The Emergence of Lowest‐Low Fertility in Europe During the 1990s

Lowest‐low fertility, defined as a period total fertility rate at or below 1.3, has rapidly spread in Europe during the 1990s. This article traces the emergence of this new phenomenon to the interaction of five factors. First, tempo and compositional distortions reduce the total fertility rate below the associated level of cohort fertility. Second, socioeconomic changes—including increased returns to human capital and high economic uncertainty in early adulthood—have made late childbearing a rational response for individuals and couples. Third, social interaction effects reinforce this behavioral adjustment and contribute to large and persistent postponement in the mean age at birth. Fourth, institutional settings favor an overall low quantum of fertility. Fifth, postponement–quantum interactions amplify the consequences of this institutional setting when combined with ongoing delays of child‐bearing. The article concludes with speculations about future trends in current and prospective lowest‐low‐fertility countries.     

An Underestimated Alternative: America and the Limits of “Critical Theory”

The main goal of this paper is to examine the intellectual and biographical reasons why the theorists of the Frankfurt school did not embrace pragmatism. This goal is pursued in four areas: (1) the epistemological area of the debate about subjective and objective “reason”—here the misleading character of Horkheimer's and Mar-cuse's writings on pragmatism is demonstrated; (2) the area of political theory—here the tension between the American democratic tradition and a quasi-Marxist functionalism is exposed; (3) the area of social psychology—here the inability of the Frankfurt school to incorporate symbolic interactionism becomes evident; (4) the elitist relationship to American mass culture. The paper ends with brief remarks on Habermas' ambivalent position between pragmatism and “Critical Theory” and with a perspective of transcending this ambivalence.     

Driving through red lights: How warning signals are missed or ignored

Managers who make incorrect decisions often realise, after the fact, that they ignored important warning signals—that they had driven through a red light. They had missed or ignored clear warning signs that, normally, would have steered their behaviour away from calamity. A recent research project demonstrated that, in a sample of highly successful managers, each admitted that he/she had missed and ignored warning signals and persevered with business mistakes even after they had become evident. With cases taken from the research, this article examines the reasons behind this phenomenon and the dangers of the cycle repeating itself, drawing attention to some of the typical settings and characteristics of this ‘red light behaviour’ and draws conclusions on how to learn from and thus avoid it.     

Allocation and distribution: A discussion of the educational transition model,with reference to the Italian case

The main characteristic of education in the past century has been its expansion: a major stratification research question associated with this is whether the inequalities of educational opportunities among classes have persisted or changed (diminished) over time. The educational transition model (29 and 30), adopted by the majority of scholars in the field, separates the study of allocation, that is class inequality in education, from that of distribution, the amount of schooling and its expansion, using conditional logits. A consequence of the way this distinction has influenced subsequent research has been the emergence of a sharp gap between macro-level research on the expansion of education and stratification studies.     

On the procedure of hodges and lehmann for testing composite hypotheses of the mean of a normal distribution with unknown variance

In 1954 Hodges and Lehmann gave a test procedure for testing the hypothesis that the mean of an identically independently normally distributed random sample with unknown variance is contained within a certain interval [μ1, μ2]. The test is similar on the boundary of the zero-hypothesis and superior in power to the composite t-test usually applied to this problem. However Hodges and Lehmann could prove the unbiasedness of their test only for the special case that the sample consists of two elements. From numerical computations they guessed that unbiasedness would be valid for arbitrary sample sizes. This question is discussed here and partially answered.     

On the limits of democracy

In this article, we extend the analysis of Gersbach (2009) and explore the limits of democratic constitutions to achieve first-best outcomes. We establish the most general possibility result and we illustrate the efficiency gains of flexible majority rules by examples. We show that no first-best constitution exists if there is uncertainty regarding the size of losses and benefits from public projects.     

Measuring changes in consumer confidence

Consumer confidence indicators are surveyed monthly and each month concern different individuals. This complicates a straightforward interpretation of shifts in confidence. First, it is not clear how many respondents switch from and to negative, neutral and positive opinions in consecutive months. Second, reported net changes in confidence may be largely driven by the different respondent samples used over time. The proposed methodology addresses both issues. It involves estimating unobserved switching between negative, neutral and positive opinions for what can be thought of as being the same set of individuals. Next, a new change-in-confidence measure is developed from these switching proportions and the associated confidence bounds are computed for testing purposes. Applications to US and Dutch confidence data show that US respondents tend to switch attitudes more often than their Dutch counterparts do. Furthermore, the illustrations show that monthly changes in consumer confidence are not often significantly different from zero. Hence, claims about increased or decreased confidence should be made with care.     

Reelection threshold contracts in politics

We propose to supplement the democratic election mechanism by threshold contracts. A threshold contract stipulates a performance level that a politician must reach in order to obtain the right to stand for reelection. “Read my lips” turns into “read my contract”. Politicians can offer threshold contracts during their campaigns. Equilibrium threshold contracts are welfare improving and do not violate the liberal principle of free and anonymous elections in democracies. We would like to thank Johannes Becker, Peter Bernholz, Robert Dur, Joao E. Gata, Volker Hahn, Susanne Lohmann, Christian Schultz, Otto H. Swank, Heinrich Ursprung, conference participants at the annual meeting of the Public Choice Society 2000, the European meeting of the Econometric Society 2001 and the annual congress of the European Economic Association 2001 in Lausanne, seminar participants in Heidelberg and Mannheim and the referee for valuable suggestions and comments. Financial support from the Deutsche Forschungsgemeinschaft (DFG) is gratefully acknowledged.