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The sustainability of an unfunded pension system depends highly on demographic and labour market trends, i.e. how fertility, mortality, and employment rates change. In this paper we provide a brief summary of recent developments in these fields in Hungary and draw up a picture of the current situation. Then, we forecast the path of the economic old-age dependency ratio, i.e. the ratio of the elderly and employed populations. We make different alternative assumptions about fertility, mortality, and employment rates. According to our baseline scenario the dependency ratio is expected to rise from 40.6% to 77% by 2050. Such a sharp increase makes policy intervention inevitable. Based on our sensitivity analysis, the only viable remedy is increasing the retirement age.
Free movement of persons is one of the fundamental values and achievements of the European Union, however, intentions towards mobility vary across and within the member states. Economic literature has remarkable theories to explain migration flows and individual selection factors of potential migrants, but it ignores major achievements of other social sciences. This paper builds an economic framework to incorporate the Hirschmanian concept of loyalty into the microeconomic (human capital) model of international migration by using interdependent preferences. Hirschman assumes that even after exiting, loyal people care about their previous communities, thus it imposes a certain psychological ‘exit tax’ on them. Based on this concept, it is hypothesized that people with altruistic motives have weaker intentions to migrate, so the presence of loyalty towards others makes international migration less likely, conveying that loyalty towards local or national community may be responsible for moderate labor mobility among EU member states. Results show that attachment to one's country makes one's intention to move abroad in the near future less likely, while loyalty towards one's city has more moderate impact on their intentions.
Abstract
We present an application preference, list-based framework to Hungarian universities, which allows different type of flexible aggregation, and hence, analysis and clustering of application data. A novel mathematical method is developed by which preference lists can be converted into scored rankings. The proposed approach is demonstrated in the case of Hungary covering the period of 2006–2015. Our method reveals that the efforts to leverage the geographical center–periphery differences did not fulfil the expectations of policy makers. Also, it turns out that a student's top preference is very difficult to influence, while recruiters may build their strategy on the information of the first but one choice.
The paper provides a brief description of the Active Ageing Index (AAI). This indicator, introduced in 2012, aims to measure the potential of older people for active and healthy ageing. The indicator is constructed from European Union survey data, and these results are weighted with coefficients determined by experts. One of the variables from the surveys measures the proportion of older people using the internet at least once a week. We argue that such regular internet usage does not show too much variation in this era of the ubiquitous internet, so a more sophisticated definition of internet usage must be taken into consideration. Our discussion contains three different AAI variants: the original expert-based, the Djurovic et al. (2017) I-distance indicator, and our factor-based index.
Abstract
Shape analysis has special importance in the detection of manipulated redistricting, which is called gerrymandering. In most of the US states, this process is made by non-independent actors and often causes debates about partisan manipulation. The somewhat ambiguous concept of compactness is a standard criterion for legislative districts. In the literature, circularity is widely used as a measure of compactness, since it is a natural requirement for a district to be as circular as possible. In this paper, we introduce a novel and parameter-free circularity measure that is based on Hu moment invariants. This new measure provides a powerful tool to detect districts with abnormal shapes. We examined some districts of Arkansas, Iowa, Kansas, and Utah over several consecutive periods and redistricting plans, and also compared the results with classical circularity indexes. We found that the fall of the average circularity value of the new measure indicates potential gerrymandering.
A number of megatrends are hitting the world of work at the same time. These include the digital revolution, globalisation and rapid population ageing, which are all having a profound impact on the types of jobs that are being created and how and where they are performed. This paper examines the challenges confronting the Visegrad Group of countries and the broad policy responses that will be required. It looks at the risk of job automation, how the structure of employment is changing by skill level and the rise of the gig economy. These changes will require a combination of policy responses in the areas of employment regulation, measures to facilitate labour mobility and lifelong learning, social protection and social dialogue. In many cases, this will not require a complete paradigm shift in policies but an adaptation and strengthening of existing polices.
Abstract
The aim of this study is to analyse the impact of board size on a firms' operational and market performance at the largest East Central European listed non-financial, non-public utility firms. The literature debates the effects of the size of the board. While the resource dependency theory supports a positive effect, the agency theory supports a negative impact on firm value. This question is rarely investigated in two-tiered corporate governance models. This paper estimates the effects of management board and supervisory board size, between 2007 and 2016. The results indicate that the effect of management board size depends heavily on the size of the observed company. In both fixed effects and GMM-type dynamic panel regression models, using Tobin's Q, market-to-book ratio, total shareholder value and ROA as firm performance measures, increase in management board size has a significant positive impact on firm performance; however, in the case of larger firms, the effect is significantly negative. Moreover, the increase in the ratio of outside directors has a positive impact on the firm's performance in all dynamic panel regression models and this effect is even more significant in Tobin's Q and market-to-book ratio models. This can indicate the effective monitoring role of the supervisory board.
Abstract
The Confucian doctrine of the Mean teaches that too much is as bad as too little. The Aristotelian doctrine of the Mean coincidently articulates that there can be too much or too little of nearly every human passion and action. In neoclassical economics, it is assumed that people tend to take any action at the optimal (not too much and not too little) level to maximise the net happiness from the action. This article argues that the Confucian doctrine of the Mean concurs with the optimality principle, and therefore that the optimality principle is a representation of human nature and can be understood as universal human wisdom. It follows that people can adopt both the Confucian doctrine of the Mean and the optimality principle as worldly common wisdom beyond the blunt dichotomy of spiritual orientalism and materialistic individualism. Too much emphasis on the technical differentials between the two has undermined the common wisdom embedded in them.
Abstract
In 2017, Korea became an ‘aged society,’ with the proportion of people aged 65 or older exceeding 14%, while the ratio of the working-age population declined for the first time. This study uses data from the Korean Longitudinal Study of Ageing (KLOSA) to examine the effects of public pension on the labour supply of older people and discusses ways of preparing for this ageing problem. The study uses the Heckman sample selection model for analysing both the extensive and intensive margins of older people's labour supply. Our results show that the effects of public pensions in Korea are very different from that in other countries. It can be inferred that these differences are a consequence of the less developed social security system and limited experience from its short period of implementation. Hence, encouraging older people to work could be a way of solving the problem of relatively high poverty among the older population in a society that is likely to age even more. This is considered an optimal solution in light of increasing life expectancy, a poor social security system, and a decrease in private income transfers from children to their ageing parents.
Abstract
Evidence from the global financial crisis (2007–2008) and the Asian financial crisis (1997) have taught policymakers valuable lessons. The contagious effects of these crises have proven unavoidable and have led to negative economic development. However, South Korea, unlike other countries, has recovered remarkably from both episodes of financial turmoil and proved their ability to maintain positive growth throughout the two periods. This study investigates the correlation between the evolution of South Korean banking and corporate sector before, during and after these crises. A VAR model was employed to test the effectiveness of the South Korean government's policies, in response to the financial crisis from 1997 to 2017, using macroeconomic variables as proxies for newly introduced policies, and non-performing loans for controlled risks. The empirical results indicate impulse response functions which suggest that changes in macroeconomic variables as a representation for the policies resulted in a reduction of non-performing loans. This implies successful risk reduction and an overall economic recovery.
