Wages,Prices and Politics: Evidence from Norway

This paper studies the empirical relevance of the close ties between a central trade union and the social democratic political party using time series data for Norway. Using a structural wage-price model we estimate that changing from a bourgeois to a social democratic government reduces manufacturing wages in the long run by 2.3 percent. This result is consistent with a wage bargaining model augmented by political preferences of the union leaders. Private service wages are not directly affected by government type, but wage spillover effects imply that the long-run dampening effect in the private service sector is around 2 percent. The results also support the proposition of the Scandinavian model of inflation that the traded goods sector is the wage leader.     

Wages and the City. Evidence from Italy

We analyze empirically the impact of urban agglomeration on Italian wages. Using micro-data from the Bank of Italy's Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets, we test whether the structure of wages varies with urban scale. We find that every additional 100,000 inhabitants in the local labor market raises earnings by 0.1 percent. The use of a geographical approach enables us to state that this effect decays very rapidly with distance, losing significance beyond approximately 12 kilometers. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to worker supervisors.     

专用性投资、隐性契约与财权配置探析

本文讨论了专用性投资与隐性契约所涉及的利益相关者问题,指出了企业在财权配置上的治理困境和计量困境,并为企业如何摆脱财权配置困境提供了方法途径.     

Internet usage and the shadow economy: Evidence from panel data

The enormous spread of the internet in the last 20 years has been having various economic consequences. In this paper I ask whether the spread of the internet aided or abetted the shadow economy. To this end, using a panel data of 152 countries over 9 years from 1999 to 2007, I examine the empirical relationship between the degree of internet usage and the size of the shadow economy. Panel and cross-section estimation results indicate that the association between internet usage and shadow economy size strongly interacts with GDP per-capita. I also suggest and then empirically test an economic mechanism to account for this observation.     

Detrending,stylized facts and the business cycle

The stylized facts of macroeconomic time series can be presented by fitting structural time series models. Within this framework, we analyse the consequences of the widely used detrending technique popularised by Hodrick and Prescott (1980). It is shown that mechanical detrending based on the Hodrick–Prescott filter can lead investigators to report spurious cyclical behaviour, and this point is illustrated with empirical examples. Structural time-series models also allow investigators to deal explicitly with seasonal and irregular movements that may distort estimated cyclical components. Finally, the structural framework provides a basis for exposing the limitations of ARIMA methodology and models based on a deterministic trend with a single break.     

State minimum wages and business location: Evidence from a refined border approach

This study examines the effect of state minimum wage changes on new and existing business establishments. It employs a refined border approach in conjunction with other differencing methods to control for unobserved heterogeneous area characteristics. The findings suggest that state minimum wage increases deter new establishments from locating in an area, particularly in industries that rely on low-education workforces, such as the retail and manufacturing industries. However, existing establishments, regardless of industry type, are not found to be adversely affected by minimum wage policy.     

Unionization and the Pattern of Nonunion Wages: Evidence for the UK

This paper presents the first examination of the effect of unionisation on the distribution of nonunion wages in the UK. We test a hypothesis that has received considerable attention in the US: that the threat of unionisation leads nonunion firms to increase the earnings of their lowest paid workers, so compressing their internal wage distribution. In aggregate we find little support for this hypothesis in the UK and suggest that the supportive evidence from the US may be a function of the absence of suitable linked employer-employee data.     

Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation

This paper assesses the impact of changes in union density on the male structure in the UK over the 1980s. Using four separate data sets, we estimate the kernel density of hourly wages for men. Counterfactual densities are then generated to predict how the distribution of wages has changed over time because of the decline in union membership. We find that approximately 20 percent of the increase in the variance of log wages over the period can be attributed to changes in unionisation. The effect is particularly strong in the latter part of the period. We also present disaggregated estimates of the impact of declining unionisation. Our results are robuts across all the data sets we examine and similar results are obtained if union coverage is used rather than union membership.     

European integration,productivity growth and real convergence: Evidence from the new member states

We estimate the determinants of labor productivity growth in 8 new European Union (EU) member states that joined the Union in 2004. Our focus is on the impact of globalization and EU integration efforts on labor productivity growth. Previous studies test the impact of trade using either exports or trade openness. We also test the impact of imports separately on labor productivity growth. Using panel data for 1995–2006 period, we find that globalization has mixed effects. FDI and exports improve productivity, but imports hurt it. Regarding domestic variables, we find that human capital is the most important source of labor productivity growth in the new member states. There is also considerable adjustment of labor productivity towards EU15 levels, indicating significant “catching up” and hence real convergence. Policy implications of the findings are also discussed.     

Teacher shortages and the business cycle

The ability of the public sector to recruit skilled workers is important for the quality of public sector services. Centralized and rigid pay systems in the public sector might reduce labour supply and lead to shortages of qualified personnel in areas and periods with strong outside labour markets. This paper shows that teacher shortages measured by the share of teachers without approved education are strongly procyclical in Norway. Using a large panel of Norwegian local governments for 1981–2002 and exploiting the rigid wage system, we find a sizeable negative relationship between teacher shortages and the regional unemployment rate.     

Creative destruction over the business cycle: a stochastic frontier analysis

This paper examines the within-industry distributions of jobs created and destructed across plants in terms of technical efficiency, technical efficiency change, scale effect, and technical change. It further investigates how these distributions vary with economic activity. By applying the stochastic frontier analysis to plant-level longitudinal data on Taiwan??s 23 two-digit manufacturing industries spanning the period 1992?C2003, we find that jobs created (destructed) are disproportionately clustered at plants with lower technical efficiency but higher rate of technical change. A fall in economic activities is associated with a statistically significant decrease (increase) in the fraction of newly created (destructed) jobs accounted for by plants with a higher rate of technical change, indicating that creative destruction is more pronounced during economic contractions.     

Fixed-term contracts as sorting mechanisms: Evidence from job durations in West Germany

We estimate the effect of initial episodes under fixed-term contracts (FTCs) on job duration in the further course of the employment spell, using data from the German Socio-Economic Panel (SOEP) from 1985 to 2002 and a statistical matching approach. Our results show that job exit rates are initially much higher if the employment spell began with an FTC. However, exit rates fall below those of comparable spells spent entirely in permanent employment after a few years time. This suggests that FTCs accelerate a sorting process and that they may at least to some part be understood as prolonged probationary periods. Strikingly, the probability of long-term employment of more than five years duration is not lower in spells that are initially concluded as FTCs. Hence, the sorting processes taking place in both forms of contracts lead to similar results.     

News shock,firm dynamics and business cycles: Evidence and theory

The literature of expectation-driven business cycles has overlooked the role played by endogenous entry. This paper documents empirically news shock as a major source of fluctuations in firm dynamics and comovement between firm entry and GDP using structural vector auto-regressions. We then develop a tractable dynamic stochastic general equilibrium model to study the propagation mechanism assuming fixed operating costs for incumbents and decreasing survival rates for entrants. Our quantitative prediction closely matches the positive comovement between firm entries and core macroeconomic indicators upon news shock. These results remain robust at the sectoral level when the baseline model is extended to a two-sector setup.     

The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model

A concern when estimating the effect of health on labour supply is that health might be endogenous, and in particular that people might use poor health to justify non-participation. This would result in the effect of health being overestimated if health were treated as exogenous. The paper employs a simultaneous equation model to explore the relationship between health and labour force status, allowing for the endogeneity of health. In addition, the paper takes advantage of panel data to control for unobserved heterogeneity so that more efficient estimation results can be obtained than using cross-sectional data. The results confirm the finding in the literature that health has a positive and significant effect on labour force participation for both males and females. As for the reverse effect, it is found that labour force participation has a negative effect on male health but a positive effect on female health, implying that the justification hypothesis is rejected for males but not for females. The exogeneity hypothesis on the health variable is rejected for both samples based on a joint test.     

Income inequality and the business cycle: A threshold cointegration approach

This paper investigates the impact of various socio-economic variables on various cohorts of the income distribution. We use asymmetric cointegration tests to show that unemployment and immigration shocks have real impacts on income inequality. In addition, using threshold test results we are able to show that positive and negative shocks to the economy do not have symmetric effects nor do the impacts of these shocks impact income quintiles uniformly.     

State productivity growth in agriculture: catching-up and the business cycle

This paper examines the relation between the business cycle and convergence in levels of agricultural productivity across the 48 contiguous states. First, we find evidence of convergence in total factor productivity levels across the different phases of the business cycle, but the speed of convergence was greater during periods of contraction in economic activity than during periods of expansion. Second, we find that technology embodied in capital was an important source of productivity growth in agriculture. As with the rate of catch-up, the embodiment effect was much stronger during low economic activity phases of the business cycle.     

Optimal control theory and the reelection problem: The rise of a political business cycle

Riassunto In questo lavoro gli autori si propongono di evidenziare, tramite tecniche di controllo ottimo, l'insorgere di un ciclo politico economico nell'andamento del sistema economico, cioè l'eventuale manipolazione da parte del governo della situazione economica al fine di essere rieletto per il successivo mandato.Il modello proposto prevede una funzione di costo-popolarità, che determina la rielezione, lineare-quadratica rispetto al reddito nazionale e all'inflazione. La formalizzazione quadratica sia rispetto alla variabile di stato che alla variabile di controllo è motivo di alcune complicazioni analitiche del tutto estranee alla letteratura esistente sul terna. Il modello, da un punto di vista economico, si presenta più ricco e completo rispetto a quelli riportati in letteratura: in esso infatti, oltre alla curva di Phillips, sono presenti anche le equazioni IS-LM. Questa caratteristica rende possibili alcune considerazioni riguardo al ruolo dei fattori monetari e della spesa pubblica all'interno del ciclo politico economico.Dall'analisi svolta nell'articolo risulta confermato l'insorgere, sotto alcune condizioni, di un ciclo politico economico. Per determinati valori dei parametri del modello il comportamento può comunque anche essere caratterizzato da oscillazioni smorzate o da una continua espansione economica.     

Labor and investment frictions in a real business cycle model

This paper develops a prototype real business cycle model in which labor and investment frictions may compete directly with technology shocks in accounting for fluctuations in the postwar US economy. Using Ireland's [2004a. A method for taking models to the data. Journal of Economic Dynamics and Control 28, 1205–1226] methodology, we establish that both types of friction are quantitatively important. Technology shocks still explain a substantial fraction of the fluctuations in aggregate output, as the baseline real business cycle model predicts. Formal hypothesis tests suggest that changes in the recurrence of shocks, frictions, and structural parameters all play a role in accounting for the shift in the time series properties of the data between the periods before and after 1980.     

The day-of-the-week effect is weak: Evidence from the European real estate sector

The day-of-the-week effect for the securitized real estate indices is investigated by employing daily data at the global, European and country level for the period 1990 to 2010. We test for daily seasonality in 12 countries using both full sample and rolling-regression techniques. While the evidence for the former is in line with the literature, the results for the latter cast severe doubts concerning the existence of any persistent day-of-the-week effects. Once we allow our sample to vary over time, the average proportion of significant coefficients per day ranges between 15 % and 24 %. We show that higher average Friday returns evident in previous literature, remain significant in 21 % of the rolling samples. We conclude that daily seasonality in the European Real Estate sector is subject to the data mining and sample selection bias criticism.