106 research outputs found
Does strict employment protection discourage job creation? Evidence from Croatia
No full textEmployment protection legislation in Croatia is among the most strict in Europe. Firing is difficult and costly, and flexible forms of employment are limited. Is this apparent rigidity reflected-as one would expect based on standard economic theory-in low labor market dynamics? Is job creation low and hiring limited? Is the job security of insiders achieved at the cost of outsiders not being able to enter thelabor market? The author attempts to answer these questions by examining job flows. If the employment protection legislation is binding, then job and worker turnover should be low. He shows that this is indeed the case. Hiring is limited and the average job tenure is very long in Croatia. Job destruction is low, however job creation is still lower. The result is accumulation of unemployment, in large part due to new labor market entrants not being able to find a job. The high degree of job protection also seems to strengthen the bargaining position of insiders and results in relatively high wages. So, wages in Croatia are higher than among its competitors, even after adjusting for productivity. These high labor costs are likely to contribute to limited job creation in existing firms, but also are likely to discourage the entry of-and thus job creation in-new firms. The author presents evidence that firm growth has been indeed limited in Croatia, contributing to the low employment level. The author examines other potential causes of high unemployment in Croatia (the unemployment benefit system, labor taxation, the wage structure, and skill and spatial mismatches). He argues that they do not play a substantial part in accounting for poor labor market outcomes in Croatia. The author concludes that the stringent employment protection legislation is the key labor market institution behind low job creation and high unemployment. Based on this he recommends specific measures aimed at liberalizing the labor market to foster job creation and employment.Labor Management and Relations,Labor Policies,Labor Markets,Environmental Economics&Policies,Trade Finance and Investment,Labor Markets,Labor Management and Relations,Labor Standards,Banks&Banking Reform,Environmental Economics&Policies
Family altruism and incentives
No full textThe author builds on the altruistic model of the family, to explore the strategic interaction between altruistic parents, and selfish children, when children's efforts are endogenous. If there is uncertainty about the amount of income the children will realize, and if parents have imperfect information, the children have an incentive to exert little effort, and to rely on their parent's altruistically motivated transfers. Because of this, parents face a tradeoff between the insurance that bequests implicitly provide their children, and the disincentive to work prompted by their altruism. The author shows that if parents can credibly commit to a pattern of transfers, they will choose not to compensate children in bad outcomes, as much as predicted by the standard (no uncertainty, no asymmetric information) dynastic model of the family. Alternatively, parents may choose to forgo any insurance, and offer a fixed level of bequest, to elicit greater effort from their children. The optimal transfers structure that the author derives, reconciles the predictions of the altruistic family model, with much of the existing evidence on inter-generational transfers, which suggests that parents compensate only partially, or not at all, for earnings differentials among their children. Moreover, the author shows that Ricardian equivalence holds in this setup, except when non-negativity constraints are binding.Economic Theory&Research,Environmental Economics&Policies,Health Economics&Finance,Educational Sciences,Safety Nets and Transfers
Can reforming global institutions help developing countries share more in the benefits from globalization?
No full textGlobalization could significantly expand trade, international investment, and technological advances, but the gains from global integration have been unevenly distributed across and within nations. Greater global interdependence has also brought greater macroeconomic volatility, resulting in several serious financial crises in the second half of the 1990s. The global matrix of Bretton Woods and United Nations institutions that developed starting in the 1940s, formed under a different balance of power, in a world of fixed exchange rates and limited capital mobility. Since the 1960s regional financial institutions have emerged because of the greater autonomy of different regions and the greater financial needs of development. The author reviews different proposals for reform of the international financial institutions and changes in the roles of the International Monetary Fund (IMF) and the World Bank. He highlights the implications for developing countries of (1) Policy conditionality. (2) The countercyclical role of multilaterals'lending. (3) Greater lending to middle-income than to low-income developing countries. (3) Access to liquidity at times of crisis. (4) Mechanisms for giving low-income countries a greater voice in IMF and World Bank decisionmaking. The author streses the overlapping responsibilities of the Bretton Woods and regional financial institutions and the need to reassess the allocation of responsibilities and to develop better coordination mechanisms between these institutions. Those designing institutional reform must consider the corporate capabilities of each type of institution. The corporate cultures of global and regional institutions differ. So does the kind of knowledge they generate and disseminate, and so do patterns of interactions with, and mechanisms for representation of, client countries.Finally, the author calls attention to the need to harmonize national and global growth-oriented policies in a way that reduces volatility and promotes social equity.Environmental Economics&Policies,Governance Indicators,Financial Intermediation,Economic Theory&Research,Banks&Banking Reform
Governance and economic growth
No full textBecause protection of property rights cannot be appropriated by any individual, it is widely recognized as being the state's responsibility. Moreover, recent empirical evidence suggests that protection of property rights leads to higher investment levels and faster growth. The extent of property rights protection differs significantly across countries. The author integrates the emergence of property rights within a simple growth framework. Drawing on North (1990), he presents a model where economic performance and enforcement of property rights may reinforce each other.Initial conditions determine the economy's convergence to a high-income or a low-income steady state. Existing empirical evidence offers tentative support for this theory.Judicial System Reform,Labor Policies,Economic Theory&Research,Environmental Economics&Policies,Common Property Resource Development,Economic Theory&Research,Inequality,Common Property Resource Development,Environmental Economics&Policies,Governance Indicators
Author visits at public libraries : A study of the author visit activities in relation to the societal function of the public library
No full textThe purpose of the present Bachelor’s thesis is to contribute to the library and information science research on how author visits for an adult target group at public libraries in Sweden as a phenomenon can be understood in relation to the public library’s societal function. The questions asked were, firstly: which goals are present in the author visit activities? And secondly: what functions does the public library hold in regard to the author visit activities? Qualitative interviews with representatives from five public libraries have been employed as a method for collecting data. The empirical data was analyzed using a qualitative content analysis method. The theoretical framework consists of the concepts in “the four space” model by Henrik Jochumsen, Casper Hvenegaard Rasmussen and Dorte Skot-Hansen. It is found that the public library through the author visit activities supports several, but not all, of the goals presented in the model. It is also found that the public library through the author visit activities to a greater degree works as inspiration and meeting space than learning and performative space. The study concluded that author visit activities at the public library holds many possibilities in regard to goals and functions of the library
How adverse selection affects the health insurance market
No full textAdverse selection can be defined as strategic behavior by the more informed partner in a contract against the interest of the less informed partner(s). In the health insurance field, this manifests itself through healthy people choosing managed care and less healthy people choosing more generous plans. Drawing on theoretical literature on the problem of adverse selection in the health insurance market, the author synthesizes concepts developed piecemeal over more than 20 years, using two examples and revisiting the classical contribution of Rothschild and Stiglitz. He highlights key insights, especially from the literature on"equilibrium refinements"and on the theory of"second best."The government can correct spontaneous market dynamics in the health insurance market by directly subsidizing insurance or through regulation; the two forms of intervention provide different results. Providing partial public insurance, even supplemented by the possibility of opting out, can lead to second-best equilibria. The same result holds as long as the government can subsidize contracts with higher-than-average premium-benefit ratios and can tax contracts with lower-than-average premium-benefit ratios. The author analyzes the following policy options relating to the public provision of insurance: a) Full public insurance. b) Partial public insurance with or without the possibility of acquiring supplementary insurance and with or without the possibility of opting out. In recent plans implemented in Germany and the Netherlands, where competition among several health funds and insurance companies was promoted, a public fund was created to discourage risk screening practices by providing the necessary compensation across riks groups. But only"objective"risk adjusters (such as age, gender, and region) were used to decide which contracts to subsidize. Those criteria alone cannot correct the effects of adverse selection. Regulation can exacerbate the problem of adverse selection and lead to chronic market instability, so certain steps must be taken to prevent risk screening and preserve competition for the market. The author considers the following three policy options for regulating the private insurance market: 1) A standard contract with full coverage. 2) Imposition of a minimum insurance requirement. 3) Imposition of premium rate restrictions.Health Economics&Finance,Environmental Economics&Policies,Insurance&Risk Mitigation,Insurance Law,Financial Intermediation
Introduction to property theory - the fundamental theorems
No full textThe market system consists of a price mechanism, built on the foundation of a system of property, and contract. In many developing, and transition economies, the market system functions poorly. In many cases, if not most, the malfunctioning is not simply in the price system (for example, anti-competitive activities), but in the underlying property system (such as contracts being breached, and externalities in the sense of transfers not covered by contracts). Economic theory tends to take the functioning of the system of property, and contract for granted, and focuses on the operation of the price mechanism. Property theory focuses on the underlying system of property, and contract. In this paper, the author inaugurates the mathematical treatment of property theory.In contrast with earlier work in"law and economics", and the"new institutional economics", this approach uses principles drawn from jurisprudence, and does not attempt to reduce"law"to"economics"in the sense of efficiency considerations, such as the minimization of transaction costs. The main results are the two fundamental theorems of property theory that are analogous to the two fundamental theorems of price theory that, in essence, state that: 1) A competitive equilibrium is Pareto optimal. 2) Given a Pareto optimal state, there exists a set of prices such, that a competitive equilibrium at those prices would realize that Pareto optimal state.Environmental Economics&Policies,Labor Policies,Banks&Banking Reform,Municipal Housing and Land,Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Municipal Housing and Land,Land and Real Estate Development
Regulating privatized infrastructures and airport services
No full textFor a World Bank Institute course on transport privatization, the authors cover basic issues associated with the regulation of privatized airport infrastructure and services: 1) Economic characteristics of airport. Three types of activities are carried out in airports: essential operational services (aeronautical and non-aeronautical), handling services (aeronautical and non-aeronautical), and commercial activities. Demand for basic airport services is directly influenced by trip purpose. The two types of airline customers (business and leisure travelers) need different levels of flexibility and tend to travel at different times. Analyzing airport capacity (practical and saturation) under peak demand is essential to airport success. Among other important issues: runway cost, level and volume of service, pollution, congestion, and air traffic control. 2) Recent trends in the airport industry. The movement toward privatization may involve public ownership and private operation, including joint ventures; partial or majority divestiture; management contracts; and BOT (build-operate-transfer) schemes and variants, including BOOT (build-own-operate-transfer) schemes and LDO (lease-develop-operate) schemes. Or it may involve private ownership and operation. 3) Price regulation. Topics covered include traditional pricing policies'price regulation through an RPI-X formula; charges for congestion, noise, and other externalities; investment plans; and design of the regulatory system. 4) Regulation of quality in the industry. Topics covered: regulation of services to passengers (as measured by targets for check-in queues, immigration queues, baggage reclaim queues, concourse crowding, shopping, parking, and so on); fault repair times; average levels of passenger boarding and disembarkation and baggage delivery; safety; and investment obligation. 5) Performance indicators in the industry. Topics covered: strategic indicators and other financial indicators (including revenues), as well as indicators of cost, productivity, and quality of service.Transport and Trade Logistics,Public Sector Economics&Finance,Banks&Banking Reform,Environmental Economics&Policies,Decentralization,Roads&Highways,Airports and Air Services,Public Sector Economics&Finance,Banks&Banking Reform,Transport and Trade Logistics
Implementing the market approach to enterprise support - an evaluation of ten matching grant schemes
No full textDeveloping viable new business is critical to recovery, and long-term growth, especially in transition economies. There has been a long history of public support of enterprise development, starting with centralized state agency initiatives, but moving more recently to decentralized instruments for development of the business services market. The window of time during which the benefits of intervention are likely to be greatest: when a market is in its infancy, and its development is constrained by uncertainty, and lack of information. Interventions for enterprise support should be demand-responsive, and flexibly organized. In some circumstances, centralized assistance may still be effective, but it is generally better to use competitive private service providers responding to enterprises'changing needs. The main task is to stimulate the private services sector, improving its capacity to respond to the demands of new, and expanding private enterprises. Support for enterprises has tended to be either free, or heavily subsidized. But such subsidies can be justified only if interventions efficiently supply goods. Providing technical, and management know-how can be a public good if it generates externalities- if, for example, know-how benefits can be disseminated at proportionately low additional cost. Any subsidy for an intervention should be temporary, and should be phased out when the main objective of intervention is achieved - that is, when the market takes off. Grants should generally be for know-how, not for equipment. There may be a case for unbundling the know-how component of loans (including feasibility studies, and follow-up expert services) for grant funding. A package combining loans and grants - through a single financial institution, or through separate institutions - may work provided safeguards can be put in place to prevent perverse use of grants. The matching grant model, which is used increasingly in the World Bank, and elsewhere, is one solution - but it must be justified, and carefully designed. After evaluating ten matching grant funds, the author concludes that performance is mixed. Best practice models are needed. Ensuring economic benefits requires proactive management, with clear objectives of market facilitation ("making a market"). And it requires a balance between rapid grant approval procedures, and careful selection of services for grants.Economic Theory&Research,Decentralization,Enterprise Development&Reform,Environmental Economics&Policies,Banks&Banking Reform,Health Economics&Finance,Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies,ICT Policy and Strategies
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