The effect of fertility on labour force participation: The Spanish evidence

Abstract. The aim of this paper is to estimate the effect of fertility on the decision of labour force participation of married females in Spain, allowing for the existence of unobserved characteristics that affect both fertility and participation. We use a pooling of five waves of the European Household Panel for Spain (1994–1998). Results indicate that not taking into account the unobserved characteristics that affect both variables imposes on average a strong downward bias on the true effect of fertility on participation. This bias is especially strong for highly educated females. We are grateful to Raquel Carrasco and an anonymous referee for helpful comments. Financial support from Gobierno Vasco (PI-1999-160)), Ministry of Education and Science (BE2000-1394), Instituto de la Mujer and Universidad del País Vasco (UPV 00035.321-13511/2001) is gratefully acknowledged.     

On some criteria for the formulation and testing of economic growth models

This paper presents a methodology for the formulation and testing of economic growth models. The model selected includes two production sectors with physical and human capital accumulation. These capital stocks are associated with spillover effects in the production of the physical good and in the accumulation of both factors.     

Capital markets integration, growth and income distribution

The paper considers a two-country model of overlapping generation heterogenous economies with intergenerational transfers carried out in the form of bequest and investment in human capital. We examine in competitive equilibrium the transitory and long-run effects of capital markets integration. First, we explore how the regime of public education affects the dynamics of the integrated economy. Second, we study the effects of capital markets integration, in equilibrium, on the intragenerational income distribution in both the host and investing country.     

Adaptability, productivity, and educational incentives in a matching model

We study the connections between the labour market and the education sector in a matching framework with ex-post wage bargaining. Workers have multidimensional skills and the search market is segmented by technology. Education is a time-consuming activity and determines jointly the scope - or adaptability - and intensity - or productivity - of individual skills. We establish three main results. First, unemployment provides incentives to schooling by raising the need for adaptability. Second, private returns to productivity are below social returns, but no hold-up phenomenon is involved. Third, due to wage and congestion externalities, private returns to adaptability exceed social returns. As a consequence, both over- and under-education may take place in equilibrium.     

Endogenous lifetime and economic growth

Endogenous mortality is introduced in a two-period overlapping generations model: probability of surviving from the first period to the next depends upon health capital that is augmented through public investment. High mortality societies do not grow fast since shorter lifespans discourage savings; development traps are possible. Productivity differences across nations result in persistent differences in capital-output ratios and relatively larger gaps in income and mortality. High mortality also reduces returns on education, where risks are undiversifiable. When human capital drives economic growth, countries differing in health capital do not converge to similar living standards, ‘threshold effects’ may also result.     

Commitment and choice of partner in a negotiation with a deadline

This paper analyses the effects of partially revocable endogenous commitments of a seller in a negotiation with a deadline. In particular, we examine when commitment is a source of strength, a source of inefficiency and when it does not affect the bargaining outcome at all. We show that when commitment possesses a minimum amount of irrevocability this crucially determines the bargaining outcome. In the bilateral bargaining case, commitment becomes a source of inefficiency since it causes a deadline effect. In the choice of partner framework, however, the deadline effect disappears and there is an immediate agreement and, moreover, commitment becomes a source of strength since it increases the seller's equilibrium payoff by triggering off competition between the buyers.     

Why are some people (and countries) more protectionist than others?

We analyze two cross-country data sets that contain information on attitudes toward trade as well as a broad range of socio-demographic and other indicators. We find that pro-trade preferences are significantly and robustly correlated with an individual's level of human capital, in the manner predicted by the factor endowments model. Preferences over trade are also correlated with the trade exposure of the sector in which an individual is employed: individuals in non-traded sectors tend to be the most pro-trade, while individuals in sectors with a revealed comparative disadvantage are the most protectionist. Third, an individual's relative economic status has a very strong positive association with pro-trade attitudes. Finally, non-economic determinants, in the form of values, identities, and attachments, play an important role in explaining the variation in preferences over trade. High degrees of neighborhood attachment and nationalism/patriotism are associated with protectionist tendencies.     

ARE COMPUTERS AT HOME A FORM OF CONSUMPTION OR AN INVESTMENT? A LONGITUDINAL ANALYSIS FOR JAPAN*

This study examines the effect on labour market outcomes, of computer possession at home using longitudinal data collected in Japan. There are positive correlations between computer possession and women's full‐time employment and the salaries of both men and women. In a fixed effects analysis, however, no temporal, causal effects of computer possession on labour market outcomes were found. Overall, the results suggest that the positive correlation between computer possession and better labour market outcomes does not imply causality among workers strongly attached to the labour market.     

Tax competition and tax structure in open federal economies: Evidence from OECD countries with implications for the European Union

Tax competition arguments suggest that governments that operate in an open economy (such as local governments) should not and will not rely on non-benefit taxes, such as the income tax. Yet we observe reliance on income taxes by local governments in many countries, and such reliance changes over time. Evidence from a panel data set of 13 OECD countries over the period 1975-1984 suggests that competition between levels of government (resulting in a vertical fiscal externality) and between governments at the same level (resulting in a horizontal fiscal externality) provide some economic rationale for these changes. Moreover, the evidence indicates that the vertical and horizontal fiscal externalities interact. These results have some interesting implications for fiscal policy in the European Union, particularly as the EU continues to evolve. One implication for the EU is that enlargement that increases tax base disparities within the EU (and is not accompanied by an EU-level income tax) will tend to lower national income tax rates, although this must be qualified because it also depends on the mobility of the population. A second implication is that fiscal expansion of the EU to include an EU-level income tax may tend to lower the reliance of national governments on income taxes through the vertical externality, but may also tend to equalize tax bases across countries, and so increase reliance on national income taxes through the horizontal externality.     

On exact D-optimal designs with 2 two-level factors and n autocorrelated observations

In this paper we consider the exact D-optimal designs for estimation of the unknown parameters in the two factors, each at only two-level, main effects model with autocorrelated errors. The vector of the n random errors in the observed responses is assumed to follow a first-order autoregressive model (AR(1)). The exact D-optimal designs seek the optimal combinations of the design levels as well as the optimal run orders, so that the determinant of the information matrix of BLUEs for the unknown parameters is maximized. Bora-Senta and Moyssiadis (1999) gave some conjectures about the exact D-optimal designs based on their experience of several exhaustive searches. In this paper their conjectures are partially proved to be true.Received: January 2003 / Accepted: October 2003Partially supported by the National Science Council of Taiwan, R.O.C. under grant NSC 91-2115-M-008-013.Supported in part by the National Science Council of Taiwan, R.O.C. under grant NSC 89-2118-M-110-003.