The B.E. Journal of Economic Analysis & Policy

Published by De Gruyter

Volume 18 Issue 2 -

April 2018

Issue of The B.E. Journal of Economic Analysis & Policy

Contents
Journal Overview

research-article

April 4, 2018

The Heterogeneous Cyclicality of Income and Wages Among the Distribution in the UK

María Cervini-Plá, Antonia López-Villavicencio, José I. Silva

Article number: 20170181

Abstract

We investigate the cyclicality of real hourly wages and income using individual data for the UK over the 1991–2013 period. By paying special attention to the heterogeneity among different earnings and income groups, we document that individuals at the top of the distribution are more cyclical than lower ones. We also show that real wages and income are roughly acyclical for low-wage and low-income workers. In particular, we present evidence that the adjustment for low-paid workers takes place through transitions to and from unemployment.

March 7, 2018

Potential Parenthood and Career Progression of Men and Women – A Simultaneous Hazards Approach

Martin Biewen, Stefanie Seifert

Article number: 20170154

Abstract

We analyze individual career transitions of men and women in Germany. Our particular focus is on the association of upward, downward and horizontal job changes with individual fertility. In contrast to most of the literature, we focus on potential rather than realized fertility. Based on mixed multivariate proportional hazard models with competing risks, we find a significant negative relationship between the contemporaneous probability of having a child and horizontal career transitions for women and a positive significant association of the hazard of parenthood with upward career transitions for men. These effects persist when we apply fixed-effects panel data models allowing for correlation of individual parenthood hazards with unobserved individual characteristics. Our results suggest clear gender differences in the relationship between career patterns and potential fertility.

March 31, 2018

The Role of Adolescent Health in Adult SES Outcomes

Dana C. Andersen, Pinar Mine Gunes

Article number: 20170169

Abstract

This paper explores the effects of adolescent health and adolescent mental health on long-term socioeconomic outcomes in the United States. Within-twin estimations are employed to overcome the bias generated by unobserved family background and genetic traits. The results indicate that poor adolescent health reduces long-term health, earnings, and household income. Accounting for life-cycle effects suggests that the effect of poor adolescent health on household income and earnings increases over the life cycle. Finally, we demonstrate that the effects on income are a consequence of the persistence of adolescent health on future health.

February 13, 2018

Corruption and Medicine Quality in Latin America: A Pilot Study

Roger Bate, Aparna Mathur

Article number: 20170076

Abstract

Fake and substandard medicines are a significant problem in developing nations, and a growing problem in developed ones too. There have been assessments of basic medicine quality from many countries and regions across the world but almost none in Central and South America. Over the past decade, as part of our research, we have collected over ten thousand samples of medicines from 22 cities in emerging markets, but the only one from the Latin region was Sao Paolo in Brazil. We have now rectified this gap, at least for one critical medicine, the broad spectrum antibiotic ciprofloxacin. Using original, self-collected data from ten countries in Latin America, we test whether the 687 Ciprofloxacin treatments pass the Global Pharma Health Fund e.V. Minilab® protocol to identify substandard or counterfeit medicines. In terms of quality, 93 percent of drugs were good quality. Within the drugs that failed the quality test, the majority were substandard rather than fake. About 26 % of the poor quality drugs were fake, with zero active pharmaceutical ingredient (API), while the rest were substandard, with less than 80 % API. In line with results from our earlier studies, we find that products that were locally registered, as well as those with SRA or WHO pre-qualification, were more likely to pass the test. A new finding in this paper is that corruption is a key predictor of poor quality drugs. Less corrupt countries had higher levels of passing drugs.

February 1, 2018

Public–Private Monopoly

Marian W. Moszoro

Article number: 20160314

Abstract

This article presents comparative statics of organizational modes of natural monopoly in public utilities with a focus on co-ownership and co-governance. Private monopoly lowers output and increases the price to maximize profit; public monopoly incurs higher costs due to the lack of know-how; and a regulated monopoly results in regulation costs to overcome informational asymmetries. A public–private partnership arises as an efficient organization mode when it enables the internalization of private know-how and saves regulation costs due to correspondingly sufficient private and public residual control rights. Public–private partnerships support higher prices than marginal costs due to rent sharing, with its upper price frontier decreasing in private residual control rights.

February 16, 2018

Going Along or Going Independent? A Dynamic Analysis of Nonprofit Alliances

Jiawei Chen, Michael Sacks

Article number: 20170009

Abstract

This paper investigates strategic alliances in the nonprofit sector in the form of franchising. Using a dynamic model of local public goods with endogenous affiliation and splitting, we show that local organizations may choose to affiliate with the national organization for faster capital accumulation. Temporary alliance occurs when a local organization strategically affiliates with the national organization only to break away after accumulating enough capital. Alliance is more likely to arise and persist when the local chapter is smaller, when the local chapter’s mission is closer to the national organization’s, when the national organization is more efficient in production, and when the local chapter is more patient. Moreover, regulation that requires the local chapter to be affiliated with the national organization would be welfare reducing when the local chapter is large, when the local and national missions differ substantially, and when production at the national organization is inefficient.

Letter

April 19, 2018

Are Busy Directors Harmful or Helpful? Evidence from the Great Recession

Pradit Withisuphakorn, Pornsit Jiraporn

Article number: 20170249

Abstract

We contribute to the debate on the costs and benefits of busy directors by investigating the effect of busy directors on firm value during a stressful time, i. e. during the Great Recession. Our results show that busy directors improve firm value significantly during the financial crisis. In particular, a rise in directors’ busyness by one standard deviation results in an improvement in Tobin’s q by 6.41 %. Directors with multiple board seats appear to help firms navigate the crisis more successfully, supporting the notion that multiple board seats signal higher quality. Outside the crisis period, however, we find that busy directors reduce firm value, consistent with many prior studies. Our results are crucial as they show that governance mechanisms function differently during stressful times than they do during normal times. Firms should exercise great caution before imposing limits on outside board seats on their directors.

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

> Information on submission process