CES-WP-03-10
What Determines Environmental Performance at Paper Mills? The Roles of Abatement Spending, Regulation, and Efficiency
Ronald Shadbegian, Wayne Gray
April 01, 2003
This paper examines the determinants of environmental performance at paper mills, measured by air
pollution emissions per unit of output. We consider differences across plants in air pollution abatement
expenditures, local regulatory stringency, and productive efficiency. Emissions are significantly lower in
plants with a larger air pollution abatement capital stock: a 10 percent increase in abatement capital stock
appears to reduce emissions by 6.9 percent. This translates into a sizable social return: one dollar of
abatement capital stock is estimated to provide and annual return of about 75 cents in pollution reduction
benefits. Local regulatory stringency and productive efficiency also matter: plants in non-attainment
counties have 43 percent lower emissions and plants with 10 percent higher productivity have 2.5 percent
lower emissions. For pollution abatement operating costs we find (puzzlingly) positive, but always
insignificant, coefficients.
 View Paper 34 Pages 232983 Bytes
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CES-WP-03-09
Firms and Layoffs: The Impact of Unionization on Involuntary Job Loss
Vanessa Tinsley
March 01, 2003
This paper focuses on the impact of unionization on involuntary job loss using establishment data from the 1997 National Employer Survey (NES-II) and merging those data with contextual data at the industry level as well as with local labor market data. The estimated logit models included information on unionization rates and employment security provisions present in collective bargaining agreements as factors influencing layoff rates for individual establishments, controlling for establishment size, firm structure, use of non-regular employees, product/service demand and local employment. Results show that the impact of unionization is not significant except for (1) establishments that operate in the non-manufacturing sector; and (2) establishments operating in industries that have major collective bargaining agreements which contain moderate employment security provisions. Under those conditions, unionization decreases layoff rates; otherwise, unionization has no effect on layoff rates. These results provide some evidence that unions may have placed increased emphasis on employment security in order to protect members against involuntary job loss. This is in contrast to earlier studies which found a positive relationship between unionization and layoffs. In addition, establishments in Right-to-Work states have higher rates of involuntary job loss.
View Paper 41 Pages 266622 Bytes
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CES-WP-03-08
Managerial Efficiency, Organizational Capital and Productivity
Michael Gort, Seong-Hoon Lee
March 01, 2003
The paper focuses on the impact of managerial efficiency on output. Three sources of
managerial efficiency are identified: (a) superior initial managerial endowments, (b) the
accumulation of managerial knowledge and skills through learning and (c) the impact of
an effective market for managerial resources internal to the firm. All three are explicitly
measured by appropriate variables and their impact is examined in the context of
variously specified production functions. The empirical analysis is carried out with data
for approximately 5,000 new manufacturing plants in the United States over the 1973-92
period. It is found that variation in managerial endowments is an important explanatory
variable for output with all other relevant inputs controlled. It is further found that the
survival of plants with superior managerial efficiency, and the death of those with inferior
efficiency, explains a substantial fraction of total factor productivity change in the
manufacturing sector of the U.S. economy. There is also clear evidence of the
significance for efficiency of internal markets as well as evidence of learning as plants
age. Learning and superior managerial resources of old plants largely offset the benefits
of capital goods of later vintage of new plants.
View Paper 26 Pages 195251 Bytes
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CES-WP-03-07
The Role of Technological and Industrial Heterogeneity In Technology Diffusion: a Markovian Approach
Adela Luque
February 01, 2003
Recent empirical studies have established the importance of intra and inter-industry heterogeneity in investment in innovation and other outcomes. This paper examines the role of industry and technology heterogeneity in the diffusion of advanced manufacturing technologies from a simple Markovian approach. Using the Maximum Entropy estimator, I estimate transition probabilities and corresponding half-lives, look for outliers in technology and industry diffusion patterns, and try to find explanations of their unusual behavior in idiosyncratic technology and industry characteristics.
A consistent industry-level pattern that emerged is one that relates consumer demand and production processes. It seems that in industries where hand-made products are a sign of quality to the customer, technology spreads very slowly. On the other hand, in industries where demand for sophisticated, high-precision goods is high or in industries where demand-driven product specifications vary quite rapidly over relatively short periods of time, advanced technologies diffuse much more rapidly.
View Paper 41 Pages 407715 Bytes
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CES-WP-03-06
Productivity, Investment in ICT and Market Experimentation: Micro Evidence from Germany and the U.S.
John Haltiwanger, Ron Jarmin, Thorsten Schank
February 01, 2003
In this paper, we examine the relationship between the use of advanced technologies, such as information and communications technologies (ICT), and related business practices and outcomes such as productivity, employment, the skill mix of the workforce and wages using micro data for the U.S. and Germany. . We find support to the idea that U.S. businesses engage in experimentation in a variety of ways not matched by their German counterparts. In particular, there is greater experimentation amongst young US businesses and there is greater experimentation among those actively changing their technology. This experimentation is evidenced in a greater dispersion in productivity and in related key business choices, like the skill mix and Internet access for workers. We also find that the mean impact of adopting new technology is greater in U.S. than in Germany. Putting the pieces together suggests that U.S. businesses choose a higher mean, higher variance strategy in adopting new technology.
View Paper 29 Pages 322585 Bytes
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CES-WP-03-05
The Geographic Concentration of New Firm Formation and Human Capital: Evidence from the Cities
Zoltan Acs, Catherine Armington
February 01, 2003
The role of education and human capital externalities is a key variable in theories of economic growth. However, the mechanism by which these externalities are realized has not been fully investigated. We examine the relationship between area differences in the levels of human capital and subsequent differences in new firm start-up rates. Firm start-ups are usually based on an innovation (in product, process, or market) that derives from utilization of new knowledge. We find that the new firm start-up rates in areas that function as integrated labor and consumer markets (city plus surrounding commuter area) are (1) positively related to the share of adults with college degrees, and also (2) positively related to higher levels of existing establishments in the same industry and area sector. The finding that higher concentrations of existing establishments in the same industry segment were strongly associated with higher startup rates suggests that spillover of relevant knowledge from other local business owners/managers and researchers within each industry contributes to greater innovation and growth in the area.
View Paper 59 Pages 313526 Bytes
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CES-WP-03-04
The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data
David Fairris, Roberto Pedace
February 01, 2003
Human capital theory suggests that workers may finance on-the-job training by accepting lower wages during the training period. Minimum wage laws could reduce job training, then, to the extent they prevent low-wage workers from offering sufficient wage cuts to finance training. Empirical findings on the relationship between minimum wages and job training have failed to reach a consensus. Previous research has relied primarily on survey data from individual workers, which typically lack both detailed measures of job training and important information about the characteristics of firms. This study addresses the issue of minimum wages and on-the-job training with a unique employer survey. We find no evidence indicating that minimum wages reduce the average hours of training of trained employees, and little to suggest that minimum wages reduce the percentage of workers receiving training.
View Paper 36 Pages 222278 Bytes
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CES-WP-03-03
The Impact of Welfare Waivers on Female Headship Decisions
David Ribar, John Fitgerald
February 01, 2003
While much of the focus of recent welfare reforms has been on moving recipients from welfare to work, many reforms were also directed at affecting decisions about living arrangements, pregnancy, marriage and cohabitation. This paper focuses on women’s decisions to become or remain unmarried mothers, that is, female heads of families. We assess the impact of welfare reform waivers on those decisions while controlling for confounding local economic and social contextual conditions. We pool the 1990, 1992, and 1993 panels of the Survey of Income and Program Participation (SIPP) which span the calendar time when many states began adopting welfare waivers. For its descriptors of local labor market conditions, the project uses skill specific measures of wages and employment opportunities for counties. We estimate
models for levels of female headship and proportional hazard models for entry and exit from female headship. In the hazards, we employ stratified Cox partial likelihood methods and investigate the use of state fixed effects or state stratified hazard models to control for unmeasured state influences. Based on data through 1995, we find limited evidence that workencouraging waivers had a beneficial effect by reducing female headship of families. We find
little evidence that family caps, teenage coresidence requirements or termination limits will reduce the number of single-parent families.
View Paper 42 Pages 1103726 Bytes
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CES-WP-03-02
Endogenous Growth and Entrepreneurial Activity in Cities
Zoltan Acs, Catherine Armington
January 01, 2003
Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas. We find that differences in levels of entrepreneurial activity, diversity among geographically proximate industries, and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception.
View Paper 42 Pages 447907 Bytes
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CES-WP-03-01
An Equilibrium Model of Sorting in an Urban Housing Market: A Study of the Causes and Consequences of Residential Segregation
Patrick Bayer, Robert McMillan, Kim Rueben
January 01, 2003
This paper presents a new equilibrium framework for analyzing economic and policy questions related to the sorting of households within a large metropolitan area. At its heart is a model describing the residential location choices of households that makes explicit the way that individual decisions aggregate to form a housing market equilibrium. The model incorporates choice-specific unobservables, and in the presence of these, a general strategy is provided for identifying household preferences over choice characteristics, including those that
depend on household sorting such as neighborhood racial composition. We estimate the model using restricted access
Census data that characterize the precise residential and employment locations of a quarter of a million households in the San Francisco Bay Area, yielding accurate measures of references for a wide variety of housing and neighborhood attributes across different types of household. The main economic analysis of the paper uses these estimates in combination with the equilibrium model to explore the causes and consequences of racial segregation in the housing market. Our results indicate that, given the preference structure of
households in the Bay Area, the elimination of racial differences in income and wealth would significantly increase the residential segregation of each major racial group. Given the relatively small fractions of Asian, Black, and Hispanic households in the Bay Area (each ~10%), the elimination of racial differences in income/wealth (or, education or employment geography) spreads households in these racial groups much more
evenly across the income distribution, allowing more racial sorting to occur at all points in the distribution – e.g., leading to the formation of wealthy, segregated Black and Hispanic neighborhoods. The partial equilibrium predictions of the model, which do not account for the fact that neighborhood sociodemographic compositions and prices adjust as part of moving to a new equilibrium, lead to the opposite conclusion,
emphasizing the value of the general equilibrium approach developed in the paper. Our analysis also provides evidence sorting on the basis of race itself (whether driven by preferences directly or discrimination) leads to large reductions in the consumption of public safety and school quality by all Black and Hispanic households, and large reductions in the housing consumption of upper-income Black and Hispanic households.
View Paper 81 Pages 1215904 Bytes
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