bank risk taking securitization supervision and low interest rates evidence from the euro area and the u s lending standards using a unique dataset of the euro area and the u s bank lending standards we find that low monetary policy short term interest rates soften standards for household and corporate loans this softening especially for mortgages is amplified by securitization activity weak supervision for bank capital and low monetary policy rates for an extended period conversely low long term interest rates do not soften lending standards finally countries with softer lending standards before the crisis related to negative taylor rule residuals experienced a worse economic performance afterward these results help shed light on the origins of the crisis and have important policy implications the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

an evaluation of the life cycle effects of minimum pensions on retirement behavior in this paper we explore the effects of the minimum pension program on welfare and retirement in spain this is done with a stylized life cycle model which provides a convenient analytical characterization of optimal behavior we use data from the spanish social security to estimate the behavioral parameters of the model and then simulate the changes induced by the minimum pension in aggregate retirement patterns the impact is substantial there is a threefold increase in retirement at 60 the age of first entitlement with respect to the economy without minimum pensions and total early retirement before or at 60 is almost 50 larger copyright 2007 john wiley sons ltd

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments

effects of family background on earnings and returns to schooling evidence from brazil we investigate whether omitted family background variables are responsible for high returns to schooling estimated in brazil returns to schooling fall by about one third when parental schooling is added to wage equations surprisingly the schooling of fathers in law has larger effects on wages than the schooling of fathers on the basis of a model of assortative mating we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market we conclude that the family background bias in returns to schooling is modest and need not imply returns to family connections

retirement in dual career families a structural model a structural econometric model of retirement of dual career couples is specified and estimated with panel data from the national longitudinal survey of mature women a coincidence of spouses retiring together despite the younger ages of wives suggests explicit efforts at coordination the estimates suggest that one reason is a correlation of tastes for leisure more important each spouse and perhaps husbands in particular values retirement more once their spouse has retired the opportunity set accounts for peaks in the retirement hazards of each spouse individually but not for peaks in the simultaneous retirement of both spouses

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

co2 emissions non renewable and renewable electricity production economic growth and international trade in italy abstract this paper applies the autoregressive distributed lag ardl bounds testing approach to cointegration to investigate the dynamic causal relationships between co2 emissions per capita real gdp per capita per capita non renewable electricity production and per capita renewable electricity production and international trade in the case of italy from 1960 to 2011 we find cointegration among these variables in the presence of possible structural breaks and we overcome the problem of multicollinearity in the research design the environmental kuznets curve ekc hypothesis is validated analytically because the estimated pollution model indicates that economic growth leads to less pollution over time per capita renewable electricity production reduces the level of co2 emissions per capita in the short run and in the long run whereas international trade only impacts positively upon carbon dioxide emissions per capita in the long run international trade granger causes co2 emissions per capita and non renewable electricity production per capita moreover the results depict the existence of the long run unidirectional granger causality relation running from output per capita to renewable electricity production per capita and from non renewable electricity production per capita to renewable electricity production per capita the findings indicate that renewable electricity production is a key solution in reducing pollutant emissions over time this result should be of concern to policy makers

breaking free of the triple coincidence in international finance the traditional approach to international finance is to view capital flows as the financial counterpart to savings and investment decisions assuming further that the gdp boundary defines both the decision making unit and the currency area this triple coincidence of gdp area decision making unit and currency area is an elegant simplification but misleads when financial flows are important in their own right first the neglect of gross flows when only net flows are considered can lead to misdiagnoses of financial vulnerability second inattention to the effects of international currencies may lead to erroneous conclusions on exchange rate adjustment third sectoral differences between corporate and official sector positions can distort welfare conclusions on the consequences of currency depreciation as macroeconomic risks may be underestimated this paper illustrates the pitfalls of the triple coincidence through a series of examples from the global financial system in recent years and examines alternative analytical frameworks based on balance sheets as the unit of analysis

the currency dimension of the bank lending channel in international monetary transmission abstract we investigate how the use of a currency transmits monetary policy changes in the global banking system we use a newly available rarely accessed dataset on the bilateral cross border lending flows of 27 bis reporting lending banking systems to borrowers in 51 countries broken down by currency denomination usd eur and jpy we have three main findings first we identify a currency dimension of the international bank lending channel monetary changes in a currency significantly affect cross border lending flows in that currency even when neither the lending banking system nor the target country uses that currency as their own second this transmission works mainly through lending to non banks third the currency dimension of the bank lending channel works similarly across the three currencies suggesting that the usd may not be unique in this respect

welfare inequality and financial effects of a multi pillar pension reform the case of peru this paper studies the potential effects of a multi pillar pension system on pension inequality actuarial liability and welfare in peru by means of simulations of future distributions of pensions with social security administrative records the results show that actual pension inequality and actuarial liability can be substantially reduced with welfare preserving policies the simulations illustrate that when welfare is considered it is important to define the implied value judgments which are not universally agreed upon therefore this paper highlights the trade offs of a pension policy reform and contributes to assess the second generation of pension reforms in latin america

time inconsistency and welfare program participation evidence from the nlsy we empirically implement a dynamic structural model of labor supply and welfare program participation for agents with potentially time inconsistent preferences using panel data on the choices of single women with children from the nlsy 1979 we provide estimates of the degree of time inconsistency and of its influence on the welfare take up decision with these estimates we conduct counterfactual experiments to quantify the utility loss stemming from the inability to commit to future decisions and the potential utility gains from commitment mechanisms such as welfare time limits and work requirements

health insurance and retirement of married couples summary most health insurance in the usa is provided by employers until eligibility for public health insurance medicare begins at age 65 retiring before 65 exposes workers who lack retiree health insurance coverage to the risk of catastrophic medical expenditure we solve and estimate a dynamic model of the employment behavior of older married couples that includes risky medical expenditure and health insurance parameter estimates imply that the risk reducing feature of health insurance can account for about half of the observed association between retiree health insurance and employment for married men but can account for only one tenth of the much larger observed association for married women policy simulations imply very small effects on employment of changing the age of eligibility for medicare from 65 to 67 copyright 2006 john wiley sons ltd

the effect of unconventional monetary policy on cross border bank loans evidence from an emerging market abstract we analyze the impact of quantitative easing by the federal reserve european central bank and bank of england on cross border credit flows relying on comprehensive loan level data we find that fed qe strongly boosts cross border credit granted to turkish banks by banks located in the us euro area and uk while ecb and boe qes work only moderately through banks in the ea and uk respectively in general qe works at short maturities across bank locations and loan currencies more strongly for weaker lenders and borrowers and may have resulted in maturity mismatches in turkish banks searching for yield 99 words

returns to education a further international update and implications this paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60 the new cross country evidence confirms and reinforces earlier patterns namely that returns are highest for primary education the general curricula the education of women and countries with the lowest per capita income the findings have important implications for directing future investment in education which for efficiency and equity purposes should concentrate on these priority areas

productive government expenditures and long run growth the purpose of this paper is to review some of the recent developments in endogenous growth models specifically our focus is on the growth effects of productive government spending in dynamic general equilibrium models we use a simple overlapping generations model as our basic framework and illustrate the role of taxes and spending we then examine several related issues nonrivalry in publicly provided goods existence and uniqueness of competitive equilibrium endogenous public policy ways of financing public expenditures composition of publicly provided goods and services and private alternatives finally we review some empirical results related to output elasticity of public capital and educational expenditures

the international transmission of bank capital requirements evidence from the uk abstract we use data on uk banks minimum capital requirements to study the impact of changes to bank specific capital requirements on cross border bank loan supply from 1999q1 to 2006q4 by examining a sample in which each recipient country has multiple relationships with uk resident banks we are able to control for demand effects we find a negative and statistically significant effect of changes to banks capital requirements on cross border lending a 100 basis point increase in the requirement is associated with a reduction in the growth rate of cross border credit of 5 5 percentage points we also find that banks tend to favor their most important country relationships so that the negative cross border credit supply response in core countries is significantly less than in others banks tend to cut back cross border credit to other banks including foreign affiliates more than to firms and households consistent with shorter maturity wholesale lending which is easier to roll off and may be associated with weaker borrowing relationships

labour market segmentation a local labour market analysis using alternative approaches earlier studies have generally attempted to establish the presence or otherwise of labour market segmentation using a single technique using data drawn form the british social and economic life initiative sceli for six local labour markets this paper tests for segmentation using four different methods of analysis a simple career non career model cluster analysis and switching regressions the results in general suggest that explanatory power is not improved by analysing the labour market in different segments but this simple career model points to higher rewards for given characteristics in the career sector and the results of the switching regression model are consistent with duality in one of the six markets

labor market integration in urban ethiopia 1994 2004 abstractan analysis of panel data on individuals in a random selection of urban households in ethiopia reveals large sustained and unexplained earnings gaps between public and private and formal and informal sectors over 1994 2004 at the same time we find first that the rate of mobility increased in the two pairs of sectors sample transitions rates grew across survey waves while state dependence in sector choice decreased second the correlation between sector choice and earnings gaps increased over the same period in particular the correlation between comparative earnings and selection into the informal sector was high throughout the survey decade and increased in magnitude over the second half of the period these results suggest that ethiopia s urban labor markets might be integrating

pension design with a large informal labor market evidence from chile this article investigates the fiscal and welfare trade offs involved in designing a pension system when workers can avoid contributing by working informally using a life cycle model of labor supply and saving decisions i structurally estimate preferences and earnings opportunities in the formal and informal sectors using data on chilean households i find limited support for formal jobs rationing instead mandatory pension contributions significantly encourage informality policy experiments show that chile could lower minimum pension spending by 23 while guaranteeing the same income to retirees if the minimum pension s implicit tax rate was increased to 60

labor market segmentation and the determination of wages in the public private formal and informal sectors in san jose costa rica a striking feature of many cities in less developed countries ldcs is the coexistence of large well organized high technology firms with the small street vendors who own little but a wooden box to sit on this apparent dualism in the urban economy has been a concern of students of economic development for many years several international agencies notably the international labour organisation ilo and the world bank have focused attention on this phenomenon the ilo popularized the terms formal sector and informal sector to describe this dichotomy to many economists one consequence of this dualism is labor market segmentation labor market segmentation plays a crucial role in explanations provided for some important issues such as rural urban migration urban poverty unemployment underemployment and growth 2 in this article i examine the hypothesis that labor market segmentation exists in san jos6 costa rica between the public and private formal sectors and between the privateformal and informal sectors defined in the appendix i define labor market segmentation as a situation where because of institutional barriers to occupational mobility between sectors a worker in the lower sector has less than full access to a job in the upper sector held by an observationally identical worker 3 if there were no barriers workers in the low wage sector would enter the high wage sector and force the wages in that sector down until wages across sectors were equalized that is labor market segmentation implies differences in wages for observationally identical workers relying on this inference most of the empirical literature on labor market segmen

financial crises and the composition of cross border lending abstract we examine the composition and drivers of cross border bank lending between 1995 and 2012 distinguishing between syndicated and non syndicated loans we show that on balance sheet syndicated loan exposures which account for almost one third of total cross border loan exposures increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis our empirical analysis of the drivers of cross border loan exposures in a large bilateral dataset leads to three main results first banks with lower levels of capital favor syndicated over other kinds of cross border loans second borrower country characteristics such as level of development economic size and capital account openness are less important in driving syndicated than non syndicated loan activity suggesting a diversification motive for syndication third information asymmetries between lender and borrower countries became more binding for both types of cross border lending activity during the recent crisis

liquidity management of u s global banks internal capital markets in the great recession abstract the recent crisis highlighted the importance of globally active banks in linking markets one channel for this linkage is through how these banks manage liquidity across their entire banking organization we document that funds regularly flow between parent banks and their affiliates in diverse foreign markets we show that parent banks when hit by a funding shock reallocate liquidity in the organization according to a locational pecking order affiliate locations that are important for the parent bank revenue streams are relatively protected from liquidity reallocations in the organization while traditional funding locations are more extensively used to buffer shocks to the parent bank balance sheets

informal employment in developing countries opportunity or last resort there is an ongoing debate among researchers and policy makers whether informal sector employment is a result of competitive market forces or labor market segmentation more recently it has been argued that none of the two theories sufficiently explains informal employment but that the informal sector shows a heterogenous structure for some workers the informal sector is an attractive employment opportunity whereas for others rationed out of the formal sector the informal sector is a strategy of last resort to test the empirical relevance of this hypothesis we formulate an econometric model which allows for several unobserved segments within the informal sector and apply it to the urban labor market in cote d ivoire

segmented labour markets theory and evidence this paper examines the possibility of accepting the labour market segmentation approach as a valid alternative to the classical and neo classical analysis of labour markets it consists of three main parts the urst part contains a historical analysis of both the distant and recent origins of the labour market segmentation hypothesis part two outlines the central ideas of both segmentationalists and radical theorists who attempted to explain the fragmented nature of labour markets and the importance of institutional and social inuuences upon pay employment and mobility of individual workers between different labour market sectors the third part examines the case for labour market segmentation using four alternative techniques and discusses the issue of mobility among different labour market segments it is thereby concluded that the lack of agreement among the segmented labour market theorists on both theoretical and methodological issues has prevented them from developing a consistent and convincing argument based on veriuable empirical evidence to validate their thesis

a note of caution on shadow rate estimates shadow short rate ssr estimates are generated regressors proposed as a proxy for policy interest rates during unconventional monetary policy ump periods however using the wu and xia 2016 shadow lower bound model i show that ssr estimates can be sensitive to minor choices in their estimation used subsequently in a small macroeconomic model those sensitivities lead to wide variations in the inferred effects of ump on inflation and unemployment outcomes therefore it should not be presumed that any ssr series will necessarily be quantitatively useful vetting ssr series allows appropriate ssr series to be retained within the suite of ump indicators

mobility in the urban labor market a panel data analysis for mexico abstract we analyze mobility in urban mexico between three labor market states working in the formal sector working in the informal sector and not working a dynamic multinomial logit panel data model with random effects is used explaining the labor market state of each individual during each time period the data are drawn from mexico s urban employment survey a quarterly household survey for urban mexico while some of the descriptive statistics suggest that informal sector jobs are inferior to formal sector jobs formal tests cannot reject the null hypothesis of equal transition rates between formal and informal sector jobs for homogeneous groups of workers looking at entry and exit into and out of nonemployment we find that transitions from formal sector jobs to nonemployment were less likely than transitions from informal sector jobs to nonemployment in 1992 but not in 1999 suggesting that employment protection in the formal sector has been reduced

development and distribution a critique of the cross country u hypothesis abstract this paper questions the validity of a modern paradigm viz the u hypothesis it argues that notwithstanding contrary claims the recent cross country econometric studies by ahluwalia and others have little in common from a methodological point of view with kuznets earlier intertemporal national studies ahluwalia s cross country u curve is found to be based on defective statistics and questionable methodological premises in specific the estimation of one u curve from observations on both ldcs and dcs is criticised a sample restricted to the ldc group considerably weakens support for the u hypothesis further even marginal variations in the data set lead to the virtual disappearance of ahluwalia s empirical relationship the paper concludes that the cross country u hypothesis is more of a hindrance than an aid to our comprehension of the relationship between economic growth and income distribution

segmented or competitive labour markets a normal roy model with four sectors is developed it allows to derive tests of several assumptions on the working of the labor market strongly or weakly competitive or segmented it shows that more important a feature of labor markets than segmentation is the presence of comparative advantages for individuals between the various economic sectors the model is applied to data on women s labor force participation in the main towns of colombia in 1980 it uses multivariate probit and tobit techniques copyright 1991 by the econometric society

the effects of health insurance and self insurance on retirement behavior this paper provides an empirical analysis of the effects of employer provided health insurance medicare and social security on retirement behavior using data from the health and retirement study we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses our results suggest that medicare is important for understanding retirement behavior and that uncertainty and saving are both important for understanding the labor supply responses to medicare half the value placed by a typical worker on his employer provided health insurance is the value of reduced medical expense risk raising the medicare eligibility age from 65 to 67 leads individuals to work an additional 0 074 years over ages 60 69 in comparison eliminating 2 years worth of social security benefits increases years of work by 0 076 years

on the impact of financial development on income distribution time series evidence financial market development is said to have equalizing or unequalizing effects on income distribution previous research used cross sectional and panel data and provided mixed results suspecting that they suffer from aggregation bias we adhere to time series data and error correction modeling technique and address the issue one more time in each of the 17 countries for which we have time series data in 10 counties short run effects of financial market development on income distribution were found to be equalizing in five countries the effects were unequalizing however the equalizing effects lasted into the long run only in three countries of denmark kenya and turkey

caste discrimination and transaction costs in the labor market evidence from rural north india abstract this paper is an empirical attempt to quantify caste based discrimination in the labor market using household data taken from rural north india in the regression analysis transaction costs associated with entry into the labor market and reservation wages are estimated simultaneously along with market wages the estimation results provide evidence of the existence of transaction costs in the labor market and discrimination against backward classes with regard to access to regular employment in line with previous studies the results suggest that the achievements of india s reservation policy so far have at best been limited in addition a comparison between the estimates from the model employed in this paper and conventional reduced form approaches shows that discrimination in labor market entry is likely to be underestimated in the conventional reduced form approaches

demand side and supply side explanations for barriers to labor market mobility in developing countries the case of guatemala the hypothesis of labor market segmentation is based on the existence of barriers to mobility between jobs because of these barriers wages of workers with similar characteristics are different from wages that would result from competition though the labor market segmentation hypothesis concerns mobility and access there have been few direct tests of the existence of restricted mobility in the labor market rather tests of labor market segmentation have focused on the presumed effects of restricted mobility in particular the presence of different reward structures across sectors is viewed as support for the segmentation hypothesis as a result much of the literature has concentrated on the appropriate comparison of the wages of workers by including controls for observable and unobservable characteristics

spatial inequality and development is there an inverted u relationship abstract this paper studies the hypothesis of an inverted u shaped relationship between spatial inequality and economic development the theory of kuznets 1955 and williamson 1965 suggests that spatial inequality first increases in the process of development and then decreases to test this hypothesis i have used a unique panel data set of spatial inequalities in 56 countries at different stages of economic development covering the period 1980 2009 parametric and semiparametric regressions are carried out using cross section and unbalanced panel data the results provide strong support for the existence of an inverted u i also find some evidence that spatial inequalities increase again at very high levels of economic development

does social security privatization produce efficiency gains while privatizing social security can improve labor supply incentives it can also reduce risk sharing we analyze a 50 privatization using an overlapping generations model where heterogeneous agents with elastic labor supply face idiosyncratic earnings shocks and longevity uncertainty when wage shocks are insurable privatization produces about 18 100 of extra resources for each future household after all transitional losses have been compensated for with lump sum taxes when wages are not insurable privatization reduces efficiency by about 2 400 per future household we check the robustness of these results to different model specifications as well as policy reforms and arrive at several surprising conclusions first privatization performs better in a closed economy where interest rates decline with capital accumulation than in an open economy second privatization also performs better when an actuarially fair private annuity market does not exist third government matching of private contributions on a progressive basis is not very effective at restoring efficiency and can actually cause harm

real interest rates leverage and bank risk taking do low interest rate environments lead to greater bank risk taking we show that when banks can adjust their capital structures reductions in real interest rates lead to greater leverage and higher risk for any downward sloping loan demand function however if the capital structure is fixed the effect depends on the degree of leverage following a decrease in interest rates well capitalized banks increase risk while highly levered banks may decrease it if loan demand is linear or concave further the capitalization cutoff depends on the degree of bank competition this effect therefore should vary across countries and over time

domestic credit growth and international capital flows during the pre crisis period europe experienced substantial cross country variation in domestic credit growth and cross border capital flows we investigate the inter relations between domestic credit growth and international capital flows during the period 1993 2008 with a special focus on the boom period of 2003 2008 we establish that domestic credit growth in european countries is strongly related to net debt inflows but not to net equity inflows this pattern also holds for an extended sample of 54 advanced and emerging economies

drivers of structural change in cross border banking since the global financial crisis abstract the paper analyzes the effects of changes to regulatory policy and to monetary policy on cross border bank lending since the global financial crisis cross border bank lending has decreased and the home bias in the credit portfolio of banks has risen sharply especially among banks in the euro area our results suggest that expansionary monetary policy in the source countries as measured by the change in reserves held at central banks has encouraged cross border lending both in euro area and non euro area countries regarding regulatory policy increases in financial supervisory power or independencve of the supervisory authorities have encouraged credit outflows from source countries the findings thus underline the importance of regulatory arbitrage as a driver of cross border bank flows since the global financial crisis however in the euro area arbitrage in capital stringency was linked to lower cross border lending since the crisis

a test of dual labor market theory despite substantial differences in their views of the appropriate policy response to the existence of poverty neither the proponents of dual market theory nor its critics have proposed potentially conclusive tests of the dual market hypothesis this paper presents a test of the two central propositions of dual market theory 1 the existence of two distinct labor markets with different wage setting mechanisms and 2 the existence of barriers to mobility between the labor markets we find considerable support for both hypothesis estimation of a switching model of wage determination with unknown regimes yields two distinct wage equations the one which most workers are associated with closely resembles the standard human capital regression with significant returns to education and experience the other equation is flat with no returns to human capital these two equations resemble the predictions of dual market theory for the primary and secondary markets respectively further we present evidence that at least some non white workers are involuntarily confined to the secondary market this crowding of minority workers into the low wage labor market accounts for a substantial portion of white non white wage differences we interpret these results as providing empirical support for the dual market hypothesis and for recent theoretical work on efficiency wagemodels in addition combining the efficiency wage argument with the observation that much of the white non white wage difference is explained by the exclusion of non whites from the primary sector suggests an explanation for the persistance of wage differences this abstract was borrowed from another version of this item

testing the determinants of income distribution in major league baseball i introduction income of professional athletes is a frequent topic of discussion of fans sportscasters and the general public economists have also increasingly been attracted to this topic because the distribution of income of these players has both policy and business implications as a consequence the report of major league baseball s mlb blue ribbon panel formed in 1998 by mlb commissioner bud selig received quite a lot of attention this panel was charged with describing and explaining the economic condition of mlb comprised of such dignitaries as former federal reserve chairman paul volker senator george mitchell yale university president richard levin and columnist george will this panel reported that team payrolls have become increasingly disparate the gap between rich and poor teams is not only wide but is growing levin et al 2000 a case in point is the fact that the salary of the highest paid player in the 2000 season los angeles kevin brown at 15 7 million was 95 of the entire payroll of the poorest team the minnesota twins the effect according to the panel s report is a dramatic decline in parity and competitiveness of mlb since 1994 a team in the top payroll quartile has won every world series game in 1999 the teams with the five largest payrolls had an average winning percentage of 0 557 whereas the five poorest teams had a comparable figure of 0 444 the report discusses various recommendations that may narrow this gap leading to what one might call convergence in team payrolls this article examines the distribution of income in mlb for 1985 to 2000 we revive and extend a technique first suggested by thurow 1970 and show how it can be used to test for time trends versus cross sectional demographic and economic aspects influencing income distribution thurow 1970 discusses the impact of various measures on median income in the present case by calculating the gini coefficient we can discuss the impact that the explanatory variables have on income inequality in the context of mlb we attempt to shed light on the reasons why teams have greater or lesser payroll disparity we leave the question of the effect of between team payroll inequality on team wins and team revenues for future research the issue of whether to use an inequality measure that is based on a particular distribution or one that is distribution free has been widely discussed in the income distribution literature silber 1999 ryu and slottje 1999 in advocating the use of parametric distributions point to several benefits of estimating the lorenz curve in this manner these benefits include the ability to summarize thousands of observation points with a few parameters the ability to estimate the density function at any point an enhanced ability to construct inequality measures and the ability to formulate possible laws that would otherwise not be possible to detect however there are problems associated with the use of a parametric lorenz curve such as the choice of a suitable distribution the problem is compounded by the fact that income data are often grouped and have an open ended highest income category making it difficult to obtain accurate estimates one advantage of using professional sports data is the fact that the salary is available per individual and is not grouped consequently an actual number is available for the highest income this study analyzes payroll inequality in a professional sport by team that is for each year we calculate a measure of inequality for each mlb team and consider the characteristic differences in within team payroll distributions our study is not however the first to consider income inequality within professional team sports depken 2000 and jewell and molina 2004 find that mlb teams with greater wage disparity have fewer wins furthermore sommers 1998 finds a negative relationship between team success and within team payroll inequality using national hockey league data

the effects of health wealth and wages on labour supply and retirement behaviour this paper estimates a life cycle model of labour supply retirement and savings behaviour in which future health status and wages are uncertain individuals face a fixed cost of work and cannot borrow against future labour pension or social security income the method of simulated moments is used to match the life cycle profiles of labour force participation hours worked and assets that are estimated from the data to those that are generated by the model the model establishes that the tax structure of the social security system and pensions are key determinants of the high observed job exit rates at ages 62 and 65 removing the tax wedge embedded in the social security earnings test for individuals aged 65 and older would delay job exit by almost one year by contrast social security benefit levels health and borrowing constraints are less important determinants of job exit at older ages for example reducing social security benefits by 20 would cause workers to delay exit from the labour force by only three months

the great retrenchment international capital flows during the global financial crisis the current crisis saw an unprecedented collapse in international capital flows after years of rising financial globalization we identify the stylized facts and main drivers of this development the retrenchment in international capital flows is a highly heterogeneous phenomenon first across time being especially dramatic in the wake of the lehman brothers failure secondly across types of flows with banking flows being the hardest hit due to their sensitivity of risk perception and thirdly across regions with emerging economies experiencing a shorter lived retrenchment than developed economies our econometric analysis shows that the magnitude of the retrenchment in capital flows across countries is linked to the extent of international financial integration its specific nature with countries relying on bank flows being the hardest hit as well as domestic macroeconomic conditions and their connection to world trade flows gian maria milesi ferretti and cedric tille

level of economic development and income inequality evidence from the postwar developed world using a recent high quality panel dataset on income distribution for 19 developed countries the postwar relation between the level of economic development and income inequality is estimated in terms of several kuznets type specifications contrary to what one might expect on the basis of kuznets s hypothesis inequality does not decline with an increase in income even at such high levels of development but shows an uninverted u pattern that is characterized by an initial decline and a subsequent increase in income inequality the estimates suggest that the position noted for the postwar united states is shared widely in the developed world

the spillovers interactions and un intended consequences of monetary and regulatory policies abstract have bank regulatory policies and unconventional monetary policies and any possible interactions been a factor behind the recent deglobalisation in cross border bank lending to test this hypothesis we use bank level data from the uk a country at the heart of the global financial system our results suggest that increases in microprudential capital requirements tend to reduce international bank lending and some forms of unconventional monetary policy can amplify this effect specifically the uk s funding for lending scheme fls significantly amplified the effects of increased capital requirements on cross border lending quantitative easing did not appear to have a similar effect and countries with stronger prudential capital regulations were partially insulated against the effects of these changes in uk policy we find that this interaction between microprudential regulations and the fls can explain roughly 30 of the contraction in aggregate uk cross border bank lending between mid 2012 and end 2013 corresponding to around 10 of the global contraction in cross border lending this suggests that unconventional monetary policy designed to support domestic lending can have the unintended consequence of reducing foreign lending

an investigation of the labor market earnings of panamanian males evaluating sources of inequality this paper presents empirical evidence on the determinants of labor market earnings and inequality for males in panama using newly available microdata we estimate earnings equations based on the measurement framework of mincer 1974 and compare them with those for other countries at various stages of economic development we present evidence on two aspects of inequality in less developed economies labor market segmentation and social stratification we present tests of the segmentation hypothesis including several of the dual labor market hypotheses and discuss their inherent ambiguity we also present evidence on the importance of family background for earnings determination and educational attainment

classification error in dynamic discrete choice models implications for female labor supply behavior two key issues in the literature on female labor supply are i whether persistence in employment status is due to unobserved heterogeneity or state dependence and ii whether fertility is exogenous to labor supply until recently the consensus was that unobserved heterogeneity is very important and fertility is endogenous hyslop 1999 challenged this using a dynamic panel probit model of female labor supply including heterogeneity and state dependence he found that adding autoregressive errors led to a substantial diminution in the importance of heterogeneity this in turn meant he could not reject that fertility is exogenous here we extend hyslop 1999 to allow classification error in employment status using an estimation procedure developed by keane and wolpin 2001 and keane and sauer 2005 we find that a fairly small amount of classification error is enough to overturn hyslop s conclusions leading to overwhelming rejection of the hypothesis of exogenous fertility

multinational banks and the global financial crisis weathering the perfect storm we use data on the 48 largest multinational banking groups to compare the lending of their 199 foreign subsidiaries during the great recession with lending by a benchmark group of 202 domestic banks contrary to earlier more contained crises parent banks were not a significant source of strength to their subsidiaries during the 2008 09 crisis as a result multinational bank subsidiaries had to slow down credit growth about twice as fast as domestic banks this was particularly the case for subsidiaries of banking groups that relied more on wholesale market funding domestic banks were better equipped to continue lending because of their greater use of deposits a relatively stable funding source during the crisis we conclude that while multinational banks may contribute to financial stability during local bouts of financial turmoil they also increase the risk of importing instability from abroad

iras and household saving this paper examines the effects of individual retirement accounts iras on private and national saving the authors construct a formal model of dynamic utility maximization that generates closed form equations for ira and other saving their empirical estimates indicate that raising the annual ira contribution limit between 1983 and 1986 would have resulted in little if any increase in national saving results from sensitivity analysis imply substantially smaller effects on national saving than most previous researchers have estimated the authors results are consistent with new evidence they present indicating considerable potential among ira holders to shift taxable forms of saving into iras copyright 1994 by american economic association

inequality and growth in the united states is there asymmetric response at the state level a previous study that tried to assess the impact of economic growth on income inequality in the u s used state level data and an ardl panel model to conclude that economic growth worsens income in

what determines success examining the human financial and social capital of jamaican microentrepreneurs abstract this research examines the performance of 215 informal microenterprises in jamaica studying the influence of human capital social capital and financial capital of the owners on their business profitability understanding the importance of particular relationships that result in successful micro businesses is important for a number of reasons first among many developing countries the growth of microenterprise provides the most visibly vibrant and growing economic activity although considerable effort and resources are being directed toward microenterprise promotion schemes empirical research on the subject is quite limited second economies in developing countries mirror many of the social and institutional problems existent in urban economically disadvantaged areas of the united states and other developed countries for these areas microenterprise may be an essential component of urban renewal and community development this study helps in identifying important characteristics of social and individual attributes that may be relevant to those attempting to strengthen this subsector finally this study seeks to provide insight into a dimension of microbusiness research for which there are limited data specifically the role that social capital plays among practicing entrepreneurs and owners this research found that different structural environments even within a singular and small economy may considerably alter the rates of return to human social and financial capital as a result the analysis of enterprises includes segmentation according to both the usage or not of employees and the sophistication of the technologies used several factors were determined to enhance the profitability of the businesses in all categories vocational training for example demonstrated consistently strong and positive effects mother s high occupational status a proxy for socioeconomic status and years of experience in the business were also consistently positive and strongly associated with increasing profits although additional starting capital played an important role for both the businesses with and without employees increasing amounts failed to differentiate the success of those firms that were already operating in the higher technological tier obtaining a small business loan acted in a similar manner enhancing the profitability of all firms except those segmented into a high technological tier one interpretation of this finding is that the role of technological choice is extremely important and appears to dwarf that of varying amounts of starting capital social capital as operationalized by frequent church attendance and marital status of the owner was found generally to increase the profitability of the business the data demonstrate that social networks play an important role in the success of these businesses and that conditions in the highest tier utilize social capital in a somewhat unique manner

human capital and earnings distribution in a developing country the case of prerevolutionary nicaragua this article examines how different patterns of human capital investments affect household earning and its major components in rural and urban areas of developing countries 1865 women aged 15 45 in the following 3 areas of prerevolutionary nicaragua supply data the central metropolis other urban areas and rural areas other urban area households have the highest average total income central metropolis households have the next highest and rural areas have the lowest urbanization is positively associated with both mean level of total earnings and with total income the authors examine 5 human capital variables womens schooling mens schooling womens health mens health and average household nutrition another variable cumulative work experience became apparent during modeling for women schooling increases labor force participation probability in urban but not rural areas nutrition has a positive impact in all 3 regions and past work experience has a significant impact health status has no effect standard human capital variables do not differ significantly between the central metropolis and other areas but sharply contrast between urban and rural areas for men there is less potential for increasing labor force participation through human capital investment although past work experience schooling and nutrition show significant effects the authors test 10 simulations of hypothetical changes in human capital distributions which involve increasing education improving nutritional status and improving health 4 conclusions are drawn 1 since changes from human capital variables on regional earnings distributions cannot be discerned from individual relations simulation is a useful tool for investigation 2 estimates of the gains toward distributional goals are needed compared to other investments 3 directing policies toward the target group is more cost effective than general measures and 4 policies should be targeted for households low in the overall distribution not just the poorest households

dynamics of income distribution in this paper we have obtained closed form solutions in cass koopmans growth models with heterogeneous agents the relationship between the form of the production function and the dynamics of income distribution is made explicit we then use this relationship to determine what production structure is simultaneously consistent with facts on growth and income inequality our empirical findings give support to models with decreasing returns in the reproducible factor jel classification d3 o1 o4 dans ce memoire les auteurs obtiennent des solutions pour des modeles de croissance a la cass koopmans dans le cas ou les agents sont heterogenes on explicite la relation entre la forme de la fonction de production et la dynamique de la repartition des revenus on utilise alors cette relation pour determiner quelle structure de production est arrimee aux faits connus a la fois quant a la croissance economique et a la repartition des revenus les resultats empiriques supportent les modeles ou les rendements sur les acteurs de production reproductibles sont decroissants

the international transmission of monetary policy abstract this paper presents the novel results from an internationally coordinated project by the international banking research network ibrn on the cross border transmission of conventional and unconventional monetary policy through banks teams from seventeen countries use confidential micro banking data for the years 2000 through 2015 to explore the international transmission of monetary policies of the united states euro area japan and united kingdom two other studies use international data with different degrees of granularity international spillovers into lending to the private sector do occur especially for us policies and bank specific heterogeneity influences the magnitudes of transmission the effects are supportive of the international bank lending channel and the portfolio channel of monetary policy transmission they also show that the frictions that banks face matter in particular foreign currency funding and hedging considerations can be a key source of heterogeneity the forms of bank balance sheet heterogeneity that differentiate spillovers across banks are not uniform across countries international spillovers into lending can be large for some banks even while the average international spillovers of policies into nonbank lending generally are not large