COMPUTATION OF BONUS IN MULTI-STATE LIFE INSURANCE

We consider computation of market values of bonus payments in multi-state with-profit life insurance. The bonus scheme consists of additional benefits bought according to a dividend strategy that depends on the past realization of financial risk, the current individual insurance risk, the number of additional benefits currently held, and so-called portfolio-wide means describing the shape of the insurance business. We formulate numerical procedures that efficiently combine simulation of financial risk with classic methods for the outstanding insurance risk. Special attention is given to the case where the number of additional benefits bought only depends on the financial risk. Methods and results are illustrated via a numerical example.

Performance Pay in Insurance Markets: Evidence from Medicare

Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of highrated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.

Bonus Payments within the New Zealand Financial Services Sector

Some major corporate scandals have shown that bonuses have been put above basic client needs. As a result, organisations within the financial services sector have been advised to move away from paying bonuses. However, bonus payments are an expected part of the current remuneration package in this sector, which poses an interesting challenge for the employment relationship between employees and organisations. The present study gained employee insights into their bonuses by looking at performance and other factors. Qualitative interviews were undertaken within the financial services sector. Alternatives for bonuses and implications are discussed to manage remuneration and the employer/employee relationship.

Functionally enhanced quality assurance incentives

In theory, the role and value of prizes in the economic mechanism is not controversial. It is now established order in which the incentive funds formed by stable regulations approved differentiated in size from year to year development cycle, the main indicator is the plan of product supply contracts, increased productivity, improved quality prepared products, growth in net profit. So there is every reason to believe the introduction of long-term wage standards for the hryvnia to strengthen product allows interest groups to increase productivity and reduce employee turnover, improved promotion procedure for combining professions, with high rates of labour initiative for implementing reasonable standards. In practice, the issue of incentives is of great interest and is constantly in the spotlight. The aim – to present one possible incentive works and those working in the system to ensure product quality in terms of increasing the responsibility of working for the final results. The formation stimulation funds spent; in fact they are regulated current set order. The distribution fund to encourage formation size of bonus payments and working units is quite controversial. This approach to the distribution system of bonus payments for quality work allows retransmit the incentive oriented, the final results of the enterprise as a whole to each worker. For workers with decentralized formation of the material incentive fund in the main production shops, it is recommended to increase the size of the incentive fund, for the shop provided an increase in the number of workers working with a personal stamp, and with an increase in the number of workers delivering products on demand. The proposed mechanism is universal. It can be used in enterprises regardless of their industry and structural profiles and can solve the problem for the optimum management of misalignment. Selecting works as a criteria for bonus payments while providing a reduction or streamlining expenses related to providing quality products.

Prosecutors: A Cross-National Political Perspective

Over the past decades, prosecutors have become more and more powerful within criminal justice systems. Yet, there is still relatively little empirical research on prosecutors. Most of the literature focuses on the analysis of the prosecutorial system of a single country. Cross-country analyses are close to nonexistent. From a comparative perspective, the various possible means to establish the independence of prosecutors from government and at the same time securing their accountability to the law are of paramount interest. Regarding the former, appointment procedures, possible career paths, and the degree to which prosecutors are subject to orders both from within the prosecution agency as well as from without (e.g., the ministry of justice) are of special concern. With regard to prosecutorial accountability, it is the legality principle (also known as mandatory prosecution), the issue whether prosecutors enjoy a monopoly in the prosecution of criminals, whether decisions not to prosecute a suspect are subject to judicial review, and the transparency of the behavior of prosecutors that are key. Regarding the organizational design choices of prosecution agencies that have been implemented across countries, four different clusters can be identified. The four clusters perform markedly different in terms of the rule of law levels associated with them. The consequences of institutional design choices are surprisingly small. The de facto organization of prosecutors turns out to be far more relevant for outcomes than what is prescribed de jure. Countries in which prosecutors enjoy a high degree of de facto independence suffer significantly less from corruption than countries in which this is not the case. Given that the institutional design choices of prosecutors are of limited relevance for their de facto situation, the question is: What factors determine the de facto independence and accountability of prosecutors? It turns out that some rather stable and immutable factors are decisive: Common law legal systems do better than those belonging to the civil law legal families. Generalized trust also plays an important role. If most people believe that others can be trusted, very specific rules for the behavior of prosecutors may seem unnecessary. A number of trends regarding the organization of prosecutors can be observed in many countries, among them the increased reliance on trial waiver systems, bonus payments to incentivize prosecutors, the founding of prosecutorial councils, and prosecutorial activism. It is questionable whether the first three of these trends will increase the efficiency of prosecution agencies; rather, they are likely to lead to a deterioration in the overall rule of law score of those countries relying on them.

EXPRESS: How Does Bonus Payment Affect the Demand for Auto Loans and Their Delinquency?

This paper studies how receiving a bonus changes the consumers’ demand for auto loans and the risk of future delinquency. Unlike traditional consumer products, auto loans have a long-term impact on consumers’ financial state because of the monthly payment obligation. Using a large consumer panel data set of credit and employment information, the authors find that receiving a bonus increases auto loan demand by 21 percent. These loans, however, are associated with higher risk, as the delinquency rate increases by 18.5 −31.4 percent depending on different measures. In contrast, an increase in consumers’ base salary will increase the demand for auto loans but not the delinquency. By comparing consumers with bonuses with those without bonuses, the authors find that bonus payments lead to both demand expansion and demand shifting on auto loans. The empirical findings help shed light on how consumers make financial decisions and have important implications for financial institutions on when demand for auto loans and the associated risk arise.

Working Conditions in Global Value Chains: Evidence for European Employees

This article investigates a sample of almost nine million workers from 24 European countries in 2014 to conclude how involvement in global value chains (GVCs) affects working conditions. We use employer–employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on the World Input-Output Database. Given the multidimensional nature of the dependent variable, we compare estimates of the Mincerian wage model with zero-inflated beta regressions focused on other aspects of working conditions (overtime work and bonus payments). Wages prove to be negatively related to involvement in GVCs: workers in the more deeply involved sectors have lower and less stable earnings, implying worse working conditions. However, they are also less likely to have to work overtime. We prove that the analysis of social implications of increasing involvement of countries in global production must compare wage effects of GVCs with other aspects of complex changes in workers’ well-being.