what drives deregulation economics and politics of the relaxation of bank branching restrictions this paper investigates private interest public interest and political institutional theories of regulatory change to analyze state level deregulation of bank branching restrictions using a hazard model we find that interest group factors related to the relative strength of potential winners large banks and small bank dependent firms and losers small banks and the rival insurance firms can explain the timing of branching deregulation across states during the last quarter century the same factors also explain congressional voting on interstate branching deregulation while we find some support for each theory the private interest approach provides the most compelling overall explanation of our results

why are there so many long term sick in britain this paper examines the upward trend of numbers in receipt of invalidity benefit the major contributory benefit for the long term sick in britain since 1971 possible explanations include the rising level of unemployment through much of the period the heightened link between ill health and early retirement changes in the real level of benefits and changes in the composition of the workforce these possibilities are examined using a variety of methodologies time series cross section and fixed effects models copyright 1991 by royal economic society

a million off incapacity benefit how achievable is labour s target since 1997 welfare reform has been a defining feature of the uk s labour government this article assesses the extent to which the new aspiration to reduce the number of incapacity benefit claimants by one million within 10 years is deliverable the assessment is based on a model of flows on and off incapacity benefits and their impact on the stock of claimants in particular the analysis takes account of the major geographical variations in the distribution of incapacity claimants and the ability of britain s divergent regional economies to absorb substantial numbers of extra workers the article concludes that without an accelerated revival in the economies of the north scotland and wales labour looks set to fall short of the one million target

productive efficiency performance of minority and nonminority owned banks a nonparametric approach abstract this study examines the efficiency performance of the minority owned banks mobs as multiproduct firms relative to that of the nonminority banks nmobs using a highly flexible nonparametric approach since mobs and nmobs employ distinct technologies the efficiency indices for the two groups are derived relative to their respective group specific frontiers and are contrasted to shed light on the ownership efficiency relationship the mob sample is then disaggregated and the intra group efficiency differentials are investigated the findings support the hypothesis that abstracting the regional regulatory size and maturity characteristics of banks efficiency differentials between mobs and nmobs are statistically insignificant

credit union policies and performances in latin america this paper presents a conceptual framework for explaining credit unions cus loan delinquency and profitability in developing countries it also offers an empirical estimation for a unique sample of cus in latin america

the dominance of inefficiencies over scale and product mix economies in banking abstract this study measures and analyzes inefficiencies for all u s banks in 1984 inefficiencies are measured relative to a thick frontier cost function and are found to dominate measured scale and product mix economies most inefficiencies are operational in nature involving the overuse of physical inputs rather than financial involving overpayment of interest also technical inefficiencies proportionate overuse of all inputs dominate allocative inefficiencies improper mix of inputs these results suggest that competitive pressures in banking from deregulation will be focused primarily on banks that do not control costs rather than on those of a particular size or product mix

panel estimates of the determinants of british regional male incapacity benefits rolls 1998 2006 this article explores the determinants of the proportion of the working age male population claiming incapacity benefits ib across the 11 british government office regions for the period 1998 to 2006 three different approaches are adopted to modelling register dynamics first treating ib stocks as if they were trend stationary albeit with persistence and estimating reduced form models for their logs second treating ib stocks as if they were nonstationary and examining their long run determinants plus short run equilibrium reversion properties third focusing on the determinants of gross inflows and outflows that together drive ib stocks given the nature of the data no approach is ideal yet the models provide reasonably robust evidence that labour market changes specifically falling unemployment rates and rising real earnings have contributed to falling male ib stocks over the period

expense preference behavior in the savings and loan industry neoclassical microeconomic theory traditionally has assumed that the decision process in the firm is guided by the objective of profit maximization a number of economists have suggested however that managers may pursue goals which maximize personal utility rather than firm profitability 1 10 11 23 24 conditions under which managerial discretion may be substituted for profit maximization include weak competition in the product or service market a high degree of regulation and the separation of ownership and control under these conditions managers have greater opportunity to indulge in discretionary expenditures and the pursuit of managerial emoluments that is managers may seek to achieve a higher level of personal utility via higher salaries additional staff and other perquisites for which they have positive preferences in general this results in an expansion of expenditures beyond the profit maximizing level and a suboptimal x inefficient use of resources within the firm the expense preference theory of the firm recently received considerable support by the work of edwards 3 in which he developed a test to distinguish between expense preference and profit maximizing behavior upon application of this test to the banking industry edwards found that the number of employees and bank expenditures on wages and salaries are higher in noncompetitive banking markets

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

savings savings and loan ownership structure and expense preference reply abstract we present counterarguments to the points krinsky and thomas make and express confidence with our original conclusions and the tests that support them

banks responses to deregulation profits technology and efficiency the deregulation of interest rates in the early 1980s raised bank funding costs and lowered profits in response banks raised fees for deposit services reduced branch operating costs and shifted to higher earning assets rates of return did not regain their prederegulation levels until the early 1990s our goal is to decompose the change in bank profits following deregulation into i intemal bank initiated adjustments to the new regulatory structure and ii external contemporaneous changes in banks business environment this decomposition will depend in part on the assumed competitive structure of the banking industry with perfect competition output and input prices are part of the external environment and banks responses are limited to changes in output and input quantities an alternative approach assumes imperfect competition where banks have some control over output prices deposit fees minimum balance requirements and interest rates on certain loans and output quantities and input prices comprise the external environment the altemative model is supported by the data using this model large banks but not smaller banks are found to have relied primarily on changing output prices and input use to mitigate and reverse the negative effects of deregulation on profits the adjustment to deregulation was essentially complete after four years following this additional changes in bank profitability during the late 1980s were primarily due to changes in banks business environment

why do disability benefit rolls vary between regions a review of the evidence from the usa and the uk mcvicar d 2006 why do disability benefit rolls vary between regions a review of the evidence from the usa and the uk regional studies 40 519 533 over the last 30 years many organization for economic co operation and development oecd countries have seen a dramatic rise in the share of the working age population receiving earnings replacement sickness and disability benefits the reasons behind this growth particularly for the usa but also to a lesser extent elsewhere have been extensively researched in the economics literature what have been less well researched are the large spatial differences in the size of disability benefit rolls that have emerged in some countries over this period the uk displays a distinct regional pattern where working age men and women in the north are considerably more likely to be claiming disability benefits than those in the south the usa has its own version of the north south divide with many southern states displaying disproportionately large disabilit

savings and loan ownership structure and expense preference abstract this paper studies the influence of ownership structure on managerial expense preference behavior the hypothesis is that the greater the diffusion of ownership the weaker is the monitoring by owners and the greater is the degree of expense preference behavior whereas expense preference behavior affects inputs particularly on the job consumption of managers well functioning managerial labor markets should resolve the problem by equating the total compensation of managers across firms of different ownership structures a more serious problem however is the potential impact of expense preference behavior on output evidence from the savings and loan industry is adduced indicating that the more diffuse ownership structures associated with mutuality exhibit greater agency costs through the expansion of inputs and outputs beyond profit maximizing levels

going onto invalidity benefit a study for women 1977 78 1983 84 the main form of state insurance for long term sickness in britain is invalidity benefit there has been a dramatic growth in the stock of claimants on this benefit since its introduction in 1971 a logit model is fitted to explain at the individual level the probability of entering invalidity benefit among over 50 000 women in 1977 8 and over 65 000 in 1983 4 demographic characteristics played a powerful role in this model pay and benefit rates were also significant married women s entry probabilities were highly sensitive to local labour market conditions and much more so than other population groups

economies of diversification in the banking industry abstract this paper defines a new measure economies of diversification to examine the cost effect of product line expansion this measure is a special case of expansion path subadditivity and contains economies of scope as a special case a nonparametric frontier technique which isolates the effects of inefficiency and scale is used to measure economies of diversification applied to a set of 468 u s depository institutions operating in 1984 we find slight diseconomies of diversification diseconomies of diversification and inefficiency due to the overutilization of resources are found to be more important determinants of bank costs than is the failure to operate at optimal scale

do government purchases affect unemployment we estimate the effect of government purchases on unemployment in 20 oecd countries for the period 1980 2007 an increase in government purchases equal to one percent of gdp is found to reduce unemployment by about 0 3 percentage points in the same year the effect is greater and more persistent under less employment friendly labour market institutions and greater and more persistent under a fixed exchange rate regime than under a floating regime the effect is also greater in downturns than in booms the effect on unemployment reflects a corresponding positive effect of increased government purchases on the employment to population rate this article is protected by copyright all rights reserved

self screening in targeted public transfer programs the self screening properties of initial eligibility determination a mechanism often under the control of the administrators of targeted transfer programs are derived and the use of this mechanism in the social security disability insurance system is explored empirically an increase in the rigor of initial eligibility screening may discourage potential applicants because they are unaware of appeal prospects and because the eligibility decision delay is lengthened as denied applicants are forced to appeal their claims in the disability program a 10 percent increase in the initial denial rate induces a 4 percent decrease in applications self selection is nonperverse

savings and loan ownership structure and expense preference abstract this note demonstrates that the conclusion of the akella and greenbaum 1988 study that managers of mutual s ls exhibit more expense preference behavior than managers of stockholder owned s ls is premature it is shown that in operationalizing their theoretical model a g introduce an endogenous variable in their correction for homogeneity invalidating their results the only firm conclusion which can be drawn from their results is that a higher proportion of assets of mutual s ls is invested in loans while a higher proportion of liabilities are sourced from deposits than is the case for stockholder owned s ls

frontier estimation and firm specific inefficiency measures in the presence of heteroscedasticity the purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers a heteroscedastic cost frontier model is developed and estimated using bank cost data similar to that used by ferrier and lovell our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process we find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one sided error term

a note on savings and loan ownership structure and expense preference a re examination this study extends the work of akella and greenbaum journal of banking finance 12 1988 419 through the use of a much larger nationwide sample of us saving and loan associations and supports their original finding of significant expense preference behavior in mutual savings and loans during their original study period 1979 80 this study also provides evidence that over the time period of substantial deregulation and changes in the competitive environment in the us financial services industry expense preference behavior for savings and loans decreased the results are consistent with the idea that the removal of barriers that restrict competition should improve managerial efficiency in firms that survive 2003 elsevier b v all rights reserved

the impact of economic regulation on attempts to curb expense preference behavior a micro data analysis of ceo compensation schemes for electric utilities this study uses a large micro data set to present evidence which suggests that owners of regulated electric utilities have little incentive to structure ceo compensation packages in an effort to curb potential expense preference behavior because such potential behavior occurs or would occur at no cost to the firm or the firm s owners little incentive exists to structure compensation schemes in a way that would curb such behavior e g by compensating them with incentive bonus plans and stock options the results presented here augment those which examine other industries e g banking in an effort to point out the relationships between ownership organization political involvement and expense preference behavior

the impact of economic conditions on participation in disability programs evidence from the coal boom and bust abstract we examine the impact of the coal boom of the 1970 s and the coal bust of the 1980 s on disability program participation these shocks provide clear evidence that as the value of labor market participation increases disability program participation falls for the disability insurance program the elasticity of payments with respect to local earnings is between 0 3 and 0 4 and for supplemental security income the elasticity is between 0 4 and 0 7 consistent with a model where qualifying for disability programs is costly the relationship between economic conditions and program participation is much stronger for permanent than for transitory economic shocks

a stock flow analysis of the welfare caseload this paper reconsiders the methods used in previous studies to assess the welfare caseload movements during the 1990s we develop a model in which the welfare caseload is the net outcome of past flows onto and off of the caseload and show that such a stock flow model can explain some of the anomalous findings in previous studies we then estimate the stock flow model using california administrative data we find that approximately 50 percent of the caseload decline in california can be attributed to the declining unemployment rate these estimates are more robust and larger than those obtained when applying more typical methods to the same california data

testing for expense preference behavior mutual versus stock savings and loans this article investigates expense preference behavior in the savings and loan industry previous studies used an intercept test and in general concluded that managers of mutual s ls exhibit expense preference behavior i derive the necessary and sufficient conditions on cost functions for the intercept test to be valid these restrictions are rejected for the savings and loan industry stock and mutual s ls have different cost structures and both have non cobb douglas production technologies i derive a new more general test for expense preference behavior that does not require the restrictive assumptions of the intercept test the results of this test do not support earlier conclusions of managerial expense preferences