state fiscal institutions and empty nest migration are tiebout voters hobbled abstract using the health and retirement study and a national panel of local fiscal data we test a lifecycle model of tiebout sorting on average cross state empty nest movers presumed to be out of fiscal equilibrium experience large fiscal gains in the form of reduced exposure to local school spending and property taxes while local empty nest movers experience no fiscal adjustment we find evidence that within state fiscal adjustment is constrained by state institutions that limit local discretion empty nest households moving within states with school finance equalization do not engage in tiebout consistent fiscal adjustment while those moving within states lacking school finance equalization adjust substantially

you can t save alone commitment in rotating savings and credit associations in kenya abstract this article examines one reason why individuals develop and maintain local level financial savings organizations known as rotating savings and credit organizations or roscas economic theories suggest that individuals form roscas to finance the purchase of a lumpy durable good in response to intrahousehold conflict over savings or to provide themselves with insurance the article proposes an additional hypothesis for rosca participation saving requires discipline and some roscas may be formed to provide a collective mechanism for commitment in the presence of time inconsistent preferences data from 70 roscas located in western kenya indicate that the commitment hypothesis is plausible and broadly consistent with the design and patterns of participation in these roscas as many rosca participants put it you can t save alone

the microfinance promise in the past decade microfinance programs have demonstrated that it is possible to lend to low income households while maintaining high repayment rates even without requiring collateral the programs promise a revolution in approaches to alleviating poverty and spreading financial services and millions of poor households are served globally a growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success particularly the use of group lending contracts with joint liability for the most part however high repayment rates have not translated into profits and studies of impacts on poverty yield a mixed picture in describing emerging tensions the paper highlights the diversity of innovative mechanisms beyond group lending contracts the measurement of financial sustainability the estimation of economic and social impacts the costs and benefits of subsidization and the potential to reduce poverty through savings programs rather than just credit the promise of microfinance has pushed far ahead of the evidence and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion

gender norms in financial markets evidence from kenya abstract the role of institutions rules and norms in markets is increasingly recognized in development discourse this paper considers the role of gender relations for rules and norms in financial markets using evidence from central kenya it develops a framework for establishing the influence of gender on the demand for and access to financial services so explaining the gender differentiated use of rotating savings and credit associations roscas it first analyzes intrahousehold norms related to income and expenditure flows and their management so identifying gendered patterns of demand second by conceptualizing financial intermediaries as operating within rules and norms it allows the influence of gender relations on access to financial services to be more systematically investigated

mobility behavior of the elderly mobility patterns of the elderly provide a particularly interesting theoretical subcase of a more general migration model which interacts individual specific traits e g health and retirement status and location specific traits e g amenities rents and wages the spatially invariant incomes pensions dividends etc of the retired are shown to lead to migration toward areas where the wage and rent compensation for amenities necessary for spatial equilibrium occurs primarily in the labor market rather than in the land market empirical evidence appears to be consistent with theoretical expectations more investigation however is clearly desirable

the economics of roscas and intrahousehold resource allocation this paper investigates individual motives to participate in rotating savings and credit associations roscas detailed evidence from roscas in a kenyan slum nairobi suggests that most roscas are predominantly composed of women particularly those living in a couple and earning an independent income to explain this phenomenon we propose an argument based on conflictual interactions within the household participation in a rosca is a strategy a wife employs to protect her savings against claims by her husband for immediate consumption the empirical implications of the model are then tested using the data collected in kenya

is there reciprocity in a reciprocal exchange economy evidence of gendered norms from a slum in nairobi kenya norms of reciprocity help enforce cooperative agreements in bilateral sequential exchange we examine the norms that apply in a reciprocal exchange economy in our one shot investment game in a nairobi slum people adhered to the norm of balanced reciprocity which obligates quid pro quo returns for any level of trust the norm is gendered with people more likely to comply when confronted with women rather than men and differs from conditional reciprocity prevalent in developed countries according to which greater trust is rewarded with proportionally larger returns balanced reciprocity produces less trust and trustworthiness and smaller gains from trade than conditional reciprocity jel c72 c91

ethnic networks and access to credit evidence from the manufacturing sector in kenya it is often anecdotally observed that networks can facilitate exchange but there are few empirical studies that explore the significance of such networks in this paper the authors analyze the impact of ethnic networks on access to finance of kenyan firms using an exceptionally rich data set the authors find that ethnicity does not affect access to formal sources of finance but being a member of an ethnic group is significant in explaining access to informal sources of finance like supplier credit the authors interpret these results in terms of information and contract enforcement mechanisms that work within ethnic groups but not across them

an extension of the tiebout hypothesis of voting with one s feet the medicaid magnet hypothesis this study empirically extends the tiebout hypothesis of voting with one s feet in two ways first it provides updated estimates using net migration data for the period 2000 2008 second in addition to investigating variables reflecting public education outlays property taxation and income taxation it investigates whether migrants are attracted to states with higher medicaid benefits per recipient the latter hypothesis is referred to as the medicaid magnet hypothesis the analysis includes three economic variables three quality of life variables and three tiebout type factors in addition to medicaid benefits results indicate that consumer voters were attracted to states with higher per pupil public school spending lower property and income tax rates and that certain consumer voters may be attracted to states that offer higher levels of medicaid benefits

the effect of welfare and wage levels on the location decisions of female headed households abstract this paper develops and estimates a model designed to calculate the impact of welfare benefit levels wages and tax rates on the location choices of female headed households the empirical model assumes that women simultaneously choose both where they will live and whether or not they will participate in the welfare system based on their expected income and expected hours of work for each location participation possibility these income and hours expectations depend in turn on the welfare benefits wage and tax rates facing each household in each location it is found that both regional welfare levels and wage rates have a significant effect on the location decisions of this population the probability of a typical female headed household with little outside income leaving an area with low welfare payments and low wages can be as much as 12 points higher over a 4 year period than the probability of leaving a high welfare high wage area

income taxes and the destination of movers to multistate msas abstract we examine how differences in state income tax rates as well as other state and local taxes and public service expenditures influence the choice of state of residence for households federal tax filers moving into multistate metropolitan areas msas using data from the irs on the migration of taxpayers msas that are on borders provide a spatial discontinuity discrete differences in state tax rates within a single labor market these msas allow residents to live in one state and work in another state we find that differences in state income tax rates have a significant impact on the relative rate of migration to the states within an msa however contrary to what would be expected this impact is only significant in msas in which the filing state is based on employment states without reciprocity and not for those states in which the filing state is the state of residence states with reciprocity in msas where states do not have reciprocity agreements a difference of ten percent in tax rates leads to a 4 1 percent difference in the relative rate of incoming taxpayers analogously we find that a ten percent difference in state tax rates in these msas results in a 3 3 percent difference in the rate of tax base inflow agi our results suggest that one reason that differences in state income taxes appear to have more impact in multistate msas without reciprocity is that only relatively large differences in state income tax rates have any impact on migration and these differences are much more pronounced in msas without reciprocity

demographic change intergenerational linkages and public education in this brief paper i explore several issues related to u s demographic change and the political economy of public education i describe the existing empirical evidence that suggests that older and childless voters are less likely to support public school spending than younger voters with children i then note several unresolved issues about the degree to which rational self interest should lead older voters to vote for low levels of public school spending excerpt

ethnic diversity social sanctions and public goods in kenya abstract this paper examines ethnic diversity and local public goods in rural western kenya the identification strategy relies on the stable historically determined patterns of ethnic land settlement ethnic diversity is associated with lower primary school funding and worse school facilities and there is suggestive evidence that it leads to poor water well maintenance the theoretical model illustrates how inability to impose social sanctions in diverse communities leads to collective action failures and we find that school committees in diverse areas do impose fewer sanctions on defaulting parents we relate these results to the literature on social capital and economic development and discuss implications for decentralization in less developed countries

a brief empirical note on the tiebout hypothesis and state income tax policies some years ago tiebout 1956 418 hypothesized that the consumervoter may be viewed as picking that community which best satisfies his preference pattern for public goods the consumer voter moves to that community whose local government best satisfies his set of preferences based upon this argument by tiebout this brief note seeks to empirically examine the impact of state income tax policy upon the geographic mobility of consumer voters in the united states more specifically we attempt to determine whether the existence of a state income tax significantly influences the in migration of consumer voters naturally the analysis includes suitable non tax control variables to reflect other factors which may influence the migration decision calculus

the dynamics of chronic inflation in brazil 1968 1985 this article develops an error correction model with the aim of analyzing the behavior of prices during a period of chronic inflation in brazil the degree of inflationary inertia is estimated and tests for the importance of disequilibria in the domestic money foreign goods labor and domestic goods markets on inflation are carried out

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

exploring gendered behavior in the field with experiments why public goods are provided by women in a nairobi slum abstract women and particularly women in all female groups appear to be especially adept at providing public goods in developing countries we use a one shot public goods game to explore the effect of sex and a group s sex composition on the voluntary provision of public goods in a nairobi slum sex heterogeneity hurts the voluntary provision of public goods because women but not men contribute less in mixed sex than same sex groups women contribute as much as men in same sex groups this result is driven by women s pessimism and men s optimism about others contributions in mixed sex groups rather than by gendered social preferences

inertial inflation indexation and price stickiness evidence from brazil abstract this paper evaluates the inertial inflation hypothesis for brazil the hypothesis posits that indexation created a feedback mechanism such that one time supply shocks were fully transmitted into permanent changes in inflation a theoretical model is used to show that this outcome is based on the assumption of perfect price flexibility however with price stickiness indexation does not produce inertial inflation the degree of inertia is then compared for two periods one without indexation 1945 1963 and one with indexation 1969 1985 finally vector autoregressive representations are estimated for the latter period allowing for price stickiness the empirical results do not support the hypothesis

honey i shrunk the kids benefits revisiting intergenerational conflict in oecd countries intergenerational conflict may arise when the interests of different age groups do not align we examine cross country data to find evidence for this conflict in oecd countries we derive our results from a fgls estimation model which is complemented by a system gmm estimation to account for potential endogeneity the data are from a panel of 22 oecd countries over the time period 1985 2005 we find little support for intergenerational conflict in general however those who are close to statutory retirement age dislike public expenditure on families and education because once they retire they will have less income compared to their work income this effect is transitory however implying a change in voting behavior during retirement age

welfare policies and migration of the poor in the united states an empirical note this paper has investigated the impact of geographic welfare benefit differentials upon migration in the united states unlike other related studies which typically focus upon black migration as a surrogate measure of migration of the poor the present study focuses directly upon migration of the poor per se a variety of reduced form estimates are provided the evidence strongly suggests that the net in migration of the poor is positively and significantly influenced by higher nominal afdc levels and by higher real afdc levels these findings support the welfare magnet hypothesis which alleges that relatively high welfare levels act to attract poor migrants moreover given that poor migrants are attracted non only by high nominal welfare levels but also by high real welfare levels an argument can be made for establishing geographically uniform real welfare benefit levels in the united states this uniformity presumably should act over the long run to eliminate the human resource distortions being caused by the currently prevailing welfare system

do the elderly vote with their feet this research explores whether the elderly vote with their feet by migrating to states with government policies that treat them favorably a theoretical model is presented that clarifies the effects of cost of living amenities and the public sector on migration decisions and that informs our empirical analysis using state level migration data from the 1990 census we estimate out migration and in migration equations that suggest that the public sector is an important determinant of elderly migration but in sometimes unexpected ways our results lend some support for the tiebout hypothesis but they also raise serious questions about the nature of the elderly s preferences for government policy