Zvi Eckstein

Zvi Eckstein
Interdisciplinary Center Herzliya | IDC · School of Economics

Ph.D.

About

146
Publications
11,776
Reads
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5,231
Citations
Introduction
Additional affiliations
January 1996 - present
Centre for Economic Policy Research - CEPR-
Centre for Economic Policy Research - CEPR-
Position
  • Research Associate

Publications

Publications (146)
Preprint
Full-text available
The average age of Israeli population, as in most OECD countries, is steadily rising. The proportion of the 55-64 age group has been increasing, and in 2019 it reached around a fifth of all primary work age population (ages 25 to 64). This policy paper utilizes data collected by the Israel Central Bureau of Statistics (CBS), as well as internationa...
Article
Full-text available
Energy security is a primary policy objective for the energy sector in every developed country. In order to achieve energy security, the design of the energy sector focuses on the attainment of three goals: power supply reliability, a clean and diverse fuel mix, and competitive pricing of electric power. The risks of power supply shortage are incor...
Chapter
This book describes and analyses developments in the Israeli economy from 1995 to 2017. During this period, inflation was vanquished, the deficit in the balance of payments turned into a surplus, the public debt to GDP ratio sharply decreased, and unemployment has declined to an historical low. Nevertheless, the economy still suffers from many mala...
Article
Full-text available
There is general agreement on the importance of the energy sector to the economy. Improved quality of energy infrastructures increases the growth rate of various industries as well as GDP growth. In Israel, the energy and electric markets are regulated by several government offices: The Ministry of Energy, which is responsible for the overall polic...
Article
Full-text available
Economists growingly highlight the role that human capital formation, institutions, and cultural transmission may play in shaping health, knowledge, and wealth. We study one of the most remarkable instances in which religious norms and child care practices had a major impact: the history of the Jews in central and eastern Europe from 1500 to 1930....
Article
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Comparing the 1935 and 1975 U.S. birth cohorts, wages of married women grew twice as fast as for married men, and the wage gap between married and single women turned from negative to positive. The employment rate of married women also increased sharply, while that of other groups remained quite stable. To better understand these diverse patterns,...
Article
There is a strong correlation between corporate interest rates, their spreads relative to Treasuries, and the unemployment rate. We model how corporate interest rates affect equilibrium unemployment and vacancies, in a Diamond‐Mortesen‐Pissarides search and matching model. Our simple model permits the exploration of US business cycle statistics thr...
Chapter
Full-text available
This paper provides a descriptive summary of the integration process of the large exogenous wave of immigrants from the Former Soviet-Union (FSU) who arrived in Israel in 1989-91, and which we follow for almost two decades until 2009. We discuss the integration of these immigrants in both the labor and marriage markets for different age and educati...
Article
This paper is based on chapters 2 and 7 of our forthcoming book "Im-migrants Labor Market Mobility: Methods and Applications" and provides a descriptive summary of the integration process of FSU immigrants who arrived in Israel in the early wave of 1989-91, which we follow for almost two decades until 2009. In addition to economic indicators, broad...
Article
Changing social norms, as reflected in the interactions between spouses, are hypothesized to affect the employment rates of married women. A model is built in order to estimate this effect, in which the employment of married men and women is the outcome of an internal household game. The type of the household game is exogenously determined as eithe...
Article
In 70 CE, the Jews were an agrarian and illiterate people living mostly in the Land of Israel and Mesopotamia. By 1492 the Jewish people had become a small group of literate urbanites specializing in crafts, trade, moneylending, and medicine in hundreds of places across the Old World, from Seville to Mangalore. What caused this radical change?The C...
Chapter
This concluding chapter highlights some puzzles that punctuate Jewish history, from the mass expulsion of the Jews from the Iberian Peninsula in 1492–97 to today. A growing number of scholars have been studying the long-term impact of institutions by illustrating that some contemporary economic patterns have been influenced by institutions that eme...
Chapter
This chapter assesses the argument that both their exclusion from craft and merchant guilds and usury bans on Christians segregated European Jews into moneylending during the Middle Ages. Already during the twelfth and thirteenth centuries, moneylending was the occupation par excellence of the Jews in England, France, and Germany and one of the mai...
Chapter
This chapter looks at the Mongol invasion of Persia and Mesopotamia, beginning in 1219 and culminating in the razing of Baghdad in 1258. The Mongol invasion of Persia and Mesopotamia contributed to the demise of the urban and commercial economy of the Abbasid Empire and brought the economies of Mesopotamia and Persia back to an agrarian and pastora...
Chapter
This chapter shows that once the Jews became literate, urban, and engaged in skilled occupations, they began migrating within the vast territory under Muslim rule—stretching from the Iberian Peninsula to India during the eighth through the twelfth centuries, and from the Byzantine Empire to western Europe via Italy and within western Europe in the...
Chapter
This chapter describes how many Jews there were, where they lived, and how they earned their living from the time of the destruction of the Second Temple to the mass expulsion of the Jews from the Iberian Peninsula. During the six centuries between the time of Jesus and the time of Muhammad, the number of Jews declined precipitously. Throughout the...
Chapter
This chapter studies how literate Jewish farmers abandoned farming and became small, urban populations of skilled craftsmen, shopkeepers, traders, money changers, moneylenders, scholars, and physicians. The literacy of the Jewish people, coupled with a set of contract-enforcement institutions developed during the five centuries after the destructio...
Chapter
This chapter shows that the implications of the economic theory in the previous chapter are consistent with what happened to the Jewish people during the five centuries following the destruction of the Second Temple. An impressive body of evidence from both the Talmud and archaeological discoveries indicates that during the Talmudic period, Jews in...
Chapter
This chapter examines the arguments set forth to explain why the Jews became a population of skilled craftsmen, traders, bankers, and physicians and why they created a worldwide urban diaspora. These arguments are grouped into two main categories: ones that highlight exogenous factors (discrimination, restrictions, persecutions, massacres) and ones...
Chapter
This chapter presents an economic theory that describes the choices regarding religious affiliation and the investment in children's literacy and education in a world populated by Jewish and non-Jewish farmers. This theory yields two main implications. First, because individuals differ in religious preferences, skills, costs of education, and earni...
Chapter
This chapter discusses the well-documented shift of the religious norm that transformed the Jews into the People of the Book. During the first century BCE, some Jewish scholars and religious leaders promoted the establishment of free secondary schools. A century later, they issued a religious ordinance requiring all Jewish fathers to send their son...
Book
In 70 CE, the Jews were an agrarian and illiterate people living mostly in the Land of Israel and Mesopotamia. By 1492, the Jewish people had become a small group of literate urbanites specializing in crafts, trade, moneylending, and medicine in hundreds of places across the Old World, from Seville to Mangalore. What caused this radical change? Thi...
Article
A study of the labor market integration of highly skilled Soviet immigrants to Israel that formulates dynamic models of job search and human capital investment. © 2012 Massachusetts Institute of Technology. All rights reserved.
Article
Circa 1000, the main occupations of the large Jewish community in Muslim Spain and of the small Jewish communities in southern Italy, France, and Germany were local trade and long-distance commerce, as well as handicrafts. A common view states that the usury ban on Christians segregated European Jews into money lending. A similar view contends that...
Article
Full-text available
This story describes the circumstances that led to all five of us starting as editors at the same time, the unexpected things we have found, the unanticipated reactions we have encountered, how we worked as an editorial team, the central role of the editorial office manager, how we managed to work with five different publishers in ten years, the va...
Article
We propose a job search model with minimum wage regulations and imperfect compliance to explain the doubling of the mean and variance of hourly earnings of white males during the first 18 years of labor market experience. The model encompasses job mobility and on-the‐job wage growth as sources of wage dynamics, and is estimated by simulated general...
Article
We formulate a dynamic discrete choice model of training and employment to measure the personal and social benefits from government provided training for a sample of high-skilled female immigrants from the Former Soviet Union in Israel. We find that training has a significant impact on the mean offered wage in white-collar occupations, but not in b...
Article
The increase in female employment and participation rates is one of the most dramatic economic changes to have taken place during the last century. However, while the employment rate of married women more than doubled during the last fifty years, that of unmarried women remained almost constant. In order to empirically analyze these trends we divid...
Article
Full-text available
The Israeli economy experienced very high inflation in the 1970s, which turned into hyperinflation in the mid-1980s. We describe the evolution of monetary policy in Israel since the implementation of the economic stabilization program of 1985, and the long road toward price stability with a floating exchange rate (ER) two decades later. The monetar...
Article
This article analyzes the labor mobility and human capital accumulation of male immigrants from the former Soviet Union to Israel. We estimate a dynamic choice model for employment and training in blue- and white-collar occupations, where the labor market randomly offered opportunities are affected by past choices. The estimated model accurately re...
Chapter
S. Rao Aiyagari was 45 years old when he died in 1997, just as his approach to dynamic macroeconomic research was gaining recognition. Rao’s vision was motivated by empirical observations and academic debates stemming from the different implications of aggregate and individual economic data. In particular, individual earnings, saving, wealth and la...
Chapter
Path dependence in occupations refers to the observed occupational distribution in a population or in a sub-population at a point in time that depends on changes that occurred years or centuries earlier. Path dependence in occupations can be the outcome of the cumulative concentration of certain productive activities in specific regions over time,...
Article
When panel data are not available, retrospective data are used in the estimation of dynamic choice models. However, retrospective data are not reliable. Previous studies of voting choices, for example, have shown that respondents misreport their past choices in order to appear more consistent with their current choice. Such retrospective bias leads...
Article
From the end of the second century CE, Judaism enforced a religious norm requiring fathers to educate their sons. We present evidence supporting our thesis that this change had a major influence on Jewish economic and demographic history. First, the high individual and community cost of educating children in subsistence farming economies (2nd to 7t...
Article
How well does a simple search on-the-job model fit the eighteen years of job and wage mobility of high school graduates? To answer this question we are confronted from the data with a prevalent non-compliance and exemptions from the minimum wage. We incorporate this observation in a job search model with three main ingredients: (i) search on-the-jo...
Article
Full-text available
Given falling birth rates, ageing baby boomers approaching retirement age as well as a pension crisis in most advanced economies, understanding the characteristics of the labour supply function of the elderly have taken on a new significance. Even in developing countries, with labour surplus economies, this is a major issue as these poor countries...
Article
Full-text available
Given falling birth rates, ageing baby boomers approaching retirement age as well as a pension crisis in most advanced economies, understanding the characteristics of the labour supply function of the elderly have taken on a new significance. Even in developing countries, with labour surplus economies, this is a major issue as these poor countries...
Article
Full-text available
Since the early Middle Ages almost all the Jews have been engaged primarily in urban, skilled occupations. The transition from farmers to merchants occurred between the eighth and the ninth centuries in the Muslim Empire where the Jews moved from villages to the newly developed urban centers. They continued to be engaged in urban occupations throug...
Article
Full-text available
We estimate a job search model with four main ingredients: (i) search on-the-job; (ii) wage growth on-the-job; (iii) minimum wages, with potentially imperfect compliance ; and, (iv) exogenous wage growth on-the-job. We use data drawn from the NLSY79 to estimate the parameters of our job search model and, in particular, the extent of compliance to t...
Article
Full-text available
Before the eighth ninth centuries CE, most Jews, like the rest of the population, were farmers. With the establishment of the Muslim Empire, almost all Jews entered urban occupations despite no restrictions prohibiting them from remaining in agriculture. This occupational selection remained their distinctive mark thereafter. Our thesis is that this...
Book
Full-text available
Liquid Assets shows that the common view of water as an inevitable cause of future wars is neither rational nor necessary. Typically, two or more parties with claim to the same water sources are thought to play a zero-sum game with each side placing a high emotional and political value over the ownership of the water. However, Franklin Fisher an...
Article
Full-text available
During the decade that started in 1990 the Israeli economy experienced two major events. First, starting in the fall of 1989 a large wave of relatively highly skilled immigrants arrived from the former Soviet Union (CIS) increasing the population and the labor force by considerable magnitude. Second, the hi-tech sector has grown substantially and r...
Article
This paper analyzes the effect of terror on the economy. Terror endangers life such that the value of the future relative to the present is reduced. Hence, due to a rise in terror activity, investment goes down, and in the long run income and consumption go down as well. Governments can offset terror by putting tax revenues into the production of s...
Article
This paper surveys the existing empirical research that uses search theory to empirically analyze labor supply questions in a structural framework, using data on individual labor market transitions and durations, wages, and individual characteristics. The starting points of the literature are the Mincerian earnings function, Heckman's classic selec...
Article
The goal of this article is to summarize the main trends in the earnings and employment distribution in the United States using data drawn from the March Current Population Surveys covering the period between 1961 and 2002. We show that inequality started to increase for men in 1974, and for women in 1981, and for both genders inequality continued...
Article
Full-text available
In this study we summarize the main trends in the earnings and employment distribution for the US during the last four decades using data drawn from the March CPS. Our aim is to state the facts in a simple descriptive way , which then enables the readers to formulate their own judgment on how well existing theories explain the recent trends and wha...
Article
We propose a framework to estimate the extent of compliance to minimum wage laws. Cases of non-compliance arise whenever the law enforcement is imperfect, and the share of the match rent offered by a firm to a worker falls below the minimum wage and above the worker’s reservation wage. This can be the case when the productivity of some job matche...
Article
This paper deals with the occupational absorption of female immigrants from the former Soviet Union (now the CIS) into Israel's labor market, and their participa- tion in subsidized vocational training courses. About 43 percent of these immi- grants had participated in such a course during their first five years in Israel. A calibration of a dynami...
Article
This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are: (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and, (iii) the mobility up the occupational ladder in the host country. U...
Article
Full-text available
1] In many situations, actual water markets will not allocate water resources optimally, largely because of the perceived social value of water. It is possible, however, to build optimizing models which, taking account of demand as well as supply considerations, can substitute for actual markets. Such models can assist the formation of water polici...
Article
Full-text available
This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are: (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and, (iii) the mobility up the occupational ladder in the host country. U...
Article
this paper is to provide a simple extension of the real business cycle model of a small open economy that can fit these facts. In particular, extending the standard model for two sectors of traded and non-traded goods and using the Israeli data for the parameter specification, we can well fit the above exceptional business cycle observations. Follo...
Article
This Paper analyses the labour mobility and human capital accumulation of male immigrants who moved from the former Soviet Union to Israel. We formulate an estimable dynamic choice model for employment and training in blue and white-collar occupations, where the labour market randomly offered opportunities are affected by past choices. The estimate...
Article
We analyze an equilibrium search model with three sources for wage and unemployment differentials among workers with the same (observed) human capital but different appearance (race): unobserved productivity, search intensities, and discrimination due to an appearance-based employer disutility factor. We show that the structural parameters are iden...
Article
Full-text available
Este artículo trata de proporcionar una visión amplia de la literatura teórica sobre modelos de búsqueda de trabajo. Para ello se construye un modelo general de búsqueda de trabajo que, mediante variaciones en los supuestos, permite englobar a los principales modelos particulares estudiados hasta el momento. Además, y para cada caso concreto, se de...
Article
Full-text available
This paper studies one of the most remarkable examples of successful economic perfor-mance in which religion, education, and human capital accumulation seems to have played a critical role: the economic history of the Jews. The main question we aim to address is to what extent a human capital model of occupational choice can explain the trends in J...
Article
The Israeli economy business cycle properties are different from those of most OECD countries in four main dimensions. Aggregate consumption is twenty percent more volatile than output, the trade balance is much more volatile than output and is procyclical, investment is almost five times more volatile than output, and the auto-correlation in outpu...
Article
The transition pattern of post schooling individuals, displaced workers and immigrants to the labor market has similar characteristics. Unemployment falls quickly as workers first find blue-collar jobs, followed by a gradual movement to white-collar occupations. For immigrants the transition includes the learning of the new country language as well...
Article
The transition pattern of post schooling individuals, displaced workers and immigrants to the labor market has similar characteristics. Unemployment falls quickly as workers first find bluecollar jobs, followed by a gradual movement to white-collar occupations. For immigrants, the transition includes the learning of the new country's language as we...
Article
Full-text available
We thank Mike Keane, Yoram Weiss and Ken Wolpin for dicussions related to this paper. Osnat Lifshitz provided excellent reasearch assistance. We are also grateful for …nancial support from NIH grant 1 R01 HD34716-01.
Article
In this paper, we structurally estimate a sequential model of high school attendance and work decisions. The estimates imply that youths who drop out of high school have different traits than those who graduate, e.g., they have lower school ability and/or motivation, lower expectations about the rewards from graduation, and a comparative advantage...
Article
Full-text available
Assessing the demand for products with characteristics that are unobservable or dicult to measure is becoming increasingly important with the growing proliferation and value of such products. Analyzing industry performance and rm competition in these sectors is hindered by the failure of traditional empirical methods to estimate demand for the prod...
Article
This paper analyzes the relationship between age-specific fertility, mortality and real wages in Sweden during the demographic transition. We fit a model of life cycle fertility to two and a half centuries of Swedish time-series data. The model fits the data well, accurately portraying the total fertility declines from more that four children per f...
Article
In this paper we develop and implement a method for bounding the extent to which labor market discrimination can account for racial wage differentials. The method is based on a two-sided, search-matching model that formally accounts for unobserved heterogeneity and unobserved offered wages. We find that racial differences in offered wages are propo...
Article
This paper analyzes the recent mass immigration from the USSR to Israel. We examine three interrelated features of the assimilation process; the rise in the productive capacity of immigrants as they gradually adapt to the Israeli labor market, the rising rewards that immigrants receive for their imported skills and the role of the family in facilit...
Article
A fundamental premise of Federal and State legislation that restricts the hours that minors can be employed while school is in session is that working may adversely affect school performence. In this paper, we develop and structurally estimate a sequential of high school attendance and work decicions. Policy experiments based on the models estimate...
Article
This paper analyses the relationship between age-specific fertility, mortality and real wages in Sweden during the demographic transition. We take an overlapping generation’s model of life cycle fertility and fit it to actual Swedish time-series data over the past two and a half centuries. The model fits the data well, accurately portraying the tot...
Article
The Fair Labour Standards Act (FLSA), impose restriction on working hours and the type of jobs held by minors at ages below 18. Hours worked in the National Longitudinal Survey of Youth (NLSY) sample increased monotonically from 2.5 for the 14-year-olds to 16.2 for the 18-year-olds, and among those who worked positive hours, it increased from 8.9 t...
Article
Full-text available
This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are: (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and (iii) the mobility up the occupational ladder in the host country. We...
Article
This paper is motivated by empirical observations on the comovements of currency velocity, inflation, and the relative size of the credit services sector. We document these comovements and incorporate into a monetary growth model a credit services sector that provides services that help people economize on money. Our model makes two new contributio...
Article
This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are : (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and, (iii) the mobility up the occupational ladder in the host country....
Article
In this paper we analyze an equilibrium search model with three sources for age and unemployment differentials among workers with the same (observed) human capital, but different appearance (race): unobserved productivity (skill), search intensities and discrimination (Becker 1957) due to an appearance-based employer disutility factor. Because thes...
Article
This paper analyzes the relationship between age-specific fertility, mortality and real wages in Sweden during the demographic transition.
Article
In this paper, we addressed the issue of whether working whle attending high school impinges on academic performance. We formulated and empirically implemented a stylized model of grade progression through high school in which youths make sequential decisions about school attendance and work.
Article
This paper uses a money-in-the-utility model to show that the Israeli data from the high-inflation and poststabilization period fit well the predictions of a simple, neoclassical framework. Specifically, a single parameter money demand equation that is derived from the model fits the data much better than a Cagan money demand function. The model's...
Article
In this note, the authors synthesize exogenous and endogenous sources of economic growth in a stochastic dynamic log linear general equilibrium model. Endogenous growth could be the result of internal constant returns to scale, external increasing returns to scale in the production of human capital or in the production of goods. The authors get a c...
Article
Full-text available
This paper investigates the properties of the joint distribution of the duration to the first post-schooling full-time job and of the accepted wage for that job within a search-matching-bargaining theoretic model. The model provides an interpretation of the observations on duration to first job and accepted wages that differentiates between behavio...