Certain characteristics of managerial employment arrangements and of the managerial labor market make shareholder wealth dependent on an executive's continued employment. These wealth effects are investigated by examining the common stock price reaction to unexpected deaths of senior corporate executives. Abnormal stock price changes are documented for a sample of fifty-three events. These abnormal stock price changes are associated with the executive's status as a corporate founder and with measures of the executive's ‘talents’ and decision-making responsibility, and of the transaction costs associated with renegotiating or terminating the employment agreement.

Except in special cases, market work and household membership are jointly chosen. A Nash bargaining model of family behavior is used to specify stochastic structural relationships (two indirect utility functions and a market and a reservation wage function) that jointly determine work, consumption, and household membership. The maximum likelihood estimates of the implied trinomial probit model differ sharply from those obtained when either market work or household membership is taken as exogenous. This application to white male youths from the National Longitudinal Surveys shows the insurance function of families: parents insure their sons against poor market opportunities

An unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model. In the context of a three-equation model determining union membership and union- and nonunion-sector wage rates, this paper presents an instrumental variables (IV) procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the Hausman specification test. An advantage of our IV procedure in comparison to the widely used inverse Mill's ratio procedure is that our procedure is a distribution-free estimator, whereas the inverse Mill's ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed. Using data for a sample of middle-aged white workers, we estimate the parameters of the union and nonunion wage equations with both procedures. On the key question of the endogeneity of union status, the Hausman test decisively rejects the null hypothesis of exogeneity. The inverse Mill's ratio procedure, in contrast, provides coefficient estimates on the selectivity terms that fail to indicate evidence of sample selectivity in either sector

A multiperiod, general equilibrium model of the labor market is developed in which risk-averse workers are faced with job-related uncertainty and labor turnover is costly. If a worker is unlucky and suffers a bad job match, he quits and joins another firm, hoping that he will like its work environment more. Because the quality of a job match is unobservable, workers cannot insure against the risk of a bad match. The firm provides implicit insurance against job dissatisfaction, typically by paying workers more than their net marginal products in their early years with the firm and less subsequently. Since the probabilities of the insured-against events (the quit rates over time) are affected by the amount of such insurance provided, this implicit insurance is characterized by moral hazard. Individuals quit when in the absence of insurance they would not. The equilibrium contract balances out efficiency in risk bearing with efficiency in turnover incentives. We show that the equilibrium contract is not (constrained) efficient and indicate why

In Britain, female labor force participation rose steadily from the Second World War to 1977. To explain this, we estimate a pooled time-series, cross-section supply function for single-year age groups of women. The life-cycle pattern is explained quite well by the presence of children. At a second stage we try to explain the rising level of the cohort intercepts estimated at the first stage. Real wage growth may be an explanatory factor, as cross-section evidence suggests it should be. Finally, we point to the 15% rise in the relative pay of women in the mid-1970s caused by the Equal Pay Act. This did not cause the expected decline in the relative demand for female employees.

This paper explores the rationales offered by participants for the accounting and management control practices in which they are involved. An analysis of these rationales emphasis four characteristics of current practices. Firstly, financial planning and control systems do not appear to be a dominant mode of organisational control for the organisation investigated, physical production planning appearing to be more important. Secondly, the parts of the whole organisation appear to be only loosely coupled, thereby insulating the various parts from each other, and from pressures for change. Thirdly, in such a context, accounting and information generally may be managed either (or both) to enhance ambiguity or to provide legitimacy in (and about) the organisation. The paper concludes, fourthly, by noting the pressures for change which appear to operate through the finance function, thereby enhancing that function's organisational role. The observations and analysis of the paper are based on an in-depth observational study of an Area (i.e. geographical division) of the National Coal Board, in the U.K., and on a detailed study of that organisation's history and environment

Popular arguments in the management literature advocate the implementation congruity and complementarity of zero-base budgeting (ZBB) with an established management-by-objectives (MBO) system. The present study examined management perceptions on 28 ZBB implementation variables for MBO users and non-MBO users which were gathered from 153 managers at two hierarchical levels within a single private sector organization. Results from both univariate and multivariate tests indicate that ZBB implementation was not facilitated by the existence of an MBO system for either lower level management or for upper level management. The evidence obtained here strongly suggests that the purported conventional rationale underlying ZBB coupling with an extant MBO system is seriously defective; ZBB design implementation issues need to be thoroughly re-assessed, with the emphasis on matching compatible systemic properties between information sub-systems.

There is often evidence of confusion between two forms of the constant percentage learning curve model: the cumulative average and the individual unit forms. Failure to distinguish between the two models can lead to their misuse and to potentially serious errors of estimation. A precise statement of the difference between the two clarifies the errors of misspecification. This note provides an analytical comparsion of the two models and addresses empirical estimation issues. Résumé. On a souvent la preuve de la confusion entre deux formules de modèle de la courbe d'apprentissage à pourcentage constant: celle de la moyenne cumulative et celle de l'unité individuelle. Le fait de ne pas distinguer les deux modèles peut conduire à une mauvaise utilisation et éventuellement à de sérieuses erreurs d'estimation. Un examen précis de la différence entre les deux peut clarifier les erreurs de spécification. Cet article présente une comparaison analytique des deux modèles et traite des questions d'estimation empirique.

Barry R. Marks, Krishnamurthy K. Raman, The Importance of Pension Data for Municipal and State Creditor Decisions: Replication and Extensions, Journal of Accounting Research, Vol. 23, No. 2 (Autumn, 1985), pp. 878-886

This paper presents an analysis of the audit risk consequences of PPD ex- tremeness deficiencies and miscalibration.While there is empirical evidence that auditors, like many other decision makers, assess miscalibrated PPDs , the attendant inferential risk consequences of such deficiencies have not been addressed in the extant literature.The comparative statics analysis performed in this study indicates that the risk effects of miscalibration and extremeness deficiencies on the auditor's (substantive testing) evaluation decision are complex and cannot be predicted from an examination of the planning (sampling size) decision