Andrew Dickerson

A Picture of Wage Inequality and the Allocation of Labor Through a Period of Trade Liberalization: The Case of Brazil

This paper constructs a picture of the labour market impact of trade liberalisation in Brazil. We examine the level and dispersion of wages, the skilled wage premium, and employment composition before and after trade liberalisation. After trade reform, there was a rise in the returns to college education which, since the share of college workers also rose, is attributable to rising demand. This change did not increase overall wage dispersion because of the small share of college-educated workers and of decreasing returns to intermediate levels of education. Among tradable goods industries, trade liberalisation is associated with increases in relative wages.

Job insecurity and wages

This paperexamines whether subjective expectations of unemployment are reliable indicators of the probability of becoming unemployed, and investigates their association with wage growth. We find that workers’ fears of unemployment are increased by their previous unemployment experience and by the unemployment experiences of a close friend, and are associated with other objective indicators of insecure jobs. We then show that unemployment fear predicts future unemployment, above and beyond observed objective variables. High fears of unemployment are found to be associated with significantly lower levels of wage growth for men, but to have no significant link with wage growth for women.

Road Accidents and Traffic Flows: An Econometric Investigation

This paper develops an empirical model of the relationship between road traffic accidents and traffic flows. The analysis focuses on the accident externality which is mainly determined by the difference between the marginal and average risks. The model is estimated using a new dataset which combines hourly London traffic count data from automated vehicle recorders together with police records of road accidents. The accident-flow relationship is seen to vary considerably between different road classes and geographical areas. More importantly, even having controlled for these and other differences, the accident externality is shown to vary significantly with traffic flows. In particular, while the accident externality is typically close to zero for low to moderate traffic flows, it increases substantially at high traffic flows.

Business Cycle Correspondence in the European Union

This paper examines whether there exists a close correspondence in the business cycles of the EU economies. We focus on the timing and magnitude of business cycles and propose criteria for defining close correspondence. We suggest that any correspondence that does exist is confined to the EU core and that, contrary to some of the existing literature, there exists a clear core-periphery distinction. This makes us less optimistic about the prospects for EMU if it is not accompanied by institutional arrangements that take into account the differences between EU economies.

Takeover risk and the market for corporate control: the experience of British firms in the 1970s and 1980s

Abstract This paper investigates the determinants of takeovers in a large sample of UK quoted companies. We focus on the channels through which the market for corporate control monitors company performance and discretionary managerial behaviour. Our results are consistent with the view that the market for corporate control disciplines poorly performing companies, and suggest that this effect is quantitatively important: a one standard deviation increase in profitability is associated with a fall in the conditional probability of takeover of 25%. However, we find no evidence that firms without apparent profitable investment opportunities are more likely to be taken over if managers increase investment or reduce dividends, contrary to the predictions of the free-cash-flow theory of takeovers.

Takeover Risk and Dividend Strategy: A Study of UK Firms

The authors investigate the relationship between a companys dividend strategy and its risk of takeover. Their results from a large panel of U.K. quoted companies suggest that higher dividend payments are associated with a significantly lower conditional probability (hazard) of takeover. Moreover, firms that wish to avoid takeover would be better to distribute the marginal L1 of earnings in dividends rather than investing it in the company. The authors consider two explanations for these findings. They suggest that the presence of an active market for corporate control could encourage firms to raise dividends to maintain shareholder loyalty. Copyright 1998 by Blackwell Publishing Ltd

Industry-wide versus firm-specific uncertainty and investment: British company panel data evidence

This paper presents evidence on the prediction that the impacts of firm-specific and industry-wide uncertainty on investment will be different. Results show that these work in opposing directions and that the effect of industry-specific uncertainty is stronger in concentrated industries.

An asymmetric error correction model of UK consumer spending

This paper augments the Granger and Lee (Journal of Applied Econometrics, 4, 1989) non-symmetric error (equilibrium) correction model to assess the possibility that, in the aggregate, consumers respond differently to different types of disequilibrium error. This idea is illustrated using an Engle-Granger implementation of the Davidson, Hendry, Srba and Yeo (DHSY, Economic Journal, 80, 1978) model. The disequilibrium error is endogenously determined by the long-run, empirical model and a binary dummy variable captures two alternative states, above and below equilibrium spending. Interaction of the dummy variable with key variables in a short-run dynamic model of UK consumer spending augments the dynamics of the DHSY model. Income elasticities, inflation elasticities and speeds of adjustment are all seen to change significantly depending on whether the disequilibrium error is positive or negative, and is suggestive of asymmetric behaviour on the part of consumers. Moreover, the asymmetrically augmented model substantially outperforms a symmetric model with standard error improvements in excess of 50%.

The Impact of Distance to Nearest Education Institution on the Post-Compulsory Education Participation Decision

This paper uses data sources from England with the unique capacity to measure distances between home addresses and education institutions, to investigate, for the first time, the effect that such distance has on an individual’s post-compulsory education participation decision. The results show that there is a small overall effect. However, when attention is focused on young people who are on the margin of participating in post-compulsory education (according to their prior attainment and family background) and when post-compulsory education is distinguished by whether it leads to academic or vocational qualifications, then greater distance to nearest education institution is seen to have a significant impact on the decision to continue in full–time post-compulsory education.

Productivity, Efficiency and Strike Activity

The economic impact of unions has received increasing attention in the literature. However, the channels through which unions impinge on performance are seldom identified. This paper examines the impact of industrial conflict on output and factor productivity in a panel of British manufacturing industries for the 1970s. Production frontiers augmented by various dimensions of strike activity are estimated and strikes are found to have a negligible net impact on output. Furthermore, while there is some weak evidence to suggest that union presence adversely affects (relative) efficiency, this effect is not derived from higher levels of strike activity.