February 2017

04Feb

Economic integration across Latin America: evidence from labor markets, 1990-2013

By Daniel Lederman & Raymond Robertson Combining macroeconomic and microeconomic data and three indicators of international market integration, this paper assesses the degree to which Latin American labor markets are integrated. The results suggest that relative to East Asia, Latin American labor markets are somewhat more integrated, but considerable differences across countries persist. In addition, the evidence indicates that the degree of labor market integration across Latin American borders is significantly less than that of labor markets within Mexico and...

February 4, 2017
Articles, Labor Market,
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04Feb

Understanding the dynamics of labor income inequality in Latin America

By Carlos Rodriguez Castelan, Luis Felipe Lopez-Calva, Nora Lustig & Daniel Valderrama Since the early 2000s, after a long period of wide and persistent gaps, Latin America has experienced a steady decline in income inequality. This paper presents evidence of a trend reversal in labor income inequality, which is considered the main factor behind such a decline in income inequality across the region. The analysis shows that, while labor income inequality increased during the 1990s, with heterogeneous experiences across countries,...

February 4, 2017
Articles, Labor Market
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04Feb

Enforcement capacity and the impact of labor regulation : evidence from the Russian Federation

By Álvaro Gonzalez, Siddharth Sharma & Hari Subhash The impact of business regulations on firms could depend on how the regulations are enforced in practice. Exploiting variation in enforcement capacity across the Russian Federation's administrative regions, this paper examines whether the enforcement of restrictive regulations on hiring and firing workers affects how firms adjust employment during industry upswings and downswings. The analysis finds that the extent to which firms adjust employment upward during industry upswings and downward during downswings is...

February 4, 2017
Articles, Labor Market, Regulation, Supervision,
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04Feb

Employee Participation, Corporate Governance and the Firm: A Transatlantic View Focused on Occupational Pensions and Co-Determination

By Markus Roth Corporate governance and the theory of the firm are discussed primarily from the shareholders’ perspective. This point of view neglects the tremendous effects of private pensions and of co-determination as well as interdependencies between co-determination, pensions and corporate governance. Since in the private pension world the firm serves as an investment tool, the focus should be shifted from short-term interests to concepts maximising long-term shareholder value. In this context, also moderate forms of co-determination might serve as...

February 4, 2017
Articles, Corporate Governance, Labor Market,
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04Feb

Sharing High Growth across Generations: Pensions and Demographic Transition in China

By Zheng Michael Song, Kjetil Storesletten, Yikai Wang & Fabrizio Zilibotti Intergenerational inequality and old-age poverty are salient issues in contemporary China. China’s aging population threatens the fiscal sustainability of its pension system, a key vehicle for intergenerational redistribution. We analyze the positive and normative effects of alternative pension reforms, using a dynamic general equilibrium model that incorporates population dynamics and productivity growth. Although a reform is necessary, delaying its implementation implies large welfare gains for the (poorer) current generations, imposing only small...

February 4, 2017
Articles, Labor Market,
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04Feb

Lessons for an Aging Society: The Political Sustainability of Social Security Systems

By Vincenzo Galasso & Paola Profeta What is the future of social security systems in OECD countries? In our view, the answer belongs to the realm of politics. We evaluate how political constraints shape the social security system in six countries - France, Germany, Italy, Spain, the UK and the US - under population aging. Two main aspects of the aging process are relevant to the analysis. First, the increase in the dependency ratio - the ratio of retirees to...

February 4, 2017
Aging, Articles, Labor Market, ,
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04Feb

The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism

By Peer C. Zumbansen & Cynthia A. Williams This paper constitutes the introduction to an edited collection, THE EMBEDDED FIRM: LABOR, CORPORATE GOVERNANCE AND FINANCE CAPITALISM (Cambridge University Press, 2011). This book brings together contributions from law, economics, sociology and politics in order to evaluate the effects of the shift to shareholder primacy in both the United States and the United Kingdom, in the context of an increasingly financialized economy. Contributors include Ruth Aguilera, William Allen, Harry Arthurs, Blanaid Clark,...

February 4, 2017
Articles, Corporate Governance, Labor Market, ,
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03Feb

The FinTech Opportunity

By Thomas Philippon This paper assesses the potential impact of FinTech on the finance industry, focusing on financial stability and access to services. I document first that financial services remain surprisingly expensive, which explains the emergence of new entrants. I then argue that the current regulatory approach is subject to significant political economy and coordination costs, and therefore unlikely to deliver much structural change. FinTech, on the other hand, can bring deep changes but is likely to create significant regulatory...

February 3, 2017
Articles, Labor Market, System Sustainability, ,
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03Feb

Putting the Pension Back in 401(k) Plans: Optimal versus Default Longevity Income Annuities

By Vanya Horneff, Raimond Maurer & Olivia S. Mitchell Most defined contribution pension plans pay benefits as lump sums, yet the US Treasury has recently encouraged firms to protect retirees from outliving their assets by converting a portion of their plan balances into longevity income annuities (LIA). These are deferred annuities which initiate payouts not later than age 85 and continue for life, and they provide an effective way to hedge systematic (individual) longevity risk for a relatively low price. Using...

February 3, 2017
Aging, Articles, Labor Market, Pension design
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03Feb

Pension Coverage in Kenya: Legal and Policy Framework Required to Enhance Pension Coverage in Kenya

By Nyakundi B. D. Kenya's pension system is fragmented and covers only 15% of the labor force. The enactment of the Retirement Benefits Act in 1997 has not in any significant way impacted on the widening coverage of the pension system. The problem of low coverage is attributable to lack of an effective policy aimed at widening of coverage and the current legal framework which was designed to target participation of formal workers. This paper argues that wide ranging policy...

February 3, 2017
Articles, Labor Market, Regulation,
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