WORKER EFFORT DECISIONS AND EFFICIENT GENDER—SPECIFIC WAGE—TENURE PROFILES

Despite theoretical arguments that predict the opposite, empirical estimates of workers' returns to tenure tend to be greater for female than for male workers. This paper develops an agency model of wage contracts to explain this empirical finding. If male and female workers differ only in the expected length of their working lives, efficient wage-tenure profiles are steeper for women than men as a direct result of their shorter working life. This result implies that returns to tenure for women and men will become comparable as women's and men's labor force attachments converge.     

STRATEGIC ENFORCEMENT,INTELLECTUAL PROPERTY RIGHTS,AND CONTRACTUAL R&D

This study examines the role of intellectual property rights (IPRs) in contractual research and development (R&D) in developing countries. We find that strong IPRs provide incentives for firms, both multinational and local, to specialize in R&D activities in which they have competitive advantage (the specialization effect). They also facilitate the switching process from imitators to potential innovators for local firms (the switching effect). Moreover, we also demonstrate that a multinational firm's strategic IPRs enforcement behavior can be an effective instrument for subsidizing contractual R&D in developing countries (the subsidizing effect). We further illustrate how a policy mix of IPRs and a foreign direct investment subsidy in these countries affects R&D activities by adding an offshore R&D subsidiary as an additional organizational form. (JEL L13, O31, O34)     

BIASED INFORMATION AND EFFORT

We study the impact of information manipulation by a principal on the agent's effort. In a context of asymmetric information at the principal's advantage, we test experimentally the principal's willingness to bias (overestimate or underestimate) the information she/he gives to her/his agent on her/his ability in order to motivate her/him to exert more effort. We find that (1) principals do bias information, and (2) agents trust the cheap‐talk messages they receive and adjust their effort accordingly. Therefore, biased messages improve both the agent's performance and thus the principal's profit. This, however, does not increase efficiency. We also find that overestimation occurs much more often than underestimation. Making the signal costly in an additional treatment reduces this effect. (JEL D83, C92, M12)     

JOB MATCH, TENURE AND WAGES PAID BY FIRMS

Using a new data set consisting of a matched sample of workers and firms, and including explicit measures of match quality, the authors estimate a structural model and find new evidence of a strong positive relation between wages and tenure. Inclusion of firm-fixed effects does not significantly reduce the estimated returns to tenure. The results also shed light on the relative importance of human capital and job matching theories.     

OUTSIDE OWNERSHIP AND WORKERS' EARNINGS AND TENURE

Increasing aggregate concentration in the economy has increased attention to the issues surrounding the outside ownership of enterprises. Outside ownership entails both industrial diversification and various forms of conglomerate ownership and represents an important new direction for studies of economic sociology and labor market segmentation. The article shows that the influence of four measures of outside ownership on worker's earnings and tenure is largely, though not universally, negative. Outside ownership tends to suppress earnings otherwise accruing to workers in companies with high levels of unionization, rapid growth, and high profits. Workers' tenure is influenced negatively by some types of outside ownership but positively by others. Tenure is reduced in subsidiary firms and in industries predominately owned by other industries due to reduced union influence on job tenure in these settings. Average tenure is increased in companies that are spread across several industries. These findings provide little support for dual labor market theories and other economic theories that argue that workers benefit from the market power of their employing organizations. Instead, the findings provide support for theories that stress the dangers to workers' fates arising from the increasing dominance of financial management in economic decision making.     

PAY SECRECY AND EFFORT PROVISION

Pay secrecy is often justified on the ground of concerns about the detrimental consequences of intra‐firm pay comparisons for work morale and performance. Surprisingly, however, there is only limited empirical evidence that the availability of pay comparison information is detrimental for effort provision. In this paper, I study pay comparison effects in a gift‐exchange game laboratory experiment where an employer is matched with two symmetric employees. I compare effort choices made by employees in a “pay secrecy” treatment and in two “public wages” treatments where employees are informed of the wage paid to the co‐worker. In one “public wages” treatment the employer can choose both wages she pays to the employees, while in the other treatment the wage paid to one employee is regulated exogenously. I show that pay disclosure can be detrimental for effort provision if employees are treated unequally. (JEL A13, C92, J31)     

INTERMEDIATE INFORMATION,LOSS AVERSION,AND EFFORT: EMPIRICAL EVIDENCE

The present article empirically explores the impact of intermediate information on contestants' effort. Data involving substituted soccer players of the German Bundesliga indicate only weak evidence of a negative effect of ex ante heterogeneity on effort; in contrast, intermediate information, measured by goal difference at the time of substitution, significantly affects effort. Players exert the greatest effort when their team is leading by one goal and reduce their effort when it is trailing. When intermediate information suggests the contest is already decided, players from both teams reduce effort. This behavior is in line with loss aversion, such that players weight potential losses more than potential gains and adjust their effort accordingly. (JEL Z22, J41, M54)     

ACADEMIC PUBLICATION, MARKET SIGNALING, AND SCIENTIFIC RESEARCH DECISIONS

Publication is an essential scientific activity, but dangers arise when it is the primary signal of professional ability. This paper presents a simple model of screening in academic job markets. Signaling pressures may bias research decisions toward orthodox, low-risk projects, denying science the bold hypotheses and vigorous competition necessary for significant advance. Screening mechanisms help explain patterns of development noted by some historians of science as well as differences in these patterns across disciplines. The paper concludes with some comments on signaling and scientific change in economics.     

CLASSROOM DIVERSITY AND ACADEMIC OUTCOMES

This paper tests how the race and ethnicity of one's college classmates affect academic performance. Incoming students at a Catholic college are assigned to their first semester, team‐taught, required course. Statistical tests support that this assignment is uncorrelated with a variety of student characteristics. Controlling for team fixed effects and student characteristics, I find evidence of racial peer effects that differ for white students and students of color. White students earn higher grades in classes with more students of color. Students of color with more nonwhite classmates earn lower grades; these effects occur exclusively among those with lower SAT scores. (JEL I21, I28)     

ON THE SEARCH FOR TALENT IN ACADEMIC LABOR MARKETS: EASILY OBSERVABLE LATER‐GRADUATE STUDY OUTCOMES AS PREDICTORS OF EARLY‐CAREER PUBLISHING,PLACEMENT, AND TENURE

Three easily observed later‐graduate study outcomes, working with a prominent advisor, publishing while in graduate school, and coauthoring with the advisor are demonstrated to be significant determinants of early‐career publishing success for a sample of nearly 3,000 Ph.D. recipients from more than 100 domestic programs between 1990 and 1993. Out‐of‐sample predictions for 681 Ph.D. recipients from the class of 1994 indicate that these easily observed later‐graduate study signals dramatically improve our ability to forecast which students become prolific and which students fail to publish more than one article. Analyzing initial domestic tenure‐track economics placements indicates that hiring departments placed far more emphasis on Ph.D. program pedigree, leading to an initial tenure rate of less than 50% but eventually nearly three‐fourths currently hold tenured positions in the United States. (JEL J24, J44)     

2006 PRESIDENTIAL ADDRESS WATER MARKETS IN THE WEST: PRICES, TRADING, AND CONTRACTUAL FORMS

Rising urban and environmental demand for water has created growing pressure to reallocate water from traditional agricultural uses. The evolution of water markets has been more complicated than those for other resources. In this paper, we first explain these differences by examining water rights and regulatory issues. Second, we place our research in the context of the economics literature on water marketing. Third, we present new, comprehensive data on prices and the extent, nature, and timing of water transfers across 12 western states from 1987 to 2005. We find that prices are higher for agriculture-to-urban trades versus within-agriculture trades, in part, reflecting the differences in marginal values between the two uses. Prices for urban use are also growing relative to agricultural use. Markets are responding in that the number of agriculture-to-urban transactions is rising, whereas the number of agriculture-to-agriculture transfers is not. Further, there is a shift from using short-term leases to using multiyear leases of water and permanent sales of water rights. This pattern underscores the need to consider the amounts of water obligated over time rather than examining only annual flows in assessing the quantities of water traded as is the common practice in the literature. Considering water obligated over time, termed committed water, we find significantly more is transferred and the direction of trading is different than if the focus is on annual flows. Finally, the data reveal considerable variation in water trading across the states. ( JEL Q2, N5, L5, K3)     

AFTER THE TOURNAMENT: OUTCOMES AND EFFORT PROVISION

Outcomes of workplace competitions may themselves influence subsequent behavior—particularly if employees feel wronged. In a laboratory experiment, we find that—consistent with inequity aversion—tournament losers supply less postcompetition effort than winners when doing so reduces their tournament opponent's earnings. Consistent with procedural fairness concerns, subjects who lose arbitrarily decided tournaments that disregard tournament effort choices supply even less post‐tournament effort than other losers. While losers' effort reductions consistent with inequity aversion persist, effort reductions following arbitrarily decided tournaments fade over time. Finally, we show that effort reductions related to inequity aversion could potentially be mitigated through workplace rotations. (JEL C90, J30, D03)     

CITATIONS AND INCENTIVES IN ACADEMIC CONTESTS

I consider a contest between scholars on the basis of three popular indices of citation. There exist equilibria in which there are more and better-quality papers in the total citations contest than in the h-index contest. In some cases, the total citations contest yields the same quality of papers but more papers than the Euclidean contest. As the cost of writing a paper increases,the h-index is inferior to the total citations index in both the quality and quantity of papers. This result is partly driven by how the number of papers constrains how the h-index counts citations. (JEL D72)     

GENDER AND THE CONSULTING ACADEMIC ECONOMIST

We surveyed academic economists on their experiences and perceptions of legal consulting. Nearly two-thirds have consulting experience and 40% have consulted within the last 5 years. Base hourly rates average $244, with a median of $200. Women are less likely than men to have served as consultants and charge lower rates than comparable men, but there are few differences by gender in willingness to consult. Women report substantially more negative bias and are less likely to consult in complex cases or to have a high profile role in litigation. (JEL J44, J71, K41)     

ACADEMIC PROBATION,STUDENT PERFORMANCE,AND STRATEGIC COURSE‐TAKING

We use a regression discontinuity design to study how academic probation affects outcomes and course‐taking behaviors at a large public university in the United States. Consistent with past work, students placed on probation improve their grade point average (GPA) in the subsequent semester. We document that part of this GPA improvement is attributable to strategic course‐taking, and there is significant heterogeneity in these behaviors across race. Non‐minority students placed on probation attempt fewer credits, easier courses, and are more likely to withdraw from courses in the following term. In contrast, underrepresented minorities exhibit few of these behaviors, consistent with past work that suggests black and Hispanic students are less likely to possess helpful institutional knowledge and use available support systems such as academic counseling. (JEL I20, I23)     

THE EFFECTS OF FORMAL AND INFORMAL TRAINING ON TENURE AND MOBILITY IN MANUFACTURING FIRMS

This article analyzes the effects of employer investment in employees through formal and informal on-the-job training on job tenure and mobility for male and female workers, male supervisors, and male managers. Formal on-the-job training positively affects job tenure of male and female workers, firm tenure of male workers, supervisors, and managers, and mobility of male workers and managers. It negatively affects mobility of female workers. The results do not support arguments about the effects of informal on-the-job training on mobility and security, found to have a positive effect only on male managers' firm tenure.     

PROFESSIONAL ACHIEVEMENTS AND GENDER DIFFERENCES AMONG ACADEMIC ECONOMISTS

This paper tests for gender differences in remuneration and professional achievement among academic economists using data on grants and grant applications to the National Science Foundation. A simultaneous equations model is used to examine the determinants of salary, rank, department affiliation and research output. In addition to confirming some long-standing folklore about the composition of faculty in research-oriented institutions, significant gender differences were found among older cohorts. Although the signs of the gender coefficients are consistent with a discrimination hypothesis for the sample of assistant professors, the results were not statistically significant.     

READING, WRITING, AND SEX: THE EFFECT OF LOSING VIRGINITY ON ACADEMIC PERFORMANCE

Controlling for a wide set of individual- and family-level observables available in the National Longitudinal Study of Adolescent Health, ordinary least squares (OLS) estimates show that sexually active adolescents have grade point averages that are approximately 0.2 points lower than virgins. However, when information on the timing of intercourse decisions is exploited and individual fixed effects are included, the negative effect of sexual intercourse disappears for females, but persists for males. Taken together, the results of this study suggest that while there may be adverse academic spillovers from engaging in intercourse for some adolescents, previous studies' estimates are overstated due to unmeasured heterogeneity. ( JEL I10, I21, I18)     

DISAPPOINTMENT AVERSION AND SOCIAL COMPARISONS IN A REAL‐EFFORT COMPETITION

We present an experiment to investigate the source of disappointment aversion in a sequential real‐effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two‐person real‐effort competition (Gill, D., and V. Prowse. “A Structural Analysis of Disappointment Aversion in a Real Effort Competition.” American Economic Review, 102, 2012, 469–503). To do this we compare “social” and “asocial” versions of the Gill and Prowse experiment, where the latter treatment removes the scope for social comparisons. If disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment. Alternatively, if losing to or winning against another person affects the evaluation of losses/gains, as we show would be theoretically the case under asymmetric inequality aversion, we would expect treatment differences. We find behavior in social and asocial treatments to be similar, suggesting that social comparisons have little impact in this setting. Unlike in Gill and Prowse we do not find evidence of disappointment aversion. (JEL C91, D12, D81, D84)