DEFINING AND MEASURING THE PUBLIC SECTOR: SOME INTERNATIONAL COMPARISONS

The public sector is defined here to include government plus public enterprises. Historically, economists and statisticians have been more concerned with its separate components than with the public sector as a whole, but it is suggested that the public sector may be an appropriate concept for studying several current problems of economic policy. While there is general agreement as to what constitutes government, countries have differing views about what makes an enterprise public. Differences in country definitions of public enterprises are identified as one of the main problems in making international comparisons for the public sector. Statistics are presented for up to 16 OECD countries on the share of the public sector in total final demand, value added, employment, and net lending. It is argued that there is rarely a unique answer to the question “How big is the public sector?” For most countries judicious selection of data and careful definition will lead to different conclusions about the size and growth of the public sector. Because of the lack of data, it is not possible to analyse public sectors in developing countries in the same detail as OECD countries. The evidence available suggests that while public sectors are about the same size in both OECD and developing countries, public enterprises play a more important role in the latter.     

MEASURING INEQUALITY WITHIN THE HOUSEHOLD

The purpose of this paper is to explore a number of measures of inequality within households. We focus primarily on two types of inequality, first, inequality in money incomes, second, inequality in control over household resources. Control is measured in two ways: first, as control over the management of household finances and, second, as influence over household decision-making. We discuss arguments for and against each of the measures of inequality, and compare the measures against one another in terms of the level of inequality each measure finds. The paper does not attempt to explain inequality; instead, its aim is to discuss the question “What is it that we wish to explain?”

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INTERNATIONAL COMPARISONS OF WEALTH INEQUALITY

This study presents reasonably comparable estimates of the size distribution of household or personal wealth for eight OECD countries—Australia, Canada, France, Germany, Japan, Sweden, the United Kingdom, and the United States. In the mid-1980s, the U.S. ranked as the most unequal and Japan the least, while the other six countries had roughly comparable levels of wealth inequality. Moreover, while wealth inequality rose sharply in the U.S. during the 1980s, it increased modestly in Sweden and showed little change or a slight decline in Canada, France, and the U.K. A comparison of time trends for the U.K. and the U.S. suggests that the relatively high wealth inequality in the U.S. in the 1980s represents a marked turnaround from the 1950s, when the U.S. was considerably more equal in terms of wealth ownership than the U.K. Comparative results for the two countries hold for both conventional (marketable) wealth and for augmented wealth, which includes a valuation of public and private pension wealth.     

THE SENSITIVITY OF INTERNATIONAL POVERTY COMPARISONS

Using data from the Luxembourg Income Study, I study the sensitivity of cross-national income poverty comparisons to the method in which poverty is measured. Absolute poverty comparisons that keep the purchasing power at the poverty line constant across countries lead to conclusions that differ from relative poverty comparisons in which the real value of the poverty line varies with average income. The absolute poverty ranking of countries also varies as the real value of the poverty line is lowered. Cross-national differences in household characteristics are largely irrelevant in explaining poverty differences.     

INTERNATIONAL COMPARISONS OF INTER-INDUSTRY WAGE DIFFERENTIALS

We use OECD data to examine inter-industry wage differentials (relative wages among industries) for 14 OECD countries over the period 1970–85. We find, first, that the industrial wage structures have shown remarkable stability over time in terms of rank order for all the countries in the sample. Second, despite their rank order stability, wage structures show a tendency to expand or contract. While the U.S. has shown increasing industry wage dispersion between 1970 and 1985, the pattern is very mixed for other countries. Unionization is a significant factor in explaining cross-country differences. Third, industry wage rankings show some evidence of becoming increasingly similar across nations over time, and this movement is associated with a convergence of per capita incomes. Fourth, industry wage differentials are positively related to an industry's productivity growth, output growth, capital intensity, and export orientation.     

INTERNATIONAL COMPARISONS OF LABOR COSTS IN MANUFACTURING

This paper presents a comparative study of the levels of unit labor costs in the manufacturing sectors of several countries. We begin by surveying earlier estimates of relative productivity and unit labor cost levels and evaluating the various methodologies that have been used in previous studies. Empirical estimates of relative unit labor costs, based on output levels that are translated at purchasing power parity exchange rates, are then presented and compared to earlier estimates. The results show that the relative levels of unit labor costs in the United States and abroad have fluctuated significantly in recent years, due largely to movements in nominal exchange rates. In 1988, unit labor costs in the United States were below the average level of other industrialized countries, but were significantly above the level in a representative newly industrialized country, Korea. Insofar as unit labor costs serve as an indicator of international competitiveness, these results imply that the competitiveness of the U.S. manufacturing sector had improved significantly since 1985, at least with respect to other major industrialized countries.     

INCOME INEQUALITY IN AUSTRALIA AND NEW ZEALAND: INTERNATIONAL COMPARISONS AND RECENT TRENDS

In this paper we present results on the distribution of income in Australia and New Zealand that can be compared with those for a range of other advanced countries. The framework of analysis, concepts and definitions used have been developed as part of the Luxembourg Income Study (LIS). Using data for the early 1980s, the results indicate that the income distributions in Australia and New Zealand are not, as previous research has suggested, more equal than those in other countries. Neither country has an equivalent net family income inequality ranking in the top half of the eight countries studied. Further analysis indicates increasing inequality in Australia in the first half of the 1980s and, on the basis of some indicators, in New Zealand also. The paper does not investigate the causes of these increases in inequality, although the results indicate that the rise in property income has been a factor behind them.     

INTERNATIONAL COMPARISONS OF REAL PRODUCT AND ITS COMPOSITION: 1950–77

Structural relationships estimated from data obtained in a benchmark study of the expenditures and prices of 16 countries are used to develop a table of real gross domestic product and shares of gross domestic product devoted to private and public consumption and investment for each of over 100 countries in the years 1950 and 1960 through 1977. Price level estimates for total product and the three components are also provided.     

INTERNATIONAL COMPARISONS OF AUSTRALIAN GDP IN THE 19TH CENTURY

This paper summarises the results of a new comparison of the level of Australian and U.K. real product in the 1890s, obtained by the direct deflation of money values of GDP by relative prices. The object of the study was to provide a check on the existing comparisons, obtained by extrapolation of time series of real GDP, as shown, for example, in Maddison (1982). Existing estimates imply that in the 1890s Australian GDP per capita was about 50 percent higher in the U.K. and U.S.A. and more than twice that for the average of 12 other western countries. The present study suggests these results probably overstate Australia's real GDP, and that Australian real GDP per capita was 36 percent higher than the U.K. in 1891 and 3 percent higher in 1900. Personal consumption per capita was 15 percent higher in Australia than in the U.K. in 1891, but about the same level in 1900.
Although this study compares prices and GDP in the colony of New South Wales with those in the U.K., the colony may be taken as representative of Australia as a whole.¹     

A NEW STAGE IN THE ACTIVITIES O F THE COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE IN THE FIELD O F INTERNATIONAL COMPARISONS OF NATIONAL PRODUCT

This article reports on the plans of the member countries of the Council for Mutual Economic Assistance (CMEA) in the area of the purchasing power parity comparisons of national product and similar aggregates. A series of comparisons of the U.S.S.R. with other individual member countries was made for 1959,1966, and 1973. A new series will be undertaken for the year 1978. The scope of the program will be expanded to cover several new aggregates, including productivity concepts and total consumption of the population. The article discusses the conceptual and methodological problems and plans. Among other matters, attention is being given to the possibility of reducing the number of specifications priced, without sacrificing accuracy.     

FAMILY INCOME,AGE, AND SIZE OF UNIT: SELECTED INTERNATIONAL COMPARISONS*

Two aspects of the relationship between family unit income and the age of the head of the family unit are examined in this exploratory paper. First, in connection with the recent discussion in the U.S. about the “fair” level of income of the aged population, the economic well-being of various age of head groups is examined for the U.S., Canada, Norway, and Israel. Problems inherent in comparing income distributions across countries are described briefly, and the sensitivity of the estimates to definitional differences is discussed. Relative incomes of the different age groups are then compared within and between countries. Relative mean incomes, relative median incomes, relative mean incomes adjusted for size of unit in alternative ways, distributions of age groups among income quintiles, and relative income shares within age groups are compared. The focus is on aged units. It is found that, using these crude measures, aged units in the U.S. are roughly as well off relative to the other age groups as aged groups in the other countries examined. In the second section of the paper, a U.S. microdata file is reweighted to be consistent with the distributions by age of head of Norway and Canada. Relative income shares of quintiles are computed before and after reweighting and compared with the shares for Norway and Canada. The reweighting to Norway's age distribution increased differences in relative income shares between the two countries; the reweighting to Canada's age distribution slightly decreased differences.     

INTERNATIONAL COMPARISONS OF EARNINGS INEQUALITY FOR MEN IN THE 1980s

In this paper we present a comparative analysis of earnings inequality during the 1980s among prime age men who headed households and worked year-round, full-time from five industrialized countries-Canada, Sweden, Australia, West Germany, and the United States. The data were obtained from the Luxembourg Income Study (LIS) database, a multinational collection of microdata sets from various countries which have been assembled for the primary purpose of making cross-national comparisons of economic and social well-being. The results of the comparison indicated that during the mid-1980s, the United States had the most unequal distribution of earnings and Sweden the least unequal. Between the early 1980s and mid-1980s, however, the earnings distributions in all five countries showed evidence of becoming more unequal, especially in the United States, Canada, and Sweden.     

MEASURING THE DEADWEIGHT COSTS OF DUP AND RENT SEEKING ACTIVITIES

I examine a simple model of rent seeking behavior in order to determine the correct way to measure welfare loss due to rent seeking. I conduct this analysis using a general equilibrium version of the standard partial equilibrium consumers' surplus cost-benefit setup. I conclude that the ordinary tools of cost-benefit analysis, such as consumers' and producers' surplus, are up to the task of measuring the deadweight loss due to rent seeking, as long as they are applied in the proper general equilibrium context.     

A TAXONOMY OF MULTILATERAL METHODS FOR MAKING INTERNATIONAL COMPARISONS OF PRICES AND QUANTITIES

A taxonomy of multilateral methods is developed. All the main methods are classified within the taxonomy. It is then shown that methods in the same class share many of the same properties. Therefore the taxonomy should help practitioners to appreciate the wide range of alternative methods for making international comparisons, the relationships between methods, and the relative strengths and weaknesses of each method.