The impact of firing costs on turnover and unemployment: Evidence from the Colombian labour market reform

Reductions in firing costs are often advocated as a way of increasingthe dynamism of labour markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S. have been limited. This paper, instead, examines the impact of the Colombian Labour Market Reform of 1990, which substantially reduced dismissal costs. I estimate the incidence of a reduction in firing costs on worker turnover by exploiting the temporal change in the Colombian labour legislation as well as the variability in coverage between formal and informal sector workers. Using a grouping estimator to control for common aggregate shocks and selection, I find that the exit hazard rates into and out of unemployment increased after the reform by over 1% for formal workers (covered by the legislation) relative to informal workers (uncovered). The increase of the hazards implies a net decrease in unemployment of a third of a percentage point, which accounts for about one quarter of the fall in unemployment during the period of study.

Audit report on the Adair County Sanitary Landfill and Recycling Center for the year ended June 30, 2008

Audit report on the Adair County Sanitary Landfill and Recycling Center for the year ended June 30, 2008

Iowa Climate Change Advisory Council Final Report 2008.

On April 27, 2007, Iowa Governor Chet Culver signed Senate File 485, a bill related to greenhouse gas emissions. Part of this bill created the Iowa Climate Change Advisory Council (ICCAC), which consists of 23 governor-appointed members from various stakeholder groups, and 4 nonvoting, ex officio members from the General Assembly. ICCAC’s immediate responsibilities included submitting a proposal to the Governor and General Assembly that addresses policies, cost-effective strategies, and multiple scenarios designed to reduce statewide greenhouse gas emissions. Further, a preliminary report was submitted in January 2008, with a final proposal submitted in December 2008. In the Final Report, the Council presents two scenarios designed to reduce statewide greenhouse gas emissions by 50% and 90% from a 2005 baseline by the year 2050. For the 50% reduction by 2050, the Council recommends approximately a 1% reduction by 2012 and an 11% reduction by 2020. For the 90% reduction scenario, the Council recommends a 3% reduction by 2012 and a 22% reduction 2020. These interim targets were based on a simple extrapolation assuming a linear rate of reduction between now and 2050. In providing these scenarios for your consideration, ICCAC approved 56 policy options from a large number of possibilities. There are more than enough options to reach the interim and final emission targets in both the 50% and 90% reduction scenarios. Direct costs and cost savings of these policy options were also evaluated with the help of The Center for Climate Strategies, who facilitated the process and provided technical assistance throughout the entire process, and who developed the Iowa Greenhouse Gas Emissions Inventory and Forecast in close consultation with the Iowa Department of Natural Resources (IDNR) and many Council and Sub-Committee members. About half of the policy options presented in this report will not only reduce GHG emissions but are highly cost-effective and will save Iowans money. Still other options may require significant investment but will create jobs, stimulate energy independence, and advance future regional or federal GHG programs.

Conglomeration with bankruptcy costs: Separate or joint financing?

The paper analyzes the determinants of the optimal scope of incorporation in the presenceof bankruptcy costs. Bankruptcy costs alone generate a non-trivial tradeoff between thebenefit of coinsurance and the cost of risk contamination associated to joint financing corporate projects through debt. This tradeoff is characterized for projects with binary returns,depending on the distributional characteristics of returns (mean, variability, skewness, heterogeneity, correlation, and number of projects), the bankruptcy recovery rate, and the taxrate advantage of debt relative to equity. Our testable predictions are broadly consistentwith existing empirical evidence on conglomerate mergers, spin-offs, project finance, andsecuritization.

Audit report on the Iowa State Center Business Office of Iowa State University of Science and Technology for the year ended June 30, 2008

Audit report on the Iowa State Center Business Office of Iowa State University of Science and Technology for the year ended June 30, 2008

Audit report on the Central Iowa Juvenile Detention Center in Eldora, Iowa for the year ended June 30, 2008

Audit report on the Central Iowa Juvenile Detention Center in Eldora, Iowa for the year ended June 30, 2008

Markups, gaps and the welfare costs of business fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted,the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

Estimates of patient costs related with population morbidity: Can indirect costs affect the results?

A number of health economics works require patient cost estimates as a basic information input.However the accuracy of cost estimates remains in general unspecified. We propose to investigate howthe allocation of indirect costs or overheads can affect the estimation of patient costs in order to allow forimprovements in the analysis of patient costs estimates. Instead of focusing on the costing method, thispaper proposes to highlight changes in variance explained observed when a methodology is chosen. Wecompare three overhead allocation methods for a specific Spanish population adjusted using the ClinicalRisk Groups (CRG), and we obtain different series of full-cost group estimates. As a result, there aresignificant gains in the proportion of the variance explained, depending upon the methodology used.Furthermore, we find that the global amount of variation explained by risk adjustment models dependsmainly on direct costs and is independent of the level of aggregation used in the classification system.

Audit report on the City of Center Point, Iowa for the year ended June 30, 2008

Audit report on the City of Center Point, Iowa for the year ended June 30, 2008

The elusive costs and the immaterial gains of fiscal contraints

We study whether and how fiscal restrictions alter the business cycle features macrovariables for a sample of 48 US states. We also examine the 'typical' transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal constraints are characterized with a number of indicators. There are similarities in second moments of macrovariables and in the transmission properties of fiscal shocks across states with different fiscal constraints. The cyclical response of expenditure differs in size and sometimes in sign, but heterogeneity within groups makes point estimates statistically insignificant. Creative budget accounting isresponsible for the pattern. Implications for the design of fiscal rules and thereform of the Stability and Growth Pact are discussed.

Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism

This chapter, originally written as a consequence of the terrorist attacksof September 11, 2001, provides an elementary, everyday introduction tothe concepts of risk and insurance. Conceptually, risk has two dimensions:a potential loss, and the chance of that loss being realized. People can,however, transfer risk to insurance companies against the payment ofso-called premiums. In practice, however, one needs accurate assessmentsof both losses and probabilities to judge whether premiums are appropriate.For many risks, this poses little problem (e.g., life insurance); however,it is difficult to assess risks of many other kinds of events such as actsof terrorism. It is emphasized, that through evolution and learning, peopleare able to handle many of the common risks that they face in life. Butwhen people lack experience (e.g., new technologies, threats of terrorism),risk can only be assessed through imagination. Not surprisingly, insurancecompanies demand high prices when risks are poorly understood. In particular,the cost of insurance against possible acts of terrorism soared afterSeptember 11. How should people approach risk after the events of that day?Clearly, the world needs to protect itself from the acts of terrorists andother disturbed individuals. However, it is also important to address the root causes of such antisocial movements. It is, therefore, suggested thatprograms addressed at combatting ignorance, prejudice, and socialinequalities may be more effective premiums for reducing the risk ofterrosrtism than has been recognized to date.

Call for Proposals Iowa Department of Agriculture and Land Stewardship Division of Soil Conservation, August 31, 2012

IDALS stands for Iowa Department of Agriculture and Land Stewardship. IDALS’s mission is to provide leadership for all aspects of agriculture in Iowa, ensure consumer protection and promote the responsible use of our natural resources. DSC stands for the Division of Soil Conservation and is the division within IDALS responsible for state leadership in the protection and management of soil, water and mineral resources. Learn more about IDALS at www.iowaagriculture.gov

Orientation Center Newsletter, Vol. 28, no. 1, Summer 2008

The Orientation Center newsletter is produced three times a year, and includes articles written by students, staff, and former students. It also contains news about what is happening to other students who have been in the Center.