Showing papers on "Earnings published in 1978"
TL;DR: This paper analyzed the earnings of foreign-born adult white men, as reported in the 1970 Census of Population, through comparisons with the native born and among the foreign born by country of origin, years in the United States, and citizenship.
Abstract: The earnings of foreign-born adult white men, as reported in the 1970 Census of Population, are analyzed through comparisons with the native born and among the foreign born by country of origin, years in the United States, and citizenship. Differences in the effects of schooling and postschool training are explored. Although immigrants initially earn less than the native born, their earnings rise more rapidly with U.S. labor market experience, and after 10 to 15 years their earnings equal, and then exceed, that of the native born. Earnings are unrelated to whether the foreign born are U.S. citizens.
2,998 citations
TL;DR: In this article, the authors focus on the first three months of training under the Manpower Development and Training Act (MDTA) in the U.S. in order to measure the full inter-temporal impact of training.
Abstract: GOVERNMENTAL post-schooling training programs have become a permanent fixture of the U.S. economy in the last decade. These programs are typically advocated for diverse reasons: (1) to reduce inflation by the provision of more skilled workers to alleviate shortages, (2) to reduce unemployment of certain groups, and (3) to reduce poverty by increasing the skills of certain groups. All of these objectives require that training programs increase the earnings of trainees above what they otherwise would be. For example, alleviating shortages by training more highly skilled workers should increase the earnings of these workers. Likewise, the concern for unemployed workers is derived from a concern for the decreased earnings of these workers; and if trainees subsequently suffer less unemployment, their earnings should be higher. Finally, training programs are intended to reduce poverty by increasing the earnings of low income workers. Evaluating the success of training programs is thus inherently a quantitative assessment of the effect of training on trainee earnings.' It is an important process both because it helps to inform discussions of public policy by shedding light on the past value of these programs as investments and because it can provide a means of testing our ability to augment the human capital of certain workers. Although there have been many studies of the effect of post-school classroom training on earnings it is by now rather widely agreed that very little is reliably known about the actual effects of these programs.2 Three main problems account for this state of affairs: (1) the large sample sizes required to detect relatively small anticipated program effects in a variable with such high variance as earnings, (2) the considerable expense required to keep track of trainees over a long enough period of time to measure the full inter-temporal impact of training, and (3) the extreme difficulty of implementing an adequate experimental design so as to obtain a group against which to reliably compare trainees.3 The purpose of this paper is to report on efforts to cope with this third problem using a data collection system that comes some way towards resolving the first two. The basic idea of this data system is to match the program record on each trainee with the trainee's Social Security earnings history. The Social Security Administration maintains a summary year-by-year earnings history for each Social Security account over the period since 1950 that may be used, under the appropriate confidentiality restrictions, for this purpose.4 In this paper I have concentrated on an analysis of all classroom trainees who started training under the Manpower Development and Training Act (MDTA) in the first 3 months of 1964 so as to ensure their having completed training in that year. In choosing to analyze trainees from so early a cohort something is clearly lost. On the one hand, the nature of the participants in these early years was considerably different than in the later years. In particular, programs geared Received for publication February 9, 1977. Revision accepted for publication August 1, 1977. * Princeton University. This research was supported by ASPER, U.S. Department of Labor, but does not represent an official position of the Department of Labor, its agencies, or staff. I would like to thank Gregory Chow, Ronald Ehrenberg, Roger Gordon, Zvi Griliches, George E. Johnson, Nicholas Kiefer, Richard Quandt, and Sherwin Rosen for helpful comments. I also owe a heavy debt to D. Alton Smith for computational and other assistance. 'See Reid (1976), for example, for a clear analysis of how knowledge of these effects is required in order to establish the impact of government training on the black/white wage differential. 2 Surveys of many of these studies may be found in Stromsdorfer (1972) and O'Neill (1973). 3For further discussion of these points see Ashenfelter (1975). 4The idea for using these data to analyze the effectiveness of government training programs is apparently quite an old one, having been suggested by the National Manpower Advisory Committee (U.S. Department of Labor, 1972) to the Secretary of Labor at its first meeting in a letter dated October 10, 1962, the year of passage of the Manpower Development and Training Act. Actual efforts along these lines were ultimately reported by Borus (1967), Commins (1970), Farber (1970), and Prescott and Cooley (1972).
1,456 citations
TL;DR: In this paper, it is shown that ties represent negative "personal" externalities which are usually, but not always, internalized by the family, and that ties tend to deter migration, to reduce the employment and earnings of migrating wives, and to increase the employment of their husbands.
Abstract: An economic definition of family ties relevant to migration decisions leads to the exploration of their effects on the probability of migration, on consequent changes in employment and earnings of family members, and on family stability. It is shown that ties represent negative "personal" externalities which are usually, but not always, internalized by the family. ties tend to deter migration, to reduce the employment and earnings of migrating wives, and to increase the employment and earnings of their husbands. The growth of labor market attachment of women creates an increase in migration ties, which both deters migration and contributes to marital instability. Conversely, growing marital instability stimulates migration and reinforces the upward trends in women's labor force participation.
1,169 citations
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01 Dec 1978
TL;DR: In this article, the authors examined inter-and intra-cohort changes in educational and occupational achievement and in earnings and social stratification in a service economy and made comparisons between blacks and whites with a further analysis by region and migrant status.
Abstract: Inter- and intra-cohort changes in educational and occupational achievement and in earnings are examined and social stratification in a service economy is discussed. Comparisons are made between blacks and whites with a further analysis by region and migrant status. Patterns of ethnic achievement are also explored (ANNOTATION)
1,157 citations
TL;DR: In this paper, a literature survey reveals consistent excess returns after public announcements of firms' earnings, which seem inconsistent with equilibrium in the securities market: public goods, being without private cost, should earn no private return.
804 citations
TL;DR: In this article, an econometric methodology was proposed to deal with life cycle earnings and mobility among discrete earnings classes. But the methodology is not suitable for the case of single individuals.
Abstract: This paper proposes an econometric methodology to deal with life cycle earnings and mobility among discrete earnings classes. First, we use panel data on male log earnings to estimate an earnings function with permanent and serially correlated transitory components due to both measured and unmeasured variables. Assuming that the error components are normally distributed, we develop statements for the probability that an individual's earnings will fall into a particular but arbitrary time sequence of poverty states. Using these statements, we illustrate the implications of our earnings model for poverty dynamics and compare our approach to Markov chain models of income mobility.(This abstract was borrowed from another version of this item.)
556 citations
TL;DR: This article found that Box-Jenkins time series models consistently produce better forecasts than martingale and submartingale earnings models; but Value Line Investment Survey consistently makes significantly better earnings forecasts than the Box-jenkins models.
Abstract: If both producers and consumers demand forecasts based solely on their forecasting ability, then the equilibrium employment of analysts, a higher cost factor than time series models, implies that analysts must produce better forecasts than time series models. Past studies of comparative earnings forecast accuracy have concluded otherwise. Using nonparametric statistics that provide proper yet powerful tests, we find that Box-Jenkins time series models consistently produce better forecasts than martingale and submartingale earnings models; but Value Line Investment Survey consistently makes significantly better earnings forecasts than the Box-Jenkins models.
407 citations
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TL;DR: In this paper, a crucial cause of the failure of share prices to rise during a decade of substantial inflation was discussed, and it was shown that the share value per dollar of pretax earnings actually fell from 10.82 in 1967 to 6.65 in 1976.
Abstract: This paper discusses a crucial cause of the failure of share prices to rise during a decade of substantial inflation. Indeed, the share value per dollar of pretax earnings actually fell from 10.82 in 1967 to 6.65 in 1976. The analysis here indicates that this inverse relation between higher inflation and lower share prices during the past decade was not due to chance or to other unrelated economic events. On the contrary, an important adverse effect of increased inflation on share prices results from basic features of the current U.S. tax laws, particularly historic cost depreciation and the taxation of nominal capital gains.
365 citations
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TL;DR: Conservation easements allow landowners to collect earnings from their land, while reducing their tax burdens because the land cannot be sold into development as discussed by the authors, however, the residents bear a...
Abstract: Conservation easements allow landowners to collect earnings from their land, while reducing their tax burdens because the land cannot be sold into development. Conservation assures open space amenities for nearby residents, however, the residents bear a ...
335 citations
TL;DR: In this paper, the authors assume the existence of a normative structure for making judgments about fairness of allocations of social goods, such as earnings, in the U.S. population, and find that judgments of earnings fairness are not idiosyncratic and that they involve individual and group differences related to considerations of merit and need.
Abstract: Previous traditions of distributive-justice research assume the existence of a normative structure for making judgments about fairness of allocations of social goods, such as earnings. Does a consensual normative framework for judging the fairness of distributions of earnings exist in the U.S. population? What principles underlie popular judgments concerning earnings distributions? Data indicate both that judgments of earnings fairness are not idiosyncratic and that they involve individual and group differences related to considerations of merit and need. Some tolerance for variation in earnings among house-holds is noted, and the same factors accounting for earnings-fairness judgments justify earnings considered fair. Considerable agreement exists concerning what principles are relevant to earnings-fairness judgments, while disagreement concerning how to apply these standards in practice is admitted. Apparently the standards for earnings judgments derive both from conceptions of the empirical distributio...
305 citations
TL;DR: In this paper, what determines the price-earnings ratio is discussed, and the authors propose a method to predict the ratio of prices and earnings of a stock based on the stock market.
Abstract: (1978). What Determines Price-Earnings Ratios? Financial Analysts Journal: Vol. 34, No. 4, pp. 65-76.
TL;DR: In this article, a crucial cause of the failure of share prices to rise during a decade of substantial inflation was discussed, and it was shown that the share value per dollar of pretax earnings actually fell from 10.82 in 1967 to 6.65 in 1976.
Abstract: This paper discusses a crucial cause of the failure of share prices to rise during a decade of substantial inflation. Indeed, the share value per dollar of pretax earnings actually fell from 10.82 in 1967 to 6.65 in 1976. The analysis here indicates that this inverse relation between higher inflation and lower share prices during the past decade was not due to chance or to other unrelated economic events. On the contrary, an important adverse effect of increased inflation on share prices results from basic features of the current U.S. tax laws, particularly historic cost depreciation and the taxation of nominal capital gains.
TL;DR: In this article, the authors investigate whether abnormal returns are observed when steps are taken to reduce the effect of deficiencies in the capital asset-pricing model, and conclude that significant abnormal returns do not cover the transactions costs unless one can avoid direct transactions costs (e.g., a broker).
TL;DR: This paper found that the effect of workers' schooling on earnings and occupational SES increase as logarithmic functions of the size of the organization which employs them, and that zero-order correlations between schooling effects and log establishment size were between +.88 and +.95.
Abstract: Employers play a crucial role in the process of social stratification in the U.S.: the jobs they provide are the primary mechanism by which individuals are distributed among occupations and by which earnings are distributed among persons. But the vast majority of sociological work on socioeconomic achievement ignores employers completely, and nearly all related work by economists either ignores employers or else ignores characteristics of workers, substituting one omission for another. In the theoretical section of this paper, we review and combine sociological work on organizational structure, sociological studies of social stratification, and economic research on labor markets, industrial wage differentials and human capital. In this review, we hypothesize that the size of an employer organization works indirectly through other dimensions of organizational structure to alter the effect of workers' schooling on their wages and occupational attainment. In particular, we hypothesize that the effect of workers' schooling on earnings and the effect of workers' schooling on occupational SES increase as logarithmic functions of the size of the organization which employs them. Since the relationship between schooling and occupational attainment is a central part of social stratification research, and because the effect of schooling on earnings is afundamentalfeature of sociological and human capital research on earnings, this hypothesis links organizational structure to the very heart of current issues in social stratification and human capital studies. In the empirical section of the paper, we divide a national probability sample of workers into five groups, depending on the size of the establishment in which they work. Fitting models of earnings and occupational attainment in each of these groups and then relating schooling effects to the size of the establishment which defines the groups, we find that the effect of workers' schooling on earnings and SES increases approximately as a logarithmic function of the size of the establishment for Which they work. Indeed, we find zero-order correlations between schooling effects and log establishment size to be between +.88 and +.95, and statistically significant at the .025 level or better. Implications of our research are discussed.
TL;DR: This paper analyzed long-term trends in racial and gender wage disparities in the urban labor market of Sao Paulo, one of Latin America's most dynamic economies, using census data from 1960-2000.
Abstract: This study relies on Brazilian census data from 1960-2000 to analyze long-term trends in racial and gender wage disparities in the urban labor market of Sao Paulo, one of Latin America's most dynamic economies. Afro-Brazilians and women have made ...
TL;DR: The efficiency of an educational system can be defined partly by the net benefits-lifetime earnings, labor productivity, or personal satisfaction-accrued to individuals with more education than those accrued to individuals having less as mentioned in this paper.
Abstract: Officials in developing countries are concerned with the efficient allocation of educational resources, since education represents their largest and usually most rapidly increasing budgetary expenditure. The efficiency of an educational system can be defined partly by the net benefits-lifetime earnings, labor productivity, or personal satisfaction-accrued to individuals with more education than those accrued to individuals with less. Educational institutions provide their graduates with these advantages by instilling in them attributes considered necessary to obtain such advantages. These attributes are both cognitive-academic achievement and manual skill-and affective self-esteem, dependability, creativity, and motivation.
01 Jan 1978
TL;DR: Hong et al. as mentioned in this paper analyzed a sample of pooling-of-interests mergers in the 1954-1964 period, and found no abnormal price movements in the period surrounding the merger or the earnings announcements immediately after the merger.
Abstract: Whether the method of accounting for mergers affects the stock prices of the acquiring firm is investigated in this article. Many observers believe that companies using the pooling-of-interests method in an acquisition with positive goodwill enjoy higher stock prices because of the higher earnings they report when using this method. An efficient capital market, however, should be able to see through the particular accounting convention used to describe an event, such as a merger, and respond to the economics of the merger, not its accounting description. The study analyzes a sample of pooling-of-interests mergers in the 1954-1964 period, and finds no abnormal price movements in the period surrounding the merger or the earnings announcements immediately after the merger. Conversely, some evidence of higher stock prices in the period preceding a merger for a much smaller sample of companies using the purchase method is found. The authors conclude that the pooling-of-interests method does not lead to abnormal stock price behavior for acquiring firms. C ONSIDERABLE evidence has been assembled in recent work supporting the Efficient Capital Markets Hypothesis. ' The hypothesis has important implications for external accounting practices. Indeed, several recent studies have looked at the informational content of alternative accounting methods and their effects on stock prices.2 Accounting changes or manipulations not accompanied by real economic impacts seem to have no statistically significant effects on stock prices. Apparently, the presence of alternative and more timely sources of information on corporate performance enables investors to look beyond simple income numbers in valuing equity securities. Accounting for business combinations has been an especially troublesome issue for accountants. Up until APB 16 was issued in October 1970, business combinations which were accomplished by means of an exchange of securities could have been accounted for either by the "purchase" method or the "poolingof-interests" method. Such combinations are almost always nontaxable exchanges so that there is no difference in the cash flows associated with using one method or the other. Therefore, differences in reported earnings between the two meth' For a summary of the early theory and empirical work on the Efficient Markets Hypothesis, see Fama [1970]. See also Beaver [1972] and Kaplan [1978] for the relevance of the hypothesis to the generation and interpretation of financial accounting numbers. 2 Kaplan and Roll [ 1972 ], Ball [ 1972 ], Sunder [ 1973 ]. Hai Hong is Assistant Professor at Northwestern University; Robert S. Kaplan is Professor at Carnegie-Mellon University and Gershon Mandelker is Associate Professor at the University of Pittsburgh.
TL;DR: In this paper, the role of net worth as a component of status was discussed, and a status-attainment model for net worth was estimated using data from the National Longitudinal Studies of Labor Force Participation.
Abstract: While sociologists have recognized the importance of wealth for analysis of political power, they have given little attention to wealth as a measure of economic status. Yet from both a sociological and an economic point of view, wealth is an important determinant of status and life chances, especially at the end of the life cycle. In this paper we discuss the role of net worth as a component of status, and, using data from the National Longitudinal Studies of Labor Force Participation, we estimate a status-attainment model for net worth. Net worth includes savings, home equity, business assets, and real estate holdings. We find that (a) the effects of family background are transmitted via education; (b) the effect of education is asymptotic rather than linear; (c) single and divorced persons possess substantially fewer assets, net of other characteristics, than married persons; and (d) net of all other variables, earnings have a substantial effect on net worth. The effects of family background and socioec...
TL;DR: In this article, an intermediate-level model of the earnings process is presented, which contains a job-quality equation, a research-output equation, and an earnings equation, in which research output and job quality enter causally.
Abstract: Our model of the earnings process contains (1) a job-quality equation which describes the type of academic job one obtains; (2) a research-output equation; and (3) an earnings equation, in which research output and job quality enter causally. Underlying this model of the earnings process is, of course, a more fundamental set of relationships that is, a set of demand, supply, and production functions which reflect utility maximization on the part of market participants. The model we develop is an intermediatelevel model, more refined than a single-equation approach but not as complete as one based on demand, supply, and production considerations and not as complete as we would like.1 A more complete model would also have separate production functions for teaching, public service, and departmental administrative outputs. The model presented here permits testing several hypotheses. In the job-quality equation (1), the quality of institutional affiliation of a particular economist that is, his or her "job quality" is hypothesized to be determined primarily by (a) the individual's characteristics, such as intelli-
TL;DR: In this paper, the relative earnings of a number of racial and ethnic minorities in the urban labor force from several countries were analyzed and a human capital model of earnings for each racial group was proposed.
Abstract: Analyzes the relative earnings of a number of racial and ethnic minorities in the urban labor force from several countries Purpose of estimating a human capital model of earnings for each racial group; Information on white/minority earning differentials in 1969; Changes in earnings in 1960 (Abstract copyright EBSCO)
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TL;DR: A structural model of the demand for college attendance is derived from the theory of comparative advantage and recent statistical models of self-selection and unobserved components, which strongly support the theory as mentioned in this paper.
Abstract: A structural model of the demand for college attendance is derived from the theory of comparative advantage and recent statistical models of self-selection and unobserved components. Estimates from NBER-Thorndike data strongly support the theory. First, expected lifetime earnings gains influence the decision to attend college. Second, those who did not attend college would have earned less than measurably similar people who did attend, while those who attended college would have earned less as high school graduates than measurably similar people who stopped after high school. Positive selection in both groups implies no "ability bias in these data.
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TL;DR: This paper used three types of evidence to analyze the nature and cause of black economic progress in post-World War II years: aggregate evidence on the timing and incidence among skill groups of changes in the relative earnings or occupational position of blacks, cross-sectional evidence on family background determinants of the socioeconomic achievement of blacks; and information from company personnel offices regarding personnel policies toward black (and other) workers affected by civil rights legislation.
Abstract: This study used three types of evidence to analyze the nature and cause of black economic progress in post-World War II years: aggregate evidence on the timing and incidence among skill groups of changes in the relative earnings or occupational position of blacks; cross-sectional evidence on the family background determinants of the socioeconomic achievement of blacks; and information from company personnel offices regarding personnel policies toward black (and other) workers affected by civil rights legislation.
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TL;DR: The authors analyzes the effects of job mobility on earnings both at young and at older ages, taking into account the discontinuity of earnings across jobs, the decline of human capital investment within the job and over the life cycle, and the effect of mobility on the slope of the earnings profile.
Abstract: The paper analyzes the effects of job mobility on earnings both at young and at older ages The model takes into account the discontinuity of earnings across jobs, the decline of human capital investment within the job and over the life cycle, and the effects of mobility on the slope of the earnings profile Careful attention to the functional form of the earnings equation indicates why the coefficient of the current segment is usually larger than the coefficient of the previous segments Findings from the NLS data include: (1) Mobile individuals at all ages invest significantly less in on-the-job training (2) Although job mobility is associated with significant wage gains (across jobs), there is a substantial wage differential between the mobile and the non-mobile at older ages (3) The explanatory power of the earnings equation is significantly increased by accounting for the effects of job mobility; job mobility is an important determinant of the wage structure
TL;DR: In this paper, the authors used a life-cycle asset maximization approach to social security acceptance and found that the earnings test is not a sufficient cause for such a distortion in the constrained period or over the life cycle.
Abstract: The distortion of the labor/leisure choice by social security during the period the earnings test is in effect is well known. This paper, using a life-cycle asset maximization approach to social security acceptance, shows that the earnings test is not a sufficient cause for such a distortion in the constrained period or over the life cycle. We use time-series analysis to test the net empirical importance of the substitution and wealth effects associated with social security on the market work of younger men and find that hours worked per week would have fallen from 2 to 3 hours since 1936 without the present social security system. Such findings suggest that large savings effects associated with social security are over-estimates.
TL;DR: In this paper, a longitudinal analysis of earning data indicates higher earnings growth for scientists of the same experience but more recent vintage, and theoretical justification for such a relation is suggested, and implied biases in cross-section data are noted.
Abstract: Analysis of longitudinal earning data indicates higher earnings growth for scientists of the same experience but more recent vintage. Theoretical justification for such a relation is suggested, and the implied biases in cross-section data are noted. Because of a basic identification problem, an alternative interpretation, time-experience interaction, is also considered. The general conclusion is that earning growth is not uniform or neutral. There is no simple mechanical method by which lifetime profiles can be inferred from single cross-section data.
TL;DR: The authors proposed a new approach to analyze gender differences in wages, identifying several alternative explanatory mechanisms to account for the sorting of women and men into different types of jobs that offer different levels of reward.
Abstract: We propose a new approach to analyzing gender differences in wages. This approach identifies several alternative explanatory mechanisms to account for the sorting of women and men into different types of jobs that offer different levels of reward. ...
TL;DR: The hypothesis that the relatively lower earnings of highly educated women can be explained largely by their career interruptions and by their lesser willingness to accumulate human capital in anticipation of such interruptions is rejected.
Abstract: Using a survey of two cohorts of men and women who received Ph.D.s in the years 1958-63 and 1967-72, the authors test two hypotheses: (1) that the relatively lower earnings of highly educated women can be explained largely by their career interruptions and by their lesser willingness to accumulate human capital in anticipation of such interruptions, and (2) that the differential in earnings between men and women increases with age because of career interruptions and that the gap narrows once women reenter the labor force on a permanent basis The findings do not lend support to either of these hypotheses, leading the authors to reject the proposition that the lower rewards of women Ph.D.s are primarily caused by their own voluntary decisions.
TL;DR: In this article, the authors used occupational level data from the U.S. Census and the Dictionary of Occupational Titles to compare the earnings attainment of males and females and found that the use of prestige may lead to misspecification.
Abstract: Recent research on sex differences in the process of earnings attainment has relied heavily on occupational prestige or status as a determinant of male and female earnings. Utilizing occupational level data from the U.S. Census and the Dictionary of Occupational Titles, this paper presents evidence suggesting that the use of prestige may lead to misspecification ws hen the earnings attainment of males andfemales is compared. The data reveal differences in the nature of the occupational task by occupational sex identification within levels of prestige. Since some of these task differences are shown to be income relevant, the task-based earning potential of male dominated occupations is higher than the earning potential of equally prestigious occupations dominated by females. Finally, after the effects of both prestige and the nature of the task have been controlled, the sex identification of the occupation is showtsn to have a substantial impact on male and female earnings.