Job displacement and the transitions to re-employment and early retirement for non-employed older workers

Despite the relatively higher frequency of job displacement among older workers in Europe, little is known about its effect on the work-retirement decision. Employing individual data from the European Community Household Panel for a number of countries with differences in their institutional environments, the effect of job displacement for non-employed workers is identified separately for the transitions into re-employment and retirement. The findings suggest that in countries with relatively more generous unemployment insurance provisions for the older unemployed, which offer a pathway to early retirement, older displaced workers exhibit lower re-employment and higher retirement rates compared to the non-displaced. These results are robust to dynamic selection due to unobserved heterogeneity and to the endogeneity of displacement.     

The determinants of jobless durations of displaced workers in Canada

A hazard model of jobless durations is estimated using data from the 1986 Canadian Displaced Workers Survey. Hypothesis concerning demographic difference in reeployment transitions are testes and the effect of certain labour market and policy variables is assested. The findings are compared with those published in studies using the United States Displayed Workers Survey,and attempt to exploit certain information which is unavailable in the US data set. The demographic variables play an important ans expected role in determining the distribution of jobless spels. Characterstic pertaining to the former job,such as union status and wage level,also have explanatory power. Contrary to the findings of US studies,the length of tenure of the former job is insignificant,and the less difference in duration is found for workers who lost their jobs due to a plant closure as opposed to those displaced via a partial layoff.     

Estimating the employment effects of education for disabled workers in Norway

In this paper we evaluate the effectiveness of educational programmes used as an employment strategy for disabled workers in Norway. To obtain these estimates we follow the employment career of a sample of participants in educational programmes and nonparticipants three years after they had left the vocational rehabilitation benefit system. We specify an employment outcome model that includes both unobserved heterogeneity and selection bias due to correlation between unmeasured factors and a person's training status. Even though participants in educational programmes have employment rates that are around eight percentage points higher than those who did not participate in such programmes, econometric selection models produce a training effect for education not significantly different from zero. First version: Jan 2001/Final version received: April 2002  The data were provided by The Norwegian Social Data Service in Bergen. I would like to thank Dag Kiberg for preparing the raw data. All the data are gathered from sources at The Directorate of Labour, The Social Insurance Organization and Statistics Norway. None of the mentioned institutions are in any circumstances responsible for the analysis or for the conclusions drawn from it.     

Earnings losses of displaced workers and the business cycle: An analysis with administrative data

This paper examines the earnings losses of displaced workers over the business cycle. Long-term earnings losses for these workers during a recessionary period are 1.7 to 3.9 times larger than for those observed during a period of economic growth.     

Estimating the natural rate of interest in an open economy

The concept of the natural or equilibrium rate of interest has attracted a lot of attention from monetary policymakers in recent years. Most attempts to estimate the natural rate use a closed-economy framework. We argue that in the face of greater integration of global product and capital markets, an open economy framework is more appropriate. We provide some initial estimates of the natural rate for the USA and Japan in a two-country framework. Our identifying assumptions include a close relationship between the time-varying natural rate of interest and the low-frequency fluctuations of potential output growth in both the home country and the foreign country. Our results suggest that the natural rates in both countries are mainly determined by their own trend growth rates of potential output. Nevertheless, the other country’s trend growth plays an important role in several specific periods. The gap between the actual real interest rate and our estimated natural rate offers valuable insights into the recent stance of monetary policy in both of these two countries.     

Estimating the equilibrium real exchange rate: the case of Turkey

This article is the first attempt in the literature to investigate the effects of public social security on aggregate consumption in a time-series setting for a developing country, Turkey that has one of the most generous social security systems in the organization for economic cooperation and development (OECD) region. In order to quantify the social security variable, this article uses the social security wealth (SSW) series calculated for Turkey in a separate study. This study indicates that SSW is the largest part of the household wealth in Turkey, and therefore should not be ignored in the aggregate consumption studies. The results show that its effect on consumption is positive and robust.     

The effect of environmental enforcement on labor: environmental workers and production workers

Journal of Regulatory Economics - This study examines the effects of environmental enforcement on labor employed by regulated facilities. The empirical analysis uses panel data from an original...     

The effect of experience and quantity-based pricing on the valuation of a curbside recycling program

Quantity-based pricing for garbage collection services and recycling programs are becoming increasingly popular methods of meeting municipal solid waste diversion objectives. This article investigates household willingness to pay (WTP) for a pilot curbside recycling program (CRP) in the presence of a quantity-based pricing scheme for garbage collection services, which allows a household to alter their garbage container size at a reduced price. Unlike previous studies that have modeled the simultaneity of these household decisions as a two-step process, we jointly estimate the household's intentions using a full-information maximum-likelihood (FIML) approach. Our results show a strong positive correlation between a household's WTP for a CRP and its stated intention to reduce its garbage container size when a CRP is offered. The positive correlation suggests that WTP will be higher for households which are more likely to reduce their garbage container size. Thus, in the presence of quantity-based pricing, a household's WTP for recycling more fully reflects the marginal social costs of garbage disposal.     

The effect of increases in the level of unemployement on older workers

This study explores the influence of the level of unemployment on labour force participation and full- versus part-time status, for men and women aged 56 to 60. Comparisons are also made with 16–19- and 31–35-year-old men and women. It is found that when the unemployment increases, discourgement is greater for older men than for younger ones. For Women, Prime-aged workers exhibit less discouragement than either the older or younger women. The study also infers the original labour force status of older discouraged workers. For men, displaced workers come largely from the ranks of full-time workers. For women, both full- and part-time workers are displaced.     

Estimating the causal effect of beliefs on contributions in repeated public good games

We use instrumental variables for estimating the causal effect of beliefs on contributions in repeated public good games. The effect is about half as large as suggested by ordinary least squares. Thus, we present evidence that beliefs have a causal effect on contributions, but also that beliefs are endogenous. We compare the causal, belief-based model of contributions to alternative models based on matching the previous contributions of others and responding to one’s deviation from the average in the previous round. The causal, belief-based model performs well, indicating that beliefs have a central role in determining contributions.     

Estimating an equilibrium exchange rate for the dollar and other key currencies

In this paper, we adapt the concept of fundamental equilibrium exchange rates ‘FEER’ in a complete model approach. We use it to determine the likely paths of the Dollar and other key currencies. The FEER is the (real) exchange rate that is consistent with internal balance and sustainable external balances. Here we examine the composition of a Dollar adjustment and hence the extent to which a FEER (for the US) depends on factors or rigidities elsewhere in the world, as well as at home. We find, the US still needs to accept an adjustment in her real exchange rate if the increase in her foreign liabilities is to come to an end. However, counterpart adjustments also have to be made in Canada, Mexico, and some Asian economies if this policy is to be successful. We also show that productivity growth differentials may act as a substitute for depreciation, and this provides an explanation for the failure of the dollar to depreciate in the 1990s.     

Estimating the effect of technological factors from samples affected by collinearity: a data-weighted entropy approach

Measuring the effect of technological activities on productivity growth is an issue that attracted much attention in recent works on empirical econometric studies. Specifically, in the field of regional economics, several attempts have been made in order to quantify the contribution of R&D to labor productivity growth at a regional scale, considering both the internal R&D and the effects obtained by geographical spillovers. The results obtained, however, are characterized by a huge variability and in many cases there is no empirical evidence of positive contributions of R&D activities to productivity growth. Our argument is that this can be a consequence of dealing with samples’ affect by a high level of collinearity. This paper proposes the use of the data-weighted prior (DWP) estimator suggested by Golan (J Econom 101:165–193, 2001). The main advantage of this estimator is that it discriminates between relevant and irrelevant regressors better than other estimators when dealing with highly collinear samples. We evaluate the performance of the DWP estimator by Monte Carlo simulations and illustrate how it works by means of a real-world example.     

The effect of the financial crisis on the retirement plans of older workers in England

This letter revisits the question of how wealth shocks influence retirement behaviour, exploiting the dramatic changes in UK asset prices between 2008 and 2009 as a source of such shocks. We find no evidence that the wealth shocks arising from this recent financial crisis affected the retirement plans of older workers in England.     

Differences in the effect of social capital on health status between workers and non-workers

This paper explores the relationship between social capital and self-rated health status in Japan, and how this is affected by the labor market. Data of 3,075 adult participants in the 2000 Social Policy and Social Consciousness survey were used. Controlling for endogenous bias, the main finding is that social capital has a significant positive influence on health status for people without a job but not for those with. This empirical study provides evidence that people without a job can afford to allocate time to accumulate social capital and thereby improve their health status.     

The effect of firm-level productivity on exchange rate pass-through

A heterogeneous-firm trade model can explain the recent decrease in exchange rate pass-through to aggregate US import prices as a result of decreased trade costs. This paper finds support for this explanation by testing another implication of this type of heterogeneous firm model: lower exchange rate pass-through for goods that are traded for short periods of time.     

Estimating the stationary distribution of a Markov chain

Summary. Let be a Markov chain with a unique stationary distribution . Let h be a bounded measurable function. Write and . This paper explores conditions for the consistency and asymptotic normality of the estimate of of assuming the existence of a solution to the Poisson equation . Our framework covers the case of nonirreducible Markov chains arising in many growth models in economics. Received: October 8, 2001; revised version: April 8, 2002 RID="*" ID="*" Thanks are due to Professors Rabi Bhattacharya, Nicholas Kiefer and Timothy Vogelsang on an earlier draft for helpful conversations, and a referee for insightful comments. Correspondence to: M.Majumdar     

How unemployable are displaced manufacturing workers?: An analysis of adjustment costs and supplemental adjustment assistance benefits in France

There are government programs which provide supplemental adjustment assistance benefits to displaced workers in designated industries. Appealing to the ‘gains from trade’ with income redistribution theory, this paper analyzes the link between the adjustment costs of displaced workers and their former sector of employment. These costs are measured by French data on the mean duration of joblessness of laid-off workers. Empirical evidence is found which confirms the hypothesis that workers displaced from traditional manufacturing and resource industries suffer particularly high losses stemming from unemployment. These effects may be tied to workings of internal labour markets.     

Testing the liquidity effect with equilibrium interest rate

A benefit of backward vertical integration in the petroleum refining industry is reduced uncertainly in the supply of crude oil for refining. However, there is no a priori reason to believe that refiners are more skilful in managing combined refining and crude oil production operations than are specialists in these functions. Using the concept of frontier production functions, efficiency differences between firms with differing degrees of backward vertical integration are estimated. Backward vertical integration improves scale efficieny and reduces business risk significantly, but it reduces both technical and overall economic efficiency. This is the first comprehensive empirical test of the efficiency of vertical integration in the literature.     

Estimating export equations: a survey of the literature

Export is an important component of national income. It is one of the main determinants of the development level of countries. Both developed and developing countries formulate policies to increase their exports, to increase quality, technology and value added of exported products and to gain competitive advantage in world markets. Export equations provide valuable information regarding this decision making process. Aim of this study was to conduct a survey on extensive literature on estimation of export equations. The literature on export equations can be grouped mainly into four levels of analysis from macro to micro: aggregated level exports, country-level, sector-level and firm-level analyses. In this study, we have surveyed the literature on each level. In the last part, a survey of econometric techniques used in estimation of export equations has been provided, as well.