Effects of subsidizing the first employee – Empirical evidence from Finland

Small businesses form a significant share of all businesses and employ a large share of all employees. Therefore, governments are often interested in subsidizing them and especially employment in smaller firms. Nonemployer firms have received special interest, especially in Finland, due to their large share of all businesses. It has been argued that the government should encourage them to hire by subsidizing employment. However, there is no evidence on the effectiveness of such policies. In general, there is surprisingly little evidence on how small firms react to employment subsidies or of employment subsidies targeted according to firm characteristics. The subject of this thesis is the effects of subsidizing the first employee. While theoretical background suggests the subsidy might have efficiency gains, because there might be market inefficiencies that lead to too little employment in small firms. The focus of this research, however, is on the empirical evidence. There was a regional subsidy for hiring the first employee in Finland between 2007 and 2011. Nonemployer firms in the subsidy area were eligible for a wage subsidy for two years when they hired the first employee. The design of the subsidy enables studying the effects in a natural experiment framework that are nowadays popular in public economics. It can be shown that the area without the subsidy provides a good counterfactual to the area where the subsidy was available. Therefore, the effects of the subsidy can be estimated with difference-in-differences method. This method compares the change in the subsidy area to the change in the area without the subsidy. The data used is firm level data spanning from 2000 to 2013. The data is provided by the Finnish Tax Administration including tax declarations by all Finland based companies. The effects for hiring decisions are estimated by examining the effects for alternative variables such as employment, wage expenditure and turnover. According to the results, the subsidy did not have statistically significant effect on any of the variables of interest. Therefore, it can be concluded that the subsidy did not increase hires in nonemployer firms. This implies that the labour demand elasticity of nonemployer firms is very small. The results are in line with previous literature on the effectiveness of general employment subsidies in Scandinavia that suggest that labour demand elasticity is rather small resulting in small or no effects of employment subsidies. However, my research provides new evidence on labour demand of nonemployer firms especially that has not been studied before. The results are in line with the observation that most nonemployer firms are self-employed persons who are not interested in growing their business to employ others as well, but only provide for themselves. Because of this employment subsidies to the self-employed are not particularly well targeted. The theoretical grounds for the subsidy actually hold for other small firms as well, so it can be argued the subsidy would be more effective if it was extended for hiring the first few employees.

Stability of Natural Colorants of Plant Origin

In recent years, there have been studies that show a correlation between the hyperactivity of children and use of artificial food additives, including colorants. This has, in part, led to preference of natural products over products with artificial additives. Consumers have also become more aware of health issues. Natural food colorants have many bioactive functions, mainly vitamin A activity of carotenoids and antioxidativity, and therefore they could be more easily accepted by the consumers. However, natural colorant compounds are usually unstable, which restricts their usage. Microencapsulation could be one way to enhance the stability of natural colorant compounds and thus enable better usage for them as food colorants. Microencapsulation is a term used for processes in which the active material is totally enveloped in a coating or capsule, and thus it is separated and protected from the surrounding environment. In addition to protection by the capsule, microencapsulation can also be used to modify solubility and other properties of the encapsulated material, for example, to incorporate fat-soluble compounds into aqueous matrices. The aim of this thesis work was to study the stability of two natural pigments, lutein (carotenoid) and betanin (betalain), and to determine possible ways to enhance their stability with different microencapsulation techniques. Another aim was the extraction of pigments without the use of organic solvents and the development of previously used extraction methods. Stability of pigments in microencapsulated pigment preparations and model foods containing these were studied by measuring the pigment content after storage in different conditions. Preliminary studies on the bioavailability of microencapsulated pigments and sensory evaluation for consumer acceptance of model foods containing microencapsulated pigments were also carried out. Enzyme-assisted oil extraction was used to extract lutein from marigold (Tagetes erecta) flower without organic solvents, and the yield was comparable to solvent extraction of lutein from the same flowers. The effects of temperature, extraction time, and beet:water ratio on extraction efficiency of betanin from red beet (Beta vulgaris) were studied and the optimal conditions for maximum yield and maximum betanin concentration were determined. In both cases, extraction at 40 °C was better than extraction at 80 °C and the extraction for five minutes was as efficient as 15 or 30 minutes. For maximum betanin yield, the beet:water ratio of 1:2 was better, with possibly repeated extraction, but for maximum betanin concentration, a ratio of 1:1 was better. Lutein was incorporated into oil-in-water (o/w) emulsions with a polar oil fraction from oat (Avena sativa) as an emulsifier and mixtures of guar gum and xanthan gum or locust bean gum and xanthan gum as stabilizers to retard creaming. The stability of lutein in these emulsions was quite good, with 77 to 91 percent of lutein being left after storage in the dark at 20 to 22°C for 10 weeks whereas in spray dried emulsions the retention of lutein was 67 to 75 percent. The retention of lutein in oil was also good at 85 percent. Betanin was incorporated into the inner w1 water phase of a water1-in-oil-inwater2 (w1/o/w2) double emulsion with primary w1/o emulsion droplet size of 0.34 μm and secondary w1/o/w2 emulsion droplet size of 5.5 μm and encapsulation efficiency of betanin of 89 percent. In vitro intestinal lipid digestion was performed on the double emulsion, and during the first two hours, coalescence of the inner water phase droplets was observed, and the sizes of the double emulsion droplets increased quickly because of aggregation. This period also corresponded to gradual release of betanin, with a final release of 35 percent. The double emulsion structure was retained throughout the three-hour experiment. Betanin was also spray dried and incorporated into model juices with different pH and dry matter content. Model juices were stored in the dark at -20, 4, 20–24 or 60 °C (accelerated test) for several months. Betanin degraded quite rapidly in all of the samples and higher temperature and a lower pH accelerated degradation. Stability of betanin was much better in the spray dried powder, with practically no degradation during six months of storage in the dark at 20 to 24 °C and good stability also for six months in the dark at 60 °C with 60 percent retention. Consumer acceptance of model juices colored with spray dried betanin was compared with similar model juices colored with anthocyanins or beet extract. Consumers preferred beet extract and anthocyanin colored model juices over juices colored with spray dried betanin. However, spray dried betanin did not impart any off-odors or off-flavors into the model juices contrary to the beet extract. In conclusion, this thesis describes novel solvent-free extraction and encapsulation processes for lutein and betanin from plant sources. Lutein showed good stability in oil and in o/w emulsions, but slightly inferior in spray dried emulsions. In vitro intestinal lipid digestion showed a good stability of w1/o/w2 double emulsion and quite high retention of betanin during digestion. Consumer acceptance of model juices colored with spray dried betanin was not as good as model juices colored with anthocyanins, but addition of betanin to real berry juice could produce better results with mixture of added betanin and natural berry anthocyanins could produce a more acceptable color. Overall, further studies are needed to obtain natural colorants with good stability for the use in food products.

Natural freeze crystallization : purification of aqueous Na2SO4 solutions with cold air

The aim of this thesis was to examine efficiency of freeze crystallization and eutectic freeze crystallization in purification of wastewater by imitating natural freezing. In addition, a mathematic model based on heat transfer to determine ice thickness and ice growth rate was examined. Also, the amount of sodium sulfate crystallized at the eutectic point was under investigation. In literature part, advantages and applications of the freeze crystallization are discussed, and possibility to apply it in Northern hemisphere winter weather conditions is under study. Furthermore, main sources of sodium sulfate from Finnish industries are described. The experiments were carried out in modified chest freezer, where a fan was placed in order to obtain laminar air flow inside. Picolog PT-104 data logger was used to monitor temperature changes in the salt-water solution, and constant temperature was maintained in the crystallizer with Lauda RP 850 thermostat. The impurity of formed ice layer was determined by weighing ice samples after experiment and again after 24 hours drying to full dryness in oven. Volume of salt-water solution was also measured after experiment. The highest purity of formed ice layer was obtained with small temperature difference and with long freezing time. On the other hand, the amount of crystallized sodium sulfate was its greatest with long freezing time and higher temperature difference. The results obtained by the mathematic model and empirical results did not differ significantly in most of the experiments. However, the difference increased when salt-water mixture reached its eutectic point, leading to simultaneous ice and salt crystallization. Eutectic point was reached only with the highest salt concentration with one exception. In these cases, calculated values were in many cases greater than the experimental ones. In winter weather conditions freeze crystallization is cost-effective wastewater treatment method and rather simple. Nonetheless, the efficiency and separation rate are strongly depended on ambient temperature and its changes