Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market

This study analyses the effect of trade and migration on wages and labour marketmobility. We estimate wage growth equations and a multinomial logit mobilityequation on an individual data set ranging from 1991 to 1994. We find substantialdifferences in the reactions of white and blue-collar workers wages and mobilityto trade and migration. In Austria exports have a positive and imports a negativeimpact on wage growth only for blue-collar workers. Migrants also reduce onlyblue-collar workers wage growth. Our results indicate that higher imports and aninflow of migrants reduce sectoral mobility of all types workers. The risk of beingout of work by contrast is increased by migration and imports only for blue-collarworkers, but reduced by exports for all types of workers. In general our results suggestenlargement of the EU would have only small effects on the Austrian labour market.     

The effect of fertility on labour force participation: The Spanish evidence

Abstract. The aim of this paper is to estimate the effect of fertility on the decision of labour force participation of married females in Spain, allowing for the existence of unobserved characteristics that affect both fertility and participation. We use a pooling of five waves of the European Household Panel for Spain (1994–1998). Results indicate that not taking into account the unobserved characteristics that affect both variables imposes on average a strong downward bias on the true effect of fertility on participation. This bias is especially strong for highly educated females. We are grateful to Raquel Carrasco and an anonymous referee for helpful comments. Financial support from Gobierno Vasco (PI-1999-160)), Ministry of Education and Science (BE2000-1394), Instituto de la Mujer and Universidad del País Vasco (UPV 00035.321-13511/2001) is gratefully acknowledged.     

A note on Bossert,Pattanaik and Xu's “Choice under complete uncertainty: axiomatic characterization of some decision rules”

Summary. Recent work by Bossert, Pattanaik and Xu provides axiomatic characterizations of some decision rules for individual decision making under complete uncertainty. This note shows that, in the case of two of these rules, they do not satisfy one of the axioms used for their characterization. A counterexample illustrating this fact is provided, as well as an alternative way to characterize the two rules under consideration, mantaining as far as possible the original axioms proposed by Bossert, Pattanaik and Xu. Received: November 3, 2000; revised version: March 1, 2002 RID="*" ID="*" I am grateful for the encouragement and support of Professor Prasanta Pattanaik. I thank also the suggestions of two anonymous referees. This work was made during an academic visit to the Department of Economics of the University of California in Riverside (UCR). The visit was possible thanks to an invitation by the UCR and the financial support of the Public University of Navarra, the Government of Navarra, and the CICYT (SEC96-0858).     

Entry deterrence and innovation in durable-goods monopoly

This paper investigates the efficiency of innovation investments in a durable-goods monopoly when a potential entrant threatens to innovate as well. We show that the durability of the good endows the monopolist with the power to discourage rival innovation since current sales alter the demand for a new generation of the good. The equilibrium is therefore determined not only by the incentive for intertemporal price discrimination in durable-goods monopoly, but also by the incumbent's concern for maintaining the technological leadership. We demonstrate that entry deterrence followed by no innovation always implies underinvestment in innovation.     

Redistribution as a selection device

This paper studies the role of the wealth distribution for the market selection of entrepreneurs when agents differ in talent. It argues that the redistribution of initial endowments can increase an economy's surplus because more talented individuals get credit for their risky investment projects. Moreover, the redistribution of initial endowments may lead to a Pareto-improvement although all agents are non-satiable. An agent's entrepreneurial ability is his private information and there is moral hazard in production. I find conditions such that unproductive rich entrepreneurs crowd out productive poor ones on the capital market. Then redistribution of initial endowments may lead to a new equilibrium where market participants are better informed about the entrepreneurs’ ability. The new equilibrium is characterized by (i) the selection of better entrepreneurs, (ii) a higher riskless rate of return on capital, (iii) lower repayments of successful entrepreneurs to their creditors and (iv) the fact that all agents are better off.     

Public sector health insurance trusts

Public sector associations have successfully developed and run employee health insurance pools for almost 30 years, providing members with savings and flexibility not available from commercial health insurance carriers. This article looks at the models, technical tools and governance philosophy that have contributed to their success in a very challenging business environment.     

Minsky Goes to Buffalo—and Takes on the Economics Establishment

This essay is based on remarks presented by the author at The Fourth Bi-Annual Cross-Border Post Keynesian Conference, Buffalo State College, on October 9, 2009. It addresses the economic challenges facing Buffalo, New York, and countless other American cities, especially in the Northeast and Midwest; draws on the writings of Hyman Minsky to offer an interpretation of what many now call the Great Recession, which began in late 2007; and challenges the image of Minsky presented by mainstream economists and journalists, with special attention to a recent lecture by Paul Krugman. The essay closes by returning to Buffalo, where—as Minsky anticipated in the 1990s—the economic fate of working families depends largely on the outcome of a national struggle over the shape of future U.S. economic transformation.     

The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model

This paper presents the first value of statistical life (VSL) meta-analysis that empirically estimates correction factors for ‘out of context’ benefits transfer (BT) purposes. In the field of mortality risk reductions elicited willingness to pay values in one risk context, say road safety, are frequently applied in other risk contexts like air pollution. However, differences in risk perception and the population at risk across contexts are likely to result in diverging VSL estimates. In a meta-analysis of 26 international stated preference studies, a Bayesian model is estimated regressing contingent values for mortality risk reductions, originating from three different risk contexts, on the characteristics of the risk reduction itself and additional variables characterizing the underlying studies. A willingness to pay (WTP) premium for mortality risk reductions in the air pollution and general mortality risk context relative to improving road safety is observed. Evaluated at the mean, road safety VSL estimates should be multiplied by a factor 1.8 before being applicable in the air pollution context. Moreover, in an illustrative BT exercise we find limited overlap in the set of context specific predictive VSL distributions. Consequently, ‘out of context’ BT results in a substantial over- or underestimation of the VSL.