Labour Market Flexibility,Wages and Incomes in Sub‐Saharan Africa in the 1990s

Abstract: This paper provides an overview of how African labour markets have performed in the 1990s. It is argued that the failure of African labour markets to create good paying jobs has resulted in excess labour supply in the form of either open unemployment or a growing self‐employment sector. One explanation for this outcome is a lack of labour market ‘flexibility’ keeping formal sector wages above their equilibrium level and restricting job creation. We identify three attributes of labour market flexibility. First, whether real wages decline over time; secondly, the tendency for wages to adjust in the face of unemployment; and thirdly, the extent of wage differentials between sectors and/or firms of various size. Recent research shows that real wages in Africa during the 1990s may have been more downwardly flexible than previously thought and have been surprisingly responsive to unemployment rates, yet large wage differentials between formal and informal sector firms remain. This third sense of the term ‘inflexibility’ can explain a common factor across diverse African economies — the high income divide between those working in large firms and those not. Those working in the thriving self‐employment sector in Ghana have something in common with the unemployed in South Africa — both have very low income opportunities relative to those in large firms.     

Phase transitions and emergence of entrepreneurship: The transformation of Chinese SOEs over time

Configurational theory has been a key building block of organizational research. An understanding of how certain configurations evolve over time, especially during discontinuous changes such as economic transition, has been largely a missing link in the literature. Considering economic transition as a process rather than an outcome, this study examined strategic adaptations among Chinese SOEs in two phases, 1990 and 2002. Findings from two surveys and from interviews revealed that environmental characteristics changed significantly over time and that firms responded with more entrepreneurial strategies aimed at firm growth rather than at satisfying state planners. Such changes were related to improved performance. The study closes by offering implications for research and practice.     

Firm racial segregation and affirmative action in the highway construction industry

In this paper I document that highway construction firms in California, particularly those owned by blacks and Asians, exhibit considerable racial segregation in that they are disproportionately located in zip codes with the greatest concentration of own-race residents. I find that segregated firms serve a larger market than minority-owned firms that are not segregated and that this effect is concentrated in black-owned firms. I next exploit the segregation of firms to examine the effect of affirmative action on the success of minority-owned firms. Following the significant curtailment of affirmative action in California due to a direct statewide ballot initiative, the number of highway construction establishments located in zip codes with the highest concentrations of black and Asian residents fell relative to the rest of the state, even conditional on the number of non-construction establishments. This suggests that affirmative action policies may play a role in the net survival rates of minority-owned firms.     

Estimation of option and non-use values for intercity passenger rail services

This paper considers option and non-use values of intercity passenger rail services in Korea. The total economic value of a given transport service can be classified into use, option and non-use values, but other grouping rules can be applied, respectively. The use value is the consumer’s surplus from the actual ride of a specific mode. The option value, on the other hand, can be defined as a traveller’s willingness to pay for reserving a travel mode, which is not his or her main choice, as a standby alternative. Finally, the non-use value represents benefits that are not attributable to the actual use or option use, but to the vicarious, altruistic, functional and existing worth of a transport service. A random stated preference survey based on a double-bounded dichotomous choice is conducted. A survival model is applied to the data collected. Calculations are based on trip makers’ willingness to pay for option and non-use values, using the parameters of the estimated survival model. Some concluding remarks are also presented.     

ASSET-ALLOCATION DECISIONS WHEN RISK IS CHANGING

Various risk estimation methods have been proposed in response to evidence that risk is changing. We investigate the effect of alternative risk-estimation methods in the context of asset-allocation decisions that seek to minimize portfolio risk. The risk measures considered include the traditional fixed-window method, exponential smoothing, and GARCH. Our findings confirm that the choice of risk measure can make a significant difference to the efficiency of asset-allocation decisions and therefore to investment outcomes and fund rankings. We find that the traditional fixed-window method is rarely optimal and that measures that account for volatility clustering are generally preferable.     

Black Power and the Power of Protest: Re-Examining Approaches for Radical Economic Development

A look at movements organized and carried out in Philadelphia aimed at economically empowering African Americans could be useful in assessing degrees of success toward identified objectives and in evaluating gains toward addressing the critical question of economic self-sufficiency. The African American community in Philadelphia has a lengthy history of social activism and was successful in establishing early legislation protecting African American employment rights. This paper surveys demonstrations in Philadelphia geared toward improving African Americans’ collective economic reality. Next, it assesses the success of the demonstrations in Philadelphia toward their desired objectives. Then, it analyzes the significance of these movements toward addressing the central concern of economic stability. Lastly, it recommends necessary shifts in objectives to adequately address economic self-sufficiency.     

The effect of item reduction on assortment satisfaction—A consideration of the category of red wine in a controlled retail setting

This study aims to investigate the effect of item reduction on assortment satisfaction within the red wine category. The study conducted an online experiment using a simulated online wine store. Lowest selling wines were removed after the first buying phase, and the respondents repeated the browsing process in the reduced assortment. A questionnaire measured the shift in perceptions. The results show that assortment perceptions can be maintained in the face of item reduction. There is also a strong association between category familiarity and assortment satisfaction, with differing levels of assortment satisfaction between high and low category familiarity groups. The presence of a favourite item also plays a role in maintaining assortment perceptions. The results suggest that retail managers can reduce assortments by removing low selling items while not affecting customers' assortment perceptions. Furthermore item reduction can be used to increase consumers' satisfaction if they are unfamiliar with the product category. This particular study is limited in the sense that the results were obtained exclusively in an online environment. Future studies may therefore be useful in validating these results in brick and mortar wine outlets.