why are there so many long term sick in britain this paper examines the upward trend of numbers in receipt of invalidity benefit the major contributory benefit for the long term sick in britain since 1971 possible explanations include the rising level of unemployment through much of the period the heightened link between ill health and early retirement changes in the real level of benefits and changes in the composition of the workforce these possibilities are examined using a variety of methodologies time series cross section and fixed effects models copyright 1991 by royal economic society

patterns and trends in local pay in great britain 1975 76 to 1987 88 whilst local pay differentials lie at the heart of most models of local labour markets not enough is known about the size and trends of such differentials in great britain this study is based on a new data set derived from inland revenue and department of social security statistics for a 1 per cent sample of national insurance records the information was available at the detailed local labour market area level annually from 1975 76 to 1987 88 disaggregated by sex age industry and for women marital status the data showed a marked widening of local pay differentials in the late 1980s much of the cross sectional variation reflected a differential between greater london and the rest of the country partly reflected in house prices the trend towards increasing local pay differentials over time was still in evidence however even when labour markets in the south east were excluded from the sample

defining the government s debt and deficit defining the government s debt and deficit although the budget deficit and the public debt feature prominently in political debate and economic research there is no agreement about how they should be measured they can be defined for different sets of public institutions including the nested sets corresponding to central government general government and the public sector and for any definition of government there are many measures of the debt and deficit including those generated by four kinds of accounts cash financial full accrual and comprehensive which can be derived from four nested sets of assets and liabilities each debt and deficit measure says something about public finances but none tells the whole story each is also vulnerable to manipulation and is likely to be manipulated if it is subject to a binding fiscal rule or target narrow definitions of government encourage the shifting of spending to entities outside the defined perimeter of government narrow definitions of debt and deficit encourage operations involving off balance sheets assets and liabilities while broad measures are susceptible to the mismeasurement of on balance sheet assets and liabilities reviewing the literature on these issues the paper concludes that governments should publish several measures of the debt and deficit in a form that clearly reveals their interrelationships

a natural experiment on sick pay cuts sickness absence and labor costs abstract this study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs german federal law reduced the legal obligation of german employers to provide 100 continued wage pay for up to six weeks per sickness episode in 1996 statutory sick pay was decreased to 80 of foregone gross wages within the reform s target group private sector employees this measure increased the proportion of employees having zero days of absence between 6 and 8 quantile regression estimates indicate that employees with up to 5 5 annual absence days reduced their days of absence by about 12 extended analyses suggest that in industries that enforced the cut behavioral effects were about twice as large we show that the direct labor cost savings effect stemming from the cut in replacement levels clearly exceeds the indirect effect due to the decrease in absenteeism our calculations about the total decrease in labor costs are very much in line with official data which suggest that total employer provided sick pay decreased by 6 7 or 1 7 billion per year

female labour supply flexibility of working hours and job mobility traditional labour supply models do not address to what extent working hours are constrained withinjobs and to what extent working hours can be adjusted by means of changing employer this paper measures the flexibility of working hours within and between jobs by relating subjective information on individual preferences to adjustments in working hours empirical analysis based on a sample of employed women in the dutch socio economic panel 1987 9 shows that the flexibility of working hours withinjobs is low the empirical literature on labour supply traditionally assumes that workers can choose their working hours freely and without costs up to a maximum level equal to the time endowment the potential invalidity of this assumption is acknowledged but the assumption is still often made for the tractability of the empirical model in response several models incorporating restrictions on working hours have been developed the first generation of these models extended the traditional censored regression model by allowing for censoring due to over and under employment and involuntary unemployment moffitt 1982 ham 1982 blundell et al 1987 the second generation of models extended the structural labour supply model by introducing job offers concerning hours of work van soest et al 1990 dickens and lundberg 1993 a conclusion stemming from all of these studies is that incorporating restrictions on working hours significantly improves the empirical fit of the model a peculiar component of the models discussed above is that they are static as a result they are not able to distinguish between the ingredients required for the existence of hours restrictions within the labour market first there needs to be restrictions on the possibilities to adjust working hours with the same employer for example within a job this alone does not necessarily imply that individuals are not on their labour supply curve as they might switch to an employer that offers them their preferred working hours a second necessary ingredient for the existence of hours restrictions within the labour market is therefore mobility costs although one cannot doubt the existence of hours restrictions in the labour market an open question is how tight these restrictions actually are altonji and paxson 1986 1992 study adjustments of working hours over time and distinguish between those individuals who stay in their job and those who change job change employer based on the us panel study of income dynamics they conclude that working hours of married women are two to four

recent developments in consumer credit and default literature this survey discusses recent contributions to the quantitative literature on unsecured consumer debt and default and some ongoing challenges for the literature key topics include the sources of the rise in personal bankruptcies the importance of asymmetric information and the effects of developments in information technologies on consumer credit markets delinquency and informal bankruptcy debt collection and restructuring of distressed debt the cyclical behavior of consumer debt and default and the insurance role of household debt implications for welfare analysis and policy design are discussed several theoretical contributions and approaches to modeling the consumer credit markets are also highlighted

a comparison of three institutions for monetary policy when central bankers have private objectives how do different institutional arrangements for the central bank perform when central bankers have private objectives and society objectives vary with time this paper evaluates three benchmark monetary institutions from a constitutional perspective i a contract with an inflation or monetary target announcement ii an inflation rule and iii the laissez faire policy i e the absence of any contractual arrangement at the stage of institutional choice there is uncertainty about both society s mean inflation target and the central banker s future inflation target a target announcement reveals the type of the central banker and solves the credibility vs flexibility trade off but it can not prevent that the central banker follows private objectives the announcement based contract is the optimal institution if i the initial uncertainty about the central banker s objectives is small and ii if unemployment is sufficiently high

adaptation and distress in the urban economy a study of kampala households abstract though uganda underwent fairly rapid economic growth after independence in 1962 the civil strife and external shocks of the 1970s and 1980s led to rapid decline the impacts on kampala households reflect in many ways those on the rest of the country and have led to extensive diversification of incomes mainly to reduce the risks perceived in today s unstable environment a decrease in the share of wages in total incomes compensated by allowances of various types increased engagement in informal sector activities and even farming in the urban sector the main tasks of economic management are twofold to stabilize wage employment and to ameliorate the social misery caused by the decline the limited resource base and the continued external disturbances make the prospects for sustained recovery precarious

male labour force participation following illness or injury this paper develops a model of the disabled individual s labour force participation decision following illness or injury and confronts it with data on the financial consequences of ill health a utility function is specified which allows for the effect of changes in health on work leisure preferences and is evaluated in relation to a household budget constraint estimation is through maximization of the appropriate likelihood function correcting for self selection bias within a switching regression model results are presented showing significant effects of financial variables on participation and these are seen to vary with age disability and income

allocation of individuals to job levels under rationing summary we augment an ordered response model for the job level at which individuals desire to work with allowance for individual reporting of a discrepancy between actual and desired job level and we also investigate possible biases from restricting the observations to the employed and omitting the unemployed we find that the latter bias can be ignored and interpret this as evidence that the unemployed are not choosier than the employed people claiming inadequate capability utilization are not markedly differently allocated than those claiming a proper match women s lower job levels cannot be explained from rationing by capability utilization

islamic banking and finance recent empirical literature and directions for future research this paper examines the recent empirical literature in islamic banking and finance highlights the main findings and provides a guide for future research early studies focus on the efficiency production technology and general performance features of islamic versus conventional banks whereas more recent work looks at profit and loss sharing pls behaviour competition risks as well as other dimensions such as small business lending and financial inclusion apart from key exceptions the empirical literature suggests no major differences between islamic and conventional banks in terms of their efficiency competition and risk features although small islamic banks are found to be less risky than their conventional counterparts there is some evidence that islamic finance aids inclusion and financial sector development results from the empirical finance literature dominated by studies that focus on the risk return features of mutual funds finds that islamic funds perform as well if not better than conventional funds there is little evidence that they perform worse than standard industry benchmarks some recent evidence however suggests that islamic bond sukuk issuance destroys value for shareholders

labour supply in italy an empirical analysis of joint household decisions with taxes and quantity constraints this study applies an econometric framework which allows for complex non convex budget sets highly non linear labour supply curves and imperfect markets with institutional constraints a married couple s version of the model is estimated on italian microdata the empirical results show that male labour supply is rather inelastic while labour supply among females especially participation is considerably more elastic the elasticities depend strongly on household income the largest elasticities are found for females living in poor households the results of the tax simulations suggest that there are only modest labour supply responses from replacing the 1987 system by proportional taxes copyright 1999 john wiley sons ltd

savings in times of demographic change lessons from the german experience pension reforms in many developed countries make individuals shoulder a bigger share of longevity and income risks the desired response is that individuals accumulate private assets for retirement whether this actually takes place is of paramount relevance for scientists and policy makers we take germany as an example twenty years of pension reform have transformed the monolithic german pension system into a multi pillar system formerly generous public pension benefits are gradually being reduced while substantial incentives are granted to occupational and private saving schemes has this transition worked out we survey the reform steps and household s reactions how did individuals adjust their labor market behavior how did private and occupational pension plans take off how do behavioral adjustments vary in the population most germans adapted to the new situation both actual and expected retirement decisions changedand the share of households without supplementary pensions decreased from 73 to 39 in little more than a decade this is a remarkable success nonetheless households with low education low income and less financial education did neither adjust their retirement behavior nor pick up supplementary pension plans and are thus likely to face difficulties in bridging the gap arising in future pension income

does health insurance reduce illness related worker absenteeism the objective of this article is to examine whether having health insurance reduces illness related absenteeism among older workers a nationally representative sample of 1780 workers in the united states aged 52 64 are drawn from the 2004 2006 health and retirement study hrs binary logistic regressions and censored tobit models are estimated for workers likelihood of missing work days due to illness and the number of illness related work days missed respectively while explicitly addressing the possibility of insurance selection effects the findings suggest that over a 12 month period older workers without health insurance are as likely as insured workers to miss work days due to illness and there are no differences in the number of days missed between insured and uninsured workers however there is strong evidence that poor baseline health onset of new diseases and longer hospitalization significantly increase an older worker s absenteeism at work these results suggest that having health ins

the decline in male labor force participation comment in an article in thisjournal parsons 1980a analyzes the doubling in the rate of nonparticipation in the labor force of older men since 1946 using cross sectional data from the national longitudinal survey parnes et al 1970 in an index function model of the labor force participation decision he tests the assertion that the withdrawal of older males is attributable to the rapid expansion of alternatives to work provided by the social security disability insurance ssdi program he reports an elasticity of nonparticipation with respect to the replacement rate of ssdi benefits of 631 and concludes that the recent decline in labor force participation can be largely explained by the increased generosity of social welfare transfers particularly social security disability payments p 130 the magnitude of parsons s estimate and its impact on the public debate over disability transfer policy require careful scrutiny of its basis in section i we describe parsons s econometric model and construction of variables in section ii we provide a critique in section iii we test the robustness of parsons s elasticity estimate by presenting alternative estimates based on corrections and extensions of his basic model section iv concludes

the labour supply unemployment and participation of lone mothers in in work transfer programmes in work transfer schemes have recently been suggested as a device for encouraging labour force participation and reducing the severity of the disincentives associated with out of work income support schemes here we estimate a discrete choice labour supply model which allows for endogenous in work welfare programme participation we also allow for involuntary unemployment so as to distinguish between programme non participation and an inability to obtain work and thereby generate an eligibility to the programme

buying and selling attacks on fixed exchange rate systems abstract in this paper we show how rational expectations models of speculative attacks on fixed exchange rate systems can be extended to take into account the possibility that the central bank could be forced to either devalue or revalue essential to the analysis are the concepts of buying attack and selling attack by means of which we were able to describe how expectations about the future exchange rate are formed we also provide a discussion on the problem of uniqueness of the equilibrium that may arise in this kind of speculative attack models

panel estimates of the determinants of british regional male incapacity benefits rolls 1998 2006 this article explores the determinants of the proportion of the working age male population claiming incapacity benefits ib across the 11 british government office regions for the period 1998 to 2006 three different approaches are adopted to modelling register dynamics first treating ib stocks as if they were trend stationary albeit with persistence and estimating reduced form models for their logs second treating ib stocks as if they were nonstationary and examining their long run determinants plus short run equilibrium reversion properties third focusing on the determinants of gross inflows and outflows that together drive ib stocks given the nature of the data no approach is ideal yet the models provide reasonably robust evidence that labour market changes specifically falling unemployment rates and rising real earnings have contributed to falling male ib stocks over the period

why have uk disability benefit rolls grown so much abstract over the last 30 years many countries including the uk have seen a dramatic rise in the share of the working age population receiving sickness and disability benefits hereafter disability benefits this is despite health levels that are generally thought to be slowly improving this paper describes the time path of uk disability benefit rolls and explores the existing uk literature together with literature from the usa in search of potential explanations for it since the early 1990s despite a number of detailed descriptive studies surprisingly little attention has been paid to quantifying the importance of the different factors believed to be driving the uk benefit roll growth this is all the more surprising given the continued growth and the level of policy attention recently and currently devoted to disability benefits in the uk

job search hours restrictions and desired hours of work a structural empirical job search model is presented that incorporates the labor supply decision of individuals the arrival of a job offer is modeled as a random draw from a wage hours offer distribution subjective information is used on desired working hours to identify optimal hours from offered hours policy simulations are performed to address several policy questions does a decrease in unemployment benefits lead to the acceptance of jobs with less preferred working hours how does a decrease in the length of the standard working week affect the job acceptance behavior of the unemployed

a life cycle consistent empirical model of family labour supply using cross section data this paper estimates a utility maximising model of the joint determination of male and female labour supplies using a sample of married couples from the u k family expenditure survey the emphasis is on the estimation of within period preferences that are consistent with intertemporal two stage budgeting under uncertainty however the approach we adopt provides an alternative method of estimating certain aspects of life cycle behaviour to the fixed effects constant approach of heckman and macurdy 1980 macurdy 1981 and browning deaton and irish 1985 moreover it relaxes some of the underlying restrictions that are implicit in these constant models under uncertainty

unemployment and female labour supply the definition of labour force participation in the standard labour supply model stands in sharp contrast to that used in compiling the labour force statistics in the labour supply models only those supplying positive hours of work are considered to be labour force participants on the other hand participation in the labour force statistics is often defined to include not only those supplying positive hours but also those actively searching for work this paper is an attempt to reconcile these concepts by allowing unemployed workers to enter a generalisation of the standard labour supply model this turns out to be a convenient way to enter demand side factors directly into the determination of an individual s labour market position the model is applied with some success to the working behaviour of married women in the uk family expenditure survey

student debt effects on financial well being research and policy implications reviewing the data regarding effects of student debt on students financial outcomes following college whether successful graduation or premature exit makes clear that there is a price to pay for having to borrow money to go to college indebted college graduates have lower net worth less home equity and compromised ability to accumulate assets as compared to their peers with the same level of education but no student debt they may also experience poorer educational outcomes with independent effects on earning power and then later wealth accumulation especially given the relationship between initial household wealth and children s later educational outcomes these findings about the post college financial outcomes of indebted students and graduates raise the specter of ongoing sustained and cross generational perpetuation of societal divides in the united states higher education is valued not just as a good in itself but also as a means to the end of greater economic security and the primary lever for economic mobility evaluating student loans through this lens underscores the long term volatile and often hidden effects of student loan dependence and raises the stakes for consideration of alternative approaches to higher education finance

consumer behaviour theory and empirical evidence a survey this survey is designed to emphasize the relationship between empirical a nd theoretical considerations in the analysis of consumer behavior a lthough it focuses primarily on analysis at the individual or micro l evel it tries where possible to draw implications for the estimati on of aggregate relationships the importance of micro level analysis stems from the rapid expansion in available panel and survey data se ts this development has generated its own theoretical and empirical issues many of which are raised in this survey copyright 1988 by royal economic society

simultaneously modeling the supply of weeks and hours of work among female household heads this paper explores the differential nature of labor supply decisions regarding weeks of work per year and hours of work per week among female household heads a model of labor supply that separates the weeks hours decision is presented and estimated allowing for simultaneity in the weeks hours decision as well as for the presence of either fixed costs or weeks and hours constraints the results indicate that not only are weeks and hours decisions separate from the labormarket participation decision but they are also quite different from each other although they appear to be simultaneously determined

married women s hours and participation revisited elasticity estimates are presented for participation and hours of work for a sample of married women in the social change and economic life initiative sceli 1986 data set a logit model is used to estimate the participation function and a tobit model is employed to estimate an hours of work equation the results are in agreement with the evidence available for the uk the own wage hours of work elasticity is found to be relatively elastic with negligible effects detected for non labour income and the husband or spouse s wage the effects on participation of an unemployed husband or spouse were examined and found to have a strong negative effect

genuine savings and sustainability genuine savings gs has emerged as the leading economic indicator of sustainable economic development at the country level it derives from the literatures on weak sustainability wealth accounting and national income accounting we discuss the theoretical underpinnings of gs focusing on the relationship between changes in a nation s extended capital stock and the future path of consumption the indicator has entered widespread use propelled by the world bank s publications despite its varying performance as a predictor for future consumption notwithstanding the extensive body of literature reviewed promising future research avenues are identified

benefits and the labour supply of women married to unemployed men this paper seeks to explain the low labor force participation rates of women married to unemployed men in the reducing the net increment to household income that would result from the wife s employment simple probit models of the participation and part time full time decisions are estimated using a large cross sectional data set the results confirm the importance of severe disincentive effects controlling for labor market conditions income related benefits are found to create worse problems than national insurance benefits both types impede part time work in particular copyright 1990 by royal economic society

student debt effects on financial well being research and policy implications student debt effects on financial well being reviewing the data regarding effects of student debt on students financial outcomes following college whether successful graduation or premature exit makes clear that there is a price to pay for having to borrow money to go to college indebted college graduates have lower net worth less home equity and compromised ability to accumulate assets as compared to their peers with the same level of education but no student debt they may also experience poorer educational outcomes with independent effects on earning power and then later wealth accumulation especially given the relationship between initial household wealth and children s later educational outcomes these findings about the post college financial outcomes of indebted students and graduates raise the specter of ongoing sustained and cross generational perpetuation of societal divides in the united states higher education is valued not just as a good in itself but also as a means to the end of greater economic security and the primary lever for economic mobility evaluating student loans through this lens underscores the long term volatile and often hidden effects of student loan dependence and raises the stakes for consideration of alternative approaches to higher education finance

labour supply search and taxes abstract classical labour supply theory is one of the most sophisticated parts of labour economics yet there is no compelling theoretical reason to believe in an outcome on a classical labour supply curve and it is unclear whether it is a good empirical description of the way in which labour markets actually work this paper uses the techniques of search theory to analyse the impact of changes in the tax system on incentives to work when individuals do not have flexibility of hours within jobs it is shown how the traditional comparative statics are of some use but are rarely the whole story and some comparative statics results are surprising

recent developments in consumer credit and default literature consumer credit and default literature this survey discusses recent contributions to the quantitative literature on unsecured consumer debt and default and some ongoing challenges for the literature key topics include the sources of the rise in personal bankruptcies the importance of asymmetric information and the effects of developments in information technologies on consumer credit markets delinquency and informal bankruptcy debt collection and restructuring of distressed debt the cyclical behavior of consumer debt and default and the insurance role of household debt implications for welfare analysis and policy design are discussed several theoretical contributions and approaches to modeling the consumer credit markets are also highlighted

central bank reputation and the monetization of deficits the 1981 italian monetary reform in 1981 the bank of italy was freed from the obligation to purchase the unsold public debt at the treasury auctions since then the bank of italy has reduced debt monetization the paper seeks to explain this policy shift by analyzing a game between the monetary and fiscal authorities the fiscal authority is imperfectly informed about the central bank preferences an equilibrium exists in which the central bank does not monetize so as to establish a reputation of being independent monetization raises fiscal deficits and may raise public debt relative to a non accommodative policy

defining the government s debt and deficit although the budget deficit and the public debt feature prominently in political debate and economic research there is no agreement about how they should be measured they can b e defined for different sets of public institutions including the nested sets corresponding to central government general government and the public sector and for any definition of government there are many measures of the debt and deficit including those generated by four kinds of accounts cash financial full accrual and comprehensive which can be derived from four nested sets of assets and liabilities each debt and deficit measure says something about public finances but none tells the whol e story each is also vulnerable to manipulation and is likely to be manipulated if it is subject to a binding fiscal rule or target narrow definitions of government encourage the shifting of spending to entities outside the defined perimeter of governme nt narrow definitions of debt and deficit encourage operations involving off balance sheets assets and liabilities while broad measures are susceptible to the mismeasurement of on balance sheet assets and liabilities reviewing the literature on these is sues the paper concludes that governments should publish several measures of the debt and deficit in a form that clearly reveals their interrelationships

economic determinants of workers retirement decisions the landscape for older workers has changed dramatically in recent decades governments have made cuts to public pension programs private pensions have shifted from defined benefit to defined contribution plans equity and housing markets have been unusually volatile and workers have experienced declining morbidity and mortality at the same time the labor force participation rate for older men and women has been rising over the past two decades implying later retirement are these phenomena related this paper reviews the large and growing body of literature exploring the economic determinants of workers retirement decisions including public and private pensions wealth and savings health and health insurance and labor demand

labour supply incentives and the taxation of family income taxing family income richard blundell and ian walker will lower marginal rates of income tax increase incentives to work the traditional theoretical argument ignores the fact that many individuals are members of households with more than one potential participant in paid employment the theory of optimal income tax is utilized to argue that the tax system should discriminate between individuals in the same household if their labour supply responses are different empirically the response of labour supply to changes in after tax wages is largest for secondary workers particularly married women hence the largest beneficial incentive effect is obtained if such individuals face lower tax rates since these individuals typically have below average pre tax earnings this suggests a simple way to implement our proposal establish a progressive income tax with individual earnings as the basis of assessment this might have additional advantages of fairness but its primary purpose would be to ensure that low earning but highly responsive individuals face low marginal tax rates while high earning but relatively unresponsive individuals face higher marginal tax rates contrary to popular wisdom a flat rate tax system would be less favourable for work incentives we illustrate this theoretical argument using an empirical model of labour supply embedded in a micro computer programme capable of simulating alternative tax systems

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

why do disability benefit rolls vary between regions a review of the evidence from the usa and the uk mcvicar d 2006 why do disability benefit rolls vary between regions a review of the evidence from the usa and the uk regional studies 40 519 533 over the last 30 years many organization for economic co operation and development oecd countries have seen a dramatic rise in the share of the working age population receiving earnings replacement sickness and disability benefits the reasons behind this growth particularly for the usa but also to a lesser extent elsewhere have been extensively researched in the economics literature what have been less well researched are the large spatial differences in the size of disability benefit rolls that have emerged in some countries over this period the uk displays a distinct regional pattern where working age men and women in the north are considerably more likely to be claiming disability benefits than those in the south the usa has its own version of the north south divide with many southern states displaying disproportionately large disabilit

off farm labour allocation decisions in small scale rural households in zimbabwe the double hurdle model is used to analyse the off farm labour decisions of small scale agricultural household members in the shamva district of zimbabwe the approach permits the joint modelling of the decision to participate in the labour market and the decision regarding the amount of time allocated to work results indicate that a number of variables notably gender education and assets indeed have effects which are qualitatively and quantitatively different in terms of participation and hours worked overall the empirical analysis confirms the importance of individual characteristics such as gender and education and household farm characteristics e g land area accessible to the household productive assets remittances and the agricultural terms of trade in influencing the labour market decisions of rural household members

a model of female labour supply in which supply is dependent upon the chances of finding a job in this paper we extend a model of female labour supply by considering the impact of the local labour market thus in our model a woman supplies her labour if she has both made the decision to participate and found a job this extension is of particular importance in times of high unemployment when discouraged worker effects will be at their strongest we also consider the contribution of such a model to the debate concerning the labour supply of women married to men who are unemployed

going onto invalidity benefit a study for women 1977 78 1983 84 the main form of state insurance for long term sickness in britain is invalidity benefit there has been a dramatic growth in the stock of claimants on this benefit since its introduction in 1971 a logit model is fitted to explain at the individual level the probability of entering invalidity benefit among over 50 000 women in 1977 8 and over 65 000 in 1983 4 demographic characteristics played a powerful role in this model pay and benefit rates were also significant married women s entry probabilities were highly sensitive to local labour market conditions and much more so than other population groups

a regional analysis of labour force participation rates across the member states of the european union elhorst j p 1996 a regional analysis of labour force participation rates across the member states of the european union reg studies 30 455 465 this study investigates the causes of variation in labour force participation rates in a regional europe two participation rate equations are estimated one for men and one for women using annual data derived from eurostat 1983 1989 the explanatory variables are based on previous studies on the subject of the neoclassical formulation of the individual s labour supply function extended by the situation in which an individual who wishes to work cannot find a job and becomes involuntarily unemployed the consistency of the parameter estimates to different estimation models is investigated it turns out that heterogeneity between the member states of the eu is so important that it is almost impossible to find an overall regression equation for the whole eu elhorst j p 1996 une analyse regionale des taux d activite dans les pays membres de l union europ

testing intertemporal substitution implicit contracts and hours restriction models of the labor market using micro data we present new tests of three theories of the labor market intertemporal substitution hours restrictions and implicit contracts the intertemporal substitution test we implement is an exclusion test robust to many specification errors and we consistently reject this model we model hours restrictions as part of an endogenous switching model we compare the implicit probit equation to an unrestricted probit equation for unemployment and reject the hours restriction model for the implicit contracts model we estimate non separable within period labor supply and consumption equations we test a cross equation restriction of the model and cannot reject the implicit contracts model jel e30 j22 j60

disability benefits replacement ratios and the labour market a time series approach in this paper a study of factors affecting the number of disability beneficiaries in norway is presented equations determining entry rates into the disability benefit system are estimated using aggregated time series data grouped by sex and age unemployment is found to influence disability entry the results regarding effects of the replacement ratio are ambiguous a model determining the number of beneficiaries including the estimated entry equations is presented the model is used to simulate the effect of counterfactual changes in exogenous variables on the number of disability beneficiaries

economic determinants of workers retirement decisions economic determinants of workers retirement decisions the landscape for older workers has changed dramatically in recent decades governments have made cuts to public pension programs private pensions have shifted from defined benefit to defined contribution plans equity and housing markets have been unusually volatile and workers have experienced declining morbidity and mortality at the same time the labor force participation rate for older men and women has been rising over the past two decades implying later retirement are these phenomena related this paper reviews the large and growing body of literature exploring the economic determinants of workers retirement decisions including public and private pensions wealth and savings health and health insurance and labor demand

government finance in a common currency area abstract european integration in 1992 may require greater exchange rate coordination thatn currently exists the delors report goes as far as to recommend the eventual adoption of a single currency however the formation of a common currency area raises fears that independent fiscal policies may produce inferior outcomes this paper shows that lack of cooperation in fiscal policy leads to too little inflation too high taxes and too much government spending jel f33

selection criteria for a microeconometric model of labour supply the wide variety of observed behaviour that is displayed in survey data suggests that microeconometric models should allow a reasonable degree of flexibility in specification however since these models are generally used for policy analysis they are required to satisfy some degree of theoretical consistency this requirement has generally led to the adoption of rather simple inflexible models based on additive preferences or linear labour supply responses we estimate and test a sequence of models for the labour supply of married working women emphasizing the importance of testing both the thecretical and statistical assumptions underlying the models

statistical models for zero expenditures in household budgets household budget surveys are an important source of data on consumer s expenditure not just for individual consumers but also for estimating national aggregates however it is a widespread finding that for certain commodities most notably tobacco and alcohol the estimate from the household survey falls short of the known consumption total calculated with some confidence from data on production imports exports and excise duties for example in the british family expenditure survey with which we shall largely be concerned total tobacco expenditure was underestimated in 1976 by 21 percent see kemsley redpath and holmes 1980 p 51 much of this understatement together with that on alcohol is thought to occur because of the design of the survey which excludes many persons amongst whom consumption of such items is thought to be atypically high e g prisoners hoteliers and their residents merchant seamen even so the possibility remains that some of the understatement is due to various types of misreporting by households included in the survey in this paper we consider a model in which the standard tobit specification tobin 1958 is supplemented by the operation of a simple binary censor the tobit model is essentially a linear regression model in which non positive observations of the dependent variable are replaced by zero we take this specification as our starting point but add a second censoring process that randomly replaces a fraction of the observations generated by the tobit model bv zeroes the combined model can serve as a representation of several types of

savings and wealth accumulation measurement influences and institutions savings and wealth accumulation type main savings and wealth accumulation are important dimensions of policy and research debates this special issue comprises a collection of survey articles on topical issues ranging from the effects of access to credit the rise of islamic finance and sovereign wealth funds the measurement of wealth inequality and genuine savings the distribution of wealth across generations and retirement savings

the duration of invalidity benefit claims a proportional hazard model this paper analyses the duration of invalidity benefit claims in great britain among men and women the cox proportional hazard model is used to estimate the effect of personal characteristics and economic factors on the claimants probability of leaving the benefit on the whole similar results were obtained for the male and female models although labour market related factors appear to have a stronger effect on the length of male claims women are also likely to have shorter claims than men age and benefit level in particular emerged as having a significant effect on the duration of claims by both groups with higher values for these variables being associated with longer claims

rural electrification and household labor supply evidence from nigeria in nigeria the most populated african country rural electrification is a critical issue because of the low household electrification rate and the poor quality of the grid this energy poverty has harmful economic and social consequences in rural areas such as low productivity lack of income generating opportunities and poor housing conditions in this paper we consider electrification as a technical shock that may affect household time allocation using the 2010 2011 general household survey we investigate how electrification affects female and male labor supply decisions within rural households in nigeria focusing on husband wife data we consider potential dependence in spouses labor supply decisions and address the challenge of zero hours of work using a recent copula based bivariate hurdle model deb et al 2013 in addition an instrumental variable strategy helps identify the causal effect of elec trification our results underline that this dependence in spouses labor supply decisions is critical to consider when assessing the impact of electrification on these outcomes electrifi cation increases the working time of both spouses in the separate assessments but the joint analysis emphasizes only a positive effect of electrification on husbands working time in line with the household labor supply approach our findings highlight that within the household the labor supply decisions of one spouse significantly affect those of the other spouse thus if we neglect the effect of electrification on the spouse of the individual examined we may fail to assess how this individual has been actually affected by this common shock on both spouses our results suggest that these within household relationships promote husbands working time at the expense of wives working time

social interactions and habit formation in a model of female labour supply this paper investigates the influence of habit formation and preference interdependence on labour supply behaviour of married females a novelty of the paper is that we incorporate direct survey information on reference groups of individuals in a neoclassical labour supply model for that purpose we first estimate a latent variables model relating the direct information to the true but unobserved reference groups one of the most interesting features of the model is that the presence of young children becomes an insignificant factor in the hours equation while it remains a significant factor in the participation decision in addition the labour supply curve is much flatter in a model with habit formation and preference interdependence than in a model without it both habit formation and preference interdependence contribute significantly to the explanation of female labour supply 1998 elsevier science s a all rights reserved

discrimination under imperfect competition a way of earning or wasting money abstract how would firms allocate their employees between two differently paid jobs suppose that a number of equally skilled workers belonging to two distinguishable groups are competent enough for both positions it is then profitable to employ the group with the higher labour supply elasticity in the high wage occupation this explains why less wealthy groups are discriminated against but it suggests that discrimination of women may be a waste from the standpoint of the employer in an important category of cases

a double hurdle model of cigarette consumption this paper shows the importance of the double hurdle approach for modelling individuals cigarette consumption using data from the uk general household survey and argues that participation and consumption should be treated as separate individual choices the likelihood function for the full double hurdle is derived and it is shown how restrictions on the stochastic specification of the model and auxillary information which identifies ex smokers allow it to be decomposed the empirical results highlight the value of the sample separation information and the need to model starting and quitting as separate decisions

how well are women doing female non employment across uk regions discussions of the uk s recent labour market performance commonly mention the contrasting trends in the unemployment rate down the employment rate up and the inactivity rate flat these same commentaries also notice that the flatness of the overall inactivity rate masks contrasting trends by sex with male rates slowly rising and female rates slowly falling and then proceed to discuss male inactivity in some detail before concluding bypassing the composition of female inactivity these commentaries fail to notice that the male and the female proportions of the population not working by reason of sickness or disability are quite similar equally they have rarely noticed that male and female non employment rates display a very similar regional hierarchy with female rates in the north as much as 50 higher than those in the south and that there is an even steeper north south gradient in some of the components of non employment for example sickness and disability rates for females in the

female participation and male unemployment duration in greece evidence from the labour force survey the work reported in this paper is part of a project financed by the centre for planning and economic research kepe athens we should like to thank kepe s scientific director louka katseli for her help and encouragement and the staff of kepe for their help with the data we should like to thank d karantinos for the insights he provided on the greek labour market finally we should like to thank neils westergaard nielsen for his comments all errors and shortcomings remain our responsibility

work incentives and in work benefit reforms a review in work benefit reforms seek to reduce poverty and promote employment among low income families using evidence from similar policies in the usa and canada this paper reviews the likely impact of recent uk reforms the focus is on employment and hours in particular the paper examines the effectiveness of the new working families tax credit in the uk in increasing employment among low income families it presents evidence suggesting modest increases in employment for single parents and workerless married couples with children but with some offsetting reductions in employment in two earner couples with young children

a model of female labour supply in the presence of hours restrictions abstract we develop a discrete choice model of female labour supply in finland using a data set constructed by merging the 1980 labour force survey and housing and population census this contains observations on the perceived incidence of constraints in the labour market and allows us to identify the effects of such constraints on observed labour supply approximately one in five women appears to be seriously constrained in her choice of hours of work our estimated model implies that the response of labour supply to variation in tax and wage rates is rather small

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

endogeneity and sample selection in a model for remittances abstract we estimate a remittance model in which we address endogeneity and reverse causality relationships between immigrants remittances pre transfer income and consumption in order to take into account the fact that a large share of individuals do not remit instrumental variable variants of the double hurdle and heckit selection models are proposed and estimated by limited information ml semiparametric extensions are considered as robustness checks our results for a sample of recent immigrants to australia show that endogeneity is substantial and that estimates obtained by the methods previously employed in the literature may be misleading if given a behavioral interpretation

rise of the fiduciary state a survey of sovereign wealth fund research we survey the literature documenting the rise of sovereign wealth funds swfs which with assets under management of over 5 4 trillion at year end 2014 are a major force in global finance research papers have analyzed the evolution of swfs from stabilization funds to stand alone wealth management funds we both survey this research and show that more than 25 countries have launched or proposed new swfs since january 2008 the most salient and controversial feature of swfs is that they are state owned we survey the existing literature on state ownership and discuss what this predicts about the efficiency and beneficence of government control of swf assets we discuss the documented importance of swf funding sources oil sales revenues versus excess reserves from export earnings and survey the normative literature describing how swfs should allocate funds we then summarize the empirical literature studying how swfs actually do allocate funds across asset classes geographically and across industries we document that most swf equity investments in publicly traded firms involve cross border purchases of sizeable minority stakes median around 20 in target firms with a strong preference for investments in the financial sector next we assess empirical studies examining the impact of swf stock investments on target firm financial and operating performance and find universal support for a positive announcement period stock price increase of 1 3 this however is significantly lower than the 5 abnormal return documented for stock purchases by comparable privately owned financial investors in recent studies indicating a sovereign wealth fund discount we conclude by summarizing the lessons of swf research and pointing out unresolved issues

testing whether unemployment represents intertemporal labour supply behaviour in the lucas rapping 1969 model of the labour market fluctuations in unemployment represent individuals optimally adjusting their labour supply behaviour in response to fluctuations in wage rates over the business cycle in this paper i propose and implement a misspecification test of the lucas rapping treatment of unemployment as labour supply behaviour using panel data this test extends previous such work with micro data by simultaneously allowing for intertemporal substitution uncertainty and endogenous unemployment using the standard specification of intertemporal labour supply behaviour i find strong evidence against this interpretation of unemployment there are two possible interpretations of the test results the first is that it is necessary to turn to alternative models of the labour market in which unemployed workers are off a supply function the second is that the test results indicate the necessity of moving to more complex models of intertemporal substitution however given current econometric techniques and data sets these alternative models of intertemporal substitution will be extremely difficult to test

testing the predictive value of subjective labour supply data empirical implementation of labour supply theories is usually based on realized labour market behaviour this requires strong assumptions about the impact of labour demand a possibility to avoid these assumptions is to make use of subjective data on desired labour supply in this paper we investigate whether respondents answers to survey questions on the desired number of working hours contain additional information on the preferences of the individuals using panel data for the netherlands we analyze whether deviations between desired hours and actual hours of work help to predict future job changes or changes in hours worked we use parametric and recently developed nonparametric tests the results suggest that subjective information on desired working hours are helpful in explaining female labour supply for males the evidence is mixed

imperfect tagging in social insurance programs abstract this paper derives the optimal benefit structure of an earnings insurance program when a characteristic or tag imperfectly identifies those unable to work with a two sided classification error the optimal program is a dual work incentive system with a work non work consumption differential maintained for the tagged and untagged just sufficient to induce the able in each group to work and with more generous payments to tagged than to untagged individuals of the same work status it includes premiums to program eligible individuals who work a price missing in the u s social security disability system and in earlier attempts to characterize the optimal disability program

household unemployment and the labour supply of married women a recent reform to the uk unemployment insurance ui system has reduced the duration of entitlement from 12 to six months the ui and welfare systems interact in the uk in such a way that exhaustion of ut for married individuals has potentially large disincentive effects on the labour supply of spouses a model of labour supply is estimated for married women allowing for endogenous unemployment durations of husbands and wives we distinguish between transfer programme induced incentive effects correlation between labour supply and wages within couples complementarity between the leisure times of spouses and a discouraged worker effect

sick pay insurance and sickness absence some european cross country observations and a review of previous research all european countries have some form of compulsory insurance against the loss of income due to temporary disability the insurance schemes vary widely between countries both in terms of measurable

estimation of a labour supply model with censoring due to unemployment and underemployment this study proposes and implements a method of labour supply estimation which is appropriate when the sample contains unemployed and underemployed workers the estimation method consists of excluding unemployed and underemployed workers from the sample and then using to avoid selection bias an extension of heckman s approach to the case where two correlated selection rules generate the sample hausman s specification test is then used to determine whether ignoring constrained workers has led to biases in traditional labour supply estimates and the empirical results suggest that previous estimates of several important parameters are biased since the biases go in the direction that would be predicted by the hypothesis that the unemployed and underemployed are constrained the results support this hypothesis

the effects of worker heterogeneity on duration dependence low back claims in workers compensation we estimate models of workers compensation claim duration for a sample of canadian workers with serious low back injuries the models extend recent duration research by allowing worker characteristics to affect duration dependence through the nonlocation parameters of the duration distribution we compare results for modified weibull models and piecewise constant hazard rate models of duration dependence the results show that workers responses to elapsed claim duration vary significantly with their characteristics and with economic incentives to return to work further allowing for heterogeneity in duration dependence effects can dramatically change the coefficient estimates of the variables that determine the location parameter of the duration distribution