Focusing on issues of particular importance to black people, and confronting the rich variety and the complexity of the black experience, the many contributors demonstrate the broad diversity of research interests and strategies among black psychologists, from the traditional to the innovative. Topics covered include studies of motivation, cognitive development, life-span development, and cultural difference versus deficit theories. Many of the studies directly refute previous conceptions of the psychological functioning of blacks and offer alternative models and formulations.

This book is the first to present soundly designed and executed research that is emphatically linked to the perspectives and the psychological concerns of black Americans. In designing these studies, the authors aimed to ameliorate the pressing educational and social problems of blacks through a better understanding of their life conditions.

A. WADE BOYKIN is associate professor of psychology at Cornell University and associate editor of the Journal of Black Psychology.

ANDERSON J. FRANKLIN is associate professor of clinical psychology in the Graduate Center and at City College of the City University of New York.

J. FRANK YATES is associate professor of psychology at the University of Michigan.

CONTRIBUTORS:  John D. Bacon,  W. Curtis Banks,  Oscar Barbarin, A. Wade Boykin,  Michael Cole,  O. Jackson Cole,  William Collins,  William E. Cross Jr.,  Herman W. Dorsett,  Ozzie L. Edwards,  Anderson J. Franklin,  Lenora Fulani, William S. Hall,  Algea . Harrison,  Janet L. Hubbart,  James S. Jackson,  Ronald M. Jennings,  James M. Jones,  Yvonne B. Kelley, Gregory V. McQuater, Lillian Patterson,  John Peterson,  Diane S. Pollard,  Stephen Reder,  James E. Savage,  Sandra A. Sims,  Anita D. Stearns,  Ewart A. C. Thomas,  M. Belinda Tucker, Janet Williams, Carl O. Word,  J. Frank Yates.

"Low-Wage Work in Germany is a valuable addition to knowledge on recent changes in German labor markets. It not only documents the extent and growth of low-wage work, but also offers well researched explanations for these developments in terms of changes in industrial systems and corporate governance, the fragmentation of work, and the weakening of collective agreements. This analysis is of interest in all industrialized countries. It also offers an important scientific contribution to the current debate in Germany on minimum wage policy."
-GERRY RODGERS, International Institute for Labour Studies, Geneva

"The German social model was praised for many decades because of its low level of social exclusion. Now low-wage work nearly reaches the high level of the United States. The brilliant analysis of Gerhard Bosch, Claudia Weinkopf, and their coauthors helps us understand the dramatic changes of the German social model after the unification. What happens in the strongest European economy is decisive for the European Social model. Therefore, Low-Wage Work in Germany is a must-read for policymakers, analysts, and researchers interested in Europe and the future of the welfare state."
-REINER HOFFMANN, European Trade Union Confederation

"This book challenges our understanding of the German social market economy by expertly documenting the incidence and implications of low-wage work in Germany. Combining labor market analysis with industry case studies, the authors provide a detailed and comprehensive treatment of low-wage work across key occupations. The surprising finding that the share of low-wage work in Germany has reached a level nearly as high as the United States and the United Kingdom makes Low-Wage Work in Germany essential reading for those interested in the German economy."
-PETER BERG, Michigan State University

In recent years, the German government has intentionally expanded the low-wage work sector in an effort to reduce exceptionally high levels of unemployment. As a result, the share of the German workforce employed in low-paying jobs now rivals that of the United States. Low Wage Work in Germany examines both the federal policies and changing economic conditions that have driven this increase in low-wage work. The new “mini-job” reflects the federal government’s attempt to make certain low-paying jobs attractive to both employers and employees. Employers pay a low flat rate for benefits, and employees, who work a limited number of hours per week, are exempt from social security and tax contributions. Other factors, including slow economic growth, a declining collective bargaining system, and the influx of foreign workers, also contribute to the growing incidence of low-wage work. Yet while both Germany and the United States have large shares of low-wage workers, German workers receive health insurance, four weeks of paid vacation, and generous old age support—benefits most low-wage workers in the United States can only dream of. The German experience offers an important opportunity to explore difficult trade-offs between unemployment and low-wage work.

GERHARD BOSCH is professor of sociology at the University of Duisburg-Essen.

CLAUDIA WEINKOPF is deputy director of the Institute for Work, Skills, and Training at the University of Duisburg-Essen.

CONTRIBUTORS: Lars Czommer, Karen Jaehrling, Thorsten Kalina, Robert Solow, Achim Vanselow, Dorothea Voss-Dahm.

A Volume in the RSF Case Studies of Job Quality in Advanced Economies

"Market failures are at the heart of why poor countries cannot get rich, and why poor people in wealthy countries do not become richer. The most crucial sort of market failures are those that plague credit and financial markets. Credit Markets for the Poor provides a rich introduction and overview of both the theory and evidence behind failing credit markets. It shows why credit markets may fail, why they actually do so, how this influences economic outcomes and people's life chances, and what can be done about it. The book will be indispensable reading for economists trying to understand the incidence and persistence of poverty within and between nations."
-JAMES A. ROBINSON, Harvard University

Access to credit is an important means of providing people with the opportunity to make a better life for themselves. Loans are essential for most people who want to purchase a home, start a business, pay for college, or weather a spell of unemployment. Yet many people in poor and minority communities—regardless of their creditworthiness—find credit hard to come by, making the climb out of poverty extremely difficult. How dire are the lending markets in these communities and what can be done to improve access to credit for disadvantaged groups? In Credit Markets for the Poor, editors Patrick Bolton and Howard Rosenthal and an expert team of economists, political scientists, and legal and business scholars tackle these questions with shrewd analysis and a wealth of empirical data.

Credit Markets for the Poor opens by examining what credit options are available to poor households. Economist John Caskey profiles how weak credit options force many working families into a disastrous cycle of short-term, high interest loans in order to sustain themselves between paychecks. Löic Sadoulet explores the reasons that community lending organizations, which have been so successful in developing countries, have failed in more advanced economies. He argues the obstacles that have inhibited community lending groups in industrialized countries—such as a lack of institutional credibility and the high cost of establishing lending networks—can be overcome if banks facilitate the community lending process and establish a system of repayment insurance. Credit Markets for the Poor also examines how legal institutions affect the ability of the poor to borrow. Daniela Fabbri and Mario Padula argue that well-meaning provisions making it more difficult for lenders to collect on defaulted loans are actually doing a disservice to the poor in credit markets. They find that in areas with lax legal enforcement of debt agreements, credit markets for the poor are underdeveloped because lenders are unwilling to take risks on issuing credit or will do so only at exorbitant interest rates. Timothy Bates looks at programs that facilitate small-business development and finds that they have done little to reduce poverty. He argues that subsidized business creation programs may lure inexperienced households into entrepreneurship in areas where little profitable investment is possible, hence setting them up for failure.

With clarity and insightful analysis, Credit Markets for the Poor demonstrates how weak credit markets are impeding the social and economic mobility of the needy. By detailing the many disadvantages that impoverished people face when seeking to borrow, this important new volume highlights a significant national problem and offers solutions for the future.

PATRICK BOLTON is John H. Scully ’66 Professor of Finance and professor of economics in the Bendheim Center for Finance at Princeton University.

HOWARD ROSENTHAL is Roger Williams Straus Professor of Social Sciences and professor of politics at Princeton University and visiting professor in the Department of Economics at Brown University.

CONTRIBUTORS: Raisa Bahchieva, Timothy Bates, Patrick Bolton, John P. Caskey, Daniela Fabbri, Robert Kaestner, Malgosia Madajewicz, Mario Padula, Howard Rosenthal, Loic Sadoulet, Lisa J. Servon, Robert M. Townsend, Susan M. Wachter, Antwuan Wallace, and Elizabeth Warren.

Why do consumer prices and wages adjust so slowly to changes in market conditions? The rigidity or stickiness of price setting in business is central to Keynesian economic theory and a key to understanding how monetary policy works, yet economists have made little headway in determining why it occurs. Asking About Prices offers a groundbreaking empirical approach to a puzzle for which theories abound but facts are scarce. Leading economist Alan Blinder, along with co-authors Elie Canetti, David Lebow, and Jeremy B. Rudd, interviewed a national, multi-industry sample of 200 CEOs, company heads, and other corporate price setters to test the validity of twelve prominent theories of price stickiness. Using everyday language and pertinent scenarios, the carefully designed survey asked decisionmakers how prominently these theoretical concerns entered into their own attitudes and thought processes. Do businesses tend to view the costs of changing prices as prohibitive? Do they worry that lower prices will be equated with poorer quality goods? Are firms more likely to try alternate strategies to changing prices, such as warehousing excess inventory or improving their quality of service? To what extent are prices held in place by contractual agreements, or by invisible handshakes?

Asking About Prices offers a gold mine of previously unavailable information. It affirms the widespread presence of price stickiness in American industry, and offers the only available guide to such business details as what fraction of goods are sold by fixed price contract, how often transactions involve repeat customers, and how and when firms review their prices. Some results are surprising: contrary to popular wisdom, prices do not increase more easily than they decrease, and firms do not appear to practice anticipatory pricing, even when they can foresee cost increases. Asking About Prices also offers a chapter-by-chapter review of the survey findings for each of the twelve theories of price stickiness. The authors determine which theories are most popular with actual price setters, how practices vary within different business sectors, across firms of different sizes, and so on. They also direct economists' attention toward a rationale for price stickiness that does not stem from conventional theory, namely a strong reluctance by firms to antagonize or inconvenience their customers. By illuminating how company executives actually think about price setting, Asking About Prices provides an elegant model of a valuable new approach to conducting economic research.

ALAN S. BLINDER is Gordon S. Rentschler Memorial Professor of Economics at Princeton University, where he has taught since 1971. He also founded and directs Princeton’s Center for Economic Policy Studies. He has served as vice chairman of the Board of Governors of the Federal Reserve System and as a member of the president’s Council of Economic Advisers.

ELIE R. D. CANETTI is an economist for the International Monetary Fund. He previously worked at the World Bank and the United States Treasury.

DAVID E. LEBOW is an economist at the Board of Governors of the Federal Reserve System.

JEREMY B. RUDD is senior economist at the Council of Economic Advisers, Washington, D.C.

"Insufficient Funds is a comprehensive presentation of what is known about the asset holdings and use of financial services by low-income U.S. households, the factors that might influence their choices in this arena, and the potential for private- and public-sector initiatives to help the poor build wealth and obtain better financial services. All of the authors are top experts in their fields and the volume is well-written, balanced, and cohesive. Insufficient Funds is undoubtedly the best single source for readers seeking a well-informed, thoughtful treatment of the issues."
-JOHN P. CASKEY, Swarthmore College

"This thorough volume from leading scholars provides a textured portrait of the relationships low-income households maintain with formal and informal financial services. Ranging from the latest theory to comparative data analysis to policy innovation, Insufficient Funds is a must read for any scholar, student, or policymaker interested in credit, savings, or asset accumulation in their role as barriers to escaping poverty."
-DALTON CONLEY, New York University

One in four American adults doesn’t have a bank account. Low-income families lack access to many of the basic financial services middle-class families take for granted and are particularly susceptible to financial emergencies, unemployment, loss of a home, and uninsured medical problems. Insufficient Funds explores how institutional constraints and individual decisions combine to produce this striking disparity and recommends policies to help alleviate the problem.

Mainstream financial services are both less available and more expensive for low-income households. High fees, minimum-balance policies, and the relative scarcity of banks in poor neighborhoods are key factors. Michael Barr reports the results of an in-depth study of financial behavior in 1,000 low- and moderate-income families in metropolitan Detroit. He finds that most poor households have bank accounts, but combine use of mainstream services with alternative options such as money orders, pawnshops, and payday lenders. Barr suggests that a tax credit for banks serving primarily disadvantaged customers could facilitate greater equality in the private financial sector.

Drawing on evidence from behavioral economics, Sendhil Mullainathan and Eldar Shafir show that low-income individuals exhibit many of the same patterns and weaknesses in financial decision making as middle-class individuals and could benefit from many of the same financial aids. They argue that savings programs that automatically enroll participants and require them to actively opt out in order to leave the program could drastically increase savings ability. Ronald Mann demonstrates that significant changes in the credit market over the past fifteen years have allowed companies to expand credit to a larger share of low-income families. Mann calls for regulations on credit card companies that would require greater disclosure of actual interest rates and fees. Raphael Bostic and Kwan Lee find that while home ownership has risen dramatically over the past twenty years, elevated risks for low-income families—such as foreclosure—may well outweigh the benefits of owning a home.

The authors ultimately argue that if we want to demand financial responsibility from low-income households, we have an obligation to assure that these families have access to the banking, credit, and savings institutions that are readily available to higher-income families. Insufficient Funds highlights where and how access is blocked and shows how government policy and individual decisions could combine to eliminate many of these barriers in the future.

REBECCA M. BLANK is the Robert S. Kerr Senior Fellow at the Brookings Institution.

MICHAEL S. BARR is professor of law at the University of Michigan Law School.

CONTRIBUTORS: Raphael W. Bostic, Daryl Collins, Kwan Ok Lee, Ronald J. Mann, Jonathan Morduch, Sendhil Mullainathan, Una Okonkwo Osili, Anna L. Paulson, Daniel Schneider, John Karl Scholz, Ananth Seshadri, Eldar Shafir, Michael Sherraden, Peter Tufano.

A Volume in the National Poverty Center Series on Poverty and Public Policy

"Given the global marketplace of ideas for reforming education systems, much can be learned from the experiences of other countries. In this excellent study of the Swedish education system, five distinguished economists provide a thorough, careful, and readable economic analysis of Sweden's experience with educational decentralization and market- based reforms. The authors' analysis of the labor market for teachers, the role of resources, and expanded parental choice of schools should be of great interest to educational policy analysts and researchers in the United States and elsewhere."
-HELEN LADD, Edgar Thompson Professor of Public Policy Studies and professor of economics, Duke University

"This is a truly interesting book on the economics of education, which has direct relevance to the way education systems are organized across the world. The authors put together a series of chapters containing original research, each showing important consequences of the market- oriented education reforms that took place in Sweden. They clearly demonstrate the importance of education and education policy in affecting the economic and social welfare of individuals and society as a whole. The Market Comes to Education in Sweden is an essential read for anyone interested in contemporary issues in the economics of education and in the way that changes in education policy matter for economic and social outcomes."
-STEPHEN MACHIN, professor of economics, University College London, research director, Centre for Economic Performance, and director, Centre for the Economics of Education, London School of Economics

A large central government providing numerous public services has long been a hallmark of Swedish society, which is also well-known for its pursuit of equality. Yet in the 1990s, Sweden moved away from this tradition in education, introducing market-oriented reforms that decentralized authority over public schools and encouraged competition between private and public schools. Many wondered if this approach would improve educational quality, or if it might expand inequality that Sweden has fought so hard to hold down. In The Market Comes to Education in Sweden, economists Anders Björklund, Melissa Clark, Per-Anders Edin, Peter Fredriksson, and Alan Krueger measure the impact of Sweden's bold experiment in governing and help answer the questions that societies across the globe have been debating as they try to improve their children's education.

The Market Comes to Education in Sweden injects some much-needed objectivity into the heavily politicized debate about the effectiveness of educational reform. While advocates for reform herald the effectiveness of competition in improving outcomes, others suggest that the reforms will grossly increase educational inequality for young people. The authors find that increased competition did help improve students' math and language skills, but only slightly, and with no effect on the performance of foreign-born students and those with low-educated parents. They also find some signs of increasing school segregation and wider inequality in student performance, but nothing near the doomsday scenarios many feared. In fact, the authors note that the relationship between family background and school performance has hardly budged since before the reforms were enacted. The authors conclude by providing valuable recommendations for school reform, such as strengthening school evaluation criteria, which are essential for parents, students, and governments to make competent decisions regarding education.

Whether or not the market-oriented reforms to Sweden's educational system succeed will have far reaching implications for other countries considering the same course of action. The Market Comes to Education in Sweden offers firm empirical answers to the questions raised by school reform and brings crucial facts to the debate over the future of schooling in countries across the world.

ANDERS BJÖRKLAND is professor of economics in the Swedish Institute for Social Research at Stockholm University.

MELISSA A. CLARK is Visiting Lecturer at Mathematica Policy Research, Inc. and teaches masters and doctoral students in the Woodrow Wilson School of Public and International Affairs at Princeton University.

PER-ANDERS EDIN is professor in the Department of Economics at Uppsala University.

PETER FREDRIKSSON is associate professor in the Department of Economics at Uppsala University.

ALAN B. KRUEGER is Bendheim Professor of Economics and Public Policy in the Economics Department and Woodrow Wilson School at Princeton University.

Explores the mechanisms of military intervention and its consequences. The contributors examine a succession of coups, attempted coups, and established military regimes, with a view to evaluate the role of the military as a ruling group and an organization fostering political development. These studies cast strong doubt on the abilities of the military as a modernizing and stabilizing agent, raising important questions about our policies on military assistance and arms sales. Bienen makes an especially strong plea for a reassessment of our military and economic-political policies in order to determine whether both are working toward the same goals.

HENRY BIENEN is assistant professor of politics and faculty associate at the Center of International Studies, Princeton University.

CONTRIBUTORS:  Donald N. Levine, Jae Souk Sohn, Philip B. Springer, Nur Yalman, Aristide R. Zolberg.

As social action programs in health, education, and welfare have expanded, interest has grown in evaluating their implementation and effectiveness. Policymakers and social planners--at all levels of government and in the private sector--are currently confronted with the problem of evaluating the large number of human service programs that compete for available resources.

Academic and Entrepreneurial Research presents a systematic study of the expenditure of federal funds for evaluation research. It reviews federally-supported evaluations of programs, including evaluations of social change experiments and research-demonstration programs funded by the various executive departments of the federal government. Evaluation studies of these large-scale programs vary in scope, quality, and potential utility. Bernstein and Freeman examine all projects initiated during fiscal year 1970 in order to understand better the methods employed, the types of persons engaged in such research, and expectations regarding the utilization of findings.

The book provides data about "high" and "low" quality evaluation research and contains recommendations for restructuring the entire evaluation research enterprise in light of the findings.

ILENE NAGEL BERNSTEIN is assistant professor of sociology at Indiana University.

HOWARD E. FREEMAN is director of the Institute for Social Science Research and professor of sociology at the University of California, Los Angeles.

Winner of the 2001 Richard A. Lester prize for Outstanding Book in Labor Economics and Industrial Relations from Princeton University

Winner of the Cornell Center for the Study of Inequality Distinguished Book Award

"This book documents the downfall of upward mobility in the United States. It is a magnificent blend of raw imagination, new empirical analysis, and existing knowledge, with a topic of fundamental importance: the long-term welfare of American workers. The result is a compelling case that the American dream has become nothing more than a cruel mirage for most workers. This book is essential for labor economists and sociologists, public policymakers, human resources professionals, and journalists."
-DAVID E. BLOOM, Harvard University

"Divergent Paths is the book about the American labor market we have all been waiting for. This meticulous empirical inquiry comes closer than anything else I know to definitively answering an entire battery of questions regarding wage inequality and upward mobility in today's post- industrial economy. This magnificently researched and written work- based on a superb statistical analysis of the wage and employment trajectories of two cohorts of young workers-should be mandatory reading for every social scientist who has ever wanted to know who the winners and losers are in the U.S. labor market."
-BARRY BLUESTONE, Northeastern University

"This highly readable and detailed analysis of economic mobility examines the experiences of young men who entered the labor market in very different economic contexts. The authors demonstrate that prospects for long-term wage growth have deteriorated dramatically over the last thirty years for most men. Judicious use of graphs makes the rigorous empirical analysis accessible to non-specialists. This book is 'must reading' for anyone who wants to understand the economic processes generating inequality today."
-EILEEN APPELBAUM, Economic Policy Institute

The promise of upward mobility—the notion that everyone has the chance to get ahead—is one of this country's most cherished ideals, a hallmark of the American Dream. But in today's volatile labor market, the tradition of upward mobility for all may be a thing of the past. In a competitive world of deregulated markets and demanding shareholders, many firms that once offered the opportunity for advancement to workers have remade themselves as leaner enterprises with more flexible work forces. Divergent Paths examines the prospects for upward mobility of workers in this changed economic landscape. Based on an innovative comparison of the fortunes of two generations of young, white men over the course of their careers, Divergent Paths documents the divide between the upwardly mobile and the growing numbers of workers caught in the low-wage trap.

The first generation entered the labor market in the late 1960s, a time of prosperity and stability in the U.S. labor market, while the second generation started work in the early 1980s, just as the new labor market was being born amid recession, deregulation, and the weakening of organized labor. Tracking both sets of workers over time, the authors show that the new labor market is more volatile and less forgiving than the labor market of the 1960s and 1970s. Jobs are less stable, and the penalties for failing to find a steady employer are more severe for most workers. At the top of the job pyramid, the new nomads—highly credentialed, well-connected workers—regard each short-term project as a springboard to a better-paying position, while at the bottom, a growing number of retail workers, data entry clerks, and telemarketers, are consigned to a succession of low-paying, dead-end jobs.

While many commentators dismiss public anxieties about job insecurity as overblown, Divergent Paths carefully documents hidden trends in today's job market which confirm many of the public's fears. Despite the celebrated job market of recent years, the authors show that the old labor market of the 1960s and 1970s propelled more workers up the earnings ladder than does today's labor market. Divergent Paths concludes with a discussion of policy strategies, such as regional partnerships linking corporate, union, government, and community resources, which may help repair the career paths that once made upward mobility a realistic ambition for all American workers.

ANNETTE BERNHARDT is Senior Research Associate at the Center on Wisconsin Strategy, University of Wisconsin, Madison.

MARTINA MORRIS is the Blumstein-Jordan Professor of Sociology and Statistics at the University of Washington, Seattle.

MARK S. HANDCOCK is Professor of Statistics and Sociology in the Center for Statistics and the Social Sciences at the University of Washington, Seattle.

MARC A. SCOTT is Assistant Professor of Educational Statistics at the School of Education, New York University.

During the 1970s, a nationwide school finance reform movement—fueled by litigation challenging the constitutionality of state education funding laws—brought significant changes to the way many states finance their public elementary and secondary school systems. School finance reform poses difficult philosophical questions: what is the meaning of equality in educational opportunity and of equity in the distribution of tax burdens? But it also involves enormous financial complexity (for example, dividing resources among competing special programs) and political risk (such as balancing local control with the need for statewide parity).

For those states (like New York) that were slow to make changes a new decade has brought new constraints and complications. Sluggish economic growth, taxpayer revolts, reductions in federal aid, all affect education revenues. And the current concern with educational excellence may obscure the needs of the poor and educationally disadvantaged.

This book will provide New York’s policy makers and other concerned specialists with a better understanding of the political, economic, and equity issues underlying the school finance reform debate. It details existing inequities, evaluates current financing formulas, and presents options for change. Most important, for all those concerned with education and public policy in New York and elsewhere, it offers a masterful assessment of the trade-offs involved in developing reform programs that balance the conflicting demands of resource equalization, political feasibility, and fiscal responsibility.

"Synthesizes the political and fiscal research [on school finance reform] and applies it to the New York Context....A blueprint for how to redesign state school finance....A fine book." —Public Administration Review

"This is a book that lucidly discusses the issues in school finance and provides valuable reference material." —American Political Science Review

The late JOEL S. BERKE was director of the Education Policy Research Institute of Educational Testing
Service.

MARGARET E. GOERTZ is policy research scientist at Educational Testing Service.

RICHARD COLEY is research associate at Educational Testing Service.