Aiding self‐employed car‐washers in the informal sector in Durban

In the past year, the South African Government has committed itself to ‘developing’ the informal sector as a strategy to ease the unemployment crisis and to aid the underemployed. In this paper, the author examines both the lives of self‐employed car‐washers and car‐washing as an activity within the informal sector. He argues that many ‘marginalised’ people who eke out a subsistence in the lower echelons of the informal sector in South Africa regard themselves as lumpenproletariat (or ‘wage‐labourers‐in‐waiting') and not dynamic entrepreneurs. These people expect the Government to intervene in the process of their transition to proletarianism. Further, activities such as car‐washing offer no prospects for self‐advancement.     

Gender and competition

In almost all European Union countries, the gender wage gap is increasing across the wage distribution. In this 2008 presidential lecture I briefly survey some recent studies aiming to explain why apparently identical women and men receive such different returns and focus especially on those incorporating psychological factors as an explanation of the gender gap. Research areas with high potential returns to further analysis are identified. Several examples from my own recent experimental work with Patrick Nolen are also presented. These try to distinguish between the role of nature and nurture in affecting behavioural differences between men and women that might lead to gender wage gaps.     

THE RISK STRUCTURE OF INTEREST RATES AND INTERDEPENDENT BORROWING COSTS: THE IMPACT OF MAJOR DEFAULTS

This paper develops a new methodology for evaluating the impact of economic events on bond yields. Term structure information and implicit forward rates are used to generate expected bond yields, and the difference between actual and expected yields is interpreted as the information effect of the event. The methodology is applied to two studies of municipal default: the New York City default and the more recent Washington Public Power Supply System (WPPSS) default. The analysis provides evidence that the New York City default did have a significant impact on the interest cost of municipal financing in general. In the case of WPPSS, however, there is no indication of a significant default impact.