The gift-exchange game is a form of sequential prisoner's dilemma, developed by Fehr et al. (1993), and popularized in a series of papers by Ernst Fehr and co-authors. While the European studies typically feature a high degree of gift exchange, the few U.S. studies provide some conflicting results. We find that the degree of gift exchange is surprisingly sensitive to an apparently innocuous change—whether or not a comprehensive payoff table is provided in the instructions. We also find significant and substantial time trends in responder behavior.

We augment a standard bilateral gift exchange game so employees can send messages at the same time as choosing an effort level. Employee effort (controlling for wages) is unaffected by allowing messages, but wages dramatically increase. Messages affect wages because employees give managers advice to set higher wages, usually explaining that this will result in higher effort. This advice prompts managers to try higher wages, helping them learn that raising wages increases their payoffs. In a follow-up experiment, we directly provide managers with additional information about the relationship between wages and effort. This too causes wages to increase, but to a lesser extent than allowing messages. Our results highlight the critical role of learning in generating gains from positive gift exchange.

Real-effort experiments are frequently used when examining a response to incentives. For a real-effort task to be well suited for such an exercise its measurable output must be sufficiently elastic over the incentives considered. The popular slider task in Gill and Prowse (Am Econ Rev 102(1):469–503, 2012) has been characterized as satisfying this requirement, and the task is increasingly used to investigate the response to incentives. However, a between-subject examination of the slider task’s response to incentives has not been conducted. We provide such an examination with three different piece-rate incentives: half a cent, two cents, and eight cents per slider completed. We find only a small increase in performance: despite a 1500 % increase in the incentives, output only increases by 5 %. With such an inelastic response we caution that for typical experimental sample sizes and incentives the slider task is unlikely to demonstrate a meaningful and statistically significant performance response.

The rise of wages in China would seem to indicate that the demographic dividend has reached its end. A more refined approach reveals, however, that the situation of Chinese workers has not really improved: even though real wages are rising, the share of wages in the nation’s wealth has not kept pace. The reason for this is China’s position within global value chains, where the employment relationship is not solely governed by the employer–employee power relationship, but by contractual relations established between ‘lead firms’ and subcontractors. This situation echoes labour institutional economist JR Commons’ concept of ‘competitive menace’ and analyses of the structural imbalance of power in the employer/employee relationship. We argue that despite the Chinese government’s desire for industrial upgrading and its intention to develop internal labour markets, Chinese labour institutions have shown significant resistance to change making it hard to envisage any shift towards a Fordist regime of capital accumulation based on a virtuous cycle of mass production and mass consumption.

Recently economists have expressed increasing interest in studying the determinants of happiness. Their main task has been to identify economic and non-economic sources of well-being to define policies aimed at maximising happiness in nations. As yet, it has not been precisely explained why ‘happiness economics’ is actually a part of economic science. In this article, we show that happiness can be an economic concept providing a critical review of the literature on (a) economic applications of happiness data and (b) economic consequences of happiness. Happiness data have been used to analyse microeconomic phenomena and to value non-market goods. Happiness may act as a determinant of economic outcomes: it increases productivity, predicts one’s future income and affects labour market performance. A growing number of happiness studies indicate a role of personality traits in understanding the link between well-being and economic outcomes.

This paper provides new insights into the effect of birth cohort size on cohort lifetime wages and its sensitivity to the future trajectories of immigration and fertility. The main innovation is to relax the typical assumption of perfect substitution of labor by age. The effect of imperfect substitution of labor by age is to qualify the standard result that smaller birth cohorts are likely to enjoy relatively high wages since that result depends on the size of co-worker cohorts. The positive small cohort effect on lifetime wages therefore depends on demographic patterns, which are simulated here through low and high fertility and immigration projections. The analysis applies to actual and projected cohorts for Australia and tests the sensitivity to alternative demographic parameters, and the substitution and discount parameters. The effects of imperfect substitution can amount several percentage points of lifetime wages.

Policy discourse surrounding Britain’s unusually well-resourced private schools surrounds their charitable status and their relationship with low social mobility, but informative evidence is scarce. We present estimates of the extent to which private and external benefits at age 25 are associated with attendance at private school in England in the 21st century. We find a weekly wage premium of 17 percent, and a 12 percentage point lower chance of downward social mobility. By contrast, private schooling is not significantly associated with participation in local voluntary groups, unpaid voluntary work, or charitable giving and fundraising; this finding casts doubt on claims that private schools deliver ‘public benefit’ in this way.

In this article I present new calculations for the evolution of prices and standards of living in Seville from 1521 to 1603. Using new data on prices and new research on changes in nutrition and consumption, I improve the consumer price index. Two major improvements can be highlighted: the inclusion of rented housing prices and the use of three baskets of goods, according to the transformations identified in the consumption patterns. As a result of these improvements, the new data show that prices increase more (336%) than previously estimated by Hamilton (155%) and when using the Allen method (234%). Consequently, real wages decrease more with the new index (32%).

We investigate trends in regional cost competitiveness in China's four regions (Coastal, Northeast, Interior and West) over the past thirty-five years. We find that the Coastal region lost its initial cost competitiveness as its higher relative labour productivity (RLP) was offset by rapidly rising relative nominal labour costs (RNLC) due to rising wages. The Northeastern region still has cost advantages in the traditional Manufacturing sector. The Interior and West regions improved their competitiveness in most industries due to low RNLCs. There is convergence of relative unit labour cost (RULC) in all industries before 1995, but only in Finance after 1995. However there is convergence in RLP in five industries in 1978–95 and 1995–2009, offering prospects for robust growth for China into the future.

This paper lays out the various reasons for the exceptional performance of the German labour market during and after the Great Recession of 2008/9. The reference point of our analysis is provided by an empirical model of both total hours worked and employment. We conduct dynamic simulations of the crisis period to assess how surprising the reaction of the labour market really was. We argue that the most important precondition for the minor reaction of employment during this crisis was the pronounced wage moderation observed in the years before, which constitutes a distinct difference to all other recessions in Germany. Beyond that, the flexibility of adjusting working time, which has increased considerably during the past ten years, facilitated a tendency to labour hoarding. In contrast, short-time work plays a minor role in explaining the difference from previous recessions, since this instrument has always been available to firms in Germany and its use has not been extraordinary compared with earlier recessions.

This paper attempts to contribute to the ongoing debate on the historical roots of the high economic inequality of contemporary Iberian America. Our approach, which is basically empirical, departs from the mainstream scholarship. We show new data on wages and heights in several viceroyalties that (1) suggest relatively medium-to-high levels of material welfare among the commoners in Bourbon Hispanic America; and (2) allow us to build indexes of economic inequality. An international comparison of those indexes casts some doubts on the widely accepted view that Viceroyal America’s economy was exclusively based on extremely unequal or extractive institutions, as it has been popularized by the influential works by Engerman and Sokoloff and Acemoglu et al.

Membership in the monetary union imposes higher demands on factor market flexibility, since neither the exchange rate nor monetary policies can be used to deal with country-specific shocks. In this paper we assess the ability of the twelve new EU member states (NMS-12) to dampen the impact of shocks by means of macroeconomic wage flexibility. Following the structural VAR approach elaborated in Moore and Pentecost (2006), real wage flexibility is measured by the responsiveness of real wages to real (permanent) and nominal (temporary) shocks. The analysis of Moore and Pentecost (2006) is extended in three ways: by employing a new Eurostat labour cost data set covering 1996Q1 to 2007Q3, by using a large sample of 24 EU member countries, and by assessing the sensitivity of the results to the sample length. We find evidence of heterogeneous real wage adjustment across the new as well as the mature EU economies. Overall, the degree of real wage flexibility in the NMS-12 lies within the bounds of the corresponding values for the Euro Area ‘core’ and ‘peripheral’ member countries.

We use the United Kingdom Labour Force Survey to estimate the returns to schooling and job-specific experience in sixteen different industry sectors over the period 1994-2001. Next, assuming skill levels are fixed, we assess the marginal effect on these returns of the capital intensity of production and the ICT intensity of capital. Our results indicate that in the UK, over the period 1994-2001, the rising ICT intensity of capital was associated with a rise in the return to schooling, and a reduction in the return to job-specific experience.

Le ralentissement des gains de productivité par tête observé depuis la findes années 80 en Europe, et notamment en France, est susceptible deplusieurs types d'interprétations. Il pourrait refléter un tassement desgains de la productivité globale des facteurs, une substitution des têtesaux heures ou un rééquilibrage des productivités apparentes des différentsfacteurs de production. L'objet de cet article est de souligner le rôle dece mouvement de rééquilibrage, en réponse à une baisse du coût relatif dutravail, notamment peu qualifié.

Dans cette perspective, la baisse des gains de productivité par tête, loind'être défavorable, refléterait un enrichissement de la croissance en emploidans un contexte de décrue du chômage structurel. Nous illustrons lesmécanismes sous-jacents en nous appuyant sur un modèle d'offre et de demandede travail à deux qualifications. La versions dynamique du modèle estcalibrée afin de donner une image des évolutions temporelles de laproduction, de l'emploi, ainsi que des productivités apparentes des facteursen réponse à des chocs de coûts.

L’article s’interroge sur les relations entre l’intégration monétaire européenne et la persistance de spécificités et d’un certain degré d’autonomie des marchés nationaux du travail, actuellement hétérogènes dans leurs structures institutionnelles, leur fonctionnement et leurs résultats. L’inspiration théorique trouve son origine dans la remarque de John Hicks selon laquelle les économies seraient passées, après 1932, de l’équivalent d’un «gold» standard, à un «labour» standard. L’intégration européenne désigne un changement de régime économique d’ampleur équivalente mais de sens opposé. Le fait que l’intégration monétaire précède très largement la charte sociale pose donc la question de la viabilité de relations professionnelles et des mécanismes nationaux de formation des revenus. En effet, il est peu de variables macroéconomiques nationales susceptibles de garantir le parallélisme des évolutions de prix et l’identité des taux d’intérêt, si ce n’est à relation salariale inchangée, des mouvements divergents du taux de chômage. Il faudrait donc réformer les relations professionnelles mais les partenaires sociaux ne seront pas nécessairement conduits à négocier des contrats salariaux compatibles avec les objectifs macroéconomiques associés à l’intégration européenne.