Semi-unionized bargaining with endogenous membership and management opposition

This paper develops a model of open shop unions and efficient bargain, in which there is a social custom to unionize and the firms can pay wage premiums to dissuade union membership. If firms actively oppose unions, the union density turns out to be affected by changes of the product price and the reservation wage, and it is not always positively correlated with the workers' income share. Moreover, the model provides a rationale for higher union density in centralized as opposed to decentralized bargaining systems.I would like to thank Robert Boyer, Hans Peter Grüner, Roger Guesnerie, and two referees for helpful comments and suggestions. All remaining errors are mine. Financial support from the Commission of the European Communities (SPES-915028) is gratefully acknowledged.     

The New Deal for Young People Five Years On*

The New Deal for Young People is the major welfare‐to‐work programme in the UK. It is a mandatory multistage policy targeted at 18‐ to 24‐year‐old unemployed people. This paper investigates the long‐term effectiveness of the programme in terms of enhancing the (re‐)employment probability of participating men. It exploits the eligibility rule to identify a suitable counterfactual relying upon a simple regression discontinuity design. The combination of job‐search assistance, training, wage subsidies and job experience enhances employability by about 4.6 per cent and this effect lasts over different cohorts.     

Team reasoning theory: an experimental analysis of common reason to believe and social distance

The aim of this paper is to study the role of the “common reason to believe” (Sugden in Philos Explor 16:165–181, 2003) and the reduction of social distance within the theory of team reasoning. The analysis draws on data collected through a Traveler’s Dilemma experiment. To study the role of the common reason to believe, players’ beliefs in their counterparts’ choices are elicited, and the correlation between the endorsement of team reasoning and beliefs is considered. The relation between social distance and team reasoning is analyzed by introducing a meeting between the two players after the game. We show that the common reason to believe appropriately explains the internal logic of team reasoning and that a reduction of social distance does not produce any statistically significant effect on the probability that team reasoning will be used.     

The Rise and Likely Fall of the German Income Tax, 1958-2005

Data from official statistics and tax laws are exploited todescribe fifty years of income taxation in Germany, with a focuson its role as a fiscal and distributive tool. The temporalpattern that emerges from the data is one of a golden age ofthe German income tax, followed by a slow shift towards a majorcrisis. The turning point on the income-tax path seems to haveoccurred in 1986. I put forward the thesis that this downturnwas the outcome of a long-term change in the balance of politicalpower. That change is probably rooted in structural breaks thatoccurred in the German economy during the 1970s and early 1980s.(JEL D31, D72, H23}.     

Hormone beef, chlorinated chicken and international trade

We study international trade in innovative goods subject to uncertain consumer health effects. Such goods are often at the center of international trade disputes. We show that an interesting form of protectionism may arise because of scientific uncertainty. A free-riding effect is identified, implying more conservative behavior by countries. We also study the role of producers (lobbies) in providing valuable information, finding that the innovative lobby has an advantage in providing information as compared with the lobby producing the ‘traditional’ good. Moreover, lobbies disclose more information when the health effects are long lasting.     

Measuring core inflation in Italy comparing aggregate vs. disaggregate price data

This paper focuses on the core inflation measurement in Italy using univariate (national-level inflation) vs. multivariate (city-level inflation) models during the period 1970–2006. We derive algebraic expressions that allow comparison between the reduced form parameters of univariate and multivariate local level models in the context of contemporaneous and temporal aggregation. We illustrate the relevance of these theoretical results for the empirical analysis of time series. Using Italian data, we find that multivariate and univariate models extract similar core inflation measures when analyzing the moderate-low inflation period. In contrast, the two competing models yield different trends when modeling the Great Inflation period.     

DETERMINANTS AND DYNAMICS OF SCHOOLING AND CHILD LABOUR IN BOLIVIA

This paper investigates the determinants of primary school enrolment, attendance, and child labour in Bolivia from 1999 to 2007, and attempts to analyse the interactions among these decisions over time. Although enrolment rates show a significant improvement, a high proportion of children do not attend school. The empirical results reveal that the increase in enrolment is led by indigenous children and those living in urban areas. Moreover, contrary to common belief, being extremely poor and indigenous are the main determinants of school attendance. Finally, although extremely poor children increased their school attendance, there was no reduction in child labour, which remains a relevant issue in Bolivia.