Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market

This study analyses the effect of trade and migration on wages and labour marketmobility. We estimate wage growth equations and a multinomial logit mobilityequation on an individual data set ranging from 1991 to 1994. We find substantialdifferences in the reactions of white and blue-collar workers wages and mobilityto trade and migration. In Austria exports have a positive and imports a negativeimpact on wage growth only for blue-collar workers. Migrants also reduce onlyblue-collar workers wage growth. Our results indicate that higher imports and aninflow of migrants reduce sectoral mobility of all types workers. The risk of beingout of work by contrast is increased by migration and imports only for blue-collarworkers, but reduced by exports for all types of workers. In general our results suggestenlargement of the EU would have only small effects on the Austrian labour market.     

Why Capital Income Taxes Survive in Open Economies: The Role of Multinational Firms

This paper discusses the role of multinational firms and double taxation treaties for corporate income taxation in open economies. We show that it is optimal for a small open economy to levy positive corporate income taxes if multinational firms are taxed according to the full taxation after deduction system or the foreign tax credit system. Positive corporate taxes also occur in the asymmetric case where some countries apply the exemption system and others apply the tax credit system. If all countries apply the exemption system, the optimal corporate income tax is zero. We also show that, under tax competition, corporate income taxes are not necessarily too low from the perspective of the economy as a whole. While the undertaxation result is confirmed for the case of the exemption system, tax rates may also be inefficiently high if the deduction or the credit systems are applied.     

Sharp IV Bounds on Average Treatment Effects on the Treated and Other Populations Under Endogeneity and Noncompliance

In the presence of an endogenous binary treatment and a valid binary instrument, causal effects are point identified only for the subpopulation of compliers, given that the treatment is monotone in the instrument. With the exception of the entire population, causal inference for further subpopulations has been widely ignored in econometrics. We invoke treatment monotonicity and/or dominance assumptions to derive sharp bounds on the average treatment effects on the treated, as well as on other groups. Furthermore, we use our methods to assess the educational impact of a school voucher program in Colombia and discuss testable implications of our assumptions. Copyright © 2015 John Wiley & Sons, Ltd.     

Measuring the effectiveness of US monetary policy during the COVID-19 recession

The COVID-19 recession that started in March 2020 led to an unprecedented decline in economic activity across the globe. To fight this recession, policy makers in central banks engaged in expansionary monetary policy. This paper asks whether the measures adopted by the US Federal Reserve (Fed) have been effective in boosting real activity and calming financial markets. To measure these effects at high frequencies, we propose a novel mixed frequency vector autoregressive (MF-VAR) model. This model allows us to combine weekly and monthly information within a unified framework. Our model combines a set of macroeconomic aggregates such as industrial production, unemployment rates, and inflation with high-frequency information from financial markets such as stock prices, interest rate spreads, and weekly information on the Fed's balance sheet size. The latter set of high-frequency time series is used to dynamically interpolate the monthly time series to obtain weekly macroeconomic measures. We use this setup to simulate counterfactuals in absence of monetary stimulus. The results show that the monetary expansion caused higher output growth and stock market returns, more favorable long-term financing conditions and a depreciation of the US dollar compared with a no-policy benchmark scenario.     

Do German Welfare‐to‐Work Programmes Reduce Welfare Dependency and Increase Employment?

Abstract. During the last decade, many Western economies reformed their welfare systems with the aim of activating welfare recipients by increasing welfare‐to‐work programmes (WTWP) and job‐search enforcement. We evaluate the short‐term effects of three important German WTWP implemented after a major reform in January 2005 (‘Hartz IV’), namely short training, further training with a planned duration of up to three months and public workfare programmes (‘One‐Euro‐Jobs’). Our analysis is based on a combination of a large‐scale survey and administrative data that is rich with respect to individual, household, agency level and regional information. We use this richness of the data to base the econometric evaluation on a selection‐on‐observables approach. We find that short‐term training programmes, on average, increase their participants' employment perspectives. There is also considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness.     

Planning for balanced growth in Chinese air traffic: A case for statistical mechanics

This paper identifies drivers of variations within air traffic systems highlighting inefficient mechanisms that can lead to system sub-optimality. Domestic air traffic in China is used as a case study. Airports need to respond to local demands with airlines that control parts of the system as agents. The relationship between the agent's behavior and system-wide variations in traffic movements shows how the collective behavior of a relatively few agents can disproportionately influence the system-wide traffic distribution.