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Welfare Effects (welfare + effects)
Selected AbstractsGROWTH AND WELFARE EFFECTS OF AN ENVIRONMENTAL TAX-BASED PUBLIC PENSION REFORM,THE JAPANESE ECONOMIC REVIEW, Issue 3 2007TETSUO ONO This paper presents an overlapping generations model in which: (i) firms create emissions as by-products of production; and (ii) tax revenue from the working young is transferred to the retired elderly as pay-as-you-go pension benefits. The paper focuses on a replacement ratio, which measures the proportion of after tax work earnings replaced by the public pension, and considers a replacement ratio neutral reform in which the newly introduced environmental tax is devoted to cutting the social security tax, keeping the replacement ratio unchanged. It is shown that the reform may improve growth, environmental quality and the nonenvironmental utility of every generation. [source] Identifying Welfare Effects from Subjective QuestionsECONOMICA, Issue 271 2001Martin Ravallion We argue that the welfare inferences drawn from answers to subjective,qualitative survey questions are clouded by concerns over the structure of measurement errors and how latent psychological factors influence observed respondent characteristics. We propose a panel data model that allows more robust tests and we estimate the model on a high-quality survey for Russia. We find significant income effects on an individual's subjective economic welfare. Demographic effects are weak at given income per capita. Ill-health and becoming unemployed lower welfare at given current income, although the unemployment effect is not robust, and returning to work does not restore welfare without an income gain. [source] Welfare Effects of Local versus Central Wage BargainingLABOUR, Issue 1 2010Marcus Dittrich The paper analyses the welfare effects of union bargaining (de)centralization in a dual labour market with a unionized and a competitive sector. We show that social welfare depends on both the structure of the union's objective function and the elasticities of labour demand in both sectors. The welfare-maximizing employment allocation can be obtained under a high degree of centralization if the union maximizes the total wage-bill. Otherwise, if the union is rent maximizing, welfare is higher under local bargaining. However, in that case neither central nor local wage setting yields the social optimum. [source] Foreign Direct Investment, Infrastructure and the Welfare Effects of Labour MigrationTHE MANCHESTER SCHOOL, Issue 3 2002Frank Barry A model of a small open economy with open capital and labour markets is presented. Labour demand is based on capital mobility and increasing returns in production. Migration decisions are based on the relative attractiveness of regions in terms of the stock of infrastructure, including its tax cost and the degree of congestion, and the level of wages prevailing. Equilibria are not Pareto efficient because individuals do not take account of the impact of their actions on the level of wages prevailing, the extent of the tax base to finance infrastructural provision, or the degree of congestion. The model generates new insights into a range of policy issues that surfaced over the course of the recent Irish boom. [source] Asymmetric Information, Bargaining, and International MergersJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2001Satya P. Das The formation of international mergers is examined in the presence of two kinds of asymmetric information, one when a local firm has private information on market size and the other when a foreign firm has private information on its technology. In each situation, parametric configurations are identified under which a merger offer may or may not be made. It also examines the kind of offer and the probability of its acceptance. The likelihood of a merger beingformed is also related to the basic market size, demand uncertainty, and cost uncertainty. Welfare effects of tax/subsidy policies by the host country are also analyzed. [source] The 35-hour workweek in France: Straightjacket or welfare improvement?ECONOMIC POLICY, Issue 55 2008Marcello Estevão SUMMARY The 35-hour week Workweek reduction laws may be beneficial if market interactions do not fully take into account the preferences reflected in declining secular trends in working hours. The most recent law in France shortened the workweek from 39 to 35 hours in 2000 for large firms, and in 2002 for small firms. Analysing differences between large and small firm employees before and after the law, we find that aggregate employment was unaffected but labour turnover increased, as firms shed workers who became more expensive. Survey responses indicate that the welfare impact of the law was different across groups of workers: women but not men may have benefited from coordination to a shorter workweek, and there is also evidence of negative welfare effects for managers, possibly due to the law's administrative burden. ,Marcello Estevão and Filipa Sá [source] Indirect tax reform and the role of exemptionsFISCAL STUDIES, Issue 4 2001John Creedy Abstract This paper examines the question of whether indirect tax rates should be uniform, using four different modelling strategies. First, marginal tax reform is examined. This is concerned with the optimal direction of small changes in effective indirect tax rates and requires considerably less information than the calculation of optimal rates. Second, the welfare effects of a partial shift from the current indirect tax system in Australia towards a goods and services tax (GST) are considered, with particular emphasis on differences between household types and the role of exemptions. Third, in view of the stress on a distributional role for exemptions of certain goods from a GST, the potential limits to such redistribution are considered. The fourth approach examines the extent of horizontal inequity and reranking that can arise when there are non-uniform tax rates. These inequities arise essentially because of preference heterogeneity. [source] Capital Assistance for Small Firms: Some Implications for Regional Economic WelfareGEOGRAPHICAL ANALYSIS, Issue 1 2000Daniel Felsenstein This paper analyzes the role of finance capital in regional economic development. A cost-benefit approach is invoked in order to estimate the welfare impacts of a regional loan and guarantee program for small firms in Israel. Program-created employment is treated as a benefit and an employment account that separates net from gross employment, is presented. An estimate of net wage benefits is then derived. This involves adjusting wages across different earnings classes in order to account for the variation in opportunity costs of labor at different levels. The estimation of costs includes the opportunity costs of capital, administration, default, and tax-raising costs. Results point to substantial regional welfare effects. We stress the need to account for changing regional economic structure in this kind of evaluation framework. [source] Union Wage Setting and Capital Income Taxation in Dynamic General EquilibriumGERMAN ECONOMIC REVIEW, Issue 2 2001Thomas Aronsson This paper concerns the effects of capital income taxation in a dynamic general equilibrium framework with union wage setting, when households face taxes related to both labor and capital. One purpose is to characterize the general equilibrium solution. Another is to study the effects of increased capital income taxation , in terms of the responses in real wages, employment, capital stock, output and consumption , and relate these behavioral responses to the overall tax structure. We also derive a cost,benefit rule for the purpose of analyzing the welfare effects of a small shift from labor income taxation to capital income taxation. [source] Small,Scale Entrepreneurship and Access to Capital in Peripheral Locations: An Empirical AnalysisGROWTH AND CHANGE, Issue 2 2002Daniel Felsenstein This paper presents an analysis of a public assistance program for small,scale entrepreneurship in peripheral areas. Public assistance compensates for market inefficiencies where the decision rules of financial institutions discriminate against otherwise viable small firms in capital markets. Lending institutions perceive high risk in providing debt capital when little information is present. Using empirical data from Israel, the determinants of this risk are estimated and the role of location in creating this information asymmetry is stressed. These results empirically establish that (1) location matters in determining the risk profile of the firm, (2) locationally targeted programs can reduce the information asymmetries that make peripheral firms unattractive to lenders, and (3) these programs can also generate positive welfare effects. Finally, there is speculation on the potential role of ICT (information and communications technology) in increasing the visibility of small firms in remote locations and creating a more symmetrical flow of information. [source] Changes in the demand for private medical insurance following a shift in tax incentivesHEALTH ECONOMICS, Issue 2 2008Marisol Rodríguez Abstract The 1998 Spanish reform of the Personal Income Tax eliminated the 15% deduction for private medical expenditures including payments on private health insurance (PHI) policies. To avoid an undesired increase in the demand for publicly funded health care, tax incentives to buy PHI were not completely removed but basically shifted from individual to group employer-paid policies. In a unique fiscal experiment, at the same time that the tax relief for individually purchased policies was abolished, the government provided for tax allowances on policies taken out through employment. Using a bivariate probit model on data from National Health Surveys, we estimate the impact of said reform on the demand for PHI and the changes occurred within it. Our findings indicate that the total probability of buying PHI was not significantly affected by the reform. Indeed, the fall in the demand for individual policies (by 10% between 1997 and 2001) was offset by an increase in the demand for group employer-paid ones. We also briefly discuss the welfare effects on the state budget, the industry and society at large. Copyright © 2007 John Wiley & Sons, Ltd. [source] Valuing avoided morbidity using meta-regression analysis: what can health status measures and QALYs tell us about WTP?HEALTH ECONOMICS, Issue 8 2006George Van Houtven Abstract Many economists argue that willingness-to-pay (WTP) measures are most appropriate for assessing the welfare effects of health changes. Nevertheless, the health evaluation literature is still dominated by studies estimating nonmonetary health status measures (HSMs), which are often used to assess changes in quality-adjusted life years (QALYs). Using meta-regression analysis, this paper combines results from both WTP and HSM studies applied to acute morbidity, and it tests whether a systematic relationship exists between HSM and WTP estimates. We analyze over 230 WTP estimates from 17 different studies and find evidence that QALY-based estimates of illness severity , as measured by the Quality of Well-Being (QWB) Scale , are significant factors in explaining variation in WTP, as are changes in the duration of illness and the average income and age of the study populations. In addition, we test and reject the assumption of a constant WTP per QALY gain. We also demonstrate how the estimated meta-regression equations can serve as benefit transfer functions for policy analysis. By specifying the change in duration and severity of the acute illness and the characteristics of the affected population, we apply the regression functions to predict average WTP per case avoided. Copyright © 2006 John Wiley & Sons, Ltd. [source] A welfare analysis of social security in a dynastic framework*INTERNATIONAL ECONOMIC REVIEW, Issue 4 2003Luisa Fuster In this article, we study the welfare effects of unfunded social security in a general equilibrium model populated with overlapping generations of altruistic individuals that differ in lifetime expectancy and earnings ability. Contrary to previous research, our results indicate that steady-state welfare increases with social security for most households, although by very different amounts. This result is mainly due to two factors. First, the presence of two-sided altruism significantly mitigates the crowding out effect of unfunded social security. Second, ability shocks and uncertain lifetimes generate significant heterogeneity among households to yield different induced preferences for social security. [source] The Welfare of Investment Deductibility Under a Flat TaxJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2002Franco Cugno This paper analyses the welfare effects of investment deductibility in a contest of endogenous growth generated by learning,by,doing and knowledge spillovers. We present a model where a set of revenue neutral fiscal policies, each characterized by different degrees of investment deductibility and different uniform tax rates on income, have been introduced. We show that, given the ratio of public expenditures to national product, partial investment deductibility turns out to be welfare enhancing when the intertemporal elasticity of substitution of consumption is sufficiently small. Our result means that a pure consumption tax,although ensuring more saving and faster growth,is not always preferable to a revenue neutral tax system in which both consumption and investment are taxed. [source] How Does Economic Development in Eastern Europe Affect Austria's Regions?JOURNAL OF REGIONAL SCIENCE, Issue 2 2002A Multiregional General Equilibrium Framework The paper quantifies regional welfare effects arising from the increasing trade flows between Austria and its Eastern neighbors after the opening up of Eastern Europe. We calibrate a static multiregional Computable General Equilibrium (CGE) model with benchmark data from 1994 for Austria, subdivided into nine Federal Provinces. The regions are linked by trade flows with the four Eastern neighboring countries and with the rest of the world. We simulate the effects of the increase of trade interpenetration as observed between 1989 and 1999 in a comparative static analysis. Regional welfare effects under fixed and flexible wages are presented. We also compare national CGE results with estimates obtained in a simple partial equilibrium approach. [source] Welfare Effects of Local versus Central Wage BargainingLABOUR, Issue 1 2010Marcus Dittrich The paper analyses the welfare effects of union bargaining (de)centralization in a dual labour market with a unionized and a competitive sector. We show that social welfare depends on both the structure of the union's objective function and the elasticities of labour demand in both sectors. The welfare-maximizing employment allocation can be obtained under a high degree of centralization if the union maximizes the total wage-bill. Otherwise, if the union is rent maximizing, welfare is higher under local bargaining. However, in that case neither central nor local wage setting yields the social optimum. [source] Inflation Uncertainty, Output Growth Uncertainty and Macroeconomic PerformanceOXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 3 2006Stilianos Fountas Abstract We use a bivariate generalized autoregressive conditionally heteroskedastic (GARCH) model of inflation and output growth to examine the causality relationship among nominal uncertainty, real uncertainty and macroeconomic performance measured by the inflation and output growth rates. The application of the constant conditional correlation GARCH(1,1) model leads to a number of interesting conclusions. First, inflation does cause negative welfare effects, both directly and indirectly, i.e. via the inflation uncertainty channel. Secondly, in some countries, more inflation uncertainty provides an incentive to Central Banks to surprise the public by raising inflation unexpectedly. Thirdly, in contrast to the assumptions of some macroeconomic models, business cycle variability and the rate of economic growth are related. More variability in the business cycle leads to more output growth. [source] Copyright, Parallel Imports and National Welfare: The Australian Market for Sound RecordingsTHE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2000Theo Papadopoulos For more than a decade now there has been considerable, often heated, debate over the issue of the parallel importation of sound recordings into Australia. Citing anti-competitive monopolistic distribution, an increasingly integrated global market and the challenges of new technologies, the Australian government recently passed the Copyright Amendment Act (No.2) 1998, which permits the parallel importation of ,non-infringing' copies of a sound recording. This paper investigates the economic rationale underpinning this regulatory change and, using a partial equilibrium model, attempts to measure the likely welfare effects on consumers, copyright owners and the nation. In addition the paper examines the likely welfare impact of piracy within the new regulatory framework. This paper demonstrates that in a global music market characterised by exclusive territorial licences and price discrimination, the removal of parallel import restrictions by a small net-importer of intellectual property may be welfare enhancing for the nation. This welfare gain is at the expense of largely foreign copyright owners. [source] DEVELOPING COUNTRY BORROWING FROM A MONOPOLISTIC LENDER: STRATEGIC INTERACTIONS AND ENDOGENOUS LEADERSHIP,THE JAPANESE ECONOMIC REVIEW, Issue 2 2009SAQIB JAFAREY We develop a two-period model with endogenous investment and credit flows. Credit is subject to quantitative restrictions. With an exogenous restriction, we analyse the welfare effects of a temporary consumption tax. We then consider three scenarios under which a monopoly lender optimally decides the level of credit and a borrower country chooses a consumption tax: one in which the two parties act simultaneously and two scenarios where one of them is a Stackleberg leader. The equilibrium under the leadership of the borrower country is Pareto superior to the simultaneous move equilibrium but may or may not be to that under the leadership of the lender. If the sequence of moves is itself chosen strategically, leadership by the borrower emerges as the unique equilibrium. [source] Pricing a Network Good To Deter EntryTHE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 4 2000Drew Fudenberg This paper develops a model of pricing to deter entry by a sole supplier of a network good. We show that the installed user base of a network good can serve a preemptive function similar to that of an investment in capacity if the entrant's good is incompatible with the incumbent's good and there are network externalities in demand. Consequently, the threat of entry can lead the incumbent to set low prices. We identify some factors that should be considered in thinking about the welfare effects of entry deterrence in this and similar models. [source] DIVISIONALIZATION AND HORIZONTAL MERGERS IN A VERTICAL RELATIONSHIP*THE MANCHESTER SCHOOL, Issue 3 2009TOMOMICHI MIZUNOArticle first published online: 5 APR 200 In this paper we evaluate the effects of horizontal mergers in a vertical relationship. Each downstream firm can create autonomous divisions. We show that an infinitesimal merger of downstream firms may exhibit a positive welfare effect if the upstream and downstream sectors are sufficiently unconcentrated. However, any merger of upstream firms reduces social welfare. Moreover, a decrease in the concentration in the upstream stage (respectively downstream stage or non-merging stage) makes the welfare effects of the merger in the upstream stage (respectively downstream stage or non-merging stage) less negative (respectively ambiguous or ambiguous). [source] On the Welfare Implications of Customs Unions in the Presence of Finance ConstraintsTHE MANCHESTER SCHOOL, Issue 2 2001Theodore Palivos We examine the welfare effects of a customs union on a small monetary economy. The role of money is captured by a generalized cash-in-advance constraint which allows for non-uniform monetization across sectors. This generates a demand-side distortion which results in a discrepancy between the marginal domestic rate of substitution and the world price. We show that, depending on the economy's inflation rate and the difference between the existing and the optimal tariff rate, trade creation may reduce welfare while trade diversion may improve it. [source] An empirical investigation of the welfare effects of banning wholesale price discriminationTHE RAND JOURNAL OF ECONOMICS, Issue 1 2009Sofia Berto Villas-Boas Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream cost differences exist, then discrimination shifts production inefficiently, toward high-cost retailers, so a ban increases welfare; if differences in price elasticity of demand across retailers exist, discrimination may increase welfare if quantity sold increases, so a ban reduces welfare. Using retail prices and quantities of coffee brands sold by German retailers, I estimate a model of demand and supply and separate cost and demand differences. Simulating a ban on wholesale price discrimination has positive welfare effects in this market, and less if downstream cost differences shrink, or with less competition. [source] THE CLOSED-LOOP EFFECTS OF MARKET INTEGRATION IN A DYNAMIC DUOPOLYAUSTRALIAN ECONOMIC PAPERS, Issue 1 2010KENJI FUJIWARA This paper develops a dynamic game model of reciprocal dumping to reconsider welfare effects of market integration, i.e. reductions in transport costs. We show that welfare under trade is unambiguously less than welfare under autarky for any level of transport costs, which is impossible in static models where trade is profitable if the transport cost is low enough. This is because the negative effect through closed-loop property of feedback strategies dominates the positive effects. [source] Measuring producer welfare under output price uncertainty and risk non-neutralityAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 1 2005David S. Bullock Procedures to measure the producer welfare effects of changes in an output price distribution under uncertainty are reviewed. Theory and numerical integration methods are combined to show how for any form of Marshallian risk-responsive supply, compensating variation of a change in higher moments of an output price distribution can be derived numerically. The numerical procedure enables measurement of producer welfare effects in the many circumstances in which risk and uncertainty are important elements. The practical ease and potential usefulness of the procedure is illustrated by measuring the producer welfare effects of USA rice policy. [source] Compulsory Schooling Laws and the Cure for Child LabourBULLETIN OF ECONOMIC RESEARCH, Issue 3 2004Giorgio Bellettini J13; J24; O11 Abstract This paper provides an explanation for the existence of child labour which relies on the imperfect enforcement of compulsory schooling laws. In the presence of complementarities in the production of human capital that justify legislative intervention, mandatory measures ensure that coordination failures are solved so that all parents send their children to school and the socially optimal equilibrium is reached. However, if enforcement of legislation is too low, multiple equilibria emerge. In this case, compulsory schooling laws may have adverse welfare effects on all households. [source] | ||||||||||||||||||||||||||||