The 27 club is a myth, but rock stars do die younger on.wsj.com/1teyte8 http://t.co/XvoLy56KNr—
Wall Street Journal (@WSJ) October 28, 2014
Pop stars should get hazard pay
29 Oct 2014 Leave a comment
in health and safety, labour supply, occupational choice Tags: compensating differentials, hazard pay
The Character Factory – NYTimes.com
28 Oct 2014 Leave a comment
in human capital, labour economics, liberalism, occupational choice Tags: labour economics, Personality traits
How to cut prison numbers | vox
26 Oct 2014 Leave a comment
in applied welfare economics, economics of crime, labour economics, occupational choice Tags: economics of crime, three strikes laws
The idea of selective incapacitation is to make a distinction between offenders with a high and a low propensity to commit crime.
Figure 1. Average rate of theft from car and domestic burglary – pre and post-introduction of the Dutch habitual offender law

Note: Plotted coefficients show the average crime rate relative to the month preceding introduction of the habitual offender law. The bars show the 95% confidence intervals. Based on monthly data for 31 cities during 1998-2007.
A habitual offender law adopted in the Netherlands in 2001 (Vollaard 2012). Only offenders with ten or more offenses on their criminal record faced enhanced prison-terms.
Between 2001 and 2007, 1,400 mostly non-violent, relatively old and invariably drug-addicted offenders were sentenced under the law. They accounted for 5% of the prison population. The law implied sentence enhancements of some 1,000%, typically a two-year rather than a two-month sentence for the affected offender population.
These sentence enhancements resulted in a 25% drop in acquisitive crime – the crimes that the affected offenders committed. The law did not have an impact on violent and sexual crimes, offenses that were rarely committed by the affected offenders.
Making the length of prison sentences more dependent on prior criminal records is a cost-effective crime policy. The Dutch policy affected only 5% of the prison population, but reduced property crime rates by 25% to 40%.
A Report on ‘Can Hearts and Minds be Bought?’ The Economics of Counterinsurgency in Iraq by Eli Berman, Jacob N. Shapiro and Joseph H. Felter
08 Oct 2014 Leave a comment
in applied price theory, defence economics, occupational choice, politics - Australia, politics - New Zealand, politics - USA Tags: war on terror
Can hearts and minds be bought? A metaphorical question posed to ask whether government spending can aid counterinsurgency. In their paper, Berman et al. seek to answer this basic question using current literature, recent data and a model of counterinsurgency.
They chose Iraq for their research because it is presently significant, there is a large amount of data and most importantly, because it is characterised by insurgency and not by ‘conventional warfare’. It is this characteristic, argued by Berman et al. that will be seen more often in future conflicts that is so crucial to understand. Another important facet to note is that current ‘US Army counterinsurgency doctrine’ is not based on any social scientific theory; thereby making the need to understand insurgency more vital to aid spending.
By using current data, Berman et al. find on the whole that the correlation between reconstruction spending and violence across Iraqi districts…
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The reverse gender gap in part-time employment
04 Oct 2014 Leave a comment
in discrimination, gender, human capital, labour economics, occupational choice Tags: compensating differentials, gender wage gap, part-time work, reversing gender gap

HT: economix
How to Make a Living as a Poet
01 Oct 2014 Leave a comment
in applied welfare economics, economics of media and culture, labour economics, occupational choice Tags: starving artists
Minimum Wage Hikes Hurt Job-Keepers
29 Sep 2014 Leave a comment
in labour economics, minimum wage, occupational choice Tags: compensating differentials, minimum wage
What the jihadists who bought “Islam for Dummies” tell us about radicalisation
10 Sep 2014 1 Comment
in economics, economics of crime, labour economics, occupational choice Tags: economics of oppositional identities, Jihadists, Terrorism is an occupational choice

Sarwar and Ahmed, who pleaded guilty to terrorism offences, purchased Islam for Dummies and The Koran for Dummies. MI5’s behavioural science unit found that
“far from being religious zealots, a large number of those involved in terrorism do not practise their faith regularly. Many lack religious literacy and could . . . be regarded as religious novices.” The analysts concluded that “a well-established religious identity actually protects against violent radicalisation”
Most evidence point to moral outrage, disaffection, peer pressure, the search for a new identity, for a sense of belonging and purpose as drivers of radicalisation. Anthropologist Scott Atran pointed out in testimony to the US Senate in March 2010:
“. . . what inspires the most lethal terrorists in the world today is not so much the Quran or religious teachings as a thrilling cause and call to action that promises glory and esteem in the eyes of friends, and through friends, eternal respect and remembrance in the wider world”. He described wannabe jihadists as “bored, underemployed, overqualified and underwhelmed” young men for whom “jihad is an egalitarian, equal-opportunity employer . . . thrilling, glorious and cool”.
Chris Morris, the writer and director of the 2010 black comedy Four Lions – which satirised the ignorance, incompetence and sheer banality of British Muslim jihadists – said:
Terrorism is about ideology, but it’s also about berks.
The role of job sorting and job matching in constitutional political economy
25 Aug 2014 Leave a comment

The importance of Baumol’s cost disease in school cost trends
16 Aug 2014 Leave a comment
in applied price theory, economics of education, human capital, labour economics, labour supply, occupational choice Tags: Baumol's disease

Baumol’s cost disease is a phenomenon described by William J. Baumol in the 1960s. It involves a rise of wages in jobs that have experienced no increase of labour productivity in response to rising wages in other jobs which did experience such labour productivity growth.
The rise of wages in jobs without productivity gains is required to compete for employees with jobs that did experience gains and can naturally pay higher wages.
The original study was conducted for the performing arts. Baumol pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century: the productivity of classical music performance has not increased, but real wages of musicians (as well as in all other professions) have increased greatly since the 19th century.
In labour-intensive sectors that rely heavily on human interaction such as nursing, education, or the performing arts, there is little or no growth in productivity over time. These sectors must pay more to stay competitive in the labour market. These jobs will survive as long as consumers are willing to pay these wage increases. Entrepreneurs react to Baumol’s disease in several ways:
- Decrease quantity/supply
- Decrease quality
- Increase price
- Increase total factor productivity
Baumol’s cost disease in the education sector would be reinforced by reductions in class sizes, more specialised teaching, and the increase in the higher education premium throughout the economy.
All of these effects would require the schooling sector to pay because would be teachers have many more options than in the past. In days gone by, outside of the professions, teaching was one of the few jobs available to a university graduate. Indeed, in days gone by, many teachers were either teachers college graduates such is the case with the sister or they learnt on-the-job as my mother was going to do.
Recall and waiting unemployment
04 Aug 2014 Leave a comment
in business cycles, job search and matching, labour economics, labour supply, macroeconomics, occupational choice, unemployment Tags: recall unemployment, rest unemployment, temporary layoffs, waiting unemployment, work for the dole
Time use surveys in a range of countries show that the unemployed spend maybe a few hours per week looking for a new job. Krueger and Mueller (2008) found that:
…average search time is highest in the U.S.A., at 32.3 minutes per day, closely followed by Canada.
Europeans search much less, but there is considerable variation across countries.
In France the unemployed search around 21 minutes a day compared with 3 minutes in Finland
A small amount of job search per week is rational for many of the unemployed because a major form of job search doesn’t involve any job search any time soon. Instead, they are waiting for a call.
Also, Anglo-Saxon labour market are much more dynamic with many more vacancies opening every month as compared with the Eurosclerosis dual labour markets. In the European Union’s dual labour markets, it is not rational to search for vacancies that will never be there.
Job searches is an entrepreneurial venture that can involve a considerable amount of biding your time. Job seekers must choose between wider job search that may involve switching to a new industry or new occupation and investing in availability for suitable vacancies in their local labour markets or a recall to employment by old employers.
A spell of unemployment followed by a rehire by an old employer is known as recall unemployment or a temporary layoff.

Demand is less stable and more seasonal in industries such as construction, manufacturing and agriculture. When demand rebounds, recalling an old employee is a faster and cheaper hiring process than screening unfamiliar applicants of uncertain quality and training recruits.
Recall is not certain. Temporary layoffs will forecast their chances of recall and review these forecasts as they discover more about the length of drop in local labour demand and the general state of the rest of the labour market. the majority of unemployed who regard themselves as temporary layoffs are indeed recalled to their old job by their old employer after most downturns.
Better prospects of recall by old employers will reduce the intensity of job searches of temporary layoffs and increase their asking wages for other jobs. Workers with considerable industry and firm-specific human capital are likely to risk waiting longer for recall. Workers will search more intensively for other jobs as their forecasts of their chances of recall to old jobs become less encouraging.

There are more temporary layoffs in milder recessions because the lull in demand is expected to be short and there are fewer business closures. The higher levels of recall unemployment will reduce downward pressure on asking wages and slow the filling of vacancies because many well qualified job applicants are waiting for recall to their old jobs rather than applying more widely for new jobs.
Dixon and Crichton (2006) found that 58% of New Zealand benefit-to-work transitions involved starting with a new employer, 30% continued with an employer for whom they worked part-time in the benefit spell and 12% returned to an employer they had worked for in the past 2 years. The prospect of a recall by an old employer has been important for unemployed workers in countries such as the US, Canada, Demark, Sweden, Austria and Norway.
In the context of work-for-the-dole schemes and activation programmes that involve intensive monitoring of job search by the unemployed on unemployment benefits, requiring workers who are temporarily laid off to search for jobs is in many ways counter-productive.
Developing a screening mechanism to find these temporary layoffs and distinguishing them from permanent layoffs would be quite challenging. Countries which have unemployment insurance premiums spend a lot of try trying to adjust those premiums for temporary layoffs. This is so employers and employees do not take advantage of unemployment insurance to have a week or two off work in slack periods at the expense of the unemployment insurance system and top up their wages in the interim.
A cousin of recall unemployment is rest unemployment or waiting unemployment – job seekers who are waiting for conditions in a depressed sector to improve (Hamilton 1988; Alvarez and Shimer 2008).

Some job seekers may wait for local labour market conditions to improve, rather than search for jobs in other industries and new occupations. A job seeker’s old industry may offer better wage and job finding prospects than other industries If the newly unemployed worker waits a while.
Rest unemployment or waiting unemployment strives to salvage as much of the occupation and industry-specific human capital of the newly unemployed worker as possible.
A significant share of job seekers have been found to be waiting for local labour market conditions to improve rather than searching further afield in different industries or new occupations (Alvarez and Shimer 2008).
Again, rest unemployment or waiting unemployment is a type of job search that cannot be well handled by work-for-the-dole schemes and intensive monitoring of the job search of unemployed workers.









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