The fallacy of the lump of labour theory: Evidence for Latin America

In a context of population ageing, this article analyses the “lump of labour” theory using empirical evidence from Latin America. Instead of finding a crowding-out effect, estimations using a fixed effects model on a panel of annual data drawn from household surveys in 11 countries between 2002 and 2019 suggest a positive correlation between the employment rates of older adults and young people. Additionally, results show a positive association between the labour incomes of older and young workers. These findings could indicate that an expansion in the employment of older adults maintains economic growth and, therefore, a greater demand for labour, which could be supplied by young people.     

Convergence criteria for interval-valued inequality indices

In this paper we introduce an interval-valued inequality index for random intervals based on a convex function. We show that if this function does not grow faster than x ^p , then the inequality index is continuous on the space of random intervals with finite p-th moment. A bound for the distance between the inequality indices of two random intervals is also constructed. An example is presented to motivate and illustrate the developments in this paper.     

Automatic Specification Testing for Vector Autoregressions and Multivariate Nonlinear Time Series Models

This article introduces an automatic test for the correct specification of a vector autoregression (VAR) model. The proposed test statistic is a Portmanteau statistic with an automatic selection of the order of the residual serial correlation tested. The test presents several attractive characteristics: simplicity, robustness, and high power in finite samples. The test is simple to implement since the researcher does not need to specify the order of the autocorrelation tested and the proposed critical values are simple to approximate, without resorting to bootstrap procedures. In addition, the test is robust to the presence of conditional heteroscedasticity of unknown form and accounts for estimation uncertainty without requiring the computation of large-dimensional inverses of near-to-singularity covariance matrices. The basic methodology is extended to general nonlinear multivariate time series models. Simulations show that the proposed test presents higher power than the existing ones for models commonly employed in empirical macroeconomics and empirical finance. Finally, the test is applied to the classical bivariate VAR model for GNP (gross national product) and unemployment of Blanchard and Quah (1989 Blanchard, O. and Quah, D. 1989. “The Dynamic Effects of Aggregate Demand and Supply Disturbances,”. The American Economic Review, 79: 655–673. [Web of Science ®] , [Google Scholar]) and Evans (1989 Evans, G. W. 1989. “Output and Unemployment Dynamics in the United States: 1950–1985,”. Journal of Applied Econometrics, 4: 213–238. [Crossref], [Web of Science ®] , [Google Scholar]). Online supplementary material includes proofs and additional details.     

An Experiment on Rational Insurance Decisions

We describe the results of an experiment on decision making in an insurance context. The experiment was designed to test for the underlying rationality of insurance consumers, where rationality is understood in usual economic terms. In particular, using expected utility as the preference function, we test for positive marginal utility, risk aversion, and decreasing absolute risk aversion, all of which are normal postulates for any microeconomic decision context under uncertainty or risk. We find that there the discrepancy from rational decision making increases with the sophistication of the rationality criteria, that irrationality concerning fair premium contracts is uncharacteristically high, and that the slope of absolute risk aversion seems to depend on the format of the insurance contract. This revised version was published online in June 2006 with corrections to the Cover Date.     

Efficient Wald Tests for Fractional Unit Roots

In this article we introduce efficient Wald tests for testing the null hypothesis of the unit root against the alternative of the fractional unit root. In a local alternative framework, the proposed tests are locally asymptotically equivalent to the optimal Robinson Lagrange multiplier tests. Our results contrast with the tests for fractional unit roots, introduced by Dolado, Gonzalo, and Mayoral, which are inefficient. In the presence of short range serial correlation, we propose a simple and efficient two‐step test that avoids the estimation of a nonlinear regression model. In addition, the first‐order asymptotic properties of the proposed tests are not affected by the preestimation of short or long memory parameters.     

Consistent Estimation of Models Defined by Conditional Moment Restrictions

In econometrics, models stated as conditional moment restrictions are typically estimated by means of the generalized method of moments (GMM). The GMM estimation procedure can render inconsistent estimates since the number of arbitrarily chosen instruments is finite. In fact, consistency of the GMM estimators relies on additional assumptions that imply unclear restrictions on the data generating process. This article introduces a new, simple and consistent estimation procedure for these models that is directly based on the definition of the conditional moments. The main feature of our procedure is its simplicity, since its implementation does not require the selection of any user‐chosen number, and statistical inference is straightforward since the proposed estimator is asymptotically normal. In addition, we suggest an asymptotically efficient estimator constructed by carrying out one Newton–Raphson step in the direction of the efficient GMM estimator.     

DISENFRANCHISEMENT IN LINGUISTICALLY DIVERSE SOCIETIES: THE CASE OF THE EUROPEAN UNION

We consider a linguistically diversified society and examine the notion of language disenfranchisement when some individuals are denied the full access to documents and political process in their native tongues. To calculate the disenfranchisement indices we use the Dyen percentage cognate matrix of linguistic distances between Indo‐European languages and apply survey and population data on language proficiency in the European Union. We then determine optimal sets of official languages that depend on society's sensitivity against disenfranchisement and comprehensiveness of the chosen language regime. We also discuss the language situation in the European Union after its last enlargement. (JEL: D70, O52, Z13)     

The dynamics of remittance behaviour among Senegalese men and women in Spain

This article explores the conditions under which Senegalese immigrants in Spain send remittances home, beginning with the premise that remittances are intertwined with migration histories and migrants’ incorporation into host societies. Given the strong gender norms in Senegal, we perform separate analyses for men and women. We use a longitudinal approach to analyse how remittance behaviour is affected by immigrants’ characteristics, their economic integration, and their ties to origin and destination. Our data come from the MAFE and MESE surveys, which were implemented in 2008 and 2011, respectively. The results indicate that remitters constitute a clear majority among Senegalese immigrants in Spain. The Kaplan–Meier analysis shows that they rarely stop remitting once they start doing so, and the multivariate analysis reveals a strong positive association between employment and remittance sending. Although most coefficients in the full model are similar for men and women, some important differences emerge as well.     

Analysis of the response structure to a set of questions with large number of scale points: a new combined metric and categorical approach

In the field of social sciences, certain tasks, such as the identification of typologies and the characterization of groups of individuals according to a set of questions, tend to pose a challenge for researchers. Further complications arise if the chosen rating scale is from 0 to 10, since the responses can be treated either as metric or categorical variables. This paper shows that neither treatment is able on its own to capture all the inherent properties of this type of data, and goes on to propose a bicriteria clustering approach, which captures both perspectives and enables the simultaneous analysis of mixed data using multiple tables.     

The Drivers of Voluntary Transparency in Nonprofits: Professionalization and Partnerships with Firms as Determinants

This research analyzes the drivers of voluntary transparency in nonprofit organizations (NPOs). Particularly, we assess the influence of key internal and external resource providers—paid staff and business partners—on the extent to which NPOs make accessible relevant information about themselves for public scrutiny on a voluntary basis. First, we conceptualize transparency as one of the critical dimensions of accountability and explain how it has become a key issue for NPOs. Second, we discuss professionalization and business–nonprofit partnerships as business-oriented strategies directly connected to the main challenges (and controversies) NPOs face. Third, following institutional theory as core theoretical framework, we propose a set of hypotheses linking those strategies to transparency. Their influence will be measured through an empirical research based on a survey to a representative sample of 325 NPOs. Regression analysis and probit models will be used to test the hypotheses. The results confirm the positive effects of both professionalization and partnerships, although each strategy influences different dimensions of transparency.