Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap

In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial model of monopsonistic competition, we show that more densely populated labour markets are more competitive and constrain employers’ ability to discriminate against women. Utilizing a large administrative data set for western Germany and a flexible semi‐parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly 10 percentage points remained surprisingly constant over the entire observation period of 30 years.     

Closing the Technology Gap?

This paper focuses on the dimensions shaping the dynamics of technology. We present a model where the knowledge stock of a country grows over time as a function of three main factors: innovation intensity, technological infrastructures, and human capital. The latter two variables determine the absorptive capacity of a country as well as its innovative ability. We then carry out an empirical analysis that investigates the dynamics of technology in a large sample of economies in the last two‐decade period, and studies its relationships with income per capita growth. The results indicate that the cross‐country distributions of technological infrastructures and human capital have experienced a process of convergence, whereas the innovative intensity is characterized by increasing polarization between rich and poor economies. Thus, while the conditions for catching up have generally improved, the increasing innovation gap represents a major factor behind the observed differences in income per capita.     

Can Minimum Wages Close the Gender Wage Gap?

Using manufacturing plant‐level census data, this paper demonstrates that minimum wage increases in Indonesia reduced gender wage gaps among production workers, with heterogeneous impacts by level of education and position of the firm in the wage distribution. Paradoxically, educated women appear to have benefitted the most, particularly in the lower half of the firm average earnings distribution. By contrast, women who did not complete primary education did not benefit on average, and even lost ground in the upper end of the earnings distribution. Minimum wage increases were thus associated with exacerbated gender pay gaps among the least educated, and reduced gender gaps among the best educated production workers. Unconditional quantile regression analysis attests to wage compression and lighthouse effects. Changes in relative employment prospects were limited.     

Wages in Managed Markets: An Explanation of the Gender Wage Gap?

Over the last decade or so in Australia, relative wages have declined in some female‐dominated occupations, notably in the care industries. This article argues that the strong growth in labour force participation of mature‐aged women has allowed wages to remain low in these ‘managed’ industries. Limited mobility across industries and occupations, at least in part due to preferences for part‐time work, and an institutional wage‐setting mechanism also play a role. Growing demand for workers in the care industries, rising skill levels of women, and slowing growth in participation as rates converge with those of men will contribute to stronger wage growth in the future.     

International Service Transactions: Is Time a Trade Barrier in a Connected World?

Firms’ international fragmentation of production has recently widened its focus from outsourcing of intermediates to off-shoring of business services such as software program development and international call center networks. Although many services are intangible and non-storable, gravity model estimates show that geographical distance between business partners matters less for commercial service transactions. Rather, time zones can be a driving force of international service trade by allowing for continuous operation over a 24 hours business day (continuity effect) when a proper division of labor is feasible and countries are connected to electronic communications infrastructure (ICT). But even when ICT provides alternatives for face-to-face interaction, time zones can act as a barrier when coordination problems with sleeping business partners occur (synchronization effect). In this paper, we find empirical evidence for the continuity effect in trade of business services, which is robust to measurement and sample size. Even more important is that the effect of time zones on service trade depends on access to ICT. An improvement of ICT infrastructure will affect business service trade at long time zone distances significantly more than trade at short time zone distances.     

Opening the Farm Gate to Women? The Gender Gap in U.S. Agriculture

Abstract:

This article provides an empirical analysis of the gender gap for farming in the United States. Using the 2012 U.S. Census of Agriculture we show that farms operated by women earn forty percent less farm income than farms operated by men after controlling for farm and operator characteristics. These findings indicate that farming is one of the most unequal professions in the United States today. Further, we investigate whether three forms of sustainable agriculture improve incomes for women farmers. We find that only farms engaging in Community Supported Agriculture experience a marked decline in the gender income gap.     

Europe,the Green Line and the Issue of the Israeli-Palestinian Border: Closing the Gap between Discourse and Practice?

The article analyses how the Europeans (meaning European states and the EC/EU) have progressively turned a discourse about the Israeli-Palestinian border into a foreign policy practice. While much of the literature highlights the existence of a ‘gap between discourse and practice’ when it comes to Europeans’ foreign policy stance towards the Arab-Israeli conflict, we argue that the gap is dynamic and has changed across time. In the absence of an internationally and locally recognised border between Israel and Palestine, the Europeans have aimed at constructing one on the 1949 armistice line, the so-called Green Line. They have done so in stages, by first formulating a discursive practice about the need for a border, then establishing economic practices in the late 1980s-early 1990s, and most recently practicing a legal frame of reference for relations with Israel and the Palestinian Authority (PA) based on the Green Line. The outcome is that, for what concerns European countries and EU legislation, the Green Line has been increasingly taken as the Israeli-Palestinian border. However, gaps never fully close and more contemporary events seem in fact to point to a re-opening of the gap, as the article explores.     

Is the Increment Principle Really Wrong ？

In view of the problems in the selection of alternatives which are mutually exclusive and the criticism against the increment principle, this article reveals the cause of the mistake and demonstrates that only the increment principle and the incremental analysis method is the principle and method that we should follow and adopt in schematizing the economic policy-making.     

Does money have a role in the inflation process? Evidence from Australia

Inflation, defined as a sustained increase in the price level, is considered a monetary phenomenon, as it can be explained within the framework of money‐demand and money‐supply relationships. In the extant literature, money growth is shown to remain causally related to inflation across countries and over time, irrespective of the exchange rate regime and stability of the money‐demand function. Nevertheless, emerging literature suggests a diminishing role of money in the conduct of monetary policy for price stability, especially under inflation targeting. Monetary policy in Australia under inflation targeting since 1993 is an example of policy that denies a relationship between money growth and inflation. The proposition that money does not matter insofar as inflation is concerned seems odd in both theory and the best‐practice monetary policy for price stability. This paper uses annual data for the period 1970–2017 and quarterly data for the period 1970Q1–2015Q1. It deploys both the Johansen cointegration approach and the autoregressive distributed lag (ARDL) cointegration approach to investigate for Australia whether money, real output, prices and the exchange rate (non‐stationary variables) maintain the long‐run price‐level relationship that the classical monetary theory suggests in the presence of such stationary variables as the domestic and foreign interest rates. As expected, the empirical findings for Australia are consistent with the classical long‐run price‐level relationship between money, real output, prices and the exchange rate. The error‐correction model of inflation confirms the presence of a cointegral relationship among these variables; it also provides strong evidence of a short‐run causal relationship between money supply growth and inflation. On the basis of a priori theoretical predictions and empirical findings, the paper draws the conclusion that the monetary aggregate and its growth rate matter insofar as inflation is concerned, irrespective of the strategy of monetary policy for price stability.     

Cuba—Is the “Special Period” Really Over?

Since 1989, Cuba has struggled to recover from the loss of Soviet trade and subsidies. The Cuban government dubbed the period between 1990 and 1994 A Special Period in Peacetime in recognition of the 35% decline in GDP. Instead of restructuring its economy, the Cuban government used a bandaid approach that permitted self-employment, raised prices, legalized the dollar, and decreased government subsidies of state enterprises. Although growth resumed in 1994, the Cuban economy never fully recovered to pre-1989 levels of GDP. This paper discusses the investment, trade, and production problems that continue to plague the Cuban economy.     

What Is the Recent Evidence on an Excess Supply of Legal Qualifications in Australia?

This article considers the Australian evidence on whether there has been an excess supply of law graduates. There is evidence of a strong growth in demand for legal services over the past 15 years. It is also shown that the number graduating from Australian universities with a law degree grew by 3.5‐fold between 1989 and 2007. Evidence on employment rates and starting salaries for law graduates does not suggest that the labour market has been unable to absorb this increase in supply. There is, however, some evidence from the 2006 Census of a decline in the median salary of law graduates.     

Is the End of the MFA a Threat?

The end of the Multifiber Agreement in January, 2005 had a negative impact on the apparel industry of regional exporters, but the effects were weaker than expected. Using a dynamic general equilibrium model, the article provides a prospective assessment of the impact on Tunisia of the phase out of the MFA, and of the agreement which manages the rate of growth of Chinese clothing exports to Europe, until the end of 2007. The main findings are an increase in unemployment and wage inequality but no significant effects on the main macroeconomic variables, if the exchange rate management takes into account this shock.     

Which Gender Wage Gap Estimates to Trust? A Comparative Analysis

The aim of this paper is to compare estimates of the adjusted wage gap from different methods and sets of conditioning variables. We apply available parametric and non‐parametric methods to LFS data from Poland for 2012. While the raw gap amounts to nearly 10 percent of the female wage; the adjusted wage gap estimates range between 15 percent and as much as 23 percent depending on the method and the choice of conditional variables. The differences across conditioning variables within the same method do not exceed 3pp, but including more variables almost universally results in larger estimates of the adjusted wage gaps. Methods that account for common support and selection into employment yielded higher estimates of the adjusted wage gap. While the actual point estimates of adjusted wage gap are slightly different, all of them are roughly twice as high as the raw gap, which corroborates the policy relevance of this methodological study.     

How do Labor Unions Influence the Gender Earnings Gap? A Comparative Study of the US and Korea

Abstract

This paper provides a comparative study of the United States and Korea regarding the effects of unions on gender earnings gaps in 2004. Using datasets representative of the population of the US and Korea, this contribution shows that gender differences in the workers' observed characteristics and the unobserved component reduce gender earnings gaps in union jobs in both the US and Korea. Fringe benefits in the union sector attract women workers with higher labor market qualifications into the union sector and thereby reduce the gender earnings gap in this sector. The study finds that this self-selection process in the union sector is stronger in Korea than in the US, but the seniority-based wage system that prevails in the Korean union sector widens the gender earnings gap.     

Is Technological Progress Pareto-Improving for a World with Global Public Goods?

This paper investigates the welfare effects of unilateral or multilateral technological progress in a world with global public goods. We focus on the consumption relation between the private and the public good, and then show that technological progress may beself-centered (benefit oneself but harm others), self-sacrificing (harm oneself but benefit others), or self-defeating (harm all) if two goods are substitutable. In addition, any type of technological progress improves every countrys welfare if the private and the public good are close complements.     

Delayed IT Usage: Is It Really the Drag on Europe's Productivity?

This paper explores the quantitative plausibility of three candidateexplanations for the European productivity slowdown with respectto the US. The empirical plausibility of the common wisdom onthe topic (the "IT usage" hypothesis) is found to cruciallydepend on how IT-using industries are defined. If a narrow definitionis chosen, the IT usage hypothesis no longer explains the wholeof the EU productivity slowdown but just about 55 percent ofit, with the remaining part to be attributed to other factorsthan IT, as argued in the "IT irrelevance" view. No room isleft for IT-producing industries as another potential vehiclefor the US-EU productivity growth gap, instead. (JEL O4, O47,O52)     

Is the Experimental Auction a Dynamic Market?

Experimental auctions are generally thought of as static markets. This paper presents the results of an experimental auction designed to test whether participants perceptions regarding the relative difficulty of delaying or reversing a transaction outside the experimental market systematically affect their willingness-to-pay bids. The results show that auction participants perceptions significantly impact their bids in a manner that is consistent with real option theory. These results suggest that economists must be careful to consider the existence of outside markets when designing experimental auctions.JEL classifications: C91, D44, D81The author was a visiting collaborator at the Center for Agricultural and Rural Development in Ames, Iowa, while part of this research was completed.     

More is Less? Regulation in a Rent Seeking World

Competition between two interest groups that engage in strategic lobbying to influence regulatory decisions is examined. It is shown that increases in gross surplus can be detrimental to all parties. The circumstances under which this might occur, along with several applications, including the decision to deregulate, are considered. It is also shown that a simultaneous increase in both groups marginal lobbying costs benefits the low cost group and harms the high cost group.