Time Past and Time Present: a Duration Analysis of IMF Program Spells*

The programs of the IMF were designed to provide short‐term assistance to countries with balance‐of‐ payments disequilibria. Over time, however, the Fund instituted new facilities with longer time horizons, while many countries adopted consecutive programs. As a result, the length of time spent by countries in IMF programs has grown. This paper analyzes IMF program spells for a group of developing economies over the period of 1982–2000. Duration models are used to investigate the time dependence of the spells and the factors that affect their duration. The hazard ratio of spells has a nonmonotonic shape, first rising and then falling. Spell duration is independent of previous spell length or the number of spells. Program duration is extended for countries with lower income, exports concentrated in primary goods, landlocked geographic status and autocratic regimes. Governments that are polarized have shorter spells, which may reflect a breakdown in governance.     

China's export tax rebate and the duration of firm export spells

Using a survival analysis technique, this paper investigates the impact of the export tax rebate (ETR) on duration of the firm, country/destination, and product (F–C–P)‐level export spells in China. Empirical analysis of a large dataset that covers the 2001 to 2013 period shows that the effect of ETR on duration of export spells of Chinese firms is large and statistically significant. A 1 percentage point increase in ETR rate increases the duration rate of F–C–P relationships by 23.2%. Furthermore, compared with the high‐tech firms, low‐tech and middle‐tech firms experience a larger increase in the duration of export spells in response to increase in China's ETR. Firm ownership‐based analysis shows that an increase in ETR leads to a larger increase in export spells of privately owned firms than the export spells of state‐ and foreign‐owned firms. These findings have important policy implications for the design and implementation of China's ETR policy.     

Unemployment Duration and Inflows onto the Disability Support Pension Program: Evidence from FaCS LDS Data

From the administrative data of the Australian Department of Family and Community Services it is found that a large proportion of Disability Support Pension (DSP) recipients transferred from unemployment benefits. Among those who transferred to DSP from unemployment benefits, a large proportion experienced multiple spells of income support receipt prior to the transition and a majority had more than a half‐year pre‐transition unemployment duration, with the average pre‐transition unemployment duration being more than one year. These findings suggest that the unemployment benefit is not simply a‘hold‐on’ benefit for those who experienced the unemployment—DSP transition. This article further examines what factors are associated with the transition. It is found that, among other things, the probability of transition to DSP from unemployment increases with duration on unemployment benefits.     

THE IMPACT OF LOW‐INCOME HOME ENERGY ASSISTANCE PROGRAM PARTICIPATION ON HOUSEHOLD ENERGY INSECURITY

The impact of the low‐income home energy assistance program (LIHEAP), the single largest energy assistance program available to poor households in the United States has received little rigorous attention. If LIHEAP participation significantly improves low‐income household energy security, funding cuts or eliminating the program could negatively impact the poor. This article empirically estimates the impact of LIHEAP on household energy security. The results indicate participation in LIHEAP significantly increases energy security in low‐income households. Simulations suggest that elimination of the current household energy‐assistance safety net will decrease the number of low‐income energy secure households by over 17%. (JEL I38, Q48)     

Rational Poverty or Poor Rationality? The Take‐up of Social Assistance Benefits

In several countries social assistance dependence has been increasing since the 1980s. After surveying the theoretical and empirical take-up literature, this study presents estimates of recent rates of non take-up of social assistance benefits. Once methodological shortcomings of prior estimations are corrected, the results show that take-up has fallen recently and thus cannot explain the rising welfare receipt. Following theoretical predictions, the probability that a rational individual takes up social assistance increases with the expected benefit amount and duration, and falls with application cost and stigma. More than half of all households eligible for transfers under the German social assistance program did not claim their benefits.     

Duration of sudden stop spells: A hazard model approach

Using a hazard‐based duration model, we analyze the determinants of the duration of a period of sudden stop, which is defined as a drop in capital inflow by two standard deviations, for at least two consecutive quarters. The hazard model estimates the conditional probability that the country exits the sudden stop today given that it experienced one until the end of last period. We find that a higher ratio of foreign exchange reserves to short‐term external debt shortens the duration of sudden stops. We also find that a higher global economic growth rate tends to shorten sudden stop spells. Our results are robust to various alternative specifications.     

Unemployment compensation and episodes of nonemployment

This paper examines the influence of unemployment insurance (UI) on the length of nonemployment spells experienced by young workers. The analysis introduces a flexible duration model to estimate the effects of the weekly benefit amount and weeks of eligibility on the amount of time spent between jobs by men, distinguishing between the experiences of UI and non-UI recipients. The empirical findings suggest three conclusions: (1) UI recipients experience longer spells of nonemployment than their non-UI recipient counterparts, at least up to the point of exhaustion of UI benefits; (2) the level of the weekly benefit amount does not significantly affect the length of nonemployment spells; and (3) increasing the number of weeks of eligibility offered by a UI program leads to longer episodes of nonemployment.     

Optimal Welfare-to-Work Programs

A Welfare-to-Work (WTW) program is a mix of government expenditures on various labour market policies targeted to the unemployed ( e.g. unemployment insurance (UI), job search monitoring (JM), social assistance (SA), wage subsidies). This paper provides a dynamic principal–agent framework suitable for analysing chief features of an optimal WTW program, such as the sequence and duration of the different policies, the dynamic pattern of payments along the unemployment spell, and the emergence of taxes/subsidies upon re-employment. The optimal program endogenously generates an absorbing policy of last resort ("social assistance") characterized by a constant lifetime payment and no active participation by the agent. Human capital depreciation is a necessary condition for policy transitions to be part of an optimal WTW program. The typical sequence of policies is quite simple: the program starts with standard UI, then switches into monitored search and, finally, into SA. The optimal benefits are decreasing during unemployment insurance and constant during both JM and SA. Whereas taxes (subsidies) can be either increasing or decreasing with duration during UI, they must decrease (increase) during a phase of JM. In a calibration exercise, we use our model to analyse quantitatively the features of the optimal program for the U.S. economy. With respect to the existing U.S. system, the optimal WTW scheme delivers sizeable welfare gains to unskilled workers because the incentives to search for a job can be retained even while delivering more insurance and using costly monitoring less intensively.     

Coaching,Counseling, Case‐Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Intensified counseling, job search assistance and related policies have been found to be effective for labor market integration of the unemployed by a large number of studies, but the evidence for older and hard‐to‐place unemployed is more mixed. In this paper, we present key results for a large‐scale active labor market program directed at the older unemployed in Germany. To identify the treatment effects, we exploit regional variation in program participation. We use a combination of different evaluation estimators to check the sensitivity of the results to selection, substitution and local labor market effects. We find positive effects of the program in the range of 5–10 percentage points on integration into unsubsidized employment. However, there are also substantial lock‐in effects, such that program participants have a higher probability of remaining on public welfare benefit receipt for up to 1 year after commencing the program.     

Survival of the Fittest? An Analysis of Self-Employment Duration in Britain

This paper uses data from the British Household Panel Survey to investigate the duration of self-employment spells in Britain. The results suggest that 40% of self-employment ventures started since 1991 have not survived their first year in business. Evidence is produced showing that a substantial proportion of self-employment spells are not terminated through bankruptcy, but through moves to alternative employment. The fittest, in terms of self-employment survival, are those with no previous unemployment experience but with some work experience, who quit their previous job, and who entered self-employment with some initial capital.     

Work incentive and other effects of social assistance and unemployment benefit policy in the Czech Republic

In this paper we provide an account of most of the passive labor market policies (unemployment compensation, social assistance, state social support and the pension system) in the Czech Republic during the 1990–1996 period. The eligibility requirements and benefit levels are described in great detail. Using Labor Force Survey data, we compare the characteristics of unemployed people receiving unemployment benefits with those receiving social assistance and those not receiving any benefits and we find significant differences in their characteristics. Finally, we provide an analysis of the work disincentive effects of the unemployment and social assistance benefits by comparing these benefits to market wages and by analyzing the effect of being in the system on the duration of unemployment of two cohorts of unemployed in 1994 and 1995. We find that social assistance benefits are fairly generous for low income families with more children, individuals with these characteristics have a higher probability of receiving social assistance and they tend to stay unemployed longer than those people with relatively fewer dependants. We conclude that the social assistance scheme seems to be having some disincentive effects for at least one group in the population.     

Effects of reintegration activities on the Dutch labour market,regarding several levels of education

In the Netherlands during the early nineteen nineties social security administration offices and labour exchange offices decided to co-operate. Goal of this cooperation is to support the reintegration of unemployed people into the labour market and to shorten the individual spells of unemployment. As a result of the cooperation information is available about levels of education of the unemployed. This article primarely focuses on the effects of reintegration activities on the duration of unemployment for different levels of education. Results of the analysis are compared with the human capital theory. Also the question is discussed whether within the framework of the cooperation persons with a higher level of education have shorter spells of unemployment. Finally there is an analysis of the effects of activities undertaken by the unemployed themselves to find a job. People with a university degree have significant longer spells of unemployment. The reintegration activities of the social security administration offices shorten unemployment durations significantly for this group only. Activities undertaken by the unemployed themselves shorten the spells of unemployment for lower educated people (only primary education) and for persons with higher general secondary/secondary/intermediate vocational education as highest completed education.     

The scarring effects of youth joblessness in Sri Lanka

Retrospective data on labor market spells for successive cohorts of youth in the school‐to‐work transition in Sri Lanka are used to examine whether early spells of joblessness lead to subsequent difficulty in finding or keeping a job. A balancing score approach is used to generate pairs of youth in the school‐to‐work transition who have similar expected levels of joblessness but who differ in realized levels of joblessness. Assuming that youth are not able to perfectly control whether they are employed or not employed, we argue that marginal differences in joblessness among otherwise observationally equivalent youth can be viewed similarly to a regression discontinuity in experienced joblessness. We find evidence of scarring in that spending the first year after leaving school without a job or training increases subsequent share of time spent jobless by 23–31 percentage points and lowers subsequent wages by 5.5%–7.5%.     

BREAKING OUT OF CO‐OPERATION'S ‘IRON CAGE’:FROM MOVEMENT DEGENERATION TO BUILDING A DEVELOPMENTAL MOVEMENT

ABSTRACT: This article focuses on co‐operative movements’ role in developing new firms and sectors. In contrast to ‘developmental movements’ which secure legislative, policy, program, and promotional, financial, and technical assistance supports for co‐operative development campaigns, this paper investigates the problem of co‐operative ‘movement degeneration’ – why some movements’ developmental commitments gradually erode. The paper next investigates the project of ‘movement regeneration’ – how mature movements become reoriented toward movement goals, including fostering successful co‐operative formations. This discussion includes the role of institutional intermediaries, educational and cultural interventions, and mobilizing networks in regenerative movement action.     

ACTIVE LABOR MARKET PROGRAMS AND REGIONAL MOBILITY OF LABOR: EVIDENCE FROM THE SWEDISH RECESSION, 1994–1995

This paper addresses the impact of active labor market programs on interregional migration in Sweden. The purpose of the study is to determine the extent to which the programs, which provide training and labor market assistance to jobless individuals, induce participants to migrate. Analysis is based on data registers compiled in 1994 and 1995 by Statistics Sweden and the Labor Market Board of Sweden. The paper specifies and estimates a two‐equation model of participation and subsequent migration. The model, which is estimated by the method of maximum simulated likelihood, accounts for the role of program participation as an endogenous choice variable in the decision to migrate. In an attempt to capture the effect of migrant self‐selection, the estimation approach also controls for unobserved heterogeneity in the participation and migration equations. Results of the study indicate a significant positive impact of participation on subsequent mobility for males. This result is robust with respect to alternative specifications of the migration equation and alternative formulations of the model for program participation. For females, the evidence of program impacts is mixed and it appears to be sensitive to the statistical formulation of the model. (JEL J38, J61)     

The integration of child tax credits and welfare: Evidence from the Canadian National Child Benefit program

In 1998, the Canadian government introduced a new child tax credit. The innovation in the program was its integration with social assistance (welfare). Some provinces agreed to subtract the new federally-paid benefits from provincially-paid social assistance, partially lowering the welfare wall. Other provinces did not integrate benefits, providing a quasi-experimental framework for estimation. We find large changes in social assistance take-up and employment in provinces that provided the labour market incentives to do so. In our sample, the integration of benefits can account for between 19 and 27% of the decline in social assistance receipt between 1997 and 2000.     

OPTIMAL UNEMPLOYMENT INSURANCE,WITH HUMAN CAPITAL DEPRECIATION,AND DURATION DEPENDENCE*

This article introduces the possibility of a deterioration in job opportunities during unemployment into the standard optimal unemployment insurance (UI) design framework and characterizes the efficient UI scheme. The optimal program may display two novel features, which cannot be present in stationary models. First, UI transfers are bounded below by a minimal assistance level that arises endogenously in the efficient contract. Second, the optimal scheme implies a wage subsidy for long‐term unemployed workers. Numerical simulations based on the Spanish and U.S. economies suggest that both assistance transfers and wage subsidies should be part of the UI scheme in these countries.     

The Impact of Vocational Training on the Unemployment Duration

In this study, we estimate a semiparametric hazard model to assess the impact of vocational training on the duration of unemployment spells. Our research work is based on the data obtained from the District Labor Office in Słupsk, Poland from 1999 to 2007. We employ matching methods to take into account the potential sample selection problem, i.e., finding an adequate control group for the group of trainees. Therefore, we estimate a random-effects probit model for the likelihood of participation in a training program. The main question of this paper is whether the training significantly raises the transition rate from unemployment to employment in the short and the long run.     

Patterns and Determinants of Price Changes: Analysing Individual Consumer Prices in Austria

Abstract. We provide empirical evidence on the degree and characteristics of price stickiness in Austria by estimating the average frequency of price changes and the duration of price spells from a large dataset of individual price records collected for the computation of the Austrian consumer price index. The mean (median) duration of price spells in Austria amounts to 14 (11) months, but there is considerable heterogeneity across sectors and products. We find that price increases occur only slightly more often than price decreases. For both directions, the average magnitude of price changes is quite large (11% and 14%, respectively). The introduction of the euro cash in January 2002 led to more frequent but, on average, smaller price adjustments than usual. Estimating the probability of a price change in a panel probit model, we find a small but positive effect of the price spell duration on the incidence of price changes. Furthermore, product‐specific inflation, the size and the sign of the last price change and the period of the euro introduction significantly affect the probability of a price change.