of this work was provided by Resources for the Future, the U.S. Environmental Protection Agency, and the Dean’s Research Fund, John F. Kennedy School of Government. The analysis benefitted from discussions with Andrew Metrick, Richard Newell, and Kerry Smith, and comments from participants at seminars at the National Bureau of Economic Research and Harvard University, and very helpful comments from two anonymous referees. The data set, which builds upon previous work by Wolf (1988), was assembled with the help of a series of research assistants, including: Rod Bender, Nancy Bilica, Alisha Bloom, Diane Cherry, Peter Condon, Andrew Hoffman, and Michael Susanto. The authors alone are responsible for any errors.     

Foreign Acquisitions in China and Multinationals’ Global Market Strategy

Using firm‐level data from 2000 to 2006, we find that foreign acquisitions in China change the target firms’ export extensive margins. We develop a three‐country model with cross‐border acquisitions to show that the acquirers can alter the targets’ export decision through three possible channels: fixed‐cost jumping, technology transfer and global market reorganization. We find evidence that foreign acquisitions change the Chinese target firms’ probability of exporting to a third market. Technology transfer is not observed. Evidence implies that fixed‐cost jumping is used to enable the targets to export, while global market reorganization is a key motive for the acquirers to withdraw the targets from the export market.     

CROSSING THE BORDER AND MIGRATION DURATION

Policies to deter illegal entry and reduce the number of undocumented immigrants have a complex impact on migration patterns, border crossings, and duration. However, studies generally assume the method of crossing into the United States is exogenous with respect to migration duration. Using data from the Mexican Migration Project, this paper finds that the migrant's decision to hire a coyote (smuggler) to cross the border is endogenous with respect to duration. Instrumental variable estimates provide evidence that migrants who incur the cost of hiring a coyote have longer migration durations as they need to work longer in the United States. The migrants most likely to hire coyotes have less education, little migration experience, and/or come from rural communities. Results suggest that continuing to increase guest worker programs could actually decrease the number of Mexican immigrants in the United States by eliminating the need for coyotes which would reduce migration durations. This would better utilize the immigrant population in the United States by encouraging immigrants to stay while employed and to migrate home when unemployed, with the knowledge they can later return. Reducing coyote use would also reduce income flowing to Mexican cartels which have profited from human smuggling. (JEL O15, J61, J64)     

THE PERSIAN GULF, GLOBAL OIL RESOURCES, AND INTERNATIONAL SECURITY

This article analyzes the interaction of politics and military security in global oil markets since the 1980s. The authors outline the historical evolution of the pricing structure that maintained a stable world oil market. They argue that the security framework underlying this pricing structure relied on a trade-off between price stability and military security that has contributed to growing political instability in individual Persian Gulf countries and the rise of Al Qaeda and similar groups. The article concludes with a discussion of the pros and cons of three possible policy approaches to this dilemma—a "hands-off" approach that is similar to the policy that prevailed between 1973 and 1990, a unilateral security system organized and led by the United States, and an international security framework. (JEL D47 , F02 , L11 , Q32 , Q41 , Q43 , Q48 )