LABOUR SUPPLY ESTIMATION AND PUBLIC POLICY

Abstract. Economists devote considerable energies towards refining their econometric techniques to overcome difficulties connected with conducting empirical research. Despite advances in technique. it is not clear whether further refinement in this direction is worthwhile for policy purposes. It may be that no further amount of statistical adjustment of inadequate data will increase understanding, and that better data is simply necessary to add to our knowledge. But rarely is sufficient credit paid to new forms of data. In short, econometric technique is emphasized to the neglect of data innovation, as if new data were merely lying about waiting for an ingenious suggestion for use. This paper surveys advances of the last twenty five years in estimating labour supply for policy purposes with a view towards appreciating the relative contribution of both improvements in econometric technique as well as developments of new data.
After briefly detailing the key parameters which economists have sought to estimate, we describe the early 'first generation' research (circa 1970), which is plagued by problems of unobservable variables, measurement errors, truncation and selectivity bias, and non linear budget constraints. 'Second generation' research constitute attempts to resolve one or more of these difficulties, and the respective contribution of econometric technique and new data is acknowledged and assessed, including the contribution of data generated by large scale social experiments in which participants are randomly assigned to different guaranteed income plans and their labour supply behaviour measured.     

HOW TO CLEAR UP THE PENSIONS MESS

All three pillars of the British pensions system are crumbling. The basic state pension is unsustainable in its present form. Defined benefit occupational pension schemes are fast disappearing, and with them the retirement hopes of millions of workers. A further 3 million low-income earners are not saving enough for their retirement. And uncertainty about pensions choices is widespread. In each case the primary cause of the problem is governmental or regulatory failure. The paper makes eight general and four specific proposals for restoring the system.     

Daylight saving effect

Kamstra et al. [Kamstra, M.J., Kramer, L.A., Levi, M.D., 2000. Losing sleep at the market: the daylight saving anomaly. The American Economic Review 90, 1005–1011] argue that the mean weekend return following the changes in daylight saving time is less than the mean weekend return throughout the rest of the year. Opposing studies, such as Pinegar [Pinegar, J.M., 2002. Losing sleep at the market: comment. The American Economic Review 92, 1251–1256), reason that the observed results depend upon methodology. We extend the ongoing discussions by providing further evidence for equity markets and bond markets in Germany and across Europe. We further demonstrate that the daylight saving effect does not serve as a potential rationale for the weekend effect.     

中国养活自己能力的长期预测:技术和政策分析

中国拥有世界五分之一强的人口 ,收入又在迅速增长。因此 ,国际上很自然地会考虑或推测她在今后的几十年是否有能力养活自己。中国的人口预计将从 2 0 0 0年的 1 2 8亿增长到 2 0 2 0年的 1 4 6亿 ,和 2 0 3 0年的 1 4 9亿。与此同时 ,人均收入的增长将导致对家畜和鱼类产品更大的需求 ,因而对饲料的需求也将有很大的增长     

A Guide to Information on Australian Resource Projects

This article provides a guide to economic information on Australian resource projects. Three sources are described in some detail and their differences, strengths and weaknesses are discussed. As the data are under‐researched, some examples of how they can be used in economic analysis are mentioned.     

New Product Development Practices and Early‐Stage Firms: Two In‐Depth Case Studies

New product development practices (NPD) have been well studied for decades in large, established companies. Implementation of best practices such as predevelopment market planning and cross‐functional teams have been positively correlated with product and project success over a variety of measures. However, for small new ventures, field research into ground‐level adoption of NPD practices is lacking. Because of the risks associated with missteps in new product development and the potential for firm failure, understanding NPD within the new venture context is critical. Through in‐depth case research, this paper investigates two successful physical product‐based early‐stage firms' development processes versus large established firm norms. The research focuses on the start‐up adoption of commonly prescribed management processes to improve NPD, such as cross‐functional teams, use of market planning during innovation development, and the use of structured processes to guide the development team. This research has several theoretical implications. The first finding is that in comparing the innovation processes of these firms to large, established firms, the study found several key differences from the large firm paradigm. These differences in development approach from what is prescribed for large, established firms are driven by necessity from a scarcity of resources. These new firms simply did not have the resources (financial or human) to create multi‐ or cross‐functional teams or organizations in the traditional sense for their first product. Use of virtual resources was pervasive. Founders also played multiple roles concurrently in the organization, as opposed to relying on functional departments so common in large firms. The NPD process used by both firms was informal—much more skeletal than commonly recommended structured processes. The data indicated that these firms put less focus on managing the process and more emphasis on managing their goals (the main driver being getting the first product to market). In addition to little or no written procedures being used, development meetings did not run to specific paper‐based deliverables or defined steps. In terms of market and user insight, these activities were primarily performed inside the core team—using methods that again were distinctive in their approach. What drove a project to completion was relying on team experience or a “learn as you go approach.” Again, the driver for this type of truncated market research approach was a lack of resources and need to increase the project's speed‐to‐market. Both firms in our study were highly successful, from not only an NPD efficiency standpoint but also effectiveness. The second broad finding we draw from this work is that there are lessons to be learned from start‐ups for large, established firms seeking ever‐increasing efficiency. We have found that small empowered teams leading projects substantial in scope can be extremely effective when roles are expanded, decision power is ground‐level, and there is little emphasis on defined processes. This exploratory research highlights the unique aspects of NPD within small early‐stage firms, and highlights areas of further research and management implications for both small new ventures and large established firms seeking to increase NPD efficiency and effectiveness.     

How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK

This paper provides new empirical evidence on the relationship between the structure of firms’ overseas FDI and the performance and organisation of their home‐country operations in both manufacturing and business services. It addresses two questions. First, does sorting into multinational status on the basis of productivity extend to the scale of overseas activity? Second, is there evidence that off‐shoring to low‐wage countries has asymmetric effects on high and low‐skill activities in the home economy? The paper considers heterogeneity in firms’ outward FDI strategies and in their behaviour at home, distinguishing between low‐skill and high‐skill‐intensive activities. I differentiate between firms that invest in relatively low‐wage economies and hence might be engaged in vertical FDI, and those that only invest in high‐wage economies. I find that firms that invest in low‐wage economies simultaneously invest in a large number of high‐wage economies, employing complex FDI strategies. I add to existing evidence by demonstrating that selection into multinational status on productivity extends beyond the decision of whether or not to engage in FDI, to the geographic scope of overseas operations. This is consistent with the highest productivity firms being best able to overcome large fixed costs of establishing multiple overseas facilities. I find evidence consistent with differential effects of vertical FDI on firms’ high and low‐skill manufacturing activity in the UK. Relocating low‐skill activity to relatively low‐wage economies could enable a firm to expand output, with potential positive effects on investment, employment and output in complementary (high‐skill) activities at home. For firms investing in relatively low‐wage economies, I find that labour in these countries may substitute for relatively low‐skilled labour in the UK. In high‐skill manufacturing industries I find that multinationals that invest in low‐wage economies are larger, more capital intensive and more intensive in their use of intermediate inputs than other UK‐owned firms.     

Managerial Problem-Solving Styles: A Cross-Cultural Study

ABSTRACT

The literature suggests that North American business-people differ from their Latin American counterparts with respect to specific behavioral traits. Our particular interest is in problem solving and in effecting changes in behavior to achieve better problem-solving capability. The purpose of the present study is to assess whether there are differences in problem-solving styles between two culturally different groups of managers registered in MBA Programs: Anglo American and Latin American. Using Kolb's (1984 2006) Learning Style Inventory, it was found that Anglo American managers tended to be relatively action-oriented, “Convergers” (they emphasize decision-making and use deductive reasoning), while Latin American managers tended to be reflection-oriented, “Assimilators” (they emphasize planning and like to create models in their analyses) in their problem-solving styles. The positive and negative aspects of each style are discussed and suggestions for improved decision-making are offered.

RESUMEN. La literatura sugiere que los empresarios norteamericanos difieren de sus contrapartes latinoamericanos, en lo que atañe a ciertos trazos comportamentales específicos. Nuestro interés particular se orienta a la solución de problemas e implementación de cambios comportamentales, con el propósito de adquirir habilidades específicas para la solución de problemas. El propósito de este estudio es evaluar si existen diferencias entre los estilos empleados para solucionar problemas entre diferentes grupos culturales de gerentes matriculados en Programas MBA angloamericanos y latinoamericanos. Usando el sistema de estilos de Kolb (1984 2006) denominado Learning Style Inventory, descubrimos que los gerentes angloamericanos tienden a orientarse con bastante frecuencia en la acción, los llamados ‘Convergentes’ (que hacen hincapié en la toma de decisiones y el uso del razonamiento deductivo), mientras que los gerentes latinoamericanos tienden a volcarse a la reflexión, los llamados ‘Asimiladores’ (que hacen hincapié enplanear y les gusta crear modelos en sus análisis), como característica de sus estilos para solucionar problemas. Discutimos los aspectos positivo y negativo de cada estilo, y hacemos sugerencias para mejorar la toma de decisión.

RESUMO. A literatura sugere que os homens de negócios norte-americanos diferem de seus colegas latino-americanos em traços comportamentais específicos. Nosso interesse particular recai sobre a resolução de problemas e a introdução de mudanças de comportamento para obter uma melhor capacidade de resolução de problemas. O objetivo deste estudo é avaliar se existem diferenças nos estilos de resolução de problemas de dois grupos culturalmente diferentes de gerentes matriculados em cursos de MBA: anglo-americanos e latino-americanos. Utilizando o inventário LSI (learning style inventory) de Kolb (1984 2006), constatou-se que os gerentes anglo-americanos tendiam a ser relativamente orientados para a ação, “convergentes” (eles enfatizam a tomada de decisões e o raciocínio dedutivo), enquanto os gerentes latinoamericanos tendiam a ser orientados para a reflexão, “assimiladores” (eles enfatizam o planejamento e gostam de criar modelos em suas análises) em seus estilos de resolução de problemas. Os aspectos positivos e negativos de cada estilo são discutidos, e sugestões para melhorar a tomada de decisões são oferecidas.     

Real effects of financial reporting and disclosure on innovation

This paper reviews the literature on the real effects of financial reporting and disclosure on corporate innovation, highlighting both the possible channels of influence and the potential challenges that researchers face when attributing causal effects. We discuss the concept of innovation, emphasising the specific characteristics that make investments in innovation difficult to report. We then provide a review of the nascent work relating disclosure to innovation, which we organise around three channels: financing, compensation and learning. Finally, we discuss recent efforts aimed at increasing the quality of corporate disclosures, including disclosures of firms’ innovative activities. Throughout the paper, we highlight the trade-offs of disclosure (reduced information asymmetry and increased proprietary costs), which are particularly exacerbated in the context of corporate innovation.