CONSEQUENCES OF MINIMUM WAGE INDEXING

During the 1980s, the minimum wage fell relative to prices and average wages in the U.S. economy. If the minimum to average wage ratio had been constant at the level maintained through the 1970s, the minimum wage would have been $5.51 in 1993. If the 1993 minimum wage had increased to $5.51, payments to minimum wage workers would have increased by an estimated $20.3 billion, and the number of people earning that wage would have risen from 2.0 million to 14.7 million. Elasticity estimates generated from other studies indicate that employment would have fallen 240,000 (4.4%) among 16–19 year olds and 349,000 (3.0%) among 20–24 year olds. Wage payments to minimum wage workers would have substantially increased, but the effect on family income distribution would have been small. Many minimum wage workers are children living with parents or adults in a family with other earners. Consequently, 75% of minimum wage workers account for less than half of their family's income.     

Estimating the environmental costs of electricity: An overview and review of the issues

This paper provides an overview of the issues associated with environmental costing and the specific questions raised by the effort to measure the environmental costs of electricity. It identifies the key methodology questions identified by these studies and discusses their relevance for more general applications of methods to estimate the monetary losses due to environmental externalities.     

THE CASE FOR PAY-AS-YOU-GO PENSIONS IN A SERVICE ECONOMY

The elderly consume more labour‐intensive services than young individuals. This makes them vulnerable to rising costs of services due to higher wages, which can be caused by increased capital accumulation. This paper shows that in a model with a service sector, the golden‐rule capital stock is lower and dynamic inefficiency is more likely to occur than in the conventional one‐sector model. This implies that in many cases, a positive Pay‐As‐You‐Go tax maximises long‐run welfare in a service economy. Calculations based on data from the United Kingdom and the Netherlands show that the long‐run optimal degree of funding coincides with the current situation in these countries.     

Investment in the absence of property rights; the role of incumbency advantages

In many situations the individuals who can generate some output must enter a contest for appropriating this output. This paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of the investment can decrease or increase the amount of investment. The results are applied to autocrats’ investment behavior and job specific investment in organizations.     

Corporate hyperlink network relationships in global corporate social responsibility system

This study analyzed the hyperlink (co-link) network structure among companies in global Corporate Social Responsibility (CSR) system. This study measured network variables such as density and centrality, including degree centrality, eigenvector centrality, closeness, and betweenness. The results indicated that European companies had relatively central roles in the global CSR system. In addition the higher performing companies are more active their CSR practices. Also, the results revealed that the industrial type of companies was not significantly associated with its CSR practices.     

Consequences of competitive bidding in project-based production

This paper discusses the consequences competitive bidding have on lead time in project-based production, such as construction. Earlier studies argued that competitive bidding may significantly increase resource consumption and generate waste in the delivery process, which this paper supports. However, the relation between competitive bidding and lead time has been less discussed. Lead time reduction has long been considered a fundamental objective for overall business improvement. An objective of our study was to understand what contributes to long lead times. The reported findings are from a 4-year study on the delivery process of power distribution equipment, a type of engineered-to-order (ETO) product. The paper concludes by suggesting procurement practices that reduce lead times for ETO products.     

Scaling the volatility of GDP growth rates

The distribution of shocks to GDP growth rates is found to be exponential rather than normal. Their standard deviation scales with GDP^β where β=−0.15±0.03. These macroeconomic results place restrictions on the microeconomic structure of interactions between agents.     

The dark side of competition: Modeling status games

Though “teams” are supposed to work together for the benefit of the firm, suboptimal outcomes may emerge when individuals within a team are more concerned with their own status and outcomes relative to their “teammates,” behaving as if they are competitors. Using a version of the stag hunt coordination game, we develop hypotheses regarding the role of status and competitiveness on coordination on Pareto optimal solutions. We test these hypotheses using three studies, with manipulations for both role and status. Status is found to play a significant role, resulting in suboptimal outcomes for competitors but not teammates.