policy watch child support policies with more parents living apart the societal problem of parents who fail to share with each other or with their children becomes more acute although governments have mainly relied on public transfers to address the resulting economic hardships among children the emphasis has been shifting toward mandatory sharing through the rigorous enforcement of child support laws this paper first describes the economic context for child support the expanding federal role in regulating awards and collections the complex array of incentive and equity effects associated with child support the record of obtaining support payments from noncustodial parents and the effects of new award setting and enforcement policies finally it considers the child support assurance system csas approach recently proposed in congress under this plan the government would make up the difference between some minimum assured payment and the child support actually paid by the non custodial parent

democracy creeping socialism and ideological socialism in rent seeking societies rent seeking societies suffer from a serious distortion of incentives incentives to engage in distributional struggles to seek contrived transfers are strong but incentives to engage in productive work are too weak stagnation and some unemployment should be expected long lasting democracies within unchanged borders create a permissive environment for rent seeking the provision of rents very much depends on government the stronger the governmental involvement in the economy the higher social security spending the more rents the government is likely to generate therefore creeping socialism understood as increased government control of the economy should reinforce the rent seeking society and the corresponding negative effects on growth and employment whether such creeping socialism is backed by ideological socialism or not should make little difference for growth or employment these ideas have been tested and partially supported by a 19 nation sample of industrial democracies using data from the sixties and seventies by and large the rent seeking approach is fairly successful in explaining national differences in economic growth rates but receives ambiguous support or less for unemployment olson s 1982 1983 proposition about the negative impact of long lasting democracy within unchanged borders on economic growth is much better supported than the growth retarding effects of government revenues or social security spending are

the indian gaming regulatory act and its effects on american indian economic development the indian gaming regulatory act igra passed by the us congress in 1988 was a watershed in the history of policymaking directed toward reservation resident american indians igra set the stage for tribal government owned gaming facilities it also shaped how this new industry would develop and how tribal governments would invest gaming revenues since then indian gaming has approached commercial state licensed gaming in total revenues gaming operations have had a far reaching and transformative effect on american indian reservations and their economies specifically indian gaming has allowed marked improvements in several important dimensions of reservation life for the first time some tribal governments have moved to fiscal independence native nations have invested gaming revenues in their economies and societies often with dramatic effect

a reanalyis of marital stability in the seattle denver income maintenance experiment this paper challenges the widely cited finding of groeneveld hannan and tuma that the seattle denver income maintenance experiment provides evidence that guaranteed income plans for poor husband wife families will increase marital dissolution relative to the existing program aid to families with dependent children the reanalysis of the experimental data distinguishes between the experimental treatment in the form of the pure negative income tax and the treatment plans that involved an experimental training program all the time periods of the experiment are used with allowance for the timing of the marital dissolution in the inferences and with allowance for attrition the conclusion of this paper is that the plans specifically the negative income tax plans in the experiment had no effect on the rate of marital dissolutions among the treatment couples relative to the control couples

tests of a rational theory of the size of government in many countries the political party holding power changes more frequently than the trend growth rates in government spending and taxes shifts of political power are often preceded by rhetoric about meeting needs or cutting taxes which post election performances rarely match yet changes in the size of government up and down occur on average the size of government measured by the share of taxes or spending to output has increased in many countries during the past century but changes in size occur at diffrent rates and at times the relative size of government declines

did unilateral divorce laws raise divorce rates a reconciliation and new results application of the coase theorem to marital bargaining suggests that shifting from a consent divorce regime to no fault unilateral divorce laws should not affect divorce rates each iteration of the empirical literature examining the evolution of divorce rates across us states has yielded different conclusions about the effects of divorce law liberalization i show that these results reflect a failure to jointly consider both the political endogeneity of these divorce laws and the dynamic response of divorce rates to a shock to the political regime taking explicit account of the dynamic response of divorce rates to the policy shock i find that liberalized divorce laws caused a discernible rise in divorce rates for about a decade but that this increase was substantially reversed over the next decade that said this increase explains very little of the rise in the divorce rate over the past half century both administrative data on the flow of new divorces and measures of the stock of divorcees from the census support this conclusion these results are suggestive of spouses bargaining within marriage with an eye to their partner s divorce threat

widows waiting to wed re marriage and economic incentives in social security widow benefits in this paper we focus on an age restriction for remarriage in the social security system to determine if individuals respond to economic incentives for marriage aged widow er benefits are paid by the federal government to persons whose deceased spouses worked in social security covered employment a widow er is eligible to receive benefits if she or he is at least age 60 if a widow er remarries before age 60 he or she forfeits the benefit and therefore faces a marriage penalty under current law there is no penalty if the remarriage occurs at 60 years of age or later we investigate whether this rule affects the marriage behavior of widows specifically we examine the rates of remarriage of women around age 60 under current as well as past social security eligibility rules using data from the vital statistics our results provide compelling evidence that this group of women respond to economic incentives when considering the decision to remarry first the 1979 law change that eliminated the marriage penalty for those at least age 60 resulted in a large increase in the marriage rate for widows at

assessing the case for social experiments rs ecent academic debates pit two alternative approaches to policy evaluation against one another the first is the experimental approach based on the random assignment of accepted program applicants to a recipient or treatment group and a non recipient or control group the second is the nonexperimental or econometric approach that uses a variety of microdata sources statistical methods and behavioral models to compare the outcomes of participants in social programs with those of nonparticipants the central question addressed in this paper is whether or not randomized social experiments aid in securing answers to basic questions about the evaluation of social programs there are many distinct and complementary approaches to the study of the impact of public policy including full general equilibrium analysis of policy impacts tinbergen 1956 auerbach and kotlikoff 1987 shoven and whalley 1992 kydland and prescott 1991 and less ambitious partial equilibrium microeconomic structural research programs such as those designed to estimate the impact of taxes on labor supply both approaches offer answers to many interesting counterfactual policy questions but their credibility rests critically on the quality of the empirical input used to generate their answers

private sector shrinkage and the growth of industrialized economies reply further tests and thoughts on the oecd data lead me to conclude that if anything my 1986 paper underestimated the magnitude of the inverse relation between economic growth and government size if one takes the nominal based measure of government scale as advised by saunders the significance levels coefficient magnitudes and goodness of fits improve over what i found with my initial investigation i would suggest that saunders reconsider his reluctance to believe that the size of the public sector is unrelated to economic growth in oecd countries over this time period

private sector shrinkage and the growth of industrialized economies comment the main conclusion which emerges from the results in tables 1 3 is the extreme sensitivity of marlow s results to the countries included in the sample particularly japan to the time period and to the other variables included in the analysis this conforms with the oecd s own analysis of these data and subsequent research based on them it suggests that the underlying relationship being investigated is inherently unstable and that the estimated model leaves a considerable proportion of the variance of the dependent variable unexplained these aspects of the results are consistent with most of the other empirical work on the relationship between economic growth and the size and growth of government in industrialised economies it is to be emphasised however that the results presented here do not refute the claims that the size and growth of government have not had any detrimental impact on economic performance in general and economic growth in particular what they do point to is the absence of any simple aggregative relationships linking government size and growth to the rate of economic growth if such relationships are to be uncovered this will require a more detailed and complex investigation of the impact of government which is embedded in a more rigorously formulated structural model of the growth process

dynamic lotsizing with a finite production rate the dynamic lotsizing problem concerns the determination of optimally produced delivered batch quantities when demand which is to be satisfied is distributed over time in different amounts at di

economic response to a guaranteed annual income experience from canada and the united states this article reviews research from the five income maintenance experiments in canada and the united states after sketching the historical and political context of the experiments we compare their designs and discuss some important analytic difficulties our primary focus is the work incentive issue both nonstructural estimates of the experimental effects and elasticity estimates of structural labor supply functions we provide initial estimates of nonstructural and structural models for the canadian experiment we discuss more briefly some non work response findings associated with a guaranteed annual income and offer some personal comments on social experimentation and the policy process

fiscal variables and growth a cross sectional analysis this paper examines the impact of the key fiscal variables taxes expenditures and deficits on economic growth performance using a reduced form model and cross sectional data for a sample of 76 developed and developing countries for the period 1972 81 its simultaneous consideration of fiscal variables overturns the results of some existing studies while taxes seem negatively associated with gdp growth they are concommitant with a higher rate of growth when their benefits in terms of reducing deficits are taken into account the positive association of government expenditures with gdp growth is rendered negative when their impact on deficits are factored in deficits are contractionary and deficit reducing tax increases and expenditure cuts are positively associated with growth a balanced budget expansion of taxes and expenditures is negatively associated with growth when separating the sample into low middle and high income countries these results hold only for the second group indicating that the level of development influences the linkages between fiscal variables and gdp growth

the impact of conditional cash transfers on marriage and divorce abstracta growing number of less developed countries have introduced conditional cash transfer programs in which funds are targeted to women economic models of the family suggest that these transfer programs may lead to marital turnover among program beneficiaries data from the experimental evaluation of the progresa program in mexico is used to provide new evidence on the short run impacts of targeted transfers on couples union dissolution and individuals new union formation decisions we find that although the overall share of women in union does not change as a result of the program marital turnover increases intact families eligible for the transfers experienced a modest 0 32 percentage points increase in separation rates with most of the effect concentrated among young and relatively educated women households in contrast young single women with low educational attainment levels experienced a substantial increase in new union formation rates the marital transition patterns are consistent

do consumers react to anticipated income changes evidence from the alaska permanent fund a central implication of the life cycle permanentincome hypothesis lc pih is that consumers should not respond to predictable changes in their income to test this hypothesis a number of recent papers have exploited natural experiments to identify anticipated income changes in particular recent work by parker 1999 uses the change in after tax income due to the cap on earnings subject to the social security tax and a related paper by souleles 1999 examines the response of consumption to income tax refunds surprisingly parker and souleles find that even when income is expected to change within the year expenditure is excessively sensitive to the timing of the income change while their results can be interpreted as evidence that our canonical model of consumption is inadequate an alternative explanation is that the anticipated income changes they exploit are small and irregular and that households will not bother to change their consumption paths when the computational costs involved are large relative to the utility gains in support of this interpretation browning and collado 2001 find that the seasonal consumption patterns of spanish households that work in sectors that provide regular bonus payments do not differ from those of households that do not receive bonus payments this paper adds to this evidence by exploiting a natural experiment provided by annual payments from the state of alaska s permanent fund to every resident in the state of alaska that should yield an unusually powerful test of the lc pih these payments are large and clearly anticipated by alaskan residents using the variation in the size of the payments over time and in the amount received by families of different sizes to identify the response of consumption to payments from the permanent fund i find no evidence that the consumption of alaskan households reacts to these payments in addition i find no evidence that the seasonal pattern of consumption in alaska differs from that in the other 49 states or that households in alaska are subject to fewer liquidity constraints engage in less buffer stock saving or spend a smaller fraction of their income on semidurable goods than households in the rest of the united states however although households in alaska do not overreact to payments from the permanent fund i find that the consumption of the very same households is excessively sensitive to their income tax refunds this evidence suggest that households will take anticipated income changes into account in their consumption decisions when the income changes are large regular and easy to predict but will not do so when they are small and irregular the paper proceeds as follows the next section of the paper presents details on the department of economics princeton university princeton nj 08544 and national bureau of economic research e mail chsieh princeton edu i am very grateful to the bureau of labor statistics bls for providing access to the data from the consumer expenditure survey and to its staff particularly steven henderson walter vandeheide and wolf weber for their generous assistance during my visits to the bls i also thank nanci jones for providing data and patiently answering questions on the operation of the alaska permanent fund anne case angus deaton jonathan parker and two referees provided useful comments the views expressed in this paper are personal and should not be attributed to the bls 1 i refer to the certainty equivalent version of the lc pih or one in which the expected variance of consumption is constant as is well known without these assumptions the lc pih only implies smoothing of marginal utility not necessarily of consumption 2 see christina h paxson 1992 john shea 1995 jonathan a parker 1999 nicholas s souleles 1999 martin browning and m dolores collado 2001 also see ronald a bodkin 1959 for an early example of the use of a natural experiment to test for excess sensitivity for comprehensive reviews of the large literature on empirical tests of the lc pih see angus deaton 1992 browning and annamaria lusardi 1996 and browning and thomas f crossley 2001 3 in 1998 for example the permanent fund paid 1 541 to every resident of the state of alaska

lucky in life unlucky in love the effect of random income shocks on marriage and divorce abstract economists have long been interested in the extent to which economic resources affect decisions to marry and divorce however this issue has been difficult to address empirically due to a lack of exogenous income shocks we overcome this problem by exploiting the randomness of the florida lottery and comparing recipients of large prizes to those of small prizes results indicate that while positive income shocks of 25 000 to 50 000 do not cause statistically significant or economically meaningful changes in divorce rates single women are less likely to marry as a result of the additional income

cumulative staircase considerations for dynamic lotsizing when backlogging is allowed abstract the dynamic lotsizing problem concerns the determination of optimal batch quantities when given required amounts appear at discrete points in time the standard formulation assumes that no shortages are allowed and that replenishments are made instantaneously for the case when no shortage is allowed previously it has been demonstrated that the inner corner condition for an optimal production plan in continuous time reduces the number of possible replenishment times to a finite set of given points at which either a replenishment is made or not the problem is thus turned into choosing from a set of zero one decisions with 2 n 1 alternatives of which at least one solution must be optimal where n is the number of requirement events recently the instantaneous replenishment assumption has been replaced by allowing for a finite production rate which turned the inner corner condition into a condition of tangency between the cumulative demand staircase and cumulative production in this paper we investigate relationships between optimal cumulative production and cumulative demand when backlogging is permitted the production rate is assumed constant and cumulative production will then be a set of consecutive ramps cumulative demand is a given staircase function the net present value npv principle is applied assuming a fixed setup cost for each ramp a unit production cost for each item produced and a unit revenue for each item sold at the time it is delivered among other results it is shown that optimal cumulative production necessarily intersects the demand staircase instead of having 2 n 1 production staircases as candidates for optimality there are 2 n 1 production structures as candidates these are made up of sequences of batches of which the set of batches may be optimised individually also is shown that the npv of each batch has a unique timing maximum and behaves initially in a concave way and ends as convex results for the average cost approach are obtained from a zeroth first order approximation of the objective function npv

how many parts to make at once reprinted from factory the magazine of management volume 10 number 2 february 1913 pp 135 136 152 interest on capital tied up in wages material and overhead sets a maximum limit to the quantity of parts which can be profitably manufactured at one time set up costs on the job fix the minimum experience has shown one manager a way to determine the economical size of lots

a century of evolution from harris s basic lot size model survey and research agenda abstract determining the economic lot size has always represented one of the most important issues in production planning this problem has long attracted the attention of researchers and several models have been developed to meet requirements at minimum cost in this paper we explore and discuss the evolution of these models during one hundred years of history starting from the basic model developed by harris in 1913 up to today following harris s work a number of researchers have devised extensions that incorporate additional considerations the evolution of eoq theory strongly reflects the development of industrial systems over the past century here we outline all the research areas faced in the past by conducting a holistic analysis of 219 selected journal papers and trying to give a comprehensive view of past work on the eoq problem finally a new research agenda is proposed and discussed

economic growth and alternative deficit reducing tax increases and expenditure cuts a cross sectional study this paper assesses empirically the relative desirability of alternative deficit reducing tax increases and expenditure cuts in terms of their individual impact on economic growth using cross sectional data for a sample of 21 developed countries for the period 1972 81

resource rents redistribution and halving global poverty the resource dividend summary this paper considers the proposal that each country distributes its resource rents directly to citizens as a universal and unconditional cash transfer or resource dividend and estimates its potential impact on global poverty for the years 2000 06 using a global dataset on resource rents and the distribution of income i find that if every developing country implemented the policy then the number of people living below 1 a day would be cut by between 27 and 66 depending on the year and the assumptions made looking ahead poverty could be better than halved as long as commodity prices do not drop below their 2004 level

the causal relation between federal expenditures and receipts federal expenditures have consistently exceeded federal revenues since 1970 in fact the federal government has seen a surplus in only five years since 1950 the symptoms of such fiscal imbalance are of course budget deficits while budget deficits are nothing new in u s history the recent and projected size of the deficit during peacetime nonrecessionary years has been the cause of much concern to academics the news media and politicians this preoccupation with federal deficits has produced a variety of policy proposals to deal with them

welfare and the family the u s experience after describing the development and dimensions of the american welfare system this paper explores the relationship of illegitimacy to welfare alternative measures of illegitimacy are discussed the relationship of the welfare package and the illegitimacy ratio is examined over time and across states by race a bivariate relationship of welfare and illegitimacy exists among whites but not among blacks among blacks a strong cross state relationship exists between density of the black population and the illegitimacy ratio the relationship is robust persisting after controlling for a variety of demographic and economic variables and persisting across time

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

holding costs under push or pull conditions the impact of the anchor point holding costs are traditionally determined from the investment in physical stock during a cycle an alternative approach instead derives holding costs from net present value npv functions it is known that applying both frameworks to the same system can lead to different holding cost valuations but little explanation has been offered by introducing the anchor point in a model this paper shows for four different systems that traditional holding cost models implicitly assume pull conditions while current npv approaches model push conditions this explains in part the differences between the methods it is shown that the anchor point concept allows the construction of npv models under pull conditions giving results in better correspondence with traditional models the traditional framework is restricted to pull conditions and important considerations could be easily overlooked leading to wrong valuations of holding costs npv seems superior as such considerations are automatically incorporated the application to multi echelon inventory systems provides interesting insights on the roles of echelon stocks and lead times and offers potential for future research

the effect of incomes wages and afdc benefits on marital disruption this paper uses a choice based model to estimate the effects of a broad set of economic factors including afdc benefit levels husband s earnings and a woman s wage rate on the probability of marital dissolution we find that the probability of divorce is lower for marriages in which the husband s labor income is higher we also find that while afdc income has a substantial effect on welfare receipt by a divorced woman it has a relatively small effect on the probability that a married woman will become divorced finally we find no support for the hypothesis that rising wages for women have increased marital instability

conditional cash transfers adult work incentives and poverty conditional cash transfer cct programs aim to alleviate poverty through monetary and in kind benefits as well as reduce future levels of poverty by encouraging investments in education health and nutrition the success of cct programs at reducing poverty depends on whether and the extent to which cash transfers affect adult work incentives the authors examine whether the progresa program of mexico affects adult participation in the labor market and overall adult leisure time and they link these effects to the impact of the program on poverty using the experimental design of progresa s evaluation sample the authors find that the program does not have any significant effect on adult labor force participation and leisure time their findings on adult work incentives are reinforced further by the result that progresa leads to a substantial reduction in poverty the poverty reduction effects are stronger for the poverty gap and severity of poverty measures

resource rents universal basic income and poverty among alaska s indigenous peoples abstract the alaska permanent fund dividend pfd program provides universal basic income ubi to all residents from investment earnings of a state sovereign wealth fund created from oil rents this paper evaluates the effect of the pfd to mitigate poverty among the state s rural indigenous alaska native peoples a population with historically high poverty rates living in a region with limited economic opportunities errors in recording pfd income in data used to calculate official poverty statistics cause them to misrepresent poverty in alaska and understate the effect of the pfd estimating poverty rates with and without pfd income therefore requires reconstruction of family incomes from household level data estimated poverty rates from reconstructed income show that the pfd has had a substantial although diminishing mitigating effect on poverty for rural indigenous families the pfd has had a larger effect on poverty among children and elders than for the rural alaska native population as a whole alaska native seniors who receive additional sources of ubi derived primarily from resource rents besides the pfd have seen a decline in poverty rates while poverty rates for children have increased evidence has not appeared for commonly hypothesized potential adverse social and economic consequences of ubi

dynamic version of the economic lot size model this article originally appeared in management science october 1958 volume 5 number 1 pp 89 96 published by the institute of management sciences a forward algorithm for a solution to the following dynamic version of the economic lot size model is given allowing the possibility of demands for a single item inventory holding charges and setup costs to vary over n periods we desire a minimum total cost inventory management scheme which satisfies known demand in every period disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full n periods

will extending medicaid to two parent families encourage marriage several welfare programs in the united states restrict eligibility to single parent families this paper asks whether eliminating this restriction for medicaid encourages marriage i identify medicaid s effect through a series of health insurance reforms that were passed in the 1980s and 1990s targeting young children these reforms were associated with an increase in the probability of marriage of 1 7 percentage points while the expansions offered some incentives to become married they also created other incentives to become divorced known as the independence effect after controlling for the outflows from marriage due to the independence effect the estimated effect increases by 10 percent

a reassessment of the effect of income maintenance on marital dissolution in the seattle denver experiment cain and wissoker claim that income maintenance treatment had no effect on marital dissolution in the seattle denver income maintenance experiment yet parametric and nonparametric analyses reveal that there was a significant increase in the dissolution rate for blacks and whites but not chicanos this conclusion holds for many different specifications including a number that allow free form time variation in response while cain and wissoker s analyses and results differ in many ways from that of groeneveld hannan and tuma consideration of the full set of estimates including both main effects and interaction effects and analyses of the complete samples reveal that their analyses agree that the income maintenance treatment increased rates of marital dissolution for blacks and whites

government expenditure and economic growth a cross country study this paper examines the relationship between the share of government consumption expenditure in gdp and the rate of growth of real per capita gdp the work of the u n international comparison project has recently made available new estimates for over 100 countries of both per capita gdp and the share of government consumption these new estimates are based on direct price comparisons rather than exchange rate conversions as a result the statistics for different countries are more comparable and cross country studies will be more reliable

the impact of the social cash transfer scheme on food security in malawi abstract the malawi social cash transfer scheme scts was launched in 2006 to improve food security by directly providing cash transfers to the country s most destitute households although government implemented cash transfer schemes have gained popularity throughout latin america these schemes are just emerging in africa while where there is evidence of the beneficial impact of cash transfers on food security from latin american countries there is a dearth of evidence from resource poor countries in africa in order to fill this gap we conducted a longitudinal randomized community control study of the pilot scts in mchinji malawi from march 2007 to april 2008 in this study we describe the impact of approximately us 14 per month on food security among recipient households compared to control households using indicators of food consumption and expenditures and dietary diversity we present compelling evidence whereby each of the tested outcomes yields large effect sizes that are highly statistically significant demonstrating a sizeable impact of cash transfers on food security and food diversity in rural malawi the scts appears to be an effective tool within the national social welfare policy for improving food security in the country s destitute households