The impact of firing costs on turnover and unemployment: Evidence from the Colombian labour market reform

Reductions in firing costs are often advocated as a way of increasingthe dynamism of labour markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S. have been limited. This paper, instead, examines the impact of the Colombian Labour Market Reform of 1990, which substantially reduced dismissal costs. I estimate the incidence of a reduction in firing costs on worker turnover by exploiting the temporal change in the Colombian labour legislation as well as the variability in coverage between formal and informal sector workers. Using a grouping estimator to control for common aggregate shocks and selection, I find that the exit hazard rates into and out of unemployment increased after the reform by over 1% for formal workers (covered by the legislation) relative to informal workers (uncovered). The increase of the hazards implies a net decrease in unemployment of a third of a percentage point, which accounts for about one quarter of the fall in unemployment during the period of study.

Markups, gaps and the welfare costs of business fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted,the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

Estimates of patient costs related with population morbidity: Can indirect costs affect the results?

A number of health economics works require patient cost estimates as a basic information input.However the accuracy of cost estimates remains in general unspecified. We propose to investigate howthe allocation of indirect costs or overheads can affect the estimation of patient costs in order to allow forimprovements in the analysis of patient costs estimates. Instead of focusing on the costing method, thispaper proposes to highlight changes in variance explained observed when a methodology is chosen. Wecompare three overhead allocation methods for a specific Spanish population adjusted using the ClinicalRisk Groups (CRG), and we obtain different series of full-cost group estimates. As a result, there aresignificant gains in the proportion of the variance explained, depending upon the methodology used.Furthermore, we find that the global amount of variation explained by risk adjustment models dependsmainly on direct costs and is independent of the level of aggregation used in the classification system.

The elusive costs and the immaterial gains of fiscal contraints

We study whether and how fiscal restrictions alter the business cycle features macrovariables for a sample of 48 US states. We also examine the 'typical' transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal constraints are characterized with a number of indicators. There are similarities in second moments of macrovariables and in the transmission properties of fiscal shocks across states with different fiscal constraints. The cyclical response of expenditure differs in size and sometimes in sign, but heterogeneity within groups makes point estimates statistically insignificant. Creative budget accounting isresponsible for the pattern. Implications for the design of fiscal rules and thereform of the Stability and Growth Pact are discussed.

Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism

This chapter, originally written as a consequence of the terrorist attacksof September 11, 2001, provides an elementary, everyday introduction tothe concepts of risk and insurance. Conceptually, risk has two dimensions:a potential loss, and the chance of that loss being realized. People can,however, transfer risk to insurance companies against the payment ofso-called premiums. In practice, however, one needs accurate assessmentsof both losses and probabilities to judge whether premiums are appropriate.For many risks, this poses little problem (e.g., life insurance); however,it is difficult to assess risks of many other kinds of events such as actsof terrorism. It is emphasized, that through evolution and learning, peopleare able to handle many of the common risks that they face in life. Butwhen people lack experience (e.g., new technologies, threats of terrorism),risk can only be assessed through imagination. Not surprisingly, insurancecompanies demand high prices when risks are poorly understood. In particular,the cost of insurance against possible acts of terrorism soared afterSeptember 11. How should people approach risk after the events of that day?Clearly, the world needs to protect itself from the acts of terrorists andother disturbed individuals. However, it is also important to address the root causes of such antisocial movements. It is, therefore, suggested thatprograms addressed at combatting ignorance, prejudice, and socialinequalities may be more effective premiums for reducing the risk ofterrosrtism than has been recognized to date.

Prevalence and costs of multinutrution in hospitalized patients; the PREDyCES study

Justificación y objetivos: El estudio PREDyCES® tuvo dos objetivos principales. Primero, analizar la prevalencia de desnutrición hospitalaria (DH) en España tanto al ingreso como al alta, y segundo, estimar sus costes asociados. Métodos: Estudio nacional, transversal, observacional, multicéntrico, en condiciones de práctica clínica habitual que evaluó la presencia de desnutrición hospitalaria al ingreso y al alta mediante el NRS-2002®. Una extensión del estudio analizó la incidencia de complicaciones asociadas a la desnutrición, el exceso de estancia hospitalaria y los costes sanitarios asociados a la DH. Resultados: La prevalencia de desnutrición observada según el NRS-2002® fue del 23.7%. El análisis multivariante mostró que la edad, el género, la presencia de enfermedad oncológica, diabetes mellitus, disfagia y la polimedicación fueron los factores principales que se asociaron a la presencia de desnutrición. La DH se asoció a un incremento de la estancia hospitalaria, especialmente en aquellos pacientes que ingresaron sin desnutrición y que presentaron desnutrición al alta (15.2 vs 8.0 días; p < 0.001), con un coste adicional asociado de 5.829€ por paciente. Conclusiones: Uno de cada cuatro pacientes en los hospitales españoles se encuentra desnutrido. Esta condición se asocia a un exceso de estancia hospitalaria y costes asociados, especialmente en pacientes que se desnutren durante su hospitalización. Se debería generalizar el cribado nutricional sistemático con el objetivo de implementar intervenciones nutricionales de conocida eficacia.

Shrouded costs of government: The political economy of state and local public pensions

Why do public-sector workers receive so much of their compensation in the formof pensions and other benefits? This paper presents a political economy model inwhich politicians compete for taxpayers' and government employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of promisedcompensation. If pension packages are "shrouded", so that public-sector workers better understand their value than ordinary taxpayers, then compensation will be highlyback-loaded. In equilibrium, the welfare of public-sector workers could be improved,holding total public-sector costs constant, if they received higher wages and lowerpensions. Centralizing pension determination has two offsetting effects on generosity:more state-level media attention helps taxpayers better understand pension costs, andthat reduces pension generosity; but a larger share of public-sector workers will votewithin the jurisdiction, which increases pension generosity. A short discussion of pensions in two decentralized states (California and Pennsylvania) and two centralizedstates (Massachusetts and Ohio) suggests that centralization appears to have modestlyreduced pensions, but, as the model suggests, this is unlikely to be universal.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

[eng] This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Characterization of Reward Functions in Networks with Costs

In this paper we study network structures in which the possibilities for cooperation are restricted and can not be described by a cooperative game. The benefits of a group of players depend on how these players are internally connected. One way to represent this type of situations is the so-called reward function, which represents the profits obtainable by the total coalition if links can be used to coordinate agents' actions. The starting point of this paper is the work of Vilaseca et al. where they characterized the reward function. We concentrate on those situations where there exist costs for establishing communication links. Given a reward function and a costs function, our aim is to analyze under what conditions it is possible to associate a cooperative game to it. We characterize the reward function in networks structures with costs for establishing links by means of two conditions, component permanence and component additivity. Finally, an economic application is developed to illustrate the main theoretical result.

Computational and Energy Costs of Cryptographic Algorithms on Handheld Devices

Networks are evolving toward a ubiquitous model in which heterogeneousdevices are interconnected. Cryptographic algorithms are required for developing securitysolutions that protect network activity. However, the computational and energy limitationsof network devices jeopardize the actual implementation of such mechanisms. In thispaper, we perform a wide analysis on the expenses of launching symmetric and asymmetriccryptographic algorithms, hash chain functions, elliptic curves cryptography and pairingbased cryptography on personal agendas, and compare them with the costs of basic operatingsystem functions. Results show that although cryptographic power costs are high and suchoperations shall be restricted in time, they are not the main limiting factor of the autonomyof a device.

Minimization of biosynthetic costs in adaptive gene expression responses of yeast to environmental changes

Yeast successfully adapts to an environmental stress by altering physiology and fine-tuning metabolism. This fine-tuning is achieved through regulation of both gene expression and protein activity, and it is shaped by various physiological requirements. Such requirements impose a sustained evolutionary pressure that ultimately selects a specific gene expression profile, generating a suitable adaptive response to each environmental change. Although some of the requirements are stress specific, it is likely that others are common to various situations. We hypothesize that an evolutionary pressure for minimizing biosynthetic costs might have left signatures in the physicochemical properties of proteins whose gene expression is fine-tuned during adaptive responses. To test this hypothesis we analyze existing yeast transcriptomic data for such responses and investigate how several properties of proteins correlate to changes in gene expression. Our results reveal signatures that are consistent with a selective pressure for economy in protein synthesis during adaptive response of yeast to various types of stress. These signatures differentiate two groups of adaptive responses with respect to how cells manage expenditure in protein biosynthesis. In one group, significant trends towards downregulation of large proteins and upregulation of small ones are observed. In the other group we find no such trends. These results are consistent with resource limitation being important in the evolution of the first group of stress responses.

Privatization, cooperation and costs of solid waste services in small towns

This paper analyzes the cost implications of privatization and cooperation in the provision of solid waste services for a sample of small municipalities. In conducting this empirical analysis, a survey is first designed and administered to municipalities in the Spanish region of Aragon, and then an estimation of the determinants of service costs is undertaken, considering the possible endogeneity of delivery choices. Our findings indicate that cooperation is more effective than privatization in saving costs. Both production forms can enable small municipalities to cut costs by exploiting scale economies. However, the fact that inter-municipal cooperation involves lower transaction costs and is less likely to be affected by competition problems would seem to account for the fact that it is a more effective way of reducing costs.

Empirical analysis of solid management waste costs: Some evidence from Galicia, Spain

This paper analyses the factors that determine solid waste service costs. The empirical analysis is based on information derived from a survey conducted in a sample of Galician municipalities. The results reveal economies of scale in municipalities of fewer than 50,000 inhabitants, such that cooperation between these municipalities could lead to cost savings. It also appears that private delivery is not cheaper than public delivery. Finally, designating a larger proportion of the total waste volume to recycling does not imply greater costs.