Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing

.disability; downsizing; layoffs; plant closing; social insurance; social interaction; welfare norms

Recruiting Older Workers: Realities and Needs of the Future Workforce

This chapter examines literature pertaining to the recruitment of older workers. It begins by addressing the question of relevance and why older worker recruitment matters. It then examines what is known about older workers, including their attitudes, motivations, and behaviors. Next the chapter addresses what employers are looking for in older workers and, more specifically, discusses the continuum of employers’ practices from those that aggressively try to attract and retain older workers and apply a conservation model of older worker management to those that apply a depreciation model and focus primarily on retrenchment and downsizing older employees. Finally, it addresses how employers can recruit older workers through changes in organizational policies and practices

BUSINESS BUZZWORDS: RIGHTSIZING, DOWNSIZING, RE-ENGINEERING, DE-LAYERING

The paper attempts to analyse the rise and use of a new vocabulary (economic buzzwords) related to staff dismissal in the new economy of the world. In this new economy, the organizational boundaries between states and firms become unclear and a new vocabulary has been conceived in order to express the changes the firms are undergoing. The new rhetoric includes buzzwords like privatization, de-regulation, re-engineering, rightsizing, downsizing, de-layering, quality service or global sourcing. The research is based on the conclusions of bibliographical and direct research of the literature relevant in the field, trying to emphasise the importance of strategic language when it comes to human resources management. Concepts like freedom of speech, politically correct language or non-discriminatory language are brought to attention and analysed focusing on their importance during periods of change and uncertainty characterising the economic environment nowadays. Two trends are depicted in the paper: the first is that of the supporters of political correctness who attempt to homogenize the language and thought to enhance the self-esteem of minorities. One approach to reaching this goal is to eliminate discriminatory or offensive words and phrases and the substitutions of harmless vocabulary at the expense of economy, clarity, and logic. Another approach is to deconstruct a word or phrase into its component parts, treat the component parts as wholes, and focus on secondary meanings of the component parts. On the other hand, reflecting upon the nature of large-scale organizational restructuring, there are the critics arguing that this type of language is a euphemistic form of phraseology. The analysis starts with the assumption that the economic lexis is not a rigid system of terms. Morphologically, there is a high degree of variety in productive types of compounding which exceeds the possibilities that exist in the common English vocabulary. In this view, four buzzwords (rightsizing, downsizing, re-engineering, de-layering) have been chosen as representative for this process and, also, due to the difficulty of translating them into Romanian. Also, the etymology of these buzzwords is analysed and by this the paper attempts to find why managers have adopted these as their favourite terms when discussing large-scale organizational restructuring.buzzwords, rightsizing, downsizing, re-engineering, de-layering

Disability in the Welfare State: An Unemployment Problem in Disguise?

Economies with low unemployment often have high disability rates. In Norway, the permanent disability insurance rolls outnumber registered unemployment by four to one. Based on administrative register data matched with firms' financial statements and closure data collected from bankruptcy proceedings, we show that a large fraction of Norwegian disability insurance claims can be directly attributed to job displacement and other adverse shocks to employment opportunities. For men, we estimate that job loss more than doubles the risk of entry to permanent disability and that displacements account for fully 28 percent of all new disability insurance claims. We conclude that unemployment and disability insurance are close substitutes.disability, displacement, social insurance, employment opportunities

Privatization and labor force restructuring around the world

Some critics of privatization argue that poor labor force restructuring is a key concern and that governments should establish better retrenchment programs. Using new data from a sample of 400 companies in the world, Chong and Lopez-de-Silanes test competing theories about the wisdom of retrenchment programs and theireffect on prices paid by buyers, and rehiring policies by private owners after privatization. The results show that adverse selection plagues retrenchment programs carried out by governments before privatization. Controlling for endogeneity, several labor retrenchment policies yield a negative impact on net privatization prices. In confirmation of the adverse selection argument, various types of voluntary downsizing lead to a higher frequency of rehiring of the same workers by the new private owners. Compulsory skill-based programs are the only type of program that is marginally associated with higher prices and lower rehiring rates after privatization, but the political and economic costs of this policy may make it somewhat impractical. While a qualified non-intervention policy appears to be the safest bet in labor retrenchment before privatization, another one might be to set up a social safety net or labor reallocation program before privatization, and then let the new private owners decide who is redundant and who is not. Setting up the program before privatization may help with the political viability of the process and letting the new owners manage the retrenchment may help avoid adverse selection.Environmental Economics&Policies,Banks&Banking Reform,Labor Policies,Municipal Financial Management,Financial Crisis Management&Restructuring,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Financial Crisis Management&Restructuring,Health Economics&Finance

Comparing the Economic and Conventional Approaches to Financial Planning

The conventional approach to retirement and life insurance planning, which is used throughout the financial planning industry, differs markedly from the economic approach. The conventional approach asks households to specify how much they want to spend before retirement, after retirement, and in the event of an untimely death of the head or spouse. It then determines the amounts of saving and life insurance needed to achieve these targets. The economic approach is based on the life-cycle model of saving. Its goal is to smooth households' living standards over their life cycles and to ensure comparable living standards for potential survivors. In the economic approach, spending targets are endogenous. They are derived by calculating the most the household can afford to consume in the present given that it wants to preserve that living standard in the future. Although spending targets under the conventional approach can be adjusted in an iterative process to approximate those derived under the economic approach, there are practical limits to doing so. This is particularly the case for households experiencing changing demographics or facing borrowing constraints. This paper illustrates the different saving and insurance recommendations provided by economic financial planning software and the practical application of traditional financial planning software. The two software programs are Economic Security Planner (ESPlanner), developed by Economic Security Planning, Inc., and Quicken Financial Planner (QFP), developed by Intuit. Each program is run on 24 cases, 20 of which are stylized and 4 of which are actual households. The two software programs recommend dramatically different levels of saving or life insurance in each of the 24 cases. The different saving recommendations primarily reflect ESPlanner's adjustment for household demographics and borrowing constraints. The different life insurance recommendations reflect these same factors as well as ESPlanner's accounting for contingent household plans and for Social Security's survivor benefits. The less detailed tax and Social Security retirement benefit calculations used in our implementation of QFP also explain some of the differences between the two programs.

Downsizing implementation and financial performance

In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented

Who downsizes for longer? A longitudinal analysis

This contribution investigates why firms keep on downsizing once they have started to do so. From a theoretical standpoint, we develop economic and institutional explanations for explaining corporate downsizing duration. The empirical work is carried out applying event history techniques to a sample of manufacturing firms drawn from the Spanish Survey on Business Strategies from 1994 to 2005. Although results show support for persistence in downsizing over time, repeated personnel reductions is not a widespread tool in managing the workforce in this country. In addition, we find certain key corporate parameters such as profitability, temporality rate, size and employment termination costs (as well as market demand trends) to be important determinants of the continuation of on-going downsizing experiences. This is the first study on this issue using corporate-level data for Spain and multivariate methods

Mine closure and its impact on the community : five years after mine closure in Romania, Russia and Ukraine

Against the backdrop of economic transition, several countries in Eastern Europe have undertaken far-reaching programs to restructure their coal sectors, which in the 1990s were in a state of deep crisis. One aspect of restructuring has been the closure of loss-making mines, which are often located in communities where the coal industry is the dominant employer, and the significant downsizing of the workforce. Mitigation efforts that are implemented at the time of mine closure (such as severance payments) are usually intended only for the laid-off workers. The authors examine the impact of mine closure on the entire community five years after mine closure in Romania, Russia, and Ukraine. Using quantitative and qualitative research methods and based on interviews with national, regional, and local experts, and members of the affected population, the authors describe the effect of mine closure and evaluate the various mitigation efforts that have been used by governments in such cases. They conclude with policy recommendations of broad relevance to programs of industrial restructuring in communities dominated by a single industry.Mining&Extractive Industry (Non-Energy),Municipal Financial Management,Environmental Economics&Policies,Banks&Banking Reform,Public Health Promotion,Municipal Financial Management,Health Monitoring&Evaluation,Mining&Extractive Industry (Non-Energy),Banks&Banking Reform,Environmental Economics&Policies