In the context of the second demographic transition, many countries consider rising fertility through pro-family polices as a potentially viable solution to the fiscal pressure stemming from longevity. However, an increased number of births implies private and immediate costs, whereas the gains are not likely to surface until later and appear via internalizing the public benefits of younger and larger population. Hence, quantification of the net effects remains a challenge. We propose using an overlapping generations model with a rich family structure to quantify the effects of increased birth rates. We analyze the overall macroeconomic and welfare effects as well as the distribution of these effects across cohorts and study the sensitivity of the final effects to the assumed target value and path of increased fertility. We find that fiscal effects are positive but, even in the case of relatively large fertility increase, they are small. The sign and the size of both welfare and fiscal effects depend substantially on the patterns of increased fertility: if increased fertility occurs via lower childlessness, the fiscal effects are smaller and welfare effects are more likely to be negative than in the case of the intensive margin adjustments.
We analyze the determinants of value added and productivity growth of New Member States in the period between 1995 and 2009. We show that in the analyzed countries exports contributed to roughly 30 to over 40% of the overall growth of GDP while the contribution of the domestic component varied from negative to over 60%. We show that in the most important export manufacturing industries of the NMS, the growth in exported value added was substantial, while the growth of the domestic component of GDP was mostly due to the growth in services. We associate growth of sectoral productivity with the foreign direct investment and exporting but, more importantly, with the position of a sector/country in the global value chains. We show that sectors that have imported intermediate goods have experienced higher productivity growth. Moreover, productivity growth was found in sectors further away from the final demand and in sectors exporting intermediate goods.
- This paper uses the WIOD data together with the accompanying Social and Economic Accounts.
- You can compute the GVC measures used in the paper (WWZ, 2013) using the Decompr R package.
- The codes computing the GDP growth decompositions presented in the paper can be downloaded below, if you use it or any part of it in your research, please, cite our paper. This code assumes that you have the WWZ (2013) decomposition ready.
We explore data from all transition economies over nearly two decades, providing insights on the mechanisms behind labor force reallocation. We show that worker flows between jobs in different industries are rare relative to the demographic flows of youth entry and elderly exit. The same applies to the flows between state-owned enterprises and private firms. In fact, evidence suggest that changes in the demand for labor were accommodated mostly through demographic flows, with a smaller role left for job transitions. We also show that the speed of changing the ownership structure in the economy has driven exits to retirement, in particular the early exits.
This study uses data from LiTS, see the paper tab for replication files as well as the additional controls.
Income inequality in the context of large structural change has received a lot of attention in the literature, but most studies relied on household post-transfer inequality measures. This study utilizes a novel and fairly comprehensive collection of micro data sets from between 1980’s and 2010 for both advanced market economies and economies undergoing transition from central planning to market based system. We show that wage inequality was initially lower in transition economies and immediately upon the change of the economic system surpassed the levels observed in advanced economies. We find a very weak link between structural change and wages in both advanced and post-transition economies, despite the predictions from skill-biased technological change literature. The decomposition of changes in wage inequality into a part attributable to changes in characteristics (mainly education) and a part attributable to changes in rewards does not yield any leading factors.
This paper uses a large collection of individual level data, described in detail in the paper. We acquired over 1600 individual level data for 44 countries over three decades. Contact us if you would want to utilize this vast collection of data.
We develop an OLG model with realistic assumptions about longevity to analyze the welfare effects of raising the retirement age. We look at a scenario where an economy has a pay-as-you-go defined benefit scheme and compare it to a scenario with defined contribution schemes (funded or notional). We show that, initially, in both types of pension system schemes the majority of welfare effects comes from adjustments in taxes and/or prices. After the transition period, welfare effects are predominantly generated by the preference for smoothing inherent in many widely used models. We also show that although incentives differ between defined benefit and defined contribution systems, the welfare effects are of comparable magnitude under both schemes. We provide an explanation for this counter-intuitive result.
An earlier version of this text was circulated under a title "Does social security reform reduce gains from increasing the retirement age?". This earlier version was coauthored by Karolina Goraus.
We provide an empirical explanation for cross-country differences in the size of the voluntary payments made for a good offered in a Pay-What-You-Want payment scheme. Using a sample of almost 500 international travellers from 50 nations participating in a guided tour that uses a voluntary payment method, we analyse the relationship between the size of the average voluntary payments and national values defined by Hofstede’s Cultural Dimensions (1983) as well as selected values from the World Value Survey (WVS). Strong correlations between certain cultural values and average payment sizes are found.
In a field experiment conducted in cooperation with city theatres in Warsaw, we allowed some of the visitors to pay whatever they wanted for the tickets. Half of these visitors were asked randomly to make a voluntary payment after (instead of before) the performance. We found a significant positive difference between payments made after and before the show. In a specially designed survey we capture factors that may potentially explain this difference: the visitors’ general expectations towards the performance and different aspects of the audience experience.
This paper develops a simple business-cycle model in which financial shocks have large macroeconomic effects when private agents are gradually learning their economic environment. When agents update their beliefs about the unobserved process driving financial shocks to the leverage ratio, the responses of output and other aggregates under adaptive learning are significantly larger than under rational expectations. In our benchmark case calibrated using US data on leverage, debt-to-GDP and land value-to-GDP ratios for 1996Q1-2008Q4, learning amplifies leverage shocks by a factor of about three, relative to rational expectations. When fed with the actual leverage innovations, the learning model predicts the correct magnitude for the Great Recession, while its rational expectations counterpart predicts a counter-factual expansion. In addition, we show that procyclical leverage reinforces the impact of learning and, accordingly, that macro-prudential policies enforcing countercyclical leverage dampen the effects of leverage shocks. Finally, we illustrate how learning with a misspecified model that ignores real/financial linkages also contributes to magnify financial shocks.
We investigate willingness to share and download cultural content by implementing a novel "piracy game" modelled after standard public good games. Subjects' decisions have real consequence, as they are rewarded with individual "transfer" on a file-sharing service. We find that willingness to share depends positively on the sharing by others. Interestingly, however, this tendency does not seem to be associated with reciprocity or other-regarding social preferences. We employ several measures of sharing - from self-reporting to experimental - and incorporate to the analysis other factors which may explain the autonomous willingness to share, irrespective of the group effects. We find that conditional cooperation in content sharing is fairly prevalent, but unrelated to personality traits, attitude towards risk, attitude towards the other, marginal valuation, as well as socio-demographic characteristics.
Undergoing a large structural shock, labor markets may become less inclusive. We test for this thesis analyzing the behavior of adjusted gender wage gaps in a wide selection of transition countries. We estimate comparable measures of adjusted gender wage gaps for a comprehensive selection of transition countries over a period spanning nearly three decades. We combine these estimates with measures of labor market reallocation in transition economies to uncover the relation between worker flows and the gender wage gap. Results indicate that in periods of reallocation, the adjusted wage gaps increase. Distinguishing between flows according to their contribution to structural transformation reveals the distinctive role paid by separations from the state-owned manufacturing sector, usually leading to greater adjusted gaps. The emerging new sectors in the economy tend to be more inclusive in the short run, associated with a lower adjusted gender gap. In the medium run, the adverse effect of greater separations from the old sector is even more pronounced, while the emergence of the new sector is less relevant.
Women in developed economies have experienced an unparalleled increase in employment rates, to the point that the gap with respect to men was cut in half. This positive trend has often been attributed to changes in the opportunity costs of working (e.g. access to caring facilities) and not-working (e.g. educational attainment). Meanwhile, the gender employment gaps were stagnant in transition economies. Admittedly, employment equality among genders was initially much higher in transition countries. We exploit this unique evidence from transition and advanced countries, to analyze the distributional nonlinearities in the relationship between the institutional environment and the (adjusted) gender employment gaps. We estimate comparable gender employment gaps on nearly 1600 micro databases from over 40 countries. We relate these estimates to changes in the opportunity costs of working and not-working. Changes in opportunity costs exhibited stronger correlation with gender employment equality where the gap was larger, i.e. advanced economies. We provide some evidence that these results are not explained away by transition-based theories, and argue that the observed patterns reflect a level effect. Currently, advanced and transition economies are at par in terms of gender employment equality. Hence, the
existing instruments might not be suffcient to further reduce the gender employment gap.
Gender wage gap (adjusted for individual characteristics) as a phenomenon means that women are paid unjustifiably less than men, i.e. below their productivity. Meanwhile, efficiency wages as a phenomenon mean that a group of workers is paid in excess of productivity. However, productivity is typically unobservable, hence it is proxied by some observable characteristics. If efficiency wages are effective only in selected occupations and/or industries, and these happen to be dominated by men, measures of adjusted gender wage gaps will confound (possibly) below productivity compensating of women with above productivity efficiency wage prevalence. We propose to utilize endogenous switching models to estimate adjusted gender wage gaps. We find that without correction for the prevalence of efficiency wages, the estimates of the adjusted gender wage gaps tend to be substantially inflated.
Celem artykułu jest zmierzenie skali obciążenia oszacowań luki płacowej kobiet, w warunkach gdy wydajność nie jest obserwowalna. Korzystamy z unikatowych danych jednostkowych o wydajności i wynagrodzeniach dla 2 292 pracowników polskiej firmy zajmującej się handlem detalicznym w branży odzieżowej. Korzystamy z parametrycznych metod dekompozycji do oszacowania skorygowanej luki płacowej z uwzględnieniem i bez uwzględnienia miar wydajności. Wyniki wskazują, że obciążenie wynikające z pominięcia miar wydajności jest istotne statystycznie i wysokie w sensie ekonomicznym, w niektórych specyfikacjach zasadniczo zmieniając wnioskowanie o występowaniu nieuzasadnionej różnicy w wynagrodzeniach pomiędzy kobietami i mężczyznami. Większość oszacowań tzw. skorygowanej luki płacowej nie uwzględnia miar produktywności, głównie z uwagi na brak stosownych miar w dostępnych zbiorach. Choć nasze wyniki dotyczą tylko dla jednego przedsiębiorstwa, dają przesłanki by stwierdzić, że oszacowania, którymi posługuje się literatura, cechować może znaczne obciążenie.
The aim of this paper is to compare estimates of the adjusted wage gap from different methods and sets of conditioning variables. We apply available parametric and non‐parametric methods to LFS data from Poland for 2012. While the raw gap amounts to nearly 10 percent of the female wage; the adjusted wage gap estimates range between 15 percent and as much as 23 percent depending on the method and the choice of conditional variables. The differences across conditioning variables within the same method do not exceed 3pp, but including more variables almost universally results in larger estimates of the adjusted wage gaps. Methods that account for common support and selection into employment yielded higher estimates of the adjusted wage gap. While the actual point estimates of adjusted wage gap are slightly different, all of them are roughly twice as high as the raw gap, which corroborates the policy relevance of this methodological study.
Methods for estimating the the scope of inequality in various outcome measures such as income, education, health or poverty are fairly accurate in detecting differences adjusted for individual characteristics. However, the actual estimated inequality may depend on the interaction between (the weakness of) the method and (the weakness of) the institutional environment. We make a case by comparing the country rankings for the adjusted gender wage gap among 23 EU countries. We show that the effects of these interactions are indeed large by comparing the estimates from various methods obtained from the same database. In fact, depending on the control variables and estimation method, a country may change its position in the ranking by as much as 10 positions -- both towards greater equality and towards greater inequality. We argue that this variability in country ranking position may yield important policy insights into prioritizing intervention. We also infer that given the intimate and unbreakable relationship between institutional deficiencies and features of the adjustment methods, ranking per se may be misguiding the public debate and thus should be abandoned or substantially refined.
Gender wage gaps are typically measured by the means of decomposition. Proliferation of methods makes the choice of the correct estimator for a given data a conceptual challenge, especially if data availability necessitates simplifications. The challenge lies in accounting for observable differences adequately, which in itself is not only a data issue, but also a conceptual issue. Ideally, one would want to compare men and women actually “alike” in terms of all relevant characteristics, including hours effectively worked, commitment, talent. However, many of these characteristics are not observable (or are imperfectly measured, e.g. human capital).
Decompositions are prone to multiple risks. For example, the urge to compare only the comparable implies that a decision needs to be made about the use of observations which clearly are not comparable. Nopo (2008) proposes to use these observations to infer about the possible selectivity in this process, but alternative approaches consist of reweighing or neglecting this issue. Similar choices concern the treatment of distributional issues. Finally, for the parametric methods, the dependence on the functional form may influence the results as well. Consequently, depending on the features of a given labor market, an estimate of gender wage gap obtained with a given method is likely to overstate or understate the extent of true unjustified inequality in wages.
We make available a dataset which provides a full selection of gender wage gap estimates for the EU countries, using data from EU-SILC. Across countries and years, everybody can see for themselves, what is the source of the gender wage inequality in a given European country. We provide:
- A dta file with the full set of estimates for the gender wage gaps and a generating dofile
- Data documentation
Jedną z istotnych przesłanek decyzji migracyjnej są różnice w płacach na domowym i docelowym rynku pracy. Różnice te wynikać mogą jednak nie tylko z względnej różnicy w produktywności czy ew. zapotrzebowania na kapitał ludzki. Istotną przyczyną może być także nierówność płac, np. ze względu na płeć. Tymczasem ekonomia behawioralna i psychologiczna dają silne przesłanki, by oczekiwać, ze grupa dyskryminowana w krajach o większej skali nierówności płacowych może akceptować wyższe luki płacowe także na docelowym rynku pracy. Wykorzystując oszacowania nierówności płacowych ze względu na płeć w krajach pochodzenia imigrantek w Stanach Zjednoczonych oraz oszacowania luk płacowych na amerykańskim rynku pracy poddajemy empirycznej weryfikacji tezę, że wysokość luki płacowej imigrantek zależy od (skorygowanych) luk płacowych doświadczanych przez kobiety w kraju pochodzenia. Otrzymane wyniki wskazują na brak korelacji pomiędzy lukami płacowymi na rynku pracy w Stanach Zjednoczonych i w kraju pochodzenia.
The pattern of trade of the Central and Eastern European countries has been changing since the beginning of the economic transition in the early 1990s. By the end of the century this process was additionally strengthened by their integration with the European Union and overlapped with the development of global value chains (GVC) spanning across Europe with which the new member states (NMS) have become increasingly integrated.
In this paper, we shed light on these changes by analysing the position of the NMS within the global value chains. We employ the upstreamness measure proposed by Antràs et al. (2012) and use the World Input–Output Database. Although we observe a global increasing trend in the upstreamness of all countries, we find that the NMS have in many cases gone against this trend while converging in their production structure within their group and with the EU-15. This convergence is mostly observed in Czech Republic, Hungary, Poland and Slovakia where the level of upstreamness in the most important exporting sectors was close to that of Germany by the end of the analyzed period 1995–2011.
- This paper uses the WIOD data
- The STATA code used to compute the U measure can be downloaded below. If you use it or any part of it in your research, please, cite our paper. This code assumes that you have all the WIOD data in one Stata file.
This article aims to investigate factors that influence the time needed for young people to find their first job. Using data from the Programme for the International Assessment of Adult Competencies (PIAAC), a Cox proportional hazard model was estimated for all respondents and for five subgroups of respondents coming from countries with similar labor markets. The results for all the respondents show that factors influencing the time needed for young people to find their first job are in line with the literature. In the case of the five subgroups, there are significant differences between countries in terms of these factors. It seems that, in order to shorten the time needed for young people to find their first job, measures from labor markets with similar characteristics, where similar factors influence the process of people searching for work, should be applied. However, one should bear in mind that this process of “copying” may not be completely successful.
An important feature of the reallocation process that took place in Eastern European and former Soviet Union countries was the decline in public sector employment due to the collapse of state-owned enterprises combined with an increase in private sector employment as new private firms emerged and old public companies were privatized. We propose a theoretical, parsimonious model which combines this feature with the standard search and matching model introduced by Diamond, Mortensen and Pissarides. Using numerical simulation we show that faster transition (associated with faster restructuring of state-owned enterprises into more productive private firms) leads to a quicker convergence to the post-transitional equilibrium characterized by high GDP and high employment in the private sector. However, this comes at the cost of negative output growth and higher unemployment in the short run.
Two main features of the reallocation process that took place in Eastern European and Former Soviet Union countries should be distinguished. The first feature was the decline in public sector employment as a result of the collapse of state-owned enterprises, linked with an increase in private sector employment as new private firms emerged and old public companies were privatized. The second feature was, and still is, the reallocation of labor from manufacturing to the service sector. Data from the Polish Labor Force Survey for the period 1995–2015 were used to construct measures of worker flows, gross and net, and their cyclical properties were used as a way to test the predictions of structural change and transition theories. It was found that labor market adjustments tend to amplify in upturns of the business cycle, while worker flows contribute only a fraction to the changing structure of employment. The policy implications of these findings are discussed.
From a theoretical perspective, the link between the speed and scope of rapid labor reallocation and productivity growth or income inequality is ambiguous. Do reallocations with more flows tend to produce higher productivity growth? Does such a link appear at the expense of higher income inequality? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, that is, the economic transition from a centrally planned to a market-oriented economy in CEE. We have collected over 450 estimates of job flows from the literature and used these inputs to estimate the short-run and long-run relationship between labor market flows, labor productivity, and income inequality. We apply the tools typical for a meta-analysis to verify the empirical regularities between labor flows and productivity growth as well as income inequality. Our findings suggest only weak and short-term links with productivity, driven predominantly by business cycles. However, data reveal a strong pattern for income inequality in the short run—more churning during reallocation is associated with a level effect toward increased Gini indices.
Pension system reforms involve fiscal consequences. In practice, a variety of fiscal closures may be implemented, while not all of them involve the same extent of distortions. This paper develops an overlapping generations model to analyze the case of a shift from pay-as-you-go defined benefit system to a partly funded defined contribution system. We calibrate the system to mimic the economy of Poland, which actually implemented such reform in 1999. We analyze the efficiency of the reform with two main closure types: public debt and taxes. Regardless of the fiscal closure scenario this particular reform seems to be efficient in terms of welfare and enhances economic performance. Comparing the welfare of various closures we find that while labor taxation yields relatively higher welfare gain, public debt closure involves least need for the redistribution if capital pillar is to be implemented.
In this study I use data on grades awarded for bachelor and master theses at a large Polish university, seeking to identify discrimination on gender or physical attractiveness. I focus on the gap between the grades awarded by the advisor (who knows the student personally) and the reviewer (who typically does not, so that gender is less salient and beauty is not observable). This provides an excellent control for actual quality of the work, which is often problematic in previous literature. Observations on nearly 15 thousand students are available, of which 2500 also have their physical attractiveness rated and included in my analysis. I can thus check if the advisor-reviewer grade gap depends on student’s gender and beauty, also in interaction with their genders. Overall, there is no evidence of such influence.
I screen academic literature for cases of misattribution of cited author’s gender. While such mistakes are overall not common, their frequency depends dramatically on the gender of the cited author. Female scholar are cited as if they were male more than ten times more often than the opposite happens, probably revealing that citers are influenced by the gender-science stereotype. The gender of the citing author and the field of study appear to have only limited effect.
The goal of this paper is to empirically investigate, on the example of eBooks, the effects of the expected quality, external and internal reference prices, risk-taking propensity and perceived costs of production on the size of the voluntary payments in pay-what-you-want (PWYW) scheme. Using the results of a vignette experiment, we show that independently from the expected quality of the eBook, when individual internal reference price is higher than external reference price, voluntary payments are significantly higher if external reference price is not provided. When the external reference price is not provided then PWYW payments depend positively on consumers’ individual internal reference price, and the perceived percentage of the price believed to cover the author’s compensation and the publication costs. The originality of the research comes from separating the anchoring effect of external reference prices from the quality signal effect.
Endogenous growth literature treats deliberate R&D effort as the main engine of long-run technology growth. It has been already recognized that R&D expenditures are procyclical. This paper builds a microfounded model that generates procyclical aggregate R&D investment as a result of optimizing behavior by heterogeneous monopolistically competitive firms.
I find that business cycle fluctuations indeed affect the aggregate endogenous growth rate of the economy so that transitory productivity shocks leave lasting level effects on the economy’s Balanced Growth Path. This result stems from both procyclical R&D expenditures of the incumbents and procyclical firm entry rates, and is in line with the empirical evidence on the negative impact of “missing generations” of firms on macroeconomic variables.
This mechanism generates economically significant hysteresis effects, increasing the welfare cost of business cycles by two orders of magnitude relative to the one typically found by the business cycles literature. High welfare costs of business cycles and potential to affect endogenous growth create ample space for welfare improving policy interventions. The paper evaluates the effects of several countercyclical subsidy schemes and finds some of them welfare improving.
This paper proposes a microfounded model featuring frictional labor markets that generates procyclical R&D expenditures as a result of optimizing behavior by heterogeneous monopolistically competitive firms. This allows to show that business cycle fluctuations affect the aggregate endogenous growth rate of the economy. Consequently, transitory shocks leave lasting level effects.
This mechanism is responsible for economically significant hysteresis effects that increase the welfare cost of business cycles by two orders of magnitude relative to the exogenous growth model. I show that this has serious policy implications and creates ample space for policy intervention. I find that several static and countercyclical subsidy schemes are welfare improving.
The Great Recession has resulted in a seemingly permanent level shift in many macroeconomic variables. This paper presents a microfounded general equilibrium model featuring frictional labor markets and financial frictions that generates procyclical R&D expenditures and replicates business cycle features of establishment dynamics. This allows demonstrating the channels through which productivity and financial shocks influence the aggregate endogenous growth rate of the economy, creating level shifts in its balanced growth path.
I find that financial shocks are an important driver of the aggregate fluctuations and their influence is especially pronounced for establishment entry. Since the growth rate of the economy can in principle be affected by policy measures, I examine the macroeconomic and welfare effects of applying several subsidy schemes.
Gender occupational segregation is one of the most stable phenomena of the labor market. In this study we employ PSID dataset to test whether the fact that women have different professions than men can be, at least partially, explained by their parents occupational history. We find that fathers profession, both first one and the one observed by the son correlate positively with gender intensity of son's occupation. Mother's first occupation is associated with daughter's, but the one that it is performed by mother during daughter's growing up is insignificant. While father's profession is negatively correlated with gender intensity of daughter's profession, mother's occupation does not matter for son's career.
Psychology and sociology literature suggests that the fact that women are less likely to work in STEM occupations may be caused by gender stereotypes related to differences in math and science abilities. In this study we test whether, particularly parents' beliefs are associated with their children's gender beliefs and with their choices of occupation. We show that the correlation between parents' and children's beliefs is strong. We use High School Longitudinal Study data - survey conducted among US 9th graders, their parents and teachers. Finally, we also test to what extend gender beliefs (parents' and own) correlate with planning to work in STEM fields by highschool pupils. We find that girls are discouraged (and boys encouraged) by parents believing that boys are better in math and science, and that the effect of parent's beliefs are stronger than the effect of pupils' school achievements in math and science.
Ethical norms on the Internet are believed to be more permissive than in the ‘real’ world and this belief often serves as an explanation for the prevalence of the so-called digital “piracy”. In this study we provide evidence from a vignette experiment that contradicts this claim. Analyzing the case of sports broadcast, we compare explicitly the ethical judgment of legal and illegal sharing in the offline and online context. We find that the norms concerning legality, availability of alternatives and deriving material benefits from sharing content do not differ substantially between the virtual and real worlds. We also test explicitly for the role of legal awareness and find that emphasizing what is prohibited (copyright infringement) is less effective than focusing on what is permitted (fair use) in reducing the disparity between legal and ethical norms.
We develop a dynamic general equilibrium model in which firms may evade the employer contribution component of social security taxes by offering some workers “secondary contracts”. When calibrated, the model yields estimates of secondary labor market participation consistent with empirical evidence for the EU14 countries and the US. We investigate the optimal mix of the avoidable and unavoidable components of labor taxes and analyze the fiscal and macroeconomic effects of bringing the composition to the welfare optimum. We find that partial labor tax evasion makes tax revenues more elastic, but full tax compliance need not be a welfare enhancing policy mix.
We analyze the political stability social security reforms which introduce a funded pillar (a.k.a. privatizations). We consider an economy populated by overlapping generations and intra-cohort heterogeneity, which introduces a funded pillar. This reform is efficient in Kaldor-Hicks sense and has political support. Subsequently, agents vote on abolishing the funded system, capturing the accumulated pension wealth, and replacing it with the pay-as-you-go scheme, i.e. “unprivatizing” the pension system. We show that even if such reform reduces welfare in the long run, the distribution of benefits across cohorts along the transition path implies that “unprivatizing” social security is always politically favored. We conclude that property rights definition over retirement savings may be of crucial importance for determining the stability of retirement systems with a funded pillar.
This paper was originally started as a part of MODELLING project, but with the time, it evolved into a heterogeneous agents framework with ex ante heterogeneity in terms of endowments and preferences.
Pension system reforms imply substantial redistribution between cohorts and within cohorts. They also implicitly affect the scope of risk sharing in societies. Linking pensions to individual incomes increases efficiency but reduces the insurance motive implicit in Beveridgean systems. The existing view in the literature argues that the insurance motive dominates the efficiency gains when evaluating the welfare effects. We show that this result is not universal: there exist ways to increase efficiency or compensate the loss of insurance, assuring welfare gains from pension system reform even in economies with uninsurable idiosyncratic income shocks. The fiscal closure, which necessarily accompanies the changes in the pension system, may boost efficiency and/or make up for lower insurance in the pension system. Indeed, fiscal closures inherently interact with the effects of pension system reform, counteracting or reinforcing the original effects. By analyzing a variety of fiscal closures, we reconcile our result with the earlier literature. We also study the political economy context and show that political support is feasible depending on the fiscal closure.
Wykorzystanie wspólnych tablic dalszego oczekiwanego trwania życia przy obliczaniu wysokości emerytury w systemie zdefiniowanej składki skutkuje subsydiowaniem przeciętnie dłużej żyjących kobiet przez krócej żyjących mężczyzn. Celem artykułu jest oszacowanie skali tej redystrybucji. Przeprowadzono symulacje oparte na modelu nakładających się pokoleń z obowiązkowym repartycyjnym systemem zdefiniowanej składki oraz heterogeniczności w ramach kohorty. Uwględniono również wydłużanie się dalszego oczekiwanego trwania życia, zgodnie z projekcjami demograficznymi. Zastosowanie wspólnych tablic życia skutkuje redystrybucją w kierunku kobiet na poziomie ok. 0,5-0,7%, wyrażoną za pomocą ekwiwalentu konsumpcji jako procent konsumpcji mężczyzn w cyklu życia. Taka skala redystrybucji w ramach systemu emerytalnego w bardzo niewielkim stopniu rekompensuje kobietom dyskryminację na rynku pracy.
The relation between income inequality and technological progress has many chapters, of which the most recent corresponds to the task content of jobs. Proponents of this theory suggest that falling prices of computational power coupled with the increasing power of computers leads to an increasing substitution of workers with computers and a hollowing of the middle of the income distribution. While empirical analysis on task content of jobs explain inequality between occupations, we test whether the framework can also foster our understanding of wage dispersion within occupations. Using European data, we obtain estimates of wage dispersion and residual wage dispersion for each occupation and relate it to the task content. The results suggest that nonroutine intensive occupations presented greater wage dispersion, even after controlling for a variety of factors.
Population ageing poses new challenges to the sustainability of the pension system and possibly to economic growth in advanced economies. In such context, calls are made to increase participation of workers close to their retirement age. Ageing occurs in a period where technological progress has changed the patterns of labor demand, away from physically demanding tasks (opportunity) and into more cognitive-interpersonal type of tasks (challenge). To understand the net effect, we analyze the relation between automation and labor supply of older workers. We explore whether exposure to technological change, measured by the task content of jobs, was connected to labor supply of older workers in Germany and Great Britain. Using panel data, we show that the adjustment in the number of hours of workers in occupations exposed to automation was small, and only negative for a subset of workers. The exposure to automation is related to somehow earlier retirement, but the size of the relation is small.
We provide an overview of gender board diversity in Europe, using an exceptional database of over 100 million firms over the period of two decades and a novel gender assignment. We show that women on supervisory boards reduce the likelihood that a woman is on a management board. In fact, as much as 90% of European corporations have no women on supervisory boards, whereas roughly 80% of them has no women on management boards. We also show that more gender equality at a country level is not conducive to greater gender board diversity.
Theoretical literature on entrepreneurship hints that labor market inequality may constitute a relevant push factor for necessity self-employment, as opposed to aspirational self-employment. Drawing on empirical confirmation, this insight is used in many policy recommendations. We provide a new approach to test and quantify the link between labor market inequality and self-employment. We exploit rich and diverse international data on patterns of self-employment from the Global Entrepreneurship Monitor. We focus on measures of labor market inequality for women, utilizing estimates of adjusted gender wage and gender employment gap, comparable for a large selection of countries and years. Our results show that greater gender disparities in access to and in compensation for wage employment are associated with necessity self-employment, but the effect is small. We find no link for the aspirational self-employment.
What is necessary to make entrepreneurship sector successful? It seems like two key factors in this matter are quantity of financial capital and quality of human capital. So far, studies on innovative firms were rather focused on spending on resources, and not on qualification of people who are entering entrepreneurship sector. Using concept of so-called talent workers (Hsieh et al. 2013) we check who is entering self-employment in Poland. Our question is whether people who enter self-employment are more likely to create successful businesses. The analysis is based on the labor force survey panel data for Poland for over a decade between 2001 and 2013. We found that talent workers were more likely to become self-employed in this period. Results are robust on two possibly confounding effects – within sector mobility and productivity of workers before entering self-employment.
Given theoretical premises, gender wage gap adjusted for individual characteristics is likely to vary over age. We extend DiNardo, Fortin and Lemieux (1996) semi-parametric technique to disentangle year, cohort and age effects in adjusted gender wage gaps. We rely on a long panel of data from the German Socio-Economic Panel covering the 1984-2015 period. Our results indicate that the gender wage gap increases over the lifetime, for some birth cohorts also in the post-reproductive age.
Forthcoming in: Feminist Economics.
The efficiency wage hypothesis suggests that wages are higher than labor productivity in labor markets where workers may shirk. The paper presents an attempt to verify empirically prevalence of efficiency wages in Poland. We utilize Labor Force Survey data for the years 1995-2010. Our identification strategy relies on differences in residuals from the Mincer wage regression between movers (i.e. people changing jobs) and stayers (i.e. persons who did not change employment in the observational window). The results provide tentative confirmation to the prevalence of efficiency wages in Poland.
While the inequalities of endowments are widely recognized as areas of policy intervention, the dispersion in preferences may also imply inequalities of outcomes. In this paper, we analyze the inequalities in an OLG model with obligatory pension systems. We model both policy relevant pension systems (a defined benefit system — DB — and a transition from a DB to a defined contribution system, DC). We introduce within cohort heterogeneity of endowments (individual productivities) and heterogeneity of preferences (preference for leisure and time preference). We introduce two policy instruments, which are widely used: a contribution cap and a minimum pension. In theory these instruments affect both the incentives to work and the incentives to save for the retirement with different strength and via different channels, but the actual effect attributable to these policy instruments cannot be judged in an environment with a single representative agent. We show four main results. First, longevity increases aggregate consumption inequalities substantially in both pension systems, whereas the effect of a pension system reform works to reinforce the consumption inequalities and reduce the wealth inequalities. Second, the contribution cap has negligible effect on inequalities, but the role for minimum pension benefit guarantee is more pronounced. Third, the reduction in inequalities due to minimum pension benefit guarantee is achieved with virtually no effect on capital accumulation. Finally, the minimum pension benefit guarantee addresses mostly the inequalities which stem from differentiated endowments and not those that stem from differentiated preferences.
We analyze the effects of increasing the retirement age in two economies with overlapping generations and within cohort ex ante heterogeneity. The first economy has a defined benefit system and the second economy is in transition from a defined benefit to a defined contribution. We find that if increase in the retirement age is phased in a way that allows agents to adjust, welfare is not reduced and welfare effects have a similar magnitude and between cohort distribution in both types of the pension systems.
In this project I look at the results of Polish matriculation exams (matura) from the gender perspective. Specifically, I investigate if male and female students are treated differently by the evaluators. I develop a new method to answer this question using the peculiarity of the data: for some subjects the scores just below the passing threshold are very rare, apparently because they are often adjusted upwards, so that the student (barely) passes. I check if the probability of such assistance depends on the gender of the student. I also apply the standard approach of checking if any gender does particularly well on oral exams (which are taken locally) compared to their scores on written exams (which are anonymized and evaluated by teachers from other schools). The main finding is that gender does matter. I find that poorly performing female students have a slightly higher chance of passing than their matched male colleagues, although for better students the bias appears to be reversed.
Even though women׳s position in academia has changed dramatically over the last few decades, there is still some evidence that when it comes to evaluation of scientific achievements, gender may play a significant role. Gender bias is particularly likely to take the form of statistical discrimination. In this study we sought to verify the hypothesis that researcher׳s gender affects evaluation of his or her work, especially in a field where women only represent a minority. Towards this end we asked a sample of subjects, mostly economics majors, to evaluate a paper written by mixed-gender couples, indicating that it was (co-)authored by a “female economist”, “male economist”, “young female economist” or “young male economist” or giving no information about the author at all. While age factor played no role, female authors appeared to be seen as less competent than males, in that subjects (being incentivized to give their best judgment) less often believed that their papers have been published. This effect did not interact strongly with the gender of the subject.
We report a laboratory experiment aimed at investigating factors affecting choice between different versions of a full-length movie. In particular, we estimate the willingness to pay for a legal, rather than pirated copy and compare it to the impact of such characteristics as picture quality or delay in delivery. We find a modest but highly significant preference for the authorized version. By conducting otherwise identical choice experiments both with and without actual experiential and monetary consequences, we conclude that the method does not seem to suffer from hypothetical bias. We also find that when the proceeds from legal sale are transferred to a good cause, willingness to pay for the unauthorized copy is reduced.
Since about 40 years the Laffer curve is used to investigate tax evasion in different ways and with different results. In this paper we present, using a critical literature review, the main considerations related to the Laffer curve starting from historically oldest theoretical models and empirical studies, through direct empirical estimations of the Laffer curve to, widely used nowadays, general equilibrium models, in particular endogenous growth models. We show, by discussing the advantages and drawbacks of these approaches, their different usefulness in studying tax evasion. We conclude that currently endogenous growth models, particularly DSGE models, provide an appropriate approach for the analysis of tax evasion using the Laffer curve.
In this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country. We find that nations with more gender neutral languages tend to be characterized by lower estimates of GWG. The results are robust to a number of sensitivity checks.
In this paper we link the estimates of the gender wage gap with the gender sensitivity of the language spoken in a given country. We find that nations with more gender neutral languages tend to be characterized by lower estimates of GWG. The results are robust to a number of sensitivity checks.
Our source of estimates for the adjusted gender wage gap is an updated version of the dataset developed by Doris Wichselbaumer and Rudolf Winter-Ebmer for a paper published in Journal of Economic Surveys in 2005 and a paper published in Kyklos in 2008. The original data covers articles published until 2005, whereas we include studies published between 2005 and 2014. In total we added 1197 estimates of the adjusted GWG from 117 new studies for 56 countries.
To ensure continuity, we adopted the same conventions with respect to the language of publication (English) and the search engine (EconLit). We also used the same keywords: “(wage* or salar* or earning*) and (discrimination or differen*) and (sex or gender)”. To test if this search was not excessively narrow, we erased one keyword at a time from the first parenthesis, subsequently erasing the logical connectors (“or” “and”). We included published final or the most recent available versions of articles (chapters and books excluded). The complete list is available upon request.} Similarly to WWE, we excluded incomparable estimates of the adjusted GWG (e.g. non-parametric estimates along the wage distribution).
All the data needed to replicate our analysis is available below. The zip file contains:
- A csv file with the information on the articles added.
- Data on language gender intensity come from World Atlas of Language Structures
- Complete data set (combining meta-data and country characteristics)
- Do files
The New Member States have been experiencing firm internationalization not only through inward foreign direct investment but also through exporting, importation of foreign technology in investment goods and increased use of imported intermediates. We argue that there are important productivity spillovers within the global value chains, ie. FDI alone does not tell the whole story of the reallocation processes going on in the economies of the NMS. We augment the standard TFP spillover empirical model with modern measures of GVC participation. We show that increased foreign content of exports brings additional productivity gains on top of the ones attributed to exporting. Moreover, we show that in selected cases, participation in the GVC leads to a smaller productivity gap between foreign and domestic firms. In Poland the productivity gains for domestic firms are located in production of intermediate goods with high foreign value content as well as in goods located close to the final demand. In many other NMS the benefits are concentrated close to the final demand.
- This paper uses WIOD data and Amadeus database.
- You can compute the GVC measures used in the paper using the Decompr R package.
- The codes used to compute the Levinsohn-Petrin TFP from firm-level data, the FDI spillover measures from WIOD and Amadeus can be found here and some trade aggregates can be downloaded below. If you use it or any part of it in your research, please, cite our paper.
In many countries, the fiscal tension associated with the global financial crisis brings about the discussion about unprivatizing the social security system. This article employs an Overlapping Generations model to assess ex ante the effects of such changes to the pension reform in Poland from 1999 as implemented in 2011 and in 2013. We simulate the behaviour of the economy without the implemented/proposed changes and compare it to a status quo defined by the reform from 1999. We find that the changes implemented in 2011 and in 2013 are detrimental to welfare. The effects on capital and output are small and depend on the selected fiscal closure. Implied effective replacement rates are lower. These findings are robust to time inconsistency. The shortsightedness of the governments imposes welfare costs.
Given the decreasing fertility and increasing longevity, in many countries the policy debate emphasizes the role of either raising the minimum eligible retirement age (MERA) or raising fertility to avoid adverse changes in the population structure. In this paper we evaluate the welfare and macroeconomic effects of increasing the retirement age for various demographic scenarios under three major pension systems (defined benefit, notionally defined contribution and funded defined contribution). We compare populations with decreasing fertility, increasing longevity and one subject to both of these changes, and show that the welfare effects of raising MERA stem mainly from longevity. We show that – for increasing longevity – raising the retirement age is universally welfare enhancing for all living and future cohorts, regardless of the pension system and fertility. Finally, we show scope for further welfare gains if productivity is relatively high at old ages.
The objective of this paper is to inquire the consequences of some simplifying assumptions typically made in the overlapping generations (OLG) models of pension systems and pension system reforms. This literature is largely driven by policy motivations. Consequently, the majority of the papers is extremely detailed in the dimension under scrutiny. On the other hand, complexity of general equilibrium OLG modeling necessitates some simplifications in the model. We run a series of experiments in which the same reform in the same economy is modeled with six different sets of assumptions concerning the shape of the utility function, time inconsistency, bequests? redistribution, labor supply decisions and internalizing the linkage between social security contributions and benefits in these decisions as well as public spending. We find that these assumptions significantly affect both the size and the sign of the macroeconomic and welfare measures of policy effects with the order of magnitude comparable to the reform itself.
Bibliometric studies show that male academics are more productive than their female counterparts and that the gap cannot be explained in terms of difference in abilities. In this project we wish to verify the hypothesis that this tendency is related to the greater support that men receive from their colleagues (“old boys network”). Towards this end we had e-mails sent by a male or female student asking academics for a minor favour. In Study 1 we asked authors of nearly 300 papers in experimental economics to share the raw data used in their study. We observed no difference in response rate or compliance rate between male and female senders. In Study 2 we sent 2775 e-mails to academics affiliated with prestigious schools from ten different fields, asking to either send us a copy of their recent article or meet the sender supposedly interested in pursuing a PhD program. Once again we manipulated gender of the senders but this time we also varied their physical attractiveness. We found a small but significant difference in the Article Treatment: attractive females’ requests were honoured less often. No such tendency was found in the Meeting Treatment and no general gender effect was observed. Overall, we find very little support for the claim that early-stage male researchers enjoy greater support than their female colleagues.
Over the past decade or so, the literature has sprung in analyses of the impact the so-called online or digital „piracy'” has on sales. Since theory posits both positive and negative effects are possible, the question remains purely empirical. Consequently, there is a variety of published articles and working papers arguing in both ways, many of which attempt to account for the challenge of providing a reliable and causal effect. The objective of this survey is to review and discuss the accomplishments of the field so far. We also provide a tentative meta-analysis. Despite the multiplicity of measures and methods used we argue that the literature as a whole fails to reject the null hypothesis of no effects on sales.
In this study, we try to assess the prevalence of illicit downloading in the market of audio books and the willingness to admit to such practices. We compare the Bayesian Truth Serum (Prelec, 2004) treatment in which truthful responses and precise estimates are rewarded to the control treatment with a flat participation fee. We find a sizable treatment effect – incentivized ‘pirates’ admit approximately 60% more often than the nonincentivized ones.
We focus on the relationship between pricing of cultural goods and willingness to download their unauthorized versions. Building on equity theory we propose that perceiving a price as overly high provides a self-justification for downloading content from unauthorized sources. In a large-scale online experiment on customers of a major e-book store we employ the Bayesian Truth Serum to induce truthful confessions of acquiring content from unauthorized sources. We confirm that self-reported downloading from unauthorized sources is associated with having experienced overpricing. We also relate it to endorsing relatively positive views on the role of file-sharing services and believing that ”pirate’s” motives are relatively principled, while those of abstainers are rather pragmatic.
Literature on charitable giving often finds that seed money matters: the example of a wealthy donor is followed by others (List and Lucking-Riley, 2002). Nearly all relevant theoretical accounts (e.g. that leaders possess superior information on quality of the project) seem to apply to the closely related environment of Pay-What-You-Want mechanisms as well. Yet, as far as we can tell, no empirical study has tested for that until now. To fill this gap, we analyze data from 16 campaigns of BookRage (an equivalent of Humble Bundle, offering bundles of e-books). We make use of the fact that a fixed number of currently highest contributions are always displayed (along with mean contribution and total amount raised). Thus a discontinuity may be expected: contributions that are displayed might directly affect subsequent donors’ behavior, in contrast to just slightly lower donations that are only observable as a (small) change in mean contribution. We find that the example of leaders makes no impact on willingness to purchase and amount paid. By contrast, the mean of past contributions has a positive impact on current contribution, yet a negative impact on the probability of contributing.
A fair share of studies analyzing “online piracy” are based on easily accessible student samples. However, it has been argued that the youths tend to have more lax social and ethical norms concerning both property rights and online behavior. In this study we present the results of a vignette experiment, i.e. a scenario survey where responders are asked to provide an ethical judgment on different forms of unauthorized acquisition of a full season of a popular TV series described in a number of hypothetical stories. The survey is conducted both on a student sample and on a sample of individuals who openly endorse protection of intellectual property rights for cultural goods. In this way we can investigate the possibly limited external validity of studies relying solely on the student samples. The vignette experiment concerned ethical evaluation of unauthorized acquisition of cultural content in both virtual and real context and was focused on six dimensions previously identified as relevant to the ethical judgment. Surprisingly, we found that the rules for the ethical judgment do not differ between our samples, suggesting that the social norms on “online piracy” follow similar patterns in student and in other populations. Findings from studies relying on ethical or moral judgments of students may thus be valid in a much broader population.
The raw gender wage gap over the period 1995-2012 amounts to app. 9% of hourly wage and is fairly stable. However, the raw gap does not account for differences in endowments between genders. In fact, the adjusted wage gap amounts to as much as 20% on average over the analysed period and shows some cyclical properties. The estimates of adjusted gender wage gap do not seem to exhibit any long-term trends, which suggest that in general neither demographic changes nor the progressing transition underlie the phenomenon of unequal pay for the same work among men and women.
We report the results of an experimental study analyzing the effects of Internet piracy on book sales. We conducted a year-long controlled large-scale field experiment with pre-treatment pair matching. Half of the book titles received experimental treatment, in which a specialized agency would immediately remove any unauthorized copy appearing on the Internet. For the other half we merely registered such occurrences, but no countermeasures were taken. For all the titles we obtained print and e-book sales statistics from the publishers. We find that removal of unauthorized copies was an effective method of curbing piracy, but this had no bearing on legal sales.
We consider a monopolist producer of information goods that may be subject to unauthorized copying. The key feature of our model is that we allow consumers to have ethical concerns based on equity theory that may reduce their utility of such a copy. We derive the formulas describing demand for the product. We find that piracy reduces prices and producers’ profit, an effect that can be limited by such measures as copyright enforcement (proxied by expected value of punishment for piracy) and anti-piracy campaigns. Welfare effects are also analyzed and generally turn out to be ambiguous.
This study employs a vignette experiment to inquire, which features of online ?piracy? make it ethically discernible from a traditional theft. This question is pertinent since the social norm concerning traditional theft is starkly different from the evidence on ethical evaluation of online ?piracy?. We specifically distinguish between contextual features of theft, such as for example the physical loss of an item, breach of protection, availability of alternatives, emotional proximity to the victim of theft, etc. We find that some of these dimensions have more weight in ethical judgement, but there are no clear differences between online and traditional theft which could explain discrepancy in the frequency of commitment.
One could expect that in the so-called talent occupations, while access to these professions may differ between men and women, the gender wage gap should actually be smaller owing to the high relevance of human capital quality. Wage regressions typically suggest an inverted U-shaped age–productivity pattern. However, such analyses confuse age, cohort and year effects. Deaton decomposition allows us to disentangle these effects. We apply this method to investigate the age–productivity pattern for the so-called ‘talent’ occupations. Using data from a transition economy (Poland) we find that talent occupations indeed have a steeper age–productivity pattern. However, gender differences are larger for talent occupations than for general occupations.