On the efficiency of labor markets

Summary Important changes in labor market parameters and a growing awareness of the cost of equity-promoting policies have led to increased interest in the efficiency of labor markets. This paper uses the orthodox result in the case of perfect competition to survey efficiency aspects of deviating assumptions: collective negotiations, imperfect information, risk and dynamics associated with education and technology. Perfect competition is found an inadequate standard, as many ‘imperfect’ market modifications enhance efficiency. This is a translation and revision of my inaugural lecture at the Universiteit van Amsterdam. May 16, 1983.     

Bargaining regimes and wages in Portugal

In this paper we analyse the bargaining regime wage-effect in Portugal. The results indicate that the bargaining regime coverage is important in explaining the variability of wages. Wage differentials between bargaining regimes are substantial, a fact which may be related to a decentralised wage setting which prevails in Portugal. The highest wages are generated by multi-firm negotiations and the lowest are generated by sectoral contracts. Single-firm contracts align at an intermediate level in the ranking.Received: April 2001, Accepted: May 2002, JEL Classification: J31Correspondence to: Pedro T. PereiraWe are very grateful to an anonymous referee. Financial support from program PRAXIS XXI under grant PRAXIS/2/2.1/CSH/781/95 and FEDER is acknowledged. The third author also acknowledges financial support from program PRAXIS XXI under grant BD/3486/94 and from the University of the Azores.     

Evaluating the performance of global emerging markets equity exchange-traded funds

We examine the performance of passively managed exchange-traded funds (ETFs) that provide exposure to global emerging markets equities. We find that the tracking errors of these funds are substantially higher than previously reported levels for developed markets ETFs. ETFs that use statistical index replication techniques turn out to be especially prone to high tracking errors, and particularly so during periods of high cross-sectional dispersion in stock returns. At the same time, we find no convincing evidence that these funds earn higher returns than ETFs that rely on full-replication techniques.     

Compensation for Earnings Risk under Worker Heterogeneity

We use two large data sets to estimate the Risk Augmented Mincer equation and test for risk compensation in expected earnings. We replicate earlier findings of a positive premium for risk and a negative premium for skew and add confirmation of the key results if we control for individual ability. We compare risk compensation and risk distributions between some labor market groups and find that immigrants and natives do not differ in risk attitudes, that public sector workers are undercompensated for their risk, and that risk compensation by gender is not fully consistent with higher risk aversion for women. We express concern that a linear compensation model may be too simple.     

On the merits of plant-based proteins for global food security: Marrying macro and micro perspectives

This paper aims to demonstrate the importance of protein production for the global environment and to give insight into the way consumers frame the protein part of their meal. Using a macro perspective, it presents a review of the literature on current and future impacts of the nutritional transition that has made animals the chief source of protein in many countries. Protein-related environmental pressure is put into the perspective of a number of vital Earth-system processes whose boundaries have already been overstepped or are under threat of transgression. To inform policy-makers about these linkages a long-term global food security frame is proposed. Using a micro perspective, survey data on consumers reveal that their frames and habits are strongly adapted to the current meat system. Although this system has induced some pickiness about meat as well as uneasiness about meat's animal origin, there is a large psychological distance between consumers and experts in their view of protein sources. It is suggested that a global food security frame may help to bridge this distance by creating overlapping frames, capturing both altruistic aspects and a reasonable measure of self-interest. This may enable a novel protein transition, featuring a greater share of plant-based protein.     

The rise and fall of Public-Private Partnerships in China: a path-dependent approach

Due to growing traffic demand, enormous investment requirements and high fiscal pressures, China has witnessed a reshaping of financing policies in large transport infrastructure projects from public financing to Public-Private Partnerships. As a result, the provision of transport infrastructure services in China has been steadily moving from the realm of government to that of private sector. In the same period, governments at the central and regional levels were actively engaged in this institutional transition by devising corresponding policies and enacting new laws and regulations. However, in late 2009 it became clear to the authors of this article that there has been a tendency of rolling back private participation in transport infrastructure and service because of various forms of opportunistic behavior on the part of some private players and malpractices among some governmental officials in their interaction with private players, and in relatively recent a number of large transport projects have been granted to state-owned enterprises. Therefore, the purpose of this article is to analyze and explain the processes of rise and fall of Public-Private Partnership in China. We argue that the adoption of Public-Private Partnership in China is a path-dependent process rather than some economic optimum advocated by a variety of international organizations. Specifics of wider Chinese political, cultural and institutional context are recognized as important factors that influence the performance of Public-Private Partnership. Effects of decisions made under transitory conditions can persist long after those conditions have vanished. In addition, these historical legacies are important in understanding contemporary use of Public-Private Partnership in China, and they are also the origins from which the sub-optimal statuses are often led.     

Overeducation, wages and promotions within the firm

We analyse data from personnel records of a large firm producing energy and telecommunication and test for the effect of deviations between required and attained education of workers. Required education is measured as hiring standards set by the firm. We find the usual effects of over- and undereducation in a wage regression, thus rejecting the argument that such effects are exclusively due to firm fixed effects. Distinguishing, within the firm, between a sheltered internal labour market and an exposed external labour market, we find that at the internal labour market over- and undereducation significantly affect career development, in particular at younger ages, but that such effects are mostly absent at the firm's external labour market.     

Shortages in an ageing labour market: an analysis of employers' behaviour

Different policies are being promoted to increase the labour supply in ageing labour markets. This article presents the results of a large-scale survey carried out among Dutch employers into their management of the constraints presented by a tight labour market. Organizations take different measures in response to staff shortages, which can in fact be distinguished as four strategies. The first relates to the recruitment of new groups of workers: groups that traditionally were perhaps not a preferred choice. The principal measures in this strategy are the recruitment of women and ethnic workers, and to a lesser extent the elderly. The second strategy focused on increasing the labour supply of existing workers. Overtime, encouraging part-timers to work extra hours and a structural increase in the length of the working week were part of this strategy. The measures constituting the third strategy were of a different type. Generally, these measures were adopted in order to cope with temporary peaks. Work was outsourced, a recruitment agency used, and higher wages offered to try to fill a vacancy. The fourth strategy focused on substituting technology/capital for labour. Regression analyses is carried out to explain which strategies organizations use to deal with shortages.