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on Investment |
| By: | Sasaki, Hiroaki; Mizutani, Aya |
| Abstract: | In contemporary Japan, the realization of a virtuous cycle of growth and distribution (i.e., how the "new form of capitalism" should be) has been discussed. To examine the validity of economic policies suggested by the new form of capitalism, we present a Kaleckian model that considers the wage gap among workers and the retained earnings of firms, and investigate the effects of minimum wage, the rate of retained earnings, and profit sharing on growth and distribution. We reveal that a decrease in the rate of retained earnings and an increase in profit sharing do not lead to a virtuous cycle of growth and distribution, whereas a rise in the minimum wage increases the income share of workers and the economic growth rate. However, an increase in the minimum wage has a negative impact on employment, whereas a decline in the rate of retained earnings and an expansion of profit sharing have a positive effect. |
| Keywords: | growth and distribution; Kaleckian model; minimum wage; retained earnings; profit sharing; Japan's new form of capitalism |
| JEL: | E12 E25 J31 J53 |
| Date: | 2024–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121692 |
| By: | William LaFiandra; Daniel Schwab (College of the Holy Cross) |
| Abstract: | The American workplace is distressingly dangerous, with 5, 333 workplace deaths and 2.8 million nonfatal injuries and illnesses in 2019. This paper uses a difference-in-differences methodology to exploit staggered changes in the minimum wage from 1992-2016 to demonstrate that an increase in the minimum wage reduces workplace injuries and deaths in the United States restaurant sector, with an elasticity between -0.73 and -1.45. We limit attention to the restaurant sector because minimum wage workers are strongly overrepresented in that sector. Safety violations in routine inspections decline when the minimum wage is increased. These violations are found in domains where the employer is most responsible (e.g., expired fire extinguisher), which suggests that employer behavior is an important mechanism. Additionally, it is possible that the exiting restaurants tend to be more dangerous. Previous research shows that the restaurants which are driven out of business by minimum wage hikes were those that were already close to the margin of exit, and firms that are barely staying afloat before the minimum wage hike may be less likely make long-term investments in safety. Finally, we analyze the manufacturing sector as an additional placebo test. The minimum wage rarely binds for workers in the manufacturing sector, so we should expect that there is only a weak relationship between the minimum wage and accident inspections. This paper ties into a long-standing debate about the wisdom of increasing the minimum wage. Most scholars indicate that raising the minimum wage causes a slight decrease in employment, but there are also papers that find no effect or even a positive effect. The present paper uncovers a new benefit to raising the minimum wage and strengthens the argument that it should be increased even if there is a small detriment to employment. |
| Keywords: | Workplace safety, minimum wage, difference-in-differences, restaurant industry |
| JEL: | E52 E58 D83 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:hcx:wpaper:2301 |
| By: | Sasaki, Hiroaki; Asada, Yasukuni; Sonoda, Ryunosuke |
| Abstract: | This study extends Goodwin’s growth cycle model by considering low- and high- skilled workers. Using the parameters obtained from the Japanese economy data, we conduct numerical simulations to reproduce Japanese business cycles. We investigate how the introduction of the minimum wage share and reduction in the wage gap between low- and high-skilled workers affect the wage share and employment rates. The results reveal that introducing the minimum wage share diminishes the amplitude of the fluctuations in both the wage shares and employment rates of the two types of workers. Reducing the wage gap decreases the amplitude of fluctuations in the wage share and employment rate of high-skilled workers and increases the amplitude of fluctuations in the wage share and employment rate of low-skilled workers. |
| Keywords: | growth cycles; low- and high-skilled workers; minimum wage share; wage gap |
| JEL: | E24 E25 E32 |
| Date: | 2024–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121695 |
| By: | Srithilat, K. |
| Abstract: | This study examines the impact of the Don Sahong Hydropower Dam on food and nutrition security in the Mekong River Basin. This study uses the Household Food Insecurity Access Score (HFIAS) and Household Dietary Diversity Score (HDDS) to measure food insecurity and dietary diversity among households affected by the dam's construction. Preliminary results indicate higher levels of food insecurity and lower dietary diversity among these households. The study underscores the need for comprehensive impact assessments and sustainable planning practices in infrastructure development. It also calls for interventions to improve food security and dietary diversity among households affected by such projects. The findings from this study will contribute to a better understanding of the intricate interplay between infrastructure development, ecological preservation, and food security, providing valuable insights for policy-making and sustainable development practices. |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty |
| Date: | 2024–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ags:asea24:344452 |
| By: | Benami, Elinor; Carter, Michael R.; Hobbs, Andrew; Jin, Zhenong; Kirchner, Ella |
| Abstract: | Agricultural index insurance seeks to protect producers against negative shocks that are common across a prespecified area, i.e., an index insurance zone. Often, administrative boundaries are used to delineate such index insurance zones. However, administrative boundaries may not reflect relevant variations in yield over space, which can be costly for policyholders as well as the public, especially since agricultural insurance is often heavily subsidized. Increased availability of finely resolved geospatial data on agronomic conditions coupled with machine learning approaches to identify similarities promises the ability to reduce losses associated with index insurance by identifying more homogeneous zones. In this work, we examine the changes in welfare impacts of a hypothetical area-yield index insurance when redrawing zone boundaries on the basis of relevant observed agronomic conditions. Drawing upon crop cut data from over 10, 000 maize fields in Kenya from 2016-2020 combined with satellite-based estimates of agronomic conditions, we examine the changes in expected utility to assess the value of data-driven and administrative insurance zones. When keeping the number of insurance zones equal to the number of administrative zones, we find that data-driven zones may offer only slightly higher risk reduction value than administrative zones. If no set number of zones are prespecified, the data-driven approach offers a flexible approach to identify an optimal number of zones that balances costs and performance. This approach can help inform program design as well as impact evaluations, as it further sheds light on trade-offs between the costs of ground sampling and zone size that can inform how to design and evaluate new programs in resource-constrained environments for maximum impact. |
| Keywords: | Agricultural Finance, International Development, Risk and Uncertainty |
| Date: | 2024–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344685 |
| By: | Raphael Auer; David Köpfer; Josef Sveda |
| Abstract: | How exposed is the labour market to ever-advancing AI capabilities, to what extent does this substitute human labour, and how will it affect inequality? We address these questions in a simulation of 711 US occupations classified by the importance and level of cognitive skills. We base our simulations on the notion that AI can only perform skills that are within its capabilities and involve computer interaction. At low AI capabilities, 7% of skills are exposed to AI uniformly across the wage spectrum. At moderate and high AI capabilities, 17% and 36% of skills are exposed on average, and up to 45% in the highest wage quartile. Examining complementary versus substitution, we model the impact on side versus core occupational skills. For example, AI capable of bookkeeping helps doctors with administrative work, freeing up time for medical examinations, but risks the jobs of bookkeepers. We find that low AI capabilities complement all workers, as side skills are simpler than core skills. However, as AI capabilities advance, core skills in lower-wage jobs become exposed, threatening substitution and increased inequality. In contrast to the intuitive notion that the rise of AI may harm white-collar workers, we find that those remain safe longer as their core skills are hard to automate. |
| Keywords: | labour market, artificial intelligence, employment, inequality, automation, ChatGPT, GPT, LLM, wage, technology |
| JEL: | E24 E51 G21 G28 J23 J24 M48 O30 O33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1207 |
| By: | Francesco Zanetti; Federico S. Mandelman; Yang Yu; Andrei Zlate |
| Abstract: | We document a steady decline in low-skilled immigration that began with the onset of the Great Recession in 2007, which was associated with labor shortages in low-skilled service occupations and a decline in the skill premium. Falling returns to high-skilled jobs coincided with a decline in the educational attainment of native-born workers. We develop and estimate a stochastic growth model with endogenous immigration and training to account for these facts and study macroeconomic performance and welfare. Lower immigration leads to higher wages for low-skilled workers and higher consumer prices. Importantly, the decline in the skill premium discourages the training of native workers, persistently reducing aggregate productivity and welfare. Stimulus policies during the COVID-19 pandemic, amid a widespread shortage of low-skilled immigrant labor, exacerbated the rise in consumer prices and reduced welfare. We show that the 2021-2023 immigration surge helped to partially alleviate existing labor shortages and restore welfare. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:24-013e |
| By: | Brussig, Martin |
| Abstract: | Der vorliegende Report untersucht die Situation von Personen, die aufgrund langer Versicherungszeiten frühzeitig in Rente wechseln können, ihren Rentenbeginn aber bis zur Regelaltersrente aufschieben. Etwa elf Prozent der Zugänge in Altersrente des Jahrgangs 1954 sind der Gruppe der späten Renteneintritte zuzurechnen, wobei die Größe dieser Gruppe aufgrund der gewählten konservativen Definition eine Untergrenze darstellt. Mit der Einführung der Altersrente für besonders langjährig Versicherte ("Rente mit 63") hat sich die Anzahl der Personen mit späten Renteneintritten schlagartig nahezu halbiert. Danach ist sie mit fast jeder nachrückenden Geburtskohorte leicht gestiegen. Eine alternsgerechte Arbeitsgestaltung ist nach wie vor erforderlich, damit Beschäftigte bei guter Gesundheit überhaupt die späte Erwerbsphase erreichen. Erforderlich ist darüber hinaus, den Arbeitsprozess so zu gestalten, dass die Arbeit als sinnstiftend und bereichernd erlebt werden kann. Andernfalls wechseln viele der Älteren, die länger arbeiten könnten, in die verbliebenen Frühverrentungsmöglichkeiten. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iaqalt:301655 |
| By: | Galina Hale; Brigid Meisenbacher; Fernanda Nechio |
| Abstract: | In the past two decades, a number of banks joined global initiatives aimed to mitigate climate change by “greening” their asset portfolios. We study whether banks that made such commitments have a different emission exposure of their portfolios of syndicated loans than banks that did not. We rely on loan-level information with global coverage combined with country-industry information on emissions. We find that all banks have reduced their loan-emission exposures over the last 8 years. However, we do not find differences between banks that did and those that did not signal their sustainability goals, with the exception of early signers of Principles of Responsible Investments (PRI), who already had lower exposure to emissions through their syndicated lending. In addition, banks that signed PRI shortened the maturity of the loans extended to highly-emitting industries but only temporarily. Thus, we conclude that banks reduced their exposure to climate transition risks on average, but voluntary climate commitments did not contribute to syndicated loan reallocation away from highly-emitting sectors. |
| JEL: | F21 G21 Q54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32874 |
| By: | van der Merwe, Melissa; Zdráhal, Ivo; Lategan, Francois |
| Abstract: | Despite the free trade agreement, South Africa’s agri-food exports to the European Union (EU) are declining. Without intervention, we expect this trend to persist. The paper aims to interrogate the change in South Africa’s agri-food exports to the EU by applying the Constant Market Share (CMS) model to study South African agri-food exports to the four EU sub-regions over 20 years. This allows us to analyse the impact of trade liberalisation and the slowdown of global value chain activity on agri-food trade. To our knowledge, this is the first attempt to understand the competitiveness of South African agri-food exports to the EU using the CMS model over a longer period. The agri-food products are grouped into four categories: bulk commodities, processed intermediate goods, horticulture products and consumer-ready goods. We find that South African agri-food exports were responsive to changes in the EU market demand for agri-food imports. However, South African agri-food exports were not competitive over the long period. This is because South Africa focused on slower-growing markets and agri- food commodities that show lower-than-average growth rates. South Africa is competitive in exporting specific agri-food commodities to specific markets with increasing demand. We recommend that South Africa focus on exporting commodities for which demand is growing quicker to fast-growing EU markets and invest in key priority areas to compete with other sources of supply available to the EU. |
| Keywords: | International Relations/Trade |
| Date: | 2024–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344687 |
| By: | Joachim Jungherr; Matthias Meier; Timo Reinelt; Immo Schott |
| Abstract: | We provide novel empirical evidence that firms’ investment is more responsive to monetary policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian model with financial frictions and endogenous debt maturity, two channels explain this finding: (1.) Firms with more maturing debt have larger roll-over needs and are therefore more exposed to fluctuations in the real interest rate (roll-over risk). (2.) These firms also have higher default risk and therefore react more strongly to changes in the real burden of outstanding nominal debt (debt overhang). Unconventional monetary policy, which operates through long-term interest rates, has larger effects on debt maturity but smaller effects on output and inflation than conventional monetary policy. |
| Keywords: | monetary policy; investment; corporate debt; debt maturity |
| JEL: | E32 E44 E52 |
| Date: | 2024–08–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:98708 |
| By: | Alvaredo, Facundo (Paris School of Economics); Bourguignon, Francois (Paris School of Economics); Ferreira, Francisco H. G. (London School of Economics); Lustig, Nora (Tulane University) |
| Abstract: | Drawing on a comprehensive compilation of quantile shares and inequality measures for 34 countries, including over 5, 600 estimated Gini coefficients, we review the measurement of income inequality in Latin America and the Caribbean over the last seven decades. We find that there is quite a bit of uncertainty regarding inequality levels for the same country/year combinations. Differences in inequality levels estimated from household surveys alone are present but they derive from differences in the construction of the welfare indicator, the unit of analysis, or the treatment of the data. With harmonized household surveys, the discrepancies are quite small. The range, however, expands significantly when –to correct for undercoverage and underreporting especially at the top of the distribution– inequality estimates come from some combination of surveys and administrative tax data. The range increases even further when survey-based income aggregates are scaled to achieve consistency not only with tax registries but with National Accounts. Since no single method to correct for underreporting at the top is fully convincing at present, we are left with (often wide) ranges, or bands, of inequality as our best summaries of inequality levels. Reassuringly, however, the dynamic patterns are generally robust across the bands. Although the evidence roughly until the 1970s is too fragmentary and difficult to compare, clearer patterns emerge for the last fifty years. The main feature is a broad inverted U curve, with inequality rising in most countries prior to and often during the 1990s, and falling during the early 21st century, at least until around 2015, when trends appear to diverge across countries. This pattern is broadly robust but features considerable variation in timing and magnitude depending on the country. |
| Keywords: | income inequality, measurement, Latin America and the Caribbean |
| JEL: | D31 D63 O54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17201 |
| By: | Adamecz, Anna (University College London); Lovász, Anna (University of Washington Tacoma); Vujic, Suncica (University of Antwerp) |
| Abstract: | This paper looks at the relationship between higher education and fertility, focusing on how intergenerational educational mobility shapes this dynamic. Using the 1970 British Cohort Study, we estimate gaps in completed fertility, distinguishing between those who are the first in their family to graduate from a university (FiF), graduates with a graduate parent, and non-graduates. Our findings reveal that while on average, graduate women have fewer children than non-graduates, this difference is driven by FiF graduates. FiF women tend to have fewer children than both non-FiF graduates and non-graduates, who exhibit similar fertility rates. The fertility gap between FiF and non-FiF graduates emerges after age 35, mainly on the extensive margin: FiF women are more likely to remain childless, but those who become mothers have an equal average number of children. Similar patterns are observed among men, although the gaps are smaller and not statistically significant. We identify child-related preferences, self-esteem, and maternal employment in childhood as potential explanations behind the FiF fertility gap, while labour market outcomes, financial constraints, partnerships, and health do not appear to play a role. These findings underscore important considerations for supporting inter-generational mobility and fertility. |
| Keywords: | first in family graduates, fertility, childlessness, inter-generational educational mobility, gender economics |
| JEL: | I26 J13 J16 J24 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17216 |
| By: | Roger E.A. Farmer |
| Abstract: | I introduce money into an incomplete markets model with heterogeneous agents and uninsurable income risk. I show that the model exhibits both non-monetary and monetary equilibria, with the latter existing when income risk is sufficiently high. Using numerical methods, I characterize the properties of these equilibria and analyze their stability. I find that for a range of realistic parameter values, the non-monetary equilibrium is dynamically inefficient and indeterminate, and there is a second determinate monetary equilibrium with positive valued fiat money. |
| JEL: | D52 E30 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32836 |
| By: | Giacomo Damioli; Vincent Van Roy; Daniel Vertesy; Marco Vivarelli |
| Abstract: | Artificial intelligence (AI) is emerging as a transformative innovation with the potential to drive significant economic growth and productivity gains. This study examines whether AI is initiating a technological revolution, signifying a new technological paradigm, using the perspective of evolutionary neo-Schumpeterian economics. Using a global dataset combining information on AI patenting activities and their applicants between 2000 and 2016, our analysis reveals that AI patenting has accelerated and substantially evolved in terms of its pervasiveness, with AI innovators shifting from the ICT core industries to non-ICT service industries over the investigated period. Moreover, there has been a decrease in concentration of innovation activities and a reshuffling in the innovative hierarchies, with innovative entries and young and smaller applicants driving this change. Finally, we find that AI technologies play a role in generating and accelerating further innovations (so revealing to be “enabling technologies”, a distinctive feature of GPTs). All these features have characterised the emergence of major technological paradigms in the past and suggest that AI technologies may indeed generate a paradigmatic shift. |
| Keywords: | Artificial Intelligence, Patents, Structural Change, Technological Paradigm |
| Date: | 2024–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:746877 |
| By: | Agar Brugiavini (Department of Economics, Ca’ Foscari University of Venice); Raluca Elena Buia (Department of Economics, Ca’ Foscari University of Venice); Irene Simonetti (Department of Economics, Ca’ Foscari University of Venice) |
| Abstract: | The extremely tight restrictions meant to limit the spread of COVID-19 pandemic strongly hit the economic activity in all countries, resulting in exceptional work disruptions and sizable (temporary) layoffs. Recent literature document the existence of an age-bias in the recruitment of new employees, which may make of older workers a vulnerable category, if experiencing work disruptions. Using data from the Survey on Health, Ageing and Retirement in Europe, we enquire to what extent having experienced work interruptions in the first wave of the pandemic might have affected the working career of older workers. Our results indicate that having undergone work disruptions in 2020 is associated with a significantly larger probability of ending up as retirees or not employed in both 2021 and 2022. The effect is not homogenous among countries. While the estimate is not significant for Northern countries, it is significant for the other country clusters, the magnitude of the effect being larger for Central-East European countries. |
| Keywords: | work interruptions, retired, unemployed, not employed |
| JEL: | J08 J71 J78 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2024:10 |
| By: | Jadouri Echaimaa (UM5 - Université Mohammed V de Rabat [Agdal]); Aziz Ragbi (UM5 - Université Mohammed V de Rabat [Agdal]) |
| Abstract: | The unemployment rate in Morocco has plummeted exponentially in recent years, with multiple potential causes for unemployment. The objective of this article is to estimate the effects of individual characteristics on unemployment using a logit model. The resulting findings indicate that the main determinants of unemployment are age, level of education, place of residence, and gender. The statistical analysis of these elements reveals that these determinants significantly influence unemployment at a 5% threshold. |
| Abstract: | Le taux de chômage au Maroc a dégringolé d'une manière exponentielle ces dernières uméannées, dont les causes qui peuvent déterminées le chômage sont multiples. L'objectif de cet article est d'estimer les effets des caractéristiques individuelles sur le chômage en utilisant un modèle logit. Les résultats qui en découlent indiquent que les principaux déterminants du chômage sont l'âge, le niveau d'éducation, le milieu de résidence et le genre. L'analyse statistique de ces éléments révèlent que ces déterminants influencent significativement le chômage au seuil de 5%. |
| Keywords: | Unemployment, Logistic regression, Employment, Public policy, Chômage, Régression logistique, Emploi, Politique publique |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04667140 |
| By: | Keppeler, Florian; Borchert, Jana; Pedersen, Mogens Jin; Nielsen, Vibeke Lehmann |
| Abstract: | Artificial Intelligence (AI) applications are transforming public sector decision-making. However, most research conceptualizes AI as a form of specialized algorithmic decision support tool. In contrast, this study introduces the concept of human-AI ensembles, where humans and AI tackle the same tasks together, rather than specializing in certain parts. We argue that this is particularly relevant for many public sector decisions, where neither human nor AI-based decision-making has a clear advantage over the other in terms of legitimacy, efficacy, or legality. We illustrate this design theory within access to public employment, focusing on two key areas: (a) the potential of ensembling human and AI to reduce biases and (b) the inclinations of public managers to use AI advice. Study 1 presents evidence from the assessment of real-life job candidates (n = 2, 000) at the intersection of gender and ethnicity by public managers compared to AI. The results indicate that ensembled decision- making may alleviate ethnic biases. Study 2 examines how receptive public managers are to AI advice. Results from a pre-registered survey experiment involving managers (n = 538 with 4 observations each) show that decision-makers, when reminded of the unlawfulness of hiring discrimination, prioritize AI advice over human advice. |
| Date: | 2024–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:2yf6r |