The Stampede Toward Defined Contribution Pension Plans: Fact or Fiction?

This paper questions recent conclusions that the trend in primary plan type toward defined contribution plans and away from defined benefit plans is due to increased pension regulation. Analysis of data from IRS 5500 filings by pension administrators shows that at least half of the trend is due to a shift in employment mix toward firms with industry, size, and union status that have historically been associated with lower defined benefit plan rates. Not more than half of the trend can be attributed to a "stampede" by firms with given industry, size, and union status toward defined contribution pension coverage.     

IS GOVERNMENT SPENDING STIMULATIVE?

This paper develops and implements a neoclassical model of fiscal policy. The paper's main empirical hypothesis is that government non-military investment spending is more expansionary than is either government consumption or military investment. The paper utilizes annual data to support the hypothesis. It finds that output "multipliers" for government non-military investment significantly exceed unity while multipliers for government consumption and military investment lie below unity. The paper also finds that public sector deficits—both actual and cyclically adjusted—contain minor explanatory power for output when one controls for the effects of non-military investment.     

The Relative Effects of Unionism on the Earnings Distributions of Women and Men

This study examines the differential effects of union density on the degree of earnings inequality among women and among men. Our results suggest an equalizing impact of union density for all men and for both men and women who work year-round and full time. Union density does not appear to equalize and may even contribute to a disequalization of the earnings distribution for all women.     

Towards Exchange Rate Stability?

At their recent meeting in Washington the Group of Seven reafirmed their desire to hold exchange rates at about their current level. In this Viewpoint we consider the prospects for success. We conclude that although current rates are feasible in terms of competitiveness, the system will remain under strain as long as there are major inconsistencies between jiscal policy in the US and the rest of the world. The present conjuncture of interest rates and inflation points to a further dollar depreciation. It would be better, in our view, to enact this quickly and to attempt to stabilize exchange rates at sustainable levels: the policy of holding the dollar is misguided.     

THE EMPLOYER SIZE-WAGE EFFECT: CAN DYNAMIC MONOPSONY PROVIDE AN EXPLANATION?

In this paper we argue that a dynamic monopsony model (basedon labour market frictions) predicts a positive relationshipbetween wages and employer size, but also that the effect willbe larger in the non-union sector than in the union sector,and larger for women than for men. We examine evidence on theemployer size-wage effect using several microeconomic data sources,and find it to be generally consistent with these predictions.After examining other theoretical explanations, our conclusionis that at least part of the employer size-wage effect is aresult of monopsony power in the labour market.     

BRITISH IMPORTS OF MANUFACTURES AND THE COMMON MARKET

This paper assesses the impact of Britain's accession to theEEC on her imports of manufactures. It argues that account mustbe taken of the substitutability of imports for home production,and that price effects must be modelled consistently. It appliesDeaton and Muellbauer's "Almost Ideal Demand System" to annualdata on UK home sales and imports from ten sources. It identifiesconsiderable trade creation, but little or no trade diversion.     

Earnings and Dividend Announcements: Is There a Corroboration Effect?

We examine abnormal stock returns surrounding contemporaneous earnings and dividend announcements in order to determine whether investors evaluate the two announcements in relation to each other. We find that there is a statistically significant interaction effect. The abnormal return corresponding to any earnings or dividend announcement depends upon the value of the other announcement. This evidence suggests the existence of a corroborative relationship between the two announcements. Investors give more credence to unanticipated dividend increases or decreases when earnings are also above or below expectations, and vice versa.