the rotten kid theorem meets the samaritan s dilemma a familiar result in the economic theory of the family is becker s rotten kid theorem this theorem states that altruism by a family member will lead other selfish members to act efficiently from the family viewpoint we extend becker s one period model to two periods and show that parental altruism can result in an inefficiency known in other contexts as the samaritan s dilemma implications of this for transfer arrangements within the family and for the ricardian equivalence theorem are drawn

fiscal structures and economic growth international evidence i introduction a large and growing body of literature searches for the determinants of economic growth employing cross country regression analysis e g kormendi and meguire 1985 grier and tullock 1989 barro 1990 1991 1992 romer 1989 1990 levine 1991 and levine and renelt 1992 1 the cross country regression approach implicitly assumes that the growth process possesses similar structural properties across the countries in the sample structural differences be they political economic social or other between countries therefore do not condition the growth process or if they do then the effects are randomly distributed with zero mean if structural differences between countries do matter significantly and non randomly in the growth process then the existing cross country research is potentially flawed attempts are sometimes made to control for such differences by including dummy variables for different regions of the world e g dummy variables for african latin american and other groups of countries within the literature on the determinants of economic growth some papers e g landau 1983 1985 1986 kormendi and meguire 1985 ram 1986 koester and kormendi 1989 barth keleher and russek 1990 easterly and rebelo 1993 and fischer 1993 consider the effects if any of government expenditure and revenue on economic growth overall the findings of these studies paint a mixed picture the relationship between growth and government is sometimes significant and positive sometimes significant and negative and sometimes not significant although these studies consider many different fiscal variables they do not as a rule examine the effects of these fiscal variables in a systematic way that controls for the mode of financing they generally overlook for example how an increase in government consumption expenditure is financed is it with higher taxes and which taxes or is it with lower spending and which spending finally is it with a larger deficit controlling for these factors may lead to different findings about the effect of an increase in government consumption expenditure on economic growth borrowing from some work on the effect of fiscal structure on national economic growth within the united states in helms 1985 mofidi and stone 1990 and miller and russek 1993 we introduce the government budget constraint into the regression equations that examine the determinants of economic growth as a result we directly address the three financing questions raised in the previous paragraph in this framework we consider the growth process using pooled times series cross section data and comparing the results from fixed and random effects econometric techniques 2 these techniques attempt to accommodate structural differences between countries and across time we also compare the performance of the more standard ordinary least squares regression approach with that of the fixed and random effect models ii an overview of international fiscal structures before presenting our model and statistical findings a brief overview of the growth and fiscal characteristics of the countries in our sample provides some additional information for those not familiar with the data which otherwise would not be revealed by our analysis 3 this information can contribute in a limited way to the debate about the effects of government on economic growth although it is not a substitute for modeling the growth process for the sample as a whole the growth rate of real per capita gross domestic product gdp averaged 1 35 per year during 1975 to 1984 with a coefficient of variation of 3 52 by comparison the average growth rate in the united states was 1 45 the five fastest growth countries were botswana 6 72 indonesia 4 19 korea 6 32 sri lanka 3 20 and thailand 4 31 the five slowest growth countries were el salvador 1

market returns transfers and demand for schooling in malaysia 1976 89 if parents expect higher market returns to schooling or additional transfers from their children they invest more in their children s schooling results from models of schooling demand using data from the malaysian family life surveys of 1976 and 1989 suggest that market returns of mothers but not fathers positively affected schooling the propensity for parents to spend time with their parents had a small positive effect on education of daughters but other transfers had a weak negative effect the results suggest that if one generation perceives a low return to schooling then the next generation especially daughters pays the price of lower schooling

o brother where art thou the effects of having a sibling on geographic mobility and labour market outcomes in most industrialized countries more people than ever are having to cope with the burden of caring for elderly parents this paper formulates a model to explain how parental care responsibilities and family structure interact in affecting children s mobility characteristics a key insight we obtain is that the mobility of young adults crucially depends on the presence of a sibling our explanation is mainly but not exclusively based on a sibling power effect siblings compete in location and employment decisions so as to direct parental care decisions at later stages towards their preferred outcome only children are not exposed to this kind of competition this causes an equilibrium in which siblings not only exhibit higher mobility than only children but also have better labor market outcomes using data from the german socio economic panel study soep and from the american national survey of families and households nsfh we find strong evidence that confirms these patterns the implications of our results are then discussed in the context of current population trends in europe and the united states

bequests and informal long term care evidence from hrs exit interviews informal long term caregiving for frail elderly individuals by their children may induce parents to compensate their children for their help to test this hypothesis i use the exit interview from the health and retirement study hrs my results show that the decision to care for one s parents has a significant positive impact on the incidence and amount of bequests received in addition increasing the amount of care relative to one s siblings significantly increases the proportion of bequest within a family furthermore i find that the positive nexus of caregiving and bequest requires a written will as a contract between the parent and the helping child

the family and the state the immaturity of children sometimes precludes efficient arrangements between children and parents or others responsible for child care the difficulty in establishing efficient relations within families provides the point of departure for our interpretation of the heavy state involvement in the family the authors believe that a surprising number of state interventions mimic the agreements that would occur if children were capable of arranging for their care many regulations of the family improve the efficiency of family activities these interventions include subsidies to education and training social security and other old age support subsidies to births laws that limit access to divorce and the sale of children and laws that require parents permission for early marriage and other choices of children families that leave bequests can force children to repay parents for investments in human capital by reducing bequests therefore these families do not underinvest in childrens human capital by contrast families that do not leave bequests often poorer families do underinvest in children the state may subsidize schools and other training facilities to raise investments in children by poorer families to efficient levels authors modified

decentralized income redistribution reconsidered decentralized income redistribution reconsidered i introduction which is the appropriate level of government to undertake income redistribution this issue is receiving renewed attention from economists examining how migration and labor supply responses affect the costs of transfer payments at the state or federal level in a recent paper brown and oates 1987 use a formal public choice model to show that the possibility of migration of transfer recipients between states leads to suboptimal transfer levels even when taxpayers care only about transfer recipients within their own states with benefit spillovers across states their argument for federal responsibility for redistribution is presumably even stronger gramlich 1985 also argues that migration is large enough to lead to suboptimal levels of transfers at the state level because states with low benefit levels will be able to export their poor increasing the cost of redistribution to high benefit states gramlich s conclusion is based on the empirical work in gramlich and laren which finds that the migration effect is very strong though only in the very long run 1984 510 the implicit argument is that migration raises the cost of redistribution at the state level compared to the federal level 1 however neither brown and oates nor gramlich consider labor supply responses that is hours and participation in their analyses on the other hand several recent papers have attempted to estimate the cost of redistribution at the national level incorporating labor supply responses to taxes and transfers but not interjurisdictional migration 2 some empirical evidence is available which is consistent with either migration or labor supply effects for example helms 1985 uses time series cross section data on state expenditure and tax policies and finds that while spending on public services schools highways etc increases personal income increased state transfer payments financed by state taxes significantly reduce total state personal income this reduction could be caused by either migration or labor supply responses to taxes and transfers indeed helms s estimates indicate a very large response to transfer spending one more dollar of transfers reduces state personal income in the long run by 14 83 helms concludes states which seek to devote substantial tax revenues to transfer payments will experience significantly reduced growth prospects which limits the scope for redistribution at the state and local levels 1985 581 a concise summary of the standard argument concerning federalism and redistribution might be as follows 1 interstate migration of taxpayers and transfer recipients raises the taxpayer cost of income redistribution at the state level above the cost at the federal level 2 state wide redistribution confers spillover benefits to residents of other states 3 therefore as compared with a national system decentralized responsibility for income redistribution yields a less redistribution because its cost is higher and b less than the socially optimal amount of redistribution because of externalities my 1988 paper shows that step 1 of the above argument is not necessarily true because the migration effect which previous authors have stressed can be offset by a tax exporting effect by which residents of one state shift some of the fiscal cost of redistribution to residents of other states both the income effect and the substitution effect of increased redistribution will reduce the labor supply and hence earnings of transfer recipients the labor supply and earnings of taxpayers may also fall if substitution effects are strong enough the tax exporting effect arises if taxes and transfers on net reduce total earnings in a state since the state s federal tax obligations depend on its earnings

location determinants of food manufacturers in the united states 2000 2004 are nonmetropolitan counties competitive infrastructure agglomeration product and input markets fiscal attributes and labor markets of local communities influenced food manufacturing location decisions in the lower 48 united states 2000 2004 negative binomial regression and spatial clustering methods forecast food processor location patterns at the county level noncore counties are at a comparative disadvantage with respect to attracting most food processors but nonmetropolitan counties adjacent to urban areas may be attractive investment sites for footloose supply and demand oriented food manufacturers

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

inter vivos transfers and intergenerational exchange the surge of interest in intergenerational transfers in the past decade has sparked a debate over the motivation for them are transfers given out of altruism or part of an exchange while each motive is probably at work to some extent we know little about whether one motive predominates the question is relevant for issues concerning public income redistribution and inequality in the family but despite its importance empirical evidence about motives is scarce because of limited data we investigate a new data set the national survey of families and households which remedies many of the shortcomings of other data sets containing private transfer information we find that empirical patterns for inter vivos transfers i e transfers between living persons are more consistent with exchange than altruism

the determinants of u s state economic growth a less extreme bounds analysis this study investigates u s state economic growth from 1970 to 1999 i innovate on previous studies by developing a new approach for addressing model uncertainty issues associated with estimating growth equations my approach borrows from the extreme bounds analysis approach of leamer while also addressing concerns raised by granger and uhlig sala i martin and others that not all specifications are equally likely to be true i then apply this approach to identify robust determinants of state economic growth my analysis confirms the importance of productivity characteristics of the labor force and industrial composition of a state s economy i also find that policy variables such as 1 size and structure of government and 2 taxation are robust and economically important determinants of state economic growth jel 040 051 h10 h20 h30 h70 r11 r58 c51

do state and local taxes affect economic growth this paper tests if variations in the treatment of expenditures by state and local governments are an explanation for the inconsistent results of previous tax studies estimates for net investment and employment in manufacturing for 1962 82 support this conjecture indicating that state and local taxes have a negative effect when the revenues are devoted to transfer payment programs and that with taxes held constant increases in expenditures on health education consistent with the vicious circle phenomenon do not appear simply to reflect common cyclical movements and provide evidence of structural linkages implicit in previous results for growth in state personal income copyright 1990 by mit press

the family as an incomplete annuities market families can self insure against uncertain dates of death through implicit or explicit agreements with respect to consumption and interfamily transfers interfamily transfers need have nothing to do with altruistic feelings they may simply reflect risk sharing behavior of completely selfish family members although family annuity markets are incomplete even small families can substitute by more than 70 percent for perfect market annuities given adverse selection and transaction costs family risk pooling may be preferred to public market annuities in the absence of public annuities these risk sharing arrangements provide powerful incentives for marriage and family formation

altruism within the family reconsidered do nice guys finish last this paper criticizes the view that altruism either increases the benefits of group interactions or improves the allocation of resources within families the authors identify a variety of circumstances in which members of a group would prefer to interact with less altruistic individuals and in which the efficiency of resource allocation is inversely related to the prevailing degree of altruism reasons that altruism might be a counter productive social force include 1 it can alter the social utility possibility frontier in surprising and sometimes unfortunate ways 2 it can entail exploitability causing family members to behave in ways that leave all parties worse off 3 altruists may take inefficient actions to preempt exploitation and 4 family members may establish efficient resource allocation by punishing selfish behavior a rise in the level of altruism may lead to the exclusion of certain punishment strategies on the grounds of credibility 1 general positive result is that sufficiently high levels of altruism almost always lead to efficient resource allocation one should not necessarily expect to find strong altruistic linkages between spouses nor should altruism necessarily contributed to marital stability in addition to the connections between this work and the literature on family behavior this analysis has broader implications concerning the role of altruism in society and the evolution of social conscience

intergenerational household formation female labor supply and informal caregiving a bargaining approach children s provision of in kind services to their elderly parents informal caregiving represents an important form of economic transfers to the elderly in this paper we develop and estimate a joint model of informal caregiving and labor force participation decisions of adult daughters who have a frail elderly parent in a broader framework of intergenerational household formation parent and daughter agree to a nash bargaining rule as the solution to the household formation and intrahousehold decision making process however rather than severed relationships the threat point is given by a noncooperative equilibrium defined in terms of voluntary contributions toward a public good the parental well being maximum likelihood parameter estimates derived from the simultaneous multiequation endogenous switching model are generally consistent with expectations our results indicate that competing demands on daughters time reduce both coresidence and informal caregiving we also find that intergenerational coresidence is an important mode of assistance to elderly persons a simulation based on the estimated parameters suggests that public programs designed to meet the long term care needs of elderly persons by subsidizing formal home care services may have substantial effects on intergenerational living and care arrangement decisions

environmental protection and economic growth what do the residuals tell us conventional wisdom implies economic growth and environmental quality are incompatible policy objectives recent empirical evidence however suggests stringency of environmental regulations are only weakly or not at all associated with decreased manufacturing activity this paper uses more recent 1982 1994 state level panel data to test if environmental regulations affect manufacturing employment estimation results from our three stage sample selection panel data model suggest that state environmental regulations adversely affect job growth in three of the four industries analyzed

new hampshire s tax base limits an example of the leviathan model this study views the lack of an income tax on wages and salaries and a general sales tax in new hampshire as tax base limits i use the leviathan model to analyze the differences between the fiscal system in new hampshire and the fiscal systems in vermont maine and massachusetts vermont maine and massachusetts do not have the tax base limits that new hampshire has from 1957 to 1989 new hampshire had lower state and local government tax and expenditure levels than the other three states more rapid population growth lower welfare expenditures but comparable levels of expenditures for several of the major public services and a more competitive structure of state and local government

tied transfers and paternalistic preferences why do parents make inter vivos transfers to their children and leave them postmortem bequests 1 gary becker s notions of altruism 1981 ch 8 by which he means that children s utilities are arguments of their parents utility function provides one explanation denoting the children s utility functions by u ci where ci denotes consumption by child i the preferences of parents with two children can be represented by a utility function of the form w cp u1 c1 u2 c2 where cp is the parents own consumption 2 in the altruistic model parents sole motive for intergenerational transfers is to increase their children s utility in other models however parents may have nonaltruistic as well as altruistic motives for transferring resources to their children the literature on economic development emphasizes old age support as a motive for fertility and to a lesser degree as a motive for providing children with human capital as part of an explicit or implicit intergenerational contract when human capital formation is the primary focus of the analysis as in discussions of education and earnings it is useful to decompose inter vivos transfers into human capital formation and other inter vivos transfers such a decomposition can mislead in discussing intergenerational transfers however because it obscures the fact that the provision of human capital by parents constitutes an intergenerational transfer laurence kotlikoff and avia spivak 1981 analyze another old age support model one in which the family operates as an incomplete annuities market in their model children make regular transfers to their aging parents and the share that each child contributes to the parents determines his or her share of the parental estate although the prospect of old age support may be an important motive for downstream intergenerational transfers i e from parents to children in some societies in the united states today upstream transfers appear too small and too uncertain to make this motive credible to explain downstream transfers in the united states today economists have investigated other models in which parents have selfish as well as selfless motives for example b douglas bernheim andrei shleifer and lawrence summers propose a model in which parents use the prospect of bequests to exact services from their children we envision a testator who though altruistic is also affected by actions taken individually by a number of potential beneficiaries he may e g enjoy receiving attention from his children 1985 p 1046 bernheim et al assume that such actions increase parents utility and decrease children s utilities in their model the children s utility functions become u1 ai ci where ai denotes services the ith child provides the parents and the parents utility function becomes w cp al a2 ul al c1 u2 a2 ca to measure these services bernheim et al use frequency of contact i e visits plus telephone calls between parents and children this approach expands the concept of child services to include those provided by adult children who live outside the parents household in an attempt to explain bequests and inter vivos transfers child services originally appeared in discussions of fertility and the allocation of resources to young children living with their parents and thus tends to evoke the joys of young parenthood university of pennsylvania philadelphia pa 19104 and university of washington i am grateful to the national science foundation and the national institutes of health for financial support to gary becker samuel preston david stapleton and paul taubman for helpful comments and to judith farnbach for editonal assistance 1 even if bequests are unplanned as some versions of the life cycle savings model assume inter vivos transfers must be intentional 21 ignore the possible dependence of the children s utility on their own children s utility etc because it is not relevant to the issues discussed in this paper

does the local government structure affect population and income growth an empirical analysis of the 1952 municipal reform in sweden hanes n and wikstrom m does the local government structure affect population and income growth an empirical analysis of the 1952 municipal reform in sweden regional studies the main purpose of the paper is to analyse if the swedish municipal reform in 1952 affected subsequent income growth and population movements the empirical analysis is conducted using data for the period 1953 to 1959 the main result is that the municipal amalgamations had no effect on the municipal income growth patterns however a positive effect on population growth is found for the municipalities that were small in size prior to the reform it is also found that the composition of the municipalities formed affected subsequent growth hanes n et wikstrom m la structure de l administration locale influence t elle la croissance de la population et des revenus une analyse empirique de la reforme municipale suedoise de 1952 regional studies cet article cherche principalement a analyser si oui ou non la reforme municipale

is the extended family altruistically linked direct tests using micro data this paper uses panel study of income dynamics data on parents and their adult children to test the standard altruism model this model predicts that within the extended family the distribution of consumption is independent of the distribution of resources the authors findings strongly reject this prediction copyright 1992 by american economic association

fifty years of methodological trends in jibs why future ib research needs more triangulation we analyze methodological trends in empirical research in jibs from 1970 2019 our results point to the prevalence of the following patterns there has been an increase in the use of 1 large scale longitudinal cross national datasets 2 complex analytical techniques including the incorporation of multiple analytical techniques within the same study but 3 a decline in the diversity of methods in use we relate these trends to the underlying social technical and communicative conventions in the journal during the 50 year period the observed patterns are consistent with theory that posits scientific fields entrench a dominant paradigm over time resulting in a restricted set of methodological options being selected such restrictions jeopardize the quality of research because the study of any phenomenon requires the use of multiple methodological procedures to avoid the systematic biases errors omissions and limitations introduced by any single option therefore we propose the use of triangulation as a strategy for building methodological alternatives into research designs institutionalization of this principle in the field of international business has the potential to enhance both the rigor and scope of inquiry of future research

public capital and the factor intensity of the manufacturing sector numerous studies have examined the effect of local fiscal policy on business activity few have emphasised local public services and fewer still have examined the effect of local fiscal policy on the composition of business activity using newly derived estimates of regional public infrastructure the effect of public capital on the factor intensity of the manufacturing sector of 36 smsas during the 1970 78 period is examined the findings of this study indicate that public investment can play an important role in determining the composition of a region s industrial sector

the missing pollution haven effect this paper examines the effect of recent increases inhazardous waste disposal taxes on employment growth inindustries that generate hazardous waste mostexisting literature has found that interjurisdictionaldifferences in environmental stringency havenegligible measurable economic consequences commonexplanations for this lack of effect include claimsthat 1 measures of environmental stringency arepoorly quantified 2 compliance costs are modest 3 variation in compliance costs among jurisdictionsis small and 4 cross section data are insufficientto explore the consequences of increasingly stringentstandards this paper addresses these four concernsby quantifying hazardous waste disposal taxes demonstrating that they are large and varied acrossjurisdictions in the united states and showing thatthey have had a significant effect on hazardous wasteshipping among states the paper then uses a panel ofstate and county level data to show that despite thesefindings state hazardous waste disposal taxes do notimpose large employment losses on industries thatgenerate waste

does state economic development spending increase manufacturing employment abstract recent studies which have attempted to determine what causes an industrial sector in a state to grow have ignored the general role of the state s economic development agency we extend the analysis to include its effect and determine that economic development expenditure by the state is significantly correlated with manufacturing growth in the state our result is robust to a variety of specification tests

public infrastructure and regional economic development a simultaneous equations approach an analysis of how central bank exchange market intervention can affect both the level of exchange rates and the risk premium in asset returns showing how the risk premium is related to the conditional variances of intervention and other exogenous processes

using spatial econometrics to analyze local growth in sweden lundberg j 2006 using spatial econometrics to analyse local growth in sweden regional studies 40 303 316 the paper investigates factors that determine the average income growth and net migration rates in swedish municipalities during 1981 99 the main issue is to test the hypothesis that conditional on a set of other possible determinants of regional growth the growth rate in one municipality is affected by the growth rates in its neighbouring municipalities the hypothesis of conditional convergence is also tested a positive correlation is found between net migration rates in neighbouring municipalities which suggests that net migration tends to spillover to neighbouring municipalities when it comes to average income growth the results indicate spatial dependence in the error terms during the 1980s however there is no clear evidence in favour of the hypothesis of conditional convergence instead the results predict conditional divergence between municipalities located in the stockholm reg

u s state and local fiscal policy and economic activity do we know more now early reviews of the academic literature on the economic effects of state and local taxes and expenditures suggested that not enough was known upon which to base policy the reviews called for better data and improvements in empirical methodology this paper reviews studies conducted since the early literature reviews to assess our current state of knowledge the conclusion of the study is that we know more now but our knowledge is unlikely to ever be sufficient to provide universal policy guidance rather we suggest that more research is needed on specific state and local policies for specific circumstances consistent with the general principles that guide place based policy

the supply of children s time to disabled elderly parents i introduction in recent years economists have become increasingly interested in intergenerational transfers of both time and money 1 such transfers may be motivated by altruism or exchange models of altruism assume that a person s utility depends on the consumption or utility of other family members and her own consumption for example children may supply unpaid informal care to aging parents because their utility increases when their parents are happier one of the most striking predictions of models of altruism is that public subsidies tend to crowd out transfers by altruistic individuals especially if the subsidy is financed by taxing the altruistic individual becker 1974 in exchange models there is typically altruism but one family member such as a parent can induce a relative such as a child or kid 2 to provide more services or money than the relative would normally provide by threatening to withhold a bequest to the extent that this is so one would plausibly expect more care and attention to be provided to wealthy parents when there is more than one kid more care should be provided because the threat of disinheritance is more credible when there is competition between kids for bequests in a well known article bernheim shleifer and summers 1985 hereafter referred to as bss found empirical support for the strategic bequest motive based on an observed positive relationship between children s visits and telephone calls to elderly parents per child as the measure of attention and bequeathable wealth per child as the measure of the financial motivation for providing such attention one might expect this result to extend to decisions about direct provision of help informal care that kids may provide to parents the marginal benefit of such care is plausibly greater than the benefit derived from a visit or telephone call in a recent article however we found no evidence that the strategic bequest motive is an important determinant of the amount of informal care kids provide or a related decision whether or not to place the parent in a nursing home sloan hoerger and picone 1996 we focused on the distinction between cognitively aware parents who can threaten to disinherit their kids and cognitively unaware parents who cannot disinherit and examined whether this distinction had any effect on the probability that the parent entered a nursing home or on amounts of formal and informal care received if the parent remained in the community any strategic effects were swamped by the greater marginal benefit of care to the parent when the parent was cognitively unaware moreover among the cognitively aware richer parents actually received less informal care contrary to the strategic model s predictions unfortunately in past research on intergenerational transfers of time and money it was not possible to control for the wealth wage and other characteristics of kids to the extent that kid s wealth and wage were positively correlated with parent s wealth which was observed the parameter estimates on parent s wealth may be negatively biased although parent s wealth and kid s wealth and wage rates are plausibly positively correlated they have opposite effects on the supply of kid s time according to the strategic bequest model that is potential bequests from a parent may be less attractive to rich kids and therefore induce less care we test the strategic bequest model using information on elderly parents and their children from two linked surveys the 1989 national long term care survey nltcs for elderly individuals and the survey of informal caregivers sic for a subsample of the elderly s children using these data we can include explicit measures of kid s wealth and wage rates thereby avoiding the possible bias introduced by a correlation between parent s and kid s wealth and wages also the data sets provide information on several pertinent health cognitive and functional status variables which are not typically observed in surveys of financial status

the interregional impact of infrastructure capital increasingly economists and state and local policymakers see a broader link between declining regional competitiveness and the deterioration of highways bridges water and sewer systems and other public infrastructure supporters of active industrialization policies point out that one way a region can regain its competitive edge is to upgrade its infrastructure the clinton administration citing the lack of infrastructure investment as a cause of sluggish national economic growth advocates massive spending hikes to repair existing public capital and to invest in new public capital the groups supporting this approach rely on recent empirical evidence showing that public infrastructure investment generally makes a significant contribution to productivity and output 2 4 5 12 16 18 existing studies however report disparate results about the size of the effect of public capital on economic growth aschauer 2 using aggregate time series data estimated output elasticities with respect to public capital ranging from 0 39 to 0 56 munnell 18 updated aschauer s study and reported an elasticity of 0 33 for labor productivity with respect to public capital the magnitude of the estimated elasticities and the associated marginal product of public capital in these two pioneer studies are generally accepted as extraordinarily large the debate on their size is extremely lively two fundamental issues dominate the debate first aaron 1 draws attention to the implausible nature of the earlier results by comparing the marginal productivities of public and private capital implied by these studies he finds that the implied marginal productivity of public capital is five times greater than that of private capital second mcguire 14 and eisner 6 contend that the empirical evidence from the aggregate time series data is not compelling mcguire argues that the established statistical relationship may not imply a causal connection between infrastructure and economic performance eisner also questions the causal link by suggesting that one cannot

public sector capital and the productivity puzzle a number of studies have suggested a quantitatively important relationship between public sector capital accumulation and private sector productivity with the most compelling evidence derived from analyses of state level data estimates herein of production functions that use standard techniques to control for unobserved state specific characteristics however reveal essentially no role for public sector capital in affecting private sector productivity only estimates of state production functions that do not include such controls find substantial productivity impacts this result reconciles existing econometric estimates with the findings of hulten and schwab based on growth accounting techniques as such techniques effectively control for state specific effects region level estimates are essentially identical to those from state data suggesting no quantitatively important spillover effects across states copyright 1994 by mit press

local economic instability and business location the case of maine this paper investigates the effects of local economic instability on business location in maine instability is represented by the quarterly six month and annual persistence of employment in maine municipalities and seasonal spikes in local employment regression results suggest that businesses are attracted to areas with high short term and seasonal stability but that annual fluctuations in local employment are not a significant deterrent to new business activity services businesses are particularly sensitive to local employment fluctuations presumably because they are often highly integrated into the economy findings suggest that policymakers can jointly pursue the objectives of local economic growth and stability

private intergenerational contact in france and the demonstration effect this study analyses motives for intergenerational contact from adult children to their middle aged parents if these transfers may be explained either by altruism or by exchange we mainly focus on the demonstration effect where households take care of their own parents in order to elicit a future support from their children we test the model using a cross sectional survey from 1992 about private transfers in france according to the data the presence of children increases the amount of visits that respondents provide to their parents and the econometric results still hold after controlling for unobserved familial heterogeneity using fixed effects although this empirical evidence is consistent with the demonstration effect we suggest an alternative interpretation for the positive correlation based on the care of grandchildren

is public expenditure productive abstract this paper considers the relationship between aggregate productivity and stock and flow government spending variables the empirical results indicate that i the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending ii military capital bears little relation to productivity and iii a core infrastructure of streets highways airports mass transit sewers water systems etc has most explanatory power for productivity the paper also suggests an important role for the net public capital stock in the productivity slowdown of the last fifteen years

the wage elasticity of informal care supply evidence from the health and retirement study author affiliation olena nizalova nizalova kse org ua acknowledgment i gratefully acknowledge steven haider jeff biddle john strauss and john goddeeris for their helpful comments throughout the process of working on the project and important comments from the anonymous referees i am also greatly indebted to michael nolte and his colleagues from the isr data enclave for making possible the revision of this article 1 introductionfor the past two decades the policy debate on issues related to the aging population has been growing at unprecedented rates throughout the world on one hand policy measures suggested in the debate include removal of the disincentives for labor force participation for the near elderly u s dhhs 1997 apfel 2004 cbo 2004 this would have effectively raised the wage rate faced by the targeted group as in the case of the elimination of the social security earnings test for those older than 65 in the united states friedberg 2000 on the other hand the role of informal caregiving is emphasized as a means to keep many individuals at home who would otherwise require expensive institutional care u s dhhs 1997 p 6 policies targeting these two objectives may turn out to conflict with each other higher wages may decrease hours devoted to informal care for elderly parents while policies encouraging informal care may lead to fewer working hours research on the effects of the social security earnings test mostly focuses on labor supply and claiming behavior of the affected group burtless and moffitt 1984 baker and benjamin 1999 gruber and orszag 1999 friedberg 2000 haider and loughran 2008 with little attention being paid to the potential interaction between incentives for paid employment and caregiving choices this interaction may have adverse implications for the well being of the oldest old given that the prevalence of caregiving is highest among individuals in their late midlife central to the analysis of this interaction is the concept of the wage elasticity the labor supply literature suggests a positive wage elasticity of labor supply smaller for males larger for females therefore if the wage elasticity of informal care supply is close to zero as has been found in earlier studies higher wages would lead to more labor supplied with negligible effects on the provision of informal care in this case one might hope that benefits from increased labor supply will not be offset along other dimensions if on the contrary the wage elasticity of informal care supply is relatively large and negative one should be more cautious when evaluating the effects of fiscal policies on labor supply among individuals in their late midlife a substantial negative wage elasticity of informal care supply would mean that along with increasing labor supply the near elderly would cut back on the hours of informal care they provide to their elderly parents this may potentially lead to more people turning to the government in their quest for help with covering formal long term care costs the goal of this article is to study the wage elasticity of informal care supply and contribute to the literature by directly addressing the issue of omitted variables in the time allocation and monetary transfer equations informal care supply is defined as annual time spent helping elderly parents with basic personal needs as well as household chores errands and transportation this article uses a unique opportunity of access to the restricted geographic identifiers for the health and retirement study hrs respondents to instrument hourly wages with the industry structure in the state of residence allowing for differential impact by education 1the primary finding of the article suggests that the wage elasticity of informal care supply is negative and substantially larger in magnitude than previously estimated due to the weakness of the instruments there is still a significant remaining bias in the estimates of the wage elasticity

the war between the rent seekers in conclusion it seems some states have experienced spending growth to the point where economic and political constraints on that growth have led to a situation where rent seekers can gain only at the expense of other rent seekers as that fact becomes recognized peaceful cooperative political action between rent seeking groups that prevailed when such action resulted in a larger expenditure rent pool might give way to war between the rent seekers if state and local spending continues its relative growth we would expect the war between rent seekers to spread to other jurisdictions

ranking the international business journals this study seeks to assess and rank the relative quality of 30 international business journals using both a citation analysis and a survey approach journal rankings are presented using both approaches in addition to a composite ranking the rankings provide an objective analysis of journal quality for tenure and promotion committees for ib researchers considering journal submission options and provide the academic community with a better understanding of which international business publication outlets are the most influential in guiding research in this discipline

designing tax policy in federalist economies an overview abstract the emerging economic federations of the european union russia and south africa along with the established federations in australia canada and the united states confront the task of designing the institutions for federal fiscal policy this paper reviews the literature on the design of tax policy in federalist economies we conclude that taxation by lower level governments can lead to significant economic inefficiencies and inequities the usual assignment view of federalis recommends central government policies for example resident based taxation or grants in aid to correct these failures these recommendations assume that the central government will act as a benevolent social planner the political economy view of federalism suggests that this assumption is in error and that additional federalist institutions must be considered alternative legislative structures and constitutional rules are considered

the productivity effect of government capital in developing and industrialized countries this paper uses an aggregate production function to examine the effect of government capital formation on growth of labour productivity in an annual panel of 12 developing and 12 oecd economies covering the period 1976 1989 the results from a pooled model of all 24 countries indicate that contribution of government capital to labour productivity is positive and statistically significant this result also holds in separate samples of the industrialized and developing economies where we find that while there are productivity differentials between the two types of economies with respect to private capital there are no differences with regards to public capital

motives for private income transfers private income transfers are becoming increasingly recognized as a key aspect of the u s economy the majority of private income transfers occur inter vivos i e between living persons but very little is known about this type of transfer behavior this paper tests alternative hypotheses concerning motivation for inter vivos transfers two motives are considered altruism and exchange evidence presented here casts doubt on the altruistic model of transfer behavior observed patterns for inter vivos transfers are more consistent with exchange related motives this finding has important implications for the effects of public transfer programs on the distribution of economic well being

strategic play among family members when making long term care decisions this paper describes a strategic model of bargaining within a family to determine how to care for an elderly parent we estimate the parameters of the model using data from the national long term care survey we find that the parameter estimates generally make sense and that the model is consistent with the data the results have strong implications for using less structural empirical models for policy analysis

the prodigal son does the younger brother always care for his parents in old age studies have shown that the older sibling often chooses to live away from his elderly parents intending to free ride on the care provided by the younger child in the presented model we incorporate income effects and depict a different pattern frequently observed in eastern countries that is the older sibling lives near his or her parents and takes care of them in old age by generalizing the existing model we show three cases of elderly parents being looked after by 1 the older sibling 2 the younger sibling and 3 both siblings depending on the relative magnitude of the income effect and the strategic incentive for one sibling to free ride on the other our study also investigates the effect of changes in relative income on the level of total care received by parents

the impact of infrastructure expenditure types on regional income in turkey kara m a tas s and ada s the impact of infrastructure expenditure types on regional income in turkey regional studies infrastructure investments that enhance regional economic performance and competitiveness fall into two categories economic and social economic infrastructure investments i e highways power generation and water facilities can directly increase regional production potential and social infrastructure investments i e education and healthcare can aid regional income by improving labour productivity this study identifies how different types of infrastructure expenditures affect regional incomes in turkey as per results drawn from data of 2004 08 infrastructure expenditures enhance regional income in turkey social infrastructure investments and education expenditures demonstrate greater impact on regional income

the stature of the journal of international business studies this article examines the standing of the journal of international business studies jibs among scholarly journals and changes in its influence over a 11 year period 1981 to 1991 using a variety of citation indices we suggested that two new measures a prestige index and a trajectory index are helpful in assessing a journal s influence and reputation we estimate these as well as several standard citation measures to gauge jibs progress in the recent past we find that jibs does well on all measures but room for improvement remains this article discusses options available to the editorial board to raise jibs prestige

the effect of state and local taxes on economic growth a time series cross section approach results based on pooled time series and cross section data are presented which indicate that state and local tax increases significantly retard economic growth when the revenue is used to fund transfer payments however when the revenue is used instead to finance improved public services such as education highways and public health and safety the favorable impact on location and production decisions provided by the enhanced services may more than counterbalance the disincentive effects of the associated taxes these findings underscore the importance of considering the incentives provided by a state s expenditures as well as by its taxes i n the past several years a number of states have implemented limitations on taxes or expenditures while others have raised tax rates in response to the revenue shortfalls of the early 1980s although much of the ongoing debate over state fiscal structures revolves around expressed preferences over tax expenditure combinations per se the question of how state and local taxes may affect economic growth is often central to the discussion nonetheless the empirical evidence remains sparse previous studies can be divided into two broad categories assessments of the magnitudes of tax costs and statistical analyses of the relationship between tax rates and growth cost studies have tended to minimize the role of taxes in business location decisions either because state and local taxes are a relatively small component of total costs for most businesses or because interstate tax differences are small relative to other cost differences between states although these results suggest that the role played by taxes is a minor one describing how large the tax disparities may be is not the same as ascertaining their economic effect of the statistical studies many including bloom 1955 thompson and mattila 1959 and carlton 1979 1983 find no relationship between taxes and growth however kleine 1977 grieson 1980 and generally grieson et al 1977 report negative correlations romans and subrahmanyam 1979 find growth to be negatively related to the fraction of revenues devoted to transfer payments and a variable which they claim measures personal tax progressivity but positively related to business taxes with the exception of carlton who estimates models of the birth and size of firms within metropolitan areas and the grieson et al 1977 and grieson 1980 studies which consider taxes in new york city and philadelphia these authors use data from a single cross section of states more recently newman 1983 and plaut and pluta 1983 both use cross sectional data from two time periods the former finding negative effects of corporate tax rates and the latter yielding mixed results in this study we utilize a time series from 1965 through 1979 of cross sections of 48 states exploiting the richness of this data set we are able to allow for otherwise unexplained differences between states which could be expected to bias results based on a single cross section moreover this much larger sample provides the statistical power necessary to disentangle the separate effects of different categories of taxes public expenditures and transfer payments a distinguishing feature of this paper is that we explicitly recognize the government budget constraint linking these fiscal variables and the deficit or surplus in addition we have taken account of the effects of labor force characteristics by including variables for wage rates unionization and population density our results indicate that tax increases significantly retard economic growth when the revenue is used to fund transfer payments as a result programs of income redistribution are more effectively undertaken at the federal than at the state and local level on the other hand when the revenue is received for publication april 30 1984 revision accepted for publication january 22 1985 university of california davis i am indebted to the institute of governmental affairs at the university of california davis for financial support to adrienne kandel for invaluable research assistance and to two referees for their helpful comments 1 see williams 1967 morgan and brownlee 1974 vasquez and deseve 1977 and the advisory commission on intergovernmental relations 1981 see also due 1961 for a survey of the early literature including a discussion of the findings and limitations of survey results on this topic 574 1 copyright 1985 this content downloaded from 157 55 39 35 on mon 29 aug 2016 04 45 38 utc all use subject to http about jstor org terms state and local taxes and economic growth 575 used instead to finance enhanced public services such as highways education and public health and safety the favorable impact on location and production decisions provided by the improved services may more than counterbalance the disincentive effects of the concomitant taxes these findings underscore the importance of considering the incentives provided by a state s expenditures as well as by its taxes we begin by sketching a model which provides the basis for the analysis and discussing appropriate estimation techniques then in section ii we describe the data used and our hypotheses the econometric results are presented in section iii followed by brief concluding remarks in the final

an analysis of twenty five years of research in the journal of international business studies the article analyzes the twenty five years of research published in the journal of international business studies jibs since its inception in 1970 the article reviews the authors their institutional affiliations and the discipline content of the published articles

membership of editorial boards and rankings of schools with international business orientation using 4 year data 1990 1994 1998 and 2002 we have provided a ranking of schools with international business ib orientation based on the membership of editorial boards of 30 leading international business journals participation on the editorial boards of quality journals is highly selective and should provide a quality indication of the schools both quality unadjusted and adjusted board membership based ranking are calculated in this study several interesting findings are worth noting first us schools play a significant leadership role among the leading ib programs second the findings of this study also show the major contribution of non us schools which confirms the importance of the global nature of the ib discipline third the top ranked schools share a number of characteristics finally the correlation among different ranking criteria can be low particularly for the top ranked schools suggesting that care should be exercised in interpreting school ranking

the power of international business research statistical power is the probability of accepting the null hypothesis when it is false type ii error this research note reports the results of a statistical power analysis of international business research published in the journal of international business studies management international review the academy of management journal and the strategic management journal from 1990 to 1999 the results show that although average statistical power is high compared with other disciplines it is sufficient only for large effect sizes ess only studies published in the journal of international business studies and the academy of management journal achieve average statistical power levels that are sufficient for both medium and large ess still the observed likelihood of committing type ii errors in international business research is very high for small ess 92 and high for medium ess 45 in addition statistical power is not explicitly mentioned or used by international business researchers a weakness that this note is designed to change

measuring and modeling intergenerational links in relation to long term care long term care has profound intergenerational implications it can be costly for those who need it and onerous for loved ones who provide it we pinpoint three intergenerational aspects of long term care that require further research one concerns the link between costs of private care and intergenerational wealth transfers the second concerns the link between participation in care and the work and welfare of family providers the third relates to intergenerational tensions that these and other late in life interactions create we outline innovations in modeling and measurement that would improve understanding of intergenerational linkages and their implementation in appropriate panel data jel d91 i13 j22

industry migration and growth in the south for at least the last two decades the south and southwest have been the fastest growing regions in the united states during this period we have witnessed considerable shifts in the location of economic activity and overall the movement has been decidedly toward the south since the early sixties when this southern migration began to accelerate an increasing amount of public attention has been directed to this topic so much so that it is now popularly referred to as the sunbelt phenomenon numerous explanations have been advanced to account for this rapid growth in the south but three explanations have persistently evoked an impressive level of debate first many have argued that a significant portion of this regional redistribution can be attributed to differentials in state and local taxing policies in particular the state corporate income tax these rates vary considerably across states but even more important is the observation that there have been significant changes in the structure of corporate taxes over the last few decades beginning in the early 1950s the relative tax rate for several southern states particularly those in the east south central and west south central divisions began to decline sharply on the other hand relative tax rates for three divisions new england the east north central and the midatlantic rose in the early sixties by 1970 the relative tax rate ranged from 0 60 in the west south central down from 1 20 in 1950 to 1 37 in the mid atlantic up from 1 15 in 1950 notwithstanding these stylized facts the consensus from previous empirical work on industry location suggests that state taxes have not influenced the direction or magnitude of industry migration however there are reasons to believe that acceptance of this conclusion may be premature for example in the early body of work results were based on simple correlations of tax levels and changes in either value added or employment 2 more recent attempts to empirically model corporate tax effects have arrived at somewhat ambiguous results carlton 1977 examining three 4 digit industries found that corporate tax differentials failed to explain any of the variation in new births of firms across smsas hodge 1979 while confirming carlton s results for the same industries discovered that taxes have significantly affected regional investment patterns in another industry not covered in carlton s study 3 why taxes mattered in one industry and not in the other three remained a matter of ad hoc speculation a second explanation alleges that states in the south have begun to exhibit a more favorable business climate although it is difficult to measure directly a state s business climate one important manifestation of that climate is its position with respect to the division of power between union and management in the collective bargaining process legal obstacles to union organization and bargaining power will be viewed by firms as a positive signal of a pro business environment the creation of legislative obstareceived for publication october 29 1981 revision accepted for publication april 16 1982 miami university the author is especially indebted to michael ward at the rand corporation for numerouls helpful discussions throughout the preparation of this study also the author benefited from the advice and comments of john antel robert cotterman lee lillard john lunn william j moore james smith finis welch and two referees of this review financial suppoi t was provided by the foundation for research in economics and education at ucla and the university of british columbia humanities and social sciences committee i the relative tax is defined as a state s tax rate divided by the average for all states as in most economic discussions it is relative price that matters 2 for a review of earlier work see due 1961 some of the studies reviewed include bloom 1955 campbell 1958 floyd 1952 and larson 1957 see also garwood 1952 3 most of the other empirical work focused exclusively on intt urban location decisions and hence had no reason to examine state corporate taxes however they found local tax differentials inter zonal were unimportant in determining intra urban movement for example see moses and williamson 1967 and schmenner 1978

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work