Abstract: Abstract In this paper we analyse the effect of constitutional structures over policy outcomes. In particular, we exploit the heterogeneity in parliamentary systems deriving from the presence and the use of the confidence vote to investigate whether stable and unstable parliamentary systems behave differently in terms of the policies they implement. This finer partition of parliamentary systems allows us to identify effects that are more robust than the ones previously discussed in the literature. We show that the difference between presidential and parliamentary systems documented in previous works is driven by a difference between presidential and stable parliamentary systems. We suggest that possible transmission channels are legislative cohesion and (the absence of) selection. PubDate: 2020-12-24
Abstract: Abstract We employ Italian administrative data to analyze the differentials in wages and workplace injuries between immigrants and natives over the 1994–2012 period. Via propensity score reweighting, we construct the factual and counterfactual, marginal and joint distributions of wages and workplace injuries. Examining the differentials along the entire distributions, our approach yields novel insights on their potential drivers. Our findings confirm that immigrants face lower wages and a substantially higher injury risk than natives; futhermore, they highlight that foreign-born workers display a disproportionate concentration of injuries around the minimum contractual wages. Our results show that the latter can be interpreted as an unintended effect of minimum contractual wages. Indeed, if wages are downward rigid and workplace safety investments are costly, firms employing low-wage workers may reallocate their savings away from wages onto safety. Over time, the gap is found to shrink. Our analysis suggests that, beyond the reduction in workplace intensity during recessions, this may be due to destruction of marginal jobs. Being disproportionally concentrated in marginal occupations, then, lower-skilled migrant workers are more vulnerable to downturns in the economic cycle. Overall, our results highlight that labour market segmentation may co-exist with wage regulations. PubDate: 2020-12-24
Abstract: Abstract This paper studies the interplay between central and local governments in defining the optimal degree of decentralization in terms of public goods supply. The choice between full centralization and asymmetric decentralization implies a trade-off between the possibility to provide public goods at a lower cost, wherever this is possible by decentralizing, and the possibility to fully internalize spillovers by full centralization. We find that asymmetric decentralization introduces distortions into the public decision-making process. We also demonstrate that the power to interfere in the central government’s ruling mechanisms should be reduced for the jurisdictions that have decentralized, in order to make their decentralization choice convenient even for the citizens in the less efficient jurisdictions. Finally, we find the conditions under which asymmetric decentralization can be simultaneously advantageous for both rich and poor regions through the design of appropriate equalization transfers. PubDate: 2020-12-24
Abstract: Abstract We compare the tax burden distribution across incomes and the income share distribution, based on a stochastic dominance approach. We find conditions to assess the progressivity of different sources of taxes, given knowledge of the income share elasticities, which measure the relative marginal change in the income share accruing to each class of income, associated to a marginal increase in income. We first consider a simple setting with only indirect taxes and then extend it to savings and direct taxation. The progressivity of a given set of taxes depends on the correlation between the relative incidence of the different sources of taxation and the income elasticity of household net expenditure. We use this approach to test empirically for the progressivity of the fiscal system. PubDate: 2020-12-24
Abstract: Abstract The Eduscopio project is the first attempt to build school performance indicators based on the university performance of high school leavers in Italy. It provides stakeholders (students and their families) with publicly available school performance indicators, and school rankings. A potential weakness of Eduscopio is that it relies on first-year student performance only. In this study, we extend its methodology to include longer-term academic outcomes, such as cumulative third-year performance and the probability of on-time graduation. Our results demonstrate that differences in university students’ performance across high schools are not temporary and limited to the first-year, but persist in the following academic years, and that the ranking of high schools based on longer-term indicators remains rather stable. Moreover, our analysis highlights non-negligible differences of between-school track dispersion in the Eduscopio index across cities, which hints on geographical differences in student selection mechanisms into school tracks or in the level of dispersion of school value added within tracks. PubDate: 2020-12-24
Abstract: Abstract In recent years, there has been a growing awareness of the need to analyze and measure the performance of sustainable transitions at a regional level. This work presents the results of an application of the socio-economic indicator for the bioeconomy (SEIB) to evaluate the socio-economic performance of the bioeconomy at a regional level, providing evidence for the Italian case. Two versions of the SEIB were applied: the first included all sectors of the bioeconomy while the second considered only manufacturing and bio-energy sectors, excluding all primary sectors. The indicator was further analyzed from spatial and longitudinal perspectives. The results showed that four regions (i.e. Trentino A.A. and Veneto in the north and Toscana and Umbria in central Italy) emerged among the five highest performing regions based on both versions of the indicator. Overall, the results underlined that the northern regions performed best when overall sectors were considered, while the central regions performed best when only manufacturing and bio-energy sectors were considered. What emerged most clearly, however, is that regions in southern Italy lagged far behind the national average, particularly when primary sectors were excluded from the analysis. PubDate: 2020-11-20
Abstract: Abstract Since production and trade are increasingly organized within global value chains (GVCs), assessing who effectively pays the cost of protection is not straightforward and since productive processes are internationally fragmented, quantifying the effects of trade policy requires an enhanced analytical framework that takes international input–output linkages into account to assess the implications trade costs have on competitiveness at national and sector levels. This paper defines a new synthetic measure of trade protection based on the value added in trade, capturing the effects that the tariff structure has on exporting firms that rely on imported intermediate inputs. The index, defined in a general equilibrium framework, provides a theoretically sound protection measurement in the context of GVCs. We assess trade protection by computing protection indexes at the bilateral level on both gross imports and imports to exports using the Global Trade Analysis Project computable general equilibrium model. These indexes are used to investigate the relationship between the European Union tariffs and integration of the Italian GVCs. In the case of Italy, imports to exports are overall less protected than gross imports with significant differences at the sector level. Despite the low levels of nominal protection, industrial sectors play a central role in explaining our results. EU tariffs mostly affect Italian exporting firms in the case of chemical products, wearing apparel and leather products. PubDate: 2020-11-18
Abstract: Abstract Cigarette filters, the most commonly littered item worldwide, are one of the main sources of marine pollution. However, reducing cigarette littering is a serious challenge for policy makers and environmental authorities: traditional instruments like bans and fines are generally ineffective. In this article, we evaluate the impact of two interventions aimed at reducing smokers’ littering in public areas, like beaches. We run a field experiment at eight beach resorts in the north east coast of Italy. Resorts were randomly assigned to three groups: in the first, we introduced portable ashtrays to test whether smokers respond to the lower effort costs (time plus inconvenience) by disposing of litter properly. In the second set, we added a social cue. The third group of resorts was used as a control with no intervention. Results suggest that reducing the private costs of a proper disposal through mobile ashtrays significantly affects littering, leading to a reduction of 10–12% in the number of cigarette filters dropped in the sand compared to beaches with no ashtrays. Reinforcing this measure with social prompts does not significantly increase the impact driven by the introduction of mobile ashtrays. PubDate: 2020-11-16
Abstract: Abstract Existing literature recognizes the possible role of trade policy and firms’ exposure to international trade as determinants of productivity. A strand of the literature sheds light on the effects of trade policy changes on firm-level productivity. Another strand studies the relationship between firms’ trade status (exporting production or importing intermediates, but usually not both simultaneously) and firm-level TFP dynamics. However, the analyses that integrate both strands are scarce. This paper aims to disentangle the impact of input and output tariffs on firms’ productivity. Further, it analyses whether the impact of changes in tariffs is conditioned by the trade status of the firm (exporting and/or importing). At difference to most previous papers, we carry out our analysis for a large developing country in a period of slow trade liberalization. Thus, in the empirical part, we use data from firms belonging to Brazilian industrial sectors (manufacturing and mining) during 2000–2008. After estimating total factor productivity (TFP) at the firm level using updated methodologies, we estimate both the impact of trade policy and firms’ trade status on TFP dynamics. Our results suggest that trade liberalization (through reductions in input or output tariffs) increases TFP, being the effect associated to a reduction in input tariffs greater. Furthermore, the impact of trade policy on TFP spreads among all firms, which could be consistent with the existence of spillovers from trading firms to non-trading firms or with the notion that trade liberalization exerts competitive pressure on all firms, regardless of their initial exposure to international trade. Finally, we also find evidence of a positive effect of both the import and export statuses on TFP. PubDate: 2020-11-05
Abstract: Abstract I use a nationally representative survey to determine whether and which Americans associate personal responsibility with economic desert. Philosophers actively debate this relationship, but social scientists routinely take it for granted, foisting this assumed relationship on the people they study. Respondents, I find, generally want their economic fates to rest on criteria for which they are (or appear) personally responsible, but they express this belief with varying levels of conviction and with two notable exceptions. The first involves specific determinants of economic status. Respondents are divided on whether individuals exert control over their intelligence, creativity, health, and educational pedigree, but they are generally comfortable with the first two affecting peoples’ economic standing. The second concerns who considers personal responsibility morally relevant to economic status. Neoliberals, chiefly concerned with economic growth, are significantly less insistent that individuals be personally responsible for their economic standing. Same for non-white, lower income, and older respondents, and respondents from elite schools, though to a lesser degree. At best, ideal paths to economic success and ruin are moderately associated with personal agency, though many are weakly correlated. So it goes with respondents’ overall correlations between perceived control over economic determinants and the ideal-importance of those factors to economic standing. Researchers must look beyond their preferred philosophical dispositions and investigate justice as it is envisioned and lived by their subjects. PubDate: 2020-10-21
Abstract: Unfortunately, the original article was published with discrepancy in the copyright holder name between A++ (International Monetary Fund) and PDF file (Springer Nature Switzerland AG). PubDate: 2020-10-16
Abstract: Abstract This paper tests whether a temporary experience of income scarcity in the recent past affects the current perception of financial fragility, and whether this effect varies according to the welfare system of the country of residence. Using EU-SILC (European Union Statistics on Income and Living Condition) longitudinal data in 2010–2013 period, two main results emerge. First, individuals who transited out of a short spell of scarcity tend to record higher financial fragility (as measured by the indicator “ability to make ends meet”) than those who never experienced it, even after controlling for the current level of household income. When a more objective measure of financial fragility is taken (financial burden of total housing costs), the effect is weaker and disappears once current income is accounted for. Second, the scarcity effect on perceived financial fragility differs according to the welfare system, whereby more generous welfare states (i.e. with greater incidence of social expenditure on GDP) appear to reduce the persistence of the effects of past income shocks on current well-being, while the level of targeting is not relevant. These results, which are robust to various robustness checks, support the idea that individual well-being is a multidimensional phenomenon not limited to more objective components such as income or wealth. Our results are in favour of a welfare system which ensures a more generous provision of services and does not focus only on the poorest section of a society. PubDate: 2020-10-01
Abstract: Abstract The class of flexible functional forms for the utility and cost function has been characterized by the pioneering work of Gorman (Some Engel curves. In: Deaton A (ed) Essays in the theory and measurement of consumer behaviour. Cambridge Univ. Press, Cambridge, 1981), known as the Gorman polar form. Despite several decades have elapsed, the economic literature has not found the most general functional form that satisfies Gorman’s theorem. This note provides a new general theoretical and parametric formulation of demand functions, labeled general expenditure system (GES), satisfying the Gorman requirement that the Engel curve cannot exceed a polynomial of third degree in expenditure. Estimates show that the GES is a significant generalization of previous popular flexible functions. PubDate: 2020-10-01
Abstract: Abstract Electoral systems are rules through which votes translate into seats in parliament. The political economy literature tells us that alternative electoral systems can generate different distributions of power among different social groups in the legislature and therefore lead to different equilibrium economic policies. On the other hand, we know from the endogenous economic growth literature that economic policy can affect growth. What the literature is lacking is a clear link between electoral systems and economic growth. The main objective of this paper is to establish a connection between them. Two main results emerge from our model. First, electoral systems matter for economic growth. Second, the way in which they matter is not straightforward. A precise ranking of these political institutions in terms of economic growth requires the knowledge of the distribution of people among different social classes in society. PubDate: 2020-10-01
Abstract: Abstract The paper presents an agent-based model developed to investigate the relationship between retirement age and pension system sustainability taking into account the redistributive implication. Moreover, we investigate the role that the government can play in reducing inequality by implementing debt stabilisation policies, as for example applying a property tax. Results show that delaying the retirement age is an effective policy to raise the pension scheme sustainability. However, there is an emerging trade-off between the pension system sustainability and the extension of the pension benefits that may have intergenerational implications. Pension reforms which reduce the pension age threshold or increase the paid benefit will rise the overall pension expenditure and will negatively affect the public debt evolution which may require some stabilisation measures, as the implementation of positive property taxation. The effects of the property taxation on the debt reduction and the level of equality in the population’s wealth distribution strongly depends on the progressivity of the measure and on the size of the taxpayer population involved. The analysis evidences the crucial role played by the age dependency ratio both in achieving the pension system sustainability and in assuring the wealth distribution within the population. PubDate: 2020-10-01
Abstract: Abstract Using data from the Survey of Health, Ageing, and Retirement in Europe (SHARE) (2004, 2006, 2011, 2013 and 2015), we analyse the determinants of adult children’s transfers of money and time to their parents. Specifically, we focus on reciprocity: analysing resource transfers, in term of both time (i.e., informal care) and money (i.e., financial transfers), helps us understand how parent-to-child transfers may influence the probability of child-to-parent transfers. A multivariate probit model for 10 EU countries is used to simultaneously estimate the probabilities that informal care or financial transfers will be given by children to their parents and, conversely, by parents to their children. Using the longitudinal structure of the data, we consider both concurrent and intertemporal reciprocity. The evidence for reciprocity is different based on the type of transfer: we do not find evidence of reciprocity for time transfers (informal care provided to parents) except in the case of sons, for which a positive link between informal care given to parents and current financial transfers received from parents emerges. In contrast, we find a positive effect of parent-to-child transfers (both time and money) on the probability of child-to-parent financial transfers. PubDate: 2020-10-01
Abstract: Abstract This paper studies the relationship between the innovation performance of European regions and their resilience. By exploiting a novel dataset that includes patents and trademarks at the regional (NUTS2) level for the 2008–2016 period, the paper addresses two research questions: (1) are innovative regions more resilient' (2) which type of innovation is more conducive to resilience' We frame the relationship between resilience and innovation within the Schumpeterian notion of innovation as a ‘creative response in history’. Overall, we find that a stronger performance in innovation is associated with a better performance in employment both during and in the aftermarket of the 2008 financial crisis. We argue that learning capabilities built over time by regions make them more effective in adapting and recovering during major shocks. While the crisis may have created an opportunity for less developed regions to move ahead, this opportunity has in fact been grasped mainly by those already having a strong regional system of innovation in place. PubDate: 2020-08-14
Abstract: Abstract Over the past two decades, the Italian labour market has undergone a number of profound changes. A thorough analysis of these changes shows that there has been a progressive employment polarisation, although with a very peculiar dynamics. While employment did grow in high-skill and low-skill occupations, and it shrank in the medium-skill ones, these changes did not take place simultaneously, as polarisation assumes. Moreover, wage polarisation is hardly observable in the same period. Quite differently, Italy has been characterised by relatively low or even declining returns to education along with progressively decreasing wages in the low-skill segment of the labour market. In this context, we study the potential of an employment incentive policy, for which we imagine two options, one targeting workers in high-skill and the other in low-skill occupations. The objectives of the policy are enhancing aggregate employment and improving working conditions (wages) either in high-skill or low-skill occupations, depending of the option. For the simulation of the two policy options, we employ an integrated model that combines a macro disaggregated and multi-sectoral Computable General Equilibrium (CGE) model with a micro-simulation model. While the CGE model evaluates how the macroeconomic shock reverberates on the labour demand at industry level, the micro-simulation model computes how the changes in macroeconomic variables affect households’ decisions in terms of labour supply and final consumption. PubDate: 2020-07-22
Abstract: Abstract The aim of this work is to study the Kuznets curve in order to examine whether the hypothesis on inequality and development that he posited in his 1955 article is verified or not when using the data at our disposal today; these data are more numerous, both for countries and periods available, than when Kuznets originally conducted his study. The approach that makes this research unique is that it will be performed by differentiating the sample in terms of underdeveloped and developed countries. In this regard, at present (with the data and methodologies of Cochrane–Orcutt and GMM System), the Kuznets hypothesis seems to be robustly verified because, when taking a variable other than the Log GDPpc (GDP per capita in logarithms) as a measure of development, such as the HDI or the proportional contribution of the agricultural sector on GDP, the relationship described by Kuznets still seems to be present; this is not a regularity when using the basic GDPpc variable. Moreover, it has been observed that, over the very long term, the Milanovic hypothesis seems to appear; namely, that inequality follows a sinusoid form rather than a concave curve. Finally, a section has been included in which we see how the 3 effects (scale, technique and composition) of world trade on inequality affect, as has been applied in recent years on CO2 emissions in the Environmental Kuznets Curve. PubDate: 2020-07-03
Abstract: Abstract This article aims at providing a better understanding of the effect of electricity access onto labour market outcomes in Nigeria, a country which hosts the second largest population without access to electricity in the world after India, but which has received so far very little attention from the academic community. We assess, through a rigorous econometric analysis carried out employing probit, biprobit and propensity score matching, this impact on the proportion of employed working age components of a household. We consider both female and male employment as well as agricultural and non-agricultural employment separately, further disaggregating the effect between rural and urban households. Our results show that, once the possible endogeneity in the relationships under investigation is tackled, electricity access has indeed a relevant impact on particular labour market outcomes. Specifically, we show a consistent shift out of agricultural employment of around 7% and into non-agricultural employment of about 15%., with some evidence of a positive effect on overall labour participation. These findings show that the expansion of electricity access to households which are not yet connected to the grid could play a relevant role in both increasing labour market participation and in helping the transformation of the Nigerian economy away from agricultural activities. PubDate: 2020-07-02
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