Declining Returns to Education in Norway? Comparing Estimates across Cohorts,Sectors and over Time

We examine the role of the Norwegian education system in explaining the moderate and stable earnings dispersion in Norway. Estimating earnings equations for 1980 and 1990, we find that returns to education have been remarkably stable in Norway, also when we compare returns to education across different sectors of the economy. Our analysis controls for self-selection into education by using an instrumental variable technique. We estimate separate education earnings profiles for different cohorts to identify the effect on wage premiums of the large changes that have taken place in the Norwegian education system. The substantially higher level of educational attainment for more recent cohorts does not, cet. par. , seem to have a negative effect on educational wage premiums for these younger cohorts.
JEL classification: J 24, J 31, I     

The Distribution of Economic Well-being in Urban Russia at the End of the Soviet Era

Assessing the extent of inequality and how various groups in the population were faring in the former Soviet Union is difficult. There are conceptual problems and severe data limitations. Here we analyse the distribution at the household level using unique microdata. The sample was collected for the Russian city Taganrog in 1989. We portray inequality in equivalent income terms, investigate income packaging, decompose inequality by population subgroups and relate equivalent income to household characteristics. The results indicate that inequality in living standards for urban Russia was small, but not extremely small. Public sector transfers and income taxes played a smaller role than in several advanced Western countries. The income situation of a household in the former Soviet Union was very strongly linked to its work efforts and dependency burden. Thus, aged persons and families with a newborn child were much worse off than people of active ages. Persons in households with a female head had considerably lower income than those with male head of households. The results also shows a clear positive relation between length of education and living-standard.     

Horizontal integration in the Dutch financial sector

In this paper, the consequences of cross-shareholding in an n-firm industry are analyzed. Our attention focuses on the case where firms have silent interests in each other. These interests can be direct or indirect. We analyze the effects of cross-shareholding on the price–cost margins in a Cournot and a Bertrand setting. In all cases, competition is reduced due to shareholding interlocks. As an empirical example the Dutch financial sector is used. Comparing the case of shareholding with the case of no-shareholding, the price–cost margins are found to be up to 2% higher in a Bertrand market, and at least 8% higher in a Cournot market.     

A Bayesian view of temporary components in asset prices

This paper studies models in which the a stock price contains a random walk and a stationary component, as in Fama and French [Fama, Eugene F., and Kenneth R. French, 1988, Permanent and Temporary Components of Stock Returns, Journal of Political Economy 96, 246–273.] and Poterba and Summers [Poterba, James, and Lawrence Summers, 1988, Mean Reversion in Stock Prices: Evidence and Implications, Journal of Financial Economics 22, 27–59.]. We extend this model to allow for two latent factors which generate short term and long term autocorrelations, respectively. To facilitate econometric identification, we assume that these factors are common across multiple asset returns, and we estimate the factor loadings. In an application to size and book/market sorted portfolios, we find the short term factor economically and statistically insignificant. Estimates of parameters relating to the long range component suggest that portfolios of small firm stock display about three times the amount of mean reversion than for large firm stocks. Overall, the evidence suggests that mean reversion is largely a small firm phenomenon. The evidence is consistent with dynamic equilibrium models in which asset prices co-integrate with aggregate consumption or dividends.     

Nitrogen Fertilizer Demand from Danish Crop Farms: Regulatory Implications of Heterogeneity

This paper estimates nitrogen fertilizer demand elasticities for Danish crop farms using the dual profit function approach on micro panel data. The model includes several farm‐specific parameters, allowing us to estimate the mean demand elasticity and test for homogeneity of elasticities across panel farms. The mean own‐price elasticity for nitrogen is ?0.45, and there is a significant standard deviation from this mean for individual farms of 0.24. Heterogeneity of demand elasticities implies that regulating fertilizer application through mandated uniform percentage reductions, as is currently used in Danish nitrogen regulation, increases abatement costs relative to tax regulation. Somewhat surprisingly, this causes the abatement costs of quota regulation to be only 8% larger than with tax regulation. Simulation results indicate that the primary threat to the efficiency of uniform reduction schemes comes from inaccurate estimation of baselines rather than from heterogeneity of elasticities. L'auteur estime les élasticités de la demande d'engrais azotés pour l'agriculture danoise en appliquant la fonction du double profit aux données issues de microgroupes de consultation. Le modèle inclut plusieurs paramètres spécifiques à l'agriculture, ce qui permet d'estimer l'élasticité moyenne de la demande et de vérifier l'homogénéité des élasticités pour les agriculteurs consultés. On constate qu'il existe une élasticité‐prix moyenne de ?0,45 pour l'azote et que cette moyenne présente un écart‐type significatif de 0,24 par exploitation agricole. Les élasticités hétérogènes de la demande supposent que si on régule les engrais azotés par une réduction uniforme du volume employé en pour cent, ainsi que l'exige présentment le règlement danois, on accroît le coût des mesures de lutte, comparativement à ce qui se produit avec les mesures fiscales. Il est un peu surprenant de voir que la régulation par quota n'augmente le coût des mesures de lutte que de 8%, par rapport aux mesures fiscales. Les résultats de la simulation révèlent que l'efficacité des programmes de réduction uniforme est surtout menacée par une estimation inexacte des valeurs de base et non par l'hétérogénéité des élasticités.     

The Structure of Production in the Norwegian Fish-Processing Industry: An Empirical Multi-Output Cost Analysis Using a Hybrid Translog Functional Form

An empirical analysis of production structure in the Norwegian fish-processing industry is undertaken, based on data for the period 1985–90. This industry processes raw materials into fresh, frozen, salted and dried fish products. Two technologies coexist in the industry. Producer behaviour is represented by a multi-output variable, or restricted cost function for each technology. The hybrid translog functional form is adopted for estimation, as this form can be evaluated even if some of the output values are zero. Results from the empirical analysis provide important information for the restructuring currently taking place in the industry.     

Design and implementation in major investments — A project network approach

Many investments in modern society take place in project networks. This article proposes a project network approach for describing the design and implementation processes in major investments. The design process of major projects is “fuzzy”, takes a long time, and is hard to capture. The implementation process, on the other hand, takes place in “semi-hierarchical” networks, and is easier to plan and control. The actor that controls the transformation of the political design process into the implementation process has a unique strategic position in the dynamically changing network. This means linking processes that are characterized by separate logic and network structures. Data from processes of design and implementation of three shopping malls illustrate the theoretical framework.     

Transforming the Energy System—the Evolution of the German Technological System for Solar Cells

To improve our understanding of processes involved in the formation and growth of new technological systems in the energy sector and to identify the associated key challenges for policy makers managing the transformation process, we examine the development of the German technological system for solar cells over the past 25 years. We use a "technological system' approach in which we will trace the evolution of actors, networks and institutions that have a bearing on the generation and diffusion of solar cells. An initial preparatory stage lasted until about 1989 and was mainly characterized by knowledge build-up induced by a Federal RDD programme. This was followed by a second stage characterized by political struggle over the regulatory framework and a subsequent beginning of a virtuous circle for solar cells. In the concluding discussion, we emphasize four key features of the evolution of the technological system: (1) the role of a coalition of system builders that successfully influenced the regulatory framework so that markets could be formed: (2) the considerable length of the learning period and the large number of actors that need to learn; (3) the importance of policies that form early markets (not only early niche markets, but beyond those) as only markets may induce firms to enter and learn, and (4) the need to run market formation policies simultaneous to policies that maintain technological variety.     

THE SYMBOLIC IMPACT OF DOUBLE BIND LEADERSHIP: DOUBLE BIND AND THE DYNAMICS OF ORGANIZATIONAL CULTURE

They are playing a game. They are playing at not playing a game. If I show them I see they are, I shall break the rules and they will punish me. I must play their game, of not seeing I see the game (Laing, 1971). Members of an organization are supposedly led, but very often they do not see the way. On the contrary, they are exposed to conflicting management signals and caught in double bind situations. Double bind connotes a situation where conflicting messages occur, but where it is vitally important to discern what message is being communicated, and where the individual is unable to comment upon the ambiguity. The result is that the individual is not capable of meta communication and thus incapable of learning about the situation. We presume that the double bind phenomenon can often be found in organizations. In extreme cases this creates ‘double bind organizations’ in which the members are continuously confronted with double bind situations. The members become incapable of exploring the existing models of organizational behaviour. Organizational dynamics emerge ‘behind the back’ of people in the organization. The organization's meaning horizon is narrowed due to a lack of authentic dialogue. Attempted changes of organizational direction are experienced as just another double bind, and attempted changes of the double bind patterns become victims of the logic they attempt to alter. In such cases, the organization could be said to be characterized by a form of institutionalized learning incompetence. Understanding the double bind phenomenon should be seen as being important for managing organizations in general, and for the change and the management of change in particular.     

South-south cooperation and economic order

Regional associations between developing countries have so far often proved to be less than successful. This, Professor Altmann points out, is hardly surprising in view of the lack of homogeneity of socio-political and economic systems among member countries, without which any integration process is bound to stagnate.