Firing Cost and Firm Size: A Study of Sri Lanka's Severance Pay System

Sri Lanka's Termination of Employment of Workmen Act (TEWA) requires that firms with 15 or more employees justify layoffs and provide generous severance pay to displaced workers, with smaller firms being exempted. Athough formally subject to TEWA, firms in Export Processing Zones (EPZs) may have been partially exempt from TEWA due to lax enforcement in that sector. A theoretical model shows that firms subject to TEWA will tend to mass at or below the threshold of 14 workers until they get an atypically large productivity shock that would propel them beyond the threshold. EPZ firms will be largely unaffected by the law. In addition, EPZ firms receive preferential tax treatment and exemptions from customs duty. Consequently, firms that anticipate rapid growth will have an incentive to locate in the EPZ sector. We test these predictions using 1995-2003 panel data on the universe of all private, formal sector firms in Sri Lanka. We find that at all sizes, EPZ firms are more likely to add employees than nonEPZ firms. Above the threshold, nonEPZ firms are more likely to shed workers while EPZ firms are more likely to add workers. Once passing the threshold, nonEPZ firms grow faster than nonEPZ firms below the threshold, consistent with a theoretical prediction that only atypically productive nonEPZ firms would cross the threshold. Finally, evidence is consistent with the the hypothesis that TEWA restrictions retard the growth of nonEPZ firms below the threshold, but only some of the evidence passes tests of statistical significance. The combined impacts of retarded growth below the threshold, the need for a large productivity shock to cross the threshold, and slower employment growth above the threshold suggest that the TEWA failed to lower unemployment. Instead, it slowed employment growth of nonEPZ firms and induced other firms to seek the EPZ sector in order to evade the law.severance; firing costs; layoff restrictions; Sri Lanka; employment growth; export promotion; threshold

Value of Single Source and Backgrounded Cattle as Measured by Health and Feedlot Profitability

Commingling cattle in the feedlot increases the odds of cattle getting sick. However, backgrounded cattle are less susceptible to diseases which allow the generalizing statements like "backgrounding is just like single source". Using data from over 15,000 cattle fed in 12 Iowa feedlots, we show that although backgrounded cattle do better than preconditioned cattle commingled in the feedlot, they have poorer carcass quality, health, and performance than single source cattle. Backgrounded cattle should be discounted $8.24/head relative to single source, and only received a small premium over multi-source preconditioned cattle though not significantly different.Livestock Production/Industries,

Firing cost and firm size : a study of Sri Lanka's severance pay system

Consistent with its focus on social policies, Sri Lanka has devoted significant attention to worker protection. One of the main pillars of its worker protection policy is the Termination of Employment of Workman Act (TEWA) introduced in 1971. The act aims to limit unemployment by raising the cost of layoffs. The act requires that each layoff of a covered worker, whether individual or as a part of a mass layoff, must be approved by the government. Until recently, the government also decided on a case-by-case basis the level of severance pay the firm had to pay to the laid off workers. Since its introduction, critics have argued that the TEWA's non-transparent, discretionary, and costly regulations discourage employment growth, hinder reallocation of labor from inefficient firms to more profitable sectors, slow the introduction of new technologies, and increase unemployment. Defenders including trade unions and the government argue that on the contrary, severance pay promotes longer-lasting employment relationships that improve incentives for training and enhance cooperation and trust between employers and workers. The paper is organized as follows: section two provides an institutional background, highlighting the intensions of the TEWA at its introduction, and it's the provisions and procedures. Section three presents the theoretical framework and formulates hypotheses to be empirically tested. Section four describes the data and the identification strategy devised to identify the employment effects of TEWA. Section five presents the empirical results based on the estimation of the multinomial model of employment growth of firms. Section six concludes witha summary and policy recommendations.Labor Markets,Microfinance,Labor Policies,Emerging Markets,Small Scale Enterprise

A Limited Information Bayesian Forecasting Model of the Cattle SubSector

The first step towards forecasting the price and output of the cattle industry is understanding the dynamics of the livestock production process. This study follows up on the Weimar and Stillman (1990) paper by using data from 1970 to 2005 to estimate the parameters that characterizes the cattle output supply. The model is then used to estimate forecast values for the periods 2006 and 2007. Bayesian limited information likelihood method is used to estimate the parameters when endogeneity exists between these variables. The forecasting ability of the model for a two-step ahead forecast for majority of the variables are relatively good and test statistic of the forecast are reported.Cattle, Bayesian, forecasting, Inventory, Slaughter, Agribusiness, Agricultural Finance, Financial Economics, Livestock Production/Industries, Marketing, Production Economics, Research Methods/ Statistical Methods,

Model Uncertainty in Characterizing Recreation Demand

A Bayesian variable selection procedure is used to control for uncertainty in the specification of a recreational demand model. Specifically, we propose a model that draws on the Bayesian paradigm to integrate the variable selection process into the model and reflect the accompanying uncertainty about which is the “best†specification used for counterfactual predictions. The advantage of this procedure over previous non-Bayesian approaches is that overcomes the problem of pre-testing in specification searches.

Controlling for Observed and Unobserved Site Characteristics in Rum Models of Recreation Demand

�Random Utility Maximization (RUM) models of recreation demand are typically plagued by limited information on environmental and other attributes characterizing the available sites in the choice set. To the extent that these unobserved site attributes are correlated with the observed characteristics and/or the key travel cost variable, the resulting parameter estimates and subsequent welfare calculations are likely to be biased. In this paper we develop a Bayesian approach to estimating a RUM model that incorporates a full set of alternative specific constants, insulating the key travel cost parameter from the influence of the unobserved site attributes. In contrast to estimation procedures recently outlined in Murdock (2006), the posterior simulator we propose (combining data augmentation and Gibbs sampling techniques) can be used in the more general mixed logit framework in which some parameters of the conditional utility function are random. Following a series of generated data experiments to illustrate the performance of the simulator, we apply the estimation procedures to data from the Iowa Lakes Project. In contrast to an earlier study using the same data (Egan \textit{et al.} \cite{eganetal}), we find that, with the addition of a full set of alternative specific constants, water quality attributes no longer appear to influence the choice of where to recreate.nonmarket valuation; water quality; discrete choice

Racial disparities in treatment patterns and clinical outcomes in patients with HER2-positive metastatic breast cancer.

Data characterizing demographics, treatment patterns, and clinical outcomes in black patients with human epidermal growth factor receptor 2 (HER2)-positive metastatic breast cancer (MBC) are limited. registHER is a large, observational cohort study of patients (n = 1,001) with HER2-positive MBC diagnosed ≤6 months of enrollment and followed until death, disenrollment, or June 2009 (median follow-up of 27 months). Demographics, treatment patterns, and clinical outcomes were described for black (n = 126) and white patients (n = 793). Progression-free survival (PFS) following first-line therapy and overall survival (OS) were examined. Multivariate analyses adjusted for baseline and treatment factors. Black patients were more likely than white patients to be obese (body mass index ≥30), to have diabetes, and to have a history of cardiovascular disease; they were also less likely to have estrogen receptor or progesterone receptor positive disease. In patients treated with trastuzumab, the incidence of cardiac safety events (grade ≥3) was higher in black patients (10.9 %) than in white patients (7.9 %). Unadjusted median OS and PFS (months) were significantly lower in black patients than in white patients (OS: black: 27.1, 95 % confidence interval [CI] 21.3-32.1; white: 37.3, 95 % CI 34.6-41.1; PFS: black: 7.0, 95 % CI 5.7-8.2; white: 10.2, 95 % CI 9.3-11.2). The adjusted OS hazard ratio (HR) for black patients compared with white patients was 1.29 (95 % CI 1.00-1.65); adjusted PFS HR was 1.29 (95 % CI 1.05-1.59). This real-world evaluation of a large cohort of patients with HER2-positive MBC shows poorer prognostic factors and independently worse clinical outcomes in black versus white patients. Further research is needed to identify potential biologic differences that could have predictive impact for black patients or that could explain these differences

Public disclosure for pollution abatement: African decision-makers in a PROPER public good experiment

A linear public good experiment has been employed to investigate strategic behaviour in pollution abatement among African climate decision-makers. The experiment consisted of three groups of which Group 1 did not receive any treatments, and Groups 2 and 3 received one and two treatments, respectively. We found that the untreated group (baseline) polluted more than the two treated groups, while there was no statistically significant difference between the pollution abatement of the two treated groups. The results suggest that public disclosure potentially drives pollution abatement and that its eventual withdrawal does not obliterate abatement behavior. We also find that pollution levels differ significantly between males and females. Furthermore, we learned that individuals who thought it was unfair for Africa to reduce emissions polluted more