Economic Policy Commons^™

Passive Discrimination: When Does It Make Sense To Pay Too Little?, Jonah B. Gelbach, Jonathan Klick, Lesley Wexler

All Faculty Scholarship

Economists have long recognized employers’ ability to construct benefits packages to induce workers to sort themselves into and out of jobs. For instance, to encourage applications from individuals with a highly valued but largely unobservable characteristic, such as patience, employers might offer benefits that patient individuals are likely to value more than other individuals. By offering a compensation package with highly valued benefits but a relatively low wage, employers will attract workers with the favored characteristic and discourage other individuals from applying for or accepting the job. While economic theory generally views this kind of self-selection in value neutral terms, …

Federalism, Variation, And State Regulation Of Franchise Termination, Jonathan Klick, Bruce Kobayashi, Larry Ribstein

All Faculty Scholarship

This article discusses and expands on our recent work examining the effects of franchise-termination laws. In a prior article, we examined empirically the effect of franchise-termination laws on the level of franchise activity. Our analysis improved upon the prior literature in two major ways. First, our work exploited two new sources of panel data to provide new empirical evidence on the effect of franchise termination laws. Second, our analysis examined variation in states’ restrictions on the ability of franchisors and franchisees to contract around a particular state’s regulation. We found that the effects of termination laws on the overall level …

United States Competition Policy In Crisis: 1890-1955, Herbert J. Hovenkamp

All Faculty Scholarship

The development of marginalist, or neoclassical, economics led to a fifty-year long crisis in competition theory. Given an industrial structure with sufficient fixed costs, competition always became "ruinous," forcing firms to cut prices to marginal cost without sufficient revenue remaining to pay off investment. Early neoclassicists such as Alfred Marshall were not able to solve this problem, and as a result many economists were hostile toward the antitrust laws in the early decades of the twentieth century. The ruinous competition debate came to an abrupt end in the early 1930's, when Joan Robinson and particularly Edward Chamberlin developed models that …

Agency Costs, Charitable Trusts, And Corporate Control: Evidence From Hershey's Kiss-Off, Jonathan Klick, Robert H. Sitkoff

All Faculty Scholarship

In July 2002 the trustees of the Milton Hershey School Trust announced a plan to diversify the Trust’s investment portfolio by selling the Trust’s controlling interest in the Hershey Company. The Company’s stock jumped from $62.50 to $78.30 on news of the proposed sale. But the Pennsylvania Attorney General, who was then running for governor, opposed the sale on the ground that it would harm the local community. Shortly after the Attorney General obtained a preliminary injunction, the trustees abandoned the sale and the Company’s stock dropped to $65.00. Using standard event study methodology, we find that the sale announcement …

The Economic Foundations Of Contemporary Slavery, Justin Guay

Human Rights & Human Welfare

“Slavery existed before money or law” (Hochschild 2005). Indeed the “peculiar institution” is one of humanity’s oldest. It has, however, evolved and manifested itself quite distinctly in different periods of history. In contrast to historical views of slavery that are associated with Chattel Slavery, numerous forms fall under the umbrella term of contemporary slavery. The United Nations (U.N.) Working Group recognizes such radically new forms as: child labor, children in conflict, trafficking in persons, sexual exploitation, and the sale of children. The International Labor Office (ILO) approaches the topic through the lens of forced labor. The ILO recognizes slavery and …

The Disadvantages Of Immigration Restriction As A Policy To Improve Income Distribution, Howard F. Chang

All Faculty Scholarship

In this Article, I argue that tax and transfer policies are more efficient than immigration restrictions as instruments for raising the after tax incomes of the least skilled native workers. Policies to protect these native workers frol1'l immigrant competition in the labor market do no better at promoting distributive justice and are likely to impose a greater economic burden on natives in the country of immigration than the tax alternative. These immigration restrictions are especially costly given the disproportionate burden that they place on households with working women, which discourages fel1'wle participation in the labor force. This burden runs contrary …

Private Equity's Three Lessons For Agency Theory, William W. Bratton

All Faculty Scholarship

No abstract provided.

Ali Wyne On The Economic Life Of Refugees By Karen Jacobsen. Bloomfield, Ct: Kumarian Press, 2005. 131pp., Ali Wyne

Human Rights & Human Welfare

A review of:

The Economic Life of Refugees by Karen Jacobsen. Bloomfield, CT: Kumarian Press, 2005. 131pp.

Labor Unions: A Corporatist Institution In A Competitive World, Michael L. Wachter

All Faculty Scholarship

Union membership, as a percentage of the private sector workforce, has been in decline for 50 years. I argue that the cause of this unrelenting decline is a single, fundamental factor – the change in the United States economy from a corporatist-regulated economy to one based on free competition. Most labor commentators have explained the decline by a confluence of unrelated economic and legal forces. Labor economists typically stress economic explanations, which vary from compositional shifts in the job structure to increased competition both domestically and internationally. On the other hand, labor law commentators naturally focus on labor law explanations, …

Reasonable Emissions Of Greenhouse Gases: Efficient Abatement For A Stock Pollutant, Howard F. Chang

All Faculty Scholarship

No abstract provided.

The New Dividend Puzzle, William W. Bratton

All Faculty Scholarship

No abstract provided.

Saving Capitalism From Itself: Whither The Welfare State?, Mimi Abramovitz

New England Journal of Public Policy

The U.S. welfare state has been under attack from both sides of the aisle since the mid-1970s. Using the lens of history, the following pages will argue that neither the rise of the welfare state in the 1930s nor the current attack were merely accidental. Instead, each was a response to a particular crisis of profitability because the institutional arrangements that had created the conditions for profit-making in the prior fifty years had deteriorated. The policies no longer worked for the powers-that-be and had to be “reformed.”

Editor's Note, Padraig O'Malley

New England Journal of Public Policy

In this issue, special guest editors, Elaine Werby and Donna Haig Friedman, assemble an array of distinguished scholars, policymakers, community activists and political advocates to examine the interaction of the economic, political, and social “flows,” the undercurrents of history that stymied the war on poverty. Their articles and essays chart the beachheads that must be secured before the war can be successfully resumed; No war, they collectively remind us, is won without some battles being lost. You do not secure the future of the country if you abandon the principles of equity and equality for all, the bedrock of the …

Foreword, Elaine Werby, Donna Haig Friedman

New England Journal of Public Policy

Interspersed throughout this issue are Voices of Community Action — the voices of executive directors, board members, and staff. Some are personal reflections; others describe their work or tell of the struggles of those who live with poverty. All speak to the commitment of service and change, to personal development and growth, and to the worth of their work. Their stories are 10 matched in the testimony of those who have received services or participated in community action programs. All of these stories bear witness to the importance of what happens on the front lines among leaders, board members, staff, …

Sozialpolitik Anders Denken. Das Verursacherprinzip – Von Der Umweltpolitischen Zur Sozialpolitischen Anwendung, Isidor Wallimann, Esteban Piñeiro

Books

The “polluter pays” principle in environmental law assumes that the actor would reduce or avoid adverse effects of his actions if he had to bear the consequences of those actions (internalization of effects). Such internalization can generally be done in two ways: either by avoiding or eliminating the harmful effects or by wearing the financial consequences of the injury. It is therefore on the one hand to have an incentive effect, on the other to a compensatory effect.

Pineiro and Wallimann apply these societal cost principles from the environmental world to the social realm, where social problems can be seen …

Pari Passu And A Distressed Sovereign's Rational Choices, William W. Bratton

All Faculty Scholarship

No abstract provided.

Rules, Principles, And The Accounting Crisis In The United States, William W. Bratton

All Faculty Scholarship

The Sarbanes-Oxley Act and the Securities Exchange Commission move too quickly ·when they prod the Financial Accounting Standards Board, the standard setter for US GAAP, to move immediately to a principles-based system. Priorities respecting reform of corporate reporting in the US need to be ordered more carefully. Incentive problems impairing audit performance should be solved first through institutional reform insulating the audit from the negative impact of rent-seeking and solving adverse selection problems otherwise affecting audit practice. So long as auditor independence and management incentives respecting accounting treatments remain suspect. the US reporting system holds out no actor plausibly positioned …

Gaming Delaware, William W. Bratton

All Faculty Scholarship

No abstract provided.

Taxing Sunny Days: Adjusting Taxes For Regional Living Costs And Amenities, Michael S. Knoll, Thomas D. Griffith

All Faculty Scholarship

Taxpayers pay tax on their nominal income without regard to their regional cost of living or the value of their regional amenities. Although commentators have argued that the income tax's failure to account for such differences is unfair - because residents of high-cost and low-amenity regions pay higher taxes than residents of low-cost and high-amenity regions - that argument is unpersuasive because migration tends to eliminate regional differences in living standards. The tax system's failure to adjust for regional differences is, however, likely to misallocate resources across regions in two ways. First, it is likely to discourage taxpayers from settling …

The Film Industry Cluster Development Recommendations For Western Massachusetts, Center For Economic Development

Center for Economic Development Technical Reports

California is home to the world's largest movie clusters. It grew out of the need to extend beyond New York's confined environment. The opportunities that lay ahead were carefully planned and exploited. For Western Massachusetts to learn from this example it will have to discover a niche that can be marketed as truly worthy of attracting businesses away from established clusters. This will require a top-down approach from government bodies to ensure that a successful cluster fits wit the New England lifestyle. Current opportunities exist within factory towns that have available old mill buildings and infrastructure. Unfortunately the establishment of …

Simplifying The Transition To A (Progressive) Consumption Tax, Mitchell L. Engler, Michael S. Knoll

All Faculty Scholarship

No abstract provided.

Put-Call Parity And The Law, Michael S. Knoll

All Faculty Scholarship

A common literary theme is the conflict between appearance and reality. That conflict also frequently arises in the law, where it is usually cast as one between substance and form. Another discipline in which the conflict arises is finance, where it appears in the put-call parity theorem. That theorem states that given any three of the four following financial instruments--a riskless zero-coupon bond, a share of stock, a call option on the stock, and a put option on the stock--the fourth instrument can be replicated. Thus, the theorem implies that any financial position containing these assets can be constructed in …

Soziale Arbeit Und Ökonomie : Politische Ökonomie - Arbeitsmärkte - Sozialpolitik Grenzen Der Ökonomisierung - Soziale Ökonomie Gemeinwesenentwicklung - Bürgergesellschaft, Susanne Elsen, Dietrich Lange, Isidor Wallimann

Books

Globalization has seen the removal of borders and increased global flows of capital and goods and services, changing the employment landscape, pressuring revenues and social-welfare spending of modern welfare states. This collection of essays brings together perspectives from different disciplines to discuss the role globalization has had on social policies of the modern welfare state and the changing relationship between social policy, social work and the economy, describes its consequences and presents innovative approaches for action.

Delaware Law As Applied Public Choice Theory: Bill Cary And The Basic Course After Twenty-Five Years, William W. Bratton

All Faculty Scholarship

No abstract provided.

Bankruptcy Judges And Bankruptcy Venue: Some Thoughts On Delaware, David A. Skeel Jr.

All Faculty Scholarship

No abstract provided.

Relativism, Reflective Equilibrium, And Justice, Justin Schwartz

Justin Schwartz

THIS PAPER IS THE CO-WINNER OF THE FRED BERGER PRIZE IN PHILOSOPHY OF LAW FOR THE 1999 AMERICAN PHILOSOPHICAL ASSOCIATION FOR THE BEST PUBLISHED PAPER IN THE PREVIOUS TWO YEARS.

The conflict between liberal legal theory and critical legal studies (CLS) is often framed as a matter of whether there is a theory of justice that the law should embody which all rational people could or must accept. In a divided society, the CLS critique of this view is overwhelming: there is no such justice that can command universal assent. But the liberal critique of CLS, that it degenerates into …

An Economic Profile Of Women In Massachusetts, Randy Albelda

Publications from the Center for Women in Politics and Public Policy

This report provides a profile of women's current economic position in Massachusetts. It examines the age, race, and geographical distribution of women and girls across the state; family structure, income and poverty; and women's labor force participation, occupational and industrial distribution in jobs, and earnings. When relevant 1990s Massachusetts data are compared to national data and to Massachusetts data from the 1970s.

Women across the Commonwealth have experienced tremendous changes in their lives over the last two decades as a result of changes in the economy and family structure. For women, the changes provide new opportunities, but they also exacerbate …

An Economic Analysis Of Trade Measures To Protect The Global Environment, Howard F. Chang

All Faculty Scholarship

In this article, Professor Howard Chang addresses the role of trade restrictions in supporting policies to protect the global environment and proposes a more liberal treatment of these environmental trade measures than that adopted by dispute-settlement panels of the General Agreement on Tariffs and Trade (GATT). The GATT Secretariat has recommended that countries like the United States rely on "carrots" rather than "sticks" in order to induce the participation of other countries in multilateral environmental agreements. Professor Chang defends the use of sticks on the ground that they encourage more restrained exploitation of the environment pending a multilateral agreement. First, …

A Property-Based Theory Of Security Interests: Taking Debtor's Choices Seriously, Steven L. Harris, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.

Introduction (The Economics And Politics Of Structural Adjustment In Egypt), Hans Löfgren

Faculty Book Chapters

[abstract not provided]