Changes in the stock of on-the-job training,race, and wage growth

This article analyzes the rate of return to on-the-job-training (OJT) investment and in particular, the different rates of return faced by whites and nonwhites. Using data from thePanel Study of Income Dynamics (PSID) on tenure on a particular job and on the amount of time necessary for the average person to become fully trained on that job, I estimate the amount of training (in months) acquired by each individual on each job held. Log wage growth is then regressed on changes in the stock of training the individual held with the current firm. In one specification, changes in the stock of training are interacted with race dummies. The results suggest that the rate of return to an additional month of training is actually higher for nonwhites than for whites.     

The effect of the equal rights amendment on the economic status of women

Conclusion The empirical analysis of the effect of stateERA's on the economic status of women yielded mixed results. The amendment has provided more job opportunities and promotions into male-stereotyped occupations. TheERA, however, has not commensurately provided equal pay for equal work or higher relative pay. Yet, on balance, theERA has provided gains for women. The employment gains progressed slowly but steadily between 1969 and 1976. Women in states that passed an equal rights amendment have made a small but substantial stride toward equality with men.     

The object allocation problem with favoring upper ranks

We introduce (strict) favoring upper ranks, which is an extension of favoring higher ranks for random assignments. We demonstrate that ex post favoring ranks implies (strict) favoring upper ranks, and envy-freeness implies favoring upper ranks. Moreover, for at least four agents, no mechanism satisfies strict favoring upper ranks and either equal division lower bound or equal treatment of equals and lower invariance. Finally, we proved that the (modified) eating algorithm provides a random assignment that is (strict) favoring upper ranks.     

Golden Rules of Wages

We consider a neoclassical growth model where labor collectively chooses labor share to maximize its steady‐state wage rate. In the basic two‐factor model, labor maximizes the steady‐state wage rate by setting labor share equal to the elasticity of output with respect to labor. This is precisely the competitive outcome. Only when we consider the model with organized and unorganized labor types can organized labor raise its steady‐state wage by choosing a higher than competitive labor share. Organized labor can benefit by choosing a higher labor share only at the expense of unorganized workers; not capital. We also analyze a version of the model that incorporates a tradeoff between collective bargaining opportunities and skill acquisition. All else equal, a higher skill premium leads organized labor to choose a higher labor share. Organized labor benefits again at the expense of skilled workers; not capital.     

Credit Ratings and CEO Risk‐Taking Incentives

This study examines the sophistication of rating agencies in incorporating managerial risk‐taking incentives into their credit risk evaluation. We measure risk‐taking incentives using two proxies: the sensitivity of managerial wealth to stock return volatility (vega) and the sensitivity of managerial wealth to stock price (delta). We find that rating agencies impound managerial risk‐taking incentives in their credit risk assessments. Assuming other things equal, a one standard deviation increase in vega (delta) will lead to an approximately one‐notch (two‐notch) rating downgrade. In addition, we evaluate the significance of credit ratings in the design of CEO compensation. Our findings suggest that rating‐troubled firms will gear down managerial incentives of risk seeking. In particular, other things equal, a rating downgrade to the lower edge of the investment category (i.e., BBB?) in the immediate prior year will bring about an approximately 51 percent reduction of vega incentive from options newly granted to the CEO in the current year. However, we find no evidence that firms' rating concerns significantly affect delta. Given the significance of credit ratings in the marketplace and their close connection to accounting, the findings of the current study advance our understanding, not only of how sophisticated rating agencies are in incorporating forward‐looking information (i.e., vega and delta) into risk assessments, but of how influential the raters are in changing firms' compensation policies. The findings also have implications on the role of accounting in constraining excessive managerial risk taking with improved disclosures on managerial compensation.     

Delaying Inter Vivos Transmissions Under Asymmetric Information

This paper develops a model of bequeathing based on a moral hazard type of argument. This model explains why altruistic parents prefer late bequests to early inter-vivos gifts; it also analyzes whether or not they ought to leave rather equal bequests to their children even when the children end up with quite different incomes.     

Author Order and Research Quality

We observe a great deal of heterogeneity in the manner in which author orderings are assigned both across and within academic markets. To better understand this phenomenon, we develop and analyze a stochastic model of author orderings. In our model, authors work equally hard to obtain priority in listings but final contributions are stochastic. Further, research outlets differ in their quality hurdles. In this setting, our simulation results are consistent with two empirical regularities. First, we find that the rate of alphabetization increases with the stringency with which papers are accepted for publication. Second, conditional on clearing the publication hurdle, quality increases with alphabetization. These findings arise because increases in the publication hurdle make it more likely that authors will exceed this threshold only when both contribute a high amount. This, in turn, leads to roughly equal contributions (alphabetization) and also generates a positive correlation between alphabetization and quality.     

Racial discrimination and long-term contracts in major league baseball

The preponderance of studies on salary determination for major league baseball players suggests that significant pay differences do not exist between races. The possibility exists, however, that salary discrimination may be disguised by a racially biased distribution of long-term contracts. This study suggests that nonwhites are not victimized by long-term contract discrimination, which is consistent with the findings of others on pay discrimination in major league baseball.     

On the decomposition of the harberger tax incidence equation

Conclusions This paper has re-examined an important area in tax incidence analysis: how the famous Harberger equation can and should be decomposed. The well-known and generally accepted decomposition scheme proposed by Mieszkowski has recently been challenged byH-H, with potential ramifications concerning the significance of the general equilibrium approach pioneered by Harberger. It has been shown that this challenge has been misplaced:H-H failed to appreciate the equal yield requirement in the Mieszkowski scheme and, consequently, their proposed method of decomposition is of little economic content. This analysis reaffirms the validity and usefulness of theH-M approach.This paper was written when the author was on the faculty of Louisiana State University. The views expressed herein are his and do not necessarily reflect those of the IMF or its staff.     

Why Local Resources Management Institutions Decline: A Comparative Analysis of Van (Forest) Panchayats and Forest Protection Committees in India

Building and nurturing institutions are most challenging tasks in any development work. In this paper an attempt has been made to understand the rise and fall of institutions involved in the management of forest resources. This has been done through comparative case studies of Van (Forest) Panchayats of Uttaranchal and Forest Protection Committees of West Bengal in India. As has been documented, Van Panchayats have been created as a response to the people’s movement against forest reservation at the beginning of the 20th century. The concept of Forest Protection Committees under Joint Forest Management in India has recently emerged in response to the severe degradation of forest resources and the persistent conflicts and movements against the State. The paper goes on to explain the evolution, management systems and effectiveness of these institutions along with the issues they are confronted with in the management and protection of forest resources.     

Control–ownership Disparity and Business Performance: A Study of Korean Firms

In Korea, there is a large disparity between voting and cash flow rights (control–ownership disparity). Using firm‐level data from Korea for the 2004–2009 period, the present study examines whether control–ownership disparity influenced firm performance. Specifically, the study analyzes whether the effects of control–ownership disparity on firm performance vary according to the type of firm (publicly traded vs private firms) and to the major shareholder's ownership stake (greater than 50 percent vs less than or equal to 50 percent). According to the results, the negative effect of control–ownership disparity on firm performance was weaker for publicly traded firms, and control–ownership disparity had a negative effect on firm performance when the major shareholder's ownership stake exceeded 50 percent.     

Factors Affecting Technical Efficiency among Coffee Farmers in Côte d’Ivoire: Evidence from the Centre West Region

This paper presents measures of technical efficiency for a sample of 81 peasant farmers in the low‐income region of Côte d’Ivoire. DEA techniques were used to compute farm‐level technical efficiency (TE) measures. The analysis reveals average levels of technical efficiency equal to 36 per cent and 47 per cent respectively for the CCR ( Charnes et al., 1978 ) and BCC ( Banker et al., 1984 ) models. These results suggest that substantial gains in output and/or decreases in cost can be attained given existing technology. In a second step analysis, two‐limit Tobit regression techniques were used to examine the relationship between TE and various farm/farmer characteristics. From a policy point of view, an important conclusion stemming from the analysis of our sample is that family size, membership to farmer's club or association and the origin of the farmer are the variables found to be most promising for action. The analysis suggests that policymakers should foster the development of the formal farmers’ club or association by building the capacity of the farmers. Our analysis also supports the argument for public sector involvement in the provision of information on labour force management to peasant farmers as a means to improve efficiency levels, and thus household incomes.     

The pribumi entrepreneurs of Bali and Central Java (or how not to help indigenous enterprise)

Fostering indigenous (pribumi) entrepreneurs remains a major aim in Indonesia. The history of the Central Javanese batik industry shows, however, that affirmative action programs in pursuit of that aim can be counter-productive if they undermine entrepreneurial skills–innovation in relation to products, markets, technologies and management–and instead encourage cultivation of political and bureaucratic contacts. The batik industry cloth subsidy did this by rewarding well-established and well-connected firms for continuing to do what they had long been doing, while discriminating against new and innovative firms. On the other hand, the emergence and rapid expansion of the Balinese garment industry showed that pribumi are capable of successful entrepreneurship in a favourable environment without any extraordinary government assistance. The challenge for policy makers determined that pribumi play a larger role in business, therefore, is to design policies that encourage the development of pribumi entrepreneurial skills, rather than causing them to atrophy.     

Managerial Discretion and Task Interdependence in Teams

This study investigates whether task interdependence in teams alters the effectiveness of managerial discretion in motivating team performance. Teams are particularly useful when employees' tasks are interdependent—that is, when the degree to which the increase in team performance resulting from a team member's effort depends on the effort and skills of the other team members. The reason is that the more interdependent tasks are, the more employees need to coordinate their actions and help one another to achieve their objectives. Prior research analyzing settings where task interdependence is absent suggests that providing managers with discretion over team bonus allocation can improve team performance relative to equal team bonus allocations because it strengthens the link between contributions to team output and rewards. Economic theory suggests that managerial discretion will also improve team performance when task interdependence is present and information is efficiently used. However, we use behavioral theory to predict that managerial discretion is less effective in the presence of task interdependence, because managers do not fully incorporate all relevant information into bonus decisions and because managerial discretion hurts coordination and helping, which is particularly problematic under task interdependence. We find that while discretion over compensation has a positive effect on team performance relative to equal bonus allocation when task interdependence is absent, it has a negative effect when task interdependence is present. Additional analyses provide support for our underlying theory. Results of our study contribute to both theory and practice by suggesting that, ironically, managerial discretion may be most useful when the potential benefits of employing teams are lowest and least useful when the potential benefits are highest. Our results help explain why firms often grant managers only partial or no discretion over team members' compensation.     

WILDLIFE MANAGEMENT IN ZIMBABWE: EVIDENCE FROM A CONTINGENT VALUATION STUDY

If communities living adjacent to the elephant see it as a burden, then they cannot be its stewards. To assess their valuation of it, a contingent valuation method study was conducted for one CAMPFIRE district in Zimbabwe. Respondents were classified according to their preferences over the elephant. The median willingness to pay for the preservation of 200 elephants is ZW$260 (US$4.73) for respondents who considered the elephant a public good and ZW$137 (US$2.49) for those favouring its translocation. The preservation of 200 elephants yields an annual net worth of ZW$10,828 (US$196) to CAMPFIRE households. However, the majority of households (62%) do not support elephant preservation. This is one argument against devolution of elephant conservation. External transfers constitute one way of providing additional economic incentives to local communities.     

The settlement preferences of Scandinavian emigrants to the United States, 1850–1960

Abstract

In the past, text books have made a false distinction between the former agrarian structure of Denmark on the one hand and of the remaining Scandinavian countries on the other. The proper dividing line should intersect the kingdom of Sweden, since farmers in Norrland and Finland were peasant-proprietors at the opening of the modern age while elsewhere in Scandinavia they were generally tenants. Much of the land not owned by peasants belonged to the Crown or the churchy but neither of them practised large-scale farming save in exceptional instances. Thus it is of crucial importance to establish at the outset the extent of landownership by the nobility and by other ‘persons of standing’ (stõndspersoner) about 1600 and how this changed during the century. In Sweden noble landownership is defined to include even land held by feudal right (donationer) and freehold or crown land for which a noble has bought or been given the right to levy taxes (frälseköp). Its status as noble property is not affected by whatever proportion of it may be held as virtual peasant freehold with hereditary rights of use (bördsrätt) and security against eviction and incorporation into the tax-exempt demesne farm (säteri) of the feudal property; such a holding is called skattefräise hemman.     

The Role of TTIP on the Environment

The current study empirically investigates and shows that, on average, the possible implementation of the Transatlantic Trade and Investment Partnership (TTIP) would generally help in the fight against global warming. In particular, the study finds that a 1% increase in the bilateral trade between the United States and the typical EU member would reduce annual per capita emissions of CO₂ and GHGs in the typical TTIP member by about 2.7% and 2.4%, respectively. However, results also show that TTIP may increase annual per capita emissions of GHGs in the United States by about 2.5% per year. These results stand because the factor endowment hypothesis and the pollution haven hypothesis based on population density variations appear to dominate the pollution haven hypothesis based on national income differences.     

Monopoly supply

Summary and Conclusions In the preceding sections, it is shown that a supply curve in the ordinary sense does exist and can be derived, which corresponds to a specified family of demand curves described by changes in a single parameter of demand. If the demand curve hasn parameters, an equal number of supply curves can be derived, one corresponding to each family of demand curves generated by variation in one of the parameters, holding the remainingn–1 constant. Since the demand curve family facing the perfectly competitive firm has the formP =a, there is only one supply curve in this case. Further, that supply curve does not involve demand parameters since the sole demand parameter,a, is eliminated in its derivation. In general, this is not the case and the marginal cost schedule will be insufficient to describe the supply relation for imperfectly competitive firms.In the teaching of graduate and undergraduate microeconomics, students often become confused by conflicting discussion suggesting that monopoly nopoly supply is meaningless, irrelevant, or a point. If there is only one demand curve, the equilibrium price-quantity supply will be one point regardless of whether monopoly or perfectly competitive firms are being considered. The broader definition of supply advocated here offers the pedagogic advantage of stressing the fundamental uniformity of the supply concept in the theory of the firm. With shifting demand, there is a meaningful supply relation in both the competitive and monopoly case.As indicated in Section III, this generalized definition of supply has strong implications for empirical work, showing that it is tractable to estimate monopoly supply relations as well as marginal cost curves in the monopoly case and thus opening the door to useful new empirical work.     

Remittance Income Volatility and Labor Supply in Mexico

Using the 2000 through 2008 waves of the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH), Mexico's income and expenditure survey, we estimate the way in which volatility surrounding the inflows of international remittances impacts male and female labor supply. We find that male and female labor supply decreases with higher levels of remittance income. Additionally, increases in remittance income volatility raise the employment likelihood of men and women, as well as the hours worked by employed women. Since men are more likely than women to be employed full‐time, women may be better suited to respond to increased volatility in remittance income by raising the number of hours worked. Overall, the findings are suggestive of labor supply being used as a buffer against income shortfalls and increased volatility in remittance inflows.