E pluribus unum? Political fractionalization and deviations from the law of one price in the USA

The magnitude of deviations from the Law of One Price (LOP) across cities depends on a number of characteristics, including language differences, distance, and other correlates of trade costs. We show that in the USA, political differences between cities are an equally important determinant of LOP deviations. LOP deviations are smaller if the cities are both strongly Democrat or both strongly Republican. These effects are of a similar order of magnitude to those of distance, and suggest that political differences represent a substantial barrier to competition.

Slow real wage growth during the Industrial Revolution: productivity paradox or pro-rich growth?

abstract I examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour’s share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest total factor productivity growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour’s share must look elsewhere.

Economic conditions, task shares, and overqualification

This article demonstrates that economic conditions affect job match quality by influencing the task shares of available jobs. Cognitive (reasoning/communication) and physical (sensory/coordination) task shares and education-based overqualification measures are generated from Canada’s Labour Force Survey, the Career Handbook, and the Occupational Information Network database. In unfavourable labour markets, cognitive task intensity decreases and physical task intensity rises. The task content of newly formed jobs is then shown to be an important empirical determinant of overqualification. A calibrated search model that accounts for these findings quantifies the costs of increased overqualification. Each percentage point increase in unemployment raises overqualification by 5.8 percentage points, partly due to changes in task shares. Economic output subsequently decreases by about 0.6%.

Task-specific human capital and returns to specialization: evidence from association football

This paper analyses returns to task specialization using a unique panel data set of professional football players in the German Bundesliga. Based on accumulated task-specific human capital, I measure whether a player is rather a specialist in one task or a generalist able to perform several tasks. Using OLS, fixed effects, and quantile regression methods (with individual fixed effects), I analyse the impact of specialization on remuneration. Differentiating by player role in team production, I find that core team members, i.e. starting players, exhibit positive returns to specialization, which increase at higher salary quantiles. In contrast, substitutes, in particular those in the lower half of the conditional salary distribution, seem to benefit from being generalists, which renders them more attractive as substitute players for their teams. The paper discusses implications of the findings for other labour market contexts.

Return to apprenticeships: a comparison between existing apprentices and newly recruited apprentices

In England, half of all apprentices are now of adult age. Most of them—and many of younger age, too—worked with their training firm for some time before starting their apprenticeship. In this article, we estimate the benefit of apprenticeship completion making the distinction between groups of newly recruited and existing staff. To deal with sources of endogeneity resulting from apprenticeship completion, we exploit an exogenous change in minimum duration of training affecting apprenticeship completion. Our findings show much higher benefits for new compared with existing staff. Also, increasing apprenticeship training only creates positive effects for new entrants, but not for existing workers. Therefore, policy should aim to refocus apprenticeships to be a mechanism of labour market entry combined with education to provide access to and acquire competences required for actual occupational roles, but not as a generic mechanism to train existing staff.

High-performance work systems and the performance of public sector workplaces in Britain

We assess the role played by high-performance work systems (HPWSs) in public sector management achieving cost reductions and efficiency savings, and in introducing ‘modernizing’ technical and operational changes. Using a nationally representative survey of public sector workplaces with 50 or more employees we find that increased use of HPWS was positively correlated with workplace financial performance ratings and the implementation of workplace organizational change, and negatively correlated with wage costs. We also find target setting (TS) practices are, as much as HPWS, significantly associated with workplace outcomes. First difference estimates for the financial rating and workplace change outcomes qualitatively support the cross-section findings in these respects. We conclude that both HPWS and TS are important management technologies for managers pursuing government objectives in the public sector.