Optimal Size and Intensity of Job Search Assistance Programs

This paper derives the welfare optimal size and intensity of job search assistance programs in a general equilibrium model where the labor market is affected by search frictions. Both instruments have a priori ambiguous fiscal implications: their direct employment stimulating effects broaden the base of the labor income tax and increase revenues, while also incurring direct costs. At optimal levels, the policy instruments trade off the positive effects on the participants against a marginal increase in taxes, which distorts employment decisions and potentially labor market tightness. We find that the higher unemployment insurance benefits, the lower is the optimal program intensity. Further, the introduction of a job search assistance program is more likely to raise welfare if it is highly effective at improving participants' job search skills, direct program costs are low and if the general level of taxation in the economy and thus the labor market participation tax are high.Job search assistance, optimal size, optimal intensity, unemployment insurance

Outsourcing, Unemployment and Welfare Policy

The paper investigates the consequences of outsourcing of labor intensive activities to low-wage economies. This trend challenges the two basic functions of the welfare state, redistribution and social insurance when private unemployment insurance markets are missing. The main results are: (i) outsourcing raises unemployment and labor income risk ofunskilled workers; (ii) it increases inequality among high- and low-income groups; and (iii) the gains from outsourcing can be made Pareto improving by using a redistributive linear income tax if redistribution is initially not too large. We finally derive the welfare optimal redistribution and unemployment insurance policies.outsourcing, unemployment, social insurance, redistribution

Profit Taxation and Finance Constraints

In the absence of financing frictions, profit taxes reduce investment by their effect on the user cost of capital. With finance constraints due to moral hazard, investment becomes sensitive to cash-flow and own equity of firms. We propose a corporate finance model of investment and derive three central results: (i) Even small taxes impose first order welfare losses on financially constrained firms; (ii) ACE and cashflow tax systems, which are investment neutral in the neoclassical model, are no longer neutral when firms are finance constrained. (iii) When banks are active and provide external finance together with monitoring services, the two systems not only reduce investment, but are also no longer equivalent. With active banks, investment is subject to double moral hazard and the timing of tax payments becomes important. The ACE system gives tax relief at the return stage and provides better incentives than a cash-flow tax which gives tax relief upfront.finance constraints, profit tax, cash-flow tax, ACE tax

Profit Taxation and Finance Constraints

In the absence of financing frictions, profit taxes reduce investment by their effect on the user cost of capital. With finance constraints due to moral hazard, investment becomes sensitive to cash-flow and own equity of firms. The impact of taxes changes fundamentally. Taxes reduce investment because they erode cash flow and, thereby, a firm's pledgeable income available for repayment to outside investors, and not because they reduce the user cost of capital. We propose a corporate finance model of investment and derive three central results: (i) Even small taxes impose first order welfare losses on financially constrained firms; (ii) ACE and cash-flow tax systems, which are investment neutral in the neoclassical model, are no longer neutral when firms are finance constrained. (iii) When banks are active and provide external finance together with monitoring services, the two systems not only reduce investment, but are also no longer equivalent. With active banks, investment is subject to double moral hazard and the timing of tax payments becomes important. The ACE system gives tax relief at the return stage and provides better incentives than a cashflow tax which gives tax relief upfront.Finance constraints, profit tax, cash-flow tax, ACE tax

Profit Taxation, Innovation and the Financing of Heterogeneous Firms

Credit constraints are more frequent among growth companies with large investment opportunities. For the same reason, profit taxes may harm innovative firms more than standard ones. This paper develops a model of heterogeneous firms where an endogenous share opts for innovation and faces credit constraints in the subsequent expansion phase. We emphasize four results: (i) R&D subsidies not only encourage innovation but also relax finance constraints and help innovative firms to exploit investment opportunities to a larger extent. (ii) Taxes which are neutral in a neoclassical world, still restrict expansion investment of constrained firms by reducing free cash-flow and thereby discourage innovation. (iii) A revenue neutral increase in profit taxes to finance larger R&D subsidies redistributes towards innovative firms and boosts aggregate productivity and welfare. (iv) A revenue neutral tax cut cum base broadening policy similarly boosts innovation and welfareProfit taxes, R&D subsidies, innovation, investment, credit constraints

Business Taxation, Corporate Finance and Economic Performance

This survey of recent research in corporate finance discusses how business taxes, subsidies as well as a country's institutional development affect several important decision margins of heterogeneous firms. We argue that innovative firms, as a result of agency problems between insiders and outside investors, are most frequently finance constrained. We discuss how profit taxes reduce investment of constrained firms by their effect on cash-flow, and of unconstrained firms by their effect on the user cost of capital. Moreover, tax reform as well as tax financed R&D subsidies can enhance aggregate investment, innovation and efficiency by implicitly redistributing profits towards constrained firms where capital earns the highest return. We argue that the corporate legal form improves firms' access to external funds. We then explain the firms' choice between venture capital and bank financing and discuss how business taxation can affect venture capital financing on both the extensive and intensive margins. Finally, we review theory and evidence on how corporate finance may shape a country's comparative advantage in innovative industries as well as aggregate labor market performance when part of firms are finance constrained.Financing constraints, innovation, business taxation, subsidies, entrepreneurial choice

Erfolgsfaktoren der Mitgliederbindung in Berufsverbänden

Wovon hängt ab, ob es einem Berufsverband gelingt, Mitglieder zu binden und damit einen hohen Organisationsgrad zu erreichen? Eine Befragung von insgesamt 850 gegenwärtigen und ehemaligen Mitgliedern aus den 13 Sektionen eines Verbands mit unterschiedlichem Leistungsangebot in seinen Sektionen zeigt, in welchem Masse die individuelle Mitgliedschaftsentscheidung über den Leistungsmix hinaus durch die Strukturen des Verbands und die damit verbundene Einbindung des einzelnen Mitglieds in die Verbandsarbeit beeinflusst werden kann

GENETIC VARIATION IN SYMPATRIC AND ALLOPATRIC POPULATIONS OF HYBRIDIZING FRESHWATER SNAIL SPECIES(VIVIPARUS ATER AND V. CONTECTUS)

To estimate the geographical extent of introgression, we studied the genetic structure of sympatric and allopatric populations of hybridizing freshwater snail species Viviparus ater and V. contectus in central Europe. Six allozyme loci which were variable in Lake Garda, Italy in a previous study (five nearly diagnostic loci between the two species and one highly polymorphic locus in V. contectus) were analyzed from ten sympatric locations and four allopatric populations each for the two species. Presumably introgressed genes (low allele frequencies) were found from at least one locus in seven out of the ten sympatric sites. These seven sites covered most of northern Italy. The data indicate that introgression has occurred from Viviparus contectus to V. ater and vice versa. Therefore, there is a possibility of widespread introgression or mosaic zones in nature. However, we cannot rule out that the observed patterns are due to the shared ancestry. V. ater possessed low genetic variation (the jackknifed mean of Wright's FST±S.E. over four loci was 0.041±0.004). On the other hand, V. contectus showed high genetic differentiation (the jackknifed mean of FST± S.E. over six loci was 0.546±0.166). Although introgression may have caused evolutionary changes in V. ater and V. contectus, it was not strong enough to level out the genetic differences between the two species, which may have originated from isolation among populations in V. contectus and a past bottleneck event in V. ate

SIZE-ASSORTATIVE MATING IN A NATURAL POPULATION OF VIVIPARUS ATER (GASTROPODA: PROSOBRANCHIA) IN LAKE ZÜRICH, SWITZERLAND

The number of mating pairs, the size of the mating partners, and the distribution of individuals of Vivi-parus ater on a grid in Lake Zürich were recorded during one breeding season in 1990. There was positive assortative mating with respect to shell size. The proportion of copulating individuals ranged from 1% to 6% (average 3%) of the active population at any one time. Individual snails copulated 60 times on average from April until November. Snails were abundant and copulated in shallow water close to the shore in Spring. They moved towards deeper areas in Autumn. V. ater copulated on all substrates at any depth (1-9 m)of the grid. The spatial distribution of copulations throughout the summer reflected the pattern of snail abundanc

Profit taxation and finance constraints

In the absence of financing frictions, profit taxes reduce investment by their effect on the user cost of capital. With finance constraints due to moral hazard, investment becomes sensitive to cash-flow and own equity of firms. We propose a corporate finance model of investment and derive three central results: (i) Even small taxes impose first order welfare losses on financially constrained firms; (ii) ACE and cashflow tax systems, which are investment neutral in the neoclassical model, are no longer neutral when firms are finance constrained. (iii) When banks are active and provide external finance together with monitoring services, the two systems not only reduce investment, but are also no longer equivalent. With active banks, investment is subject to double moral hazard and the timing of tax payments becomes important. The ACE system gives tax relief at the return stage and provides better incentives than a cash-flow tax which gives tax relief upfront