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  • Luuppala, Linnea (2015)
    Growing human populations and their growing appetites have caused severe environmental degradation. Ecological restoration promises an answer to environmental degradation and consequently serves as a major form of environmental management in the future. This Master’s thesis is a conceptual analysis of ecological restoration, also looking at the ethical implications that should follow from the concept. It is important to define the concept clearly to ensure that it fully responds to the causes and challenges of environmental degradation instead of simply justifying them by assuming that it is possible to restore nature without any problems. In addition, ecological restoration goes to the very heart of environmental philosophy, by challenging the dichotomy between nature and humans and therefore, offers a welcome perspective to the search of human place in the natural world. The thesis takes an analytical approach to the search for an appropriate definition of ecological restoration. Conceptual analysis is the main form of inquiry and the aim is to understand how the term has been understood and how it should be understood in a global context. This thesis looks at how ecological restoration has been defined in both philosophical and ecological literature, but the emphasis is on the philosophical literature. The analysis is confined to the most influential work covering ecological restoration, that is, of Robert Elliot (1982 and 1997), Eric Katz (1992 and 1997), Andrew Light (2000, 2012 and 2009), Eric Higgs (2003) and William Throop (2000 and 2012). Also Aldo Leopold’s (1949) work will be covered, even though he does not write about ecological restoration. The analysis is done by framing ecological restoration within four categories: goals, values, means and overall attitude. Framing ecological restoration within these categories ensures a thorough analysis of all the aspects of the concept that might otherwise remain hidden. If one of these categories is missing the concept would be lessened. The concepts of ‘nature’ and ‘wilderness’ have a major impact on how ‘ecological restoration’ is understood. The dichotomy of nature and humans distorts the debate surrounding ecological restoration. Therefore, the concept of nature needs to be defined clearly or even redefined in order to allow ecological restoration. The aim of the thesis is to resolve this conceptual conflict. Ecological restoration has the potential to re-build the relationship between nature and humans and offers the opportunity to re-evaluate the concept of nature, so that it does not necessarily exclude humans. If defined carefully, ecological restoration has the potential to restore damaged ecosystems.
  • Lilja, Saara (Helsingin yliopisto, 2006)
    The first aim of this thesis was to explore the structural characteristics of near-natural forests and to quantify how human utilization has changed them. For this, we examined the stand characteristics in Norway spruce Picea abies (L.) Karst-dominated old-growth stands in northwestern Russia and in old Scots pine Pinus sylvestris L.-dominated stands in three regions from southern Finland to northwestern Russia. In the second study, we also compared stands with different degrees of human impact, from near-natural stands and stands selectively cut in the past to managed stands. Secondly, we used an experimental approach to study the short-term effects of different restorative treatments on forest structure and regeneration in managed Picea abies stands in southern Finland. Restorative treatments consisted of a partial cut combined with three levels of coarse woody debris retention, and a fire/no-fire treatment. In addition, we examined burned and unburned reference stands without cutting treatments. Results from near-natural Picea abies forests emphasize the dynamic character of old-growth forests, the variety of late-successional forest structures, and the fact that extended time periods are needed to attain certain late-successional stages with specific structural and habitat attributes, such as large-diameter deciduous trees and a variety of deadwood. The results from old Pinus sylvestris-dominated forests showed that human impact in the form of forest utilization and fire exclusion has strongly modified and reduced the structural complexity of stands. Consequently, small protected forest fragments in Finland may not serve as valid natural reference areas for forest restoration. However, results from the restoration experiment showed that early-successional natural stand characteristics can be restored to structurally impoverished managed Picea abies stands, despite a significant portion of wood volume being harvested. A variety of restoration methods is needed, due to differences in the condition of the forest when restoration is initiated and the variety of successional stages of forest structures after anthropogenic and natural disturbances. Keywords: dead wood, disturbance dynamic, fire, near-natural stand, rehabilitation, succession
  • Laaka-Lindberg, Sanna (Helsingin yliopisto, 2000)
  • Kolehmainen, Johanna (Helsingin yliopisto, 2008)
    The ongoing rapid fragmentation of tropical forests is a major threat to global biodiversity. This is because many of the tropical forests are so-called biodiversity 'hotspots', areas that host exceptional species richness and concentrations of endemic species. Forest fragmentation has negative ecological and genetic consequences for plant survival. Proposed reasons for plant species' loss in forest fragments are, e.g., abiotic edge effects, altered species interactions, increased genetic drift, and inbreeding depression. To be able to conserve plants in forest fragments, the ecological and genetic processes that threaten the species have to be understood. That is possible only after obtaining adequate information on their biology, including taxonomy, life history, reproduction, and spatial and genetic structure of the populations. In this research, I focused on the African violet (genus Saintpaulia), a little-studied conservation flagship from the Eastern Arc Mountains and Coastal Forests hotspot of Tanzania and Kenya. The main objective of the research was to increase understanding of the life history, ecology and population genetics of Saintpaulia that is needed for the design of appropriate conservation measures. A further aim was to provide population-level insights into the difficult taxonomy of Saintpaulia. Ecological field work was conducted in a relatively little fragmented protected forest in the Amani Nature Reserve in the East Usambara Mountains, in northeastern Tanzania, complemented by population genetic laboratory work and ecological experiments in Helsinki, Finland. All components of the research were conducted with Saintpaulia ionantha ssp. grotei, which forms a taxonomically controversial population complex in the study area. My results suggest that Saintpaulia has good reproductive performance in forests with low disturbance levels in the East Usambara Mountains. Another important finding was that seed production depends on sufficient pollinator service. The availability of pollinators should thus be considered in the in situ management of threatened populations. Dynamic population stage structures were observed suggesting that the studied populations are demographically viable. High mortality of seedlings and juveniles was observed during the dry season but this was compensated by ample recruitment of new seedlings after the rainy season. Reduced tree canopy closure and substrate quality are likely to exacerbate seedling and juvenile mortality, and, therefore, forest fragmentation and disturbance are serious threats to the regeneration of Saintpaulia. Restoration of sufficient shade to enhance seedling establishment is an important conservation measure in populations located in disturbed habitats. Long-term demographic monitoring, which enables the forecasting of a population s future, is also recommended in disturbed habitats. High genetic diversities were observed in the populations, which suggest that they possess the variation that is needed for evolutionary responses in a changing environment. Thus, genetic management of the studied populations does not seem necessary as long as the habitats remain favourable for Saintpaulia. The observed high levels of inbreeding in some of the populations, and the reduced fitness of the inbred progeny compared to the outbred progeny, as revealed by the hand-pollination experiment, indicate that inbreeding and inbreeding depression are potential mechanisms contributing to the extinction of Saintpaulia populations. The relatively weak genetic divergence of the three different morphotypes of Saintpaulia ionantha ssp. grotei lend support to the hypothesis that the populations in the Usambara/lowlands region represent a segregating metapopulation (or metapopulations), where subpopulations are adapting to their particular environments. The partial genetic and phenological integrity, and the distinct trailing habit of the morphotype 'grotei' would, however, justify its placement in a taxonomic rank of its own, perhaps in a subspecific rank.
  • Saarinen, Juha (Helsingin yliopisto, 2014)
    The climatic cooling during the Cenozoic (65 Ma present) culminated in the Pleistocene Ice Ages (ca. 2.6 Ma 10 000 BP) during which the global climate oscillated between relatively warm climatic phases and very cold and dry glacial phases when extensive continental glaciers formed in the Northern hemisphere. The oscillation between the cold and warm climatic stages caused dramatic cyclic changes in the structure of vegetation varying at its extreme between relatively humid forests and very dry and cold mammoth steppes in Europe. These constantly changing and harsh climatic and environmental conditions caused strong extinction and evolution pressures on mammal species. In this thesis I will discuss how two major ecometric variables, body size and diet, of large herbivorous land mammals have varied during the Pleistocene and how these patterns are connected with climate, environmental conditions and competing mammal species. Mammals diversified and started to occupy the niches of large vertebrates after the Late Cretaceous mass extinction which caused the extinction of large non-avian dinosaurs. The frequency of maximum body size in archaic mammal orders shows a significant global peak in the Middle Eocene (ca. 40 Ma) as a result of the diversification and niche filling after the Late Cretaceous mass extinction, but after that maximum size frequency in mammal orders was low until it peaked significantly again the Pleistocene Ice Ages. This indicates that the Pleistocene climatic and environmental conditions favoured particularly large body sizes in mammals. The overall harshness of the Ice Age climate (seasonal, mostly cold and dry conditions and often rapid climatic changes) could have favoured large body sizes in large terrestrial mammals through mechanisms which are more complicated than the often cited benefit of large size for heat conservation (Bergmann s rule). Large size increases the ability to survive over seasonal shortages of resources such as food and water and enables long-distance migrations to areas of better resource availability. On the other hand, strong erosional processes caused by glaciers produced fertile soils and harsh climates reduced the chemical defences of plants, which resulted in seasonally high primary production and plant quality, which would have enabled herbivorous mammals to grow into large sizes during seasons of high productivity. The main factor driving fine-scale body size variations in ungulate populations has been shown by several studies to be resource availability, which is regulated by primary productivity, plant quality, population densities of the ungulate species (intraspecific resource competition) and interspecific resource competition. The comparisons of ungulate body sizes from Middle and Late Pleistocene of Britain and Germany with vegetation openness (percentages of non-arboreal pollen from associated pollen records) show that species with different ecological strategies have different body size patterns in relation to the vegetation structure. The connection between body size patterns and ecological strategies could explain the different responses of body size to vegetation openness. Species which tend to have relatively small group sizes (e.g. deer) show on average larger body sizes in environments where the vegetation structure is open, whereas gregarious, open adapted species (e.g. horses) tend to have smaller average body sizes in open habitats. I suggest this is because open habitats favour large body size in ecologically flexible species with small group sizes due to high resource availability and quality per an individual (relatively low population densities), less size-restricted manoeuvrability and enhanced capability to escape predators, whereas resource limitations for each individual caused by high population densities can become a limiting factor for individual body size in open-adapted, gregarious species which are efficient open-vegetation feeders and form large groups in open habitats. In closed environments, the body size of the open-adapted, gregarious species is not limited by high population density which enables them to attain larger individual sizes. Dietary signals of the key ungulate species in Middle and Late Pleistocene Europe based on mesowear analyses are on average significantly positively correlated with vegetation openness (non-arboreal pollen percentages) at locality-level. However, there are significant interspecific differences. While most of the species show positive correlations between their mesowear signal and non-arboreal vegetation, others, especially the red deer (Cervus elaphus), do not show any correlation. Instead, the mesowear signal of the red deer is significantly more abrasive dominated when other browse-dominated feeders, especially the roe deer (Capreolus capreolus) are present. This indicates that interspecific competition can obscure the effect of available plant material in the diet of ecologically flexible species. This should be taken into account when interpreting the feeding ecology of the key species in palaeocommunities, and especially when attempting to reconstruct palaeoenvironmental conditions from dietary proxies of mammals. Such attempts should ideally be based on as complete dietary analyses of fossil herbivore faunas as possible. In order to extend the palaeodietary and palaeoecological analyses based on mesowear signals of herbivorous mammas, a new tooth wear -based dietary analysis method was developed for elephants and other lamellar toothed proboscideans, based on measuring occlusal relief of their molar teeth as angles. The benefits of that approach compared with other available methods are that it is easy-to-do, fast and robust, and it gives consistent and comparable results for species with different dental morphologies. The preliminary results from that study indicate that the angle measurement method is a powerful tool for reconstructing proboscidean diets from the fossil record.
  • Yrttiaho, Pihla (2013)
    The subject of the research was the expectations of Finnish consumers in electronic commerce, especially concentrating on electronic products. The goal was to find out which underlying characteristics arise when the valuations of online shopping are surveyed. These dimensions were also compared to the background variables. In addition the point of interest was on expectations on delivery, payment and customer service. The research was conducted with a questionnaire form using a convenience sample. The survey was conducted in the areas of Helsinki, Espoo, Vantaa, Kotka and Turku. The aim was to reach different aged Finnish respondents, who were on the moment of the survey 16 years or older. The final sample consisted of 103 respondents. The data was analysed mainly with a Principle Component Analysis and further tests were made using the Analysis of Variance and t-tests. According to the Principle Component Analysis the characteristics of e-commerce in Finland were: privacy control, delivery, mobile-shopping, complete price, Finnish service language and design & navigation. These components followed mostly the original dimensions that were based on earlier research. However a new component of Finnish service language was found. Based on t-tests women valued privacy, mobile-shopping and design more than men. Differences according to the place of residence were examined in the same way. According to this research respondents living outside the capital area value Finnish service language in ecommerce more the residents of capital area. Approximately half of the respondents preferred to pay their purchases using online banking. The second most popular method was a credit card. Most of the respondents expect the package to arrive in 4 to 5 days from the ordering. Over half would pick up the parcel from the post office and approximately one fifth chose the home delivery. The traditional customer service mediums were the most preferred. Together over 90 percent of the respondents would contact the customer service by phone and by e-mail.
  • Favada, Ibrahim (2007)
    This dissertation examines the short- and long-run impacts of timber prices and other factors affecting NIPF owners' timber harvesting and timber stocking decisions. The utility-based Faustmann model provides testable hypotheses of the exogenous variables retained in the timber supply analysis. The timber stock function, derived from a two-period biomass harvesting model, is estimated using a two-step GMM estimator based on balanced panel data from 1983 to 1991. Timber supply functions are estimated using a Tobit model adjusted for heteroscedasticity and nonnormality of errors based on panel data from 1994 to 1998. Results show that if specification analysis of the Tobit model is ignored, inconsistency and biasedness can have a marked effect on parameter estimates. The empirical results show that owner's age is the single most important factor determining timber stock; timber price is the single most important factor in harvesting decision. The results of the timber supply estimations can be interpreted using utility-based Faustmann model of a forest owner who values a growing timber in situ.
  • Salenius, Fredrik (2014)
    Fishing vessels run on fossil fuels that produce greenhouse gases, which are harmful to the environment and costly to society. Since fuel use in fisheries is often subsidized through tax concessions, private fuel consumption will be higher than what is socially optimal. Furthermore,fuel tax concessions will lead to greater fishing effort, with overfishing as a possible consequence. This thesis deals with these negative externalities associated with fisheries. The aim of the study is to elicit the economic and environmental effects fromremoving fuel tax concessions, and to view these effects in relation to the results of current and optimal fisheries management.To this end, four different fuel costscenarios are introducedas basis for the analysis.The current situation of the fishery is compared to an optimized fishery with fuel tax concessions maintained andremoved, i.e. with fuel costs implemented. The target of the studyis thecommercial Baltic salmon fishery, which is a small-scale coastal fishery carried out with trapnets. The analysis employs a bioeconomic model, which accounts for the economic and biological features of this specific fishery. Results from the analysis conveyed that the fishery is currently unprofitable, and therefore not capable of coping withadditional costsimposed on it. However, results from the optimization suggest that economic performance can be improvedby managing the fishery in an optimal way, i.e. by adjustingthe fishing effort to an efficient level. Furthermore, amovement to optimal management is suggested to be an efficient way of gaining both economic and environmental benefits. An optimally managed fishery is thus better equipped to pay for the external costs fromtheCO2 emissions arising from its fishing operations.
  • Natunen, Anu (2002)
    The Asian crisis in 1997-98 was different to prior crises experienced in Europe (1992-93) and Mexico (1994-95). In the Asian crisis shock sensitivity seemed to be liked to financial weaknesses and other structural fragilities rather than weak macroeconomic fundamentals. Banks extended credits, enterprises were indebted with greater leverage and money was invested in the real estate even though investments’ output was not always productive. Credit availability increased as banks competed for customers, cutting back ex ante screening of projects and customer monitoring. Several researches have identified moral hazard caused by government bailout guarantees as the origin of the financial vulnerability in Asia at the time of crisis, explaining the irresponsible behavior of the corporate sector, banking sector, and investors. Due to the crisis’s microeconomic nature the traditional first- and second-generation currency crises models were not able to explain the Asian currency crisis and as a result third-generation models have emerged. This thesis aims to find answers to the following questions: (1) what was relevant in the Asian currency crisis, (2) when governments use exchange rates policies to bailout troubled companies, how can these bailout policies be explained theoretically, and (3) what other factors can affect the functionality of these exchange rate policies as bailout, when are they not a solution. In other words this paper presents an empirical and a theoretical approach to the Asian currency crisis and analyzes to what extent theoretical explanations are supported by empirical evidence. As a theoretical explanation to the Asian currency crisis this thesis presents a third-generation currency crises model by Bris and Koskinen (2002), based on an argument that bailing out financially distressed export companies through currency devaluation is optimal ex post for an economy. As a competing point of view to the model of Bris and Koskinen on the affect of devaluation on corporate sector, the paper presents a review of the theoretical work of Aghion et al. (2000) on currency crises, who argue that currency devaluation leads to further corporate balance-sheet deteriorating. Empirical evidence on the Asian currency crisis supports the implications of the model of Bris and Koskinen.
  • Leivo, Tiina (Helsingin yliopisto, 2001)
  • Saleh, Raya (2000)
    The conflict between economic growth and environmental quality is very complex. Many believe that environmental concerns depend on the GNP levels of countries. It is against this background that we formulated the problem of the study, to examine the complex relationship between externalities and income level using the overlapping generations model of economic growth and environmental externalities. According to the overlapping generations model the solution to externality problem is a function of individual choices and planner's policies. The model shows us that economies can have both economic growth and clean environment if the following conditions are fulfilled: First individuals have to give up a large amount of consumption in return for improvement in the environmental quality therefore and according to the overlapping generations model the individual decisions has long lasting effects on both factors productivity and environment. Second, the planner has to set policies to control population growth since population growth leads to low capital and poor environment. Third, the planner has to implement a tax transfer scheme which will be optimal to solve the externalities problem not for only the current generations but also for future generations as well. The overlapping generations model of economic growth and environmental quality provides theoretical explanations in analysing the competitive equilibrium in the steady-state. And obtain also the golden rule and achieve the optimal level of allocation. The model concludes that the optimal path towards pollution reduction is to keep a low population growth and low consumption in order to have a clean environment regardless the GNP level or the individuals income level since high consumption cause degradation of the environment.
  • Ingutia, Rose Anyiko (2007)
    The aim of this study is to find causes that have led to economic growth decline in SSA, and differences in growth rates across countries in SSA and overtime. At independence (early 60s) SSA was characterised by young political institutions that turned out to be of authoritarian rule, an acute shortage of skilled labour, a predominance of peasantry, widespread poverty and resurgent ethnic rivalries. These kinds of background on several occasions led to conflicts and has not been conducive for economic growth. The economic as well as the political crisis carried on into the early 90s. Most countries pressed for multiparty system in early 90s and by mid 90s SSA saw the birth of democracy. Stability was restored and over 70 per cent of SSA experienced positive growth rates. It is hypothesised that democracy (freedom) is the bedrock behind economic growth in SSA. This is empirically tested on 34 countries of SSA, between 1965-2000, with the use of panel data method. Freedom index is measured in ascending order from 1 to 7. In the ordinary least squares estimations, I have found that one-unit increase in freedom index, increases growth rate by a third (.33) of a percentage points. A country that moves 3 levels of freedom from lower to higher levels, increases growth rate by 1 %. The freedom variable has been found to be statistically significant and of practical importance in most cases. There are numerous channels through which freedom variable affects economic growth, under the present study the most important are- the budget balance, government consumption, public expenditure, public investment, for these variables are under the direct dominion of government and are subject to scrutiny, transparency and accountability. The efficiency and effectiveness of these variables are an incentive to domestic investment, better terms of trade, and low illiteracy rates, in their respective roles. All the above variables have turned out to be of both statistical significance and of practical importance. The point that this study highlights is that for any of these variables to become effective in their respective roles, they need to be under an enabling environment of democratic institutions. Democracy (freedom index) is a key determinant of growth in as far as it is associated with improved governance. In cases where this association is absent, freedom index loses it’s key importance to growth. However, any conclusions should be based on both empirical findings as well as on theory. Freedom of political rights and civil liberties is the engine behind government effectiveness, regulatory quality, political stability, law and order and low corruption.
  • Hakola, Tuulia (2002)
    The Finnish pension system is structured mainly with a pay-as-you-go –principle. Accordingly, the working population pays the pensions of the already retired population. If there is a change in the worker-retiree –ratio, financing of the pension system can become problematic. Therefore, the timing of retirement or the average retirement age matters. The decision to retire is influenced by a number of economic and non-economic factors. This thesis focuses on the economic incentives of retirement. The thesis uses large panel data sets to construct these incentives for the Finnish population. The aim of the study is to assess how much these incentives affect the probability of retirement. The first essay divides retirement into retirement with the disability pension, with the unemployment pension and with the old-age pension. Higher replacement rate increases the conditional probability of retirement, but this relationship is non-monotonic. Most clearly the replacement rate increases the probability of retirement through the unemployment pension, and it has no effect on the timing of the old-age retirement. The second essay shows that ignoring the difference between disability application and transition probability produces results that are halfway between the two. The essay also tests the impact of a number of different life-cycle incentives. Results on the pure life-cycle incentives are counter-intuitive, whereas the option value results are of the expected sign. The third essay considers part-time retirement. Financial compensation is estimated for each individual in full-time work, part-time work and in full-time retirement. Results show that the part-time pension has been financially most advantageous to those who chose this option. The essay also estimates that fifty per cent of the partially retired would have chosen full-time retirement, had they not had the part-time option. The fourth essay takes also the employer incentives into account. It tests an implicit contracts model on a linked employer-employee panel data. Results show that joint incentives of early retirement matter more when the economic conditions are bad. The essay also shows that experience-rating of the displacements affects the firm behaviour.
  • Hakola, Tuulia (2002)
    Suomen eläkejärjestelmä perustuu laajalti jakojärjestelmään. Sen mukaan työssä käyvät maksavat jo eläkkeelle jääneiden eläkkeet. Jos työssä käyvien ja eläkeläisten lukumäärien suhde muuttuu merkittävästi, eläkkeiden rahoitus vaikeutuu. Siksi eläkkeelle siirtymisen ajankohdalla (tai keskimääräisellä eläkkeelle siirtymisiällä) on merkitystä. Eläkkeelle siirtymiseen vaikuttavat sekä taloudelliset että muut seikat. Väitöskirjassa keskitytään taloudellisiin kannustimiin siirtyä eläkkeelle. Väitöskirjassa muodostetaan taloudellisia kannustimia suomalaiselle väestölle käyttäen laajoja paneeliaineistoja. Väitöskirjan tavoitteena on arvioida, paljonko kannustimet vaikuttavat eläkkeelle siirtymisen todennäköisyyteen. Ensimmäisessä esseessä eläkkeet jaetaan työkyvyttömyyseläkkeeseen, työttömyyseläkkeeseen ja vanhuuseläkkeeseen. Korkeampi korvaussuhde kohottaa eläkkeelle siirtymisen ehdollista todennäköisyyttä, mutta korvaussuhteen ja ehdollisen eläkkeelle siirtymisen todennäköisyyden välinen suhde on ei-lineaarinen. Selkeimmin korvaussuhde korottaa työttömyyseläkkeelle siirtymisen todennäköisyyttä. Vastaavasti riippuvuussuhdetta ei havaittu todennäköisyydessä siirtyä vanhuuseläkkeelle. Toisessa esseessä näytetään se, että ellei työkyvyttömyyseläkkeelle hakemisen todennäköisyyttä eroteta työkyvyttömyyseläkkeelle siirtymisen todennäköisyydestä, saadut tulokset ovat näiden kahden erillistulosten puolesta välistä. Esseessä testataan erilaisten elinkaarikannustimien vaikutuksia. Suoraviivaiset elinkaarivaikutusten tulokset olivat odotusten vastaisia, kun taas optioarvoon perustuvat tulokset olivat odotusten mukaisia. Kolmannessa esseessä käsitellään osa-aikaeläkkeitä. Siinä arvioidaan taloudellista korvausta henkilölle, jos hän on kokoaikatyössä, osa-aikaeläkkeellä ja täydellä eläkkeellä. Tulosten mukaan osa-aikaeläke on rahallisesti paras vaihtoehto niille, jotka ovat osa-aikaeläkkeellä. Esseessä arvioidaan lisäksi, että puolet osa-aikaeläkeläisistä olisi valinnut täyden eläkkeen, jos heillä ei olisi ollut osa-aikaeläkevaihtoehtoa. Neljännessä esseessä otetaan huomioon myös työnantajaan kohdistuvat kannustimet. Esseessä testataan implisiittisten sopimusten mallia yhdistetyllä työnantaja-työntekijä –paneelilla. Tulosten mukaan yhteiskannustimilla (sekä työnantajan että työntekijän) on eniten väliä, silloin kun taloudellinen tilanne on vaikein. Esseessä myös näytetään, että firmoihin kohdistetuilla eläkekustannuksilla on vaikutusta yritysten irtisanomiskäyttäytymiseen.
  • Gangnuss, Danila (2005)
    The European Union has created a massive market for goods, services, capital and labour. In principle, goods and services as well as factors of production can move freely across the national borders within the European Union. Migration of the factors of production is driven by the country-specific differences in marginal productivity. As a result of this, migration ensures the most efficient use of the factors of production and therefore promotes the general welfare. However, international mobility of the factors of production might threaten national welfare of the countries that participate in economic integration. For some of the countries, this raises concerns about loosing factors of production in favor of the other member-states of the European Union. The purpose of this thesis is to analyze how mobility of skilled labour affects income taxation decisions in the countries that face economic integration. The thesis identifies optimal patterns of taxes and of public expenditures in the countries that face international agglomeration of industry. It poses the question of whether there exists an optimal size of the public sector in the presence of economic integration. Starting with the core-periphery models of Krugman (1991a), Fujita et al. (1999) and Forslid (1999), the thesis considers a new economic geography model of tax competition (Andersson and Forslid 2001), where two initially identical countries compete for internationally mobile skilled workers. The model contains two types of equilibria. In the dispersed equilibrium, manufactured production and skilled workers are located in both countries. In the agglomerated equilibrium, manufactured production and skilled workers are concentrated in one of the countries. For both types of equilibrium we construct taxes, which are optimal for the purpose of preserving current distribution of manufactured production and of skilled workers. We show that it is always optimal to tax the income of skilled workers at some positive rate. In the dispersed equilibrium, taxes on the income of skilled workers cannot be increased above some critical level without producing agglomeration of industry. However, in the agglomerated equilibrium, economic integration decreases sensitivity of skilled workers with respect to fiscal incentives. As a result of this, the scope for income taxation of skilled workers in the agglomerated equilibrium does not monotonically decline with trade costs. We also show that taxes on the income of unskilled workers determine the size of the public sector in the dispersed equilibrium but not in the agglomerated equilibrium. It is interesting that in the country, which contains agglomeration of industry, taxes on the income of unskilled workers can be decreased without reducing the size of the public sector.
  • Riihimäki, Elisa (2003)
    This study analyzes the effects of the economic integration on the elasticities of labour demand. We present a linear model of intra-industry trade considering how product market integration affects labour demand. For traded goods, there is firm in each country producing with two factors of production, labour and capital, and non-traded goods are produced only with labour. In a Cournot-Nash equilibrium, we show that the various channels of integration have different effects on labour demand. A decrease in trade barriers tends to increase labour demand. However, if product market integration gives rise to an increase in the number of traded goods, we can expect labour demand to decrease. The reason behind these counteracting results is that taking better advantage of economies of scale firms expand production despite lower price-cost margins, while firms face an increase in the degree of competition in goods markets. In a non-linear model, the purpose is to analyze how economic integration changes in theory the labour-demand elasticity with own price. We suppose that, in an open economy, industries produce goods with capital and labour. We derive two different effects of an increase in the degree of integration, a scale effect and a substitution effect, on the labour-demand elasticity. If integration gives rise to an increase in substitutability, we can expect labour demand to become more elastic. We show also that international trade increases the elasticity of labour demand by increasing the elasticity of product demand. Then, integration makes labour demand more elastic either by making output markets more competitive or by making domestic labour more substitutable with foreign factors. We present a two-stage estimation model in which the aim is to investigate empirical whether integration within European Union has changed the labour-demand elasticities with own price in Finland using data from the manufacturing sector from 1975 to 1999. The more elastic labour demand is, the more sensitive employment in consequence of the change of labour costs changes. We find that the labour demand became more elastic over process of integration in manufacturing overall and in all sectors by using instrumental variables estimation, and by using ordinary least squares in manufacturing overall and in the majority of the sectors. We find also that the effects of the demand shocks on labour demand have become greater in all sectors except one. Determining European integration’s effect on the labour-demand elasticities, our second stage results provide some support for the hypothesis that integration has contributed to increase in labour-demand elasticities. The majority of the integration indicators have the predicted effect on the elasticities for manufacturing overall and for the majority of the sectors. The results provide also some evidence that the integration forces changing labour substitutability by making labour more easily substituted for foreign factors of production.
  • Johnston, Casey (2013)
    This Master’s Thesis aims to explore the link between the state of the economy and the outcome of elections in the United States. The thesis begins with an introduction that focuses on the importance that the economy has had in determining elections, in particular, the presidential election of 2012. After a brief opening, it then moves to a comprehensive review of previous literature related to what has been tagged the ‘economic voting theory: the idea that voters reward incumbents for positive economic outcomes and punish them for negative ones. Next, I suggest the addition of another dimension to the economic voting theory in order to separate my research from previous studies on this topic. The additional dimension is what is known as the ‘shale gas revolution’: an enormous increase in natural gas production capacity that has created jobs and pumped money into the American economy. I am interested in finding how and if the positive economic effects of the shale gas revolution helped to increase support for Barack Obama in the 2012 election as the economic voting theory would suggest. From there I will further refine the research question by selecting the state of Ohio as the focus of my study based on both its experience with the shale gas revolution and its history as a swing state. With this, the research question that this thesis aims to answer becomes: According to the economic theory of voting, did improved economic conditions help to boost support for Barack Obama in Ohio in the 2012 Presidential Election? Finally, I am able to begin the analysis using data in the form of economic indicators in order to establish the impact that the shale gas revolution has had on the economy and then explore whether these positive effects coincided with support for President Obama.