Open Journal Systems Trinity College Dublin
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Inequality and Employment Sensitivities to the Falling Labour Share
Get PDFThis paper examines whether the labour share (wage-productivity gap) is a major factor in the evolution of inequality and employment. To this end, we use annual data for the US, UK and Sweden over the past forty years and estimate country-specific systems of labour demand and Gini coefficient equations. Further to the statistical significance of our models, we validate their economic significance through counterfactual simulations. In particular, we evaluate the contributions of the labour share to the trajectories of inequality and employment during specific time intervals in the post-1990 years. We find that during the 1990s the cost of a one per cent increase in employment was in the range of 0.7 per cent-0.9 per cent higher inequality in all three countries. However, in the 2000s, whereas the inequality-employment sensitivity ratio slightly fellin the US, it exceeded unity in the countries on the other side of the Atlantic. It obtained its highest value in the UK, where a 1 per cent growth in employment was achieved at the expenseof 1.3 per cent worsening in income inequality. We argue that the inequality-employment sensitivity ratio can be viewed as a barometer of socio-economic pressure, and thus the evolution of the wage-productivity gap and its impacts on the personal income distribution and labour demand deserve the attention of policy makers
Estimating the Amount of Overweight and Obesity Related Health-Care Use in the Republic of Ireland Using SLÁN Data
Get PDFIn Ireland, over half the adult population are now considered to be overweight or obese. This has implications for individuals in terms of their health as well as for the health service in terms of care utilisation. Using SLÁN (2007) data we estimate the impact on use of general practitioner (GP) services, hospital inpatient and hospital day case services of overweight and obesity. Our modelling approach accommodates potential unobserved heterogeneity associated with utilisation of primary and secondary health care. Controlling for a range of sociodemographic variables, we find that overweight and obesity are significant predictors of GP utilisation and obesity is a significant predictor of inpatient episodes. Translating increased utilisation into costs, primary health-care costs are estimated conservatively to be approximately €17 million higher and secondary health-care costs approximately €24 million higher in the Republic of Ireland as a result of overweight and obesity in adults. Given trends, overweight and obesity are likely to present an increasing challenge to the health service in the future that warrant further investigation
Wealth Effects in the US: Evidence from the Combination of Two Surveys
Get PDFIn this article we investigate the role of wealth in household consumption during the period 1989-2007 using a household-level cross sectional dataset. We combine information from the Consumer Expenditure Survey and the Survey of Consumer Finances to build a detailed dataset for the US for this. We adopt a sample combination procedure which differs considerably from that used earlier by other researchers. When comparing our results with previous research, we find a higher elasticity of consumption with respect to income and a lower elasticity of consumption with respect to both housing wealth and, particularly, to financial wealth
Deleveraging, Banks and Economic Recovery in Ireland
Get PDFThe challenge that the Irish economy faces can best be described in the context of flows and stocks of assets and liabilities. Under the Memorandum of Understanding with the IMF/EU/ECB Troika, Ireland must implement a severe fiscal austerity programme and reduce the size of its banking system. These goals must be achieved in the context of a deleveraging process in the household sector brought about by the need to repair balance sheets following a collapse in the value of housing assets. The current policy mix, which aims to reduce these stocks simultaneously, is unlikely to be successful, a feature we term the domestic trilemma. An external trilemma arising from the constraints of EMU membership also limits the policy choices for highdebt economies attempting to engineer an export-led recovery. This paper argues that a sequencing of policies is required for Ireland to achieve its goals
What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears
Get PDFThis paper presents a comprehensive analysis of Irish mortgage arrears using a new loan-level dataset which incorporates data from four Irish banks. We identify the main characteristics of accounts in arrears and examine the role of ability-to-pay and equity factors in the recent hike in mortgage delinquency rates. We find that borrowers who took out their mortgage for buy-to-let purposes, those with high loan-to-value ratios and those with high repayment burdens are all more likely to be in arrears. This is also the case for borrowers with properties in regions that have suffered more severe economic shocks, as proxied for by changes in the regional unemployment rate. Our empirical analysis suggests that affordability issues and general macroeconomic developments have had an important and sizeable effect on arrears trends over time, suggesting that policy efforts to target the growing level of mortgage arrears need to take account of these issues
Private Saving Rates and Macroeconomic Uncertainty: Evidence from Spanish Regional Data
Get PDFThe aftermath of the recent financial crisis has been followed by increasing saving rates, which may well reflect precautionary behaviour of households. In spite of a broad agreement on the theoretical implications of uncertainty on saving rates, empirical work has not yet reached a consensus on which is the most reliable measure of uncertainty. In this paper we empirically test the precautionary saving theory and explore different measures of macroeconomic uncertainty, using Spanish regional data for the period 1980-2007. Our results suggest that part of the recent increase in saving rates is related to a precautionary motive and that increased uncertainty causes greater savings rates. Moreover, our results also suggest that, in Spain, the unemployment rate is a relevant variable as a measure of future income uncertainty
Making and Breaking Tax Systems (Geary Lecture 2012)
Get PDF\u27The fiscal history of a people is above all an essential part of its generalhistory. An enormous influence on the fate of nations emanates from theeconomic bleeding which the needs of the state necessitates, and fromthe use to which the results are put.\u27Joseph Schumpeter, “The Crisis of the Tax State”, 1917/18, page 100The above quote is from an article by Schumpeter which is often thought ofas one of the founding articles in the field of fiscal sociology. I am fairlycertain that many economists, even those who work in the field of publicfinance, have not engaged very much with the issues that Schumpeter raiseshere. It is worth bearing in mind he wrote the words above in an era when itwas common for governments of the most prosperous countries to raise around10 per cent of GDP in taxes. Even then, the question that pre-occupiedSchumpeter was whether and how revenues on that scale were sustainable.This requires a proper appreciation of the economic, social and political forcesthat make tax raising possible
Modelling Asylum Migration Pull-Force Factors in the EU-15
Get PDFWe model the relationship between asylum applications across the EU-15 and three key pull-force factors, GDP, the recognition rate (grants of refugee status as a percentage of all refugee decisions) and refugee stocks. A Dynamic Coefficient Random Effects Panel model is employed which captures both the country specific variance and temporal features. This model provides deeper insight into the relationship than has hitherto been possible. We show for Austria, Spain and possibly Belgium that the three predictive factors dominate while for other countries in the EU-15 country specific factors are more important. In relation to temporal effects we show both GDP and the recognition rate at the overall EU-15 level remain significant over time but refugee stock does not. We also show a downward level shift occurred in the elasticity of recognition rate in 2002 resulting in fewer refugees being recognised (i.e., granted refugee status) and, therefore, providing evidence that asylum policies have become more restrictive
Tax Policy Challenges in EU Countries: A Few Lessons from the 2012 Commission Tax Reform Report and the European Semester
Get PDFThe 2012 Commission Tax Reform Report and the 2013 European Semester point to a series of challenges affecting tax policy in EU Member States in the context of fiscal consolidation. These concern the potential need and scope for consolidating public finance on the revenue side and rationalising the tax system by shifting tax away from labour to least growth-detrimental bases, broadening tax bases, improving tax design and enhancing tax governance. Only a few countries are not affected by at least one of these issues, which call for an ambitious and resolutereform effort, also paying attention to the redistributive effects. This complements actions improving the global tax governance
