The recent debate questioning whether unemployment in the 1970s represents sectoral adjustment or cyclical variation is expanded to examine comparable causes of real wage variability. Using Panel Study of Income Dynamics panel data, real wages respond more to persistent sectoral shocks than cyclical shocks in the 1970s, making recent estimates of procyclical wage variability appear weak in perspective. Employing a model of endogenous sector-specific individual skills, older workers earning economic rents are shown to have the greatest wage response to sectoral shocks. These results are consistent with the hypothesis that short run cyclical shocks may be met with hours adjustment, as specified in implicit or explicit contracts, but that persistent shocks require wage adjustment.

The earnings of married women have a more equalizing effect on the distribution of lifetime family earnings (or the expected present value of earnings) than on the distribution of annual family earnings, using Panel Study of Income Dynamics longitudinal data. The intertemporal variability of wives' labor supply causes the correlation between the lifetime earnings of husbands and wives to weaken relative to the correlation between their annual incomes, resulting in lower lifetime inequality. The inequality of potential income (full employment earnings) is found to be much greater for lifetime earnings than average annual earnings, based on alternative endogenous wage-hours models.

The relationship between employer size and within firm job mobility is investigated. Larger employers are posited to provide their workers with greater options for career advancement within the firm in an attempt to both protect (and encourage) the relatively higher investments in their workers and to evaluate employee performance. Using microdata on actual levels of internal mobility, direct support is found for the propositions of greater internal mobility in larger establishments.

In recent years, nursing home care expenditures have approached one percent of GNP. Their growth is a major contributor to the escalating costs of health care. In this article, the authors analyze a sample of nursing homes from Wisconsin to determine the characteristics of the efficiently operated nursing homes. Data envelopment analysis is used to calculate efficiency scores for the various nursing homes in the sample. The authors then use regression analysis to investigate the determinants of efficiency, holding constant the characteristics of the output. They find that for-profit firms have significantly higher efficiency scores.

Timothy A. Deyak, W. Charles Sawyer, Richard L. Sprinkle, An Empirical Examination of the Structural Stability of Disaggregated U.S. Import Demand, The Review of Economics and Statistics, Vol. 71, No. 2 (May, 1989), pp. 337-341

A model of consumption of residential energy in dwellings is developed, distinguishing between attributes of housing that provide direct benefits to consumers and attributes that serve as inputs in the production of final goods, for example, the thermal comfort of dwellings. Empirical estimates are made of the mode, based upon the Annual Housing Survey, and the results are used to calculate the effects of changes in energy prices on the consumption of housing, residential energy, and other goods. The analysis suggests that the adjustment process within the housing market permits a great deal of substitution in response to energy price changes.

Elchanan Cohn, Sherrie L. W. Rhine, Maria C. Santos, Institutions of Higher Education as Multi-Product Firms: Economies of Scale and Scope, The Review of Economics and Statistics, Vol. 71, No. 2 (May, 1989), pp. 284-290