Revisiting wage subsidies: How pro-poor is a South African wage subsidy likely to be?

Wage subsidies have been used in both developed and developing countries to raise employment. After a decade of deliberation, the South African Government recently announced the introduction of a wage subsidy scheme. Given the intrinsic link between unemployment and poverty in South Africa, the belief is that a wage subsidy programme sufficient in scope will also make inroads into poverty. However, the way in which jobs are distributed among poor and non-poor jobseekers is crucial. Our general equilibrium microsimulation model confirms the expectation that a higher wage elasticity of labour demand is associated with larger reductions in poverty. We also find that a greater proportion of new jobs accrue to poor jobseekers when the elasticity is high. While youth-targeting does not improve the poverty-reducing effect of the policy, sectors such as textiles, accommodation, and construction services with their pro-poor employment profiles are good candidates for targeting.     

Municipal annexation: Does state policy matter?

Annexation, the process of bringing land from one jurisdiction to another is the means by which municipalities physically expand in the United States. The process of annexation is implemented through procedures at the local level and authorized by general state enabling legislation. State annexation policy varies widely across the United States, but it has the potential to play a significant role in facilitating or constraining local annexation activity. This paper details the effects of specific provisions of state annexation law on municipal annexation activity. A sample of over 900 cities containing at least 10,000 people that annexed during the 1990–1999 decade was used to explore the effects. Eleven different provisions of state law were included in the analysis, including whether the state has a boundary agency overseeing annexation and whether an election is required to complete the annexation process. Results show that nearly all state provisions affect the frequency of municipal annexation, although some had unexpected results. State provisions also affect rates of annexation and acre growth through annexation, but not as consistently as they affect frequencies. The paper concludes with a discussion of the efficacy of state policy to influence local annexation activity.     

What lessons for economic development can we draw from the Champagne fairs?

The medieval Champagne fairs are widely used to draw lessons about the institutional basis for long-distance impersonal exchange. This paper re-examines the causes of the outstanding success of the Champagne fairs in mediating international trade, the timing and causes of the fairs' decline, and the institutions for securing property rights and enforcing contracts at the fairs. It finds that contract enforcement at the fairs did not take the form of private-order or corporative mechanisms, but was provided by public institutions. More generally, the success and decline of the Champagne fairs depended on the policies adopted by the public authorities — for good or ill.     

Determinants of Recidivism in Paroled Queensland Prisoners: A Comparative Analysis of Custodial and Socioeconomic Characteristics

A multinomial ordered probit model is used to predict post-release performance in a sample of Queensland prisoners released between January 1992 and December 1994. Post-release performance is defined in terms of the seriousness of parole breaches and/or reoffences over the length of the parole period or until April 1996. The paper examines the statistical significance of a number of custodial and socioeconomic variables on the likelihood of a parole breach or re-offence. Factors analysed include family composition, age, occupation, ethnicity, the number of events in custody, the number of prison violations and the length of sentence of the most recent custodial episode. All other things being equal, the marginal effects of readmission with respect to the set of explanatory variables varies markedly according to whether readmission is through a parole breach or through actual recidivist behaviour.     

Scale,Scope and Survival: A Comparison of Cooperative and Capitalist Modes of Production

This paper draws on a comprehensive data set from Portugal to investigate the activities, internal characteristics and survival prospects of cooperatives and capitalist enterprises. Consistent with theory, high levels of market concentration and low entry costs were shown to be conducive to cooperatives. Cooperatives were found to be, on average, older and to operate with a larger, more highly educated and more productive labour force than do their capitalist counterparts. Finally, we show that cooperatives have a markedly higher probability of survival than do capitalist enterprises due, in part, to differences in industry of operation and internal characteristics.     

Price‐Setting Behaviour in Lesotho: Stylised Facts from Consumer Retail Prices

This paper documents some of the main features of price‐setting behaviour by retail outlets in Lesotho over the period March 2002 to December 2009. These features include the frequency, size, duration and synchronisation of price changes. In addition, the paper compares price‐setting behaviour in Lesotho and South Africa using a comparable set of products. The findings reveal considerable heterogeneity in price‐setting behaviour across products, outlets, locations and time. Variations in inflation are strongly correlated with the average size of price changes, but rising inflation raises the frequency of price increases and reduces the frequency of price decreases. Price decreases constitute an important determinant of inflation movements. Surprisingly, the frequency and size of price changes in Lesotho differ substantially from those in South Africa, despite the presence of common retail chains and their joint membership in a customs union and common monetary area. These findings open up opportunities for further research into the sources of heterogeneity across products and Lesotho and South Africa in the setting of prices.