NIESR Discussion Paper

Union Density, Productivity, and Wages

We exploit tax-induced exogenous variance in the price of union membership to identify the effects of changes in firm union density on firm productivity and wages in the population of Norwegian firms over the period 2001 to 2012. Increases in union density lead to substantial increases in firm productivity and wages having accounted for the potential endogeneity of unionization. The wage effect is larger in more productive firms, consistent with rent-sharing models.

The power of self-interest: Effects of subsidies for adult education and training

Education and training among the working-age population has become an increasingly important policy issue as working lives have lengthened and the pace of technological change has quickened.  This paper describes the effects of a reform that broadened access to public subsidies for adult Vocational Education and Training.  Difference-in-differences analysis reveals that the large-scale reform, which was introduced in the Australian state of Victoria from 2009, increased participation in VET among the population aged 25-54, and corresponded with an improved match between subsidised VET cours

Exploring the importance of behavioural endogeneity for policy projections

Behavioural endogeneity is appealing functionality for any analytical tool designed to explore the implications of public policy alternatives. This study improves the evidence base for choosing between alternative approaches for projecting decision making by exploring two key research questions: (i) how important are the impact effects of policy change, relative to associated incentive effects; and (ii) to what extent can the over-all infuence of behavioural responses to policy change be approximated by labour supply responses alone?

The macroeconomic effects of banking crises: evidence from the United Kingdom, 1750-1938

This paper investigates the macroeconomic effects of UK banking crises over the period 1750 to 1938. We construct a new annual banking crisis series using bank failure rate data, which suggests that the incidence of banking crises was every 30 or so years. Using our new series and a narrative approach to identify exogenous banking crises, we find that industrial production contracts by 8.2 per cent in the year following a crisis.

Mutual gains? Is there a role for employee engagement in the modern workplace?

I examine the history of employee engagement and how it has been characterised by thinkers in sociology, psychology, management and economics.  I suggest that, while employers may choose to invest in employee engagement, there are alternative management strategies that may be profit-maximising.

The interest rate effects of government debt maturity

Using an empirical model, this paper finds that shortening the average maturity of US Treasury debt held outside the Federal Reserve by one year reduces the five-year forward 10-year yield by between 130 and 150 basis points. Based on a pre-crisis period, these estimates suggest that portfolio balance effects are unlikely to reflect only post-crisis market conditions.

Foreign Investment and Shared Sovereignty

This study investigates how the legal provisions contained in Bilateral Investment Treaties (BITs) affect foreign direct investment inflows in OECD countries. This stands in contrast to the existing literature on two counts: first, we examine separate investor protection provisions contained in BITs; and second we cover OECD economies only. We also take account of the existence of investment clauses in Preferential Trade Agreements. Additional attention is paid to the role of trade in the gravity model, estimated using a Poisson Pseudo Maximum Likelihood estimator.

The UK Economy in the Long Expansion and its Aftermath

In the aftermath of the inflation and recessions of the 1970s and early 1980s, from the early 1990s onwards there was a major upswing in most advanced countries. In the UK it was the longest period of economic expansion on record. But it came to an abrupt end in 2007, with the freezing of the interbank markets and the collapse of Northern Rock, followed in 2008 by Bear Stearns and Lehman Brothers. 

The New Art of Central Banking

This article outlines some of the intellectual lessons learnt by central bankers during the financial crisis. The key question is whether a broader range of policy options than simple inflation targeting has to be considered in order to limit instability. Interactions with overseas pools of savings, government debt markets and financial risk have all conspired to complicate significantly the task of monetary policymaking.