Search

It is widely recognized that children who grow up without a biological parent do worse, on average, than other children. However, because having a single parent is highly correlated with many other socioeconomic disadvantages, the negative outcomes might be caused by something beyond the parent's absence. Econometric tests using a variety of background controls and parental death as an exogenous cause of absence, show little evidence that a parent's presence during childhood affects economic well being in adulthood. The two exceptions are that living without a mother impacts girls' cognitive performance while having a father die lowers sons' chances of marriage.

Surveys in the United States and Canada reveal that approximately half of all workers would like to work a different number of hours per week if they could continue to receive their usual hourly wage. Of these about two-thirds would like to work more hours and one-third would like to work fewer hours (Kahn and Lang, 1991; Shank, 1986). Despite the apparent prevalence of hours constraints, the reasons why they exist are poorly understood. In previous research we showed that Lazear's (1981) agency model of the return to seniority is inconsistent with the data and that the specific-capital model and insurance-based implicit contract models cannot account for important regularities (Kahn and Lang, 1992, 1995). In this paper, we examine whether hours constraints can be explained by the existence of a hedonic wage/hours locus. We find that the actual wage/hours locus is reasonably consistent with the wage/hours locus predicted by observed hours constraints when the hedonic model is augmented by considerations of long-term contracting. We conclude that despite data and estimation shortcomings, hedonic choices are an important reason for hours constraints to exist.

Over half of workers are dissatisfied with the number of hours they work, and of these the vast majority desire more rather than fewer hours. Using the Canadian Survey of Work Reduction, we examine two potential explanations for hours constraints - long-term contracts due to worker moral-hazard or specific-capital and implicit contracts in which wages are insured but hours fluctuate. Our results contradict the moral-hazard and insurance models and weakly support the specific-capital model. Les causes des contraintes sur les heures de travail: le cas canadien. Plus de la moitie des travailleurs ne sont pas satisfaits du nombre d'heures qu'ils travaillent et de ceux-ci la grande majorite veut travailler plus et non pas moins d'heures. A l'aide des donnees de l'Enquete canadienne sur la reduction des heures de travail, les auteurs examinent deux sources potentielles d'explication pour ce genre de phenomene: les contrats 'a long terme attribuables au probl'eme du capital humain specifique des travailleurs et au hasard moral, et les contrats implicites par lesquels le niveau de salaire horaire est assure mais le nombre d'heures travaillees fluctue. Les resultats presentes contredisent les modeles fondes sur le hasard moral et l'assurance et supportent faiblement le modele de capital humain specifique. Surveys conducted in the United States consistently show that a substantial fraction of workers wish to work a different number of hours from those that they actually work. Of those who would like to change their hours, the vast majority would prefer to work more hours (Shank 1986). In previous work (Kahn and Lang 1992), we tested whether u.s. hours constraints could be explained by lifetime contract agency models in which the earnings profile is structured so as to deter worker cheating or

In this book, 16 leading economists establish the connection between the forces of the labour market and the persistent but ever-changing problem of unemployment. These scholars examine structural unemployment in terms of efficiency wage and dual labour market models, as well as neo-classical theory. The effects of the decline of the manufacturing sector, the rise in services, and the upheaval in the oil industry on our understanding of cyclical and frictional unemployment are incorporated into the analysis. An examination of the relationship between structural shifts and unemployment considers the frequency and duration of unemployment of displaced workers, the effects of migration caused by structural shifts, and the phenomenon of unemployment within particular industries. Finally, the book presents intriguing thoughts on the conduct of labour research and experimental policy analysis. The contributors include: David M. Lilien, Alan B. Krueger, Lawrence H. Summers, William T. Dickens, Lawrence F. Katz, Kevin M. Murphy, Robert H. Topel, Mark Dynarski, Steven M. Sheffrin, Danny Steinberg, Frank A. Monforte, James W. Albrecht, John Haltiwanger and Mark Plant.

When a product or job is not homogeneous but instead embodies several different characteristics, it is difficult to use price information about the product to learn anything about the structure of the supply and demand for the embodied characteristics. S. Rosen (1974) highlighted this problem and suggested that the estimated slope of the price/characteristic relation (the marginal price) could be used instead of standard prices in otherwise standard estimation of the supply and demand system. However, recently Brown and H. Rosen (1982), Brown (1983), and Mendelsohn (1985) have pointed out that this method is applicable only when the marginal price depends on variables not found in the supply and demand equations. In this paper, we show that since the hedonic system matches consumers with high demand for the characteristic to firms with low costs of producing it, exogenous variables from the supply equation are not valid instruments in the demand equation and vice versa. Therefore, even when the Brown/Rosen/Mendelsohn (BRM) condition holds, estimation of the identified system by standard simultaneous equations techniques will produce inconsistent estimates. We then show that the system can be identified despite the absence of the "standard" instruments, and develop an efficient estimator for the identified system. Since cross-equation constraints make estimation of hedonic systems particularly vulnerable to specification error, we also consider some specification tests. In this section, we consider a simple model with only one characteristic. The extension to several characteristics is straightforward. The basic model developed by Rosen can be described as follows. Firms with different technologies produce products which provide consumers with varying levels of some characteristic Z. Each consumer buys one unit of the good. The product is such that an amount of Z from two units of the good provides less utility than the same amount of Z embodied in a single unit (e.g., acceleration in a car, safety in a job). Consumers'