credit constraints and the phenomenon of child labor abstract this paper develops an overlapping generations general equilibrium model where inefficient child labor arises due to credit constraints it derives a positive relationship between inequality in the distribution of income and the incidence of child labor looking at policy implications it shows how trade sanctions against countries using child labor may fail to reduce the incidence of child labor it discusses some alternative policies to reduce the incidence of child labor

commodity tax harmonization and the location of industry we study the positive implications of commodity taxation and tax harmonization under the destination and origin principles when firms are monopolistic competitors facing variable demand elasticity and segmented markets our emphasis is on the international location of firms in the presence of market size asymmetries and trade costs under the destination principle an increase in the tax rate of a country always causes some firms to relocate to the other this effect may be reversed under the origin principle when economic integration is deep enough under tax harmonization the choice of a common tax principle is irrelevant for the market outcomes and for the global tax revenues it affects however the distribution of revenues between small and large countries c 2006 elsevier b v all rights reserved

microfinance and home improvement using retrospective panel data to measure program effects on fundamental events summary rigorously estimating the effects of development programs is notoriously difficult we present a methodology that borrows from event studies commonly used in the finance literature in our retrafect methodology a retrospective panel dataset is created based on fundamental events in the history of surveyed households events that are discrete unforgettable and important to welfare we apply this methodology to examine home improvements among 1 672 households in guatemala india and ghana using village and country year level fixed effects we find the probability of a major housing improvement increases from 0 038 to 0 070 in the years subsequent to a first microfinance loan

a life cycle consumption model with liquidity constraints theory and empirical results a structural consumption model incorporating endogenous liquidity constraints is fit to a cross section of 798 u s families liquidity constrained families are estimated to constitute 19 4 percent of the population sampled a group that accounts for 16 7 percent of consumption in the population sampled in sample simulations of the model suggest that a temporary tax has three to four times more impact on aggregate consumption than it would if liquidity constraints were not in effect copyright 1987 by the econometric society

saving puzzles and saving policies in the united states in the past two decades the widely reported personal saving rate in the united states has dropped from double digits to below zero first we attempt to account for the decline in the national income and product accounts nipa saving rate the macroeconomic literature suggests that 40 50 per cent of the drop since 1988 can be attributed to households spending stock market capital gains another 30 per cent is accounting transfers from personal saving into government and corporate saving because of the way pensions and capital gains taxes are treated in the nipa second while nipa saving measures are well suited to measuring the supply of new funds for investment and capital accumulation it is not clear that they should be the target of government saving policies finally we emphasize that the nipa saving rate is not useful in judging whether households are preparing for retirement or other contingencies many households have accumulated significant wealth primarily through retirement saving vehicles and capital gains even as the saving rate slid there remains a segment of the population who save little and whose behaviour appears untouched either by the stock market boom or the slide in personal saving we explore reasons and policy options for their puzzling low saving rate copyright 2001 oxford university press

child labor and agricultural shocks this paper examines the relationship between household income shocks and child labor in particular we investigate the extent to which transitory income shocks lead to increases in child labor and whether household asset holdings mitigate the effects of these shocks using data from a household panel survey in tanzania we find that both relationships are significant we investigate mechanisms that could account for these results including buffer stocks and borrowing

reversion taxes contingent benefits and the decline in pension funding abstract the evidence since the mid 1980s contradicts the axiom that firms maximize the arbitrage value of their tax exempt pension funds instead it suggests the emergence of a new minimum funding paradigm a prominent candidate to explain the change is a sequence of escalating reversion taxes enacted between 1986 and 1990 a valuable option to a pension plan sponsor is its ability to cancel the contingent portion of its pension obligations pension promises beyond those legally required as a result of reversion taxes this option value is preserved only if the firm maintains zero excess assets and falls in proportion to the amount of excess assets retained in the pension fund the potential for this tax policy to profoundly affect the economics of pension funding seems apparent by 1995 the cumulative effect of the new contribution behavior resulted in a 60 percent reduction in excess pension assets

tax competition and tax co ordination under destination and origin principles a synthesis this paper proposes a general framework for analysing commodity tax competition under destination and origin principles based on three possible tax spillovers the consumer price spillover the producer price terms of trade spillover and rent spillovers a model is presented which can be extended to accommodate all three spillovers using this model many of the results in the existing literature can be derived compared and extended

the illusory effects of saving incentives on saving the authors evaluate research on how tax based saving incentives iras and 401 k s affect saving previous research overstates the impact of the incentives on saving by failing to account for several issues households with saving incentives have stronger tastes for saving than others saving incentives have interacted with debt nonfinancial assets financial markets and pensions and saving incentives represent pretax balances whereas taxable accounts represent posttax balances accounting for these issues essentially eliminates the impact of saving incentives on saving the authors conclude that little if any of the contributions to existing saving incentives have raised saving

the comparison between destination and origin principles under imperfect competition abstract especially but not only in the european union closer economic integration is putting increasing pressure on the destination principle under which goods entering international trade are normally taxed this has raised the possibility of switching to the origin principle which dispenses with problematic border tax adjustments this paper compares destination and origin principles under conditions of imperfect competition previous analyses which have considered only the competitive case have led to a qualified presumption in favour of the destination principle a series of results are established here for both cooperative and non cooperative tax setting which challenge that presumption under imperfect competition

virtuous interactions in removing exclusion the link between foreign market access and access to education abstract we outline a methodology which aims to give an answer to the widespread demand of impact analyses by regulators or by funding agencies which need to evaluate the current and past performance of development projects and may lack time series evidence we devise a retrospective panel data approach to evaluate the dynamics of the effects of fair trade affiliation on the schooling decisions of a sample of thai organic rice producers across the past 20 years we find that the probability of school enrolment in families with more than two children is significantly affected by fair trade affiliation years we try to ascertain whether our finding is robust to endogeneity of producers choices of local cooperative affiliation and adoption of organic techniques the significant difference between pre and post fair trade affiliation performance documents that fair trade participation generates a significant break in the schooling decisions of affiliated households

tax principles and tax harmonization under imperfect competition a cautionary example this paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle in a standard model of imperfect competition while harmonization always makes at least one country better off and may be pareto improving when taxes are levied under the destination principle which currently applies in the european union harmonization of origin based taxes as recently proposed by the european commission is certain to be pareto worsening when the preferences in the two countries are identical and is likely to be so even when they differ

harmonisation of commodity taxes the restricted origin principle comment abstract this note shows that within a model where tariffs have distorted the pre tax situation as in the one used by berglas 1981 application of the restricted origin principle causes resource misallocation even when trade deflection takes place this conclusion is different from the one derived from models where the pre tax situation is pareto optimal e g shibata 1967 where trade deflection guarantees optimal allocation

how retirement saving programs increase saving this paper summarizes the authors work on the effect of ira and 401 k contributions on net personal saving they consider many different nonparametric approaches to controlling for heterogeneity in individual saving behavior and conclude that the weight of the available evidence suggests that contributions to both iras and 401 k s largely represent new saving the authors devote particular attention to reconciling their results with the findings in other studies that reach different conclusions sometimes using the same databases that the authors analyze methodological limitations that undermine the reliability of results in other studies explain many of these disparities

confronting the coffee crisis can fair trade organic and specialty coffees reduce small scale farmer vulnerability in northern nicaragua summary this paper links changing global coffee markets to opportunities and vulnerabilities for sustaining small scale farmer livelihoods in northern nicaragua changing governance structures corporate concentration oversupply interchangeable commodity grade beans and low farm gate prices characterize the crisis in conventional coffee markets in contrast certified fair trade and organic are two alternative forms of specialty coffee trade and production that may offer opportunities for small scale producers a research team surveyed 228 farmers to measure the impact of sales on organic and fair trade markets the results suggest that participation in organic and fair trade networks reduces farmers livelihood vulnerability 2004 elsevier ltd all rights reserved

longer term effects of head start specially collected data on adults in the panel study of income dynamics are used to provide evidence on the longer term effects of head start an early intervention program for poor preschool age children whites who attended head start are relative to their siblings who did not significantly more likely to complete high school attend college and possibly have higher earnings in their early twenties african americans who participated in head start are less likely to have been booked or charged with a crime there is some evidence of positive spillovers from older head start children to their younger siblings language en

the economics of child labor if child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents concern for the household s survival the popular argument for banning child labor loses much of its force however this assumption about parental decision making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market with one equilibrium where children work and another where adult wage is high and children do not work the paper establishes this result and discusses its policy implications copyright 1998 by american economic association

the working behavior of young people in rural cote d ivoire one of the major features of structural adjustment is an attempt to reallocate laborand hence output through changes in relative prices this article assesses how price changes affect the working patterns of young people in rural c6te d7voire the analysis is based on a model of the labor supply of rural households and on the construction of composite price indexes the data come from the c6te d ivoire living standards survey for 1985 and 1986 the panel aspect of the data allows the work choice made in one year to depend on the individual s choice in the previous year results indicate that the price of agricultural output generally is a positive incentive on the decision to participate in the labor force however this result depends heavily on the employment and education of the individual in the previous period those not already working are less likely to respond to favorable movements in the prices of cash crops by entering the work force this article reports on research on the determinants of working patterns among young people in rural c6te d ivoire because young people s decisions about working are closely related to decisions about schooling the article also focuses on the relationship between work and school the motivation for this study arises from an interest in the effects of structural adjustment programs on work incentives structural adjustment is expected to increase output by altering the incentives facing producers the effect of improved incentives could in principle be measured by directly observing changes in output the time lag between the change in incentives and the change in output can be substantial however especially when tree crops are involved so that data over a long period may be

tax competition when firms choose their organizational form should tax loopholes for multinationals be closed we analyze a sequential game between two symmetric countries when firms can invest in a multinational structure that confers tax savings governments are able to commit to long run tax discrimination policies before firms decisions are made and before statutory capital tax rates are chosen non cooperatively whether a coordinated reduction in the tax preferences granted to mobile firms is beneficial or harmful for the competing countries depends critically on the elasticity with which the firms organizational structure responds to tax discrimination incentives a model extension with countries of different size shows that small countries are likely to grant more tax preferences than larger ones along with having lower effective tax rates

domestic tax reform and international oligopoly abstract this paper examines the strategic use of domestic tax instruments and the welfare effects of multilateral domestic tax reform in a model of international cournot oligopoly the welfare effects of commodity tax harmonization appropriately defined are precisely as in the competitive case it is always potentially pareto improving and starting from the nash equilibrium in tax rates is pareto improving without any need for compensation a mutual reduction of production subsidies benefits the efficient low marginal cost country and harms the inefficient despite the pre existing monopoly distortion the effect on global efficiency is ambiguous

consumption during retirement the missing link in the life cycle this study presents the first evidence on the relation of consumption to lifetime wealth based on data from the 1973 and 1975 retirement history survey that have been linked to social security earnings records nearly 500 white married fully retired couples ages 62 69 form the basis of the analysis on average their consumption early in retirement exceeds by 14 percent the income that their financial pension and social security wealth can generate this implies that their saving both private and through social security is insufficient to sustain consumption throughout the rest of their lives additional evidence based on changes in spending between 1973 and 1975 shows that these households respond by reducing their real consumption at a rate sufficient to generate positive changes in net financial worth within a few years after retirement these two pieces of evidence can be rationalized by a rate of time preference much higher than the interest rate coupled with either a bequest motive or uncertainty about the length of life they also imply that even when combined with private pensions and savings social security in the united states today does not enable most recipients to maintain their living standard at the levels they enjoyed before they retired this abstract was borrowed from another version of this item

child labor in the global economy few issues in developing countries draw as much popular attention as child labor this paper begins by quantifying the extent and main characteristics of child labor it then considers the evidence on a range of issues about child labor fundamentally child labor is a symptom of poverty low income and poor institutions are driving forces behind the prevalence of child labor worldwide this study concludes by assessing the policy options to reduce worldwide child labor

the fair trade movement parameters issues and future research although fair trade has been in existence for more than 40 years discussion in the business and business ethics literature of this unique trading and campaigning movement between southern producers and northern buyers and consumers has been limited this paper seeks to redress this deficit by providing a description of the characteristics of fair trade including definitional issues market size and segmentation and the key organizations it discusses fair trade from southern producer and northern trader and consumer perspectives and highlights the key issues that currently face the fair trade movement it then identifies an initial research agenda to be followed up in subsequent papers

the ricardian approach to budget deficits persistent budget deficits have increased economists interest in theories and evidence about fiscal policy this paper develops the ricardian approach and contrasts it with standard models the discussion considers from major theoretical objections to ricardian equivalence finite lifetimes imperfect capital markets uncertainty about future taxes and incomes and the distorting effects of taxation the paper then considers empirical evidence on interest rates consumption and saving and current account deficits the conclusion is that the ricardian approach is a useful first order approximation and that this approach will probably become the benchmark model for assessing fiscal policy this abstract was borrowed from another version of this item

optimal second best tariffs on an intermediate input with particular reference to pakistan abstract this is a theoretical and empirical study of trade policy in a small open economy with intermediate inputs the first part develops a theoretical model and obtains expressions for optimal second best tariffs on an intermediate input when tax revenue is used to provide a public good and all other taxes are unalterable in the second part we estimate for pakistan the optimal tariff on sheet steel using the formula developed in the theoretical part we find that the current level of tariff is considerably higher than the optimal one even after making generous allowances for government s revenue constraint

international oligopoly and the taxation of commerce with revenue constrained governments we evaluate the incentives for strategic commodity tax setting under destination and origin regimes when competition is imperfect and commodity taxes must be used to finance the government budget different cases of international duopoly are compared where firms compete over quantities or prices and markets are segmented or integrated in each setting the international spillovers of tax policy are isolated and evaluated at the pareto efficient tax rate we find that origin based commodity taxation leads to a downward competition of tax rates in each of the models analysed whereas no similarly broad based incentives for beggar thy neighbour policies exist under the destination principle

harmonization of commodity taxes destination origin and restricted origin principles abstract the three tax principles are compared using a multiproduct custom union model it is shown that if member countries use the destination or origin principles no distortion or redistribution of income occurs even if their tax rates differ however under the restricted origin principle different tax rates result in distortion and income redistribution equal tax rates still result in a redistribution of real income an exact measurement of this redistribution is derived given these results it seems possible to conclude that the origin principle is superior to the other tax principles

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

impact of microfinance on schooling evidence from poor rural households in bolivia summary channels for the influence of microfinance programs on a rural household s demand for schooling are identified income growth risk management child labor demand gender empowerment and parent information within a random utility framework a model of household consumption investment in education and borrowing suggests determinants at the individual household and regional levels of the probability of schooling gaps using data from two surveys of households of clients of microfinance organizations in bolivia regression models examine determinants of schooling gaps inferences about otherwise positive microfinance impacts identify potential negative effects of increased child labor demand which challenge usual assumptions and pose dilemmas for policymakers

the latte revolution regulation markets and consumption in the global coffee chain abstract coffee is a truly global commodity and a major foreign exchange earner in many developing countries the global coffee chain has changed dramatically as a result of deregulation new consumption patterns and evolving corporate strategies from a balanced contest between producing and consuming countries within the politics of international coffee agreements power relations shifted to the advantage of transnational corporations a relatively stable institutional environment where proportions of generated income were fairly distributed between producing and consuming countries turned into one that is more informal unstable and unequal through the lenses of global commodity chain analysis this paper examines how these transformations affect developing countries and what policy instruments are available to address the emerging imbalances

on the marginal welfare cost of taxation this paper develops a rigorous partial equilibrium analysis of the determinants of margin al welfare cost mwc of taxes on labor earnings it shows that four key parameters interact to determine the magnitude of mwc using aggregate data and plausible ranges of values for the parameters mwc can vary from under 10 percent to more than 300 percent of marginal tax revenue intermediate parameter values sugge st mwc is in the 25 50 percent range however the more extreme estimates cannot be ruled out on the basis of available evidence suggesting that mwc cannot yet be copyright 1987 by american economic association

welfare effects of changing commodity tax rates toward uniformity abstract this paper presents a theory of tax reform that is applicable to a many good economy where i the initial tax structure is arbitrarily given ii no lump sum tax exists and iii the initial tax revenue must be maintained after the reform sufficient conditions are established under which tax changes definitely result in increases in welfare they indicate that in a wide class of situations the uniform tax structure can be a useful intermediate target on the way to optimum

procrastination and obedience in this lecture i shall focus on situations involving repeated decisions with time inconsistent behavior although each choice may be close to maximizing and therefore result in only small losses the cumulative effect of a series of repeated errors may be quite large thus in my examples decision makers are quite close to the intelligent well informed individuals usually assumed in economic analysis but cumulatively they make seriously wrong decisions that do not occur in standard textbook economics this lecture discusses and illustrates several pathological modes of individual and group behavior procrastination in decision making undue obedience to authority membership of seemingly normal individuals in deviant cult groups and escalation of commitment to courses of action that are clearly unwise in each case individuals choose a series of current actions without fully appreciating how those actions will affect future perceptions and behavior the standard assumption of rational forwardlooking utility maximizing is violated the nonindependence of errors in decision making in the series of decisions can be explained with the concept from cognitive psychology of undue salience or vividness for example present benefits and costs may have undue salience relative to future costs

sri lanka can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks this brief summarizes the results of a gender impact evaluation study can conditional cash transfer cct programs serve as safety nets in keeping children at school and from working when exposed to shocks conducted the program started in 1997 and still exists today in sri lanka the study observed that income shocks on poor households are known to induce parents to take their children out of school and send them to work when other risk coping instruments are insufficient cct programs where the condition is on school attendance have been shown to be effective in increasing educational achievements and reducing child work shocks are highly prevalent and children have irregular periods of school enrollment children who are taken out of school are less likely to re enroll

the future of value added tax in the european union the current vat regime in the eu introduced with the removal of fiscal frontiers in 1993 is explicitly transitional we consider the issues that arise in designing a definitive regime the two most widely canvassed options adoption of a clearing house or a shift to origin taxation are found wanting the paper develops an alternative strategy combining a harmonized rate of vat on transactions between firms both between and within member states with national discretion over rates applied to final sales this offers the prospect of a real improvement on current arrangements

reforming an asymmetric union on the virtues of dual tier capital taxation the tax competition for mobile capital in particular the reluctance of small countries to agree on measures of tax coordination has ongoing political and economic fallouts within europe we analyse the effects of introducing a two tier structure of capital taxation where the asymmetric member states of a union choose a common federal tax rate in the first stage and then non cooperatively set local tax rates in the second stage we show that this mechanism effectively reduces competition for mobile capital between the members of the union moreover it distributes the gains across the heterogeneous states in a way that yields a strict pareto improvement over a one tier system of purely local tax choices we also discuss the effects of diverging capital endowments within the union and capital flows to third countries

school subsidies for the poor evaluating the mexican progresa poverty program abstract this paper evaluates how the progresa program which provides poor mothers in rural mexico with education grants has affected enrollment poor children who reside in communities randomly selected to participate in the initial phase of the progresa are compared to those who reside in other control communities pre program comparisons check the randomized design and double difference estimators of the program s effect on the treated are calculated by grade and sex probit models are also estimated for the probability that a child is enrolled controlling for additional characteristics of the child their parents local schools and community and for sample attrition to evaluate the sensitivity of the program estimates these estimates of program short run effects on enrollment are extrapolated to the lifetime schooling and the earnings of adults to approximate the internal rate of return on the public schooling subsidies as they increase expected private wages

which border taxes origin and destination regimes with fiscal competition in output and emission taxes abstract this paper posits a two stage game in tax regime and tax rates to study the property of second best emission and output taxes in a two country world with an atmospheric externality it shows that i either the destination destination or the origin origin tax regime may constitute the subgame perfect nash equilibrium of this game ii either regime may pareto dominate the other iii it is possible to have a prisoner s dilemma game where the origin origin regime pareto dominates but the choice of the destination regime is the dominant strategy for each country other results include iv under origin origin regime the output tax is used for fiscal competition the emission tax is set at a rate equal to the national marginal social damage of emissions and public goods are provided suboptimally v under destination destination regime the output tax is ineffective as an instrument for fiscal competition the emission tax is used not only for combating pollution but also for tax competition the tax is set at a rate below the national marginal social damage of emissions emissions are pushed above their closed economy level the provision of public goods are optimal

understanding why high income households save more than low income households abstract we use a calibrated life cycle model to evaluate why high income households save as a group a much higher fraction of income than do low income households in us cross section data we find that 1 age and relatively permanent earnings differences across households together with the structure of the us social security system are sufficient to replicate this fact 2 without social security the model economies still produce large differences in saving rates across income groups and 3 purely temporary earnings shocks of the magnitude estimated in us data alter only slightly the saving rates of high and low income households

racial and ethnic differences in wealth in the health and retirement study this paper examines wealth data in the health and retirement study hrs in comparison with asset data in other major surveys the quality of hrs asset data is high missing asset data does remain a problem however to which future hrs analysts must remain sensitive evidence is presented showing that it is no accident that asset data are missing and solutions for imputing missing data are developed finally racial and ethnic wealth disparities are large these minority wealth disparities are due in part to differential inheritances and desired bequests as inequities perpetuate themselves across generations the disparities are also due to lower minority incomes poorer health and an excessively narrow definition of wealth that excludes social security and employer pensions authors

market size and tax competition abstract with international externalities different country sizes imperfect competition and trade costs tax competition for mobile firms is efficiency enhancing with respect to the free market outcome under both scenarios the resulting inefficiencies in international specialization and trade flows vanish when trade costs are low enough otherwise only international tax coordination can implement the efficient spatial distribution of firms

fighting the tide alternative trade organizations in the era of global free trade abstract this paper explores the proliferation of fair trade organizations their products services and client groups in order to establish the impact of this movement although small in volume alternative trade represents a unique response to the relentless pursuit of free trade through the gatt wto process the economic underpinnings of both fair trade and subsidy programs in general such as the eu s stabilization of exchange system are evaluated ultimately alternative trade can provide significant assistance to targeted groups within developing countries including gains in production and export proficiency on the negative side fair trade is likely to prolong the dependence of developing countries on products with poor future prospects

commodity taxation and parallel imports we examine the interaction between commodity taxes and parallel imports in a two country model with imperfect competition while governments determine non cooperatively their commodity tax rate the volume of parallel imports is determined endogenously by the retailing sector we compare the positive and normative implications of having commodity taxes based on destination or origin principle we show that as the volume of parallel imports increases non cooperative origin taxes converge while destination taxes diverge moreover origin taxes are more similar and lead to higher aggregate welfare levels than destination taxes

what accounts for the variation in retirement wealth among u s households even among households with similar socioeconomic characteristics saving and wealth vary considerably life cycle models attribute this variation to differences in time preference rates risk tolerance exposure to uncertainty relative tastes for work and leisure at advanced ages and income replacement rates these factors have testable implications concerning the relation between accumulated wealth and the shape of the consumption profile using the panel study of income dynamics and the consumer expenditure survey we find little support for these implications the data are instead consistent with rule of thumb mental accounting or hyperbolic discounting theories of wealth accumulation jel di d91 e21

the effects of pensions on household wealth a reevaluation of theory and evidence this paper examines the extent to which households offset pension wealth with reductions in other wealth systematic econometric biases imply that the estimated offsets in previous empirical studies are smaller than the true offset and may even have the wrong sign new empirical estimates that do not correct for the biases generate little offset between pensions and other wealth estimates that correct for the biases show substantially more offset a smaller impact of pensions on overall saving than in most previous studies the estimates also indicate that the effects of pensions on wealth vary significantly across households

commodity tax competition under destination and origin principles abstract this paper studies the effect of switching from the destination to the origin principle of taxation on non cooperative commodity tax equilibrium when taxes are constrained to be uniform across commodities the switch has no effect when differentiated taxes are allowed the effects of the switch depend on whether countries are small or large in both cases the switch imposes the requirement that taxes must be uniform across commodities within each country in the second case there are two further effects of the switch i negative spillover effects from tax policy are introduced ii incentives to manipulate the terms of trade are changed the switch does not necessarily lead to a fall in all tax rates

household income and child schooling in vietnam the stronger are the associations between household income and child schooling the lower is intergenerational social mobility and the less equal is opportunity this study estimates the associations between household income and children s school success in vietnam the estimates indicate that these associations are considerable this article also investigates some ways in which policies relate to household incomes school fees are progressive but school fees are only about one third of what households pay directly to schools and are a much smaller proportion of a household s total school related expenditures total household expenditures paid directly to schools increase with household income less proportionately than do school fees alone so the overall structure of such payments is less progressive than is the structure of school fees because school enrollment is positively related to household income moreover the structure of school fees is less progressive for the entire population than for the selected subset that has children enrolled in school further the two school quality measures that have the strongest positive association with children s school success are much more available to higher income households meaning that higher income households have greater school expenditures in part because they are obtaining higher quality schooling and not because charges for the same quality schooling are progressive across income classes

destination based vs origin based commodity taxation in large open economies with unemployment we construct a perfectly competitive model of two symmetric countries producing tradable commodities and a public consumption good destination or origin based taxes are levied on the consumption of the tradable goods in both countries a fixed wage leads to involuntary unemployment we derive the nash equilibrium consumption taxes under the two taxation principles with endogenous world prices and compare them to i the cooperative rates and ii the rates when world prices are fixed we demonstrate that with endogenous world prices the induced terms of trade effects cancel out under the destination principle but they prevail under the origin principle of taxation nash equilibrium destination based taxes are inefficiently low when the exporting sector in each country is non labour intensive the nash equilibrium origin based taxes can be either higher or lower than the corresponding cooperative rates

will destination based taxes be fully exploited when available an application to the u s commodity tax system abstract we develop a tax competition model that allows for the setting of both an origin based and a destination based commodity tax rate in the presence of avoidance and evasion in the presence of evasion jurisdictions will give cross border shoppers tax preferential treatment thus not fully exploiting the potential of destination based taxation moreover the divergence between origin based and destination based taxes is stronger when the incentives for consumers tax arbitrage opportunities increase the united states is one example of many such systems while sales taxes are due at the point of sale use taxes are due on goods purchased out of state we document that when able to set both rates a majority of jurisdictions levy destination based use taxes at a lower rate than origin based sales taxes in response to changes in state level policies that increase tax avoidance opportunities the results of the empirical model broadly confirm our theory

double tax discrimination to attract fdi and fight profit shifting the role of cfc rules abstract governments worldwide use targeted tax policies to trade off the gains from increased fdi against the cost of excessive profit shifting by multinational firms we show that nationally optimal tax systems generally incorporate both thin capitalization rules which tax discriminate between purely national and multinational firms and controlled foreign company cfc rules which discriminate between home based and foreign based multinationals in the non cooperative policy equilibrium both thin capitalization rules and cfc rules are set more lenient than if tax policies were chosen cooperatively implying an excessive tax discrimination in favor of multinationals we also analyze the effects of reduced transaction costs for fdi and reduced costs for debt shifting on the optimal policy mix our results correspond to the observed developments of anti avoidance rules in oecd countries

pareto efficient international taxation this paper analyzes pareto efficient international tax regimes because every country faces its own national budget constraint the diamond mirrlees production efficiency theorem which underlies key tenets of policy advice in international taxation the desirability of destination basis for commodity taxation of the residence principle for capital income taxation and of free trade does not apply the paper establishes conditions relating to the availability of explicit or implicit devices for reallocating tax revenues across countries under which production efficiency is nevertheless desirable and characterizes the precise ways in which pareto efficient international taxation may require violation of established tenets

tacit collusion and international commodity taxation the paper employs a model of dynamic price competition to study how international commodity taxation affects the stability of collusive agreements when producers in an international duopoly agree not to export into each other s home market we consider both the choice of international tax principle and the harmonization of tax rates and differentiate between a setting where production costs differ between countries and a setting where exogenous tax rate differentials are the only asymmetry the conclusions derived from this model differ strongly from those obtained under the assumption of competitive product markets

assessing the effectiveness of saving incentives concluding that iras and 401 k s do increase saving this text provides a fresh cost benefit approach for analyzing the success of savings incentives it compares the new savings to the government tax revenue lost through contributions to iras and 401 k s

the dynamic efficiency cost of not taxing housing traditional welfare cost estimates of tax subsidies for owner occupied housing are less than 0 5 of gnp in the united states and canada this paper argues that these static measures understate the true cost of the tax subsidy increasing the capital income tax makes untaxed housing more valuable delivering a windfall bonus to existing homeowners at the expense of future generations this intergenerational transfer has real efficiency effects in the presence of pre existing tax distortions when housing is in fixed supply the dynamic efficiency cost of preferential tax treatment for housing is as much as 2 2 of gnp or 120 billion dollars in 1990

the trade off between child quantity and quality an empirical investigation of trade offs between number of children and their scholastic performance confirms that family size directly affects children s achievement though parents show no favori

stock market wealth and consumption this paper explores the link between changes in the aggregate value of corporate stock and changes in consumer spending it presents data on the distribution of corporate stock ownership based on the 1998 survey of consumer finances it also uses time series evidence on the comovement of stock market wealth and various categories of consumer spending to calibrate the wealth effect it concludes that in the year after a change in stock market values consumer spending is likely to rise by between one and two cents for each dollar increase in the value of corporate stock

on the superiority of the destination over the origin principle of taxation for intra union trade this paper shows that the widely accepted view that the destination principle is preferred to the restricted origin principle on allocative efficiency grounds is not correct in a more realistic model of a customs union with common external tariffs the restricted origin principle can be superior to the destination principle for both general and nongeneral taxes the two principles can also be equivalent in the case of both general and nongeneral taxes but under different sets of conditions copyright 1992 by royal economic society

is there a retirement savings puzzle in this paper we ask whether households are saving enough for their retirement we use data on income expenditure and expenditure components to analyse patterns of behaviour at and around the time of retirement for successive date of birth cohorts we compare periods of unemployment to periods of retirement and separate expenditures into categories reflecting work related expenditures basic necessities and other goods we find that income typically falls by more at unemployment than retirement but the reverse is true for expenditure we observe falls in expenditure at retirement for all expenditure categories using a stochastic life cycle model including mortality rates we assess the anticipated impact of retirement on consumption against that of unemployment the inter relationship between goods and leisure explains a large part of the persistent fall in expenditure at retirement we argue that the only way in which the life cycle hypothesis could be reconciled with the remaining unanticipated dip in consumption would be with the systematic arrival of unexpected adverse information at the time of retirement