“Making work pay” in a rationed labor market

This paper empirically analyzes the labor supply effects of two “making work pay” reforms in Germany. We provide evidence in favor of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than those with low earnings. We discuss our results more generally and with comparisons to the family-based tax credits in force in the US and the UK. For the evaluation of the policies, we apply a static structural labor supply framework and explicitly account for demand-side constraints by using a double-hurdle model.     

Behavior in the loss domain: An experiment using the probability trade-off consistency condition

In gambles with two or more outcomes, the two versions of prospect theory, i.e., original prospect theory and cumulative prospect theory, make use of different composition rules and therefore yield different valuations of gambles. We test these composition rules in the loss domain using the probability trade-off consistency condition. The probability trade-off consistency condition offers a convenient and efficient way to compare gambles under risk and decision makers’ behavior. Experimental findings suggest that the rank dependent version of prospect theory, or cumulative prospect theory, cannot be rejected in the loss domain while original prospect theory is clearly rejected when a certainty effect is taken into account.     

Adoption and Outcomes of ISO 14001: A Systematic Review

The objective of this paper is to analyze the adoption and outcomes of the ISO 14001 standard through a systematic review of the main studies on this issue published in peer‐reviewed journals between 1996 and 2015. The 94 papers analyzed make it possible to paint a comprehensive picture of the effectiveness of ISO 14001 in environmental management practices, performance in this area and social aspects such as employee awareness. The systematic review also sheds more light on the main pitfalls and success factors of the standard. Nevertheless, the similarities and even redundancies of the literature in terms of objectives, approaches and methods used tend to produce quite predictable and optimistic results, which do not reflect the complexity of the impact of ISO 14001. The paper highlights the importance of more diverse and critical approaches that might challenge the successful rhetoric of the dominant literature, which tends to focus on positive aspects and be limited to a few countries that are not representative of the wide international distribution of certification. The findings of this systematic review can also help managers in making decisions on the adoption and renewal of certification.     

DATA‐DRIVEN SMOOTH TESTS AND A DIAGNOSTIC TOOL FOR LACK‐OF‐FIT FOR CIRCULAR DATA

Two contributions to the statistical analysis of circular data are given. First we construct data‐driven smooth goodness‐of‐fit tests for the circular von Mises assumption. As a second method, we propose a new graphical diagnostic tool for the detection of lack‐of‐fit for circular distributions. We illustrate our methods on two real datasets.     

Monetary incentives in the loss domain and behavior toward risk: An experimental comparison of three reward schemes including real losses

In the loss domain, both practical and ethical considerations rule out the systematic use of an incentive-compatible procedure involving real losses. The experimental study presented here aims at investigating whether some easier-to-implement procedure could be adequately used. For that purpose, the subjects’ degree of risk aversion is compared across three payment conditions: a real-losses condition based on a random-lottery (incentive-compatible) system, which serves as a benchmark, and two challengers, namely a “losses-from-an-initial-endowment” procedure and a hypothetical-losses condition. As a by-product, our experimental design also allows us to investigate the impact of monetary incentives in the gain domain. The main result is twofold: no significant difference arises between the three payment conditions in the loss domain, while real and hypothetical choices significantly differ in the gain domain. Our results suggest that the use of monetary incentives may be more crucial in the gain domain than in the loss domain.     

Simple Bounds on the Value of a Reputation

We introduce entropy techniques to study the classical reputation model in which a long‐run player faces a series of short‐run players. The long‐run player's actions are possibly imperfectly observed. We derive explicit lower and upper bounds on the equilibrium payoffs to the long‐run player.     

DISTANCE TO RETIREMENT AND OLDER WORKERS‘ EMPLOYMENT: THE CASE FOR DELAYING THE RETIREMENT AGE

This paper presents empirical evidence and a theoretical foundation in favor of the view that the retirement age decision affects older workers' employment prior to retirement. To the extent that there are search frictions on the labor market, the return on jobs is determined by their expected duration: The time to retirement is then key to understanding older workers' employment. Countries with a retirement age of 60 are indeed characterized by lower employment rates for workers aged 55–59. Based on the French Labor Force Survey, we show that the likelihood of employment is significantly affected by the distance to retirement, in addition to age and other relevant variables. We then extend McCall's job search model by explicitly integrating life‐cycle features with the retirement decision. Using simulations, we show that the distance effect in interaction with the generosity of unemployment benefits and the depressed demand for older workers explains the low rate of employment just before the eligibility age for the Social Security pension. Finally, we show that implementing actuarially fair schemes not only extends the retirement age, but also encourages a more intensive job search by older unemployed workers. (JEL: J22, J26, H55)