A Dynamic Model for the Cross‐sectional Distribution of Unemployment Rates

This paper proposes a model to describe the continuous time‐evolution of density of the cross‐sectional distribution of unemployment rates. The model is founded on the theory of analytical diffusion processes. The steady‐state distribution as well as the dynamic behaviour of the model are analytically derived. Parameters in the resulting analytical expressions are then fitted to US regional data. The empirical portion of the paper illustrates the usefulness of modeling the temporal evolution of the cross‐sectional distribution of unemployment rate, rather than simply attending to equilibrium implications of the process.     

Self‐financing Unemployment Insurance and Bargaining Structure

Abstract. This study examines how the size of trade unions relative to the labor force impacts on the desirability of different organizational forms of self‐financing unemployment insurance (UI). For this purpose, we compare the outcome of a model with a uniform payroll tax to a model where workers pay taxes according to their systematic risk of unemployment. Our results highlight the importance of the bargaining structure for the assessment of a particular UI scheme. Most importantly, it depends on the relative size of the unions whether efficiency favors a uniform or a differentiated UI scheme.     

The Employment–Hours Trade‐off: Theory and an Application to the Portuguese Case

Abstract. Using traditional production theory, it is possible to estimate production functions in which hours per worker and number of workers hired are treated as endogenous and chosen by the firm, priced respectively by the variable hourly wage and the so‐called quasi‐fixed unit cost. The available data suggested the use of Cobb–Douglas or CES specifications or the use of two‐stage separable technologies, with a second‐level Cobb–Douglas being possible. Quasi‐fixed costs were associated with legal social security payments, which were also conditioned by the data. The estimates for the Portuguese metal products and engineering industries — using cross‐section evidence for 1987 — showed that disaggregation of the labor input is empirically justifiable, and total man‐hours employed and the numbers of workers hired are complements in production. Hours per worker respond negatively to the variable hourly wage and positively to the quasi‐fixed unit cost. Nevertheless, in our framework, this would be so by construction. Total labor costs increase with both the hourly wage and the quasi‐fixed unit costs.     

Kurt Lewin's Field Theory: A Review and Re‐evaluation

Field theory was central to Kurt Lewin's work yet, after his death, interest in it declined significantly until the 1990s when a variant, force field analysis, became widely used. This paper examines the origins, purpose and continuing relevance of field theory. It especially looks at the influences of gestalt psychology, topology and Ernst Cassirer's philosophy of science on its development. It argues that Lewin's attempt to replace conventional topology with his own Lewinian mathematics‐based topology in pursuit of scientific rigour resulted in the undermining of its relevance. The paper also compares force field analysis with Lewin's original conception of field theory and shows that it has significant weaknesses in terms of rigour. It concludes that a return to Lewin's original conception of field theory, based on gestalt psychology and conventional topology, can provide academics and practitioners with a valuable and much‐needed approach to managing change.     

A Value Measure for Public‐Sector Enterprise Risk Management: A TSA Case Study

This article presents a public value measure that can be used to aid executives in the public sector to better assess policy decisions and maximize value to the American people. Using Transportation Security Administration (TSA) programs as an example, we first identify the basic components of public value. We then propose a public value account to quantify the outcomes of various risk scenarios, and we determine the certain equivalent of several important TSA programs. We illustrate how this proposed measure can quantify the effects of two main challenges that government organizations face when conducting enterprise risk management: (1) short‐term versus long‐term incentives and (2) avoiding potential negative consequences even if they occur with low probability. Finally, we illustrate how this measure enables the use of various tools from decision analysis to be applied in government settings, such as stochastic dominance arguments and certain equivalent calculations. Regarding the TSA case study, our analysis demonstrates the value of continued expansion of the TSA trusted traveler initiative and increasing the background vetting for passengers who are afforded expedited security screening.     

Unemployment and Retirement in a Model with Age‐specific Heterogeneity

This paper presents a model where young and old workers compete for one type of jobs in the presence of retirement opportunity. Within this framework, we show that increased retirement opportunities (such as a decrease of the retirement age) has most of the time a depressing impact on the unemployment rate. Indeed the number of vacancies posted by firms is influenced by the probability that an old worker is going into retirement. We show that the degree to which younger workers are influenced by retirement of older workers depends on the relative productivity of young and older workers. It is only when older workers are much more productive than young workers that retirement may benefit to unemployment.     

Toward a Theory of Whistleblowing Intentions: A Benefit‐to‐Cost Differential Perspective*

In order to rescue information technology (IT) projects when they go awry, it is critical to understand the factors that affect bad news reporting. Whistleblowing theory holds promise in this regard and a number of salient factors that may influence whistleblowing intentions have been identified. However, an integrative theory that explains how they influence whistleblowing intentions has been conspicuously absent. In this research, we introduce and test a middle‐range theory of whistleblowing that can explain how and why a variety of factors may influence an individual's whistleblowing intentions. Drawing on the social information processing perspective, we propose that individuals holistically weigh the perceived “benefit‐to‐cost differential” and that this mediates the relationship between whistleblowing factors and whistleblowing intentions. Tests using data collected from 159 experienced IT project managers largely support our theoretical perspective, in which the central explanatory variable (benefit‐to‐cost differential) significantly mediates a majority of the proposed relationships. Implications of these findings for research and practice are discussed.     

Employment Protection and the Incidence of Unemployment: A Theoretical Framework

Abstract. The present paper aims to analyse the effects of employment protection on a heterogeneous labour force. To this end, a standard matching model with employment protection has been extended to allow for the existence of two types of workers differing from each other only in the probability of becoming less productive while holding a job. In working out the model it turns out that in equilibrium workers with a relatively higher probability of becoming less productive face both a higher turnover and a longer duration of unemployment. Therefore, employment protection here raises the unemployment rate of this worker category, a result which looks consistent with consolidated evidence but contrasts with standard theoretical results.     

Coordinating Service‐Sensitive Demand and Capacity by Adaptive Decision Making: An Application of Case‐Based Decision Theory*

The subject of this article is the simultaneous choice of product price and manufacturing capacity if demand is stochastic and service‐level sensitive. In this setting, capacity as well as price have an impact on demand because several aspects of service level depend on capacity. For example, delivery time will be reduced if capacity is increased given a constant demand rate. We illustrate the relationship between service level, capacity, and demand reaction by a stylized application problem from the after‐sales services industry. The reaction of customers to variations in service level and price is represented by a kinked price‐demand‐rate function. We first derive the optimal price‐capacity combination for the resulting decision problem under full information. Subsequently, we focus on a decision maker (DM) who lacks complete knowledge of the demand function. Hence the DM is unable to anticipate the service level and consequently cannot identify the optimal solution. However, the DM will acquire additional information during the sales process and use it in subsequent revisions of the price‐capacity decision. Thus, this decision making is adaptive and based on experience. In contrast to the literature, which assumes certain repetitive procedures somewhat ad hoc, we develop an adaptive decision process based on case‐based decision theory (CBDT) for the price‐capacity problem. Finally, we show that a CBDT DM in our setting eventually finds the optimal solution, if the DM sets the price based on absorption costs and adequately adjusts the capacity with respect to the observed demand.     

A Context‐sensitive Approach to Analysing Talk in Strategy Meetings

The talk of managers in meetings is central to organizational life and crucial to research in strategic management, as well as managerial and organizational cognition, sensemaking and decision‐making. To achieve full understanding, both the text and the context of discussion require systematic analysis, but most approaches treat context as everything that is known and observed beyond the immediate text. This obscures different readings of the text of meetings. To resolve this problem, the discourse historical approach (DHA) to critical discourse analysis is outlined as a framework within which researchers can analyse the text and context of talk in meetings. The primary contribution of this paper is to isolate four ‘levels of context’ as a heuristic framework within which discursive practices, strategies and texts can be located. By making explicit the levels of contextual analysis that are implicit in other methods, and illustrating the DHA using an episode of strategic discussion from a multinational company, this paper shows how researchers can use the approach to analyse the naturally occurring talk of senior managers in meetings, which is arguably the most important but yet under‐explored venue for strategizing.     

Self‐Control and the Theory of Consumption

To study the behavior of agents who are susceptible to temptation in infinite horizon consumption problems under uncertainty, we define and characterize dynamic self‐control (DSC) preferences. DSC preferences are recursive and separable. In economies with DSC agents, equilibria exist but may be inefficient; in such equilibria, steady state consumption is independent of initial endowments and increases in self‐control. Increasing the preference for commitment while keeping self‐control constant increases the equity premium. Removing nonbinding constraints changes equilibrium allocations and prices. Debt contracts can be sustained even if the only feasible punishment for default is the termination of the contract.     

Efficiency‐wage Unemployment and Economic Welfare in a Model of Endogenous Growth

This paper examines positive and normative implications of efficiency‐wage‐induced unemployment within a model of endogenous growth. Sector‐specific impacts of the wage rate on labour efficiency establish a correlation between the growth rate and the rate of unemployment. The sign of this correlation is determined by the intersectoral wage differential. Despite the existence of unemployment, decisive positive properties of the full‐employment model are preserved. However, welfare implications of the full‐employment model may be reversed. The optimal policy can be to reduce growth, while at the same time raising unemployment.     

Robust Estimation and Inference for Jumps in Noisy High Frequency Data: A Local‐to‐Continuity Theory for the Pre‐Averaging Method

We develop an asymptotic theory for the pre‐averaging estimator when asset price jumps are weakly identified, here modeled as local to zero. The theory unifies the conventional asymptotic theory for continuous and discontinuous semimartingales as two polar cases with a continuum of local asymptotics, and explains the breakdown of the conventional procedures under weak identification. We propose simple bias‐corrected estimators for jump power variations, and construct robust confidence sets with valid asymptotic size in a uniform sense. The method is also robust to certain forms of microstructure noise.     

A Theory of the Firm with Non‐binding Employment Contracts

This paper examines an employment relation in which individual workers enjoy some bargaining power vis‐a‐vis the firm although they are not unionized. The main elements of the situations studied here are that the employment contracts are non‐binding across periods of production and that the firm has opportunities to replace workers. The paper analyzes a dynamic model in which the processes of contracting and recontracting between the firm and its workers are intertwined with the dynamic evolution of the firm's workforce. The analysis of the model is somewhat complicated because the employment level is a nondegenerate state variable that evolves over time and is affected by past decisions. The main analytical results characterize certain important equilibria: the profit maximizing and stationary equilibria. The unique stationary equilibrium is markedly inefficient: it exhibits inefficient over‐employment and the steady state wages coincide with the workers' reservation wage. It confirms earlier results derived by Stole and Zwiebel (1996a, b) in the context of a static model and shows that they are very robust even when the firm has nearly frictionless hiring opportunities. In contrast, in the profit maximizing equilibrium the outcome is nearly efficient and the wage exhibits a mark‐up over the reservation wage.     

Rotten Parents and Disciplined Children: A Politico‐Economic Theory of Public Expenditure and Debt

This paper proposes a dynamic politico‐economic theory of fiscal policy in a world comprising a set of small open economies, whose driving force is the intergenerational conflict over debt, taxes, and public goods. Subsequent generations of voters choose fiscal policy through repeated elections. The presence of young voters induces fiscal discipline, that is, low taxes and low debt accumulation. The paper characterizes the Markov‐perfect equilibrium of the voting game in each economy, as well as the stationary equilibrium debt distribution and interest rate of the world economy. The equilibrium can reproduce some salient features of fiscal policy in modern economies.     

Unemployment Flows in Finland, 1969–95: A Time Series Analysis

We adopt a flow approach to analyse Finnish unemployment experience during the last three decades. In addition to data on short-term and total outflow and inflow rates from a relatively long period beginning in 1969, we also have data on duration-specific outflow rates for the period 1984 I–96 II which encompasses the spectacular increase in unemployment in the early nineties. The empirical study shows that both the inflow and the outflow is mainly driven by variation in job opportunities. For a given vacancy-unemployment ratio, the outflow rate has fallen because of changes in unemployment compensation, demographic structure and emigration. The outflow has been only marginally affected by long-term unemployment. The results indicate that the beneficial effects of labour market policies on long-term unemployment are to some extent counteracted by substitution effects.     

Job Stability Trends,Lay‐offs,and Transitions to Unemployment in West Germany

This paper examines the evolution of different aspects of job stability, notably the termination reasons and the transition states. We estimate Semi‐Parametric Cox Hazard Models with competing risks for West Germany and find an increasing hazard of job ending that is driven by an increasing hazard of being laid off, primarily. One explanation found is that men with fixed‐term contracts face increasing risks of being displaced. In accordance with the technological change hypothesis we also find that men with a high degree of non‐routine interactive tasks face a declining risk of displacement.     

中国失业问题与财政政策研究

失业是市场经济运行中各国以及我国社会经济发展面临的一大难题。促进就业、控制失业率是各国政府的宏观调控目标之一和不可推卸的责任。本报告从理论与实践的结合上,深入研究失业与宏观调控及财政政策的关系,揭示当前我国政府及财政促进就业政策的成效和问题,并在借鉴国际经验的基础上,进一步提出了近期我国缓解失业压力、建立促进就业长效机制的宏观对策思路和财政政策取向。