Knowledge that Transforms

Contrary to the original intention of no‐fault workers’ compensation laws, employers deny liability for a substantial fraction of on‐the‐job injuries. We develop and estimate a simple structural model that explains the high rate of litigation as a consequence of asymmetric information. We estimate the model using data for a large sample of back injuries in Minnesota. Simulations under the counterfactual assumption that all denied workers pursue their claims suggest that the strategic incentive accounts for 30%–40% of observed liability disputes.

This paper reexamines an old question: what is work and why do we do it? A straightforward ’economic ’ answer is that work is any time activity for which we receive a positive wage, but this begs the question which activities command a positive wage. Now the answer depends on market level considerations such

Even in countries with high average job security, workers with low tenure typically enjoy very limited job protection. This study analyzes the impact of such a feature on job duration. It uses a 1999 British reform that increased job security for workers with 1–2 years of tenure. The firing hazard for these workers decreased by 26% relative to the hazard for workers with 2–4 years of tenure. The firing hazard for workers with 0–1 year of tenure also decreased by 19%, which is consistent with better recruitment practices and hence improved match quality.

What can account for the differences in marriage and employment decisions across blacks and whites? To answer this question, I develop a dynamic, equilibrium model of marriage. Two explanations for the racial differences in behavior are considered: differences in population supplies and wages. Black‐white differences in population supplies explain one‐fifth of the difference in marriage rates and between one‐fifth and one‐third of the differences in employment rates across race. Removing the racial gap in wages eliminates the differences in employment but increases the differences in marriage rates.