The Trade-Off Between Supervision Cost and Performance-Based Pay: Does it Matter?

The study adds to the literature by providing new empirical evidence consistent with efficiency wage theory, and by providing estimates of the average cost of supervising a worker by industry. This research uses the 1996 wave of the NLSY and incorporates estimates of supervision cost computed from industry classifications. We further detect presence of no gender differences neither in risk-averseness nor in productivity gains associated with cost of Supervision and performance-based pay.

Union-Nonunion Wage Differentials and Macroeconomic Activity

This research is concerned with identifying the differing responses of union and nonunion wages to shocks to real output growth, inflation, and the stance of monetary policy. Aggregate measures of union and nonunion wages and salaries are used to construct a time series of the wage differential for several major industrial sectors over the 1976-2001 period. The literature documents the existence of a union wage premium; however, previously the focus has primarily been at the micro-level, and on whether or not a union worker receives greater compensation than an otherwise comparable nonunion worker [e.g., Wunnava and Ewing (1999, 2000)]. Research also links the wage differential to the stage of the business cycle [Wunnava and Okunade 1996] and to the industrial sector [Okunade, Wunnava, and Robinson (1992)]. Theoretical macroeconomic models imply that wages will respond in certain ways to unanticipated changes in aggregate measures of economic activity [e.g., Romer (1996)]. Given the differences in compensation level of union and nonunion workers, and the link to the stage of the business cycle and industry, it is expected that the aggregate wage differentials both for the entire private sector and by industry will respond to macroeconomic shocks in a predictable manner. The relationship among these wage differentials and the macroeconomy is examined in the context of a vector autoregression. In addition, the paper employs the newly developed technique of generalized impulse response analysis [Koop, et al. (1996), Pesaran and Shin (1998)], a method that does not impose a priori restrictions on the relative importance that each of the macroeconomic variables may play in the transmission process. The results show the extent and the magnitude of the relationship between the union-nonunion wage differentials and several key macroeconomic factors. Finally, the paper documents how the responses of these wage differentials vary by industrial sector.

Firm Size and Union Threat Effects across Genders: Evidence from NLSY79

It is evident that both male and female workers in medium/larger establishments receive not only higher wages but also have a higher probability of participating in benefit programs than those in smaller establishments. This reinforces the well-documented ‘size’ effect. Further, the firm size wage effects are much larger for men than women. The union wage effect decreases with establishment size for both genders. This supports the argument that large nonunion firms pay higher wages to discourage the entrance of unions (i.e., the ‘threat’ effect argument). In addition, the union wage premium is higher for males across firm sizes relative to females. This implies that unions in the large establishments may have a role to play in achieving a narrowing of the gender union wage gap. Further, given the presence of noticeable gender differences in estimated union effects on the different components of the compensation structure, unions should not treat both genders similarly with respect to wages and benefits

Recent longitudinal evidence of size and union threat effects across genders

Based on data from the National Longitudinal Surveys of Youth covering years 2000 through 2008, it is evident that both male and female workers in medium/larger establishments receive not only higher wages but also have a higher probability of participating in benefit programs than those in smaller establishments. This reinforces the well-documented 'size' effect. Further, the firm size wage effects are much larger for men than women. The union wage effect decreases with establishment size for both genders. This supports the argument that large nonunion firms pay higher wages to discourage the entrance of unions (i.e., the 'threat' effect argument). In addition, the union wage premium is higher for males for small and medium firm sizes relative to females. This implies that unions in the large establishments may have a role to play in achieving a narrowing of the gender union wage gap. In other words, the threat of unionization could reduce union wage premiums for both genders as firm size increases. Given the presence of noticeable gender differences in estimated union effects on the different components of the compensation structure, unions should not treat both genders similarly with respect to wages and benefits

Alumni Giving of Business Executives to the Alma Mater: Panel Data Evidence at a Large Metropolitan Research University

Charitable giving to public and private institutions of higher learning in the US is a growing major source of financing academic and support programs. The novel contribution of this research is the estimation of an econometric model of gift-giving alumni business executives of a large public urban university using 10,192 individual donor observations [that is, a panel of 392 donors for 26 years]. Our theoretically consistent empirical results reinforce the earlier research findings that male alumni in Greek social organizations gave significantly more. New insights unique to this study are that alumni individuals with the higher-order executive job titles (proxy for permanent income) of a Chief Executive Officer or President (relative to the lesser ranks) are significantly more charitable, and that the number of other gift-giving alumni and friends known to donors, and national athletic conference (basketball and football) championship wins are also highly statistically significant positive drivers of alumni annual giving to the comprehensive metropolitan research university. The resulting profile of gift-giving alumni business executives can be profitably used to more effectively target likely donors and raise cost-effectiveness of fundraising efforts in these times of fiscal austerity in higher education.educational economics, educational finance, charitable donations, alumni giving of business executives

Testing Mundell’s Intuition of Endogenous OCA Theory

This paper presents an empirical assessment of the endogenous optimum currency area theory. Frankel and Rose (1998) study the endogeneity of a currency union through the lens of international trade flows. Our study extends Frankel and Rose's model by using FDI flows to test the original theory developed by Mundell in 1973. A gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU-15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, our results suggest that economic convergence ensured by belonging to the common currency area helps double FDI flows.economic integration, gravity model, endogenous optimum currency area

Determinants of Inter-Country Internet Diffusion Rates

This paper employs cross-sectional data from 100 countries to analyze the main determinants of inter-country Internet diffusion rates. We set up an empirical model based on strong theoretical foundations, in which we regress Internet usage on variables that capture social, economic and political differences between these countries. Our results support past findings that economic strength, infrastructure and knowledge of the English language positively affect Internet connectivity. In addition to these indicators, the openness of a country, tertiary enrollment, and income equality are found to also have a significant positive effect on Internet diffusion.internet, technological diffusion, inequality, education, English proficiency

The Effect of Access to Information and Communication Technology on Household Labor Income: Evidence from One Laptop Per Child in Uruguay

This paper examines the effect of the One Laptop Per Child program in Uruguay [Plan Ceibal] on household labor income. Since 2007, the Uruguayan government has delivered one laptop to every child and every teacher in public primary schools. This program has considerably increased access to information technology within households since evidence shows that parents make use of the technology. Households in the department of Florida received laptops in 2007, while those in the department of Canelones received them in 2009. Therefore, using data from Household Surveys from the National Institute of Statistics in Uruguay, a difference-in-difference model is estimated to capture the effect of the plan of giving laptops on labor income [either total or hourly income]. The results indicate that there is a statistically significant positive effect of this plan on the labor income of those households below the median income. Such findings call for a plan that is more targeted to give laptops to low-income households, where parents possess less computer skills and the program has a greater potential

Help Not Wanted: The Dismal Science of Youth Unemployment's Scarring Effect

The scarring effect is defined as an increase in the probability of future unemployment spells and the reduction of subsequent wages as the result of joblessness early in one's working years. Many youths get into a rut at the beginning of their professional careers when they become unemployed, hindering future individual prospects and producing negative consequences for the economy as a whole. Because there is considerable evidence in the United States that early job displacement is followed by a higher risk of subsequent unemployment and lower trajectory for future earnings after re-entry, it is crucial to gain a better understanding of the economic factors that influence the youth unemployment rate in order to reduce the consequences on youths' future outlooks (Arulampalam, Gregg, and Gregory, 2001). This study not only demonstrates that the scarring effect is real but also allows for policy recommendations to be obtained from this analysis

Financial Liberalization and the Brain Drain: A Panel Data Analysis

This paper explores the impact of financial liberalization on the migration of high skilled labor from 46 countries to the OECD, taken at five year intervals over the period 1985-2000. Using an exploratory factor analysis, we are able to distinguish between two dimensions of financial liberalization, namely the robustness of the markets and their freedom from direct government control. We find that a standard deviation improvement in the robustness of the source country financial sector magnifies the extent of brain drain by a factor of about four percentage points on the average. However, a corresponding increase in the freedom of the source country financial sector from government control has a modest negative impact on the emigration of high skilled labor and the effect is not statistically significant. Further, the impact of improved financial sector robustness on selection is more pronounced for non-OECD economies than for OECD nations, which experience virtually no impact on skilled emigration.immigration, financial liberalization, brain drain, institutions