A rich panel data set from Mexico is used to study the patterns of entry, exit, and growth of microenterprises and to compare these with the findings of the mainstream theoretical and empirical work on firm dynamics. The Mexican self-employment sector is much larger than its counterpart in the United States, which is reflected in higher unconditional rates of entry into the sector. The evidence for Mexico points to the significant presence of well-performing salaried workers among the likely entrants into self-employment, as opposed to the higher incidence of poorer wageworkers among the entrants into the U.S. self-employment sector. Despite these differences, however, the patterns of entry, survival, and growth with respect to age, education, and many other covariates are very similar in Mexico and the United States. These strong similarities suggest that mainstream models of worker decisions and firm behavior are useful guides for policymaking for the developing-country microenterprise sector. Furthermore, they suggest that, as a first approximation, the developing-country microenterprise should probably be viewed as they are in the advanced countries as offering potentially desirable job opportunities to low-productivity workers.This article examines whether microenterprises in developing countries behave similarly to their industrial country counterparts or whether they represent a separate phylum altogether. In industrial countries, the last two decades have seen the emergence of a set of stylized facts about the personal and firm characteristics associated with entry into self-employment, the survival and growth of existing microenterprises, and theoretical frameworks to explain them. However, notwithstanding the increasing importance given to the
Skill premia trends for the Mexican urban labour market are analysed, decomposing into demand and supply factors. Moreover, among the former both between and within effects are studied, in line with the Katz and Murphy decomposition. It is shown that demand factors are more important for explaining the initial increment in skill premia, but supply factors are responsible for driving them down. It is concluded that the North American Trade Agreement (NAFTA) favours unskilled labour.
We analysed labour costs in Mexico and evaluated their impact in terms of firm performance. Using a new survey, we studied how firms chose to conduct a firing procedure (i.e. mandatory payment, negotiation, or legal dispute) and the actual costs derived from that decision. We found that firms that negotiate have, on average, lower costs. This may mean that workers subvaluate the legal benefits. Moreover, legal disputes may increase firing costs by 50 per cent. We contributed to the analysis of the impact of such costs on employment and found that, when firms negotiate or pay higher costs, this decreases the level of employment. We also analysed the impact of Social Benefits on employment using an industrial survey. We found that a 10 per cent increment in these benefits may have a negative long-term impact of 9 per cent on the level of employment. Copyright 2007 The Authors; Journal compilation 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..
Using a simple theoretical model we conjecture that dual practice may increase the number of patients seen but reduce hours spent at public facilities, if public physicians lack motivation and/or if their opportunity costs are very large. Using data from Indonesia, we then test these theoretical conjectures. Our identification strategy relies on a 1997 legislation necessitating health professionals to apply for license for private practice only after three years of graduation.Results using a difference-in-difference regression discontinuity design provides support to our conjectures, identifying the role of weak work discipline, lack of motivation and opportunity costs of public service provision.
In this paper we explore an alternative version of model-consistency of expectations, which allows the expectation-generating schemes to vary according to the state of accepted macroeconomic analysis. We perform an econometric exercise using standard existing models of different generations (built for the US economy) as potential expectations-forming tools. The discussion and implementation of alternative forms of model-consistency is the main purpose of the paper. As for the results, they suggest an absence of strong sensitivity to the expectations-generating schemes in past decades, while the performance of the models become problematic in recent times marked by the Great Recession. RESUMENEn este trabajo exploramos una versión alternativa de modelo-consistencia, que permite que los esquemas de generación de expectativas varíen en función del estado del análisis macroeconómico influyente. Llevamos a cabo un ejercicio econométrico usando dos modelos existentes, de distintas generaciones, elaborados para la economía de EEUU. La discusión e implementación de diferentes formas de modelo-consistencia es el propósito central del trabajo. Respecto a los resultados, sugieren ausencia de gran sensibilidad al esquema generador de expectativas en décadas pasadas, mientras que el desempeño de los modelos se vuelve problemático en tiempos recientes marcados por la Gran Recesión.
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