This article arises from a symposium sponsored by Pace University School of Law celebrating the ninetieth anniversary of the famous decision of Wood v. Lucy, Lady Duff-Gordon, 118 N.E. 214, 214 (N.Y. 1917). This case, amongst other advances, popularizes a particular notion of good faith in contracts as an "instinct with an obligation". This article examines the implications of the good faith doctrine as borne from the Wood decision in the employment context. Three challenges exist to the orderly development of the good faith doctrine in employment law. First, the meaning of good faith remains far from certain. Courts have intermingled good faith with other employment doctrines thereby hindering its widespread acceptance. Second, the good faith covenant in employment lacks mutuality. Usually bilateral in the contractual context, the covenant remains an obligation that usually runs only from the employer to the employee. The questions of whether the covenant should obligate employers and what the consequences of such an obligation could be remain unaddressed. Finally, and perhaps most interestingly, there is a limited understanding of the costs of the good faith duty. The emerging empirical work studying the effects of wrongful discharge law, of which the duty of good faith is a part, reveals potential economic costs of this important doctrine articulated by Judge Cardozo ninety years ago.
本文源于佩斯大学法学院主办的一次研讨会，庆祝著名的伍德诉露西案(Wood v. Lucy, Lady Duff-Gordon, 118 N.E. 214,214 (N.Y. 1917))判决90周年。本案，除其他进展外，普及了合同中诚信的特定概念，即“有义务的本能”。这篇文章探讨了诚信原则的含义，从伍德判决在就业背景下产生。诚信原则在就业法中的有序发展面临三大挑战。首先，诚信的含义还远未确定。法院将诚信原则与其他雇佣原则混为一谈，从而阻碍了其被广泛接受。二是就业诚信契约缺乏互补性。契约通常是双边契约，通常是雇主对雇员的义务。盟约是否应使雇主有义务以及这种义务的后果如何的问题仍未得到解决。最后，或许也是最有趣的是，人们对诚信义务的成本理解有限。研究不当解雇法影响的实证工作正在兴起，其中诚信义务是其中的一部分，揭示了卡多佐法官90年前阐明的这一重要原则的潜在经济成本。
{"title":"An Employment Contract 'Instinct with an Obligation': Good Faith Costs and Context","authors":"R. Bird","doi":"10.58948/2331-3528.1097","DOIUrl":"https://doi.org/10.58948/2331-3528.1097","url":null,"abstract":"This article arises from a symposium sponsored by Pace University School of Law celebrating the ninetieth anniversary of the famous decision of Wood v. Lucy, Lady Duff-Gordon, 118 N.E. 214, 214 (N.Y. 1917). This case, amongst other advances, popularizes a particular notion of good faith in contracts as an \"instinct with an obligation\". This article examines the implications of the good faith doctrine as borne from the Wood decision in the employment context. Three challenges exist to the orderly development of the good faith doctrine in employment law. First, the meaning of good faith remains far from certain. Courts have intermingled good faith with other employment doctrines thereby hindering its widespread acceptance. Second, the good faith covenant in employment lacks mutuality. Usually bilateral in the contractual context, the covenant remains an obligation that usually runs only from the employer to the employee. The questions of whether the covenant should obligate employers and what the consequences of such an obligation could be remain unaddressed. Finally, and perhaps most interestingly, there is a limited understanding of the costs of the good faith duty. The emerging empirical work studying the effects of wrongful discharge law, of which the duty of good faith is a part, reveals potential economic costs of this important doctrine articulated by Judge Cardozo ninety years ago.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133577270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This essay sets out a progressive workplace regulatory policy that can also prove institutionally and politically tractable. I lay out a broad regulatory agenda on normative grounds and then discuss how existing federal workplace policies provide for those ends. Given this "installed base" of regulations, I focus on what regulatory strategies a new administration might draw upon to most effectively advance those goals given existing systems. Finally, I argue that such a regulatory strategy is consistent with a variety of institutional factors affecting federal policy.
{"title":"Crafting a Progressive Workplace Regulatory Policy: Why Enforcement Matters","authors":"D. Weil","doi":"10.2139/ssrn.960987","DOIUrl":"https://doi.org/10.2139/ssrn.960987","url":null,"abstract":"This essay sets out a progressive workplace regulatory policy that can also prove institutionally and politically tractable. I lay out a broad regulatory agenda on normative grounds and then discuss how existing federal workplace policies provide for those ends. Given this \"installed base\" of regulations, I focus on what regulatory strategies a new administration might draw upon to most effectively advance those goals given existing systems. Finally, I argue that such a regulatory strategy is consistent with a variety of institutional factors affecting federal policy.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115292582","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Work is central to American life and drives us in fundamental ways. And the workplace, as a result, dominates our lives. We are spending ever greater amounts of time in the workplace and less time in civic and social engagements. As a consequence, our relationships at work have become so significant that they are nearly as important to us as our family relationships. In fact, the employment relationship is similar to the family relationship in the emotional support from coworkers it can provide and in the financial support it provides. Because the employment relationship is so common and psychologically so important to us, employment disputes are especially difficult and sensitive for both employers and employees. Moreover, disruptions in employment wreak real financial havoc in people's lives and can significantly disrupt the operations of a business as well. Given these factors, trials, with their delays, uncertainties, and expenses look less attractive as a method dispute resolution than they otherwise might. From the perspective of the courts, the potential caseload posed by employment disputes also makes trials an unattractive choice for resolution. Accordingly, alternative forms of dispute resolution (ADR) play a dominant role in resolving and avoiding labor and employment conflicts. This paper, building on the comparison of the employment relationship to the family relationship, focuses on one newer form of ADR, the collaborative law process, and explores its application in the employment context. Collaborative law, as the name implies, is not adversarial and has been used in family law where continuing relationships are an important outcome of the resolution process. Part two of this paper outlines the various forms of ADR, part three details the specific features of the collaborative law process, and part four suggests some possibilities and limitations of using that process in the employment setting. Although collaborative law will probably not transform labor and employment conflicts the way it has some family law matters, there is, nonetheless, significant value to be gained by adapting it.
{"title":"It's About the Relationship: Collaborative Law in the Employment Context","authors":"Marcia L. McCormick","doi":"10.2139/ssrn.934439","DOIUrl":"https://doi.org/10.2139/ssrn.934439","url":null,"abstract":"Work is central to American life and drives us in fundamental ways. And the workplace, as a result, dominates our lives. We are spending ever greater amounts of time in the workplace and less time in civic and social engagements. As a consequence, our relationships at work have become so significant that they are nearly as important to us as our family relationships. In fact, the employment relationship is similar to the family relationship in the emotional support from coworkers it can provide and in the financial support it provides. Because the employment relationship is so common and psychologically so important to us, employment disputes are especially difficult and sensitive for both employers and employees. Moreover, disruptions in employment wreak real financial havoc in people's lives and can significantly disrupt the operations of a business as well. Given these factors, trials, with their delays, uncertainties, and expenses look less attractive as a method dispute resolution than they otherwise might. From the perspective of the courts, the potential caseload posed by employment disputes also makes trials an unattractive choice for resolution. Accordingly, alternative forms of dispute resolution (ADR) play a dominant role in resolving and avoiding labor and employment conflicts. This paper, building on the comparison of the employment relationship to the family relationship, focuses on one newer form of ADR, the collaborative law process, and explores its application in the employment context. Collaborative law, as the name implies, is not adversarial and has been used in family law where continuing relationships are an important outcome of the resolution process. Part two of this paper outlines the various forms of ADR, part three details the specific features of the collaborative law process, and part four suggests some possibilities and limitations of using that process in the employment setting. Although collaborative law will probably not transform labor and employment conflicts the way it has some family law matters, there is, nonetheless, significant value to be gained by adapting it.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"62 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121570280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the problem of optimal job design when there is only one contractible and imperfect performance measure for all tasks whose contribution to firm value is non-veritable. I find that task splitting is optimal when relational contracts based on firm value are not feasible. By contrast, if an agent who performs a given set of tasks receives an implicit bonus, the principal always benefits from assigning an additional task to this agent.
{"title":"Relational Contracts and Job Design","authors":"Anja Schöttner","doi":"10.2139/ssrn.856906","DOIUrl":"https://doi.org/10.2139/ssrn.856906","url":null,"abstract":"This paper analyzes the problem of optimal job design when there is only one contractible and imperfect performance measure for all tasks whose contribution to firm value is non-veritable. I find that task splitting is optimal when relational contracts based on firm value are not feasible. By contrast, if an agent who performs a given set of tasks receives an implicit bonus, the principal always benefits from assigning an additional task to this agent.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128924158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article is as simple and provocative as its title suggests: it explores the legal implications of the word fuck. The intersection of the word fuck and the law is examined in four major areas: First Amendment, broadcast regulation, sexual harassment, and education. The legal implications from the use of fuck vary greatly with the context. To fully understand the legal power of fuck, the nonlegal sources of its power are tapped. Drawing upon the research of etymologists, linguists, lexicographers, psychoanalysts, and other social scientists, the visceral reaction to fuck can be explained by cultural taboo. Fuck is a taboo word. The taboo is so strong that it compels many to engage in self-censorship. This process of silence then enables small segments of the population to manipulate our rights under the guise of reflecting a greater community. Taboo is then institutionalized through law, yet at the same time is in tension with other identifiable legal rights. Understanding this relationship between law and taboo ultimately yields fuck jurisprudence.
{"title":"Fuck","authors":"Christopher M. Fairman","doi":"10.2139/ssrn.896790","DOIUrl":"https://doi.org/10.2139/ssrn.896790","url":null,"abstract":"This Article is as simple and provocative as its title suggests: it explores the legal implications of the word fuck. The intersection of the word fuck and the law is examined in four major areas: First Amendment, broadcast regulation, sexual harassment, and education. The legal implications from the use of fuck vary greatly with the context. To fully understand the legal power of fuck, the nonlegal sources of its power are tapped. Drawing upon the research of etymologists, linguists, lexicographers, psychoanalysts, and other social scientists, the visceral reaction to fuck can be explained by cultural taboo. Fuck is a taboo word. The taboo is so strong that it compels many to engage in self-censorship. This process of silence then enables small segments of the population to manipulate our rights under the guise of reflecting a greater community. Taboo is then institutionalized through law, yet at the same time is in tension with other identifiable legal rights. Understanding this relationship between law and taboo ultimately yields fuck jurisprudence.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115839685","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A range of alternative empirical definitions of informal activity have been employed in the literature. Choice of definition is often dictated by data availability. Different definitions may imply very different conceptual understandings of informality. In this paper the authors investigate the degree of congruence between three definitions of informality based on employment contract registration, social security protection, and the characteristics of the employer and employment using Brazilian household survey data for the period 1992 to 2001. The authors present evidence showing that 64 percent of the economically active population are informal according to at least one definition, but only 40 percent are informal according to all three. Steady compositional changes have been taking place among informal workers, conditional on definition. The econometric analysis reveals that the conditional impact of particular factors (demographic, educational attainment, and family circumstances) on the likelihood of informality varies considerably from one definition to another. The results suggest growing heterogeneity within the informal sector. Therefore, the authors argue that informal activity may be as much associated with entrepreneurial dynamism as with any desire to avoid costly contract registration and social protection. However, the authors confirm there is no a priori reason for entrepreneurial activity to be unprotected. Consequently definitions of informality based on occupation and employer size seem the most arbitrary in practice even if conceptually well-founded.
{"title":"On Defining and Measuring the Informal Sector","authors":"Andrew Henley, G. Arabsheibani, F. Carneiro","doi":"10.1596/1813-9450-3866","DOIUrl":"https://doi.org/10.1596/1813-9450-3866","url":null,"abstract":"A range of alternative empirical definitions of informal activity have been employed in the literature. Choice of definition is often dictated by data availability. Different definitions may imply very different conceptual understandings of informality. In this paper the authors investigate the degree of congruence between three definitions of informality based on employment contract registration, social security protection, and the characteristics of the employer and employment using Brazilian household survey data for the period 1992 to 2001. The authors present evidence showing that 64 percent of the economically active population are informal according to at least one definition, but only 40 percent are informal according to all three. Steady compositional changes have been taking place among informal workers, conditional on definition. The econometric analysis reveals that the conditional impact of particular factors (demographic, educational attainment, and family circumstances) on the likelihood of informality varies considerably from one definition to another. The results suggest growing heterogeneity within the informal sector. Therefore, the authors argue that informal activity may be as much associated with entrepreneurial dynamism as with any desire to avoid costly contract registration and social protection. However, the authors confirm there is no a priori reason for entrepreneurial activity to be unprotected. Consequently definitions of informality based on occupation and employer size seem the most arbitrary in practice even if conceptually well-founded.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127510297","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper investigates the demographic alternatives for dealing with the projected population aging and low or negative growth of the population and labor force in the North. Without further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. In contrast, the labor force in the South is projected to add some 1.55 billion, predominantly in South and Central Asia and in Sub-Saharan Africa. The demographic policy scenarios to deal with the projected shrinking of the labor force in the North include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population through a variety of measures, and filling the demographic gaps through enhanced immigration. The estimations indicate that each of these policy scenarios may partially or even fully compensate for the projected labor force gap by 2050. But a review of the policy measures to make these demographic scenarios happen also suggests that governments may not be able to initiate or accommodate the required change.
{"title":"Demographic Alternatives for Aging Industrial Countries: Increased Total Fertility Rate, Labor Force Participation, or Immigration","authors":"Robert Holzmann","doi":"10.2139/ssrn.875377","DOIUrl":"https://doi.org/10.2139/ssrn.875377","url":null,"abstract":"The paper investigates the demographic alternatives for dealing with the projected population aging and low or negative growth of the population and labor force in the North. Without further immigration, the total labor force in Europe and Russia, the high-income countries of East Asia and the Pacific, China, and, to a lesser extent, North America is projected to be reduced by 29 million by 2025 and by 244 million by 2050. In contrast, the labor force in the South is projected to add some 1.55 billion, predominantly in South and Central Asia and in Sub-Saharan Africa. The demographic policy scenarios to deal with the projected shrinking of the labor force in the North include moving the total fertility rate back to replacement levels, increasing labor force participation of the existing population through a variety of measures, and filling the demographic gaps through enhanced immigration. The estimations indicate that each of these policy scenarios may partially or even fully compensate for the projected labor force gap by 2050. But a review of the policy measures to make these demographic scenarios happen also suggests that governments may not be able to initiate or accommodate the required change.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124796802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
At a time when cities are competing with one another to attract or retain jobs within a globalizing economy, city governments are providing an array of financial incentives to stimulate job growth and retain existing jobs, particularly in high cost locations. This paper provides the first systematic and comprehensive analysis of datasets on economic development incentives in New York City over the last fifteen years. The evidence on job retention and creation is mixed. Although many companies do not meet their agreed-upon job targets in absolute terms, the evidence suggests that companies receiving subsidies outperform their respective industries in terms of employment growth, that is, the grow more, or decline less. We emphasize that this finding is difficult to interpret, since firms receiving incentives may not be representative of the industry as a whole. In other words, their above-average performance may simply reflect the fact that the Economic Development Corporation (EDC) selects economically promising companies within manufacturing (or other industries) when granting incentives. At the same time, it is also possible that receiving incentives helps these companies to become stronger.
{"title":"Are Local Economic Development Incentives Promoting Job Growth? An Empirical Case Study","authors":"F. Fuerst, J. Mollenkopf","doi":"10.2139/SSRN.854566","DOIUrl":"https://doi.org/10.2139/SSRN.854566","url":null,"abstract":"At a time when cities are competing with one another to attract or retain jobs within a globalizing economy, city governments are providing an array of financial incentives to stimulate job growth and retain existing jobs, particularly in high cost locations. This paper provides the first systematic and comprehensive analysis of datasets on economic development incentives in New York City over the last fifteen years. The evidence on job retention and creation is mixed. Although many companies do not meet their agreed-upon job targets in absolute terms, the evidence suggests that companies receiving subsidies outperform their respective industries in terms of employment growth, that is, the grow more, or decline less. We emphasize that this finding is difficult to interpret, since firms receiving incentives may not be representative of the industry as a whole. In other words, their above-average performance may simply reflect the fact that the Economic Development Corporation (EDC) selects economically promising companies within manufacturing (or other industries) when granting incentives. At the same time, it is also possible that receiving incentives helps these companies to become stronger.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130770284","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a pair of cases decided by 5-4 majorities (Mertens, 1993; Great-West, 2002) interpreting the scope of remedy for wrongdoing under ERISA, the Supreme Court construed the statute's grant of "appropriate equitable relief" to prevent the victims of ERISA-prohibited conduct from being compensated for consequential injury. The Court read ERISA's authorization of "appropriate equitable relief" to have disinterred the law/equity division from the era before the two systems were fused in the 1930s, and the Court treated equity as not having awarded monetary relief. As a consequence, lower courts have held ERISA to preclude remedy in a host of situations in which wrongful plan administration (almost always in violation of ERISA's fiduciary rules) has caused expense, physical harm, or other suffering. This Article explains why and how the Court's interpretation of ERISA remedy law went wrong, beginning with the Court's earlier encounter with the field in Russell (1985). The main theme is that the reach of trust-law principles in ERISA is far deeper and more controlling than the opinions in Mertens and Great-West allow. When federalizing the administration of pension and employee benefit plans in ERISA, Congress made a deliberate choice to subject these plans to the pre-existing regime of trust law rather than to invent a new regulatory structure. In this dimension, ERISA is federal trust law. Congress intended ERISA remedy law to replicate the core principles of trust remedy law in the regulation of pension and benefit plans, including the long-familiar make-whole standard of trust remedy law.
{"title":"What Erisa Means by 'Equitable': The Supreme Court's Trail of Error in Russell, Mertens and Great-West","authors":"John H. Langbein","doi":"10.2307/3593389","DOIUrl":"https://doi.org/10.2307/3593389","url":null,"abstract":"In a pair of cases decided by 5-4 majorities (Mertens, 1993; Great-West, 2002) interpreting the scope of remedy for wrongdoing under ERISA, the Supreme Court construed the statute's grant of \"appropriate equitable relief\" to prevent the victims of ERISA-prohibited conduct from being compensated for consequential injury. The Court read ERISA's authorization of \"appropriate equitable relief\" to have disinterred the law/equity division from the era before the two systems were fused in the 1930s, and the Court treated equity as not having awarded monetary relief. As a consequence, lower courts have held ERISA to preclude remedy in a host of situations in which wrongful plan administration (almost always in violation of ERISA's fiduciary rules) has caused expense, physical harm, or other suffering. This Article explains why and how the Court's interpretation of ERISA remedy law went wrong, beginning with the Court's earlier encounter with the field in Russell (1985). The main theme is that the reach of trust-law principles in ERISA is far deeper and more controlling than the opinions in Mertens and Great-West allow. When federalizing the administration of pension and employee benefit plans in ERISA, Congress made a deliberate choice to subject these plans to the pre-existing regime of trust law rather than to invent a new regulatory structure. In this dimension, ERISA is federal trust law. Congress intended ERISA remedy law to replicate the core principles of trust remedy law in the regulation of pension and benefit plans, including the long-familiar make-whole standard of trust remedy law.","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2003-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121642070","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Between 1990 and 1992 in Slovenia, recipients of unemployment insurance (UI) benefits tended to remain (formally) unemployed until their benefits expired, before taking a job. Institutional set-up suggests, and labor surveys show, that many of the recipients were actually working while collecting UI benefits. In the spirit, if not in the letter of the law, the UI system was abused. The author shows that the escape rate of the recipients of unemployment compensation to employment increased dramatically just before the potential exhaustion of unemployment benefits - and decreased equally dramatically after benefits were exhausted. When grouped by the potential duration of benefits, unemployment length varies significantly. The unemployed with longer potential benefits stay unemployed longer. Because these groups differ in their characteristics (for example, in age), this does not prove the"waiting behavior"of the recipients. However, exits to employment dramatically increase just before exhaustion - and that does prove waiting behavior. The pattern of an increased escape rate just before benefits are exhausted and its dramatic fall thereafter is more rigorously demonstrated using hazard model estimation. Possibilities for informal employment are abundant in Slovenia, and the environment of transition economies generally seems conducive to misuse of the UI system. Legislative loopholes and failure to enforce the labor code allowed the unemployed to work and to collect benefits. The monitoring of job searches was also lax. The author's calculations suggest that reducing the duration of benefits would reduce the incidence of unemployment, its duration, the amount spent on UI benefits, and the inefficiencies generated by raising taxes to finance unemployment insurance. At the same time, reducing the duration of benefits would not impair job matches or crowd out jobs for nonrecipients. True, despite increased efficiency generally, the workers with the least job mobility might suffer hardships for the least mobile group and greater efficiency generally would have to be resolved in the political sphere. Redesigning the system for better targeting would be less controversial. One way to reduce UI spending without seriously curtailing incentives to work would be to reduce the benefits in proportion to earnings from irregular work. Another possibility is stricter monitoring of the job searches of the unemployed. To reduce spending and make"double dipping"less attractive, old-age insurance could be removed from the package of benefits the UI system offers. Also, counselors who help the unemployed find jobs (and who may thus develop a close relationship with them) should perhaps not be expected to be able to make impartial decisions about disqualifications for benefits; someone else should do that. In addition to better targeting, a"benefit transfer program"- a voluntary program that converts UI benefits Also, counselors who help the unemployed find jobs (thro
{"title":"Unemployment Insurance and Duration of Unemployment: Evidence from Slovenia's Transition","authors":"Milan Vodopivec","doi":"10.1596/1813-9450-1552","DOIUrl":"https://doi.org/10.1596/1813-9450-1552","url":null,"abstract":"Between 1990 and 1992 in Slovenia, recipients of unemployment insurance (UI) benefits tended to remain (formally) unemployed until their benefits expired, before taking a job. Institutional set-up suggests, and labor surveys show, that many of the recipients were actually working while collecting UI benefits. In the spirit, if not in the letter of the law, the UI system was abused. The author shows that the escape rate of the recipients of unemployment compensation to employment increased dramatically just before the potential exhaustion of unemployment benefits - and decreased equally dramatically after benefits were exhausted. When grouped by the potential duration of benefits, unemployment length varies significantly. The unemployed with longer potential benefits stay unemployed longer. Because these groups differ in their characteristics (for example, in age), this does not prove the\"waiting behavior\"of the recipients. However, exits to employment dramatically increase just before exhaustion - and that does prove waiting behavior. The pattern of an increased escape rate just before benefits are exhausted and its dramatic fall thereafter is more rigorously demonstrated using hazard model estimation. Possibilities for informal employment are abundant in Slovenia, and the environment of transition economies generally seems conducive to misuse of the UI system. Legislative loopholes and failure to enforce the labor code allowed the unemployed to work and to collect benefits. The monitoring of job searches was also lax. The author's calculations suggest that reducing the duration of benefits would reduce the incidence of unemployment, its duration, the amount spent on UI benefits, and the inefficiencies generated by raising taxes to finance unemployment insurance. At the same time, reducing the duration of benefits would not impair job matches or crowd out jobs for nonrecipients. True, despite increased efficiency generally, the workers with the least job mobility might suffer hardships for the least mobile group and greater efficiency generally would have to be resolved in the political sphere. Redesigning the system for better targeting would be less controversial. One way to reduce UI spending without seriously curtailing incentives to work would be to reduce the benefits in proportion to earnings from irregular work. Another possibility is stricter monitoring of the job searches of the unemployed. To reduce spending and make\"double dipping\"less attractive, old-age insurance could be removed from the package of benefits the UI system offers. Also, counselors who help the unemployed find jobs (and who may thus develop a close relationship with them) should perhaps not be expected to be able to make impartial decisions about disqualifications for benefits; someone else should do that. In addition to better targeting, a\"benefit transfer program\"- a voluntary program that converts UI benefits Also, counselors who help the unemployed find jobs (thro","PeriodicalId":357008,"journal":{"name":"Employment Law eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1995-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131414152","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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