Matching Items (6)

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An Analysis on the Impact of the Recession on Working Hours in European Countries

Description

The impact of the 2008 Great Recession was felt on a global level. While many European countries moved to
implement large fiscal adjustments in response to the financial crisis, various

The impact of the 2008 Great Recession was felt on a global level. While many European countries moved to
implement large fiscal adjustments in response to the financial crisis, various other economic consequences
were felt, such as inflation, public debt growth, and a decrease in purchasing power. A result from these
consequences that typically occur every recession are demand shocks within the employment sector. As firms
are put into tight financial positions, employers are forced to make employment decisions to cut costs for
long-term sustainability, such as laying off workers, or reducing their working hours.

This paper aims to investigate how weekly working hours are impacted by shocks to the economy across European countries. Using the 2008 recession as the basis, an empirical analysis was conducted with panel data for 32 countries over 33 years, with average weekly working hours across four occupational groups as the variable of interest, and various economic indicators such as GDP growth as independent variables. Additionally, countries were split up and grouped based on geographical location to examine potential country and region-specific trends.
Over time, there is a decreasing trend in weekly working hours across all observed occupations and countries. This decreasing trend continues during the 2008 recession, but the slope of decrease is not significant relative to the entire time period. However, when dis-aggregated into occupational groups with a distinction between full-time and part-time workers, the trends in working hours are a much more noticeable, both during the recession and over the entire time frame of observation.

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Agent

Created

Date Created
  • 2019-05

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Essays in growth and development

Description

The dissertation consists of three essays that deal with variations in economic growth and development across space and time. The essays in particular explore the importance of differences in occupational

The dissertation consists of three essays that deal with variations in economic growth and development across space and time. The essays in particular explore the importance of differences in occupational structures in various settings.

The first chapter documents that intergenerational occupational persistence is significantly higher in poor countries even after controlling for cross-country differences in occupational structures. Based on this empirical fact, I posit that high occupational persistence in poor countries is symptomatic of underlying talent misallocation. Constraints on education financing force sons to choose fathers' occupations over the occupations of their comparative advantage. A version of Roy (1951) model of occupational choice is developed to quantify the impact of occupational misallocation on aggregate productivity. I find that output per worker reduces to a third of the benchmark US economy for the country with the highest level of occupational persistence.

In the second chapter, I use occupational prestige as a proxy of social status to estimate intergenerational occupational mobility for 50 countries spanning the breadth of world's income distribution for both sons and daughters. I find that although relative mobility varies significantly across countries, the correlation between relative mobility and GDP per capita is only mildly positive for sons and is close to zero for daughters. I also consider two measures of absolute mobility: the propensity to move across quartiles and the propensity to move relative to father's occupational prestige. Similar to relative mobility, the first measure of absolute mobility is uncorrelated with GDP per capita. The second measure, however, is positively correlated with GDP per capita with correlations being significantly higher for sons compared to daughters.

The third chapter analyses to what extent the growth in productivity witnessed by India during 1983--2004 can be explained by a better allocation of workers across occupations. I first document that the propensity to work in high-skilled occupations relative to high-caste men increased manifold for high-caste women, low-caste men and low-caste women during this period. Given that innate talent in these occupations is likely to be independent across groups, the chapter argues that the occupational distribution in the 1980s represented talent misallocation in which workers from many groups faced significant barriers to practice an occupation of their comparative advantage. I find that these barriers can explain 15--21\% of the observed growth in output per worker during the period from 1983--2004.

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Agent

Created

Date Created
  • 2015

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Essays on the Dynamics of Residential Sorting, Health, and Environmental Quality

Description

My dissertation combines the notion of residential sorting from Tiebout (1956) with Grossman’s (1972) concept of a health production function to develop a new empirical framework for investigating what individuals’

My dissertation combines the notion of residential sorting from Tiebout (1956) with Grossman’s (1972) concept of a health production function to develop a new empirical framework for investigating what individuals’ residential location choices reveal about their valuation of amenities, the welfare effects of climate change, the forces underlying environmental justice, and the value of a statistical life. Location

choices are affected by age, health, and financial constraints, and by exposure to local amenities that affect people’s health and longevity. Chapter 1 previews how I formalize this idea and investigate its empirical implications in three interrelated essays. Chapter 2 investigates interactions between health, the environment, and income. Seniors tend to move at higher rates after being diagnosed with new chronic medical conditions. While seniors generally tend to move to locations with less polluted air, those who have been diagnosed with respiratory conditions move to relatively more polluted locations. This counterintuitive pattern is reconciled by documenting that new diagnoses bring about increases in medical expenditures, thereby limiting disposable income that can be spent on housing. Relatively cheaper places tend to be more polluted, and higher exposure to pollution leaves seniors more vulnerable to future health shocks. In Chapter 3, I combine information about housing prices with estimates of location-specific effects on mortality to estimate the Value of a Statistical Life (VSL) for seniors - one of the most important statistics used to evaluate policies affecting mortality. Since local amenities correlate with causal mortality effects, but also provide utility independently, the difficulty in controlling for local amenities implies that my VSL estimates are best interpreted as bounds. Chapter 4 builds a new structural framework for evaluating spatially heterogeneous changes to local amenities. I estimate a dynamic model of location choice with a sample of 5.5 million seniors from 2001-2013. Their average annual willingness-to-pay to avoid future climate change in the United States under a “business as usual” scenario ranges from $962 for older, sicker groups who are more vulnerable to climate change’s negative effects on health to -$1,894 for younger, healthier groups, who value warmer winters and are relatively resilient.

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Agent

Created

Date Created
  • 2020

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Essays on the macroeconomic effects of taxation

Description

This dissertation is a collection of two essays relating to the dynamic effects of taxation.

In the first chapter, I focus on a key challenge faced by tax reforms: their short-run

welfare

This dissertation is a collection of two essays relating to the dynamic effects of taxation.

In the first chapter, I focus on a key challenge faced by tax reforms: their short-run

welfare consequences. I examine a consumption-based tax reform that, despite the long-run welfare gains it generates, causes the welfare for some groups such as retirees or the working poor to fall during transition between steady states. Using a life-cycle model with heterogeneous households, I show how to devise a transition path from the current U.S. federal tax system to a consumption-based tax system that improves the welfare of current generations as well as those who are born in the long-run steady state. In a nutshell, all households alive at the time of the policy change can choose when they want to switch to the new tax system, or whether they want to switch at all. I find that implementing a tax reform with this feature improves the welfare of 95% of the population in the short run, compared to less than 25% of population in the conventional case with no choice. It takes about 20 years for half of the population to pay their taxes under the new tax code.

In the second chapter, I study the aggregate consequences of the differential tax treatments of U.S. businesses focusing on the role of legal forms of organization. I develop an industry equilibrium model in which the organizational form is an endogenous choice.

This model incorporates the key trade-off that businesses face when choosing their legal forms: the tax treatment of the business income; the access to external capital, and the potential level and evolution of productivity over time.

The model is matched to the firm dynamic features of U.S. businesses and the contributing share of each legal form in total output. Using the model, I study revenue-neutral tax reforms in which legal forms receive the same tax treatments, and

I find that the incentives induced by tax structure for organizational form and external finance are both large. Relative to the benchmark economy, unifying the tax code for all legal forms, can lead to 8% increase in the aggregate output.

Contributors

Agent

Created

Date Created
  • 2018

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Essays on human capital, taxation, and adverse selection

Description

This dissertation consists of three chapters. The first two explore the impact of government policies on human capital accumulation.

Chapter one makes two novel contributions related to the two workhorse models

This dissertation consists of three chapters. The first two explore the impact of government policies on human capital accumulation.

Chapter one makes two novel contributions related to the two workhorse models in the human capital literature: Learning by Doing (LBD) and Ben-Porath (BP).

First, I show that BP is much more consistent with empirical life-cycle patterns related to individual earnings growth rates relative to LBD.

Second, I show that the same model features that generate different life-cycle predictions between models also generate different policy implications. In particular, increasing the top marginal labor tax rate, relative to the current US level, generates much larger reductions in lifetime human capital accumulation in the BP model versus the LBD model.

Chapter two examines reforms to the Social Security taxable earnings cap in the context of a human capital model. Old age Social Security benefits in the US are funded by a 10.6% payroll tax up to a cap of $118,500. There has been little work examining the likely outcomes of such a policy change. I use a life-cycle BP human capital model with heterogeneous individuals to investigate the aggregate and distributional steady state impacts of several policy changes the earnings cap. I find that when I eliminate the cap: (1) aggregate output and consumption fall substantially; (2) the role of endogenous human capital is first order; (3) total federal tax revenues are lower or roughly unchanged; (4) about 1/3 of workers are made worse off.

The final chapter studies the existence and optimality of equilibria in the presence of asymmetric information. I develop an equilibrium concept which corresponds to the presence of mutual insurance organizations for a class of adverse selection economies which includes the Spence (1973) signaling and Rothschild-Stiglitz (1976) insurance environments. The defining features of a mutual insurance organization are that policy holders are also the owners of the organization, and that the organization can write policies for which the terms depend on the experience of the mutual members. In general the equilibrium exists and is weakly Pareto optimal. Further, all equilibria have the same individual type utility vector.

Contributors

Agent

Created

Date Created
  • 2016

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Essays on economic growth and structural transformation

Description

This dissertation consists of three essays on modern economic growth and structural transformation, in particular touching on the reallocation of labor across industries, occupations, and employment statuses.

The first chapter investigates

This dissertation consists of three essays on modern economic growth and structural transformation, in particular touching on the reallocation of labor across industries, occupations, and employment statuses.

The first chapter investigates the quantitative importance of non-employment in the labor market outcomes for the United States. During the last 50 years, production has shifted from goods to services. In terms of occupations, the routine employment share decreased, giving way to increases in manual and abstract ones. These two patterns are related, and lower non-employment had an important role. A labor allocation model where goods, market services, and home services use different tasks as inputs is used for quantitative exercises. These show that non-employment could significantly slow down polarization and structural transformation, and induce significant displacement within the labor force.

The second chapter, coauthored with Bart Hobijn and Todd Schoellman, looks at the demographic structure of structural transformation. More than half of labor reallocation during structural transformation is due to new cohorts disproportionately entering growing industries. This suggests substantial costs to labor reallocation. A model of overlapping generations with life-cycle career choice under switching costs and structural transformation is studied. Switching costs accelerate structural transformation, since forward-looking workers enter growing industries in anticipation of future wage growth. Most of the impact of switching costs shows on relative wages.

The third chapter establishes that job polarization is a global phenomenon. The analysis of polarization is extended from a group of developed countries to a sample of 119 economies. At all levels of development, employment shares in routine occupations have decreased since the 1980s. This suggests that routine occupations are becoming increasingly obsolete throughout the world, rather than being outsourced to developing countries. A development accounting framework with technical change at the \textit{task} level is proposed. This allows to quantify and extrapolate task-specific productivity levels. Recent technological change is biased against routine occupations and in favor of manual occupations. This implies that in the following decades, world polarization will continue: employment in routine occupations will decrease, and the reallocation will happen mostly from routine to manual occupations, rather than to abstract ones.

Contributors

Agent

Created

Date Created
  • 2019