Optimal Taxation and Monopsonistic Labor Market: Does Monopsony Justify the Minimum Wage?

Does monopsony on the labor market in itself justify the implementation of a minimum wage when it would not be used in a competitive economy? This issue is studied in a model of optimal taxation. We find that there is no room for the minimum wage when there are a continuum of skills with no isolated mass point at the bottom of the wage distribution. Accordingly, in the empirically relevant situation, where there is a continuum of wages at the bottom of the distribution, the minimum wage is not helpful.     

Do Your Neighbors Influence Your Health?

When individuals make decisions regarding their allocation of time and income, the health investment and health that they achieve may fall short of the goals prescribed by medical guidelines and health policymakers. Instead of the oft‐observed policy responses such as additional spending on public awareness campaigns, it may be more fruitful to determine how individuals can be induced to choose behaviors that will lead to the prescribed health. That is, one must recognize the trade‐offs between health investment and consumption or leisure today in the face of factors such as social norms, job stress and advances in health technology.     

How Does FDI Affect Health?

This paper investigates the impact of foreign direct investment (FDI) on population health using panel data for up to 179 countries for the period between 1980 and 2011. Our main finding is that the relationship between FDI and health is nonlinear, depending on the level of income: FDI has a positive effect on health at low levels of income, but the effect decreases with increasing income, then changes sign and becomes increasingly negative at higher levels of income.     

Can Countries with Severe Labor Market Frictions Gain from Globalization?

The interaction between increased Southern trade integration (globalization) and labor market frictions is analyzed in a dynamic general-equilibrium North–South nonscale growth model with endogenous Northern innovation and endogenous Southern imitation. The qualitative employment, growth, and relative-wage effects of globalization are shown to depend crucially on the degree of Northern labor market frictions. I demonstrate that only Northern countries with particularly large labor market adjustment costs for both firms and workers benefit from globalization in terms of permanently lower unemployment, temporarily faster growth, and permanently higher wages. This is because of the resulting general-equilibrium feedback effects of Northern labor market frictions that deter Southern imitation incentives. The result does not imply the recommendation to increase Northern labor market rigidities, but it challenges the common belief that labor market flexibility helps Northern countries to better adjust to the "globalization threat" coming from the South.     

The Welfare State versus the Common Labor Market: Which to Dismantle?

Migration by low-income workers limits the ability of a countryto redistribute income, since more generous income supplementsattract additional workers into the country, reducing wagesand raising the cost of the program. This article studies therole of immigration controls, which allow the government toraise the real incomes of existing immigrants without causingadditional immigration. Paradoxically, immigration controlsmay lead to higher equilibrium levels of immigration in a commonlabor market, and those low-income individuals left behind inthe source countries may be better off. Simply stated, a hostcountry benefits more from immigrants when they are not impoverished,and immigration controls enable the country to eliminate impoverishment.Thus, the country is willing to increase the number of immigrantsthat it allows within its borders. After obtaining this insightfrom the basic model, the article discusses some extensionsand qualifications.     

Effects of Transport Regulation on the Oil Market: Does Market Power Matter?

Instruments used to regulate the consumption of oil in the transport sector include fuel taxes, biofuel requirements, and fuel‐efficiency standards. However, the effects that these have on oil consumption and price vary. If market power is present in the oil market, the directions of change in consumption and price might contrast with those in a competitive market. As a result, the market structure affects not only the effectiveness of the policy instruments used to reduce oil consumption, but also the terms of trade and carbon leakage. In particular, reduced oil consumption, as a result of increased fuel‐efficiency standards, will unambiguously increase the price of oil under a monopoly.     

Will Deregulating the Labor Market in Australia Improve the Employment COnditions of Women?

This article traces the development of policies designed to reduce gender workforce inequality in Australia. In contrast to earlier centralized and collective approaches, current strategy is founded on individualism and direct workplace bargaining. The location of reform is now the enterprise, with direct bargaining replacing collective standards. Current policy developments have seen gender subsumed under market imperfections and family responsibilities. These policies will remove many of the safeguards of minimum pay and conditions for women workers, especially those who are most vulnerable. When combined with the growth of "nonstandard" jobs the picture is bleak for many workers, especially the low paid. The onus for corrective action now rests with individual employees and workplace managers, with trade unions being marginalized. The authors suggest that a continuation of the current policy will wind back the clock on the employment conditions of women workers in Australia.     

Does Economic Insecurity Cause Weight Gain Among Canadian Labor Force Participants?

The National Population Health Survey (NPHS) suggests that for labor force participants age 25 to 64, the prevalence of self‐reported obesity in Canada has increased from 16 percent in 1998 to 23 percent in 2008. Using six cycles of NPHS data (1998–2009), I explore Canada's obesity dilemma by considering the effect of economic insecurity—measured as the probability of an individual experiencing a severe negative economic shock. As an identification strategy, a fixed effects model is employed to control for unobserved time‐invariant heterogeneity and a set of instruments based on an individual's economic environment are specified in order to isolate causality. Results suggest that for males age 25 to 64, a 1 percent increase in economic insecurity is predicted to increase their body mass index (BMI) by 0.10 points. For females age 25 to 64, the association between economic insecurity and BMI is statistically insignificant at conventional confidence levels.     

Equity Markets and Economic Development: Does the Primary Market Matter?

This article examines the role played by primary and secondary equity markets in economic growth. It departs from standard literature to integrate both markets and to explicitly acknowledge the primary equity market. By employing a variety of dynamic panel estimators for 54 countries over the period 1995‐2010, we show that the primary equity market is not an important determinant of economic growth, although it facilitates the development of the secondary market. This study also confirms the importance of liquidity provided by the secondary market. The evidence here calls for further investigation into the capital‐raising function of equity markets.     

Does Women’s Labor Force Participation Reduce Domestic Violence? Evidence from Jordan

Enhancing women’s labor force participation is seen as a way to promote their empowerment and improve their well-being and that of their children. The empirical literature on the relationship between women’s employment status and domestic violence is less clear-cut. Using quantitative data from Jordan in 2007, this study explores the effect of women’s employment, as measured by their participation in paid work outside the home, on reported domestic violence, controlling for the potential endogeneity of women’s employment, which might bias the relationship between employment and domestic violence. Without taking endogeneity into account, the regression results suggest that a woman’s participation in paid work enhances violence by her husband. After controlling for endogeneity, these results turn out to be insignificant, which suggests that women’s work status has no causal influence on marital violence. Differentiating between various types of domestic violence provides weak evidence that women’s employment lowers sexual violence.     

Does bank efficiency matter? Market value relevance of bank efficiency in Australia

The stochastic frontier analysis is employed to investigate efficiency of publicly listed Australian banks over the period 1985 to 2008. The results suggest that technical, cost and profit efficiency of Australian banks have improved over time. Large banks have attained a higher level of cost efficiency but a lower level of technical efficiency compared to small banks. No substantial difference between the two groups is found in terms of profit efficiency. A panel regression of bank stock return on bank efficiency suggests that an improvement in technical, cost or profit efficiency contributes to the market value of a bank. Thus, the shareholder wealth maximization goal is aligned with the goal of maximizing bank efficiency in the Australian context.     

QFII in China Security Market： Status Quo and Investment Strategy

This paper firstly introduces the definition and features of QFII, and then mainly analyzes the QFII＇s portfolio performance and investment yield, as welt as stock market. And at last, it refers to the impacts of QFII＇s companies and supervision systems in China security market. the investment ideas and strategies of QFII in China investment styles and strategies on investors, listed     

Do Psychological Fallacies Influence Trading in Financial Markets? Evidence from the Foreign Exchange Market

Research in both economics and psychology suggests that when agents predict the next value of a random series they frequently exhibit two types of biases, which are called the gambler's fallacy (GF) and the hot hand fallacy (HHF). The GF is to expect a negative correlation in a process that is in fact random. The HHF is more or less the opposite of this—to believe that another heads is more likely after a run of heads. The evidence for these fallacies comes largely from situations where they are not punished (lotteries, casinos, and laboratory experiments with random returns). In many real-world situations, such as in financial markets, succumbing to fallacies is costly, which gives an incentive to overcome them. The present study is based on high-frequency data from a market maker in the foreign exchange market. Trading behavior is only partly explained by the rational exploitation of past patterns in the data. There is also evidence of the GF: a tendency to sell the dollar after it has risen persistently or strongly.     

Does Ageing Call for a Reform of the Health Care Sector?

A popular view is that ageing populations increase health expenditureto GDP ratios because health expenditure correlates positivelywith age and because the concomitant shrinking of the labourforce depresses GDP. The resulting increase in transfers fromthe young to the old then calls for a reform of health carepolicies. This article critically examines the arguments underlyingthis view. It gives credit to factors that counteract the expenditureeffect, the effects upon health care market and labour marketdistortions and the effects upon intergenerational solidarity.Although important, these factors are found to have insufficientweight to invalidate the popular view. (JEL: H21, I10, J10)     

Career Paths,Unemployment, and the Efficiency of the Labor Market: Should Youth Employment Be Subsidized?

This paper studies the implications of learning‐by‐doing on youth unemployment and market efficiency when workers benefiting from this kind of training experience search (while on the job) for a higher skill job. Firms with low‐skill jobs suffer from a poaching behavior by firms with high‐skill jobs, causing a shortage of low‐skill jobs and excessive youth unemployment. An optimal policy, consisting of taxing the output of high‐skill jobs and subsidizing the output of low‐skill jobs, restores market efficiency and reduces youth unemployment.     

When a Door Closes,a Window Opens? Long‐Term Labor Market Effects of Involuntary Separations

This study estimates the earning losses of workers experiencing an involuntary job separation. We employ, for the first time in the earning losses literature, a Poisson pseudo‐maximum‐likelihood estimator with fixed effects that has several advantages with respect to conventional fixed effects models. The Poisson estimator allows considering the full set of involuntary separations, including those with zero labor market earnings because of unemployment. By including individuals with zero earnings and by using our new method, the loss in the year of separation becomes larger than in previous studies. The loss starts with roughly 30% and, although it quickly shrinks, it remains at around 15% in the following years. In addition, we find that compared to other reasons for separation, the earning loss pattern is unique for involuntary separations, because no other type of separation implies such permanent scarring. This latter finding makes us confident that the self‐reported involuntariness of a separation is a reliable source of information.     

Does Foreign Environmental Policy Influence Domestic Innovation? Evidence from the Wind Industry

This paper analyses the relative influence of domestic and foreign demand-pull policies in wind power across OECD countries on the rate of innovation in this technology. We use annual wind power generation to capture the stringency of the portfolio of demand-pull policies in place (e.g., guaranteed tariffs, investment and production tax credits), and patent data as an indicator of innovation activity. We find that wind technology improvements respond positively to policies both home and abroad, but the marginal effect of domestic policies is 12 times greater. The influence of foreign polices is reduced by barriers to technology diffusion, in particular lax intellectual property rights. Reducing such barriers therefore constitutes a powerful policy leverage for boosting environmental innovation globally.     

How do Labor Unions Influence the Gender Earnings Gap? A Comparative Study of the US and Korea

Abstract

This paper provides a comparative study of the United States and Korea regarding the effects of unions on gender earnings gaps in 2004. Using datasets representative of the population of the US and Korea, this contribution shows that gender differences in the workers' observed characteristics and the unobserved component reduce gender earnings gaps in union jobs in both the US and Korea. Fringe benefits in the union sector attract women workers with higher labor market qualifications into the union sector and thereby reduce the gender earnings gap in this sector. The study finds that this self-selection process in the union sector is stronger in Korea than in the US, but the seniority-based wage system that prevails in the Korean union sector widens the gender earnings gap.     

Do Selection Criteria Make a Difference?: Visa Category and the Labour Market Status of Immigrants to Australia

This paper assesses the role of selection criteria in the immigrant settlement process. Do skill-based immigrants have higher participation and employment rates than family-based immigrants? Does this represent a head start or a persistent labour market advantage? The Longitudinal Survey of Immigrants to Australia is used to address these questions. Generally, migrants selected for their skills have better labour market outcomes. Over time, the relative gap in participation rates increases, while the gap in employment rates decreases. Net of visa category, outcomes are better for native English speakers and for those who visited Australia prior to migration.