885 research outputs found

    The Effect of Job Flexibility on Female Labor Market Outcomes: Estimates from a Search and Bargaining Model

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    This paper develops and estimates a search model of the labor market where jobs are characterized by wages and work-hours flexibility. Flexibility is valued by workers, and is costly to provide for employers. The model generates observed wage distributions directly related to the preference for flexibility parameters: the higher the preference for flexibility, the wider is the support of the wage distribution at flexible jobs and the larger is the discontinuity between the wage distribution at flexible and non-flexible jobs. Estimation results show that more than one third of women place positive value to flexibility, with women with a college degree valuing flexibility more than women with a high school degree. Counterfactual experiments show that flexibility has a substantial impact on the wage distribution but not on the unemployment rate. We comment on the implications of our approach for gender differentials in wages and schooling.search model, work-hours flexibility, structural estimation

    Specific Human Capital, Trade, and the Wealth of Nations

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    We develop a general equilibrium model of trade with endogenous human capital acquisition in job specific skills and imperfectly observable skills. We show that even if there are no ex-ante fundamental differences between countries there may be equilibria under international trade with specialization in production and cross-country differences in standards of living. In particular, this may happen even if there is a unique equilibrium under autharchy; protectionism may in this case be a welfare enhancing policy for the poor country. In an asymmetric equilibrium, the country with a relatively skilled labor force will specialize in production of goods that are intensive in skilled labor. Incentives to invest in human capital depend on aggregate investments within the country and the relative factor prices. We show that incentives to invest in human capital are strictly decreasing in aggregate investments in the other country. Hence, our model has in common with many other approaches that externalities are central. Furthermore, as in most macro-oriented research on the topic, differences in standard of living are generated by differences in human capital accumulation. However, contrary to most previous work we provide explicit micro-foundations for the externalities: what distinguishes our model from most of the previous literature is that we assume that human capital investments are imperfectly observable. The external effects are derived from what we view as a rather natural informational problem and will as a consequence of barriers to labor mobility be local to the country where labor can move freely within.

    Informationally Efficient Trade Barriers

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    Why are trade barriers often used to protect home producers, even at the cost of introducing deadweight losses from higher commodity prices? We add an informational friction to the standard textbook argument in favor of free trade, and show that trade restrictions may be a more effcient policy than a lump sum transfer to the displaced producers. Trade barriers, while generating deadweight losses, have the benefit that they do not generate a need for compensation. When the policy maker does not know the amount that should be transferred, the risk of over- compensating may make trade barrier more efficient.Trade barriers, Distortionary policies

    The Empirical Content of Models with Multiple Equilibria

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    We consider a generic environment with (potentially) multiple equilibria and analyze conditions for identification of the structural parameters. We then study conditions that allow for the estimation of both the structural parameters and the Ć¢ā‚¬Å“selected equilibriumĆ¢ā‚¬. We focus on a Ć¢ā‚¬Å“easy to computeĆ¢ā‚¬ consistent 2-step estimator and use Monte Carlo methods on a model with social interactions to describe its finite sample propertiesmultiple equilibria, identification, structural estimation, montecarlo simulations

    The Performance of the Pivotal-Voter Model in Small-Scale Elections: Evidence from Texas Liquor Referenda

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    How well does the pivotal-voter model explain voter participation in small-scale elections? This paper explores this question using data from Texas liquor referenda. It first structurally estimates the parameters of a pivotal-voter model using the Texas data. It then uses the estimates to evaluate both the within and out-of-sample performance of the model. The analysis shows that the model is capable of predicting turnout in the data fairly well, but tends, on average, to predict closer electoral outcomes than are observed in the data. This difficulty allows the pivotal-voter model to be outperformed by a simple alternative model based on the idea of expressive voting.

    ā€œKataptationā€ or the Qwerty-Effect in Language Evolution

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