Flexible employment and cross- regional adjustment

Employment flexibility is commonly associated to greater labour mobility and thus faster cross-regional adjustments. The literature however offers very little hard evidence on this and quite limited theoretical guidance. This paper examines empirically the relationship between employment flexibility and cross-regional adjustment (migration) at the regional and local levels in the UK. Employment flexibility is associated to higher labour mobility (but only at a rather localised scale) and at the same time seems to reduce the responsiveness of migration to unemployment. This suggest that rising flexibility may be linked to higher persistence in spatial disparities, as intra-regional adjustments are strengthened while extraregional adjustments weakened. Keywords: Employment flexibility, regional migration, labour market adjustment JEL Codes: R11, R23, J08, J61

Adjustment to Target Capital, Finance, and Growth

Does financial development result in capital being reallocated more rapidly to industries where it is most productive? We argue that if this was the case, financially developed countries should see faster growth in industries with investment opportunities due to global demand and productivity shifts. Testing this cross-industry cross-country growth implication requires proxies for (latent) global industry investment opportunities. We show that tests relying only on data from specific (benchmark) countries may yield spurious evidence for or against the hypothesis. We therefore develop an alternative approach that combines benchmark-country proxies with a proxy that does not reflect opportunities specific to a country or level of financial development. Our empirical results yield clear support for the capital reallocation hypothesis.

How important is the intensive margin of labor adjustment?

Using new quarterly data for hours worked in OECD countries, Ohanian and Raffo (2011) argue that in many OECD countries, particularly in Europe, hours per worker are quantitatively important as an intensive margin of labor adjustment, possibly because labor market frictions are higher than in the US. I argue that this conclusion is not supported by the data. Using the same data on hours worked, I find evidence that labor market frictions are higher in Europe than in the US, like Ohanian and Raffo, but also that these frictions seem to affect the intensive margin at least as much as the extensive margin of labor adjustment.

Population based resource allocation: The use of hybrid risk adjustment

The emphasis on integrated care implies new incentives that promote coordinationbetween levels of care. Considering a population as a whole, the resource allocation systemhas to adapt to this environment. This research is aimed to design a model that allows formorbidity related prospective and concurrent capitation payment. The model can be applied inpublicly funded health systems and managed competition settings.Methods: We analyze the application of hybrid risk adjustment versus either prospective orconcurrent risk adjustment formulae in the context of funding total health expenditures for thepopulation of an integrated healthcare delivery organization in Catalonia during years 2004 and2005.Results: The hybrid model reimburses integrated care organizations avoiding excessive risktransfer and maximizing incentives for efficiency in the provision. At the same time, it eliminatesincentives for risk selection for a specific set of high risk individuals through the use ofconcurrent reimbursement in order to assure a proper classification of patients.Conclusion: Prospective Risk Adjustment is used to transfer the financial risk to the healthprovider and therefore provide incentives for efficiency. Within the context of a National HealthSystem, such transfer of financial risk is illusory, and the government has to cover the deficits.Hybrid risk adjustment is useful to provide the right combination of incentive for efficiency andappropriate level of risk transfer for integrated care organizations.

Adjustment to target capital, finance and growth

Does financial development result in capital being reallocated more rapidly to industries where it is most productive? We argue that if this was the case, financially developed countries should see faster growth in industries with investment opportunities due to global demand and productivity shifts. Testing this cross-industry cross-country growth implication requires proxies for (latent) global industry investment opportunities. We show that tests relying only on data from specific (benchmark) countries may yield spurious evidence for or against the hypothesis. We therefore develop an alternative approach that combines benchmark-country proxies with a proxy that does not reflect opportunities specific to a country or level of financial development. Our empirical results yield clear support for the capital reallocation hypothesis.

Hybrid risk adjustment for pharmaceutical benefits

This paper analyses the application of hybrid risk adjustment versus either prospective orconcurrent risk adjustment formulae in the context of funding pharmaceutical benefits for thepopulation of an integrated healthcare delivery organization in Catalonia during years 2002 and2003. We apply a mixed formula and find that a hybrid risk adjustment model increasesincentives for efficiency in the provision of low risk individuals at health organizations not only asa whole but also at each internal department compared to only prospective models by reducingwithin-group variation of drug expenditures.

States of maximum entropy production in a onedimensional vertical model with convective adjustment

We investigate the hypothesis that the atmosphere is constrained to maximize its entropy production by using a one-dimensional (1-D) vertical model. We prescribe the lapse rate in the convective layer as that of the standard troposphere. The assumption that convection sustains a critical lapse rate was absent in previous studies, which focused on the vertical distribution of climatic variables, since such a convective adjustment reduces the degrees of freedom of the system and may prevent the application of the maximum entropy production (MEP) principle. This is not the case in the radiative–convective model (RCM) developed here, since we accept a discontinuity of temperatures at the surface similar to that adopted in many RCMs. For current conditions, the MEP state gives a difference between the ground temperature and the air temperature at the surface ≈10 K. In comparison, conventional RCMs obtain a discontinuity ≈2 K only. However, the surface boundary layer velocity in the MEP state appears reasonable (≈3 m s-¹). Moreover, although the convective flux at the surface in MEP states is almost uniform in optically thick atmospheres, it reaches a maximum value for an optical thickness similar to current conditions. This additional result may support the maximum convection hypothesis suggested by Paltridge (1978)

The dynamic adjustment of local government budgets : Does Spain behave differently?

[spa] El objetivo de este trabajo es analizar si los municipios españoles se ajustan en presencia de un shock presupuestario y (si es así) qué elementos del presupuesto son los que realizan el ajuste. La metodología utilizada para contestar estas preguntas es un mecanismo de corrección del error, VECM, que estimamos con un panel de datos de los municipios españoles durante el período 1988-2006. Nuestros resultados confirman que, en primer lugar, los municipios se ajustan en presencia de un shock fiscal (es decir, el déficit es estacionario en el largo plazo). En segundo lugar, obtenemos que cuando el shock afecta a los ingresos el ajuste lo soporta principalmente el municipio reduciendo el gasto, las transferencias tienen un papel muy reducido en este proceso de ajuste. Por el contrario, cuando el shock afecta al gasto, el ajuste es compartido en términos similares entre el municipio – incrementado los impuestos – y los gobiernos de niveles superiores – incrementando las transferencias. Estos resultados sugieren que la viabilidad de las finanzas pública locales es factible con diferentes entornos institucionales.

The dynamic adjustment of local government budgets : Does Spain behave differently?

[spa] El objetivo de este trabajo es analizar si los municipios españoles se ajustan en presencia de un shock presupuestario y (si es así) qué elementos del presupuesto son los que realizan el ajuste. La metodología utilizada para contestar estas preguntas es un mecanismo de corrección del error, VECM, que estimamos con un panel de datos de los municipios españoles durante el período 1988-2006. Nuestros resultados confirman que, en primer lugar, los municipios se ajustan en presencia de un shock fiscal (es decir, el déficit es estacionario en el largo plazo). En segundo lugar, obtenemos que cuando el shock afecta a los ingresos el ajuste lo soporta principalmente el municipio reduciendo el gasto, las transferencias tienen un papel muy reducido en este proceso de ajuste. Por el contrario, cuando el shock afecta al gasto, el ajuste es compartido en términos similares entre el municipio – incrementado los impuestos – y los gobiernos de niveles superiores – incrementando las transferencias. Estos resultados sugieren que la viabilidad de las finanzas pública locales es factible con diferentes entornos institucionales.