{"title":"A Real Options Analysis of Dual Labor Markets and the Single Labor Contract","authors":"Pedro Gete, Paolo Porchia","doi":"10.2139/ssrn.1942048","DOIUrl":"https://doi.org/10.2139/ssrn.1942048","url":null,"abstract":"We study the optimal hiring and firing decisions of a firm under two different firing costs regulations: 1) Dual labor markets characterized by high firing costs for workers with seniority above a threshold (\"permanent workers\") and by low costs for \"temporary workers\". 2) The Single Labor Contract, a policy proposal to make firing costs increasing in seniority at the job. We focus on the option value implied by the regulations and obtain some new results: the optimal firing rule is a constant function of worker's productivity only for permanent workers. For temporary workers it varies with seniority at the job because the firm tries to keep alive the option to fire at low cost. In the Dual regulation the workers more likely to be fired are those close to become permanent. On the contrary, the Single Contract transfers that maximum firing to the new hires. Thus, fired workers are fired sooner under the Single Contract. However, if both regulations have the same average firing cost for workers who become permanent, temporary workers are less likely to be fired in the Single Contract. Moreover, this new regulation increases hiring and average employment duration. It also reduces turnover among temporary workers, but at the expense of higher turnover among permanent workers who are more often replaced by temporary workers.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"199 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122098362","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Employment Law and Social Equality","authors":"S. Bagenstos","doi":"10.2139/SSRN.2208883","DOIUrl":"https://doi.org/10.2139/SSRN.2208883","url":null,"abstract":"What is the normative justification for individual employment law? For a number of legal scholars, the answer is economic efficiency. Other scholars argue, to the contrary, that employment law protects against (vaguely defined) imbalances of bargaining power and exploitation. Against both of these positions, this paper argues that individual employment law is best understood as advancing a particular conception of equality. That conception, which many legal and political theorists have called social equality, focuses on eliminating hierarchies of social status. Drawing on the author’s work elaborating the justification for employment discrimination law, this paper argues that individual employment law is justified as preventing employers from contributing to or entrenching social status hierarchies — and that it is justifiable even if it imposes meaningful costs on employers.The paper argues that the social equality theory can help us critique, defend, elaborate, and extend the rules of individual employment law. It illustrates the point by showing how concerns about social equality, at an inchoate level, underlie some classic arguments against employment-at-will. It also shows how engaging with the question of social equality can enrich analysis of a number of currently salient doctrinal issues in employment law, including questions regarding how the law should protect workers’ privacy and political speech, the proper scope of maximum-hours laws and prohibitions on retaliation, and the framework that should govern employment arbitration.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134262006","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Critical Analysis of the Minimum Wages in Order to Achieve Substantive Justice","authors":"Asri Wijayanti","doi":"10.2139/ssrn.2183624","DOIUrl":"https://doi.org/10.2139/ssrn.2183624","url":null,"abstract":"Everyone needs income to meet their needs. Determination of minimum wage for workers always rises social conflict. There is a sharp conflict of interests between employers and workers in determining the minimum wage. Workers demands high wages, but employers tend to keep the wages low. At the beginning of 2012, the Bandung State Administrative Court verdict that defeat Apindo’s claim on the revision of Minimum Wages caused a labour strike and this action was followed by the enclosing of highway. The purpose of this study was to analyze whether the law on the minimum wage has reflected the substantive justice? The research method used was sociolegal. This study discusses whether the law on minimum wage can be a legal problem solving for workers to achieve welfare. Has the law on minimum wage been in line with ILO Convention No.131? Have the court's decisions on the minimum wage shown substantive justice? The results of discussion show that the law on minimum wage has not served as legal problem solving yet. Its substances, decent living components as the objects on minimum wage, have not been in accordance with the ILO Convention No. 131.The authority of the Wage Councils (tripartite: workers, employers, government) has not been maximal for only giving recommendation. Procedure on the formulation of minimum wage has not applied the principle of transparency yet. The impact of unfavorable wage system was the action chosen by the labor to strike and shut down the highway as a form of shopping forum. There are two recommendations; the first is by revising the substance of decent living components in the minimum wage. The second is by revising the procedure in determining the minimum wage based on the principle of transparency.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"229 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120850222","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Employment Protection and Multinational Enterprises: Theory and Evidence from Micro Data","authors":"Pehr-Johan Norback, J. Duanmu, Per Skedinger","doi":"10.2139/ssrn.2168141","DOIUrl":"https://doi.org/10.2139/ssrn.2168141","url":null,"abstract":"In this paper we show, theoretically and empirically, that stronger employment protection legislation (EPL) in a host country has important and differing effects on the various activities of multinational enterprises (MNEs). Using micro data on affiliates to Swedish multinational firms in 20 countries for the period of 1965–1998, we find that increased stringency in EPL is associated with fewer investments in new affiliates and lower employment in existing affiliates. We also find that it is mainly affiliate exports that are affected negatively by stronger EPL, while the impact on local sales is small. This is in accordance with our theoretical model, which predicts that the impact of EPL on the costs of competing firms is likely to put affiliates at a smaller disadvantage when selling for the local market than in the production for exports.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133905334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"CEO Compensation: A Resource Advantage and Stakeholder-Bargaining Perspective","authors":"Gurupdesh Pandher, Russell Currie","doi":"10.1002/SMJ.1995","DOIUrl":"https://doi.org/10.1002/SMJ.1995","url":null,"abstract":"This paper studies how CEO pay and its composition is shaped by strategic factors related to the firm’s capacity to generate rents and value, the uncertainty of its resource advantage, and the competitive interaction between firm stakeholders and top management. This is done using an analytical framework in which the CEO and other firm stakeholders interact over the firm’s resource surplus as utility-maximizing claimants based on their relative bargaining power while providing shareholders their market-based required return. Results from the model yield a number of cogent strategic insights and predictions on the causal interplay between CEO pay, firm growth and risk characteristics, stakeholder management, corporate strategy (e.g., offshoring production), and behavioral biases such as CEO optimism and overconfidence.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132361848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Labor Enforcement Theory: The Case of Public vs. Private Enforcement","authors":"S. Willborn","doi":"10.2139/ssrn.2034893","DOIUrl":"https://doi.org/10.2139/ssrn.2034893","url":null,"abstract":"Labor laws are enforced in many different ways. Sometimes public agencies enforce the laws and sometimes workers are authorized to do so. Sometimes employer/violators pay for litigation costs and sometimes not. Sometimes the sanctions for violations are set by the harm caused (such as loss of backpay) and sometimes the sanctions are fines and penalties. Sometimes agencies are the primary fora for hearing disputes and sometimes courts. The consequences of these types of differences in labor enforcement are under-studied empirically. Labor enforcement theory, if anything, is even less well-studied. This book chapter examines labor enforcement theory with a focus on the choice between public or private enforcement. The article begins by presenting a standard economic model of enforcement. The chapter then applies the model to private and public enforcement and argues, among other things, that private enforcement adjusts better than public enforcement to economic downturns, but is less effective at enforcing violations that affect current employees. The chapter concludes with a critique and call for re-evaluation of the standard economic model of enforcement.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121672974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Papers, Please! The Effect of Birth Registration on Child Labor and Education in Early 20th Century USA","authors":"Sonja Fagernäs","doi":"10.2139/ssrn.1874042","DOIUrl":"https://doi.org/10.2139/ssrn.1874042","url":null,"abstract":"A birth certificate establishes a child's legal identity and age, but few quantitative estimates of the significance of birth registration exist. Birth registration laws were enacted by U.S. states in the 19th and early 20th centuries. Using 1910-1930 census data, this study finds that minimum working age legislation was twice as effective in reducing under-aged employment if children were born with a birth registration law, with positive implications for school attendance. Registration laws also improved the enforcement of schooling laws somewhat, but the connection is weaker. The long-term effect of registration laws was to increase educational attainment by 0.06-0.1 years.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116010607","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Lalive, Analía Schlosser, Andreas Steinhauer, J. Zweimüller
{"title":"Parental Leave and Mothers' Careers: The Relative Importance of Job Protection and Cash Benefits","authors":"R. Lalive, Analía Schlosser, Andreas Steinhauer, J. Zweimüller","doi":"10.2139/ssrn.1958192","DOIUrl":"https://doi.org/10.2139/ssrn.1958192","url":null,"abstract":"Parental leave regulations in most OECD countries have two key policy instruments: job protection and cash benefits. This paper studies how mothers’ return to work behavior and labor market outcomes are affected by alternative mixes of these key policy parameters. Exploiting a series of major parental leave policy changes in Austria, we find that longer cash benefits lead to a significant delay in return to work and that the magnitude of this effect depends on the relative length of job protection and cash benefits. However, despite their impact on time on leave, we do not find a significant effect on mothers’ labor market outcomes in the medium run, neither of benefit duration nor of job-protection duration. To understand the relative importance (and interaction) of the two policy instruments in shaping mothers’ return to work behavior, we set up a non-stationary job search model in which cash benefits and job protection determine decisions of when to return to work and whether or not to return to the pre-birth employer. Despite its lean structure, the model does surprisingly well in matching empirically observed return to work profiles. The simulation of alternative counterfactual regimes shows that a policy that combines both job protection and benefits payments succeeds to induce mothers to spend some time with the child after birth without jeopardizing their medium run labor market attachment.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"257 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124227734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Effect of Homeownership on Geographic Mobility and Labor Market Outcomes","authors":"Hernan Winkler","doi":"10.2139/ssrn.1724455","DOIUrl":"https://doi.org/10.2139/ssrn.1724455","url":null,"abstract":"This paper examines the effect of homeownership on mobility and labor income and provides new evidence that owning a home makes workers less likely to move in response to labor market shocks. To identify this effect, I develop and estimate a structural dynamic model of housing choices, migration decisions and labor market outcomes. I find that owning a home has a large negative effect on the probability of moving in response to a labor market shock and a small negative effect on labor income. Owners suffering from a decrease in home equity are 40 percent less mobile. I conduct two policy experiments. The first shows that the home mortgage deduction has a positive effect on homeownership, affects mobility and creates an incentive to buy larger houses. Second, I find that if the down payment requirement for buying a home is eliminated, homeownership exhibits a large increase, while the mobility and labor income of households experiencing negative labor market shocks decrease.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"122 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129188154","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Income Support for Persons with Disabilities","authors":"Ronald Kneebone, Oksana Grynishak","doi":"10.11575/SPPP.V4I0.42366","DOIUrl":"https://doi.org/10.11575/SPPP.V4I0.42366","url":null,"abstract":"Alberta, British Columbia and Ontario all maintain separate income-support programs for the disabled. This paper examines the criteria applicants must meet for each program and traces variations in monthly payment levels in relation to political exigencies and inflationary pressures affecting the cost of living. As it is impossible to settle on a definitive way to measure poverty, the authors present several proposals and compare all of them with the income recipients realize from each of the three programs. While acknowledging that the precise level of income support for the disabled is ultimately a value judgment, they suggest that the existing income-support program provided by the federal government for impoverished seniors is a suitable baseline. The authors crunch the numbers to reveal the amounts Alberta, BC and Ontario would have to spend to bring their existing income-support programs for the disabled up to the level of similar programs for seniors. Finally, they recommend that governments index income support for the disabled to inflation. Governments already take inflation into account for taxpayers and seniors and the authors believe the disabled should not be treated differently.","PeriodicalId":177971,"journal":{"name":"Economic Perspectives on Employment & Labor Law eJournal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114806610","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}