A reinterpretation of the relation between firm-specific pay inequalities and productivity

The main objective of this paper is to question the interpretation of the usually-found positive correlation between firm-specific pay inequalities and productivity. We estimate from French employer-employee matched data this correlation and confirm that it is positive, even after accounting for fixed unobserved heterogeneity and simultaneity using instrumental variables. This result is consistent with the idea that wage inequality is one of the tools that are available to stimulate workers productivity. However, in such a framework, pay inequality is an optimization variable controlled by the firm, and should therefore appear as endogenous. This is not the case: tests show that variations in pay inequality are exogenous, i.e. they are imposed to the firm in a way that is uncorrelated to other unobserved determinants of productivity. We therefore adapt the standard model of incentive theory to make it compatible with this exogeneity property, along the lines of Lazear (1989). The model that we develop is a model where the choice of a higher or lower degree of pay inequality is fully constrained by an exogenous technical characteristic of the firm, i.e. the varying importance of collective and individual effort in its production function. In such a context, the degree of pay inequality is interpreted as an indirect measure of this technical characteristic. We confirm this interpretation by examining the relationship between pay inequality and organizational characteristics of firms measured by the REPONSE survey.Wages, Compensation, and Labor Costs, LaborManagement Relations, Trade Unions, and Collective Bargaining, Firm Objectives, Organization, and Behavior

Parliament, people or technocrats? Explaining mass public preferences on delegation of policymaking authority

While delegation of policymaking authority from citizens to parliament is the most defining characteristic of representative democracy, public demand for delegating such authority away from legislature/government to technocrats or back to citizens appears to have increased. Drawing on spatial models of voting, we argue that the distance between individuals’ ideal policy points, the status quo, experts’ policy positions and aggregated societal policy preferences can help explain whether individuals prefer to delegate decision-making power away from parliament and, if so, to whom. The effects of individual’s preference distance from these ideal points are likely to be stronger the more salient the policy issue is for the respective individual. We test this argument using survey experiments in Germany, Switzerland and the United Kingdom. The analysis provides evidence for the empirical implications of our theoretical arguments. The research presented here contributes to better understanding variation in citizens’ support for representative democracy and preferences for delegating policymaking authority away from parliament

Environmental changes and violent conflict

This letter reviews the scientific literature on whether and how environmental changes affect the risk of violent conflict. The available evidence from qualitative case studies indicates that environmental stress can contribute to violent conflict in some specific cases. Results from quantitative large-N studies, however, strongly suggest that we should be careful in drawing general conclusions. Those large-N studies that we regard as the most sophisticated ones obtain results that are not robust to alternative model specifications and, thus, have been debated. This suggests that environmental changes may, under specific circumstances, increase the risk of violent conflict, but not necessarily in a systematic way and unconditionally. Hence there is, to date, no scientific consensus on the impact of environmental changes on violent conflict. This letter also highlights the most important challenges for further research on the subject. One of the key issues is that the effects of environmental changes on violent conflict are likely to be contingent on a set of economic and political conditions that determine adaptation capacity. In the authors' view, the most important indirect effects are likely to lead from environmental changes via economic performance and migration to violent conflict. © 2012 IOP Publishing Ltd

Conflict and Livelihood Decisions in the Chittagong Hill Tracts of Bangladesh

__Abstract__ We analyse rural household livelihood and child school enrolment decisions in the post-conflict setting of the Chittagong Hill Tracts (CHT) region of Bangladesh. What makes this paper innovative is the use of current subjective perceptions regarding the possibility of violence in the future and past actual experiences of violence in explaining household economic decision-making. Preferences are endogenous in line with behavioural economics. Regression results show that heightened subjective perceptions of future violence and past actual experiences of conflict influence current consumption and child enrolment and could encourage risky mixed crop cultivation. The trauma emanating from past experiences combined with current high perceptions of risk of violence may induce bolder and riskier behaviour in line with prospect theories of risk. Furthermore, a postconflic

Effective-Range Expansion of the Neutron-Deuteron Scattering Studied by a Quark-Model Nonlocal Gaussian Potential

The S-wave effective range parameters of the neutron-deuteron (nd) scattering are derived in the Faddeev formalism, using a nonlocal Gaussian potential based on the quark-model baryon-baryon interaction fss2. The spin-doublet low-energy eigenphase shift is sufficiently attractive to reproduce predictions by the AV18 plus Urbana three-nucleon force, yielding the observed value of the doublet scattering length and the correct differential cross sections below the deuteron breakup threshold. This conclusion is consistent with the previous result for the triton binding energy, which is nearly reproduced by fss2 without reinforcing it with the three-nucleon force.Comment: 21 pages, 6 figures and 6 tables, submitted to Prog. Theor. Phy