Detecting Earnings Management Using Neural Networks

Detecting Earnings Management Using Neural Networks. Trying to balance between relevant and reliable accounting data, generally accepted accounting principles (GAAP) allow, to some extent, the company management to use their judgment and to make subjective assessments when preparing financial statements. The opportunistic use of the discretion in financial reporting is called earnings management. There have been a considerable number of suggestions of methods for detecting accrual based earnings management. A majority of these methods are based on linear regression. The problem with using linear regression is that a linear relationship between the dependent variable and the independent variables must be assumed. However, previous research has shown that the relationship between accruals and some of the explanatory variables, such as company performance, is non-linear. An alternative to linear regression, which can handle non-linear relationships, is neural networks. The type of neural network used in this study is the feed-forward back-propagation neural network. Three neural network-based models are compared with four commonly used linear regression-based earnings management detection models. All seven models are based on the earnings management detection model presented by Jones (1991). The performance of the models is assessed in three steps. First, a random data set of companies is used. Second, the discretionary accruals from the random data set are ranked according to six different variables. The discretionary accruals in the highest and lowest quartiles for these six variables are then compared. Third, a data set containing simulated earnings management is used. Both expense and revenue manipulation ranging between -5% and 5% of lagged total assets is simulated. Furthermore, two neural network-based models and two linear regression-based models are used with a data set containing financial statement data from 110 failed companies. Overall, the results show that the linear regression-based models, except for the model using a piecewise linear approach, produce biased estimates of discretionary accruals. The neural network-based model with the original Jones model variables and the neural network-based model augmented with ROA as an independent variable, however, perform well in all three steps. Especially in the second step, where the highest and lowest quartiles of ranked discretionary accruals are examined, the neural network-based model augmented with ROA as an independent variable outperforms the other models.

Essays on Earnings Management (summary section only)

There is much literature developing theories when and where earnings management occurs. Among the several possible motives driving earnings management behaviour in firms, this thesis focuses on motives that aim to influence the valuation of the firm. Earnings management that makes the firm look better than it really is may result in disappointment for the single investor and potentially leads to a welfare loss in society when the resource allocation is distorted. A more specific knowledge of the occurrence of earnings management supposedly increases the awareness of the investor and thus leads to better investments and increased welfare. This thesis contributes to the literature by increasing the knowledge as to where and when earnings management is likely to occur. More specifically, essay 1 adds to existing research connecting earnings management to IPOs and increases the knowledge in arguing that the tendency to manage earnings differs between the IPOs. Evidence is found that entrepreneur owned IPOs are more likely to be earnings managers than the institutionally owned ones. Essay 2 considers the reliability of quarterly earnings reports that precedes insider selling binges. The essay contributes by suggesting that earnings management is likely to occur before high insider selling. Essay 3 examines the widely studied phenomenon of income smoothing and investigates if income smoothing can be explained with proxies for information asymmetry. The essay argues that smoothing is more pervasive in private and smaller firms.

Essays on Corporate Governance and the Quality of Disclosed Earnings: Across Transitional Europe

A growing body of empirical research examines the structure and effectiveness of corporate governance systems around the world. An important insight from this literature is that corporate governance mechanisms address the excessive use of managerial discretionary powers to get private benefits by expropriating the value of shareholders. One possible way of expropriation is to reduce the quality of disclosed earnings by manipulating the financial statements. This lower quality of earnings should then be reflected by the stock price of firm according to value relevance theorem. Hence, instead of testing the direct effect of corporate governance on the firm’s market value, it is important to understand the causes of the lower quality of accounting earnings. This thesis contributes to the literature by increasing knowledge about the extent of the earnings management – measured as the extent of discretionary accruals in total disclosed earnings - and its determinants across the Transitional European countries. The thesis comprises of three essays of empirical analysis of which first two utilize the data of Russian listed firms whereas the third essay uses data from 10 European economies. More specifically, the first essay adds to existing research connecting earnings management to corporate governance. It testifies the impact of the Russian corporate governance reforms of 2002 on the quality of disclosed earnings in all publicly listed firms. This essay provides empirical evidence of the fact that the desired impact of reforms is not fully substantiated in Russia without proper enforcement. Instead, firm-level factors such as long-term capital investments and compliance with International financial reporting standards (IFRS) determine the quality of the earnings. The result presented in the essay support the notion proposed by Leuz et al. (2003) that the reforms aimed to bring transparency do not correspond to desired results in economies where investor protection is lower and legal enforcement is weak. The second essay focuses on the relationship between the internal-control mechanism such as the types and levels of ownership and the quality of disclosed earnings in Russia. The empirical analysis shows that the controlling shareholders in Russia use their powers to manipulate the reported performance in order to get private benefits of control. Comparatively, firms owned by the State have significantly better quality of disclosed earnings than other controllers such as oligarchs and foreign corporations. Interestingly, market performance of firms controlled by either State or oligarchs is better than widely held firms. The third essay provides useful evidence on the fact that both ownership structures and economic characteristics are important factors in determining the quality of disclosed earnings in three groups of countries in Europe. Evidence suggests that ownership structure is a more important determinant in developed and transparent countries, while economic determinants are important determinants in developing and transitional countries.

Income Inequality and Healt: A Multi-Country Analysis

This paper investigates the effect of income inequality on health status. A model of health status was specified in which the main variables were income level, income inequality, the level of savings and the level of education. The model was estimated using a panel data set for 44 countries covering six time periods. The results indicate that income inequality (measured by the Gini coefficient) has a significant effect on health status when we control for the levels of income, savings and education. The relationship is consistent regardless of the specification of health status and income. Thus, the study results provide some empirical support for the income inequality hypothesis.

Income inequality in the process of economic development : An empirical approach

This thesis studies the effect of income inequality on economic growth. This is done by analyzing panel data from several countries with both short and long time dimensions of the data. Two of the chapters study the direct effect of inequality on growth, and one chapter also looks at the possible indirect effect of inequality on growth by assessing the effect of inequality on savings. In Chapter two, the effect of inequality on growth is studied by using a panel of 70 countries and a new EHII2008 inequality measure. Chapter contributes on two problems that panel econometric studies on the economic effect of inequality have recently encountered: the comparability problem associated with the commonly used Deininger and Squire s Gini index, and the problem relating to the estimation of group-related elasticities in panel data. In this study, a simple way to 'bypass' vagueness related to the use of parametric methods to estimate group-related parameters is presented. The idea is to estimate the group-related elasticities implicitly using a set of group-related instrumental variables. The estimation results with new data and method indicate that the relationship between income inequality and growth is likely to be non-linear. Chapter three incorporates the EHII2.1 inequality measure and a panel with annual time series observations from 38 countries to test the existence of long-run equilibrium relation(s) between inequality and the level of GDP. Panel unit root tests indicate that both the logarithmic EHII2.1 inequality measure and the logarithmic GDP per capita series are I(1) nonstationary processes. They are also found to be cointegrated of order one, which implies that there is a long-run equilibrium relation between them. The long-run growth elasticity of inequality is found to be negative in the middle-income and rich economies, but the results for poor economies are inconclusive. In the fourth Chapter, macroeconomic data on nine developed economies spanning across four decades starting from the year 1960 is used to study the effect of the changes in the top income share to national and private savings. The income share of the top 1 % of population is used as proxy for the distribution of income. The effect of inequality on private savings is found to be positive in the Nordic and Central-European countries, but for the Anglo-Saxon countries the direction of the effect (positive vs. negative) remains somewhat ambiguous. Inequality is found to have an effect national savings only in the Nordic countries, where it is positive.

On the Rademacher maximal function

Tools known as maximal functions are frequently used in harmonic analysis when studying local behaviour of functions. Typically they measure the suprema of local averages of non-negative functions. It is essential that the size (more precisely, the L^p-norm) of the maximal function is comparable to the size of the original function. When dealing with families of operators between Banach spaces we are often forced to replace the uniform bound with the larger R-bound. Hence such a replacement is also needed in the maximal function for functions taking values in spaces of operators. More specifically, the suprema of norms of local averages (i.e. their uniform bound in the operator norm) has to be replaced by their R-bound. This procedure gives us the Rademacher maximal function, which was introduced by Hytönen, McIntosh and Portal in order to prove a certain vector-valued Carleson's embedding theorem. They noticed that the sizes of an operator-valued function and its Rademacher maximal function are comparable for many common range spaces, but not for all. Certain requirements on the type and cotype of the spaces involved are necessary for this comparability, henceforth referred to as the “RMF-property”. It was shown, that other objects and parameters appearing in the definition, such as the domain of functions and the exponent p of the norm, make no difference to this. After a short introduction to randomized norms and geometry in Banach spaces we study the Rademacher maximal function on Euclidean spaces. The requirements on the type and cotype are considered, providing examples of spaces without RMF. L^p-spaces are shown to have RMF not only for p greater or equal to 2 (when it is trivial) but also for 1 < p < 2. A dyadic version of Carleson's embedding theorem is proven for scalar- and operator-valued functions. As the analysis with dyadic cubes can be generalized to filtrations on sigma-finite measure spaces, we consider the Rademacher maximal function in this case as well. It turns out that the RMF-property is independent of the filtration and the underlying measure space and that it is enough to consider very simple ones known as Haar filtrations. Scalar- and operator-valued analogues of Carleson's embedding theorem are also provided. With the RMF-property proven independent of the underlying measure space, we can use probabilistic notions and formulate it for martingales. Following a similar result for UMD-spaces, a weak type inequality is shown to be (necessary and) sufficient for the RMF-property. The RMF-property is also studied using concave functions giving yet another proof of its independence from various parameters.

Hautamuistomerkki elämän ja kuoleman tulkitsijana : Heikki Häiväojan, Kain Tapperin ja Matti Peltokankaan tekemät hautamuistomerkit 1952-2002

Grave sculpture as interpreter of life and death. Grave sculptures done by Heikki Häiväoja, Kain Tapper and Matti Peltokangas 1952-2002. The thoughts of Philippe Ariès and Erwin Panofsky on western funeral art constitute the starting point of this study. These scholars speak about the 20th century as a period of decline regarding western funeral art. The reason for this situation lies, according to them, in the fact that death has been rejected and become a private affair in modern society. Especially Panofsky sees an important reason for the decay of funeral art also in the separation of death from religion. In this study, I approach the view of Ariès and Panofsky from the angle of Finnish funeral art. The subject of the study is grave sculptures of three Finnish sculptors: Heikki Häiväoja, Kain Tapper and Matti Peltokangas, from 1952 to 2002. (The analysis of the grave sculptures has been performed with the Iconology of Erwin Panofsky. The analysis has been deepened by the ideas of a graveyard as a semiotic text according to Werner Enninger and Christa Schwens. In order to confirm their argumentation, they analyse the graveyard text with the model of communicative functions of Roman Jakobson and verify that the graveyard is a cultural text according to Juri Lotman.) Results of the study In the grave sculptures of the sculptors, different worldviews appear alongside Christian thoughts indicating a new stage in the tradition of funeral art. In the grave sculptures characterised as Christian, the view of life after death is included. In these memorials the direction of life is prospective, pointing to the life beyond. Death is a border, beyond which one is unable to see. Nevertheless the border is open or marked by the cross. On this open border, death is absence of pain, glory and new unity. In memorials with different worldviews, the life beyond is a possibility which is not excluded. Memorials interpret life retrospectively; life is a precious memory which wakens grief and longing. Many memorials have metaphysical and mystic features. In spite of democratization the order and valuation of social classes appear in some memorials. The old order also materializes in the war memorials relating the same destiny of the deceased. Different burial places, nevertheless, do not indicate social inequality but are rather signs of diversity. The sculptors' abstract means of modern funeral art deepen the handling of the subject matter of death and reveal the mystery of it. Grave sculptures are a part of Finnish and sacral modern art, and there is an interaction between funeral art and modern art. Modern art acquires a new dimension, when grave sculptures become a part of its field. Grave sculptures offer an alternative to anonymous burying. The memorial is a sign of the end of life; it gives death significance and publicity and creates a relation to the past of the society. In this way, grave sculptures are a part of the chain of memory of the western funeral art, which extends throughout Antiquity until ancient Egypt. (In this study I have spoken of funeral art as a chain of memory using the thoughts of Danièle Hervieu-Léger.) There are no signs of decay in the grave sculptures, on the contrary the tradition of funeral art continues in them as a search for the meaning of life and death and as an intuitive interpretation of death. As such, grave sculptures are part of the Finnish discussion of death.

Halvennettu työ : Pätkätyö ja sukupuoli sopimusyhteiskuntaa edeltävissä työmarkkinakäytännöissä

Unvalued Work. Gender and fragmented labour before national collective bargaining Systematically irregular work creates economic and social insecurity. A novelty? To think that globalisation results in unprecedented labour conditions turns out to be questionable when the idea is put in perspective. In the light of history there is nothing new in the frequency of today s short-term employment, for instance, ranking genders in labour relations in an old custom. Unvalued Work (Halvennettu työ) examines the regulation and management of labour before the time of collective bargaining. In the study present trends engage in a dialogue with empirical findings from the past. Preventing trade unions to take the initiative has been and remains an employer interest. The analysis focuses on female employment in the 1920s and 1930s. The inferences challenge to ask on what conditions the history of Finnish labour relations warrants on the whole speaking of contractual security, stable earnings and regular waged work that provides livelihood. Success in selling one s labour is not synonymous with good employment that yields decent income. Juxtaposing labour relations between the world wars and the 21st century helps us to understand the currently transforming labour market. Present policies are informed by past choices and patterns of thought. Unvalued Work (Halvennettu työ) offers instruments for making sense of today s labour relations.

Dental Service Utilization, Dental Health Production and Equity in Dental Care: the Finnish Experience

This thesis is grounded on four articles. Article I generally examines the factors affecting dental service utilization. Article II studies the factors associated with sector-specific utilization among young adults entitled to age-based subsidized dental care. Article III explores the determinants of dental ill-health as measured by the occurrence of caries and the relationship between dental ill-health and dental care use. Article IV measures and explains income-related inequality in utilization. Data employed were from the 1996 Finnish Health Care Survey (I, II, IV) and the 1997 follow-up study included in the longitudinal study of the Northern Finland 1966 Birth Cohort (III). Utilization is considered as a multi-stage decision-making process and measured as the number of visits to the dentist. Modified count data models and concentration and horizontal equity indices were applied. Dentist s recall appeared very efficient at stimulating individuals to seek care. Dental pain, recall, and the low number of missing teeth positively affected utilization. Public subvention for dental care did not seem to statistically increase utilization. Among young adults, a perception of insufficient public service availability and recall were positively associated with the choice of a private dentist, whereas income and dentist density were positively associated with the number of visits to private dentists. Among cohort females, factors increasing caries were body mass index and intake of alcohol, sugar, and soft drinks and those reducing caries were birth weight and adolescent school achievement. Among cohort males, caries was positively related to the metropolitan residence and negatively related to healthy diet and education. Smoking increased caries, whereas regular teeth brushing, regular dental attendance and dental care use decreased caries. We found equity in young adults utilization but pro-rich inequity in the total number of visits to all dentists and in the probability of visiting a dentist for the whole sample. We observed inequity in the total number of visits to the dentist and in the probability of visiting a dentist, being pro-poor for public care but pro-rich for private care. The findings suggest that to enhance equal access to and use of dental care across population and income groups, attention should focus on supply factors and incentives to encourage people to contact dentists more often. Lowering co-payments and service fees and improving public availability would likely increase service use in both sectors. To attain favorable oral health, appropriate policies aimed at improving dental health education and reducing the detrimental effects of common risk factors on dental health should be strengthened. Providing equal access with respect to need for all people ought to take account of the segmentation of the service system, with its two parallel delivery systems and different supplier incentives to patients and dentists.

Traditional Village Governance (Desa Adat) and Inter-ethnic Conflict in Bali : A Study of Conflict between Balinese and Migrants: Cases from Municipality of Denpasar

Regional autonomy in Indonesia was initially introduced as a means of pacifying regional disappointment at the central government. Not only did the Regional Autonomy Law of 1999 give the Balinese a chance to express grievance regarding the centralist policies of the Jakarta government but also provided an opportunity to return to the regional, exclusive, traditional village governance (desa adat). As a result, the problems faced by the island, particularly ethnic conflicts, are increasingly handled by the mechanism of this traditional type of governance. Traditional village governance with regard to ethnic conflicts (occurring) between Balinese and migrants has never been systematically analyzed. Existing analyses emphasized only the social context, but do not explain either the cause of conflicts and the ensuing problems entails or the virtues of traditional village governance mechanisms for mediating in the conflict. While some accounts provide snapshots, they lack both theoretical and conflict study perspective. The primary aim of this dissertation is to explore the expression and the causes of conflict between the Balinese and migrants and to advance the potential of traditional village governance as a means of conflict resolution with particular reference to the municipality of Denpasar. One conclusion of the study is that the conflict between the Balinese and migrants has been expressed on the level of situation/contradiction, attitudes, and behavior. Yet the driving forces behind the conflict itself consist of the following factors: absence of cooperation; incompatible position and perception; inability to communicate effectively; and problem of inequality and injustice, which comes to the surface as a social, cultural, and economic problem. This complex of factors fuels collective fear for the future of both groups. The study concludes that traditional village governance mechanisms as a means of conflict resolution have not yet been able to provide an enduring resolution for the conflict. Analysis shows that the practice of traditional village governance is unable to provide satisfactory mechanisms for the conflict as prescribed by conflict resolution theory. Traditional village governance, which is derived from the exclusive Hindu-Balinese culture, is accepted as more legitimate among the Balinese than the official governance policies. However, it is not generally accepted by most of the Muslim migrants. In addition, traditional village governance lacks access to economic instruments, which weakens its capacity to tackle the economic roots of the conflict. Thus the traditional mechanisms of migrant ordinance , as practiced by the traditional village governance have not yet been successful in penetrating all aspects of the conflict. Finally, one of the main challenges for traditional village governance s legal development is the creation of a regional legal system capable of accommodating rapid changes in line with the national and international legal practices. The framing of the new laws should be responsive to the aspirations of a changing society. It should not only protect the various Balinese communities interests, but also that of other ethnic groups, especially those of the minority. In other words, the main challenge to traditional village governance is its ability to develop flexibility and inclusiveness.

Microeconometric Studies on Unemployment and Business Cycles

Väitöskirja koostuu neljästä esseestä, joissa tutkitaan empiirisen työntaloustieteen kysymyksiä. Ensimmäinen essee tarkastelee työttömyysturvan tason vaikutusta työllistymiseen Suomessa. Vuonna 2003 ansiosidonnaista työttömyysturvaa korotettiin työntekijöille, joilla on pitkä työhistoria. Korotus oli keskimäärin 15 % ja se koski ensimmäistä 150 työttömyyspäivää. Tutkimuksessa arvioidaan korotuksen vaikutus vertailemalla työllistymisen todennäköisyyksiä korotuksen saaneen ryhmän ja vertailuryhmän välillä ennen uudistusta ja sen jälkeen. Tuloksien perusteella työttömyysturvan korotus laski työllistymisen todennäköisyyttä merkittävästi, keskimäärin noin 16 %. Korotuksen vaikutus on suurin työttömyyden alussa ja se katoaa kun oikeus korotettuun ansiosidonnaiseen päättyy. Toinen essee tutkii työttömyyden pitkän aikavälin kustannuksia Suomessa keskittyen vuosien 1991 – 1993 syvään lamaan. Laman aikana toimipaikkojen sulkeminen lisääntyi paljon ja työttömyysaste nousi yli 13 prosenttiyksikköä. Tutkimuksessa verrataan laman aikana toimipaikan sulkemisen vuoksi työttömäksi jääneitä parhaassa työiässä olevia miehiä työllisinä pysyneisiin. Työttömyyden vaikutusta tarkastellaan kuuden vuoden seurantajaksolla. Vuonna 1999 työttömyyttä laman aikana kokeneen ryhmän vuosiansiot olivat keskimäärin 25 % alemmat kuin vertailuryhmässä. Tulojen menetys johtui sekä alhaisemmasta työllisyydestä että palkkatasosta. Kolmannessa esseessä tarkastellaan Suomen 1990-luvun alun laman aiheuttamaa työttömyysongelmaa tutkimalla työttömyyden kestoon vaikuttavia tekijöitä yksilötasolla. Kiinnostuksen kohteena on työttömyyden rakenteen ja työn kysynnän muutoksien vaikutus keskimääräiseen kestoon. Usein oletetaan, että laman seurauksena työttömäksi jää keskimääräistä huonommin työllistyviä henkilöitä, jolloin se itsessään pidentäisi keskimääräistä työttömyyden kestoa. Tuloksien perusteella makrotason kysyntävaikutus oli keskeinen työttömyyden keston kannalta ja rakenteen muutoksilla oli vain pieni kestoa lisäävä vaikutus laman aikana. Viimeisessä esseessä tutkitaan suhdannevaihtelun vaikutusta työpaikkaonnettomuuksien esiintymiseen. Tutkimuksessa käytetään ruotsalaista yksilötason sairaalahoitoaineistoa, joka on yhdistetty populaatiotietokantaan. Aineiston avulla voidaan tutkia vaihtoehtoisia selityksiä onnettomuuksien lisääntymiselle noususuhdanteessa, minkä on esitetty johtuvan esim. stressin tai kiireen vaikutuksesta. Tuloksien perusteella työpaikkaonnettomuudet ovat syklisiä, mutta vain tiettyjen ryhmien kohdalla. Työvoiman rakenteen vaihtelu saattaa selittää osan naisten onnettomuuksien syklisyydestä. Miesten kohdalla vain vähemmän vakavat onnettomuudet ovat syklisiä, mikä saattaa johtua strategisesta käyttäytymisestä.

Long-term results of obstetric brachial plexus surgery

Background: Brachial plexus birth palsy (BPBP) most often occurs as a result of foetal-maternal disproportion. The C5 and C6 nerve roots of the brachial plexus are most frequently affected. In contrast, roots from the C7 to Th1 that result in total injury together with C5 and C6 injury, are affected in fewer than half of the patients. BPBP was first described by Smellie in 1764. Erb published his classical description of the injury in 1874 and his name became linked with the paralysis that is associated with upper root injury. Since then, early results of brachial plexus surgery have been reasonably well documented. However, from a clinical point of view not all primary results are maintained and there is also a need for later follow-up results. In addition most of the studies that are published emanate from highly specialized clinics and no nation wide epidemiological reports are available. One of the plexus injuries is the avulsion type, in which the nerve root or roots are ruptured at the neural cord. It has been speculated whether this might cause injury to the whole neural system or whether shoulder asymmetry and upper limb inequality results in postural deformities of the spine. Alternatively, avulsion could manifest as other signs and symptoms of the whole musculoskeletal system. In addition, there is no available information covering activities of daily living after obstetric brachial plexus surgery. Patients and methods: This was a population-based cross-sectional study on all patients who had undergone brachial plexus surgery with at least 5 years of follow-up. An incidence of 3.05/1000 for BPBP was obtained from the registers for this study period. A total of 1706 BPBP patients needing hospital treatment out of 1 717 057 newborns were registered in Finland between 1971 and 1997 inclusive. Of these BPBP patients, 124 (7.3%) underwent brachial plexus surgery at a mean age of 2.8 months (range: 0.4―13.2 months). Surgery was most often performed by direct neuroraphy after neuroma resection (53%). Depending on the phase of the study, 105 to 112 patients (85-90%) participated in a clinical and radiological follow-up assessment. The mean follow up time exceeded 13 years (range: 5.0―31.5 years). Functional status of the upper extremity was evaluated using Mallet, Gilbert and Raimondi scales. Isometric strength of the upper limb, sensation of the hand and stereognosis were evaluated for both the affected and unaffected sides then the differences and their ratios were calculated and recorded. In addition to the upper extremity, assessment of the spine and lower extremities were performed. Activities of daily living (ADL), participation in normal physical activities, and the use of physiotherapy and occupational therapy were recorded in a questionnaire. Results: The unaffected limb functioned as the dominant hand in all, except four patients. The mean length of the affected upper limb was 6 cm (range: 1-13.5 cm) shorter in 106 (95%) patients. Shoulder function was recorded as a mean Mallet score of 3 (range: 2―4) which was moderate. Both elbow function and hand function were good. The mean Gilbert elbow scale value was 3 (range: -1―5) and the mean Raimondi hand scale was 4 (range:1―5). One-third of the patients experienced pain in the affected limb including all those patients (n=9) who had clavicular non-union resulting from surgery. A total of 61 patients (57%) had an active shoulder external rotation of less than 0° and an active elbow extension deficiency was noted in 82 patients (77%) giving a mean of 26° (range: 5°―80°). In all, expect two patients, shoulder external rotation strength at a mean ratio 35% (range: 0―83%) and in all patients elbow flexion strength at a mean ratio of 41% (range: 0―79%) were impaired compared to the unaffected side. According to radiographs, incongruence of the glenohumeral joint was noted in 15 (16%) patients, whereas incongruence of the radiohumeral joint was found in 20 (21%) patients. Fine sensation was normal for 34/49 (69%) patients with C5-6 injury, for 15/31 (48%) with C5-7 and for only 8/25 (32%) of patients with total injury. Loss of protective sensation or absent sensation was noted in some palmar areas of the hand for 12/105 patients (11%). Normal stereognosis was recorded for 88/105 patients (84%). No significant inequalities in leg length were found and the incidence of structural scoliosis (1.7%) did not differ from that of the reference population. Nearly half of the patients (43%) had asynchronous motion of the upper limbs during gait, which was associated with impaired upper limb function. Data obtained from the completed questionnaires indicated that two thirds (63%) of the patients were satisfied with the functional outcome of the affected hand although one third of all patients needed help with ADL. Only a few patients were unable to participate in physical activities such as: bicycling, cross-country skiing or swimming. However, 71% of the patients reported problems related to the affected upper limb, such as muscle weakness and/or joint stiffness during the aforementioned activities. Incongruity of the radiohumeral joints, extent of the injury, avulsion type injury, age less than three months of age at the time of plexus surgery and inexperience of the surgeon was related to poor results as determined by multivariate analyses. Conclusions: Most of the patients had persistent sequelae, especially of shoulder function. Almost all measurements for the total injury group were poorer compared with those of the C5-6 type injury group. Most of the patients had asymmetry of the shoulder region and a shorter affected upper limb, which is a probable reason for having an abnormal gait. However, BPBP did not have an effect on normal growth of the lower extremities or the spine. Although, participation in physical activities was similar to that of the normal population, two-thirds of the patients reported problems. One-third of the patients needed help with ADL. During the period covered by this study, 7.3% BPBP of patients that needed hospital treatment had a brachial plexus operation, which amounts to fewer than 10 operations per year in Finland. It seems that better results of obstetric plexus surgery and more careful follow-up including opportunities for late reconstructive procedures will be expected, if the treatment is solely concentrated on by a few specialised teams.

Hyvinvointivaltion optimaalisen köyhyyspolitiikan määrittelyä

The purpose of this research is to identify the optimal poverty policy for a welfare state. Poverty is defined by income. Policies for reducing poverty are considered primary, and those for reducing inequality secondary. Poverty is seen as a function of the income transfer system within a welfare state. This research presents a method for optimising this function for the purposes of reducing poverty. It is also implemented in the representative population sample within the Income Distribution Data. SOMA simulation model is used. The iterative simulation process is continued until a level of poverty is reached at which improvements can no longer be made. Expenditures and taxes are kept in balance during the process. The result consists of two programmes. The first programme (social assistance programme) was formulated using five social assistance parameters, all of which dealt with the norms of social assistance for adults (€/month). In the second programme (basic benefits programme), in which social assistance was frozen at the legislative level of 2003, the parameter with the strongest poverty reduction effect turned out to be one of the basic unemployment allowances. This was followed by the norm of the national pension for a single person, two parameters related to housing allowance, and the norm for financial aid for students of higher education institutions. The most effective financing parameter measured by gini-coefficient in all programmes was the percent of capital taxation. Furthermore, these programmes can also be examined in relation to their costs. The social assistance programme is significantly cheaper than the basic benefits programme, and therefore with regard to poverty, the social assistance programme is more cost effective than the basic benefits programme. Therefore, public demand for raising the level of basic benefits does not seem to correspond to the most cost effective poverty policy. Raising basic benefits has most effect on reducing poverty within the group of people whose basic benefits are raised. Raising social assistance, on the other hand, seems to have a strong influence on the poverty of all population groups. The most significant outcome of this research is the development of a method through which a welfare state’s income transfer-based safety net, which has severely deteriorated in recent decades, might be mended. The only way of doing so involves either social assistance or some forms of basic benefits and supplementing these by modifying social assistance.