Progressive Taxes and the Labour Market: Is the Trade–off Between Equality and Efficiency Inevitable?

Does an income tax harm economic efficiency more the more progressive it is? Public economics provides a strong case for a definite ‘yes’. But at least three forces may pull in the other direction. First, low–wage workers may on average have more elastic labour supply schedules than high–wage workers, in which case progressive taxes contribute to a more efficient allocation of the total tax burden. Second, in non–competitive labour markets, progressive taxes may encourage wage moderation, and hence reduce the equilibrium level of unemployment. And third, if wage setters have egalitarian objectives, progressive taxes may reduce the need for redistribution in pre–tax wages, and hence increase the demand for low–skilled workers. This paper surveys the theoretical, as well as the empirical literature about labour supply, taxes and wage setting. We conclude that in a second best world, the trade–off between equality and efficiency is not always inevitable.     

Business or Basic Needs? The Impact of Loan Purpose on Social Crowdfunding Platforms

Journal of Business Ethics - Crowdfunding has created new opportunities for poor microentrepreneurs. One crucial question is the impact that the purpose of a loan—either business investment...     

Mixed Causal–Noncausal Autoregressions: Bimodality Issues in Estimation and Unit Root Testing1

This paper stresses the bimodality of the likelihood function of the Mixed causal–noncausal AutoRegressions (MAR), and it is shown that the bimodality issue becomes more salient as the causal root approaches unity from below. The consequences are important as the roots of the local maxima are typically interchanged, attributing the noncausal component to the causal one and vice-versa. This severely changes the interpretation of the results, and the properties of unit root tests of the backward root are adversely affected. To circumvent the bimodality issue, this paper proposes an estimation strategy which (i) increases noticeably the probability of attaining the global MLE; and (ii) selects carefully the maximum used for the unit root test against a MAR stationary alternative.     

Consumer Boycotts: Does Trust in Law-Making and Law-Enforcing Institutions Matter?

This article estimates the effects of trust in political and judicial institutions on individuals’ propensity to take part in consumer boycotts. In particular, this study disentangles the effects of institutional trust and quality. The analysis relies on data from the 2010 European Social Survey, which is a path breaking comparative study of how justice is perceived and allows a valid measure of judicial and political trust to be constructed. A two-step instrumental variable method was used to measure the effects of institutional trust, controlling for micro- and macro- level factors. The results indicate that trust in law-making institutions is negatively associated with boycott participation, whereas the relationship between judicial trust in institutions and an individual’s likelihood to boycott is U-shaped. The findings are robust to the introduction of social capital and sociodemographic variables.     

Using Engel curves to estimate bias in the Canadian CPI as a cost of living index

Abstract.  Semiparametric Engel curves are used to infer bias in the Canadian CPI as a Cost of Living Index. The budget share of food has long been used as an indicator of welfare. We compare households with the same levels of CPI deflated total expenditure over the period 1978–2000. Differences in the expenditure share of food are attributed to the CPI failing to capture changes in costs of living. We employ a novel econometric approach using a single index penalized linear spline model. Over the period, we find that the CPI overstated changes in the cost of living between 1.33 and 1.86% for the four household types considered. JEL classification: D1, C1     

Egalitarian wage policies, unemployment and skill-biased technological change

A popular explanation for the rise in European unemployment during the past decades is that relative wages failed to adjust to changes in relative productivities. Many economists reject this hypothesis on the ground that the ratios of low- to high-skill unemployment did not increase. Building on a search model, I argue that relative unemployment rates are affected by skill-neutral, as well as skill-biased shocks; hence stable ratios are theoretically consistent with a mix of skill-biased and skill-neutral shocks. Yet, numerical exercises confirm that wage rigidity in the face of skill-biased shocks probably did not explain much of the European unemployment experience.     

Cure or Sell: How Do Pharmaceutical Industry Marketers Combine Their Dual Mission? An Approach Using Moral Dissonance

Journal of Business Ethics - Pharmaceutical industry marketers are confronted with specific ethical issues linked to the tension between the economic interest being pursued and the health mission...     

The Provider-Customer Interface in Business and Professional Services

On the basis of several nationalandinternational studies in thefield of business and professional services the aim of this paperistoreconsider the core question of provider-customer interface. It first shows that the question of the relationships between internal and external business services may not only be posed in terms of substitution but also in terms of complementarity and interaction. It then analyses the interface as a ‘moment of truth’(i.e. as a process of interaction, as a form of organisation, and as part of both the client's and the consultant's value chain) a ‘moment of trust’ (based upon various modes of interaction and various logics of interface) and a moment of thrust (thanks to innovation).     

Innovation and Employment Effects in Services: A Review of the Literature and an Agenda for Research

This article addresses the difficult question of the relationship between innovation and employment. Its main objective is to re-examine the literature on innovation in services in the light of the employment issue. In particular, it attempts to assess to what extent and in what way this question is implicitly or explicitly addressed in the literature or deserves to be introduced into it. In pursuit of these objectives, the national and international literature is reviewed and a research agenda proposed. The following three topics are explored in succession: 1) technologist approaches and the employment question; 2) the question of employment in service-based approaches; 3) innovation by services and employment.