Analysis of delinquent firms using multi-state transitions

This paper analyzes the behavior of firms with defaulted credits in terms of recovery or extinction. By defining classes for the severity of default, survival models for the multiple transitions from each class are estimated. The models are used to simulate the evolution of a firm’s credit conditional on its characteristics. Estimates for the expected recovery or extinction rates are constructed from these simulations. They show that (i) the severity of default strongly influences the probability of extinction; (ii) for less severe default episodes, recovery is faster than extinction, and the opposite is true for more severe defaults; (iii) larger firms tend to display better outcomes; (iv) and the number of employees is the single most important determinant of the time profile of the extinction/recovery process. Estimates of a loss given default measure suggest that the supervision recommendations found in the literature are appropriate.

Do labor market policies affect employment composition? Lessons from European countries

We study the effects of different labor market policies on employment composition in a matching model with salaried work and self-employment. We empirically assess some of the model’s predictions using micro data from the European Union Household Panel. Policies such as employment protection legislation and compulsory social security contributions of the self-employed, and their interactions, are relevant to explain the composition of employment in the European labor market. One major policy implication of this result is the need for a convenient policy mix definition.

Fragmentation? The future of work in Europe in a global economy: the WORKS final International Conference debate

WORKS final conference reportWork, Future

Are societal changes new? Questions or trends and future perceptions on knowledge-based economy

With the emergence of a global division of labour, the internationalisation of markets and cultures, the growing power of supranational organisations and the spread of new information technologies to every field of life, it starts to appear a different kind of society, different from the industrial society, and called by many as ‘the knowledge-based economy’, emphasizing the importance of information and knowledge in many areas of work and organisation of societies. Despite the common trends of evolution, these transformations do not necessarily produce a convergence of national and regional social and economic structures, but a diversity of realities emerging from the relations between economic and political context on one hand and the companies and their strategies on the other. In this sense, which future can we expect to the knowledge economy? How can we measure it and why is it important? This paper will present some results from the European project WORKS – Work organisation and restructuring in the knowledge society (6th Framework Programme), focusing the future visions and possible future trends in different countries, sectors and industries, given empirical evidences of the case studies applied in several European countries, underling the importance of foresight exercises to design policies, prevent uncontrolled risks and anticipate alternatives, leading to different ‘knowledge economies’ and not to the ‘knowledge economy’.Knowledge-based economy; Future trends; Work

The 1st ISA forum of sociology on the “Sociological Research and Public Debate”

1st ISA Forum reportSociology, International

Into a new phase of the research on restructuring of work in the knowledge society: the Third WORKS General Assembly in Sofia (Bulgaria)

The WORKS Project started two years ago (2005), involving the efforts of research institutes of 13 European countries with the main purpose of improving the understanding of the major changes in work in the knowledge-based society, taking account both of global forces and the regional diversity within Europe. This research meeting in Sofia (Bulgaria) aimed to present synthetically the massive amount of data collected in the case studies (occupational and organisational) and with the quantitative research during last year.knowledge-based society; work

Accounting for the Hidden Economy: Barriers to Legality and Legal Failures

This paper examines how much of the difference in the size of the informal sector and in per capita income across countries can be accounted by regulation costs (barriers to legality) and contractual imperfections in financial markets (legal failures). It constructs and solves numerically a general equilibrium model with credit constrained heterogeneous agents, occupational choices over formal and informal businesses, contractual imperfections and a government sector which imposes taxes and regulations on formal firms. The premium from formalization is better access to outside finance. differences in regulation costs and the degree of enforcement in financial contracts endogenously generate differences in the size of the informal sector and in total factor productivity (TFP). The numerical exercises suggest that: (i) regulation costs and not financial market imperfections account for the difference in the size of the informal sector between United States and Mediterranean Europe; (ii) this is not the case for countries with very weak enforcement systems, such as Peru, as both contractual imperfections and regulation costs account for the observed difference in the size of the informal sector. Regarding output per capita, regulation costs and the strength of enforcement explain roughly 60% of the difference in observed international incomes.