Economics of Food Labeling

Federal intervention in food labeling is often proposed with the aim of achieving a social goal such as improving human health and safety, mitigating environmental hazards, averting international trade disputes, or supporting domestic agricultural and food manufacturing industries. Economic theory suggests, however, that mandatory food-labeling requirements are best suited to alleviating problems of asymmetric information and are rarely effective in redressing environmental or other spillovers associated with food production and consumption. Theory also suggests that the appropriate role for government in labeling depends on the type of information involved and the level and distribution of the costs and benefits of providing that information. This report traces the economic theory behind food labeling and presents three case studies in which the government has intervened in labeling and two examples in which government intervention has been proposed.     

WAGE SIGNALING: A DYNAMIC MODEL OF INTRAFIRM BARGAINING AND ASYMMETRIC LEARNING*

The article analyzes the effect of employer–worker bargaining on wage dynamics in the presence of asymmetric information between current and potential employers. A failure to reach an agreement leads to output loss. Because the disagreement points depend upon the worker's productivity, productive workers separate themselves from less productive workers and signal their ability through wages. In existing models of asymmetric learning, wages are attached to publicly observable characteristics and wage growth occurs only when there is a change in observable characteristics. This model, in contrast, generates an increase in earnings dispersion in cohorts of workers with similar observable characteristics.     

Elitism in Higher Education and Inequality: Why Are the Nordic Countries So Special?

Countries in which there are two channels of education may have a separating equilibrium in which individuals with high abilities learn in elite universities and individuals with low ability learn in standard ones. Elite universities have higher budgets, better scholars, better labs and a better student network, resulting in the human capital of these students having a higher productivity in the more competitive tradable sector.     

Building trust in US-Japanese business relationships: Mediating role of cultural sensitivity

While evidence suggests trust plays a fundamental role in maintaining successful buyer-seller relationships in Japan, little is known conceptually as to how foreign sellers can best develop trust in the minds of their Japanese customers. In this research, we develop and test a multi-component model of US seller actions that manifest key trust-building processes (intentionality- and capability-processes) which sellers find effective in building trust with their Japanese buyers. In this unique cultural context, theory suggests trust develops when sellers demonstrate benevolent intentions toward the buyer and exhibit a strong capability to fulfill business promises. An analysis of 181 US sellers in Japan demonstrates that a combination of trust-building efforts is recognized as being critical in seller attempts to develop and sustain trust on the part of their Japanese customers. Importantly, cultural sensitivity mediates the impact of intentionality-based practices on buyer trust, while capability-based activities directly influence trust.     

Reconsidering The “Firstmale-Breadwinner Economy”: Women's Labor Force Participation in the Netherlands, 1600–1900

Abstract

This contribution provides methods for estimating developments in women's labor force participation (LFP) in the Netherlands, for both preindustrial and industrializing eras. It explains long-term developments in Dutch LFP and concludes that the existing image of Dutch women's historically low participation in the labor market should be reconsidered. Contrary to what many economic historians have supposed, Dutch women's LFP was not lower, and was perhaps even higher, than elsewhere in the pre-1800 period. As in other Western European countries, the decline of (married) Dutch women's LFP only started in the nineteenth century, though it then probably declined faster than elsewhere. Thus, this study concludes that the Netherlands did not constitute the “first male-breadwinner economy,” as historians and economists have suggested. Scrutinizing the nineteenth-century data in more detail suggests that a complex of demographic, socioeconomic, and cultural changes resulted in this sharp decline of Dutch women's crude activity rates.     

HR practices and affective organisational commitment: (when) does HR differentiation pay off?

We argue that differentiating HR practices across employees leads employees to compare their situation with colleagues to assess the favourability of HR practice outcomes (e.g. money). These perceptions can be negative (i.e. feeling set back), neutral (i.e. feeling treated the same) or positive (i.e. feeling advantaged). Data from 13,639 Belgian employees showed that perceived favourability of HR practice outcomes is positively associated with affective organisational commitment, but the relationship is attenuated at positive levels. Thus, differentiation may be a double‐edged sword as the losses among employees feeling set back may temper, neutralise or even outweigh the benefits among those feeling advantaged. The relationships found were especially salient for work practices (e.g. autonomy) compared with economic practices (e.g. bonuses). Developmental practices were found to be least suited for differentiation across employees. No evidence of a moderating role of employees’ preference for equality (vs. differentiation) was found.     

EFFECTS OF GOVERNMENT POLICIES ON URBAN AND RURAL INCOME INEQUALITY

We use three conventional inequality indices—the Gini, the coefficient of variation of income, and the relative mean deviation of income—and the Atkinson index to examine the effect of income tax rates, the minimum wage, and all the major government welfare and transfer programs on the evolution of income inequality for rural and urban areas by state from 1981 to 1997. We find that these programs have qualitatively similar but quantitatively different effects on urban and rural areas. Most importantly, taxes are more effective in redistributing income in urban than in rural areas, while welfare and other government transfer programs play a larger role in rural areas.