This article attempts to determine whether wage records reported by employers to state unemployment insurance (UI) agencies provide a valid alternative to more costly retrospective sample surveys of individuals as the basis for measuring the impacts of employment and training programs for low‐income persons. We analyze UI data and survey data for a sample of low‐income adults and youths from 12 sites in the National Job Training Partnership Act (JTPA) study. Our comparison indicates that impact estimates based on UI data and survey data were usually comparable. However, average surveyreported earnings were higher than average UI‐reported earnings.

Empirical models of local government unionization reveal substantial reductions in union membership due to right-to-work laws. Free riders, rather than underlying antiunion sentiments, are probably responsible because the unionization models include better measures of sentiments than right-to-work laws. Furthermore, these laws reduce the probability that bargaining unions form by more than they reduce the probability that nonbargaining associations form in three of five local government functions. These results also confirm the importance of free riders because union security clauses that prohibit free riders in states without right-to-work laws exist only in collective-bargaining contracts.

"This paper develops a model of the transmission of earnings, assets, and consumption from parents to descendants. The model assumes utility-maximizing parents who are concerned about the welfare of their children. The degree of intergenerational mobility is determined by the interaction of this utility-maximizing behavior with investment and consumption opportunities in different generations and with different kinds of luck. We examine a number of empirical studies for different countries. Regression to the mean in earnings in rich countries appears to be rapid. Almost all the earnings advantages or disadvantages of ancestors are wiped out in three generations." A comment by Robert J. Willis is included (pp. 40-7).

IN The general theory of employment, interest and money we can discover what gives a book eternal youth. It is the quality of imperishable relevance to the essential, insoluble problems of time-bound humanity. A problem solved, a situation resolved into its ultimate constituents, a veil finally and irrevocably withdrawn, is the end of a matter. can salute the author who did these things, but we can no longer look into a living face and see our own enigmas and perplexities reflected there. Keynes's book, however, is a great enigma; it is the image of the vaster enigma of conduct, decision, and history itself. It is doubtless paradoxical to say that Keynes's book achieves its triumph by pointing out that the problems it is concerned with are essentially beyond solution. The business of scholars, scientists and philosophers is to gain and give understanding. But only the best of them tell us that they can describe only the shadows in the mouth of the cave. All problems are solvable, the characteristic stance of our civilization, afflicts us with a terrible myopia. If all problems are to be solvable, we must be very careful what kinds of thing we admit to the category of problems. They must be carefully tailored to fit our selfassumed omni-competence. The task which suits us, which we can do with astounding ingenuity and surprising effect, is that of analysis, the application of reason to the dismemberment of a body of information declared or assumed to be self-sufficient, and its re-constitution into a prescription for conduct. It is the selfsufficiency of such supposed bodies of information which removes them so immeasurably far from the harsh truth of things. Why was not Keynes satisfied with the Treatise? It had the Keynesian touch. It knotted up a mass of perplexities and cut them with one Alexandrine stroke. The Fundamental Equations were extremely concise and ostensibly simple. Had Myrdal been at Keynes's elbow to interpret the dream, they would have done the trick, thrown back the bolt and enabled the gates to swing open upon an undiscovered country. What was wanted was some clue to the nature of the inducement to invest. Keynes in the Treatise sought for it in a WicksellianAustrian theory of the nature of capital. (If one draws a diagram of what Keynes says about capital in the Treatise, there will appear a Hayekian triangle of the stages of production.) But this did not seem to go quite to the heart of the matter. What, in its essential nature, was the Natural Rate of Interest? This was the difficulty, the source of dissatisfaction, that led to a fresh attempt as soon as the Treatise was published. The General theory devotes a whole Book to the Inducement to Invest. The apparatus is the confrontation with each other of the Marginal Efficiency of Capital and the rate of interest. What is the M.E.C.? learn its real nature in Section V of Chapter 11. It depends on expectation. And what does expectation depend on? To find that stated, with full uncompromising explicitness, we have to look in a part of the canon which few economists seem able to endure the sight of-or else they have never heard of it. It is his reply to his critics. It appeared in the Quarterly Journal of Economics for February 1937, and it declares unequivocally that expectations do not rest on anything solid, determinable, demonstrable. We simply do not know. The General theory is a detour. (Is everything in economics a detour?) It is a detour from a path which might have led direct from the Treatise to the Q.J.E. article. Keynes and many of the readers of the Treatise were worried about how investment and saving could differ from each other. The dilemma needed only the same liberating insight that can ex-

This paper attempts to provide a unified analysis of the effects of taxation on the equilibrium value of marginal q under alternative financial policies. It is shown that the q approach does not avoid all the specification problems associated with analyses based on the cost of capital. The (theoretically and empirically) crucial relationship between average and marginal q is also examined, and it is shown that, under UK and US tax rules, the possibility of winding up precludes persistent undervaluation in equilibrium.