Research for Economics

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THE UNEMPLOYMENT INSURANCE TAX AND LABOR TURNOVER, FURTHER EMPIRICAL RESULTS
January 1, 1980
The research reported here is an extension of a previous enquiry by Brechling and Jehn into the relationships between labor turnover and the unemployment insurance tax. First, the data base was extended through 1977, and the original models were re-estimated. The original and enlarged data sets yielded similar conclusions. Second, the influence of the taxable wage base of the social security tax upon labor turnover was examined. This taxable wage base seems to have a different impact from that of the taxable wage base of the unemployment insurance tax. Third, the relationships between the seasonal pattern of labor turnover and the unemployment insurance tax were examined. The results tended to be weak. Viewed as a whole, the results of the new investigation are not as strong as the original ones, but they do support the conclusion that there are significant relationships between labor turnover and the parameters of the unemployment insurance tax.
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The Influence of Federal R and D Funding on the Demand for and Returns to Industrial R and D
November 1, 1979
This paper presents estimates of how changes in the price of inputs to R&D, and changes in federal funding of R&D, affect private demand for R&D. Estimates of the return to privately funded and federally funded R&D are also presented. Estimates are obtained using regression analysis. Data used in the analysis were for fourteen manufacturing industries covering the period 1958 to 1975. A steady-state rotation model is described in CNA Research Contribution 380.
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EARNINGS LOSS DUE TO DISPLACEMENT
September 1, 1979
Very often, legislation that yields substantial benefits for society as a whole can be costly to certain segments of society. The purpose of this Research Contribution is to present the best available information about earnings losses that result from displacement (job loss) and to predict earnings losses that might result from future changes in government policies.
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DO FINANCES INFLUENCE AIRLINE SAFETY, MAINTENANCE, AND SERVICES
July 1, 1979
This research contribution addresses the question of whether financially stressed airlines are likely to cut back activities contributing to airline safety, to reduce maintenance expenditures, or degrade service levels. Theoretical analysis shows that financially unsuccessful airlines have some incentives to cut back in these areas. The forces influencing such decisions are so numerous and complex, however, that we cannot predict whether such cutbacks would or would not occur in any particular case. We do show, however, that variations in the profitability, liquidity, and debt-equity leverage of the eleven trunk airlines over the period 1965 to 1977 did not affect their accidents, maintenance expenditures, and passenger complaints. A summary of this research contribution and our findings are presented in this report.
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LAYOFFS AND UNEMPLOYMENT INSURANCE
March 1, 1979
This paper examines the relationship between layoffs and the unemployment insurance systems utilizing an extended Baily-Feldstein model of unemployment insurance and layoffs.
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MARKET ANALYSIS WITH RATIONAL EXPECTATIONS: THEORY AND ESTIMATION
June 1, 1978

This paper presents an approach for analysis and estimation of dynamic market structures with rational expectations. Certainty equivalence is maintained and aggregate behavior represented by linear equations with some expected prices as arguments. Conditions imposed by the market structure are solved for an equilibrium, fixed point, price sequence. In this framework prices, current and expected, are linear functions of exogenous values and elements of a state vector. The structure poses an interesting estimation problem and suggests effective estimation procedures. Results for an application to the broiler chicken market using three years of weekly data are discussed.

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THE PRICE DIFFERENTIAL BETWEEN DOMESTIC AND IMPORTED STEEL
December 1, 1977
It is remarkable that imported steel, while priced below domestic steel for most of the last twenty years, has increased its share of the U.S. market to only about 15 percent in 1976. This study finds that the slow growth of imports is due not to inferior physical characteristics of imported steel, but to requirements that users hold larger inventories and face the danger of having to pay very high prices during economic boom periods. For the average buyer to switch from domestic to imported steel, the price difference would have to be about 17 percent.
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AN EVALUATION OF THE GNP DEFLATOR AS A BASIS FOR ADJUSTING THE ALLOWABLE PRICE OF CRUDE OIL
February 1, 1977
The price controls on crude oil, beginning in February 1976, allowed the average price to grow at the same rate as the GNP deflator. An additional increase up to 3% per year was also allowed. Furthermore, the two adjustments to price were limited to a total of 10% per year. The use of the GNP deflator to adjust the price of crude oil is evaluated to determine whether it compensates for changes in the prices of purchased items and labor used in the discovery and production of crude oil. A price index for these costs is constructed and compared with the GNP deflator for the period 1965 to 1976.
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LOSSES TO WORKERS DISPLACED BY PLANT CLOSURE OR LAYOFF, A SURVEY OF THE LITERATURE
January 1, 1977
Seventeen studies of the economic effects of permanent layoff on the displaced workers are reviewed, and a summary of each is provided. Findings on earnings loss and unemployment are summarized and compared. The effects of employment trends, labor market conditions, and personal characteristics on losses are also summarized and (for personal differences) compared. Experience with ways to reduce and compensate losses is reviewed. Suggestions are made for improving future research into earnings losses from employee displacement.
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ECONOMIC PRINCIPLES OF LIABILITY AND FINANCIAL RESPONSIBILITY FOR OIL POLLUTION
June 1, 1974
This paper examines the economic issues involved in the imposition of liability for the damages caused by disasters in general and major oil spills in particular.
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