Essays on Wage and Price Formation in Sweden

Study IReal Wage Determination in the Swedish Engineering Industry This study uses the monopoly union model to examine the determination of real wages and in particular the effects of active labour market programmes (ALMPs) on real wages in the engineering industry. Quarterly data for the period 1970:1 to 1996:4 are used in a cointegration framework, utilising the Johansen's maximum likelihood procedure. On a basis of the Johansen (trace) test results, vector error correction (VEC) models are created in order to model the determination of real wages in the engineering industry. The estimation results support the presence of a long-run wage-raising effect to rises in the labour productivity, in the tax wedge, in the alternative real consumer wage and in real UI benefits. The estimation results also support the presence of a long-run wage-raising effect due to positive changes in the participation rates regarding ALMPs, relief jobs and labour market training. This could be interpreted as meaning that the possibility of being a participant in an ALMP increases the utility for workers of not being employed in the industry, which in turn could increase real wages in the industry in the long run. Finally, the estimation results show evidence of a long-run wage-reducing effect due to positive changes in the unemployment rate. Study IIIntersectoral Wage Linkages in Sweden The purpose of this study is to investigate whether the wage-setting in certain sectors of the Swedish economy affects the wage-setting in other sectors. The theoretical background is the Scandinavian model of inflation, which states that the wage-setting in the sectors exposed to international competition affects the wage-setting in the sheltered sectors of the economy. The Johansen maximum likelihood cointegration approach is applied to quarterly data on Swedish sector wages for the period 1980:1–2002:2. Different vector error correction (VEC) models are created, based on assumptions as to which sectors are exposed to international competition and which are not. The adaptability of wages between sectors is then tested by imposing restrictions on the estimated VEC models. Finally, Granger causality tests are performed in the different restricted/unrestricted VEC models to test for sector wage leadership. The empirical results indicate considerable adaptability in wages as between manufacturing, construction, the wholesale and retail trade, the central government sector and the municipalities and county councils sector. This is consistent with the assumptions of the Scandinavian model. Further, the empirical results indicate a low level of adaptability in wages as between the financial sector and manufacturing, and between the financial sector and the two public sectors. The Granger causality tests provide strong evidence for the presence of intersectoral wage causality, but no evidence of a wage-leading role in line with the assumptions of the Scandinavian model for any of the sectors. Study IIIWage and Price Determination in the Private Sector in Sweden The purpose of this study is to analyse wage and price determination in the private sector in Sweden during the period 1980–2003. The theoretical background is a variant of the “Imperfect competition model of inflation”, which assumes imperfect competition in the labour and product markets. According to the model wages and prices are determined as a result of a “battle of mark-ups” between trade unions and firms. The Johansen maximum likelihood cointegration approach is applied to quarterly Swedish data on consumer prices, import prices, private-sector nominal wages, private-sector labour productivity and the total unemployment rate for the period 1980:1–2003:3. The chosen cointegration rank of the estimated vector error correction (VEC) model is two. Thus, two cointegration relations are assumed: one for private-sector nominal wage determination and one for consumer price determination. The estimation results indicate that an increase of consumer prices by one per cent lifts private-sector nominal wages by 0.8 per cent. Furthermore, an increase of private-sector nominal wages by one per cent increases consumer prices by one per cent. An increase of one percentage point in the total unemployment rate reduces private-sector nominal wages by about 4.5 per cent. The long-run effects of private-sector labour productivity and import prices on consumer prices are about –1.2 and 0.3 per cent, respectively. The Rehnberg agreement during 1991–92 and the monetary policy shift in 1993 affected the determination of private-sector nominal wages, private-sector labour productivity, import prices and the total unemployment rate. The “offensive” devaluation of the Swedish krona by 16 per cent in 1982:4, and the start of a floating Swedish krona and the substantial depreciation of the krona at this time affected the determination of import prices.

Detection and localization of GLUTs in spermatozoa from different domestic species

Sperm cells need hexoses as a substrate for their function, for both the maintenance of membrane homeostasis and the movement of the tail. These cells have a peculiar metabolism that has not yet been fully understood, but it is clear that they obtain energy from hexoses through glycolisis and/or oxidative phosphorylation. Spermatozoa are in contact with different external environments, beginning from the testicular and epididymal fluid, passing to the seminal plasma and finally to the female genital tract fluids; in addition, with the spread of reproductive biotechnologies, sperm cells are diluted and stored in various media, containing different energetic substrates. To utilize these energetic sources, sperm cells, as other eukaryotic cells, have a well-constructed protein system, that is mainly represented by the GLUT family proteins. These transporters have a membrane-spanning α-helix structure and work as an enzymatic pump that permit a fast gradient dependent passage of sugar molecules through the lipidic bilayer of sperm membrane. Many GLUTs have been studied in man, bull and rat spermatozoa; the presence of some GLUTs has been also demonstrated in boar and dog spermatozoa. The aims of the present study were - to determine the presence of GLUTs 1, 2, 3, 4 and 5 in boar, horse, dog and donkey spermatozoa and to describe their localization; - to study eventual changes in GLUTs location after capacitation and acrosome reaction in boar, stallion and dog spermatozoa; - to determine possible changes in GLUTs localization after capacitation induced by insulin and IGF stimulation in boar spermatozoa; - to evaluate changes in GLUTs localization after flow-cytometric sex sorting in boar sperm cells. GLUTs 1, 2, 3 and 5 presence and localization have been demonstrated in boar, stallion, dog and donkey spermatozoa by western blotting and immunofluorescence analysis; a relocation in GLUTs after capacitation has been observed only in dog sperm cells, while no changes have been observed in the other species examined. As for boar, the stimulation of the capacitation with insulin and IGF didn’t cause any change in GLUTs localization, as well as for the flow cytometric sorting procedure. In conclusion, this study confirms the presence of GLUTs 1, 2 ,3 and 5 in boar, dog, stallion and donkey spermatozoa, while GLUT 4 seems to be absent, as a confirmation of other studies. Only in dog sperm cells capacitating conditions induce a change in GLUTs distribution, even if the physiological role of these changes should be deepened.

Banking Regulation in Turkey and Russia: An Economic Analysis

The importance of the banks and financial markets relies on the fact that they promote economic efficiency by allocating savings efficiently to profitable investment opportunities.An efficient banking system is a key determinant for the financial stability.The theory of market failure forms the basis for understanding financial regulation.Following the detrimental economic and financial consequences in theaftermath of the crisis, academics and policymakers started to focus their attention on the construction of an appropriate regulatory and supervisory framework of the banking sector. This dissertation aims at understanding the impact of regulations and supervision on banks’ performance focusing on two emerging market economies, Turkey and Russia. It aims at examining the way in which regulations matter for financial stability and banking performance from a law & economics perspective. A review of the theory of banking regulation, particularly as applied to emerging economies, shows that the efficiency of certain solutions regarding banking regulation is open to debate. Therefore, in the context of emerging countries, whether a certain approach is efficient or not will be presented as an empirical question to which this dissertation will try to find an answer.

Stochastic foundations of dynamic trade and labor market models

This dissertation consists of three self-contained papers that are related to two main topics. In particular, the first and third studies focus on labor market modeling, whereas the second essay presents a dynamic international trade setup.rnrnIn Chapter "Expenses on Labor Market Reforms during Transitional Dynamics", we investigate the arising costs of a potential labor market reform from a government point of view. To analyze various effects of unemployment benefits system changes, this chapter develops a dynamic model with heterogeneous employed and unemployed workers.rn rnIn Chapter "Endogenous Markup Distributions", we study how markup distributions adjust when a closed economy opens up. In order to perform this analysis, we first present a closed-economy general-equilibrium industry dynamics model, where firms enter and exit markets, and then extend our analysis to the open-economy case.rn rnIn Chapter "Unemployment in the OECD - Pure Chance or Institutions?", we examine effects of aggregate shocks on the distribution of the unemployment rates in OECD member countries.rn rnIn all three chapters we model systems that behave randomly and operate on stochastic processes. We therefore exploit stochastic calculus that establishes clear methodological links between the chapters.

Immigrants in the Czech Republic (With Special Reference to Ukrainian Workers and "Western" Firms Operating in Prague)

International migration has increased rapidly in the Czech Republic, with more than 150,000 legally registered foreign residents at the end of 1996. A large proportion of these are in Prague - 35% of the total in December 1996. The aim of this project was to enrich the fund of information concerning the "environment", reasons and "mechanisms" behind immigration to the Czech Republic. Mr. Drbohlav looked first at the empirical situation and on this basis set out to test certain well-known migration theories. He focused on four main areas: 1) a detailed description and explanation of the stock of foreign citizens legally settled in Czech territory, concentrating particularly on "economic" migrants; 2) a questionnaire survey targeting a total of 192 Ukrainian workers (98 in the fall 1995 and 94 in the fall 1996) working in Prague or its vicinity; 3) a second questionnaire survey of 40 "western" firms (20 in 1996 and 20 in 1997) operating out of Prague; 4) an opinion poll on how the Czech population reacts to foreign workers in the CR. Over 80% of economic immigrants at the end of 1996 were from European countries, 16% from Asia and under 2% from North America. The largest single nationalities were Ukrainians, Slovaks, Vietnamese and Poles. There has been a huge increase in the Ukrainian immigrant community over both space (by region) and time (a ten-fold increase since 1993), and at 40,000 persons this represents one third of all legal immigrants. Indications are that many more live and work there illegally. Young males with low educational/skills levels predominate, in contrast with the more heterogeneous immigration from the "West". The primary reason for this migration is the higher wages in the Czech Republic. In 1994 the relative figures of GDP adjusted for parity of purchasing power were US$ 8,095 for the Czech Republic versus US$ 3,330 for the Ukraine as a whole and US$ 1,600 for the Zakarpatye region from which 49% of the respondents in the survey came. On an individual level, the average Czech wage is about US$ 330 per month, while 50% of the Ukrainian respondents put their last monthly wage before leaving for the Czech Republic at under US$ 27. The very low level of unemployment in the latter country (fluctuating around 4%) was also mentioned as an important factor. Migration was seen as a way of diversifying the family's source of income and 49% of the respondents had made their plans together with partners or close relatives, while 45% regularly send remittances to Ukraine (94% do so through friends or relatives). Looking at Ukrainian migration from the point of view of the dual market theory, these migrants' type and conditions of work, work load and earnings were all significantly worse than in the primary sector, which employs well educated people and offers them good earnings, job security and benefits. 53% of respondents were working and/or staying in the Czech Republic illegally at the time of the research, 73% worked as unqualified, unskilled workers or auxiliary workers, 62% worked more than 12 hours a day, and 40% evaluated their working conditions as hard. 51% had no days off, earnings were low in relation to the number of hours worked. and 85% said that their earnings did not increase over time. Nearly half the workers were recruited in Ukraine and only 4% expressed a desire to stay in the Czech Republic. Network theories were also borne out to some extent as 33% of immigrants came together with friends from the same village, town or region in Ukraine. The number who have relatives working in the Czech Republic is rising, and many wish to invite relatives or children to visit them. The presence of organisations which organised cross-border migration, including some which resort to organising illegal documents, also gives some support for the institutional theory. Mr. Drbohlav found that all the migration theories considered offered some insights on the situation, but that none was sufficient to explain it all. He also points out parallels with many other regions of the world, including Central America, South and North America, Melanesia, Indonesia, East Africa, India, the Middle East and Russia. For the survey of foreign and international firms, those chosen were largely from countries represented by more than one company and were mainly active in market services such as financial and trade services, marketing and consulting. While 48% of the firms had more than 10,000 employees spread through many countries, more than two thirds had fewer than 50 employees in the Czech Republic. Czechs formed 80% plus of general staff in these firms although not more than 50% of senior management, and very few other "easterners" were employed. All companies absolutely denied employing people illegally. The average monthly wage of Czech staff was US$ 850, with that of top managers from the firm's "mother country" being US$ 6,350 and that of other western managers US$ 3,410. The foreign staff were generally highly mobile and were rarely accompanied by their families. Most saw their time in the Czech Republic as positive for their careers but very few had any intention of remaining there. Factors in the local situation which were evaluated positively included market opportunities, the economic and political environment, the quality of technical and managerial staff, and cheap labour and low production costs. In contrast, the level of appropriate business ethics and conduct, the attitude of local and regional authorities, environmental production conditions, the legal environment and financial markets and fiscal policy were rated very low. In the final section of his work Mr. Drbohlav looked at the opinions expressed by the local Czech population in a poll carried out at the beginning of 1997. This confirmed that international labour migration has become visible in this country, with 43% of respondents knowing at least one foreigner employed by a Czech firm in this country. Perception differ according to the region from which the workers come and those from "the West" are preferred to those coming from further east. 49% saw their attitude towards the former as friendly but only 20% felt thus towards the latter. Overall, attitudes towards migrant workers is neutral, although 38% said that such workers should not have the same rights as Czech citizens. Sympathy towards foreign workers tends to increase with education and the standard of living, and the relatively positive attitudes towards foreigners in the South Bohemia region contradicted the frequent belief that a lack of experience of international migration lowers positive perceptions of it.

Governing the Local: Sovereignty, Social Governance and Community Safety

There has been much commentary about the re-ordering of the relations between nation state government, geographical territory, and populations in the advanced liberal democracies. This is seen as a product of: increasing demographic and cultural diversity due to legal and illegal migration; economic, cultural, and political global interdependence; footloose mobility of capital and the outsourcing of jobs to poorer countries; the growing power of international corporations and financial markets; and the growth of supra-national bodies like the European Union and The North Atlantic Free Trade Association, the World Trade Organisation, and (debatably), the UN. These developments are held to be associated with the gradual demise of the model of the increasingly secular nation state first crystallised by the Treaty of Westphalia in 1648. This conception provided a mutual, guarantee of states’ jurisdiction over territory and populations through their legitimated attempts to monopolise the use of force. Though, the relations between these states have always been asymmetrical and often challenged (Hunter 1998).

Executive Stock Ownership and Performance: Tracking Faint Traces

We examine the relation between managers' financial interests and firm performance. Since the relation could go in either direction, we cast the analysis in a simultaneous equations framework. For firms involved in acquisitions, we find that acquisition performance and Tobin's Q ratios affect the size of managers' stockholdings. We find no evidence, however, that larger stockholdings lead to better performance. Perhaps management is effectively disciplined by competition in product and labor markets. Alternatively, it may not be necessary for top executives to own stock to the residual claimants. And finally, higher ownership might multiply the opportunities to appropriate corporate wealth.

Secondary Forests and Local Livelihoods along a Gradient of Accessibility: A Case Study in Northern Laos

Rural livelihoods in developing countries can be enhanced by improving access to natural resources, services, and markets. In remote rural areas of the humid or semihumid tropics, forests represent an important resource for livelihoods. In countries like Laos, where most primary forest has been converted to secondary forest, and where an intricate and interlinked mosaic of forest and farmland prevails, people depend on secondary forests as a prime source of goods and services. The linkages between local livelihoods and secondary forest resources are subject to changes caused by improving accessibility. This article studies how accessibility affects the condition of forests and local livelihoods by comparing three villages along a gradient of accessibility in Phonxay district, Luang Prabang province, northern Laos. The results of this research show that accessibility strengthens the influence of the government and of markets, and that local livelihoods improve with increasing accessibility, while forest condition deteriorates.

An empirical examination of relative profitability in the nursing facility industry between ownership form and regionality in the state of Texas

The purpose of this research is to examine the relative profitability of the firm within the nursing facility industry in Texas. An examination is made of the variables expected to affect profitability and of importance to the design and implementation of regulatory policy. To facilitate this inquiry, specific questions addressed are: (1) Do differences in ownership form affect profitability (defined as operating income before fixed costs)? (2) What impact does regional location have on profitability? (3) Do patient case-mix and access to care by Medicaid patients differ between proprietary and non-profit firms and facilities located in urban versus rural regions, and what association exists between these variables and profitability? (4) Are economies of scale present in the nursing home industry? (5) Do nursing facilities operate in a competitive output market characterized by the inability of a single firm to exhibit influence over market price?^ Prior studies have principally employed a cost function to assess efficiency differences between classifications of nursing facilities. The inherent weakness in this approach is that it only considers technical efficiency. Not both technical and price efficiency which are the two components of overall economic efficiency. One firm is more technically efficient compared to another if it is able to produce a given quantity of output at the least possible costs. Price efficiency means that scarce resources are being directed towards their most valued use. Assuming similar prices in both input and output markets, differences in overall economic efficiency between firm classes are assessed through profitability, hence a profit function.^ Using the framework of the profit function, data from 1990 Medicaid Costs Reports for Texas, and the analytic technique of Ordinary Least Squares Regression, the findings of the study indicated (1) similar profitability between nursing facilities organized as for-profit versus non-profit and located in urban versus rural regions, (2) an inverse association between both payor-mix and patient case-mix with profitability, (3) strong evidence for the presence of scale economies, and (4) existence of a competitive market structure. The paper concludes with implications regarding reimbursement methodology and construction moratorium policies in Texas. ^

Ar-40/Ar-39 Evidence for Middle Proterozoic (1300-1500 Ma) Slow Cooling of the Southern Black Hills, South Dakota, Midcontinent, North America: Implications for Early Proterozoic P-T Evolution and Posttectonic Magmatism

Ar-40/Ar-39 total gas and plateau dates from muscovite and biotite in the southern Black Hills, South Dakota, provide evidence for a period of Middle Proterozoic slow cooling. Early Proterozoic (1600-1650 Ma) mica dates were obtained from metasedimentary rocks located in a synformal structure between the Harney Peak and Bear Mountain domes and also south of Bear Mountain. Metamorphic rocks from the dome areas and undeformed samples of the similar to 1710 Ma Harney Peak Granite (HPG) yield Middle Proterozoic mica dates (similar to 1270-1500 Ma). Two samples collected between the synform and Bear Mountain dome yield intermediate total gas mica dates of similar to 1550 Ma. We suggest two end-member interpretations to explain the map pattern of cooling ages: (1) subhorizontal slow cooling of an area which exhibits variation in mica Ar retention intervals or (2) mild folding of a Middle Proterozoic (similar to 1500 Ma) similar to 300 degrees C isotherm. According to the second interpretation, the preservation of older dates between the domes may reflect reactivation of a preexisting synformal structure (and downwarping of relatively cold rocks) during a period of approximately east-west contraction and slow uplift during the Middle Proterozoic. The mica data, together with hornblende data from the Black Hills published elsewhere, indicate that the ambient country-rock temperature at the 3-4 kbar depth of emplacement of the HPG was between 350 degrees C and 500 degrees C, suggesting that the average upper crustal geothermal gradient was 25 degrees-40 degrees C/km prior to intrusion. The thermochronologic data suggest HPG emplacement was followed by a similar to 200 m.y. period of stability and tectonic quiescence with little uplift. We propose that crust thickened during the Early Proterozoic was uplifted and erosionally(?) thinned prior to similar to 1710 Ma and that the HPG magma was emplaced into isostatically stable crust of relatively normal thickness. We speculate that uplift and crustal thinning prior to HPG intrusion was the result of differential thinning of the subcrustal lithosphere beneath the Black Hills. If so, this process would have also caused an increase in mantle heat flux across the Moho and triggered vapor-absent melting of biotite to produce the HPG magma. This scenario for posttectonic granite generation is supported, in part, by the fact that in the whole of the Black Hills, the HPG is spatially associated with the deepest exposed Early Proterozoic country rock.

Heterogeneous Beliefs and the Demand for D&O Insurance by Listed Companies

This paper introduces a new rationale for the existence of “Directors’ and Officers’” (D&O) insurance. We use a model with volatile stock markets where shareholders design compensation schemes that incentivize managers to stimulate short-term increases in stock prices that do not maximize long run stock market value. We show that D&O insurance provides a convenient instrument for the initial shareholders of a company to take advantage of differences in beliefs between insiders and outsiders in capital markets. The empirical results support the idea that both the insurance coverage and the premium are higher in the presence of new shareholders and volatile markets. The results prove robust in various empirical model specifications.

The formalization fix? Land titling and land concessions in Cambodia

Issuing land titles to smallholder farmers has long been embraced as a way to promote lending and land markets, but is increasingly being reframed as a way to protect smallholders from irresponsible agricultural investment. This brief examines the case of Cambodia, where over the last decade extensive land titling efforts have occurred alongside a wave of large-scale land concessions. The problem, however, is that titling has failed to live up to the rhetoric of systematic coverage, and has often focused on areas where tenure was already relatively secure. Areas outside the titling zone, in contrast, have become formalized de facto through the process of granting land concessions to investors. This undermines pro-poor development significantly.

Discrimination in Metropolitan Housing Markets: National Results from Phase 1 of the Housing Discrimination Study (HDS)

The Housing Discrimination Study 2000 (HDS 2000) is the third nationwide effort sponsored by HUD to measure the amount of discrimination faced by minority home seekers. This report provides national estimates of discrimination faced by African Americans and Hispanics in 2000 as they searched for housing in the sales and rental markets. It also provides an accurate measure of how housing discrimination has changed since 1989. The report shows large decreases between 1989 and 2000 in the level of discrimination experienced by Hispanics and African Americans seeking to a buy a home. There are, however, worrisome upward trends of discrimination in the areas of geographic steering in home sales for African Americans and the amount of help agents provide to Hispanics with obtaining financing. There has also been a modest decrease in discrimination toward African Americans seeking to rent a unit. This downward trend, however, has not been seen for Hispanic renters. Hispanic renters now are more likely to experience discrimination in their housing search than do African American renters.

What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets

The paper provides a fairly comprehensive examination of recent empirical work on discrimination within economics. The three major analytical approaches considered are traditional regression analysis of outcomes, paired testing or audits, and finally analysis of performance where higher group performance suggests that a group has been treated disfavorably. The review covers research in the labor, credit, and consumption markets, as well as recent studies of discrimination within the legal system. The review suggests that the validity of interpreting observed racial differences as discrimination depends heavily on whether the analysis is based on a sample that is representative of a population of individuals or households or based on a sample of market transactions, as well as the analyst?s ability to control for heterogeneity within that sample. Heterogeneous firm behavior and differentiated products, such as those found in labor and housing markets, also can confound empirical analyses of discrimination by confusing the allocation of individuals across firms or products with disparate treatment or by ignoring disparate impacts that might arise based on that allocation.

(Table 1) Normalized difference vegetation index in control and warming plots, Abisco Research Station

Extreme winter warming events in the sub-Arctic have caused considerable vegetation damage due to rapid changes in temperature and loss of snow cover. The frequency of extreme weather is expected to increase due to climate change thereby increasing the potential for recurring vegetation damage in Arctic regions. Here we present data on vegetation recovery from one such natural event and multiple experimental simulations in the sub-Arctic using remote sensing, handheld passive proximal sensors and ground surveys. Normalized difference vegetation index (NDVI) recovered fast (2 years), from the 26% decline following one natural extreme winter warming event. Recovery was associated with declines in dead Empetrum nigrum (dominant dwarf shrub) from ground surveys. However, E. nigrum healthy leaf NDVI was also reduced (16%) following this winter warming event in experimental plots (both control and treatments), suggesting that non-obvious plant damage (i.e., physiological stress) had occurred in addition to the dead E. nigrum shoots that was considered responsible for the regional 26% NDVI decline. Plot and leaf level NDVI provided useful additional information that could not be obtained from vegetation surveys and regional remote sensing (MODIS) alone. The major damage of an extreme winter warming event appears to be relatively transitory. However, potential knock-on effects on higher trophic levels (e.g., rodents, reindeer, and bear) could be unpredictable and large. Repeated warming events year after year, which can be expected under winter climate warming, could result in damage that may take much longer to recover.