Investor protection, risk sharing and inequality

This paper studies the relationship between investor protection, financial risk sharing and income inequality. In the presence of market frictions, better protection makes investors more willing to take on entrepreneurial risk while lending to firms. This implies lower cost of external finance and better risk sharing between financiers and entrepreneurs. Investor protection, by boosting the market for risk sharing plays the twofold role of encouraging agents to undertake risky enterprises and providing them with insurance. By increasing the number of risky projects, it raises income inequality. By extending insurance to more agents, it reduces it. As a result, the relationship between the size of the market for risk sharing and income inequality is hump-shaped. Empirical evidence from a cross-section of sixty-eight countries, and a panel of fifty countries over the period 1976-2000, supports the predictions of the model.

What works best for getting the unemployed back to work: employment services or small-business assistance programs? evidence from Romania

Recent empirical evidence has found that employment services and small-business assistance programmes are often successful at getting the unemployed back to work. Â One important concern of policy makers is to decide which of these two programmes is more effective and for whom. Â Using unusually rich (for transition economies) survey data and matching methods, I evaluate the relative effectiveness of these two programmes in Romania. Â While I find that employment services (ES) are, on average, more successful than a small-business assistance programme (SBA), estimation of heterogeneity effects reveals that, compared to non-participation, ES are effective for workers with little access to informal search channels, and SBA works for less-qualified workers and those living in rural areas. Â When comparing ES to SBA, I find that ES tend to be more efficient than SBA for workers without a high-school degree, and that the opposite holds for the more educated workers.

Reversal of opinion: the implications of the work of Acemoglu and Robinson for marxist thought

This paper describes the implications for Marxist thought of the work of Daron Acemoglu and James Robinson. In the first two periods of this they explained how the rise of democracy brought prosperity to Europe  and why the same process had not worked in Latin America because of the possibility of coups. The implication is that mass poverty can better be alleviated by safeguarding democracy rather than moving to socialism. In the last period A and R have formalized doubts about the efficacy of democracy in this role. The implication here is that Marxists should work to find a system of government that is immune to elite dominance. Hugo Chávez is taken as an example.

Structure du temps de travail des infirmières de santé publique: effets de l'âge des patients, de la nature des prestations fournies et du lieu du contact. [Structure of work times of public health nurses: effect of the age of patients, nature of care given and location of contact].

In the framework of health services research sponsored by the Swiss National Science Foundation, a research was undertaken of the activity of the large majority of the public health nurses working in the Swiss cantons of Vaud and Fribourg (total population 700,000). During one week, 130 nurses gathered, with a specially devised instrument, data on 4165 patient visits. Studying the duration of the contacts, one has distinguished contact duration per se (DC), duration of the travel time preceding the contact (DD), and total duration in relation with the contact (DTC-addition of the first two). It was noted that the three durations increased significantly with patient age (as regard travel time, this is explained by the higher proportion of home visits in higher age groups, as compared with visits at a health center). Examined according to location of the visit, contact duration per se (without travel) is higher for visits at home and in nursing homes than for those taking place at a health center. Looked at in respect to the care given (technical care, or basic nursing care, or both simultaneously), our data show that the provision of basic nursing care (alone or with technical care) doubles contact duration (from 20 to 42-45'). The analyses according to patient age shows that, at an advanced age (beyond 80 years particularly), there is an important increase of the visits where both types of care are given. However, contact duration per se shows a significant raise with age only for the group "technical care only"; it can be demonstrated that this is due to the fact that older patients require more complex technical acts (e.g., bladder care, as compared with simpler acts such as injection). A model of the relationships between patient age and contact duration is proposed: it is because of the increase in the proportions of home visits, of visits including basic nursing care, and of more complex technical acts that older persons require more of the working time of public health nurses.

Threshold Effects of Dismissal Protection Regulation and the Emergence of Temporary Work Agencies

Labour market regulations aimed at enhancing job-security are dominant in several OECD countries. These regulations seek to reduce dismissals of workers and fluctuations in employment. The main theoretical contribution is to gauge the effects of such regulations on labour demand across establishment sizes. In order to achieve this, we investigate an optimising model of labour demand under uncertainty through the application of real option theory. We also consider other forms of employment which increase the flexibility of the labour market. In particular, we are modelling the contribution of temporary employment agencies (Zeitarbeit) allowing for quick personnel adjustments in client firms. The calibration results indicate that labour market rigidities may be crucial for understanding sluggishness in firms´ labour demand and the emergence and growth of temporary work.

The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach

As demand for electricity from renewable energy sources grows, there is increasing interest, and public and financial support, for local communities to become involved in the development of renewable energy projects. In the UK, “Community Benefit” payments are the most common financial link between renewable energy projects and local communities. These are “goodwill” payments from the project developer for the community to spend as it wishes. However, if an ownership stake in the renewable energy project were possible, receipts to the local community would potentially be considerably higher. The local economic impacts of these receipts are difficult to quantify using traditional Input-Output techniques, but can be more appropriately handled within a Social Accounting Matrix (SAM) framework where income flows between agents can be traced in detail. We use a SAM for the Shetland Islands to evaluate the potential local economic and employment impact of a large onshore wind energy project proposed for the Islands. Sensitivity analysis is used to show how the local impact varies with: the level of Community Benefit payments; the portion of intermediate inputs being sourced from within the local economy; and the level of any local community ownership of the project. By a substantial margin, local ownership confers the greatest economic impacts for the local community.

Work Hours, Social Value of Leisure and Globalisation

We examine how openness interacts with the coordination of consumption-leisure decisions in determining the equilibrium working hours and wage rate when there are leisure externalities (e.g., due to social interactions). The latter are modelled by allowing a worker’s marginal utility of leisure to be increasing in the leisure time taken by other workers. Coordination takes the form of internalising the leisure externality and other relevant constraints (e.g., labour demand). The extent of openness is measured by the degree of capital mobility. We find that: coordination lowers equilibrium work hours and raises the wage rate; there is a U-shaped (inverse-U-shaped) relationship between work hours (wages) and the degree of coordination; coordination is welfare improving; and, the gap between the coordinated and uncoordinated work hours (and the corresponding wage rates) is affected by the extent and nature of openness.

Non-cooperative incentives to share knowledge in competitive environments

In this paper we study a model where non-cooperative agents may exchange knowledge in a competitive environment. As a potential factor that could induce the knowledge disclosure between humans we consider the timing of the moves of players. We develop a simple model of a multistage game in which there are only three players and competition takes place only within two stages. Players can share their private knowledge with their opponents and the knowledge is modelled as in uencing their marginal cost of e¤ort. We identify two main mechanisms that work towards knowledge disclosure. One of them is that before the actual competition starts, the stronger player of the rst stage of a game may have desire to share his knowledge with the "observer", be- cause this reduces the valuation of the prize of the weaker player of that stage and as a result his e¤ort level and probability of winning in a ght. Another mechanism is that the "observer" may have sometimes desire to share knowledge with the weaker player of the rst stage, because in this way, by increasing his probability of winning in that stage, he decreases the probability of winning of the stronger player. As a result, in the second stage the "observer" may have greater chances to meet the weaker player rather than the stronger one. Keywords: knowledge sharing, strategic knowledge disclosure, multistage contest game, non-cooperative games

It’s Not About the Work Ethic

Journal review:Sascha O. Becker and Ludger Woessmann, “Was Weber Wrong? A Human Capital Theory of Protestant Economic History,” The Quarterly Journal of Economics, May 2009.

An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work

This paper engages in an interdisciplinary survey of the current state of knowledge related to the theory, determinants and consequences of occupational safety and health (OSH). First, it synthesizes the available theoretical frameworks used by economists and psychologists to understand the issues related to the optimal provision of OSH in the labour market. Second, it reviews the academic literature investigating the correlates of a comprehensive set of OSH indicators, which portray the state of OSH infrastructure (social security expenditure, prevention, regulations), inputs (chemical and physical agents, ergonomics, working time, violence) and outcomes (injuries, illnesses, absenteeism, job satisfaction) within workplaces. Third, it explores the implications of the lack of OSH in terms of the economic and social costs that are entailed. Finally, the survey identifies areas of future research interests and suggests priorities for policy initiatives that can improve the health and safety of workers.

Predictors of temporary and permanent work disability in patients with inflammatory bowel disease: results of the swiss inflammatory bowel disease cohort study.

BACKGROUND: Inflammatory bowel disease can decrease the quality of life and induce work disability. We sought to (1) identify and quantify the predictors of disease-specific work disability in patients with inflammatory bowel disease and (2) assess the suitability of using cross-sectional data to predict future outcomes, using the Swiss Inflammatory Bowel Disease Cohort Study data. METHODS: A total of 1187 patients were enrolled and followed up for an average of 13 months. Predictors included patient and disease characteristics and drug utilization. Potential predictors were identified through an expert panel and published literature. We estimated adjusted effect estimates with 95% confidence intervals using logistic and zero-inflated Poisson regression. RESULTS: Overall, 699 (58.9%) experienced Crohn's disease and 488 (41.1%) had ulcerative colitis. Most important predictors for temporary work disability in patients with Crohn's disease included gender, disease duration, disease activity, C-reactive protein level, smoking, depressive symptoms, fistulas, extraintestinal manifestations, and the use of immunosuppressants/steroids. Temporary work disability in patients with ulcerative colitis was associated with age, disease duration, disease activity, and the use of steroids/antibiotics. In all patients, disease activity emerged as the only predictor of permanent work disability. Comparing data at enrollment versus follow-up yielded substantial differences regarding disability and predictors, with follow-up data showing greater predictor effects. CONCLUSIONS: We identified predictors of work disability in patients with Crohn's disease and ulcerative colitis. Our findings can help in forecasting these disease courses and guide the choice of appropriate measures to prevent adverse outcomes. Comparing cross-sectional and longitudinal data showed that the conduction of cohort studies is inevitable for the examination of disability.

Complete Markets Strikes Back: Revisiting Risk Sharing Tests under Discount Rate Heterogeneity

Recent risk sharing tests strongly reject the hypothesis of complete markets, because in the data: (1) the individual consumption comoves with income and (2) the consumption dispersion increases over the life cycle. In this paper, I revisit the implications of these risk sharing tests in the context of a complete market model with discount rate heterogeneity, which is extended to introduce the individual choices of effort in education. I .nd that a complete market model with discount rate heterogeneity can pass both types of the risk sharing tests. The endogenous positive correlation between income growth rate and patience makes the individual consumption comove with income, even if the markets are complete. I also show that this model is quantitatively admissible to account for both the observed comovement of consumption and income and the increase of consumption dispersion over the life cycle.