Causality patterns in aggregate labor markets: A statistical analysis of west german data

Empirical Economics - The paper addresses the dynamic interaction between strikes and wage increases in aggregate labor markets. Attention is drawn to the fact that pertinent empirical studies...     

Smallest Meaningful Pay Increases: Field Test,Constructive Replication,and Extension

The authors extend prior literature by examining, in two distinct field settings, smallest meaningful pay increases (SMPIs) in terms of magnitude, behavioral intention, and affective reactions. In Study 1, a two‐wave study of 177 employees of a university medical center in the United States, the authors find stable thresholds of about 5.0 percent for positive reactions to pay increases (magnitude [5.4 percent], behavioral intentions [4.2 percent], and affective reactions [5.6 percent]). In Study 2, a sample of 495 university employees in Finland, the authors also find stable but slightly higher thresholds of about 8 percent for behavioral intentions (8.4 percent) and positive affective reactions (7.2 percent) to pay increases. They also find threshold effects of ?5.7 percent for behavioral intentions and ?5.8 percent for negative affective reactions in response to restricted future pay increases levied in the transition to a new pay system. Discussion of the results centers on pay raise administration and future research regarding implied and direct pay reductions. © 2015 Wiley Periodicals, Inc.     

Reanalyzing Zero Returns to Education in Germany

Pischke and von Wachter (Review of Economics and Statistics 2008; 90 (3): 592–598) find zero earnings returns to compulsory schooling in the basic school track in Germany. We reanalyze their study using a different dataset. In an extension, we use additional instruments which allow estimation of heterogeneous effects for different groups of compliers. We can confirm the previous result and also find zero returns for other compliers in higher track schools. Moreover, we do not find a causal effect of schooling on cognitive skills. This is in line with a potential reason Pischke & von Wachter (2008) give for their result, namely that basic skills are learned earlier in Germany and additional years of schooling are no longer effective. Copyright © 2015 John Wiley & Sons, Ltd.     

The probability of a “gross” violation of an efficient markets variance inequality

This note considers the small sample bias of the empirical variances of observed and ex-post-rational prices of financial assets, and shows that this can be much more severe than has previously been thought.     

The opportunity cost of duality

A dual representation of a technology, e.g., a cost function, may not contain all of the technological information, but it will contain all of the information about input vectors that would be chosen by a cost-minimizing firm. At least this much is clear for deterministic technologies. The main question addressed in this paper is whether the same can be said about stochastic technologies and their dual representations. Despite some pessimism expressed in the stochastic frontier literature on this question, we argue that there is no extra cost imposed in the stochastic case. Thus, the conclusion of this paper is: Just dual it!     

Firms,public good provision and institutional uncertainty: Evidence from Russia

Enterprises in post-socialist and transition economies often participate in providing infrastructure and social services to the surrounding community which in the Russian legal setting should be local authorities’ responsibility. We propose that this bundling of social and infrastructure goods provision with firm's core operations is a fully rational choice in an uncertain institutional environment. A unique survey data suggest that this manifests itself through more reliable infrastructure, stronger employee attachment to the firm and, most interestingly, through better relations with the authorities. Relationship with authorities is a two-way game where the firm gains from the arrangement but on the other faces sanctions if it decided to depart from it. Firm's participation in the arrangement is clearly enhanced by inherited fixed capital assets from the Soviet era.     

Wealth and sustainable development: the role of David Pearce

Green net national product was thought to be one way of measuring sustainable income. However, David Pearce understood that a better measure of sustainable development was to look at what a generation is leaving in form of capital assets to later generations. In this article, his arguments and insights are highlighted against recent theoretical advances.