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on Law and Economics |
| By: | Machin Stephen; Marie Olivier; Vujić Sunčica (METEOR) |
| Abstract: | We present new evidence on the causal impact of education on crime, by considering a largeexpansion of the UK post-compulsory education system that occurred in the late 1980s and early1990s. The education expansion raised education levels across the whole education distributionand, in particular for our analysis, at the bottom end enabling us to develop an instrumentalvariable strategy to study the crime-education relationship. At the same time as the educationexpansion, youth crime fell, revealing a significant cross-cohort relationship between crime andeducation. The causal crime reducing effect of education is estimated to be negative andsignificant, and considerably bigger in (absolute) magnitude than ordinary least squaresestimates. The education boost also significantly impacted other productivity related economicvariables (qualification attainment and wages), demonstrating that the incapacitation effect ofadditional time spent in school is not the sole driver of the results. |
| Keywords: | public economics ; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2012037&r=law |
| By: | Eleftherios Goulas (Department of Economics, University of Patras, Greece); Athina Zervoyianni (Department of Economics, University of Patras, Greece) |
| Abstract: | This paper contributes to the crime literature by exploring how the crime-uncertainty interaction impacts on economic growth. Using a panel of 25 countries over the period 1991-2007, we find evidence suggesting that increased crime has an asymmetric effect on growth depending on the future prospects of the economy as reflected in the degree of macroeconomic uncertainty. In particular, our results indicate that higher-than-average macroeconomic uncertainty enhances the adverse impact of crime on growth implying that a 10% increase in the crime rate can reduce annual per-capita GDP-growth by between 0.49 and 0.62 percent. |
| Keywords: | growth, crime, uncertainty |
| JEL: | O40 K14 D80 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:51_12&r=law |
| By: | Mankart, Jochen; Rodano, Giacomo |
| Abstract: | Every year 400,000 entrepreneurs fail and 60,000 file for personal bankruptcy. The option to declare bankruptcy provides entrepreneurs with insurance against the financial consequences of business failures. However, it comes at the cost of worsened credit market conditions. In this paper, we construct a quantitative general equilibrium model of entrepreneurship to show that the presence of secured credit in addition to unsecured credit substantially alters the trade-off between insurance and credit conditions. A lenient bankruptcy law always worsens credit conditions, in particular for poor entrepreneurs. If secured credit is not available, their credit conditions are so bad that many prefer to become workers. In that case, we show that the optimal bankruptcy law is very harsh because the benefits from better credit conditions dominate the worsened insurance. However, if secured credit is available, entrepreneurs who might be rationed out of the unsecured credit market can still obtain secured credit. Therefore, they can run larger firms, which makes entrepreneurship more attractive. Since the presence of secured credit lowers the cost of a generous bankruptcy law, we find that the optimal law is lenient in this case: moving to the optimal bankruptcy law would increase entrepreneurship by more than four per cent. |
| Keywords: | Debt portfolio, Bankruptcy, Occupational Choice |
| JEL: | M13 K10 O41 E20 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2012:16&r=law |
| By: | Tedds, Lindsay M.; Compton, Ryan; Morrison, Caitlin; Nicholls, Christopher; Sandler, Daniel |
| Abstract: | Insiders of Canadian reporting issuers are required to file public reports when they acquire, buy, or sell securities of that reporting issuer. These public reports must be filed using a prescribed form and must be filed within a specific time frame. Failure to file these public reports or filing with inaccurate information constitutes an offence under securities law. The two main objectives served by these reporting rules are: (1) primarily as a regulatory tool to detect or prevent the improper use of undisclosed information by insiders; and (2) to increase market efficiency by providing investors with information concerning the trading activities of an issuer. These objectives are dependent on compliance with the rules, yet no information regarding compliance exists. To investigate compliance a secondary source of information to verify the information provided in public reports must exist. In Canada, the CEO and the top four highest paid executives must report detailed information regarding their compensation, including stock option awards, in the annual report to shareholders. We collect information on stock option grants for these individuals for a sample of Canadian public companies for the period 2003-2011 and compare this information to that provided in the public reports. We find that while the majority of executives properly and accurately file public reports, a significant minority fail to file or file inaccurate information. We consider the consequences of this finding and suggest ways to improve the quality of insider reporting in Canada. |
| Keywords: | Securities Regulation; Compliance; Insider Disclosure; Continuous Disclosure; Employee Stock Options; Insider Trading |
| JEL: | K22 G38 M12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39793&r=law |