Employment risk, unemployment insurance and search strategies: a disaggregated equilibrium approach with application to the Swiss labour market in the 1990-ies

The Organization of the Thesis The remainder of the thesis comprises five chapters and a conclusion. The next chapter formalizes the envisioned theory into a tractable model. Section 2.2 presents a formal description of the model economy: the individual heterogeneity, the individual objective, the UI setting, the population dynamics and the equilibrium. The welfare and efficiency criteria for qualifying various equilibrium outcomes are proposed in section 2.3. The fourth section shows how the model-generated information can be computed. Chapter 3 transposes the model from chapter 2 in conditions that enable its use in the analysis of individual labor market strategies and their implications for the labor market equilibrium. In section 3.2 the Swiss labor market data sets, stylized facts, and the UI system are presented. The third section outlines and motivates the parameterization method. In section 3.4 the model's replication ability is evaluated and some aspects of the parameter choice are discussed. Numerical solution issues can be found in the appendix. Chapter 4 examines the determinants of search-strategic behavior in the model economy and its implications for the labor market aggregates. In section 4.2, the unemployment duration distribution is examined and related to search strategies. Section 4.3 shows how the search- strategic behavior is influenced by the UI eligibility and section 4.4 how it is determined by individual heterogeneity. The composition effects generated by search strategies in labor market aggregates are examined in section 4.5. The last section evaluates the model's replication of empirical unemployment escape frequencies reported in Sheldon [67]. Chapter 5 applies the model economy to examine the effects on the labor market equilibrium of shocks to the labor market risk structure, to the deep underlying labor market structure and to the UI setting. Section 5.2 examines the effects of the labor market risk structure on the labor market equilibrium and the labor market strategic behavior. The effects of alterations in the labor market deep economic structural parameters, i.e. individual preferences and production technology, are shown in Section 5.3. Finally, the UI setting impacts on the labor market are studied in Section 5.4. This section also evaluates the role of the UI authority monitoring and the differences in the Way changes in the replacement rate and the UI benefit duration affect the labor market. In chapter 6 the model economy is applied in counterfactual experiments to assess several aspects of the Swiss labor market movements in the nineties. Section 6.2 examines the two equilibria characterizing the Swiss labor market in the nineties, the " growth" equilibrium with a "moderate" UI regime and the "recession" equilibrium with a more "generous" UI. Section 6.3 evaluates the isolated effects of the structural shocks, while the isolated effects of the UI reforms are analyzed in section 6.4. Particular dimensions of the UI reforms, the duration, replacement rate and the tax rate effects, are studied in section 6.5, while labor market equilibria without benefits are evaluated in section 6.6. In section 6.7 the structural and institutional interactions that may act as unemployment amplifiers are discussed in view of the obtained results. A welfare analysis based on individual welfare in different structural and UI settings is presented in the eighth section. Finally, the results are related to more favorable unemployment trends after 1997. The conclusion evaluates the features embodied in the model economy with respect to the resulting model dynamics to derive lessons from the model design." The thesis ends by proposing guidelines for future improvements of the model and directions for further research.

The Political Economy of Active Labor-Market Policy

Active labor-market policies (ALMPs) have developed significantly over the past two decades across Organization for Economic Cooperation and Development (OECD) countries, with substantial cross-national differences in terms of both extent and overall orientation. The objective of this article is to account for cross-national variation in this policy field. It starts by reviewing existing scholarship concerning political, institutional, and ideational determinants of ALMPs. It then argues that ALMP is too broad a category to be used without further specification, and it develops a typology of four different types of ALMPs: incentive reinforcement, employment assistance, occupation, and human capital investment. These are discussed and examined through ALMP expenditure profiles in selected countries. The article uses this typology to analyze ALMP trajectories in six Western European countries and shows that the role of this instrument changes dramatically over time. It concludes that there is little regularity in the political determinants of ALMPs. In contrast, it finds strong institutional and ideational effects, nested in the interaction between the changing economic context and existing labor-market policies.

A new classification of the Turkish terranes and sutures and its implication for the paleotectonic history of the region

The Turkish part of the Tethyan realm is represented by a series of terranes juxtaposed through Alpine convergent movements and separated by complex suture zones. Different terranes can be defined and characterized by their dominant geological background. The Pontides domain represents a segment of the former active margin of Eurasia, where back-arc basins opened in the Triassic and separated the Sakarya terrane from neighbouring regions. Sakarya was re-accreted to Laurasia through the Balkanic mid-Cretaceous orogenic event that also affected the Rhodope and Strandja zones. The whole region from the Balkans to the Caucasus was then affected by a reversal of subduction and creation of a Late Cretaceous arc before collision with the Anatolian domain in the Eocene. If the Anatolian terrane underwent an evolution similar to Sakarya during the Late Paleozoic and Early Triassic times, both terranes had a diverging history during and after the Eo-Cimmerian collision. North of Sakarya, the Küre back-arc was closed during the Jurassic, whereas north of the Anatolian domain, the back-arc type oceans did not close before the Late Cretaceous. During the Cretaceous, both domains were affected by ophiolite obduction, but in very different ways: north directed diachronous Middle to Late Cretaceous mélange obduction on the Jurassic Sakarya passive margin; Senonian synchronous southward obduction on the Triassic passive margin of Anatolia. From this, it appears that the Izmir-Ankara suture, currently separating both terranes, is composite, and that the passive margin of Sakarya is not the conjugate margin of Anatolia. To the south, the Cimmerian Taurus domain together with the Beydağları domain (part of the larger Greater Apulian terrane), were detached from north Gondwana in the Permian during the opening of the Neotethys (East-Mediterranean basin). The drifting Cimmerian blocks entered into a soft collision with the Anatolian and related terranes in the Eo-Cimmerian orogenic phase (Late Triassic), thus suturing the Paleotethys. At that time, the Taurus plate developed foreland-type basins, filled with flysch-molasse deposits that locally overstepped the lower plate Taurus terrane and were deposited in the opening Neotethys to the south. These olistostromal deposits are characterized by pelagic Carboniferous and Permian material from the Paleotethys suture zone found in the Mersin mélange. The latter, as well as the Antalya and Mamonia domains are represented by a series of exotic units now found south of the main Taurus range. Part of the Mersin exotic material was clearly derived from the former north Anatolian passive margin (Huğlu-type series) and re-displaced during the Paleogene. This led us to propose a plate tectonic model where the Anatolian ophiolitic front is linked up with the Samail/Baër-Bassit obduction front found along the Arabian margin. The obduction front was indented by the Anatolian promontory whose eastern end was partially subducted. Continued slab roll-back of the Neotethys allowed Anatolian exotics to continue their course southwestward until their emplacement along the Taurus southern margin (Mersin) and up to the Beydağları promontory (Antaya-Mamonia) in the latest Cretaceous-Paleocene. The supra-subduction ocean opening at the back of the obduction front (Troodos-type Ocean) was finally closed by Eocene north-south shortening between Africa and Eurasia. This brought close to each other Cretaceous ophiolites derived from the north of Anatolia and those obducted on the Arabian promontory. The latter were sealed by a Maastrichtian platform, and locally never affected by Alpine tectonism, whereas those located on the eastern Anatolian plate are strongly deformed and metamorphosed, and affected by Eocene arc magmatism. These observations help to reconstruct the larger frame of the central Tethyan realm geodynamic evolution.

A Behavioral Account of the Labor Market: The Role of Fairness Concerns

In this paper, we argue that important labor market phenomena can be better understood if one takes (a) the inherent incompleteness and relational nature of most employment contracts and (b) the existence of reference-dependent fairness concerns among a substantial share of the population into account. Theory shows and experiments confirm that, even if fairness concerns were to exert only weak effects in one-shot interactions, repeated interactions greatly magnify the relevance of such concerns on economic outcomes. We also review evidence from laboratory and field experiments examining the role of wages and fairness on effort, derive predictions from our approach for entry-level wages and incumbent workers' wages, confront these predictions with the evidence, and show that reference-dependent fairness concerns may have important consequences for the effects of economic policies such as minimum wage laws.

The Impact of Housing Market Segmentation between Tourists and Residents on the Hedonic Price for Landscape Quality

Market segmentation is an important issue when estimating the implicit price for an environmental amenity from a surrogate market like property. This paper tests the hypothesis of a segmentation of the housing market between tourists and residents and computes the implicit price for natural landscape quality in Swiss alpine resorts. The results show a clear segmentation between both groups of consumers, although tests also show that the estimated coefficient for landscape is similar in the tourists' model and in the residents'. However, since the functional form is non linear, the nominal - rather than relative - value of a change in natural landscape quality is higher in the tourist housing market than in the residents'. Hence, considering the segmentation of the market between tourists and residents is essential in order to provide valid estimates of the nominal implicit price of natural landscape quality.