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on Public Economics |
| By: | Albert Ando; Sergio Nicoletti-Altimari (European Central Bank) |
| Abstract: | The relationship between the demographic structure and the saving rate of a society is the reflection of the aggregation of the behaviour of heterogeneous households, differing from one another in the type of living arrangements and in the characteristics of their members. In order to contribute to the understanding of this relationship, we construct a dynamic micro model capable of simulating the demographic development of a population, including the creation, destruction, dimension and various other important characteristics of households and their members. The demographic model is then combined with a specification of the processes generating income, social security wealth, retirement and consumption behaviour of households, and applied to a data set derived from survey data on the Italian household sector. Simulations of the model are used to study the evolution of aggregate income, saving and asset accumulation over the period 1994-2100. If fertility and mortality assumptions of recent official projections are adopted and marriage and divorce rates maintained at current levels, the dramatic ageing of the population and the marked decline in the share of population living in traditional households would lead, other things being equal, to a substantial decline in the aggregate saving rate. However, the reduction in the number of children per household and, above all, the decline in the ratio of social security wealth of households to disposable income as the effects of the recently introduced reforms begin to be felt act as offsetting factors. As a result, the aggregate saving rate increases over the initial 30 years of the simulation and moderately decreases thereafter, stabilizing slightly above the original level. Implications of changes in a number of key assumptions regarding the demographic evolution, productivity growth and individual behavioural responses are also analyzed. |
| Keywords: | demographic developments, family structure, consumption, saving, social security, micro simulation model |
| JEL: | D12 D31 D91 E21 H55 J10 J26 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_533_04&r=pbe |
| By: | Lorenzo Forni (Bank of Italy); Sandro Momigliano (Bank of Italy) |
| Abstract: | This paper examines the information-related problems associated with the analysis of fiscal policies, an issue recently analyzed in connection with monetary policies but largely ignored in the literature on budgetary actions. The results indicate that reliance on the information actually available to policy-makers in real-time is important for the assessment of past policies. We show that estimating fiscal policy rules based on ex post revised data tends to provide a misleading assessment of the sensitivity of discretionary policies to cyclical conditions. The results also suggest that part of the problems the Stability and Growth Pact encountered may have come from a misjudgment of cyclical conditions in some European countries in recent years. |
| Keywords: | Real-time information, OECD countries, stabilization policies, fiscal policy rules |
| JEL: | E61 E62 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_540_04&r=pbe |
| By: | Qing-Yun Jiang |
| Abstract: | The judiciary in developing countries is troubled with various problems. Specifically, court delays, backlogs and uncertainty associated with unexpected outcomes have diminished the quality of justice and leads to loss of confidence of the general public in judiciary. Court delay is always coupled with impartiality, corruption and low quality of judgment, etc. The reform program needs to address the major causes of the deterioration in the quality of court services and address the root political, economic causes of an inefficient and inequitable judiciary and not simply deal with its symptoms. Like many other judiciaries in developing countries, court delay is also a problem facing the jurisdiction in Chinese courts, especially in appeal and retrial procedure. Based on empirical study, this paper will also illustrate the major causes of court delay as well as difficulties of law enforcement in Chinese jurisdiction. In particular, some special references are made to the retrial procedure and the roll of the Trial Committee in the course of jurisdiction, as well as accessibility to the courts. |
| Keywords: | jurisdiction, duration of the court, retrial, the Trial Committee, enforcement of judgments, |
| URL: | http://d.repec.org/n?u=RePEc:bep:dewple:2004-1-1114&r=pbe |
| By: | Katrin Lantermann (Universität Hamburg, Fachbereich Rechtswissenschaften, Institut für Recht und Ökonomik); Hans-Bernd Schäfer (University of Hamburg, Germany) |
| Abstract: | This article looks at choice of law rules from an economic perspective . The aim is to understand whether particular choice of law norms are wealth creating or wealth destroying and which of different norms should be preferred from this point of view. In this article we do not try to understand the forces that generate and sustain particular choice of law rules. We restrict ourselves to an efficiency analysis of existing or proposed choice of law rules. In the first part of the paper we argue that a free choice of law should be granted, whenever the choice causes no third party effects. We show that this criterion would extend free choice beyond the present scope. Free menu choice of law increases the wealth of the parties and creates institutional competition. It should be extended to fields of the law other than contract and tort law. In the second part we proceed with choice of law rules if the choice leads to positive or negative third party effects. To take care of these effects mandatory choice rules are sometimes but not always necessary. Methodologically choice of law rules should be market-mimicking rules, which reflect the interests of a grand coalition of the parties and all third parties affected by the choice rule. In the third part of the paper we discuss existing rules for the choice of tort law and refer to the discussion on a draft proposal for a European Council regulation of the law applicable to non-contractual obligations . In the fourth part we discuss whether the German or the US approach of international comparative law is preferable from an economic perspective. The US approach gives more judicial discretion for the choice of law than the German approach. We argue that the choice of law rules should lead to precise and clear legal commands with escape clauses for the judiciary only in exceptional and obvious cases. As Guzman pointed out it is striking that choice of law scholars have paid virtually no attention on how choice of law rules affect individual behaviour. But any economic analysis has to focus on this aspect as otherwise the social consequences of legal norms remain unknown and consequently little can be said about whether the consequences of one rule are socially better than those of another rule. |
| URL: | http://d.repec.org/n?u=RePEc:bep:dewple:2005-1-1115&r=pbe |
| By: | Vincy Fon (The George Washington University); Hans-Bernd Schäfer (University of Hamburg, Germany) |
| Abstract: | The criminal justice system is not infallible. This unfortunate but unavoidable fact has been known for some time. For many reasons, in spite of advocacy raised as early as 1913 by Borchard to offer compensation to those wrongfully convicted and later exonerated, currently in the United States only 15 states, the District of Columbia, and the federal government have laws for such compensation. Further, the compensation is fairly meager, and compensation is usually not granted if the alleged criminal pleaded guilty in cases involving confessions. Outside the United States, a different era seems to be on the horizon. In recent years, the scope of state liability has been expanding through membership in international organizations and through international treaties. In particular, the Council of Europe's Convention for the Protection of Human Rights and Fundamental Freedoms encourages compensation for anyone punished as a result of a wrongful conviction. Article 3 of Protocol 7, Compensation for Wrongful Conviction, states that: When a person has by a final decision been convicted of a criminal offence and when subsequently his conviction has been reversed, or he has been pardoned, on the ground that a new or newly discovered fact shows conclusively that there has been a miscarriage of justice, the person who has suffered punishment as a result of such conviction shall be compensated according to the law or the practice of the State concerned, unless it is proved that the non-disclosure of the unknown fact in time is wholly or partly attributable to him. Although this article lacks specifics, it clearly endorses compensation for the wrongfully convicted. People who are wrongfully convicted and later exonerated should be compensated for many reasons. The wrongfully accused typically incur huge legal expenses for defense. They lose their earning opportunities and their reputations while in prison, and they suffer psychological harm. It is just to compensate these victims -- society is responsible for rectifying its errors by helping these victims regain normal lives when they are released from prison. Following Borchard, scholars also raised the possibility of applying eminent domain principles to compensate those wrongfully convicted, making the case that takings are involved when these victims are incarcerated. Against this backdrop, our paper attempts to study the compensation problem in a different direction. We ask whether expanding the scope of state liability would improve the well-being of citizens after public wrongs occur. In particular, we propose that compensating the wrongfully convicted after exoneration could affect the aggregate level of crime. A model will be developed in which we first point out that the possibility of wrongful conviction, although it cannot be avoided, in fact increases the amount of crime committed as compared to the idealistic case of no erroneous conviction. Then the simple model is extended to show why state liability for wrongful conviction changes criminal behavior. We conclude that the net impact of the expansion of state liability is that the aggregate level of crime decreases. |
| URL: | http://d.repec.org/n?u=RePEc:bep:dewple:2005-1-1116&r=pbe |
| By: | Agnès Benassy-Quere; Nicolas Gobalraja; Alain Trannoy |
| Abstract: | We study the extent and policy implications of tax competition in the case of a double-competition on both tax rates and provision of public factors. First, we derive the relevant theoretical results in a unified framework where a corporate tax is used to finance a public good which both raises household utility and firm productivity. Then, the relevance of such double competition is tested with FDI data from the United States to the EU. We find ground for the coexistence of high tax/spending countries and low tax/spending ones. International competition could then act as a vector for rising public sector efficiency rather than a standardisation factor. |
| Keywords: | Tax competition; public factors; public goods; FDI; tax and budget policy |
| JEL: | F21 F23 H25 H41 H54 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2005-08&r=pbe |
| By: | Luc Godbout; Suzie St-Cerny |
| Abstract: | This report was generated in the framework of consultations by the Expert Panel on Equalization and Territorial Formula Financing. The study first presents a brief history of equalization and the evolution of its main parameters. The principal issues are discussed next, in particular the volatility of equalization payments, the integration of certain revenue sources, and the revision of standards of comparison. Certain impacts springing from these issues are also illustrated. By analyzing the evolution of equalization over the past ten years, the authors illustrate that gaps between the Canadian provinces in fiscal capacity have become more pronounced while the impact of equalization has decreased. The new equalization framework ensuing from the federal offer of 2004, including the existence of several specific bilateral agreements, is also analyzed. The authors conclude that the new framework must be abandoned and that a reform of the equalization program that respects the initial goals is required. In particular, a return to the ten-province average is recommended, along with backtracking on the fixed global envelope of equalization. Other recommendations address adding a smoothing mechanism and doing away with bilateral agreements. <P>Cette étude a été réalisée dans le cadre des consultations du Groupe d’experts sur la péréquation et la formule de financement des territoires. Elle présente d’abord brièvement l’historique de la péréquation et l’évolution de ses principaux paramètres. Puis, les principaux enjeux sont discutés, notamment la volatilité de la péréquation, la révision de certaines assiettes et la révision de la norme de comparaison. Certains impacts liés à ces enjeux sont aussi illustrés. En analysant l’évolution de la péréquation au cours des dix dernières années, les auteurs illustrent que les écarts de capacité fiscale se sont accentués entre les provinces canadiennes pendant que, de son côté, l’impact de la péréquation diminuait. Le nouveau cadre de la péréquation découlant de l’offre fédérale de 2004, incluant l’existence de plusieurs ententes bilatérales particulières, est aussi analysé. Les auteurs concluent au rejet du nouveau cadre et à la nécessité de réformer le système de péréquation en gardant les objectifs initiaux. Il est en particulier recommandé de revenir à la norme des dix provinces et de faire marche arrière en ce qui concerne l’enveloppe globale fixe de la péréquation. D’autres recommandations concernent notamment l’ajout d’un mécanisme de lissage et la fin des ententes bilatérales. |
| Keywords: | equalization, fiscal capacity, federal government, fiscal imbalance, federal transfers, provinces, Quebec, standard of comparison, capacité fiscale, déséquilibre fiscal, gouvernement fédéral, norme de comparaison, péréquation, provinces, Québec, transferts fédéraux |
| JEL: | H27 H77 |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2005s-27&r=pbe |
| By: | Luc Godbout; Karine Dumont |
| Abstract: | This report was generated in the framework of consultations by the Subcommittee on Fiscal Imbalance of the House of Commons’ Standing Committee on Finance. In the first instance, this study describes the various arguments used by the federal government and the provinces to substantiate or refute the existence of the fiscal imbalance in Canada. The authors analyze these arguments and conclude that there is, in fact, a fiscal imbalance in Canada. They then propose several solution paths. <P>Cette étude a été réalisée dans le cadre des consultations du Sous-comité sur le déséquilibre fiscal du Comité permanent des finances de la Chambre des communes. Elle dresse d'abord le portrait des différents arguments utilisés, autant par le gouvernement fédéral que par les provinces, afin d’illustrer ou de nier l’existence du déséquilibre fiscal au Canada. Les auteurs analysent ces arguments et arrivent à la conclusion qu'un déséquilibre fiscal est bel et bien présent au Canada. Par la suite, différentes pistes de solution sont proposées afin de le résoudre. |
| Keywords: | budget surplus, Commission on Fiscal Imbalance, CHST, debt, division of taxation fields, equalization, federal government, federal transfers, fiscal federalism, fiscal imbalance, provinces, Commission sur le déséquilibre fiscal, déséquilibre fiscal, dette, fédéralisme fiscal, gouvernement fédéral, péréquation, provinces, surplus budgétaire, TCSPS, transfert d’espace fiscal, transferts fédéraux |
| JEL: | H73 H77 |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2005s-28&r=pbe |
| By: | Luc Godbout |
| Abstract: | This study compares the parameters of income taxation in Quebec with those prevailing elsewhere in the Canadian federation and in the G7 countries. After demonstrating the government of Québec’s greater dependence on income taxes, the authors use a historical analysis to show that there has been a slight improvement in this situation. Moreover, a comparative analysis of average tax rate changes shows that, with the recent fiscal reforms, Quebec has cut income taxes much more deeply than other G7 countries. This study also demonstrates that the parameters of the income tax system in Quebec take specific account of taxpayers’ essential needs and their family status. However, the analysis also shows that the tax burden is most onerous on Quebec’s middle class. Overall, the authors present twelve points to guide the government of Quebec in the elaboration of an income tax reduction plan. More precisely, the study seeks to answer the following questions: (1) When should it occur? (2) What group of taxpayers should benefit first? and (3) How should the government proceed with its implementation? <P>L’étude compare les paramètres de l’impôt sur le revenu du Québec comparativement à ceux qui prévalent dans la fédération canadienne et dans les pays du G7. Après avoir illustré une plus forte dépendance gouvernementale par rapport aux impôts sur le revenu au Québec, les auteurs montrent par une analyse rétrospective qu’à cet égard une légère amélioration de la situation s’est produite. De plus, en comparant l’effet sur les taux moyens de taxation des récentes réformes fiscales, ils constatent que le Québec se distingue par une réduction nettement supérieure à celle des pays du G7. L’étude illustre également que les paramètres de l’impôt sur le revenu au Québec prennent particulièrement en compte les besoins essentiels des contribuables ainsi que leur situation familiale. Par ailleurs, l’analyse démontre que les contribuables québécois de la classe moyenne sont plus durement frappés par les impôts sur le revenu. Dans l’ensemble, les auteurs dressent douze constats afin de guider le gouvernement du Québec dans l’éventualité d’une réduction de l’impôt sur le revenu. Plus précisément, l’étude cherche à répondre à ces questions : 1) quand devra-elle avoir lieu? 2) quel groupe de contribuables devrait en être le premier bénéficiaire? et 3) de quelle manière le gouvernement devrait-il procéder pour la réaliser? |
| Keywords: | Quebec, income tax, tax reform,, tax competitiveness, international comparison, tax schedule, tax policy, progressivity, Québec, impôt sur le revenu, réforme fiscale, compétitivité fiscale, comparaison internationale, barème d’imposition, politique fiscale, progressivité. |
| JEL: | H24 |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2005s-29&r=pbe |
| By: | Franz Hamann; Julián Pérez; Paulina Restrepo |
| Abstract: | Este artículo presenta un análisis cuantitativo del impacto macroeconómico de la forma como se financia el déficit fiscal en una economía pequeña y abierta. En particular, nos enfocamos en evaluar el impacto macroeconómico de una situación en la que, dado un nivel de déficit fiscal, el gobierno decide entre financiarlo con deuda doméstica o externa. Para este propósito empleamos un modelo de equilibrio general dinámico y estocástico para una economía pequeña y abierta. Al calibrar el modelo a la economía colombiana, encontramos que los efectos de una sustitución de deuda pública externa por interna dependen de qué tan permanente sea dicha sustitución. Una sustitución transitoria tiene efectos macroeconómicos despreciables, con excepción de su impacto sobre los flujos de capital privados (“efecto portafolio”). Es decir, un aumento de la deuda pública doméstica vis a vis una reducción en la externa, es balanceado por una reducción de los activos externos netos privados. Por el contrario, una sustitución permanente de un 10% de deuda externa por doméstica tiene efectos macroeconómicos transitorios pero considerables sobre la actividad real y los flujos de capital. Dicha recomposición genera un aumento en los activos externos netos de un 5% acompañada de una depreciación nominal cercana al 1 %. Aunque nuestros resultados son generales en ambientes con flexibilidad de precios, especulamos que pueden variar en presencia de incertidumbre acerca de la sostenibilidad de las finanzas públicas y/o rigideces nominales y reales. |
| Keywords: | Política Fiscal; |
| JEL: | F41 |
| Date: | 2005–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000070:000995&r=pbe |
| By: | Zarco-Jasso, Hugo (IESE Business School) |
| Abstract: | This paper considers the relationships between public and private organizations entering into public-private partnerships (PPPs) within the context of New Public Management (NPM). After offering a brief discussion of similarities and differences between public and private organizations and their relationships, it provides a short overview of how PPPs are organized in practice. Through elaborating on three dimensions of differentiation between public and private organizations -ownership, funding and control- it proposes a matrix model for identifying a suitable "dimensional mix" for PPP contracts. |
| Keywords: | Public-private partnerships; hybrid organizations; contractual choices; qualitative comparative analysis; |
| Date: | 2005–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0584&r=pbe |
| By: | Fernando de Holanda Barbosa (EPGE/FGV) |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:591&r=pbe |
| By: | António Afonso; Mariana Santos |
| Abstract: | We employ a non-parametric methodology, Data Envelopment Analysis, to estimate efficiency scores for Portuguese public universities, using data mainly for 2003. The input measures are constructed from the number of teachers and from universities’ spending while the outputs measures are based on the undergraduate success rate and on the number of doctoral dissertations. Using frontier analysis we are able to separate universities that might qualify, as “performing well” from those were some improvement might be possible in terms of efficiency. This could imply a better allocation by the universities of the usually scarce public financial resources available to tertiary education. |
| Keywords: | tertiary education, efficiency, production possibility frontier, DEA |
| JEL: | C14 H52 I21 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp72005&r=pbe |
| By: | Martijn Egas (IBED, University of Amsterdam); Arno Riedl (CREED, University of Amsterdam, Tinbergen Institute and IZA Bonn) |
| Abstract: | Explaining the evolution and maintenance of cooperation among unrelated individuals is one of the fundamental problems in biology and the social sciences. Recent experimental evidence suggests that altruistic punishment is an important mechanism to maintain cooperation among humans. In this paper we explore the boundary conditions for altruistic punishment to maintain cooperation by systematically varying the cost and impact of punishment, using a subject pool which extends beyond the standard student population. We find that the economics of altruistic punishment lead to the demise of cooperation when punishment is relatively expensive and/or has low impact. Our results indicate that the 'decision to punish' comes from an amalgam of emotional response and cognitive costbenefit analysis. Additionally, earnings are lowest when punishment promotes cooperation, suggesting that the scope for altruistic punishment as a means to maintain cooperation is limited. |
| Keywords: | altruistic punishment, collective action, public goods, internet experiment |
| JEL: | C72 C91 C93 D70 H41 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1646&r=pbe |
| By: | Fred Ramb; Alfons J. Weichenrieder |
| Abstract: | The paper analyses the financial structure of German inward FDI. From a tax perspective, intra-company loans granted by the parent should be all the more strongly preferred over equity the lower the tax rate of the parent and the higher the tax rate of the German affiliate. From our study of a panel of more than 8,000 non-financial affiliates in Germany, we find only small effects of the tax rate of the foreign parent. However, our empirical results show that subsidiaries that on average are profitable react more strongly to changes in the German corporate tax rate than this is the case for less profitable firms. This gives support to the frequent concern that high German taxes are partly responsible for the high levels of intra-company loans. Taxation, however, does not fully explain the high levels of intra-company borrowing. Roughly 60% of the cross-border intra-company loans turn out to be held by firms that are running losses. |
| Keywords: | foreign direct investment, financial structure, taxation |
| JEL: | F23 H25 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1252&r=pbe |
| By: | Monika Bütler; Olivia Huguenin; Federica Teppa |
| Abstract: | Early retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that an actuarially fair, but mandatory funded system may also distort optimal individual allocation. If individuals are credit constraint (or just reluctant to borrow), a higher than desired retirement capital induces people to retire earlier than they would have in the absence of such a scheme. Individuals thus retire as soon as the retirement income is deemed sufficient the pension plan avails withdrawal of benefits. We provide evidence using individual data from a selection of Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is indeed a key determinant in the retirement decisions. The fact that early retirement has become much more prevalent in the last 15 years is a strong indicator for the importance of affordability as the maturing the Swiss mandatory funded pension system over that period has led to an increase in the already high effective replacement rates. Moreover, even after controlling for the time trend, the higher the accumulated pension capital, the earlier men, and - to a smaller extent - women, tend to leave the work force. |
| Keywords: | occupational pension; retirement decision; duration models |
| JEL: | D91 H31 J26 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:05.05&r=pbe |
| By: | Barla, Philippe; Pestieau, P. |
| Abstract: | In this paper charity brings some joy of giving; it yields more contributions to public goods than standard "subscription", but its creation is costly. We compare the laissez-faire number of charities with both the second and the first-best level. In general, laissez-faire implies an underprovision of both charities and public goods. |
| Keywords: | Charities, Public Good |
| JEL: | L31 H41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:laeccr:0501&r=pbe |
| By: | Ian W.H. Parry; Hilary Sigman; Margaret Walls; Roberton C. Williams III |
| Abstract: | This paper reviews theoretical and empirical literature on the household distribution of the costs and benefits of pollution control policies, and ways of integrating distributional issues into environmental cost/benefit analysis. Most studies find that policy costs fall disproportionately on poorer groups, though this is less pronounced when lifetime income is used, and policies affect prices of inputs used pervasively across the economy. The policy instrument itself is also critical; freely allocated emission permits may hurt the poor the most, as they transfer income to shareholders via scarcity rents created by higher prices, while emissions taxes offer opportunities for progressive revenue recycling. And although low-income households appear to bear a disproportionate share of environmental risks, policies that reduce risks are not always progressive, for example, they may alter property values in ways that benefit the wealthy. The review concludes by noting a number of areas where future research is badly needed. |
| JEL: | Q52 H23 H22 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11438&r=pbe |
| By: | Alan J. Auerbach; Kevin A. Hassett |
| Abstract: | The "Jobs and Growth Tax Relief Act of 2003" (JGTRA03) contained a number of significant tax provisions, but the most noteworthy may have been the reduction in dividend tax rates. The political debate over the dividend tax reductions of 2003 took a number of surprising twists and turns. Accordingly, it is likely that the views of market participants concerning the probability of significant dividend tax reduction fluctuated significantly during 2003. In this paper, we use this fact to estimate the effects of dividend tax policy on firm value. We find that firms with higher dividend yields benefited more than other dividend paying firms, a result that, in itself, is consistent with both new and traditional views of dividend taxation. But further evidence points toward the new view and away from the traditional view. We also find that non-dividend-paying firms experienced larger abnormal returns than other firms as the result of the dividend tax cut, and that a similar bonus accrued to firms likely to issue new shares, two results that may appear surprising at first but are consistent with the theory developed in the paper. |
| JEL: | G12 H24 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11449&r=pbe |
| By: | Raj Chetty; Joseph Rosenberg; Emmanuel Saez |
| Abstract: | This paper investigates the effects of capital gains and dividend taxes on excess returns around announcements of dividend increases and ex-dividend days for U.S. corporations. Consistent with standard no-arbitrage conditions, we find that the ex-dividend day premium increased from 2002 to 2004 when the dividend tax rate was cut. Consistent with the signalling theory of dividends, we also find that the excess return for dividend increase announcements went down from 2002 to 2004. However, these findings are very sensitive to the years chosen for the pre-reform control period. Semi-parametric graphical analysis using data since 1962 shows that the relationship between tax rates and ex-day and announcement day premia is very fragile and sensitive to sample period choices. Strong year-to-year fluctuations in the ex-day and announcement day premia greatly reduce statistical power, making it impossible to credibly detect responses even around large tax reforms. The important non-tax factors affecting these premia must therefore be understood before progress can be made in evaluating the role of taxation in market responses. |
| JEL: | G1 H3 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11452&r=pbe |
| By: | Daniel S. Hamermesh |
| Abstract: | I ask generally whether a country can benefit from the temporary importation of human capital, and specifically whether a program that attracts large groups of academic visitors to a distant country benefits it by generating additional scholarly research on local issues. Using the list of visitors to the ANU Research School's Economics Program, I estimate this impact from responses to a survey in which visitors described their research before and after their visit and designated as a"control person" another economist who had a similar career but had not visited. The matching of the control may be viewed as being along both observable and (to the researcher) unobservable characteristics of the "treated" and control individuals. The results show a highly significant ceteris paribus impact of such visits on the visitor's subsequent research. Valuing this extra research based on the scholarly citations it received and the effects of citations on salaries shows a substantial monetary impact of visiting economists. Less tangible additional impacts in terms of research style also clearly result. |
| JEL: | J24 H43 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11453&r=pbe |
| By: | Maria Cancian; Arik Levinson |
| Abstract: | We examine the labor market consequences of the Earned Income Tax Credit (EITC), comparing labor market behavior of eligible parents in Wisconsin, which supplements the federal EITC for families with three children, to that of similar parents in states that do not supplement the federal EITC. Data come from the 2000 Census of Population. Most previous studies have relied on changes in the EITC over time, or EITC eligibility differences for families with and without children, or have extrapolated from measured labor supply responses to other tax and benefit programs, and find significant effects of the EITC on employment. In contrast, our cross-state comparison examines a larger difference in EITC subsidy rates, uses more similar treatment and control groups, relies on a policy that has been in place for 5 years, and finds no effect of the EITC on employment or hours worked. |
| JEL: | H24 H73 J38 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11454&r=pbe |
| By: | Mihir A. Desai; Dhammika Dharmapala; Winnie Fung |
| Abstract: | Legal rules, politics and behavioral factors have all been emphasized as explanatory factors in analyses of the determinants of the concentration of corporate ownership and stock market participation. An extension of standard tax clientele arguments demonstrates that changes in the progressivity of taxes can also significantly influence patterns of equity ownership. A novel index of the concentration of corporate ownership over the twentieth century in the U.S. provides the opportunity to quantitatively test for the role of taxes in shaping ownership concentration. The index of ownership concentration is characterized by considerable time series variation, with significant diffusion of ownership in the post WWII era and reconcentration in the late 1990s. Analysis of this index indicates that the progressivity of taxation significantly influences corporate ownership concentration and equity market participation as predicted by the model. This evidence supports the intuition of Berle and Means (1932) that taxation can significantly influence patterns of equity ownership. |
| JEL: | G30 H24 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11469&r=pbe |
| By: | Markus Knell (Oesterreichische Nationalbank, Economic Studies Division) |
| Abstract: | In this paper, the author deals with the question how to make PAYG pension systems financially resistant to fluctuating fertility rates. The author presents two pension schemes that lead to a permanently balanced budget but differ in the mixture of changes in the contribution rates and replacement rates they require in order to achieve this result. After analyzing the variations in the central parameters (both over time and across generations) for each of the schemes he discusses which consequences they have with regard to intergenerational burden sharing and fairness. In particular, the author is interested in how a generation is affected by changes in the size of proceeding and succeeding cohorts. He introduces a proportionality measure(defined as the ratio of relative inputs to relative outputs) that can be used as an indicator to study this impact. The author shows that the schemes have quite different implications concerning how past and future cohorts influence the proportionality measure. Finally he discusses how suitable the formulas are to be implemented in either traditional PAYG or in notional defined contribution (NDC) systems. |
| Keywords: | Pension System; Demographic Change; Intergenerational Fairness |
| JEL: | H55 J1 J18 D63 |
| Date: | 2005–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:95&r=pbe |
| By: | Teresa Ciabattari (Sonoma State University) |
| Abstract: | The purpose of this paper is to examine work-family conflict among low-income, unmarried mothers. I examine how social capital affects work-family conflict and how both social capital and work-family conflict affect employment. I analyze the Fragile Families and Child Wellbeing Study, a national sample of non-marital births collected in 1998-2000 and 1999-2002. Results show that social capital reduces unmarried mothers' reports of work-family conflict, especially for low-income women. In addition, mothers who report high levels of work-family conflict are less likely to be employed; this pattern holds for women who are not looking for work as well as those who are. However, even at high levels of conflict, low-income women are more likely to be employed. The results suggest that work-family conflict has two consequences for unmarried women: it keeps them out of the labor force and makes it more difficult for women who want to work to maintain employment stability. |
| Keywords: | work-family, work, family, conflict, low-income, unmarried, mothers, social, capital |
| JEL: | J1 H4 I3 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:05-118&r=pbe |
| By: | Fan-chin Kung (City University of Hong Kong & Academia Sinica) |
| Abstract: | Many local public goods are provided by coalitions and some of them have network effects. Namely, people prefer to consume a public good in a coalition with more members. This paper adopts the Drèze and Greenberg (1980) type utility function where players have preferences over goods as well as coalition members. In a game with anonymous and separable network effect, the core is nonempty when coalition feasible sets are monotonic and players' preferences over public goods have connected support. All core allocations consist of connected coalitions and they are Tiebout equilibria as well. We also examine the no-exodus equilibrium for games whose feasible sets are not monotonic. |
| Keywords: | Coalition formation, core, network effect, local public goods |
| JEL: | C71 D71 H41 |
| Date: | 2005–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0506007&r=pbe |
| By: | Jan Schnellenbach (Philipps-University Marburg) |
| Abstract: | Recent contributions to the economics of terrorism have given contradicting recommendations for campaigning against terrorism, from the proposal to deprive terrorists of their resources to the proposal of raising the opportunity costs of terrorism by increasing the wealth of the affected regions. Within a simple framework which differentiates between the decision to become an active terrorist and the decision to support terrorists and which allows for reciprocal reactions to anti- terrorism policies, it is argued here that undifferentiated deterrence may indeed backfire, but so may an increase of the opportunity costs of terrorism. A very targeted anti-terrorism policy aimed only at active terrorists would then be the most reasonable remaining approach. |
| JEL: | H56 |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwple:0507001&r=pbe |
| By: | Christophe Kamps (Kiel Institute for World Economics) |
| Abstract: | The issue of whether government capital is productive has received a great deal of recent attention. Yet empirical analyses of public capital productivity have generally been limited to the official capital stock estimates available in a small sample of countries. Alternatively, many researchers have investigated the output effects of public investment- recognizing that investment may be a poor proxy for the corresponding capital stock. This paper attempts to overcome the data shortage by providing internationally comparable capital stock estimates for 22 Organization for Economic Cooperation and Development (OECD) countries. |
| Keywords: | Capital stock, capital goods, public capital, perpetual inventory method, OECD countries, public investment, productivity |
| JEL: | C82 E22 E62 H54 |
| Date: | 2005–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0506015&r=pbe |
| By: | Stefan Voigt (Department of Economics, University of Kassel) |
| Abstract: | Judicial independence is not only a necessary condition for the impartiality of judges, it can also endanger it: judges that are independent could have incentives to remain uninformed, become lazy or even corrupt. It is therefore often argued that judicial independence and judicial accountability are competing ends. In this paper, it is, however, hypothesized that they are not necessarily competing ends but can be complementary means towards achieving impartiality and, in turn, the rule of law. It is further argued that judicial accountability can increase per capita income through various channels one of which is the reduction of corruption. First tests concerning the economic effects of JA are carried out drawing on the absence of corruption within the judiciary as well as data gathered by the U.S. State Department as proxies. On the basis of 75 countries, these proxies are highly significant for explaining differences in per capita income. |
| Keywords: | Judicial Independence, judicial accountability, rule of law, economic growth, corruption, constitutional political economy |
| JEL: | H11 K40 O40 P51 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:kas:wpaper:2005-72&r=pbe |
| By: | Stefan Voigt (Department of Economics, University of Kassel) |
| Abstract: | This paper analyzes whether nation-state governments can increase their credibility by becoming members of international organizations. Credibility is an important asset because it determines the real interest rate and is expected to have an important impact on investment and growth. It is hypothesized that the degree of delegation to international organizations can improve the credibility of nation-state governments. This hypothesis is tested by introducing a new indicator. On the basis of 136 countries, various versions of an indicator of international delegation are highly significant for explaining variation in countries’ credibility. The effect of international delegation on credibility is particularly strong among the group of lower income countries (N=60). |
| Keywords: | Delegation of Competence, Credibility, Dilemma of the Strong State, International Organizations |
| JEL: | F02 F21 H11 K33 P26 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:kas:wpaper:2005-73&r=pbe |
| By: | Karen Pittel (Institute of Economic Research (WIF), Swiss Federal Institute of Technology Zurich (ETH)); Dirk T.G. Rübbelke (Department of Economics, Chemnitz University of Technology) |
| Abstract: | In many countries the government supports individuals' and companies' donations dedicated to charity organizations or { more general { to public goods. Yet the effects of governmental support with respect to the provision of public goods has been and still is subject to an extensive debate in the economic literature. Starting from Warr's (1982, 1983) famous neutrality result an array of conditions has been identified under which this result holds or not. In this paper we examine the commonly used policy approach to subsi- dize the private provision of public goods by granting agents deductions with respect to their income or corporate tax burden. We especially take into ac- count that most income tax schemes are progressive and that deductibility is limited. The problems that arise from these specific properties of the con- sidered tax-refund schemes are pointed out first. We then turn towards the effects which such a tax-refund scheme has with respect to the provision of the public good on the one hand and individual as well as aggregate wel- fare on the other hand. We show that the effects of this commonly practised method of supporting private public good provision depend crucially on the specific properties of the progressive tax scheme and the preference structure of agents. While Pareto-improvements and even Pareto-efficiency can result from the implementation of such a scheme, it is also conceivable that at least some agents perceive a utility reduction. Due to the dependency of welfare effects on the tariff structure, income tax reforms as they are planned in many countries might not only induce a reduction in private public good provision, but might also alter the induced welfare effects. |
| Keywords: | public goods, sponsoring, neutrality |
| JEL: | H23 H42 |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:04-34&r=pbe |