Competition and Relational Contracts: The Role of Unemployment as a Disciplinary Device When unemployment prevails, relations with a particular firm are valuable for workers. As a consequence, a worker may adhere to an implicit agreement to provide high effort, even when performance is not third-party enforceable. But can implicit agreements – or relational contracts – also motivate high worker...

Although earnings generally increased in rural areas in the 1990s, Hispanic population growth led to lower wages for at least one segment of the rural population—workers with a high school degree (skilled workers), particularly men in this skill group. Using data from the Bureau of Economic Analysis and the Current Population Survey, this report examines the effects of Hispanic population growt...

The last eight years have been disastrous for many workers, and particularly so for those with low human capital or other forms of disadvantage. Although the Great Recession officially ended in 2009, the labor market has been very slow to recover. One explanation attributes the ongoing poor labor market outcomes of young and non-college workers to the combination of deficient aggregate labor de...

This paper investigates the issue of child labor in the context of land reforms in transition economies, using farm household data from the Republic of Georgia. The results show that an increase in landholdings as an outcome of the land reform can, in the presence of market imperfections, lead to an increase in child labor. This is because the increased demand for labor on the family farm is st...

Poor rural households in Malawi often chose to supplement their income through additional casual work on other farms (“ganyu” labor). Based on data from the Second Integrated Household Survey for 2004, we explore the potential objectives and determinants of ganyu supply. We find a confirmation of the neoclassical theoretical hypothesis whereby households use ganyu as a consumption smoothing opt...

Labor hoarding is a widely believed empirical behavior of …rms and a prominent explanation for procyclical labor productivity. Conventional wisdom attributes labor hoarding to labor adjustment costs. This paper argues that the conventional wisdom is inadequate for understanding labor hoarding because it ignores the role of inventories. Since idle labor can be used to produce inventories, why do...

A remarkable feature of the current U.S. economic expansion has been its ability to shrug off the adverse effects of financial crises and economic slowdowns around the world for nearly two years. Employment has been expanding smartly and unemployment has continued to edge down. Recently, however, foreign-sector developments have triggered a sizable shift in the sectoral composition of U.S. empl...

In the aftermath of a natural catastrophe there is an increased demand for skilled reconstruction labor, which leads to significant increases of reconstruction labor wages and hence insured losses. Such inflation effects are referred to as "Demand Surge" effects. It is important for insurance companies to properly account for these effects when calculating insurance premiums and determining the...