Potential Disincentive Effects Research Articles

The influence of emergency food aid on the causal disaster vulnerability of Indigenous food systems

Emergency food aid is the dominant humanitarian response to food insecurity precipitated by disasters. There is a significant literature on food aid effectiveness (e.g., bolstering food security, targeting, modality selection) in various disaster contexts. Additionally, there are some studies on the potential disincentive effects on agricultural production among other unintended consequences. However, there has been no explicit research on the possible effects of emergency food aid on the causal disaster vulnerability of Indigenous food systems. This research, based within the remote Bedamuni tribe of Western Province, Papua New Guinea, addresses this gap. The Bedamuni first received emergency food aid in response to the 1997 El Nino drought, followed by the 2015/16 El Nino and February 2018 Highlands earthquake. We identify first sustained contact (1962), the subsequent establishment of a mission (1968), and the societal changes that followed as more pronounced drivers of vulnerability. However, emergency food aid exacerbates several key determinants of vulnerability such as declining self-efficacy and adaptive capacity, in addition to encouraging unsustainable food system practices. This paper argues for a more holistic understanding of causal vulnerability in food systems and renewed critique regarding the use of emergency food aid in rural Indigenous contexts.

Diagnosis Related Groups in reconstructive plastic surgery of malignant head and neck skin tumours

Diagnosis Related Groups (DRGs) were introduced in Germany as a medico-economic classification system 13 years ago. In this analysis, we looked into the compensation for reconstructive plastic surgery after the excision of malignant head and neck skin tumours by DRGs. Four main diagnoses (malignant melanoma, basal cell carcinoma, squamous cell carcinoma, carcinoma in situ) at a maximum of 6 different locations in the head and neck were combined with the following procedures: excision and primary wound closure, excision with temporary soft tissue coverage, split-thickness or full-thickness skin grafting, local, free or regional pedicle flaps, distant flaps as well as combined procedures for coverage. We defined 10 different DRGs based on 5750 combinations of diagnoses and procedures. DRG J22Z (revenue: EUR 2817) predominated for large temporary soft tissue coverage and skin grafting techniques. In 2017, local flaps were devaluated and now lead to DRG J11D (revenue: EUR 1903) in most cases. In this context, an aggregation of cases by a two-stage approach (stage 1: excision, stage 2: reconstruction) is particularly important. Malignant tumours of the lips are inconsistently represented by DRGs with a lack of definite rules. The highly rated main group DRG J08 (including DRGs J08A, J08B and J08C) can be achieved almost invariably by addition of specific single procedures. The current representation of reconstructive surgery for malignant skin tumours by DRGs is associated with potential disincentive effects, which may have an impact on patient care. In search of a diversified portfolio, the main group DRG J08 should be considered in addition to the common practice of coding. The authors of this study think that this may be a possibility to compensate for the actual devaluation and to achieve resource-related reimbursement in high-cost cases. However, incorrect and inflationary use should be avoided due to the lack of long-term orientation caused by dilution of the DRGs.

The Right Kind of Help? Tax Incentives for Staying Small

Some countries support smaller firms through tax incentives in an effort to stimulate job creation and startups, or alleviate specific distortions, such as financial constraints or high regulatory or tax compliance costs. In addition to fiscal costs, tax incentives that discriminate by firm size without specifically targeting R&D investment can create disincentives for firms to invest and grow, negatively affecting firm productivity and growth. This paper analyzes the relationship between size-related corporate income tax incentives and firm productivity and growth, controlling for other policy and firm-level factors, including product market regulation, financial constraints and innovation. Using firm level data from four European economies over 2001–13, we find evidence that size-related tax incentives that do not specifically target R&D investment can weigh on firm productivity and growth. These results suggest that when designing size-based tax incentives, it is important to address their potential disincentive effects, including by making them temporary and targeting young and innovative firms, and R&D investment explicitly.

In-work benefits for married couples: an ex-ante evaluation of EITC and WTC policies in Italy

Abstract This paper investigates labor supply and redistributive effects of in-work benefits for Italian married couples using a tax-benefit microsimulation model and a multi-sectoral discrete choice model of labor supply. We consider in-work benefits based on the Earned Income Tax Credit (EITC) and the Working Tax Credit (WTC) existing in the US and the UK, respectively. The standard design of these income support mechanisms is however augmented with a premium for two-earner households to avoid potential disincentive effects on secondary earners. Revenue neutral policy simulations show that our reforms may greatly improve the current Italian tax-benefit system in terms of both incentive and redistributive effects. Furthermore, neglecting sector-specific attributes of the various job opportunities may lead to overstated estimates of the policy effects. JEL classification I38; H31; H53

Reverse-Share-Tenancy and Marshallian Inefficiency: Landowners’ Bargaining Power and Sharecroppers’ Productivity

While there are ample empirical studies that claim the potential disincentive effects of sharecropping arrangements, the existing literature is shallow in explaining why share tenancy contracts are prevalent and diffusing in many developing countries. Using a unique tenant-landlord matched dataset from the Tigray region of Ethiopia, we are able to show how the tenants’ strategic response to the varying economic and tenure-security status of the landlords can explain sharecroppers’ productivity differentials. To the best of our knowledge, this is the first study to use tenant–landlord matched data that accounts for both the supply (landlord) and demand (tenant) side characteristics in analyzing sharecroppers’ level of effort and productivity. The study reveals that sharecroppers’ yields are significantly lower on plots leased from landlords who are non-kin, who are female, who have lower income-generating opportunity, and who are tenure insecure than on plots leased from landlords with the opposite characteristics. While, on aggregate, the results show no significant efficiency loss on kin-operated sharecropped plots, more decomposed analyses indicate strong evidence of Marshallian inefficiency on kin-operated plots leased from landlords with weaker bargaining power and higher tenure insecurity. This study thus shows how failure to control for the heterogeneity of landowners’ characteristics can explain the lack of clarity in the existing empirical literature on the extent of moral hazard problems in sharecropping contracts.

In-Work Benefits for Married Couples: An Ex-Ante Evaluation of EITC and WTC Policies in Italy

This paper investigates labor supply and redistributive effects of in-work benefits for Italian married couples using a tax-benefit microsimulation model and a multi-sectoral discrete choice model of labor supply. We consider in-work benefits based on the Earned Income Tax Credit (EITC) and the Working Tax Credit (WTC) existing in the US and the UK, respectively. The standard design of these income support mechanisms is however augmented with a premium for two-earner households to avoid potential disincentive effects on secondary earners. Revenue neutral policy simulations show that our reforms may greatly improve the current Italian tax-benefit system in terms of both incentive and redistributive effects. Furthermore, neglecting sector-specific attributes of the various job opportunities may lead to an oversimplified representation of the choice set that does not allow to capture some labor market transitions and thus results in attenuated labor supply responses.

Work incentives and other effects of the transition to social assistance: Evidence from the Slovak Republic

In this paper we investigate whether the potential disincentive effects of the Slovak benefit system have an actual meaning. Using data from subsequent labour force surveys we study the determinants of the outflow from unemployment to a job and the determinants of the outflow to out of the labour force. We find that single unemployed, highly educated unemployed and unemployed living in the capital Bratislava have higher exit rates both to a job and to out of the labour force. The characteristic with a distinctly different effect on both exit rates is the previous labour market position We also find that there are fluctuations in the hazard rate over the duration of unemployment. However, these fluctuations are not very informative. The direct indicators of the type of unemployment benefit do not affect the exit rates, neither do the indirect indicators like, for example, the presence of young children. Although there are potential disincentive effects in the Slovak benefit system we find no evidence that these potential effects materialise.

Food aid and agricultural disincentives

One of the most persistent objections to non-emergency food aid is that it inhibits local agricultural production in the recipient country. In particular, by causing local market prices to be depressed, food aid is alleged to reduce the incentive to local farmers to produce. This article examines how these price disincentive effects might occur, whether food aid always gives rise to such effects, and whether the effects are always negative. What emerges is that there is no clear-cut case for or against food aid on these grounds, and that the onus is placed on project planners to devise ways by which potential disincentive effects can be minimized.