How to Do Things With Words

Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

Using a Bayesian likelihood approach, we estimate a dynamic stochastic general equilibrium model for the US economy using seven macro-economic time series. The model incorporates many types of real and nominal frictions and seven types of structural shocks. We show that this model is able to compete with Bayesian Vector Autoregression models in out-of-sample prediction. We investigate the relative empirical importance of the various frictions. Finally, using the estimated model we address a number of key issues in business cycle analysis: What are the sources of business cycle fluctuations? Can the model explain the cross-correlation between output and inflation? What are the effects of productivity on hours worked? What are the sources of the "Great Moderation"?

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Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach

The Study of Man. By Michael Polanyi. Price, $1.75. Pp. 102. University of Chicago Press, 5750 Ellis Ave., Chicago 37, 1959. One subtitle to Polanyi's challenging and fascinating book might be The Evolution and Natural History of Error , for Polanyi is at pains to expunge what he believes to be the false notion contained in the contemporary view of science which treats it as an object and basically impersonal discipline. According to Polanyi not only is this a radical and important error, but it is harmful to the objectives of science itself. Another subtitle could be Farewell to Detachment , for in place of cold objectivity he develops the idea that science is necessarily intensely personal. It is a human endeavor and human point of view which cannot be divorced from nor uprooted out of the human matrix from which it arises and in which it works. For a good while

Personal Knowledge: Towards a Post-Critical Philosophy

Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data

This paper investigates inter-industry wage differentials in Belgium, taking advantage of access to a unique matched employer-employee data set covering the period 1995-2002. Findings show the existence of large and persistent wage differentials among workers with the same observed characteristics and working conditions, employed in different sectors. The hypothesis that workers with better unmeasured abilities are over-represented in high-wage sectors may not be rejected on the basis of Martins (2004) methodology. However, the contribution of this explanation to the observed industry wage differentials appears to be limited. Further results show that ceteris paribus, workers earn significantly higher wages when employed in more profitable firms. Our instrumented wage-profit elasticity stands at 0.063 and Lesters range of pay is about 41 per cent of the mean wage. This rent-sharing phenomenon accounts for a large fraction of the industry wage differentials. We find indeed that the magnitude, dispersion and significance of industry wage differentials decreases sharply when controlling for profits.

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Industry Wage Differentials, Unobserved Ability, and Rent-Sharing: Evidence from Matched Worker-Firm Data, 1995-2002

Substantial research has been devoted to the estimation and explanation of the gender wage gap. The effects of work status on wages have been studied somewhat less. This article draws on existing work to generate new estimates of the wage penalty associated with part-time employment in Belgium. Given the fact that women remain the primary caregivers, almost solely in charge of housework, part-time employment has often been presented as an ideal solution for those wanting to combine family and professional responsibilities. However, parttime employment has many flaws, not the least of which is the wage penalty it induces. On the basis of the 1995 Structure of Earnings Survey (SES), we estimate the wage gap between part-time and full-time work for a sample of women only. Based on our results, we advance explanations related to human capital and productivity differences, types of job and industry branches, personal characteristics of part-timers, etc. We also compare the results with earlier results for Belgium based on the European Community Household Panel (ECHP). The unexplained part of the part-time wage gap allows us to assess the degree to which labour markets discriminate against part-timers. The existence of such discrimination suggests that equal opportunities policies should focus not only on labour market conditions but also on a more equal sharing of domestic work between men and women.

The wage penalty induced by part-time work: the case of Belgium

https://www.econstor.eu/bitstream/10419/69374/1/733824862.pdf

The impact of educational mismatch on firm productivity: Evidence from linked panel data

This article examines how professional female tennis players react to (a) prize incentives and (b) heterogeneity in ex ante players' abilities. It is found that a larger prize spread encourages women to increase effort, even when controlling for many tournament and player characteristics. Further results indicate that uneven contests lead favorites to win more games and underdogs to be less performing. They also show that the performance differential among players increases with the ranking differential. These findings suggest that the outcome of a match is more linked to players' abilities than to players' incentives to adjust effort according to success chances.

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Women and Competition in Elimination Tournaments Evidence From Professional Tennis Data

– This paper aims to measure and analyse the wage gap between male part‐ and full‐timers in the private sector of six European countries, i.e. Belgium, Denmark, Ireland, Italy, Spain, and the UK., – Using a unique matched employer‐employee data set providing harmonised information on six European countries (the 1995 European Structure of Earnings Survey), the empirical strategy is based on the estimation of standard Mincer wage equations and the Oaxaca and Ransom wage gap decomposition technique. First, individual gross hourly wages are regressed on a set of human capital variables only and second, a wider range of control variables related to e.g. occupation, sector of activity, firm size, and level of wage bargaining is inserted., – The study finds that the raw gap in hourly gross pay amounts to 16 per cent of a male part‐timer's wage in Spain, to 24 per cent in Belgium, to 28 per cent in Denmark and Italy, to 67 per cent in the UK and to 149 per cent in Ireland. Human capital differences explain between 31 per cent of the observed wage gap in the UK and 71 per cent in Denmark. When the whole set of explanatory variables is included in the wage regressions, a much larger part of the gap is explained by differences in observed characteristics (except in Italy)., – Unfortunately, the paper is not able to correct for workers' potential self‐selection into part‐time and full‐time employment. Results suggest that policy initiatives to promote lifelong learning and training are of great importance to help part‐timers catch up with full‐timers in terms of human capital. Moreover, except for Italy, they point to a persisting problem of occupational and sectoral segregation between men working part‐time and full‐time which requires renewed policy attention., – Economic theory advances a number of reasons for the existence of a wage gap between part‐time and full‐time workers. Empirical work has concentrated on the wage effects of part‐time work for women. For men, much less empirical evidence exists, mainly because of lacking data. This paper therefore makes a valuable contribution. The more so given that (to the best of our knowledge) there exists no cross‐national evidence with respect to men's part‐time wage penalty.

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François Rycx

Papers

Industry Wage Differentials, Unobserved Ability, and Rent-Sharing: Evidence from Matched Worker-Firm Data, 1995-2002

The wage penalty induced by part-time work: the case of Belgium

The impact of educational mismatch on firm productivity: Evidence from linked panel data

Women and Competition in Elimination Tournaments Evidence From Professional Tennis Data

The part‐time wage penalty in European countries: how large is it for men?