Capital market data are used to investigate the termination announcement effect of over‐ and underfunded corporate pension plans. Significant positive abnormal returns are initially observed for samples of both over‐ and underfunded plan terminations; however, after segmenting the samples on the basis of publicly available information regarding a firm's financial condition, significant returns are observed only for financially distressed subsamples. The evidence suggests that the property rights to pension fund assets and liabilities reside fully with the sponsoring firm, and that financially distressed firms may effect a wealth transfer to shareholders by fund termination. Résumé. Les auteurs utilisent les données relatives au marché financier pour analyser l'incidence des avis de discontinuation de régimes de retraite surcapitalisés et sous‐capitalisés de sociétés. Des rendements positifs irréguliers importants sont d'abord observés pour des échantillons de cas de discontinuation de régimes surcapitalisés ainsi que sous‐capitalisés; toutefois, après une segmentation des échantillons à partir de l'information mise à la disposition du public concernant la situation financière de la société, des rendements importants sont observés seulement pour les sous‐échantillons de sociétés en difficulté financière. Les résultats donnent à penser que les éléments d'actif et de passif de la caisse de retraite échoient entièrement à la société promotrice et que les sociétés en difficulté financière peuvent procéder à un transfert de richesses au profit des actionnaires par voie de discontinuation du régime.

Hall has shown that, with perfect competition and price flexibility, total factor productivity measured using labor's share either in revenues or in costs will be acyclical regardless of the level of labor hoarding. We show that if firms producing a homogeneous good under constant returns must pick their prices before demand is known, both measures of productivity become procyclical. The model implies that productivity should be more procyclical the more important is labor hoarding. Empirically, productivity is more procyclical in industries and in nations where labor hoarding appears more important.

A small interview survey was undertaken to see how actual wage-setters would react to the central ideas of several economic theories of wage stickiness. Wage cuts were surprisingly prevalent in recent years, despite the booming economy. The strongest finding was that managers believe that perceptions of fairness play a major motivational role in labor markets and that a “fair” wage policy is a good deal more complicated than simply not cutting wages. We also found substantial evidence for money illusion and against the adverse-selection version of the efficiency wage model.

When members of the baby-boom generation began entering the work force in substantial numbers during the 1970s, the resulting crowding reduced their earnings in comparison with earlier cohorts of the same age, and wage premiums for schooling also declined. These developments raised questions about how well members of the babyboom generation might fare during their working lives compared with smaller neighboring cohorts (Finis Welch, 1979; Mark Berger, 1985). When wage premiums for schooling increased sharply during the 1980s, however, it became apparent that workers' levels of schooling were more important determinants of their lifetime earnings than the size of their birth cohort. The small decline in schooling wage premiums during the 1970s now appears to have been only a temporary interruption of a trend toward higher economic rewards for schooling. Since schooling and work experience account for about half of the variation in earnings, wage trends of the work force as a whole have been influenced by changes in its composition since the late 1960s. In addition to these compositional changes, relative wages have also changed dramatically as the number of entrants into the labor force with high schooling levels surged during the 1970s and receded during the 1980s. The purpose of this paper is to describe the relationship between changes in the schooling and work experience composition of the labor force and changes in relative wages during the past fifteen years.

The paper develops a model of retirement based on the option value of continuing to work.Continuing to work maintains the option of retiring on more advantageous terms later.The model is used to estimate the effects on retirement of firm pension plan provisions.Typical defined benefit pension plans in the United States provide very substantial incentives to remain with the firm until some age, often the early retirement age, and then a strong incentive to leave the firm thereafter.(This may be a major reason for the rapidly declining labor force participation rates of older workers in the United States.)The model fits firm retirement data very well; it captures very closely the sharp discontinuous jumps in retirement rates at specific ages.The model is used to simulate the effect on retirement of potential changes in pension plan provisions.Increasing the age of early retirement from 55 to 60, for example, would reduce firm departure rates between ages 50 and 59 by almost forty percent.

Voluntary Disclosure, Management forecasts, Screening, Signaling

This study evaluates the effectiveness of a radon risk communication program based on how the estimated value of additional information varies across the six types of descriptive materials randomly assigned to a panel of homeowners participating in a radon utility model estimated with probit from respondents' answers to a contingent behavior question asking if they would purchase at a one-time price the services of a licensed technician to analyze their radon problems. The findings indicate that the information materials used most frequently by states and testing companies to explain radon's risk are the least effective of the six considered.