The cost of living,threshold bargaining and incomes policy1

For trade union bargainers one of the infallible laws of political economy is that wages lag behind prices. This means that in an inflationary era the real value of the wage to which their members are entitled will be eroded, and some compensation will have to be made for this at the next round of wage negotiations. Therefore, changes in the cost of living since the last settlement will be regarded by trade unions as one of the most important factors to be taken into account in arriving at a new settlement. This is implicit in the statement made by the TUC in 1971 that “it requires pay increases of at least 10 per cent simply to restore the real disposable pay of a union's previous settlement 12 months earlier”. Economists, on the other hand, argue that once an inflation is under way, then economic agents will develop an inflationary psychology—that is, they will expect it to continue and will adjust their behaviour accordingly. If this is correct, trade union bargainers will attempt to anticipate inflation by trying to fix the money wage at a higher level than they would aim for if the price level were more stable.     

A return to incomes policy?*

The Government's continuing difficulties in controlling the money supply and determination to use cash limits to control the level of public sector pay settlements have renewed cause for a return to a form of incomes policy covering both the public and private sectors. In this article Brian Towers examines the nature of incomes policy and the importance of comparability and collective bargaining structure in its implementation and discusses the form which a viable future policy should take.     

Agricultural incomes and the CAP

Concern with the living standards of farmers is central to the CAP yet it demonstrates the muddled objectives, inappropriate indicators and misdirected interventions that are the stuff of analysts' worst nightmares. As a consequence, the performance of the CAP in terms of this fundamental aim has, in all likelihood, been very poor. Attempts to reorientate the CAP to be more in line with its declared objectives face enormous vested interests in the agricultural industry and among policy-makers.     

Testing neoclassical convergence in regional incomes and earnings

The time-series properties of per capita income and per capita earnings in the regions of the United States are tested for consistency with the neoclassical growth model's prediction of convergence. We find evidence for per capita income convergence for U.S. regions during the 1929–1990 period after allowing for a trend break in 1946. These findings support the neoclassical model's prediction of convergence. The evidence for per capita earnings convergence is, however, less conclusive. Shocks to per capita earnings are found to be more persistent than shocks to per capita income. This implies that the regional distribution of transfer payments tends to smooth the effects of deviation on relative regional per capita earnings and reinforce trends in per capita income convergence.     

Free collective bargaining and incomes policy: learning from Barbara Wootton and Hugh Clegg on post‐war British Industrial Relations and wage inequality

Growing income inequality has returned as a major political issue in affluent, advanced economies, often associated directly with the decline of trade unions and collective bargaining. In policy terms, this has been reflected in the British campaign for a ‘Living Wage’ and the new German minimum wage. Yet on the broader front, Industrial Relations (IR) struggles to find a credible regulatory strategy to address inequality—one that combines state and civil society initiatives and can be legitimised in political philosophy. This History and Policy article argues that there is much to learn from the IR past, before neo‐liberalism. My focus is the writing of Barbara Wootton and Hugh Clegg on ‘Incomes Policy’, from the 1950s to the early 1980s, when this was a central intellectual and policy issue in British IR. I explore the differing justifications for Incomes Policy, from corporatist macro‐economic management to social equality, comparing and contrasting the democratic socialist political principles of Wootton with Clegg's social democratic pluralism. The conclusion relates this historical debate between state pattern and civil society process to current concerns about how social democratic ideas and IR policy can address the problem of labour market inequality.     

Inter-Industry Wage Differentials in Great Britain

The paper considers the determination of earnings of private sector employees in Great Britain, focusing upon the importance of industry affiliation in this process. Whilst cross-sectional estimates, using waves 1 to 4 of the British Household Panel Survey, suggest industry status is of considerable importance, much of this variation is removed by estimating earnings equations by fixed effects methods. Estimated differentials are not inversely related to the steepness of age-earnings pro(r)les in an industry, do not appear to vary over time and are positively related to industry profitability.     

A note on the feasibility of incomes policies

It has been argued recently that collective bargaining reform will contribute towards a successful incomes policy. The author in this note suggests that it is too soon to predict the demise of decentralised bargaining and the emergence of co-ordinated private sector bargaining with favourable outcomes for incomes policy.     

现阶段我国居民收入差距的现状、成因及对策

现阶段我国已经从一个平均主义盛行的国家发展成为一个中度不平等的国家。影响收入差距扩大的因素包括政策体制、经济结构和税收等等。当前应采取措施防止收入差距过分扩大 ,以维护社会稳定和保证改革顺利进行 ,最终实现共同富裕。     

The prevalence and impact of misstated incomes on mortgage loan applications

Misstatement of income on mortgage loan applications (the “liar-loan” problem) is thought to have been a contributor to the boom and bust of mortgage markets. We provide nationwide measurements that reflect the degree to which incomes on mid-2000 home-purchase mortgage loan applications were overstated relative to the actual incomes of mortgage applicants. Our results suggest a substantial degree of income overstatement in 2005 and 2006, one consistent with the average mortgage application overstating income 15–20%. We find the tendency to misstate income was associated with markets with large home-price increases during the boom. There is little support for the proposition that income overstatement played a substantial role in subsequent mortgage defaults.     

信用差价看跌期权的定价

本文在Duffie-Singelton的可违约债券的定价模型的基础上，结合Cox-Ingersoll-Ross多因子平方根扩散模型，给出信用差价看跌期权的定价公式。     

The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations

Abstract.  This paper provides an integrated overview of theoretical and empirical explanations used in the applied literature on regional unemployment differentials. On the basis of 41 empirical studies, four different model types covering nine theoretical constructs of regional unemployment determination and 13 sets of explanatory variables are identified. The overall conclusion is that theoretical and empirical explanations help to reduce the weaknesses in each other. While theory is found to predict that the regional unemployment rate depends on labour supply factors (a collection of factors which affect natural changes in the labour force, labour force participation, migration and commuting), labour demand factors and wage‐setting factors, it is the empirical studies that provide a more profound understanding of the explanatory variables involved. Conversely, whereas most empirical studies provide clear‐cut explanations for the signs of the explanatory variables, it is theory that shows that some of these explanations might be out of proportion. By grouping many studies together, this paper shows that there are indeed clear‐cut trends.     

Monopoly, Monopsony, and Union Strength and Local Market Wage Differentials

A bstract . The study of the influence of product market monopoly, local labor market monopsony , and union strength on market wage differentials is the purpose of this paper. Accordingly, the related theoretical propositions are examined, synthesized and extended to explain more fully observed variations in local labor market wages. In contrast to previous investigations, this study considers several varied occupations at once, encompasses nineteen different two digit SIC industries , and computes market wage data using observations on individuals from the 1970 census. The results indicate that the extent of unionism and employer monopsony contribute significantly to the explanation of market wage differentials, while the product market concentration , and its interaction with unionism does not.     

Preferences,Comparative Advantage,and Compensating Wage Differentials for Job Routinization*

I attempt to explain why there is not much evidence on compensating wage differentials for job disamenities. I focus on the match between workers’ preferences for routine jobs and the variability in tasks associated with the job. Using data from the Wisconsin Longitudinal Study, I find that mismatched workers earn lower wages and that both male and female workers in routinized jobs earn, on average, 5.5% and 7% less than their counterparts in non‐routinized jobs. However, once preferences and mismatch are accounted for, this difference decreases to 2% for men, and 4% for women, not statistically significant in both cases.