0000000000427090
AUTHOR
Martin Biewen
An empirical test of marginal productivity theory
We explore an hitherto unused approach to testing marginal productivity theory. Our method rests on the simple idea that, under the assumption of a linear homogeneous production function, residual profits are informative about the discrepancies between factor payments and marginal products. Our empirical application using data on manufacturing plants in Chile suggest moderate deviations from marginal productivity theory which depend on firm size.
Measuring state dependence in individual poverty histories when there is feedback to employment status and household composition
This paper argues that the assumption of strict exogeneity, which is usually invoked in estimating models of state dependence with unobserved heterogeneity, is violated in the poverty context as important variables determining contemporaneous poverty status, in particular employment status and household composition, are likely to be influenced by past poverty outcomes. Therefore, a model of state dependence is developed that explicitly allows for possible feedback effects from past poverty to future employment and household composition outcomes. Empirical results based on data from the German Socio-Economic Panel (GSOEP) suggest that there are indeed such feedback effects and that failure t…