How working time reduction affects jobs and wages

In 1996, by law the maximum standard workweek in Portugal was reduced from 44 h to 40 h. We find that for workers involved this change reduced the job separation rate and increased hourly wages, keeping monthly earnings approximately constant. The working hours reduction also affected workers working less than 40 h per week; they were more likely to lose their job.     

The costs of hiring skilled workers

This paper analyzes the structure of hiring costs for skilled workers. We use novel Swiss administrative firm-level survey data that provide direct and detailed measures of hiring costs, including recruitment and adaptation. Results show that average hiring costs range, depending on firm size, from 10 to 17 weeks of wage payments. The structure of hiring costs is convex. Marginal hiring costs increase with the number of hires and reach up to 24 weeks of wage payments. We find no evidence for a fixed cost component. Hiring costs also increase with the hiring rate (the ratio of hires and skilled workers), confirming convexity. Hiring costs generally increase with skill requirements for job applicants, and depend on macroeconomic conditions: a 1% point increase in the unemployment rate reduces average hiring costs by more than 5%.     

Property rights,mobile capital,and comparative advantage

Recent papers show that imperfect property rights to a natural resource – a sector-specific factor–can be a source of comparative advantage. In these models, weaker property rights attract labor–the only mobile factor – to the resource sector, increasing the country's comparative advantage for that sector. If capital in addition to labor is mobile, and if the benefits of capital are non-excludable or if the degree of property rights is endogenous, a deterioration of property rights has ambiguous effects on comparative advantage and on the equilibrium wage/rental ratio.     

Job search and unemployment insurance: New evidence from time use data

This paper provides new evidence on job search intensity of the unemployed in the U.S., modeling job search intensity as time allocated to job search activities. The major findings are: 1) the average U.S. unemployed worker devotes about 41 min to job search on weekdays, which is substantially more than their European counterparts; 2) workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker; 3) across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between ?1.6 and ?2.2; 4) job search intensity for those eligible for Unemployment Insurance (UI) increases prior to benefit exhaustion; and 5) time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for UI.     

Travel patterns and the potential use of electric cars – Results from a direct survey in six European countries

A significant penetration of electrical drive vehicles (EDVs) in the fleet is possible only if their use is compatible with mobility patterns of individuals. Building on the analysis of car mobility patterns by means of web-based car trips diaries filled in by a sample of individuals in six European countries, this paper provides insights on how EDVs could fit mobility habits. Critical aspects related to driving behaviour, which should be considered to allow the penetration of electric cars in the market, are identified. Among others results, we show that average daily driven distance in 6 countries ranges from an average of 40 km (UK) to an average of 80 km (Poland) and the parking time after the last trip of a day amounts to more than 16 h per day. These findings show that the current drive and parking behaviours are in line with the range limitation of current EDVs and the potential need for a full slow recharge of an average EDV battery. Our results are a starting point for the estimation on energy demand profiles to assess how electrical energy supply can meet demand under the assumptions of a wide market share of EDVs.     

An application of Lotka–Volterra model to Taiwan's transition from 200 mm to 300 mm silicon wafers

In this paper, we explore the innovation growth of 200 mm and 300 mm silicon wafers from Taiwan. Using the historic data, we simulate the growth of the area of 200 mm and 300 mm silicon wafers manufactured in Taiwan by the competitive Lotka–Volterra model. The parameters in the Lotka–Volterra model estimated with the realistic data are obtained numerically. The dynamic growth of competitive relationship between 200 mm silicon wafers and 300 mm silicon wafers is then analyzed. To prove the performance of the model, we further compare the famous Bass model and the Lotka–Volterra model. We also perform the equilibrium analysis to determine the long-term stability state in the simulation trajectory. Our research exhibits that 200 mm silicon wafers and 300 mm silicon wafers show a prey–predator relationship under the assumption of natural competition in the global semiconductor market. From a managerial perspective, the coefficients in the Lotka–Volterra model of exponential growth, self-interaction and cross-interaction represent the strength of product attractiveness, niche capacity and interaction for two competition products. We also find that there exists a stable equilibrium state for 200 mm silicon wafers and 300 mm silicon wafers. The prey 200 mm generation does not disappear completely; it finally settles to a constant market alongside the predator 300 mm generation.     

The corporation as a tax shelter: Evidence from recent Israeli tax changes

Shifting of income between the corporate and the personal income tax bases in response to tax incentives is the premise of the literature on taxation and organizational form. Empirical evidence of income shifting is, however, merely circumstantial. Using a unique panel of high-frequency VAT data from Israel, we trace the footprints of income shifting through incorporation by high-income individuals who convert their labor income into less-taxed dividends. A rise in the personal income tax rates resulted in more than 4500 companies–a 5% addition to the corporate sector–being registered in the 12 months following the tax change, mainly by self-employed professionals in the industries of business activities and health services; behavioral response to taxation was found only in the top percentile of the income distribution.     

You can take it with you: Proposition 13 tax benefits,residential mobility,and willingness to pay for housing amenities

The endogeneity of prices has long been recognized as the main identification problem in the estimation of marginal willingness to pay (MWTP) for the characteristics of a given product. This issue is particularly important in the housing market, since a number of housing and neighborhood features are unobserved by the econometrician. This paper proposes the use of a well defined type of transaction costs–moving costs generated by property tax laws–to deal with this type of omitted variable bias. California's Proposition 13 property tax law is the source of variation in transaction costs used in the empirical analysis. Beyond its fiscal consequences, Proposition 13 created a lock-in effect on housing choice because of the implicit tax break enjoyed by homeowners living in the same house for a long time. Its importance to homeowners is estimated from a natural experiment created by two amendments that allow households headed by an individual over the age of 55 to transfer the implicit tax benefit to a new home. Indeed, 55-year old homeowners have 25% higher moving rates than those of comparable 54 year olds. These transaction costs from the property tax laws are then incorporated into a household sorting model. The key insight is that because of the property tax laws, different potential buyers may have different user costs for the same house. The exogenous property tax component of this user cost is then used as an instrumental variable. I find that MWTP estimates for housing characteristics are approximately 100% upward biased when the choice model does not account for the price endogeneity.     

Growth-returns nexus: Evidence from three Central and Eastern European countries

Using a sample of monthly data from January 1996 to December 2012, we provide new evidence on the unidirectional Granger causality from real stock market returns to real economic activity in three Central and Eastern European countries: the Czech Republic, Hungary, and Poland. By employing the Granger causality tests of Cheung and Ng (1996) and Hong (2001), we show evidence of short-term (up to 6 months), medium-term (up to 12 months) and long-term (up to 24 months) causality for the Czech Republic and Hungary. In the case of Poland, only medium-term and long-term causality is found. Using rolling-correlation analysis, we find that although the growth–returns relationship is positive during the examined period, there is an apparent variability in the strength of this relationship that is particularly visible during the period of the financial crisis in the late 2000s. Consequently, we find that the predictive power of stock markets in the CEE-3 countries increases during periods of high market volatility and decreases during periods of economic recovery.     

Creative destruction with on-the-job search

This paper studies the consequences of creative destruction on unemployment in a frictional labor market with on-the-job search. For a benchmark calibration, a 1% increase in growth raises the unemployment rate by 1.72 percentage points in the economy without on-the-job search and by only 0.07 percentage points with on-the-job search. Rather than contributing to unemployment through more frequent job separations, in the presence of on-the-job search, creative destruction induces a direct reallocation of workers from low to high productivity jobs.     

Central school exit exams and labor-market outcomes

Many countries use centralized exit exams as a governance devise of the school system. While abundant evidence suggests positive effects of central exams on achievement tests, previous research on university-bound students shows no effects on subsequent earnings. We suggest that labor-market effects may be more imminent for students leaving school directly for the labor market and, on rigid labor markets, for unemployment. Exploiting variation in exit-exam systems across German states, we find that central exams are indeed associated with higher earnings for students from the school type directly bound for the labor market, as well as with lower unemployment.     

Labor and behavior determinants of remittances in Saudi Arabia

Saudi Arabia is the second largest sender of international remittances. These remittances constitute large foreign capital inflows to labor‐exporting remittee economies. This study is the first to structurally decompose remittance dynamics into behavioral and labor market outcomes of migrants. Remittance outflows are decomposed into migrant labor supply, unemployment and participation rates, wage earnings, and the marginal propensity to remit (MPR) out of migrant earnings. The estimates suggest that migrant labor supply is highly elastic. The important driver of remittance dynamics is the MPR, migrant wages, and the labor supply of migrants. The MPR is found to respond counter‐cyclically to foreign gross domestic product.     

A note on incomplete factor taxation

Optimal capital taxes may be positive in the steady state in Ramsey models with an incomplete set of factor taxes. I show this possibility crucially depends on how fiscal policy is constrained at date t = 0. If the government is barred from manipulating the value of initial assets, the Chamley–Judd result reappears: the optimal capital tax is always zero in the steady state.     

REDD+and community-controlled forests in low-income countries: Any hope for a linkage?

Deforestation and forest degradation are estimated to account for between 12% and 20% of annual greenhouse gas emissions and in the 1990s (largely in the developing world) released about 5.8 Gt per year, which was bigger than all forms of transport combined. The idea behind REDD + is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits. Recent analysis has suggested that developing country carbon sequestration can effectively compete with other climate investments as part of a cost effective climate policy.This paper focuses on opportunities and complications associated with bringing community-controlled forests into REDD +. About 25% of developing country forests are community controlled and therefore it is difficult to envision a successful REDD + without coming to terms with community controlled forests. It is widely agreed that REDD + offers opportunities to bring value to developing country forests, but there are also concerns driven by worries related to insecure and poorly defined community forest tenure, informed by often long histories of government unwillingness to meaningfully devolve to communities. Further, communities are complicated systems and it is therefore also of concern that REDD + could destabilize existing well-functioning community forestry systems.     

Privatizing public services and strategic behavior: The impact of incentives to reduce workers' compensation claim duration

During the 1990s, the state of Ohio contracted out Workers' Compensation (WC) case management, incorporating a large bonus payment intended to reward reduced claim duration. The bonus is essentially a decreasing function of average days away from work, excluding claims longer than 15 months. In response, duration is predicted to decrease for claims with moderate injuries and increase for some severe claims so that claimants will miss more than 15 months of work and be excluded from the calculation. I show that contractors increased duration for severe claims but find no evidence that contractors successfully reduced duration for moderate claims. However, contractors received large bonus payments. This is likely because the financial reward to merely excluding a small share of severe claims from the calculation of the bonus payment is large enough to enable TCMs to receive the full bonus. These contractor responses are inconsistent with state intentions, suggesting public entities should anticipate strategic behavior when crafting performance-based incentives.     

WORK HISTORIES AND LIFETIME UNEMPLOYMENT

A long-standing question in economics is how important unobserved differences across workers are for explaining unemployment. I revisit this topic using variation in lifetime unemployment across workers in U.S. data. A comparison of workers often unemployed with the rest shows that although differences in job-finding rates increase over the course of a career, differences in job-separation rates are large right from the start. I develop a directed search model with symmetric unobserved heterogeneity, in which agents learn workers' types from their labor market histories, to rationalize these findings. The model cannot match the data if unobserved heterogeneity is neglected.     

Courses or individual counselling: does job search assistance work?

How does labour market policy affect welfare recipients and long-term unemployed people? We investigate whether job search assistance (JSA) helps disadvantaged individuals to find jobs and whether courses or individual counselling is more successful in reaching this goal. To evaluate individual employment effects, we apply a quasi-experimental design and construct suitable comparison groups using propensity score matching methods. We compare participants to nonparticipants as well as participants of both schemes directly. Our article benefits from access to rich administrative data from the German Federal Employment Agency. When comparing participants to nonparticipants, results suggest that the individual JSA does not affect participants’ employment prospects at all and that the course JSA even decreased their employment chances. At the same time, differences in these effects can be ascribed to programme design differences and to differences in the groups of participants. Therefore, we compare both programmes directly to each other, that is, we use the other programme participants as a comparison group, respectively. We found some evidence that individual JSA performs better than course JSA.     

Long-term global water projections using six socioeconomic scenarios in an integrated assessment modeling framework

In this paper, we assess future water demands for the agricultural (irrigation and livestock), energy (electricity generation, primary energy production and processing), industrial (manufacturing and mining), and municipal sectors, by incorporating water demands into a technologically-detailed global integrated assessment model of energy, agriculture, and climate change — the Global Change Assessment Model (GCAM). Base-year water demands – both gross withdrawals and net consumptive use – are assigned to specific modeled activities in a way that maximizes consistency between bottom-up estimates of water demand intensities of specific technologies and practices, and top-down regional and sectoral estimates of water use. The energy, industrial, and municipal sectors are represented in fourteen geopolitical regions, with the agricultural sector further disaggregated into as many as eighteen agro-ecological zones (AEZs) within each region. We assess future water demands representing six socioeconomic scenarios, with no constraints imposed by future water supplies. The scenarios observe increases in global water withdrawals from 3710 km³ year^− 1 in 2005 to 6195–8690 km³ year^− 1 in 2050, and to 4869–12,693 km³ year^− 1 in 2095. Comparing the projected total regional water withdrawals to the historical supply of renewable freshwater, the Middle East exhibits the highest levels of water scarcity throughout the century, followed by India; water scarcity increases over time in both of these regions. In contrast, water scarcity improves in some regions with large base-year electric sector withdrawals, such as the USA and Canada, due to capital stock turnover and the almost complete phase-out of once-through flow cooling systems. The scenarios indicate that: 1) water is likely a limiting factor in meeting future water demands, 2) many regions can be expected to increase reliance on non-renewable groundwater, water reuse, and desalinated water, but they also highlight an important role for development and deployment of water conservation technologies and practices.     

Labor Taxation in Search Equilibrium with Home Production

Conventional models of equilibrium unemployment typically imply that proportional taxes on labor earnings are neutral with respect to unemployment as long as the tax does not affect the replacement rate provided by unemployment insurance, i.e. unemployment benefits relative to after–tax earnings. When home production is an option, the conventional results may no longer hold. This paper uses a search equilibrium model with home production to examine the employment and welfare implications of labor taxes. The employment effect of a rise in a proportional tax is found to be negative for sufficiently low replacement rates, whereas it is ambiguous for moderate and high replacement rates. Numerical calibrations of the model indicate that employment generally falls when labor taxes are raised.     

Interdependencies in the energy–bioenergy–food price systems: A cointegration analysis

The present paper studies the interdependencies between the energy, bioenergy and food prices. We develop a vertically integrated multi-input, multi-output market model with two channels of price transmission: a direct biofuel channel and an indirect input channel. We test the theoretical hypothesis by applying time-series analytical mechanisms to nine major traded agricultural commodity prices, including corn, wheat, rice, sugar, soybeans, cotton, banana, sorghum and tea, along with one weighted average world crude oil price. The data consists of 783 weekly observations extending from January 1994 to December 2008. The empirical findings confirm the theoretical hypothesis that the prices for crude oil and agricultural commodities are interdependent including also commodities not directly used in bioenergy production: an increase in oil price by 1 $/barrel increases the agricultural commodity prices between 0.10 $/tonne and 1.80 $/tonne. Contrary to the theoretical predictions, the indirect input channel of price transmission is found to be small and statistically insignificant.