The relationship between government size and economic growth has been widely debated. Departing from this issue, we provide an empirical analysis of the impact of government size on technical efficiency. The aim of this paper is to estimate by using a True Random Effect model the impact of public sector’s size and of public expenditure components on 15 European countries’ technical efficiency from 1996 to 2011. Using the total public expenditure as a proxy for the government size we estimate simultaneously national optimal production function and technical efficiency model by controlling for income distribution and institutional quality. Our main findings show that the effect of public sector’s size on efficiency is positive while the type of public expenditures may have both positive and negative impact. In more details, results suggest that social protection, cultural, and health expenditures have a positive effect on technical efficiency, while others have a negative impact. More controversial is the impact of education expenditure, even if a positive effect on efficiency prevails when controlling for heteroscedasticity.
{"title":"How Does the Public Spending Affect Technical Efficiency? Some Evidence from 15 European Countries","authors":"S. Auci, L. Castellucci, M. Coromaldi","doi":"10.2139/ssrn.3495620","DOIUrl":"https://doi.org/10.2139/ssrn.3495620","url":null,"abstract":"The relationship between government size and economic growth has been widely debated. Departing from this issue, we provide an empirical analysis of the impact of government size on technical efficiency. The aim of this paper is to estimate by using a True Random Effect model the impact of public sector’s size and of public expenditure components on 15 European countries’ technical efficiency from 1996 to 2011. Using the total public expenditure as a proxy for the government size we estimate simultaneously national optimal production function and technical efficiency model by controlling for income distribution and institutional quality. Our main findings show that the effect of public sector’s size on efficiency is positive while the type of public expenditures may have both positive and negative impact. In more details, results suggest that social protection, cultural, and health expenditures have a positive effect on technical efficiency, while others have a negative impact. More controversial is the impact of education expenditure, even if a positive effect on efficiency prevails when controlling for heteroscedasticity.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132777188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the USA a high relative price of housing is associated with log GDP growth over the following 5 years. It is possible to forecast the great recession using this pattern and a trend both estimated with 20th century data. The forecast recession is even more severe than the actual recession.
{"title":"The Relative Price of Housing and Subsequent GDP Growth in the USA","authors":"R. Waldmann","doi":"10.2139/ssrn.3495585","DOIUrl":"https://doi.org/10.2139/ssrn.3495585","url":null,"abstract":"In the USA a high relative price of housing is associated with log GDP growth over the following 5 years. It is possible to forecast the great recession using this pattern and a trend both estimated with 20th century data. The forecast recession is even more severe than the actual recession.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116322078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent research has focused on the consequences on the unilateral divorce laws on several aspects of individual behavior but the issue of children custody after divorce has been almost neglected. This paper studies the implications on mothers of the changes in child custody law from maternal preference to joint custody using the 1960-2000 Census Public Use Micro Sample (IPUMS). Variation in the timing of joint custody reforms across states provides a natural experimental framework to study the causal effect of shared custody on mothers' economic outcomes. We also study the heterogeneity of the effect according to the years of exposure and to the age of the child at the time of the reform. The results show that divorced/separated mothers are negatively affected by the adoption of the joint custody laws in terms of a decrease in total income and earnings, exposing them to a higher risk of poverty. The paper discusses a possible rationale for these fidings in terms of higher child support payments the mother gets from the non custodial father in case of joint custody which might discourage them from looking for high paid jobs or investing in their careers.
{"title":"Joint Custody Laws and Mother's Welfare: Evidence from the US","authors":"Daniela Vuri","doi":"10.2139/ssrn.2785617","DOIUrl":"https://doi.org/10.2139/ssrn.2785617","url":null,"abstract":"Recent research has focused on the consequences on the unilateral divorce laws on several aspects of individual behavior but the issue of children custody after divorce has been almost neglected. This paper studies the implications on mothers of the changes in child custody law from maternal preference to joint custody using the 1960-2000 Census Public Use Micro Sample (IPUMS). Variation in the timing of joint custody reforms across states provides a natural experimental framework to study the causal effect of shared custody on mothers' economic outcomes. We also study the heterogeneity of the effect according to the years of exposure and to the age of the child at the time of the reform. The results show that divorced/separated mothers are negatively affected by the adoption of the joint custody laws in terms of a decrease in total income and earnings, exposing them to a higher risk of poverty. The paper discusses a possible rationale for these fidings in terms of higher child support payments the mother gets from the non custodial father in case of joint custody which might discourage them from looking for high paid jobs or investing in their careers.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"124 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133348274","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the historical dynamics of government debt in post-unification Italy, from 1861to 2009. Unit root tests for the debt-GDP ratio are unable to reject either the non-stationarity or the stationarity null hypothesis. Controlling debt dynamics for fiscal feedback policies of the Barro-Bohn style, however, the debt-GDP ratio is found to be mean-reverting. Mean-reversion in the debt-GDP ratio is due not only to a nominal growth dividend, but also to a positive response of primary surpluses to variations in outstanding debt. There is indeed significant evidence that, over the history of Italy, fiscal policy makershave reacted to the accumulation of debt, taking corrective measures to rule out potential long-term sustainability problems.
{"title":"Fiscal Policy and Public Debt Dynamics in Italy, 1861-2009","authors":"A. Piergallini, M. Postigliola","doi":"10.2139/ssrn.2118748","DOIUrl":"https://doi.org/10.2139/ssrn.2118748","url":null,"abstract":"We examine the historical dynamics of government debt in post-unification Italy, from 1861to 2009. Unit root tests for the debt-GDP ratio are unable to reject either the non-stationarity or the stationarity null hypothesis. Controlling debt dynamics for fiscal feedback policies of the Barro-Bohn style, however, the debt-GDP ratio is found to be mean-reverting. Mean-reversion in the debt-GDP ratio is due not only to a nominal growth dividend, but also to a positive response of primary surpluses to variations in outstanding debt. There is indeed significant evidence that, over the history of Italy, fiscal policy makershave reacted to the accumulation of debt, taking corrective measures to rule out potential long-term sustainability problems.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117279812","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider the optimal factor income taxation in a standard R&D model with technical change represented by an increase in the variety of intermediate goods. Redistributing the tax burden from labor to capital will increase the employment rate in equilibrium. This has opposite effects on two distortions in the model, one due to monopoly power, the second to the incomplete appropriability of the benefits of inventions. Their relative momentum determines the sign of the welfare effect. We show that, for parameter values consistent with available estimates, the optimal tax rate on capital will be sizable.
{"title":"Welfare Improving Taxation on Savings in a Growth Model","authors":"X. Long, Alessandra Pelloni","doi":"10.2139/ssrn.1993162","DOIUrl":"https://doi.org/10.2139/ssrn.1993162","url":null,"abstract":"We consider the optimal factor income taxation in a standard R&D model with technical change represented by an increase in the variety of intermediate goods. Redistributing the tax burden from labor to capital will increase the employment rate in equilibrium. This has opposite effects on two distortions in the model, one due to monopoly power, the second to the incomplete appropriability of the benefits of inventions. Their relative momentum determines the sign of the welfare effect. We show that, for parameter values consistent with available estimates, the optimal tax rate on capital will be sizable.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124585859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A growing body of literature tests the effects of different tax structures on long-run economic growth. We argue that these tests do not properly account for endogeneity between supposedly independent variables. We run several cross-country ordinary least squares tests with special attention to human capital, and show how education choice behaviors are affected by different tax mixes. The results obtained by microeconomic theory are validated, and they imply that accumulation rates of human capital cannot be deemed independent from savings taxation. Our results also show that more progressive labor taxation does not appear to be correlated with lower investments in education, contrary to what one would expect from microeconomic theory. We discuss possible implications, and suggest that a likely explanation lies in the outcome of redistribution policies reducing credit constraints of poorer households, thus allowing them easier access to education and, consequently, higher aggregate human capital accumulation.
{"title":"Fiscal Policy Impacts on Growth: An OECD Cross-Country Study with an Emphasis on Human Capital Accumulation","authors":"Diego d’Andria, Giuseppe Mastromatteo","doi":"10.2139/ssrn.1987616","DOIUrl":"https://doi.org/10.2139/ssrn.1987616","url":null,"abstract":"A growing body of literature tests the effects of different tax structures on long-run economic growth. We argue that these tests do not properly account for endogeneity between supposedly independent variables. We run several cross-country ordinary least squares tests with special attention to human capital, and show how education choice behaviors are affected by different tax mixes. The results obtained by microeconomic theory are validated, and they imply that accumulation rates of human capital cannot be deemed independent from savings taxation. Our results also show that more progressive labor taxation does not appear to be correlated with lower investments in education, contrary to what one would expect from microeconomic theory. We discuss possible implications, and suggest that a likely explanation lies in the outcome of redistribution policies reducing credit constraints of poorer households, thus allowing them easier access to education and, consequently, higher aggregate human capital accumulation.","PeriodicalId":287116,"journal":{"name":"CEIS: Labor Economics","volume":"218 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121560126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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