http://aladinrc.wrlc.org:80/handle/1961/4916 2013-06-19T20:24:33Z 2013-06-19T20:24:33Z Wisman, Jon D. http://aladinrc.wrlc.org:80/handle/1961/5045 2009-03-01T08:45:59Z 2008-11-01T00:00:00Z

The Moral Imperative and Social Rationality of Government-Guaranteed Employment and Reskilling Wisman, Jon D. Unemployment exacts a high cost to its victims, not only in lost income, but also in terms of quality of life (insecurity, depression, abandoned families, divorce, suicide, poorer health). It also exacts a high cost to society in terms of lost output, foregone tax revenue, depreciating human capital, and increased costs of welfare, crime, and health care. Yet modern wealthy societies have, principally for the sake of price stability and to avoid the budget costs of a full remedy, chosen to tolerate a substantial level of permanent unemployment. This article explores the moral conditions of this social choice and its rationality in terms of social welfare. It makes and develops support for two claims: society’s tolerance of involuntary unemployment is morally wrong, and it is socially and economically irrational. It concludes that government should guarantee employment by serving as employer of last resort and where appropriate provide for retraining. Working paper No. 2008-20. 47 pages.

2008-11-01T00:00:00Z Wisman, Jon D. http://aladinrc.wrlc.org:80/handle/1961/5044 2009-07-31T14:30:15Z 2008-11-01T00:00:00Z

Household Saving, Class Identity, and Conspicuous Consumption Wisman, Jon D. The saving rate for U.S. households has long been low relative to those in other wealthy countries and in recent decades this rate has plummeted. Most studies of household saving behavior are based on the life-cycle theory of saving. However, there is doubt as to whether these studies adequately explain the low and declining rate in the U.S. This study explores two hypotheses that depart from the life-cycle explanatory framework. The first hypothesis examines the possibility that the low rate of household saving in the U.S. is related to Americans’ strong belief that vertical mobility in the U.S. is readily possible and hence their relatively weak sense of class identity. A second corollary hypothesis is that in an economy in which a high degree of vertical mobility is thought possible, a high degree of inequality in the distribution of income and wealth may reinforce the tendency to save little. working paper No. 2008-19. 38 pages.

2008-11-01T00:00:00Z Bono, James http://aladinrc.wrlc.org:80/handle/1961/5043 2009-03-01T08:46:03Z 2008-11-01T00:00:00Z

Coral Games and the Core of Cores Bono, James Many economically and politically important groups are themselves comprised of groups. Examples of such multi-level group structures include coalition governments, labor confederations and research consortia. In this paper, a model of multi-level group structures and an equilibrium concept are developed. The results establish that individu- als and groups will make tradeo®s across levels of the overall structure. Therefore, overall stability and overall instability can both arise from any combination of stable and unsta- ble levels. The framework and results have applications in many ¯elds, including political economy, industrial organization, and environmental economics. Working Paper No. 2008-18. 28 pages.

2008-11-01T00:00:00Z Bono, James http://aladinrc.wrlc.org:80/handle/1961/5042 2009-03-04T08:52:50Z 2008-09-01T00:00:00Z

Adapting Strategic Risk in Corporate Tournaments Bono, James The way in which agents manipulate the distribution of performance outcomes in strategic settings has received increasing attention in the game theory literature. This paper uses an evolutionary approach to examine the optimal adaptation of strategic variability in corporate promotion tournaments. The model describes a situation in which agents are promoted to a higher salary based on observable performance, which depends stochastically on effort. Simulation results show that the optimal adaptation of risk-taking is highly dependent on the population mix. However, strategies that involve adapting risk early in the tournament are almost never part of an evolutionarily stable state, particularly when using uniform initial conditions. Results also show how managers can choose rank-order payoff schemes and tournament lengths to optimize with respect to risk-taking and effort. Working Paper No. 2008-17. 19 pages.

2008-09-01T00:00:00Z Starr, Martha http://aladinrc.wrlc.org:80/handle/1961/5041 2009-03-04T08:52:48Z 2008-09-01T00:00:00Z

Consumption, sentiment, and economic news Starr, Martha This paper investigates the influence of economic news on consumer sentiment, and examines whether ‘news shocks’ –- changes in coverage that would not be expected from incoming data on economic fundamentals -– have aggregate effects. Using monthly U.S. data and a structural vector-autoregression, I find that (1) sentiment is affected by news shocks, (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending, and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of non-fundamental factors in aggregate fluctuations. Working Paper No. 2008-16. 30 pages.

2008-09-01T00:00:00Z Hansen, Mary Eschelbach Hansen, Bradley A. http://aladinrc.wrlc.org:80/handle/1961/5040 2009-03-04T08:52:43Z 2008-09-01T00:00:00Z

Religion, Social Capital, and Business Bankruptcy in the United States, 1921-1932 Hansen, Mary Eschelbach; Hansen, Bradley A. We consider the value of social capital that derives from membership in a church. American states with larger churchgoing populations had lower business bankruptcy rates from 1921 to 1932, and states in which the churchgoing population was concentrated in few churches had business bankruptcy rates that were lower still. Both voluntary and involuntary bankruptcy were lower in states with higher church membership. The evidence suggests that church membership acted on bankruptcy through a safety net mechanism and not solely through indicating a preference for honoring commitment. Working Paper No. 2008-15. 35 pages.

2008-09-01T00:00:00Z Feinberg, Robert M. Husted, Thomas A. Reynolds, Kara M. http://aladinrc.wrlc.org:80/handle/1961/5039 2009-04-13T21:56:52Z 2008-09-01T00:00:00Z

Antitrust and Trade Policy: Are Legislators Consistent? Feinberg, Robert M.; Husted, Thomas A.; Reynolds, Kara M. In analyzing the potential exercise of monopoly power in domestic markets, both the academic literature and U.S. antitrust authorities have acknowledged the disciplining role of competition from abroad. In this paper, we explore the extent to which this view seems to reveal itself in recent U.S. Congressional votes taken during the 108th Congress (2003-04) on four free trade agreements (FTAs). To the extent that antitrust and trade liberalization are both viewed as pro-consumer in nature, we would expect to see a positive relationship between antitrust enforcement in their legislative district and Congressional votes in support of new FTAs. We do find evidence supporting a positive relationship between state-level antitrust enforcement (measured either by absolute number of cases filed or by cases relative to the state’s economic size) and support for FTAs. Working Paper No. 2008-14. 23 pages.

2008-09-01T00:00:00Z Meurs, Mieke Miluka, Juna Hertz, Thomas http://aladinrc.wrlc.org:80/handle/1961/5038 2009-03-04T08:48:56Z 2008-09-01T00:00:00Z

Declining Secondary Enrollment in Albania: What Drives Household Decisions? Meurs, Mieke; Miluka, Juna; Hertz, Thomas In some post-socialist countries, the post-socialist economic downturn had a negative impact on human development indicators. Education is one area of concern. In this paper, we examine secondary schooling dynamics in Albania, where enrollment declines have occurred. Drawing on the existing literature on household investment in schooling, we examine factors underlying the recent changes. We find that, as in other counties, parental education has a significant impact on the choice to attend secondary school. But we also find that factors specifically related to transition, including household economic resources, local employment prospects, opportunity costs of children’s time, and access to school are significant predictors of schooling decisions in Albania. These findings suggest a number of areas where policy interventions may positively affect long-term outcomes. Working Paper No. 2008-13. 45 pages. Draft: Do Not Cite without Authors’ Permission.

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