We develop a continuous-time regime-switching model for the term structure of interest rates, in which the spot rate follows the Taylor rule, and government bonds at different maturities are priced by no-arbitrage. We allow the coefficients of the Taylor rule and the dynamics of inflation and output gap to be regime-dependent. We estimate the model using government bond yields and find that the...

Women earn less than men but are not less satisfied with life. This paper argues that norms on the appropriate pay for women compared to men explain these findings. We take citizens’ approval of an equal rights amendment to the Swiss constitution as a proxy for the norm that “women and men shall have the right to equal pay for work of equal value”. We find that the gender wage gap narrows by on...

The Paradox of Declining Female Happiness By many objective measures the lives of women in the United States have improved over the past 35 years, yet we show that measures of subjective well-being indicate that women’s happiness has declined both absolutely and relative to men. The paradox of women’s declining relative well-being is found across various datasets, measures of subjective wellbei...

The recent productivity experience of the New Zealand economy is examined using a cyclically-adjusted or trend measure of total factor productivity (TFP). On the basis of this measure, the results of estimating a leader-follower convergence relationship suggest that productivity in New Zealand has been converging to US levels through a process of technological diffusion. The evidence also tenta...

The Programme for International Student Assessment (PISA) and Trends in Mathematics and Science Study (TIMSS) are two highly respected studies of school pupils’ academic achievement. English policymakers have been disappointed with school children’s performance on these tests, particularly in comparison to the strong results of young people from East Asia. In this paper we provide new insight i...

The Sexual Orientation Wage Gap: The Role of Occupational Sorting, Human Capital, and Discrimination Using data from the 2000 U.S. Census, we document and explore three alternative explanations for the sexual orientation wage gap: occupational sorting, human capital differences, and discrimination. We find lesbian women earn more than their heterosexual counterparts irrespective of marital stat...

Although partially disabled individuals in Spain are allowed to combine the receipt of disability benefits with a job, the empirical evidence shows that employment rates for this group of individuals are very low. Therefore, in this paper we construct labor market model with search intensity and matching frictions in order to identify the incentives and disincentives to work provided by the par...

Standard banking theory suggests that there exists an optimal level of credit risk that yields maximum bank profit. We identify the optimal level of risk-weighted assets that maximizes banks’ returns in the full sample of US banks over the period 1996–2011. We find that this optimal level is cyclical for the average bank, being higher than the realized credit risk in relatively stable periods w...

Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills The wages of part-time workers are considerably lower than are those of full-time workers. Measurable worker and job characteristics, including occupational skill requirements, account for much of the part-time penalty. Longitudinal analysis indicates that much of the remaining gap reflects worker heterogeneity, evidenced by ...

This paper studies the labor market in Vietnam during the transition towards market economy (1993-2006): we show that the public-private sector wage gap markedly increased, but that wage inequality decreased overall. Our aim is to assess how much of this evolution can be explained by workers’ productive skills and their allocation between sectors. We use a simple, yet innovative, method that al...