Mário Centeno

The Match Quality Gains from Unemployment Insurance

This paper assesses the benefits of unemployment insurance (UI) by measuring its effect in match quality. We note that UI generosity should affect the decision to match or not and should therefore have some effect on match quality. Using NLSY data, we analyze the relationship between postunemployment job tenure and measures of the state-level UI generosity and the unemployment rate at the time the job is started. We show that greater UI generosity leads to longer job tenure. Furthermore, we find some evidence that this effect is more pronounced during busts, UI having a limited dampening effect on the cyclical variation in match quality.

How integrated are the money market and the bank loans market within the European Union

Abstract This paper estimates cointegration vectors of the time series of money market interest rates and bank lending rates. The study includes six member countries of the European Union (EU) and covers a period of 10 years, from 1985 to 1994. During this period, significant steps were taken that intensified financial integration in the EU, including the free flow of capital, a system of stable exchange-rate parities and the implementation of a single market for banking services. We conclude that the domestic money markets are closely linked, but the domestic banking markets are segmented. Preliminary investigation of international differences in the capital structure of firms, on the one hand, and of domestic business cycle conditions, on the other hand, do not seem to explain differences in bank spreads across countries. The results point to other directions, presumably to local market power and to differences in the role of lender monitoring.

A composite heuristic for the single machine early/tardy job scheduling problem

Abstract The single machine early/tardy job scheduling problem (SMETP) consists of determining the best processing sequence for a set of jobs in order to minimize total costs. Minimizing both earliness and tardiness costs pushes the completion of each job to as close to its due date as possible in accordance with the just-in-time philosophy of production planning. As the problem is NP-hard and local optimality conditions may be well away from global optimality conditions new methods are needed to generate near optimal solutions. We propose a new heuristic for the SMETP that alternates search techniques performed at different neighborhood ranges using its own results to guide the alternation in a dynamic way. The computational results we obtained on randomly generated test problems compared very favorably with the results obtained with tabu search and simulated annealing algorithms. The single machine early/tardy job scheduling problem (SMETP) is a NP-hard problem for which most properties of optimal solutions for single machine problems with regular objective function do not hold. In this paper we present a new composite heuristic for the SMETP that combines tabu search, simulated annealing and steepest descent techniques to generate near optimal schedules. Computational experience is reported for a set of randomly generated test problems.

When Supply Meets Demand: Wage Inequality in Portugal

Wage inequality in Portugal has increased over the last thirty years, with two distinct periods. The period from 1984 to the mid-90s witnessed strong increases in both upper- and lower-tail inequality. A shortage of skills combined with skill-biased technological changes were at the core of this evolution. Since the mid-90s, lower-tail inequality has decreased, while upper-tail inequality has increased, but at a slower rate. A larger supply of skills and polarization of labor demand contribute to this evolution. Other developed economies share similar trends, but the Portuguese experience shows clearly the role of supply and demand factors in shaping the wage distribution.JEL codesJ3; D3; O3

Unemployment benefits and reservation wages: key elasticities from a stripped-down job search approach

This paper exploits survey information on reservation wages and data on actual wages from the European Community Household Panel to deduce, in the manner of Lancaster and Chesher, additional parameters of a stylized structural search model; specifically, reservation wage and transition/duration elasticities. The informational requirements of this approach are minimal, thereby facilitating comparisons between countries. Further, its policy content is immediate in so far as the impact of unemployment benefit rules and measures increasing the arrival rate of job offers are concerned. These key elasticities are computed for the United Kingdom and 11 other European nations.

The impact of unemployment insurance generosity on match quality distribution

This paper investigates the impact of unemployment insurance (UI) generosity on the distribution of match tenure. We show that more generous UI increases expected tenure, reducing the mass of the lower tail of match duration and increasing the duration of matches available. This impact is differentiated across education levels, with the larger benefits accruing to the less educated.

The Careers of Top Managers and Firm Openness: Internal versus External Labour Markets

This paper studies the careers of top managers using a large panel of firms. The main objective is to empirically evaluate the role of learning and human capital acquisition in promotion dynamics along with variables capturing the formation of internal labour market (ILM) practices. We find that promotion is negatively correlated with tenure, but that there is a non-linear negative duration dependence with elapsed time since the last promotion event. Firms showing a weaker degree of ILM are less prone to promote insiders. We next take the managers career inside a firm as a sequence of promotion decisions, and use a nested structure of the promotion decision modelled as a nested logit model. Results show that the top managers progression nest into four types: loser, early starter, late beginner, and champion, and that the degree of ILM as a signigicant impact on the process of learning inside the firm.

Do Low‐Wage Workers React Less to Longer Unemployment Benefits? Quasi‐Experimental Evidence

The fact that unemployed workers have different abilities to smooth consumption entails heterogeneous responses to extended unemployment benefits. Our empirical exercise explores a quasi-experimental setting generated by an increase in the benefits entitlement period. The results point towards a hump-shape response of unemployment duration over the one-year pre-unemployment wage distribution; individuals at the bottom and at the top of the wage distribution reacted less than those in the interquartile range. This behavior of job searchers is consistent with labor supply models with unemployment insurance and savings. It questions the optimality of very long entitlement periods to target the unemployment experiences of low-wage workers.

Technological progress and average job matching quality

O objetivo deste artigo e o de estudar, em um mercado de trabalho caracterizado por friccoes, os efeitos do progresso tecnologico sobre a qualidade media das parcerias produtivas. Para tal, utilizamos uma extensao do modelo de Mortensen and Pissarides (1998) e obtivemos, como resultados, que os efeitos de variacoes na taxa de progresso tecnologico sobre o mercado de trabalho dependerao das condicoes da economia. Se a economia for totalmente caracterizada pela presenca de parcerias produtivas de baixa qualidade, um aumento na taxa de progresso tecnologico vem acompanhado por um aumento na qualidade medias das parcerias produtivas. Por sua vez, se a economia for totalmente caracterizada pela presenca de parcerias produtivas de alta qualidade, um aumento na taxa de progresso tecnologico gera um efeito inverso. Finalmente, se a economia for totalmente caracterizada pela presenca de parcerias produtivas de muito alta qualidade, um aumento na taxa de progresso tecnologico vira acompanhado de uma elevacao na qualidade media dos empregos.