Recruiting manual workers in high unemployment: an employer's experience

This article, written by a practitioner in the engineering industry, describes and reflects upon an employer's response in terms of recruitment and selection practices to the ‘landslide’ in job applications arising from the transition from full employment to the high and persisting unemployment of the 1980s. The introduction has been written by the Editor.     

The first-order approach when the cost of effort is money

We provide sufficient conditions for the first-order approach in the principal-agent problem when the agent’s utility has the nonseparable form u(y−c(a))$u(y-c\left(a\right))$ where y$y$ is the contractual payoff and c(a)$c\left(a\right)$ is the money cost of effort. We first consider a decision-maker facing prospects which cost c(a)$c\left(a\right)$ and with distributions of returns y$y$ that depend on a$a$. The decision problem is shown to be concave if the primitive of the cdf of returns is jointly convex in a$a$ and y$y$, a condition we call Concavity of the Cumulative Quantile (CCQ) and which is satisfied by many common distributions. Next we apply CCQ to the distribution of outcomes (or their likelihood-ratio transforms) in the principal-agent problem and derive restrictions on the utility function that validate the first-order approach. We also discuss another condition, log-convexity of the distribution, and show that it allows binding limited liability constraints, which CCQ does not.     

The unemployment structure of the US states

This paper analyses the time series properties of the unemployment rates of the US economy using a regional disaggregated level. Our results are, in general, favorable to the rejection of the presence of a unit root in these variables. However, we can also observe that this conclusion is clearly qualified by the level of disaggregation employed. We also find robust evidence in favor of the presence of some breaks in the evolution of these unemployment rates. We subsequently offer an estimation of the NAIRU, which is based on the use of the Bai–Perron procedure.     

罗力 滑雪带来的快乐是100

体验着速度带来的快感,罗力只感觉到了风驰电掣,感觉到刺眼的白色与景物从肩头飞速掠过,把一座座山峰甩在了身后。受过滑雪带来的伤害的他皱了皱眉说:“如果滑雪带来的快乐是100,受伤带来的痛苦就是100000!”     

Payroll tax incidence when the tax varies by jurisdiction: The case of the U.S. unemployment insurance tax

Standard treatment of payroll tax incidence suggests that labor, both because of inelastic supply and because workers value the benefit financed by the tax, bears most of the tax. This note considers the special case of the U.S. unemployment insurance tax, which is a payroll tax that varies by jurisdiction (states). The model set forth in this paper allows for differing degrees of both labor mobility and substitutability between types of labor and capital. Contrary to the standard treatment, this paper predicts that some types of labor will avoid this particular type of payroll tax completely. I thank Daniel Hamermesh and seminar participants at the Upjohn Institute for Employment Research and at Oakland University for helpful comments on an earlier draft. I also gratefully acknowledge sabbatical support provided by Oakland University during the initial conceptualization of the ideas presented in this paper.     

The effect of monitoring unemployment insurance recipients on unemployment duration: Evidence from a field experiment

Programme administration is a relatively neglected issue in the analysis of disincentive effects of unemployment benefit systems. We investigate this issue with a field experiment in Hungary involving random assignment of benefit claimants to treatment and control groups. Treatment increases the monitoring of claims — claimants make more frequent visits to the employment office and face questioning about their search behaviour. Treatment has quite a large effect on durations on benefit of women aged 30 and over, while we find no effect for younger women or men.     

The wage scar from male youth unemployment

We utilise the National Child Development Survey to analyse the impact of youth unemployment upon the wage up to twenty years later. We find a large and significant wage penalty, even after controlling for education, region and a wealth of family and individual characteristics. Our estimates are robust to an instrumental variables technique, indicating that the relationship estimated between youth unemployment and the wage is causal. Our results suggest a scar from early unemployment in the magnitude of 13–21% at age 42. However, this penalty is lower, at 9–11%, if individuals avoid repeat exposure to unemployment.     

The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance reform

In January 2003, the unemployment benefits in Finland were increased for workers with long employment histories. The average benefit increase was 15% for the first 150 days of the unemployment spell. At the same time severance pay system was abolished. In this paper we evaluate the effect of the change in the benefit structure on the duration of unemployment by comparing the changes in the re-employment hazard profiles among the unemployed who were affected by the reform to the changes in a comparison group whose benefit structure remained unchanged. We find that the change in the benefit structure reduced the re-employment hazards by on average 17%. The effect is largest at the beginning of the unemployment spell and disappears after the eligibility period for the increased benefits expires.     

The impact of unemployment insurance taxes on wages

This paper examines the incidence of state unemployment insurance taxes on wages paid to workers in various demographic groups. The empirical work matches state level measures of unemployment insurance tax and benefit variables to data aggregated from the Current Population Survey on worker earnings for the period 1992 to 2002. Econometric evidence presented in the paper supports the paper's main hypothesis that UI tax rate structure has its greatest adverse impact on less mobile workers (prime age married women and young workers) and little impact on more mobile workers (prime age men).     

The conduct of the sample average when the first moment is infinite

Summary Many books about probability and statistics only mention the weak and the strong law of large numbers for samples from distributions with finite expectation. However, these laws also hold for distributions with infinite expectation and then the sample average has to go to infinity with increasing sample size. Being curious about the way in which this would happen, we simulated increasing samples (up to n= 40000) from three distributions with infinite expectation. The results were somewhat surprising at first sight, but understandable after some thought. Most statisticians, when asked, seem to expect a gradual increase of the average with the size of the sample. So did we. In general, however, this proves to be wrong and for different parent distributions different types of conduct appear from this experiment. The samples from the “absolute Cauchy”-distribution are most interesting from a practical point of view: the average takes a high jump from time to time and decreases in between. In practice it might well happen, that the observations causing the jumps would be discarded as outlying observations.     

国内失业问题研究最新进展

从失业的性质和原因、农村劳动力的转移和经济增长、失业统计和失业现状、缓解失业的对策措施等四个方面介绍了当前国内理论界对我国失业问题研究的最新进展,并进行了简要评述.本文认为,当前我国对失业问题的理论研究取得了重大进展,为促进就业奠定了理论基础.但和我国日益严峻的就业形势相比,失业理论的研究总体滞后,创新不够.     

The conduct of the sample average when the first moment is infinite

Summary  Many books about probability and statistics only mention the weak and the strong law of large numbers for samples from distributions with finite expectation. However, these laws also hold for distributions with infinite expectation and then the sample average has to go to infinity with increasing sample size.
Being curious about the way in which this would happen, we simulated increasing samples (up to n = 40000) from three distributions with infinite expectation. The results were somewhat surprising at first sight, but understandable after some thought. Most statisticians, when asked, seem to expect a gradual increase of the average with the size of the sample. So did we. In general, however, this proves to be wrong and for different parent distributions different types of conduct appear from this experiment.
The samples from the "absolute Cauchy"-distribution are most interesting from a practical point of view: the average takes a high jump from time to time and decreases in between. In practice it might well happen, that the observations causing the jumps would be discarded as outlying observations.     

The effects of unemployment insurance on postunemployment earnings

There is surprisingly little research into the effects of unemployment insurance (UI) on postunemployment wage outcomes. Moreover, the few existing studies are sufficiently varied in their approach and conclusions that experienced observers have reached very different interpretations of their implications. We provide new estimates of the effect of UI on subsequent earnings, using data on workers displaced in the period 1983–1990. Our objective is to provide a systematic evaluation of the approaches used in the existing literature. We find some limited evidence of a favorable impact of UI on earnings, but only when we compare recipients with nonrecipients. Even in this case, our point estimates lie well below those reported in earlier studies that pointed to beneficial UI effects.     

Optimal investment decisions when time-horizon is uncertain

Many investors do not know with certainty when their portfolio will be liquidated. Should their portfolio selection be influenced by the uncertainty of exit time? In order to answer this question, we consider a suitable extension of the familiar optimal investment problem of Merton [Merton, R.C., 1971. Optimal consumption and portfolio rules in a continuous-time model. Journal of Economic Theory 3, 373–413], where we allow the conditional distribution function of an agent’s time-horizon to be stochastic and correlated to returns on risky securities. In contrast to existing literature, which has focused on an independent time-horizon, we show that the portfolio decision is affected.     

Efficiency measurement when producers control pollutants: a non-parametric approach

This paper treats efficiency measurement when some outputs are undesirable and producers control pollutants by end-of-pipe or change-in-process abatement. A data envelopment analysis framework that compares producers with similar pollution control efforts is proposed. First, my approach avoids arbitrary disposability assumptions for undesirable outputs. Second, the model is used to evaluate the interplay between pollution control activities and technical efficiency. I compare my approach to the traditional neo-classical production model that does not incorporate undesirable outputs among outputs, and to Färe et al.’s (Rev Econ Stat 71:90–98, 1989, J Econom 126:469–492, 2005) well-known model that incorporates bads. I evaluate the common assumption in the literature on polluting technologies, that inputs are allocatable to pollution control, and apply U.S. electricity data to illustrate my main point: Although my empirical model specifications are in line with the literature on polluting technologies, they rely on inputs that play an insignificant role in controlling nitrogen oxides (NO_x) emissions. Consequentially, there are no reasons to expect the efficiency scores of the traditional model to differ from the efficiency scores of the other two models that account for resources employed to pollution control. Statistical tests show that my model, which explicitly takes pollution control efforts into account, produces efficiency scores that are not statistically different from the traditional model’s scores for all model specifications, while Färe et al.’s model produces significantly different results for some model specifications. I conclude that the popular production models that incorporate undesirable outputs may not be applicable to all cases involving polluting production and that more emphasis on appropriate empirical specifications is needed.     

The cyclical pattern of regional unemployment flows in Poland

Using male unemployment benefit data across Polish regions during 1994–1996, we find that unemployment flows are pro-cyclical and increase with job reallocation, controlling for other factors. At the national level we observe that job reallocation and output are associated with stagnant unemployment flows, low inflows and long duration. This has heretofore been attributed to workers by-passing the unemployment benefit system as they move job to job. We show this to be a fallacy of aggregation. The cyclical behaviour of regional unemployment flows and their response to job reallocation suggests that workers use unemployment benefit system to facilitate transition.     

The index theorem for a GEI economy when the degree of incompleteness is even

The purpose of this paper is to present a method to compute the index in an incomplete market economy. We show that generically in endowments and the asset structure the index theorem holds when the deficiency of markets, S−J, is even. The result is based on the indices of homotopies which have been presented for computation of an equilibrium in incomplete market economies.     

Volatility smiles when information is lagged in prices

This study explores volatility smiles when stock market information is lagged, specifically in the REIT industry. A usual requirement is that REITs can only disseminate information relating to their property valuations once per year; therefore, this leads to the lagging effect. Within the context of exchange options (i.e. mergers), it seems that no study has researched on this theme. This article uses the Black & Scholes model to calculate implied volatilities and their corresponding implied options to illustrate arbitrage opportunities when exchange options emerge. The results illustrate that implied volatilities are different from non-implied volatilities. Further, arbitrage is still higher among REITs as opposed to other capital market instruments. Finally, just like other capital market instruments, REIT acquisitions generate alpha.