Fiscal stimulus effectiveness in Japan: evidence from recent policies

This article examines the effects of Japanese fiscal policy after the 2008 global financial crisis using a mixed vector autoregression/event study approach. We focus on the effects of stimulus packages with environmental benefits. The empirical results show that a tax break and subsidy programme designed to promote the adoption of eco-friendly cars helped stimulate automobile production, while a similar programme intended to promote the purchase of energy-efficient appliances had no effect on appliance production.     

The impact of recent mental health changes on employment: new evidence from longitudinal data

This study uses longitudinal data and four different measures of mental health to tease out the impact of psychiatric disorder onsets and recoveries on employment outcomes. Results suggest that developing a mental health problem leads to a significant increase in the probability of transitioning to non-employment, while a recovery increases the probability of return to work among the not employed with a mental health problem. No consistent effect was found on hours worked and earnings. Research and policy attention is needed with respect to early interventions such as job retention programmes to help workers with mental health problems remain employed as well as interventions that may lead to recovery and return to work. More research is needed especially with data and models that can differentiate between the effects of mental health onsets and recoveries on employment exit and return to work transitions.     

The willingness to migrate in the CEECs evidence from the Czech Republic

Given the low levels of migration in the CEEC found in the literature, this paper raises the issue of who is willing to migrate in these countries. Using data on the willingness to migrate in the Czech Republic we show that variables measuring regional labour market conditions and amenities contribute little to explaining willingness to migrate, but that personal and household characteristics are more important. The least willing to migrate are the family-house owners, the less educated and the elderly as well as persons residing in regions with above-average unemployment rates. Improving the efficiency of the housing market and focusing on the problems of peripheral regions should thus be primary foci of a policy aimed at improving labour-market adjustment through migration. These policies are, however, unlikely to yield rapid results, since the willingness to migrate of all subgroups analysed (except for the less educated) reacts only weakly to regional labour market incentives and amenities.

The exceptional performance of exporters and labour market outcomes: evidence from Egyptian firms

ABSTRACT

This paper examines the manufacturing export market in Egypt after the Arab Spring using a novel firm-level census dataset from 2013. Export is very rare in Egypt. The conventional export premia are very high, except for total factor productivity. Exporters have stark effects on labour market outcomes, including wages, employment, demand for skilled and female workers, wage inequality, and job security. These findings have two important implications: (1) Manufacturing exports might be monopolized by large firms, and (2) promoting exports could improve labour market outcomes, especially for skilled and female workers.     

The returns to general experience,job and occupational tenure: a study using Australian panel data

This article uses Australian panel data for the years 2001–2009 to estimate returns to general experience, job and occupational tenure. We pay particular attention to issues of unobserved heterogeneity bias in our estimations. We find that both general experience and occupational tenure have statistically and numerically significant effects on wage outcomes, even after controlling for unobserved heterogeneity. Job tenure on the other hand only seems to matter in OLS regressions that do not control for heterogeneity biases. Once these biases are controlled for, only a modest effect from job tenure remains. The inclusion of occupational tenure in the estimating equation tends to negate even this modest job tenure effect. The only exception to this is for workers in large organizations. For these workers a small but statistically significant effect from job tenure remains, even once we have controlled for heterogeneity and included occupational tenure in the estimating equation. The results reported in this article have implications for the various theories of the labour market that predict upward-sloping wage-job-tenure profiles.     

Election cycles in mining licensing: theory and evidence from Albania

Most of the literature on political business and budgetary cycles (PBBC) has focused on fiscal and monetary policy variables in advanced-country contexts. We extend this literature by investigating political cycle effects in a non-monetary, non-fiscal policy regime (the allocation of mining licences) in a transition country context. We propose a model of mining licensing that allows for corruption and for both supply and demand effects to determine the outcome. We then estimate this model using time-series data from post-communist Albania. Relying on a dynamic Poisson model, we find evidence of both opportunistic and partisan effects. Based on our theory, we suggest a corruption interpretation of political cycles in non-fiscal/non-monetary variables. This interpretation, we suggest, may be more applicable to the context of developing and transition countries. Our study raises important questions about the unintended (and often pernicious) effects of transition politics on economic regulation and economic performance in post-socialist economies.     

Incentives and disincentives to drug innovation: evidence from recent literature

Aim: Drug innovation is strongly driven by economic incentives. How these incentives work in determining or changing the level of activity of innovators and the direction of their innovation remains understudied. We seek to address these issues in reviewing recent literature on drug innovation, which offers one major unifying theme of pharmacoeconomic scholarship presented at the 2019 AEA-ASSA annual convention.

Methods: Drawn from three AEA-ASSA convention panel sessions, papers were reviewed for newly charted research terrains and new research trajectories, and their theoretical and practical implications on efficiency, effectiveness, and value in the production and utilization of pharmaceutical products.

Results: While high and continuously rising drug prices are typically claimed as the price of scientific innovation, the reviewed literature finds that this link only partially accounts for the problem. High risk aversion owing to information asymmetries and vastly intractable uncertainties is prevalent among innovating firms. Predatory business models abound. Reverse predatory strategies also exist to maintain product exclusivity without much added clinical benefits, and to constrain generic competition. CEO compensation practices contribute to rising drug prices. Finally, the US government’s hands-off policy on drug list prices leave the forces of supply and demand to allocate them and reward innovation (at times perversely), even as the government extensively regulates or over-regulates practically every other aspect of innovation.

Conclusions: Price-elasticity of demand is critical in drug innovation. The drug value chain is price-sensitive to the balance of incentives and disincentives to innovation. American health policy should consider charting a middle course that introduces some form of regulatory price control, while stimulating and sustaining the benefits of market competition. That should incentivize stakeholders to take into account both resources and value for money in making decisions based on best-quality, clinical-economic evidence.     

Ethnic discrimination in hiring,labour market tightness and the business cycle - evidence from field experiments

Several studies using observational data suggest that ethnic discrimination increases in downturns of the economy. We investigate whether ethnic discrimination depends on labour market tightness using data from correspondence studies. We utilize three correspondence studies of the Swedish labour market and two different measures of labour market tightness. These two measures produce qualitatively similar results, and, opposite to the observational studies, suggest that ethnic discrimination in hiring decreases in downturns of the economy.     

Beveridge's analysis of unemployment in 1909: the reserve of labour

Abstract

The aim of this paper is to provide a rational reconstruction of Beveridge's theory of unemployment published in 1909. First and foremost, it shows that his theory of unemployment is coherent – what Beveridge refers to as ‘the reserve of labour’ represents ‘unemployment’ as a whole; unemployment is due to the imperfection of the labour market and associated friction and the organisation of the labour market is necessary. Second, it suggests that as early as 1909, a negative relationship already existed between unemployment and job vacancies and that the segmentation of the labour market and imperfect information are key factors of friction. The first part of the paper provides a reconstruction of Beveridge's theory of the reserve of labour (1909) including causes and factors of unemployment and unemployment policies. The second part shows that certain founding principles of the ‘Beveridge curve’ (Beveridge 1944 Beveridge, W. H. 1944 [1953]. Full Employment in a Free Society, London: George Allen and Unwin.  [Google Scholar] [1953]) were already to be found in his 1909 book and that links can be established between Beveridge (1909 Beveridge, W. H. 1909. Unemployment: A Problem of Industry, London: Longmans, Green and Co.  [Google Scholar]), Phelps (1970 Phelps, E. S. 1970. The new microeconomic in inflation and employment theory. The American Economic Review, 59(2): 147–60. [Web of Science ®] , [Google Scholar]) and Pissarides (2000 Pissarides, C. A. 2000. Equilibrium Unemployment Theory, Cambridge, MA: MIT Press.  [Google Scholar]).     

Displacement Effects of Active Labour Market Policy: The Youth Labour Market in Finland

In 1994 the number of workers participating in active labour market programmes in Finland was 299,000. On average there where 125,000 workers in these programmes at any one time, the average length of participation in a programme being about 5 months. In relation to the 2.5 million-strong Finnish labour force, these figures are proportionally large. In 1994 the total expenditure on unemployment amounted to 6.7 per cent of GNP of which the share spent on active labour market programmes was about 25 per cent. The study investigates the displacement effects of active labour market programmes in the youth labour market in Finland. The two age groups analysed are 15-19-year-olds and 20-24-year-olds. The results, based on a VAR analysis of quarterly data from the period 1981.1-1995.2, suggest that the displacement effects of job-creation programmes may be substantial. The study cannot, however, provide any robust estimates of the likely size of such displacement effects on youth employment in Finland. This revised version was published online in July 2006 with corrections to the Cover Date.     

Stock price responses to the eco-points programme for electrical household appliances: evidence from Japan

This article examines the Japanese government’s ‘Project for Green Consumer Electronics to Promote Business through the Use of Eco-points’ and its economic impact on consumer electronics firms’ stock prices. There has been little research on the economic effect of this project. In order to achieve our aim, we employ event study methodology. Our results show that stock prices responded positively to programme adoption, thereby indicating that the programme had positive effects on the related firms’ performance. The results also show that the programme’s economic effects gradually decreased over each subsequent programme extension. This probably occurred because the programme targeted durable goods, which consumers do not replace frequently.     

从企业集团的边界看中央企业集团整体上市

本文在研究企业集团边界的基础上,分析了中央企业集团整体上市的利弊得失。企业集团作为一种企业间组织形式,在某些情况下比一个独立大企业节约组织成本．比若干独立企业节约交易成本．是若干企业通过特定的联结而形成的一种有效率的企业问组织形式。从企业集团边界角度．中央企业集团采取母公司或主营业务的整体上市不一定有利于其实现效率,也不是从根本上解决国内企业集团治理中的大股东侵犯债权人或中小股东利益问题的最佳策略。完善中央企业集团治理重在产权制度改革和从根本上改善公司治理的法律制度。     

Information asymmetry in small and medium enterprise credit guarantee schemes: evidence from Japan

In this article, we investigate whether there is adverse selection and/or moral hazard in credit guarantee schemes for small and medium enterprises (SMEs) in Japan. As credit guarantee corporations cannot distinguish low risk from risky borrowers, credit guarantee schemes typically attract a larger proportion of risky borrowers, which results in inefficient resource allocation. Using bank-level data, we analyse whether the default rate is positively associated with the ratio of guaranteed loans to total loans, and find that the data are consistent with an adverse selection and/or moral hazard hypothesis. Further analysis shows that the relationship is stronger for 100% coverage than for 80% coverage, indicating that the ‘20% self-payment’ requirement somewhat mitigates the problem, but not enough to eliminate it altogether.     

The impact of trade liberalization on employment,capital, and productivity dynamics: evidence from the uruguayan manufacturing sector

This paper studies the impact of trade liberalization on labor and capital gross flows and productivity in the Uruguayan Manufacturing Sector. Higher international exposure implied a slightly higher job creation, an important increase in job and capital destruction, and an increase in productivity. Unions dampened these effects. Although not associated with higher creation rates, unions were effective in reducing job and capital destruction but they also reduced productivity growth. Industry concentration mitigated the destruction of jobs but had no effects on job creation or in capital and productivity dynamics.     

Border effects in the enlarged EU area: evidence from imports to accession countries

By looking at imports of Eastern European countries, we provide novel insights on the importance and magnitude of border effects and on how they are linked with technical barriers to trade. All Central Eastern European Countries (CEECs) traded with themselves more than with other countries. We grouped products into three categories; depending on the importance of applicaple technical barriers. Our results show border effects are the largest for products, where we expect to have the most important technical barriers. We assess if border effects changed over the transition period and we find that for products where technical barriers are less important the magnitude of border effects was declining at the end of the 90s.     

Occupational transition and country-of-origin effects in the early stage occupational assimilation of immigrants: some evidence from Australia

We examine the occupational attainment of recent immigrants at 2 years post migration in order to study their early stage assimilation into the labour market in Australia. Human capital endowments and country-of-origin effects are examined for six occupational groups. We also study transitions across occupations from source to host country. The empirical approach utilizes the Ordered Generalized Extreme Value (OGEV) model which embodies differing utility functions across occupational outcomes, as well as accounting for any ordering in these outcomes. The results suggest that the transferability of knowledge and skills is affected by cultural and social backgrounds, and that non-Western immigrants are disproportionately channelled into inferior jobs post migration. The investigation of the country-of-origin effect on the skilled migrants’ occupational transition process is especially apt in the context of skill shortages in many host countries.     

The Image of Australia. Perceptions of the Australian Economy from the Eighteenth to the Twentieth Century

Recent institutionalist and post-Keynesian work on business cycles continues with the traditional institutionalist supposition that financial bubbles drive cycles; however there has been a growing sense in the literature that household consumption, not business investment, has become the key variable. This paper will show how this is a change from historical institutional theory and it will then discuss how this change pushes income distribution toward a more central role in explaining current cycle dynamics. Specifically, this paper argues that much of the economic growth over the last two decades can be attributed to the top two quintiles borrowing more and the current slow growth can be attributed to high quintile households increasing their consumption while middle income households are continuing to deleverage.     

The impact of public employment on labour market performance: evidence from African countries

Using census data for Ghana, Mali and Mozambique, we study the long-term impact of public sector employment on local labour markets. We find that the public sector crowds out private employment and induces skilled workers to queue for a public job, thus increasing their unemployment rate. In addition, a growing public sector fosters employment in the tradable and nontradable sectors, remarkably for the unskilled, and the reallocation of unskilled workers away from agriculture.     

The effect of death tax on the labour supply of donors: evidence from TRA97

Exploiting estate tax cuts from the Taxpayer Relief Act of 1997 (TRA97), this paper estimates the effect of death tax on the labour supply of living potential donors. To this end, difference-in-difference with multiple imputation approach is applied to micro-level panel data. This paper finds that the estate tax cuts makes no difference in labour force participation or working hours of potential donors in a statistically meaningful way, although the TRA97 reduces marginal estate tax rates by 37.51% on average. This finding suggests that the death tax causes no meaningful distortion of living potential-donors’ labour supplies at either extensive or intensive margin.     

Effects of health insurance on labour supply: evidence from the health care fund for the poor in Vietnam

The expansion of health insurance in emerging countries raises concerns about the unintended negative effects of health insurance on labour supply. This article examines the labour supply effects of the Health Care Fund for the Poor (HCFP) in Vietnam in terms of the number of work hours per month and labour force participation (the probability of employment). Employing various matching methods combined with a Difference-in-Differences approach on the Vietnam Household Living Standard Surveys 2002–2006, we show that the HCFP, which aims to provide poor people and disadvantaged minority groups with free health insurance, has a negative effect on labour supply. This is manifested in both the average number of hours worked per month and the probability of employment, suggesting the income effect of the HCFP. Interestingly, the effects are mainly driven by the non-poor recipients living in rural areas, raising the question of the targeting strategy of the programme.