Risk aversion enters many theoretical models of human capital investment, but attitudes toward risk have not been incorporated in empirical models of human capital investment. This article develops a model of the joint investment in financial wealth and human wealth to show that human capital investment is an inverse function of the degree of relative risk aversion. Using data from the Survey of Consumer Finances, I find that wage growth is positively correlated with preferences for risk taking. More-educated individuals are also more likely to be risk takers, thus risk taking explains a portion of the returns to education.

This paper hypothesizes that the quit propensity of married men rises with an increase in their wives' income. Assuming that individuals are risk averse and that quitting is risky, the wife's income increases the husband's expected value of quitting by reducing the variance of expected family income. Using the longitudinal data from the Michigan Panel Study of Income Dynamics (PSID), the wife's income is found to have a large effect on quits. The average husband's quit rate increases by about 45% when the wife's income rises from zero to two-thirds that of the husband's. The wife's income effect nearly offsets the negative effect that marriage typically has on male quit rates.

The recent debate questioning whether unemployment in the 1970s represents sectoral adjustment or cyclical variation is expanded to examine comparable causes of real wage variability. Using Panel Study of Income Dynamics panel data, real wages respond more to persistent sectoral shocks than cyclical shocks in the 1970s, making recent estimates of procyclical wage variability appear weak in perspective. Employing a model of endogenous sector-specific individual skills, older workers earning economic rents are shown to have the greatest wage response to sectoral shocks. These results are consistent with the hypothesis that short run cyclical shocks may be met with hours adjustment, as specified in implicit or explicit contracts, but that persistent shocks require wage adjustment.

The earnings of married women have a more equalizing effect on the distribution of lifetime family earnings (or the expected present value of earnings) than on the distribution of annual family earnings, using Panel Study of Income Dynamics longitudinal data. The intertemporal variability of wives' labor supply causes the correlation between the lifetime earnings of husbands and wives to weaken relative to the correlation between their annual incomes, resulting in lower lifetime inequality. The inequality of potential income (full employment earnings) is found to be much greater for lifetime earnings than average annual earnings, based on alternative endogenous wage-hours models.

Using unique panel data on production lines in U.S. minimills, we analyze the adoption of problem‐solving teams and group incentive pay and their effects on productivity. Almost every line ultimately adopts group incentives. However, problem‐solving teams are found almost exclusively in lines with more complex production processes. Consistent with these patterns, fixed‐effects models reveal increased productivity under group incentives in all lines, while teams raise productivity in lines with more complex production processes. This evidence indicates that teams give workers a valuable opportunity to solve problems in more complex production processes, while standard operating procedures appear to suffice elsewhere.

Randall P. Mariger, Kathryn Shaw, Unanticipated Aggregate Disturbances and Tests of the Life-Cycle Consumption Model Using Panel Data, The Review of Economics and Statistics, Vol. 75, No. 1 (Feb., 1993), pp. 48-56

Among typical entrepreneurs, is serial entrepreneurship common? Is the serial entrepreneur more likely to succeed? If so, why? These questions are addressed using data on all establishments started between 1990 and 2011 to sell retail goods and services in Texas. An entrepreneur is the owner of a new business. A serial entrepreneur is one who opens repeat businesses. We find that 25.6% of businesses are operated by serial entrepreneurs. These are the more successful businesses: prior business experience increases the longevity of the next business opened. Results with owner fixed effects suggest that past experience imparts valuable business skills.

Griliches’ 1994 presidential address considers the limited success economists had in trying to account for the productivity slowdown of the 1970’s and 1980’s, and “urges us toward the task of observation and measurement.” In the 1990’s, the high rates of productivity growth emphasized the need for new models of productivity, this time turning to estimating organization-level determinants of productivity focusing on businesses’ use of new computerbased information technologies (IT), and new methods of work organization (Timothy Bresnahan et al., 2002). In this paper, we take up the charge to develop new data and new methods for modeling the productivity of organizations. We summarize three methods for assembling data for an “insider econometrics” study of the productivity of organizations, and we illustrate one method that we refer to as “informed survey analysis.”