Knowledge that Transforms

The article studies the U.S. earning trends since 1950 and gives explanations for the inequality in earnings. Both slow growth and increased inequality appear in the comparison of adult male earnings distributions for 1979 and 1987. Trends in women's earnings paint a somewhat brighter picture. Women, like men, have experienced slow hourly wage growth and growing wage inequality. But in terms of annual earnings, both factors have been offset by changes in hours worked. The result is a significant increase in the proportion of women who earn $20,000 a year or more. A combination of shifts in supply and shifts in demand is necessary to explain the observed trends between these groups. A critical aspect of supply shifts was the entry into the labor market of the well-educated baby boom generation. Demand shifts can be characterized as a long-term trend toward increasing relative demand for highly skilled workers. The growth in within group earnings inequality has many potential explanations, but it is not well understood and contains opportunities for future research.

In this paper I show that the Medicaid program can improve the access of financially indigent patients to nursing home care by raising the rate of return paid on Medicaid patients' care, but only at the cost of lower quality of care. To quantify the policy tradeoff, I derive expressions for the elasticity of access with respect to total Medicaid expenditures and the elasticity of access with respect to quality. These elasticities expressions are complicated by the fact that Medicaid payment formulas are cost based and, therefore, depend on the quality choices of nursing homes. Using New York State data, I find that a 10% increase in Medicaid expenditures induces a 4.1% increase in Medicaid patient care but also reduces nursing home expenditures on patient services by about 3.4%.

The results show that demand decreases with prices.They indicate that if we take a household with particular characteristics and vary only the marginal price a negative relationship holds between quantity and price.While this approach is less informative than that of section 1I, table 4 supports the downward sloping demand curve results rather than those produced in the Rosen framework and does not make any assumptions regarding the household's utility function. IV. ConclusionThis paper develops estimates of the demand for electricity in Medellin, Colombia using a method which exploits the information implicit in constrained maximization subject to a convex, but segmented linear, budget set.The estimates seem adequate statistically, fall within the accepted range of parameter estimates, and show a consistent pattern whereby richer consumers have absolutely larger price and income elasticities than do the poor.Their veracity is enhanced by similar results developed using a generalised Heckman method due to Vella (1990).This contrasts sharply with the results obtained when the standard Rosen method is applied to the same data.The formation of instruments which linearise the budget constraint was incapable with these data of identifying the downward sloping demand curve from the upward sloping supply curve.

A labor-market model of search and transitions is analyzed where certain jobs carry layoff prospects and others do not. The dynamic value functions are solved for reservation wages for searchers with a choice between these jobs. For the laid-off worker, the wage at the prior job emerges as an important determinant of the optimal search strategy. Similarly, prospect of layoff is an important consideration for permanently separated workers during search. Conditioning on the nonparametric estimates of the reservation wages, the model is estimated using data from the Employment Opportunities Pilot Project survey. Copyright 1992 by MIT Press.

Bargaining models suggest that firm-specific variables play an important role in wage determination. Yet previous empirical studies of wage determination have largely ignored these variables. Our analysis of a large panel data set of U.S. wage contracts suggests that firm-specific variables suggested by bargaining models. such as the values of sales. the capital-labor ratio, and the financial liquidity of the firm. are important determinants of negotiated real wages.

In a recent paper, Yoram C. Peles and Meir I. Schneller (1989) ignore the sampling autocorrelation bias. A replication of their work that removes the bias changes their results. With the bias removed, there is no evidence that their three long-term ratios follow an adjustment process. Copyright 1992 by MIT Press.

Donald H. Dutkowsky, William G. Foote, Intertemporal Substitution in Macroeconomics: Consumption, Labor Supply, and Money Demand, The Review of Economics and Statistics, Vol. 74, No. 2 (May, 1992), pp. 333-338

Susan Feigenbaum, Gerard Anderson, Judith R. Lave, Medicare's Prospective Payment System: The Victim of Aggregation Bias?, The Review of Economics and Statistics, Vol. 74, No. 1 (Feb., 1992), pp. 185-191