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Understanding the vertical equity judgements underpinning health inequality measures
Get PDFThe choice of income-related health inequality measures in comparative studies is often determined by custom and analytical concerns, without much explicit consideration of the vertical equity judgements underlying alternative measures. This note employs an inequality map to illustrate how it these judgements that affect the ranking of populations by health inequality. In particular, it is shown that relative indices of inequality in health attainments and shortfalls embody distinct vertical equity judgments, where each may represent ethically defensible positions in specific contexts. Further research is needed to explore people’s preferences over distributions of income and health
Universal banking, competition and risk in a macro model
Get PDFA stylized macroeconomic model is developed with an indebted, heterogeneous Investment Banking Sector funded by borrowing from a retail banking sector. The government guarantees retail deposits. Investment banks choose how risky their activities should be. We compared the benefits of separated vs. universal banking modelled as a vertical integration of the retail and investment banks. The incidence of banking default is considered under different constellations of shocks and degrees of competitiveness. The benefits of universal banking rise in the volatility of idiosyncratic shocks to trading strategies and are positive even for very bad common shocks, even though government bailouts, which are costly, are larger compared to the case of separated banking entities. The welfare assessment of the structure of banks may depend crucially on the kinds of shock hitting the economy as well as on the efficiency of government intervention
Unionisation, International Integration and Selection
Get PDFWe study how unionisation affects competitive selection between heterogeneous firms when wage negotiations can occur at the rm or at the profit-centre level. With productivity specific wages, an increase in union power has: (i) a selection-softening; (ii) a counter-competitive; (iii) a
wage-inequality; and (iv) a variety effect. In a two-country asymmetric setting, stronger unions soften competition for domestic firms and toughen it for exporters. With profit-centre bargaining, we show how trade liberalisation can affect wage inequality among identical workers both across firms (via its effects on competitive selection) and within firms (via wage
discrimination across destination markets)
The marginal utility of money: A modern Marshallian approach to consumer choice
Get PDFWe reformulate neoclassical consumer choice by focusing on lambda, the marginal utility
of money. As the opportunity cost of current expenditure, lambda is approximated by the
slope of the indirect utility function of the continuation. We argue that lambda can largely supplant the role of an arbitrary budget constraint in partial equilibrium analysis. The result is a better grounded, more flexible and more intuitive approach to consumer choice
The Impact of Population Ageing on the Labour Market: Evidence from Overlapping Generations Computable General Equilibrium (OLG-CGE) Model of Scotland
Get PDFThis paper presents a dynamic Overlapping Generations Computable General Equilibrium (OLG-CGE) model of Scotland. The model is used to examine the impact of population ageing on the labour market. More specifically, it is used to evaluate the effects of labour force decline and labour force ageing on key macro-economic variables. The second effect is assumed to operate through age-specific productivity and labour force participation. In the analysis, particular attention is paid to how population ageing impinges on the government expenditure constraint. The basic structure of the model follows in the Auerbach and Kotlikoff tradition. However, the model takes into consideration directly age-specific mortality. This is analogous to “building in” a cohort-component population projection structure to the model, which allows more complex and more realistic demographic scenarios to be considered
Lead Miners’ Earnings in 19th Century Allendale
Get PDFThis paper uses the records of the Beaumont/Blackett lead mining concerns in Allendale to examine the earnings for lead miners in the early 1860‟s. The paper matches two parts of the
historical record, the Bargain books and the quarterly financial accounts, to give a more complete picture of the earnings of this group of workers than has previously been done. The paper also examines aspects of the setting of the rates in the bargains by the mine owner‟s agents
The Impact of Population Ageing on House Prices: A Micro-simulation Approach
Get PDFThis paper attempts to estimate the impact of population ageing on house prices. There is considerable debate about whether population ageing puts downwards or upwards pressure on house prices. The empirical approach differs from earlier studies of this relationship, which are mainly regression analyses of macro time-series data. A micro-simulation methodology is adopted that combines a macro-level house price model with a micro-level household formation model. The case study is Scotland, a country that is expected to age rapidly in the future. The parameters of the household formation model are estimated with panel data from the British Household Panel Survey covering the period 1999-2008. The estimates are then used to carry out a set of simulations. The simulations are based on a set of population projections that represent a considerable range in the rate of population ageing. The main finding from the simulations is that population ageing—or more generally changes in age structure—is not likely a main determinant of house prices, at least in Scotland
Pareto or log-normal? A recursive-truncation approach to the distribution of (all) cities
Get PDFTraditionally, it is assumed that the population size of cities in a country follows a Pareto
distribution. This assumption is typically supported by nding evidence of Zipf's Law. Recent
studies question this nding, highlighting that, while the Pareto distribution may t reasonably
well when the data is truncated at the upper tail, i.e. for the largest cities of a country, the
log-normal distribution may apply when all cities are considered. Moreover, conclusions may
be sensitive to the choice of a particular truncation threshold, a yet overlooked issue in the
literature. In this paper, then, we reassess the city size distribution in relation to its sensitivity to the choice of truncation point. In particular, we look at US Census data and apply a recursive-truncation approach to estimate Zipf's Law and a non-parametric alternative test where we consider each possible truncation point of the distribution of all cities. Results
con rm the sensitivity of results to the truncation point. Moreover, repeating the analysis
over simulated data con rms the di culty of distinguishing a Pareto tail from the tail of a
log-normal and, in turn, identifying the city size distribution as a false or a weak Pareto law
Extending contingency: the impact of strategy, technology, size and business environment on the organisational form of small Chinese firms
No full textThis paper is inspired by articles in the last decade or so that have argued for more attention to theory, and to empirical analysis, within the well-known, and long-lasting, contingency framework for explaining the organisational form of the firm. Its contribution is to extend contingency analysis in three ways: (a) by empirically testing it, using explicit econometric modelling (rather than case study evidence) involving estimation by ordered probit analysis; (b) by extending its scope from large firms to SMEs; (c) by extending its applications from Western economic contexts, to an emerging economy context, using field work evidence from China. It calibrates organizational form in a new way, as an ordinal dependent variable, and also utilises new measures of familiar contingency factors from the literature (i.e. Environment, Strategy, Size and Technology) as the independent variables. An ordered probit model of contingency was constructed, and estimated by maximum likelihood, using a cross section of 83 private Chinese firms. The probit was found to be a good fit to the data, and displayed significant coefficients with plausible interpretations for key variables under all the four categories of contingency analysis, namely Environment, Strategy, Size and Technology. Thus we have generalised the contingency model, in terms of specification, interpretation and applications area
Chasing Graduate Jobs?
Get PDFThis paper examines empirically the relationship between under-employment and migration amongst five cohorts of graduates of Scottish higher education institutions with micro-data collected by the Higher Education Statistical Agency. The data indicate that there is a strong positive relationship between migration and graduate employment—those graduates who move after graduation from Scotland to the rest of the UK or abroad have a much higher rate of graduate employment. Versions of probit regression are used to estimate migration and graduate employment equations in order to explore the nature of this relationship further. These equations confirm that there is a strong positive relationship between the probability of migrating and the probability of being in graduate employment even after other factors are controlled for. Instrumental variables estimation is used to examine the causal nature of the relationship by attempting to deal with the potential endogeneity of migration decisions. Overall the analysis is consistent with the hypotheses that a sizeable fraction of higher education graduates are leaving Scotland for employment reasons. In turn this finding suggests the over-education/under-employment nexus is a serious problem in Scotland