when strong ties are strong networks and youth labour market entry the conditions under which young workers find their first real post graduation jobs are important for their future careers and insufficiently documented given their potential importance for young workers welfare to study these conditions and in particular the role played by social ties we use a swedish population wide linked employer employee data set of graduates from all levels of schooling that includes detailed information on family ties neighbourhoods schools class composition and parents and children s employers over a period covering years with both high and low unemployment together with measures of firm performance we find that strong social ties parents are an important determinant for where young workers find their first job the effects are larger if the graduate s position is weak low education bad grades during high unemployment years and when information on potential openings are likely to be scarce on the hiring side by contrast the effects are larger if the parent s position is strong long tenure high wage and if the parent s plant is more productive the youths appear to benefit from the use of strong social ties through faster access to jobs and by better labour market outcomes as measured a few years after entry in particular workers finding their entry jobs through strong social ties are considerably more likely to remain in this job while experiencing better wage growth than other entrants in the same plant firms also appear to benefit from these wage costs relative to comparable entrants starting at a lower base they also benefit on the parents side parents wage growth drops dramatically exactly at the entry of one of their children in the plant although this is a moment when firm profits tend to be growing indeed the firm side benefits appear large enough for at least small firms to increase job creation at the entry level in years when a child of one of their employees graduates

explaining regional autonomy differences in decentralized countries why do groups want to secede and where is demand for self determination most likely to arise we argue self determination demand is moderated by the projected economic costs of policy autonomy the trade off between income and sovereignty implies that other things being equal richer regions are more likely to demand more autonomy this trade off suggests that relative regional income is a key predictor of autonomy demands we show evidence of this using new data collected at the level of second tier administrative sub divisions in 48 decentralized countries consistent with a demand and supply model of self determination we find that levels of policy autonomy are positively correlated with relative regional income regional population share natural resource endowment and regional inter personal inequality ethnically distinct regions have lower sovereignty which could explain higher levels of conflict in these regions but this association is conditional on controlling for the interactive effects be

optimal taxation and fiscal constitution abstract assuming a world with excessive taxes the focuses of this paper are political mechanisms that ensure efficiency enhancing restraints on taxes in particular it is shown that supermajority requirements to approve tax increases as currently used in some us states is the means of attaining this objective their relationship to another such mechanism prevalent in earlier centuries that of franchise restrictions is discussed

nominal price rigidity money supply endogeneity and business cycles abstract this paper investigates the ability of nominal price rigidity to explain the co movement of inflation with the cyclical component of output observed in the post war u s data a dynamic general equilibrium model is constructed with the introduction of monopolistic competition and nominal price rigidity in a standard real business cycle model allowing for an endogenous money supply rule it is then demonstrated that sticky price models can explain the observed associations between movements in inflation and output much better than flexible price models this result depends little on whether money supply is assumed to be endogenous or not

transition costs in secessions with a brief application to scotland this article demonstrates that the costs incurred in the process of a region becoming a sovereign state can be large enough to outweigh the long term material benefits of independence transition costs consist of transaction costs fiscal costs and the cost of uncertainty their size depends crucially on whether the politics of the transition are cooperative game theory however shows that there are incentives for threats of non cooperation and for the exercise of such threats these considerations are applied briefly to the debate about scottish independence this includes a short analysis of how transition costs can be reduced a final section inquires about possible transition benefits which can consist of solidarity

backward looking interest rate rules interest rate smoothing and macroeconomic instability the existing literature on the stabilizing properties of interest rate feedback rules has stressed the perils of linking interest rates to forecasts of future inflation such rules have been found to give rise to aggregate fluctuations due to self fulfilling expectations in response to this concern a growing literature has focused on the stabilizing properties of interest rate rules whereby the central bank responds to a measure of past inflation the consensus view that has emerged is that backward looking rules contribute to protecting the economy from embarking on expectations driven fluctuations a common characteristic of the existing studies that arrive at this conclusion is their focus on local analysis the contribution of this paper is to conduct a more global analysis we find that backward looking interest rate feedback rules do not guarantee uniqueness of equilibrium we present examples in which for plausible parameterizations attracting equilibrium cycles exist the paper also contributes to the quest for policy rules that guarantee macroeconomic stability globally our analysis indicates that policy rules whereby the interest rate is set as a function of the past interest rate and current inflation are likely to ensure global stability provided that the coecient on lagged interest rates is greater than unity

imitation contagion or exertion using a tax reform to reveal how colleagues sick leaves influence worker behaviour we analyse the social interaction effects in sick leave behaviour in the workplace using high quality norwegian matched employer employee data with detailed individual information on sick leaves during the 2004 2006 period we find that social interaction effects in sick leave behaviour in the workplace do exist and that the effects are noticeable in size the strong relationship between the sick leave rates among colleagues is not solely the result of contagious diseases nor is it caused by improved informational quality or by the increased workload for the non absent workers evidence supports the existence of reciprocal worker behaviour that is unrelated to joint leisure seeking activities

incentives and social norms in household behavior in a broad psychological perspective both economic incentives and social norms may be be regarded as giving rise to purposesful or rational behavior by this i simply mean that individuals act in accordance with expected reward or punishment even though the form these take differs substantially in the two cases whereas economic incentives imply material rewards or favors that can be traded for such rewards including leisure social norms imply social rewards the latter basically take the form of approval or disapproval from others and related feelings of pride or shame moreover once a social norm has been internalized in an individual s own value system behavior in accordance with or against the norm will also result in feelings of self respect or guilt all this suggests that not only economic incentives but also social norms may be analyzed by means of utility theory as will be illustrated below many social norms may not have much to do with economic incentives elster 1989 in some cases it is however useful to study the interaction between them indeed this is the basic message of the paper my discussion will be limited to three norms of apparent importance for household behavior i work norms ii norms against wage underbidding and iii saving and consumption norms thus the paper deals with norms concerning willingness to work ability to get a job and the use of income this abstract was borrowed from another version of this item

the long run consequences of living in a poor neighborhood author s oreopoulos philip abstract many social scientists presume that the quality of the neigborhood to which children are exposed affects a variety of long run social outcomes i examine the effect on the long run labor market outcomes of adults who were assigned when young to substantially different public housing projects in toronto administrative data are matched to public housing addresses to track children from the program for over 15 years the main finding is that neighborhood quality plays little role in determining a youth s adult earnings education attainment or welfare participation but does affect exposure to crime while living in contrasting housing projects cannot explain large variances in labor market outcomes family differences as measured by sibling outcome correlations account for up to 30 percent of the total variance in the data

regional income redistribution and risk sharing how does italy compare in europe abstract this paper investigates income redistribution and risk sharing and the underlying public policy in italy a country marked by stark regional economic contrasts unlike previous works this study also assesses the roles of public consumption investment and welfare assistance in kind the findings suggest that italy s fiscal system provides redistribution at 25 35 and risk sharing at 10 15 of gdp with public consumption playing a large role compared with results in the literature for other countries there appears to be less redistribution and risk sharing through italy s welfare and tax systems because of their different structures

channels of interstate risk sharing united states 1963 1990 we develop a framework for quantifying the amount of risk sharing among states in the united states and construct data that allow us to decompose the cross sectional variance in gross state product into several components which we refer to as levels of smoothing we find that 39 percent of shocks to gross state product are smoothed by capital markets 13 percent are smoothed by the federal government and 23 percent are smoothed by credit markets the remaining 25 percent are not smoothed we also decompose the federal government smoothing into subcategories taxes transfers and grants to states

cross border externalities and cooperation among representative democracies abstract this paper analyzes the provision of public goods with cross border externalities by representative democracies the level of provision of each country is decided by a policy maker elected by majority rule at the country level we compare the case in which policy makers set their policies noncooperatively with the case in which they set their policies through coasian cooperation cooperation induces policy makers to internalize cross border externalities but it also induces strategic voters to elect a policy maker who cares less about the public good to reduce their public good contribution the former effect increases public good provision while the latter reduces it we show that once voters incentives are taken into account whether cooperation is beneficial depends neither on voters preferences nor on the magnitude of spillovers nor on the size bargaining power or efficiency of each country instead it depends only on the curvature of the demand for the public good cooperation increases decreases public good provision when the demand function is more less convex than the unit elastic demand function hence the desirability of international cooperation depends mostly on the type of public good considered

fiscal flows and financial markets to what extent do they provide risk sharing within sweden andersson l fiscal flows and financial markets to what extent do they provide risk sharing within sweden regional studies the objective of this paper is to analyse the amount of risk sharing that takes place between regions in sweden it is found that the capital market is the largest source of risk sharing of an exogenous change in gross regional product in sweden still roughly 20 of a change in regional output is smoothed among the regions through the fiscal system there is also some evidence that there are regional differences in the sense that regions located in the south rely more on the capital market as a source of insurance against shocks in output while the tax and transfer systems provide a larger extent of risk sharing for regions located in the north andersson l flux fiscaux et marches financiers dans quelle mesure assurent ils le partage de risques en suede regional studies l objet de cette communication est d analyser l importance du partage de risques entre regions suedoises

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

secessionism and minority protection in an uncertain world abstract with the changing political and economic circumstances confronting their countries regionally concentrated minorities have been facing a strategic problem important aspects of which can be stylized as a situation in which a minority leader is uncertain about the costs of secession for her community this paper shows that this uncertainty is a central cause of secession using a model which incorporates both policies to appease secessionist aspirations and informational asymmetries in a situation of asymmetric information in which the policy maker is better informed about the consequences of separation than the minority leader signaling incentives make secession the unique equilibrium outcome whether mutually advantageous compromises exist or not we also show that the ruling majority may seek to maintain political unity by pre committing to minority protection rules which prevent bluffing by the informed policy maker additionally the model generates comparative statics results on the question of which states are most likely to adopt constitutional rules protecting the minorities living within their borders

spillovers from gatekeeping peer effects in absenteeism abstract we study peer effects in absenteeism among workplace colleagues gatekeeping is an essential task in many insurance systems in this study we exploit exogenous shifts of general practitioners gps occurring when physicians quit or retire we find that these shifts induce changes in absenteeism for affected workers by utilizing high quality norwegian matched employer employee data with detailed individual information on certified sick leave during the period 2003 2012 we can study how the transfer of workers between gps affects co workers absenteeism we identify strong causal positive peer effects in absenteeism a one day change in focal worker sickness absence transfers to a 0 41 day shift in peer absence

do neighborhoods affect hours worked evidence from longitudinal data using a confidential version of the nlsy79 we estimate large effects of neighborhood social characteristics and job proximity on labor market activity a variety of neighborhood social characteristics are associated with less market work social characteristics have nonlinear effects with the greatest impact in the worst neighborhoods social characteristics are also more important for less educated workers exploiting the panel aspects of our data we find that estimates that do not account for neighborhood selection on the basis of time invariant and time varying unobserved individual characteristics substantially overstate the social effects of neighborhoods but understate the effects of job access

the breakup of nations a political economy analysis this paper develops a model of the breakup or unification of nations in each nation the decision to separate is taken by majority voting a basic trade off between the efficiency gains of unification and the costs in terms of loss of control on political decisions is highlighted the model emphasizes political conflicts over redistribution policies the main results of the paper are i when income distributions vary across regions and the efficiency gains from unification are small separation occurs in equilibrium and ii when all factors of production are perfectly mobile all incentives for separation disappear i introduction following the demise of communism the entire map of europe from the atlantic coast to the urals is being redrawn and issues of separation unification and the redrawing of borders are yet again at the forefront of european concerns many of the issues raised by this process are primarily of a political cultural or linguistic nature however there are also economic considerations that bear on this problem the objective of this paper is to analyze some important economic and political determinants of the process of unification and separation of democratic nations the starting point of our analysis is to suppose that from an economic efficiency point of view separation of nations is never desirable a unified nation is always more efficient since free trade among regions is guaranteed duplication costs in defense and law enforcement are avoided and local public goods provision such as transportation and communication networks or common standards can be coordinated furthermore any benefits of decentralization that might be obtained in a world with several nations may also be achieved within a unified nation by replicating the administrative structure of the world with several

sickness absence and local benefit cultures in many countries sickness absence financed by generous insurance benefits is an important concern in the policy debate there are strong variations in absence behavior among local geographical areas such variations are difficult to explain in terms of observable socioeconomic factors in this paper we investigate whether such variations are related to group effects in the form of social interaction among individuals within neighborhoods well known methodological problems arise when trying to answer this question a special feature of our efforts to deal with these problems is that we adopt several alternative approaches to identify group effects our study is based on a rich set of swedish panel data and we find indications of group effects in each of our approaches

fiscal flows in the united states and canada lessons for monetary union in europe regional flows of federal taxes and transfers within the united states and canada are used to analyze long term fiscal flows the redistributive element and short term responses to regional business cycles the stabilization element in the united states long run flows amount to 22 cents in the dollar while the stabilization effect is 31 cents in the dollar in canada the redistributive effect is larger 39 cents and the stabilization effect smaller 17 cents federal flows appears to depend on the institutional structure of the country concerned however in both countries the redistributive element is considerably larger than the amounts involved in the ec structural funds program as for stabilization national fiscal policies in the ec appear to have been as effective as federal governments in the united states and canada in cushioning shocks to incomes

federal fiscal constitutions risk sharing and redistribution the paper studies the political and economic determinants of regional public transfers specifically it focuses on how such transfers are shaped by alternative fiscal constitutions where a constitution is an allocation of fiscal instruments across different levels of governments plus a procedure for the collective choice of these instruments realistic restrictions on fiscal instruments introduce a tradeoff between risk sharing and redistribution different constitutions produce very different results in particular a federal social insurance scheme chosen by voting provides overinsurance whereas an intergovernmental transfer scheme chosen by bargaining provides underinsurance

redistribution and risk sharing in italy learning from the past abstractredistribution and risk sharing in italy learning from the past regional studies this paper investigates the role of public policies in italy by assessing both the redistribution and the risk sharing functions of interregional net fiscal flows in the long run its comparative approach allows one to contrast results obtained for two periods characterized by diverse regional policy and dynamics of regional convergence although based on a specific example the evidence supports more general conclusions when assessing the regional redistributive and risk sharing power of national fiscal policies many different factors related to the existing policy regime should be accounted for particularly the distribution of government spending between current expenditure and public investment

secession and value abstract a model with random proposals where secession of coalitions is the only threat yields exploitative allocations if proposals for coalition s involve randomization the responders pay off vector consists of shapley values for coalition sizes ranging from 1 to s 1

decentralization fueling the fire or dampening the flames of ethnic conflict and secessionism political decentralization is widely believed to reduce ethnic conflict and secessionism in the world today yet decentralization is more successful in reducing conflict and secessionism in some countries than in others in this article i explore why this difference occurs i demonstrate using a statistical analysis of thirty democracies from 1985 to 2000 that decentralization may decrease ethnic conflict and secessionism directly by bringing the government closer to the people and increasing opportunities to participate in government but that decentralization increases ethnic conflict and secessionism indirectly by encouraging the growth of regional parties regional parties increase ethnic conflict and secessionism by reinforcing ethnic and regional identities producing legislation that favors certain groups over others and mobilizing groups to engage in ethnic conflict and secessionism earlier versions of this article were presented at harvard university and the center for the study of democratic politics at princeton university the author would like to thank sandra alfonso leon james alt micah altman barry friedman shigeo hirano simon hug gary king rose rozaghian tulia falleti and two anonymous reviewers for their very helpful comments

distributional conflict and jurisdictional organization abstract this paper explores the endogenous formation of jurisdictions assuming the political process is a costly fight to acquire shares of the gnp pie in such a setting the stability of a unified jurisdiction is not necessarily determined by the preferences of the richest member region we also show that a system of federalism is especially significant in ameliorating distributional competition and conflict less resources are spent in aggregate on appropriative activities under a hierarchical system of federalism than in a unified jurisdiction with a single central government

network effects and welfare cultures we empirically examine the role of social networks in welfare participation using data on language spoken at home to better infer networks within an area our empirical strategy asks whether being surrounded by others who speak the same language increases welfare use more for those from high welfare using language groups this methodology allows us to include local area and language group fixed effects and to control for the direct effect of being surrounded by one s language group these controls eliminate many of the problems in previous studies the results strongly confirm the importance of networks in welfare participation

ethnic enclaves and the economic success of immigrants evidence from a natural experiment recent immigrants tend to locate in ethnic enclaves within metropolitan areas the economic consequence of living in such enclaves is still an unresolved issue we use an immigrant policy initiative in sweden when government authorities distributed refugee immigrants across locales in a way that may be considered exogenous this policy initiative provides a unique natural experiment which allows us to estimate the causal effect on labor market outcomes of living in enclaves we find substantive evidence of sorting across locations when sorting is taken into account living in enclaves improves labor market outcomes for instance the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of four to five percent

secession and the limits of taxation toward a theory of internal exit comment the purpose of this note is to correct an error in the seminal article on secession by buchanan and faith 1987 in their paper buchanan and faith neglected an important effect political separation affects markets and consequently individual private incomes

subnational fiscal balance interregional redistribution and risk sharing in italy abstractthis paper provides new estimates of redistribution and risk sharing across regional territories accomplished by the italian public sector for the first time subnational governments fisc

social insurance networks based on administrative panel data from norway we examine how social insurance dependency spreads within neighborhoods families ethnic minorities and among former schoolmates we use a fixed effects methodology that accounts for endogenous group formation contextual interactions and time constant as well as time varying confounders we report evidence that social insurance dependency is contagious the estimated network effects are both quantitatively and statistically significant and they rise rapidly with relational closeness in a way that establishes endogenous social interaction as a central causal mechanism social interactions do not cross ethnic borders

externalities vs internalities a model of political integration abstract decentralized government leads to inter regional externalities whereas an integrated jurisdiction solves the externality problem centralized government entails other costs in particular a neglect for minority interests the paper models formally the trade off between these two forces in determining the optimum as well as the equilibrium design of jurisdictions both the relative size of regions and the distribution of tastes are shown to be important parameters of the problem

immigrating to opportunity estimating the effect of school quality using a natural experiment on ethiopians in israel in may 1991 fifteen thousand ethiopian jews were brought to israel in an overnight airlift and sorted in a haphazard and essentially random fashion to absorption centers across the country this quasi random assignment produced a natural experiment whereby the initial schooling environment of ethiopian children can be considered exogenous to their family background and parental decisions we examine the extent to which the initial elementary school environment affected the high school outcomes of ethiopian children using administrative panel data on the educational career of each child in israel through much of the 1990s the results show that the early schooling environment has an important effect on high school dropout rates repetition rates and the passing rate on matriculation exams necessary to enter college the results are robust to using alternative measures of the schooling environment and to the inclusion of community fixed effects which suggests that aspects of the elementary school itself are important for high school success

peer effects in welfare dependence quasi experimental evidence this paper examines peer effects in welfare use among refugees we exploit a swedish refugee placement policy which generated exogenous variation in peer group composition our analysis distinguishes between the quantity of contacts the number of individuals of the same ethnicity and the quality of contacts welfare use among members of the ethnic group long term welfare dependence increases if the individual is placed in a welfare dependent community the number of contacts is either irrelevant or negatively related to welfare receipt not controlling for residential self selection yields the opposite conclusion the results are very similar across household types and in different parts of the predicted earnings distribution

revisiting the relationship between ethnic diversity and preferences for redistribution comment in this paper we return to the question raised in dahlberg et al 2012 concerning a causal relationship between ethnic diversity and preferences for redistribution a re analysis of their study indicates that results are based on an endogenous instrument and severe sample attrition bias correcting for either of these two problems reveals that there is no relationship between ethnic diversity and preferences for redistribution more generally we provide results that put into question the conventional description of the swedish refugee placement policy

the tiebout model bring back the entrepreneurs several recent papers in the literature have reformulltlated the nature of equilibrium in ifiebout mo lels by alssliuim ing an exogenous number of communities inflexible commullity l ou alaries anti in pirticular inactive lantlowners and developers ihis paper argues that these assumptions are unwarranted and resul1t iin in eterminate solutions and incorrect analyses determinate lon1g run1 solutions require equilibrium in intercommui land markets which in turn require giving lantlowners and or entrepreneurial leveloelers an active role in the models the role of politics in these models and its juxtaposition with entrepreneurial activities are also analyzed

ssi for disabled immigrants why do ethnic networks matter immigrants residing among many coethnics are especially likely to receive ssi for a disability when they belong to high ssi take up immigrant groups after showing that this relationship cannot be fully explained by differences in health we consider the likely sources of these network effects by separately examining their role in the decision to apply for ssi and conditional on applying their role in determining who ultimately receives benefits our results suggest that networks may increase the probability of applying for ssi despite minor disabilities but it is unlikely that network effects are driven by egregious lies on applications

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

the effects of social networks on employment and inequality we develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts we show that employment is positively correlated across time and agents moreover unemployment exhibits duration dependence the probability of obtaining a job decreases in the length of time that an agent has been unemployed finally we examine inequality between two groups if staying in the labor market is costly and one group starts with a worse employment status then that group s drop out rate will be higher and their employment prospects will be persistently below that of the other group

immigrant networks and the take up of disability programs evidence from the united states we examine the role of ethnic networks in disability program take up among working age immigrants in the united states controlling for country of origin and area of residence fixed effects immigrants residing amid a large number of co ethnics are more likely to receive disability payments when their ethnic groups have higher take up rates differences in satisfying the work history or income and asset requirements of the disability programs explain part of this relationship but social norms also play an important role information sharing appears influential for supplemental security income take up but not for social security disability income jel j61 h55 i18

political bargaining in a federation buchanan meets coase abstract in recent decades the issues of federalism and political integration have gained prominence in public debate as well as in the academic realm a frequently made point is that allowing free secession may protect the minority s interests thus providing it with an incentive to enter the federation this paper explicitly considers the political process in the federation arguing that the option to secede may distort the political choices made by the individual regions to improve their bargaining positions as a result the allocation of resources in the federation could well end up being inefficient and unattractive for the minority region in contrast limiting the secession possibilities by requiring the consent of a majority of voters through a regional referendum rather than leaving it to the discretion of the legislature restores efficiency

coordinated action in local public goods models the case of secession without exclusion abstract this paper investigates threats of coordinated exit secession when coalitions cannot choose their members by exclusion this is modeled by a three stage noncooperative game in which voters choose a proportional tax rate and the level of public services and may choose to exit jointly a modified perfectly coalition proof nash concept is applied to rule out dynamically inconsistent threats and behavior by coalitions that is not self enforcing the major result is that cooption of potential seceding coalitions will not occur this result relies on the assumption that seceding coalitions cannot exclude potential members

networks or neighborhoods correlations in the use of publicly funded maternity care in california abstract this study focuses on network effects in the utilization of publicly funded prenatal care using vital statistics data from california for 1989 2000 networks are defined using 5 digit zip codes and a woman s racial or ethnic group like others we find evidence that the use of public programs is highly correlated within groups defined using race ethnicity and neighborhoods these correlations persist even when we control for many unobserved characteristics by including zip code year fixed effects and when we focus on the interaction between own group behavior and measures of the potential for contacts with other members of the group contact availability however the richness of our data allows us to go further and to conduct several tests of one important hypothesis about networks that the estimated effects represent information sharing within groups the results cast doubt on the idea that the observed correlations can be interpreted as evidence of information sharing in particular we find estimated effects to be as large or larger among women who have previously used the program as among first time users

does redistribution matter the decomposition of the fiscal residuum in italian regions fiscal residuum has often been used as an index of the territorial balance between taxes paid and benefits received from the policies of different tiers of government its standard calculation how

fiscal devolution and dependency public spending devolution in practice is widely seen as more appropriate for addressing varied political aspirations within state boundaries than is tax devolution a drawback is that devolved public spending may be subject to irresistible upward pressure as illustrated by formula drift of the united kingdom devolved administrations by crowding out the private sector such public spending can exacerbate the problem it was originally intended to alleviate when taxpayers do not value increases in government output at least as highly as the private goods and services they must forgo to finance them then the public sector is too large this article estimates a three sector hecksher ohlin model of the economy with the greatest relative rise of the public spending ratio in the united kingdom wales simulation of the model shows a net gain in employment from a 1 cut in income tax matched by a corresponding reduction in government spending this result is consistent with the current level of intergovernme

incentives for secession in the presence of mobile ethnic groups abstract this paper presents a model on secessions and nationalism with special emphasis on the role of imperfectly mobile ethnic minorities individuals trade off political benefits of homogeneity against economic costs from increasing returns to scale in production the main findings are i mobility decreases the political motivation for independence because increased competition for labour forces the ethnic majorities in the separating countries to accommodate their policy ii the impact of mobility depends on whether separation is politically or economically motivated iii increased mobility leads to a less accommodated policy in case of no separation

financial literacy externalities this paper uses unique administrative data and a quasi field experiment of exogenous allocation to apartments in sweden to estimate medium and longer run effects on financial behavior from exposure to financially literate neighbors it contributes evidence of causal impact of financial literacy and points to a social multiplier of effective programs to enhance it exposure promotes saving in private retirement accounts and stockholding especially when neighbors have economics or business education but only for educated or male headed households findings point to relevant knowledge transfer through social interactions rather than to labor market or other channels linked to local economic conditions

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

comments on backward looking interest rate rules interest rate smoothing and macroeconomic instability benhabib schmitt grohe and uribe 2003 argue that if you relied solely on local analysis you would be led to believe that aggressive backward looking interest rate rules are sufficient for determinacy but from the perspective of global analysis backward looking rules do not guarantee uniqueness of equilibrium and indeed may lead to cyclic and even chaotic equilibria this comment argues that this result is premature we utilize a discrete time model and make two observations first compared to their continuous time model the cyclic equilibria under a backward looking rule are much less likely to arise in a discrete time model second pure backward looking rules are less likely to suffer from these global indeterminacy problems than rules that also include current or future inflation