Relative Labour Costs Research Articles

The persistence and expansion of sharecropping in a Javanese village

AbstractIn the Javanese village of Kaliloro, share tenancy in rice cultivation, which was widely predicted to disappear with the Green Revolution, has not declined but expanded since the early 1970s. In this article, building on previous debates on share tenancy, we show how sharecropping has survived and expanded in Kaliloro's generally commoditized agrarian economy. Many share tenancy relationships in Kaliloro link wealthier landowners and landless or near‐landless tenants. But many also occur between households of relatively equal status and between parents and their own children. For both landowners and share tenants, their reasons for reliance on sharecropping over hired labour are complex, going beyond simple comparisons of relative labour costs (to landowners) or labour earnings (to share tenants). The landless and near‐landless are well aware of the exploitative nature of share tenancy, but it remains an important component of their pluriactive livelihoods, even in times of rising farm wage rates, mainly to ensure a supply of rice for domestic consumption. For landowners who are too busy, or unable, to manage cultivation themselves, share tenancy remains the most convenient, effective, and risk‐free labour regime, and mechanism of surplus transfer from direct producer to landowner.

Do local differences in trust affect bank lending activities?

This study investigates the impact of local differences in trust on bank lending activities. Using a novel dataset of nearly 600 local Polish banks and their socioeconomic environments, we find that banks operating in regions with high-trust scores set lower loan interest rates and have lower labor-related costs compared to those operating in low-trust regions. Therefore, the empirical evidence suggests that local differences in trust influence not only bank-borrower relationships but also the human resources needed to gather and process credit information.

Payroll Tax Reductions for Minimum Wage Workers: Relative Labor Cost or Cash Windfall Effects?

Payroll Tax Reductions for Minimum Wage Workers: Relative Labor Cost or Cash Windfall Effects?

Prickly Pear Cladodes as an Alternative Source of Water in Small- and Medium-Scale Yellow Mealworm Rearing

New solutions are compulsorily needed to reconcile the enormous and ever-growing request for protein for human nutrition and, at the same time, reduce conventional meat production. This epochal challenge can find a valuable aid to a winning solution in insect rearing. The use of insects as feed and food, far from being a definitive solution to global food shortages, can offer new protein sources and perfectly fit circular economy precepts, yet more so when insects feed on by-products from the agri-food industry. In this scenario, Tenebrio molitor (TM) is a concrete alternative. Therefore, making its rearing more sustainable is a prime objective. In this paper, we evaluated the possibility of replacing usual plant sources of wet supplementation used in TM rearing with sustainable alternatives, including the cladodes of prickly pear (Opuntias ficus indica, OFI), to reduce the frequency of administration, thus minimizing related labor costs. The alternatives were tested for water content, dehydration, and shelf life to select the best-performing ones. On the selected matrices, we evaluated the preference of the larvae and their palatability because a matrix may be convenient and sustainable but not appreciated by consumers. The results showed that OFI cladodes have high moisture and a long shelf life and are appreciated by the larvae that prefer them to other matrices. Thus, OFI can replace the conventional wet source in TM rearing, at least in areas where this cactus grows wild and is not difficult to obtain.

Weather information and agricultural outcomes: Evidence from a pilot field experiment in Benin

Weather conditions are an important determinant of agricultural factor input, particularly labor allocation. The availability of weather forecasts can therefore lead to efficiency gains in the form of cost decreases and productivity increases. We test the practical feasibility, the uptake, and the effect of providing basic weather forecasts in the rainy season on the labor productivity of smallholder farmers. For this purpose, we conducted a Randomized Controlled Trial as a pilot with monthly data collections involving 331 farmers across six villages in northern Benin. We find that most farmers subscribe to the intervention and report satisfaction with the service. The impact estimates indicate positive and economically significant intention-to-treat and local average treatment effects in terms of reduced relative labor costs, increased yield and, in turn, increased labor productivity for maize and cotton cultivation. These benefits come at relatively low cost, suggesting that weather-related information via mobile phone outreach holds promise for helping smallholder farmers to better adapt to changing weather.

Shipbuilding Decision-Making Optimization Based on the Functional Technical Documentation Information Level Usage in Ship Production

_ Decision-makers in shipyards face the problem of determining the design cost concerning the information level contained in drawing and how it influences the shipbuilding process efficiency. Shipyards have their approach and shipbuilding practices about the level of functional technical documentation usage directly in ship production. However, decisions may vary related to the ship type, complexity, size, and deadlines. The shipbuilding decision-making optimization model based on functional technical documentation defines an algorithm for creating and analyzing the data representing the effects of applying functional technical documentation in ship production. Based on such analysis, it is possible to decide the preferred shipbuilding strategy, based on the level of functional technical documentation usage directly in ship production at the level other than one identified in the ship contractual stage, reducing overall shipbuilding costs. By varying different factors of the technological phase of ship production and the relative labor cost with the level of functional technical documentation usage directly in ship production, the curves of the shipbuilding cost and duration deviations, in relation with the value specified by the reference point, are obtained. Also, such analysis provides relevant conclusions about the trend of losses or savings of budget and labor hours based on the level of functional technical documentation usage directly in ship production.

Flexible sensing enabled intelligent manipulator system (FSIMS) for avocados (Persea Americana Mill) ripeness grading

In the face of the COVID-19 pandemic and the global sales trend of fruits, automatic ripeness grading of fruits is of great significance for enterprises, reducing labor-related costs and precise resource regulation of the fruit industry chain. The wrong ripeness grading may lead to inferior products entering the market chain and resulting in over ripeness, spoilage, quality degradation, and economic loss issues. Traditional manual grading and machine vision-enabled grading methods are facing a series of challenges, such as low efficiency, inconsistent grading standards, and vulnerability to environmental interferences. Therefore, a flexible sensing enabled intelligent manipulator system (FSIMS) is developed for efficient, automatic and accurate ripeness grading of avocados, one of the most popular and economically valuable fruits in the world. When avocados of different ripeness level are gripping, the flexible sensing units attached in the clamps can sense the firmness of the contact points and feedback different pressure values of the system, which could accurately determine four ripeness levels of avocados. Compared with traditional manual or machine vision enabled fruit ripeness grading methods, the designed FSIMS could achieve better grading effect (97.5% accuracy), and the system also has a faster grading speed (the fast-grading speed could reach 1.3 s/time) and high environmental robustness. The application of FSIMS could effectively reduce the waste of avocados in the market supply chain, greatly alleviating the labor-intensive and inefficiency problems of the fruits ripeness grading, thereby promoting the more sustainable and cleaner production of the avocado industry.

Methodology Focused on Identifying Variables Necessary to Develop Logistics Clusters

Several scholars have addressed the locational factors necessary for the best installation of industries or services; among them, one finds the costs with transportation of products and raw materials, labor-related costs, benefits deriving from the agglomeration of companies, as well as place-environment associations. Some agglomeration types stand out in this context, each one of them has its specific features, although they share the same goal. The agglomeration of companies is an increasingly frequent trend observed in production centers. Companies belonging to the same production chain remain close to each other in order to reduce costs with product transportation, storage and distribution processes. Consequently, they get to optimize their processes and increase their profits. The proximity between companies belonging to the same branch increases competitiveness between them. In addition, there is significant presence of skilled labor in these regions, a fact that favors logistics operations such as the transportation of inputs needed to enable companies’ production, and cost reduction. Thus, the aim of the present research is to create a methodology capable of identifying the variables necessary to develop a logistics cluster based on concepts such as productive economic agglomerations, by taking into consideration aspects addressed in a survey conducted with key cluster policy-development actors. Moreover, Interpretive Structural Modelling (ISM) was used to create an ontology to help better understanding the association among all variables necessary to structure logistics clusters.

Superstructure-based process synthesis and economic assessment under uncertainty for solid drug product manufacturing

This paper presents a new method for process synthesis and economic assessment for solid drug product manufacturing, considering continuous manufacturing as a prominent process alternative. Of the three phases of drug development, phase II was targeted where the dosage form, formulation, and processing technology are determined. For a comprehensive alternative generation, a superstructure was developed that covered 9452 options for the unit level, which was combined with two options on the formulation strategy. The generated alternative was assessed by a net present value calculation model, which was adapted for dynamic cash flow consideration in the drug lifecycle. The model can incorporate uncertainty in the drug development and manufacturing in the result, and can perform global sensitivity analysis by Monte Carlo simulation. The method was demonstrated in a case study where two different scenarios regarding the price of the active pharmaceutical ingredient and the demand for the product were assumed. The results showed that when the demand and price are both low, the labor-related costs are dominant, and in the opposite case, the material-related costs become relevant. We also introduce the prototype version of the software “SoliDecision,” by which the presented method was implemented for industrial application.

Complementarity Between Low- and High-Skilled Workers and the Employment Impact of Tax versus Human Capital Policies

The present paper analyses theoretically the impact of substitutability and complementarity between labour market segments on the efficiency of policies tackling low-skilled unemployment. Based on a search and matching model with multiple segments interacting through the production function, it is shown that the efficiency of cost policies - decreasing payroll taxes on low-skill segments - increases with the segments' substitutability. Reducing the relative cost of low-skill labour - through tax wedge decrease - induces labour demand increase if low-skill labour is substitute to other production factors. The efficiency of productivity policies - upgrading workers from lower to higher-skill segments - increases with their complementarity. Enhancing human capital allows increasing production - constrained by the scarcity of high-skill labour - hence increases low-skill labour demand if factors are complements. Consequently, variations of the efficiency of both policies may derive from the technological change, modifying the complementarity between segments.

Productivity growth, Smith effects and Ricardo effects in Euro Area's manufacturing industries

AbstractWe analyse the determinants of labour productivity across (a sample of) EA member states. We focus on the divergent dynamics before and after the financial crisis, and of core countries relative to peripheral countries. We ground our empirical analysis in Paolo Sylos‐Labini's productivity equations. We test different models, including a Panel 2S‐LS model and a Panel vector autoregression model. Our preliminary findings confirm and strengthen Sylos‐Labini's main insights. Labour productivity in manufacturing industries is strongly and positively correlated with the market size (Smith effect), the relative cost of labour (Ricardo effect), the absolute cost of labour (organization effect) and past investment, whereas it is negatively correlated with current investment. Furthermore, we find evidence that the crisis has affected the size of these effects. Focusing on the core periphery dichotomy, the signs of the effects are the same for both groups of countries, although the Smith, Ricardo and long‐run investment effects are usually stronger for core countries compared to peripheral countries. The opposite holds for the organization effect, while investment effects are less clear.

Construction at Cochin: Building ships at the VOC-yard in Cochin

The port of Cochin on the Malabar Coast of India had always been a centre of shipbuilding. After the Dutch conquest in the port in 1663, the Dutch East India Company (VOC), too, established a shipyard there. At this yard, the VOC experimented with building ocean-going ships until the management of the company decreed that these were to be built solely in the Dutch Republic itself. During the first half of the eighteenth century, the yard focused on the repair of passing Indiamen and the construction of smaller vessels for use in and between the VOC commands in Malabar, Coromandel, Bengal and Sri Lanka. For most of the vessels built during the 1720s and 1730s, detailed accounts exist, allowing for a reconstruction of the costs of the various shipbuilding materials in Malabar, as well as the relative cost of labour. From the 1750s onwards, operations at the yard again become more difficult to discern. Likely, the relative decline of the VOC’s presence in Malabar caused a reduction in operations at the yard, but the shipyard was still in existence when Cochin was captured by British forces in 1795. However, this did not mean the end of Cochin as a shipbuilding centre, as a number or Royal Navy frigates were built at Cochin during the early nineteenth century.

An optimum treatment for waste electronic home appliance in remote area: The case of Kinmen, Taiwan

An optimum treatment system for the waste electronic home appliance in remote area by local pre-processing and outsourcing post-processing is proposed. The cost reduction potential of the proposed treatment system is presented for main four types of electronic home appliances by the case study of Kinmen, Taiwan. Implementation of local pre-processing in Kinmen, Taiwan can provide 42, 54, 32, and 41 TWD unit cost reduction for television, washing machine, refrigerator, and air conditioner, respectively, comparing to the current treatment system. The different treatment characteristics according to the type of the appliances are the major factors for the applicability and cost reduction potential of the local pre-processing system. The application of this system to other cases is presented by sensitivity analysis with relative labor cost and transportation distance as the parameters. The results and the analysis process can be applied to the domestic systems with regions without recycling facilities, and also the international systems under the extended producer responsibility concept to take back the products for recycling.

Macroeconomic imbalances and structural change in the EMU

Macroeconomic imbalances in the EMU are at the heart of the current crisis. One explanation for the high current account deficits in the Southern European countries is that they lack a large, competitive and export-oriented industrial sector. The paper tests the hypothesis that parts of the structural change which happened in the EU before 2008 were supported by the divergent unit labour cost developments in the EMU. We look into patterns of structural change and sectoral competitiveness in all EU member countries and assess their linkages by means of a descriptive analysis as well as through econometric estimations. Our results broadly support the hypothesis. Industrial policy, which aims at fostering new competitive export-oriented industries in Southern Europe in order to reduce macroeconomic imbalances in the EMU, should thus be combined with adjustments in relative labour costs.

Economic Competitiveness and Social Policy in Open Economies

ABSTRACTWhile many studies have shown that greater trade openness affects the overall size of social spending, this study emphasizes that it also affects types of social policies that a government prioritizes. When faced with deepening trade competition, governments tend to use different policy measures to address the opportunities and challenges stemming from their economic competitiveness in the international market. Policy makers in countries with high relative labor costs are likely to privilege social insurances and income transfer. This is because as high labor costs make their workers more vulnerable in the trade competition, governments seek to protect skilled labor in order to maintain their economic advantage in advanced industries. In contrast, when relative labor costs are low, human capital investment programs are likely to be emphasized to enhance productivity and the quality of labor to capitalize the cost competitiveness of a country’s workers. The findings from empirical analyzes of 26 OECD economies from 1991 to 2012 support these arguments.

The economic geography of race in the New World: Brazil, 1500–2000†

AbstractRace is a fundamental aspect of historical inequality and institutions, yet it is at times overlooked within the literature on comparative development in the Americas. This article investigates the nature of staple production in Brazil and attendant changes in the racial composition of 20 modern states from its discovery by the Portuguese to the present. The Indigenous population was surpassed by that of African descent in the north‐east, south‐east, and north, respectively, during the seventeenth and eighteenth centuries; not until decades after the abolition of slavery did people of European heritage come to constitute a majority. These transitions were guided by the relative productivity, natural increase, and price of Native and African slaves, contingent on the extent of natural resource wealth (mineral deposits or land suitable for growing cash crops) and supply of free labour. In those areas where slavery was most profitable, a 1 per cent increase in the relative cost of Native labour raised the proportion of people of African ancestry by up to 2 per cent, depending on the measures of slave prices and racial classifications considered. This relationship is robust to changes in output prices or the populace of European descent, and alternative scenarios of aboriginal population decline.

Food prices and the development of manufacturing in India

Structural change associated with rapid growth has not occurred in labour-intensive manufacturing in India. It is argued in the present paper that this is at least partly due to the rise in the relative cost of labour, which is the result of the rising cost of food stemming from rapid overall growth and sluggish growth in agricultural productivity. A theoretical model has been developed and the experience of India is used to illustrate the model and its implications.

Offshore production and business cycle dynamics with heterogeneous firms

To examine the effect of offshoring through vertical FDI on the international transmission of business cycles, I propose a two-country model in which firms endogenously choose the location of their production plants over the business cycle. Firms face a sunk cost to enter the domestic market and an additional fixed cost to produce offshore. As such, the offshoring decision depends on the firm-specific productivity and on fluctuations in the relative cost of effective labor. The model generates a procyclical pattern of offshoring and dynamics along its extensive margin that are consistent with data from Mexico's maquiladora sector. The extensive margin enhances the procyclical response of the value added offshore to expansions in the home economy, as the number of offshoring firms mirrors the dynamics of firm entry at home. As a result, offshoring increases the comovement of output across economies, in line with the empirical evidence.

Work Incentive and Productivity in Spain

Work incentives are closely related to production performance. This paper presents evidence that the value added of a firm increases when relative labor costs rise, or the level of unemployment increases. Both circumstances imply evidence in favor of the efficiency wage model. This theory is consistent with the views of many managers and personal administrators, who tend to ascribe primary importance to wage setting as an incentive to increase effort. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier of a firm’s value added and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundacion SEPI.

Performance and economic analysis of the production of Nile tilapia submitted to different feeding management

The productive performance and the variable cost of production were evaluated for different feeding strategies for tilapia during the production cycle. A sample of 2,000 juvenile tilapia was distributed (23.55 ± 2.38 g) into five treatments and with four repetitions as follows: C (feed consumption to apparent satiety), R20 (beginning feed restriction when fish reached an average weight of 20 g), R200 (beginning feed restriction when fish reached an average weight of 200 g), R400 (beginning feed restriction when fish reached an average weight of 400 g) and R600 (beginning feed restriction when fish reached an average weight of 600 g). The fish were given extruded commercial feed containing 34% crude protein until they reached a weight of 200 g, at which time they received feed containing 32% crude protein. Monthly biometrics were performed in order to determine the food restriction starting point, which was one day of restriction followed by six feeding days. The following parameters were evaluated: water quality, productive performance variables, the variable costs of production and excreted nitrogen. The results were subjected to analysis of variance, and the means were compared using Tukey’s test (5% significance). No statistical differences were observed in final weight, weight gain, feed consumption, feed conversion or survival. The fish from the R20 treatment had the lowest variable cost of production (g fish-1) and the lowest nitrogen excretion into the water. This suggests that feed restriction from the early stages of life does not compromise the productive performance and contributes to reducing the variable costs and the quantity of nitrogen excreted into the environment. Thus, a one-day per week feed restriction strategy can be applied from the earliest stages of life without compromising the productive performance or body composition of Nile tilapia. This strategy can also reduce variable costs of production by means of reducing relative labour and feed costs.