Tim Perri

I consider educational signaling of inherent ability that facilitates sorting of individuals between sectors. More able individuals are more productive in the primary sector, and less able individuals are more productive in the secondary sector. I find signaling may increase but never maximizes welfare, and is more likely to increase welfare the gr...

The extent of publishing in predatory journals in economics is examined. A simple model of researcher behavior is presented to explore those factors motivating an academic to publish in predatory journals as defined by Beall (Criteria for determining predatory open access publishers, Unpublished document, 3rd edn, 2015. https://scholarlyoa.com/publ...

Previous research suggests that universities that fear tenuring bad candidates more than they fear rejecting good candidates would optimally have both department and outside evaluating committees. I find that a higher relative cost of accepting bad candidates is neither necessary nor sufficient for the optimality of more than one committee. Also, w...

Online higher education may lower educational time cost for less able individuals more than for others. If education merely signals ability, decreasing education cost for the less able may decrease welfare by increasing over-investment in education by the more able. When education adds to human capital and may signal ability, decreasing education c...

Maybe. Lemons and signalling models generally deal with different welfare problems, the former with withdrawal of high quality sellers, and the latter with socially wasteful signals. Absent signalling, with asymmetric information, high productivity workers may not be employed where they are valued the most. If one’s productivity is known in alterna...

The article focuses on the evolution of military conscription in the US. The National Defense Act of 1916 allowed the regular army to expand to 175,000, asserted the principle of military service for able-bodied males ages eighteen to forty- five, and empowered the president to draft militia units if sufficient volunteers did not appear. A draft of...

Oyer (20074. Oyer , P. 2007. Is there an insider advantage in getting tenure?. American Economic Review, 97: 501–5. [CrossRef], [Web of Science ®]View all references, 2008) considered the turnover of economics professors early in their careers. He found professors are more likely to move down from higher ranked schools than up from lower ranked sc...

It has been argued the draft may enable the military to attract more able individuals than a volunteer military and thus increase welfare. We find this may be the case if a volunteer military simply takes the least able individuals. Ignoring the deadweight loss from taxation, when the military tests individuals, does not take the lowest quality app...

We consider the possibility a draft increases the likelihood individuals will invest in human capital in the military. This possibility exists because those drafted have less time to reap the return from human capital investment. A draft is more likely to increase human capital investment in the military the larger the civilian return to human capi...

The existing superstar model (Rosen 1981) does not require imperfect substitutes and explains the convexity of total earnings with respect to talent due to higher output for those with the most talent. We develop a model that explains why per unit earnings (wages or prices) would increase at an increasing rate in talent. Imperfect substitution resu...

Spence (1974a) considered a variant of his signaling model in which there are two types of jobs, and in which signaling can increase wealth by improving the allocation of individuals to jobs. Using results in signaling games since Spence’s work---the Riley outcome (Riley, 1979), the intuitive criterion (Cho and Kreps, 1987), and undefeated equilibr...

This paper models how a nation's military manpower procurement system affects popular sup-port for war and political choices regarding war. When citizens have idiosyncratic benefits from war and costs from serving, I characterize when a volunteer military maximizes support, and when a mixture of volunteer and conscripted forces does. Pure conscript...

“Garden leave†(GL)---when workers are paid but do not work---may be preferred by firms since courts are more likely to enforce GL than “covenants not to compete†(CNCs). We consider when GL is more profitable than a CNC. Also, assuming it is optimal to offer GL or a CNC, we find (1) the optimal length of either GL or a CNC is the same, (2) f...

A model of military conscription with costly deferments is developed. Deferments may enable the induction of only those with the lowest reservation wages, avoiding the usual misallocation of resources with conscription versus a volunteer military. With costly deferments, the tradeoff between conscription and a volunteer military involves the cost o...

The US government had limited power during the Civil War, including an inability to tax income. Similar to conscription plans considered in the War of 1812, Civil War conscription was not intended to compel service, but was a second-best plan to shift the tax burden to state and local governments. The time allowed communities to provide volunteers...

US conscription in the Civil War is analyzed. Conscription was designed to gain federal control of enlistments, leaving state and local governments much of the fiscal and administrative responsibility for raising troops. Due to the hiring of substitutes, the payment of a fee to avoid service (commutation), and community-provided funds, only 2% of t...

Publications signal a professor’s productivity and may lead to raids by other universities. A raided professor learns the value of non-wage benefits at a raiding university, and will quit only if benefits elsewhere are relatively high. The social value of these benefits suggests research may be efficient even in the absence of a direct social value...

The usual explanations for superstar effects---when a firm’s revenue is positive and convex in quality, and a few firms earn a large share of market revenue---are imperfect substitution between sellers, low marginal cost of output, and marginal cost declining as quality increases. Herein, a competitive model is developed in which superstar effects...

In an influential article, “Unraveling in Matching Markets,” Li and Rosen (1998) note the first seven picks, and 17 among 29 first round selections of the 1997 NBA draft, were not college seniors. In 2004, the first pick in the NBA draft was a high school senior, and 25 of the first 29 picks were not college seniors. Li and Rosen (1998) suggest ear...

Adam Smith’s proposal for paying professors was intended to induce increased faculty knowledge. If students have imperfect information about what they learn, and universities can only imperfectly measure the input of faculty time in student learning, publications may be used to measure faculty knowledge. If professors’ ability to publish is positiv...

Since Gary Becker’s classic treatise Human Capital, the cost of education has generally been viewed as the sum of direct cost plus net foregone earnings—the difference between what could have been earned without attending school and what is earned while in school. However, individuals invest in specialized and not generic human capital. For some in...

Typical models of educational signaling assume firms are uncertain of worker ability. However, there are both theoretical and empirical problems with such models. In contrast, as in Salop and Salop [Quarterly Journal of Economics 90 (1976) 619], a model is considered in this paper in which individuals differ in the likelihood of quitting and firms...

The 1981 Klein-Leffler model of product quality does not explain why high-quality firms would dissipate the rents they earn from quality-assuring price premia, and it relies on consumers knowing the cost functions of firms. In the present article, consumers do not know any firm's cost of producing quality goods, so firms with a low cost of producin...

This paper assesses the influence of David Kreps, winner of the John Bates Clark medal, primarily through citations to his work.

This paper analyzes the behavior of federal expenditures and budget deficits since 1955. It is found that growth in these series is well described by two simple step functions allowing for three discrete increases in the means of the variables. When adjusted for the changes in means, both series are stationary with no significant time trend. It is...

As a consequence of the rapid growth of temporary agency employment in Germany, the debate on the remuneration of temporary agency workers has intensified recently. The study finds that the earnings gap of temporary help workers in Germany is indeed large and increased during the past decade. Decomposition reveals that the widening gap mainly is dr...

This paper considers the ‘invisibility hypothesis’ in which an individual not promoted is of unknown ability to other employers. Previous research finds that only some of those efficiently promoted are promoted. However, this paper shows that, with no prohibition on wage cuts and no specific human capital, all are promoted owing to a reverse lemons...

This study extends a recent paper by Jean Louis Heck and Peter A. Zaleski [1991] on trends in economics journal publication from 1969–89. The primary purpose of the work is to analyze the impact on article production of an observed dramatically increasing tendency toward coauthorship among scholars in economics. A simple model is tested with total...

Attracting an executive of desired ability or inducing effort from top executives may require a strong relation between executive compensation and firm performance. Yet the evidence suggests that there is a trivial impact of firm value on CEO compensation. I show that influence activity by executives can explain this evidence. One of the results is...

I combine ability testing by individuals (Burdett and Mortensen, 1981) with indirect signalling via job assignment (Waldman, 1984). Models of individual testing and signalling (Spence, 1974) usually find that such activity is socially excessive and that the most able are the most likely to test or signal. The job assignment model of Waldman suggest...

This paper is concerned with a world where firms initially do not know workers' productivity and workers do not know the level of match specific job satisfaction at any firm. We find that, even if firms will not default on contingent contracts, there is generally a positive private and social return to educational screening. Contingent contracts do...

When testing is imprecise, given heterogenous labor and shirking, bonding can be costly because non-shirkers are discharged (Type II error). Thus firms must pay higher wages to compensate for this possibility. In this case, an inefficient allocation of labor results.

We consider a labor market where information is asymmetric. Previous research suggests that excess supply may result in this situation. We find no excess supply if labor suppliers respond to wage prospects – the wage times the probability of employment.

We estimate the causal effect of mandatory participation in the military service on the involvement in criminal activities. We exploit the random assignment of young men to military service in Argentina through a draft lottery to identify this causal effect. Using a unique set of administrative data that includes draft eligibility, participation in...

In this paper an explanation is offered for guaranteed contracts based on turnover costs. Because workers value shirking, turnover costs are notnecessary for firms to offer these contracts: firms are willing to trade a higher level of shirking for a lower wage as long as l<T. If turnover is not costly to firms, then there is no particular reason f...