Knowledge that Transforms

The following sections are included:INTRODUCTIONTHEORETICAL SPECIFICATION OF THE EXPORT FUNCTIONSRESULTSCONCLUSIONAPPENDIXREFERENCES

InttwIttctionN important question in political economy A.' ts how, if at all, economic events affect voting behavior.Although there is by now a fairly large literature devoted to this question,' there is no widely agreed upon answer.Kramer (1971), for example, concluded from his analysis of U.S. voting behavior that economic fluctuations have an important influence on congressional elections, whereas Stigler (1973) concluded that they do not.This debate'has been continued by Arcelus and Meltzer (1975a, b), Bloom and Price (1975), and Goodman and Kramer (1975)?Many of the disagreements in this area are over statistical procedures and the interpretation of empirical results, but it is also clear that there is no single theory of voting behavior to which everyone subscribes.Unfortunately, the distinction between theoretical and empirical disagreements in this literature is often not very sharp, and there has been no systematic testing of one theory against another.This paper has two main purposes.The first is to present a model of voting behavior that is general enough to incorporate what appear to be most of the theories of voting behavior in the recent literature and that allows one to test

GOVERNMENTAL post-schooling training programs have become a permanent fixture of the U.S. economy in the last decade. These programs are typically advocated for diverse reasons: (1) to reduce inflation by the provision of more skilled workers to alleviate shortages, (2) to reduce unemployment of certain groups, and (3) to reduce poverty by increasing the skills of certain groups. All of these objectives require that training programs increase the earnings of trainees above what they otherwise would be. For example, alleviating shortages by training more highly skilled workers should increase the earnings of these workers. Likewise, the concern for unemployed workers is derived from a concern for the decreased earnings of these workers; and if trainees subsequently suffer less unemployment, their earnings should be higher. Finally, training programs are intended to reduce poverty by increasing the earnings of low income workers. Evaluating the success of training programs is thus inherently a quantitative assessment of the effect of training on trainee earnings.' It is an important process both because it helps to inform discussions of public policy by shedding light on the past value of these programs as investments and because it can provide a means of testing our ability to augment the human capital of certain workers. Although there have been many studies of the effect of post-school classroom training on earnings it is by now rather widely agreed that very little is reliably known about the actual effects of these programs.2 Three main problems account for this state of affairs: (1) the large sample sizes required to detect relatively small anticipated program effects in a variable with such high variance as earnings, (2) the considerable expense required to keep track of trainees over a long enough period of time to measure the full inter-temporal impact of training, and (3) the extreme difficulty of implementing an adequate experimental design so as to obtain a group against which to reliably compare trainees.3 The purpose of this paper is to report on efforts to cope with this third problem using a data collection system that comes some way towards resolving the first two. The basic idea of this data system is to match the program record on each trainee with the trainee's Social Security earnings history. The Social Security Administration maintains a summary year-by-year earnings history for each Social Security account over the period since 1950 that may be used, under the appropriate confidentiality restrictions, for this purpose.4 In this paper I have concentrated on an analysis of all classroom trainees who started training under the Manpower Development and Training Act (MDTA) in the first 3 months of 1964 so as to ensure their having completed training in that year. In choosing to analyze trainees from so early a cohort something is clearly lost. On the one hand, the nature of the participants in these early years was considerably different than in the later years. In particular, programs geared Received for publication February 9, 1977. Revision accepted for publication August 1, 1977. * Princeton University. This research was supported by ASPER, U.S. Department of Labor, but does not represent an official position of the Department of Labor, its agencies, or staff. I would like to thank Gregory Chow, Ronald Ehrenberg, Roger Gordon, Zvi Griliches, George E. Johnson, Nicholas Kiefer, Richard Quandt, and Sherwin Rosen for helpful comments. I also owe a heavy debt to D. Alton Smith for computational and other assistance. 'See Reid (1976), for example, for a clear analysis of how knowledge of these effects is required in order to establish the impact of government training on the black/white wage differential. 2 Surveys of many of these studies may be found in Stromsdorfer (1972) and O'Neill (1973). 3For further discussion of these points see Ashenfelter (1975). 4The idea for using these data to analyze the effectiveness of government training programs is apparently quite an old one, having been suggested by the National Manpower Advisory Committee (U.S. Department of Labor, 1972) to the Secretary of Labor at its first meeting in a letter dated October 10, 1962, the year of passage of the Manpower Development and Training Act. Actual efforts along these lines were ultimately reported by Borus (1967), Commins (1970), Farber (1970), and Prescott and Cooley (1972).

European Doctoral Program in Quantitative Economics: The London School of Economics, Rheinische Friedrichwilhems Universität Bonn, Université Catholique de Louvain The Review of Economic Studies, Volume 45, Issue 1, February 1978, Pages 213–214, https://doi.org/10.2307/restud/45.1.213-a Published: 01 February 1978

Journal Article Consumer's Surplus when Consumers are Subject to a Time and an Income Constraint Get access Kenneth S. Lyon Kenneth S. Lyon Utah State University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 2, June 1978, Pages 377–380, https://doi.org/10.2307/2297352 Published: 01 June 1978 Article history Received: 01 January 1976 Accepted: 01 June 1977 Published: 01 June 1978

Journal Article On Stochastic Entry and Exit without Expectations Get access Frederick S. Inaba Frederick S. Inaba Washington State University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 3, October 1978, Pages 535–545, https://doi.org/10.2307/2297255 Published: 01 October 1978 Article history Received: 01 February 1976 Accepted: 01 July 1977 Published: 01 October 1978

Journal Article Distributional Goals and Optimal Growth Get access Owen Stanley Owen Stanley Australian National University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 2, June 1978, Pages 389–390, https://doi.org/10.2307/2297355 Published: 01 June 1978 Article history Received: 01 February 1976 Accepted: 01 April 1977 Published: 01 June 1978

Journal Article A Note on Feldstein's Criticism of Mean-Variance Analysis Get access Joram Mayshar Joram Mayshar The Hebrew University of Jerusalem Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 1, February 1978, Pages 197–199, https://doi.org/10.2307/2297094 Published: 01 February 1978

Journal Article A Limit Theorem on the Core of an Economy with Individual Risks Get access Yaffa Machnes Caspi Yaffa Machnes Caspi The Hebrew University of Jerusalem Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 2, June 1978, Pages 267–271, https://doi.org/10.2307/2297341 Published: 01 June 1978 Article history Received: 01 July 1976 Accepted: 01 May 1977 Published: 01 June 1978

Journal Article A Vintage Model of the Demand for Energy and Employment in Australian Manufacturing Industry Get access R. G. Hawkins R. G. Hawkins Australian National University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 3, October 1978, Pages 479–494, https://doi.org/10.2307/2297250 Published: 01 October 1978 Article history Received: 01 July 1976 Accepted: 01 November 1977 Published: 01 October 1978