nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2013‒09‒24
six papers chosen by
Karl Petrick
Western New England University

  1. Keynesian Utilities: Bulls and Bears By Anat Bracha; Donald Brown
  2. "Economic Crises and the Added Worker Effect in the Turkish Labor Market" By Serkan Degirmenci; Ipek Ilkkaracan
  3. The economics of federal food programs: Weighing the costs and benefits - Executive Summary By Kinsey, Jean
  4. Liberty for More: Finance and Educational Opportunities By Ross Levine; Yona Rubinstein
  5. Behavioral economics and public sector reform : an accidental experiment and lessons from Cameroon By Raballand, Gael; Rajaram, Anand
  6. (Ir)rational Exuberance: Optimism, Ambiguity, and Risk By Anat Bracha; Donald Brown

  1. By: Anat Bracha; Donald Brown
    Date: 2013–09–19
  2. By: Serkan Degirmenci; Ipek Ilkkaracan
    Abstract: Turkish economic growth has been characterized by periodic crises since financial liberalization reforms were enacted in the early 1990s. Given the phenomenally low female labor force participation rate in Turkey (one of the lowest in the world) and the limited scope of the country's unemployment insurance scheme, there appears to be ample room for a female added worker effect as a household strategy against unemployment shocks under economic crises. Using micro data from household labor force surveys for the 2004-10 period, we examine the extent to which an unemployment shock to the primary male earner instigates female members of the household to move from nonparticipant status to labor market participation. This paper differs from the earlier few studies on the added worker effect in Turkey in a number of aspects. First, rather than simply basing the analysis on a static association between women's observed participation status and men's observed unemployment status in the survey period, we explore whether there is a dynamic relationship between transitions of women and men across labor market states. To do this, we make use of a question introduced to the Household Labor Force Survey in 2004 regarding the survey respondent's labor market status in the previous year. This allows us to explore transitions by female members of households from nonparticipant status in the previous year to participant status in the current year, in response to male members making a transition from employed in the previous period to unemployed in the current period. We explore whether and to what extent the primary male earner's move from employed to unemployed status determines the probability of married or single female full-time homemakers entering the labor market. We estimate the marginal effect of the unemployment shock on labor market transition probability for the overall sample as well as for different groups of women, and hence demonstrate that the effect varies widely depending on the particular characteristics of the woman--for example, her education level, age, urban/rural residence, and marital and parental status. We find that at the micro level an unemployment shock to the household increases the probability of a female homemaker entering the labor market by 6-8 percent. The marginal effects vary substantially across different groups of women by age, rural or urban residence, and education. For instance, a household unemployment shock increases by up to 34 percent the probability that a university graduate homemaker in the 20-45 age group will enter the labor market; for a high school graduate the probability drops to 17 percent, while for her counterpart with a secondary education the marginal effect is only 7 percent. Our estimate of the total (weighted) number of female added workers in the crisis years shows that only around 9 percent of the homemakers in households experiencing an unemployment shock enter the labor market. Hence we conclude that, while some households experiencing unemployment shocks do use the added worker effect as a coping strategy, this corresponds to a relatively small share. We attribute this finding to the deeply embedded structural constraints against female labor market participation in Turkey.
    Keywords: Labor Supply; Economic Crisis: Turkey
    JEL: J16 J21 J22
    Date: 2013–09
  3. By: Kinsey, Jean
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2013–01
  4. By: Ross Levine; Yona Rubinstein
    Abstract: Banking reforms—that reduced interest rates—boosted college enrollment rates among able students from middle class families. We define “able” students as those with learning aptitude scores in the top two-thirds of the U.S. population. We define “middle class” as families in which both parents are not highly-educated (above 12 years of education) and that are neither in the bottom fourth nor in the top 10 percent of the distribution family income in the U.S. Our findings suggest that credit conditions, the ability of an individual to benefit from college, and a family’s financial and educational circumstances combine to shape college decisions. The functioning of the financial system plays a powerful role in shaping the degree to which a child’s educational choices—and hence economic opportunities—are defined by parental income.
    JEL: G21 G28 G38 I21 I22 I24 J08 J24 O15 O16
    Date: 2013–08
  5. By: Raballand, Gael; Rajaram, Anand
    Abstract: Starting with the hypothesis that behaviors are the critical (and often overlooked) factor in public sector performance, this paper explores the notion of how behavioral change (and thus institutional change) might be better motivated in the public sector. The basis for this study is"an accidental experiment"resulting from the World Bank's operational engagement in Cameroon. In 2008, World Bank staff successfully concluded preparation on a project to support the Government of Cameroon to improve transparency, efficiency, and accountability of public finance management. The US$15 million project supported a number of ministries to strengthen a broad range of management systems and capacities. Independently and concurrently, other Bank staff initiated a low-profile, technical assistance project to improve performance in Cameroon's Customs, supported by a small trade facilitation grant of approximately US$300,000. One approach appears to have succeeded in initiating change while the other has signally failed. The two projects of different scale, scope and design in the same governance environment offer a very interesting natural experiment (unplanned but accidental for that reason) that allows insights into the nature of institutional change and the role of behavior and incentives and approaches that offer greater prospects for making reform possible. The paper confirms the value of using ideas from behavioral economics, both to design institutional reforms and to critically assess the approach to institutional reform taken by development agencies such as the World Bank.
    Keywords: Environmental Economics&Policies,Cultural Policy,National Governance,E-Business,Public Sector Economics
    Date: 2013–09–01
  6. By: Anat Bracha; Donald Brown
    Date: 2013–09–19

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