ISO 45001 and controversial transnational private regulation for occupational health and safety

This article analyses the genesis of the ISO 45001 standard on occupational health and safety, a new initiative of transnational private regulation. The authors draw a picture of controversy from interviews with stakeholders involved in its design, approval and initial dissemination, and from a qualitative content analysis of the internal documentation of the committee responsible for its approval. Like its predecessors relating to environmental management – ISO 14001 – and corporate social responsibility – ISO 26000 – this new standard raises serious concerns among stakeholders given that it deals with substantive political, social and legal issues.     

Consumption Over the Life Cycle

This paper estimates a structural model of optimal life‐cycle consumption expenditures in the presence of realistic labor income uncertainty. We employ synthetic cohort techniques and Consumer Expenditure Survey data to construct average age‐profiles of consumption and income over the working lives of typical households across different education and occupation groups. The model fits the profiles quite well. In addition to providing reasonable estimates of the discount rate and risk aversion, we find that consumer behavior changes strikingly over the life cycle. Young consumers behave as buffer‐stock agents. Around age 40, the typical household starts accumulating liquid assets for retirement and its behavior mimics more closely that of a certainty equivalent consumer. Our methodology provides a natural decomposition of saving and wealth into its precautionary and life‐cycle components.     

Reconciling Work, Family and Child Outcomes: What Implications for Family Support Policies?

This paper discusses the potential of family policies to reconcile the multiple objectives that they are expected to serve, over and above their role in offsetting the economic cost of children. We start by emphasizing the need to consider the multiple challenges that family policies in European Union??and/or OECD??countries have to address through a broadening of the standard economic approach to the cost of children. Policies indeed aim to reduce the ??direct?? monetary cost of raising children, but they also aim to minimise the indirect cost arising from the incidence of children on the parents?? work-life balance and on the aggregate level of employment. Moreover, motives for policy intervention such as concerns about child development, gender equity or aggregate fertility levels are not fully captured by cost measurements. We thus analyse how, and to what extent, family policies can successfully reconcile these multidimensional objectives. We offer a holistic approach, pointing out that a coherent family policy mix supporting working parents with preschool children is the only way to reconcile or limit the conflicts between work, family and child outcomes. Three main dichotomies are identified to explain cross-country differences in family policy packages: the emphasis on poverty alleviation; the supposed antagonism between fertility and female employment; and the potential conflict between this latter and child development. Ways to reconcile these objectives and to improve the effectiveness and efficiency of family policies are further discussed.     

Information Independence and Common Knowledge

In Bayesian environments with private information, as described by the types of Harsanyi, how can types of agents be (statistically) disassociated from each other and how are such disassociations reflected in the agents' knowledge structure? Conditions studied are (i) subjective independence (the opponents' types are independent conditional on one's own) and (ii) type disassociation under common knowledge (the agents' types are independent, conditional on some common‐knowledge variable). Subjective independence is motivated by its implications in Bayesian games and in studies of equilibrium concepts. We find that a variable that disassociates types is more informative than any common‐knowledge variable. With three or more agents, conditions (i) and (ii) are equivalent. They also imply that any variable which is common knowledge to two agents is common knowledge to all, and imply the existence of a unique common‐knowledge variable that disassociates types, which is the one defined by Aumann.     

Separating curvature and elevation: A parametric probability weighting function

This paper presents a preference foundation for a two-parameter family of probability weighting functions. We provide a theoretical link between the well-established notions of probabilistic risk attitudes (i.e., optimism and pessimism) used in economics and the important independent measures for individual behavior used in the psychology literature (i.e., curvature and elevation). One of the parameters in our model measures curvature and represents the diminishing effect of optimism and pessimism when moving away from extreme probabilities 0 and 1. The other parameter measures elevation and represents the relative strength of optimism vs. pessimism. Our empirical analysis indicates that the new weighting function fits elicited probability weights well, and that it can explain differences in the treatment of probabilities for gains compared to that for probabilities of losses.     

A robust coefficient of determination for regression

To assess the quality of the fit in a multiple linear regression, the coefficient of determination or R² is a very simple tool, yet the most used by practitioners. Indeed, it is reported in most statistical analyzes, and although it is not recommended as a final model selection tool, it provides an indication of the suitability of the chosen explanatory variables in predicting the response. In the classical setting, it is well known that the least-squares fit and coefficient of determination can be arbitrary and/or misleading in the presence of a single outlier. In many applied settings, the assumption of normality of the errors and the absence of outliers are difficult to establish. In these cases, robust procedures for estimation and inference in linear regression are available and provide a suitable alternative.     

THE JOINT DESIGN OF UNEMPLOYMENT INSURANCE AND EMPLOYMENT PROTECTION: A FIRST PASS

Unemployment insurance and employment protection are typically discussed and studied in isolation. In this paper, we argue that they are tightly linked, and we focus on their joint optimal design in a simple model, with risk‐averse workers, risk‐neutral firms, and random shocks to productivity. We show that, in the “first best,”unemployment insurance comes with employment protection—in the form of layoff taxes; indeed, optimality requires that layoff taxes be equal to unemployment benefits. We then explore the implications of four broad categories of deviations from first best: limits on insurance, limits on layoff taxes, ex post wage bargaining, and ex ante heterogeneity of firms or workers. We show how the design must be modified in each case. Finally, we draw out the implications of our analysis for current policy debates and reform proposals, from the financing of unemployment insurance, to the respective roles of severance payments and unemployment benefits.