Employee referrals and efficiency wages

Many workers believe that personal contacts are crucial for obtainingjobs in high-wage sectors. On the other hand, firms in high-wage sectorsreport using employee referrals because they help provide screening andmonitoring of new employees. This paper develops a matching model thatcan explain the link between inter-industry wage differentials and useof employee referrals. Referrals lower monitoring costs because high-effortreferees can exert peer pressure on co-workers, allowing firms to pay lowerefficiency wages. On the other hand, informal search provides fewer job andapplicant contacts than formal methods (e.g., newspaper ads). In equilibrium,the matching process generates segmentation in the labor market becauseof heterogeneity in the size of referral networks. Referrals match good high-paying jobs to well-connected workers, while formal methods matchless attractive jobs to less-connected workers. Industry-level data show apositive correlation between industry wage premia and use of employeereferrals. Moreover, evidence using the NLSY shows similar positive andsignificant OLS and fixed-effects estimates of the returns to employeereferrals, but insignificant effects once sector of employment is controlledfor. This evidence suggests referred workers earn higher wages not becauseof higher unobserved ability or better matches but rather because theyare hired in high-wage sectors.

Social security in theory and practice (II): Efficiency theories, narrative theories and implications for reform

166 countries have some kind of public old age pension. What economic forcescreate and sustain old age Social Security as a public program? Mulligan and Sala-i-Martin (1999b) document several of the internationally and historically common features of social security programs, and explore "political" theories of Social Security. This paper discusses the "efficiency theories", which view creation of the SS program as a full of partial solution to some market failure. Efficiency explanations of social security include the "SS as welfare for the elderly" the "retirement increases productivity to optimally manage human capital externalities", "optimal retirement insurance", the "prodigal father problem", the "misguided Keynesian", the "optimal longevity insurance", the "governmenteconomizing transaction costs", and the "return on human capital investment". We also analyze four "narrative" theories of social security: the "chain letter theory", the "lump of labor theory", the "monopoly capitalism theory", and the "Sub-but-Nearly-Optimal policy response to private pensions theory".The political and efficiency explanations are compared with the international and historical facts and used to derive implications for replacing the typical pay-as-you-go system with a forced savings plan. Most of the explanations suggest that forced savings does not increase welfare, and may decrease it.

Adverse selection, credit and efficiency: The case of the missing market

We analyze a standard environment of adverse selection in credit markets. In our environment,entrepreneurs who are privately informed about the quality of their projects need toborrow from banks. Conventional wisdom says that, in this class of economies, the competitiveequilibrium is typically inefficient.We show that this conventional wisdom rests on one implicit assumption: entrepreneurscan only borrow from banks. If an additional market is added to provide entrepreneurs withadditional funds, efficiency can be attained in equilibrium. An important characteristic of thisadditional market is that it must be non-exclusive, in the sense that entrepreneurs must be ableto simultaneously borrow from many different lenders operating in it. This makes it possible toattain efficiency by pooling all entrepreneurs in the new market while separating them in themarket for bank loans.

Organisational values as "attractors of chaos": An emerging cultural change to manage organisational complexity

Business organisations are excellent representations of what in physics and mathematics are designated "chaotic" systems. Because a culture of innovation will be vital for organisational survival in the 21st century, the present paper proposes that viewing organisations in terms of "complexity theory" may assist leaders in fine-tuning managerial philosophies that provide orderly management emphasizing stability within a culture of organised chaos, for it is on the "boundary of chaos" that the greatest creativity occurs. It is argued that 21st century companies, as chaotic social systems, will no longer be effectively managed by rigid objectives (MBO) nor by instructions (MBI). Their capacity for self-organisation will be derived essentially from how their members accept a shared set of values or principles for action (MBV). Complexity theory deals with systems that show complex structures in time or space, often hiding simple deterministic rules. This theory holds that once these rules are found, it is possible to make effective predictions and even to control the apparent complexity. The state of chaos that self-organises, thanks to the appearance of the "strange attractor", is the ideal basis for creativity and innovation in the company. In this self-organised state of chaos, members are not confined to narrow roles, and gradually develop their capacity for differentiation and relationships, growing continuously toward their maximum potential contribution to the efficiency of the organisation. In this way, values act as organisers or "attractors" of disorder, which in the theory of chaos are equations represented by unusually regular geometric configurations that predict the long-term behaviour of complex systems. In business organisations (as in all kinds of social systems) the starting principles end up as the final principles in the long term. An attractor is a model representation of the behavioral results of a system. The attractor is not a force of attraction or a goal-oriented presence in the system; it simply depicts where the system is headed based on its rules of motion. Thus, in a culture that cultivates or shares values of autonomy, responsibility, independence, innovation, creativity, and proaction, the risk of short-term chaos is mitigated by an overall long-term sense of direction. A more suitable approach to manage the internal and external complexities that organisations are currently confronting is to alter their dominant culture under the principles of MBV.

Attentional networks efficiency in preterm children.

Recent studies have reported specific executive and attentional deficits in preterm children. However, the majority of this research has used multidetermined tasks to assess these abilities, and the interpretation of the results lacks an explicit theoretical backdrop to better understand the origin of the difficulties observed. In the present study, we used the Child Attention Network Task (Child ANT; Rueda et al. 2004) to assess the efficiency of the alerting, orienting and executive control networks. We compared the performance of 25 preterm children (gestational age < or = 32 weeks) to 25 full-term children, all between 5(1/2) and 6(1/2) years of age. Results showed that, as compared to full-term children, preterm children were slower on all conditions of the Child ANT and had a specific deficit in executive control abilities. We also observed a significantly higher correlation between the orienting and executive control networks in the preterm group, suggesting less differentiation of these two networks in this population.

Understanding portfolio efficiency with conditioning information

We show that unconditionally efficient returns do not achieve the maximum unconditionalSharpe ratio, neither display zero unconditional Jensen s alphas, when returns arepredictable. Next, we define a new type of efficient returns that is characterized by thoseunconditional properties. We also study a different type of efficient returns that is rationalizedby standard mean-variance preferences and motivates new Sharpe ratios and Jensen salphas. We revisit the testable implications of asset pricing models from the perspective ofthe three sets of efficient returns. We also revisit the empirical evidence on the conditionalvariants of the CAPM and the Fama-French model from a portfolio perspective.

Health care management autonomy: Evidence from the Catalonian hospital sector in a decentralised Spain

The organisation of inpatient care provision has undergone significant reform in many southern European countries. Overall across Europe, public management is moving towards the introduction of more flexibility and autonomy . In this setting, the promotion of the further decentralisation of health care provision stands out as a key salient policy option in all countries that have hitherto had a traditionally centralised structure. Yet, the success of the underlying incentives that decentralised structures create relies on the institutional design at the organisational level, especially in respect of achieving efficiency and promoting policy innovation without harming the essential principle of equal access for equal need that grounds National Health Systems (NHS). This paper explores some of the specific organisational developments of decentralisation structures drawing from the Spanish experience, and particularly those in the Catalonia. This experience provides some evidence of the extent to which organisation decentralisation structures that expand levels of autonomy and flexibility lead to organisational innovation while promoting activity and efficiency. In addition to this pure managerial decentralisation process, Spain is of particular interest as a result of the specific regional NHS decentralisation that started in the early 1980 s and was completed in 2002 when all seventeen autonomous communities that make up the country had responsibility for health care services.Already there is some evidence to suggest that this process of decentralisation has been accompanied by a degree of policy innovation and informal regional cooperation. Indeed, the Spanish experience is relevant because both institutional changes took place, namely managerial decentralisation leading to higher flexibility and autonomy- alongside an increasing political decentralisation at the regional level. The coincidence of both processes could potentially explain why some organisation and policy innovation resulting from policy experimentation at the regional level might be an additional featureto take into account when examining the benefits of decentralisation.

Adverse selection, credit and efficiency: The case of the missing market

We analyze a standard environment of adverse selection in credit markets. In our environment,entrepreneurs who are privately informed about the quality of their projects needto borrow in order to invest. Conventional wisdom says that, in this class of economies, thecompetitive equilibrium is typically inefficient.We show that this conventional wisdom rests on one implicit assumption: entrepreneurscan only access monitored lending. If a new set of markets is added to provide entrepreneurswith additional funds, efficiency can be attained in equilibrium. An important characteristic ofthese additional markets is that lending in them must be unmonitored, in the sense that it doesnot condition total borrowing or investment by entrepreneurs. This makes it possible to attainefficiency by pooling all entrepreneurs in the new markets while separating them in the marketsfor monitored loans.

Communication, coordination and efficiency in evolutionary one-population models

We analyze the role of commitment in pre-play communication for ensuringefficient evolutionarily stable outcomes in coordination games. All players are a priori identical as they are drawn from the same population. In games where efficient outcomes can be reached by players coordinating on the same action we find commitment to be necessary to enforce efficiency. In games where efficienct outcomes only result from play of different actions, communication without commitment is most effective although efficiency can no longer be guaranteed. Only when there are many messages then inefficient outcomes are negligible as their basins of attraction become very small.

The efficiency of a carbamazepine-mianserin combination scheme in opiate detoxification.

A recent comparative randomized double-blind study has suggested the utility of a carbamazepine/mianserin combination as a treatment for opiate withdrawal. The aim of the present study was to explore the feasibility and efficiency of this combination under naturalistic conditions. Five hundred and fifty mostly polysubstance abusing patients treated with a standardized scheme combining carbamazepine and mianserin were assessed with regard to deviations to the protocol, used co-medications and retention in treatment.Three hundred and sixty three patients (66.0%) received the carbamazepine/mianserin combination as specified by the standardized protocol. In 350 patients (63.7%) the whole 10 days was completed. The most frequently used p.r.n. medications were for anxiety (47.5%) and insomnia (54.5%).The treatment of opiate withdrawal with a carbamazepine/mianserin combination scheme in an inpatient setting seems to be feasible and applicable with few adaptations to most patients, and may represent an interesting treatment option for multidrug users.

Biosafety of Recombinant Adeno-associated Virus Vectors.

It is hoped that the use of gene transfer technology to treat both monogenetic and acquired diseases may soon become a common therapy option in medicine. For gene therapy to achieve this objective, any gene delivery method will have to meet several criteria, including ease of manufacturing, efficient gene transfer to target tissue, long-term gene expression to alleviate the disease, and most importantly safety in patients. Viral vectors are an attractive choice for use in gene therapy protocols due to their relative efficiency in gene delivery. Since there is inherent risk in using viruses, investigators in the gene therapy community have devoted extensive efforts toward reengineering viral vectors for enhance safety. Here we review the approaches and technologies that are being evaluated for the use of recombinant vectors based upon adeno-associated virus (AAV) in the treatment of a variety of human diseases. AAV is currently the only known human DNA virus that is non-pathogenic and AAV-based vectors are classified as Risk Group 1 agents for all laboratory and animal studies carried out in the US. Although its apparent safety in natural infection and animals appears well documented, we examine the accumulated knowledge on the biology and vectorology of AAV, lessons learned from gene therapy clinical trials, and how this information is impacting current vector design and manufacturing with an overall emphasis on biosafety.

Effects of fructose-containing caloric sweeteners on resting energy expenditure and energy efficiency: a review of human trials.

Epidemiological studies indicate that the consumption of fructose-containing caloric sweeteners (FCCS: mainly sucrose and high-fructose corn syrup) is associated with obesity. The hypothesis that FCCS plays a causal role in the development of obesity however implies that they would impair energy balance to a larger extent than other nutrients, either by increasing food intake, or by decreasing energy expenditure. We therefore reviewed the literature comparing a) diet-induced thermogenesis (DIT) after ingestion of isocaloric FCCS vs glucose meals, and b) basal metabolic rate (BMR) or c) post-prandial energy expenditure after consuming a high FCCS diet for > 3 days vs basal,weight-maintenance low FCCS diet. Nine studies compared the effects of single isocaloric FCCS and glucose meals on DIT; of them, six studies reported that DIT was significantly higher with FCCS than with glucose, 2 reported a non-significant increase with FCCS, and one reported no difference. The higher DIT with fructose than glucose can be explained by the low energy efficiency associated with fructose metabolism. Five studies compared BMR after consumption of a high FCCS vs a low FCCS diet for > 3 days. Four studies reported no change after 4-7 day on a high FCCS diet, and only one study reported a 7% decrease after 12 week on a high FCCS diet. Three studies compared post-prandial EE after consumption of a high FCCS vs a low FCCS diet for > 3 days, and did not report any significant difference. One study compared 24-EE in subjects fed a weight-maintenance diet and hypercaloric diets with 50% excess energy as fructose, sucrose and glucose during 4 days: 24-EE was increased with all 3 hypercaloric diets, but there was no difference between fructose, sucrose and glucose. We conclude that fructose has lower energy efficiency than glucose. Based on available studies, there is presently no hint that dietary FCCS may decrease EE. Larger, well controlled studies are however needed to assess the longer term effects of FCCS on EE.

On the efficiency and sensitivity of a pyramidal classification algorithm

In this paper we propose a Pyramidal Classification Algorithm,which together with an appropriate aggregation index producesan indexed pseudo-hierarchy (in the strict sense) withoutinversions nor crossings. The computer implementation of thealgorithm makes it possible to carry out some simulation testsby Monte Carlo methods in order to study the efficiency andsensitivity of the pyramidal methods of the Maximum, Minimumand UPGMA. The results shown in this paper may help to choosebetween the three classification methods proposed, in order toobtain the classification that best fits the original structureof the population, provided we have an a priori informationconcerning this structure.

Cost efficiency in primary care contracting: A stochastic frontier cost function approach

The principal aim of this paper is to estimate a stochastic frontier costfunction and an inefficiency effects model in the analysis of the primaryhealth care services purchased by the public authority and supplied by 180providers in 1996 in Catalonia. The evidence from our sample does not supportthe premise that contracting out has helped improve purchasing costefficiency in primary care. Inefficient purchasing cost was observed in thecomponent of this purchasing cost explicitly included in the contract betweenpurchaser and provider. There are no observable incentives for thecontracted-out primary health care teams to minimise prescription costs, whichare not explicitly included in the present contracting system.