The Effect of Job Flexibility on Women Labor Market Outcomes: Estimates from a Search and Bargaining Model,
by Luca Flabbi and Andrea Moro
.
This paper presents and estimates a search model of the labor market where jobs are
characterized by wages and work-hours
exibility. Flexibility is valued by workers, and
is costly to provide for employers. The model generates observed wage distributions
directly related to the preference for
exibility parameters: the higher the preference
for
exibility, the wider is the support of the wage distribution at
exible jobs and the
larger is the discontinuity between the wage distribution at
exible and non-
exible
jobs. Results show that more than one third of women place positive value to
exibility,
and that reducing the cost of
exibility may considerably reduce the gender wage gap.
Why Do Incumbent Senators Win? Evidence from a Dynamic Selection Model,,
by Gautam Gowrisankaran, Matthew Mitchell, and Andrea Moro.
Working paper, October 2006
Since 1914, incumbent U.S. senators running for reelection have won almost 80% of the time. We investigate why incumbents win so often. We allow for three potential explanations for the incumbency advantage: selection, tenure, and challenger quality, which are separately identified from histories of election outcomes following an open seat election. We specify a dynamic model of voter behavior that allows for these three effects, and structurally estimate the parameters of the model using U.S. Senate data. We find that tenure effects are negative or small. We also find that incumbents face weaker challengers than candidates running for open seats. If incumbents faced challengers as strong as candidates for open seats, the incumbency advantage would be cut in half.
Endogenous Comparative Advantage,
by Andrea Moro and Peter Norman.
Working paper
A stylized model of trade between identical countries is developed, where the only departure from standard neoclassical theory is that worker skills are imperfectly observable. This creates an informational externality since firms take aggregate investments into consideration when making inference about individual workers. The interaction between the informational externality and price effects generates a force in favor of specialization. Equilibria where comparative advantages in different industries arise endogenously exist even when the autarky model has a unique
equilibrium.
Informationally Efficient Trade Barriers,
by Matthew Mitchell and Andrea Moro.
Working paper
Why are trade barriers often used to protect home producers, even at the cost of introducing deadweight losses from higher commodity prices? We add an informational friction to the standard textbook argument in favor of free trade, and show that trade restrictions may be a moreefficient policy than a lump sum transfer to the displaced producers. Trade barriers, while generating deadweight losses, have the benefit that they do not generate a need for compensation. When the policy maker does not know the amount that should be transferred, the risk of over-compensating may make tradebarrier more efficient.
This is an application of a more general policy paper forthcoming in the AER