The B.E. Journal of Economic Analysis & Policy

Published by De Gruyter

Volume 19 Issue 2 -

April 2019

Issue of The B.E. Journal of Economic Analysis & Policy

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Contents
Journal Overview

January 11, 2019

The Impact of Secondary Environmental Variables on OECD Healthcare Efficiency: A Robust Conditional Approach

Richard Gearhart

Article number: 20180063

Abstract

In this paper, I estimate country-level efficiency using a newer order- m estimator where I condition efficiency estimates on secondary environmental variables. This allows me to identify which variables influence the effectiveness of a healthcare delivery system. I find that not controlling for secondary environmental variables leads to the average OECD country being 11% inefficient; after controlling for demographics and economic (social protection) environmental variables, inefficiency reduces to 7% (5%). This provides evidence that a substantial part of the inefficiencies of a healthcare system is related to demographics, socioeconomics, and the structure of the healthcare delivery system. Using the second-stage results, I find lower healthcare spending, both as a percent of GDP and total out-of-pocket, as well as more of the population covered by public health insurance, is related to better efficiency. Lower fertility rates, lower immigration rates, higher incomes, and lower pharmaceutical doses are also consistent with better healthcare efficiency. Lastly, a healthcare system that provides a basic benefits package but allows for purchase of private health insurance, with moderate gatekeeping and flexibility to increase the budget for healthcare through public and private financing, are the most efficient healthcare systems.

January 24, 2019

Voluntary Mobility of Employees for Better Job Opportunities Given a Temporary Contract: Insights Regarding an Age-Varying Association Between the Two Events

Chiara Mussida, Luca Zanin

Article number: 20180143

Abstract

What mechanisms govern the mobility of employees who voluntarily switch employers for better opportunities, given a temporary contract (TC)? We attempt to answer this question by exploring this issue in Southern and Central European countries. We use cross-sectional data from the European Union Statistics on Income and Living Conditions survey for the 2005–2016 period. We estimate a flexible simultaneous equation model for binary responses by assuming the presence of an age-varying association between voluntary mobility and having a TC. After accounting for several socio-demographic and economic variables, we find a nonlinear decreasing relation between age and the outcomes, while we detect heterogeneous nonlinear patterns in the association between voluntary mobility and having a TC across countries. These insights can support policy-makers aiming to promote initiatives that facilitate the professional mobility of employees given a TC for an efficient allocation of human capital in the production system.

January 17, 2019

Do Local Institutions Affect Labour Market Participation? The Italian Case

Massimiliano Agovino, Antonio Garofalo, Massimiliano Cerciello

Article number: 20180077

Abstract

Italy features very low labour market participation rates for both men and women, coupled with a sizeable participation gender gap. This work investigates empirically the relation between institutional quality and labour market participation at the local level. Using official records on the Italian provinces over the 2004–2012 timespan and the Institutional Quality Index, we use a Spatial Lag of X model to gauge the direct and indirect impact of local institutions on male and female participation rates, with particular regard to the participation gender gap. The results support the idea that institutional quality has a significant impact on local labour market participation, for both men and women, while it does not affect the participation gap. Moreover, institutions generate spatial spillovers, affecting participation in neighbouring provinces. Finally, the availability of public child care facilities is as a key determinant of female participation.

January 30, 2019

Refunding Emissions Taxes: The Case For A Three-Part Policy

Philippe Bontems

Article number: 20180123

Abstract

This paper examines theoretically whether by combining both output-based refunding and abatement expenditure-based refunding, it is possible to limit the negative consequences that a pollution tax implies for a polluting industry. We show that this is indeed the case by using a three-part policy where emissions are subject to a fee and where output and abatement expenditures are subsidized. When the industry is homogenous, it is possible to replicate the standard emission tax outcome by inducing a polluting firm to choose the production and emission levels obtained under any emission tax, without departing from budget balance. By construction, any polluter earns strictly more than under the standard tax alone without rebate, making this proposal more acceptable to the industry. When firms are heterogeneous, the refunding policy needed to replicate the standard emission tax outcome is personalized in the sense that at least the output subsidy should be type dependent and it is strictly preferred only from the industry’s point of view to a standard environmental tax. We also explore the implications of uniform three-part refunding policies for a heterogeneous industry.

January 24, 2019

Do Minimum Wage Increases Affect SNAP Benefits?

Thomas Snyder, Senayt Rinkevich, Weici Yuan

Article number: 20180045

Abstract

The recession of the late 2000s accompanied a steep increase in the number of people on the U.S. federal Supplemental Nutrition Assistance Program (SNAP). The economy recovered, yet the number of people on SNAP remained relatively high. This study investigates whether increases in minimum wages affected the number of SNAP beneficiaries and the per-capita cost of the program. Economic reasoning suggests a minimum wage increase can decrease poverty through higher wages or increase poverty by enacting a barrier to work. Using a panel data set (1997–2015) at the state level, two-way fixed effects estimates demonstrate a nonlinear relationship between minimum wages and SNAP benefits. At low minimum wages, increases in the minimum wage reduce SNAP enrollment and benefits; however, at high minimum wages, increases in the minimum wage increase SNAP enrollment and benefits. Twenty states have already passed the minimum wage turning point. Further increases can lead to more SNAP participants.

Open Access February 16, 2019

Dynamics of Individual Income Rank Volatility: Evidence from West Germany and the US

Louis Chauvel, Anne Hartung, Flaviana Palmisano

Article number: 20180153

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Abstract

This paper presents a methodology for comparing income rank volatility profiles over time and across distributions. While most of the existing measures are affected by changes in marginal distributions, this paper proposes a framework based on individuals’ relative positions in the distribution that is neutral to structural changes that occur in that distribution. Applying this approach to West Germany and the US over three decades, we show that while poorer individuals in both countries are the most volatile in all periods investigated, the long-term trends of volatility at the different points of the distribution in each of these countries differ.

February 8, 2019

Elevated Uncertainty during the Financial Crisis: Do Effects on Subjective Well-Being Differ across European Countries?

Lena Tonzer

Article number: 20180099

Abstract

This paper focuses on the effect of uncertainty as reflected by financial market variables on subjective well-being. The analysis is based on Eurobarometer surveys, covering 18 countries over the period 2000–2013. Individuals report lower levels of life satisfaction in times of higher uncertainty approximated by stock market volatility. This effect is heterogeneous across respondents: the probability of being unsatisfied is higher for respondents who are older, unemployed, less educated, and live in one of the GIIPS countries of the Euro area. Furthermore, higher uncertainty in combination with a financial crisis increases the probability of reporting low values of life satisfaction.

March 21, 2019

Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession

Michael Chletsos, Stelios Roupakias

Article number: 20180059

Abstract

We attempt to identify the impact of immigration on the labour market opportunities of resident workers by analysing data from the Greek Labour Force Survey (1999–2015) as well as census data for 1981, 1991, and 2001. Slicing the national labour market into education and experience segments, we find modest adverse effects on the employment outcomes of natives and usually insignificant effects on earnings. Our results are generally robust to alternative definitions of skill groups and the potential “downgrading” of immigrants. Importantly, we obtain similar results in qualitative terms when we account for potential endogenous selection into skill-cells, by implementing an instrumental variables approach in the spirit of Card (2001). We also show that veteran immigrants compete more heavily with natives than recent immigrants do. In addition, our analysis indicates that the effects of immigration were economically more important during the Greek crisis. Finally, the evidence supports the idea that migrants push natives towards complementary, non-routine tasks.

March 5, 2019

Housing Wealth Effects in Japan: Evidence Based on Household Micro Data

Masahiro Hori, Takeshi Niizeki

Article number: 20180101

Abstract

Using micro data covering almost 500,000 Japanese households over the period 1983–2012, we examine to what extent household consumption responds to changes in housing wealth. To do so, we estimate the housing wealth of individual households by matching several official statistics. Employing cross-section and pseudo-panel-based regressions, we find that the marginal propensity to consume (MPC) out of housing wealth is approximately 0.0008–0.0013 for nondurable consumption and 0.0059–0.0082 for total consumption. We further find that the consumption response of older households is larger than that of younger households, which is consistent with the pure wealth effects hypothesis.

March 9, 2019

Gender Discrimination in Exam Grading? Double Evidence from a Natural Experiment and a Field Experiment

Beatrice Schindler Rangvid

Article number: 20180084

Abstract

Grading bias against boys may be one of the reasons why boys underperform in school compared to girls. This study assesses the causal effect of blind grading of boys relative to girls using difference-in-differences methods and exploiting two separate identification strategies: a unique full cohort natural experiment providing exogenous variation in blind grading, and a field experiment where the exact same exam papers are scored twice (blind and non-blind). Even though the two strategies hinge on different assumptions, the results persistently suggest against the existence of systematic gender biases in non-blind evaluation. The results are robust to different model specifications.

March 23, 2019

On Lawyer Compensation When Appeals Are Possible

Christian At, Tim Friehe, Yannick Gabuthy

Article number: 20180273

Abstract

This paper describes how plaintiff should compensate lawyers, who choose unobservable effort, when litigation may proceed from the trial to the appeals court. We find that, when it is very likely that the defendant will appeal, transfers made to the lawyer only after an appeals court’s ruling are key instruments in incentivizing both trial and appeal court effort. Indeed, the lawyer may not receive any transfer after the trial court’s ruling. In contrast, when reaching the appeals stage is unlikely, a favorable trial court ruling triggers a positive transfer to the lawyer and first-best appeals effort. In our setup, the lawyer may receive a lower transfer after winning in both the trial and the appeals court as compared to the scenario in which the first-instance court ruled against the plaintiff and the appeals court reversed that ruling.

March 30, 2019

Optimal Disability Insurance with Informal Child Care

Christine Ho

Article number: 20180082

Abstract

The possibility of engaging in household child care may exacerbate the incentives of parents and grandparents to falsely claim disability benefits as households also get to save on formal child care costs. This paper considers a multi-generational family model with persistence in privately observed shocks and presents an efficient implementation case for subsidizing formal child care costs of the disabled. An implementation of the optimal scheme that consists of capped formal day care subsidies, non-linear income taxation and asset-testing is proposed. Simulations based on a parametrization that targets key features of the US labor and child care markets suggest that day care subsidies may lead to sizeable cost savings.

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

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