102,574 research outputs found
Evaluating Pooled Evidence from the Reemployment Bonus Experiments
No full textSocial experiments conducted in Pennsylvania and Washington tested the effect of offering Unemployment Insurance (UI) claimants a cash bonus for rapid reemployment. This paper combines data from the two experiments and uses a consistent framework to evaluate the experiments and determine with greater certainty the extent to which a reemployment bonus can affect economic outcomes. Bonus offers in each of the experiments generated statistically significant but relatively modest reductions in UI receipt. Since the estimated impacts on UI receipt were modest, the reemployment bonuses did not generate the UI savings necessary to pay for administering and paying the bonuses. Hence, contrary to earlier findings from a bonus experiment conducted in Illinois, findings from the Pennsylvania and Washington experiments strongly suggest that a reemployment bonus is not a cost-effective method of speeding the reemployment of UI claimants.unemployment, insurance, bonus, experiments, O'Leary, Decker
Reemployment Incentives for Unemployment Insurance Beneficiaries: Results from the Washington Reemployment Bonus Experiment
No full textUnemployment insurance is intended to reduce hardship by providing labor force members with partial wage replacement during periods of involuntary unemployment. However, in performing this income maintenance function, unemployment insurance may prolong spells of unemployment. Evidence from a field experiment conducted in Illinois in 1984 suggested that offering unemployment insurance claimants a modest cash bonus for rapid reemployment would increase the speed of return to work and reduce program costs. In 1988 a similar experiment, examining several different bonus offers, was conducted in Washington State. Evidence from the Washington experiment indicates that bonus offers do change job seeking behavior, but that only relatively generous bonus offers about six times the weekly benefit amount should be expected to significantly change the behavior of persons eligible for unemployment benefits.unemployment, insurance, bonus, experiment, Washington, O'Leary
Implications of the Illinois Reemployment Bonus Experiments For Theories of Unemployment and Policy Design
No full textReemployment bonus experiments offer large lump sum payments to unemployment insurance (UI) recipients who find a job quickly. Such experiments are underway or have been recently completed in four states. This paper analyzes the results from Illinois and discusses the implications of the experiments for theories of unemployment and policy design. I examine the hazard rate of exit from unemployment and find that it is significantly higher for the experimental groups, but only during the period of bonus eligibility. Both labor supply and search theories of unemployment are shown to suggest a rise in the reemployment hazard just before the end of bonus eligibility and to suggest larger effects of the fixed amount bonus for lower income groups. Only weak support is found for these hypotheses, which suggests limitations of the models of unemployment. Some modifications of the models are suggested. The experiments demonstrate the effects of economic incentives on job finding behavior but they do not show the desirability of a permanent reemployment bonus program. Evidence from another sample suggests that as many as half of those who received a reemployment bonus returned to their previous employer, so that a bonus program that pays people returning to their last employer would provide a strong encouragement to temporary layoffs. A discussion of UI claim filing behavior suggests that a permanent program could well increase the frequency or promptness of filing, thus reducing any financial advantages of a bonus program
Cost-Effectiveness of Targeted Reemployment Bonuses
No full textTargeting reemployment bonus offers to unemployment insurance (UI) claimants identified as most likely to exhaust benefits is estimated to reduce benefit payments. While earlier research indicated that non-targeted reemployment bonus offers would not be good public policy, in this paper we show that targeting bonus offers with profiling models similar to those in state Worker Profiling and Reemployment Services (WPRS) systems can improve their cost effectiveness. Since estimated average benefit payments do not steadily decline as the eligibility screen is gradually tightened, we find that narrow targeting is not optimal. The best candidate to emerge for a targeted reemployment bonus is a low bonus amount with a long qualification period, targeted to the half of profiled claimants most likely to exhaust their UI benefit entitlement.reemployment, bonus, UI, personal, accounts, PRA, unemployment, insurance, Upjohn, Institute, O'Leary, Decker, Wandner
The Pennsylvania Reemployment Bonus Experiments: How a survival model helps in the analysis of the data
No full textSurvival models for life-time data and other time-to-event data are widely used in many fields, including medicine, the environmental sciences, engineering etc. They have also found recognition in the analysis of economic duration data. This paper provides a reanalysis of the Pennsylvania Reemployment Bonus Experiments, which were conducted in 1988-89 to examine the effect of different types of reemployment bonus offers on the unemployment spell. A Cox-proportional-hazards survival-model is fitted to the data and the results are compared to the results of a linear regression approach and to the results of a quantile regression approach. The Cox-proportional-hazards model provides for a remarkable goodness of fit and yields less effective treatment responses, therefore lower expectations concerning the overall implications of the Pennsylvania experiment. An influence analysis is proposed for obtaining qualitative information on the influence of the covariates at different quantiles. The results of the quantile regression and of the influence analysis show that both the linear regression and the Cox-model still impose stringent restrictions on the way covariates influence the duration distribution, however, due to its flexibility, the Cox-proportional hazards model is more appropriate for analysing the data.
Tram of Bus: Does the Tram Bonus Exist?
No full textThe tram bonus is a much discussed topic as there is severe uncertainty about its definition and its existence. In this paper the tram bonus is considered to be the extra value it generates for travellers, which causes a new tram service to gain more passengers when compared to an equivalent bus service. The tram bonus is examined by comparing the alternative specific utility attached to tram and a bus while controlling for level of service attributes.Delft University of Technolog
The Effects of a Bonus Tax on Manager Compensation and Welfare
No full textThis paper analyses the implications of a currently publicly debated issue, namely the introduction of a bonus tax. We shed light on the effects of the bonus tax on compensation components and study its incidence. We use the Principal Agent model within a two-country framework and consider two main scenarios. In the first scenario the firm cannot relocate managers between countries whereas in the second scenario relocation possibilities exist. Our findings show that the effort based compensation component always rises in the country introducing the tax such that the optimal contracts are tilted towards more effort based pay. Moreover, the bonus tax negatively affects profits and dividends and thus the incidence falls on the firm’s shareholders. With no relocation possibilities, the country that does not introduce such a tax will be worse off in terms of welfare, as the dividend income accruing to its residents declines. Accordingly, the bonus tax can be interpreted as a transfer from the worldwide shareholders to the government levying the tax. However, the welfare results may be reversed when manager relocation is an alternative. In this case, welfare in the country introducing the tax is lower than in the no relocation scenario, while the country that does not levy a bonus tax might even gain in welfare terms.bonus tax, labor taxation, effort, manager compensation, welfare
The effect of performance-related pay of hospital doctors on hospital behaviour: a case study from Shandong, China.
No full textBACKGROUND: With the recognition that public hospitals are often productively inefficient, reforms have taken place worldwide to increase their administrative autonomy and financial responsibility. Reforms in China have been some of the most radical: the government budget for public hospitals was fixed, and hospitals had to rely on charges to fill their financing gap. Accompanying these changes was the widespread introduction of performance-related pay for hospital doctors--termed the "bonus" system. While the policy objective was to improve productivity and cost recovery, it is likely that the incentive to increase the quantity of care provided would operate regardless of whether the care was medically necessary. METHODS: The primary concerns of this study were to assess the effects of the bonus system on hospital revenue, cost recovery and productivity, and to explore whether various forms of bonus pay were associated with the provision of unnecessary care. The study drew on longitudinal data on revenue and productivity from six panel hospitals, and a detailed record review of 2303 tracer disease patients (1161 appendicitis patients and 1142 pneumonia patients) was used to identify unnecessary care. RESULTS: The study found that bonus system change over time contributed significantly to the increase in hospital service revenue and hospital cost recovery. There was an increase in unnecessary care and in the probability of admission when the bonus system switched from one with a weaker incentive to increase services to one with a stronger incentive, suggesting that improvement in the financial health of public hospitals was achieved at least in part through the provision of more unnecessary care and drugs and through admitting more patients. CONCLUSION: There was little evidence that the performance-related pay system as designed by the sample of Chinese public hospitals was socially desirable. Hospitals should be monitored more closely by the government, and regulations applied to limit opportunistic behaviour. Otherwise, the containment of government financing for public facilities may result in an increase in the provision of unnecessary care, an increase in health costs to society, and a waste in social resources
Policy Lessons from the U.S. Unemployment Experiments
No full textRecently, there has been extensive experimental evaluation of reforms of the unemployment insurance (UI) system. The UI experiments can be divided into two main areas: reemployment bonuses and job search programs. The four reemployment bonus experiments offered payments to UI recipients who found jobs quickly and kept them for a specified period of time. The six job search experiments evaluated combinations of services including additional information on job openings, more job placements, and more extensive checks of UI eligibility. The bonus experiments show that economic incentives do affect the speed with which people leave the unemployment insurance rolls. They also show that speeding claimants' return to work appears to increase total earnings following the claim, but the evidence is less strong. They also suggest that the rate of pay on the new job is not adversely affected by an earlier return to work. Despite these encouraging results, I argue that the experiments do not show that permanent adoption of a reemployment bonus would be beneficial as they cannot account for the effect of a reemployment bonus on the size of the claimant population. The job search experiments test several reforms that appear more promising. Nearly all of the combinations of services and increased enforcement reduce UI receipt, and have benefits that exceed costs. The treatments which mainly increase enforcement of work search rules have small but often statistically significant effects. The experiments which focus more on providing services induce much larger reductions in UI receipt, but at a higher cost of services per claimant. Nevertheless, these experiments have very favorable ratios of benefits to costs.
The impact of the bonus at birth on reproductive behaviour in a lowest-low fertility context: Friuli-Venezia Giulia (Italy) from 1989 2005
No full textAs of 1 January 2000 the government of the north-eastern Italian region of FriuliVenezia Giulia (FVG) introduced a substantial bonus at birth. The birth bonus was differentiated by marital status (only married women were eligible), citizenship (only Italians were eligible), and birth order (the bonus grew for the second and especially the third birth). Moreover, the income threshold below which one got the bonus was fairly high. As of 1 January 2004 a new government substantially reduced the bonus amount as well as the upper income limit. We evaluate if the bonuses handed out in FVG during those four years (2000-03) had a significant impact on fertility and abortion choices, verifying whether fertility changed in a different way for women more affected by the new legislation. We also test if the impact of monetary measures was higher for less educated women, because in Italy the relationship between income and education is very strong, and the bonus was practically the same irrespective of income level, hence its relative impact should be stronger in a poorer family. We use two different methods: First, we compare the trends of births and abortion ratios, separately for women affected and not affected by the monetary measures, looking at the differential changes. Second, using log-linear models, we measure if the interactions among time, parity, marital status, citizenship and education are statistically significant in the direction that follows our expectations. Our results show that for low educated (and hence also less rich) women with one or (especially) two and more children, birth trends did change after 1999, whereas the trends for childless women living in FVG and for low-educated women living in other Italian regions did not change.
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