Fairness and the employment contract: North American regions versus Germany

Substantial evidence shows that North Americans are generallymore accepting of the market than Europeans and attribute marketoutcomes to a larger degree to effort or skill. Thus, NorthAmericans might be more accepting of layoffs and pay cuts thanGermans, and Germans might be more sensitive to the proceduresand conditions under which pay cuts and layoffs occur. The empiricalresults from our quasi-experiment are largely in line with thesehypotheses. The results may help to explain and be explainedby the different labour market institutions in the differentregions.     

要素市场扭曲对企业家寻租及创新的影响

Baumol认为企业家行为模式受到所在制度环境的影响，良好的制度环境会促进企业家从事增加社会福利的生产性活动，比如创新；而制度环境不佳会导致企业家从事攫取社会利益的非生产性活动，比如寻租。Baumol的企业家才能配置理论在中国具体情境中，是否有其适用性？以我国2009-2014年省级层面面板数据，利用各省份人均土地出让面积作为地区要素市场扭曲的工具变量，在有效控制内生性可能导致的模型估计偏误后，实证考察了要素市场扭曲对企业家寻租活动的作用效应。研究发现，转轨时期我国地区要素市场扭曲程度越深，企业家寻租活动就越多。进一步通过系数检验以及Bootstrap方法考察企业家寻租活动在地区要素市场扭曲和企业创新强度之间的中介效应，证实了“要素市场扭曲→企业家寻租活动增多→企业创新强度减弱”传导机制的存在，可为深化中国要素市场机制改革提供理论和实证支持。     

SEEKING RENT IN THE INFORMAL SECTOR

Rent seeking within the vast informal segment of the developing world is a relatively under‐explored topic in the interface of labor market policies and public economics. Moreover, how rent seeking and corruption within the informal segment gets affected by economic reforms targeted for the formal sector is rarely discussed in the literature. This paper fills the gap. We identify conditions under which economic reform in the formal segment will increase the rate of corruption or rent seeking in the informal sector and raise the pay‐off for those involved in rent‐seeking activities. When the formal sector contracts due to reforms, rent seeking in the informal sector may increase and lower the level of welfare unconditionally. Economic reforms may increase corruption instead of reducing it, unlike standard conjectures.     

Flexibility and Growth

After two decades of theoretical discussion and application of labour policies aimed at flexibility, ever-spreading unemployment in Europe has compelled some official institutions to admit that the 'rigidity' of the labour market does not suffice to account for the different trends in employment displayed by Europe and the United States. In this paper, we focus on the role played by differentials in income growth. After briefly reviewing the explanations of European unemployment based on labour market rigidity and their respective weaknesses, we look at the relationship between growth and employment, concluding that there are grounds for maintaining that the causes of Europe's higher unemployment reside mainly in its lower rate of growth.We therefore investigate the reasons that may be responsible for a more stringent macroeconomic constraint on European growth.We conclude that if a lack of growth is at the root of European unemployment, then merely dismantling labour market institutions, and replacing them with a more flexible system of industrial relations, will not only fail to produce the expected results but may also have negative effects, in both the social and productive structure.     

What drives inequality and poverty in the EU? Exploring the impact of macroeconomic and institutional factors

Employing panel data techniques, we investigate the macroeconomic and institutional determinants of inequality and poverty in the EU over the period 1994–2008. We pay particular attention to the effects of macroeconomic environment, social protection and labour market institutions. The empirical analysis shows that the social transfers in cash, and principally the transfers that do not include pensions, exert a prominent impact on inequality and poverty. Also significant is the effect of the GDP per capita. The impact of employment on inequality and poverty is not empirically sound. The same holds for the labour market institutions; an exception is the union density, which appears conducive to a less dispersed personal income distribution. Importantly, the results support the view that the social protection system acts as a catalyst in determining the effectiveness of social spending and the distributive role of economic growth and employment.     

Rent control and unemployment duration

In this paper we analyse how rent control affects the duration of individual unemployment. In a theoretical search model we distinguish between two effects of rent control. On one hand, rent control reduces housing mobility and hence mobility in the labour market. On the other hand, to maintain rent control benefits, unemployed individuals are more likely to accept job offers in the local labour market. Based on a rich Danish data set, we find that the probability of finding a local job increases with the rent control intensity of the housing unit, whereas the probability of finding a job outside the local labour market decreases with the rent control intensity.     

Rent Seeking with Politically Contestable Rights to Tariff‐rate Import Quotas**

This paper analyzes rent seeking for agricultural import quotas and the associated waste of resources when politically contestable licenses are allocated to either or both importers and exporters. In a two‐stage simultaneous contest where firms seek rent for licenses and then bargain over the import/export price, it is shown that (1) rents are not dissipated completely because of uncertainty in allocation of “rights,” (2) the dissipation ratio increases if the country with a more competitive contest increases the probability of establishing licenses, (3) rent seeking may cause the market structure to change, (4) less rent is dissipated in the case of pre‐existing market power, and (5) allocation of multiple licenses decreases rent‐seeking outlays.     

Labour market institutions and unemployment: an international panel data analysis

This paper deals with the effects of labour market institutions on unemployment in a panel of 19 OECD countries for the period 1960–2000. In contrast to many other studies, we use long time series and analyse cyclically adjusted trend values of the unemployment rate. Our novel contribution is the estimation of panel models where we allow for heterogeneous effects of institutions on unemployment. Our main results are, first, that on the average tighter employment protection, a higher tax burden on labour income and a more generous unemployment insurance system increase, whereas a higher centralization of wage negotiations decreases unemployment, and secondly, that the magnitude of the effects of institutions differs considerably between countries.     

Where are the rent seekers?

In a remarkably simple and yet one of the most original and insightful observations of 20th century economics, Gordon Tullock pointed out that there are efficiency losses when public policies and political behavior create contestable rents. Tullock also observed that social losses from contesting rents appeared smaller than might be expected, so raising the question ‘where are the rent seekers?’ Tullock proposed that political accountability and ‘free-riding’ incentives in interest groups limit social losses from rent seeking. We affirm Tullock’s explanations, which apply differently under different political institutions. We compare Tullock with Gary Becker, who focused on deadweight losses from redistribution and concluded, in contrast to Tullock, that political redistribution is efficient. The comparison with Becker highlights the significance of the recognition of Tullock’s concept of rent seeking. By excluding rent-seeking losses from the social costs of redistribution, Becker could arrive at a conclusion more favorable than Tullock to an ideology that sees merit in extensive redistribution. Tullock’s model, although more encompassing of actual social costs of redistribution, would have been less welcome in the social democratic welfare state.     

Bargaining with Rent Seekers

Consider a rent‐seeking game, which has government bargain with firms over dividing the rents. In period 1, each firm can invest to increase the probability that the rent will appear. In period 2, the parties bargain. In equilibrium, though firms will invest more than the socially optimal level, rent‐seeking expenditures may be low. Firms that collude to restrict investment maximize joint profits by investing at a positive, non‐infinitesimal level, and restrict investment even if the cost of rent‐seeking effort is zero.     

Enduring rents

Rent seeking is often studied with reference to a contemporaneous rent evaluated at a point in time. We study the social cost of rent seeking when rents endure over time, but may have to be re-contested because of imperfect rent protection, or may disappear because of deregulation. The present value of a contested rent measures the social cost of rent seeking, irrespective of imperfect rent protection and the prospect of deregulation. Rent seeking is discouraged by the inability of governments to commit to protect rents and by their inability to commit to rent-generating regulations and policies. Moreover, lasting deregulation can preempt a substantial fraction of the potential rent seeking cost.     

The Gender Wage Gap in Paid- and Self-Employment in Australia

This paper presents an analysis of the gender wage gap in the highly regulated Australian labour market. It compares wage outcomes in the wage and salary sector with those for the self-employed. Comparisons with the United States are provided. The large gender pay gap in self-employment suggests that the aggregate gender wage differential will not be eliminated solely through wage determination for wage and salary earners. The greater gender wage gap in the self-employed sector may reflect liquidity constraints that are more difficult for self-employed women to overcome relative to self-employed men. The comparisons with the United States suggest that women will experience deterioration in relative earnings as the Australian labour market is deregulated.     

On the Benefits From Rigid Labour Markets: Norms, Market Failures, and Social Insurance

The common view that far-reaching labour market deregulation is the only remedy for high European unemployment is too simplistic. First, the evidence suggests that deeply rooted social customs are an important cause of wage rigidity, going beyond the legal constraints emphasised in the political debate. Second, in a second-best setting, a compressed wage structure may generate an efficiency gain. Finally, based on simple plots of the relation between labour market institutions and openness in OECD countries, I conclude that the globalisation of economic activity may lead to increased demand for various labour market rigidities.     

Exports, unemployment, and the welfare state

Abstract .  The paper analyzes the labour market effects of globalization when foreign market entry is costly and risky. With flexible labour markets, a fall in foreign market entry cost tends to generate more income inequality, but not necessarily so, as more firms pay foreign entry cost. By contrast, when labour markets are inflexible in the short run, globalization tends to increase unemployment. In this situation, government unemployment benefits reduce the wages that exporting firms need to pay workers as risk compensation. Thus more firms within an industry and more industries enter the foreign market, which in turn tends to increase unemployment.     

Flexicurity Labour Market Performance in Denmark

Unemployment is at a low and stable level in Denmark. This achievementis often attributed to the so-called flexicurity model combiningflexible hiring and firing rules for employers with income securityfor employees. Whatever virtues this model may have, a low andstable unemployment rate is not automatically among them sincethe basic flexicurity properties were also in place during the1970s and 1980s where high and persistent unemployment was prevalent.Labour market performance has changed due to a series of reformsduring the 1990s, the main thrust of which was a shift froma passive focus of labour market policies to a more active focuson job search and employment. The policy tightened eligibilityfor unemployment benefits and their duration as well as introducedworkfare elements into unemployment insurance and social policiesin general. Thereby, policy makers attempted to strengthen theincentive structure without taking resort to general benefitreductions. We argue that the workfare policies have playedan important role running primarily via motivation/threat andwage effects. However, active labour market policies are resourcedemanding, and although the workfare reforms have improved costeffectiveness, there is still an issue as to whether the resourcesgoing into active labour market policies are used efficiently.(JEL codes: J30, J40, J60, H53)     

Estimating the relationship between labour market tightness,unemployment insurance benefits and union election activity

Using detailed data from the US National Labor Relations Board, we find labour market tightness, defined as the ratio of job vacancies to the number of unemployed, has a positive relationship with the likelihood of voting in favour of union representation. Specifically, a 1 SD increase in labour market tightness increases Vote Share in favour and the likelihood of union certification by roughly 1.5% and 3%, respectively. We also find that length of unemployment insurance benefits has a positive relationship with Vote Share in favour. Taken together, these results suggest that workers are more comfortable engaging in pro-union election behaviours when exogenous conditions, like labour market tightness and unemployment insurance benefit duration, shift in a way that more favourably insulates them from unemployment and income risk.     

Labour market implications of EU product market integration

European labour markets are in a state of flux due to the changing market situation induced by international integration. This process affects wage formation through more fierce product market competition and increased mobility of jobs. This development is by some observers taken to enforce labour market flexibility, while for others it signals an erosion of social standards and in turn possibly the welfare society. Since labour is not very mobile in Europe, the effects of international integration on labour markets are mostly indirect via product market integration. We review the channels through which product market integration affects labour markets and perform an empirical analysis of the convergence and interdependencies in wage formation among EU countries. We find that integration is changing labour market structures and inducing wage convergences as well as stronger wage interdependencies, but it is a gradual process. Moreover, the present study does not support the view that international integration will lead to a 'race to the bottom' and rapidly erode domestic labour markets standards, nor that it will relieve politicians of the need to consider labour market reforms to improve labour market performance.     

我国会计寻租的原因探析

在我国,一些企业为了自身利益,如为了保住上市公司资格等原因而进行会计寻租。会计寻租会导致会计信息失真,造成租值耗散或效率损失,严重破坏了市场的正常运行环境。为了维护良好的经济运行环境,可以通过改进准则制定的监督机制,寻求管制者与被管制者之间的均衡点,合理配置政府行政主管部门的事务管理权等措施遏制会计寻租现象。     

The Response to Reform in a Growing Economy: The Role of Rent-Seeking Technology

Individuals engaged in rent seeking accumulate sector-specific human capital through learning-by-doing. If agents specialize, small reforms of the trade regime may fail to reduce the level of the rent-seeking activity. The size of the reform necessary to induce movement out of rent seeking is increasing in the time that controls have been in place. If rent seeking and production are complementary activities, agents will not specialize in either, and will fully respond to a small reform of the trade regime. This is true even though they accumulate human capital specific to rent seeking.     

Why do diplomas pay? An expanded Mincerian framework applied to Mexico

We compare four explanations for the value of diplomas, each of which has implications for unemployment and wage variation amongst graduates, most of which have not previously been tested for when seeking to explain the effects of diplomas. We test for these implications using a refined econometric framework, exploiting idiosyncrasies in Mexican labour market and educational institutions. Premiums in Mexico appear to result from diplomas tied to jobs with downwards rigid wages?–?an uncommon but simple explanation. The standard explanations, including screening, are not suggested by Mexican data. Our results illuminate how labour markets segmented by diplomas clear. This depends upon the nature of the labour market rigidities exactly as predicted by neoclassical theory.