From severance pay to self-insurance: Effects of severance payments savings accounts in Colombia

In 1990 Colombia replaced its traditional system of severance paymentswith a new system of severance payments savings accounts (SPSAs). Althoughseverance payments often are justified on the grounds that they provideinsurance against earnings loss, they also increase costs for employersand distort employment decisions. The impact of severance payments dependslargely on how much of the costs to employers can be shifted to workers.The theoretical analysis in this paper shows that, in contrast to atraditional system of severance payments, the system of SPSAs facilitatesthe shifting of severance payments costs to workers in the form of lowerwages. Empirical results using the Colombian National Household Surveysindicate that the introduction of SPSAs shifted around 80% of the totalseverance payments contributions to wages and had a positive effect onweekly hours. Results using the 1997 Colombian Living Standards MeasurementSurvey suggest that, although SPSAs in part replaced employer insurancewith self-insurance, SPSAs continue to play a consumption smoothing rolefor the non-employed.

Equilibrium asset prices and savings of heterogeneous agents in the presence of incomplete markets and portfolio constraints

We study the quantitative properties of a dynamic general equilibrium model in which agents face both idiosyncratic and aggregate income risk, state-dependent borrowing constraints that bind in some but not all periods and markets are incomplete. Optimal individual consumption-savings plans and equilibrium asset prices are computed under various assumptions about income uncertainty. Then we investigate whether our general equilibrium model with incomplete markets replicates two empirical observations: the high correlation between individual consumption and individual income, and the equity premium puzzle. We find that, when the driving processes are calibrated according to the data from wage income in different sectors of the US economy, the results move in the direction of explaining these observations, but the model falls short of explaining the observed correlations quantitatively. If the incomes of agents are assumed independent of each other, the observations can be explained quantitatively.

Spinning welfare: The gains from process innovation in cotton and car production

Economists and economic historians want to know how much better life is today than in the past.Fifty years ago economic historians found surprisingly small gains from 19th century US railroads,while more recently economists have found relatively large gains from electricity, computers and cellphones. In each case the implicit or explicit assumption is that researchers were measuring the valueof a new good to society. In this paper we use the same techniques to find the value to society ofmaking existing goods cheaper. Henry Ford did not invent the car, and the inventors of mechanisedcotton spinning in the industrial revolution invented no new product. But both made existing productsdramatically cheaper, bringing them into the reach of many more consumers. That in turn haspotentially large welfare effects. We find that the consumer surplus of Henry Ford s production linewas around 2% by 1923, 15 years after Ford began to implement the moving assembly line, while themechanisation of cotton spinning was worth around 6% by 1820, 34 years after its initial invention.Both are large: of the same order of magnitude as consumer expenditure on these items, and as largeor larger than the value of the internet to consumers. On the social savings measure traditionally usedby economic historians, these process innovations were worth 15% and 18% respectively, makingthem more important than railroads. Our results remind us that process innovations can be at least asimportant for welfare and productivity as the invention of new products.

Monetary unions and the transaction cost savings of a single currency

This paper studies the transaction cost savings of moving froma multi-currency exchange system to a single currency one. Theanalysis concentrates exclusively on the transaction andprecautionary demand for money and abstracts from any othermotives to hold currency. A continuous-time, stochastic Baumol-like model similar to that in Frenkel and Jovanovic (1980) isgeneralized to include several currencies and calibrated to fitEuropean data. The analysis implies an upper bound for thesavings associated with reductions of transaction costs derivedfrom the European Monetary Union of approximately 0.6\% of theCommunity GDP. Additionally, the magnitudes of the brokeragefee and the volatility of transactions, whose estimation hastraditionally been difficult to address empirically, areapproximated for Europe.

Money, fame and the allocation of talent: Brain drain and the institution of science

The earning structure in science is known to be flat relative to the one in theprivate sector, which could cause a brain drain toward the private sector. In thispaper, we assume that agents value both money and fame and study the role ofthe institution of science in the allocation of talent between the science sector andthe private sector. Following works on the Sociology of Science, we model theinstitution of science as a mechanism distributing fame (i.e. peer recognition). Weshow that since the intrinsic performance is less noisy signal of talent in the sciencesector than in the private sector, a good institution of science can mitigate thebrain drain. We also find that providing extra monetary incentives through themarket might undermine the incentives provided by the institution and therebyworsen the brain drain. Finally, we study the optimal balance between monetaryand non-monetary incentives in science.

Specialization and rent-seeking in moral enforcement: The case of confession

Moral codes are produced and enforced by more or less specialized means and are subject to standard economic forces. This paper argues that the intermediary role played by the Catholic Church between God and Christians, a key difference from Protestantism, faces the standard trade-off of specialization benefits and agency costs. It applies this trade-off hypothesis to confession of sins to priests, an institution that epitomizes such intermediation, showing that this hypothesis fits cognitive, historical and econometric evidence better than a simpler rent-seeking story. In particular, Catholics who confess more often are observed to comply more with the moral code; however, no relationship is observed between mass attendance and moral compliance. The data also links the current decline in confession to the rise in education, which makes moral self-enforcement less costly, and to the productivity gap suffered by confession services, given its necessarily interpersonal nature.

Income and body mass index in Europe

The problem of obesity is alarming public health authorities around the world. Therefore, it is important to study its determinants. In this paper we explore the empirical relationship between household income and body mass index (BMI) in nine European Union countries. Our findings suggest that the association is negative for women, but we find no statistically significant relationship for men. However, we show that the different relationship for men and women appears to be driven by the negative relationship for women between BMI and individual income from work. We tentatively conclude that the negative relationship between household income and BMI for women may simply be capturing the wage penalty that obese women suffer in the labor market.

The Coordinated Radio and Infrared Survey for High-Mass Star Formation (The CORNISH Survey). I. Survey Design

We describe the motivation, design, and implementation of the CORNISH survey, an arcsecondresolution radio continuum survey of the inner galactic plane at 5 GHz using the Very Large Array (VLA). It is a blind survey coordinated with the northern SpitzerGLIMPSE I region covering 10° massive star formation. A sensitivity around 2 mJy will allow the automatic distinction between radio-loud and radio-quiet midIR sources found in the Spitzersurveys. This survey has many legacy applications beyond star formation, including evolved stars, active stars and binaries, and extragalactic sources. The CORNISH survey for compact ionized sources complements other Galactic plane surveys that target diffuse and nonthermal sources, as well as atomic and molecular phases to build up a complete picture of the interstellar medium in the Galaxy.

The use of ISO 9001 quality standard in higher education institution libraries

[eng] ISO standard 9001 is one of a set of management tools that libraries have adopted in recent years. This article focuses on libraries in higher education institutions that have received ISO certification of their quality management systems (ISO standard 9001:2000). We examine their reasons for seeking certification and the advantages and difficulties they have encountered in applying this ISO standard. Finally, we consider the future prospects of ISO standard 9001 in university libraries.

Beta cell mass and growth after syngeneic islet cell transplantation in normal and streptozocin diabetic C57BL/6 mice

In islet transplantation, nonimmunological factors such as limited growth capacity or increased death rate could reduce the beta cell mass in the graft and lead to failure of the transplant. We studied the evolution of beta cell replication and mass after transplantation of insufficient, minimally sufficient, or excessive islet tissue. Streptozocin diabetic C57BL/6 mice received 150 or 300 syngeneic islets under the kidney capsule and normal mice received 300 islets. In streptozocin diabetic mice 300 islets restored normoglycemia; beta cell replication in transplanted islets was similar to replication in normal pancreas and beta cell mass in the graft remained constant. In contrast, 150 islets were insufficient to achieve normoglycemia; beta cell replication was increased initially but not by 18 or 30 d despite persistent hyperglycemia, and beta cell mass fell progressively. When islets were transplanted into normal recipients, beta cell replication remained normal but beta cells underwent atrophy and mass in the graft was substantially reduced. Therefore, with a successful islet transplant, in diabetic mice beta cell replication and mass remain constant. In contrast, when insufficient islet tissue is transplanted an initial increase in beta cell replication can not compensate for a decline in beta cell mass. When excessive islet tissue is transplanted, beta cell mass is reduced despite normal beta cell replication.

Transplanted beta cell response to increased metabolic demand. Changes in beta cell replication and mass

We determined the capacity of transplanted beta cells to modify their replication and mass when stimulated by changes in metabolic demand. Five groups of Lewis rats were studied: group 1 (Tx-Px) had a 95% pancreatectomy 14 d after transplantation of 500 islets; group 2 (Px-Tx) had a 95% pancreatectomy 14 d before transplantation of 500 islets; group 3 (Tx) was transplanted with 500 islets; group 4 (Px) had a 95% pancreatectomy; and group 5 (normal) was neither transplanted nor pancreatectomized. Blood glucose was normal in Tx-Px and Tx groups at all times. Px-Tx and Px groups developed severe hyperglycemia after pancreatectomy that was corrected in Px-Tx group in 83% of rats 28 d after transplantation. Replication of transplanted beta cells increased in Tx-Px (1.15 +/- 0.12%) and Px-Tx (0.85 +/- 0.12%) groups, but not in Tx group (0.64 +/- 0.07%) compared with normal pancreatic beta cells (0.38 +/- 0.05%) (P < 0.001). Mean beta cell size increased in Tx-Px (311 +/- 14 microns2) and Px-Tx (328 +/- 13 microns2) groups compared with Tx (252 +/- 12 microns2) and normal (239 +/- 9 microns2) groups (P < 0.001). Transplanted beta cell mass increased in Tx-Px (1.87 +/- 0.51 mg) and Px-Tx (1.55 +/- 0.21 mg) groups compared with Tx group (0.78 +/- 0.17 mg) (P < 0.05). In summary, changes in transplanted beta cells prevented the development of hyperglycemia in Tx-Px rats. Transplanted beta cells responded to increased metabolic demand increasing their beta cell mass.

The Unemployment Benefit System: a Redistributive or an Insurance Institution?

[eng] In this paper we analyze how the composition of labor taxation affects unemployment in a unionized economy with capital accumulation and an unemployment benefit system. We show that if the unemployment benefit system is gross Bismarckian then the unemployment rate is reduced if wage taxes are decreased (and thus payroll taxes are increased). However, if the unemployment benefit system is net Bismarckian then the unemployment rate does not depend on how the system is financed. Besides, in a Beveridgean system the labor tax composition does not affect the unemployment rate if and only if the unemployed do not pay taxes and the employed pay a constant marginal tax rate. We also analyze when an unemployment benefit budget-balanced rule makes the economy to have a hysteresis process.

Effective mass and dielectric constant mismatch effects in spherical multishell quantum dots

The role of effective mass and dielectric mismatches on chemical potentials and addition energies of many-electron multishell quantum dots (QDs) is explored within the framework of a recent extension of the spin density functional theory. It is shown that although the gross electronic density is located in the wells of these multishell QDs, taking position-dependent effective mass and dielectric constant into account can lead to the appearance of relevant differences in chemical potential and addition energies as compared to standard calculations in which the effective mass and the dielectric constant of the well is assumed for the whole multishell structure.

Maximum mass of neutron stars

We determine the structure of neutron stars within a Brueckner-Hartree-Fock approach based on realistic nucleon-nucleon, nucleon-hyperon, and hyperon-hyperon interactions. Our results indicate rather low maximum masses below 1.4 solar masses. This feature is insensitive to the nucleonic part of the EOS due to a strong compensation mechanism caused by the appearance of hyperons and represents thus strong evidence for the presence of nonbaryonic "quark" matter in the interior of heavy stars.