This paper develops a new approach to the problem of testing the existence of a level relationship between a dependent variable and a set of regressors, when it is not known with certainty whether the underlying regressors are trend- or first-difference stationary. The proposed tests are based on standard F- and t-statistics used to test the significance of the lagged levels of the variables in a univariate equilibrium correction mechanism. The asymptotic distributions of these statistics are non-standard under the null hypothesis that there exists no level relationship, irrespective of whether the regressors are I(0) or I(1). Two sets of asymptotic critical values are provided: one when all regressors are purely I(1) and the other if they are all purely I(0). These two sets of critical values provide a band covering all possible classifications of the regressors into purely I(0), purely I(1) or mutually cointegrated. Accordingly, various bounds testing procedures are proposed. It is shown that the proposed tests are consistent, and their asymptotic distribution under the null and suitably defined local alternatives are derived. The empirical relevance of the bounds procedures is demonstrated by a re-examination of the earnings equation included in the UK Treasury macroeconometric model. Copyright © 2001 John Wiley & Sons, Ltd.

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Bounds testing approaches to the analysis of level relationships

The present historical moment may seem a particularly inopportune time to review Bowling Alone, Robert Putnam's latest exploration of civic decline in America. After all, the outpouring of volunteerism, solidarity, patriotism, and self-sacrifice displayed by Americans in the wake of the September 11 terrorist attacks appears to fly in the face of Putnam's central argument: that \"social capital\" -defined as \"social networks and the norms of reciprocity and trustworthiness that arise from them\" (p. 19)'has declined to dangerously low levels in America over the last three decades. However, Putnam is not fazed in the least by the recent effusion of solidarity. Quite the contrary, he sees in it the potential to \"reverse what has been a 30to 40-year steady decline in most measures of connectedness or community.\"' As an example of how the current \"war on terrorism\" could generate a durable civic renewal, Putnam points to the burst in civic practices that occurred during and after World War II, which he says \"permanently marked\" the generation that lived through it and had a \"terrific effect on American public life over the last half-century.\" 3 If Americans can follow this example and channel their current civic

Bowling alone: The collapse and revival of American community

https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

The future of employment: How susceptible are jobs to computerisation?

Trust: The Social Virtues and the Creation of Prosperity

We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

This paper shows that the United Kingdom since 1975 has exhibited a pattern of job polarization with rises in employment shares in the highest- and lowest-wage occupations. This is not entirely consistent with the idea of skill-biased technical change as a hypothesis about the impact of technology on the labor market. We argue that the “routinization” hypothesis recently proposed by Autor, Levy, and Murnane (2003) is a better explanation of job polarization, though other factors may also be important. We show that job polarization can explain one-third of the rise in the log(50/10) wage differential and one-half of the rise in the log(90/50).

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Lousy and Lovely Jobs: The Rising Polarization of Work in Britain

This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993-2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within- industry and between-industry components.

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Explaining job polarization: Routine-biased technological change and offshoring

The structure of employment is always changing, and economists are always trying to understand those changes. In the 1990s the idea of skill-biased technological change (SBTC) was used to understand the shift in employment toward more educated workers (see David H. Autor and Lawrence F. Katz 1999, for a survey). However, in recent years, it has become appar ent that a more nuanced approach is needed. The idea of SBTC might lead one to predict a uni form shift in employment away from low-skilled and toward high-skilled occupations, but studies for the United States (Autor, Katz, and Melissa S. Kearney 2006) and the United Kingdom (Goos and Manning 2007) have shown that there is growth in employment in both the high est-skilled (professional and managerial) and lowest-skilled (personal services) occupations, with declining employment in the middle of the distribution (manufacturing and routine office jobs). This is what Goos and Manning (2007) term job polarization (although see the introduc tion to Goos and Manning 2007 for antecedents of these ideas). There are several hypotheses about the rea sons for job polarization. First, the "routiniza tion" hypothesis (first put forward by Autor, Frank Levy, and Richard Murnane 2003) sug gests that the effect of technological progress is to replace "routine" labor which tends to be clerical and craft jobs in the middle of the wage distribution. Second, there is the view that globalization in general, and offshoring in par ticular, is an important source of change in the job structure in the richest countries (see, for example, Alan S. Blinder 2007). Third, there may be a link between job polarization and

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Job Polarization in Europe

What happens if an employer cuts wages by one cent? Much of labour economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition. "Monopsony in Motion" stands apart by analyzing labour markets from the real-world perspective that employers have significant market (or monopsony) power over their workers. Arguing that this power derives from frictions in the labour market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labour economics based on this alternative and equally plausible assumption.This book addresses the theoretical implications of monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labour market, concludes Manning, the 'free' market can no longer be sustained as an ideal and labour economists need to be more open-minded in their evaluation of labour market policies. "Monopsony in Motion" will represent for some a new fundamental text in the advanced study of labour economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.

Monopsony in Motion: Imperfect Competition in Labor Markets

Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any significant effect on the wages of native-born workers in the UK. This is potentially puzzling since there is evidence that changes in the supply of educated natives have significant effects on their wages. Using a pooled time series of British crosssectional micro data on male wages and employment from the mid-1970s to the mid-2000s, this paper offers a resolution to this puzzle, namely that in the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants - and in particular of university educated immigrants - with little discernable effect on the wages of the native-born.

Alan Manning

Papers

Lousy and Lovely Jobs: The Rising Polarization of Work in Britain

Explaining job polarization: Routine-biased technological change and offshoring

Job Polarization in Europe

Monopsony in Motion: Imperfect Competition in Labor Markets

The impact of immigration on the structure of male wages: theory and evidence from Britain