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Can child benefits encourage parents’ attitudes toward a childrearing environment in Japan? Effects of the expansions of the child benefit policy
No full text* Revised： [19-04 , 2019]This study clarifies the effects of the expansion of Japan’s child benefit policy (CB) on parental attitudes toward childrearing environments in terms of culture, education, and childcare. A fixed-effect model was employed on data from Osaka University’s “ Preference Parameters Study, ”which provides large-scale longitudinal micro-data covering not only specific individuals but also their families. Compared with the control group of parents with only high-school children aged 16-18, the CB expansion, on average, increased the priority given to childcare environments by one grade. The subsample analysis revealed that parents with only pre-school children (0-6years old) came to hope for a better childcare environment and those with only primary-school-aged children (7-12 years old) demanded a better educational environment. Moreover, by dividing the respondents by whether the household income was above the mean, parents with higher household income levels were shown to increase the priority they gave to the educational environment in exchange for a decrease in the priority given to the childcare environment. However, parents in the lower household income groups increased the priority they gave to the childcare environment. These results indicate that the unpredicted CB expansion led parents to react differently to the neighborhood environment, depending on their child’s age and household income. Hence, the most important implication of this study is that the government should carefully choose target households in light of policy objectives and not increase the opportunity gaps between households when introducing new financial support policies
Coordination and free-riding problems in the provision of multiple public goods
No full text* Revised： [19-15 , 2019]This study considers the twin problems of free riding and coordination failure prevailing in the provision of multiple public goods with diminishing marginal returns in which the payoff-summaximising Pareto optimal outcome requires less-than-full contributions by group members. We examine theoretically and experimentally whether the provision of information on the demand for public goods helps overcome these problems and improves efficiency. We construct a game of two public goods, each with an upper bound on effective contributions. Theoretical analysis predicts that this information improves efficiency as it prompts efficiency concerned individuals to match the upper bound of each public good in equilibrium. The experimental results show countervailing effects of demand information,i.e.,it improves coordination but deteriorates the free-riding problem
Is Environmental Tax Harmonization Desirable in Global Value Chains?
No full text* Revised： [19-13 , 2019]The spatial unbundling of parts production and assembly currently characterizes globalization, leading to the worldwide dispersion of pollution. We consider socially optimal (cooperative) environmental taxes in a two-country model of global value chains in which the location of both parts and assembly can differ. When unbundling costs are so high that parts and assembly must colocate in the pre-globalized world, pollution is spatially concentrated, and harmonizing environmental taxes maximizes global welfare. In contrast, with low unbundling costs triggering the dispersion of parts and thus pollution throughout the world as today, harmonization fails to maximize global welfare. Similar results hold when the two countries non-cooperatively choose their environmental taxes
Organizational structure and technological investment
No full textNovember 2019. Revised April 2020. Secondary Revised December 2020.We analyze firms' decisions to adopt a vertical integration or separation, taking into account the characteristics of both the final good competition and the R&D process. We consider two vertical chains, where upstream sectors conduct R&D investment. Such investment determines the production costs of the downstream sector and has knowledge and R&D spillovers on the rivals' costs. In a general setting, we show that the equilibrium organizational structure depends on whether the situation considered belongs to one of four possible cases. We study how final good market competition, spillover, and incentives in innovation interact to determine the equilibrium vertical structure
Effects of Monetary Policy in a Model with Cash-in-Advance Constraints on R&D and Capital Accumulation
No full textFebruary 2020. Revised June 2020.To examine the effect of monetary policy on economic growth, we formulate an endogenous growth model with cash-in-advance constraints on R&D and capital accumulation as endogenous growth engines. Within this framework, we show that the relationship between economic growth and the nominal interest rate can be an inverted-U shape. Moreover, we demonstrate that the welfare-maximizing level of the nominal interest rate is larger than the growth rate-maximizing level of the nominal interest rate
An Analysis of Monetary Policy in a Monetary Search Model with Non-unitary Discounting
No full textSeptember 2019. Revised July 2020.Based on findings in the behavioral economics literature, I incorporate non-unitary discounting into a monetary search model to study optimal monetary policy. I apply non-unitary discounting, that is, discount rates that are different across goods. With this extension to the model, I find that there are cases where optimal monetary policy deviates from the Friedman rule
The Education Gender Gap and the Demographic Transition in Developing Countries
No full textDecember 2019. Revised August 2020This paper explores, theoretically and empirically, the role of the declining gender gap in education in the demographic transition and the emergence of modern economic growth. Specifically, the paper develops a model in the tradition of the unified growth theory that captures and interconnects the key empirical features of the demographic transition, the decline in gender gap in education, and the transition to sustained growth across less-developed economies. The mechanism on which the model relies comprises several interplaying components. First, technological progress reduces housework time through the creation and diffusion of labor-saving home appliances, which frees women's time for childrearing, resulting in an initial increase in fertility, as well as in labor-force participation. Second, due to the possibly higher female labor-force participation as housework time decreases, households invest relatively more in their daughters' education, given its higher return following the initial imbalance. This improves gender equality in education and increases the opportunity cost of childrearing, which leads to a subsequent decrease in fertility. Third and finally, the decrease in the education gender gap through higher investment in daughters' education increases average human capital, thus accelerating technological progress in turn. This reinforcing loop results in the transition to a new fertility regime and accelerated economic growth. We provide the empirical confirmation of the model's predictions using data from developing countries in the late 20th and early 21st centuries
Reputation Concerns in Risky Experimentation
No full text2019-07. Revised Aug 2020.High-ability agents are more likely to achieve early success in risky experimentation, but learn faster that their project is not promising. These counteracting effects give rise to a signaling model with double-crossing property. This property tends to induce homogenization of quitting times between types, which in turn leads to some pooling in equilibrium. Low-ability agents may hold out to continue their project for the prospect of pooling with the high type, despite having a negative instantaneous net payoff. A war-of-attrition mechanism causes low-ability agents to quit only gradually over time, and to stop quitting for a period immediately before all agents exit
