Robert A. Hart

Forced to Be Rich? Returns to Compulsory Schooling in Britain

Do students benefit from compulsory schooling? Researchers using changes in compulsory schooling laws as instruments have typically estimated very high returns to additional schooling that are greater than the corresponding OLS estimates and concluded that the group of individuals who are influenced by the law change have particularly high returns to education. That is, the Local Average Treatment Effect (LATE) is larger than the average treatment effect (ATE). However, studies of a 1947 British compulsory schooling law change that impacted about half the relevant population have also found very high instrumental variables returns to schooling (about 15%), suggesting that the ATE of schooling is also very high and higher than OLS estimates suggest. We utilize the New Earnings Survey Panel Data-set (NESPD), that has superior earnings information compared to the datasets previously used and find instrumental variable estimates that are small and much lower than OLS. In fact, there is no evidence of any positive return for women and the return for men is in the 4-7% range. These estimates provide no evidence that the ATE of schooling is very high.

Working time and employment

1. Background and aims 2. Working Time and Employment in an International Perspective 3. A Labour Market Framework 4. Some Economic Concepts and Relationships 5. Employment Effects of Workweek Reductions: Theoretical Issues 6. Employment Effects of Workweek Reductions: Empirical Evidence 7. Part-Time Employment: The Demand and Supply of Workers and Hours 8. Hours, Layoffs and Implicit Contracts 9. Labour Subsidies and Social Security Funding 10. Retirement and Employment 11. Collective Bargaining Constraints 12. More Jobs through Shorter Hours

The economics of non-wage labour costs

1. Introduction 2. The Structure of Non-wage Labour Costs: Definitions and Distinctions 3. The Quantitative Importance of Non-wage Labour Costs 4. Why do Firms incur such Costs? 5. Factor Substitution and Non-wage Labour Costs 6. Cyclical Employment Effects 7. Wage Inflation and Wage Rigidities 8. Unemployment Insurance, Other Obligatory Social Welfare Contributions and Unemployment 9. Worksharing and Non-wage Labour Costs 10. Fringe Benefit Payments 11. Should Governments Attempt to Reduce Non-wage Labour Costs?

The Spot Market Matters: Evidence on Implicit Contracts from Britain

Based on the methodology of Beaudry and DiNardo (1991), this paper investigates the relative importance of the spot market and implicit contracts in the determination of British real wages. Empirical work is carried out separately for males and females with individual-level data taken from the New Earnings Survey Panel for the years 1976 to 2001. In contrast to previous studies that used North American data, the spot market is found to be more important than implicit contracts in determining real wages. Indeed, there is very little support for implicit contracts in these data. Further evidence is provided through the analysis of individual wage sequences. These suggest that the downwardly rigid wage sequences implied by implicit contracts with costless worker mobility are not prevalent in Britain.

Worker-Job Matches, Job Mobility and Real Wage Cyclicality

Using the British New Earnings Survey Panel Data from 1980 to 2001, this paper examines male and female real wage cyclicality. Estimation is undertaken separately for job stayers and job movers. A unique data advantage compared to earlier studies is that movers are defined by job changes both within and between companies. Core estimates concern real hourly standard wage rates. Special features include (a) differentiating between white- and blue-collar workers, (b) delineating job stayers by length of job tenure, (c) examining the cyclicality of the average overtime premium, (d) distinguishing between hourly wage earnings and hourly wage rates. Wage cyclicality in Britain is found to be significantly greater than comparable United States estimates.

Human capital, employment and bargaining

This book examines human capital investment, employment and bargaining at the level of the firm. It attempts a summary of results that incorporate both human capital investment and employment decisions within firm union bargaining models, emphasising investment in teams, or groups, of workers. The authors also examine human capital in relation to labour demand as well as the delineation between neoclassical and coalitional firms. Further they investigate connections between, on the one hand, turnover costs and firm-specific human capital and, on the other, unemployment. Labour market policy topics recur throughout the book and include the choice between pure wage and profit sharing remuneration systems, the issue of whether training should be subsidized by governments, and work-sharing versus layoff decisions. This book is aimed mainly at the academic economics profession, but is easily accessible to final-year undergraduate and postgraduate students.

Labour force participation and the business cycle: a comparative analysis of France, Japan, Sweden and the United States

This paper investigates the cyclical responsiveness of participation in the labour force. We examine systems of equations, disaggregated by age and gender, for France, Japan, Sweden and the US, using data from the OECD Labour Force Statistics, 1970–1995. We use measures of country specific business cycles following Harvey and Jaeger (1993) and test for asymmetric responses of participation to expansionary and contractionary phases of the cycle. Our results show that discouraged worker effects are prevalent. These effects are strongest in the downward phase of the cycle and are essentially a female phenomenon, with a particular concentration among 45–54 year olds.

Hours, Layoffs and Unemployment Insurance Funding: Theory and Practice in an International Perspective

The strikingly different behaviour of important economic aggregates in the United States and other industrial countries has received surprisingly little attention from economists. Among recent exceptions, however, Gordon (I 982) has shown that wages and hours of work are much more flexible in the United Kingdom and Japan than in the United States. Such relative hours variability is confirmed in a macro analysis by Capdevielle and Alvarez (i98I) and, at micro level, by Sengenberger and Kohler (I982). The latter authors are concerned with labour market adjustment within the U.S. and West German automobile industries. Between I 97 I and i 980 estimates of the German workeroutput elasticity are found to be less than half that of the United States, while the German hours elasticity is twice the United States figure. At the national aggregate level, Capdevielle and Alvarez also reveal much greater employment variability in the United States than in most other OECD countries in the years following the I973/74 OPEC supply shock. Much in line with these employment hours observations, Moy and Sorrentino (i98I) argue that, after

Worksharing and factor prices

Abstract The aspect of worksharing on which this paper concentrates concerns an increase in the firms workforce offset by a reduction in average working hours. Emphasis is given to the effect of relative factor prices on worksharing within a model structure which includes the capital stock and worker productivity as endogenous inputs. Factor prices include all the main categories of wage and non-wage labour payments as well as the user cost of capital. Special attention is given to the role of non-wages, both quasi-fixed and variable. An analysis of the effects of marginal employment subsidies on worksharing is also considered with reference to the French ‘solidarity contracts’.

Excess Labour and the Business Cycle: A Comparative Study of Japan, Germany, the United Kingdom and the United States

Against the background of firm-specific human capital theory, this paper investigates empirically the relative propensity of manufacturing industries in Japan, Germany, the United Kingdom, and the United States to hold excess labor over the business cycle. Both stock and utilization dimensions of the labor input are integrated into the study. Throughout, discussion is linked to earlier research that has analyzed the relative international performance of the Japanese labor market. Copyright 1996 by The London School of Economics and Political Science.