nep-pbe New Economics Papers
on Public Economics
Issue of 2015‒06‒13
24 papers chosen by
Thomas Andrén

  1. Majority Choice of Tax Systems in Single- and Multi-Jurisdictional Economies By Stephen Calabrese; Dennis Epple; Richard Romano
  2. A decentralization theorem of taxation By Lipatov, Vilen; Weichenrieder, Alfons J.
  3. Unprofitable Affiliates and Income Shifting Behavior By De Simone, Lisa; Klassen, Kenneth J.; Seidman, Jeri K.
  4. Management compensation, monitoring and aggressive corporate tax planning By Steinhoff, Melanie
  5. The Hidden Costs of Tax Evasion: Collaborative Tax Evasion in Markets for Expert Services By Balafoutas, Loukas; Beck, Adrian; Kerschbamer, Rudolf; Sutter, Matthias
  6. On the Effects of Formalization on Taxes and Wages : Panel Evidence from Vietnam By Amadou Boly
  7. Optimal Level of Government Debt: Matching Wealth Inequality and the Fiscal Sector By Vogel, Edgar
  8. Income Inequality in Latin America : Recent Decline and Prospects for Its Further Reduction By Giovanni Andrea Cornia
  9. Analysing Income Distribution Changes : Anonymous Versus Panel Income Approaches By Gary S. Fields; Robert Duval-Hernández; George Jakubson
  10. Shifting the burden of corporate taxes: Heterogeneity in direct wage incidence By aus dem Moore, Nils
  11. Intergenerational Politics, Government Debt, and Economic Growth By Tetsuo Ono
  12. Public education, accountability, and yardstick competition in a federal system By Mandel, Philipp; Süßmuth, Bernd
  13. Optimal social assistance and unemployment insurance in a life-cycle model of family labor supply and savings By Haan, Peter; Prowse, Victoria
  14. The Relationship between Healthcare expenditures and Disposable Personal Income in the US States: A Fractional Integration and Cointegration Analysis By Guglielmo Maria Caporale; Juncal Cunado; Luis A. Gil - Alana; Rangan Gupta
  15. Can Helping the Sick Hurt the Able? Incentives, Information and Disruption in a Disability-Related Welfare Reform By Bagaria, Nitika; Petrongolo, Barbara; Van Reenen, John
  16. This time is different: a problem with raising taxes By Mark Roberts
  17. Long-term fiscal sustainability in advanced economies By Alan J. Auerbach
  18. Accounting for the spouse when measuring inequality of opportunity By Peichl, Andreas; Ungerer, Martin
  19. Idiosyncratic Risk, Aggregate Risk, and the Welfare Effects of Social Security By Daniel Harenberg; Ludwig, Alexander
  20. Social norms and mothers' labor market attachment: The medium-run effects of parental benefits By Kluve, Jochen; Schmitz, Sebastian
  21. Recovery Targets and Taxation/Subsidy Policies to Promote Product Reuse By Aflaki , Sam; Mazahir , Shumail
  22. Long-term care insurance and carers' labor supply: A structural model By Geyer, Johannes; Korfhage, Thorben
  23. Social Preference and Social Welfare Under Risk and Uncertainty By Mongin , Philippe; Pivato , Marcus
  24. Can Compulsory Dialogues Nudge Sick-Listed Workers Back to Work? By Markussen, Simen; Røed, Knut; Schreiner, Ragnhild C.

  1. By: Stephen Calabrese; Dennis Epple; Richard Romano
    Abstract: We examine majority choice of tax instruments in single- and multi-jurisdictional economies with heterogeneous households. In our framework majority voting equilibrium exists despite the multidimensional policy choice set. We identify five competing incentives that influence choice of tax instruments. Equilibria generally entail a mixture of tax types. With multiple jurisdictions, strong reliance on head taxation in rich communities arises to deter poorer households from immigrating. Mobility fundamentally affects the equilibrium tax system with redistribution incentives dominating choice of instruments when mobility is limited. Limiting or eliminating head taxation fundamentally alters stratification, public good provision levels, and tax systems.
    JEL: H2 H71
    Date: 2015–06
  2. By: Lipatov, Vilen; Weichenrieder, Alfons J.
    Abstract: In the EU there are longstanding and ongoing pressures towards a tax that is levied on the EU level to substitute for national contributions. We discuss conditions under which such a transition can make sense, starting from what we call a "decentralization theorem of taxation" that is analogous to Oates (1972) famous result that in the absence of spill-over effects and economies of scale decentralized public good provision weakly dominates central provision. We then drop assumptions that turn out to be unnecessary for this results. While spill-over effects of taxation may call for central rules for taxation, as long as spill-over effects do not depend on the intra-regional distribution of the tax burden, decentralized taxation plus tax coordination is found superior to a union-wide tax.
    Keywords: fiscal federalism,taxing rights,decentralization theorem
    JEL: H21 H77
    Date: 2015
  3. By: De Simone, Lisa (Stanford University); Klassen, Kenneth J. (University of Waterloo); Seidman, Jeri K. (University of TX)
    Abstract: Income shifting from high-tax to low-tax jurisdictions is commonly considered a primary method of reducing worldwide tax burdens of multinational firms. Extant research generally makes the high-tax and low-tax distinctions using statutory or aggregated effective tax rates. However, current losses also affect the marginal tax rates of affiliates. In the absence of carryback or carryforward provisions, an unprofitable affiliate has a marginal tax rate of zero. Thus, an unprofitable affiliate can alter the income shifting incentives and strategy of a multinational firm. We build upon prior estimation approaches to allow for the inclusion of unprofitable affiliates and test whether the reported pre-tax income of unprofitable affiliates deviates from the negative association with statutory tax rates observed in samples of profitable affiliates. We also estimate a marginal tax rate that takes into account factors such as loss carryback and carryforward. Results suggest that multinational firms with an unprofitable affiliate adjust their transfer pricing strategies to take advantage of losses and that the marginal tax rate is a determinant of observed pre-tax income. Our point estimates imply that an average-sized affiliate facing the average statutory tax rate alters its income shifting behavior by approximately $7.8M upon a change from profitability to loss.
    Date: 2015–02
  4. By: Steinhoff, Melanie
    Abstract: The empirical literature shows that management incentives often reduce corporate tax aggressiveness. Focussing on the riskiness of tax aggressiveness this paper offers one explanation for the observed negative relation. Using an agency framework, I analyze the manager's choice of effort dedication in other tasks and her explicit choice of the firm's tax risk. I show that corporate tax aggressiveness may decrease with compensation incentives. By choosing the tax risk, the manager (partly) determines her compensation risk. When the manager is assumed to be risk averse, an increase in compensation incentives motivates her to reduce her compensation risk through a less aggressive tax planning strategy. Further, a good governance structure may mitigate this effect of incentive compensation when marginal returns for tax planning are sufficiently ciently low. I also demonstrate that the tax deductibility of performance-based pay yields less aggressive tax planning.
    Keywords: management incentives,hidden action,corporate tax planning
    JEL: H25 D82 D21
    Date: 2015
  5. By: Balafoutas, Loukas (University of Innsbruck); Beck, Adrian (University of Innsbruck); Kerschbamer, Rudolf (University of Innsbruck); Sutter, Matthias (University of Cologne)
    Abstract: We experimentally examine the impact of tax evasion attempts on the performance of credence goods markets, where contractual incompleteness results from asymmetric information on the welfare maximizing quality of the good. Our results suggest that tax evasion attempts – independently of whether they are successful or not – lead to efficiency losses in the form of too low quality and less frequent trade. Thus, shadow economies may reduce welfare not only by inducing agents to incur costs to hide or to uncover taxable transactions, by imposing risk on risk-averse tax evaders and by distorting competition, but also by creating an additional efficiency loss in the underlying market by forfeiting possible gains from trade and by inducing insufficient quality provision. We call this the hidden costs of tax evasion.
    Keywords: tax evasion, expert services, credence goods, fraud, experiment
    JEL: C72 C91 D82 H26
    Date: 2015–05
  6. By: Amadou Boly
    Abstract: Based on a unique panel dataset consisting of both formal and informal firms surveyed every other year from 2005 to 2013, this paper explores the benefits of formalization to the government and firm employees in Vietnam. We find that formalization benefits the government by increasing the amount and the likelihood of tax payments. Formalization also increases the wage level paid by firms that shift out of the informal sector, as well as the share of wages in value added. Our results are therefore supportive of governments. efforts to reduce the size of the informal sector by promoting formalization.
    Keywords: Income, Informal sector (Economics), Tax evasion, Taxation, Wages
    Date: 2015
  7. By: Vogel, Edgar (Munich Center for the Economics of Aging (MEA))
    Abstract: We calibrate an incomplete markets large scale OLG model to the US income and wealth distribution and examine the effects of alternative government debt levels and adjustment policies on macroeconomic aggregates and welfare. We find that the government should hold negative debt. Due to the high degree of wealth and income dispersion ex ante lifetime utility increases with increasing wages (falling interest rates) by around 6% of lifetime consumption at optimal debt levels. The optimal level depends on the adjustment policy can vary by up to 70% of GDP (between -180% and -110%). With lower government debt, high income/wealth agents are always worse off. Adjusting transfers benefits the lowest income/wealth group. The largest gains are, however, experienced by agents in the middle of the income/wealth distribution: they benefit from higher wages and transfers but do not lose too much capital income.
    JEL: C54 C68 D52 D60 E20 E62 H2 H6
    Date: 2014–04–02
  8. By: Giovanni Andrea Cornia
    Abstract: The paper reviews the extent of the income inequality decline that took place in Latin America in 2002-10 and then focuses on the factors that may explain such decline. These include a lowered skill premium following an expansion of secondary education among the poor, and the adoption of more equalizing tax, labour market subsidies and macro policies by a growing number of progressive governments. Finally, the paper reviews the changes in inequality during 2009-12 and discusses whether and how the recent decline can be sustained over the next decade in the context of sluggish world growth. 
    Keywords: Education, Equality and inequality, Fiscal policy, History, Local, Income distribution
    Date: 2015
  9. By: Gary S. Fields; Robert Duval-Hernández; George Jakubson
    Abstract: We reconcile, both theoretically and empirically, changes in inequality with panel income changes over periods of economic growth and decline. We also explore what factors account for the trends of short-run inequality and of inequality in individual average earnings. Finally, we explore what factors account for the equalization brought about by economic mobility. Using panel earnings data from Mexico we find that earnings changes are convergent, irrespective of whether inequality rises or falls. This is caused by a small fraction of individuals experiencing large and convergent earnings changes. The equalization that earnings changes bring over a year is mainly driven by changes in the employment and sector of workers.
    Keywords: Equality and inequality, Income, Income distribution
    Date: 2015
  10. By: aus dem Moore, Nils
    Abstract: We contribute to the empirical literature on the effective incidence of corporate income taxation. We focus on the so-called direct incidence via the wage bargaining process. Building on the innovative framework of Arulampalam, Devereux and Maffini (2012), we analyze the importance of various dimensions of heterogeneity at the firm-level. In particular, we investigate the distinct effects of (i) firm size, (ii) level of profitability, and (iii) competition intensity across (iv) different economic sectors. Furthermore, we investigate the relative importance of the surrounding institutional setting. To this end, a firm-level within-country approach is pursued separately for two different economies, namely France and the United Kingdom, which can be regarded as polar cases with respect to the relevant features of the wage-setting process. However, in many respects, we find surprisingly similar results for both countries. Thereby, this paper also adds to the literature by providing new insights on the degree to which results from previous single-country studies can possibly be generalized.
    Abstract: Die effektive Inzidenz der Körperschaftsteuer ist ein theoretisch wie empirisch kontroverses Thema. Das Paper leistet einen Beitrag zur empirischen Literatur und fokussiert dabei auf die sogenannte direkte Inzidenz über den Lohnverhandlungskanal. Aufbauend auf dem innovativen Ansatz von Arulampalam, Devereux und Maffini (2012) wird die Bedeutung von verschiedenen Dimensionen der Heterogenität auf der Firmenebene analysiert. Konkret wird erforscht, welchen Einfluss (i) Firmengröße, (ii) Profitabilität und (iii) Wettbewerbsintensität in (iv) verschiedenen Branchen auf das Ausmaß ausüben, in dem die Last der Körperschaftsteuer auf die Löhne der Beschäftigten überwälzt wird. Darüber hinaus wird untersucht, welche Relevanz dabei den institutionellen Gegebenheiten der Lohnverhandlungen zukommt. Dazu werden alle Analysen separat für Frankreich und das Vereinigte Königreich vollzogen, deren Volkswirtschaften mit Blick auf Arbeitsmarktinstitutionen als polare Fälle gelten können. Die jeweiligen Ergebnisse für die beiden Länder sind sich jedoch qualitativ wie quantitativ überraschend ähnlich. Insofern gibt die Studie auch einen Hinweis darauf, inwiefern die Ergebnisse aus auf einzelne Länder bezogene Studien zur effektiven Lohninzidenz der Körperschaftsteuer generalisiert werden können.
    Keywords: corporate income taxation,profit taxation,tax incidence,wages,difference-in-differences
    JEL: H22 H25 J31 J38
    Date: 2014
  11. By: Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This study presents a two-period overlapping-generations model featuring in- tergenerational conflict over fiscal policy. In particular, we characterize a Markov- perfect political equilibrium of the voting game between generations and show the following three main results. First, population aging incentivizes the government to invest more in capital for future public spending, positively affecting economic growth. Second, when the government finances its spending by issuing bonds, the introduction of the balanced budget rule results in a higher public spending-to-GDP ratio and a higher growth rate. Third, to obtain a normative implication of the po- litical equilibrium, we compare it with an allocation chosen by a benevolent planner who takes care of all future generations. The planner's allocation might feature less growth and more borrowing than the political equilibrium if the planner attaches low weights to future generations.
    Keywords: Economic Growth; Government Debt; Overlapping Generations; Pop- ulation Aging; Voting
    JEL: D72 D91 H63
    Date: 2014–06
  12. By: Mandel, Philipp; Süßmuth, Bernd
    Abstract: Against the backdrop of a growing national and international accountability movement in education outcomes, this study sets up a simple model of yardstick competition with incumbent-disciplining effects through voters comparing performance measures of public education both across nations and federal states. It implies a potential strategic dilemma where a single top-performance state can block reform measures that could benefit low-performance states more than would do for itself. The linchpin predictions of the model are tested by analyzing announcement effects of student achievement tests on vote and popularity (VP) functions of German national and state government incumbents.
    Keywords: yardstick competition,public education,VP-functions
    JEL: H75 H77 I28
    Date: 2015
  13. By: Haan, Peter; Prowse, Victoria
    Abstract: We analyze empirically the optimal design of social insurance and assistance programs when families obtain insurance by making labor supply choices for both spouses. For this purpose, we specify a structural life-cycle model of the labor supply and savings decisions of singles and married couples. Partial insurance against wage and employment shocks is provided by social programs, savings and the labor supplies of all adult household members. The optimal policy mix focuses mainly on Social Assistance, which provides a permanent universal household income oor, with a minor role for temporary earnings-related Unemployment Insurance. Reecting that married couples obtain intra-household insurance by making labor supply choices for both spouses, the optimal generosity of Social Assistance decreases in the proportion of married individuals in the population. The link between optimal program design and the family context is strongest in low-educated populations.
    Keywords: life-cycle labor supply,family labor supply,unemployment insurance,social assistance,design of benefit programs,intra-household insurance,household savings,employment risk,added worker effect
    JEL: J18 J68 H21 I38
    Date: 2015
  14. By: Guglielmo Maria Caporale (Department of Economics and Finance, Brunel University London, UB8 3PH, UK); Juncal Cunado (University of Navarra, Pamplona, Spain); Luis A. Gil - Alana (University of Navarra, Pamplona, Spain); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This study examines the relationship between healthcare expenditure and disposable income in the 50 US states over the period 1966-2009 using fractional integration and cointegration techniques. The degree of integration andnon-linearityof both series are found to vary considerably across states, whilst the fractional cointegration analysis suggests that a long-run relationship exists between them in only 11 out of the 50 US states.The estimated long-run income elasticity of healthcare expendituresuggests that healthcareis a luxury good in these states. By contrast, the short-run elasticity obtained from the regressions in first differences is in the range (0,1) for most US states, which suggeststhat healthcareis a necessity good instead. Theimplications of these results for health policy are also discussed.
    Keywords: Healthcare expenditure, income elasticity, US states, fractionalintegration, fractionalcointegration
    JEL: C22 C32 H51 I18
    Date: 2015–05
  15. By: Bagaria, Nitika (London School of Economics); Petrongolo, Barbara (Queen Mary, University of London); Van Reenen, John (CEP, London School of Economics)
    Abstract: Disability rolls have escalated in developed nations over the last 40 years. The UK, however, stands out because the numbers on these benefits stopped rising when a welfare reform was introduced that integrated disability benefits with unemployment insurance (UI). This policy reform improved job information and sharpened bureaucratic incentives to find jobs for the disabled (relative to those on UI). We exploit the fact that the policy was rolled-out quasi-randomly across geographical areas. In the long-run the policy improved the outflows from disability benefits by 6% and had an (insignificant) 1% increase in unemployment outflows. This is consistent with a model where information helps both groups, but bureaucrats were given incentives to shift effort towards helping the disabled find jobs and away from helping the unemployed. Interestingly, in the short-run the policy had a negative impact for both groups, suggesting important disruption effects. We estimate that it takes about six years for the estimated benefits of the reform to exceed its costs, which is beyond the time horizon of most policy-makers.
    Keywords: incentives, public sector, unemployment benefits, performance standards
    JEL: H51 I13 J18
    Date: 2015–05
  16. By: Mark Roberts
    Abstract: This paper investigates the syndrome of “this time is different†with respect to Reinhart and Rogoff’s (2011) interpretation of their extensive, historical data on financial default, and with regard to public debt in a closed-economy. Recurrent promises to credulous investors of an ex ante, policy-optimal return that always exceeds its actual value amounts to an extra policy instrument through raising the demand for public debt. In a version of the Diamond (1965) model, we find the policy-maker has a strong incentive to resort to this strategy, only if taxes cannot be set at a policy-optimal level, suggesting that inadequate fiscal infrastructure is at the root of the problem.
    Keywords: Public debt, unanticipated inflation, dynamically-consistent, instrument, Wagner’s Law
    Date: 2015
  17. By: Alan J. Auerbach
    Abstract: This paper provides an evaluation of the long-term fiscal sustainability of advanced economies, based on current estimates of these economies’ current-policy fiscal trajectories. As will be quite evident, for many countries short-term fiscal measures, such as the debt-GDP ratio and the current budget deficit as a share of GDP, bear little relationship to the sustainability of policy. Some countries appear to be on relatively sustainable paths despite challenging short-run statistics, while for others benign short-term measures mask very large long-term problems. Of course, the future is uncertain while the present is known, so one may be tempted to discount negative long-term projections. But, based as they are on a demographic transition that is surely underway, one can discount particular estimates but not their general direction.
    Keywords: Fiscal Sustainability, public debt, Fiscal Gap
    JEL: H62 H63 H68
    Date: 2015–04
  18. By: Peichl, Andreas; Ungerer, Martin
    Abstract: Existing literature on inequality of opportunity (IOp) has failed to address the question as to how the circumstances and choices of spouses in a couple should be treated. By omitting information relevant to the spouse in IOp estimations, the implicit assumption was full responsibility for the partner's income, effort and circumstance variables. In this paper, we discuss whether or not the partner's characteristics should be treated as responsibility factors. Using German micro data, we analyze empirically, how IOp estimates are affected when a partner's circumstance or effort variables are included as own circumstances in the analysis. Our analysis indicates that including spouse's variables can increase IOp measures by more than 20 (35) percent for gross (net) earnings. The less the responsibility assumed for the partner's variables, the higher the IOp estimate.
    Keywords: Equality of Opportunity,Earnings Inequality,Couple,Family Background,Assortative Mating
    JEL: D63 H2 J62 J7
    Date: 2015
  19. By: Daniel Harenberg; Ludwig, Alexander (Munich Center for the Economics of Aging (MEA))
    JEL: C68 E27 E62 G12 H55
    Date: 2015–05–08
  20. By: Kluve, Jochen; Schmitz, Sebastian
    Abstract: Increasing mothers' labor supply is a key policy challenge in many OECD countries. Germany recently introduced a generous parental benefit that allows for strong consumption smoothing after childbirth and, by taking into account opportunity costs of childbearing, incentivizes working women to become mothers and return to the labor force rapidly. Using a sharp regression discontinuity design, we estimate policy impacts for up to 5 years after childbirth and find significant and striking patterns. First, medium-run effects on mothers' employment probability are positive, significant and large, for some subgroups ranging up to 10 per cent. The effects are driven by gains in part-time but not full-time employment. We also find significant increases in working hours. Second, the probability of job continuity rises significantly, i.e. mothers return to their pre-childbirth employer at higher rates. Third, employers reward this return to work by raising job quality significantly and substantially. We argue that the policy generated a profound change in social norms: the new parental benefit defines an 'anchor', i.e. a societally preferred point in time at which mothers return to work after childbirth.
    Keywords: parental benefits,female labor supply,regression discontinuity
    JEL: H31 J13 J22
    Date: 2014
  21. By: Aflaki , Sam; Mazahir , Shumail
    Abstract: This paper seeks to identify the optimal policies for promoting product recovery and remanufacturing. Using a stylized equilibrium model, the authors analyze the problem as a Stackelberg game between a regulator and a monopolistic firm. They compare three types of policies that legislated regulation could effect: (i) A recovery target policy that requires firms to recover no less than a specified fraction of their production for proper disposal or possible remanufacturing; (ii) a taxation policy that both taxes manufacturing and subsidizes remanufacturing; and (iii) a newly introduced mixed approach that incorporates a recovery target as well as taxes and subsidies. They study a firm's behavior under the three policy types, including pricing decisions for new and remanufactured products as well as the strategic decision of whether to create a secondary channel for remanufactured products. They find that legislative intervention makes it more likely that firms will maintain a single-market strategy. The authors further demonstrate the mixed approach's superiority as measured by a comprehensive set of economic and environmental criteria, and show that this finding is robust under two different objective functions for the policy maker, one that does and one that does not entail a budget neutrality constraint.
    Keywords: product recovery; remanufacturing; optimal sustainable policies; closed-loop supply chains
    Date: 2015–04–04
  22. By: Geyer, Johannes; Korfhage, Thorben
    Abstract: In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective family care is a cost-saving alternative to formal home care and to stationary nursing care. However, the opportunity costs resulting from reduced labor supply of the carer are often overlooked. We focus on the labor supply decision of family carers and the incentives set by the long-term care insurance. We estimate a structural model of labor supply and the choice of benefits of family carers. We find that benefits in kind have small positive effects on labor supply. Labor supply elasticities of cash benefits are larger and negative. If both types of benefits increase, negative labor supply effects are offset to a large extent.
    Abstract: Eines der zentralen Ziele der deutschen Pflegeversicherung ist die Unterstützung informeller Pflege durch Familienangehörige. Die Pflegeversicherung bietet anspruchsberechtigten Personen die Möglichkeit, zwischen verschiedenen Leistungen zur Unterstützung der häuslichen Pflege zu wählen. Pflegegeld kann entweder als Geldleistung direkt ausgezahlt werden oder als Sachleistung (in Form von formeller Pflege durch Pflegedienstleister) in Anspruch genommen werden. Werden ausschließlich die direkten Ausgaben der Pflegeversicherung berücksichtigt, erscheinen Geldleistungen und damit informelle Pflege durch Familienangehörige als kostengünstiger im Vergleich zu den teureren Alternativen der formellen häuslichen Pflege oder der stationären Pflege in Pflegeheimen. Unberücksichtigt bleiben dabei jedoch die Opportunitätskosten der informellen Pflege, die vor allem durch ein reduziertes Arbeitsangebot der Pflegenden entstehen können. Wir untersuchen deshalb die Veränderungen der Arbeitsangebotsentscheidung und des Pflegeverhaltens informell pflegender Haushaltsmitglieder durch veränderte Anreize der Pflegeversicherung. Dafür schätzen wir ein strukturelles Modell des Arbeitsangebots und der Nachfrage nach Leistungen aus der Pflegeversicherung. Unsere Ergebnisse zeigen kleine positive Arbeitsangebotseffekte durch eine Ausweitung der Sachleistungen und große negative Effekte durch eine Erhöhung der Geldleistungen. Kommt es zu einer simultanen Ausweitung beider Leistungen, gleichen sich die die gegenläufigen Effekte zu großen Teilen gegenseitig aus und der Arbeitsangebotseffekt bleibt moderat.
    Keywords: labor supply,long-term care,long-term care insurance,structural model
    JEL: J22 H31 I13
    Date: 2014
  23. By: Mongin , Philippe; Pivato , Marcus
    Abstract: This handbook chapter covers the existing theoretical literature on social preference and social welfare under risk (i.e., when probability values enter the data of the situation) and uncertainty (i.e., when this is not the case and only subjective probability assessments can be formed). Section 1 sets the stage historically by contrasting classical social choice theory and welfare economics, which are restricted to the certainty case, with Harsanyi's pathbreaking attempt at extending these fields to the risk case. Section 2 reviews the work, both ancient and recent, stemming from Harsanyi's Impartial Observer Theorem. Section 3 does the same job for Harsanyi's Social Aggregation Theorem and discusses Sen's objections against the utilitarian relevance of either theorem. Section 4 explains why the Social Aggregation Theorem does not carry through from risk to uncertainty, a major conundrum that can also be expressed as a clash between ex ante and ex post welfare assessments; the proposed solutions are covered, including some very recent ones. Section 5 explains that equality, like social welfare, can be defined either ex ante or ex post, and using a basic example by Diamond, that these two definitions clash with each other. Section 6 covers the main solutions that egalitarian writers have given to this problem, again including some very recent ones.
    Keywords: N/A
    Date: 2015–01–01
  24. By: Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research); Schreiner, Ragnhild C. (Ragnar Frisch Centre for Economic Research)
    Abstract: We evaluate the impacts of a compulsory dialogue meeting for long-term sick-listed workers in Norway. The meeting is organised by the local social security administration after around six months of absence, and its purpose is to bring together the absentee, the employer, and the family physician to discuss whether arrangements can be made to facilitate partial or full work resumption. Our causal analysis is based on random-assignment-like geographical variation in the meeting propensity. We find that the meetings reduce absence duration considerably, both through a notification and an attendance effect. They also reduce the risk of premature labour market exit.
    Keywords: moral hazard, public social insurance, treatment effects, instrumental variables
    JEL: C21 H51 H55 I38 J22
    Date: 2015–05

This nep-pbe issue is ©2015 by Thomas Andrén. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.