Cotton M. Lindsay

Sex Differences in Tenure Profiles: Effects of Shared Firm-Specific Investment

This article employs a model of Masanori Hashimoto with extensions by Donald Parsons to analyze variation in tenure by sex, age, and firm type. Fixed-wage contracts eliminate postcontractual opportunism associated with firm-specific human capital investment. However, such contracts result in inefficient quits and terminations. Calibration of the sharing of this investment between workers and employers minimizes the costs of these inefficient separations. Moreover, this optimal sharing rate varies systematically with the characteristics listed above. These tenure-slope implications are tested with favorable results.

Does the Government Free Ride

THE allocation of resources to the provision of public goods has long been regarded as an arena where government has an advantage over private voluntary exchange. Whereas private provision is subject to the free-rider problem, a government may simply identify the efficient level of production and secure its production, financing the endeavor through taxation. Discovering the optimal level of production may be problematic; private individuals can be as reluctant to reveal their valuations to the government as they are to reveal them to other voluntary cooperative users. Nevertheless, the solution to this market failure is widely perceived to be government provision of these goods. At odds with this view is another long-standing notion in economics, that is, that the behavior of democratic government can be interpreted as the expression of private aims. This view holds that citizens seek in their public roles as law makers, voters, constituents, and so on, the satisfaction of strictly selfish wants. The behavior of such governments has been examined in the context of a wide range of models. Though the structures of these models exhibit great variety, they share a common prediction, namely, that decision makers within such governments will show less interest in solving allocative problems than in pursuing their own ends subject to the physical and constitutional constraints imposed on them. It is quite plausible that such a government may itself free ride on private sector public good production. This article seeks to illuminate this issue by examining the question empirically. Does government itself free ride? Our data support an affirmative response to this question. We examine the response of state and local governments to voluntary charitable giving and find convincing evidence that private charity crowds out spending by these governments in

ASSORTATIVE MATING OR GLASS CEILING: UNDER-REPRESENTATION OF FEMALE WORKERS AMONG TOP EARNERS

Three empirical regularities characterize markets for married workers: (1) productivity and leadership potential are predicted by intelligence; (2) assortative mating based on intelligence characterizes marriages; and (3) labor force participation declines with spouse income more rapidly for married women than for married men. Taken together these characteristics imply that labor force participation will decline for women relative to their husbands as intelligence rises. These three observations suggest a nondiscriminatory explanation for the alleged under-representation of females among corporate leaders. They imply that the women who might be predicted to win the tournament for these positions often do not enter this competition. Instead they choose employment in full time household production. Both the three regularities and the implication concerning labor force participation are empirically examined. The findings of these tests are supportive on all counts.

Cost Savings from Pupil Migration to Private Schools

Considerable disagreement exists over the magnitude of potential savings to public school boards associated with the migration of public school students to independent schools in connection with voucher or tax credit plans being considered by many states in the US. This paper argues that the appropriate measure of any such savings is the marginal cost of a student. Using three years worth of school level data for South Carolina, a cost function for a school is estimated. We find that though some costs are fixed, variable costs comprise about 80 percent of school costs. Moreover, variable costs are very sensitive to changes in enrollment. When estimated in first differences on year-to-year changes, the hypothesis that these costs vary in strict proportionality to enrollment cannot be rejected at generally accepted levels of confidence. We find that these potential savings lie in the range of

The derived demand for faculty research

4,000 to

Party Politics and the Price of Payola

5,000 per student. Costs are estimated separately for elementary, middle and high schools as well as for disabled, gifted and regular students.