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Abstract:
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Abstract:
An early retirement window is an offer, by an employer, of a special incentive to retire at a particular time, beyond that provided by the firm's pension plan. While such windows have attracted increasing attention in the academic literature and the business press, most of our current knowledge about them is based on case studies or compensation consultants' surveys of their clients. The Health and Retirement Study provides an opportunity to analyze the incidence and consequences of such offers among a representative sample of workers who are in the age range (51-61 in 1992) where such windows may be important. HRS data suggest that window offers increased in the early 1990s. At their peak in the mid-1990s, employers were making about 5 offers per 100 workers age 55-59. One third of the offers were accepted. The economic impact of window offers depends on the extent to which those who accept such offers would have left the employer soon anyway, and those who are induced to leave one employer go to work elsewhere. But multiplying the frequency of such offers by the acceptance rate suggests a substantial potential impact on the employment of workers in the HRS age range. Window offers are generally made to workers in "career" jobs. Such workers have above-average education, tenure with employer, and earnings. The attachment between the employer and such workers is often strengthened by defined-benefit pension plans, which discourage leaving before the early-retirement age of the pension plan but often also provide sharp incentives to leave "on time". Workers who received window offers were closer to early retirement age (as defined by their pension plan), and were expecting to retire sooner than other workers. Thus, one might expect that those who receive window offers would have retired earlier than other workers, even without the special window incentive. On the other hand, those receiving window offers are better paid and in better health than the average worker, and these differences would encourage them to retire later. Workers who received window offers worked in jobs that had cognitive rather than physical demands, and there is some evidence that those most affected by technological change were more likely to receive an offer. Window offers with "up front" cash incentives offer, on average, six to eight months pay; those featuring increased pension benefits are more generous. Accepted offers tended to be those with more generous cash incentives and were more likely to include increased pension benefits, increased "service credit" (which indirectly raises pension benefits), and health insurance. Those who received window offers are less likely to be working at subsequent waves of the HRS; this effect is larger at the interview following the window offer (where those receiving an offer are 15 percentage points less likely to be employed), but declines fairly rapidly thereafter. Controlling for a wide variety of variables that are related to receiving a window offer and to the probability of being employed does not change the short-run impact significantly, but increases the rate at which the impact declines in later waves.

Abstract:
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Abstract:
Existing research on retirement behavior tends to ignore "conventional" or "focal" or "usual" retirement ages in the model and estimation, and then ask whether a model which takes no direct account of such conventions can account for the observed spikes in the retirement hazard at age 62 and 65. This paper, in contrast, focuses on a direct measure of "usual" retirement age, based on a question that has been included in each wave of the Health and Retirement Study HRS).

Using actual survey responses has several advantages: it identifies respondents who say that there is no "usual" retirement age for workers like them; it distinguishes between those who regard 62 and those who regard 65 as the relevant age; and it identifies the not insignificant number of workers for whom the usual age is neither 62 nor 65. There is little evidence that workers regard 63, the age at which COBRA coverage could provide a bridge to Medicare eligibility, as conventional, or that those affected by the increase in the age of eligibility for "full" retirement benefits under Social Security have adopted 66 or 67 as a focal retirement age.

Following Wave I HRS respondents for six additional waves (12 years) so that their actual retirement can be observed shows that the actual retirement hazard is substantially higher at (and around) the age that workers identified in Wave I as the "usual" retirement age for workers like them. This is true even when we control for actual age at each wave, and for baseline values of earnings, wealth, health, and marital status.

The finding that workers are more likely to retire at a particular age if they regard that age as the usual retirement age for workers like them suggests that the direct measures of the usual age may be useful in more formal models of the retirement process. In a world where some workers understand the incentives they face and respond appropriately, but others are poorly informed and overwhelmed by the choices they face, the "usual" retirement age may be a starting point for modeling the behavior of the latter group of workers.

Abstract:
This paper explores the roles of different levels of government in assisting the poor. Using a model with utility interdependence, the paper presents some theoretical results on how levels of poor relief vary with the extent of mobility of the poor under both centralized and decentralized systems of support. After surveying the relevant empirical work and the experience under the English Poor Laws, the paper argues for a basic role for central government in this function.

Abstract:
In this paper, we analyze the relationship between how long an employer has been in business (firm age) and wages. Using data from special supplements to the Survey Research Center's monthly Survey of Consumers, we find that firms that have been in business longer pay higher wages (as previous studies have found), but pay if anything lower wages after controlling for worker characteristics. There is some evidence that the relationship is not monotonic, with wages falling and then rising with years in business. Older firms provide better fringe benefits and more stable employment, but these differences do not appear very important in understanding the age-wage relationship. Established employers do appear to make greater use of back-loaded compensation, consistent with their higher probability of remaining in business.

Abstract:
This paper applies the rational addiction model, which emphasizes the interdependency of past, current, and future consumption of an addictive good, to the demand for cocaine by young adults in the Monitoring the Future Panel. The price of cocaine is added to this survey from the System to Retrieve Information from Drug Evidence (STRIDE) maintained by the Drug Enforcement Administration of the U.S. Department of Justice. Results suggest that annual participation and frequency of use given participation are negatively related to the price of cocaine. In addition current participation is positively related to past and future participation, and current frequency of use given participation is positively related to past and future frequency of use. The long-run price elasticity of total consumption (participation multiplied by frequency given participation) of -1.18 is substantial. A permanent 10 percent reduction in price due, for example, to the legalization of cocaine would cause the number of cocaine users to grow by slightly more than 8 percent and would increase the frequency of use among users by a little more than 3 percent. Surely, both proponents and opponents of drug legalization should take account of this increase in consumption in debating their respective positions.

Abstract:
This paper reports evidence on the error properties of survey reports of labor market variables such as earnings and work hours. Our primary data source is the PSID Validation Study, a two-wave panel survey of a sample of workers employed by a large firm which also allowed us access to its very detailed records of its workers earnings, etc. The second data source uses individuals' 1977 and 1978 (March Current Population Survey) reports of earnings, matched to Social Security earnings records.

In both data sets, individuals reports of earnings are fairly accurately reported, and the errors are negatively related to true earnings. The latter property reduces the bias due to measurement error when earnings are used as an independent variable, but (unlike the classical-error case) leads to some bias when earnings are the dependent variable. Measurement-error-induced biases when change in earnings is the variable of interest are larger, but not dramatically so. Various measure of hourly earnings were much less reliable than annual earnings. Retrospective reports of unemployment showed considerable under-reporting, even of long spells.

Abstract:
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Abstract:
Previous analyses of postwar black/white earnings ratios have found a more rapid rate of increase in the period since 1964 than before. The reason for this acceleration is unresolved. One view is that federal equal-employment activities have increased the relative demand for black labor. An alternative view is that rising relative earnings reflects (1) reductions in relative supply and (2) the "statistical" effect of low earners raising median earnings by withdrawing from the labor market.

This study differs from previous work on the subject in two ways. First, the restrictions on the universe from which published median earnings data by race are calculated are discussed explicitly. The restriction most commonly addressed in previous work (having positive earnings in the year in question) is found to be less important than an undiscussed restriction (being employed as a wage and salary worker the following March). Second, data on the distribution of earnings are used to determine the effect of labor market dropouts on median earnings, instead of trying to estimate this effect (as well as demand and supply effects) from time series data. This permits comparison of "corrected" and "uncorrected" post-1964 trends.

For males, about half of the "uncorrected" trend remains after the relative earnings variable is corrected for labor market withdrawals. For females, between half and four fifths remains.

Abstract:
"Standard rate" wage policies, under which all workers in a particular job receive the same wage, are common for blue-collar workers, especially those covered by collective bargaining agreements and those who work for large employers.This paper analyzes the impact of standard-rate wage setting.There are two important conclusions. First,a standard-rate rule which leaves the employer free to set the rate can either increase or reduce the quality of labor hired. Given empirically likely distributions of alternative wages for workers, it pushes employers toward the middle of the quality distribution. Second, union standard-rate policies allow union?ununion differences in wages for workers of a given qualityto exist even when union employers are free to alter the quality of their workforces.

Abstract:
Employers often wish to know whether the factors used in selecting employees do in fact allow them to choose the most qualified applicants. Because the performance of those not chosen is not observed, sample-selection bias is a likely problem in any attempt to "validate" employee-selection criteria. With minor modifications, the recently-developed techniques for dealing with sample-selection problems can be used in this context. Using data on applicants for first-line supervisory positions and ratings of on-the-job performance of those hired, ordinary least squares estimates of the determinants of performance are compared with maximum-likelihood estimates which correct for selection bias. The correction for selection bias produces some appreciable improvements in some variables` coefficients, though the corrected estimates remain "insignificant" at conventional levels. Differences in the firm`s stated and actual hiring criteria are also noted.

Abstract:
This paper analyzes the determinants of the supply of enlistees to the U.S. Army, using quarterly data from 1975:4 through 1982:3 for the 50 states and the District of Columbia. For high-quality enlistees, defined as those with test scores in the top half of the population or top scoring individuals who are also high school graduates, supply elasticities with respect to military compensation are estimated to be about 1.0. Elasticities with respect to the unemployment rate center on 0.5, larger than most previous estimates. Recruiting resources have the expected effects (Army recruiters increase and other services recruiters reduce Army enlistments). Advertising (both national and local) does not have consistently positive effects. Results are similar for high school graduates,except that the effect of military compensation depends crucially on how it is measured. Estimates of the supply of enlistees of all qualities are weaker still: estimates of compensation effects vary widely, and estimated effects of recruiters and advertising are less plausible. Unemployment elasticities of about 0.3 are smaller than for high-quality recruits, but hardlyn egligible.A tentative explanation for the weaker results of the latter two groupsis that the number of such enlistees is not supply determined, but reflect demand constraints as well. Further work is needed to determine how standards for enlistees vary in each recruiting district in response to both national and local fluctuations in recruit supply.

Abstract:
The purpose of this paper is to review available evidence on the impact of federal equal employment opportunity programs. While Title VII of the Civil Rights Act of 1964 and Executive Order 11246 have been in effect for over 15 years, the lag in data collection and evaluation means that little can be said regarding the last few years` experience. In particular, evidence on the impact of recent administrative changes in the agencies responsible for enforcement is unavailable. In general, time series studies find significant improvements in the relative labor market position of blacks compared with whites since 1965. While several arguments have been advanced that these gains are illusory, the most plausible interpretation is that much of the apparent progress is real. Cross-sectional studies of the impacts of the Office of Federal Contract Compliance Programs (which enforces the nondiscrimination and affirmative action requirements of the Executive Order) and the Equal Employment Opportunity Commission (which enforces Title VII) have been much less conclusive. Half of the major studies of the OFCCP find that the program had the intended effects on the relative position of blacks -- or at least black males. Unfortunately, variations in conclusions among studies are not readily explained, even after a careful look at the competing data and methods. Equally disturbing is the inability of studies producing positive results to associate such impacts with the "levers" by which OFCCP might exert influence. Studies of EEOC impacts are more vulnerable to problems of identifying the appropriate control group, since Title VII covers contractor and noncontractor firms. Apart from evidence that relative black employment grew considerably faster in firms which must report to EEOC (firms with over 15 employees are subject to Title VII, but only those with 100 or more must report to EEOC), available studies have not produced consistent evidence of EEOC impact. Besides the lack of strong cross-sectional support for the time series conclusions, three puzzles emerge: (1) What caused the decline in black male labor force participation which began about the same time as the federal antidiscrimination effort? (2) Why did black females advance more rapidly than black males since the federal effort began? (3) Why did advantaged blacks advance more rapidly than less advantaged blacks?

Abstract:
In high school and in college, men and women take significantly different courses. Using data from the Survey of Income and Program Participation and the National Longitudinal Study Class of 1972, we relate these differences in school content to sex differences in adult wages. Differences in field of highest degree account for a significant part of the male-female wage gap among college graduates, but differences in coursework account for very little of the equally large wage gap between men and women with less schooling. We find little consistent evidence that men receive larger rewards for taking traditionally male rather than traditionally female courses and majors, though there is some indication of this for college graduates.

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No abstract is available for this paper.