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Article
Publication date: 28 October 2014

M.K. Francke and F.P.W. Schilder

This paper aims to study the data on losses on mortgage insurance in the Dutch housing market to find the key drivers of the probability of loss. In 2013, 25 per cent of…

Abstract

Purpose

This paper aims to study the data on losses on mortgage insurance in the Dutch housing market to find the key drivers of the probability of loss. In 2013, 25 per cent of all Dutch homeowners were “under water”: selling the property will not cover the outstanding mortgage debt. The double-trigger theory predicts that being under water is a necessary but not sufficient condition to predict mortgage default. A loss for the mortgage insurer is the result of a default where the proceedings of sale and the accumulated savings for postponed repayment of the principal associated to the loan are not sufficient to repay the loan.

Design/methodology/approach

For this study, the authors use a data set on losses on mortgage insurance at a national aggregate level covering the period from 1976 to 2012. They apply a discrete time hazard model with calendar time- and duration-varying covariates to analyze the relationship between year of issue of the insurance, duration, equity, unfortunate events like unemployment and divorce and affordability measures to identify the main drivers of the probability of loss.

Findings

Although the number of losses increases over time, the number of losses relative to the active insurance is still low, despite the fact that the Dutch housing market is the world’s most strongly leveraged housing market. On average, the peak in loss probability lies around a duration of four years. The average loss probability is virtually zero for durations larger than 10 years. Mortgages initiated just prior to the beginning of the financial crisis have an increased loss probability. The most important drivers of the loss probability are home equity, unemployment and divorce. Affordability measures are less important.

Research limitations/implications

Mortgage insurance is available for the lower end of the market only and is intended to decrease the impact of risk selection by banks. The analysis is based on aggregate data; no information on individual households, like initial loan-to-value and price-to-income ratios; current home equity; and unfortunate events, like unemployment and divorce, is available. The research uses averages of these variables per calendar year and/or duration. Information on repayments of insured mortgages is missing.

Originality/value

This paper is the first to describe the main drivers of losses on insured mortgages in The Netherlands by using loss data covering two housing market crises, one in the early 1980s and the current crisis that started in 2008. Much has changed between the two crises. For instance, prices have risen steeply as has household indebtedness. Furthermore, alternative mortgage products have increased in popularity. Focusing a study on the drivers of mortgage losses exclusively on the current crisis could therefore be biased, given the time-specific circumstances on the housing market.

Details

Journal of European Real Estate Research, vol. 7 no. 3
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 13 August 2018

Carmen Díaz-Mora, Rosario Gandoy and Belen Gonzalez-Diaz

Drawing on the literature that has shown the prevalence of short-lived trade relationships, the purpose of this paper is to provide further understanding about this issue…

Abstract

Purpose

Drawing on the literature that has shown the prevalence of short-lived trade relationships, the purpose of this paper is to provide further understanding about this issue by exploring the impact of engaging in Global Value Chains (GVCs) on the chance of export survival at product-country level, paying special attention to the differences between advanced and developing countries. The authors also investigate whether the type of GVC participation (backward or forward) matters for export survival.

Design/methodology/approach

To capture to what extent a country’s exports are integrated in GVCs, the authors use the OECD Inter-Country Input-Output database to estimate value added incorporated in exports. Through the estimation of a discrete-time duration model, the authors explore the impact of engaging in GVCs on export survival using highly disaggregated trade data from the CEPII’s BACI database.

Findings

The findings endorse the hypothesis that deeper participation in GVCs is a key factor in explaining stability in trade relationships, mainly for developing countries where the trade flows are especially fragile. The authors also find different effects depending on the type of GVC involvement and on whether the value chain partners are advanced or developing.

Originality/value

The paper contributes to the literature by extending the understanding on the factors that promote the stability of exports, including among them, involvement on GVCs (and its forms) which is one of the most relevant factors to explain recent behavior of trade.

Details

Journal of Economic Studies, vol. 45 no. 3
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 2 August 2018

Panos Sousounis and Gauthier Lanot

The purpose of this paper is to examine the effect employed friends have on the probability of exiting unemployment of an unemployed worker according to his/her…

Abstract

Purpose

The purpose of this paper is to examine the effect employed friends have on the probability of exiting unemployment of an unemployed worker according to his/her educational (skill) level.

Design/methodology/approach

In common with studies on unemployment duration, this paper uses a discrete-time hazard model.

Findings

The paper finds that the conditional probability of finding work is between 24 and 34 per cent higher per period for each additional employed friend for job seekers with intermediate skills.

Social implications

These results are of interest since they suggest that the reach of national employment agencies could extend beyond individuals in direct contact with first-line employment support bureaus.

Originality/value

Because of the lack of appropriate longitudinal information, the majority of empirical studies in the area assess the influence of social networks on employment status using proxy measures of social interactions. The current study contributes to the very limited empirical literature of the influence of social networks on job attainment using direct measures of social structures.

Details

International Journal of Social Economics, vol. 45 no. 8
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 26 August 2015

Eirini Andriopoulou and Panos Tsakloglou

The paper analyses the effects of individual and household characteristics on current poverty status, while controlling for initial conditions, past poverty status and…

Abstract

The paper analyses the effects of individual and household characteristics on current poverty status, while controlling for initial conditions, past poverty status and unobserved heterogeneity in 14 European countries for the period 1994–2001, using the European Community Household Panel. The distinction between true state dependence and individual heterogeneity has important policy implications, since if the former is the main cause of poverty it may be crucial to break the ‘vicious circle’ of poverty using income-supporting social policies, whereas if it is the latter anti-poverty policies should focus primarily on education, training, development of personal skills and other labour market oriented policies. The empirical results are similar in qualitative terms but rather different in quantitative terms across the EU countries covered in the paper. State dependence remains significant in all model specifications, even after controlling for unobserved heterogeneity or when removing possible endogeneity bias. Higher poverty rates and higher poverty persistence are associated with particular welfare state regimes, although the link is substantially weakened when other explanatory variables are included in the analysis.

Details

Measurement of Poverty, Deprivation, and Economic Mobility
Type: Book
ISBN: 978-1-78560-386-0

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Article
Publication date: 19 October 2010

Antonio Caparrós Ruiz

The aim of this paper is to offer new empirical evidence for Spain about the transition into self‐employment or paid employment of potential entrants to the labor market…

Abstract

Purpose

The aim of this paper is to offer new empirical evidence for Spain about the transition into self‐employment or paid employment of potential entrants to the labor market and their duration in both segments of the market.

Design/methodology/approach

The econometric methodology consists of estimating discrete‐choice models and survival models, controlling for personal characteristics, job characteristics, and unobserved heterogeneity.

Findings

One of the main results of this paper is that the immigrants are a disadvantaged group with regard to entry into self‐employment as a first job. Moreover, once they enter self‐employment, they are more likely than native Spaniards to exit from it.

Practical implications

The results obtained in this paper are of interest to policy makers seeking to design economic policies that promote the assimilation of immigrants into the Spanish labor market.

Originality/value

The topic discussed in this paper and the distinction made by the workers according to nationality is unknown in economic literature in Spain.

Details

International Journal of Social Economics, vol. 37 no. 12
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 6 August 2014

Stephan Lindner and Austin Nichols

Workers in the United States who lose their job may benefit from temporary assistance programs and may apply for Disability Insurance (DI) and Supplemental Security Income…

Abstract

Workers in the United States who lose their job may benefit from temporary assistance programs and may apply for Disability Insurance (DI) and Supplemental Security Income (SSI). We measure whether participation in four temporary assistance programs (Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance (UI), and Temporary Disability Insurance programs (TDI)) influence application for DI, SSI, and re-employment. We instrument temporary assistance participation using variation in policies across states and over time. Results from our instrumental variables models suggest that increased access to UI benefits reduces applications for DI. This result is robust to different sensitivity checks. We also find less robust evidence that UI participation increases the probability of return to work and reduces the probability of claiming SSI benefits. In contrast, some of our results suggest a positive effect of SNAP participation on claiming SSI.

Details

Safety Nets and Benefit Dependence
Type: Book
ISBN: 978-1-78441-110-7

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Article
Publication date: 16 November 2010

Dimitris Pavlopoulos and Didier Fouarge

The purpose of this paper is to investigate the extent and the human‐capital determinants of low‐wage mobility for labour market entrants in the UK and Germany.

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Abstract

Purpose

The purpose of this paper is to investigate the extent and the human‐capital determinants of low‐wage mobility for labour market entrants in the UK and Germany.

Design/methodology/approach

Using panel data for the UK (BHPS) and Germany (GSOEP), a competing‐risks duration model is applied that allows the study of transitions from low pay to competing destination states: higher pay, self‐employment, unemployment and inactivity. Unobserved heterogeneity is tackled by a non‐parametric mass‐point approach.

Findings

It is found that low pay is only a temporary state for most young job starters. However, there is a small group of job starters that is caught in a trap of low pay, unemployment or inactivity. In the UK, job starters escape from low pay mainly by developing firm‐specific skills. In Germany, involvement in formal vocational training and the attainment of apprenticeship qualifications account for low pay exits.

Originality/value

Over the past decades, unemployment and low‐wage employment have emerged as major challenges facing young labour market entrants. While most empirical studies focus exclusively on the transition from low pay to high pay, the paper shows that a significant percentage of young entrants are caught in a low‐pay‐non‐employment trap. Moreover, it is shown that, depending on the institutional context, different types of human capital investments can account for a successful low‐pay exit.

Details

International Journal of Manpower, vol. 31 no. 8
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 April 2006

Ralitza Nikolaeva

To investigate the determinants of e‐commerce adoption in the retail sector using duration analysis.

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4769

Abstract

Purpose

To investigate the determinants of e‐commerce adoption in the retail sector using duration analysis.

Design/methodology/approach

The study proposes a conceptual model based on technology adoption and population ecology models. It identifies specific determinant factors organized under three areas: perceived benefits, organizational readiness, and external influences. Duration analysis is applied to data on 392 retailers.

Findings

Organizational readiness and external influences were the main driving factors of the adoption decision. There is no strong support for the perceived benefits construct. This suggests that e‐commerce adoption was to a great extent responsive to external pressures.

Research limitations/implications

Major limitations include insufficient data. Future research can collect other types of data. Other extensions include the investigation of the effect of e‐commerce adoption, the construction of a formal theoretical model, and the collection of data from other countries.

Practical implications

The study provides guidelines to entry anticipation. It appears that many retailers mimetically responded to the online entry of other retailers. Managers should be also aware of the suitability of e‐commerce adoption to their organization. In order to be proactive, firms can put more emphasis on internal factors and rely less on outside signals in their strategies.

Originality/value

The paper investigates the e‐commerce adoption decision among retailers using a unique database collected from public sources, avoiding potential subjectivity bias. It traces the timing of e‐commerce adoption incorporating both fixed and time‐varying covariates.

Details

International Journal of Retail & Distribution Management, vol. 34 no. 4/5
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 28 October 2014

José María Arranz and Carlos García-Serrano

Using a Spanish administrative data set, the authors document the importance of recalls in labour market transitions. The authors focus on two issues: the interplay…

Abstract

Purpose

Using a Spanish administrative data set, the authors document the importance of recalls in labour market transitions. The authors focus on two issues: the interplay between the unemployment compensation system, the widespread use of fixed-term contracts and the layoff-rehire process; and the use of implicit contracts and, hence, the existence of cross-subsidisation between industries and firms within unemployment insurance. The purpose of this paper is to estimate a duration model with competing risks of exits in order to investigate the individual, job and firm attributes that influence the probabilities of leaving unemployment to return to the same employer or to find a new job. The findings indicate that recalls are very common and that, although they are widespread among the labour market, there are certain types of contract, firms and sectors which are more prone to use them.

Design/methodology/approach

The authors estimate a duration model with competing risks of exits in order to investigate the individual, job and firm attributes that influence the probabilities of leaving unemployment to return to the same employer or to find a new job with a different employer.

Findings

The findings indicate that recalls are very common and that, although they are widespread along the Spanish labour market, there are certain types of contract, firms and sectors which are more prone to use them.

Practical implications

Overall, the results suggest that there is room for the reform of the way the UCS is financed, in combination with changes in other labour market institutions.

Originality/value

The contribution of this paper is twofold. First, it documents the importance of rehirings in labour market transitions, in general, and in compensated unemployment, in particular, highlighting the use of different types of contract (in particular, temporary ones) and using a large data set for Spain. Second, it examines the interplay between the unemployment compensation system, the use of temporary contracts and the layoff-rehire process, focusing its attention on the likely cross-subsidisation of firms and sectors with respect to unemployment benefits . This constitutes a relevant research and policy issue since it has to do with the design of the unemployment compensation system.

Details

International Journal of Manpower, vol. 35 no. 8
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 29 October 2021

Thibault Mirabel

Various theories predict that firm buyouts survive longer than newly created firms. The study aims to know whether it is the case for worker-owned firms (WOFs), i.e. firms…

Abstract

Purpose

Various theories predict that firm buyouts survive longer than newly created firms. The study aims to know whether it is the case for worker-owned firms (WOFs), i.e. firms owned and controlled mostly by their workers.

Design/methodology/approach

The author conducted a comparative survival analysis of French WOFs distinguished by their entry mode (i.e. newly created, worker buyouts (WBOs) of sound conventional firms, WBOs of conventional firms in difficulty or WBOs of non-profit organizations).

Findings

The hazard of exit is 32% lower for WBOs of sound conventional firms than newly created WOFs, 18% for WBOs of conventional firms in difficulty and 64% for WBOs of non-profit organizations. The current study confirms that WBOs, even of conventional firms in difficulty, have on average a survival advantage over newly created WOFs. Surprisingly, the author also shows that this survival advantage is similar across sectors with different knowledge intensity but is lower in high capital-intensive sectors than in low capital-intensive ones.

Research limitations/implications

Endogeneity issues limit the scope of the results and should be tackled in future research. Overall, these findings show that WOFs are composed of groups with different survival likelihoods that are obscured if one only looks at the aggregate population.

Practical implications

With caution, support agencies could foster WBOs of firms in difficulty and of non-profit organizations as viable forms of entrepreneurship.

Originality/value

The current study offers the first survival analysis distinguishing four modes of entry among WOFs.

Details

Journal of Participation and Employee Ownership, vol. 4 no. 3
Type: Research Article
ISSN: 2514-7641

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