A Theory of the Firm with Non‐binding Employment Contracts

This paper examines an employment relation in which individual workers enjoy some bargaining power vis‐a‐vis the firm although they are not unionized. The main elements of the situations studied here are that the employment contracts are non‐binding across periods of production and that the firm has opportunities to replace workers. The paper analyzes a dynamic model in which the processes of contracting and recontracting between the firm and its workers are intertwined with the dynamic evolution of the firm's workforce. The analysis of the model is somewhat complicated because the employment level is a nondegenerate state variable that evolves over time and is affected by past decisions. The main analytical results characterize certain important equilibria: the profit maximizing and stationary equilibria. The unique stationary equilibrium is markedly inefficient: it exhibits inefficient over‐employment and the steady state wages coincide with the workers' reservation wage. It confirms earlier results derived by Stole and Zwiebel (1996a, b) in the context of a static model and shows that they are very robust even when the firm has nearly frictionless hiring opportunities. In contrast, in the profit maximizing equilibrium the outcome is nearly efficient and the wage exhibits a mark‐up over the reservation wage.     

The Characteristics of Children’s Subjective Well-Being

Despite the increased interest in recent decades in the study of children’s subjective well-being (SWB), much too little is known about the factors that contribute to their SWB, especially with regards to socio-demographic characteristics. In addition, only handful of studies has made a comparison between countries and was based on large samples. The present study is a first of its kind. Utilizing the International Study of Children’s Well-Being first wave data set with questionnaires from over 34,500 children from 14 different countries to explore the characteristics of children’s SWB and the relations between an array of socio-demographic variables and children’s SWB. SWB was measured using three scales—overall life satisfaction, overall satisfaction in specific domains and overall SWB that was measured using agreement items. The socio-demographic variables were composed of demographic characteristics (e.g. gender and age), self-reported socio-economic items and the children’s country of residence. Findings show that children’s SWB in all countries is relatively high, although some variation can be found between the three SWB scales. Differences were found between the three measurements of SWB in regard to the explained variance, nevertheless the socio-demographic characteristics explain relatively low amount of the variance in SWB (10.9–20.2 %). The demographic variables have the lowest contribution, followed by the socio-economic items, while countries have the highest contribution. Thus one of our main conclusions is that the answer for understanding children’s SWB does not lay in the socio-demographic characteristics. The implications of these findings for further research of children’s SWB are discussed.     

The paradox of child poverty in israel

Data on the levels of child poverty in Israel indicate that it has remained consistently high and indeed is higher than that in most welfare states. This finding is paradoxical given the fact that, since its establishment fifty years ago, Israel has emphasized its commitment to the well-being of its children and to their welfare. Indeed, this approach has been reflected in a wide variety of social programmes aimed at bettering the living standards of children and of families with children. The reasons for the failure of the Israeli welfare state to deal more effectively with child poverty and deprivation over the last two decades can be linked to economic developments, such as high unemployment and inflation levels and wide wage disparities, to demographic trends such as the concentration of large, single income families among the Arab and orthodox Jewish sectors, and to policies that have encouraged privatization and have discriminated against Arab children. Social workers can play a major role in dealing with these developments by seeking more universal and equitable social policies for children in Israel.     

The impact of changing union density on earnings inequality: Evidence from the private and public sectors

The degree of inequality in U.S. earnings has varied considerably over the past 20 years, including a dramatic, much documented rise since 1980. We examine empirically how changes in union density have contributed to these trends, using Current Population Survey data for 1977 and 1992. Inequality is measured as the mean logarithmic deviation of individual earnings from overall average earnings. A decomposition of the change in the inequality index reveals that decreases in private-sector union density have accounted for about 25 percent of the overall rise in earnings inequality during the past 15 years. Decompositions based on public-sector earnings indicate that increases in union density have produced inequality that is 29 percent below what it otherwise would have been. The analysis demonstrates that, among private sector workers, the results are sensitive to the population being studied: Changing union density accounts for 13 percent of the rise among prime aged males (a noticeably smaller fraction than found in existing studies) and only 4 percent among females and non-prime-aged males. The analysis also demonstrates that covariances between the subsamples explain why the union effect is larger in percentage terms for the whole sample than it is in either subsample.     

College Students' Revenge Goals Across Friend,Romantic Partner,and Roommate Contexts: The Role of Interpretations and Emotions

Residential college environments provide young people with distinctive relationship opportunities and challenges. A major purpose of the present study was to learn whether college students respond differently to conflict‐of‐interest vignettes in three different relationship contexts. Students were more likely to make negative interpretations about their romantic partner's behavior than they did about their friend's or roommate's behavior. They were also more likely to feel angry and hurt and to endorse hostile goals and strategies with romantic partners. A second major purpose was to learn about the types of interpretations and emotions associated with revenge goals in conflict‐of‐interest situations. Results indicated that interpreting the other person's actions as disrespectful and as rejecting was related to revenge goals and also predicted to revenge goals beyond the contributions of anger and hurt feelings.     

“I Swear I Will Never Betray You”: Factors Reported by Spouses as Helping Them Resist Extramarital Sex in Relation to Gender,Marriage Length,and Religiosity

Studies suggest that married people frequently engage in intimate relationships with people other than their spouses, and the literature has extensively examined motives for doing so. However, less is known about what factors prevent spouses from engaging in extramarital sex. While investment theory, interdependence theory, and moral theories offer insights into this question, they have not been subject to much empirical research. We examine these theories in relation to several characteristics of individuals and couples: gender, length of the marriage, and religiosity. In two studies, 423 participants completed a questionnaire on the perceived importance of 29 reasons to resist the temptation for extramarital sex. Participants also reported the likelihood that they would engage in extramarital sex if the opportunity presented itself. Results show that being female, more religious, and married for less time were associated with greater expectations of refraining from extramarital sex when presented with a hypothetical scenario. Multiple hierarchical regression showed that among factors relevant to conscious decision making, moral standards and fundamental anxieties (fear of remaining alone) predict expectations of refraining from extramarital sex better than concerns about effects on the children or the other participant.     

Search With Adverse Selection

This paper analyzes a sequential search model with adverse selection. We study information aggregation by the price—how close the equilibrium prices are to the full‐information prices—when search frictions are small. We identify circumstances under which prices fail to aggregate information well even when search frictions are small. We trace this to a strong form of the winner's curse that is present in the sequential search model. The failure of information aggregation may result in inefficient allocations.