nep-sea New Economics Papers
on South East Asia
Issue of 2013‒10‒02
23 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Political Business Cycles in Local Indonesia By Bambang Suharnoko Sjahrir; Krisztina Kis-Katos; Guenther G. Schulze
  2. The Role of Advertising Expenditure in Measuring Indonesia’s Money Demand Function By Hiew, Lee-Chea; Puah, Chin-Hong; Habibullah, Muzafar Shah
  3. U.S. Foreign Policy and Asia: Peace and Prosperity or Instability and Crisis? By Khan, Haider
  4. Global dynamic timelines for IPRs harmonization against software piracy By Asongu Simplice; Antonio R. Andrés
  5. Workers’ agency and re-working power relations in Cambodia’s garment industry By Dennis Arnold
  6. A brief future of Time in the monopoly of scientific knowledge By Asongu Simplice
  7. Private tutoring in Vietnam : a review of current issues and its major correlates By Dang, Hai-Anh H.
  8. Does Economic Growth Reduce Corruption? Theory and Evidence from Vietnam By Jie Bai; Seema Jayachandran; Edmund J. Malesky; Benjamin A. Olken
  9. Entrepreneurial Orientation and Network Ties: Innovative Performance of SMEs in an Emerging-Economy Manufacturing Cluster By Theresia Gunawan; Jojo Jacob; Geert Duysters
  10. Restructuring of post-crisis GPNs: tourism in Indonesia. By Girish Nanda; Keith Hargreaves
  11. Tourism overview: changing end markets and hyper competition By Michelle Christian; Dev Nathan
  12. Does the Military Train Men to be Violent Criminals? New Evidence from Australia’s Conscription Lotteries By Peter Siminski; Simon Ville; Alexander Paull
  13. International Linkages of Agri-Processed and Energy commodities traded in India By Sinha, Pankaj; Mathur, Kritika
  14. Capturing the jobs from globalization: trade and employment in global value chains By Xiao Jiang; William Milberg
  15. Industrialization and Development Strategies in the 21st Century: Towards Sustainable Innovation Systems By Khan, Haider
  16. Neighbourhood effects and social behaviour: the case of irrigated and rainfed farmeres in Bohol, the Philippines By Tsusaka, Takuji W.; Kajisa, Kei; Pede, Valerien O.; Aoyagi, Keitaro
  17. Financial Health and Firm Productivity: Firm-level Evidence from Viet Nam By Thangavelu, Shandre M.; Chongvilaivan, Aekapol
  18. Cumulative Benefits from Trade Liberalization for the South African Economy By Matthias Bauer; Andreas Freytag
  19. Les meilleurs élèves. Qui sont-ils ? By OCDE
  20. Grandchild Care, Intergenerational Transfers, and Grandparents’ Labor Supply By Christine Ho
  21. An Early Warning System for Inflation in the Philippines Using Markov-Switching and Logistic Regression Models By Cruz , Christopher John; Mapa, Dennis
  22. Effect of Conflict on Dietary Energy Supply: Evidence from Cote d’Ivoire By Saumik Paul; Andrew L. Dabalen
  23. Wage, Income and Consumption Inequality in Japan, 1981-2008: from Boom to Lost Decades By Jeremy Lise; Nao Sudo; Michio Suzuki; Ken Yamada; Tomoaki Yamada

  1. By: Bambang Suharnoko Sjahrir; Krisztina Kis-Katos; Guenther G. Schulze (Department of International Economic Policy, University of Freiburg)
    Abstract: We analyze the determinants of the excessive administrative spending of local governments in Indonesia. In an unbalanced panel data set of 399 districts for 2001‐2009, we show that the proliferation of districts has not led to increased administrative spending; instead a lack of political accountability is responsible for this excess. The degree of political competition influences the level of administrative spending significantly; newly introduced direct elections of district heads, however, did not curtail the waste.
    Keywords: administrative expenditures, decentralization, direct elections, Indonesia
    JEL: D73 H76 H11 R51
    Date: 2013–07
  2. By: Hiew, Lee-Chea; Puah, Chin-Hong; Habibullah, Muzafar Shah
    Abstract: Using the consumer theory approach as suggested by Habibullah (2009), this study aims to shed new light on monetary authority by incorporating advertising expenditure, a variable that has been neglected in the past, into study of the money demand function in Indonesia. In addition, different measurements of monetary aggregates (simple-sum and Divisia money) have been used in the estimation to provide better insight into the selection of a suitable monetary policy variable for the case of Indonesia. Empirical findings from the error-correction model (ECM) indicate that the advertising expenditure variable has a significant impact on the demand for money. Furthermore, as compared to simple-sum money, the model that used Divisia monetary aggregates rendered more plausible estimation results in the estimation of money demand function.
    Keywords: Advertising Expenditure, Divisia Money, Money Demand
    JEL: C43 E41 M37
    Date: 2013
  3. By: Khan, Haider
    Abstract: Should the U.S. reassess its grand strategy and as part of this reassessment change its policy perspective strategically in Asia? These are difficult and contentious questions. However, given the current turbulence in global politics and political economy, their importance is undeniable. I argue that the US should change its grand strategy, giving up hegemonic practices and working multilaterally with other nations---particularly the BRICS in order to achieve the twin related goals of global peace and economic prosperity. U.S. policy towards Asia is much more than mere regional policy. As the largest continent on our planet, to a large extent Asia holds the key towards the global future for better or worse. U.S. relations with Asia are, therefore, crucial for any reasonable assessment of various pathways to the global future. It is my hope that wise reciprocal (or even wise unilateral U.S.) policies will open the door towards a better planetary future. Part of this changed strategy will be to build the institutions for a hybrid global financial architecture where regional financial architectures play a crucial role for averting financial and economic crises. To this end cooperating with East Asia in particular is of great strategic significance.
    Keywords: Grand Strategy, East Asia, Turbulence, hybrid global financial architecture, regional financial architecture
    JEL: F3
    Date: 2013–09
  4. By: Asongu Simplice (Yaoundé/Cameroun); Antonio R. Andrés (Ifrane, Morocco)
    Abstract: This paper employs a recent methodological innovation on intellectual property rights (IPRs) harmonization to project global timelines for common policies against software piracy. The findings on 99 countries are premised on 15 fundamental characteristics of software piracy based on income-levels (high-income, lower-middle-income, upper-middle-income and low-income), legal-origins (English common-law, French civil-law, German civil-law and, Scandinavian civil-law) and, regional proximity (South Asia, Europe & Central Asia, East Asia & the Pacific, Middle East & North Africa, Latin America & the Caribbean and, Sub-Saharan Africa). The results broadly show that a feasible horizon for the harmonization of blanket policies ranges from 4 to 10 years.
    Keywords: Software piracy; Intellectual property rights; Panel data; Convergence
    JEL: F42 K42 O34 O38 O57
    Date: 2013–03–14
  5. By: Dennis Arnold
    Abstract: Abstract This paper explores Cambodian garment factory workers’ collective voice and ability to negotiate a living wage. Workers’ agency is examined through a case study of a large-scale strike in September 2010 over national minimum wage negotiations, led by two Cambodian trade union federations. Analysis is centred on four structural impediments to workers’ wage demands. First, the Cambodian People’s Party (CPP) consolidated power in 2008. As a result, space for independent trade unions and civil society is decreasing. Second, Cambodia is not deemed ‘competitive’ as a global sourcing option in terms of price, quality and speed to market. As a result, low wages and a proliferation of unmonitored subcontract factories are increasingly becoming the industry’s competitive advantage vis-à-vis Bangladesh and Vietnam. Third, the proliferation of fixed-duration contracts in Cambodia means work is less secure, with attendant impacts on workers and unions’ negotiating strength. And fourth, the unusually high number of plant-level and national trade union federations makes it difficult for ‘genuine’ unions to promote the rights of their members, and workers’ agency potential is marginalized. The intersection of these four structural forces circumscribes workers and independent trade unions’ ability to rework power relations with the employers association, the Garment Manufacturers Association in Cambodia (GMAC). Despite the challenges, workers and independent unions recognize themselves as the agents who must shape key demands, including on wages.
    Date: 2013
  6. By: Asongu Simplice (Yaoundé/Cameroun)
    Abstract: This seminal paper provides global empirical evidence on catch-up processes in scientific and technical publications. Its purpose is to model the future of scientific knowledge monopoly in order to understand whether the impressive growth experienced by latecomers in the industry has been accompanied by a similar catch-up in scientific capabilities and knowledge contribution. The empirical evidence is based on 41 catch-up panels which together consist of 99 countries. The richness of the dataset allows us to disaggregate countries into fundamental characteristics based on income-levels (high-income, lower-middle-income, upper-middle-income and low-income), legal-origins (English common-law, French civil-law, German civil-law and, Scandinavian civil-law) and, regional proximity (South Asia, Europe & Central Asia, East Asia & the Pacific, Middle East & North Africa, Latin America & the Caribbean and, Sub-Saharan Africa). Three main issues are investigated: the presence or not of catch-up processes, the speed of the catch-up processes and, the time needed for full (100%) catch-up. The findings based on absolute and conditional catch-up patterns broadly show that advanced countries will continue to dominate in scientific knowledge contribution. Policy implications are discussed.
    Keywords: Research and Development; Catch-up
    JEL: F42 O10 O30 O38 O57
    Date: 2013–05–01
  7. By: Dang, Hai-Anh H.
    Abstract: Building on the earlier work, this paper provides an updated review of the private tutoring phenomenon in Vietnam in several aspects, including the reasons, scale, intensity, form, cost, and legality of these classes. In particular, the paper offers a comparative analysis of the trends in private tutoring between 1998 and 2006 where data are available. Several (micro-) correlates are examined that are found to be strongly correlated with student attendance at tutoring, including household income, household head education and residence area, student current grade level, ethnicity, and household size. In particular, the analysis focuses on the last three variables, which have received little attention in the previous literature on the determinants of tutoring.
    Keywords: Tertiary Education,Teaching and Learning,Education For All,Primary Education,Access&Equity in Basic Education
    Date: 2013–09–01
  8. By: Jie Bai; Seema Jayachandran; Edmund J. Malesky; Benjamin A. Olken
    Abstract: Government corruption is more prevalent in poor countries than in rich countries. This paper uses cross-industry heterogeneity in growth rates within Vietnam to test empirically whether growth leads to lower corruption. We find that it does. We begin by developing a model of government officials' choice of how much bribe money to extract from firms that is based on the notion of inter-regional tax competition, and consider how officials' choices change as the economy grows. We show that economic growth is predicted to decrease the rate of bribe extraction under plausible assumptions, with the benefit to officials of demanding a given share of revenue as bribes outweighed by the increased risk that firms will move elsewhere. This effect is dampened if firms are less mobile. Our empirical analysis uses survey data collected from over 13,000 Vietnamese firms between 2006 and 2010 and an instrumental variables strategy based on industry growth in other provinces. We find, first, that firm growth indeed causes a decrease in bribe extraction. Second, this pattern is particularly true for firms with strong land rights and those with operations in multiple provinces, consistent with these firms being more mobile. Our results suggest that as poor countries grow, corruption could subside "on its own,'' and they demonstrate one type of positive feedback between economic growth and good institutions.
    JEL: D73 O11 O40
    Date: 2013–09
  9. By: Theresia Gunawan (Maastricht School of Management and Technical University of Eindhoven, the Netherlands); Jojo Jacob (United Nation University- Maastricht Economic and Social Research Institute on Innovation and Technology (UNU MERIT), the Netherlands); Geert Duysters (Tilburg University, the Netherlands)
    Abstract: This study investigates the role of intra-cluster ties, extra-cluster ties, and entrepreneurial orientation in shaping firms’ innovative performance. We conduct our analysis on a primary data set of 120 SMEs in the Cibaduyut footwear-manufacturing cluster, Indonesia. We find that extra-cluster ties mediate the relationship between proactiveness and innovative performance. A combination of high extra-cluster ties and risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative performance. Overall, the findings of this study point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance.
    Date: 2013–08
  10. By: Girish Nanda; Keith Hargreaves
    Abstract: Abstract Global production network (GPN) maps are not static, and both incremental and major changes can and do occur. This study examines one potentially game-changing scenario, that is, the effect of an external shock. The most damaging of these are severe shocks brought about by economic or terrorist events. Three types of shocks relevant in the case studies of Bali and Sulawesi presented here were the devastating Bali bombs, which fundamentally changed the GPN for low-end mass tourism of Australian origin; the financial crises of 1998 and 2008, which sucked the lifeblood out of the market; and ethnic tensions in Sulawesi, which scared away virtually all tourism from Sulawesi. This paper attempts to show that there can be significant differences in these maps, ‘pre-’ and ‘post-shock’. The paper also discusses the nature of coping by workers in tourism as employment and incomes fell.
    Date: 2013
  11. By: Michelle Christian; Dev Nathan
    Abstract: Abstract This overview of tourism research conducted by Capturing the Gains covers cases from Asia (China, Indonesia and India), and Africa (Kenya, South Africa and Uganda). The tourism value chain is outlined and changes in the relative roles of different agencies discussed. The paper analyses the changes in the composition of tourists in these countries and the resultant change in relative importance of national and international tour agencies. Our findings suggest that benefits from the growth of tourism are unevenly distributed, with the oligopolistic nature of the tour agencies and hyper-competition among service providers even resulting in some cases of below-cost provision of destination services. These commercial value chain dynamics have led to precarious employment arrangements. There is a synthesis of the nature of employment in tourism, with a large presence of own-account and other forms of informal employment. Ways of dealing with the oligopolistic buyers’ market are discussed, including branding and organization by destination service providers. Methods of improving the gains of women and other workers are also addressed, such as the role of workers’ organization and state-supported social security measures.
    Date: 2013
  12. By: Peter Siminski (University of Wollongong); Simon Ville (University of Wollongong); Alexander Paull (University of Wollongong)
    Abstract: Combat is the most intense form of military service, but several aspects of the training experience, which explicitly prepares people for violent warfare, are hypothesized to link service to violent crime. Using Australia’s Vietnam-era conscription lotteries for identification and criminal court data from Australia’s three largest states, we seek to estimate the effect of army training on violent crime. Using various specifications, we find no evidence that military training causes violent crime, and our point estimates are always negative. In our preferred specification (using only non-deployed cohorts), we rule out with 95% confidence any positive violent crime effects larger than 3.6% relative to the mean.
    Keywords: Violent Crime; Military Service; Natural Experiment; Australia
    JEL: H56 I12 J45
    Date: 2013
  13. By: Sinha, Pankaj; Mathur, Kritika
    Abstract: The current study focuses on the linkages in agri-processed (soy oil and crude palm oil) and energy commodities (natural gas and crude oil) traded on commodity exchanges of India (NCDEX; MCX) and their corresponding international commodity exchanges(Chicago Board of Trade; Bursa Malaysia Derivative Exchange; New York Mercantile Exchange). This paper examines the linkages in futures price, return and volatility of a commodity across commodity exchanges with the help of three models – (a) Price – Co-integration methodology and Error Correction Mechanism Model (b) Return and Volatility – Modified GARCH model (c) Return and Volatility – ARMA-GARCH in mean model (Innovations Model). The study indicates that there are strong linkages in price, return and volatility of futures contracts traded across commodity exchanges of India and their corresponding international commodity exchanges. Given the level of linkages, the study argues against the imposition of Commodity Transaction Tax (CTT) on sellers at the time of trading in agri-processed and energy commodities. The tax would lead to lower trading volumes thereby defeating the purpose of price discovery via commodity exchanges.
    Keywords: Futures, Commodity Transaction Tax, GARCH, Crude oil
    JEL: G13 G18 H2
    Date: 2013–06–28
  14. By: Xiao Jiang; William Milberg
    Abstract: Abstract With the steady growth of global value chains (GVCs), each country’s trade now has a more complex relationship with the international division of labor. We decompose the employment effects of a country’s trade into five components, specifically the labour content (1) in exports, (2) in imports, (3) in the import content of exports, (4) in the export content of imports and (5) in intermediates contained in imports. The last three components relate strictly to a country’s participation in GVCs. With the availability of World Input-Output Database (WIOD), we are able to compute the amount of employment generated by each component for 39 countries over 1995-2009. On the aggregate level, final goods trade generated demand for about 538 million jobs in 2009, and GVC trade produced demand for about 88 million jobs. The countries with the greatest GVC-based labour demand are Germany, the US, China, the Netherlands and France. The only emerging developing economy that comes close to them in this respect is China. The countries with the largest positive difference between domestic and foreign labour demand are China, India, Indonesia and Brazil. On the other hand, the countries with greatest negative difference between domestic and foreign labour demand are the US, Germany and Japan. For the full sample in 2009, the import content of exports led to the demand for about 44 million jobs. Third-party intermediates contained in imports generated labour demand of about 39 million jobs. And the export content of imports created demand for about 5 million jobs. Using the data on ‘hours worked by skill type’ in the Social Economic Accounts, we find that, on a global scale, vertical specialization contained significantly more medium-skill and low-skill than high-skill labour content.
    Date: 2013
  15. By: Khan, Haider
    Abstract: The main purpose of this paper is to explore the possibilities of industrialization and development in the 21st century. With an ongoing global financial and economic crisis with only a tepid recovery at the time of this writing(August 2013) as well as the still unfolding ecological crisis, the 21st century presents an even greater challenge for industrialization in the developing world than the post-WWII period. The changed global economic and ecological environment will shape the emergence of new technological and industrial paradigms and trajectories in significant ways (Dosi 2000, Khan 2004a). However, while the main thesis of this paper argues for a radical rethinking of development and industrialization within an ecological political economy framework in the 21st century, there are still many relevant lessons---positive and negative--- from the post-WWII development and industrialization experiences and discourses. Therefore, the next section focuses on the development and industrialization experiences of the post-WWII period. This section also focuses in particular on the successful Asian economies in order to bring out a number of still relevant insights. Section 3 discusses the problems of industrialization and innovation in the particular 21st century context for China. The problems revealed through this case study can highlight many of the challenges of development, industrialization and innovation in the 21st century. However, it must be pointed out that China is also a special case in many respects and poses some problems for itself and for the smaller developing countries by the strategy of development it has followed so far. The research strategy here is to both avoid the danger of falling into overgeneralization and to emphasize the need for a radical change in both the global economic environment and specific development and industrialization strategies. This is highlighted in section 4 of this paper where the outlines of an alternative development strategy are given.
    Keywords: Industrialization strategies, development strategies. Innovation, heterodox policies, industrial policies, China
    JEL: O1 P1
    Date: 2013–08
  16. By: Tsusaka, Takuji W.; Kajisa, Kei; Pede, Valerien O.; Aoyagi, Keitaro
    Abstract: Artefactual field experiments, spatial econometrics, and household survey are blended in a single study to investigate how the experience of collective irrigation management in the real world facilitates the spillover of social behaviour among neighbours. The dictator and public goods games are conducted among irrigated and non-irrigated rice farmers in the Philippines. The spillover effect is found only among irrigated farmers. In the public goods game, punishment through social disapproval reduces free-riding more effectively among irrigated farmers. These indicate that strengthened ties among neighbours are likely to induce the spillover of social norms together with an effective punishment mechanism.
    Keywords: behavioural games, artefactual field experiments, spatial econometrics, dictator game, public goods game, irrigation, social norms
    JEL: C59 D01 Q25
    Date: 2013–07–19
  17. By: Thangavelu, Shandre M. (Asian Development Bank Institute); Chongvilaivan, Aekapol (Asian Development Bank Institute)
    Abstract: This paper empirically investigates whether financial health shores up firm productivity. It presents productivity as another driving factor in translating financial development into real economic progress. The authors’ empirical framework employs Levinsohn and Petrin’s (2003) semi-parametric estimation of total factor productivity (TFP) using firm-level panel data during 2002–2008, and incorporates financial health variables into conventional determinants of firm productivity. The findings suggest that liquidity and access to external credit boosts firm productivity, with the latter particularly imperative for exporting and/or importing firms.
    Keywords: financial health; total factor productivity; financial development
    JEL: O16 O25 O53
    Date: 2013–09–23
  18. By: Matthias Bauer (Friedrich Schiller University Jena); Andreas Freytag (Friedrich-Schiller-University Jena and University of Stellenbosch)
    Abstract: South Africa's trade barriers are still relatively high compared to other emerging market economies, and its industrial policy still preferentially treats certain industries. Based on a static GTAP model, we estimate the economic impact of further trade liberalization on the South African economy. We particularly take into account core NTB's on tradable commodities and the costs imposed by cross-border trade facilitation, which is particularly inefficient in South Africa. Our results indicate that a full liberalization package, including a reduction of core NTB's as well as a substantial increase in the efficiency of cross-border trade facilitation to the levels of Singapore, would cause the South African GDP to rise by up to 4.51 per cent. This implies an increase in aggregate welfare of up to 21 billion US Dollars. This sum is the equivalent of what should be given to the South African economy in order to leave citizens as well of as after the implementation of a full liberalization package, given South African policy-makers abstain from further trade liberalization policies.
    Keywords: South Africa, trade policy, international trade, non-tariff trade barriers, GTAP
    JEL: D58 K2 L5 F1 F17
    Date: 2013–09–19
  19. By: OCDE
    Abstract: En moyenne, dans les pays de l’OCDE, environ 4 % des élèves sont très performants en compréhension de l’écrit, en mathématiques et en sciences (soit les élèves très performants dans toutes les matières). En Australie, en Finlande, à Hong-Kong (Chine), en Nouvelle-Zélande, à Shanghai (Chine) et à Singapour, le pourcentage de ces élèves est plus élevé que dans tout autre pays ou économie.
    Date: 2013–09
  20. By: Christine Ho (Singapore Management University)
    Abstract: One-fifth of children aged below five with employed mothers benefit from grandparent provided child care as their main source of daycare in the U.S. Using data from the Health and Retirement Study, we investigate how grandchild care needs relate to intergenerational transfers of time and money and grandparents’ labor supply behavior. We find that grandparents with a new born grandchild are more likely to provide grandchild care while married grandparents are also more likely to be employed and provide financial help. Grandparents with grandchildren living close by provided higher time transfers while married grandmothers with resident grandchildren also worked longer hours.
    Keywords: Grandchild care, Intergenerational Transfers, Grandparents’ Labor Supply
    JEL: D13 J13 J14 J22
    Date: 2013–09
  21. By: Cruz , Christopher John; Mapa, Dennis
    Abstract: With the adoption of the Bangko Sentral ng Pilipinas (BSP) of the Inflation Targeting (IT) framework in 2002, average inflation went down in the past decade from historical average. However, the BSP’s inflation targets were breached several times since 2002. Against this backdrop, this paper develops an early warning system (EWS) model for predicting the occurrence of high inflation in the Philippines. Episodes of high and low inflation were identified using Markov-switching models. Using the outcomes of regime classification, logistic regression models are then estimated with the objective of quantifying the possibility of the occurrence of high inflation episodes. Empirical results show that the proposed EWS model has some potential as a complementary tool in the BSP’s monetary policy formulation based on the in-sample and out-of sample forecasting performance.
    Keywords: Inflation Targeting, Markov Switching Models, Early Warning System
    JEL: C5 C52 E37
    Date: 2013
  22. By: Saumik Paul (University of Nottingham, Malaysia campus (UNMC)); Andrew L. Dabalen (The World Bank)
    Abstract: In this paper we estimate the causal effects of conflict on dietary energy supply in Côte d’Ivoire. To identify the true impact of conflict, we use (1) pre-war and post-war household data, (2) the specific counts of conflict events across departments and (3) self-reported victimization indicators. We find robust and statistically significant evidence of households in the worst-hit conflict areas and individuals who are the direct victims of the conflict having lower dietary energy supply. The propensity score matching estimates do not alter the main findings. Other robustness checks including subsamples of households with children supports the existing findings.
    Keywords: Conflict, Food security, Nutrition, Evaluation, Africa
    JEL: I20 I3 D12 C40 H43 O15
    Date: 2013–09
  23. By: Jeremy Lise (University College London); Nao Sudo (Bank of Japan); Michio Suzuki (University of Tokyo); Ken Yamada (Singapore Management University); Tomoaki Yamada (Meiji University)
    Abstract: In this paper we document the main features of the distributions of wages, earnings, consumption and wealth in Japan since the early 1980s using four main data sources: the Basic Survey on Wage Structure (BSWS), the Family Income and Expenditure Survey (FIES), the National Survey of Family Income and Expenditure (NSFIE) and the Japanese Panel Survey of Consumers (JPSC). We present an empirical analysis of inequality that specifically considers the path from individual wages and earnings, to household earnings, after-tax income, and finally consumption. We find that household earnings inequality rose substantially over this period. Inequality in disposable income and in consumption also rose over this period but to a lesser extent, suggesting taxes and transfers as well as insurance channels available to households help to insulate household consumption from shocks to wages. We find the same pattern in inequality trends when we look over the life cycle of households as we do over time in the economy. Additionally we find that there are notable differences in the inequality trends for wages and hours between men and women over this period. Keywords: inequality trends; life-cycle inequality; wage dynamics.
    Keywords: inequality trends; life-cycle inequality; wage dynamics
    JEL: D31 D91 E23
    Date: 2013–09

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