Stock–flow job matching implies that there are two types of job seekers—those on the short side of their occupations who can easily find work, and those on the long side who expect extended unemployment spells. Using matching data and information on completed and uncompleted unemployment spells for England and Wales, this paper uses the stock–flow matching hypothesis to identify the fraction (incidence) of laid off workers who find themselves on the long side of the market and, conditional on being on the long side, their expected unemployment duration. The average incidence is around one-half and increases significantly in recessions. The expected duration is also strongly countercyclical—peaking at 15 months in the 1990–1992 recession and falling to a more modest 9 months by January 1999. Cross-section estimates also identify a North–South divide and a large city effect—the unemployed in large cities and in the North experience longer spells.

Cultural variables in economic analysis have recently experienced a strong renewal. This evolution sheds a new light on the old debate between the “Beckerian model” of fertility and the “synthesis model” of fertility. In this paper, I propose a fertility model making the evolution of culture endogenous. The whole population is divided into two cultures corresponding to specific preferences for fertility. Parents decide their fertility rate and try to transmit their culture to their children. Differential fertility between cultures gives rise to an evolutionary process while differential effort to transmit the parental culture gives rise to a cultural process. The long-run distribution of preferences and the average total fertility rate both result from interactions between these processes. As a result, a fertility transition cannot appear without productivity shocks in favor of the culture that is not biased toward quantity of children. However, asymmetric productivity shocks are not always sufficient to cause a fertility transition.

This paper characterizes the saving rate in the Ramsey–Cass–Koopmans model analytically with a general production function when there exist both exogenous and endogenous growth. It points out conditions involving the share of capital and the elasticities of factor and intertemporal substitution under which the saving rate path to its steady-state value exhibits overshooting or undershooting or is monotonic. Simulations illustrate these interesting dynamics. The paper also identifies the general class of production functions that render the saving rate constant along the entire transition path and hence make the Ramsey–Cass–Koopmans model isomorphic to that of Solow and Swan.

This paper presents an equilibrium explanation of the inter- and intrasectoral mobility of workers. Analyses of our samples from the Panel Study of Income Dynamics and the National Longitudinal Survey of Youth show that, other things being equal, the initial wage decline is greater for intersectoral movers than for intrasectoral movers. Intersectoral movers, however, enjoy higher wage growth in subsequent years on postunemployment jobs than intrasectoral movers do, and hence are compensated for their initial wage decline. Our estimates suggest that, other things being constant, the additional short-term wage loss associated with sector shifts is overturned in no more than four years by the greater wage growth of intersectoral movers in subsequent years. The findings in the current study clearly show that the true economic costs of intersector mobility tend to be overstated in existing studies and are significantly lowered in the long-term perspective. Calibration of a simple lifetime utility model demonstrates that inter- and intrasectoral movements of workers are quantitatively consistent with an equilibrium framework, at least for a major group of workers who move with longer term perspectives. Evidence also shows that job seekers consider not only the initial wage rate but also the subsequent wages received from the postunemployment job when deciding whether to recommence employment or switch sectors.

We examine the nexus between land transfers and human capital formation. A sequence of land redistributions enables the beneficiaries to educate their children and thus to escape from poverty. A successful land reform allows the transition of a society from an agriculture-based state of poverty to a human capital–based developed economy. We find that a temporary state of inequality among the poor is unavoidable. Finally, we discuss the political economy of land reform, whether access to land markets should be allowed for beneficiaries of land reforms, and property rights issues.

James Heckman is one of the most important and influential scholars to have graced the economics profession. His work is deeply rooted at the intersection of economic theory and empirical microeconomics, and he has made significant contributions to the study of labor economics, microeconometrics, and the use of micro data in macroeconomic analysis. Heckman's work is motivated by the scientific method, in which theory is held up to the scrutiny of the data and empirical analysis is informed by economic theory. During the course of his work, he has made lasting contributions to the study of sample selection bias, duration analysis, heterogeneity, and treatment effects in microeconometrics. In labor economics, he has applied these econometric methods to the study of labor supply and life-cycle dynamic models of unemployment, wage growth, and skill formation. In addition, he is the leading scholar on the evaluation of active labor market programs. As an applied microeconomist, one cannot do research on labor supply, sample selection, duration models, or life-cycle dynamics without encountering Jim Heckman's work.

A standard timing protocol in a cash-in-advance model allows the government to elude the inflation tax. That matters. Altering the timing of tax collections to make the government hold cash overnight disables some classical propositions but enables others. The altered timing protocol loses a Ricardian proposition and also the proposition that open market operations, accompanied by tax adjustments needed to finance the change in interest on bonds due the public, are equivalent to pure units changes. The altered timing enables a Modigliani–Miller equivalence proposition that does not otherwise prevail.

One of the most prominent and consistent findings of the recent empirical literature on fiscal policy is that investment expenditure is crowded out by public spending in the short run. In this contribution, we address this empirical fact using a dynamic general equilibrium model and show that the introduction of habit-forming behavior plays a major role in accommodating the observed negative relationship between investment and government expenditure. Our numerical experiments point out the role of consumption inertia in determining the reactions of the open economy: as habit persistence gets stronger, fiscal expansion crowds out real consumption by a smaller amount and investment by a larger one, while the current account enters into a greater deficit.