PRIVATE INCENTIVES AND SOCIAL INTERACTIONS: FERTILITY PUZZLES IN ISRAEL

This paper explores how private and social incentives for fertility may have combined to produce the complex fertility pattern observed in Israel in the past half‐century. Fertility has declined within some ethnic‐religious groups, moderately increased in others, and parts of the ultra‐Orthodox Jewish population have experienced a reverse fertility transition, in which childbearing has increased rapidly and substantially. We present a theoretical analysis of the social dynamics of fertility that shows how private preferences, preferences for conformity to social norms in childbearing, and piecewise linear child allowances could have combined to yield such a complex fertility pattern. We then explain the identification problem that makes it so difficult to infer the actual Israeli fertility process from data on completed fertility. (JEL: J13, Z13, H53)     

Facts and myths about suicide: a study of Jewish and Arab students in Israel

This research investigates the knowledge and myths regarding suicide among students in Israel, and examines whether they are affected by ethnic origin, gender, and religiosity. A random sample of 450 undergraduate students from two colleges was asked to fill out the Suicide Opinion Questionnaire (SOQ). Knowledge was measured by five SOQ items (alpha = 0.57) and myths of suicide by 20 SOQ items (alpha = 0.67). The level of Israeli students' knowledge about suicide is generally good (X = 3.21; SD = 0.58). There are significant differences, however, between the Jewish (n = 266) and Arab (n = 154) students in knowledge about basic facts of suicide in Israel [(X Arabs = 3.04; X Jews = 3.32; t (419, 0.95) = 4.63, p < .001)]. Although both groups share the same educational milieu, the Arab students tend more to believe that suicide rates are higher in Israel, and even more so among people of Asian African origin and minorities. They also perceive suicide by shooting to be the most popular suicide method. There are also significant differences between those groups with respect to their belief in suicide myths [(X Arabs = 2.91; SD = 0.40; X Jews = 3.17, SD = 0.41; t (419, 0.95)= 6.31, p < 0.01)]. Arabs tend more to relate suicide to lower religious affiliation, mental illness and chronic tendency, and to believe that the victim's relatives know nothing about the coming suicide. No significant differences were found based on religiosity or gender. Discussion focuses on the influence of the different cultural characteristics of lifestyle and the social control systems among Jews and Arabs in Israel on perceptions toward suicide.     

THE ROLE OF SOCIAL WORK NORMS IN JOB SEARCHING AND SUBJECTIVE WELL‐BEING

Social norms are usually neglected in economics, because they are to a large extent enforced through nonmarket interactions and difficult to isolate empirically. In this paper, we offer a direct measure of the social norm to work and we show that this norm has important economic effects. The stronger the norm, the more quickly unemployed people find a new job. This behavior can be explained by utility differences, probably due to social pressure. Unemployed people are significantly less happy than employed people and their reduction in life satisfaction is the larger, the stronger the norm is. (JEL: I31, J64)     

Revolt on the Nile: Economic Shocks,Religion, and Political Power

Using centuries of Nile flood data, I document that during deviant Nile floods, Egypt's highest‐ranking religious authority was less likely to be replaced and relative allocations to religious structures increased. These findings are consistent with historical evidence that Nile shocks increased this authority's political influence by raising the probability he could coordinate a revolt. I find that the available data provide support for this interpretation and weigh against some of the most plausible alternatives. For example, I show that while Nile shocks increased historical references to social unrest, deviant floods did not increase a proxy for popular religiosity. Together, the results suggest an increase in the political power of religious leaders during periods of economic downturn.     

System Perspectives of Experts and Farmers Regarding the Role of Livelihood Assets in Risk Perception: Results from the Structured Mental Model Approach

Pesticide application is increasing and despite extensive educational programs farmers continue to take high health and environmental risks when applying pesticides.
The structured mental model approach (SMMA) is a new method for risk perception analysis. It embeds farmers' risk perception into their livelihood system in the elaboration of a mental model (MM). Results from its first application are presented here. The study region is Vereda la Hoya (Colombia), an area characterized by subsistence farming, high use of pesticides, and a high incidence of health problems. Our hypothesis was that subsistence farmers were constrained by economic, environmental, and sociocultural factors, which consequently should influence their mental models.
Thirteen experts and 10 farmers were interviewed and their MMs of the extended pesticide system elicited. The interviews were open-ended with the questions structured in three parts: (i) definition and ranking of types of capital with respect to their importance for the sustainability of farmers' livelihood; (ii) understanding the system and its dynamics; and (iii) importance of the agents in the farmers' agent network. Following this structure, each part of the interview was analyzed qualitatively and statistically. Our analyses showed that the mental models of farmers and experts differed significantly from each other.
By applying the SMMA, we were also able to identify reasons for the divergence of experts' and farmers' MMs. Of major importance are the following factors: (i) culture and tradition; (ii) trust in the source of information; and (iii) feedback on knowledge.     

Occupational Upgrading and the Business Cycle

Many economics theories suggest that the assignment of workers to occupations changes over the business cycle: expansions allow workers to upgrade to occupations that pay higher wages and require more skill. This paper provides some empirical evidence from the USA that such upgrading does occur and that, as predicted, it has greater effects on less‐skilled individuals. Furthermore, the skill composition of new hires changes over the business cycle, even within occupations. Consistent with a job competition model, the education levels of new hires within occupations are higher when the unemployment rate is high and this effect is more pronounced in lower‐paying occupations. The changes in assignment imply that low‐skilled individuals suffer most from recessions in terms of occupation quality and unemployment. The results are consistent with employers responding to a greater supply of educated workers by increasing hiring standards, and so imply that the social return to education may be lower than the private return. However, the results are also consistent with more neo‐classical models of the labor market.     

GIFT EXCHANGE AND WORKERS' FAIRNESS CONCERNS: WHEN EQUALITY IS UNFAIR5

We study how different payment modes influence the effectiveness of gift exchange as a contract enforcement device. In particular, we analyze how horizontal fairness concerns affect performance and efficiency in an environment characterized by contractual incompleteness. In our experiment, one principal is matched with two agents. The principal pays equal wages in one treatment and can set individual wages in the other. We find that the use of equal wages elicits substantially lower efforts. This is not caused by monetary incentives per se because under both wage schemes it is profit‐maximizing for agents to exert high efforts. The treatment difference instead seems to be driven by the fact that the norm of equity is violated far more frequently in the equal wage treatment. After having suffered from violations of the equity principle, agents withdraw effort. These findings hold even after controlling for the role of intentions, as we show in a third treatment. Our results suggest that adherence to the norm of equity is a necessary prerequisite for successful establishment of gift‐exchange relations. (JEL: J33, D63, M52, C92, J41)     

Merit‐based Rewards,Job Satisfaction and Voluntary Turnover: Moderating Effects of Employee Demographic Characteristics

This paper draws on the reflection theory of compensation (Thierry, H. (1998). ‘Compensating work’. in P. J. D. Drenth, H. Thierry and C. J. de Wolff (eds), Handbook of Work and Organizational Psychology, 2nd edn, pp. 291–315, Psychology Press: Hove; Thierry, H. F. (2001). ‘Job evaluation systems and pay grade structures: do they match’, International Journal of Human Resource Management, 8, pp. 1313–1324) to examine the influence of individual merit‐based rewards on voluntary turnover via job satisfaction. It also tests the moderating effects of employees’ gender, age and education level between merit‐based rewards and job satisfaction. Data were collected from 636 employees in Japan at three points in time over a 12‐month period. The findings show that merit‐based rewards have a direct, positive effect on job satisfaction and an indirect effect on voluntary turnover. The effect of merit‐based rewards on job satisfaction was moderated by gender and education, providing evidence that merit‐based rewards are more important for male and highly educated employees. Practical and theoretical implications are discussed.     

Occupational and Locational Substitution: Measuring the Effect of Occupational and Regional Mobility

The paper analyses the effects of occupational and regional mobility on the matching rate using monthly panel data disaggregated at the regional and occupational level. The main contribution of the paper is to measure the effect of substitutability between vacancies in different occupations, and vacancies in different regions on the matching rate. The estimates indicate higher regional mobility in West Germany but higher occupational mobility in East Germany. The results show that if occupations were perfect substitutes, then the number of matches could increase by 5–9 per cent. Perfect regional mobility would increase matchings by 5–15 per cent. It is also shown that partial aggregation causes a downward bias in substitutability estimates.     

Communal values and economic success: A comparison of israeli collective settlements

The association between economic success and adherence to communal values in Israeli kibbutz communes is analyzed over a thirty year period. Adherence to four communal objectives, as independent variables, is considered: Settling the land and absorbing settlers, farming as a way of life, refraining from financial speculation and minimizing consumption. Economic performance was used as the criterion variable. The findings show that the federation of religious kibbutzim (plural of kibbutz) adhered most closely to the social objectives and achieved better economic/financial performance than other kubbutz federations. The economic success of the religious kibbutzim is attributed to a religious rational ethic that was developed during their formative years and maintained consistently over time.     

THE RISE OF THE EAST AND THE FAR EAST: GERMAN LABOR MARKETS AND TRADE INTEGRATION

We analyze the effects of the unprecedented rise in trade between Germany and “the East” (China and Eastern Europe) in the period 1988–2008 on German local labor markets. Using detailed administrative data, we exploit the cross‐regional variation in initial industry structures and use trade flows of other high‐income countries as instruments for regional import and export exposure. We find that the rise of the East in the world economy caused substantial job losses in German regions specialized in import‐competing industries, both in manufacturing and beyond. Regions specialized in export‐oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 442,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. This is almost exclusively driven by the rise of Eastern Europe, not by China. We also conduct an analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships.     

The Governance of Voluntary Work in the Public Sector: Institutional Differences and Invariant Traits

In response to fiscal constraint and the introduction of quasi-market mechanisms into the public sector, in public policy there appears to be the acceptance of the increased use of voluntary labour in the delivery of public services. Traditional forms of governance have tended to ignore the use of voluntary labour in the public sector. The paper builds on an earlier (Hellshorm and Collins, 1999) model of concurrence between voluntary and municipal labour, by focusing onthe demand side of voluntary work. Our exploratory study uses this model to analyse two municipal organisations' mix of voluntary and municipal labour, one Italian and the other a Swedish context.The research method used to collect empirical data was semi-structured interviews of local government employees within the two sites. Thisis linked with an analysis of the institutional context of the two municipalities to inform and test the proposed model of demand for volunteer labour in local government. Resource scarcity, presence of agency for voluntary work, type of production and state rules and norm are used to analyse the institutional invariant traits. The study concludes that traditional institutional theory has ignored voluntary activities. Our case studies of actual practice indicate that different state norms and ruleson citizen rights and equal opportunities are stronger influential factors than the resources situation, in determining the demand for voluntary activities in municipalities.     

EQUILIBRIUM SEARCH UNEMPLOYMENT,ENDOGENOUS PARTICIPATION,AND LABOR MARKET FLOWS

The sustainability of welfare states requires high employment and high participation to raise the tax base. To analyze labor supply in a world with market frictions, we propose and solve a macro model of the labor market with unemployment and labor force participation as endogenous and distinct states. In our world, workers' decisions of participating are determined by an entry decision and an exit decision. A calibration of the model improves the usual representations of labor markets, since it quantitatively accounts for the observed flows between employment and nonparticipation. The paper investigates also the effect of payroll taxes and unemployment benefits on participation decisions. Taxes reduce entries and increase exits, whereas unemployment benefits, at a given job‐finding rate, raise entries and have ambiguous effects on exits. (JEL: J2, J6)     

Work and religious faith: How people of faith relate to their employers

This article focuses on the connection between the religious faith of employees and their relationships with employers. There are two models for how religionists understand their role in the world: they can either try to model behavior not common in a secular world or infiltrate the structures of society in the hope of bringing about social change. Most employees tend to be infiltrators. Further, employees tend to internalize the values of their employers. But it may well be that the moral and religious beliefs of employees can benefit employers by providing the latter with access to different perspectives. In particular, the long-range perspective common to religionists may be helpful to corporations that tend to focus on short-term considerations.     

Culture and Institutions: Economic Development in the Regions of Europe

Does culture have a causal effect on economic development? The data on European regions suggest that it does. Culture is measured by indicators of individual values and beliefs, such as trust and respect for others, and confidence in individual self determination. To isolate the exogenous variation in culture, we rely on two historical variables used as instruments: the literacy rate at the end of the 19th century, and the political institutions in place over the past several centuries. The political and social history of Europe provides a rich source of variation in these two variables at a regional level. The exogenous component of culture due to history is strongly correlated with current regional economic development, after controlling for contemporaneous education, urbanization rates around 1850, and national effects. (JEL: O10, F10, P10, N13)     

How Responsive Is Investment in Schooling to Changes in Redistributive Policies and in Returns?

This paper uses an unusual pay reform to test the responsiveness of investment in schooling to changes in redistribution schemes that increase the rate of return to education. We exploit an episode where different Israeli kibbutzim shifted from equal sharing to productivity‐based wages in different years and find that students in kibbutzim that reformed earlier invested more in high school education and, in the long run, also in post‐secondary schooling. We further show that the effect is mainly driven by students in kibbutzim that reformed to a larger degree. Our findings support the prediction that education is highly responsive to changes in the redistribution policy.     

THE PRIVATE AND FISCAL RETURNS TO SCHOOLING IN THE EUROPEAN UNION

We present estimates of the private and fiscal returns to schooling in 14 European Union countries. Estimates of the private returns to post‐compulsory formal education take into account the effects of schooling on wages and employment probabilities and allow for academic failure rates, the direct and opportunity costs of education, and the impact of personal taxes, social security contributions, and unemployment and pension benefits on lifetime earnings. Estimates of fiscal returns capture the long‐term effects of a marginal increase in average educational attainment on public finances under conditions that approximate general equilibrium. (JEL: I20, J31, H60).     

A Quantitative Assessment of the Risks from Illegally Imported Meat Contaminated with Foot and Mouth Disease Virus to Great Britain

Foot and mouth disease (FMD) is considered by many as the most important animal disease in the world. FMD is highly contagious and outbreaks incur significant costs as affected countries are severely limited in their ability to trade. A number of trade commodities may be contaminated with FMD virus (FMDV) including animal products, for example, meat. As a member of the European Union, Great Britain (GB) has put in place a number of regulations to prevent the importation of pathogens in imported meat products. However, the illegal importation of meat provides a route by which safety controls may be circumvented and meat from FMD affected areas may be imported. This study assesses the FMD infection risk posed to the livestock population of GB from the illegal importation of meat, and estimates the major contributors to this overall risk, through the development of a quantitative risk assessment model. From model results, the total amount of illegal meat entering GB each year is estimated on average to be 11,875 tonnes. with 90% certainty that this is between 4,398 and 28,626 tonnes per year; of which between 64.5 and 565 kg are contaminated with FMDV. This flow of illegal meat results in an estimate of a frequency of FMD infection in GB livestock of 0.015 cases of infected animals per year, with 90% certainty it is between 0.0017 and 0.053. Imports from the region Near and Middle East account for 47% of this risk, and 68% of the risk is attributed to bone-in and dried de-boned products.     

Can corporate planning ‘Invent’ the future of the third world?

Corporate planners, accustomed to stretch their mind in time will need to distend it in geographic space as well. Seemingly unrelated events in faraway countries suddenly implicate the work of planners, their homes and their futures. Europe and Japan rely for 95 per cent of their petroleum requirements upon the Third World. Huge pipelines carrying natural gas connect Soviet Russia with the United States and Europe. One electric power grid will eventually tie Europe together. Europe depends for 10 million guest workers upon southern countries, including North Africa and the Near East. Energy and labor are weighty factors in the increasing inter-dependence of nations. The author argues that these and related demands will require creative responses from corporate planners.     

Inequality in Incomes and Access to Education: A Cross‐country Analysis (1960–95)

Abstract. In the current debate on the relationship between inequality in income distribution and growth, one of the possible links works through access to education. Starting from an optimal demand for education where, among other things, the years of education depend on family income, we derive two testable predictions in the analysis of aggregate data on school enrolments: a negative (linear) dependence of enrolment rates on the Gini concentration index on income distribution; and a positive dependence on public resources invested in education and/or on skill premium in the labour market. These predictions are tested on a (unbalanced) panel of 108 countries for the period 1960–95. The main finding of this analysis is that, once we control for the degree of development with the (log of) per capita output, financial constraints seem mainly relevant in limiting the access to secondary education. However, when considering gender differences, there is evidence that female participation in education is more conditioned by family wealth, in some cases starting from primary education. Finally, there is weak evidence that public resources spent on education raise the enrolment rates.