23 research outputs found

    Low-pay transitions and attrition bias in Italy: an analysis using simulation based estimation

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    This paper analyses the extent to which existing econometric models of low-pay transition probabilities in Italy are biased by the presence of endogenous panel attrition. Non-random exits from the sample of wage earners may result from both demand and supply side factors and this could lead to under- or overestimation (respectively) of the extent of low-wage persistence. The analysis is carried out by extending the bivariate probit model used in Cappellari [1999] (where starting state and transition probabilities are jointly modelled thus tackling the endogeneity of the conditioning starting wage state) with a third equation which controls for the non-randomness of panel attrition. The resulting trivariate probit model with endogenous switching, whose evaluation is not feasible within the routines customarily available in microeconometric packages, is implemented by applying simulation estimation techniques. Results show the ignorability of attrition in SHIW data, thus pointing towards the robustness of the results previously obtained without controlling for attrition

    Specific Human Capital Accumulation and Job Match Quality – Implications for Measuring Returns to Tenure

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    This paper uses the theoretical argument presented by Stevens (2003) that suggests that the measured returns to tenure will unambiguously be biased downwards. We illustrate this effect for data from a UK internal labour market using the counterfactual methodology outlined by DiNardo, Fortin and Lemieux (1996). Finally we argue that Stevens’s theory offers a possible explanation for the apparent puzzle presented by Medoff and Abraham (1980) who find that their estimated coefficient on tenure did not fall when direct measures of productivity were introduced into the wage equation

    Is Self-Employment Always a Bad Experience?

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    We estimate the effects of past self-employment experience on subsequent earnings in wage work using the population of Danish citizens between 16 and 65 years of age that we observe between 1980 and 1996. Specifically, we analyze how the effects of previous self-employment experience are affected by age, success in self-employment and the employment status prior to self-employment. We also take a long-term perspective and test whether wage-effects of self-employment are nonlinear and if they depreciate over time. We find that an additional year of self-employment experience reduces subsequent wage earnings by 4.7%-8.2% compared to continued wage-work experience. Young and successful formerly self-employed benefit, however, from their self-employment experience. Moreover, formerly self-employed who were non-employed or unemployed prior to their self-employment experience receive only slightly lower wages than individuals that never entered self-employment. We also find that the negative self-employment effects decrease with longer spells of self-employment and that they depreciate over time in subsequent wage work.self-employment; entrepreneurship; wages; experience

    Intersection of two TASEP traffic lanes with frozen shuffle update

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    Motivated by interest in pedestrian traffic we study two lanes (one-dimensional lattices) of length LL that intersect at a single site. Each lane is modeled by a TASEP (Totally Asymmetric Exclusion Process). The particles enter and leave lane σ\sigma (where σ=1,2\sigma=1,2) with probabilities ασ\alpha_\sigma and βσ\beta_\sigma, respectively. We employ the `frozen shuffle' update introduced in earlier work [C. Appert-Rolland et al, J. Stat. Mech. (2011) P07009], in which the particle positions are updated in a fixed random order. We find analytically that each lane may be in a `free flow' or in a `jammed' state. Hence the phase diagram in the domain 0α1,α210\leq\alpha_1,\alpha_2\leq 1 consists of four regions with boundaries depending on β1\beta_1 and β2\beta_2. The regions meet in a single point on the diagonal of the domain. Our analytical predictions for the phase boundaries as well as for the currents and densities in each phase are confirmed by Monte Carlo simulations.Comment: 7 figure

    CAP subsidies and productivity of the EU farms

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    The paper investigates the impact of the Common Agricultural Policy (CAP) subsidies on farm total factor productivity (TFP) in the European Union (EU). We employ a structural semi-parametric estimation algorithm directly incorporating the effect of subsidies into a model of unobserved productivity. We empirically study the effects using the Farm Accountancy Data Network (FADN) samples for the EU-15 countries. Our main findings are clear: subsidies impact negatively on farm productivity in the period before the decoupling reform was implemented; after decoupling the effect of subsidies on productivity is more nuanced and in several countries it turned positive

    CAP Subsidies and the Productivity of EU Farms. Factor Markets Working Paper No. 37, March 2013

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    This paper investigates the impact of subsidies from the common agricultural policy on the total factor productivity of farms in the EU. We employ a structural, semi-parametric estimation algorithm, directly incorporating the effect of subsidies into a model of unobserved productivity. We empirically study the effects using samples from the Farm Accountancy Data Network for EU-15 countries. Our main findings are clear: subsidies had a negative impact on farm productivity in the period before the decoupling reform was implemented; after decoupling the effect of subsidies on productivity was more nuanced, as in several countries it turned positive

    Market-timing and Agency Costs: Evidence from Private Equity

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    Private equity (PE) funds operate at the interface of private and public capital markets. This paper investigates whether PE fund managers have private information about the valuations of publicly traded securities. Using a dataset of cash flows from 941 buyout and venture funds, I show that PE funds' distribution patterns predict returns of public securities in the industries of the funds' specialization, but fund managers tend to sell at the market peaks only when they have performance fees to harvest. I find that the cost of this agency tension increases in the manager's survival risk and that the managers' knowledge pertains to the public firms' future earnings rather than the discount-rates. My tests distinguish market-timing from reactions to the variation in risk premia and spillover effects of PE activity on public firms. The results help better understand PE performance and have strong implications for PE manager selection. It follows that PE activity embeds private information into the prices of public securities.Doctor of Philosoph