parental human capital investment and old age transfers from children is it a loan contract or reciprocity for indonesian families abstract this paper proposes two alternative models of intergenerational transfers linking parental investment in human capital of children to old age support the first model formulates these transfers as a pure loan contract and the second model as self enforcing reciprocity both models predict neutrality of intergenerational redistribution of resources within the family also known as the difference in income transfer derivatives property two models however provide different reasons for the failure of this property and yield different policy implications for parental human capital investment and provision of old age support specification tests on the indonesian family life survey data reject the pure loan model in favor of the reciprocity model the estimated difference in income transfer derivatives for this data is found to be significantly higher than the difference estimated by altonji hayashi and kotlikoff altonji et al 1992 altonji j g hayashi f and kotlikoff l j 1992 is the extended family altruistically linked direct tests using micro data the american economic review vol 82 5 1177 98 for the u s psid data

how well do children insure parents against low retirement income an analysis using survey data from urban china abstract as population aging becomes more pronounced in the developing world the uneven implementation of social safety nets raises important questions as to how well traditional family based mechanisms insure elderly incomes when pension systems fail using a unique dataset from a recent household survey conducted in urban china we find evidence that private transfers respond to low household income of retired workers when income falls below the poverty line this finding is consistent with an altruistic motive for transfers at low levels of household income at the same time however the transfer response to elderly pre transfer income is not sufficient to fully cover shortfalls that arise with severe pension arrears and low retirement income

an alternative model of pro cyclical absenteeism abstract current economic models of absenteeism derive pro cyclical properties from cyclical variations in the costs and consequences of absence through an extension of the household production model this paper proposes a complementary approach based on variations in forgone earnings associated with work commodity itself

crowding out of private support to the elderly evidence from a demogrant in mexico abstract to examine whether private support dampens or reinforces the impact of redistributive policies this paper estimates the effect of an exogenous increase in the income of the elderly caused by a recent demogrant in mexico on the amount of private transfers they receive my instrumental variables strategy overcomes the endogeneity of income that typically contaminates estimates and unlike related studies that use natural or policy experiments in reduced form estimations it yields evidence of a positive bias this suggests that an unobservable characteristic is positively correlated both with income and private transfer receipt and that treating income as exogenous could lead to an underestimation of the crowding out effect in contrast my preferred estimates are negative significant and not far from minus one implying an almost complete crowding out my findings suggest that private transfers could neutralize the changes in the public transfers for the elderly

tax base erosion in developing countries it is widely believed that the tax base in most developing countries has been severely eroded by legal tax avoidance and illegal tax evasion brought about largely by poor tax administration 1 this erosion it is thought has had a variety of fiscal effects tax revenues are lost and the growth of the tax base is dampened the progressivity implied by the statutory rate structure is not achieved the costs of tax administration are increased and horizontal and vertical equity suffer because the effective tax rates faced by individuals depend largely upon their success in playing the tax compliance game it is not surprising therefore that virtually all fiscal reform programs in developing countries start with the promise to improve administration better administration is a discretionary government action that at once can lower the tax rate increase revenues slow capital flight and improve the fairness of the system yet tax base erosion in developing countries is something about which precious little is known and in particular the empirical evidence about the severity and the nature of the problem is all but nonexistent 2 why do we know so little about the dimensions of the evasionavoidance problem one reason is conceptual problems in measuring erosion of the tax base for example how does one estimate the substitution of nontaxable for taxable compensation in response to the tax structure or the extent to which a higher marginal tax rate has induced individuals to report less of their taxable income another reason is the problem of comparability across countries the many legal and

does the government crowd out private donations new evidence from a sample of non profit firms abstract during the 1980s government grants to non profit organizations declined dramatically and the price of private donations increased given there are different costs associated with government grants and private donations to non profits it is important to study the relationship between these two sources and determine whether government grants crowd out private donations i take a fresh look at the issue of crowd out and improve upon the literature by exploiting a panel data set that links private donations to non profit firms with the government grants they received i study 430 non profit shelter human services and other similar types of organizations that were in operation between 1982 and 1992 i find private donations to these non profits effectively do not change with changes in government grants after controlling for firm heterogeneity and political and economic factors under an ols specification in a 2sls specification after controlling for possible endogeneity of the government grants the estimated crowd out is significantly different from zero and one dollar on average the estimated crowd out is 50 cents

crowd out and diversity abstract research has shown that altruism is lower in diverse communities can this phenomenon be counteracted by government intervention to answer this question this paper introduces diversity to the canonical model of warm glow giving diversity may have two effects on incentives it may attenuate individuals altruistic preferences for public goods and it may cool off the warm glow that individuals get from voluntarism either of these effects leads to diverse communities having lower levels of public goods consistent with prior research however these effects have opposite implications for the efficacy of government intervention i then empirically investigate whether government intervention is more effective in diverse communities for identification i exploit the supreme court mandated 1991 expansion of the ssi program using a new dataset of united methodist churches from 1984 to 2000 the results show that the expansion of ssi crowded out charitable spending by churches the crowd out estimate for the average church is reasonably large but this masks significant differences in crowd out between communities crowd out occurred almost entirely in relatively homogeneous communities there is only modest evidence of crowd out in racially diverse communities thus diverse communities while having the lowest levels of altruism are in this instance the most amenable to government intervention

does africa need a rotten kin theorem experimental evidence from village economies this paper measures the economic impact of social pressure to share income with kin and neighbors in rural kenyan villages the authors conduct a lab experiment in which they randomly vary the observability of investment returns the goal is to test whether subjects reduce their income in order to keep it hidden the analysis finds that women adopt an investment strategy that conceals the size of their initial endowment in the experiment although that strategy reduces their expected earnings this effect is largest among women with relatives attending the experiment parameter estimates suggest that women behave as though they expect to be pressured to share four percent of their observable income with others and substantially more when close kin can observe income directly although this paper provides experimental evidence from a single african country observational studies suggest that similar pressure from kin may be prevalent in many rural areas throughout sub saharan africa

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

an investigation of the relationship between unemployment and absenteeism a multi level approach the article discusses research pertaining to the relationship between unemployment and absenteeism at the national level the regional level and or the organizational level data on monthly absent

motives for household private transfers in burkina faso abstract resource transfers among households have received considerable interest among economists in recent years two of the main reasons for the surge of interest in household transfers are the information on human nature conveyed by transfer behavior and the implication on income redistribution policy that private transfer might have empirical studies however provide mixed results on transfer behavior this is because previous inquiries were confronted with several estimation issues and have focused on data from developed countries where private transfers are already small this paper contributes to the literature on transfer behavior by using a multifaceted econometric approach to examine the motives of household transfers in burkina a low income country with a well documented tradition of gift exchanges the findings suggest that risk sharing is not central to transfers altruistic transfers are apparent for the middle income class but not at low income level the evidence implies that crowding out may be minimal at low income level suggesting that public transfers targeting poor households may be effective

do private transfers displace the benefits of public transfers evidence from south africa abstract this paper investigates whether government transfer programs displace or crowd out private support focusing on a large increase in state old age pensions in south africa using data spanning the period of the expansion we find that each rand of public pension income to the elderly leads to a 0 25 0 30 rand reduction in private transfers from children living away from home however despite the large increase in income there were no significant changes in migration labor supply or household composition we also show that evaluations of the distributional effects of the pension are overstated when crowding out is ignored

do financial bonuses reduce employee absenteeism evidence from a lottery this paper investigates the effectiveness of a lottery based bonus reward system in reducing employee absenteeism starting in june 2002 a dutch manufacturing firm held a monthly lottery for workers who had taken no sick leave in the previous three months and had not previously won the lottery in a given lottery each of seven contestants whose names were randomly drawn received 75 euros the authors find statistically significant differences in absence patterns across groups of workers with different eligibility statuses depending on their attendance records and whether they had previously won one finding is that absenteeism rose among workers who having won already were ineligible for further participation nevertheless and although the reduction in firm wide absence associated with the lottery drifted from 2 4 percentage points to 1 1 percentage points after seven months the authors conclude that the lot tery was of net benefit to the firm a perennial question is how firms can most effectively use financial incentives to motivate workers and thereby boost pro ductivity in this paper we investigate this issue with respect to workplace absenteeism which is a measure of lost productivity 1 we

social security and private transfers in developing countries the case of peru do social security systems crowd out private transfers from younger to older generations this question has generated much theoretical discussion but little empirical work exists to confirm or refute this crowding out hypothesis we investigate the connection between social security and private transfers in peru using the peruvian living standards survey and find that private transfers from young to old would have been nearly 20 percent higher without social security benefits this indicates that the peruvian social security system is less effective at delivering benefits to the elderly than a simple assignment of government expenditures would suggest social security s displacement of private transfers while significant is less than that predicted by models with widespread altruistic transfers

tax evasion and capital gains taxation this paper uses time series data to investigate how changes in capital gains tax rates affect taxpayer compliance it finds that a one percent increase in the marginal tax rate reduces voluntary compliance by between one half and one percent these results confirm the findings of previous studies based on individual household data they also suggest that at least one quarter of the observed capital gain realization response to changes in marginal tax rates is due to changes in reporting behavior rather than portfolio behavior this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

an accurate measurement of the crowd out effect income effect and price effect for charitable contributions in the past empirical research on charitable contributions has focused on two issues estimating the income and price elasticities of contributions and estimating the extent to which government funding crowded out private contributions the two fundamental problems in all these studies are the differences in the underlying conceptual models and the use of imperfect data for empirical analysis this paper addresses both of these problems

communication and inventory as substitutes in organizing production a major organizational design decision for manufacturing firms is the extent to which production should be to stock versus to order inventories and communication with customers are substitutes we show that profits are convex in the share of the market supplied from inventory thus firms will tend to specialize in one mode of organization we examine how this choice depends on market size the level and variability of demand the costs of communication price levels production costs and the costs of expanding product lines the results are consistent with observed patterns in several industries

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

private monetary transfers in rural china are families altruistic monetary transfers between relatives may be motivated by altruism or they may represent payments for services rendered data from a large 1988 household survey are used to test these hypotheses and to study the size and direction of transfers in rural china the analysis suggests that altruism alone cannot explain the observed transfers and that exchange may be involved most of the money flows appear to be transfers from adult children to elderly parents and remittances from migrants child care is likely to be one of the main services that parents render to adult children in exchange for money

the robustness of kingma s crowd out estimate evidence from new data on contributions to public radio we revisit kingma s kingma 1989 journal of political economy 97 1197 1207 widely cited study of charitable contributions to public radio kingma s estimate of partial but statistically significant crowd out remains a benchmark in the literature because he was able to match household level contributions data with station level data on revenue including revenue from government grants to the best of our knowledge no comparable data have become available until now we replicate kingma s estimates with the original data and then apply the same methodology to very similar data from 1996 kingma s estimates are not robust to the use of the newer data

the effect of transfers on household expenditure patterns and poverty in south africa abstract this paper uses household level unit record data from south africa to examine the behavioural and welfare impacts of private and public transfers we allow for joint endogeneity of resource variables and the expenditure shares our results show that crowding out of private transfers as a result of the introduction of public pensions holds only for poor households and not for the non poor both private transfers and public pensions significantly reduce poverty but private transfers have a larger impact on expenditure patterns the results also reject the hypothesis of income pooling underlying the conventional unitary model by finding that the marginal impact on expenditures are different for public pension received private transfer received and other resources flowing into the household the principal conclusions are robust to changes in specification

social spending and automatic stabilizers in the oecd the macroeconomic literature on automatic stabilization tends to focus on taxes and dismiss the relevance of government expenditure except for unemployment compensation our results go sharply contrary to this view we engage in an empirical analysis of 21 oecd countries from 1982 to 2003 and find that age and health related social expenditure as well as incapacity and sick benefits all react to the cycle in a stabilizing manner while possibly new in the macro literature this conforms to many results in studies in labour economics the policy implications are broad since much previous analysis of discretionary fiscal policy rests on official figures for automatic stabilization there are also major implications for efforts to incorporate automatic fiscal policy in simulation models julia darby and jacques melitz

cheating ourselves the economics of tax evasion no government can announce a tax system and then rely on taxpayers sense of duty to remit what is owed some dutiful people will undoubtedly pay what they owe but many others will not over time the ranks of the dutiful will shrink as they see how they are being taken advantage of by the others thus paying taxes must be made a legal responsibility of citizens with penalties attendant on noncompliance but even in the face of those penalties substantial tax evasion exists and always has the history of taxation is replete with episodes of evasion often notable for their inventiveness during the third century many wealthy romans buried their jewelry or stocks of gold coin to evade the luxury tax and homeowners in eighteenth century england temporarily bricked up their fireplaces to escape notice of the hearth tax collector webber and wildavsky 1986 p 141 this essay reviews what is known about the magnitude nature and determinants of tax evasion with an emphasis on the u s income tax alm 1999 andreoni erard and feinstein 1998 and slemrod and yitzhaki 2002 offer more comprehensive recent reviews of the literature it then places this information into a conceptual and policy context

partners in giving the crowding in effects of uk government grants abstract this study examines the determinants of voluntary donations to uk charities using empirical specifications that combine error component and simultaneous equations methods in a series of tests we identify the one way fixed effects endogenous representation for government grants as the best empirical model when this endogeneity is taken into account government grants cause significant crowding in for the full sample and the two largest cohorts price coefficients are negative and fund raising coefficients are positive religion charities are net revenue maximizers whereas other charity cohorts fund raise short of net revenue maximization

how responsive are private transfers to income evidence from a laissez faire economy abstract in recent years there has been burgeoning interest in how private transfers respond to household income or transfer derivatives much of it is fueled by the specter of crowding out the more responsive are private transfers the more likely they could be supplanted by expansions in public transfers weakening or destroying the latter s distributive impact yet there is also an emerging consensus that actual transfer derivatives are trivial at least for the united states suggesting that crowding out might loom larger in the minds of some economists than in the data but perhaps crowding out is a fait accompli in the united states accordingly we focus on the philippines which has a much smaller public sector we also pursue a novel theoretical angle which generates a sharp non linear relationship between private transfer receipts and income in the form of a spline our empirical work applies recently developed estimation techniques that treat the spline s threshold as an unknown parameter and they uncover transfer derivatives much larger than conventional methods reveal notably private transfers patterns are consistent with altruistic preferences effective risk sharing or both in accord with theoretical predictions however strong transfer derivatives prevail only among low income households our findings suggest that attempts to aid the poor could be thwarted by private responses which leak benefits to richer households in the form of lighter burdens of support for less fortunate kin so the problems that operative private transfers create for public redistribution policy first pointed out by becker and barro over 25 years ago do indeed matter empirically

endogenous information acquisition in supply chain management in this paper we analyze an endogenous determination of efforts put into information acquisition and its impact on supply chain management more specifically we consider a supplier who sells a product to a buyer during a single selling season prior to placing an order with the supplier the buyer has an option to acquire additional information about the demand by hiring experts who are capable of providing forecasts because a commission fee must be paid to each hired expert there exists a tradeoff between the cost and the value of the information and the buyer needs to determine how much information to acquire we derive the optimal information acquisition level in an integrated setting and compare it with that determined in a decentralized setting we also analyze several types of supply contracts to examine if they can coordinate the supply chain and allow an arbitrary division of system profit between the supplier and the buyer

how widespread are nonlinear crowding out effects the response of private transfers to income in four developing countries this article investigates the relationship between household income and private transfers received in developing countries if private transfers are unresponsive to household income there is less likelihood of expansions in public social security crowding out private transfers most literature finds that private transfers are unresponsive but this may be because responses have been obscured by the methods that ignore nonlinearities threshold regression techniques find such nonlinearity in the philippines and scope for serious crowding out with 30 80 of private transfers potentially displaced for low income households cox et al 2004 to see if these nonlinear effects occur more widely semiparametric and threshold regression methods are used to model private transfers in four developing countries china indonesia papua new guinea and vietnam the results reported in this article suggest that nonlinear crowding out effects are not important features of transfer behaviour in these countries the

examining the impact of taiwan s cash allowance program on private households summary to fill the gap of crowding out literature in asia this study analyzes the crowding out impact of taiwan s public old age allowances on familial transfers to poor parents using government data during 1990 2003 we estimate that 1 of public transfers displaces 30 50 cents of inter household transfers one explanation is that the old parents in this analysis were from poor families and they reacted strongly to allowances however the overall consumption especially in luxury goods of the poor individuals has substantially increased this finding indicates that taiwan s old age allowance program does improve the welfare of older individuals

public goods hidden income and tax evasion some nonstandard results from the warm glow model abstract a large literature explores crowd out in situations where public goods are jointly provided work in this area typically depicts a tax system where individuals take taxes as given but in some settings such as those in developing economies efforts to evade or avoid taxes may be widespread using the canonical warm glow model this paper considers joint public good provision in a setting where individuals can evade taxes by hiding their income the model s implications change significantly in this setting with hidden income stronger warm glow will lead to greater crowd out not less using research on crowd out and inter family transfers i present suggestive evidence that the model s results may help to reconcile divergent estimates of crowd out in the literature

who benefits from public old age pensions evidence from a targeted program abstract given the aging of the population policies relating to the design and reform of public pension programs are prominent in policy debates for many developing countries a major concern centers around the possible displacement of traditional family based support by public programs one challenge in estimating this displacement or crowding out is the endogeneity of social security benefits the incidence and size of benefits may be correlated with unobserved determinants of private transfers especially if benefits are means tested using two rich data sets this article explores the impact of the taiwanese farmers pension program fpp on recipients and their noncohabiting adult children the fpp is targeted at elderly farmers and has relatively clean exogenous rules for eligibility that allow the endogeneity problem to be addressed estimates from multiple identification strategies consistently imply that 1 dollar of pension crowds out 30 39 cents of private transfers received by the elderly

tax structure and tax compliance a model of individual tax compliance behavior including evasion and avoidance is developed and estimated the model recognizes the importance of marginal income tax rates payroll tax contributions and benefits and the probabil ity of detection and the penalty on unpaid taxes share equations for avoidance evasion and reported income are estimated using individual level data the estimation results indicate that the tax base rises with higher benefits for payroll tax contributions and falls with higher marginal tax rates the base also falls with more severe penalties and more certain detection of evasion as individuals substitute towards avoid ance income t he methods by which individuals reduce their tax liabilities take a variety of legal and illegal forms all of which are influenced at least in part by incentives created by the tax structure these methods can be broadly classified as avoid ance and evasion tax avoidance is any legal activity that lowers taxes such as worker substitu tion between wage and nonwage compensation tax evasion is the reduction in tax liabilities by illegal means such as underreporting income on tax returns despite extensive but separate literatures on avoidance and evasion we know very little about the tax base response to changes in tax structure it is the purpose of this paper to examine the role that the tax structure plays in compliance there are several reasons for the persistence of the compliance puzzle most prominent is the absence of detailed individual data that would allow a full empirical specification of all factors affecting compliance this difficulty is most evi dent when searching for individual data on the evasion compliance decision even when avail able data have never allowed in the same work the construction of both tax and audit variables 1 clearly data availability is even more problem atic when looking at the choice among evasion avoidance and reported income in addition pre vious work has not looked at the avoidance evasion compliance decision as a joint process even though these decisions are made simultane ously 2 further both strands of the literature have ignored another factor that may affect the compliance decision the benefits that accrue from participation in payroll programs if benefits are tied only to taxable income then their presence gives individuals an incentive to pay taxes in short there has been no empirical work that analyzes the effects of tax rates probabilities penalties and payroll benefits on avoidance and evasion choices of individuals in this paper we provide such an analysis we first develop a theory of individual choice among the three types of compensation we then esti mate the resulting share demand equations using a unique data set which has detailed information on the compensation paid to roughly one quarter of the labor force in jamaica in 1983 from these data we are able to derive measures of reported taxable income evasion income and avoidance income for individual workers in the formal sec tor we are also able to construct measures of the marginal income tax rate marginal payroll taxes and benefits the probability of detection and the penalty on evasion for individual workers we are therefore able to estimate for the first time the responses of workers to the full range of tax structure parameters section i presents the theoretical model of worker compensation choice and the empirical specification of the model section ii discusses the jamaican tax system data and variable con struction are discussed in section iii estimation results are presented in section iv the final section summarizes the main results

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate