FROM FLEXIBILITY TO INSECURITY: HOW VERTICAL SEPARATION AMPLIFIES FIRM‐LEVEL UNCERTAINTY

This article presents a model where firms may endogenously externalize part of their production process. We start from the premise that adaptation to uncertainty cannot be contracted upon in the worker/employer relationship. Vertical separation then balances flexibility gains against hold‐up costs of opportunistic behavior by outside contractors. In equilibrium, the degree of separation is shown to depend on the degree of product market competition, contractor's bargaining power, and the volatility of demand shocks. Our main result is that an increase in the degree of vertical separation amplifies the elasticity to demand shocks of firms' sales and employment. It does not, however, amplify aggregate uncertainty. Evidence from firm‐level data is shown to be largely consistent with the main implications of our theory. (JEL: L16, L23, L24)     

How to ask sensitive multiple-choice questions

Motivated by recent failures of polling to estimate populist party support, we propose and analyze two methods for asking sensitive multiple-choice questions where the respondent retains some privacy and therefore might answer more truthfully. The first method consists of asking for the true choice along with a choice picked at random. The other method presents a list of choices and asks whether the preferred one is on the list or not. Different respondents are shown different lists. The methods are easy to explain, which makes it likely that the respondent understands how her privacy is protected and may thus entice her to participate in the survey and answer truthfully. The methods are also easy to implement and scale up.     

Premium Risk and Managed Care

This paper analyzes how individuals can insure premium risk and obtain high quality health insurance in a managed care environment. Insurers choose health care providers. Only a fraction of high risk individuals is unambiguously identifiable in front of a court. Premium insurance is not able to reach a first-best risk allocation while health insurers have an incentive to stint on quality under guaranteed renewable contracts. It is shown that a contract exists which can implement the first-best. This contract specifies payments to individuals and a third party upon switching to create a credible self-commitment by the insurer to provide high quality.     

Subjective Attendants of Unification and Transformation in Germany

The article is concentrated on negative aspects of quality of life, mainly anomie. Anomic attitudes have been thematized since the beginning of sociological analysis as phenomena accompanying rapid social change and economic crises. It is shown to what extent the processes of unification and transformation in Germany after 1990 are accompanied by a fragile perceived quality of life. That such a problematic has become virulent at the beginning of the nineteen-nineties indicates the fact that the unification of Germany and the transformation process of the former socialist states are undoubtedly part of the great rapid societal changes of the past decades.     

The savings behavior of temporary and permanent migrants in Germany

This paper examines the relative savings position of migrant households in West Germany paying particular attention to differences between temporary and permanent migrants. Our findings reveal significant differences in the savings rates between German natives and immigrants. If remittances are treated as savings, however, migrants who intend to return to their home country save significantly more than comparable natives. The results of a decomposition analysis indicate that slightly more than half of the differences in the savings rate between Germans and permanent migrants and almost 70% between temporary and permanent migrants can be attributed to differences in observable characteristics.     

On residual approximation in solution extension problems

The solution extension variant of a problem consists in, being given an instance and a partial solution, finding the best solution comprising the given partial solution. Many problems have been studied with a similar approach. For instance the Pre-Coloring Extension problem, the clustered variant of the Travelling Salesman problem, or the General Routing Problem are in a way typical examples of solution extension variant problems. Motivated by practical applications of such variants, this work aims to explore different aspects around extension on classical optimization problems. We define residue-approximations as algorithms whose performance ratio on the non-prescribed part can be bounded, and corresponding complexity classes. Using residue-approximation, we classify problems according to their residue-approximability, exhibit distinct behaviors and give several examples and first interesting results.     

The Effect of Visas on Migration Processes

The effectiveness of migration policies has been widely contested. However, because of methodological and conceptual limitations, evidence has remained inconclusive. Moreover, prior studies focus on the effects of policies on inflows and fail to assess the simultaneous effect of policies on outflows. This is essential from a theoretical point of view as immigration restrictions may reduce both inflows and outflows and, hence, overall circulation. This renders the effect of immigration restrictions on net migration theoretically ambiguous. To fill this gap, and using unique migration and visa data from the Determinants of International Migration (DEMIG) project, this paper assesses the short‐ and long‐term effects of travel visa policy regimes on bilateral immigration and emigration dynamics. The results suggest that travel visa policies significantly decrease inflows, but this effect is undermined by decreasing outflows of the same migrant groups. This confirms that migration restrictions decrease circulation and tend to encourage long‐term settlement, and thereby sharply reduce the responsiveness of migration to economic fluctuations in destination and origin societies. We also identify asymmetric policy effects with migration flows declining only very gradually after a visa introduction but increasing almost immediately after visa removal.     

The Gravity of High-Skilled Migration Policies

Combining unique, annual, bilateral data on labor flows of highly skilled immigrants for 10 OECD destinations between 2000 and 2012, with new databases comprising both unilateral and bilateral policy instruments, we present the first judicious cross-country assessment of policies aimed to attract and select high-skilled workers. Points-based systems are much more effective in attracting and selecting high-skilled migrants than requiring a job offer, labor market tests, and shortage lists. Offers of permanent residency, while attracting the highly skilled, overall reduce the human capital content of labor flows because they prove more attractive to non-high-skilled workers. Bilateral recognition of diploma and social security agreements foster greater flows of high-skilled workers and improve the skill selectivity of immigrant flows. Conversely, double taxation agreements deter high-skilled migrants, although they do not alter overall skill selectivity. Our results are robust to a variety of empirical specifications that account for destination-specific amenities, multilateral resistance to migration, and the endogeneity of immigration policies.     

That Man Behind the Curtain: Investigating the Sexual Online Dating Behavior of Men Who Have Sex With Men but Hide Their Same-Sex Sexual Attraction in Offline Surroundings

This study investigates how men who have sex with men (MSM) use chat and dating sites based on theories of stigma-related offline behavior and online self-disclosure. We hypothesize that hidden MSM (those who self-label as heterosexual or who hide their same-sex sexual attraction from family, friends, acquaintances, or a female romantic partner) differ from open MSM in how they behave on gay chat and dating sites and in offline gay venues. Drawing on a survey of 12,002 MSM, we show that hidden MSM tend to mask their identity on gay chat and dating sites while avoiding offline gay venues. They also focus more strongly on online sexual activities (e.g., masturbating during online chats) when using gay chat and dating sites. However, they spend the same amount of time on these sites, and they use them to initiate offline sexual encounters as often and as fast as open MSM.