The Role of Comparative Advantage and Learning in Wage Dynamics and Intra-Firm Mobility: Evidence from Germany

This paper analyzes the dynamics of wages and worker mobility within firms with hierarchical structures of job levels. The paper empirically implements the theoretical model proposed by Gibbons and Waldman (1999) that combines the notions of human capital accumulation, job rank assignment based on comparative advantage, and learning about workers' ability. The paper measures the importance of these elements in explaining intra-firm wage and mobility dynamics using survey data from the German Socio-Economic Panel (GSOEP). The use of this data set makes it possible to examine this issue over a large sample of firms and draw conclusions about the common features characterizing firms' wage policy. The GSOEP survey also provides information about workers' job ranks within the firm that is unavailable in most surveys. The results of the estimation are consistent with non-random selection of workers onto the rungs of the firm's job ladder. There is no direct evidence of learning about workers' unobserved ability, but the analysis reveals the unmeasured ability is an important factor driving wage dynamics. Job rank effects remain significant even after controlling for measured and unmeasured characteristics.wage dynamics, intra-firm mobility, human capital accumulation, unobserved heterogeneity, learning

Beating the random assignment on constraint satisfaction problems of bounded degree

We show that for any odd $k$ and any instance of the Max-kXOR constraint satisfaction problem, there is an efficient algorithm that finds an assignment satisfying at least a $\frac{1}{2} + \Omega(1/\sqrt{D})$ fraction of constraints, where $D$ is a bound on the number of constraints that each variable occurs in. This improves both qualitatively and quantitatively on the recent work of Farhi, Goldstone, and Gutmann (2014), which gave a \emph{quantum} algorithm to find an assignment satisfying a $\frac{1}{2} + \Omega(D^{-3/4})$ fraction of the equations. For arbitrary constraint satisfaction problems, we give a similar result for "triangle-free" instances; i.e., an efficient algorithm that finds an assignment satisfying at least a $\mu + \Omega(1/\sqrt{D})$ fraction of constraints, where $\mu$ is the fraction that would be satisfied by a uniformly random assignment.Comment: 14 pages, 1 figur

On Suicidal punishment among "Acromyrmex Versicolor" Cofoundresses: the Disadvantage in Personal Advantage

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Streaming Hardness of Unique Games

We study the problem of approximating the value of a Unique Game instance in the streaming model. A simple count of the number of constraints divided by p, the alphabet size of the Unique Game, gives a trivial p-approximation that can be computed in O(log n) space. Meanwhile, with high probability, a sample of O~(n) constraints suffices to estimate the optimal value to (1+epsilon) accuracy. We prove that any single-pass streaming algorithm that achieves a (p-epsilon)-approximation requires Omega_epsilon(sqrt n) space. Our proof is via a reduction from lower bounds for a communication problem that is a p-ary variant of the Boolean Hidden Matching problem studied in the literature. Given the utility of Unique Games as a starting point for reduction to other optimization problems, our strong hardness for approximating Unique Games could lead to downstream hardness results for streaming approximability for other CSP-like problems

The majority-party disadvantage: revising theories of legislative organization

Dominant theories of legislative organization in the U.S. rest on the notion that the majority party arranges legislative matters to enhance its electoral fortunes. Yet, we find little evidence for a short-term electoral advantage for the majority party in U.S. state legislatures. Furthermore, there appears to be a pronounced downstream majority-party disadvantage. To establish these findings, we propose a technique for aggregating the results of close elections to obtain as-if random variation in majority-party status. We argue that the results from this approach are consistent with a phenomenon of inter-temporal balancing, which we link to other forms of partisan balancing in U.S. elections. The article thus necessitates revisions to our theories of legislative organization, offers new arguments for balancing theories, and lays out an empirical technique for studying the effects of majority-party status in legislative contexts