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on Investment |
| By: | Paweł Strawiński (University of Warsaw, Faculty of Economic Sciences); Aleksandra Majchrowska (University of Lodz) |
| Abstract: | Research background: The number of research regarding employment effects of minimum wages is enormous. Another problem examined by prior studies is the impact of minimum wage increases on the wages. The evidence shows that minimum wage increases compress the wage distribution. The same literature brings conflicting evidence regarding minimum wage spill-over effects. Purpose of the article: The study analyses the effects of a minimum wage increase on the wage distribution of low- and high-wage sectors and possible spill-overs. The analysed period 2014-2018 is characterized by relatively stable economic conditions, while the minimum wage increased by 25%. Methods: We follow case study method and as example Poland, the EU country with high share of minimum wage workers. We use individual data on wages and worker characteristics from the Structure of Earnings Survey in Poland for 2014–2018. We use reweighting and decompose counterfactual wage distribution. Findings & value added: In low-wage sector, a wage increase in the left tail of the distribution is almost entirely due to the increase in the minimum wage level and spill-over effects are present throughout the distribution. In high-wage sector the role of the minimum wage growth is weaker and also the workers’ characteristics have substantial impact on wages; no spill-over effects of a minimum wage increase are observed. We demonstrate that the conflicting evidence on the effects of minimum wage changes on the wage distribution may occur because the effects differ across the low- and high-paid economic sectors. They depend on sector productivity and openness. |
| Keywords: | Minimum wage, wage distribution, reweighting, low-wage sector, high-wage sector, spill-over effects |
| JEL: | J21 J31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2024-17 |
| By: | Han, Jung Min (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The overall composite Business Survey Index (BSI) for the manufacturing sector in the second quarter (Q2) of 2024 remained below the baseline (100). However, most feeder indices increased compared to the previous quarter. Specifically, both business conditions (91) and sales (94) improved compared to the first quarter (83 and 82), reaching their highest levels in over two years. Domestic demand (92) and exports (99) still remain below 100 but have both turned to an upward trajectory after declining in the previous quarter (83 and 88). Both facility investment (100) and employment (99) rose together for the first time in four quarters, while inventory (101) increased slightly. Ordinary profit (91) has also turned upward compared to the previous quarter. BSI forecasts for Q3 2024 indicate that manufacturers anticipate a more favorable business environment. Business conditions (97) and sales (98) should top out at just under 100, and are showing robust performance compared to the beginning of the year (Q1 business conditions 90, sales 94). The outlook for domestic demand (96) is expected to fall below 100, while the outlook for exports (101) is expected to remain above 100. Facility investment (99) and employment (100) are projected to hold steady quarter over quarter. |
| Keywords: | Business Survey Index; business sentiment; business cycles; exports; production; economic growth; macroeconomic outlook |
| JEL: | E60 E66 L60 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:2024_021 |
| By: | Lee, Minju (Korea Institute for Industrial Economics and Trade); Lee, Sora (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The prices of crude oil and natural gas have long demonstrated a relationship in which their prices move together, as they are both industrial resources and economic substitutes. This relationship owes to the pricing mechanism at work in the natural gas market, in which the price of gas is linked to the price of oil in order to protect its price competitiveness. For the natural gas industry, price competitiveness is crucial because in commercial applications, it is more difficult to utilize natural gas than crude oil. For one, natural gas is less energy dense than crude oil, making it inherently less economical to transport and store. Thus, the natural gas industry has adopted a pricing mechanism that connects the price of gas to oil and sets them at a lower rate to ensure continued price competitiveness. However, since the late 2000s, the price correlation between crude oil and natural gas has weakened. One of the main causes of this decoupling phenomenon is the increase in shale gas production in the United States. The production of shale gas in the US has increased global supply, affecting natural gas prices. In addition, changes to the contract method for natural gas have fostered competition within the natural gas market, further weakening its linkages to oil prices. As oil and gas are two resources that fuel global industry, their prices can significantly impact the cost structure of firms in various industries. And so the newly-independent pricing mechanisms being observed in the natural gas market carry significant implications. In this paper we investigate the causes of the changes in the price relationship between these two resources and describe their potential impacts on major industries in Korea. |
| Keywords: | oil; oil prices; natural gas; natural gas prices; energy markets; energy; energy pricing; Korea; KIET |
| JEL: | Q40 Q41 Q43 Q48 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:2024_019 |
| By: | Xing Huang; Philippe Jorion; Jeongmin Lee; Christopher Schwarz |
| Abstract: | Using 150, 000 actual trades, we study the U.S. equity retail broker-wholesaler market, focusing on brokers’ order routing and competition among wholesalers. We document substantial and persistent dispersion in execution costs across wholesalers within brokers. Despite this, many brokers hardly change their routing and even consistently send more orders to the more expensive wholesalers, although there is considerable variation among brokers. We also document a case where, after a new wholesaler enters, existing wholesalers significantly reduce their execution costs. Overall, our findings and theoretical framework highlight the heterogeneity across brokers and are inconsistent with perfect competition in this market. |
| Keywords: | Execution quality; Retail trading; Order routing; Competition; Bid/ask spread; Market microstructure; Broker-dealers |
| JEL: | G50 G12 G14 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2024-80 |
| By: | Louise Bernard; Andy Hackett; Robert D. Metcalfe; Andrew Schein |
| Abstract: | Heat pumps have been proposed as the leading technology in the electrification of domestic heat and therefore could play a crucial part in the transition to low-carbon energy systems. However, there is very little causal evidence of the impact of heat pumps on energy demand and the impact of marginal prices to help optimize energy demand with heat pumps. We leverage a staggered roll-out of heat pumps from Octopus Energy Group to show that: (1) heat pumps have a large impact on energy demand, on average causing a 90% reduction in home gas use and a 61% increase in home electricity use – overall, households reduced total energy demand by 40% and carbon dioxide emissions by 36% in 2024 (with an average of 68% emissions savings over the lifetime of the heat pump); (2) a time-of-use tariff designed for heat pumps can provide large demand flexibility benefits, halving electricity consumption during the evening peak to help balance the grid, and that load shifting is possible on the coldest days and from all building types in our sample; (3) the marginal value of public funds of the current UK heat pump subsidy is £1.24 (for every £1 spent by the Government). Overall, we find that heat pumps can meaningfully decarbonize heat and subsidies to encourage heat pumps can be welfare-enhancing. |
| JEL: | H2 Q40 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33036 |
| By: | Akhter, Fahmida; Bhattacharjee, Ankita; Hasan, Amena |
| Abstract: | This research investigates the application of Artificial Intelligence (AI) in Human Resource Management (HRM) in Bangladesh. Through interviews and case studies, the study explores the current state of AI adoption, challenges, opportunities, and ethical considerations. Key findings include limited AI adoption, primarily focused on recruitment, and challenges such as lack of expertise and data privacy concerns. AI offers potential benefits like improved efficiency and decision-making. The study recommends organizations to invest in AI expertise, address privacy concerns, and develop ethical guidelines. Policymakers should support AI education, reskilling, and a favorable regulatory environment. AI can significantly enhance HR practices in Bangladesh if implemented responsibly and ethically. |
| Keywords: | Artificial intelligence; Human Resource Management; Efficiency; Bangladesh |
| JEL: | A2 C8 P0 |
| Date: | 2024–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122222 |
| By: | Kazeem B. Ajide (University of Lagos, Lagos, Nigeria); Olorunfemi Y. Alimi (University of Lagos, Lagos, Nigeria); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | The research investigates the relationship between intelligence quotient (IQ) and environmental degradation, aiming to understand how cognitive abilities influence environmental outcomes across different nations and time periods. The objective is to examine the impact of intelligence quotient (IQ) on environmental indicators such as carbon emissions, ecological demand, and the Environmental Kuznets Curve (EKC), seeking insights to inform environmental policy and stewardship. The study utilizes statistical techniques including Ordinary Least Squares (OLS), Two Stage Least Squares (2SLS), and Iteratively Weighted Least Squares (IWLS) to analyze data from 147 nations over the years 2000 to 2017. These methods are applied to explore the relationship between IQ and environmental metrics while considering other relevant variables. The findings reveal unexpected positive associations between human intelligence quotient and carbon emissions, as well as ecological demand, challenging conventional notions of "delay discounting." Additionally, variations in the Environmental Kuznets Curve (EKC) hypothesis are identified across different pollutants, highlighting the roles of governance and international commitments in mitigating emissions. The study concludes by advocating for the adoption of a "delay discounting culture" to address environmental challenges effectively. It underscores the complex interactions between intelligence, governance, and population dynamics in shaping environmental outcomes, emphasizing the need for targeted policies to achieve sustainability objectives. |
| Keywords: | Human capital; intelligence quotient; population; output; carbon emission; EKC, World |
| JEL: | C52 O38 O40 Q50 I20 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:exs:wpaper:24/017 |
| By: | Carola Stapper (University of Cologne) |
| Abstract: | Disruptions of labor market trajectories have lasting effects on later economic success. One type of disruption that is understudied is displacement due to forced labor conscription, despite it still being a frequent event nowadays. I study the consequences of exposure to forced labor conscription for individuals' long-term labor market outcomes. I exploit that cohorts of Dutch civilians faced a differential probability of temporary labor coercion in Nazi Germany during WWII in a Regression Discontinuity Design. Using Dutch census data from 1971, I find that conscripted individuals have lower education, income, and likelihood of employment. Studying heterogeneous effects, I find that facing harsher conditions in Germany is associated with lower labor force participation and worse health. My findings suggest that the negative impact on labor force participation is mitigated when individuals are forced to work in similar sectors to those in the Netherlands, enhancing their ability to reintegrate into the workforce. |
| Keywords: | Labor economic history, labor market careers, coercive labor market, forced labor, health, skills |
| JEL: | N34 N44 J24 J47 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:338 |
| By: | Jonathan Muringani; Rune Dahl Fitjar; Andres Rodriguez-Pose; ; |
| Abstract: | This paper examines the complex relationship between political and social trust, government quality, and economic development across 208 regions in the European Union (EU). We use a pooled data generalized structural equation model (GSEM) to show that political trust serves as a fundamental driver of regional economic development in the EU. Political trust is, in turn, influenced by both social trust and government quality. Social trust and government quality have quadratic effects on political trust, showing diminishing returns, while the effect of political trust on economic development is linear. Political trust mediates the relationship between social trust and economic development entirely, while government quality retains a direct relationship with economic development. These findings underscore the fundamental role that political trust plays as a mechanism through which both formal and informal institutions shape regional development. |
| Keywords: | EU, Political trust, Quality of government, regional economic development, social trust |
| JEL: | O43 D73 R11 H11 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2436 |
| By: | Kiss, Tamás (Örebro University School of Business); Mazur, Stepan (Örebro University School of Business); Nguyen, Hoang (Linköping University); Österholm, Pär (Örebro University School of Business) |
| Abstract: | In this paper, we extend the standard Gaussian stochastic-volatility Bayesian VAR by employing the generalized hyperbolic skew Student’s t distribution for the innovations. Allowing the skewness parameter to vary over time, our specification permits flexible modelling of innovations in terms of both fat tails and – potentially dynamic – asymmetry. In an empirical application using US data on industrial production, consumer prices and economic policy uncertainty, we find support – although to a moderate extent – for time-varying skewness. In addition, we find that shocks to economic policy uncertainty have a negative effect on both industrial production growth and CPI inflation. |
| Keywords: | Bayesian VAR; Generalized hyperbolic skew Students’s t distribution; Stochastic volatility; Economic policy uncertainty |
| JEL: | C11 C32 C52 E44 E47 G17 |
| Date: | 2024–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2024_008 |
| By: | Juan Carlos Hatchondo; Leonardo Martinez; Yasin Kürsat Önder; Francisco Roch (-) |
| Abstract: | We study a sovereign default model in which the government issues CoCos (contingent convertible bonds) that stipulate a suspension of debt payments upon a sizeable increase of the global risk premium (and thus, of the government’s borrowing cost). We find that CoCos allow the government to smooth out the effects of risk-premium shocks on consumption, but they increase the default frequency. By suspending debt payments, CoCos imply higher debt levels and thus higher default probabilities after adverse shocks. We also study CoCos that in addition to the payment suspension, stipulate debt forgiveness after adverse shocks. In contrast with no-forgiveness CoCos, debt-forgiveness CoCos reduce debt levels after adverse shocks, thereby reducing default probabilities. Debt-forgiveness CoCos also yield larger welfare gains. |
| Keywords: | Sovereign default, CoCos, debt relief, reprofiling, debt forgiveness squares, efficiency, robustness |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:24/1096 |
| By: | Wolf, Elias; Montes-Galdón, Carlos; Paredes, Joan |
| JEL: | C11 C53 E31 E37 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc24:302442 |
| By: | Dorian Jullien (Université Paris 1 Panthéon-Sorbonne, CNRS, Centre d'Economie de la Sorbonne, Paris, France); Alexandre Truc (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | Existing histories of behavioral and experimental economics (BE-XP) are mostly focused on the intellectual and institutional developments of these approaches in the United States of America - and to a lesser extent in Germany. While a seminal contribution to these approaches was produced in the early 1950s in France by Maurice Allais, the literature is rather silent on how BE-XP developed subsequently in France. We propose to fill this gap by comparing the history of BE-XP in France to international trends previously identified in the literature. We show that after an ambivalent influence of the work of Allais (1953) on BE-XP in France during the 1980s, that influence rapidly faded. BE-XP in France then largely follows international trends. We nevertheless identify some heterogeneity across the French territory and the development of at least two national specificities on the measurement of utility and the modeling of social preferences. |
| Keywords: | Behavioral economics, Experimental economics, History of economics |
| JEL: | B21 B40 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-23 |