Education and productivity growth in a market economy

The purpose of this paper is to measure the impact of investment in education on U.S. economic growth. Education is treated as an investment in human capital, since benefits accrue to an educated individual over a lifetime of activities. One of the most important benefits is higher income from participation in the labor market. This is the key to understanding the link between investment in education and economic growth. The most important finding is that investment in human and nonhuman capital accounts for an overwhelming proportion of the growth of the U.S. economy during the postwar period. Educational investment will continue to predominate in the investment requirements for more rapid growth.Invited Address at the Thirty-Fourth Atlantic Economic Society Conference, October 15–18, 1992, Plymouth, Massachusetts.     

Voucher Privatization: A detour on the road to transition?

We explore an overlooked aspect of the design of the Czech voucher privatization programme, namely, the consequences of allowing individuals to distribute their vouchers among the voucher privatization funds (VPFs). We develop and analyse a model of voucher privatization in which we study the problem facing individuals who invest their vouchers in VPFs which, in turn, are able to use their skills to alter the performances of the firms in which they acquire shares. The VPFs have different skills and, by their bids and subsequent joint ownership patterns, affect the performances of the firms in their funds. We show that even in the case in which voucher holders have identical and full information, and wish to allocate their vouchers to the VPFs in a manner consistent with the maximization of economy–wide profit, a coordination failure generally prevents the implementation of this efficient outcome. Uncertainty, as well as differing payouts by the VPFs, is shown to exacerbate the problem. We conclude that there was an inherent flaw in the design of the Czech voucher scheme. JEL classification: D44, L33, P21, G11.     

Report: Performance Management—The Key to Higher Standards in Schools?

The object of this article is to make a critical review of a series of official documents which have emanated from the Department for Education and Employment (DfEE), since the Labour Government came to office in 1997, on performance management in schools. This technique is seen by the Government as crucial in improving standards in schools. The key documents are shown in the list of references at the end of the article, and our review is divided into two parts: the first considers the defining features of performance management in schools and the role which the Government sees it playing in improving standards; the second part explores some key tensions in the performance management framework.     

A Causal Model of the Impact of Skills, Synergy, and Design Sensitivity on New Product Performance

Notwithstanding the best efforts of outstanding managers, project team members, researchers, and consultants, no product development plan can guarantee success. Every new products organization will experience its fair share of failures, but a firm can take steps to ensure that its failures do not outweigh its successes. By benchmarking the competition, a firm can gain insight into best practices–the factors that lead most directly to new product success. To help identify these best practices, X. Michael Song, William E. Souder, and Barbara Dyer develop and test a causal model of the relationships among the key variables leading to new product performance. The proposed model identifies five factors that lead to marketing and technical proficiency: process skills, project management skills, alignment of skills with needs, team skills, and design sensitivity. According to the model, marketing and technical proficiency directly determine product quality, and ultimately lead to new product success or failure. The causal model was tested using information on 65 completed projects–34 successes and 31 failures–from 17 large, multi-divisional Japanese firms. The study participants develop, manufacture, and market high-technology consumer and industrial products. These firms judged the success or failure of the projects in this study by using seven criteria: return on investment, profit, market share, sales, opportunities for technical leadership, market dominance, and customer satisfaction. These firms generally assigned the greatest importance to customer satisfaction, opportunity creation, and long-term growth. For the most part, the responses from these firms support the relationships presented in the causal model. According to the respondents, marketing proficiency and product quality have a strong, positive influence on their new product performance, as do process skills, project management skills, and alignment of skills and needs. The responses highlight the importance to these firms of responsiveness to customer wants and needs, as well as ensuring a close fit between project needs and the firm's skills in marketing, R&D, engineering, and manufacturing. Somewhat surprisingly, the responses do not support the model's suggested relationships between skills/needs alignment and technical proficiency or between technical proficiency and product quality.     

Sexual harassment: Rights and responsibilities

This article briefly reviews the development of a philosophy about sexual harassment at work and legal protection for victims of harassment. It then focuses on the rights and responsibilities of three groups affected by sexual harassment: the target of harassment, the alleged harasser, and the employing organization. A discussion follows regarding the current status of the rights and responsibilities of the relevant parties as well as opportunities for abuse of rights and abnegation of responsibilities.     

On market mavens and consumer self‐confidence: A cross‐cultural study

Market mavens are attentive to media and important diffusers of marketplace information. This study examines the relationships between cultural individualism, general and consumer self‐confidence, and market mavenism in the context of two distinct cultural systems, the United States and South Korea. The examination of cross‐cultural equivalence of the constructs under study provides evidence for both configural and full or partial metric invariance. The results indicate that cultural individualism is positively related to general self‐confidence, general self‐confidence is positively related to consumer selfconfidence, and consumer self‐confidence is positively related to market mavenism. Additionally, this research shows that these relationships hold in both the U.S. and South Korean samples. The results of this study indicate that market mavenism, and thus levels of confidence about marketplace knowledge and speed of diffusion of such information may be more prevalent among the more individualistic than collectivistic consumers. © 2007 Wiley Periodicals, Inc.     

An Empirical Analysis of and Policy Recommendations to Improve the Nutritional Quality of School Meals

The National School Lunch Program is not meeting its nutritional goals. Data for 330 Minnesota school districts are analyzed to derive recommendations for improving the nutritional quality of school lunches. This study finds, contrary to widely held views, that lunch sales do not decline when healthier meals with less fat, for example, are served and that more nutritious lunches do not necessarily cost more. Healthier meals have higher labor costs, but lower costs for processed foods. Indirect costs, paid by the food service to the school district, negatively affect meal quality by decreasing funds to upgrade kitchens and train staff to prepare more nutritious meals.     

Estimation of the equilibrium exchange rate: The CHEER approach

The paper presents the results of an investigation where the concept of a steady-state level of the exchange rate is equated with the capital market equilibrium based on the CHEER approach. The empirical analysis concentrates on Poland, because in this case the assessment of the equilibrium exchange rate is of vital importance. The prospect of the Polish currency joining the ERM2 provokes controversies and requires research into the economic consequences of accession to the EMU. The international transmission mechanisms affecting the Polish economy are identified within the VEqCM framework. The calculations indicate that in the last years of the analyzed sample (i.e. up to December 2006) the zloty/euro exchange rate was slightly overvalued, and the steady-state level was found to have been adjusting to the value of 4.1 zlotys.     

Market makers as information providers: The natural experiment of STAR

Market makers are financial intermediaries who are supposed to provide additional liquidity, but do not have any information-related obligation. This paper studies the unique case of the Italian Stock Exchange, where market makers are also obliged to facilitate information disclosure about the firms they cover. We focus on a group of small/medium capitalization stocks (STAR) that are assigned a designated market maker (DMM) starting from 2001. We show that their liquidity requirements are not binding during the sample periods and that the main impact of DMMs' introduction is due to their obligations on information provision. We find that DMMs' activity as information providers reduces spread and price volatility, the probability of informed trading (PIN), and the adverse selection component of the spread. An event study provides evidence that the information released through DMMs is perceived as useful by market participants.