The rise and fall of piecework–timework wage differentials: market volatility, labor heterogeneity, and output pricing

Based on detailed payroll data of blue collar male and female labor in Britain’s engineering and metal working industrial sectors between the mid-1920s and mid-1960s, we provide empirical evidence in respect of several central themes in the piecework-timework wage literature. The period covers part of the heyday of pieceworking as well as the start of its post-war decline. We show the importance of relative piece rate flexibility during the Great Depression as well as during the build up to WWII and during the war itself. We account for the very significant decline in the differentials after the war. Labor market topics include piecework pay in respect of compensating differentials, labor heterogeneity, and the transaction costs of pricing piecework output.

Investment and financing constraints in China: does working capital management make a difference?

We use a panel of over 120,000 Chinese firms of different ownership types over the period 2000-2007 to analyze the linkages between investment in fixed and working capital and financing constraints. We find that those firms characterized by high working capital display high sensitivities of investment in working capital to cash flow (WKS) and low sensitivities of investment in fixed capital to cash flow (FKS). We then construct and analyze firm-level FKS and WKS measures and find that, despite severe external financing constraints, those firms with low FKS and high WKS exhibit the highest fixed investment rates. This suggests that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment.

On Measuring the Efficiency of Monetary Policy

Cecchetti et al. (2006) develop a method for allocating macroeconomic performance changes among the structure of the economy, variability of supply shocks and monetary policy. We propose a dual approach of their method by borrowing well-known tools from production theory, namely the Farrell measure and the Malmquist index. Following FÄare et al (1994) we propose a decomposition of the efficiency of monetary policy. It is shown that the global efficiency changes can be rewritten as the product of the changes in macroeconomic performance, minimum quadratic loss, and efficiency frontier.

Development of tools to measure and explain changes in health inequalities in Scotland and benchmark performance

This project will develop a modelling framework to explain changes in income-related health inequalities and benchmark the performance of Scotland in tackling income-related health inequalities, both over time and relative to that of England and Wales.

Time Variation in the Dynamics of Worker Flows: Evidence from the US and Canada

VAR methods have been used to model the inter-relationships between inflows and outfl ows into unemployment and vacancies using tools such as impulse response analysis. In order to investigate whether such impulse responses change over the course of the business cycle or or over time, this paper uses TVP-VARs for US and Canadian data. For the US, we find interesting differences between the most recent recession and earlier recessions and expansions. In particular, we find the immediate effect of a negative shock on both in ow and out flow hazards to be larger in 2008 than in earlier times. Furthermore, the effect of this shock takes longer to decay. For Canada, we fi nd less evidence of time-variation in impulse responses.

A balance of questions: what can we ask of climate change economics?

The standard approach to the economics of climate change, which has its best known implementation in Nordhaus's DICE and RICE models (well described in Nordhaus's 2008 book, A Question of Balance) is not well equipped to deal with the possibility of catastrophe, since we are unable to evaluate a risk averse representative agent's expected utility when there is any signi cant probability of zero consumption. Whilst other authors attempt to develop new tools with which to address these problems, the simple solution proposed in this paper is to ask a question that the currently available tools of climate change economics are capable of answering. Rather than having agents optimally choosing a path (that differs from the recommendations of climate scientists) within models which cannot capture the essential features of the problem, I argue that economic models should be used to determine the savings and investment paths which implement climate targets that have been suggested in the physical science literature.

Overtime Working and Contract Efficiency

We present a wage-hours contract designed to minimize costly turnover given investments in specific training combined with firm and worker information asymmetries. It may be optimal for the parties to work ‘long hours’ remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.

Consumer Behaviour in a Social Context: Implications for Environmental Policy

In this paper we summarise some of our recent work on consumer behaviour, drawing on recent developments in behavioural economics, in which consumers are embedded in a social context, so their behaviour is shaped by their interactions with other consumers. For the purpose of this paper we also allow consumption to cause environmental damage. Analysing the social context of consumption naturally lends itself to the use of game theoretic tools, and indicates that we seek to develop links between economics and sociology rather than economics and psychology, which has been the more predominant field for work in behavioural economics. We shall be concerned with three sets of issues: conspicuous consumption, consumption norms and altruistic behaviour. Our aim is to show that building links between sociological and economic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic policy prescriptions, especially with respect to environmental policy.

Nondictatorial Arrovian Social Welfare Functions: An Integer Programming Approach

In the line opened by Kalai and Muller (1997), we explore new conditions on prefernce domains which make it possible to avoid Arrow's impossibility result. In our main theorem, we provide a complete characterization of the domains admitting nondictorial Arrovian social welfare functions with ties (i.e. including indifference in the range) by introducing a notion of strict decomposability. In the proof, we use integer programming tools, following an approach first applied to social choice theory by Sethuraman, Teo and Vohra ((2003), (2006)). In order to obtain a representation of Arrovian social welfare functions whose range can include indifference, we generalize Sethuraman et al.'s work and specify integer programs in which variables are allowed to assume values in the set {0, 1/2, 1}: indeed, we show that, there exists a one-to-one correspondence between solutions of an integer program defined on this set and the set of all Arrovian social welfare functions - without restrictions on the range.

Out of sight, out of mind? Educational outcomes of children with parents working abroad.

Impact of parental emigration on educational outcomes of children is theoretically ambiguous. Using novel data I collected on migration experience and its timing, family background and school performance of lower secondary pupils in Poland, I analyse the question empirically. Migration is mostly temporary in nature, with one parent engaging in employment abroad. As many as 63% of migrant parents have vocational qualifications, 29% graduated from high school, 4% have no qualifications and the remaining 4% graduated from university. Almost 18% of children are affected by parental migration. Perhaps surprisingly, estimates suggest that parental employment abroad has a positive immediate impact on a pupil’s grade. Parental education appears pivotal; children of high school graduates benefit most. Longer term effects appear more negative, however, suggesting that a prolonged migration significantly lowers a child’s grade. Interestingly, siblings’ foreign experiences exert a large, positive impact on pupils’ grades.