infonet-economy

In current welfare state analysis there is little theory to explain the action of exclusive groups. This article explores the possibilities of a theory that focuses on the interaction between individual choices and strategies, the formal systems, policies and rules of governments and the informal norms and practices of groups. The argument is that club theory, a branch of public choice concepts, represents a promising new element in such an approach. A theoretical frame has to account for both collectivisation and fragmentation processes - how mass solidarities in welfare states come to be created and in turn to be broken up into narrower mutualities. Migration is used as an example to show how the actions of migrants and policy decisions about them affect these dynamics or are affected by them.

In this paper, I discuss the interpretation of qualification related income differentials from income functions that control for age rather than the theoretically more appropriate variable years of labour market experience. I reestimate income functions for New Zealand that were originally reported by Maani (1997) with changed specification, and I update her results by also estimating an income function with data from the 1996 census.

This paper reports quantitative information on the effects of tariffs and quotas on prices of individual goods. The analyses uses the natural experiment provided by a comprehensive unilateral trade policy reform in New Zealand to examine the response of foreign exporters to an incident of liberalisation that is unique in the developed world. The price effects of tariffs and quotas are estimated using a multidestination 7-digit longitudinal product-level dataset on export values and quantities. The effects are found to be by no means equivalent: whereas tariffs display no significant effect, the impact that quantitative restrictions have on the terms-of-trade of the country that imposes them are unequivocally detrimental and quantitatively important.

In the literature on optimal indemnity schedules, indemnities are usually restricted to be non-negative. Keeler [1974] and Gollier [1987] show that this constraint might well bind: insured could get higher expected utility if insurance contracts would allow payments from the insured to the insurer at some losses. This paper extends Collier’s findings by allowing for negative indemnity payments for a broader class of insurers’ cost functions and argues that the indemnity schedule derived here is more appropriate for practical applications (e.g. in health insurance).

This paper applies the five standard criteria for assessing the performance of an economy to one of its sectors, namely, the provision of health care. They are (1) matching of consumer preferences, (2) technical efficiency, (3) adaptive capacity, (4) dynamic efficiency, and (5) a distribution of income that provides incentives for producers to attain criteria (1) through (4).

Being insurance-based, the Swiss healthcare system comprises three contractual relationships that can be judged in the light of these criteria.

First, the relationship between consumers and health insurers satisfies criterion (1) to a high degree, not least thanks to the managed-care (MC) options that were introduced with the new law on health insurance (effective 1996). However, it fails with regard to (2) because cost reductions achieved by MC cannot be passed on to consumers but to a very limited degree. The relationship between health insurers and service providers, by way of contrast, does not fully satisfy any of the five criteria, mainly because health insurers continue to operate under an any-willing-provider clause for conventional fee-for-service care. This makes it difficult for them to find MC providers. Finally, the relationship between consumers and healthcare providers match consumer preferences well (criterion 1) but do not result in an income distribution in the healthcare sector that is conducive to the attainment of criteria (2) through (4).

The total score for the Swiss healthcare system amounts to 13 points out of a maximum of 30, to which the relationship between insurers and providers contributes only 3 points. Therefore, performance could be improved by granting health insurers freedom to contract not only with domestic but also foreign healthcare providers offering a favorable benefit cost ratio.

This paper analyses the effects of taxation and subsidies in an economy with private provision of a public good. It is shown that in a situation where all individuals contribute, taxation affects the equilibrium allocation if and only if at least one individual's voluntary contribution to the public good has an impact on the aggregate tax payments of the others. We then consider linear nonneutral tax-subsidy schemes and analyse efficiency and uniqueness of the resulting Nash equilibria. We show that an efficient Nash equilibrium, where all individuals contribute, will in general not be unique, and establish a non-uniformity property which a tax-subsidy scheme must fulfil in order to induce a unique interior equilibrium that is efficient. Throughout the paper it is assumed that individuals fully understand and take into account the government's budget constraint.

It is a widely held belief that apprenticeship training represents a net investment for training firms, the cost of which needs to be recouped after the training period. A new firm-level data set for Switzerland reveals large variation in net costs across firms and, remarkably, negative net costs for 60 per cent of all firms. We use these data to estimate the effect of net costs on the number of apprentices hired by a firm. The results show that the costs have a significant impact on the training decision but no significant influence on the number of apprentices, once the firm has decided to train. For policy purposes, these results indicate that subsidies for firms that already train apprentices would not boost the number of available training places.

This paper evaluates the German health care reform of 1997, using the individual number of doctor visits as outcome measure and data from the German Socio-Economic Panel for the years 1995–1999. A number of modified count data models allow us to estimate the effect of the reform in different parts of the distribution. The overall effect of the reform was a 10% reduction in the number of doctor visits. The effect was much larger in the lower part of the distribution than in the upper part.

We consider a two-stage model of locational choice. Firms decide in which of three locations (or countries) to build plants; they then compete in all three markets. Knowledge spillovers reduce marginal costs in agglomerations; through intra-firm spillovers these cost reductions can be exported to other locations. We show that improvements in the exchange of information within firms make agglomeration more likely, because knowledge obtained in the center can be transmitted to other locations more easily. Decreases in transportation costs tend to destabilize agglomerations, since competition for peripheral locations increases, which decreases the value of knowledge obtained in agglomerations.

A new theoretical model is developed which describes the structure of competition for attention and characterizes equilibria. The exogenous fundamentals of an attention economy are the space of receiving subjects with their attention capacity, and the potential set of competing firms (senders) with their radiation technology. The endogenous variables explained by the theory are equilibrium audiences (the clients belonging to a sender), their signal exposure and attention, and the diversity of senders surviving the contest for attention. Application of the equilibrium analysis suggests that international integration or progress in information technologies tend to decrease global diversity. Local diversity, perceived by the individual receivers, may increase nonetheless.