This article develops and estimates a model of wage determination that isolates the effects of alcohol use on wages as mediated through human capital accumulation. Although generally insignificant, estimation results suggest that moderate alcohol use while in school or working has a positive effect on the returns to education or experience, and therefore on human capital accumulation, but heavier drinking reduces this gain slightly. Based on these results, alcohol use does not appear to adversely affect returns to education or work experience and therefore has no negative effect on the efficiency of education or experience in forming human capital.

The large literature on labor‐market rent sharing consists of closed economy analyses. In this article we examine whether profits are shared across borders and also conditioned by international linkages that help shape economic openness. In a sample of 1,014 Canadian manufacturing union contracts from 1980 through 1992, we find that U.S. industry profitability affects Canadian wage outcomes and that the pattern of rent sharing varies significantly across international linkages, including multinational ownership, union type, and trade barriers. There seems to be international rent sharing, with profit sharing across borders conditioned by firm‐ and industry‐level institutions.

This article presents an equilibrium model of a dual labor market. Firms are assumed to be identical ex ante, and dualism arises endogenously. The dual labor market outcome is supported by efficiency wage and search considerations. Firms choose wage/effort requirement packages optimally given optimal search and effort choice by workers, and vice versa. We prove existence and investigate the occurrence and nature of dual labor market equilibria.

Using 1979–2012 CPS data for the United States and 1975–2012 NES data for Great Britain, we study wage behavior in both countries, with particular attention to the Great Recession. Real wages are procyclical in both countries, but the procyclicality of real wages varies across recessions, and does so differently between the two countries, in ways that defy simple explanations. We devote particular attention to the hypothesis that downward nominal wage rigidity plays an important role in cyclical employment and unemployment fluctuations. We conclude that downward wage rigidity may be less binding and have lesser allocative consequences than is often supposed.

Firstborns, on average, complete more education than laterborns. We study whether individuals’ endowments measured by genetic information amplify this effect. Our familyfixed effects approach allows exploiting exogenous variation in birth order and genetic endowments among 14,850 siblings in the UK Biobank. We find that those with higher genetic endowments benefit disproportionately more from being firstborn compared to those with lower endowments, providing a clean example of how nature and nurture interact in producing human capital. Since parental investments are a dominant channel driving birth order effects, our results are consistent with complementarity between endowments and investments in human capital formation.