Perspectives on Risk Management

The development of the techniques of risk assessment and management are considered, noting the early emphasis on quantitative approaches. The basic strategies available to governments for risk management—educational, economic, and regulatory—are discussed. Six specific issues are considered with reference to the Canadian experience and the lessons learned. These are: the separation of risk assessment from risk management; the uncertainties of science; the weakness of numerical comparisons; too great a trust in education; the Great White Father Syndrome; and regulatory perils. This examination shows a number of inadequacies in the application of risk management techniques. It is suggested that knowledge of the limitations of quantitative assessment in its application to decision-making together with the involvement of those affected by the risk in the decision-making processes will lead to greater success.     

Labor market participation in France: an asymptotic least squares analysis of couples’ decisions

This paper examines the interactions between spouses’ decisions to join the labor force. We use the asymptotic least squares method in order to estimate a system of equations with limited dependent variables. We find that when spouse’s decision-making is modeled as simultaneous, this affects primarily the man’s participation equation who appears to be positively influenced by whether the woman works or not, by the number of children and by the birth of a child. The woman’s decision to participate is not affected by whether the man participates or not and depends negatively of the number of children and the birth of a child. This implies that there is a female leadership in decisions to participate in the labor market and that the added-worker effect should be reinterpreted as a function of demography rather than unemployment.

Italy: A fundamental transformation of the pension system

Italy completely transformed its pension system in 1995. The reform undertaken is of unequalled magnitude in industrialized countries. The main innovations introduced comprise the creation of a single scheme covering all employees, as well as the self-employed; the adoption of a new method of calculation linking the pension amount to contributions; and the introduction of a flexible retirement age. In addition, measures have been foreseen to encourage the development of funded supplementary pension provision. This reform, which will transform the Italian pensions scene, is mainly the result of an agreement signed between the government and the confederations of trade unions.     

Twenty Years and Counting: Thoughts about Measuring the Upper Tail

This article first describes the main developments in measuring the upper tail of the income and wealth distributions over the last twenty years. Second, it points out some of the key methodological challenges and how better data could address them. Third, it discusses the academic and policy impacts of upper tail measurement.

     

Ambiguous life expectancy and the demand for annuities

In this paper, ambiguity aversion to uncertain survival probabilities is introduced in a static life-cycle model with a bequest motive to study the optimal demand for annuities. Provided that annuities’ return is sufficiently large, and notably when it is fair, positive annuitization is known to be the optimal strategy of ambiguity neutral individuals. Conversely, we show that the demand for annuities decreases with ambiguity aversion and that there exists a finite degree of aversion above which the demand is non-positive: the optimal strategy is then to either sell annuities short or to hold zero annuities if the former option is not available. To conclude, ambiguity aversion appears to be a relevant candidate for explaining the annuity puzzle.     

Vaccine clinical trials with dynamic borrowing of historical controls: Two retrospective studies

Traditional vaccine efficacy trials usually use fixed designs with fairly large sample sizes. Recruiting a large number of subjects requires longer time and higher costs. Furthermore, vaccine developers are more than ever facing the need to accelerate vaccine development to fulfill the public's medical needs. A possible approach to accelerate development is to use the method of dynamic borrowing of historical controls in clinical trials. In this paper, we evaluate the feasibility and the performance of this approach in vaccine development by retrospectively analyzing two real vaccine studies: a relatively small immunological trial (typical early phase study) and a large vaccine efficacy trial (typical Phase 3 study) assessing prophylactic human papillomavirus vaccine. Results are promising, particularly for early development immunological studies, where the adaptive design is feasible, and control of type I error is less relevant.     

Tensions between (Post)Bureaucratic and Neo-normative Demands: Investigating Employees’ Subjective Positions at EurAirport

The introduction of a neo-normative discourse in a (post)bureaucratic organization can result in tensions between the neo-normative injunction to be authentic and exhortations to fit with the ideal (post)bureaucratic organizational subject. Focusing on how shopfloor workers subjectively experience the tensions between neo-normative and (post)bureaucratic demands, this empirical investigation yielded three major contributions. First, it pinpointed and addressed significant gaps in existing studies of normative and neo-normative discourse. Second, the study better distinguished normative and neo-normative control on the basis of two tensions: (1) authenticity versus conformity; and (2) conflation versus differentiation between life and work. Third, the study identified four distinct subject positions that demonstrated how organizational participants creatively appropriate and strive to resolve these two tensions in a work setting that mixes normative and neo-normative control.     

Pareto models for top incomes and wealth

Top incomes are often related to Pareto distribution. To date, economists have mostly used Pareto Type I distribution to model the upper tail of income and wealth distribution. It is a parametric distribution, with interesting properties, that can be easily linked to economic theory. In this paper, we first show that modeling top incomes with Pareto Type I distribution can lead to biased estimation of inequality, even with millions of observations. Then, we show that the Generalized Pareto distribution and, even more, the Extended Pareto distribution, are much less sensitive to the choice of the threshold. Thus, they can provide more reliable results. We discuss different types of bias that could be encountered in empirical studies and, we provide some guidance for practice. To illustrate, two applications are investigated, on the distribution of income in South Africa in 2012 and on the distribution of wealth in the United States in 2013.