Working time, employment, and work sharing: Evidence from Sweden

We study three questions which are important for work sharing to increase employment. First, is there a negative long-run relation between working time and employment? Second, are hours per worker exogenous with respect to wages and employment? Third, can policy makers influence actual hours per worker? We formulate a theoretical model for employment, hours per worker, production, and real wages. A VAR model with cointegrating constraints is estimated by maximum likelihood using Swedish private sector data 1970:1–1990:4. We find (i) no long-run relation between hours per worker and employment, (ii) that hours per worker are endogenous with respect to the estimation of long-run parameters, and (iii) that legislated working time and hours per worker are related to each other in the long run. First version received: September 1997/final version accepted: June 1999     

Working time and labour demand in Finnish manufacturing: short-run and long-run effects

The effect of changes in the standard working time on employment and average hours is studied using pooled data from five Finnish manufacturing industries. The model is an error correction model, which makes it possible to separate short-run, reductions in standard hours increase employment. There is evidence that the long run effect of working time on employment has changed over time. In the 1970s reductions in hours have had positive long-run employment effects, but in the 1980s the positive short-run impact has been neutralized in the long run. Changes in standard hours do not influence the utilization rate of labour, which is defined as the ratio of overtime hours to standard hours. In the short run, the utilization rate is influenced by output changes.     

Can intertemporal choice experiments elicit time preferences for consumption?

The paper considers what can be inferred about experimental subjects’ time preferences for consumption from responses to laboratory tasks involving tradeoffs between sums of money at different dates, if subjects can reschedule consumption spending relative to income in external capital markets. It distinguishes three approaches identifiable in the literature: the straightforward view; the separation view; and the censored data view. It shows that none of these is fully satisfactory and discusses the resulting implications for intertemporal decision-making experiments. JEL Classification C90, C91, D90, D91, D11, D12     

The Dutch disease revisited: absorption constraint and learning by doing

This paper revisits the Dutch disease by analyzing the general equilibrium effects of a resource shock on a dependent economy, both in a static and dynamic setting. The novel aspect of this study is to incorporate in one coherent framework two distinct features of the Dutch disease literature that have previously been analyzed in isolation: capital accumulation with absorption constraint, and productivity growth induced by learning-by-doing. The result of long run exchange rate appreciation is maintained in line with part of the Dutch Disease literature. In addition, a permanent change in the employment shares occurs after the resource windfall, in favor of the non-traded sector and away from the traded sector growth engine of the economy. In other words, in the long run both of the classic symptoms of the Dutch Disease remain in place.     

Working time reduction and employment in a finite world*

We study the consequences of a working time reduction (WTR) in a growth model with efficiency wages and an essential natural resource (natural capital), and in which technical progress cannot reduce the resource content of final production to zero. We show that if natural capital is scarce enough, a WTR increases the long-term levels of the hourly wage and employment. A numerical analysis of the transitory impacts of a WTR confirms that when natural capital is scarcer, a WTR increases employment more and the hourly wage less, with a less negative initial impact on output.     

Working time and wage rate differences: Revisiting the role of preferences and labor scarcity

In the labor economics literature, discrimination is often defined as occurring when identically productive workers, placed in the same working conditions, are assigned contracts involving, in particular, different hourly wage rates. This paper applies contract theory to explain how in some circumstances such differences take place, even if contract discrimination and productivity differences are strictly ruled out. It is assumed that worker types differ only in their consumption/leisure preferences and in their availability. A labor cost-minimizing firm offers a menu of labor contracts, and lets workers self-select. The model reveals external effects between types and the possibility of a paradoxical situation in which less demanding workers obtain a higher wage rate. A mixed employment regime always requires a minimum number (a quantum) of most demanding workers.     

Alternative approaches to discrete working time choice in an AGE framework

We compare two options of integrating discrete working time choice of heterogenous households into a general equilibrium model. The first, known from the literature, produces household heterogeneity through a working time preference parameter. We contrast this with a model that directly incorporates a logit discrete-choice approach into an AGE framework. On the grounds of both calibration consistency and adequate accommodation of within-household interaction, we argue that the logit approach is preferable.     

Location choice by households and polluting firms: An evolutionary approach

This paper examines several policy regimes to deal with the problem of households suffering from environmental damage by firms in the same region. We employ an evolutionary framework to analyze migration movements in the course of time, since firms and households will not relocate immediately in response to payoff differentials. We show that taxation gives firms and households an incentive to stay away from each other. Laissez faire (compensation) only gives households (firms) an incentive to stay away from firms (households). We find that taxation creates the right incentives to reach a local welfare maximum. However, when there are multiple local maxima, circumstances may arise under which compensation leads to a better outcome than taxation.     

Quality variations and the choice between foreign and indigenous goods or technology

In this paper, different production techniques are distinguished by both their resource requirements and the quality of their outputs. The optimal choice of production methods depends upon demand conditions, as well as the economy's capital-labor endowment and the technical characteristics of the alternatives. When product quality improvement is possible through the adoption of a foreign, advanced, capital-intensive technique, at most two techniques should be employed and the more closely matched are the capital-labor requirement of the advanced method and the aggregate capital-labor ratio, the greater the extent of adoption. The presence of a competing quality-improving activity using the indigenous technology reduces the range of aggregate capital-labor endowments for which the advanced technique should be employed. We consider quality inspection of units which reduces the amount of tradable output produced by given inputs as its market value increases. Economies of scale, in that the per unit cost of a given quality improvement falls with increasing sectoral output, are included.     

The choice to cash out pension rights at job change or retirement

Most pension plans allow a lump sum distribution upon job separation, enabling a subsequent cash-out. In the 1992–2000 HRS, 13% of entitlements were cashed-out, representing 5.3% of entitlement dollars. Among plans with a lump sum option, 20% were cashed out. Cash-outs can be rational and we broadly confirm hypotheses for cash-out determinants, but not that individuals with short expected longevity should wish to disproportionately cash out. Fears of adverse selection into the pool of pensioners with annuity income thus appear unfounded. While we find only limited leakage, it is concentrated among individuals vulnerable to poverty in old age.     

The high/low divide: Self-selection by values in auction choice

Most prior theoretical and experimental work involving auction choice has assumed bidders find out their value after making a choice of which auction to enter. We examine whether or not bidders knowing their value prior to making a choice of which among multiple alternative auction formats to enter impacts their choice decision and/or the outcome of the auctions. The results show a strong impact on auction choice. Subjects with low values choose the first price sealed bid auction more often while subjects with high values choose the ascending auction more often. The number of bidders in each auction, revenue, efficiency and average bidder surplus all end up equalized.     

Water allocation by social choice rules: The case of sequential rules

This paper considers the problem of allocating shares of irrigation water to different agricultural agents with single-peaked preferences with respect to their own shares. We define two different sequential allocation rules that respect the asymmetry between the agents and maintain the properties of Pareto efficiency and strategy-proofness, and we design a specific algorithm to apply these rules. The results of the empirical application of these rules for the case of an irrigated area located in the Ebro Basin (Spain) show that the designed sequential rules are able to substantially improve the efficiency of the currently applied proportional rule in context of severe scarcity of water and/or high administrative water prices.     

工人主体性的实践：重述中国近代工人阶级的形成

我们试图从新劳工史研究的理论和方法出发,对中国近代产业发展初期工人主体身份的演变和构成进行考察。我们将尝试对工人阶级在传统论述中的单一化、政治化形象进行反思,以近代(1919年之前)工人阶级与工人运动的相关历史资料以及相关研究文献为基础,将并非单一化的各种工人形象作为分析对象,探索地方、血缘、族群以及性别关系等是如何与近代工人主体身份认同的建构之间相互嵌入的。本文的结论是,中国近代史上的工人阶级,从它一出现开始,便不仅仅是一个劳动意义或政治意义上的单一化主体,同时更是一个操演性文化产物以及一系列实践性关系。     

School choice: an experimental study

We present an experimental study of three school choice mechanisms. The Boston mechanism is influential in practice, while the Gale-Shapley and Top Trading Cycles mechanisms have superior theoretical properties. Consistent with theory, this study indicates a high preference manipulation rate under Boston. As a result, efficiency under Boston is significantly lower than that of the two competing mechanisms in the designed environment. However, contrary to theory, Gale-Shapley outperforms Top Trading Cycles and generates the highest efficiency. Our results suggest that replacing the Boston mechanism with either Gale-Shapley or Top Trading Cycles mechanism might significantly improve efficiency.     

Nash implementing non-monotonic social choice rules by awards

Summary. By a slight generalization of the definition of implementation (called implementation by awards), Maskin monotonicity is no more needed for Nash implementation. In fact, a weaker condition, to which we refer as almost monotonicity is both necessary and sufficient for social choice correspondences to be Nash implementable by awards. Hence our framework paves the way to the Nash implementation of social choice rules which otherwise fail to be Nash implementable. In particular, the Pareto social choice rule, the majority rule and the strong core are almost monotonic (hence Nash implementable by awards) while they are not Maskin monotonic (hence fail to be Nash implementable in the standard framework).Received: 12 April 2004, Revised: 18 March 2005, JEL Classification Numbers: D 79.I thank François Maniquet, Efe Ok and Ipek Ozkal-Sanver for their valuable contributions. The paper is part of a project on Electoral System Design supported by Bilgi University Research Fund.     

The dynamic of bank lending channel: Basel regulatory constraint

This article analyzes the impact of monetary policy on bank behavior under the Basel I regulatory framework using a dynamic model with monopolistic competition. There are two main objectives. First, we theoretically predict the dynamic model of bank lending channels under the Basel I regulatory constraint. Second, we empirically analyze the situation in Malaysia by using panel data on 23 commercial banks in the period of 1999 to 2007 by using General Method of Moments. The empirical results show that market rates on loans and policy rates are important influences on average rates of banks' loans. This has an implication that Malaysian banks have the power to set their own prices on loans as they are influenced by the change in the market rate and policy rate. We also have proven that the previous period of spread risk weighted loans and securities is statistically significant and correlated with the average loan rate, whereas risk weighted securities is also statistically significant and correlated with the average time deposit rate in both periods. This shows that the role of risk-weighted assets under the Basel I is important in influencing the optimal rates on loans and time deposits.     

Soft budget constraint theories: From centralization to the market

This paper surveys the theoretical literature on the effect of soft budget constraints on economies in transition from centralization to capitalism; it also reviews our understanding of soft budget constraints in general. It focuses on the conception of the soft budget constraint syndrome as a commitment problem. We show that the two features of soft budget constraints in centralized economies – ex post renegotiation of firms' financial plans and a close administrative relationship between firms and the centre – are intrinsically related. We examine a series of theories (based on the commitment-problem approach) that explain shortage, lack of innovation in centralized economies, devolution, and banking reform in transition economies. Moreover, we argue that soft budget constraints also have an influence on major issues in economics, such as the determination of the boundaries and capital structure of a firm. Finally, we show that soft budget constraints theory sheds light on financial crises and economic growth.