ON IMPERFECT EVALUATION AND EARNING DIFFERENTIALS

This paper investigates the relationship between the technology for evaluating performance and optimal contract choice. Specifically, the paper examines the different compensation packages that arise when occupations differ in evaluation technology, workers are risk averse, work effort is endogenous, and there exists asymmetric information. In occupations in which it is less difficult to measure output, it is shown that compensation is more closely tied to output; the implications for work effort, the sorting of workers by ability, and average compensation are developed. Analysis of a new data set confirms our predictions concerning earning differentials and wage growth.
The powerful 1.6 million-member National Education Association and other teacher organizations have traditionally fought the notion of rewarding better teachers with more money, arguing that there is no objective way to measure a teacher's competence and that it would lead to favoritism, and bad morale [ Time , June 20, 1983].     

A Revisionist History of Intermediate Treatment

Correspondence to John Pratt, Department of Social Policy and Social Work, Massey University, Palmerston North, New Zeland. Summary This paper examines and challenges the view that intermediatetreatment for young offenders in England and Wales has alwaysbeen intended as an alternative to custody provision. It arguesthat its origin and subsequent development have to be understoodwithin what was the prevailing welfare discourse at the timeof the 1969 Children and Young Persons Act. It traces some ofthe processes involved in the change that has since taken place,characterized by a move from ‘welfare’ to ‘justice’talk, and suggests that it was only then that the conceptualspace for intermediate treatment to operate as an alternativeto custody was established. Finally, it examines some of thecritical issues raised by these changes in policy and discourse.     

AGGREGATE DEMAND CONTRACTIONS WITH NOMINAL DEBT COMMITMENTS: IS WAGE FLEXIBILITY STABILIZING?

When nominal debt payments commitments exist, output losses following an aggregate demand contraction will be larger and more persistent. Paradoxically, output can be less stable if wages are more flexible. This occurs because falling wages and prices cause debtors' cash flow to deteriorate relative to their debt commitments. To reduce the chance of incurring bankruptcy costs, debtors cut expenditure. Creditor's wealth increases from an unexpected deflation but their gain does not offset debtors' loss because of the increased threat of bankruptcy and associated costs. Net wealth and aggregate demand fall, magnifying the effect of the initial contraction.     

Some Questions About the Reverse Tariff

Summary The modified version of the reverse tariff theory, developedby Pauline Hardiker, claims that a matrix combining risk andneed is implicit in the recommendations made to courts by probationofficers. This version of the theory is criticized on threecounts. (i) A number of counter-examples are examined: someof them imply factors other than risk and need which probationofficers take into account; others illustrate types of recommendationwhich, relative to the theory, have an anomalous form; (ii)it is suggested that, in any event, Hardiker does not have anadequate theory of how ‘need’ and ‘risk’are combined; (iii) it is argued that, given the evidence onwhich it is based, the reverse tariff model cannot have thestatus which Hardiker appears to claim for it.     

UNCERTAINTY AND STICKY-DOWNWARD BUT UPWARD-MOBILE WAGES

The usual search models of unemployment hold that firms do not offer wage cuts to employees in time of slack demand because the employees have alternatives open to them at wages higher than the reduced wage that would be required to maintain full employment. This paper extends these models by considering employees as choosing in conditions of uncertainty and showing that refusal to accept a wage cut is often rational in the absence of a higher alternative wage. Additional implications are derived for union behavior and simultaneous inflation and unemployment.     

The Canadian syndrome of regional polarities: an obituary

Les études dans lesquelles il est question des différences entre les régions du Canada mentionnent souvent un phénomène appelé le «syndrome des polarités»; il s'agit de la tendance à l'augmentation, d'est en ouest, des taux de plusieurs indicateurs sociaux, dont le divorce, le suicide et la criminalité. L'auteur de cette communication, estimant que ce syndrome appartient plutǒt à l'histoire, démontre que les taux de suicide et de divorce convergent dans toutes les régions canadiennes depuis 1921 et met cette tendance en relation avec les résultats d'une analyse récente des taux de criminalité régionaux. The ‘syndrome of polarities’ whereby rates for social indicators such as divorce, suicide, and crime rise from east to west is often noted in studies of Canadian regional differences. There are, however, reasons to view this polarity as an historical remnant, and the paper shows a convergence in regional suicide and divorce rates since 1921. The trend is tied in with a recent analysis of regional crime rates.