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Existing literature shows that a ban on child labour may be self-enforcing under the extreme assumption that, above the subsistence level, no amount of consumption can compensate parents for the disutility of child labour. The present paper shows that a partial ban may be self-enforcing also in a more general model where education is an alternative to work, and the disutility of child labour can be compensated by higher present consumption or future income, but a total ban may not. It also shows that, in the absence of informational asymmetries, child labour can be eliminated and a first best achieved if the ban is combined with a credit-backed policy including a subsidy to parents, and a tax on skilled adults. A first best is out of reach if the use children make of their time when they are neither at school, nor working in the labour market is private information, because the policy maker then faces an incentive-compatibility constraint. The second-best policy reduces child labour, but not to zero. [ABSTRACT FROM AUTHOR]

Purpose: The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities. Design/methodology/approach: The empirical analysis is conducted on a sample of 6,458 Italian municipalities by applying the ordinary least squares (OLS) and instrumental variables (IVs) approaches. Findings: The estimation results show a small increase in marital separations and divorces as the difference between the municipal secondary and primary home tax rate increases. Specifically, an increase of 1‰ in the property tax rate differentials is accompanied by an increase of six marital separations and four divorces per 1,000 inhabitants. Research limitations/implications: The main limitation of the analysis is that the strategic behavior of the married couple is inferred from econometric analysis with data aggregated at the municipal level. To investigate this phenomenon more precisely, it would be useful to have individual data collected by surveys on strategic divorce decisions due to property tax incentives. Originality/value: This study contributes to the scant existing literature on the tax incentives for strategic divorce. It is the first study to empirically investigate the effects of property tax on separation and divorce decisions by investigating the Italian context. In Italy, a property tax was introduced in 1993, encouraging "false" divorces by spouses with a second home since the tax on the secondary home was set at a rate higher than that on the primary residence. Moreover, there were no tax deductions and no additional tax breaks on the secondary home, while they were established on the primary one. Higher property taxes and the absence of tax breaks on the secondary home may have encouraged a strategic behavior whereby many married couples filed for false separation and divorce in order to recover part of property tax rebates. [ABSTRACT FROM AUTHOR]

This study investigates the conditions under which welfare fraud and incomplete take-up emerge simultaneously and persist for a long time, which has been observed in many countries, particularly Japan and Germany. To do this, we extend models of statistical discrimination and taxpayers’ resentment to simple models of population dynamics. We find two stable boundary equilibria in the first model. One of these equilibria entails low welfare fraud and 100 % incomplete take-up, and the other entails high welfare fraud and 100 % take-up. In contrast, we find a unique stable equilibrium in the tax resentment model, which is interior and thus allows for the coexistence of welfare fraud and incomplete take-up in a long run. Hence, we conclude that this unique long-run equilibrium of the dynamic taxpayers’ resentment model provides a better explanation for the observation of simultaneous and persistent presence of welfare fraud and incomplete take-up in actual economies. [ABSTRACT FROM AUTHOR]

We examine how means-tested childcare subsidies affect parental labor supply. Using the introduction of reduced childcare prices for low-income families in Norway in 2015, we show that these subsidies may have the unintended effect of discouraging work rather than promoting employment. First, structural labor supply simulations suggest that a negative parental labor supply effect dominates, ex ante. Ex post, we find a small and insignificant effect of means-tested childcare subsidies on parental labor supply in the reform year. We find no statistically significant bunching around the income limits in subsequent years, but we do find negative labor supply effects in subsequent expansions of the reform. Our results suggest that in a context where both parental employment and participation in formal childcare are high, means-tested childcare subsidies may have unintended parental labor supply effects. [ABSTRACT FROM AUTHOR]

We analyse the different fiscal treatment of married and cohabiting couples across all EU Member States using microsimulation methods. Our article highlights important differences across EU countries' tax–benefit systems, where seven countries show substantial bonuses for married couples and four exhibit marriage penalties. On a micro level, we find that these marriage bonuses/penalties differ substantially across household types and income. From a policy point of view, our results suggest that the abolishment of marriage-related tax–benefit components in countries with marriage bonuses would leave some households financially worse off but would increase governments revenues that could be spent to targeted support of specific groups. From both an equity and efficiency point of view, this abolishment would be desirable. [ABSTRACT FROM AUTHOR]

Abstract We investigate whether a universal basic income (UBI) programme should replace New Zealand’s public pension system. A UBI programme would increase the number of social benefit recipients and hence increase tax rates. Not only the basic income itself but also its accompanying tax rate hikes would influence intra- and inter-temporal choices of households. We use an overlapping generations model and show that households’ preferences would be time-inconsistent—in hindsight, households regret having saved too little. There are three major findings of this study. First, the public pension system would be preferred to a UBI programme increasing the tax rate of income. Second, a UBI programme increasing the consumption tax rate would be preferred to the public pension system by households at most ages, but they would reverse the preference later in their lives. Third, a decrease in the population growth rate would make the reversal of the preference more noticeable. [ABSTRACT FROM AUTHOR]

We investigate the behavioural responses of individual taxpayers to changes in marginal personal income tax rates applying empirical bunching methodology to tax administrative data from Zambia over the period from 2014 to 2021. We find evidence for excess bunching at the first kink in the tax schedule for all years but less evidence of bunching at the second and third thresholds. While bunching is considerable and behavioural responses are observed to changes in the location of the kinks over time, bunching at reference points (’round-number bunching’) also appears large. Implied elasticities of taxable income are however not remarkable, and comparing actual and estimated counterfactual wage distributions reveal that missed tax revenue arising from the excess bunching is limited. This is consistent with the observed bunching reacting sharply and immediately to changes in the location of the kink points over time, suggesting that observed behavioural change is driven by reporting behaviour rather than real economic responses. [ABSTRACT FROM AUTHOR]

Increasing mature-age access to education and training in a way that is responsive to changing labour market needs is a key policy challenge. In this paper we examine the impacts of a unique reform in the Australian state of Victoria that aimed to meet this challenge by introducing a broad-based voucher for those 25 and older. In effect, the reform uncapped public course-level funding and linked it to individual student choice instead of centralised funding allocations. Using national administrative enrolment data and difference-in-differences estimation, exploiting the continuation of existing centralised funding models in other states, we find that the voucher increased mature-age vocational education and training participation and improved the alignment of course enrolments with measures of prevailing skill needs, including enrolments of disadvantaged groups. Our study provides first evidence on the use of broad-based vouchers in vocational education and training to expand access to mature-age learning in a demand-responsive way. These results provide support for policies that put student choice at the centre of efforts to lift mature-age access to training, which is especially important for countries, such as the United States, that have traditionally funded vocational education and training through centralised allocations. [ABSTRACT FROM AUTHOR]

We examine the impact of the Allowance for Newborn Children, a universal baby bonus offered by the Canadian province of Quebec, on birth order, sibship sex composition, income, and education. We find a large response for third- and higher-order births for which the bonus was more generous. Interestingly, though, we find stronger response if there were two previous sons or a previous son and daughter rather than two previous daughters. We also find, in addition to a transitory effect, a permanent effect, with the greatest increase in one daughter-two son families among three-child households. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Also, women with at least some post-secondary education respond more to the policy than those with less. These findings suggest that properly structured pro-natal policies can successfully increase fertility among different segments of the population while simultaneously diminishing the effect of gender preferences and fertility disparity related to women's education. [ABSTRACT FROM AUTHOR]

Preferences of Nigerian households vary across different types of public goods. For example, some prefer roads while others favor education even after controlling for the existing supply of these goods. What explains this variation? Wearguethattheperceiveddistributionalconsequencesofspecificpublicgoods differ conditional on the personal characteristics of households. In particular, households demand the type of public good that (a) increases the utility of assets they already own and (b) resonates with their past experiences involving the lack of particular public goods. We test our argument with data on 123,000 Nigerian households. We find strong evidence for our argument across six types of public goods. [ABSTRACT FROM AUTHOR]

Energy labels are a key element of energy efficiency policies. They provide information on appliances' energy consumption and aim at increasing consumers' attention to this characteristic. A well-known example is the EU Energy Label, which is required by law to be displayed on most energy-using durables in the EU as well as in Switzerland. In cooperation with a large online retailer in Switzerland we assess the impact of the EU Energy Label and of a newly designed monetary lifetime-oriented energy label in the field. We analyze private purchases of household appliances, especially freezers, vacuum cleaners and tumble dryers. We find that the display of any of the two energy labels increases the sales proportion of energy-efficient appliances compared to the absence of any energy label. At the same time, we observe a volume-effect for freezers: The average size of purchased freezers is larger when any of the two energy labels is displayed compared to the absence of any energy label. The influence of the two different energy labels is similar except for vacuum cleaners, for which monetary information might have an adverse effect. [ABSTRACT FROM AUTHOR]

The global shift towards diets high in sugar-sweetened beverages (SSBs) and energy dense ultra-processed foods is linked to higher prevalence of obesity, diabetes and most other non-communicable diseases (NCDs), causing significant costs to societies and individuals. Chile has the highest SSB consumption in the world, very high junk food intake and very rapid increases in these poor components of the diet plus obesity prevalence. This study’s purpose is to compare the effect of different tax policies for SSBs and ultra-processed foods on nutrient availability, utilizing price-elasticities, which are estimated from a Quadratic Almost Ideal Demand System model, using the 2011–2012 Income and Expenditure survey from Chile. We take into account the high proportion of households not purchasing various food and beverage groups (censored nature of data) and endogeneity on total expenditures. The food groups considered were: sweets and desserts; salty snacks and chips; meat products and fats; fruits, vegetables and seafood; grain-based staples; ready-to-drink SSB; SSB from concentrate; plain water, coffee and tea; and milk, which together represent 90% of food expenditures. The simulated taxes were: (1) 18% price tax on all foods and beverages exceeding thresholds on sodium, saturated fat, and added sugar and for which marketing is restricted (based on a Chilean law, effective June 16, 2016); (2) 40% tax on SSBs (22% above the current tax level); and (3) a 1 Chilean peso (0.2 US cents) per gram of sugar tax on products with added sugar. Unhealthy beverages and foods are price-elastic (−1.95 for salty snacks and chips, −1.30 for ready-to-drink SSBs, and −1.27 for SSBs from concentrate), meaning that the change in consumption is proportionally larger with respect to a change in price. Results are robust to different model specification, and consistent among different socioeconomic sub-populations. Overall, the tax on foods and beverages high in fat, salt and sugar is associated with the largest reduction in household purchases of sodium, added sugar, saturated fat and calorie purchases. Chile is unique in currently having instituted a small current SSB tax as well as marketing controls and front-of-package labelling of unhealthy foods and beverages. The design of a more comprehensive tax to enhance the overall effect of these policies on healthier diets is a next critical step. This study shows that a tax on the same foods and beverages already delineated as unhealthy by the marketing controls and front-of-pack labelling should promote a healthier diet. [ABSTRACT FROM AUTHOR]

The perception of risks associated with climate change appears to be a key factor for the support of climate policy measures. Using a generalized ordered logit approach and drawing on a unique data set originating from two surveys conducted in 2012 and 2014, each among more than 6000 German households, we analyze the determinants of individual risk perception associated with three kinds of natural hazards: heat waves, storms, and floods. Our focus is on the role of objective risk measures and experience with these natural hazards, whose frequency is likely to be affected by climate change. In line with the received literature, the results suggest that personal experience with adverse events and personal damage therefrom are strong drivers of individual risk perception. [ABSTRACT FROM AUTHOR]

We present the symmetric thermal optimal path (TOPS) method to determine the time-dependent lead-lag relationship between two stochastic time series. This novel version of the previously introduced thermal optimal path (TOP) method alleviates some inconsistencies by imposing that the lead-lag relationship should be invariant with respect to a time reversal of the time series after a change of sign. This means that, if ‘Xcomes beforeY’, this transforms into ‘Ycomes beforeX’ under a time reversal. We show that a previously proposed bootstrap test lacks power and leads too often to a lack of rejection of the null that there is no lead-lag correlation when it is present. We introduce instead two novel tests. The first criterion, based on the free energyp-value, quantifies the probability that a given lead-lag structure could be obtained from random time series with similar characteristics except for the lead-lag information. The second self-consistent test embodies the idea that, for the lead-lag path to be significant, synchronizing the two time series using the time varying lead-lag path should lead to a statistically significant correlation. We perform intensive synthetic tests to demonstrate their performance and limitations. Finally, we apply the TOPS method with the two new tests to the time-dependent lead-lag structures of house price and monetary policy of the United Kingdom (UK) and United States (US) from 1991 to 2011. We find that, for both countries, the TOPS paths indicate that interest rate changes were lagging behind house price index changes until the crisis in 2006–2007. The TOPS paths also suggest a catch up of the UK central bank and of the Federal Reserve still not being on top of the game during the crisis itself, as diagnosed by again the significant negative values of TOPS paths until 2008. Only later did the central banks interest rates as well as longer maturity rates lead the house price indices, confirming the occurrence of the transition to an era where the central bank is ‘causally’ influencing the housing markets more than the reverse. The TOPS approach stresses the importance of accounting for change of regimes, so that similar pieces of information or policies may have drastically different impacts and developments, conditional on the economic, financial and geopolitical conditions. This study reinforces the view that the hypothesis of statistical stationarity in economics is highly questionable. [ABSTRACT FROM AUTHOR]

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper provides detailed evidence on the mechanism by which a public pension system depresses fertility, based on historical data. Our theoretical framework highlights that the effect of a public pension system on fertility is ex ante ambiguous while its size is determined by the internal rate of return of the pension system. We identify an overall negative effect of the introduction of pension insurance on fertility using regional variation across 23 provinces of Imperial Germany in key variables of Bismarck's pension system, which was introduced in Imperial Germany in 1891. The negative effect on fertility is robust to controlling for the traditional determinants of the first demographic transition as well as to other policy changes. [ABSTRACT FROM AUTHOR]

There is a huge variation in the size of labor supply elasticities in the literature, which hampers policy analysis. While recent studies show that preference heterogeneity across countries explains little of this variation, we focus on two other important features: observation period and estimation method. We start with a thorough survey of existing evidence for both Western Europe and the USA, over a long period and from different empirical approaches. Then, our meta-analysis attempts to disentangle the role of time changes and estimation methods. We highlight the key role of time changes, documenting the incredible fall in labor supply elasticities since the 1980s not only for the USA but also in the EU. In contrast, we find no compelling evidence that the choice of estimation method explains variation in elasticity estimates. From our analysis, we derive important guidelines for policy simulations. [ABSTRACT FROM AUTHOR]

For twenty years or so, the outsourcing of household tasks has been considered to be increasing in many countries. In some countries (particularly in France), extensive public policies have been put in place to develop demand and create employment by explicitly seeking to democratize consumption, which still predominantly concerns more affluent households. By using both quantitative and qualitative data, this paper aims to gain a better understanding of the factors of demand for these services and to examine the possibility of bringing the process of democratization to a successful conclusion. Due to the originality of the data used, my approach differs from previous research in two main areas: first, it highlights the lack of democratization of the consumption of these services (among working-age households), and second, it identifies the two forms of inequality underlying their development. [ABSTRACT FROM AUTHOR]

This article provides evidence on the role of consumer food subsidies in improving nutritional intake and diet quality by evaluating the expansion of the government food assistance program coverage in the hunger prone state of Odisha in India. In 8 districts of Odisha, popularly known as the Kalahandi-Balangir-Koraput (KBK) region which is notable for extreme poverty and starvation deaths, the government did away with the targeted food assistance program in 2008 and made the scheme universal. Using a Difference-in-Difference methodology over two repeated cross sectional household surveys, this article finds that the shift from targeted to a universal food security program in the KBK region of Odisha has led to an improvement in the household nutritional intake and diet quality. Further examination suggests that proportion of households consuming below the recommended dietary allowance of calorie, fats and protein has declined significantly in this region post the intervention. [ABSTRACT FROM AUTHOR]

Beginning with the high school class of 2015, Tennessee Promise will provide college coaching and last-dollar aid to every high school graduate making a seamless transition to community college. We examine the program that preceded this effort and evaluate its potential effect on college-going and college persistence. Knox Achieves originated in Knox County, Tennessee with the class of 2009. Eligibility was neither need-based nor merit-based, negating some of the application hurdles that accompany other aid vehicles. We find that program participation is strongly associated with an increased likelihood of graduating from high school and enrolling directly in college, albeit with a modestly lower chance of starting in a four-year college. The evidence suggests that aid per se is not the only lever by which Knox Achieves worked: college enrollment and college credit gains are largest among lower-income students who likely saw little to no scholarship aid from the program. [ABSTRACT FROM AUTHOR]

In a real-effort laboratory experiment, labor supply decreases more with the introduction of a tax than with a financially equivalent drop in wages. This “tax aversion” is large in magnitude: when we decompose the productivity decrease that arises from taxation, we estimate that 40% is due to the lower net wage and the remaining 60% to tax aversion. This tax aversion affects labor supply more on the extensive margin (working less) than on the intensive margin (being less productive while working). The aversion is equally strong whether tax revenue goes to the U.S. government or back to the experimenter (a “laboratory tax”). We discuss the implications of our results for the relationship between labor supply and taxation. [ABSTRACT FROM AUTHOR]

This paper takes two different approaches to assess the sustainability of household debt in Korea. First, we identify marginal households whose debts are excessive and whose financial soundness is weak, and examine how much these household groups would grow should external shocks occur. This sensitivity analysis shows that the low-income brackets are highly exposed to rollover and default risks, and that a decline in housing prices is an important factor affecting the vulnerability of household debt. Furthermore, we employ a debt dynamics equation and a primary savings reaction function in order to derive the debt limit for each income quintile, and find that the sustainable debt ratio for each income quintile differs in line with the interest rate burden of the household sector, income fluctuations and savings capability. According to the results of this analysis, the first quintile at the bottom income level records debt ratios close to their debt limit, calling for urgent debt restructuring for this income class. [ABSTRACT FROM PUBLISHER]

South Africa waived user fees for primary healthcare in 1994 and, again, in 1996. The first waiver focused on young children, elderly adults, pregnant women and nursing mothers, while the 1996 reform waived fees for the remainder of the population, subject to means tests. We take advantage of household survey information to examine the impact of the policy on a subset of the reform-eligible population. Although it was expected that public healthcare facility usage would have increased post reform, no statistically significant evidence supported such a claim. Therefore, our results are consistent with some very recent research examining the 1994 reform, but are generally at odds with the general impression in the literature that user fee abolition matters when it comes to alleviating inequities in access to healthcare. [ABSTRACT FROM PUBLISHER]

We study deception choices, the self-selection of capable and less capable deceivers and deception detection in a tax compliance experiment. We find large systematic differences between whether subjects are perceived as honest or as dishonest. Taxpayers are seemingly aware of these perceptions. The empirical outcomes are in line with a theory suggesting that taxpayers make their tax compliance choices on the basis of these perceptions. Taxpayers who are perceived as honest self-select since they are more likely to underreport. This selection effect is stronger if the fines for underreporting are high. [ABSTRACT FROM AUTHOR]

The impacts of trade liberalisation in South Asia on poverty and income inequality in Sri Lanka are examined in this paper using a multi-country computable general equilibrium model. A non-parametric extended representative household-agent approach employing micro-household survey data is used to estimate the income inequality and poverty effects. Two trade liberalisation policy simulations are investigated: (1) the formation of a South Asian Free Trade Agreement and (2) unilateral trade liberalisation in South Asia. The results indicate that overall income inequality and income inequality among different household groups in the urban, rural and estate sectors in Sri Lanka would fall under both trade liberalisation policies. Foster, Greer and Thorbecke indices reveal that poverty would also decline in all three sectors. In both instances, unilateral trade liberalisation delivers the greatest reductions. [ABSTRACT FROM AUTHOR]

Migration, important for many areas in development, is strongly related to employment. Debate over labour supply in developing countries frequently hinges on labour migration. This paper examines the determinants of spatial mobility of working-age adults in South Africa, using the first nationally representative longitudinal survey – the National Income Dynamics Study – for 2008–10. The paper outlines the unique advantages of these data for the study of individual mobility – data that open the possibility of a new research project. Specifically, it asks how policy-relevant programmes, such as social transfers and housing assistance, affect migration. This paper finds, on balance, that transfers are negatively correlated with subsequent relocation. Previous migration is also predictive of future migration and both are tightly related to attrition, while there is an increasing but strongly non-linear relationship between income and mobility. Further, we highlight potential pitfalls – including attrition, and definitional difficulties – in the study of migration and illustrate possible solutions. [ABSTRACT FROM PUBLISHER]

In this study, we examine the effect of church tax on the church membership decision using Finnish data. We present both descriptive statistics from an opting-out website and econometric evidence exploiting the panel structure of a large individual-level data set. Our descriptive analysis shows that opting out is concentrated towards the last days of the year, i.e., the last chance to avoid paying church tax for the entire coming year. Our econometric evidence suggests that the average effect of tax incentives for the whole population is both statistically and economically significant. A 1 standard deviation increase in church tax leads to between 0.5 and 1 percentage point decline in the likelihood of church membership. In addition, we find that church membership dropped substantially when a law change made opting out significantly easier. This finding suggests that transaction costs play an important role in the membership decision. [ABSTRACT FROM AUTHOR]

In 2007, Germany implemented a generous parental leave regulation in order to make parenthood more attractive and more compatible with a working career, especially for mothers. We evaluate the reform using a natural experiment that compares outcomes of parents with children born shortly after and before the coming into effect of the law, and find a significant decrease in mothers' employment probability during the 12 months after giving birth, and an increase in mothers' employment probability after the transfer expires. The implementation of two daddy months is currently not reflected in significant changes in fathers' time devoted to childcare. [ABSTRACT FROM AUTHOR]

Scientists have noted that recent shifts in the earth's climate have resulted in more extreme weather events, like stronger hurricanes. Such powerful storms disrupt societal function and result in a tremendous number of casualties, as demonstrated by recent hurricane experience in the US Planning for and facilitating evacuations of populations forecast to be impacted by hurricanes is perhaps the most effective strategy for reducing risk. A potentially important yet relatively unexplored facet of people's evacuation decision-making involves the interpersonal communication processes that affect whether at-risk residents decide to evacuate. While previous research has suggested that word-of-mouth effects are limited, data supporting these assertions were collected prior to the widespread adoption of digital social media technologies. This paper argues that the influence of social network effects on evacuation decisions should be revisited given the potential of new social media for impacting and augmenting information dispersion through real-time interpersonal communication. Using geographic data within an agent-based model of hurricane evacuation in Bay County, Florida, we examine how various types of social networks influence participation in evacuation. It is found that strategies for encouraging evacuation should consider the social networks influencing individuals during extreme events, as it can be used to increase the number of evacuating residents. [ABSTRACT FROM AUTHOR]

Exploiting the exogenous variation in user fees caused by a Swedish childcare reform, we are able to identify the causal effect of childcare costs on fertility in a context in which childcare enrollment is almost universal, user fees are low, and labor force participation of mothers is very high. Anticipation of a reduction in childcare costs increased the number of first and higher-order births, but only seemed to affect the timing of second births. For families with many children we also find a marginally significant negative income effect on fertility. [ABSTRACT FROM AUTHOR]

This paper presents a micro-economic model to analyze intergenerational exchange in which the utility maximizing decisions of 'selfish' children on family services, labor market activities, and leisure are determined endogenously. We show that altruistic parents' financial transfers have a disincentive effect on the labor supply of their children and that the children's equilibrium income is positively correlated with parental income. Based on the theoretical model, we find that redistributing US$1 from children to their parents increases parental transfers by less than US$1, implying that intergenerational public transfers are Ricardian non-neutral. However, the non-neutral redistributive transfers may enhance intergenerational family bonds because the equilibrium levels of services rendered by children to their parents increase. [ABSTRACT FROM AUTHOR]

We develop an extended version of Roemer's Equality of Opportunity (EOp) criterion that accounts for income differentials between as well as within types, where types are defined by circumstances that are beyond people's control (parental education, in this study). A microeconometric model of labour supply in Italy is employed to identify income tax-transfer rules that are optimal according to the extended EOp criterion. Overall, the results do not conform to the perhaps common expectation that the more conventional Equality of Outcome criterion is more supportive of 'interventionist' (redistributive) policies than the EOp approach. [ABSTRACT FROM AUTHOR]

We study the optimal income taxation of couples. We determine the resulting intra-family labor supply allocation and its implication for the choice of the tax unit (individual versus joint taxation). We provide a general condition for full joint taxation to arise. We also study how the spouses' respective labor supply decisions are distorted when the condition does not hold. In particular, we show that, depending on the pattern of mating, the celebrated result according to which the spouse with the more elastic labor supply faces the lower marginal tax rates may or may not hold in our setting. [ABSTRACT FROM AUTHOR]

Using the Mirrlees optimal income tax model, with no income effects on labour supply, this article shows that the discrete population approach provides new insights into the characterization of the optimal tax system, which complements the previous findings. The analysis is based on the “Spence-Mirrlees wedge” which corresponds, at each observed gross income level, to a ratio between the marginal tax rate of the individual for whom the bundle is designed and that of his nearest more productive neighbour if he chooses to mimic. Using this wedge, a necessary and sufficient condition for bunching to be optimal is obtained in terms of the primitives of the model, separating optima are characterized geometrically, and comparative statics properties derived, notably with respect to skill levels and individual social weights. It is then shown that the analysis extends to adverse-selection problems where participation constraints replace the tax revenue constraint. [ABSTRACT FROM AUTHOR]

This paper empirically analyzes the labor supply effects of two “making work pay” reforms in Germany. We provide evidence in favor of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than those with low earnings. We discuss our results more generally and with comparisons to the family-based tax credits in force in the US and the UK. For the evaluation of the policies, we apply a static structural labor supply framework and explicitly account for demand-side constraints by using a double-hurdle model. [ABSTRACT FROM AUTHOR]

Abstract: This paper draws on three waves of Japan household longitudinal data (Keio Household Panel Survey, KHPS) and estimates a proportional hazard model to investigate the effects of two distinctive polices in Japan that influence residential moves. One is the implementation of an income tax deduction system in 2004 for the carrying over of capital losses for owner-occupied households and the other is the Japan Rental Act for renter households. The tax policy was devised to cope with the severe equity constraints that followed the bursting of Japan’s asset Bubble in the early 1990s. The Rental Act (1921, amended in 1941) provides renters protection from eviction and is the basis for a court arbitrated rent control system. We examine the effect of this rent control system on residential mobility based on an estimate of the implicit subsidy resulting from the Rental Act. We find that both government policies have a strong impact on residential mobility. The implementation of an income tax deduction system linked to capital losses increases owners’ mobility, especially for those households with a large LTV (Loan to Value Ratio). [Copyright &y& Elsevier]

Abstract: I investigate the wealth distribution and endogenous fiscal policy in a two-class growth model in which individuals exhibit a desire for social status. The latter is increasing with individual wealth and decreasing with the average wealth of the society. First, I show that status-seeking is crucial in determining the long-run wealth distribution: agents with stronger status motive end up holding a higher level of wealth. Second, higher wealth inequality can be associated with a higher growth if the inequality is due to a stronger incentive of one class of agents to accumulate wealth. Third, the model implies that a higher growth rate may reduce welfare of one class of agents and increase welfare of the other one. Finally, when fiscal policy is determined through a voting mechanism, an increase in the strength of the status motive of the majoritarian class can reduce political-equilibrium growth. [Copyright &y& Elsevier]

We consider the optimal determination of family allowances in a model where some of the parents have higher ability to raise children than others. First-best policy gives both types of parents the same level of utility. If neither parental ability nor parental actions are fully observable, however, the policy maker has to take into account the incentive-compatibility constraint that more able parents should not find it profitable to mis-represent their true ability by investing less in their children, and having a lower number of children. The second-best policy induces more able parents to have the first-best number of children, and to invest in each child at the first-best level. Less able parents are induced to have fewer children than in first best, and will underinvest in each child. Whether the government should subsidize more the more able parents, or the less able ones, depends on the properties of the cost function. In second best, however, less able parents will end up with lower utility than more able parents whatever the cost function. [ABSTRACT FROM AUTHOR]

Dynamic multi-sector computable general equilibrium (CGE) models often utilize investment aggregation according to fixed shares. The question is, do these models come to the same policy conclusions as CGE models that derive sectoral investment shares by optimal household decisions in a framework with heterogeneous capital? Two models—a model with heterogeneous capital, and a second model with a capital aggregate (and fixed investment shares)—show that the impact of the same given tax shock is strikingly different in the two models. The paper also shows under which conditions the two models bring about “similar” policy conclusions. [Copyright &y& Elsevier]

We examine how tax avoidance in the form of trade in well-functioning asset markets affects the study of labor supply. We discuss the implications for tax policy analysis, and we show that a failure to account for avoidance responses may lead to huge errors when analyzing how tax reform affects labor supply, tax revenue and the welfare cost of taxation. Our model may explain a number of otherwise hard to understand dimensions of taxpayer response. [Copyright &y& Elsevier]

A new source of resistance to the highly virulent and widespread biotype L of the Hessian fly, Mayetiola destructor (Say), was identified in an accession of tetraploid durum wheat, Triticum turgidum Desf., and was introgressed into hexaploid common wheat, Triticum aestivum L. Genetic analysis and deletion mapping revealed that the common wheat line contained a single locus for resistance, H31, residing at the terminus of chromosome 5BS. H31 is the first Hessian fly-resistance gene to be placed on 5BS, making it unique from all previously reported sources of resistance. AFLP analysis identified two markers linked to the resistance locus. These markers were converted to highly specific sequence-tagged site markers. The markers are being applied to the development of cultivars carrying multiple genes for resistance to Hessian fly biotype L in order to test gene pyramiding as a strategy for extending the durability of deployed resistance. [ABSTRACT FROM AUTHOR]