has canadian house price growth been excessive the dramatic rise in the ratio of canada s average house price to average rent has led to speculation that there is a bubble in the canadian housing market others have argued however that the currently high level of house prices may be rationalized by the low cost of financing given the decline in interest rates over the last two decades in this article we assess these arguments through the lens of a simple asset pricing model applied to city level data we quantify the extent to which excess growth in canadian house prices depends on the nature of the current regime governing real interest rates expectations of rent growth in different cities and variations in property taxes

nonstationarity in job search theory generally structural job search models are taken to be stationary in this paper models are examined in which every exogenous variable can cause nonstationarity for instance because its value is dependent on unemployment duration a general differential equation that describes the evolution of the reservation wage over time is derived as an empirical illustration a nonstationary structural model is estimated that focuses on the consequences of a downward shift in the level of benefits it appears that the elasticity of duration with respect to the level of benefits after the shift is much larger than the elasticity with respect to the level before the shift this paper examines the movement of a job seeking individual s reservation wage over time in a general nonstationary job search model also results concerning comparative dynamics of the reservation wage and the distribution of the duration of unemployment are derived as an empirical illustration a nonstationary structural model is estimated the nonstationarity originates from the decrease in the level of benefits when unemployment duration equals two years from the results some detailed policy recommendations can be deduced as one is able to distinguish the effect of a change in the level of benefits in the first two years of unemployment from the effect of a change in the level after that period recently the use of job search models for the analysis of unemployment duration has become widespread the reduced form approach in empirical studies see e g lancaster 1979 in which only the hazard of the duration distribution is estimated is gradually being replaced by a more structural approach the latter way of modelling is characterized by the explicit use in empirical analysis of the reservation wage equation as stated by the theory e g yoon 1981 lancaster and chesher 1983 lynch 1983 narendranathan and nickell 1985 and van den berg 1988 use the complete theoretical framework of job search theory to make inferences about search behaviour however the structural models used in these studies are stationary this implies that variables like unemployment benefits or the rate of arrival of job offers are assumed to be constant over the spell of unemployment which is often at variance with reality what is more various reduced form empirical studies indicate a significant durationdependence of the re employment probability which is generally interpreted as evidence in favour of the presence of nonstationarity see e g blau and robins 1986 kooreman and ridder 1983 lancaster 1979 and narendranathan nickell and stern 1985 consequently there is a need to model reservation wage movements over time based on a nonstationary theoretical framework

duration and risk of unemployment in argentina abstract after a decade of structural reforms unemployment rates have tripled in argentina this paper is concerned with the measurement of unemployment risk and its distribution we show the importance of considering re incidence in the measurement of unemployment risk and develop a methodology to do that our estimates for argentina show that though the typical unemployment spell is short once re incidence is taken into account unemployment risk is high has risen substantially in the last decade and is shared very unequally in the labor force this counters the established view that unemployment is a small risk short duration phenomenon which arises when re incidence is not considered

belief based refinements in signalling games abstract there are many economic problems which when modelled as games of incomplete information give rise to many sequential equilibria severely limiting the usefulness of the model there has recently been a large literature devoted to refining the set of equilibria in order to reduce this multiplicity by restricting the set of admissible disequilibrium beliefs this paper argues that the logical foundations of some refinements and the equilibria they focus on are problematic and further proposes an alternative refinement that avoids the difficulties we also provide an existence theorem covering a broad class of signalling games often studied in economics journal of economic literature classification numbers c72 c70 d82

can training and employment subsidies combat european unemployment active policy evaluation problems methods and results european countries with poorly performing labour markets and labour market institutions conducive to high unemployment also feature considerable expenditures on active labour market policy and such policies are emphasized by the european union s employment strategy however the practice of these programmes evaluation is much less well developed in europe than in the united states we outline key issues facing such evaluation and offer a review and formal assessment of european evaluation studies over the last three decades we find that programme effects are very heterogeneous across types of interventions and target groups that training and job search assistance can be effective and that the young among the unemployed are typically difficult to assist jochen kluve and christoph m schmidt

how do different entitlements to unemployment benefits affect the transitions from unemployment into employment abstract in portugal duration of benefits is exclusively age determined while replacement rates are essentially uniform we exploit differences in potential maximum duration of benefits for nearly matched pairs of individuals to determine the effects of benefit duration on job finding

market externalities of large unemployment insurance extension programs we provide evidence that unemployment insurance affects equilibrium conditions in the labor market which creates significant market externalities we provide a framework for identification of such equilibrium effects and implement it using the regional extension benefit program rebp in austria which extended the duration of ui benefits for a large group of eligible workers in selected regions of austria we show that non eligible workers in rebp regions have higher job finding rates lower unemployment durations and a lower risk of long term unemployment we discuss the implications of our results for optimal ui policy jel e24 j64 j65 r23

the impact of the potential duration of unemployment benefits on the duration of unemployment abstract this paper examines the impact of the potential duration of unemployment insurance ui benefits on unemployment in the united states first we use a large sample of household heads to examine differences in the unemployment spell distributions of ui recipients and nonrecipients sharp increases in the escape rate from unemployment both through recalls and new job acceptances are apparent for ui recipients around the time of benefits exhaustion such increases are not apparent at similar points of spell duration for nonrecipients second our analysis of accurate administrative data from 12 states indicates that a one week increase in potential benefit duration increases the average duration of the unemployment spells of ui recipients by 0 16 to 0 20 weeks

the college to work transition during the 1990s evidence from sweden this article analyses the time it takes for swedish college graduates to start a full time job that lasts for 6 months or more the focus is on the transition over time during the period 1991 to 1999 this period covers both upturns and downturns of the business cycle providing a unique opportunity to consider the importance of the timing of graduation the results show that the risk of unemployment and the unemployment duration have varied considerably with the business cycle both within and between cohorts for example the field of education is of more importance for the outcomes during recessions further the relative risk of unemployment has decreased over time for individuals with the highest degree of education whereas the unemployment duration has increased indicating that the selection into unemployment for this group may have changed over time this is interesting not least in the light of the sharp expansion of the higher educational system during the study period

do benefit cuts boost job finding swedish evidence from the 1990s in june 1995 the swedish parliament decided to cut the replacement rate in unemployment insurance from 80 percent to 75 percent a change that took effect on january 1 1996 this paper examines h

intertemporal price discrimination dynamic arrivals and changing values we study the profit maximizing price path of a monopolist selling a durable good to buyers who arrive over time and whose values for the good evolve stochastically the setting is completely stationary with an infinite horizon contrary to the case with constant values optimal prices fluctuate with time we argue that consumers randomly changing values offer an explanation for temporary price reductions that are often observed in practice

education signalling with preemptive offers offers before workers complete their education workers cannot commit to turning down such offers offers are private so that workers are unable to use one firm s offer in an attempt to elicit better offers from other firms in the unique sequential equilibrium outcome of the model with unproductive education there is no wasteful education when education is productive the standard model predicts that more able individuals become overeducated to separate themselves from less able workers in our model less able workers become overeducated to partially pool with more able workers the pooling mutes the incentives of high ability workers who in consequence actually choose to become undereducated we examine the robustness of our result to modifications to the basic model

unemployment duration unemployment benefits and labor market programs in sweden abstract standard search theory as well as some empirical evidence suggest that an unemployed individual s probability of entering employment increases as he approaches the time when unemployment benefits are due to expire this pattern may not carry over to a country like sweden where labor market programs are targeted at the long term unemployed at risk of benefit exhaustion the paper examines transitions out of unemployment using data on unemployed individuals in sweden a semi parametric competing risks model for transitions to employment labor market programs and non participation is estimated there is some evidence that the exit rate from unemployment to employment increases as benefit exhaustion is approached

the electoral consequences of the washington consensus this paper assesses how electoral outcomes in both presidential and legislative elections in latin america have been affected by the adoption of economic policies that seek to improve macroeconomic stability and facilitate the functioning of markets the database includes 17 latin american countries for the period 1985 2002 and a total of 66 presidential and 81 legislative elections the set of testable hypotheses is derived from a review of the literature and is structured around the hypothesis of economic voting it is found that i the incumbent s party is rewarded for reductions in the rate of inflation and to a lesser extent for increases in the rate of growth ii the more fragmented or ideologically polarized the party system the higher the electoral rewards of reducing the inflation rate or raising the economic growth rate iii voters care not only about economic outcomes but also about some of the policies adopted while the electorate seems blind to macroeconomic policies such as fiscal or exchange rate policies it is averse to pro market policies irrespective of their effects on growth or inflation and iv the electorate is more tolerant of pro market reforms when the incumbent s party has a more market oriented ideology these results suggest that reforming parties have paid a hefty price for the adoption of pro market reforms except when such reforms have been undertaken in conjunction with stabilization policies in high inflation economies

the role of commitment in bilateral trade abstract this paper characterizes the set of equilibrium payoffs in bargaining with interdependent values when the informed party makes all offers as discounting vanishes the seller of a good is informed of its quality which affects both his cost and the buyer s valuation but the buyer is not to characterize this payoff set we derive an upper bound using mechanism design with limited commitment we then prove that this upper bound is tight by showing that all its extreme points are equilibrium payoffs our results shed light on the role of different forms of commitment in bargaining in particular they imply that the buyer s inability to commit before observing the terms of trade is what precludes efficiency

public vs private offers in the market for lemons we study the role of observability in bargaining with correlated values short run buyers sequentially submit offers to one seller when previous offers are observable bargaining is likely to end up in an impasse in contrast when offers are hidden agreement is always reached although with delay

duration dependence versus unobserved heterogeneity in treatment effects swedish labor market training and the transition rate to employment summary the effect of a treatment on the hazard rate of a duration outcome may depend on the elapsed time since treatment in addition treatment effects may be heterogeneous across agents the former gives rise to duration dependence of the treatment effect whereas unobserved heterogeneity gives rise to spurious duration dependence of the observable hazard rate we develop a model allowing for duration dependence and unobserved heterogeneity in the treatment effect the model incorporates a timing of events model and allows for selectivity on unobservables we prove identification exploiting variation in the timing of treatment and outcome in the application we analyze the effects of the swedish vocational employment training program on the individual transition rate from unemployment to work we demonstrate the appropriateness of the approach by studying the enrollment process the data cover the population and include multiple unemployment spells for many individuals the results indicate a large significantly positive effect on exit to work shortly after exiting the program the effect at the individual level diminishes after some weeks when taking account of the time spent in the program the effect on the mean unemployment duration is small copyright 2012 john wiley sons ltd

deciphering the causes for the post 1990 slow output recoveries abstract this paper explores the causes for the slow output recoveries in the u s since 1990 via estimating a time varying parameter vector autoregressive model with stochastic volatilities the model incorporates routine employment as a share of total employment and two financial variables to simultaneously evaluate the roles of labor market related and credit related factors in determining output dynamics based on the estimated model the counterfactual experiments highlight the crucial roles of routine biased technological changes and structural changes that shift investment dynamics in explaining post 1990 slow output recoveries

does unemployment compensation affect unemployment duration abstract we use a flexible hazard rate model with unrestricted spell duration and calendar timeeffects to analyse a dataset including all norwegian unemployment spells during the1990 s the dataset provides a unique access to conditionally independent variation inunemployment compensation we find that a marginal increase in compensation re duces the escape rate from unemployment significantly irrespective of business cycleconditions and spell duration the escape rate rises sharply in the months just prior tobenefit exhaustion while men are more responsive than women with respect to mar ginal changes in compensation women are most responsive with respect to benefitexhaustion keywords unemployment spells business cycles unemployment compensation non parametric duration analysis jel classification c41 j64 the ragnar frisch centre for economic research oslo we wish to thank the re search council of norway for financial support and christian brinck harald goldstein costas meghir espen moen steinar strom rolf aaberge and three anonomyous referees for helpful comments cor respondence to knut roed the ragnar frisch centre for economic research gaustadalleen 21 0349oslo norway e mail knut roed frisch uio no

the swedish unemployment experience by international standards unemployment in sweden remained remarkably low throughout the 1970s and the 1980s in the early 1990s however the unemployment rate increased sharply and hit double digit levels the paper argues that the steep rise in unemployment was mainly the result of a series of adverse macroeconomic shocks partly self inflicted by bad policies and partly caused by unfavourable international developments the extremely contractionary monetary policy in 1992 appears to have had strong and long lasting effects on unemployment institutional factors do not appear as convincing explanations of the steep rise in unemployment in the early 1990s

unemployment benefit duration and incentives in britain how robust is the evidence abstract recent years have seen considerable advances in the econometric treatment of micro data in models of unemployment duration this paper examines the evidence from such models concerning the effects of unemployment benefits on incentives to work in britain widely accepted results of a small but significant benefit effect are reproduced using a sample of 1 231 unemployed men however these results are only found when benefit receipt is assumed to follow a hypothetical pattern which is shown to be unrealistic and over generous when more realistic calculations of benefits are used no benefit effect is found the paper also argues that search theory is of little help in determining the choice between competing functional forms and explanatory variables results concerning benefits are shown to be sensitive to the latter

unemployment insurance in welfare states the impacts of soft duration constraints based on a major reform of norwegian unemployment insurance ui we examine the behavioral impacts of soft and hard ui duration constraints a constraint is interpreted as hard if a claimant cannot rely on any form of income support after exhaustion and as soft if ui is replaced by follow on benefits or participation in active labor market programs almp we find that both hard and soft constraints raise the job hazard significantly with surprisingly similar spikes at ui exhaustion participation in almp raises the probability of eventually finding a job but at the cost of lengthening the overall job search period

unemployment duration and competing risks evidence from sweden the determinants of unemployment duration are studied in the presence of multiple exits out of unemployment the results indicate that state aggregation may be a severe problem in empirical analysis of a labor market such as the one in sweden estimating a joint model for all transitions out of unemployment leads to biased estimates since different transitions are governed by different mechanisms the results also indicate positive duration dependence in both transitions to regular employment and transitions out of the labor force but no duration dependence in transitions to public labor market programs i introduction during the last decade we have witnessed a rapidly expanding literature on the determinants of unemployment duration the main motivation for this development is that a large share of the increasing unemployment rates in most western economies since the mid 1970s may be attributed to increased unemployment duration see e g the survey by lofgren and engstrom 1988 most empirical studies formulate an estimating equation for the determinants of the outflow from unemployment in terms of the hazard function which describes the conditional probability of leaving unemployment these studies are typically based on an explicit or implicit assumption that the only relevant transition out of unemployment is reemployment in this paper it is argued that such an assumption which amounts to assuming that all transitions from unemployment are governed by the same mechanism may lead to state aggregation bias we have no a priori reason to believe that e g increased education has the same effect on transitions from unemployment to employment as on transitions from

learning about the arrival of sales abstract we analyse optimal stopping when the economic environment changes because of learning a primary application is optimal selling of an asset when demand is uncertain the seller learns about the arrival rate of buyers as time passes without a sale the seller becomes more pessimistic about the arrival rate when the arrival of buyers is not observed the rate at which the seller revises her beliefs is affected by the price she sets learning leads to a higher posted price by the seller when the seller does observe the arrival of buyers she sets an even higher price

do mature economies grow exponentially abstract in academic discussions and in public debate economic growth is commonly presumed to be exponential economic theories model growth in an exponential manner and central policy institutions regard growth rates of 2 3 to be normal also implying growth to be exponential in this paper we investigate empirically whether economic growth is indeed exponential by estimating autoregressive integrated moving average time series models based on gross domestic product data for 18 mature economies from 1960 to 2013 our findings cast doubts on whether these commonly discussed economic growth paths reflect the economic reality only two out of 18 mature countries depict exponential growth rates above these levels five have lower exponential growth and the development of eleven countries exhibit rather linear growth additionally we show that prominent theories of economic growth assume growth to be exponential and that a more heterogeneous set of theories is needed to explain different patterns of growth across time and space

income dynamics in argentina during the 1990 s mobiles did change over time in this paper we seek to determine the principal observed socioeconomic factors correlated with household income dynamics in argentina during the nineties in other words we want to identify who got ahead who fell behind and who kept up economic position in argentina in order to determine if they were always the same type of individuals households or if on the contrary their characteristics changed during the distressing 1990 s such analysis is relevant since the rises and falls in income or consumption experienced by households are the most direct indicators available of who benefits how much from economic development although there is a vast literature on income distribution analysis from a cross sectional perspective studies offering insights into the dynamics of income or more generally of economic well being and the factors associated with it are still on the research agenda for many countries such work has been particularly delayed in developing countries chiefly because of a lack of panel data surveys which have only recently begun to be carried out in a more systematic way 4 moreover and again due to data restraints even less is known about the possible changes in the dynamics of income over time if mobility analysis requires at least two observations over time from the same household or

the dynamo and the computer an historical perspective on the modern productivity paradox the dynamo and the computer an historical perspective on the modern productivity paradox author s paul a david source the american economic review vol 80 no 2 papers and proceedings of the hundred and second annual meeting of the american economic association may 1990 pp 355 361 published by american economic association stable url http www jstor org stable 2006600 accessed 08 12 2010 01 40

selling a lemon under demand uncertainty we consider a seller who has private information about the quality of her good but is uncertain about buyer arrivals assuming that the high quality seller insists on a price we show that the low quality seller s surplus and pricing strategy crucially depend on buyers knowledge about the demand state if they are also uncertain about demand then demand uncertainty increases the low quality seller s expected payoff and her optimal strategy is to lower the price after some time if buyers know the demand state then demand uncertainty does not affect the low quality seller s payoff but she must employ a sophisticated pricing strategy

an evaluation of the swedish system of active labour market programmes in the 1990s we investigate the presence of short and long term effects from joining a swedish labor market program vis a vis more intense job search in open unemployment overall the impact of the program system is found to have been mixed joining a program has increased employment rates among participants a result robust to a misclassification problem in the data on the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits exhaustion

benefit duration unemployment duration and job match quality a regression discontinuity approach summary we use a sharp discontinuity in the maximum duration of benefit entitlement to identify the effect of extended benefit duration on unemployment duration and post unemployment outcomes employment stability and re employment wages we address dynamic selection which may arise even under an initially random assignment to treatment estimating a bivariate discrete time hazard model jointly with a wage equation and correlated unobservables owing to the non stationarity of job search behavior we find heterogeneous effects of extended benefit duration on the re employment hazard and on job match quality our results suggest that the unemployed who find a job close to and after benefit exhaustion experience less stable employment patterns and receive lower re employment wages compared to their counterparts who receive extended benefits and exit unemployment in the same period these results are found to be significant for men but not for women copyright 2012 john wiley sons ltd

asset price bubbles and technological innovation we introduce borrowing constraints into a two sector schumpeterian growth model and examine the impact of asset price bubbles on innovation in this environment rational bubbles arise when the intermediate good producing r d sector is faced with adverse productivity shocks importantly these bubbles help alleviate credit constraints and facilitate innovation in the stagnant economy on the policy front we make a case for debt financed credit to the r d sector further we establish that a constant credit growth rule akin to the friedman rule outperforms the often prescribed counter cyclical lean against the wind credit policy jel e32 e44 o40

sequential bargaining with correlated values the paper analyzes an infinite horizon sequential bargaining game with one sided offers between a buyer and a seller when the buyer s valuation depends on the seller s the seller knows the value of the object and the buyer does not the influence of relative discount factors on the solution is studied it is shown for example that an impasse may result if the buyer offeror is too impatient relative to the seller the buyer makes a single take it or leave it offer

digitalization and energy consumption does ict reduce energy demand abstract this article investigates the effect of digitalization on energy consumption using an analytical model we investigate four effects 1 direct effects from the production usage and disposal of information and communication technologies ict 2 energy efficiency increases from digitalization 3 economic growth from increases in labor and energy productivities and 4 sectoral change tertiarization from the rise of ict services the analysis combines empirical and theoretical findings from debates on decoupling energy consumption from economic growth and from debates on green it and ict for sustainability our main results effects 1 and 3 tend to increase energy consumption effects 2 and 4 tend to decrease it furthermore our analysis suggests that the two increasing effects prevail so that overall digitalization increases energy consumption these results can be explained by four insights from ecological economics a physical capital and energy are complements in the ict sector b increases in energy efficiency lead to rebound effects c ict cannot solve the difficulty of decoupling economic growth from exergy d ict services are relatively energy intensive and come on top of former production in future digitalization can only boost sustainability when it fosters effects 2 and 4 without promoting effects 1 and 3

are we entering the age of involuntary degrowth promethean technologies and declining returns of innovation any reflections on an eventual transition towards a degrowth society have to take into account the current crisis in the dominant system and question whether the latter will be able to grow again or not in order for the latter to happen the role played by technological innovation is crucial this paper starts by reconsidering georgescu roegen s definition of promethean techniques and tainter s principle of declining marginal returns with the aim of providing within the common framework of the theory of complex systems a sound theoretical basis for the analysis of the rise and fall of complex societies the main purpose is to verify whether after the last promethean revolution a great wave emerged or not the second part of the paper presents an initial investigation into this hypothesis using total factor productivity growth as an indicator of marginal returns on innovation 1750 2015 despite the limitations implicit in the use of this indicator data show three cycles of innovation corresponding to the first second and third industrial revolutions but of different magnitude and duration in particular the whole cycle that began with the first industrial revolution in england around 1750 reached a peak in the u s in the nineteen thirties and later declined following a trend that basically confirms the great wave hypothesis even recent innovations resulting from the ict revolution however considerable do not seem capable of counteracting this long term trend data on returns on innovation seem therefore to be coherent with evidence provided by research in other fields energy mineral resources agriculture health education and scientific research showing that advanced capitalist societies have entered a phase of declining marginal returns or involuntary degrowth with possible major effects on the system s capacity to maintain its present institutional framework

optimal experimentation in a changing environment this paper studies optimal experimentation by a monopolist who faces an unknown demand curve subject to random changes and who maximizes profits over an infinite horizon in continuous time we show that there are two qualitatively very different regimes determined by the discount rate and the intensities of demand curve switching and the dependence of the optimal policy on these parameters is discontinuous one regime is characterized by extreme experimentation and good tracking of the prevailing demand curve the other by moderate experimentation and poor tracking moreover in the latter regime the agent eventually becomes trapped into taking actions in a strict subset of the feasible set

search with adverse selection this paper analyzes a sequential search model with adverse selection we study information aggregation by the price how close the equilibrium prices are to the full information prices when search frictions are small we identify circumstances under which prices fail to aggregate information well even when search frictions are small we trace this to a strong form of the winner s curse that is present in the sequential search model the failure of information aggregation may result in inefficient allocations

unemployment durations and local labour market conditions abstractunemployment durations vary across local authority districts in the uk we explore the extent to which this variation is explained by differences in local labour demand as opposed to compos

bargaining with common values this paper examines a bargaining model with asymmetric information in which the private valuations of the two bargaining agents are correlated it shows that equilibria in such models typically exhibit a significant probability of a significant delay to agreement the paper characterizes the unique perfect bayesian equilibrium to the game in which an uninformed buyer makes offers to a privately informed seller it also shows by example that in this framework bargainers may rationally break off negotiations even in the presence of commonly known gains from trade

unemployment duration and economic incentives a quasi random assignment approach abstract we investigate how economic incentives and spell duration affect hazard rates out of insured unemployment we take into account that insured unemployment not always ends in employment but also in disability training programs or benefit sanctions our empirical basis is norwegian register data containing variation in economic incentives and spell duration similar to that of random assignment experiments we find that the employment and benefit sanction hazards are negatively affected by the unemployment insurance replacement ratio but that the effects vary considerably among individuals there is negative duration dependence in the employment hazard and positive duration dependence in the disability hazard

competition between employed and unemployed job applicants swedish evidence we use the swedish applicant database to investigate empirically whether being unemployed per se reduces the probability of getting contacted by a firm all searchers looking for a new job are invited to submit their personal details to this database over the internet since we have access to exactly the same information as the firms we can minimize the problems associated with unobserved heterogeneity our results show that an unemployed applicant faces a lower contact probability than an otherwise identical employed applicant thus supporting the notion that firms view employment status as a signal of productivity

secular stagnation a supply side view secular stagnation on the supply side takes the form of a slow 1 6 percent annual growth rate of us potential real gdp roughly half the 3 1 percent annual growth rate of actual real gdp realized from 1972 to 2004 this slowdown stems from a sharp decline in the growth rate of aggregate hours of work and of output per hour this paper attributes the productivity growth decline to diminishing returns in the digital revolution that had its peak effect business hardware software and best practices in the late 1990s but has resulted in little change in those methods over the past decade

sick of being unemployed interactions between unemployment and sickness insurance this paper examines the incentive effects of interactions between unemployment insurance ui and sickness insurance si two important components of sweden s social insurance system the main topic is how the sickness report rate among the unemployed is affected by i the limit of 300 workdays for ui benefits and ii the difference in maximum compensation between ui and si benefits results obtained by duration analysis suggest that sick reports increase as the ui benefit expiration date approaches there is also evidence of an incentive effect on the sick report rate because si offers higher compensation than ui

in search of complementary assets the determinants of alliance formation of high tech start ups abstract why do new technology based firms ntbfs cooperate starting from teece s teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence based tradition and in the social structure perspective we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm specific characteristics and the nature of the alliance in particular a distinction is made between exploitative commercial alliances and explorative technological alliances the econometric estimates based on a large sample of italian young high tech firms that are observed from 1994 to 2003 provide strong evidence supporting two key intuitions of teece s work first the combination of specialized complementary assets appears to be a key driver of the formation of exploitative commercial alliances by ntbfs more specifically patent holding affects positively the likelihood to establish commercial alliances but this propensity is found to rapidly decrease with firm size suggesting that as long as ntbfs become larger and possess specialized commercial assets their urge for commercial alliances diminishes second following the parallelism set forth by teece between search for alliance partners and access to external financing the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller ntbfs in this respect our results clearly support the view that sponsor institutions as public research organizations venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance

unemployment insurance and unemployment spells this paper tests the effects of the level and length of unemployment insurance benefits on unemployment durations the paper particularly studies individual behavior during the weeks just prior to when benefits lapse higher unemployment insurance benefits are found to have a strong negative effect on the probability of leaving unemployment however the probability of leaving unemployment rises dramatically just prior to when benefits lapse individual data are used with accurate information of spell durations and the level and length of benefits the semiparametric estimation techniques used in the paper yield more plausible estimates than conventional approaches and provide useful diagnostics copyright 1990 by the econometric society

the effects of labour market policies in an economy with an informal sector in this article we build an equilibrium search and matching model of an economy with an informal sector our model extends mortensen and pissarides 1994 by allowing for ex ante worker heterogeneity with respect to formal sector productivity we use the model to analyse the effects of labour market policy on informal sector and formal sector output on the division of the workforce into unemployment informal sector employment and formal sector employment and on wages finally we examine the distributional implications of labour market policy specifically we analyse how labour market policy affects the distributions of wages and productivities across formal sector matches in this article we construct a search and matching model that we use to analyse the effects of labour market policies in an economy with a significant informal sector what we mean by an informal sector is a sector that is unregulated and hence not directly affected by labour market policies such as severance or payroll taxes we find that labour market policies that apply only to the formal sector nonetheless affect the size and the composition of employment in the informal sector this is important since there is substantial economic activity in the informal sector in many economies particularly in developing countries estimates for some latin american countries put the informal sector at more than 50 of the urban work force 1 the informal sector is also important in many transition countries as well as in some developed economies 2 although much of the literature treats the informal sector as a disadvantaged sector in a segmented labour market framework this interpretation is not consistent with recent empirical evidence from latin america under a segmented or dual labour market interpretation one would expect jobs to be rationed in the primary sector and workers to be in the secondary or informal sector involuntarily and to be queuing for formal sector jobs maloney 2004 presents evidence for several latin american countries that challenges this view and instead interprets the informal sector as an unregulated micro entrepreneurial sector similarly using data from the argentinian household survey pratap and quintin 2006 reject the notion that labour markets are segmented in the greater buenos aires area concluding that there is no evidence of a formal sector wage premium after controlling for individual and establishment we thank mauricio santamaria for stimulating conversations that inspired our interest in this topic we also thank bob hussey and fabien postel vinay as well as our editor steve pischke and two anonymous

effects of manpower policies on duration dependence in re employment rates the example of sweden in contrast to the evidence from other countries swedish studies of the transition from unemployment to employment have consistently reported a non negative duration dependenice in the hazard this study examines the extent to which this results from large scale labour market programmes a limited duration of unemployment benefits or differences among available jobs the labour market programmes are here found to be the primary factor behiind the earlier swedish results the programmes thus pick up those with the worst employment prospects thereby postponing a decrease in the re employment probability among job searchers this in turn generates an on average constant duration dependence

improving incentives in unemployment insurance a review of recent research abstract this paper provides a review of the recent literature on how incentives in unemployment insurance can be improved we are particularly concerned with three instruments i e the duration of benefit payments or more generally the time sequencing of benefits monitoring in conjunction with sanctions and workfare our reading of the theoretical literature is that the case for imposing a penalty on less active job search is fairly solid a growing number of empirical studies including randomized experiments are in line with this conclusion

revenue management without commitment dynamic pricing and periodic flash sales a seller has a fixed number of goods to sell by a deadline at each time he posts a regular price and decides whether to hold a flash sale over time buyers privately enter the market and strategically time their purchases if a buyer does not purchase when she arrives she can pay an attention cost to recheck the regular price afterwards or she can wait for future flash sales where she may obtain a good at a discounted price in the unique markov perfect equilibrium the seller sporadically holds flash sales to lower the stock of goods a flash sale increases the willingness to pay of future buyers but decreases the willingness to pay of buyers who arrive early in the game when it is very likely that a buyer will obtain a good in a flash sale the seller holds a big initial flash sale for all but one unit of the good

the home selling problem theory and evidence this paper formulates and solves the problem of a homeowner who wants to sell their house for the maximum possible price net of transactions costs including real estate commissions the optimal selling strategy consists of an initial list price with subs equent weekly decisions on how much to adjust the list price until the home is sold or withdrawn from the market the solution also yields a sequence of reservation prices that determine whether the homeowner should accept bids from potential buyers who arrive stochastically over time with an expected arrival rate that is a decreasing function of the list price this model was developed to provide a theoretical explanation for list price dynamics and bargaining behavior observed for a sample of homeowners in england in a new data set introduced by

temporary disability insurance and labor supply evidence from a natural experiment most developed countries have compulsory insurance programs for temporary disability that is cash benefits for non work related sickness despite the economic significance of these programs little is known about their effects on work absenteeism or labor supply we exploit a policy reform that consisted of the abolishment of a waiting day together with an increase of cash benefits for short sick leaves we find that the total number of days of sickness absence was reduced by the reform which is likely due to the fact that the abolishment of the waiting period made it less costly for workers to be absent for short periods

how shortening the potential duration of unemployment benefits affects the duration of unemployment evidence from a natural experiment in this article we investigate the disincentive effects of shortening the potential duration of unemployment insurance ui benefits we identify these disincentive effects by exploiting changes in slovenia s unemployment insurance system a natural experiment that involved substantial reductions in the potential duration of benefits for four groups of workers plus no change in benefits for another group which served as a natural control we find that the change had a positive effect on the exit rate from unemployment to new jobs and other options for unemployment spells of various lengths and for several categories of unemployed workers

dormancy risk and expected profits of consumer loans abstract a bank that lends money to a household faces two types of risk frequently mentioned is the risk of default seldom referred to is the risk of an early redemption of the loan leading to dormancy in this paper we model the transition of consumer loans from an active to a dormant state to this end we use data on 4786 individuals who were granted credit by a swedish lending institution between september 1993 and august 1995 and estimate a semi parametric duration model we analyze the factors that determine the time to maturity on consumer loans and investigate the ability of the model to match the maturities observed in the data moreover we derive the distribution of conditional expected durations of loans and show how a loan application can be evaluated by calculating its expected profit