Designing a financial literacy course for a liberal arts curriculum

The broad objectives of liberal education include the instilling of a sense of responsible citizenship along with knowledge that creates a better society. Although financial literacy is required at both the individual and public levels for an improved societal outcome to ensue, it is rare to find a finance‐related course within the general education curriculum of most universities. Liberal arts administrators and faculty are reluctant to include finance‐related courses because they are not perceived to be sufficiently broad in scope. The argument is accurate for a typical personal finance course. However, the purpose of this article is to show that it is possible to construct a financial literacy course with design features that make it acceptable for inclusion in the general education curriculum of a liberal arts university. First, the objectives of liberal education are highlighted, as enumerated by three independent organizations [American Academy for Liberal Education (AALE), Association of American Colleges and Universities and the Annapolis Group]. Next, the assessment standards of the AALE are utilized to develop the pedagogical features of the course design. A liberal arts focus can be achieved by including topical readings, in‐class discussions or debates and a research paper that highlights the societal impacts of financial decisions. Finally, it is illustrated how the design features allow the course to fulfil the assessment standards of liberal arts objectives including effective reasoning, broad and deep learning and the inclination to inquire.     

An expected utility analysis of k-majority rules

Buchanan and Tullok (The calculus of consent: logical foundations of constitutional democracy. University of Michigan Press, Ann Arbor, 1962) argued that the optimal k-majority rule should minimize the sum of external costs and decision costs. Dougherty et al. (Public Choice, 163(1–2):31–52, 2015) formalized their approach using various groups of voters. In this study, we analyze the optimal k-majority rule in terms of expected utility and compare our results to Dougherty et al. (2015), which focuses on costs alone. Specifically, we replace Buchanan and Tullock’s external cost function with an external utility function that accounts for both the benefits and costs of enacting proposals. We find that analyzing k-majority rules in terms of utility, rather than costs, affects the optima. Furthermore, in terms of utility, the optimal k-majority rule can vary depending on the group one expects to be in during a vote. With some interesting exceptions, individuals from groups that favor the proposal often find small k-majority rules optimal. Individuals from groups that oppose the proposal often find large k-majority rules optimal.     

Earnings inequality narrows for young workers despite a widening wage structure

Inequality of wage rates has widened in the United States. But inequality of earnings also depends on the distribution of hour's worked. If the distribution of hours contracts sufficiently, earnings inequality may narrow despite a widening wage structure. The present study examines recent trends in inequality for young workers and, consistent with the preceding scenario, finds that rising inequality of wage rates has been overwhelmed by declining inequality of hours worked. As a consequence, earnings inequality of young workers declined during the 1980s.     

Un-COLA: Why Have Cost-of-Living Clauses Disappeared from Union Contracts and Will They Return?

For more than 20 years, unions have been trading cost-of-living adjustment clauses (COLAs) for other forms of compensation. Various explanations have been offered for the erosion of COLA coverage—including reduced inflationary uncertainty, lower union power, and structural shifts in the economy—but the relative importance of these and competing hypotheses remains untested. We investigate the reasons for the decline in COLA coverage using a pooled cross-sectional, time-series model that accounts for industry fixed effects and recognizes the multiyear nature of most union contracts. After assessing the relative importance of alternative hypotheses, we conclude with a discussion of the potential for a rebound in COLA rates.     

Financial Support for Family Members and Importance of Performance Quality Interact as a Source of Motivation for Multiple Jobholding

Very few studies on multiple jobholding have examined predictors. Most studies have focused on outcomes. The current study examined an interactive predictor of multiple jobholding. Data were extracted from a data set used in a path-analytic study (Mellor and Decker 2020). An interactive perspective was drawn from a motivation framework on extrinsic and intrinsic reasons to hold more than one job, in which a conditional relationship was hypothesized between number of family members supported financially and number of employers. The data confirmed that number of family members supported interacts with importance placed on performance quality by employees as a predictor of multiple jobholding. Implications for work motivation in reference to multiple jobholding research are discussed.

     

Favor trading in public good provision

Favor trading is common. We do something nice for someone and they do something nice in return. Several motives might underlie such behavior, including altruism, strategic motives, and direct or indirect positive reciprocity. It is not yet well-understood how these fit together to affect behavior, how they interact in various institutional structures, and how they play out over time. We use a laboratory experiment to study the elements and dynamics of favor trading in a particular setting: the private provision of a public good. In our experiment, giving subjects the ability to practice targeted reciprocity by making a simple, low-cost change in information provision increases contributions to the public good by 14 %. Subjects reward group members who have previously been generous to them and withhold rewards from ungenerous group members. Strategic concerns cannot explain all of this behavior, and it must be at least partly due to direct reciprocity. When someone cannot directly benefit from favor trading, he gives much less to the public good. People thus excluded from the “circle of reciprocity” provide a clean and strict test of indirect reciprocity. Contrary to previous studies in the literature, we do not observe indirect reciprocity.     

Farm Household Production Efficiency: Evidence from The Gambia

This article investigates the economic efficiency of farm households, with an application to The Gambia. The efficiency analysis is conducted not at the farm level but at the household level, thus capturing the importance of off-farm activities. Output-based measures of technical, allocative, and scale efficiency are generated using nonparametric measurements. An econometric analysis of factors affecting the efficiency indexes is then conducted using a Tobit model. Technical efficiency is fairly high indicating that access to technology is not a severe constraint for most farm households. The cost of scale inefficiency is modest. Allocative inefficiency by contrast is found to be important for the majority of farm households. On the basis of the Tobit results, imperfections in markets for financial capital and nonfarm employment contribute to significant allocative inefficiency.