The macroeconomic consequences of migration diversion: Evidence for Germany and the UK

This paper examines the macroeconomic consequences of the diversion of migration flows away from Germany towards the UK in the course of the EU's Eastern Enlargement. The EU has agreed transitional periods for the free movement of workers with the new member states from Central and Eastern Europe. The selective application of migration restrictions during the transitional periods has resulted in a reversal of the pre-enlargement allocation of migration flows from the new member states across the EU. Based on a forecast of the migration potential under the conditions of free movement and of the transitional arrangements, we employ a CGE model with imperfect labour markets to analyse the macroeconomic effects of this diversion process. We find that EU Eastern enlargement has increased in the GDP per capita in the UK substantially, but that the diversion of migration flows towards the UK has reduced wage gains and the decline in unemployment there. The effects of the EU Eastern enlargement are less favourable for Germany, but the diversion of migration flows has protected workers there against a detrimental impact on wages and unemployment.     

Sustainability seen from the perspective of consumers

An important step in promoting sustainable consumption is to find out how consumers understand the concept of sustainability. In this paper, we report on a study among Norwegian consumers in which we explored their understanding of sustainability at two levels. First, we investigated consumers' understanding of the general sustainability concept; specifically, we studied how important the following five sustainability dimensions are in consumers' conception of sustainability: the environmental, social, economic, temporal and the developmental dimension. Second, we investigated how consumers' understanding of sustainability manifests itself in consumption decisions: We studied consumers' opinions about how important various attributes are for sustainable products and which product labels they consider indicative of sustainable products. We found that all five sustainability dimensions occurred as elements of consumers' understanding of the sustainability concept. The environmental dimension, the social dimension and the developmental dimension were particularly outstanding. With regard to attributes that are important for sustainable products, consumers placed high emphasis on recyclability of the packaging, fair payment of producers, low energy use and low carbon dioxide emissions during production and shipping. Humane animal treatment was also considered an important attribute of sustainable products. The product labels that were considered most indicative of sustainable products were the Nordic Swan and the Norwegian Debio label. Consumers' judgments of how indicative the labels are of sustainable products were related positively to familiarity with the labels.     

Productivity change and the effects of policy reform in China's agriculture since 1979

During China's rural reforms, policies were frequently adjusted. Most policies favoured the continuation and deepening of reform; but some were contradictory or even led to regression in the reform process. How have the rural reforms affected China's agricultural production over the past three decades; and what lessons can be learned to aid the future course of reform? To answer these questions, this study estimates productivity change in China's agriculture and evaluates the effects of policy on agricultural output during the reform period. Aggregated provincial‐level data for the 1979–2008 period are used in a translog production frontier model to estimate indices of total factor productivity (TFP) change and its three components—technical change, technical efficiency change, and a scale effect—with a focus on explaining the variation in technical efficiency. The estimation results show that the impressive improvement of TFP change is dominated by the technical change component. However, technical efficiency change and scale effects have worked against the improvement in TFP change in most periods. To improve technical efficiency, social welfare policies designed to eliminate the rural–urban divide, and reform polices focusing on factor market reforms, such as reform of the household registration system (hukou) and reform of land rights, seem to hold some potential.     

Self‐Directed Pensions: Gender,Risk, and Portfolio Choices*

In this paper, I investigate gender differences in financial risk‐taking from a new perspective, and I show that gender plays a different role across the risk distribution. To evaluate risk‐taking, I exploit portfolio choices following a reform that entitles almost the entire Swedish workforce to choose a risk profile for a part of their public‐pension contributions. The novel finding is that portfolio risk does not differ much between the men and women who choose less risky portfolios, while the men who choose risky portfolios take on significantly more risk than do the women who choose risky portfolios. The findings are robust to investors choosing the default alternative, chasing past returns, rebalancing, and different measures of risk‐taking.     

Feature Article: A Resource‐Based Perspective on Business Strategies of Newly Founded Subsidiaries: The Case of German Pensionsfonds

Diversification by firms into unfamiliar areas of business is achieved either by acquisition of an existing business in the destination industry or a greenfield start‐up. This article focuses on the business strategy of greenfield start‐ups. We theorize and find that firms entering a market by establishing a new subsidiary rely solely on their own preexisting internal resources, making it favorable to align the business strategy of the start‐up with the firm's value‐generating competencies. Our empirical results, which are based on a sample of German Pensionsfonds and their parent companies, are consistent with the view that the business strategy choice of a newly founded subsidiary is substantially directed by the internal resources and competencies of the parent firm.