I quantify the effects of welfare work exemptions on women's labor force participation and welfare receipt. This study, which also examines the age of youngest child (AYC) exemption, is the first to investigate the pregnancy exemption. Between‐state and within‐state variations in exemption length allow me to estimate the heterogeneous effects of each exemption by its timing and strictness. I find that the effects on labor force participation are driven by employment for the pregnancy exemption, inducing relatively stable welfare receipts. In contrast, the effects are driven by unemployment for the AYC exemption, which triggers more reliance on welfare after birth. (JEL I38)
{"title":"The Timing of Exemptions from Welfare Work Requirements and its Effects on Mothers' Work and Welfare Receipt Around Childbirth","authors":"Jiyoon Kim","doi":"10.1111/ecin.12496","DOIUrl":"https://doi.org/10.1111/ecin.12496","url":null,"abstract":"I quantify the effects of welfare work exemptions on women's labor force participation and welfare receipt. This study, which also examines the age of youngest child (AYC) exemption, is the first to investigate the pregnancy exemption. Between‐state and within‐state variations in exemption length allow me to estimate the heterogeneous effects of each exemption by its timing and strictness. I find that the effects on labor force participation are driven by employment for the pregnancy exemption, inducing relatively stable welfare receipts. In contrast, the effects are driven by unemployment for the AYC exemption, which triggers more reliance on welfare after birth. (JEL I38)","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126384409","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}
Nicolas S. Aubert, Ben Aameur Hachmi, Guillaume Garnotel, J. Prigent
The aim of this paper is to compute and describe the conditions of an optimal employee ownership contract between an employer and an ambiguity-averse employee. We then introduce ambiguity aversion in the baseline model of Aubert et al (2014) using the multiple prior preferences of Gilboa and Schmeidler (1989) and its extension proposed by Maccheroni et al (2006). This model offers solutions that reconcile labor and financial economics and behavioral economics research findings on employee ownership. The paper focuses on the most common situation where employee ownership has a positive impact on corporate performance, but can also be used as an entrenchment mechanism. We determine the optimal company stock contribution, which corresponds to a perfect subgame Nash equilibrium in the ambiguity framework. Using the framework of Gilboa and Schmeidler's (1989), we show that the optimal ownership contract is respectively increasing with respect to the lower bound of the return expectation in the case of a high level of effort, and decreasing with respect to the upper bound of the return expectation in the case of a low level of effort. In the framework of Maccheroni et al (2006), we prove that if aversion to ambiguity is sufficiently high, then we find the same behavior as in the case of no ambiguity.
{"title":"Optimal Employee Ownership Contracts Under Ambiguity Aversion","authors":"Nicolas S. Aubert, Ben Aameur Hachmi, Guillaume Garnotel, J. Prigent","doi":"10.1111/ecin.12478","DOIUrl":"https://doi.org/10.1111/ecin.12478","url":null,"abstract":"The aim of this paper is to compute and describe the conditions of an optimal employee ownership contract between an employer and an ambiguity-averse employee. We then introduce ambiguity aversion in the baseline model of Aubert et al (2014) using the multiple prior preferences of Gilboa and Schmeidler (1989) and its extension proposed by Maccheroni et al (2006). This model offers solutions that reconcile labor and financial economics and behavioral economics research findings on employee ownership. The paper focuses on the most common situation where employee ownership has a positive impact on corporate performance, but can also be used as an entrenchment mechanism. We determine the optimal company stock contribution, which corresponds to a perfect subgame Nash equilibrium in the ambiguity framework. Using the framework of Gilboa and Schmeidler's (1989), we show that the optimal ownership contract is respectively increasing with respect to the lower bound of the return expectation in the case of a high level of effort, and decreasing with respect to the upper bound of the return expectation in the case of a low level of effort. In the framework of Maccheroni et al (2006), we prove that if aversion to ambiguity is sufficiently high, then we find the same behavior as in the case of no ambiguity.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125543414","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}
I relax the full memory assumption in Ely and Valimaki's (2003) mechanic game, where reputation is bad for all players. First I consider "bounded memory," where only finitely many recent periods are observed. For long memory, reputation is still bad. Shortening memory avoids bad reputation but only by making it "useless." There is no "happy middle:" reputation is either useless or reduces equilibrium payoffs for any memory length. I find a qualitatively different result for "fading memory," where players randomly sample past periods with probabilities "fading" toward zero. Unlike bounded memory, reputation is not bad but remains useful under sufficiently fast fading. This result extends to a more general class of both good and bad reputation games, suggesting reputation leaves long-run player behavior unaffected in some realistic word-of-mouth environments.
{"title":"Bad Reputation Under Bounded and Fading Memory","authors":"B. Sperisen","doi":"10.1111/ecin.12460","DOIUrl":"https://doi.org/10.1111/ecin.12460","url":null,"abstract":"I relax the full memory assumption in Ely and Valimaki's (2003) mechanic game, where reputation is bad for all players. First I consider \"bounded memory,\" where only finitely many recent periods are observed. For long memory, reputation is still bad. Shortening memory avoids bad reputation but only by making it \"useless.\" There is no \"happy middle:\" reputation is either useless or reduces equilibrium payoffs for any memory length. I find a qualitatively different result for \"fading memory,\" where players randomly sample past periods with probabilities \"fading\" toward zero. Unlike bounded memory, reputation is not bad but remains useful under sufficiently fast fading. This result extends to a more general class of both good and bad reputation games, suggesting reputation leaves long-run player behavior unaffected in some realistic word-of-mouth environments.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116301331","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}
This paper examines the efficiency and distributional impacts of introducing a price floor in an emissions trading system (ETS) when environmental regulation is partitioned. We theoretically characterize the conditions under which a price floor enhances welfare. Using a multi-country multi-sector numerical general equilibrium model of the European carbon market, we find that moderate minimum price levels in the EU ETS can reduce the costs of EU climate policy by up to thirty percent and yield outcomes close to uniform carbon pricing. Moreover, most of the EU Member States would gain. Our results are robust with respect to parametric uncertainty in production and consumption technologies.
{"title":"Higher Price, Lower Costs? Minimum Prices in the EU Emissions Trading Scheme","authors":"J. Abrell, S. Rausch, H. Yonezawa","doi":"10.1111/sjoe.12279","DOIUrl":"https://doi.org/10.1111/sjoe.12279","url":null,"abstract":"This paper examines the efficiency and distributional impacts of introducing a price floor in an emissions trading system (ETS) when environmental regulation is partitioned. We theoretically characterize the conditions under which a price floor enhances welfare. Using a multi-country multi-sector numerical general equilibrium model of the European carbon market, we find that moderate minimum price levels in the EU ETS can reduce the costs of EU climate policy by up to thirty percent and yield outcomes close to uniform carbon pricing. Moreover, most of the EU Member States would gain. Our results are robust with respect to parametric uncertainty in production and consumption technologies.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124009504","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 this paper, we aim to quantify the impact of changing family structures on labor supply and savings in Western societies. Our dynamic general equilibrium model features both genders, and it takes into account changes in marital status as a stochastic process. The numerical results indicate that changes in household formation can partly explain the reallocation of male and female labor supply observed during the last decades in Germany. We also find a negative impact on capital accumulation, and we show that a combination of higher marital risk and a narrowing gender wage gap can explain the changes in hours ratios between single and married men and women.
{"title":"Household Formation, Female Labor Supply, and Savings","authors":"H. Fehr, M. Kallweit, F. Kindermann","doi":"10.1111/sjoe.12154","DOIUrl":"https://doi.org/10.1111/sjoe.12154","url":null,"abstract":"In this paper, we aim to quantify the impact of changing family structures on labor supply and savings in Western societies. Our dynamic general equilibrium model features both genders, and it takes into account changes in marital status as a stochastic process. The numerical results indicate that changes in household formation can partly explain the reallocation of male and female labor supply observed during the last decades in Germany. We also find a negative impact on capital accumulation, and we show that a combination of higher marital risk and a narrowing gender wage gap can explain the changes in hours ratios between single and married men and women.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"235 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132968890","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}
This article investigates the existence of asymmetric price transmission between crude oil, rack (wholesale) and retail gasoline prices. A threshold cointegration technique is used, with regime switches being triggered by the size of the markup margin. There is consistent evidence of band-TAR in which the crude, rack and retail prices are free to diverge until the markup margin is squeezed or stretched beyond a lower or upper critical threshold. This finding indicates that abnormally high markup margins cannot be sustained, which provides evidence against market power exertion. The threshold error correction models indicate that there is no systematic relationship between the speed of adjustment back to the long-run relationship and the markup margin, which rules out the existence of rockets and feathers.
{"title":"Rockets and Feathers Meet Markup Margins: Applications to the Oil and Gasoline Industry","authors":"J. Mann","doi":"10.1111/caje.12213","DOIUrl":"https://doi.org/10.1111/caje.12213","url":null,"abstract":"This article investigates the existence of asymmetric price transmission between crude oil, rack (wholesale) and retail gasoline prices. A threshold cointegration technique is used, with regime switches being triggered by the size of the markup margin. There is consistent evidence of band-TAR in which the crude, rack and retail prices are free to diverge until the markup margin is squeezed or stretched beyond a lower or upper critical threshold. This finding indicates that abnormally high markup margins cannot be sustained, which provides evidence against market power exertion. The threshold error correction models indicate that there is no systematic relationship between the speed of adjustment back to the long-run relationship and the markup margin, which rules out the existence of rockets and feathers.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"12 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114089383","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}
Brent Moulton and Nicole Mayerhauser (2015) point out that, for more than 50 years, economists have featured the concept of human capital in their models of labor, growth, productivity, and distribution of income. The authors recommend the addition to the System of National Accounts (SNA) of supplemental person-level accounts: i.e., a System of Person Accounts (SPA). They see this as the best way of recognizing the processes of human capital creation as well as related issues of how income is distributed among individuals and families. The authors argue that this change would support three different perspectives from which economic activity can be viewed: (1) a current period outcomes perspective, (2) a risky possibilities perspective, and (3) a resources perspective. Moreover, these gains could be realized without changing the SNA in any substantial respects.
{"title":"The System of National Accounts and Alternative Economic Perspectives","authors":"A. Nakamura, L. Nakamura","doi":"10.2139/ssrn.2662449","DOIUrl":"https://doi.org/10.2139/ssrn.2662449","url":null,"abstract":"Brent Moulton and Nicole Mayerhauser (2015) point out that, for more than 50 years, economists have featured the concept of human capital in their models of labor, growth, productivity, and distribution of income. The authors recommend the addition to the System of National Accounts (SNA) of supplemental person-level accounts: i.e., a System of Person Accounts (SPA). They see this as the best way of recognizing the processes of human capital creation as well as related issues of how income is distributed among individuals and families. The authors argue that this change would support three different perspectives from which economic activity can be viewed: (1) a current period outcomes perspective, (2) a risky possibilities perspective, and (3) a resources perspective. Moreover, these gains could be realized without changing the SNA in any substantial respects.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"93 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127062744","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}
The recent financial crisis highlighted that balance sheet exposures can be a major shock transmission channel. Using sectoral accounts data in combination with data from the Coordinated Portfolio Investment Survey, International Investment Position, and BIS this paper estimates bilateral exposures between financial and non-financial sectors in three different financial instruments within and across G-4 economies (Euro Area, Japan, U.K. and U.S.). The generated financial networks represent a powerful tool for assessing financial stability, as they allow for the identification of systemically important sectors. The analysis suggests that after the financial crisis bilateral exposures in debt securities have increased, while exposures in loans and equities have declined. Shock simulations reveal that the vulnerability of the financial sector to the government sector has increased considerably since the outbreak of the financial crisis.
{"title":"A Network Analysis of Sectoral Accounts: Identifying Sectoral Interlinkages in G-4 Economies","authors":"Luiza Antoun de Almeida","doi":"10.2139/ssrn.2615303","DOIUrl":"https://doi.org/10.2139/ssrn.2615303","url":null,"abstract":"The recent financial crisis highlighted that balance sheet exposures can be a major shock transmission channel. Using sectoral accounts data in combination with data from the Coordinated Portfolio Investment Survey, International Investment Position, and BIS this paper estimates bilateral exposures between financial and non-financial sectors in three different financial instruments within and across G-4 economies (Euro Area, Japan, U.K. and U.S.). The generated financial networks represent a powerful tool for assessing financial stability, as they allow for the identification of systemically important sectors. The analysis suggests that after the financial crisis bilateral exposures in debt securities have increased, while exposures in loans and equities have declined. Shock simulations reveal that the vulnerability of the financial sector to the government sector has increased considerably since the outbreak of the financial crisis.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"296 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124673020","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}
Harald Dale-Olsen, Kjersti Misje Østbakken, Pål Schøne
We analyse the social interaction effects in sick-leave behaviour in the workplace, using high-quality Norwegian matched employer–employee data with detailed individual information on sick leaves during the 2004–2006 period. We find that social interaction effects in sick-leave behaviour in the workplace do exist, and that the effects are noticeable in size. The strong relationship between the sick-leave rates among colleagues is not solely the result of contagious diseases, nor is it caused by improved informational quality or by the increased workload for the non-absent workers. Evidence supports the existence of reciprocal worker behaviour that is unrelated to joint leisure-seeking activities.
{"title":"Imitation, Contagion, or Exertion? Using a Tax Reform to Reveal How Colleagues' Sick Leaves Influence Worker Behaviour","authors":"Harald Dale-Olsen, Kjersti Misje Østbakken, Pål Schøne","doi":"10.1111/sjoe.12082","DOIUrl":"https://doi.org/10.1111/sjoe.12082","url":null,"abstract":"We analyse the social interaction effects in sick-leave behaviour in the workplace, using high-quality Norwegian matched employer–employee data with detailed individual information on sick leaves during the 2004–2006 period. We find that social interaction effects in sick-leave behaviour in the workplace do exist, and that the effects are noticeable in size. The strong relationship between the sick-leave rates among colleagues is not solely the result of contagious diseases, nor is it caused by improved informational quality or by the increased workload for the non-absent workers. Evidence supports the existence of reciprocal worker behaviour that is unrelated to joint leisure-seeking activities.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120899560","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}
The Nobel Memorial Prize in Economic Sciences for 2013 was awarded to Eugene Fama, Lars Peter Hansen, and Robert Shiller for their contributions to the empirical study of asset pricing. Some observers have found it hard to understand the common elements of the laureates' research, preferring to highlight areas of disagreement among them. In this paper, I argue that empirical asset pricing is a coherent enterprise, which owes much to the laureates' influential contributions, and that important themes in the literature can best be understood by considering the laureates in pairs. Specifically, after summarizing modern asset-pricing theory using the stochastic discount factor as an organizing framework, I discuss the following: the joint hypothesis problem in tests of market efficiency, which is as much an opportunity as a problem (Fama and Hansen); patterns of short- and long-term predictability in asset returns (Fama and Shiller); and models of deviations from rational expectations (Hansen and Shiller). I conclude by reviewing the ways in which the laureates have already influenced the practice of finance, and how they might influence future innovations.
{"title":"Empirical Asset Pricing: Eugene Fama, Lars Peter Hansen, and Robert Shiller","authors":"E. Fama, L. Hansen, R. Shiller, J. Campbell","doi":"10.1111/sjoe.12070","DOIUrl":"https://doi.org/10.1111/sjoe.12070","url":null,"abstract":"The Nobel Memorial Prize in Economic Sciences for 2013 was awarded to Eugene Fama, Lars Peter Hansen, and Robert Shiller for their contributions to the empirical study of asset pricing. Some observers have found it hard to understand the common elements of the laureates' research, preferring to highlight areas of disagreement among them. In this paper, I argue that empirical asset pricing is a coherent enterprise, which owes much to the laureates' influential contributions, and that important themes in the literature can best be understood by considering the laureates in pairs. Specifically, after summarizing modern asset-pricing theory using the stochastic discount factor as an organizing framework, I discuss the following: the joint hypothesis problem in tests of market efficiency, which is as much an opportunity as a problem (Fama and Hansen); patterns of short- and long-term predictability in asset returns (Fama and Shiller); and models of deviations from rational expectations (Hansen and Shiller). I conclude by reviewing the ways in which the laureates have already influenced the practice of finance, and how they might influence future innovations.","PeriodicalId":398400,"journal":{"name":"ERN: Other Macroeconomics: National Income & Product Accounts (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130559379","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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