Optimal income taxation with Kalai wage bargaining and endogenous participation

This paper characterizes the optimal redistributive tax schedule in a search–matching framework where (voluntary) nonparticipation and (involuntary) unemployment are endogenous and wages are determined by proportional bargaining à la Kalai. The optimal employment tax rate is given by an inverse elasticity rule. This rule depends on the global response of the employment rate, which depends not only on the participation (labor supply) responses, but also on the vacancy posting (labor demand) responses and on the product of these two responses. For plausible values of the parameters, our matching environment induces much lower employment tax rates than the usual competitive model with endogenous participation only. However, optimal employment tax rates are larger (in absolute value) when a given level of the global elasticity of employment is more due to search frictions and less due to participation responses.     

Distance,Transnational Arrangements,and Return Decisions of Senegalese,Ghanaian, and Congolese Migrants

This article examines the determinants of return of Senegalese, Ghanaian and Congolese migrants in Europe, and the extent to which their return decisions were linked to reasons and circumstances of their initial migration to Europe. We utilize the retrospective life history data collected by the MAFE Project in Senegal, Ghana and DR Congo and six European countries in order to understand whether and how changing conditions in both origin and destination countries, including policies, affect the migration dynamics between Sub‐Saharan Africa and Europe. The results show how the high cost entailed by this type of transcontinental long distance migration, reinforced by restrictive immigration policies, tend to delay and reduce return in comparison to shorter‐distance moves. In addition, brain circulation and transnational family arrangements seem to be at work and seriously question the dominant approach to admission and circulation policies in Europe.     

Micro-Flexibility and Macro-Rigidity: Some Notes on Expectations and the Dynamics of Aggregate Supply

ABSTRACT: The high macro supply elasticity experienced by industrialised countries during the second post-war boom is not explainable as the aggregate effect of current variations of companies’output in response to current variations of demand. A firm cannot adapt rapidly its output to higher demand unless it has decided fairly in advance to expand its productive capacity. Macro elasticity depends thus on the existence of ex ante excess capacity, built on the basis of expectations. The post-war boom is thus explained in terms of a virtuous sequence expectations-decisions-events. This approach helps in understanding the inversion of the expansionary phase to one of stag-flation, the failure of Keynesian policies and the subsequent industrial restructuring which gave rise to the present employment squeeze. Flexibility is something which depends on the relationships between individual expectations and decisions and their systemic results; the presently pursued micro-flexibility is at high risk of producing increasing macro-rigidity.     

The Management of Redundancies in Europe: The Case of Denmark

The paper presents the findings of comparative and interdisciplinary legal and economic study on managing labour redundancies in seven EU member countries. It is structured for comparability between the systems examined. The introductory section contains an account of the evolution of the Danish labour market, with special reference to redundancy trends, of the features of the programmes for managing redundancies, of the roles of firms and the ‘external environment’ in handling workforce adjustments. The second section presents a map of policies that work to prevent labour redundancies (preventive measures) such as flexibility, training etc. Next, the instruments for handling temporary labour redundancies (retentive measures) are examined (e.g. short-time working, temporary layoffs etc.). The following section is devoted to instruments and programmes involved in the management of permanent labour redundancies (expulsive measures), e.g. collective dismissals, severance pay etc. The final section provides an overall assessment of the Danish system for managing labour redundancies, and briefly discusses the national debate on the prospects for reform, in light of the principles and policies of convergence set forth by the European Union.     

Cognition and Behavior in Normal‐Form Games: An Experimental Study

This paper reports experiments designed to study strategic sophistication, the extent to which behavior in games reflects attempts to predict others’ decisions, taking their incentives into account. We study subjects’ initial responses to normal‐form games with various patterns of iterated dominance and unique pure‐strategy equilibria without dominance, using a computer interface that allowed them to search for hidden payoff information, while recording their searches. Monitoring subjects’ information searches along with their decisions allows us to better understand how their decisions are determined, and subjects’ deviations from the search patterns suggested by equilibrium analysis help to predict their deviations from equilibrium decisions.     

Floral morphology as the main driver of flower-feeding insect occurrences in the Paris region

Through the rapid expansion worldwide of impervious areas and habitat fragmentation, urbanization has strong consequences that must be understood to efficiently manage biodiversity. We studied the effects of urbanization on flower-feeding insects by using data from a citizen science program in the Parisian region. We analysed the occurrence of insects from 46 different families on flowers of different morphologies, using landscape indices in buffer areas from a 100-m to a 4000-m radius around 1194 sampled sites. Our aims were to determine (i) how the proportion of impervious area around sampled sites affected the occurrence of flower-feeding insect families and at which landscape scales impervious area calculations best predicted these occurrences; (ii) the effect of corolla shape variables on insect family occurrences. Twenty-one families were negatively impacted by increasing proportion of impervious areas (urbanophobic) and 3 were positively impacted (urbanophilic). Urbanophobic families were most affected by the proportion of impervious areas when it was estimated within buffers of 200-m to 1400-m radii, depending on the family. Notable losses of urbanophobic families were detected at less than 50% of impervious areas, which highlights the threat to the diversity of flower-feeding insects posed by urban sprawl. Corolla shape variables were the variables most often significantly implicated in the occurrence of insect families. Urbanophobic families were negatively affected by the tubular shape of flowers, and tubular corollas were found more often in urbanized areas. These results suggest that flora management might be a key component for the conservation of insect diversity in cities.     

Unemployment, Wage Pressure and Sectoral Shifts: Permanent and Temporary Consequences of Intersectoral Shocks

The main purpose of this study is to examine the effect of allocative disturbances using Italian labour market data and a VECM (vector error correction model). In order to measure sectoral shifts in labour demand, we use Neumann-Topel's [Neumann, G.R., & Topel, R.H. (1991). Employment risk, diversification, and unemployment. Quarterly Journal of Economics 106:1341–1365] employment-based dispersion index. In searching for a restricted cointegration space, we set down, and identify a stylized version of the battle of the mark-ups model. Lilien [Lilien, D. (1982). Sectoral shifts and cyclical unemployment. Journal of Political Economy 90:777–793] argued that an important part of cyclical unemployment comes from permanent shifts in the composition of labour demand. Our findings emphasize that an important source of the persistence of unemployment comes from sectoral shifts.