David H. Ciscel

The Determinants of Executive Salaries: An Econometric Survey

FOR over three decades, debate has raged over the economic assumption that the large corporation, through the decisions of its managers, attempts to maximize its profits. Empirical analysis of the behavior of the corporation has led to conflicting claims. The inquiry into the determinants of executive compensation has been no exception. Statistical investigation of executive compensation has been dominated by a search for one decisive explanation. Is the size, measured by either sales or assets, or profitability, measured by net corporate income or by the rate of return on assets, the key variable in establishing the level of the executives reward? Proponents on both sides of this issue-the managerialists who support the corporate growth hypothesis and the neoclassical economists who favor the profit maximization assumption-seem to argue that the contest can be resolved by the presentation of unambiguous evidence that will award victory to one side and vanquish the other. This spirit of antagonism has distorted the essential element of the executive compensation question. The behavior of the corporation and the market forces that shape this behavior can be explained or illustrated only by the use of a series of intercorrelated variables. Not one of the available measures of corporate success, be it net income, sales or assets, is an exact measure of economic profits or firm size, nor is it independent of the other variables. This study focuses on the resolution of the serious econometric problems encountered in the process of estimating the determinants of executive compensation. Later we will show how the successful elimination of problems of simultaneous equations bias, multicollinearity and heteroscedasticity leads to the conclusion that the managerialist and neoclassical models of the firm are complementary, rather than substitute, explanations for the pattern of executive compensation.

To market, to market: imperial capitalism’s destruction of social capital and the family☆

The market, far from being the sine qua non for modem society in general, and the family in particular, has eroded the social fiber that gives shape and resilience to the experiences of individuals, families, and ultimately, the market itself. Reviewing both historical and feminist analysis of the family in a capitalist market society, it is clear that the modem market is imperial. Not only does it transform every human interaction into a transient market exchange, it undermines the basis for social reproduction through the family. Using the concept of social capital as a primary analytical tool, this paper argues that the distinction between home and market labor has been unnecessarily polarized, limiting policy options. Thus, societys ability to produce and maintain long-standing social networks is put at risk, paradoxically reducing the markets ability to perform efficiently.

DETERMINANTS OF EXECUTIVE COMPENSATION

from the vagaries of individual leadership, the control and the goal formation process have moved to the management group. In response the corporation has adapted its style, performance, and reward structure to the dominance of the professional manager. The management group tends to be motivated by identification with the companys expansion. In turn, the organization rewards management with a larger organization and a higher salary structure. There is a strong correlation between sales, management compensation, and employment in the large corporation. Beginning with Berle and Means observation that effective control of the largest industrial corporations had passed into hands of management, debate has raged over the implications of the change in control [2]. The result has been a great deal of speculation over the impact of management control on the performance of the corporation. Most recent investigations have been tied to Baumols revenue maximization hypothesis

Ghosts in the Global Machine: New Immigrants and the Redefinition of Work

The incorporation of new immigrant workers into the lower reaches of the U.S. labor market has been a very significant employment trend. Debates over the implications of this trend—in particular whether immigrants displace and/or lower wages for native workers—abound (Borjas 1995; Borjas, Freeman and Katz 1997; Camarota 2001; Cornelius 1998; Hamermesh and Bean 1998; Smith and Edmonston 1997). In the U.S. South, the rapid incorporation of large numbers of Latino immigrants into the labor market is a development of historical significance. This region’s economy has long been racially segmented as a bipolar black-white construct, though with substantial internal variation by time and place. Since World War II, a combination of factors including agricultural mechanization, wartime labor demand, and the modern civil rights movement undermining legal and economic constraints on black workers’ mobility, changed the region’s labor markets significantly. Today, the growing Latino presence in labor markets throughout the South (a phenomenon that was heretofore largely confined to only two

Family Work Trends and Practices:1971 to 1991

Families are allocating their time in an increasingly market-oriented fashion, with a decreasing proportion of labor hours being devoted to unpaid work. This article analyzes two aspects of the changing allocation of time. First, using longitudinal data from 1971 to 1991, the nature of the changes in how the families have changed their allocation of time between market and non-market alternatives is examined. Next, how family types have changed their allocations over the same period are examined. The Panel Study of Income Dynamics is used for this analysis.Results of this research indicate that the proportion of time spent on household labor among men has increased over individual mens life cycles and between cross-sectional cohorts. However, women continue to devote more hours to household labor than men. The number of hours women spend in the labor force are increasing, but the number of hours women spend in the labor force is still less than the number of hours men spend in the labor force. While the families in the longitudinal analysis have been able to maintain fairly stable work and income patterns, the cross-sectional data indicate that families need to devote an increasing number of hours to the labor market to maintain economic stability.

Patriarchy, Family Structure and the Exploitation of Women's Labor

The authors present a case for including the patriarchal model into the analysis of female labor force participation in the United States. They argue that only if it is assumed that the division of labor and distribution of goods and services are structured to benefit the male head of the family can various trends be explained, including the low relative income of women compared to men, the increase in female labor force participation without a corresponding increase in household work by men, and the increasing number of divorces initiated by women despite the fact that divorce increases female poverty.

The Work of Families: The Provision of Market and Household labor and the Role of Public Policy

This paper examines the ability of the family to perform both its economic and institutional functions in todays economy. We argue that individual and family choice with respect to paid and unpaid labor is severely limited. This lack of alternatives in work is generated by three social forces that shape the economic landscape: (1) a tradition rooted in patriarchy; (2) the market system; and (3) the social policies of the state. We create a framework within which the work of families can be analyzed over the past two decades. The analysis is based on data from three waves of the PSID: 1972, 1983, and 1992. Three family types—dual-earner, male-earner, and female-earner family structures—are examined for the nature and intensity of the work effort, the change in labor commitment over time, changes in real income and hourly earnings, and the effect of the increasing encroachment of the market on the familys distribution of labor between the two spheres. Finally, the work of families is examined within the context of the social policies of government, including a review of the institutional difficulties of providing family friendly policies in the current social environment.

Escaping the Fate of Sisyphus: Bargaining, Divorce, and Employment in the Patriarchal Family

A radical bargaining approach, the Sisyphus Syndrome paradigm, is offered as an alternative to the neoclassical treatment of womens labor force participation and divorce incidence. In this paradigm, women who do not participate in the wage system remain in marriages because of the dearth of viable alternatives. The results from a simultaneous equation model, using data from first and second marriages, support the Sisyphus Syndrome paradigm, and offer a more realistic alternative to the traditional treatments of family behavior.

Too Many Hours - Too Little Pay: The Impact of Market and Household Hours on Women's Work Lives

Work has many components. For many women, the great divide is the number of hours spent in the paid labor force relative to the number of hours working in the household. As the number of hours women commit to the labor market expands, there is a potential for a nurturance gap [Stanfield and Stanfield 1997] as the family unit finds itself underserved. On the other hand, if women choose to emphasize household work, they do not accumulate useable human capital necessary to protect their long-term economic well-being. The result is that many women in families, participating fully in both home and market, work too many hours for too little pay. This paper adds to the research in the economics of household labor through an analysis of the current work effort required of women in different types of families. How many hours does it take to maintain the household? Just how many hours do women in households work each week? What are the actual hourly earnings for that labor? And what are the benefits associated with this work effort?

The Peripheral Worker: CET a Training as Imperfect Job Socialization

The purpose of this article is to evaluate the effect of the Comprehensive Employment and Training Act (CETA) on individuals who have participated in various employment and training programs. Particular emphasis will be, placed on determining the influence of the CETA experience on the work history of the CETA trainee. Our findings are derived from a series of open-ended interviews with selected trainees and a detailed questionnaire completed by former CETA participants, both conducted in Tennessee. A work history, which is a linear time record of a persons labor market experiences, education, and other economic activities, generally involves several stages: (1) preparation for a job through education, training, and socialization; (2) work experience gained from entry level jobs to attain the appropriate mix of personal and work characteristics required for most jobs; (3) access to a career ladder of increasingly more responsible and