Employment shifts, economic reform and the changes in public/private sector wages in Mexico: 1987–1997

Over the last decade, the public sector in Mexico experienced substantial fiscal reform, divestiture of public enterprises, and the elimination of many regulations affecting pay and employment. This study analyzes the changes in the public/private sector differences in wages during the 1987–1997 period. The results from analyzing microdata from the Encuesta Nacional de Empleo Urbano show that relative public sector wages increased from 1987 to 1997. Most of the relative wage increase in the public sector can be explained by increases in the price of skills and by changes in sorting across sectors. The results have important public policy implications since they suggest that public sector workers earn more and their wages have grown faster than those of their private sector counterparts. As such, policies contemplating public sector reform should take into account the effect of these measures on the inter-sectoral income distribution and the overall economic growth. First version received: April 2000/Final version received: December 2000     

Twenty years of economic transition in Russia: Results and lessons learned

The present article studies the events and processes that took place during the socioeconomic transformation in Russia. The positive and negative consequences of the reforms are considered, and their macroeconomic results are assessed. The article reveals the causes of the weak points in the present-day Russian economy and focuses on mistakes and wrong solutions that should be avoided in the future.     

Do employment subsidies work? Evidence from regionally targeted subsidies in Turkey

This paper studies the effects on registered employment and number of registered establishments of two employment subsidy schemes in Turkey. We implement a difference-in-differences methodology to construct appropriate counterfactuals for the covered provinces. Our findings suggest that both subsidy programs did lead to significant net increases in registered jobs in eligible provinces (5%–13% for the first program and 11%–15% for the second). However, the cost of the actual job creation was high because of substantial deadweight losses, particularly for the first program (47% and 78%). Because of better design features, the second subsidy program had lower, though still significant, deadweight losses (27%–46%). Although constrained by data availability, the evidence suggests that the dominant effect of subsidies was to increase social security registration of firms and workers rather than boosting total employment and economic activity. This supports the theory that in countries with weak enforcement institutions, high labor taxes on low-wage workers may lead to substantial incentives for firms and workers to operate informally.     

The contribution of holiday trips to life satisfaction: the case of people with disabilities

This study analyses the contribution of holiday trips to the life satisfaction (LS) of people with disabilities as compared to people without disabilities. Particular attention is paid to the effects of the intensity of taking part in holiday trips on LS. We are interested in testing two different hypotheses: (a) holiday trips increase individuals' LS and (b) the effects of holiday trips on LS are different for people without and with disabilities, being greater for this latter group. Using longitudinal data from the German Socio-Economic Panel, we estimate LS equations (running generalised least square random-effects models) for people without and with disabilities which include a set of variables measuring participation or not in holiday trips and its intensity. Although people with disabilities are less likely to participate in holiday trips than people without disabilities, the results indicate that people with disabilities obtain higher levels of LS than people without disabilities from their participation in holiday trips, especially when this participation is more intense. Policy-makers and the tourism industry must promote and facilitate full access and participation of people with disabilities in holiday trips by eliminating all barriers, understanding their differential needs and providing an inclusive leisure environment.     

Immigration,Conflict, and Redistribution

In this paper, we analyze how the possibility of conflict between natives and immigrants shapes income redistribution in developed democracies. This possibility can generate income redistribution towards immigrants even if they have no voting rights. We show that the threat of conflict between natives and immigrants lowers vertical income redistribution (from the rich to the poor) as the level of immigration increases. The opposite holds for horizontal income redistribution (from natives to immigrants), which increases with the level of immigration. Income inequality weakens the negative effect of immigration on vertical redistribution, but it also reduces horizontal redistribution. These theoretical predictions are consistent with the results of our empirical analysis on data from 29 European countries: larger immigrant populations are associated with more redistribution towards immigrants and lower vertical redistribution.     

CVaR HEDGING USING QUANTIZATION‐BASED STOCHASTIC APPROXIMATION ALGORITHM

In this paper, we investigate a method based on risk minimization to hedge observable but nontradable source of risk on financial or energy markets. The optimal portfolio strategy is obtained by minimizing dynamically the conditional value‐at‐risk (CVaR) using three main tools: a stochastic approximation algorithm, optimal quantization, and variance reduction techniques (importance sampling and linear control variable), as the quantities of interest are naturally related to rare events. As a first step, we investigate the problem of CVaR regression, which corresponds to a static portfolio strategy where the number of units of each tradable assets is fixed at time 0 and remains unchanged till maturity. We devise a stochastic approximation algorithm and study its a.s. convergence and weak convergence rate. Then, we extend our approach to the dynamic case under the assumption that the process modeling the nontradable source of risk and financial assets prices is Markovian. Finally, we illustrate our approach by considering several portfolios in connection with energy markets.     

Job satisfaction and disability: lower expectations about jobs or a matter of health?

This article focuses on the analysis of the reported differentials of job satisfaction for disabled and non-disabled individuals. Using the Spanish data of the European Community Household Panel during the period 1995–2001, we estimate a job satisfaction equation for each group and evaluate job satisfaction differentials through the Oaxaca-Blinder methodology. The results show that disabled individuals are more likely to be more satisfied in their jobs than non-disabled ones, but only after controlling for other variables. Oaxaca-Blinder decomposition shows the greater importance of the returns in job satisfaction for disabled people, which is supported by explanations based on the lower expectations about jobs of disadvantaged groups.      

Self-employment in the era of the new economic model in Latin America: a case study from Nicaragua

Using data from the 1993 and 1998 Nicaraguan Living Standards Measurement Survey, this paper analyses the desirability of self-employment for Nicaraguan men and women over two points in time in a changing economic environment characterized by market-based reforms called the New Economic Model. Switching regressions of the self-employed and waged and salaried sectoral choice suggest that experience is the major determinant of self-employment for both Nicaraguan men and women. Mixed findings are reported for sectoral selection suggesting that the self-employed men, depending upon current economic conditions, may alternate back and forth between the sector (self-employment or waged and salaried employment) with the highest returns. For women, improvement in economic conditions reflected negative selection in both sectors suggesting that much of the economic gains in the 1990s accrued to men.