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on Regulation |
| By: | Philipp Festerling (Department of Economics, University of Aarhus, Denmark) |
| Abstract: | The paper explores the interdependencies between corporate and individual leniency programs. In a duopoly model where corporations are separated into representing owners and operating managers, conflicts between the two types of agents arise if the relative benefits of participating in the corresponding leniency programs differ. As an example of what might cause differing relative benefits, the paper considers the inclusion of damage payments for owners which are not covered by the corporate leniency program. The main findings are: (1) Individual leniency applications are never observed. (2) Threats by managers to apply for individual leniency may, however, increase the owners’ incentive to carry out corporate self-reports. (3) In other cases, the individual leniency program increases the owners’ tolerance for cartel activity for two reasons: Either the corporate leniency program is sufficiently unattractive to the owners, or the owners rely on the option to apply for corporate leniency after the Antitrust Authority has opened a case. (4) Finally, the more distortion decreases, the more ineffective the individual leniency program becomes. |
| Keywords: | Leniency, corporate leniency, individual leniency, cartel, law enforce- ment, antitrust |
| JEL: | K21 K42 L13 L44 |
| Date: | 2005–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2005-20&r=reg |
| By: | Marcel Boyer |
| Abstract: | The development of the canadian telecommunications web is significantly influenced by the regulatory framework put in place to oversee the evolution of the web toward a competitive system. This paper has two specific objectives: first, to develop a methodological framework, which will allow a proper characterization of the level of competition in the telecommunications industry, more specifically in the residential local access market and second, to recommend some (significant) changes in the CRTC approach to the regulation of the Canadian Telecommunications industry. I argue that the current approach to the regulation of telecommunications in Canada is likely to generate significant harms to consumers and businesses as well as efficiency losses for the Canadian economy. I conclude that there is a urgent need for a telecommunications regulatory reform, with a stronger accent put on three crucial roles of the telecommunications regulator as the trusted generator of information for the consumers, as the manager of the level playing field conditions, and as the promoter of efficient investment programmes. <P>Le développement du réseau canadien des télécommunications est influencé de façon significative par le cadre réglementaire adopté pour régir l’évolution de ce réseau vers la concurrence. Cet article a deux objectifs principaux : d’une part, développer un cadre méthodologique adéquat pour caractériser le niveau de concurrence dans l’industrie des télécommunications, plus particulièrement du marché des services résidentiels locaux, et, d’autre part, de proposer des changements (importants) au cadre réglementaire actuel. Je montre que le cadre réglementaire actuel peut engendrer des problèmes importants pour les consommateurs et l’industrie ainsi que des pertes d’efficacité pour l’économie canadienne. Il existe un besoin urgent de réformer le cadre réglementaire actuel, en mettant l’accent sur trois rôles essentiels de l’agence de régulation des télécommunications comme fournisseur d’informations aux consommateurs, comme gestionnaire des conditions de concurrence loyale pour toutes les entreprises et comme promoteur de programmes d’investissement efficaces. |
| Keywords: | competition, regulatory reform, telecommunications , concurrence, réforme de la réglementation, télécommunication |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2005s-35&r=reg |
| By: | Marcel Boyer; Catherine Mercier |
| Abstract: | The CRTC recently released Regulatory Framework for Voice Communication Services using Internet Protocol (Decision 2005-28), Telecom Decision CRTC 2005-28, setting out the details of the appropriate regulatory regime applicable to the provision of VoIP services. We present a brief overview of Decision 2005-28, we then consider the positions of incumbents and competitors, and finally we comment on the above interventions in light of the economic theory of regulation and the theory of strategic competition. We conclude that the predominant model underlying the positions not only of the CRTC but also of the parties involved, including the firms themselves, both the incumbents and the new entrants, and their respective business consultants, do not stand the test of modern economic theory. <P>Le CRTC a récemment publié la décision Cadre de réglementation régissant les services de communication vocale sur protocole Internet (Décision 2005-28) dans laquelle il fixe les paramètres du régime de réglementation qui régira la fourniture des services VoIP. Nous présentons d’abord un aperçu de la Décision 2005-28 ainsi que les positions des entreprises de services locaux titulaires et des nouveaux concurrents. Finalement, nous commentons ces interventions à la lumière de la théorie économique de la réglementation et de la théorie de la concurrence stratégique. Nous concluons que le modèle dominant sur lequel s’appuient non seulement la position du CRTC, mais également celles des parties intéressées, y compris les entreprises elles-mêmes, les entreprises de services locaux titulaires et les nouveaux concurrents, et leurs conseillers d’affaire, ne résiste pas à l’analyse économique moderne. |
| Keywords: | regulation, strategic competition, telecommunications, VoIP, concurrence stratégique, réglementation, télécommunication VoIP |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2005s-36&r=reg |
| By: | Eslava, Marcela; Haltiwanger Jr, John C; Kugler, Adriana D.; Kugler, Maurice |
| Abstract: | In this paper, we analyse employment and capital adjustments using a panel of plants from Colombia. We allow for nonlinear adjustment of employment to reflect not only adjustment costs of labour but also adjustment costs of capital, and vice-versa. Using data from the Annual Manufacturing Survey, which include plant-level prices, we generate measures of plant-level productivity, demand shocks, and cost shocks, and use them to measure desired factor levels. We then estimate adjustment functions for capital and labour as a function of the gap between desired and actual factor levels. As in other countries, we find non-linear adjustments in employment and capital in response to market fundamentals. In addition, we find that employment and capital adjustments reinforce each other, in that capital shortages reduce hiring and labour shortages reduce investment. Moreover, we find that the market oriented reforms introduced in Colombia after 1990 increased employment adjustments, especially on the job destruction margin, while reducing capital adjustments. Finally, we find that while completely eliminating frictions from factor adjustments would yield a dramatic increase in aggregate productivity through improved allocative efficiency, the reforms introduced in Colombia generated only modest improvements. |
| Keywords: | adjustment costs; deregulation; input reallocation; irreversibilities; joint factor adjustment |
| JEL: | C14 E22 E24 J63 O11 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5267&r=reg |
| By: | Kelly, Morgan |
| Abstract: | This paper models corruption as optimal parasitism in organizations where teams of agents are weakly restrained by principals. Each agent takes on part of the role of principal, choosing how much to invest in policing to repress corruption in others and how rapaciously to act when unpoliced opportunities arise. This simple model can incorporate many factors stressed in empirical analyses of corruption, and gives rise to a wide variety of equilibria. Allowing income to co-evolve with corruption, we show how adding corruption to a textbook exogenous growth model leads to a Lucas paradox. When income and corruption affect each other sufficiently strongly, economies converge to two corner equilibria despite diminishing returns to capital: a rich, clean corner and a poor, corrupt one; a pattern that appears to characterize international data. |
| Keywords: | corruption; growth |
| JEL: | O17 O40 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5281&r=reg |
| By: | Hotte, Louis; van Ypersele, Tanguy |
| Abstract: | We revisit the question of the efficiency of individual decisions to be protected against crime for the cases of both observable and unobservable protection. We obtain that observable protection is unambiguously associated with a negative externality and that at the individual level, it has a deterrence effect but no payoff reduction effect. Unobservable protection has a global deterrence effect and is associated with a private payoff reduction effect but no private deterrence effect. A decrease in the global crime payoff is detrimental to a victim if protection is observable, while it is beneficial with unobservable protection. While protection has a positive diversion effect when observable, it has the equivalent of a negative diversion effect when unobservable. |
| Keywords: | crime; efficiency; private protection |
| JEL: | D62 D82 K42 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5293&r=reg |
| By: | Schivardi, Fabiano; Torrini, Roberto |
| Abstract: | We study the effects of the more stringent employment protection legislation (EPL) that applies in Italy to firms with over 15 employees. We consider firms' propensity to grow when close to that threshold and changes in employment policies when they pass it. Using a comprehensive matched employer-employees dataset, we find that the probability of firms' growth is reduced by around 2 percentage points near the threshold. Using the stochastic transition matrix for firm size, we compute the long-run effects of EPL on the size distribution, finding that they are quantitatively modest. We also find that, contrary to the implications of more stringent firing restrictions, workers in firms just above the threshold have on average less stable employment relations than those just below it. We document that this is because firms above the threshold make greater use of flexible employment contracts, arguably to circumvent the stricter regulation on open-end contracts. |
| Keywords: | employment policies; firing costs; firm size distribution; matched data |
| JEL: | D21 J63 J65 L11 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5303&r=reg |
| By: | Chen, Zhaohui; Wilhelm Jr, William J |
| Abstract: | In our model, information-producing agents can opt to produce from the sell-side, in which case they can only sell their information to other market participants, or produce from the buy-side, in which case they agent can trade in the financial market. If sell-side information substitutes for that produced on the buy-side, some form of subsidy is necessary to sustain sell-side production in equilibrium because sell-side agents cannot commit to narrow dissemination of their information among buy-side agents. Competition among buy-side agents leaves buy-side (private) information as the primary source of trading profits. Subsidizing sell-side research promotes welfare because such information enters financial market prices and thereby improves real investment decisions. But subsidies compromise welfare through conflicts of interest facing the sell-side analyst. We derive conditions under which the net welfare effect is positive and shed light on means of managing the tradeoff. |
| Keywords: | conflicts of interest; financial analysts; industrial organization; investment banking; securities regulation |
| JEL: | D82 G14 G24 L22 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5314&r=reg |
| By: | Pica, Giovanni; Rodríguez Mora, José Vicente |
| Abstract: | This paper presents evidence on the effect of countries proximity in regulation on bilateral FDI flows. By exploiting the OECD International Direct Investment Statistics and data on nationwide regulation levels, we find a significant negative effect of the absolute value of the difference between countries indexes of regulation on the associated bilateral flows of FDIs, controlling for each country regulation level. Motivated by this evidence, we build a model where agents are heterogeneous and differ in their abilities to be entrepreneurs or workers. Entrepreneurs may engage in FDIs, which entails incurring additional fixed costs, one of which is the cost of learning the foreign regulation. In this framework, more similar regulations foster FDI, raise wages, output and productivity. The increase in productivity is the consequence of very efficient foreign entrepreneurs driving out of the market inefficient local firms, improving the allocation of talent in the economy as a whole. |
| Keywords: | heterogeneous agents; multinational firms; policy harmonization |
| JEL: | E61 F23 F41 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5318&r=reg |
| By: | Patacchini, Eleonora; Zenou, Yves |
| Abstract: | We propose a simple conformism model that explains how parental education and peer pressure impact on criminal activities. We then test the model using the U.S. National Longitudinal Survey of Adolescent Health (AddHealth), which contains unique information on friendship relationships among delinquent teenagers. We find that conformity is very strong within groups of delinquents and that the higher the taste for conformity of an individual, the lower the deviation from the norm's group. These results suggest that, for teenagers, the decision to commit crimes is not a simple choice based primarily on individual considerations but is strongly affected by their environment and peers. |
| Keywords: | conformism; juvenile crime; norms; parents' education |
| JEL: | A14 I21 K42 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5331&r=reg |
| By: | Frisell, Lars; Lagerlöf, Johan N.M. |
| Abstract: | A firm must decide whether to launch a new product. A launch implies considerable fixed costs, so the firm would like to assess downstream demand before it decides. We study under which conditions a potential buyer would be willing to reveal his willingness to pay under different pricing regimes. We show that the firm's welfare - as well as consumers' - may be higher with a commitment to linear pricing than when pricing is unrestricted. That is, if informational asymmetries are significant, price regulations such as the Robinson-Patman Act may be endorsed by all parties. |
| Keywords: | cheap talk; incomplete information; price discrimination; price regulations; Robinson-Patman Act |
| JEL: | D82 L11 L42 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5343&r=reg |
| By: | Quak, H.J.; Koster, M.B.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Local governments in Western Europe increasingly use city time-access regulations to improve social sustainibility. These regulations significantly influence the distribution process of retail chain organizations. This paper studies the impact of governmental timewindow pressure on retailers? logistical concept and consequential financial and environmental distribution performance. We determine which dimensions in the retailer?s logistical concept determine its cost and emission sensitivity to increasing time-window pressure. Our research is based on a multiple case study of fourteen Dutch retail cases in different sectors and with different store formulas. The retailers provided all organizational, flow and cost data of their secondary distribution (between distribution center and stores). We use these data to calculate the impacts of different time-window pressure scenarios, including the current situation, using vehicle routing software. It appears that cost increases are moderate, when few cities are affected. However, as more cities are affected, costs increase considerably, particularly if time-window lengths become shorter. Time-windows harmonized between cities, lead to less negative effects. We find various dimensions that contribute to reducing the retailer?s sensitivity to timewindow pressure. We formulate conclusions hypothesizing the links between timewindow pressure, its effects, and the dimensions that determine these effects. |
| Keywords: | sustainability;governmental regulation;city logistics / distribution;retail;case study; |
| Date: | 2005–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30007770&r=reg |
| By: | M. Soledad Arellano; Pablo Serra |
| Abstract: | This paper analyzes market power in price-regulated power industries. We derive market equilibrium under different assumptions (perfect competition, monopoly, Cournot, etc.), with and without free entry. We show that when peak-load pricing is used, producers can exercise market power by increasing the share of peaking technology in the generation portfolio, compared to the welfare-maximizing configuration. In this framework natural measure of market power is the length of time that peaking technology plants operate beyond their operational time in the welfare maximizing solution. We show that when there is free entry with an exogenous fixed entry cost that is later sunk, more intense competition results in higher welfare but fewer firms. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:208&r=reg |
| By: | Stephen Machin (University College London, CEP, London School of Economics and IZA Bonn); Olivier Marie (CEP, London School of Economics) |
| Abstract: | In this paper we look at links between police resources and crime in a different way to the existing economics of crime work. To do so we focus on a large-scale policy intervention - the Street Crime Initiative - that was introduced in England and Wales in 2002. This allocated additional resources to some police force areas to combat street crime, whereas other forces did not receive any additional funding. Estimates derived from several empirical strategies show that robberies fell significantly in SCI police forces relative to non-SCI forces after the initiative was introduced. Moreover, the policy seems to have been a cost effective one, even after allowing for possible displacement or diffusion effects onto other crimes and adjacent areas. There is some heterogeneity in this positive net social benefit across different SCI police forces, suggesting that some police forces may have made better use of the extra resources than others. Overall, we reach the conclusion that increased police resources do in fact lead to lower crime, at least in the context of the SCI programme we study. |
| Keywords: | street crime, police resources, cost effectiveness |
| JEL: | H00 H5 K42 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1853&r=reg |
| By: | M E Haque; R Kneller |
| Abstract: | The relationship between corruption and economic development is characterised by three stylised facts: (i) a strong negative correlation between corruption and development (ii) countries can remain trapped in high corruption-low development or low corruption-high development equilibria (iii) amongst intermediate levels of development corruption levels are more variable, some countries have high corruption and others low corruption. This paper argues that existing models are consistent with the first two only and demonstrates how these models might be extended to capture all three. The paper searches for the location of corruption clubs within the data and provides some explanation of their cause. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:67&r=reg |
| By: | Frederic S. Mishkin |
| Abstract: | This review essay examines whether too-big-to-fail is as serious a problem as Gary Stern and Ron Feldman contend. This essay argues that Stern and Feldman overstate the importance of the too-big-to-fail problem and do not give enough credit to the FDICIA legislation of 1991 for improving bank regulation and supervision. However, this criticism of the Stern and Feldman book does not detract from many of its messages. Even if the too-big-to-fail problem is not as serious as they contend, the policies they outline can make it less likely that a banking crisis will occur even if driven by other factors. |
| JEL: | G21 G28 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11814&r=reg |
| By: | G. Nicoletti; Stefano Scarpetta |
| Abstract: | This paper assesses the implications of past and ongoing reforms in OECD product markets for the labour productivity gap, a key component of cross-country differences in GDP per capita. After a brief review of the theoretical literature, we bring together the results obtained in some of our empirical work over the past few years, discussing econometric approaches and their drawbacks. We then use these results to gauge the likely effect of further reforms. We distinguish effects on capital deepening and technical progress by examining the impact of regulations on investment (domestic and foreign) and multi-factor productivity. We focus on the effects of policies aimed at strengthening private governance (e.g. through privatization) and opening up access to markets where competition is economically viable. The results suggest that pro-competitive reforms tend to increase both investment and multifactor productivity and, through both these channels, they can lead to higher growth in GDP per capita. Ce papier analyse les implications des réformes dans les marchés des biens de la zone OCDE pour un des facteurs qui expliquent les différences internationales dans le PIB par tête : les écarts dans la productivité du travail. Après avoir examiné brièvement la littérature théorique, nous résumons les résultats de quelques unes des études empiriques que nous avons réalisées aux cours des dernières années, tout en discutant les approches économétriques utilisées et leurs limites. Nous utilisons ensuite ces résultats pour évaluer les effets qui pourraient être observés si les réformes étaient poussées plus loin à l’avenir. Nous distinguons les effets des réformes sur l’accroissement de l’intensité en capital et sur le progrès technique en nous appuyant sur trois études qui analysent l’impact de la régulation anti-concurrentielle sur l’investissement (national et de l’étranger) et la productivité multifactorielle. Nous nous concentrons sur les implications quantitatives au niveau macroéconomique des politiques visant à renforcer la gouvernance des entreprises (par exemple par la privatisation) et à éliminer les barrières réglementaires à l’accès dans les marchés où la concurrence est soutenable. Cet examen porte à conclure que les réformes qui accroissent les pressions concurrentielles sur les marchés des biens tendent à augmenter à la fois l’investissement et la productivité multifactorielle. Par ce biais, les réformes peuvent mener à une croissance plus soutenue du PIB par tête dans les pays qui les réalisent. |
| Keywords: | investment, investissement, panel data, données de panel, regulations, régulation, productivité et croissance, aggregate productivity and growth |
| JEL: | C23 E22 F21 L5 O4 |
| Date: | 2005–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:460-en&r=reg |
| By: | Ariane Lambert-Mogiliansky; Mukul Majumda; Roy Radner |
| Abstract: | This paper develops a game-theoretic model of "petty corruption" by government officials. Such corruption is widespread, especially (but not only) in developing and transition economies. The model goes beyond the previously published studies in the way it describes the structure of bureaucratic "tracks" and the information among the participants. Entrepreneurs apply, in sequence, to a "track" of two or more bureaucrats in a prescribed order for approval of their projects. Our first result establishes that in a one-shot situation no project ever gets approved. This result leads us to consider a repeated interaction setting. In that context we characterize in more detail the trigger-strategy equilibria that minimize the social loss due to the system of bribes, and those that maximize the expected total bribe income of the bureaucrats. The results are used to shed some light on two much advocated anti-corruption policies: the single window policy and rotation of bureaucrats. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-40&r=reg |
| By: | Jeffrey Milyo (Department of Economics, University of Missouri-Columbia); David M. Primo |
| Abstract: | Scholars have proposed many routes by which campaign finance laws may impact turnout. For instance, laws restricting campaign spending may decrease mobilization, resulting in lower turnout. Alternatively, such laws might increase the competitiveness of elections, resulting in higher turnout. Existing studies tend to focus on only one causal pathway, ignoring the net effects of campaign finance reforms on voter turnout. We exploit the variation in state campaign finance laws from 1950 to 2000 in order to estimate the reduced-form relationships between reform and turnout. Using both aggregate and individual-level data, we find that campaign finance laws on net have little impact on turnout in gubernatorial elections. There are two exceptions to this finding: Limits on organizational contributions are shown in an individual level analysis to increase turnout prior to a sea change in campaign finance ushered in by the Buckley v. Valeo decision in 1976, while public financing laws are shown to have an equally large negative impact on turnout in the post-Buckley era. These results strengthens the existing literature, which finds similarly perverse effects of public financing on the “quality of democracy,” and demonstrates the advantages of reduced-form analysis for understanding the influence of laws on behavior. |
| Keywords: | voting, campaign finance |
| JEL: | D72 H79 K39 |
| Date: | 2005–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0516&r=reg |
| By: | Guido Travaglini (Università 'La Sapienza' Roma) |
| Abstract: | In this paper a Cobb-Douglas utility function is introduced and solved for a dynamic equation of property crime supply and its determinants, namely deterrents and income. Thereafter, all variables are empirically tested, by means of a simultaneous equations model, for the sign and magnitude of their mutual relationships in a panel of Italy and its two economically and culturally different areas, the North and the South. The period scrutinized is 1980-95 and the results obtained widely differ among the two. When appropriately modeled and instrumented, in fact, property crime is found to react to police and criminal justice deterrence, and also to incomes, with different parameter magnitudes and significance. The same diversity applies to the parameters related to deterrence, flawed in quite a few cases by scarce law enforcement and productivity, and to those related to local incomes, which still reflect for the South a tendency of crime to substitute for legal activities. |
| Keywords: | Models with Panel Data, Illegal Behavior and the Enforcement of Law |
| JEL: | C33 K42 |
| Date: | 2005–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpem:0512001&r=reg |
| By: | Paolo Buccirossi (Lear - Laboratorio di economia, antitrust, regolamentazione, E-mail: paolo.buccirossi@learlab.it); Giancarlo Spagnolo (Stockholm School of Economics, Consip Research Unit, and C.E.P.R. E-mail: giancarlo.spagnolo@tesoro.it or giancaspagnolo@yahoo.com) |
| Abstract: | We study the consequences of leniency – reduced legal sanctions for wrongdoers who spontaneously self-report to law enforcers – on sequential, bilateral, illegal transactions, such as corruption, manager-auditor collusion, or drug deals. It is known that leniency helps deterring illegal relationships sustained by repeated interaction. Here we find that - when not properly designed - leniency may simultaneously provide an effective governance mechanism for occasional sequential illegal transactions that would not be feasible in its absence. |
| Keywords: | amnesty, corruption, collusion, financial fraud, governance, hold up, hostages, illegal trade, immunity, law enforcement, leniency, organized crime, self-reporting, whistleblowers |
| JEL: | K42 K21 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:74&r=reg |
| By: | Dr. Martina Eckardt (University of Rostock) |
| Abstract: | Institutions matter both for long-term economic evolution as well as for more short-termed economic performance. The law is particularly important in shaping the institutional framework for economic activities. This paper gives an overview of typical evolutionary explanations of legal change, i.e. the generation and dissemination of legal innovations over time. The main actors, the key determinants, and the central mechanisms are identified. In addition to approaches which deal primarily with statutory respectively judge-made legal change, the concept of legal paradigms and path dependence, the co-evolution of law and technology and the impact of institutional competition on legal change are discussed. |
| Keywords: | Evolutionary Economics, Law and Economics, Judge-made Legal Change, Legis- lation, Technological Change, Path Dependence |
| JEL: | B52 B53 K40 P16 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:47&r=reg |
| By: | Prof. Dr. Carsten Ochsen (University of Rostock) |
| Abstract: | In this paper we investigate the effects of labour market policy on several types of criminal offences for fifteen European countries. The main results are the following: Firstly, the results change markedly if we control for unobserved heterogeneity. In the context of criminal offences the estimates seem to be reliable only if we apply fixed effects instead of simple pool specifications. Secondly, the effects of labour market policy vary considerably with respect to the different types of criminal offences and cannot be subdivided into unambiguous effects on property crimes and violent crimes, respectively. Thirdly, the proxy variables for labour market policy we consider have different importance with respect to their effect on criminal offences. Benefit replacement rate, benefit duration, and average years of schooling seem to be important, whereas active labour market policy appears not to be linked to crime. The combination of a shorter benefit duration and higher replacement rate, like in the Nordic countries, seems to be a “crime reducing” combination. |
| Keywords: | Unemployment, labour market policy, illegal behaviour, time allocation |
| JEL: | J64 H31 K42 J22 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:55&r=reg |