Wage compensation for job-related illness: Evidence from a matched employer and employee survey in the UK

Despite voluminous studies on compensating wage differentials for job-related fatal or non-fatal injuries, there remain few published studies confirming the existence of compensating wage differentials for job-related illness. This study utilizes a recently completed UK employer-employee survey to look at this specific issue. I find there is strong evidence of wage compensation for job-related illness risk for both male and female employees in the UK. The estimated wage compensation for one job-related illness episode per year ranges from 27% to 140% of annual earnings depending on gender and estimation approaches.     

Ambiguity aversion and familiarity bias: Evidence from behavioral and gene association studies

It is increasingly recognized that decision making under uncertainty depends not only on probabilities, but also on psychological factors such as ambiguity and familiarity. Using 325 Beijing subjects, we conduct a neurogenetic study of ambiguity aversion and familiarity bias in an incentivized laboratory setting. For ambiguity aversion, 49.4% of the subjects choose to bet on the 50–50 deck despite the unknown deck paying 20% more. For familiarity bias, 39.6% choose the bet on Beijing’s temperature rather than the corresponding bet with Tokyo even though the latter pays 20% more. We genotype subjects for anxiety-related candidate genes and find a serotonin transporter polymorphism being associated with familiarity bias, but not ambiguity aversion, while the dopamine D5 receptor gene and estrogen receptor beta gene are associated with ambiguity aversion only among female subjects. Our findings contribute to understanding of decision making under uncertainty beyond revealed preference.     

Reevaluating evidence on myopic loss aversion: aggregate patterns versus individual choices

Investors who are more willing to accept risks when evaluating their investments less frequently are said to exhibit myopic loss aversion (MLA). Several recent experimental studies found that, on average, subjects bet significantly higher amounts on a risky lottery when they observe only a cumulative outcome of several realizations of the lottery (long evaluation period). In this article, we reexamine these empirical findings by analyzing individual rather than aggregate choice patterns. The behavior of the majority of subjects is inconsistent with the hypothesis of MLA: they bet an intermediate fraction of their initial endowment and these bets, on average, are not significantly different across two treatments with short and long evaluation period. We discuss several alternative explanations of this finding, including the Fechner model of random errors and the financial asset pricing model.     

Measuring risk aversion with lists: a new bias

Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury (Am Econ Rev 92(5):1644–1655, 2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk aversion and scrambles the ranking of individuals by risk aversion. This bias, that we call embedding bias, is quite distinct from other confounds that have been previously observed in the use of the HL method. It may be related to empirical phenomena and theoretical developments where better prospects increase risk aversion. Nevertheless, we also find that the more recent elicitation method due to Abdellaoui et al. (Theory Decis 71:63–80, 2011), also based on lists but using only one and the same probability in the list, does not display any statistically significant bias when the corresponding items of the list are removed. Our results suggest that methods other than the popular HL one may be preferable for the measurement of risk aversion.     

Immigration and wage inequality in the 1990s: Panel evidence from the current population survey

In spite of record economic growth in the 1990s, income inequality continued to escalate in the United States. One popular explanation is that the proportion of unskilled immigrant inflows has increased due to policy reforms over the last four decades. This study evaluates the impact of immigrant skills on inequality using a panel data set of states derived from the March Current Population Survey (CPS). The data set provides unique insights into local impacts of immigration due to its ability to discern shorter-term annual adjustments versus the traditional longer-term focus of the Decennial Census. Using a basic theoretical model to develop testable hypotheses, the dynamic analyses reveal that increased relative inflows of unskilled immigrants indeed increase wage inequality. The impact on native wage inequality is especially pronounced, with an effect nearly twice as large as that on overall wage inequality.     

Fusion ballots as a candidate-centered reform: Evidence from Oregon

This article argues that fusion balloting, or the ability of multiple parties to nominate a single candidate for office, can be viewed as a candidate-centered and incumbent-oriented reform. Using the recent passage of fusion legislation in Oregon in 2009 and its subsequent use in 2010 state legislative elections as a test case, I study the factors behind supporting fusion legislation in both chambers of the state legislature and how these same factors affected, or did not affect, the incumbents that received cross-nominations in the 2010 elections. Overall, I find that party did not play a direct role in determining which legislators supported fusion, though female legislators were less supportive. When it came to obtaining nominations, the main finding is that incumbent candidates who voted yes to fusion were generally more likely to receive nominations. Still, legislators from the group that most opposed fusion, Democratic women, attempted to win cross-nominations once the 2010 elections approached. These findings suggest that candidate factors, more than party dictates, affected support for fusion and the ability of incumbents to receive cross-endorsements. Thus, the willingness of major-party candidates to adopt fusion can be understood through theories of candidate-centered elections and political parties.     

Situational predictors of violent intentions: Results from a factorial survey

Though many sociological and criminological theories of violence provide a role for both situational and individual-level factors, research largely focuses on individual-level characteristics. The current research, drawing on the psychological and sociological aggression literatures, utilizes a factorial survey approach to identify important situational risk factors. Multi-level regression results indicate that provocation, aggressive cues, and the presence of an audience are all statistically significant risk factors. Moreover, these factors maintain their importance even after statistically controlling for well-known individual-level characteristics. These results highlight the importance of situational factors and serve as a call for more situationally oriented research and theory on violence.     

Risk aversion and equilibrium selection in a vertical contracting setting: an experiment

Theory and Decision - The theoretical literature on vertical relationships usually assumes that beliefs about secret contracts take specific forms. In a recent paper, Eguia et al. (Games Econ Behav...     

Mixed risk aversion and preference for risk disaggregation: a story of moments

In a recent article entitled “Putting Risk in its Proper Place,” Eeckhoudt and Schlesinger (2006) established a theorem linking the sign of the n-th derivative of an agent’s utility function to her preferences among pairs of simple lotteries. We characterize these lotteries and show that, in a given pair, they only differ by their moments of order greater than or equal to n. When the n-th derivative of the utility function is positive (negative) and n is odd (even), the agent prefers a lottery with higher (lower) n + 2p-th moments for p belonging to the set of positive integers. This result links the preference for disaggregation of risks across states of nature to the complete structure of moments preferred by mixed risk averse agents. It can be viewed as a generalization of a proposition appearing in Ekern (1980) which focused only on the differences in the n-th moments.     

Compensating wage differentials for workplace accidents: Evidence for union and nonunion workers in the UK

This article measures compensating wage differentials for job risks for union and nonunion workers. Job risk is made endogenous to avoid a selectivity bias arising if more able people choose safer jobs. We find that this adjustment has a considerable effect on the union group, raising their fatal risk premium above that of non union workers. This implies that there is more variation in unmeasured ability in the unionized group, and that job risk is an inferior good. The fact that unionized workers are also found in safer jobs might therefore be attributable to their greater wealth, rather than to greater“knowledge” in the unionized plant. The estimated statistical value of a life is £8.8 million in 1990 prices for union workers, with nonunion workers about 20% lower.     

Determinants of fertility: Results from a 1989 rural household survey in China

The relationship between family planning, socioeconomic conditions, and fertility was investigated in six rural villages of China. Data from a 1989 random household survey were used to test the hypothesis relating fertility (number of children born) to family planning policy (policy impact and free contraceptive provision) and socioeconomic conditions (education and income). The fertility behavior of two cohorts (the first refers to those married before 1969 and the second those between 1978 and 1980) was compared to examine the impact of strict family planning policy on fertility. The average number of children born was significantly fewer in the second cohort than the first cohort (1.6 versus 4.2) during the ten year span after marriage. The regression results indicate that family planning policy measures and female education have both direct and indirect (through influence on age at first marriage and contraceptive use) significant impact on fertility.     

Child Malnutrition and Mortality in Developing Countries: Evidence from a Cross-Country Analysis

In this article, after having identified the main clusters of food-insecure households worldwide, and summarily analyzed their livelihood profiles, we discuss the interaction and relevance of the most relevant key economic and social factors causing child malnutrition and mortality. On the basis of an essential but consistent World Bank database, covering all developing and transition countries, we also carry out a cross-country econometric analysis on relations of income and non-income factors with child malnutrition and mortality. Our main findings are threefold. First, among income factors, each country's overall level of economic development is paramount, but income distribution also plays an important role. Second, taking into account that public provision of basic services tends to increase with economic growth, each country's relative propensity to spend on basic services is significantly and negatively correlated with child malnutrition and mortality. Third, gender-related cultural factors also play a large role.     

Taxation and economic performance: Evidence from China

This paper empirically tests the effects of taxation on economic performance using prefectural level city and county data from China. Results based on cross-sectional data from over 200 prefectural cities in 2007 indicate that overall tax burden and tax structure affect economic performance. Specifically, tax burden has a negative correlation with economic activities. Empirical results from the analysis of disaggregated local data for over 2,000 counties in China also support the hypothesis that distortionary taxation lowers the economic activities. These findings provide empirical evidence from China on a negative relationship of the total tax burden with economic activities.     

Modesty can promote trust: Evidence from China

When people let others know about their accomplishments, they can improve their social standing, but doing so may also have a cost, especially within social environments in which there is great emphasis on the value of modesty. One particular downside of self‐promotion, the risk of being seen as untrustworthy, was examined among children in China. Across three studies, children ranging in age from 7 to 11 years (total N = 251) judged the trustworthiness of protagonists who exhibited either modesty or immodesty. In Study 1, protagonists who told lies in the service of modesty were judged as more trustworthy than those who told lies to avoid getting into trouble. In Study 2, protagonists who demonstrated modesty were rated as trustworthy, but those who demonstrated immodesty were not. Study 3 showed that the positive implications of modesty for trust are specific to downplaying one’s own accomplishments and do not extend to downplaying the accomplishments of a peer. Taken together, the results suggest that for children in China, the level of modesty serves as a cue about which people can be trusted.     

E-cigarettes and adult smoking: Evidence from Minnesota

Journal of Risk and Uncertainty - E-cigarettes provide nicotine in a vapor form, which is considered less harmful than the smoke from combustible cigarettes because it does not contain the toxins...     

Payment of Universal Credit for couples in the UK: Challenges for reform from a gender perspective

Universal Credit has been rolled out gradually in the United Kingdom since 2013 as one integrated means-tested benefit replacing six different transfers with a single monthly payment. Previously, these benefits were awarded for distinct purposes and, for couples who claimed them, were potentially payable to different partners. Concerns about Universal Credit’s single payment include the opportunities it may create for facilitating domestic abuse, the fostering of more unequal power relations within couples, the reduction of financial autonomy for individuals, and the de-labelling of benefit payments. This article explores debates about the prospects for individual payments to partners in couples of Universal Credit as a jointly assessed integrated means-tested benefit, including different approaches emerging from the United Kingdom’s devolved governments (mainly Scotland and Northern Ireland). Whilst payment to each partner is likely to be more feasible where there are separate rather than integrated means-tested benefits, it concludes that genuine financial autonomy for partners in couples is best pursued via individually based non-means-tested benefits.