Taxes, Regulations, and the Value of U.S. and U.K. Corporations

We derive the quantitative implications of growth theory for U.S. corporate equity plus net debt over the period 1960–2001. There were large secular movements in corporate equity values relative to GDP, with dramatic declines in the 1970's and dramatic increases starting in the 1980's and continuing throughout the 1990's. During the same period, there was little change in the capital–output ratio or earnings share of output. We ask specifically whether the theory accounts for these observations. We find that it does, with the critical factor being changes in the U.S. tax and regulatory system. We find that the theory also accounts for the even larger movements in U.K. equity values relative to GDP in this period.     

Baland,J.-M., Bourguignon,F., Platteau,J.-P. and T. Verdier,The Handbook of Economic Development and Institutions

Journal of Economics -     

Education, earnings, and the 'Canadian G.I. Bill'

Canadian Second World War veterans benefited from an extensive educational program similar to the U.S. G.I. Bill. Because of differences in military enlistment rates, however, a much lower fraction of Quebec men were eligible for these benefits than men from other provinces. Building on this fact, we analyse inter-cohort patterns of education and earnings for English-speaking men from Ontario, using French-speaking men from Quebec as a control group. We find that the instrumental variables estimates of the return to schooling are typically as big or bigger than the corresponding OLS estimates. JEL Classification: J24, I21
Education, revenus, et le 'G.I. Bill canadien.' Les anciens combattants canadiens de la deuxième guerre mondiale ont bénéficié d'un programme d'aide aux études similaire au G.I. Bill américain. Relativement peu de Québécois ont cependant pu bénéficier de ce programme en raison de la faible proportion de ces derniers qui ont fait leur service militaire durant cette période. Sur la base de cette observation, nous analysons les différences intergénérationelles dans la scolarisation et les revenus des Ontariens anglophones en se servant des Québécois francophones comme groupe témoin. Nos résultats indiquent que les estimés du taux de rendements de l'éducation obtenus à l'aide de la méthode des variables instrumentales sont comparables sinon plus élévés que ceux obtenus par moindres carrés ordinaires.