Search

This dissertation contains three papers that increase our understanding of the impacts of public policies, with a special focus on policies geared toward the poor. The first chapter considers the impact of the minimum wage, one of the most pervasive policy in existence today, to a population that has received very little direct attention in relation to said policy, the unemployed. In this chapter, we show that the policy does not benefit the unemployed. The second chapter studies a welfare program that has seen it's popularity surge in the last couple decades: conditional cash transfers (CCT) are a type of public policy that benefit the poor with cash in exchange for investments in their children. In this chapter, I show that a conditional cash transfer program can have pernicious labor supply distortions if maintained too long. The last chapter focuses not on one policy but rather on the knowledge necessary to create good country-level policies in a increasingly interconnected world. I show in this paper that the key determinant of long term development for a country is its people's principles (i.e., basic ideas), which means that imposing institutions to a third country (i.e., democracy) would be ineffective in increasing their wellbeing. In the first chapter, we use four panels of the Survey of Income and Program Participation (SIPP) to find how the minimum wage impact unemployed workers, using a difference-in-difference strategy. We take advantage of the high-frequency of the SIPP data to study both the impact of minimum wage levels at the beginning of an unemployment period and the possible impact of a minimum wage increase while the worker is looking for a job. Our analysis shows that minimum wage levels have relatively mild effects on workers' labor outcomes; it does not show an impact on unemployment duration, or re-employment wages and hours over the next two years. However, minimum wage increases seem to have a more important impact on unemployed workers, their unemployment periods become longer and their working hours' trajectories are worsened. We find it particularly important that our analysis reveals no significant positive effects of higher minimum wages, or its increases, on the unemployed. The second chapter of this dissertation uses data from seven editions of Chile's National Survey of Socioeconomic Characterization (CASEN), a longitudinal survey meant to evaluate public policies and describe the poor, to show how the oldest conditional cash transfer (CCT) in existence impacts labor force participation of women. Using a difference-in-difference strategy, I evaluate whether a small cash transfer that is suddenly made increasingly more generous and popular after 2007 impacts labor choices by Chilean mothers. Because I study a program that is sixteen years older than any other CCT, my findings can be relevant to rethink newer CCTs; the education level of the population I study more closely resembles educational attainment for many current CCT beneficiaries than their own country's average educational attainment in the early 2000s. I find evidence that older women increase slightly their labor force participation, but younger mothers between 18 to 24 years of age decrease their probability of working significantly (about 4%). The latter finding raises the question of whether the policy should be addressed to this group of young mothers at all. In the last chapter of this dissertation, I consider the key determinants of long term wellbeing. Using data borrowed from \cite{acemoglu2002reversal} and complemented with additional relevant information on former colonies I compiled, I show that the aforementioned authors oversimplified the colonization process and that my approach explains the current and historical data better. My theory complicates matters by considering both direction and speed of progress. The direction of progress I argue is determined by principles, which are 'basic' ideas (i.e., a principle: 'all men are created equal'; not a principle: choice of jurisprudence). I show how Europeans played an important role in transmitting these principles (or not) to their colonies; I proxy this transmission with data on founding of the first university in each former colony. My theory also allows for different speeds in progressing towards societal goals. Borrowing from \cite{besley2009origins}, I contend that progress is faster for less heterogeneous societies everything else equal, I use population density in 1500 to find the former colonies that would be homogeneous today . My results show that having European principles explains a higher GDP by PPP in 1995 by 0.9 standard deviations, and being homogeneous explains an increase by 1.1 standard deviations in the same metric.

This paper is a review of the volume “Support for Establishing a Minimum Wage-Setting Mechanism in Romania”, published by Lumen Publishing House from Iași, Romania, in 2017, authored by Madalina Ecaterina Popescu, Eva Militaru, Dan Pele, Miruna Mazurencu Marinescu, Valentina Vasile, Simona Ilie, Adina Mihailescu, Adela Şerban.

Are markets in developing and transition economies over‐regulated or under‐regulated? This is a perennial question in the development discourse, but one for which answers appear to come more from preset ideology than from context‐specific analysis and evidence. These issues become even more pressing when the debate turns to the links between regulation, deregulation and inequality. The recent experience of rising inequality in many countries has also brought to the fore predictable policy positions. A key aspect of labor regulation in developing countries, and one becoming more prominent in the era of rising inequality, is the minimum wage. The range of issues around regulation, minimum wage and informality was addressed by papers presented to a conference held in New Delhi on December 17–18, 2014. The conference was co‐sponsored by the World Bank, UK Department for International Development, Cornell University and Columbia University. The organizers of the conference were Kaushik Basu, Stefan Dercon, Ravi Kanbur and Jan Svejnar. A selection of papers from the conference which passed the usual review procedures of the Review of Development Economics, and a further selection of papers from those submitted to the journal, form this symposium.

This paper provides empirical evidence for the Keynesian demand-driven propagation: initial rounds of job losses lead to additional rounds of job losses. The paper shows that U.S. counties with higher pre-existing exposure to tradable industries experienced larger job losses in non-tradable sectors during the Great Recession. This was arguably because laid-off tradable workers cut their consumption, which hurts local non-tradable firms. The finding is not driven by exposure to the construction sector, by the collapse in house prices, or by credit supply problems. In addition, the spillover is stronger when the focus is on the job losses of more income-elastic non-tradable sectors.

The two reforms that most contributed to the idea of an antipodean social laboratory at the end of the 19th century were the old age pension and state arbitration of the minimum wage. Both are said to reflect the influence of the new liberalism, buttressed by the emergence of the labour movement into politics. This paper argues that debates on the old age pension at the turn of the 19th century illustrate a more tangled set of liberal trajectories than either a narrative of a unified Deakinite consensus, or of a new liberal importation, would allow. While there was clearly some new liberal influence in how New South Wales debated the pension, in Victoria an older tradition of colonial liberalism — which emphasized self-governance as much as social reform — meant that it was seen as much as a reward for good moral character as a measure to deal with poverty.

We study how two dimensions of market conditions affect behaviour in experimental gift-exchange markets with repeated interaction. First, we consider the impact of competitive imbalance, by varying whether there is an excess supply of firms or an excess supply of workers in the market. Second, we impose a minimum wage in the market with an excess supply of workers, and study the overall effect on wages and productivity. Perhaps surprisingly, the state of competition does not appear to have strong effects in our data; however, there is some evidence of lower productivity when a minimum wage is imposed. © Royal Economic Society 2004., Financial support from the Spanish Ministerio de Educación y Cultura (SEC2002-01352) is gratefully acknowledged. Charness also gratefully acknowledges support from the MacArthur Foundation and the Russell Sage Foundation and Brandts from the Barcelona Economics Program of CREA.

In the US minimum wages were initially enacted by individual states, beginning with the Commonwealth of Massachusetts in 1912. These laws were modeled on legislation enacted over the previous two decades in Australia, New Zealand, and England (Fisher, 1926, chap. 8; Hammond, 1915, 1913; Hobson, 1915; Hart, 1994, chaps. 2 & 3; Morris, 1986). From 1912 to 1923, the legislatures of 16 states, Puerto Rico, and the District of Columbia passed minimum wage legislation, although not all of them were operational by the end of this period (Brandeis, 1935, p. 501; Clark, 1921; Millis & Montgomery, 1938, chap. 6; Morris, 1930, chap. 1).

Contents: Introduction PART I: THE ECONOMICS OF REGULATING THE LABOR MARKET 1. Labor Law and Employment Regulation: Neoclassical and Institutional Perspectives Bruce E. Kaufman PART II: GOVERNANCE AND SELF-GOVERNANCE OF EMPLOYMENT RELATIONSHIPS 2. Employment Contracts Ann-Sophie Vandenberghe 3. Regulating Unions and Collective Bargaining Kenneth G. Dau-Schmidt and Arthur R. Traynor PART III: EMPLOYMENT TERMS AND CONDITIONS AND THEIR REGULATION 4. Investments in Adult Lifelong Learning Lisa M. Lynch 5. Minimum Wage Legislation Simon Deakin and Frank Wilkinson 6. Health Insurance David A. Hyman 7. International Executive Pay: Current Practices and Future Trends Randall S. Thomas 8. Workers' Compensation John F. Burton, Jr. 9. Occupational Safety and Health Regulation Sidney A. Shapiro 10. Employment Discrimination Stewart J. Schwab 11. Accommodating Families Joyce P. Jacobsen 12. Workplace Disability Seth D. Harris and Michael Ashley Stein 13. Adjudication of Workplace Disputes Douglas M. Mahony and Hoyt N. Wheeler PART IV: REGULATING EMPLOYMENT OF SPECIAL POPULATIONS 14. The Economics of Child Labour Alessandro Cigno 15. The Economics of Slavery, Forced Labor and Human Trafficking Patrick Belser PART V: GOVERNING TERMINATION OF EMPLOYMENT RELATIONSHIPS AND POST-EMPLOYMENT RELATIONSHIPS 16. Discharge J.H. Verkerke 17. Unemployment Stephen A. Woodbury 18. Intellectual Property and Restrictive Covenants Orly Lobel 19. Pensions and Retirement Jonathan Barry Forman PART VI: GOVERNING GLOBAL LABOR MARKETS 20. Migration and Labor Markets: A Brief Survey Jagdeep S. Bhandari 21. Employee Collective Action in a Global Economy Jeffrey M. Hirsch 22. National Regulation in a Global Economy: New Governance Approaches to 21st Century Work Law Orly Lobel 23. International Labor Standards and International Trade: An Economic Overview Richard N. Block and Jonas Zoninsein PART VII: THE FUTURE OF LABOR AND EMPLOYMENT LAW 24. A Labor Law for the Digital Era: The Future of Labor and Employment Law in the United States Katherine V.W. Stone

Msgr. John A. Ryan (1869-1945) was among the earliest advocates of minimum wage laws in the United States. This paper examines his A Living Wage (1906; 1920)in the context of intellectual trends of the Progressive era. Msgr. Ryan wrote about and lobbied for labor market reform during a period of growing specialization in the social sciences and the divorce of science from religion, philosophy, and ethics. His analysis, despite the currency of labor market reform, appears as a throwback to a prescientific age. However, it was just his reliance on prescientific Christian natural law that protected him from the eugenic excesses into which other reformers fell.

Upon receiving Jerald Waltman's book, the first thing I read was the dedication to the author's "coworkers at A. & W. Root Beer, Ruston, Louisiana, 1963­67." I like root beer, but I wondered whether a mistake had been made in sending me this book to review. It did not take long to realize no mistake had been made. This is a book that treats minimum wage as symbolic politics, but, more important, it entirely reexamines public policy.

The scene is a little village in the Vosges, just beyond the last houses on the outskirts, on the main road to Paris. A factory is being dismantled. Originally it was used for the production of cloth, and the looms, which are now being carefully packed into packing cases, are destined to be sent to Marseilles, and from there to Formosa. The looms are still fairly new, in good working order. They have been well maintained and only a short while previously they were still being used to weave cloth which had been eagerly sought after for more than one hundred years, not just in France but also abroad. Once they have arrived in Formosa these looms will be reassembled, and the cloths that will be woven on them will be sold to clothing wholesalers in Hong Kong, whose jeans and jackets will find their way into shops and stores in France and will be paid for, like most imported goods, in dollars. The cloth-spinning mill now lies deserted and abandoned and the inhabitants of the village are unemployed. In Parliament there is talk of retraining, and a minister has promised that high-technology industries will be brought to the village, but there has been no sign of anything so far.

In his foreword to Kusum Nair’s Blossoms in the Dust 2 Gunnar Myrdal describes the human factor in development as of paramount importance: ‘People’sattitudes to work and life, hardened by stagnation, isolation and poverty, and underpinned by tradition and often by religion, are frequently found to be inimical to change of any kind.’ In addition to this general statement may I make a few carefully chosen quotations from Blossoms in the Dust? Writing about the Madras farmers the author tells us that ‘five acres on lease is the limit of their aspiration. … Their demands are calculated solely on the basis of the family’sconsumption requirements of rice at two meals a day …’ (p. 31). About Kerala she remarks that ‘an average Malayalee … would prefer the security of a small job than take any risk whatever’ (p. 40). Caste also is a drawback to development.’ Not one of these Brahmin farmers [in Bihar] ploughs, or is permitted by caste custom to plough and work on the land’ (p. 90). In West Bengal ‘many communities among the peasants consider it below their dignity to take their farm produce to the market for sale’ (p. 141). And one more quotation:’ [a landlord’s] reaction to land reforms — proposed imposition of a ceiling on land holdings and the fixing of a minimum wage for agricultural labour — is perfectly logical and natural. He feels that they will affect the landlords adversely.