Tenure responses in the Panel Study of Income Dynamics (PSID) and the National Longitudinal Surveys are often inconsistent with calendar time. These inconsistencies pose special problems in the PSID because job changes cannot be identified directly, so researchers must infer them from error-ridden tenure data. We use alternative rules for partitioning PSID data into jobs and then estimate several wage and mobility models to assess the sensitivity of parameter estimates to the partitioning method. We also assess the importance of replacing "raw" tenure data with imputed measures that are internally consistent.
Little is known about the search strategy that employers use in their efforts to fill job vacancies. In this article, we analyze unique micro data to study this search strategy. We conclude that almost all vacancies are filled from a pool of applicants that is formed shortly after the posting of the vacancy. Hence, vacancy durations should be interpreted as selection periods and not as search periods for applicants.
This article uses aggregate birth year/calendar year level data derived from the Current Population Survey (CPS) to estimate the effect of Social Security wealth on the labor supply of older men in the 1970s and 1980s. The analysis focuses on measuring the impact of the 1977 amendments to the Social Security Act, which created a substantial, unanticipated reduction in Social Security wealth for individuals born after 1916. This differential in benefits has become known as the benefit notch. Results indicate that labor supply continued to decline for the "notch babies" who received lower Social Security benefits than earlier cohorts.
Firms often view job applicant referrals from current employees as more informative than direct applications or referrals through formal labor market intermediaries such as placement firms. The authors argue that old boy networks reduce employers' uncertainty about worker productivity. Using Jovanovic's job matching model, they show that workers hired through the old boy network should (1) earn higher initial salaries, (2) experience lower subsequent wage growth on the job, and (3) stay on the job longer than otherwise comparable workers hired from outside the network. They find considerable support for this theory using data from the 1972 Survey of Natural and Social Scientists and Engineers.
tag=1 data=Are economists' traditional trade policy views still valid? by Robert E. Baldwin tag=2 data=Baldwin, Robert E. tag=3 data=Journal of Economic Literature, tag=4 data=XXX tag=6 data=June 1992 tag=7 data=804-829. tag=8 data=TRADE tag=10 data=Recent developments in trade theory have raised doubts whether economists should continue their traditional opposition to trade taxes and subsidies. tag=11 data=1992/4/11 tag=12 data=92/0735 tag=13 data=CAB
Suddenly, and somewhat unexpectedly, there seems to be a real chance for change in the way economics is taught in American colleges and universities. During the last two years, three different groups have taken a critical look at economics education and declared that change is in order. The Association of American Colleges (AAC), in conjunction with the American Economic Association (AEA), commissioned a study of the undergraduate economics major which has led to a report with several recommendations for reform (John Siegfried et al. 1991); in response to a National Science Foundation (NSF) symposium that revealed concern over the state of graduate education, the AEA formed the Commission
for at least three reasons. First, it is fun. A skillful narrator and analyst can bring alive exciting or important events, and that is enjoyable. Second, a study of history alerts economists to two important but usually neglected characteristics of economies, namely that they are sometimes strongly influenced by noneconomic factors-not only wars, but political impasses, charismatic leaders, or ideological beliefs deeply rooted in public or official psychology-and that contrary to what is usually assumed in formal modeling, the structure of economies changes over time as public attitudes change and as institutions evolve. Third, economists should study history, at least relatively recent history, because it is usually impossible to understand our institutions and attitudes without some appreciation of the events that shaped the legacy from our parents and grandparents. Barry Eichengreen has written a book that is likely for some time to become the standard reference on monetary and financial developments during the interwar period, 1919-1936.' It is traditional history, telling a story, or rather a series of stories, with more tables and charts and a stronger reliance on economic concepts than most histories, but little econometrics and no formal modeling. The interwar period, which contains what is still the most dramatic and traumatic economic event of the past century, the Great Depression, left a strong imprint on contemporary American, European, and world institutions and attitudes, such as the Securities and Exchange Commission, the Glass-Steagall Act requring the separation of banking from other activities, and the International Monetary Fund. In addition to telling an interesting story, Eichengreen helps us interpret those events in ways that may have lessons for the future as well. Eichengreen's most significant conclusion is that the Great Depression was due to attempts to adhere to a restored gold standard with inadequate international cooperation to make it work. That flawed behavior, in turn, must be understood in light of experience in the early 1920s, especially in three critical countries-France, Germany, and the United States. As the interwar period may not be well known to most readers of this Journal, I first sketch the main economic and political events. The next section indicates the influence of these events on post-World War II international institutions and behavior. I turn then to the various explanations that have been put forward for the severity of the Great Depression, and conclude with a commentary on Eichengreen's contribution to this literature, and to our understanding of the interwar period more generally.
THE THICK VOLUME under review, by Richard Layard, Stephen Nickell, and Richard Jackman, is an extensive econometric and theoretical study, using time-series and cross section data, of the central tendency of the unemployment rate and its fluctuations in 19 OECD countries since the mid-50s. It thus joins the company of several recent macroeconometric studies of employment determination using international time-series data. Of these it is easily the most far-ranging study to date though in its microscopic examination of social legislation it has somehow neglected a range of macro factors right under its nose. Readers will find an abundance of arresting claims and provocative positions to keep the critical juices flowing. For me the volume is significant not (or hardly at all) as an assemblage of particular modelings and findings but primarily as an early econometric expression of the paradigm shift we are now witnessing in macroeconomics. Once nearly made extinct by a neoclassical winter, a school of economists are today furiously at work on unemployment considered as an equilibrium phenomenon' springing from en-