Human resources, Human capital, Investments

The current members of the Committee on Economic Statistics are Katharine Abraham, University of Maryland (chair); Robert Feenstra, University of California, Davis; Dennis Fixler, Bureau of Economic Analysis; Barbara Fraumeni, University of Southern Maine; David Johnson, Census Bureau; Dale Jorgenson, Harvard University; Charles Schultze, Brookings Institution; Matthew Shapiro, University of Michigan; and Jack Triplett, Brookings Institution. The Committee met by phone four times during 2007, in January, March, May, and October. In January 2007, the Executive Committee gave the Committee on Economic Statistics standing authority to organize up to three sessions each year for inclusion in the program of the annual meeting of the Association. The Committee has organized three sessions for the January 2008 meeting, one titled “Innovation, Intangibles, and R&D,” a second titled “Reconciliation of Seemingly Inconsistent Data Series,” and the third titled “The Output of Banking and Finance.” Each includes a mix of academic and statistical agency participants. Topics being considered for sessions at the January 2009 meeting are health accounting, matching survey data to administrative records in the production of statistical information, and the development of consistent industry production accounts. The committee wishes to cast its net widely to identify papers suitable for inclusion in the sessions it organizes and, for January 2010 and beyond, plans to develop a process for soliciting proposals for papers in topic areas of potential interest. The Committee also has undertaken the task of commissioning reviews of needs for data in particular subject matter areas. One such report on needs for data in public economics has been completed by a group chaired by Joel Slemrod. Report of the Committee on Economic Statistics

An important stylized fact about labor markets is that workers with longer seniority with their current employer have higher earnings than other workers with the same total labor market experience. This study shows that the measured positive cross-sectional return to seniority is largely a statistical artifact due to the correlation of seniority with an omitted variable representing the quality of the worker, job, or worker-employer match. The implication is that earnings do not, in fact, rise very much with seniority.

Recent work by David Lilien has argued that the positive correlation between the dispersion of employment growth rates across sectors (σ) and the unemployment rate implies that sectoral shifts in labor demand are responsible for a substantial fraction of cyclical variation in unemployment. This paper demonstrates that, under empirically satisfied conditions, traditional single-factor business-cycle models will produce a positive correlation between σ and the unemployment rate. Information on the job vacancy rate permits one to distinguish between a pure sectoral shift and a pure aggregate demand interpretation of this positive correlation. The finding that σ and the volume of help wanted advertising (a job vacancy proxy) are negatively related supports an aggregate demand interpretation.

We derive a macroeconomic asset pricing model in which the key factor is the opportunity cost of money. The model explains well the cross section of stock returns in addition to the excess market return. The interest rate factor is priced and seems to drive most of the explanatory power of the model. In this model, both value stocks and past long-term losers enjoy higher average (excess) returns because they have higher interest rate risk than growth/past winner stocks. The model significantly outperforms the nested models (capital asset pricing model (CAPM) and consumption CAPM (CCAPM)) and compares favorably with alternative macroeconomic models.

We analyze new Swedish data on the portfolio holdings of large blockholders and find that firm value increases with the weight of a stock in a large blockholder's portfolio. In our sample, this weight may be greater than 50%. We are the first to show that this value premium is correlated with portfolio weights for any large blockholders, not just institutions. We find some evidence that indicates that “stock importance” (high portfolio weight) can mitigate the negative effects of a dual-class structure on firm value. Further, it does not seem that a large blockholder's tenure as a CEO or as a board chairman affects this value premium. We conduct a variety of tests to rule out endogeneity and reverse causality.