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Mark L Bryan - One of the best experts on this subject based on the ideXlab platform.
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the union membership wage premium puzzle is there a Free Rider Problem
Industrial and Labor Relations Review, 2004Co-Authors: Alison L Booth, Mark L BryanAbstract:Economists have long suggested that labor unions suffer a Free Rider Problem. The argument is that, since union-set wages are available to all workers covered by unions irrespective of their union status, and union membership entails costs, workers will only join if they are coerced or are offered non-wage goods that they value above membership costs. Yet U.S. and British empirical research has found a substantial union membership wage premium among private-sector union-covered workers, implying that there is no Free Rider Problem. The authors of this study hypothesize that these findings arise due to selectivity Problems associated with identifying the union membership effect. Their analysis, which uses rich data from a new linked employer-employee survey for Britain and exploits the within-establishment variation in wages as a function of individual union membership status, demonstrates that the apparent wage premium for members is illusory. Hence, a potential Free Rider Problem remains. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)
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the union membership wage premium puzzle is there a Free Rider Problem
Research Papers in Economics, 2001Co-Authors: Alison L Booth, Mark L BryanAbstract:Economists have, at least since Olson (1965), suggested that there is a Free Rider Problem associated with labour union membership. The reason is that union-set wages are available to all workers covered by unions irrespective of whether or not they are union members, and - given that there are costs to membership – workers will only join if they are coerced or offered incentive excludable goods. Yet empirical research for both the US and for Great Britain has shown that there is a substantial union membership wage premium amongst private sector union-covered workers. An implication is that the Free Rider hypothesis is therefore irrelevant, since these studies reveal significant economic gains in the form of higher wages for union members. Using rich data from a new linked employer-employee survey for Britain, we show that this is not the case. While estimates assuming exogenous membership do indeed suggest there is a union membership wage premium of a similar order of magnitude to that found in other studies, we demonstrate that – with appropriate instruments based on theory and with additional controls – this wage premium vanishes.
Alison L Booth - One of the best experts on this subject based on the ideXlab platform.
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the union membership wage premium puzzle is there a Free Rider Problem
Industrial and Labor Relations Review, 2004Co-Authors: Alison L Booth, Mark L BryanAbstract:Economists have long suggested that labor unions suffer a Free Rider Problem. The argument is that, since union-set wages are available to all workers covered by unions irrespective of their union status, and union membership entails costs, workers will only join if they are coerced or are offered non-wage goods that they value above membership costs. Yet U.S. and British empirical research has found a substantial union membership wage premium among private-sector union-covered workers, implying that there is no Free Rider Problem. The authors of this study hypothesize that these findings arise due to selectivity Problems associated with identifying the union membership effect. Their analysis, which uses rich data from a new linked employer-employee survey for Britain and exploits the within-establishment variation in wages as a function of individual union membership status, demonstrates that the apparent wage premium for members is illusory. Hence, a potential Free Rider Problem remains. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)
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the union membership wage premium puzzle is there a Free Rider Problem
Research Papers in Economics, 2001Co-Authors: Alison L Booth, Mark L BryanAbstract:Economists have, at least since Olson (1965), suggested that there is a Free Rider Problem associated with labour union membership. The reason is that union-set wages are available to all workers covered by unions irrespective of whether or not they are union members, and - given that there are costs to membership – workers will only join if they are coerced or offered incentive excludable goods. Yet empirical research for both the US and for Great Britain has shown that there is a substantial union membership wage premium amongst private sector union-covered workers. An implication is that the Free Rider hypothesis is therefore irrelevant, since these studies reveal significant economic gains in the form of higher wages for union members. Using rich data from a new linked employer-employee survey for Britain, we show that this is not the case. While estimates assuming exogenous membership do indeed suggest there is a union membership wage premium of a similar order of magnitude to that found in other studies, we demonstrate that – with appropriate instruments based on theory and with additional controls – this wage premium vanishes.
Patrick J Kehoe - One of the best experts on this subject based on the ideXlab platform.
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time inconsistency and Free riding in a monetary union
Research Papers in Economics, 2010Co-Authors: V V Chari, Patrick J KehoeAbstract:We analyze the setting of monetary and nonmonetary policies in monetary unions. We show that in these unions a time inconsistency Problem in monetary policy leads to a novel type of Free- Rider Problem in the setting of nonmonetary policies, such as labor market policy, fiscal policy, and bank regulation. The Free-Rider Problem leads the union's members to pursue lax nonmonetary policies that induce the monetary authority to generate high inflation. The Free-Rider Problem can be mitigated by imposing constraints on the nonmonetary policies, like unionwide rules on labor market policy, debt constraints on members' fiscal policy, and unionwide regulation of banks. When there is no time inconsistency Problem, there is no Free-Rider Problem, and constraints on nonmonetary policies are unnecessary and possibly harmful.
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time inconsistency and Free riding in a monetary union
Journal of Money Credit and Banking, 2008Co-Authors: V V Chari, Patrick J KehoeAbstract:In monetary unions, a time inconsistency Problem in monetary policy leads to a novel type of Free-Rider Problem in the setting of non-monetary policies. The Free-Rider Problem leads union members to pursue lax non-monetary policies that induce the monetary authority to generate high inflation. Free-riding can be mitigated by imposing constraints on non-monetary policies. Without a time inconsistency Problem, the union has no Free-Rider Problem; then constraints on non-monetary policies are unnecessary and possibly harmful. This theory is here detailed and applied to several non-monetary policies: labor market policy, fiscal policy, and bank regulation.
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on the need for fiscal constraints in a monetary union
Research Papers in Economics, 1998Co-Authors: V V Chari, Patrick J KehoeAbstract:The desirability of fiscal constraints in monetary unions depends critically on whether the monetary authority can commit to following its policies. If it can commit, then debt constraints can only impose costs. If it cannot commit, then fiscal policy has a Free-Rider Problem, and debt constraints may be desirable. This type of Free-Rider Problem is new and arises only because of a time inconsistency Problem.
Josef Zechner - One of the best experts on this subject based on the ideXlab platform.
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Large Shareholder Activism, Risk Sharing, and Financial Market Equilibrium
Journal of Political Economy, 1994Co-Authors: Anat R. Admati, Paul Pfleiderer, Josef ZechnerAbstract:The authors develop a model in which a large investor has access to a costly monitoring technology affecting securities' expected payoffs. Allocations of shares are determined through trading among risk-averse investors. Despite the Free-Rider Problem associated with monitoring, risk-sharing considerations lead to equilibria in which monitoring takes place. Under certain conditions, the equilibrium allocation is Pareto efficient and all agents hold the market portfolio of risky assets independent of the specific monitoring technology. Otherwise, distortions in risk sharing may occur and monitoring activities that reduce the expected payoff on the market portfolio may be undertaken. Copyright 1994 by University of Chicago Press.
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large shareholder activism risk sharing and financial market equilibrium
Journal of Political Economy, 1994Co-Authors: Anat R. Admati, Paul Pfleiderer, Josef ZechnerAbstract:We develop a model in which a large investor has access to a costly monitoring technology affecting securities' expected payoffs. Allocations of shares are determined through trading among risk-averse investors. Despite the Free-Rider Problem associated with monitoring, risk-sharing considerations lead to equilibria in which monitoring takes place. Under certain conditions the equilibrium allocation is Pareto efficient and all agents hold the market portfolio of risky assets independent of the specific monitoring technology. Otherwise distortions in risk sharing may occur, and monitoring activities that reduce the expected payoff on the market portfolio may be undertaken.
David Levinson - One of the best experts on this subject based on the ideXlab platform.
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financing infrastructure over time
Social Science Research Network, 2008Co-Authors: David LevinsonAbstract:This paper investigates the Problem of financing infrastructure over time when the number of users also changes. The Problem is confronted in many fast growing communities desiring to coordinate the timing of infrastructure and development, yet still achieve economies of scale where they exist. The temporal Free Rider Problem is defined; whereby the group that finances the construction at a given time is not identical with the group that uses it. The continuous recovery method, which effectively establishes a property rights framework for infrastructure is described. Continuous recovery enables existing residents to be appropriately compensated by new residents, independent of the number of new residents who ultimately arrive. The system is illustrated and compared with practice in a case that uses a non-continuous cost recovery system.
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financing infrastructure over time
Research Papers in Economics, 2001Co-Authors: David LevinsonAbstract:This paper investigates the Problem of financing infrastructure over time when the number of users also changes. The Problem is confronted in many fast-growing communities that need to coordinate the timing of infrastructure and development, yet still achieve economies of scale where they exist. The temporal Free-Rider Problem is defined, whereby the group that finances the construction at a given time is not identical with the group that uses it. The continuous recovery method, which effectively establishes a property rights framework for infrastructure, is described. Continuous recovery enables existing residents to be appropriately compensated by new residents, independent of the number of new residents who ultimately arrive. The system is illustrated and compared with practice in a case that uses a noncontinuous cost recovery system.
