HOW DO SPOUSES SHARE THEIR FULL INCOME? IDENTIFICATION OF THE SHARING RULE USING SELF‐REPORTED INCOME

The paper applies the collective model to the analysis of intra-household inequality using one of the subjective-qualitative questions available in the RLMS (Russia Longitudinal Monitoring Survey) data, and provides a test for its assumptions. Interpreting the individual answers as reported budget scales we assume a correspondence between the budget level that household members report and their true income sharing. We first show that this assumption is supported by the data, and then use couples who report the same level of budget to identify the full sharing rule for the whole sample.     

HOW DO HIGH SCHOOL GRADUATES IN JAPAN COMPETE FOR REGULAR,FULL‐TIME JOBS? AN EMPIRICAL ANALYSIS BASED UPON AN INTERNET SURVEY OF THE YOUTH*

We use a survey of Japanese youth within 10 years after high school graduation to investigate impacts of academic and social skills on their success in the job market. We find three major factors account for the job market outcome immediately after school: school characteristics and job‐placement services, academic performance, and social skills, including negative impacts of problematic behaviors at school. Second, when we run a probit regression on whether or not the surveyed individuals hold regular, full‐time jobs, we find the persistent but declining (over age) impact of the job placement immediately after school. Moreover, we find that the impact of variables pertaining to social skills remain significant even after controlling for the job‐placement outcome after school, whereas other variables, such as grade point average or attributes of high schools, are largely irrelevant to the current employment status.     

HOW DO FISCAL CONSOLIDATION AND FISCAL STIMULI IMPACT ON THE SYNCHRONIZATION OF BUSINESS CYCLES?

Using quarterly data for a panel of advanced economies, we show that synchronized fiscal consolidation (stimulus) programmes in different countries make their business cycles more closely linked. We also find: (i) some evidence of decoupling when an inflation targeting regime is unilaterally adopted; (ii) an increase in business cycle synchronization when countries fix their exchange rates and become members of a monetary union; (iii) a positive effect of bilateral trade on the synchronization of business cycles. Global factors, such as a rise in global risk aversion and uncertainty and a reversal of nonstandard expansionary monetary policy, can also reduce the degree of co‐movement of business cycles across countries. From a policy perspective, our work shows that an inflation targeting regime coupled with simultaneous fiscal consolidations can lead to more business cycle synchronization.     

MEASURING INEQUALITIES: DO HOUSEHOLD SURVEYS PAINT A REALISTIC PICTURE?

The paper addresses the issue of the accuracy of standard‐of‐living measurements using household survey data. First, it highlights the fact that lighter data collection processes in some developing countries have added to measurement errors in consumption and income aggregates measurement errors. The paper reasserts the need to apply reference guidelines to the measurement of household consumption in order to compute comparable distribution indicators across countries and over time. Second, it contends that it is hard to analyze inequality solely from consumption patterns without taking income and savings into account. Two solutions are proposed for the correction of income measurement errors: by using savings declarations and by implementing a multiple imputation procedure. The results are based on a careful analysis of the EPM93 survey of Madagascar whose design is quite close to the LSMS household surveys, and the ENV98 survey of Côte d'Ivoire representative of surveys conducted nowadays in most Sub‐Saharan African countries.     

HOW DO STATE INFERTILITY INSURANCE MANDATES AFFECT DIVORCE?

The technological developments in infertility treatments have increased the success of childbearing among women with impaired fertility. Fifteen U.S. states have mandated insurance coverage of assisted reproductive technology, thus subsidizing and increasing the use of the technology. We exploit the variation of mandates across states and over time to examine the relationship between state mandates and the likelihood of divorce. Using individual‐level data from the 1984–2008 Survey of Income and Program Participation, we find that women are less likely to divorce after the state adopts infertility insurance mandates. We find the effect is larger among women in their 40s, covered by private insurance, with a college degree, and without children. (JEL J12, J13, J18, I13, I18)     

HOW DO SPEED AND SECURITY INFLUENCE CONSUMERS' PAYMENT BEHAVIOR?

The Federal Reserve named improvements in the speed and security of the payment system as two of its policy initiatives for 2012–2016. Using new data from the 2013 Survey of Consumer Payment Choice (SCPC) and models from earlier research, we estimate how various aspects of speed and security influence consumers' decisions to adopt and use payment instruments. Some aspects of speed and security have a statistically significant influence on the adoption and use of selected payment instruments, but not as much as other characteristics of payment instruments. Using econometric models to simulate selected policies proposed by the Fed, we show that faster speed of payment deduction for Automatic Clearing House (ACH) transactions would slightly increase consumers' adoption of ACH‐based payment methods, while enhanced security of payment cards would marginally increase the use of credit and debit cards. However, neither improvement is likely to increase consumer welfare much because consumer demand for payments is very inelastic with respect to speed and security. Our analysis focuses exclusively on consumers' behavior and does not include potential benefits of improvements to the payment system that would directly benefit businesses or financial institutions. In addition, preventing security breaches may preserve public confidence in the payment system, benefitting consumers even if they do not change their payment behavior. (JEL D12, D14, E58)     

IS EMPLOYMENT DISCRIMINATION BASED ON TOBACCO USE EFFICIENT?

Numerous employers in over 20 U.S. states currently discriminate legally against smokers in their hiring policies. We analyze the cost of being a smoker, measured in annual hospital days, and compare this with the cost of being a former smoker, the cost of being obese, and the cost of a variety of other medical conditions, relative to the cost of being a never smoker, using three large recent surveys each having in excess of one hundred thousand observations. The paper also explores the cost of former smokers as determined by the number of years since quitting. Smokers as a whole are not found to be the most costly employees. Furthermore, health costs vary dramatically among smokers of different duration and intensity. As a consequence, our results question the efficiency of such discrimination. (JEL I10, I18, J71, J7)     

DO PERMANENT SHOCKS EXPLAIN INCOME LEVELS? A COMMON CYCLE–COMMON TREND ANALYSIS OF REGIONAL INCOME LEVELS FOR CHINA

Abstract. In this paper, we analyse per capita income levels of China's three main regions: the western region, the eastern region and the central region using common cycle and common trend tests. Our main contribution is that we impose the common cycle and common trend restrictions in decomposing shocks into permanent and transitory components. We find that: (i) there is evidence for two cointegrating relationships and one common cycle; and (ii) the variance decomposition analysis of shocks provides evidence that over short horizons, permanent shocks play a large role in explaining variations in regional per capita incomes.     

HOW FAST DO TOKYO AND NEW YORK STOCK EXCHANGES RESPOND TO EACH OTHER? AN ANALYSIS WITH HIGH‐FREQUENCY DATA

This paper uses one‐min returns on the TOPIX and S&P500 to examine the efficiency of the Tokyo and New York Stock Exchanges. Our major finding is that Tokyo completes reactions to New York within six min, but New York reacts within fourteen min. Dividing the sample period into three subperiods, we found that the response time has shortened and the magnitude of reaction has become larger over the period in both markets. The magnitude of response in New York to a fall in Tokyo is roughly double that of a rise.     

DO SCHOOL LUNCH SUBSIDIES CHANGE THE DIETARY PATTERNS OF CHILDREN FROM LOW‐INCOME HOUSEHOLDS?

This article examines the effects of school lunch subsidies provided through the means‐tested component of the National School Lunch Program on the dietary patterns of children aged 10–13 years in the United States. Analyzing data on 5,140 public school children in fifth grade during spring 2004, we find significant increases in the number of servings of fruit, green salad, carrots, other vegetables, and 100% fruit juice consumed in 1 week for subsidized children relative to unsubsidized children. The effects on fruit and other vegetable consumption are stronger among the children receiving a full subsidy, as opposed to only a partial subsidy, and indicate the size of the subsidy is an important policy lever underlying the program's effectiveness. Overall, the findings provide the strongest empirical evidence to date that the means‐tested school lunch subsidies increase children's consumption over a time period longer than one school day. (JEL H51, I12, I38)     

HOW CAN PUBLIC SPENDING HELP YOU GROW? AN EMPIRICAL ANALYSIS FOR DEVELOPING COUNTRIES

Although many studies indicate that both the level and composition of public spending are significant for economic growth, the results in the empirical literature are mixed. This paper suggests that the country sample selection and expenditure classification are important in explaining these conflicting results. The empirical analysis shows that the link between growth and public spending, especially its core component, is strong only for countries with macroeconomic stability and fast GDP per capita growth dynamics, which are also capable of using public funds for productive purposes.     

DOES SIZE MATTER? THE IMPACT OF CHANGES IN HOUSEHOLD STRUCTURE ON INCOME DISTRIBUTION IN GERMANY

Income inequality in Germany has been continually increasing during the past 20 years. One cause of this development, among others, could be structural shifts in household formation due to long‐term societal trends. These affect per capita incomes, which has repercussions for the income distribution even if wages remain constant. The aim of this paper is to quantify the proportion of changing household structures in the increase in inequality. We find that the growth of the income gap in Germany (for both East and West from 1991 to 2007) is indeed strongly related to changes in household structure and employment behavior, and a large part of this increase is compensated by the welfare state.     

BETTER LATER THAN NEVER? AN EXPERIMENT ON BARGAINING UNDER ADVERSE SELECTION

A central result in the literature on bargaining with asymmetric information is that the uninformed party (buyer) can screen the informed party (seller) over time. Screening eliminates trade failures that are otherwise common in the presence of adverse selection, but the downside of the bargaining institution is the cost associated with repeated offers and time frictions. This article reports an experimental test of these predictions. We find that rates of trade are substantially higher in the bargaining institution than in control treatments in which we remove the possibility to make repeated offers (take‐it‐or‐leave‐it offer) or the time frictions. However, we also observe a persistent overdelay before agreements are reached, that is, bargaining takes longer than theoretically predicted. This lowers efficiency below its predicted level and below the level observed in the take‐it‐or‐leave‐it offer institution. We identify possible channels for overdelay in the form of fairness preferences and loss aversion, concluding that there are important behavioral deviations from the standard model that are detrimental to the efficiency of bargaining under incomplete information.     

HOW DO SPATIAL SPILLOVERS DIFFUSE IN SCIENCE–INDUSTRY INTERACTIONS? THE CASE OF FRENCH BIOTECH SECTOR

The objective of this article is to study the interactions that exist between public research and private research in the French biotechnology sector. These interactions are observable at a double level. On the one hand, public research can influence private research, and conversely. Researchers of these two spheres develop important relations of cooperation. We then seek to identify these mutual influences and to measure their spatial dimension. Using asymptotic least squares method, we show that spillovers can diffuse through cooperation in upstream and downstream phases of the innovation process. On the other hand, spillovers resulting from public or private research, when measured by an external stock of knowledge, would be located, in so far as they exist.     

WHY DO CHARTER SCHOOLS FAIL? AN ANALYSIS OF CHARTER SCHOOL SURVIVAL IN NEW JERSEY

Charter school competition can only work as a policy to improve public education if schools that do not contribute to this goal are allowed to fail. We estimate survival regressions to assess the effects of various factors on the probability of school failure. We find that students' test scores are the most important determinant of survival: a one standard deviation increase reduces the probability of failure by 76%. Higher expenditures per student and a longer wait list result in smaller, but significant, reductions. Enrollment, average performance in the host district, and student demographics do not significantly affect school survival. (JEL I21, H75)     

HOW GREEN IS YOUR CAMPUS? AN ANALYSIS OF THE FACTORS THAT DRIVE UNIVERSITIES TO EMBRACE SUSTAINABILITY

I examine the factors that influence the adoption of sustainable practices by institutions of higher education (IHEs) in the United States. Using data from the Sustainable Endowments Institute, I conduct an ordered probit analysis on 180 IHEs. The results show that size and wealth are significant factors in the adoption of sustainable practices and that stakeholders such as faculty, alumni, and the surrounding community also play an important role. I find no evidence that institutions adopt sustainability to attract students. Also, in contrast to the findings of similar studies on for‐profit entities, there is no evidence that regulatory pressures encourage campus sustainability. I also examine the factors that affect the institutions' decision to sign the Presidents Climate Commitment (PCC), a largely symbolic gesture. The results for the PCC are quite different than those for overall sustainability. Most importantly, neither wealth nor size are significant factors in that decision. (JEL Q2, L3)     

HOW DO OIL PRICE SHOCKS AFFECT A SMALL NON‐OIL PRODUCING ECONOMY? EVIDENCE FROM HONG KONG

We find no evidence from either in‐sample or out‐of‐sample analyses that an oil price shock would necessarily affect a small non‐oil producing economy such as Hong Kong. In our in‐sample recursive vector autoregressive investigations, oil price does not Granger cause the key macroeconomic indicators. The forecast errors from our out‐of‐sample examination using a vector error correction model with oil shocks, which represents an extension to previous studies, were found to be statistically the same as those from the vector error correction model without these shocks. The analysis leads us to dispel the conventional wisdom that a small non‐oil producing economy is more vulnerable to oil shocks than a larger oil‐producing economy such as the USA.     

HOW COOPERATIVE ARE SAVINGS AND CREDIT COOPERATIVES IN DEVELOPING COUNTRIES?: AN ANALYSIS OF DATASETS FROM UGANDA

Building successful savings and credit cooperatives (SACCOs) that actually embody the cooperative principles is a challenge to development agencies. Although SACCOs form the majority of microfinance providers in many developing countries, the most recent literature on microfinance governance and performance has given little reference to the longstanding body of relevant cooperative literature. SACCO representation in microfinance datasets is biased. Drawing on so‐far unexploited datasets of Ugandan SACCOs and savings groups, this paper empirically analyses policy debate regarding SACCO‐ and savings group regulation. The findings point to the relevance of practically implementing the principle of ‘cooperation between cooperatives’ to ensure effective governance at SACCO level. Moreover, the paper introduces two new measures, based on members' savings and shares, which could become useful tools to track the application of cooperative principles in developing countries, and hence improve evidence‐based policy‐making for SACCOs.