Productivity efficiencies in Ukrainian polyclinics: lessons for health system transitions from differential responses to market changes

Ukraine’s recent elections revealed deep divisions between eastern regions, which favored central economic planning, and western regions, which preferred more free market reforms. This study compares polyclinics in Ukraine to see if the inflexibility of Soviet-style planned economies results in lower economic efficiency in eastern regions. Using data from two geopolitical regions, Data Envelopment Analysis (DEA) scores for polyclinic efficiencies are modeled as a function of demographic and economic determinants. Surprisingly, results indicate that polyclinics in western Ukraine are less efficient. Possible explanations, including case mix intensity, responsiveness to local preferences, physician entrepreneurial behavior and a legacy of inequitable funding, are discussed.

A Note on the Benefits of Homeownership

This brief note adds to recent work that attempts to identify externalities associated with homeownership. The results suggest that some of the homeownership effect found by Green and White is driven by family characteristics associated with homeownership, especially residential stability. However, as much as homeownership increases residential stability, it appears to be correlated with higher school attainment. Attempts to control for endogeneity cannot eliminate this finding.     

INDUSTRY DYNAMICS AND THE MINIMUM WAGE: A PUTTY‐CLAY APPROACH

We document two new findings about the industry‐level response to minimum wage hikes. First, restaurant exit and entry both rise following a hike. Second, there is no change in employment among continuing restaurants. We develop a model of industry dynamics based on putty‐clay technology that is consistent with these findings. In the model, continuing restaurants cannot change employment, and thus industry‐level adjustment occurs gradually through exit of labor‐intensive restaurants and entry of capital‐intensive restaurants. Interestingly, the putty‐clay model matches the small estimated short‐run disemployment effect of the minimum wage found in other studies, but produces a larger long‐run disemployment effect.     

“Minding Our Business”: What the United States Government has done and can do to Ensure that U.S. Multinationals Act Responsibly in Foreign Markets

The United States Government does not mandate that US based firms follow US social and environmental law in foreign markets. However, because many developing countries do not have strong human rights, labor, and environmental laws, many multinationals have adopted voluntary corporate responsibility initiatives to self-regulate their overseas social and environmental practices. This article argues that voluntary actions, while important, are insufficient to address the magnitude of problems companies confront as they operate in developing countries where governance is often inadequate. The United States can do more to ensure that its multinationals act responsibly everywhere they operate. First, policymakers should define the social and environmental responsibilities of global companies. They must consistently make their expectations for global business clear – and underscore that this objective can often be accomplished without mandates. Second, the US should closely examine the policies that undermine global Corporate Social Responsibility (CSR) and address the many conflicting signals sent by policymakers. Third, the President should make the US government a CSR model by examining how to use its purchasing power to promote human rights. Finally, the US government should require pension funds to report on the social and environmental consequences of their investments. In these ways, Americans can mind our business – and thus make sure that US based firms do not undermine social and environmental progress when they operate in the developing world. Susan Aaronson is Senior Fellow and Director of Globalization Studies at the Kenan Institute Washington Center, an arm of the Kenan-Flagler Business School, University of North Carolina Chapel Hill. Her scholarly research focuses on international investment and social responsibility issues. Aaronson devised and directed a study, funded by the Ford, UN and Levi Strauss Foundations, that examined how U.S. public policies can promote or undermine global corporate social responsibility. She is now beginning a Levi-Strauss funded project on trade and human rights. Aaronson is a frequent speaker on public understanding of globalization issues and the author of four books on globalization including, Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization (Michigan: 2001).     

EU data protection reform: Opportunities and concerns

Last year, the European Commission proposed a comprehensive reform of the EU’s data protection rules. The proposed regulation has been surrounded by fi erce controversy and has been the subject of frenzied lobbying by global corporations, industry groups, research centres and privacy campaigners on both sides of the Atlantic. This Forum applies cool economic reasoning to this heated issue. What are the potential economic benefi ts of EU harmonisation? Will the proposed regulation negatively impact the competitiveness and innovation of European fi rms in the global marketplace? Or could it jeopardise attempts to protect privacy as a fundamental right in civil societies?     

How Firms Construct Price Changes: Evidence from Restaurant Responses to Increased Minimum Wages

We use price data underlying the Consumer Price Index to assess how restaurants, whose prices are generally quite sticky, respond to minimum wage increases. Aggregate prices rise, quickly, by amounts reflecting the increase in costs, and they rise more among fast food outlets and in low-wage locations. But restaurants do not construct price increases by raising all their prices by amounts reflecting the increase in wages. Instead, they raise only some prices, but by larger amounts. Prices at cluster points are less likely to be changed, and prices that were recently increased (decreased) are less (more) likely to be raised.     

HOW BIASED ARE MEASURES OF CYCLICAL MOVEMENTS IN PRODUCTIVITY AND HOURS?

The movement of hours worked over the business cycle is an important input into the estimation of many key parameters in macroeconomics. Unfortunately, the available data on hours do not correspond precisely to the concept required for accurate inference. We study one source of mismeasurement—that the most commonly used source data measure hours paid instead of hours worked. In particular, we focus our attention on salaried workers, a group for whom the gap between hours paid and hours worked is likely to be large. We show that the measurement gap varies significantly and positively with changes in labor demand. As a result, we estimate that the standard deviations of the workweek and of total hours worked are 27 and 5 percent larger, respectively, than published measures of hours suggest. We also find that this measurement gap is unlikely to be the source of the acceleration in published measures of productivity in the early 2000s.     

Ronald Seavoy. Origins and Growth of the Global Economy: From the Fifteenth Century Onward. Westport, Conn.: Praeger, 2003. 275 pp. ISBN 0-275-97912-1, $70.95.

Few scholars are confident enough to believe that they can describethe history of the "origins and growth of the global economy"in 275 pages. But Ronald Seavoy, an emeritus professor of historyat Bowling Green State University, uses that history to illuminatetwo themes: to show that the global economy is built on thefoundation of European commercial imperialism and "to show thatthe global economy as it is currently evolving is capable ofproducing