Earnings on the Information Technology Roller Coaster: Insight from Matched Employer-Employee Data

This article uses matched employer-employee data for the State of Georgia to examine workers' earnings experience through the information technology (IT) sector's employment boom of the mid-1990s and bust in the early 2000s. The results show that even after controlling for pre-boom individual characteristics, transitioning out of the IT sector to a non-IT industry generally resulted in a large wage penalty. However, IT service workers who transitioned to a non-IT industry still fared better than workers who took a non-IT employment path. For IT manufacturing workers, there is no benefit to having been touched by technology, likely because of the nontransferability of manufacturing experience to other industries.     

A Varying Parameters Approach to Constructing House Price Indexes

Conventional housing price index models assume interperiodparameter stability and typically employ either repeat sales or hedonic methodologies. This paper introduces a method of index construction that combines multiple sales observations with single sale transactions while permitting characteristics prices from hedonic regressions to vary over time. A test for interperiod parameter stability is provided. Each period's data are arranged by location and repeat sales are matched by rows. This construction allows greater use of sample information and acknowledges the unique contribution of repeat sales to the estimation process. It also produces intertemporal error correlations that can be beneficially exploited by the seemingly unrelated regressions (SUH) technique. The paper also demonstrates a significance test for error correlation and discusses the treatment of unequal numbers of observations among index periods.     

Strategic groups as reference groups: Theory,modeling and empirical examination of industry and competitive strategy

Previous studies on strategic groups have mainly focused on their static characteristics in order to test the theory of strategic groups and intraindustry performance differences (Porter, 1979; Cool and Schendel, 1988; Fiegenbaum and Thomas, 1990). In contrast, this study takes a longitudinal, dynamic perspective and describes the forces driving strategic group membership and structural evolution. It proposes that a strategic group acts as a reference point for group members in formulating competitive strategy. A partial adjustment model of strategic mobility is then developed which incorporates the idea of a strategic group as a reference group. It models strategic change in an industry both within and across strategic groups. The model is tested in the context of an in-depth industry analysis of the more significant firms in the insurance industry over the 1970-84 time period. The results suggest that strategic groups act as reference points for firm strategies and that predictions of future firm strategies and industry/group structures may also be successfully derived.     

Heterogeneity and Share Contracting in Medical Group Practices

This paper offers an empirical analysis of the relationship between income sharing rules and physician heterogeneity in medical group practices.The economies to group formation associated with risk–sharing, mutual monitoring,and internal referral are served by sharing at least a portion of group income equally. Sharing group income equally is problematic, however, when group members differ in their contribution to group income. Member contributions to group income may differ because of differences in ability, effort, or the price of services across specialty fields. The analysis below is addressed to the question of how income sharing rules in physician groups are affected by variation in member contributions. The analysis finds evidence that heterogeneity in member contributions to group income limits the use of equal income sharing rules in multispecialty groups relative to single specialty groups, and large groups relative to small groups. Nevertheless, 65% of all groups in the survey share at least a pn of group income equally, which broadly suggests that the joint surplus enhancement from risk sharing, mutual monitoring, and internal referral are sufficient to overcome the incentive problems of such rules     

Some economics of content protection

We are grateful to a perceptive referee for many constructive comments on an earlier version of this paper entitled The Economics of Content Protection: A Dual Approach. The usual disclaimer applies.     

The human factor in national development: some reflections on population and development in Nigeria

The relationship between the effective utilization of human resources and successful socioeconomic development in Nigeria is examined. The author argues that Nigeria's current socioeconomic difficulties cannot be blamed on population growth alone, and maintains that "underutilization of human resources; lopsided production and distribution mechanisms; economic depression; and under-developed science and technology system; erratic climatic and agronomic conditions; the illegal exportation of food; [and] corruption and mismanagement of revenue, all constitute forces that simultaneously limit the national capacity to produce more resources for the growing population."     

Educational attainment and cohort size

"We argue that the postwar baby boom [in the United States] caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades. If substitutability between young and old workers diminishes with education, the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers, reducing incentives for educational attainment. The opposite is true for pre- and postboom cohorts. The diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers."     

The structural and economic implications of urbanization

"This study surveys the policy issues associated with urbanization following the abolition of the pass laws [in South Africa]. The demographic background is briefly sketched. Using neo-classical analysis as a starting point, particular attention is paid to the present inefficiencies of city form associated with segregation. It is argued that current planning procedures are in danger of perpetuating or even worsening the situation. Obstacles to employment generation are considered and transport, local government and housing issues are discussed. On every front, urbanization policy is unstable and, even in the short term, there will be pressures to change it."     

Balancing corporate power: a new Federalist paper

In an effort to govern their increasingly complex organizations, chief executives in some of today's largest corporations are turning to one of the world's oldest political philosophies-federalism. Given that organizations are seen more and more as minisocieties, the prospect of applying political principles to management makes a great deal of sense. Federalism is particularly appropriate because it offers a well-recognized system for dealing with paradoxes of power and control: the need to make things big by keeping them small; to encourage autonomy but within bounds; and to combine variety and shared purpose, individuality and partnership, local and global. As London Business School professor Charles Handy explains it, federalism responds to these paradoxes by balancing power among those in the center of the organization, those in the centers of expertise, and those in the center of the action--the operating businesses. The centers of federal organizations meet regularly, but they do not need to live together. Doing so would concentrate too much power in one place, whereas federalism gets its strength and energy from spreading responsibility across many decision points. Guided by five principles, federalism avoids the risks of autocracy and the overcontrol of a central bureaucracy. It ensures a measure of democracy and creates a "dispersed center" that is more a network than a place. That's why Asea Brown Boveri CEO Percy Barnevik calls his sprawling "multi-domestic" enterprise of 1,100 separate companies and 210,000 employees a federation. It succeeds because the independent bits, be they individuals, clusters, or business units, know they are part of the greater whole.