Blockchain Papers

Alexandre Rigaud

No abstract is available for this record.

Acharya Sennimalai Kalimuthu

This letter evaluates Sennimalai Kalimuthu’s radical proposal to transition all private-sector employees across villages, towns, and cities into state government staff. By replacing decentralized private payrolls with a state-administered framework financed by direct corporate revenue routing, this structural model aims to eliminate working-class income precarity and geographical inequality. We outline a phased implementation strategy alongside a dual-metric performance tier to sustain workforce innovation under standardized civil service pay grades. Finally, we discuss macroeconomic trade-offs regarding fiscal sustainability, administrative friction, and the mitigation of capital flight under total labor nationalization.

Christos Makridis

Emerging evidence suggests a declining labor share alongside rising markups, profits, and rents in parts of advanced economies, and artificial intelligence (AI) may intensify these dynamics by increasing the importance of capital and intangible assets. This paper examines whether broad employee ownership can help workers share in AI related surplus and mitigate distributional risks. First, it synthesizes competing perspectives on factor share measurement and the roles of technology and market structure, and it reviews evidence on employee ownership and profit sharing for wages, productivity, and firm performance. Second, it develops transparent simulation exercises in which AI adoption shifts surplus toward profits under alternative ownership trajectories. In a stylized high adoption scenario with no institutional change, the combined wage plus capital income accruing to workers falls by roughly 5% points of value added. Under expanded employee ownership, workers receive additional capital income on the order of 5% points, largely offsetting the decline in their overall claim on output. The paper concludes by assessing legal and financial architectures, including tokenization and institutional decentralized finance, that could reduce frictions in scaling employee ownership.

Elisa Gerten, Michael Beckmann, Lutz Bellmann

Abstract This study investigates the impact of information and communication technologies (ICT) on worker autonomy and monitoring using the second wave of the German Linked Personnel Panel, a linked employer-employee data set. From a theoretical point of view, the impact of ICT on workplace organization is ambiguous. On the one hand, the fast diffusion of ICT among employees makes it possible to monitor professional activities, leading to greater centralization. On the other hand, ICT enable employees to work more autonomously, so that workplace organization becomes more decentralized. Based on ordinary least squares and instrumental variable estimates, we find that ICT promotes both centralization and decentralization tendencies. Furthermore, managerial employees are more affected by ICT-induced monitoring and autonomy than their non-managerial counterparts. Finally, the effect of digital ICT on employee autonomy is more pronounced than the corresponding effect on employee monitoring. Again, this does especially hold for managerial employees. All in all, our results support the view that unlike prior technological revolutions digitalization primarily affects the employment prospects and working conditions of employees at medium and higher hierarchical levels.

Thomas A. Kochan, Adam Seth Litwin

[Excerpt] It is not surprising that most theories of human capital treat the firm as the key unit of analysis, given the deep imprint that Becker (1964 [1993]) left with his early efforts to distinguish between general and specific human capital. It is especially understandable for research that focuses on American institutions and practices. Ever since the passage of the New Deal employment policies of the 1930s, firms have been assigned central roles in the delivery and financing of a variety of labor-market services, including the provision of workforce training and development (Osterman et al, 2001). Most of the chapters in this volume reflect this emphasis by exploring how individuals and firms allocate the costs and share the benefits of human capital, incorporating human capital development into alternative theories of the firm (such as transaction cost, resource-based, agency, entrepreneurial, and knowledge-based perspectives), and how human capital plays into emerging research on social capital, organizational capabilities, learning, and human resource strategies and architectures. But, as Chapters 12, 22, and 23 each suggest, firm-centric theories, particularly those founded upon the neoclassical economics framework, need to more fully take into account how firm boundaries, strategies, and practices relate to other institutions in society. This is particularly important given the changes in employment relationships that are acting to reduce the labor-market functions served by individual employers. In short, the central argument of this chapter is that a more up-to-date theory of the changing nature of employment relationships is needed to understand whether and how human capital is to serve as a source of competitive advantage in a modern economy—even one as decentralized as that of the US.

Mário Fortuna, José António Cabral Vieira, Margarida Mendes

One objective frequently found in models of decentralized financing is that of equalization. The concern is that poorer jurisdictions receive enough resources for basic services and for development promotion, thus eliminating horizontal and vertical imbalances. In Portugal, decentralization has occurred at two levels: the local, for the whole country and the regional for the autonomous regions of the Azores and Madeira. Decentralization to local governments has undergone several changes in recent decades. The current paper focuses on testing for the presence of an equalization effect in the models adopted to finance municipalities in Portugal, since the nineteen nineties. Using the theoretical background that maintains that for the presence of an equalizing effect it is necessary that, on a per capita basis, poorer regions or localities receive relatively more transfers than the richer jurisdictions, a test is made using a data set that includes all municipalities of Portugal. The situation of the two autonomous regions is controlled with dummy variables. The hypothesis that the models used have an equalizing effect is tested through the sign of the coefficient of the regression of per capita transfers on per capita own resources. In the presence of an equalizing effect the sign will be significant and negative. It is confirmed that, for the period under analysis, the municipalities with lower per capita own revenues are those that receive more transfers per capita. There is, therefore, an equalizing effect in the current transfer system to municipalities. Using pooled data, one can also conclude that the equalization effect has become stronger with the 1998 and 2002 reviews of the system, when compared to the system in effect in 1991.

Ève Caroli

We model the links between skills and changes in work organization. As the proportion of skilled workers increases, the economy travels through a sequence of organizational equilibria. We show that as the relative supply of skills increases the organization of work becomes more decentralized. Both skilled and unskilled workers become more autonomous and perform a wider range of tasks: decentralization spreads across firms at the expense of the old centralized organization based on a strict division of labor. Moreover, as firms switch to decentralization, their employment structure becomes more homogeneous and wage inequality stops decreasing. These predictions are compared with empirical evidence based on French establishment‐level data and we find support for both of them. This suggests that the long‐term increase in the skill level of the workforce may have been one important factor driving the recent introduction of new work practices by a large number of firms.

Horst Siebert

In continental Europe, the unemployment rate has risen continuously from a low level of below 3 percent in the early 1970s to more than 10 percent in the late 1990s. If those who are in governmental employment schemes and in early retirement are included, the unemployment rate runs as high as 20 percent in quite a few European countries, including France and Spain. The basic rule for a stable employment situation in an economy is: nominal wages should stay in line with labor productivity growth plus the increase in producer prices. In a situation of high unemployment, however, when the unemployed are to be integrated into the labor market, the productivity rule has to be modified: the increase in real wages should stay below the productivity growth rate until a satisfactory level of employment has been obtained. The most elegant approach to creating more employment is to improve labor productivity. If an economy succeeds in raising labor productivity, there is more scope for real wage increases or for more employment. We should, however, not overestimate the potential of an economy to increase labor productivity. If we want to integrate the unemployed, average labor productivity in the economy is likely to decrease. We should be realistic enough as to expect trends in Europe to be similar to those in the United States, where labor productivity per hour has increased by less than 1 percent per year since 1980. The task for Europe is to change the institutional setup of labor relations, to move wage formation closer to the market process, and to allow greater wage differentiation. It is unlikely that the "social partners", i.e., the trade unions and employers' associations, will be able to change the rule system sufficiently. Therefore, it is necessary to change the legal rules, especially those in favor of the unemployed, for instance, by introducing a legal right for each individual to enter the labor market at a wage of his or her choice. If continental Europe wants to reduce unemployment, it will have to change the impact of the welfare state. With respect to the level of benefits provided by unemployment and health insurance, a distinction should be made between large risks and small risks for the individual. Such a distinction between large and small risks would allow the costs of the social security system to be reduced, thus lowering the tax on labor. Insurance against large risks would be mandatory, small risk coverage would be optional. With respect to financing the welfare state, more choice should be given to the individual as concerns the insurance coverage that he/she desires. One serious issue concerning social welfare payments is determining the extent to which the level of social welfare benefits should be scaled down for those who are able to work in order to increase the incentive to work and the intensity of the search for work. A related issue is whether unemployment benefits should be reduced in their level or in the length of time they are paid in order to intensify the job search and reduce the reservation wage. • Shifting the employment issue to the EL) level would take attention away from the need to decentralize wage formation, i.e., to negotiate wages at the level of firms. It would be an incentive not to undertake the necessary steps to solve national unemployment problems and it would shift the financial burden to those countries that are successful in reducing unemployment. It would elevate the national labor market cartels to the EU level and it would blur the lines of responsibility. National governments would shift their responsibility to the EU level. This would be an extremely dangerous development for European integration because the European cause would become the scapegoat of failed national policies.